LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 26, 2001 TO: Honorable Ron Wilson, Chair, House Committee on Licensing & Administrative Procedures FROM: John Keel, Director, Legislative Budget Board IN RE: HB2984 by Corte (Relating to the regulation of air conditioning and refrigeration contractors and technicians.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2984, 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. * ************************************************************************** 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 Probable Revenue Change in Number of * * Year Savings/(Cost) from Gain/(Loss) from State Employees from * * General Revenue Fund General Revenue Fund FY 2001 * * 0001 0001 * * 2002 $(5,409,090) $5,409,090 19.0 * * 2003 (1,837,263) 1,837,263 25.0 * * 2004 (1,562,263) 1,562,263 25.0 * * 2005 (1,562,263) 1,562,263 25.0 * * 2006 (1,562,263) 1,562,263 25.0 * ************************************************************************** Technology Impact Additional computers and software would be needed for the additional Full-time Equivalent Positions (FTEs) totaling $57,500 in fiscal year 2002. Fiscal Analysis The bill amends Article 8861, Vernon's Texas Civil Statutes by defining air conditioning and refrigeration contracting technicians and requiring them to become licensed, which entitles the license holder to install, service, or repair only the type of system for which the license is endorsed. The provisions of the bill require the Commissioner of the Department of Licensing and Regulation (TDLR) to prescribe a separate examination for each of the seven endorsements established. The effective date of the bill is September 1, 2001. A person is not required to hold a technician license until March 1, 2002. The rules must be established by December 31, 2001. Methodology According to TDLR, the agency estimates that the new licensing of technicians would add approximately 37 percent to the agency's current license population. TDLR estimates that there will be 45,000 first year applicants with 35,000 anticipated to pass the exam. The agency also estimates that each applicant will apply for an average of two endorsements (90,000 exams in 2002), requiring a separate exam for each. The professional fee for each exam is estimated at $50. Total estimated professional fees in fiscal year 2002 are $4,500,000 with a reduced number of anticipated license exam fees in subsequent years of $825,000 in fiscal year 2003 and $550,000 each year thereafter. According to TDLR, the agency would need additional FTEs for the required licensing of technicians. It is anticipated the agency would need five licensing analysts to process applications, renewals, and assist in processing/administering the exam program. Seven enforcement investigators to process complaints, write rules, assist in the development of exams, testify at hearings, and liaison with the Advisory Board. The agency would need four legal assistants to assist in complaint investigation and process required legal notices prior to and after administrative hearings. It is assumed that the investigators and legal assistants would not be needed until March 1, 2002 when technician licenses are required. It is estimated that the agency would need four administrative technicians to develop and administer exams and to handle the additional mail anticipated for licensing. It would need three accountants to process the additional fees anticipated for licensing received by mail. The agency also anticipates needing a programmer to write new programs and make necessary changes to their system, to create a licensing database, and to perform maintenance. It is also anticipating needing a network specialist to help maintain the computer network as a result of the increase in staff and licensees. It is assumed the agency would adjust fees to offset any costs associated with the implementation of the bill. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 452 Texas Department of Licensing and Regulation LBB Staff: JK, JO, RT, DE