81(R) SB 14 - Introduced version

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2010	$0
2011	$0
2012	$0
2013	$0
2014	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Savings from Dept Ins Operating Acct 36	Probable Revenue (Loss) from Dept Ins Operating Acct 36	Probable Savings from Insurance Maint Tax Fees 8042	Probable Revenue (Loss) from Insurance Maint Tax Fees 8042
2010	$1,000,000	($1,000,000)	$610,740	($610,740)
2011	$1,000,000	($1,000,000)	$610,740	($610,740)
2012	$1,000,000	($1,000,000)	$610,740	($610,740)
2013	$1,000,000	($1,000,000)	$610,740	($610,740)
2014	$1,000,000	($1,000,000)	$610,740	($610,740)

Fiscal Year	Probable Revenue Gain from General Revenue Fund 1	Probable (Cost) from General Revenue Fund 1	Change in Number of State Employees from FY 2009
2010	$0	$0	(28.0)
2011	$0	$0	(28.0)
2012	$0	$0	(28.0)
2013	$0	$0	(28.0)
2014	$198,569	($198,569)	(25.0)

The bill would amend the Insurance Code relating to the operations of the Texas Windstorm Insurance Association (TWIA) and the Texas FAIR Plan Association.

The bill would transfer the windstorm inspection program from TDI to the TWIA, which would result in a reduction of $1,610,740, due to staffing reductions of 28 FTEs and the elimination of the windstorm field offices. This program is partially funded from approximately $1 million deposited in Fund 36 annually in investment income from the Catastrophe Reserve Trust Fund (CRTF) to subsidize inspections. The bill would eliminate the transfer, leaving the funding in the CRTF. The bill would require TDI to adopt rules relating to the implementation of the bill.

The bill would restructure the revenues collected and deposited into the CRTF, which is held outside the Treasury and therefore was not included in this analysis.

The bill would eliminate insurance companies' premium insurance tax credits from TWIA assessments.

This bill would require the Sunset Advisory Commission (SAC) to review TWIA, but does not subject the entity to abolishment. The bill would require that the review be conducted as if the association were scheduled to be abolished September 1, 2015. The bill would require TWIA to pay the costs incurred by the Sunset Commission upon receipt of a statement from the Sunset Commission.

The bill would take effect immediately if it receives a vote of two-thirds of all members of each house, or September 1, 2009 if it does not receive the two-thirds vote.

Based on analysis from TDI, the reduction of 28 FTEs in FY 2010-2014 would decrease costs to TDI in the amount of $1,297,573 for salaries and associated costs. Additionally, the reduction in FTEs would decrease benefits costs to the state by $313,167 in FY2010-2014.

Since TDI is required to generate revenues equivalent to its costs of operation under current law, this analysis assumes that any savings realized would remain in the fund or the maintenance tax would be set to recover a lower level of revenue the following year.

Based on the analysis from the SAC, implementation of this legislation would require 3 new FTEs for FY 2014-15 at a cost to General Revenue of $194,319 each year for salaries and benefits and additional travel costs of $4,000 in FY2014. TWIA would reimburse the SAC for these costs.

Based on the analysis from the Comptroller of Public Accounts, elimination of the premium tax credits would result in a potential positive fiscal impact to General Revenue. Due to the nature of the current assessments and the unpredictability of hurricanes and hailstorms, the specific positive impact could not be determined.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION


March 30, 2009

TO:	Honorable Troy Fraser, Chair, Senate Committee on Business & Commerce

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

IN RE:	SB14 by Fraser (Relating to the operation of the Texas Windstorm Insurance Association and the Texas FAIR Plan Association.), As Introduced