Honorable John Kuempel, Chair, House Committee on Licensing & Administrative Procedures
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB2508 by Kuempel (Relating to the licensing and regulation of tow truck companies, tow truck operators, vehicle storage facilities, and vehicle storage facility employees, the regulation of parking facilities and parking facility owners, and the elimination of required state licensing for vehicle booting companies and operators; authorizing fee increases.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2508, As Introduced: a negative impact of ($839,992) through the biennium ending August 31, 2019.
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
2018
($412,046)
2019
($427,946)
2020
($445,196)
2021
($464,096)
2022
($484,296)
Fiscal Year
Probable Revenue Gain from General Revenue Fund 1
Probable Revenue (Loss) from General Revenue Fund 1
Probable Savings from General Revenue Fund 1
Change in Number of State Employees from FY 2017
2018
$382,700
($841,950)
$47,204
(1.0)
2019
$418,400
($893,550)
$47,204
(1.0)
2020
$457,400
($949,800)
$47,204
(1.0)
2021
$500,000
($1,011,300)
$47,204
(1.0)
2022
$546,700
($1,078,200)
$47,204
(1.0)
Fiscal Analysis
This bill would amend the Occupations Code relating to the licensing and regulation of tow truck companies and operators, vehicle storage facilities and their employees, the regulation of parking facilities and parking facility owners, and state licensing for booting companies and operators.
The bill would direct the Texas Commission of Licensing and Regulation (TCLR) to adopt rules regarding the licensing of a person to operate a vehicle storage facility (VSF). The bill would repeal risk based inspections.
The bill would continue regulation of Incident Management Towing, Private Party Towing, and Consent Towing, and vehicle storage facilities. The bill would eliminate the requirements for a license to perform booting operations or operate a booting company. The bill would also eliminate the requirement that a VSF only employ an individual who holds a VSF employee license, and would eliminate the dual towing operator/VSF employee license.
The bill would direct the Texas Commission on Licensing and Regulation (TCLR) to adjust fees biennially for vehicle storage in governmental facilities based on the Consumer Price Index for Urban Wage Earners and Clerical Workers and send notification of fee adjustments to facilities as necessary.
The bill would direct a parking facility to send the $10 fee required for the disposition of an abandoned nuisance vehicle to the Texas Department of Motor Vehicles (DMV) or the appropriate law enforcement agency, if required by that agency. Currently that money is sent to the Texas Department of Licensing and Regulation (TDLR) or a law enforcement agency.
The bill would increase the fee a local political subdivision can charge a towing operator from $15 to $50.
The bill would take effect September 1, 2017.
Methodology
Eliminating various licenses would result in a loss of General Revenue to the state. According to information provided by TDLR, there are 16 booting companies, and they each pay $250 per license annually, resulting in a loss of $4,000 per year. The license population of booting operator averages 94 licensees per year, and at $75 per license, would result in an annual loss of $7,050. The license population of vehicle storage facility employees averages 3,416 licensees per year; at $75 per license, the result would be an annual loss of $256,200 per year. The license population of towing training licenses averages 26, with an annual license fee of $25, resulting in a loss of $650 per year.
The license population of dual towing/VSF employee has grown at a rate of 9%, estimated to be 3,827 in FY 2018 and 5,402 by FY 2022. The dual licenses cost $150 per license. Eliminating this license would result in a loss of $574,050 in fiscal year 2018, growing to a loss of $810,300 by fiscal year 2022. TDLR assumes that once dual licenses are eliminated, and those with a towing operator's license are allowed to work in a vehicle storage facility per the provisions of the bill, licensees will only obtain the towing operator's license, which costs $100 per license. Assuming the same number of licensees, this would yield a gain of $382,700 in fiscal year 2018, increasing to $546,700 in fiscal year 2022.
With the deregulation of the booting industry, TDLR estimates it would requires one fewer full time equivalent employee, yielding a savings to the state of $47,204 per year in wages and employee benefits.
The Department of Motor Vehicles estimates an insignificant revenue gain from the new $10 fee it may receive.
The Office of Court Administration and the State Office of Administrative Hearings anticipate any additional work resulting from the passage of the bill could be reasonably absorbed within current resources.
Local Government Impact
According to the Texas Municipal League, municipalities could be liable for certain towing and storage costs; however, the fiscal impact cannot be determined at this time.
According to the Comptroller of Public Accounts, the fiscal implications from the biennial changes in the fees based on changes in the consumer price index cannot be estimated.
Source Agencies:
212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts, 360 State Office of Administrative Hearings, 452 Department of Licensing and Regulation, 608 Department of Motor Vehicles