LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 21, 1999 TO: Honorable David Sibley, Chair, Senate Committee on Economic Development FROM: John Keel, Director, Legislative Budget Board IN RE: SB1787 by Bivins (relating to the regulation of insurance and to requirements regarding motor vehicle insurance; establishing business offenses; providing penalties), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1787, Committee Report 1st House, Substituted: positive impact * * of $1,114,447 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 $1,328,400 * * 2001 (213,953) * * 2002 (672,053) * * 2003 (1,130,053) * * 2004 (1,588,053) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Revenue Revenue Revenue Cost from Number of * * Loss to Gain to Gain to State State * * General General State Highway Employees * * Revenue Revenue Highway Fund from FY 1999 * * Fund Fund Fund 0006 * * 0001 0001 0006 * * 2000 $2,840,400 $4,352,400 $0 (11.0) * * $(1,512,000) * * 2001 (1,512,000) 1,298,047 3,894,300 (2,596,253) (7.0) * * 2002 (1,512,000) 839,947 3,436,200 (2,596,253) (7.0) * * 2003 (1,512,000) 381,947 2,978,200 (2,596,253) (7.0) * * 2004 (1,512,000) (76,053) 2,520,200 (2,596,253) (7.0) * *********************************************************************** Fiscal Analysis The bill would require the Texas Department of Transportation (TxDot) to conduct random sampling of vehicle registrations for the purpose of verifying proof of insurance. Methodology The Texas Department of Transportation assumed that the primary day-to-day functions required by provisions of the bill would be outsourced to a private vendor. TxDot estimated that cost to be $2,405,742 each fiscal year. Programming modifications to the Registration and Titling system in fiscal year 2000 was estimated to be $315,540. TxDot estimated one FTE would be needed in fiscal year 2000 and an additional 4 FTEs thereafter would be needed to oversee the outsourcing of the program starting in fiscal year 2001. TxDot assumed a revenue loss to State Highway Fund 006 due to the denial/delay of registration issuance because of suspensions placed on motor vehicles. This would be offset by TxDot being able to recoup costs associated with administering the program. Any additional revenue above costs would be deposited to the General Revenue Fund. The Department of Public Safety (DPS) estimated that, pursuant to provisions of the bill that reduces the authority of the DPS to suspend a driver's license or motor vehicle registration due to violation of financial responsibility, the DPS would need 12 fewer FTEs to process the suspensions. The department estimated that there would be a savings to the State Highway Fund 006 of $324,832 in fiscal year 2000 and $326,596 thereafter. In addition, the department estimated that there would be a loss to general revenue of approximately $1.5 million per fiscal year starting in 2000 from the reduction in reinstatement fees. Local Government Impact The Texas Department of Transportation estimated counties could experience a revenue loss due to the delay/denial of registration issuance. Source Agencies: 454 Department of Insurance, 405 Department of Public Safety LBB Staff: JK, TH, ML