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:SB1457 by Harris (Relating to administrative procedures for title insurance hearings, licensing, and enforcement.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1457, As Introduced: an impact of $0 through the biennium ending August 31, 2013. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
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:SB1457 by Harris (Relating to administrative procedures for title insurance hearings, licensing, and enforcement.), As Introduced
TO: Honorable John Carona, Chair, Senate Committee on Business & Commerce
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB1457 by Harris (Relating to administrative procedures for title insurance hearings, licensing, and enforcement.), As Introduced
Honorable John Carona, Chair, Senate Committee on Business & Commerce
Honorable John Carona, Chair, Senate Committee on Business & Commerce
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB1457 by Harris (Relating to administrative procedures for title insurance hearings, licensing, and enforcement.), As Introduced
SB1457 by Harris (Relating to administrative procedures for title insurance hearings, licensing, and enforcement.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1457, As Introduced: an impact of $0 through the biennium ending August 31, 2013. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1457, As Introduced: an impact of $0 through the biennium ending August 31, 2013.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 $0 2013 $0 2014 $0 2015 $0 2016 $0
2012 $0
2013 $0
2014 $0
2015 $0
2016 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain fromInsurance Maint Tax Fees8042 Probable (Cost) fromInsurance Maint Tax Fees8042 Change in Number of State Employees from FY 2011 2012 $467,327 ($467,327) 5.5 2013 $506,798 ($506,798) 5.5 2014 $435,095 ($435,095) 5.5 2015 $506,798 ($506,798) 5.5 2016 $435,095 ($435,095) 5.5
Fiscal Year Probable Revenue Gain fromInsurance Maint Tax Fees8042 Probable (Cost) fromInsurance Maint Tax Fees8042 Change in Number of State Employees from FY 2011 2012 $467,327 ($467,327) 5.5 2013 $506,798 ($506,798) 5.5 2014 $435,095 ($435,095) 5.5 2015 $506,798 ($506,798) 5.5 2016 $435,095 ($435,095) 5.5
2012 $467,327 ($467,327) 5.5
2013 $506,798 ($506,798) 5.5
2014 $435,095 ($435,095) 5.5
2015 $506,798 ($506,798) 5.5
2016 $435,095 ($435,095) 5.5
Fiscal Analysis
The bill would amend the Insurance Code relating to administrative procedures for title insurance hearings, licensing, and enforcement. The bill would amend the anti-rebating subchapter of the Texas Title Insurance Act by striking the word "legal" as a qualifier of permissible promotional and educational activities. The bill would modify procedures and timing for handling and determination of license applications for title agents and escrow officers and establish requirements for notice and pursuit of disciplinary actions. The bill would modify procedures and timing for adoption and implementation of changes to title insurance statistical reporting. The bill would modify what persons may request a title insurance premium rate hearing, establish a new timing and procedural requirements associated with the rate hearing, and would includes a mechanism to petition a district court adopt a rate. The bill would amend title insurance biennial hearing requirement, amend the party admission statute for certain title insurance rate hearings, and amend notice requirements for certain title insurance rate and rule hearings. The bill would take effect immediately upon receiving a two-thirds majority vote in each house. If the bill does not receive a two-thirds vote in each house, the bill would take effect September 1, 2011.
Methodology
Based on the analysis by the Texas Department of Insurance (TDI), implementation of the bill require 5.5 FTEs in each fiscal year due to the increase the workload due to additional title insurance enforcement cases and the increased frequency of rate hearings. Based on the analysis by TDI, the 5.5 FTEs would cost $320,544 for salaries and wages with associated benefit costs of $89,304, travel costs of $12,500, telephone and consumable costs of $11,100, and other operating expenses of $1,350 each fiscal year from General Revenue Insurance Maintenance Tax. One-time equipment are anticipated to be $32,529 in fiscal year 2012 and additional operating expenses of $297 will be incurred in fiscal year 2014 and 2016 due to additional reference materials that are updated every two years. Additionally, expert witnesses will be required the additional rate cases at a cost of $72,000 in fiscal year 2013 and 2015. Since insurance maintenance tax is self-leveling, this analysis assumes that the costs to implement this bill would come from fund balances or the maintenance tax would be set to recover a higher level of revenue.
Technology
The bill is anticipated to have a technology impact of $7,350 in fiscal year 2012.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Department of Insurance
454 Department of Insurance
LBB Staff: JOB, AG, MW, CH
JOB, AG, MW, CH