LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 5, 1999
TO: Honorable David Sibley, Chair, Senate Committee on
Economic Development
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1074 by Carona (Relating to the licensing of mortgage
brokers; providing civil and administrative penalties.),
As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1074, As Introduced: impact of $0 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $92,080 *
* 2001 (92,080) *
* 2002 112,329 *
* 2003 (112,328) *
* 2004 70,130 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Savings/(Cost) Revenue Revenue Number of State *
* from General Gain/(Loss) Gain/(Loss) Employees from *
* Revenue Fund from General from New - FY 1999 *
* 0001 Revenue Fund Other Mortgage *
* 0001 Broker Recovery *
* Trust Fund *
* 2000 $(354,604) $446,684 $84,000 4.2 *
* 2001 (171,764) 79,684 7,000 4.0 *
* 2002 (324,883) 437,212 84,000 4.2 *
* 2003 (182,540) 70,212 7,000 4.0 *
* 2004 (337,870) 408,000 84,000 4.2 *
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Fiscal Analysis
The bill would create a licensing requirement for mortgage brokers and
loan officers to be administered by the Texas Real Estate Commission
(TREC). A person would be required to submit an application for a
mortgage broker license to the commission along with an application fee
of $130. A loan officer license application would have an application
fee of $80. Licenses would be valid for two years and could be renewed
at the same rate.
The bill would also require licensees to pay a $20 fee into the new
Mortgage Broker Recovery Trust Fund which would be a trust fund 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 the commission 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.
This 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.
Estimated revenues for fiscal year 2001 are 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.
TREC estimates the need for an additional 4.25 FTEs and associated
operating costs in 2000, 2002, and 2004 and four FTEs and associated
operating costs in 2001 and 2003. TREC estimates a cost of $39 ($15 DPS,
$24 FBI) per applicant for criminal background checks required by the
bill. TREC also estimates the need for per diem and travel expenses for
the new Texas Mortgage Broker Committee.
It is assumed that the TREC would increase fees in an amount to offset
the increased costs associated with the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, TH, RT, DP