LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 25, 2025 TO: Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB11 by Phelan (Relating to occupational licensing reciprocity agreements.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB11, As Introduced: a negative impact of ($949,552) through the biennium ending August 31, 2027. 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 toGeneral Revenue Related Funds2026($457,523)2027($492,029)2028($492,909)2029($493,641)2030($484,389)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromDept Ins Operating Acct36 Probable Savings/(Cost) fromDept Ins Operating Acct36 Change in Number of State Employees from FY 20252026($457,523)$224,593($224,593)6.02027($492,029)$218,897($218,897)6.02028($492,909)$82,496($82,496)5.02029($493,641)$82,496($82,496)5.02030($484,389)$82,496($82,496)5.0 Fiscal AnalysisThe bill would require each licensing authority to maximize occupational licensing reciprocity agreements and identify state laws that prevent a reciprocity agreement with another state.The bill would require rules that establish procedures for a licensing authority to follow to determine whether licensing requirements of another state are substantially equivalent to Texas requirements. If occupational licensing requirements of another state are substantially equivalent to Texas requirements, the licensing authority would be required to implement a reciprocity agreement.The bill would require development of a biennial report to be submitted by each licensing authority to the Legislative Budget Board and the Governor describing the extent where the state's licensing requirements exceed the requirements of other states; describing efforts by the licensing authority to enter into reciprocity agreements with other states; and recommendations for legislative action to increase the number of license reciprocity agreements.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 25, 2025
TO: Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB11 by Phelan (Relating to occupational licensing reciprocity agreements.), As Introduced
TO: Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB11 by Phelan (Relating to occupational licensing reciprocity agreements.), As Introduced
Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures
Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB11 by Phelan (Relating to occupational licensing reciprocity agreements.), As Introduced
HB11 by Phelan (Relating to occupational licensing reciprocity agreements.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB11, As Introduced: a negative impact of ($949,552) through the biennium ending August 31, 2027. 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 HB11, As Introduced: a negative impact of ($949,552) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
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:
2026 ($457,523)
2027 ($492,029)
2028 ($492,909)
2029 ($493,641)
2030 ($484,389)
All Funds, Five-Year Impact:
2026 ($457,523) $224,593 ($224,593) 6.0
2027 ($492,029) $218,897 ($218,897) 6.0
2028 ($492,909) $82,496 ($82,496) 5.0
2029 ($493,641) $82,496 ($82,496) 5.0
2030 ($484,389) $82,496 ($82,496) 5.0
Fiscal Analysis
The bill would require each licensing authority to maximize occupational licensing reciprocity agreements and identify state laws that prevent a reciprocity agreement with another state.The bill would require rules that establish procedures for a licensing authority to follow to determine whether licensing requirements of another state are substantially equivalent to Texas requirements. If occupational licensing requirements of another state are substantially equivalent to Texas requirements, the licensing authority would be required to implement a reciprocity agreement.The bill would require development of a biennial report to be submitted by each licensing authority to the Legislative Budget Board and the Governor describing the extent where the state's licensing requirements exceed the requirements of other states; describing efforts by the licensing authority to enter into reciprocity agreements with other states; and recommendations for legislative action to increase the number of license reciprocity agreements.
The bill would require rules that establish procedures for a licensing authority to follow to determine whether licensing requirements of another state are substantially equivalent to Texas requirements. If occupational licensing requirements of another state are substantially equivalent to Texas requirements, the licensing authority would be required to implement a reciprocity agreement.
The bill would require development of a biennial report to be submitted by each licensing authority to the Legislative Budget Board and the Governor describing the extent where the state's licensing requirements exceed the requirements of other states; describing efforts by the licensing authority to enter into reciprocity agreements with other states; and recommendations for legislative action to increase the number of license reciprocity agreements.
Methodology
This estimate assumes that the Department State Health Services (DSHS) would require 4.0 additional Program Specialist IV full-time equivalent positions (FTE) to research other states' occupational licensing and certification requirements; to develop interest and negotiate with states to develop an agreement with Texas; review current rules and recommendations for amendments; and to develop the biennial report. Estimated salaries, benefits, and related costs for the new FTEs at DSHS total $411,178 in fiscal year 2026 from the General Revenue Fund and $479,205 from the General Revenue Fund in fiscal year 2027. The lower cost in the first fiscal year is attributable to an assumed start date for these positions later in the fiscal year. The agency would require ongoing licensing and data broker services fees related to other states' licensing data of $15,720 in fiscal year 2026 and $12,824 in fiscal year 2027 and one-time staff augmentation costs of $30,625 in fiscal year 2026 for modifications to the existing licensing system to store data from the implementation tasks, including setting up new licensing transactions that expedite reciprocity-related applications, all from the General Revenue Fund.This estimate assumes that the Department of Insurance would require additional staffing resources to implement the provisions of the bill and that any additional appropriated funds would be from the Department of Insurance Operation Account, General Revenue-Dedicated Account No. 36. For the first two years of implementation, the agency anticipates needing 1.0 Attorney FTE to review the current license types in the Insurance Code at a cost of $139,247 in fiscal year 2026 and $136,401 in fiscal year 2027 for salaries, benefits, and operating costs. Additionally, the agency anticipates permanently needing a Program Specialist to assess training and scope of practice of reciprocal programs and continuously monitor reciprocity requirements across other states at a cost of $82,496 each fiscal year with an additional $2,850 in fiscal year 2026 for onboarding costs.Due to the self-leveling nature of the Insurance Operating Account 36, any expenditure increases would be reflected in the annual adjustment of the maintenance tax rates for insurance carriers. Therefore, the overall revenue into the Insurance Operating Account 36 will equal overall expenses.According to the Department of Public Safety (DPS), there would be significant costs related to updating information technology systems and application for programs impacted by an occupational licensing reciprocity agreement. Such updates would be necessary to track and report any businesses or individuals performing regulated activities and operating under a reciprocity agreement. DPS identified four licensing systems that would require updates if reciprocity agreements were reached: Texas Online Private Security, Vehicle Inspection Connection, Texas Online Metals, Compassionate Use Registry of Texas. The fiscal implications of the bill for DPS cannot be determined because it is unknown which occupational licenses would meet the conditions of a reciprocity agreement and would therefore require information technology upgrades.Analysis of responses by the Department of Information Resources, Real Estate Commission, Department of Licensing and Regulation, Board of Plumbing Examiners, Board of Public Accountancy, Board of Architectural Examiners, Board of Professional Engineers and Land Surveyors, Texas Racing Commission, Texas Medical Board, Board of Dental Examiners, Texas Board of Nursing, Behavioral Health Executive Council, Board of Pharmacy, Health and Human Services Commission, and Board of Veterinary Medical Examiners, indicated that any costs associated with the bill could be absorbed within existing resources.
Technology
Information technology costs associated with new FTEs would be minimal. DSHS would require licensing system modifications and ongoing licensing and data broker services fees.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 313 Department of Information Resources, 329 Real Estate Commission, 405 Department of Public Safety, 452 Department of Licensing and Regulation, 454 Department of Insurance, 456 Board of Plumbing Examiners, 457 Board of Public Accountancy, 459 Board of Architectural Examiners, 460 Board of Professional Engineers and Land Surveyors, 476 Racing Commission, 503 Texas Medical Board, 504 Texas State Board of Dental Examiners, 507 Texas Board of Nursing, 510 Behavioral Health Executive Council, 515 Board of Pharmacy, 529 Health and Human Services Commission, 537 State Health Services, Department of, 578 Board of Veterinary Medical Examiners
313 Department of Information Resources, 329 Real Estate Commission, 405 Department of Public Safety, 452 Department of Licensing and Regulation, 454 Department of Insurance, 456 Board of Plumbing Examiners, 457 Board of Public Accountancy, 459 Board of Architectural Examiners, 460 Board of Professional Engineers and Land Surveyors, 476 Racing Commission, 503 Texas Medical Board, 504 Texas State Board of Dental Examiners, 507 Texas Board of Nursing, 510 Behavioral Health Executive Council, 515 Board of Pharmacy, 529 Health and Human Services Commission, 537 State Health Services, Department of, 578 Board of Veterinary Medical Examiners
LBB Staff: b > td > JMc, TUf, ER, APA, NV, KVEL, BFa
JMc, TUf, ER, APA, NV, KVEL, BFa