LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 24, 2001
TO: Honorable John T. Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1752 by Gutierrez (Relating to motor vehicle insurance
verification and creating the motor vehicle insurance
verification program; providing criminal penalties.),
Committee Report 1st House, as amended
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1752, Committee Report 1st House, as amended: 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