COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.: 1497-06

Bill No.: Truly Agreed To and Finally Passed SS for SCS for HB 598

Subject: Revenue Dept.; Licenses-Motor Vehicle; Disabilities; Motor Vehicles

Type: Original

Date: May 22, 2003

FISCAL SUMMARY

* Includes a revenue shift

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 17 pages.

*Includes a revenue shift.

ASSUMPTION

Officials with the Department of Public Safety, State Treasurer's Office and Office of State Courts Administrator assume this proposal would have no fiscal impact on their agencies.

41.033

This section could create the 'Antiterrorism Fund.'

No fiscal impact was noted by responding agencies.

Oversight notes that Homeland Security could see additional funding from this source.

ASSUMPTION (continued)

301.141, 301.142 and 304.601

These sections of the proposal have provisions for handicap placards and biennial registration.

Officials with the Department of Revenue (DOR) assume this section includes:

-Any physician or health care practitioner who gives a statement to a person who does not meet one of the statutory conditions, if no condition is given or who signs for a condition that is outside the scope of their license is guilty of a class A misdemeanor.

-Fraudulent procurement or use of disabled person plate or placard is a class A misdemeanor.

-Any physician or other health care practitioner who issues a certificate to enable someone to receive a disabled plate or placard out side the scope of such health care provider's license is guilty of a class A misdemeanor.

-Creates a definition of "Other authorized health care practitioner", includes only chiropractors licensed pursuant to chapter 331, RSMo, podiatrists licensed pursuant to chapter 330, RSMo, and optometrists licensed pursuant to chapter 336, RSMo;

-Certificate of disability must be signed by physician or other authorized health care practitioner.

-A physician or other health care practitioner who issues a certificate to enable someone to receive a disabled plate or placard must maintain documentation of issuing certificate.

-Allows the DOR to issue not more than two disabled placards, for good cause shown, as set by rule.

-Indicates that placards are to be used in vehicles that do not bear the handicap symbol on the license plate and the placard must not be hung from the mirror during operation.

-Disabled placards could be issued for a two-year period of time and allows the director to stagger the expiration dates of disabled placards.

-Requires the placard to only be renewable by the person or entity to which the placard was originally issued and it is not transferable.

-Requires the director to issue a registration certificate.

-Requires the director to provide information explaining disabled plates/placards and the penalties for mis-use.

-Beginning July 1, 2004, requires a current physician's statement issued within ninety (90) days to issue or renew disabled plates or placards. Thereafter every new applicant is required to present a new physician's statement.

-Requires the director to retain all physicians' statements and all other documents received in connection with a person's application for disabled license plates and disabled windshield placards.

ASSUMPTION (continued)

-Requires the director to cancel disable plates and placards if an applicant fails to furnish the new physician's statement.

-Makes the failure to return disabled plates or placards upon death of the person who has disabled plates or placards by the decedent's representative or other person who may come into or otherwise take possession of the plates a class A misdemeanor

Officials with DOR assume there could be cost in FY 05 to microfilm 438,213 transactions.

Additionally in FY06, DOR estimates there could be approximately 122,181 new transactions that would require physician's statements and any accompanying documents to be microfilmed. Additional cost could also be incurred for procedure changes, envelopes and postage to ensure the field is adequately notified of the proposed changes.

DOR could also require programming modifications to the General Registration System, renewal pulls, disabled placards system, and the Uniformed Field Office System (UFOS). ITB estimates they could incur costs in the amount of $13,480 for FY05 to complete the modifications for the requirement physician statements every four years. In addition, the State Data Center has indicated that to store this data it could require approximate $1,000 annually.

This section could see a revenue shift for the biennial registration for placards and a cost savings for mailings in FY 06.

FY 04

Procedural Changes ($530)

Programming for physician statements ($13,480)

Storage ($1,000)

Total ($15,010)

FY 05

Overtime hours for microfilming ($11,925)

Biennial Registration (revenue shift) $314,266

Storage ($1,000)

Total $301,341

FY 06

Overtime for microfilming ($3,320)

Savings for mailings of annual placards $105,279

Storage ($1,000)

Total $100,959

ASSUMPTION (continued)

Sections 301.130, 301.134, 301.144, 301.456, 301.3106, 301.3122, 301.3098, 301.3130, 301.3139, 301.3140, 301.3141, 301.3144, 301.3123, 301.3124, 301.3125, 301.3126, 301.3128, 301.3129, 301.3132, 301.3137, 301.3999 and 301.3145

These sections have provisions for special license plates, special funds and additional weight registrations.

Officials with DOR assume the provisions of these sections create seventeen new license plate types to be known as Missouri State Society Daughters of the American Revolution, Former Missouri Legislator, Friends of Kids with Cancer, Fight Terrorism, Special Olympics Missouri, Be An Organ Donor, Missouri Foxtrotting Horse Breed Association, Concerns of Police Survivors, Firefighters Memorial, Missouri Association of State Troopers Emergency Relief Society, Missouri Society of Professional Engineers, Alpha Phi Omega, Boy Scouts, Girl Scouts, Girl Scouts Gold Medallion Award, Camp Quality of Missouri, National Rifle Association and U.S. Vet. This proposal also creates new categories in the existing specialty plates by increasing the weight limit to 18,000 pounds (including silver star) and requires Amateur Radio to in the place of SHOW-ME STATE.

DOR assumes revenue could be generated from the $15 annual special plate fee. DOR could incur cost for 566 hours of overtime, forms, procedures, postage and plates/tabs. Their agency could also require 180 hours of overtime programming to modify the special plate reservation program, the renewal pull program for fees and the Uniform Field Office System (UFOS). Programming overtime costs are estimated to be $4,221. In addition, the State Data Center will require $500 storage costs annually for these plate records.

Officials with the Department of Health and Senior Services (DHSS) assume this proposal could have a modest positive effect on the Organ Donor Fund due to contributions by persons with the Organ Donor special plate. DHSS assumes the potential funds deposited into the Organ Donor Fund would be $2,500-$6,250 annually. For fiscal note purposes, Oversight will use the estimates provided by DOR for the Organ Donor and Antiterrorism Fund.

ASSUMPTION (continued)

FY 04 (Ten months) Income and Cost

License Plate Fees (9,076*$15) $136,140

Overtime salaries (566 hours) ($8,774)

Procedures, Forms (including plate designs) ($7,307)

Postage ($61,271)

Plates and Tabs ($59,130)

Organ Donor Contributions $2,000

Anti Terrorism Contributions $2,000

Programming ($4,221)

Storage ($500)

Total $1,063

FY 05 and FY 06 Income

License Plate Fees (9,476*$15) $142,140

Organ Donor Contribution $2,500

Anti Terrorism Fund Contribution $2,500

Storage ($500)

Total $146,640

Section 301.463

This section of the proposal has provisions for the Children's Trust Fund.

Officials with DOR assume this section could allow their agency to collect a logo use fee for the Children's Trust Fund special plate. This section requires the director of revenue to issue sample Children's Trust Fund license plates to all license offices for prominent display along with literature prepared by the director or the children's trust fund describing the purpose of the fund. DOR further assumes this section allows the general assembly to appropriate moneys annually from the fund to DOR to offset costs incurred by the director of revenue.

FY 04 (10 months)

Sample Plates ($8*185) ($1,480)

Fund appropriations $1,480

Literature provided by Children's Trust Fund Board.

ASSUMPTION (continued)

Section 301.132

This section of the proposal has provisions for Street Rods and creates a Custom vehicle.

Officials with DOR assume this section of the proposal could change the definition of Street

Rod. There are approximately 163,696 motor vehicles currently on the General Registration System (GRS) with a model year of 1949 through 1978 that would qualify as custom vehicle. DOR cannot determine the number of owners that would apply as a custom vehicle. However, 5% (8,185) were used for estimation purposes.

DOR-ITB could incur programming cost to make modifications to the General Registration System (GRS) and all associated systems, including the Missouri Transportation Accounting System. Programming costs for these systems are estimated at $7,924. In addition, the State Data Center has indicated that this proposal could require approximately $500 annually for computer storage costs associated with these changes.

FY 04 Ten Months

6,821 Custom vehicle registrations and $15 annual fee $102,315

Programming cost ($7,924)

Storage ($500)

Total $93,891

FY 05 and 06

8,185 Custom vehicle registrations and $15 annual fee $122,775

Storage ($500)

Total $122,275

307.366, 643.315, 301.147, 643.310

These sections of the proposal have provisions for emissions and biennial testing in Franklin County.

ASSUMPTION (continued)

Officials with Department of Transportation (MoDOT) assume these sections prohibit failure of emissions testing unless vehicles fail both OBD and tailpipe testing. Federal law requires Missouri to implement OBD as part of the Inspection and Maintenance (IM) program. Thus, this amendment will make Missouri's IM program ineligible under the Clean Air Act and unless Missouri comes up with a comparable clean air measure the Environmental Protection Agency (EPA) or go out of compliance. This noncompliance would result in a loss of federal highway construction funds. Since this is a legislative enactment and not a regional decision, EPA would likely sanction all of Missouri's federal highway construction funds ($730,000,000), not just federal highway construction funds for the St. Louis region.

If the EPA does find the State in violation of the State Implementation Plan, the EPA could require more stringent air pollution standards for the St. Louis non-attainment area because the OBD requirements of the proposed legislation violate the federal OBD requirements. The most likely impact would be more stringent air quality standards applied to would be industry. This could discourage economic development within the St. Louis ozone non-attainment area.

Oversight assumes this potential loss of funding is speculative in nature and is not included for fiscal note purposes.

Officials with Department of Natural Resources (DNR) assume this section also changes the basic vehicle inspection and maintenance (I/M) testing program in Franklin County from an annual requirement to a biennial requirement. The motorist test fee would be increased from $10.50 annually to $24.00 biennially. The state's portion of the test fee $0.75 remains unchanged, but since testing is changed to biennial from annual, state revenue could decrease.

Officials with DOR assume this section could have savings for mailing the annual tabs to 3,300 Franklin County residents who complete a one-year emission. They could also incur cost for programming the MORE system for Franklin County and policy and procedure changes.

FY 04

3,300 annual tabs*$.26 $858

Overtime programming ($3,764)

Procedure changes ($529)

Total ($3,435)

FY 05

Loss of annual fee from 44,000 vehicles *$0.75 ($33,000)

ASSUMPTION (continued)

Section 307.125

This section has provisions to allow horse drawn carriages to have reflective material as a safety marking.

No cost were noted by responding agencies.

Section 301.010

This section has provisions to allow certain all terrain vehicles to carry more than one passenger.

No cost were noted by responding agencies.

Section 227.338

This section could designate part of state highway the Corporal Bobbie Harper Memorial Highway.

From a similar proposal, officials with MoDOT assume this could cost $866.

FY 04

Cost of sign ($866)

Section 407.1200, 407.1227. 407.1218, 407.1221, 407.1227

Officials with the Department of Insurance (INS) assume these sections contain the following provisions:

Section 407.1200 contains the terminology and definitions to be used throughout these sections.

Section 407.1203 states that no service contracts shall be sold in Missouri unless certain conditions are met.

Section 407.1203.1.4 exempts provider fees from premium taxes but not the premiums for reimbursement insurance policies from applicable taxes.

Section 407.1203.1.5 says that those selling the service contracts do not have to be licensed.

ASSUMPTION (continued)

Section 407.1206 sets forth certain information regarding the disclosure of the provider's and insurer's legal obligations.

Section 407.1209 states the requirements of such service contracts. This includes a mandatory disclosure to the consumer regarding the existence of reimbursement insurance policies and their involvement should the provider fail to pay.

Section 407.1212 is regarding the terminology to be used in describing or selling this product.

Section 407.1215 states the record keeping requirements of the service contract administrators and providers. States that they should be made available to the Director upon request.

Section 407.1218 involves the cancellation of the underlying reimbursement policies. States that the Director shall be given notice of such cancellations and that termination shall not affect the issuer's responsibility for contracts issued prior to that termination date.

Section 407.1221 states that providers are considered agents of the insurer of the reimbursement policy.

Section 407.1224 is with regard to the Director's powers and responsibilities regarding these contracts. Discusses cease and desist orders, hearings and actions for injunctive relief, and penalties.

Section 407.1225 is regarding the Director's power regarding the promulgation of rules.

Section 407.1227 states that these provisions shall not apply to warranties, maintenance agreements, commercial transactions, service contracts sold to persons other than consumers. Manufacturer's contracts need only comply with Sections 407.1209, 407.1212 and 407.1224.

INS further assumes that in order to enforce provisions of this proposal their department could need one additional Financial Analyst Specialist II and one additional Investigator II. INS cannot determine the number of companies to be registered but assumes it could be less than 100. If numbers are considerably more than additional staff could be requested.

Oversight notes this section does not have fiscal impact until FY 07. However, the costs are listed below for reference.

ASSUMPTION (continued)

Revenue could be generated as a registration fee is required to be paid annually. For fiscal note purposes, Oversight uses an annual $100. It is assumed that is could be deposited into the Insurance Dedicated Fund where other such fees are deposited. Oversight further assumes that additional taxes could be collected but this amount is unknown.

FY 07

Annual fee estimate (100*$100) $10,000

Salaries and related expenses ($97,623)

FY 08 and 09

Annual fee estimate (100*100) $10,000

Salaries and related expenses ($110,602)

Section 301.567

This section contains provisions for advertising of motor vehicles.

No fiscal impact was noted by responding agencies.

To implement sections of this proposal, DOR could require additional funds. In the past, the programs included in this legislation have been paid for with highway funds. This year, however, highway funds may not be available for this purpose as a result of legislation enacted by the General Assembly in 2000 that limits the use of highway funds.

If highway funds are not available, then another source of funding must be identified to pay for the cost of implementing this legislation.

ASSUMPTION (continued)

Officials from the Secretary of State (SOS) assume DOR 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 DOR could require as many as 36 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. 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. The SOS estimates the cost of this legislation to be $2,214.

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 through additional special plate fees and contributions as well as fee collections for certain insurance companies.

This proposal could also decrease state revenues through a decrease in emission fees in Franklin County.

FISCAL IMPACT - Small Business

Small business could be impacted by the change in advertising regulations for motor vehicle dealers.

Small business dealing in service contracts could also have fiscal impact.

DESCRIPTION

This proposal revises the disabled license plate law and creates numerous special license plates.

This proposal creates the Anti Terrorism fund.

This proposal allows for the biennial testing in Franklin county.

This proposal establishes the Bobbie Harper memorial highway.

This proposal establishes the Bobbie Harper memorial highway.

This proposal allows certain advertising practices for motor vehicles.

This proposal allows INS to regulate certain insurance providers.

This proposal allows horse drawn vehicles to have separate safety devices.

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

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 Revenue

Department of Transportation

Department of Public Safety

Department of Health and Senior Services

Office of State Courts Administrator

Department of Natural Resources

Department of Insurance

Mickey Wilson, CPA

Director

May 22, 2003