LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 11, 2001 TO: Honorable David Sibley, Chair, Senate Committee on Business & Commerce FROM: John Keel, Director, Legislative Budget Board IN RE: HB1752 by Gutierrez (Relating to proof of financial responsibility in connection with operation of a motor vehicle and creating the motor vehicle insurance verification program; providing criminal penalties.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1752, As Engrossed: 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. * ************************************************************************** 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: ************************************************************************** *Fiscal Probable Revenue Probable Change in Number of * * Year Gain/(Loss) from Savings/(Cost) from State Employees from * * State Highway Fund State Highway Fund FY 2001 * * 0006 0006 * * 2002 $15,833,000 $(1,139,648) 3.0 * * 2003 16,102,000 (294,644) 3.0 * * 2004 16,376,000 (294,644) 3.0 * * 2005 16,671,000 (294,644) 3.0 * * 2006 16,971,000 (294,644) 3.0 * ************************************************************************** Technology Impact Additional contract programming services for the modifications needed to the Texas Department of Public Safety (DPS) driver's license systems and Texas Law Enforcement Telecommunications Systems and computers and software for three additional Full-time Equivalent Positions (FTEs) totaling $641,267 in fiscal year 2002. Additional programming modification to the Texas Department of Transportation's (TxDOT) automated Registration and Title System and mainframe system totaling $263,647 in fiscal year 2002. Fiscal Analysis The bill would amend the Transportation Code to create and fund the Motor Vehicle Insurance Verification Program (MVIVP) and require DPS to administer the program. The bill would require county tax assessor-collectors to charge an additional $1 fee, payable at the time of registration (or re-registration) of any motor vehicle for which the owner was required to provide proof of financial responsibility. Fee proceeds would be deposited to the credit of the State Highway Fund. TxDOT would use the fee revenue to administer the program and to reimburse DPS for expenses in administering the program. DPS would contract with a designated agent to develop, maintain, and manage a computer database containing information from insurers, DPS, and TxDOT. The contract could not obligate DPS beyond any amount available from the new $1 fee. The designated agent would update the insurance information provided by insurers and compare the updated information with all current registration information. Reporting would not begin before September 1, 2002. DPS would be required to appoint a technical advisory committee to assist DPS in developing rules. The committee would be abolished September 1, 2002. DPS would have to contract with an entity to serve as a designated agent and adopt rules to implement the bill no later than September 1, 2002. After January 1, 2007, TxDOT must determine that if compliance of the bill has not decreased by 8%, then the provisions of the bill will expire. The bill would take effect September 1, 2001. Methodology DPS estimates that a project manager and two senior programmers would be needed to oversee the entire project from its inception through implementation. The staff would also be available to provide necessary support and maintenance once the contract personnel have concluded their activities and departed. According to DPS, contract programming services for the modifications needed to the driver's license systems and Texas Law Enforcement Telecommunications Systems cost will be approximately $633,600. It would include creating the new insurance database to house all relevant information and process it. The cost is estimated by using five contract programmers working six months, (30 programmer-months) 5,280 hours at $120 per hour totaling $633,600. TxDOT would incur costs of programming modifications which are necessary to allow for the collection and reporting of the $1 fee at the time of registration issuance, initial or renewal, including registration of special license plates and apportioned vehicles. It would also include those costs to modify the registration print renewal program to reflect the $1 fee on affected registration renewal notices. TxDOT estimates that to modify their automated Registration and Title System will require approximately $254,700 and to modify their mainframe system would cost about $8,647 in fiscal year 2002. TxDOT would be required to furnish the designated agent motor vehicle record information for all currently registered "non-exempt vehicles" on a weekly basis and in an electronic form. It is assumed that TxDOT would begin providing the vehicle registration information beginning in fiscal year 2003 with a cost of $64,000 each year thereafter. According to Comptroller's Office, there were approximately 17.2 million county registrations for fiscal 2000, of which 89 percent required proof of financial responsibility. It is assumed that collection of the new $1 fee would begin with the effective date of the bill. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 601 Texas Department of Transportation, 405 Texas Department of Public Safety, 454 Texas Department of Insurance, 304 Comptroller of Public Accounts LBB Staff: JK, JO, RT, DE