LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 12, 1997
         
         
      TO: Honorable Kenny Marchant, Chair            IN RE:  Senate Bill No. 1781, Committee Report 2nd House, as amended
          Committee on Financial Institutions                              By: Ellis
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1781 ( Relating 
to deliquency charges in retail charge agreements.) this office 
has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1781-Committee Report 2nd House, as amended
         
Implementing the provisions of the bill would result in a net 
impact of $0 to General Revenue Related Funds through the biennium 
ending August 31, 1999.
         
The bill would make no appropriation but could provide the legal 
basis for an appropriation of funds to implement the provisions 
of the bill.
         
 
Fiscal Analysis
 
This bill would allow the Consumer Credit Commissioner to accept 
financial contributions from a seller or creditor licensed, 
by the Commissioner, who charges a delinquency charge in excess 
of $10 for the purpose of conducting research conducted by the 
Finance Commission.  Also, such creditors would be required 
to provide financial support to private credit counseling institutions. 
 If the Consumer Credit Commissioner determines that such a 
creditor moves its credit operations out of this state in such 
a manner that results in the seller's retail installment contracts 
not being subject to these provisions, the creditor would pay 
a fee equivalent to 25 cents per delinquency charge collected 
by the creditor during the previous 12 months. 

 
Methodolgy
 
According to the agency, the cost to complete the research and 
private counseling projects would be borne by a funding formula 
to be determined by an agency workgroup.  Preliminary costs 
of each project is estimated at $100,000 each, which would be 
raised through assessments on licensees.  The Office of the 
Consumer Credit Commissioner estimates that two Consumer Education 
Specialists would be required to administer provisions related 
to credit counseling.
The probable fiscal implications of Implementing the provisions 
of the bill during each of the first five years following passage 
is estimated as follows:
 
Five Year Impact:
 
Fiscal Year Probable           Probable           Change in Number   
            Savings/(Cost)     Savings/(Cost)     of State                                                
            from General       from General       Employees from                                          
            Revenue Fund       Revenue Fund       FY 1997                                                 
            0001               0001                                                                        
       1998          $200,000        ($200,000)               1.0                                    
       1998           200,000         (200,000)               1.0                                    
       2000           200,000         (200,000)               1.0                                    
       2001           200,000         (200,000)               1.0                                    
       2002           200,000         (200,000)               1.0                                    
 
 
         Net Impact on General Revenue Related Funds:
 
The probable fiscal implication to General Revenue related funds 
during each of the first five years is estimated as follows:
 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998                   $0
               1999                    0
               2000                    0
               2001                    0
               2002                    0
 
Similar annual fiscal implications These impacts would continue 
as long as the provisions of the bill are in effect.
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,TH ,JA