LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 21, 2001
TO: Honorable Kip Averitt, Chair, House Committee on
Financial Institutions
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3454 by Tillery (Relating to certain requests for
financial institution records.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3454, 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 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 $(112,493) $112,493 2.0 *
* 2003 (107,493) 107,493 2.0 *
* 2004 (107,493) 107,493 2.0 *
* 2005 (107,493) 107,493 2.0 *
* 2006 (107,493) 107,493 2.0 *
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Technology Impact
Computers for the additional Full-time Equivalent positions (FTEs)
totaling $5,000 in fiscal year 2002.
Fiscal Analysis
The bill amends and adds a new subsection to the Finance Code. The bill
would require a state or federal government agency to respond to a
district court action by a financial institution under its jurisdiction
to establish to the court's satisfaction that its request for records was
not unreasonable or onerous.
The bill takes effect immediately if it receives a vote of two-thirds of
members of each house. If it does not, then it takes effect September
1, 2001.
Methodology
The Savings and Loan Department (SLD) estimates that the provisions of
the bill would require an additional half-time legal assistant to assist
the SLD's General Counsel in preparation of support for the SLD's
request, and filing necessary motions and documents with the court in
rebuttal of financial institution claims for relief. It is estimated
that annually, three examinations and two consumer complaint
investigations would require district court action. In addition to a
part time legal assistant, the bill would require significant time by the
SLD's General Counsel (at least 40 hours of preparation, 24 hours for
trial in each occurrence) to represent SLD in district court on these
matters.
According to the SLD, the potential number of responses to such a
challenge cannot be determined because these information requests are
expressly exempt from provisions of discovery. Eliminating the exemption
would subject all (approximately 25 annually) examination requests for
information and all (10-25 annually) consumer complaint investigation
requests to contested action in district court. SLD estimates the number
of challenges by financial institutions to the SLD's requests at 10
percent, however, the number could be as high as 100 percent.
The Department of Banking (DOB) estimates that the provisions of the bill
would require an additional financial examiner and a part-time attorney,
which totals one and a half FTEs. DOB estimates that 15 examinations and
20 complaints would require district court action each year. DOB
estimates 16 hours of attorney preparation for an action and 24 hours of
administrative court time for an examination dispute and 8 hours and 16
hours for a complaint dispute, respectively. This equates to 1,080
attorney hours per year or 1/2 FTE. The hour calculations for the
examiner are 40 hours related to preparation time and 24 hours of
administrative court time for an examination dispute and 24 and 16 for a
complaint dispute, respectively. This equates to 1,760 examiner hours
per year or one FTE.
It is assumed that the agencies would adjust fees to cover the cost of
implementing the bill.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 469 Credit Union Department, 449 Finance
Commission of Texas, 451 Department of Banking, 450
Texas Savings and Loan Department,
LBB Staff: JK, JO, RT, DE