SB 0711 - Fiscal Note

Fiscal Note - SB 0711 - Prohibits Sale of Fuel Below Cost

L.R. NO.  2917-01
BILL NO.  SB 711
SUBJECT:  Motor Fuel Merchandising Practices
TYPE:     Original
DATE:     January 29, 1996



                              FISCAL SUMMARY


                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED                FY 1997         FY 1998        FY 1999

General Revenue             ($53,747)       ($57,930)      ($59,440)


Total Estimated
Net Effect on All
State Funds                 ($53,747)       ($57,930)      ($59,440)


                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED                 FY 1997         FY 1998        FY 1999

None


Total Estimated
Net Effect on All
Federal Funds                     $0               $0             $0


                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED                FY 1997          FY 1998        FY 1999

Local Government                  $0               $0             $0



                              FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of State Courts Administrator assume the proposed
legislation may result in a very slight increase in the number of cases
filed; however, they would not anticipate any increase in costs to the budget
of the judiciary.

Officials from the Office of Attorney General (AGO) assume they would need
one FTE Assistant Attorney General I ($30,000 per year), equipment and
operating expenses to carry out the provisions of this proposal with an
estimated cost of approximately $52,000 per full fiscal year to the General
Revenue Fund.  AGO expects the "intent or effect" language would result in
hundreds of reports from outside agencies or individuals that would require
investigation.  As a result of the investigations, AGO would expect to file
at least 50 complaints, five to ten of which would result in protracted
litigation.

Based on the fact that AGO investigated 35 complaints and litigated two cases
during FY 93 under the "intent or effect" language contained in the proposed
legislation, Oversight assumes that .50 FTE Assistant Attorney General I and
.50 FTE Investigator would enable AGO to effectively carry out the provisions
of this proposal.

Officials from the Office of Prosecution Services, the Department of Revenue,
and Department of Public Safety assume the proposed legislation would have no
fiscal impact on their respective budgets.


FISCAL IMPACT - State Government     FY 1997     FY 1998     FY 1999
                                    (10 Mo.)
GENERAL REVENUE FUND
Costs - Office of Attorney General (AGO)
   Personal Service (1.0 FTE)      ($29,961)   ($36,853)   ($37,774)
   Fringe Benefits                 (  7,045)   (  8,665)   (  8,882)
   Equipment and Expense           ( 16,741)   ( 12,412)   ( 12,784)

Total Costs - AGO                  ($53,747)   ($57,930)   ($59,440)

ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND               ($53,747)   ($57,930)   ($59,440)



FISCAL IMPACT  - Local Government    FY 1997     FY 1998     FY 1999
                                    (10 Mo.)

                                          $0          $0          $0


DESCRIPTION

This proposal would make it unlawful to sell motor fuel below cost if the
intent or effect of the sale is to injure competition.  Currently, it is only
unlawful to sell motor fuel below cost if the intent of the sale is to injure
competition.  The proposal would reenact Section 416.640, repealed in 1995,
allowing a prima facie case to be shown by proof of sale below cost and
injury to competition.

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 State Courts Administrator
Office of Attorney General
Department of Revenue
Department of Public Safety
Office of Prosecution Services