LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
 
May 22, 2009

TO:
Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
SB2233 by Eltife (Relating to the regulation of debt management service providers and a study regarding the business of consumer debt settlement. ), Committee Report 2nd House, Substituted



Estimated Two-year Net Impact to General Revenue Related Funds for SB2233, Committee Report 2nd House, Substituted: an impact of $0 through the biennium ending August 31, 2011.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.



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




Fiscal Year Probable Savings/(Cost) from
General Revenue Fund
1 		Probable Revenue Gain from
General Revenue Fund
1 		Change in Number of State Employees from FY 2009
2010 ($254,484) $254,484 3.5
2011 ($234,484) $234,484 3.5
2012 ($234,484) $234,484 3.5
2013 ($234,484) $234,484 3.5
2014 ($244,484) $244,484 3.5

Fiscal Analysis

The bill would amend Chapter 394 of the Finance Code so that the Finance Commission could adopt rules to require debt settlement service providers to register and provide information to the Office of Consumer Credit Commissioner (OCCC). Additionally, the bill would create a consumer debt settlement task force to study the business of consumer debt settlement.

The bill would take effect January 1, 2010, except for Section 4, which would take effect September 1, 2009.


Methodology

The OCCC estimates there are between 900-1,000 debt settlement companies.
 
Based on the information provided by the Office of Consumer Credit Commissioner (OCCC), it is assumed that OCCC would require 3.5 additional positions, including 1.5 Financial Examiners at the salary and benefits cost of $89,678 each fiscal year for examination and enforcement and 2.0 Administrative Assistants at the salary and benefits cost of $92,056 in each fiscal year to process licenses and track the bond requirements for an increase of approximately 1,000 new licensees. Other costs associated with the 3.5 FTEs include travel costs, other operating expenses, and consumable supplies, totaling $52,750 each fiscal year. Additional technology costs of $10,000 in fiscal year 2010 and 2014 include computers and software for new positions. The agency would need $10,000 in fiscal year 2010 to upgrade the agency’s database and servers.
 
The OCCC is a self-leveling agency and is statutorily required to generate revenues sufficient to cover all of the agency's direct and indirect costs.

Based on the analysis of the Office of Attorney General, duties and responsibilities associated with implementing the provisions of the bill could be accomplished by utilizing existing resources.


Technology

Technology costs include $10,000 in fiscal years 2010 and 2014 for computers and software for 3.5 FTEs and $10,000 in fiscal year 2010 for a database upgrade.


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, 450 Department of Savings and Mortgage Lending, 451 Department of Banking
LBB Staff:
JOB, JRO, MW, ACa