LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 11, 1999
TO: Honorable Kip Averitt, Chair, House Committee on
Financial Institutions
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1074 by Carona (relating to the licensing of mortgage
brokers; providing penalties), Committee Report 2nd
House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1074, Committee Report 2nd House, Substituted: positive impact *
* of $920 through the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $394,941 *
* 2001 (394,021) *
* 2002 521,654 *
* 2003 (389,562) *
* 2004 619,970 *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Probable Probable Change in *
* Year Revenue Savings/(Cost) Revenue Number of State *
* Gain/(Loss) from General Gain/(Loss) Employees from *
* from General Revenue Fund from New - FY 1999 *
* Revenue Fund 0001 Other Mortgage *
* 0001 Broker Recovery *
* Trust Fund *
* 2000 $989,500 $(594,559) $84,000 8.5 *
* 2001 67,450 (461,471) 4,200 8.5 *
* 2002 1,093,638 (571,984) 92,620 8.5 *
* 2003 72,447 (462,009) 4,620 8.5 *
* 2004 1,203,819 (583,849) 102,100 8.5 *
***************************************************************************
Technology Impact
The Texas Savings and Loan Department (TSLD) estimates the need for
additional computer hardware and software in fiscal years 2000 and 2001,
and for licensing record maintenance in fiscal years 2000 through 2004.
Fiscal Analysis
The bill would create a licensing requirement for mortgage brokers and
loan officers to be administered by the Texas Savings and Loan Department
(TSLD). Mortgage brokers covered by the bill would be required to make
application to the department for a license along with an application fee
not to exceed $375. A loan officer license application would have an
application fee not to exceed $175. Licenses would be valid for two
years and could be renewed for a fee not to exceed $375 for mortgage
brokers and a fee not to exceed $175 for loan officers.
The bill would also require licensees to pay a $20 fee into the new
Mortgage Broker Recovery Trust Fund which would be outside the State
Treasury and would be held by the Texas Treasury Safekeeping Trust
Company. The fund would be used for reimbursing individuals for damages
for acts committed by licensed mortgage brokers or loan officers.
The bill would also create the new Texas Mortgage Broker Committee to
advise TSLD in the administration of the bill's provisions. Committee
members would be entitled to a per diem allowance and reimbursement of
travel expenses as provided by the General Appropriations Act.
The bill would take effect September 1, 1999, but a person would not be
required to be licensed until January 1, 2000.
Methodology
The Comptroller estimates 1,200 brokers and 3,000 loan officers would
initially apply for licenses in fiscal year 2000. Revenues for 2000
include fees for applications by the above individuals, branch office
licenses, changes in supervising mortgage brokers, and address changes.
TSLD estimates revenues for fiscal year 2001 based on a smaller number
of individuals who would obtain new licenses in the second year, and
continued fees for changes in supervising mortgage brokers and addresses.
Fees for 2002, 2003, and 2004 reflect the two-year renewal cycle for
licensees with a five percent annual increase in the number of licensees.
TSLD estimates the need for an additional 8.5 FTEs and associated
operating costs in fiscal year 2000 through fiscal year 2004. TSLD
estimates a cost of $39 per applicant for DPS and FBI criminal
background checks required by the bill. TSLD also estimates the need
for per diem and travel expenses for the new Texas Mortgage Broker
Committee.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, TH, RT, DP