COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3681-12

Bill No.:          Truly Agreed To and Finally Passed CCS for SS for HCS for HBs 1549, 1771, 1395 & 2366

Subject:           Federal - State Relations; Immigration

Type:              Original

Date:               June 3, 2008

Bill Summary:            This proposal modifies the law relating to illegal immigration.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 17 pages.

☒ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Agriculture, Office of the State Courts Administrator, Department of Conservation, Department of Insurance, Financial Institutions and Professional Registration, Office of the State Treasurer, Department of Natural Resources, Department of Public Safety - Director’s Office and Highway Patrol as well as the Office of Administration - Division of Purchasing and Materials Management and Administrative Hearing Commission each assume the proposal would not fiscally impact their respective agencies.

Officials from the Office of Prosecution Services (OPS) state the fiscal impact to county prosecutors is unknown. Any new criminal law creates the potential for an increase in the number of cases referred for prosecution. In the absence of any estimates of the number of additional criminal cases that would be referred to County Prosecutors for charges because of this proposed legislation, it is not possible to provide estimates concerning the extent of any fiscal impact. Additionally, the OPS is not otherwise able to establish a workable estimate of the number of additional criminal cases that would be referred to County Prosecutors for charges. OPS assumes the proposal would not have a significant direct fiscal impact on their agency.

Officials from the Department of Corrections (DOC) state currently, they cannot predict the number of new commitments which may which may result from the creation of the offense(s) outlined in this proposal. An increase in commitments depends on the utilization by prosecutors and the actual sentences imposed by the court.

If additional persons are sentenced to the custody of the DOC due to the provisions of this legislation, the DOC will incur a corresponding increase in operational cost through supervision provided by the Board of Probation and Parole (FY ‘07 average of $2.43 per offender, per day or an annual cost of $887 per offender).

In summary, supervision by the DOC through probation or incarceration would result in some additional costs, but it is assumed the impact would be $0 or a minimal amount that could be absorbed within existing resources.

In response to previous version of this bill, officials at the Office of the State Public Defender (SPD) assumed the proposal requires all public employers to only contract with employers who

ASSUMPTION (continued)

participate in the status verification program. This could potentially mean that every individual attorney with whom we contract, every court reporter we utilize, every trainer we bring in for a training program, every expert used in a case, cannot be used unless they participate in this program. Because most of these individuals are doing us a favor by working with us for much lower pay than they can make in private sector contracts, they are unlikely to voluntarily agree to take on the extra work involved in verifying the status of each of their employees. As a result, SPD anticipates increased difficulty (more so than we're already experiencing, which is significant) in finding contract attorneys, experts, etc. willing to work with us.

Additionally, it is unclear whether the part of the statute that requires all public employers to verify immigration status before providing benefits would be deemed applicable to the public defender system or not since the federal and state constitutions require us to provide benefits to all accused of criminal offenses who can't afford a lawyer without regard to immigration status. However, if that is something that we ARE expected to do, there will be a significant impact in the time and resources required for us to verify the immigration status of all 88,000 of our cases prior to providing services, esp at a time when we already lack the resources to provide the services we are constitutionally required to provide these clients.

Officials from the Department of Health and Senior Services (DOHSS) state section 208.009

requires applicants to prove citizenship, permanent residence, or lawful presence in order to receive state or local public benefits. The DOHSS has two General Revenue funded programs, including the State Only In-Home Program and the Non-MO HealthNet Eligible (NME) Program, that may be impacted by this legislation. DOHSS assumes the other programs administered by the department would be exempted from this legislation because either the programs are at least partially federally funded and would therefore fall under the federal laws and provisions as to how the programs are to be administered, or the programs are exempted based on the definition of public benefit. Currently, both the State Only In-Home Program and the NME program are frozen to new applicants. Since this legislation requires applicants, at the time of application, to proof of legal citizenship, the department assumes existing applicants are exempted from the provisions of this legislation. Should the program freezes be lifted from the program, the department assumes the program contractors will be required to verify lawful presence to all recipients prior to administering services; therefore there is no impact to the department for this requirement.

Section 208.009.8 states that any agency that administers public benefits shall provide assistance in obtaining appropriate documentation for those applicants that cannot provide proof of lawful presence. Since the State Only In-Home Program and the Non-MO HealthNet Eligible (Non-Medicaid) Program are both frozen and do not currently accept new applicants, the

ASSUMPTION (continued)

department assumes there would be no cost to provide assistance to obtain proper documentation, as there would be no new applicants to provide such assistance, and therefore would not result in a fiscal impact for the department. However, if the freeze is ever removed from the program, the department may incur an unknown cost to provide such assistance, which would be sought through the appropriations process.

This legislation would not be expected to fiscally impact the operations of the Department of Health and Senior Services. If a fiscal impact were to result, funds to support the program would be sought through the appropriations process.

In response to a previous version of this proposal, officials from the Department of Transportation and the Department of Social Services each assumed the proposal would not fiscally impact their respective agencies.

Officials from the Department of Mental Health (DMH) state they do not knowingly serve persons who are not citizens or permanent residents of the United States. On occasion, a person that is not a citizen or permanent resident may be court ordered into the care and custody of the DMH for competency evaluation. DMH will notify authorities when this happens.

Current DMH screening practices include I-9 documentation reviews and the utilization of the E-Verify system. This bill does not appear to require any additional steps in the employee screening procedures already in place.

Officials from the Office of the Secretary of State (SOS) assume many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The SOS is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than $2,500. The SOS recognizes that this is a small amount and does not expect that additional funding would be required to meet these costs. However, we also recognize that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what our office can sustain with our core budget. Therefore, we reserve the right to request funding for the cost of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the governor.

Officials at the Department of Higher Education (DHE) assume the bill provides that applicants for public benefits, which would include state grants and scholarships, would have to provide proof of their legal eligibility to receive the benefits at the time of application. The DHE

ASSUMPTION (continued)

assumes that it will incur some cost in addressing the proof of eligibility standards. It cannot, however, estimate the cost to any reasonable degree of certainty.

Officials at the Department of Economic Development (DED) assume they would require, upon application and issuance of tax credits, verification of use of federal work authorization program for employees related to the contract and affidavit affirming that it does not knowingly employ unauthorized aliens in connection to said application of issuance. DED would do compliance checks of recipient employees and forward findings as compliant to Attorney General.

DED assumes the need for one Compliance Auditor III to conduct 450 site visits to review and monitor credit/benefit recipients hiring practices. DED assumes the need for space and funding to operate the compliance program.

This legislation allows for penalties of $25,000 for first offense and $50,000 for second offense from business who employ unauthorized aliens. The proposal allows the fee to be collected by the agency administering the program. For the purposes of the fiscal note, Oversight assumes the fees will result in an increase of general revenue.

Officials at the Department of Elementary and Secondary Education (DESE) assume there is no state cost to the foundation formula associated with this proposal. Should the new crimes and amendments to current law result in additional fines or penalties, DESE cannot know how much additional money might be collected by local governments or the DOR to distribute to schools. To the extent fine revenues exceed 2004-2005 collections, any increase in this money distributed to schools increases the deduction in the foundation formula the following year. Therefore the affected districts will see an equal decrease in the amount of funding received through the formula the following year; unless the affected districts are hold-harmless, in which case the districts will not see a decrease in the amount of funding received through the formula (any increase in fine money distributed to the hold-harmless districts will simply be additional money). An increase in the deduction (all other factors remaining constant) reduces the cost to

the state of funding the formula.

Officials at the Department of Revenue (DOR) assume they would need to make changes to the Commercial Drivers License (CDL) manual upon next re-order, capture the data from hard copy 1099 MISC. DOR also assumes they would need to hire one temporary tax employee for every 18,000 documents received at an estimated cost of roughly $8,500 per year. DOR also assumes they would need to modify forms specifying the file format and layout as required to allow for electronic submission.

ASSUMPTION (continued)

Officials from the Office of the Attorney General (AGO) state they assume that the following provisions may result in costs to the AGO:

Sections 67.307.2, relating to sanctuary policies, and Section 650.681.4, relating to policies restricting communication with the Department of Homeland Security, allow for Missouri residents, through their elected representatives, to seek an AGO opinion to determine if a particular policy violates the above provisions. AGO assumes that it will receive relatively few requests but may seek additional resources in the event AGO receives a large number of requests.

Section 285.503 authorizes the AGO to investigate and bring actions against an employer who hires 5 or more employees engaged in public works as defined in Section 290.210, RSMo, and knowingly misclassifies a worker. AGO assumes that the costs of investigating and bringing any such actions is unknown but would be less than $100,000 per year.

Section 285.535 authorizes the AGO to investigate and bring actions against an employer, which includes contractors and subcontractors, who knowingly hires or continues to employ an unauthorized alien. AGO assumes that the costs of investigating and bringing any such actions is unknown but would be less than $100,000 per year. Section 285.540 provides rulemaking authority to the AGO. AGO assumes that any costs associated with rulemaking can be absorbed with existing resources.

Section 285.543 requires the AGO to maintain a database listing any business entity whose license, permit or exemption has been suspended or whose state contract has been terminated. While the legislation does not specify, AGO assumes that this database would be limited to those business entities whose license, permit or exemption has been suspended or contract is terminated due to a violation of one of the provisions of this proposal. If this is the case, AGO assumes that any costs can be absorbed. If the legislation is read so that AGO keeps a database of all suspensions stemming from any local, state or federal action, whether related to immigration policy or not, AGO assumes that costs are unknown.

Section 302.063 makes changes in the way DOR recognizes drivers' licenses from other states. To the extent AGO represents DOR in these matters, AGO assumes that costs can be absorbed.

Sections 577.722 and 578.570 establish new crimes related to transporting unauthorized aliens and assisting in a person who attempts to obtain a driver's license by fraud. AGO assumes that any appeals stemming from convictions under these sections would be minimal and that AGO can handle such additional appeals with existing resources.

ASSUMPTION (continued)

Officials from the Department of Labor and Industrial Relations (DOLIR) state the following assumptions apply to the provisions proposed for Section 292.675:

Chapter 292 establishes an Inspection Section that is assumed to be under DOLIR. Funding for the Inspection Section has not been obtained for over 30 years since OSHA has become the enforcement agency for workplace health and safety. It is assumed that the provisions of this bill would be enforced by the Division of Labor Standards' Workers Safety program.

The Division estimates that 3 FTEs would be required to administer this legislation as follows:

•          2 Investigators - These FTEs would be assigned to investigate any claim of violation to assure compliance with the provisions of the legislation and determine whether a penalty shall be assessed.

•          1 Administrative Analyst - This FTE would be assigned to review training programs to determine compliance.

DOLIR assumes a total cost of these three FTE to be roughly $175,000 per year. This section does not go into effect until August 28, 2009. Therefore cost for enforcement of this program will not be incurred until Fiscal Year 2010.

Section 544.470 Bail

In response to similar legislation SB 1269 filed this year the following responded:

Officials from the Boone County Sheriff’s Department assume they would incur costs of $62.50 per day per suspected illegal alien in custody, that must remain in custody until their

status in the US is verified. If the person is illegally in the US, Boone County Sheriff’s Department would incur costs of $62.50 per day until the case is adjudicated. Officials assume the cost of this legislation on sheriff’s departments with jails could be substantial.

Officials from the St. Louis County Department of Justice Services assume they are unable to determine if the US Immigration authorities would reimburse any costs to local jails for persons found to be illegal. Officials state the inmate per diem costs in St. Louis County are approximately $80. Officials assume an indeterminate number of suspected illegal persons that would be held and an indeterminate number of days held. Officials state 20 persons incarcerated per week, or 80 per month, held for just one day would cost approximately $80,000 annually for the incarceration. Costs would be approximately $160,000 if the person was held for two days. Officials state additional significant costs would be incurred for overtime if jail overcrowded conditions result or if local jails need to contract for more bed space.

ASSUMPTION (continued)

Oversight assumes local law enforcement agencies would incur increased costs for holding the suspected illegal aliens in custody. Based on information received from local law enforcement agencies, Oversight assumes the cost could exceed $100,000 per fiscal year.

FISCAL IMPACT - Small Business

The OHSA training requirement could have impact on contractors in increased costs for the training and reduced workers compensation payments.

FISCAL DESCRIPTION

This bill changes the laws regarding illegal aliens and immigration status verification.

ENFORCEMENT OF IMMIGRATION LAWS (Section 43.032, RSMo)

The Superintendent of the State Highway Patrol is required, subject to appropriations, to designate some or all members of the patrol to be trained in accordance with a memorandum of

understanding between Missouri and the United States Department of Homeland Security concerning the enforcement of federal immigration laws during the course of their normal duties in Missouri.

SANCTUARY CITIES (Section 67.307)

Any county, city, town, or village is prohibited from enacting a sanctuary policy. Any municipality that enacts a sanctuary policy will be ineligible for money provided through grants

FISCAL DESCRIPTION (continued)

administered by any state agency or department until the policy is repealed or is no longer in effect. Upon complaint by any state resident or before the provision or award of any funds or

grants to any government entity, agency, or political subdivision, any member of the General Assembly may request that the Attorney General issue an opinion as to whether the government entity, agency, or political subdivision has a sanctuary policy. County and municipal law enforcement officers must be notified in writing of their duty to cooperate with state and federal agents and officials regarding matters