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