COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.: 1067-11

Bill No.: Truly Agreed To and Finally Passed CCS for SS for SCS for HB 327

Subject: Transportation Dept., Roads and Highways, Property, Real and Personal; Revenue Dept., Motor Vehicles, Motor Carriers, Drunk Driving/ Boating, Insurance-Automobile, Licensing- Motor Vehicle

Type: Original

Date: May 29, 2003

FISCAL SUMMARY

*Unknown not expected to exceed $100,000.

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 20 pages.

* Unknown not expected to exceed $100,000

ASSUMPTION

Section 137.298

This section of the proposal has provisions for intergovernmental revenue collection.

No fiscal impact was noted by responding agencies.

Section 144.062

This section has provisions for sales tax exemption for MoDOT.

Officials with the Department of Transportation (MoDOT) assume this legislation exempts contractors from paying sales tax on materials used in MoDOT projects. Section 144.062, RSMo currently exempts sales of personal property and materials used for the purpose of constructing, repairing, or remodeling facilities for counties, other political subdivisions and certain exempt entities from the state sales tax. This bill would add the Department of Transportation as an exempt entity. Therefore, materials could be purchased by a contractor for a MoDOT project on a tax-exempt basis.

MoDOT further assumes the sales tax which contractors currently pay on materials purchased for MoDOT projects is included in the project cost which is paid by MoDOT. Assuming that contractors would reduce their project costs due to the ability to purchase materials on a tax-exempt basis, this bill would result in a cost savings for MoDOT.

The proposed legislation would result in cost savings beyond the three-year period addressed by this fiscal note. Based on the 2003-2007 Statewide Transportation Improvement Program (STIP); 1/2 construction contracts labor, 1/2 materials; August 31, 2003 effective date; and sales tax rate of 4.225%, the cost savings were calculated as follows:

Fiscal Year STIP Awards % Materials Materials Cost Sales Tax Rate Cost Savings 2004 $410,000,000 50% $205,000,000 4.225% $8,661,250 2005 $510,000,000 50% $255,000,000 4.225% $10,773,750 2006 $530,000,000 50% $265,000,000 4.225% $11,196,250 2007 $570,000,000 50% $285,000,000 4.225% $12,041,250 2008 $550,000,000 50% $275,000,000 4.225% $11,618,750

ASSUMPTION (continued)

Oversight assumes since this bill creates an additional sales tax exemption which could reduce revenue to the state and local governments, this legislation would have minimal administrative impact on DOR and any costs could be absorbed.

Oversight calculated the revenue impact to include an impact to cities and counties. Oversight assumes the revenue impact for FY04 would be for ten months. This proposal would create a savings of $9.8 million in FY04, $14.6 million in FY05 and $15.2 million in FY06 for the Road Fund. Combined losses in the General Revenue Fund, School District Trust Fund, Conservation Fund, Parks and Soils Fund and local city/county funds equal the savings in the Road Fund for this proposal.

Sections 226.525 and 226.535

These sections have provisions for making certain school eligible for tourism signs.

No fiscal impact was noted by responding agencies.

Section 227.120

This section of the proposal has provisions for right of way considerations.

Officials with MoDOT assume this provision could require jurors to consider loss of access when awarding condemnation damages. They state that this is contrary to current law and practice in which, the fair market value is considered before and after the taking. Typically, particularly in urban areas, damages awarded for loss of access represents a large portion of the ultimate costs of acquiring the right of way for completion of highway projects. Recent awards in the St. Louis area have resulted in the right of way cost increasing from $1,000,000 to $5,000,000, on a single commercial tract

MoDOT further assumes they could also direct appraisers, commissioners, and jurors to "consider" loss of direct access, including the prohibition of making right or left turns into or out of a property, in assessing damages. This expansion of the parameters for inclusion of damages is anticipated to lead to greater condemnation awards. The fiscal impact on MoDOT would be significant, however the amount is unknown.

Oversight assumes the unknown negative fiscal impact is speculation on the potential secondary effects of this section of the proposal and no direct fiscal impact was noted.

ASSUMPTION (continued)

Section 227.338

This section has provisions to rename a portion of the highway.

Officials with MoDOT note they could need $866 for applicable signs.

FY 04

Cost of sign ($866)

Sections 238.207, 238.210, 238.215, 238.220, 238.222, 238.235, 238.236

These sections of the proposal address the property separated by easements, allow two or more local transportation authorities to form a transportation development district and allow the alternatively formed development district to impose a sales tax contingent upon voter approval.

Officials with the Department of Revenue (DOR) assume these sections could authorize political subdivisions to create a transportation development district. However, their agency assumes the language in Section 238.215 is not clear as to who is to administer and collect the tax created for funding the transportation district. If the administration of the tax (Section 238.215) is to be handled by local authorities, this legislation is not in accordance with the Streamline Sales Tax Project (SSTP). Therefore, DOR assumes the responsibility of the collections of the district tax (Section 238.215). DOR assumes 692 hours of programming could be necessary, resulting in a total cost of $23,085.

Oversight notes that this proposal does not name DOR the collector of this local sales tax and additional program changes would not be needed. With further information from DOR,

Oversight notes that SSTP is not a federal mandate.

Oversight further assumes these sections for the proposal are enabling in nature and provide for an alternative way to create and fund a Transportation Development District. This does not mandate an imposition of a tax. Voter approval would be required before any tax could be imposed. Oversight assumes no state or local fiscal impact.

Section 292.602

This section could change the Director of the Emergency Response Team.

No fiscal impact was noted by responding agencies.

ASSUMPTION (continued)

Sections 301.026

This section has provisions for DOR to not renew a license when a driver has failed to pay local vehicle related fines and fees.

Officials with DOR assume this section proposes that their agency not issue or renew a motor vehicle registration as long as the owner of the motor vehicle owes outstanding vehicle-related fees or fines to a county, city or township within the state. This legislation is limited to violations within the City of St. Louis.

DOR further states that based on conversations with the City of St. Louis, approximately 30,000 violations will be reported annually to DOR.

Their agency could require overtime programming, two Telephone Information Operators and two Office Support Assistants - Keyboarding (Clerk Typist II) and associated costs for these FTE for equipment and expenses. In addition, the Motor Vehicle Bureau could also require associated forms and postage for 30,000 notices and approximately 15,000 reinstatements.

FY 04

Reinstatement fees (12,500 issued*$20 fee) $25,000

Programming and Testing Cost ($40,000)

Personal services- Salaries (4 FTE) ($76,814)

Fringe Benefits ($31,087)

Expenses ($182,472)

Forms and Postage (Unknown)

FY 05

Reinstatement fees (15,000 issued*$20 fee) $30,000

Personal Services-Salaries ($94,481)

Fringe Benefits ($38,236)

Expenses ($10,514)

Forms and Postage (Unknown)

ASSUMPTION (continued)

FY 06

Reinstatement fees (15,000 issued*$20 fee) $30,000

Personal Services-Salaries ($96,842)

Fringe Benefits ($39,192)

Expenses ($10,830)

Forms and Postage (Unknown)

301.010

This section allows certain all terrain vehicles to carry more than one passenger.

Minimal fiscal impact was noted by responding agencies.

301.069

This section has definition changes for driveaway plates.

Officials with DOR assume that the section dealing in biennial registration for the Driveaway plates could have fiscal impact on their agency. The biennial registration could cause a shift in the current fee income by increasing the amounts for FY04 by 50% and decreasing the amounts in FY 05 by 50%. No additional income is anticipated, only a shift in collections.

DOR further assumes their agency could incur cost for programming, procedural changes and storage at the State Data Center.

Officials with MoDOT assume a driveaway operation is defined in the statute as the movement of motor vehicles or trailers by a person other than a dealer over a public highway for the purpose of delivery either before or after sale. The annual license fee for a driveaway operation is established by Section 301.069, RSMo at $44.50. The legislation would expand the definition of a driveaway operation to include the movement of motor vehicles or trailers by a person other than a dealer over a public highway for the purpose of transporting vehicles from one place to another

With information from DOR, Oversight assumes the language is not broad enough to include other vehicle registrations.

ASSUMPTION (continued)

FY 04

Procedural changes and mailings ($530)

Programming Salaries ($2,971)

Storage ($1,000)

Total ($4,501)

FY 05

Revenue shift for biennial driveaway $38,660

FY 06

Postage savings for mailing renewals $8,400

Section 302.272

This section of the proposal could require applicants for school bus drivers to have a background check completed by the Highway Patrol.

From a similar proposal, officials with DOR assume this section could require applicants for school bus permits to submit fingerprints when applying for a school bus operator's permit. DOR assumes their agency could have cost for form changes. These forms would be changed to provide information regarding the requirement. There could also be cost for programming and testing of the school bus applicant system and the MTAS fee collection system in order to accommodate the new requirements for the enhanced background checks.

Officials with DOR defer the revenue impact for additional fee income for the background checks to the Department of Public Safety (DPS).

From a similar proposal, officials with the DPS assume the Patrol's Information System Division could have an increase in the number of additions and modifications at the State Data Center based on the number of checks created by the proposed legislation. It is estimated that the number of fingerprint backgrounds would increase by 9,150 in FY04, and then by 2,013 for the following years. This would require 9,150 applicant/participant records be created and modified in the first year, and 2,013 for each year after. Based on information from DPS, Oversight assumes the additional cost would be minimal and could be absorbed by DPS.

ASSUMPTION (continued)

At the time this fiscal note is prepared, the Patrol's Information Systems Division is using the best estimates it has available for State Data Center charges, but has also begun a study of the internal processing of the State Data Center. The Patrol will notify Oversight if completion of this study indicates that State Data Center estimates used in the above calculations were inaccurate.

FY 04

9,150 additional checks submitted *$38 fee $347,700

Fee amount passed through to FBI ($219,600)

Form changes for DOR ($1,000)

Programming for fingerprint applications (100 hours*$25) ($2,500)

Programming for fingerprint applications (160 hours*$23) ($3,680)

Program testing for fingerprint applications (80 hours*$20) ($1,600)

Programming for MTAS fee collection (80*$25) ($2,000)

Testing for MTAS fee collection (720*$20) ($14,400)

State Data Center ($615)

Total $102,305

FY 05, 06

2,013 annual checks submitted *38 fee $76,494

Fee amount passed through to FBI ($48,312)

State Data Center ($135) and ($144 for FY 06)

Total $28,047

Section 302.302

This section of the proposal has revisions to the number of points assessed when the driver is under the age of 18 and commits certain violations.

Officials with DOR assume their agency could absorb the cost associated with these provisions and no additional revenue was noted.

ASSUMPTION (continued)

Sections 302.540

This section proposes changes to the definition of "gross vehicle weight rating".

Officials with DOR assume this could have a minimal impact on the number of persons receiving a commercial drivers license. Oversight assumes that DOR could absorb the minimal loss of revenue and does not include this loss in the summary.

Section 302.700, 302.725, 302.726, 302.755, 302.735 302.760

These sections propose changes to the Uniform Commercial Driver's Act.

In a revised response, MoDOT states that the changes in Section 302.225 and 302.700 to 755 would keep Missouri in compliance with federal commercial driver's license (CDL) law if enacted by September 30, 2005. However, the additions to Section 302.775, RSMo, which exempts from the CDL law those on official department or agency business will not be in compliance with federal laws. Therefore, MoDOT assumes that federal highway funds could be withheld beginning in federal fiscal year 2006, which begins October 1, 2005, pursuant to 49 U.S.C 31314. The FY02 total for the National Highway System, Interstate Maintenance and Surface Transpiration Program funds was $436 million. Therefore the negative fiscal impact for FY06 would be $22 million ($436 X 5 percent).

Oversight assumes the provisions which could impact federal funding would be addressed in subsequent proposals.

Officials with DOR assume these sections could require their agency to change numerous procedures and forms. Additional workloads could occur primarily in the Conviction Processing Area and the related telephone area. DOR assumes the additional workloads could be absorbed in the current processing groups and no additional FTE is requested. This proposal could require changes to the disqualification notices, letters generated by an automated correspondence generation system (CTG), procedure manuals, CDL manual and law enforcement manual. It could also require additional training of our staff. Since the proposed legislation has an implementation date of September 30, 2005, these changes can be accomplished within the time frame allowed.

ASSUMPTION (continued)

Officials with DOR-Information Technology Bureau (ITB) assume this proposal could require programming to create new disqualification actions, create new convictions, create new disqualification notices of loss and modify various.

FY05- Cost

Internal Systems testing (800 hours*$20) ($16,000)

CAB Internal testing (800 hours*$20) ($16,000)

Internal Programming (1760*various) ($42,080)

Contracted Programming(80*$100) ($8,000)

Total Cost ($82,080)

304.015

This section of the proposal could prevent certain trucks from being driven in the left lane.

The estimated fiscal impact of this legislation to MoDOT is $430,000. It is estimated that 950 new signs will need to be installed for the left lane provision for trucks. Labor cost is not included in these figures, it will be absorbed by the existing staff.

FY 04

Sign cost ($430,000)

304.021

This section classifies tow trucks as emergency vehicles for certain sections.

No fiscal impact was noted.

304.029

This section has provisions that could allow low speed vehicles to be operated on some highways.

Officials with the DOR assume this proposal would allow drivers of low speed vehicles to operate on some highways. DOR cannot estimate the number of low speed vehicles which could be registered.

ASSUMPTION (continued)

DOR further assume they could incur cost for procedure modifications and the additional costs to title and register those vehicles that are not currently being titled and registered. The agency assumes it could require FTE and associated expenses for these FTE.

DOR further assumes they could incur programming costs to modify the existing registration and fee systems. The low speed vehicles do not always contain the same information and information formatting as normal motor vehicles; therefore, these programs will have to be modified to handle unique information from the low speed vehicles. The cost incurred for these modifications is unknown; however, the cost for programming is anticipated to be less than $20,000.

Oversight assumes there could be income and cost associated with the unknown number of applicants for low speed vehicle registration, however Oversight assumes that DOR could handle the request with existing personnel.

FY 04

Low Speed registrations Unknown less than $100,000

Forms and Procedures (Unknown)

Plates and Tabs (Unknown)

Programming (Unknown)

Note: Unknown total cost not expected to exceed $100,000

FY 05 and 06

Low Speed registrations Unknown less than $100,000

304.677

This section requires drivers to use caution in certain roadway conditions.

No fiscal impact was noted by the responding agencies.

307.125 and 307.127

This section has provisions for animal drawn vehicles.

No fiscal impact was noted by the responding agencies.

ASSUMPTION (continued)

307.177

This section of the proposal has provisions for hazardous materials.

No fiscal impact was noted by the responding agencies.

389.610

This section has provisions for rail crossings.

No fiscal impact was noted by responding agencies.

Section 537.038

This section has provisions relating to collisions with cyclists or pedestrians.

No fiscal impact was noted by the responding agencies.

Section 565.070

This section has provisions for intentionally colliding with a pedestrian.

From a similar proposal, CTS noted that they anticipate few cases in this class and no fiscal impact was noted.

Section 577.023

This section makes certain technical changes and no cost was indicated.

Section 302.304, 191.831, 577.041, 577.049, 577.520

Officials with the Department of Mental Health (DMH) state the proposed legislation permits payment of supplemental fees to the Department of Mental Health Earnings Fund (MHEF) of up to $200 as compared to the current supplemental fee of $60. Based on collecting 98% of the fees from an estimated 29,143 persons, the estimated required supplemental fee is currently $125. Therefore, the estimate of the fiscal impact to the MHEF is $1,856,409

ASSUMPTION (continued)

The dollar amount of Health Initiatives Fund funding for the Substance Abuse Traffic Offender Program (SATOP) to be removed is $1,365,680 for program costs.

FY 04, 05 and 06

See summary for fiscal impact

Officials with the Secretary of State (SOS) assume DOR, DPS and MoDOT could promulgate rules to implement this bill. These rules would be published in both the Missouri Register and the Code of State Regulations. Based on experience with other divisions, the rules, regulations and forms issued by the Department of Revenue could require as many as 72 pages in the Code of State Regulations. For any given rule, roughly half again as many pages are published in the Missouri Register as in the Code because of cost statements, fiscal notes and the like are not published in the Code. These costs are estimated. The estimated cost of a page in the Missouri Register is $23.00 and the estimated cost of a page in the Code of State Regulations is $27.00. [(72 x $27) + (98 x $23) = $4,198] The actual cost could be more or less than the numbers given. The impact of this legislation in future years in unknown and depends upon the frequency and length of rules filed, amended, rescinded or withdrawn.

Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.

This proposal could increase state revenue with additional background check fees from bus drivers, registration of low speed vehicles and increase fees for SATOP.

* Unknown not expected to exceed $100,000.

FISCAL IMPACT - Small Business

The section of the proposal which could require background checks for school bus drivers could have a cost to school bus contract companies who would pay a fee for this check.

The section which exempts MoDOT suppliers from sales tax could impact small business.

DESCRIPTION

This proposal has provisions for right of way and condemnation, local transportation districts, bus driver background checks, low speed vehicles and several technical changes.

This proposal revises provisions pertaining to the Substance Abuse Traffic Offender Program.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Transportation

Department of Revenue

Department of Public Safety

Department of Elementary and Secondary Education

Department of Social Services

Office of State Courts Administrator

Secretary of State

Mickey Wilson, CPA

Director

May 29, 2003