OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

sHB-5785

AN ACT CONCERNING INSURANCE AND TESTING REQUIREMENTS FOR HOME IMPROVEMENT CONTRACTORS.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 16 $

FY 17 $

Consumer Protection, Dept.

GF - Cost

260,000

520,000

Comptroller Misc. Accounts (Fringe Benefits)1

GF - Cost

96,625

193,250

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill results in a cost to the state of $356,625 in FY 16 and $713,250 in FY 17 due to the need for additional staffing within the Department of Consumer Protection (DCP). The DCP would require ten new positions to meet the requirements of the bill. This includes the following: License and Application Specialist, Processing Technician (2), Office Assistant (2), Accounts Examiner, Special Investigator, Paralegal, Staff Attorney (2). In FY 16 costs include Personal Services $250,000, Other Expenses $10,000 and Fringe Benefits $96,625. In FY 17 costs include Personal Services $500,000, Other Expenses $20,000 and Fringe Benefits $193,250.

There are approximately 26,000 registered home improvement contractors (HIC's) in Connecticut. Each year there are approximately 3,000 new registrants. The DCP would have to determine if each HIC passed a test and acquired a $1,000,000 liability policy. Noncompliance would result in a compliance meeting potentially followed by a revocation hearing. It is estimated that between ten and 30 percent of HIC applications would result in some type of hearing. Only twenty-five percent of HIC applications are done on-line. The remaining seventy-five percent would need to be hand processed and checked for compliance.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation and the number of applications.

1 The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller. The estimated active employee fringe benefit cost associated with most personnel changes is 38.65% of payroll in FY 16 and FY 17.