Regulatory Fees Examined by Finance Committee

As part of its work between legislative sessions, the Senate Finance Committee is examining how much state regulatory agencies charge their clients. The aim of this inquiry is to determine how that income affects the overall state budget. Today, the committee also took a look at the operations of the regulatory agencies.

Rick Travis, Legislative Budget Board analyst, described how the regulatory collection system works and the effects of recent legislation on the agencies that collect those fees.

Jerry Walker of the Board of Medical Examiners, described not only their fees, but said they had dramatically increased the number of licenses they had pulled this year. When Chairman Steve Ogden asked, Walker replied that the number was approximately ten out of two thousand cases that merited investigation. Senator Gonzalo Barrientos said that far too many physicians with suspended licenses were still practicing, especially in the Houston area.

Katherine Thomas from the Board of Nurse Examiners covered several topics, but also spoke about foreign nurses coming into Texas for work. She said the biggest challenge that institutions have with foreign employees is not their qualifications, but rather cultural barriers, and that when a foreign nurse does not meet state standards, they are treated exactly the same as any U.S. citizen.

The Texas Department of Licensing and Regulation reported that it had reduced its budget as long ago as the 2000 fiscal year. William Kuntz reported that it was successful in working though that problem, but their people are not able to travel as much as is needed.

The Department of Banking reported that they are a revenue-neutral agency, that they don't charge any more than their cost of doing business. Stephanie Newberg told the committee that all fees are published so that their clients know what they'll be paying. Regarding regulation, the committee was told that the Department of Banking had some authority over out-of-state banks, but that consumer complaints as a rule were sent to the bank's home state.

Commissioner Jose Montemayor of the Texas Department of Insurance provided the committee with a report on how his department was funded. He said that along with appropriations from the Legislature and user fees, the office also gets a small amount of federal funding. It collects enough to operate, but not enough to create a surplus.

Also scheduled to testify today was Lane Lanford, Executive Director of the Public Utility Commission, who said that penalties and fees constitute a part of his agency's income, but that some of the penalties are currently set so low that it's easier for some companies to pay the penalties than to make changes in the way they do business.

The Senate Finance Committee is chaired by Senator Steve Ogden. Members include Senators Kip Averitt, Gonzalo Barrientos, Kim Brimer, Robert Duncan, Kyle Janek, Jane Nelson, Florence Shapiro, Eliot Shapleigh, Todd Staples, Royce West, John Whitmire and Tommy Williams. The Committee recessed with its next meeting scheduled for tomorrow, April 13, 2004 at 9:00 A.M.

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