Honorable Eddie Lucio III, Chair, House Committee on Insurance
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB2289 by Ortega (relating to the regulation of amusement rides by the Texas Department of Licensing and Regulation, including the creation of the amusement ride regulation advisory board; providing authority to increase a fee.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB2289, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2021.
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
2020
$0
2021
$0
2022
$117,603
2023
$148,833
2024
$148,833
Fiscal Year
Probable Revenue Gain from General Revenue Fund 1
Probable Revenue (Loss) from Dept Ins Operating Acct 36
Probable (Cost) from General Revenue Fund 1
Probable Savings from Dept Ins Operating Acct 36
2020
$0
$0
$0
$0
2021
$0
$0
$0
$0
2022
$420,000
($420,000)
($302,397)
$255,167
2023
$420,000
($420,000)
($271,167)
$255,167
2024
$420,000
($420,000)
($271,167)
$255,167
Fiscal Analysis
The bill would amend the Occupations Code transferring the regulation of amusement rides from the Texas Department of Insurance (TDI) to the Texas Department of Licensing and Regulation (TDLR). Effective September 1, 2019, the bill would require TDI and TDLR to enter into a memorandum of understanding to identify the applicable powers and duties that are transferred between the two agencies and establish a plan for the transfer. The transfer would take effect on September 1, 2021.
Methodology
Although the bill authorizes TDLR to change fees after consultation with the amusement ride advisory board, this analysis assumes the bill's provisions and the transfer of the regulation of the amusement ride program from TDI to TDLR would not have an effect on the revenue collected for the program. The Comptroller's Biennial Revenue Estimate for the amusement ride regulation revenue is projected at $420,000 in fiscal year 2021, therefore this analysis assumes the revenue will remain at that level in fiscal year 2022 and beyond. This analysis assumes a revenue loss to the TDI Operating Fund 36 and an equal revenue gain to the General Revenue Fund beginning in fiscal year 2022. Due to the self-leveling nature of the TDI operating fund, this analysis assumes that TDI would adjust the assessment of the maintenance tax to account for the revenue loss and cost savings resulting from the implementation of the bill. The adjustment in the maintenance taxes is anticipated to be insignificant and is excluded from the tables above.
TDI allocates 5.0 full-time-equivalent (FTE) positions for administering the amusement ride program at an annual cost of $255,167 per fiscal year, including all salaries, personnel costs, and wage benefits. Implementation of the bill would result in a cost savings of an equal amount to the TDI Operating Account Fund 36 and a reduction of 5.0 FTEs beginning in fiscal year 2022. This analysis assumes TDLR would receive an additional 5.0 FTE positions at the same cost per fiscal year including all salaries, personnel costs, and wage benefits. Additionally, TDLR would require $31,230 in start-up costs for equipment for the FTEs in fiscal year 2022. TDLR reports the advisory board could be established and maintained with existing resources. TDLR also estimates approximately 8,000 amusement rides would require the compliance sticker at a cost of approximately $16,000 per year. The total costs to the General Revenue Fund for implementing the bill's provisions at TDLR would be approximately $302,397 in fiscal year 2022 and $271,167 each fiscal year thereafter.
Technology
This analysis estimates a total one-time technology cost of $8,230 in fiscal year 2022 for computers required to implement the provisions of the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
452 Department of Licensing and Regulation, 454 Department of Insurance