COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3910-01

Bill No.:          HB 1470

Subject:           Cities, Towns, and Villages: Department of Revenue, Traffic Violations, Fines

Type:              Original

Date:               January 29, 2008

Bill Summary:            Revises provisions relating to moving traffic violation revenues.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 8 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 of the Office of the State Auditor assume any costs of this proposal could be absorbed due to permissive language of Section 302.341. Officials assume no fiscal impact.

Officials of the Office of Secretary of State - Rules Division stated that many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The Secretary of State’s office 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 Secretary of State’s office for Administrative Rules is less than $2,500. The Secretary of State’s office 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.

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.

Officials of the Department of Revenue assume there would be minimal fiscal impact to the department. The department would need to promulgate rules regarding how to administer the program.

Officials of the Office of State Courts Administrator assume this proposal would increase the amount of excess revenues generated by fines for moving traffic violations that municipalities must send to the Department of Revenue. Currently, it is any amount in excess of 45% of its total annual general operating budget; the legislation would change that to in excess of 35%.

Officials stated the additional amount of money that would go to the Department of Revenue is unknown. Officials assume no fiscal impact to the Courts.

ASSUMPTION (continued)

Officials of the Department of Elementary and Secondary Education assume no fiscal impact to the state or to local schools.

Oversight assumes there is no state cost to the foundation formula associated with this proposal. Although the amendments to current law should result in additional remittance to DOR, it is unknown how much DOR would distribute to schools. To the extent fine revenues exceed 2006-2007 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. Cities in Jackson County would not be subject to the provisions of subsection 2 of this proposal until 2010.

Oversight assumes that as of January, 2007 there were 181 hold harmless school districts; therefore, the full amount of fine collection will not result in an equal savings to General Revenue.

Officials of the City of West Plains assume this proposal would not have any impact on their city.

Officials of the City of Webb City assume depending on the number of citations issued, cities could have some negative fiscal impact.

Officials of the City of Centralia assume no fiscal impact.

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

FISCAL DESCRIPTION

Currently, if a city, town, or village receives more than 45% of its total annual revenue from fines for traffic violations, all revenue from these violations in excess of 45% must be sent to

the Department of Revenue. This bill reduces the amount to 35% of the annual general operating revenue, but includes court costs for traffic violations in the amount. Failure to send the excess

revenue to the department in a timely manner as determined by the department director may result in the city, town, or village being subject to an annual audit by the State Auditor.

The provisions of the bill become effective January 1, 2010, for municipalities in Jackson County.

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

Office of the Secretary of State - Rulemaking

Office of the State Auditor

Department of Elementary and Secondary Education

Department of Revenue

City of Centralia

City of Webb City

City of West Plains

NOT RESPONDING

City of Boonville

City of California

City of Columbia

City of Florissant

City of Fulton

City of Joplin

City of Knob Noster

City of Linn

City of Louisiana

NOT RESPONDING (continued)

City of Maryland Heights

City of Maryville

City of Mexico

City of Neosho

City of Pacific

City of Raytown

City of Republic

City of Liberty

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                January 29, 2008