82(R) SB 1291 - Introduced version

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012	$0
2013	$0
2014	$0
2015	$0
2016	$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 Revenue Gain from New Financial Department Trust Fund - Outside the Treasury	Probable (Cost) from Insurance Maint Tax Fees 8042
2012	$7,421,489	($7,421,489)	$7,421,489	($4,526,281)
2013	$7,421,489	($7,421,489)	$7,421,489	$0
2014	$7,421,489	($7,421,489)	$7,421,489	$0
2015	$7,421,489	($7,421,489)	$7,421,489	$0
2016	$7,421,489	($7,421,489)	$7,421,489	$0

Fiscal Year	Probable Revenue Gain from Insurance Maint Tax Fees 8042	Change in Number of State Employees from FY 2011
2012	$4,526,281	(85.8)
2013	$0	(85.8)
2014	$0	(85.8)
2015	$0	(85.8)
2016	$0	(85.8)

This bill would amend Chapter 401 of the Insurance Code, regarding audits and examinations.

The bill would amend the Insurance Code regarding a self-directed budget for the costs incurred by the Texas Department of Insurance (TDI) financial examinations and actuarial divisions while administering the statutorily required examination function. The bill would limit these costs to salary, travel and related personnel expenses. The bill would require the senior associate commissioner of the program to submit to the Commissioner of Insurance an annual budget of examination costs to be submitted for approval to the Legislative Budget Board.

The bill would require that the TDI financial program be solely responsible for all examination costs; the financial program would be prohibited from directly or indirectly causing the TDI operating account General Revenue-Dedicated Fund 36 (GR-D Fund 36) to incur any examination cost. The bill would authorize TDI to set the amounts of required or allowed fees as necessary to carry out the financial examination and actuarial functions relating to the examination of insurers and other regulated entities. The financial program would not be prohibited from receiving state funds to cover costs other than examination costs.

The bill would establish an account with the Texas Treasury Safekeeping Trust Company to receive fees, charges, or other revenue collected by the financial program relating to the examination of insurers and other regulated entities. The account could be used only to pay examination costs of the financial program. Revenue not related to the examination of insurers would be deposited to GR-D Fund 36.

The bill would require that the financial department to annually submit to the Commissioner and the LBB a report of the program's receipts and examination costs, including the revenue received from assessments and fees related to the examination of insurers, the portions of financial program employee salaries and total travel expenses paid from the self-directed budget and the portions paid from funds appropriated by the state.

The bill would allow TDI, in fiscal 2012, to spend for the purposes of the financial program not more than 50 percent of the money appropriated out of the general revenue fund for the fiscal year ending August 31, 2011. This money could be spent as directed, subject to the provisions of this bill, and would be repaid as funds become available.

This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source. Legislative policy, implemented as Government Code 403.094, consolidated special funds (except those affected by constitutional, federal, or other restrictions) into the General Revenue Fund as of August 31, 1993 and eliminated all applicable statutory revenue dedications as of August 31, 1995. Each subsequent Legislature has reviewed bills that affect funds consolidation. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.

This bill would take effect September 1, 2011.

The bill would authorize a division of TDI to operate with a self-directed semi-independent (SDSI) budget for the use of paying salaries, travel, and related personnel expenses associated with the examination activities. Based on the analysis provided by the Comptroller, the bill creates a new fund outside the treasury for the deposit of examination fees.

Revenue from the examination fees and overhead assessments will be deposited to the new fund outside the treasury instead of to the credit of GR-D Fund 36. The costs associated with this division, related to salaries, travel, and related personnel expenses, will be funded with the new fund outside the treasury therefore reducing the costs to GR-D Fund 36. Based on the analysis provided by TDI, the change in funding would be $5,285,765 in salaries with $1,472,614 in associated benefits cost, and $663,110 in travel costs, totalling $7,421,489 each fiscal year for the 85.8 FTEs in the new SDSI division.

Since TDI is not appropriated General Revenue Fund for this division, this analysis assumes that the reference to the General Revenue Fund is General Revenue � Insurance Maintenance Taxes and Fees. The bill states that not more than 50 percent of the funds appropriated for the financial division out of general revenue in fiscal year 2012 are available for the transition. Based on the analysis provided by TDI, the amount is assumed to be $3,635,202 in fiscal year 2012 with $891,079 in associated benefits. The bill states that this amount will be repaid by the new fund outside the treasury to General Revenue � Insurance Maintenance Taxes and Fees when the funds become available. This analysis assumes that the funds would become available in fiscal year 2012, in an amount of $4,526,281.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION


April 11, 2011

TO:	Honorable John Carona, Chair, Senate Committee on Business & Commerce

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

IN RE:	SB1291 by Hegar (Relating to the budget of certain divisions of the Texas Department of Insurance.), As Introduced