LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

May 23, 2007

TO:	Honorable Tom Craddick, Speaker of the House, House of Representatives
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB2138 by Paxton (Relating to regulation of property tax lenders; providing a penalty.), As Passed 2nd House

Estimated Two-year Net Impact to General Revenue Related Funds for HB2138, As Passed 2nd House: 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	$0
2012	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable (Cost) from GENERAL REVENUE FUND 1	Probable Revenue Gain from GENERAL REVENUE FUND 1	Change in Number of State Employees from FY 2007
2008	($81,882)	$81,882	1.0
2009	($74,382)	$74,382	1.0
2010	($74,382)	$74,382	1.0
2011	($74,382)	$74,382	1.0
2012	($76,882)	$76,882	1.0

Fiscal Analysis

The bill would amend the Finance Code relating to regulation of property tax lenders by requiring property tax lenders to register with the Office of Consumer Credit Commissioner (OCCC) and requiring the OCCC to regulate this industry. The bill would authorize the adoption of rules and the establishment of fees pertaining to the provisions of the bill. This bill would also require OCCC to prepare and publish an analysis of the transactions conducted under the provisions of this bill.

This bill would take effect September 1, 2007.

Methodology

Based on information provided by the Office of Consumer Credit Commissioner (OCCC), this analysis assumes that under the provisions of the bill, fewer than 100 individuals will register as property tax lenders (lenders) in fiscal year 2008.

It is estimated that OCCC would have costs associated with registering these lenders.  Based on the analysis of OCCC, it is assumed that registering lenders and regulating this industry would necessitate additional resources at a cost of $156,264 through fiscal year 2009.
 
OCCC also estimates costs for staff of $42,000 for 1.0 FTE each year in fiscal year 2008 through fiscal year 2012.  Other operating expenses, travel, equipment, and consumable supplies are estimated at $28,000 in fiscal year 2008, $20,500 each year in fiscal year 2009 through fiscal year 2011, and $23,000 in fiscal year 2012.  Estimated costs also include $11,882 each year in fiscal year 2008 through fiscal year 2012 for associated benefits.
 
OCCC is required by statute to adjust fees to generate revenue sufficient to cover all direct and indirect costs. Therefore, this analysis assumes that any increased costs resulting from this bill would be offset by an equal increase in fee generated revenue.

Technology

It is assumed that there would be a one-time technology impact of $5,000 in fiscal year 2008 to upgrade and enhance the agency's database for tracking this type of registration.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

302 Office of the Attorney General, 466 Office of Consumer Credit Commissioner

LBB Staff:

JOB, MN, JRO, MW, TGl