LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 9, 2001
TO: Honorable John T. Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB718 by Chavez (Relating to a motor vehicle liability
insurance database.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB718, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* 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 *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Probable Change in Number of *
* Year Gain/(Loss) from New Savings/(Cost) from State Employees from *
* General Revenue New General Revenue FY 2001 *
* Dedicated Motor Dedicated Motor *
* Vehicle Liability Vehicle Liability *
* account account *
* 2002 $(4,983,103) $(1,073,080) 3.0 *
* 2003 (4,983,103) (218,496) 3.0 *
* 2004 (4,983,103) (218,496) 3.0 *
* 2005 (4,983,103) (218,496) 3.0 *
* 2006 (4,983,103) (218,496) 3.0 *
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Fiscal Analysis
The bill would require the Department of Public Safety (DPS) to create
and maintain a motor vehicle liability database. The bill would
establish the Motor Vehicle Liability account in the General Revenue Fund
which could only be used for maintaining the database. The bill would
fund this new account through an annual assessment imposed on each motor
vehicle insurer of $0.50 on each motor vehicle liability policy issued,
delivered or renewed by the insurer to a resident of this state.
The bill would take effect September 1, 2001.
Methodology
Information from the Department of Insurance indicates that as of
December 31, 1999, there were 9,966,207 personal auto liability insurance
policies in force. This figure treats a policy renewed semiannually as
0.5 of a policy, quarterly as 0.25 of a policy, and monthly as 0.83 of a
policy. Thus, there are well in excess of 9.9 million individual
liability policies. Auto policies may be renewed on a monthly,
quarterly, semiannual and annual basis generating by means of the
assessment a minimum revenue gain of $0.50 on each policy renewed
annually up to a maximum gain of $6.00 on any policy renewed monthly.
Due to the unavailability of information that breaks down the number of
policies by renewal period, this fiscal note assumes all policies renewed
are renewed annually and that the number of policies issued will remain
constant. Assuming this, it is estimated that the annual assessment will
generate $4,983,103 annually, however this estimate represents the
absolute minimum revenue gain possible. Should the bill take effect, the
amount generated is likely to be far in excess of $4.98 million.
DPS estimates that implementing this bill would require 3,696 hours of
contract programming at $120 per hour for a total cost of $443,520. An
additional $400,000 would be required to purchase mainframe disk storage.
These costs would occur in fiscal year 2002 only.
DPS estimates that the maintenance and upkeep of the database would
require one Program Analyst IV, one Programmer V, and one Database
Administrator IV. Salaries for these personnel are estimated to be
$158,562 with associated personnel benefits of $44,841 each fiscal year.
Annual operating expenses are estimated to be $15,093. There would be
one time capital costs related to these employees of $11,064 related to
computer hardware and software and furniture.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 454 Texas Department of Insurance, 601 Texas
Department of Transportation, 304 Comptroller of
Public Accounts, 405 Texas Department of Public
Safety
LBB Staff: JK, JO, JN, DG