80(R) HB 1413 - House Committee Report version

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION


April 10, 2007

TO:	Honorable Kino Flores, Chair, House Committee on Licensing & Administrative Procedures

FROM:	John S. O'Brien, Director, Legislative Budget Board

IN RE:	HB1413 by Bailey (Relating to the regulation of fire protection sprinkler technicians. ), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for HB1413, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2009.

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
2008	$0
2009	$0
2010	$0
2011	($156,528)
2012	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue Gain from DEPT INS OPERATING ACCT 36	Probable (Cost) from DEPT INS OPERATING ACCT 36	Probable Revenue Gain from INSURANCE MAINT TAX FEES 8042	Probable (Cost) from INSURANCE MAINT TAX FEES 8042
2008	$3,000	($3,000)	$113,059	($113,059)
2009	$180,000	($180,000)	$3,771	($3,771)
2010	$9,000	($9,000)	$213,063	($213,063)
2011	$369,000	($212,472)	$0	$0
2012	$15,000	($15,000)	$197,472	($197,472)

Fiscal Year	Probable Revenue (Loss) from INSURANCE MAINT TAX FEES 8042	Change in Number of State Employees from FY 2007
2008	$0	2.3
2009	$0	4.0
2010	$0	4.8
2011	($156,528)	4.8
2012	$0	4.8

The bill would amend the Insurance Code to add fire protection sprinkler technicians to the licensing program for fire sprinkler system contractors. The Texas Department of Insurance (TDI) and the State Fire Marshal's Office would be required to administer this licensing function, create a state examination for the new license, and establish a continuing education program. The bill would set the application and examination fee for the license.

TDI would be required to establish the procedures and requirements necessary to implement the bill by January 1, 2008 while fire protection sprinkler technicians would not be required to hold a license under the bill before July 1, 2009.

The bill would take effect September 1, 2007.

Based on the analysis of TDI, it is assumed there would be costs associated with implementing the provisions of the bill.

This analysis assumes that costs for fiscal year 2008 would include salaries for 2.25 FTEs (1.75 FTEs for Administrative Assistant IIIs and 1.5FTEs for Administrative Assistant IIs) in the amount of $61,396 with associated benefit costs of $17,369 and other operating expense costs of $37,294. Costs for fiscal year 2009 would include salaries for 4 FTEs (3.5 FTEs for Administrative Assistant IIIs and 1.5 FTEs for Administrative Assistant IIs) in the amount of $110,301 with associated benefit costs of $31,204 and other operating expense costs of $42,266. Costs for fiscal years 2010 through 2012 would include salaries for 4.75 FTEs (1.0 FTE for an Investigator III, 1.5 FTEs for Administrative Assistant IIs, and 2.25 FTEs for Administrative Assistant IIIs) in the amount of $136,595 with associated benefit costs of $38,643. Other operating expense costs, including travel, training, and telephone costs, would be $46,825 in fiscal year 2010 and $37,234 in fiscal years 2011 and 2012.

Based on the analysis of TDI, it is assumed the new license fee would be $30 and the renewal license fee would be $60 ($30 annual fee for the two-year license). It is also assumed 100 new licenses would be issued in fiscal year 2008; 6,000 new licenses would be issued in fiscal year 2009; 100 renewal and 100 new licenses would be issued in fiscal year 2010; 6,100 renewal and 100 new licenses would be issued in fiscal year 2011; and 200 renewal and 100 new licenses would be issued in fiscal year 2012.

Based on the analysis of TDI, it is assumed the revenue from this fee would be deposited into General Revenue - Dedicated Fund 36. Since TDI is required to generate revenues equivalent to its costs of operation under current law, it is also assumed that costs would be paid out of General Revenue - Dedicated Fund 36 to the extent that the additional revenue generated under the bill would cover those costs. This analysis assumes that costs incurred above the amount of revenue generated would be paid out of fund balances or maintenance tax revenues in General Revenue Fund 8042 - Insurance Maintenance Tax and Insurance Department Fees and that revenues generated in excess of costs would be credited toward fund balances.

There would be a technology impact of $4,332 in fiscal year 2008, $2,888 in fiscal year 2009, and $3,263 in fiscal year 2010 for computer hardware and software.

Local Government Impact

No fiscal implication to units of local government is anticipated.