This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0893 - Modifies Program For Motor Fuel Efficiency In State Vehicles
L.R. NO. 3309-01
BILL NO. SB 893
SUBJECT: Alternative Fuel Vehicles
TYPE: Original
DATE: February 19, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
All State Funds ($503,160) ($581,952) ($958,272)
General Revenue $12,400 $15,500 $0
Highway Fund (Unknown) (Unknown) (Unknown)
Partial Estimated
Net Effect on All
State Funds ($490,760) ($566,452) ($958,272)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Total Estimated
Net Effect on All
Federal Funds (Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
The Department of Corrections (DOC), Department of Public Safety (DPS),
Division of Highway Safety (DHS), Division of Liquor Control, State Emergency
Management Agency (SEMA) and Missouri Veteran's Commission (VET) assumed no
fiscal impact from this proposal.
The Department of Agriculture (DOA) assumed this proposal would have no
fiscal impact to the DOA as they are currently exceeding the requirements to
purchase alternative fuel vehicles specified in the proposal.
To a request for a similar proposal, the Department of Public Safety (DPS)
reported they currently have only six cars in their Director's Office. All
six of DPS's vehicles use Ethanol.
Oversight assumed the alternative fuel vehicle requirement of this proposal
would not affect DPS, as the proposal does not pertain to fleets of 15
vehicles or less.
To a request for a similar proposal, the Missouri Highway Patrol (MHP)
assumed no fiscal impact from this proposal as the infrastructure for
refueling is not currently in place.
Oversight assumes the MHP would be exempt from the requirement to use 30%
alternative fuel until there are adequate refueling stations. However, the
requirement that a specified percentage of the fleet vehicles purchased each
year must be alternative fuel vehicles would apply to MHP.
The Missouri Water Patrol (MWP) assumed they would request an additional
one-half FTE as a result of this proposal. They would request one-half of a
Clerk Typist position and related expenses and equipment costs to preform
clerical tasks related to compilation of information and record-keeping in
regard to vehicle fleet fuel efficiency.
Oversight assumes this proposal does not require any additional significant
record- keeping responsibilities. Oversight has not included costs for MWP's
clerical position.
The Department of Natural Resources (DNR) assumed no fiscal impact from this
proposal as the costs to implement this program were included with HB 45 in
1991.
The Department of Conservation (MDC) assumed the fiscal impact to their
agency was dependent on future decisions to be made by the Commissioner of
Administration and the director of the Department of Natural Resources.
Accordingly, MDC was unable to estimate the fiscal impact of this proposal.
Oversight assumes the MDC is allowed to develop its own plan to meet the fuel
efficiency requirements in the proposal. However, Oversight assumes MDC does
not have an exemption from the requirement that a specified percentage of
alternative vehicles be purchased each year.
The Office of Administration (OA) assumed alternative fuel vehicles would
cost $1,000 to $4,800 more than gasoline powered vehicles. OA assumed they
would incur additional costs of $1,000 for a percentage of the new vehicles
they purchased each year. Also, OA estimated the cost of E-85 fuel to be
higher than gasoline. OA included additional costs for the increased cost
to operate alternative fuel vehicles.
OA responded to a fiscal note request for HB 262 from the 1995 Session that
approximately 7,000 state vehicles would be subject to the fleet management
requirements of this proposal. Additional data provided by OA showed
alternative fuel vehicles are 10 to 20 per cent less efficient than gasoline
powered engines. OA calculated the cost to operate an alternative fuel
vehicle to be $62.40 a year less than a conventional vehicle.
The Department of Revenue (DOR) estimated this proposal would create a
reduction in costs for DOR. The DOR has a FY 1997 budget decision item of
$31,000 to convert 10 vehicles to alternative fuels. This was part of DOR's
plan to comply with existing law regarding alternative fuel fleet vehicles.
The DOR assumed that under this proposal they would only have to convert six
vehicles by FY 1999. Therefore, DOR could reduce costs by $12,400 in FY 1997
and $15,500 in FY 1998.
The Missouri Lottery Commission (LOT) could not estimate the specific fiscal
impact of this proposal at this time.
The Department of Social Services (DOS) assumes they would incur additional
costs to obtain alternative fuel vehicles as prescribed in the proposal.
The Department of Highways and Transportation (DHT) assumed additional costs
of $740,000 to install the 33 fueling stations necessary to manage an
alternative fuel fleet. DHT also estimated they would incur costs of
$1,414,800 to convert 566 existing vehicles.
DHT estimated an annual net savings of approximately $25,000 due to the
difference in the cost of alternative fuel prices and the price of gasoline.
DHT assumed an additional cost of approximately $57,000 for Compressed
Natural Gas fuel; and a savings of $82,000 for Liquid Propane Gas.
Oversight assumes this proposal does not require the DHT to convert any
existing vehicles to alternative fuel vehicles. Accordingly, no costs for
converting existing vehicles have been included. Oversight assumes this
proposal would not require DHT to install 33 new fueling stations at this
time. As additional alternative fuel vehicles are acquired at the pace
prescribed in the proposal additional fueling stations may be required in the
future.
As Oversight has not included costs for additional fueling stations, savings
resulting from the use of alternative fuels has also been eliminated.
DHT assumed that as alternative fuels are not assessed motor fuel taxes, this
proposal would create an unknown loss to the Highway Fund due to reduced fuel
tax collections. DHT assumed the federal share of tax collected would be
reduced as there is a 5.4 cent motor fuel tax exemption on Ethanol. DHT
assumed this could result in a loss to the Highway Fund also.
Oversight assumes this proposal deals with two separate issues. The first is
a requirement that state agencies reduce fleet fuel consumption and meet
minimum guidelines for fleet fuel efficiency as established and updated by
DNR. The agencies' overall fleet fuel efficiency must meet or exceed the
efficiency that would be achieved if each vehicle in the fleet met
established Corporate Average Fuel Economy (CAFE) standards which is
currently 27.5 miles per gallon.
Oversight assumes the proposal allows the MDC and DHT to develop their own
plans which meet the objectives of the proposal related to fuel efficiency.
However, DHT and MDC are required to purchase a minimum percentage of
alternative fuel vehicles each year.
To meet this requirement, the proposal requires agencies to submit a fleet
efficiency plan that meets the guidelines in this proposal to DNR or get
approval from OA, otherwise, the agencies may only purchase fleet vehicles
which meet or exceed CAFE standards and have a life cycle cost that is equal
to or less than the average for the vehicle class.
Oversight assumes the second issue is to promote the use of alternative fuel
vehicles in state agencies, and if adequate refueling facilities are
available, require that 30% of the motor fuel purchased for fleet vehicles be
alternative fuel by July 1, 2000. State agencies are essentially precluded
from buying alternative fuel vehicles under existing law, as the price of an
alternative fuel vehicle can not exceed 5% of the cost of a conventional
vehicle. This proposal would require that agencies purchase a percentage of
alternative fuel vehicles each year regardless of the price differential.
Oversight assumes this proposal would apply to 7,000 state vehicles and 20%
of this number, or 1,400, will be replaced each year. Oversight assumes the
additional cost of an alternative fuel vehicle would be between $1,000 and
$4,800. For purposes of this fiscal note, Oversight assumes this cost to be
$1,500. Oversight also assumes the annual savings to operate an alternative
fuel vehicle is $62.40. Therefore, Oversight assumes this proposal will
require the state to purchase 350 alternative fuel vehicles in FY 1997, 420
in FY 1998, and 700 in FY 1999.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
ALL STATE FUNDS
Savings
Operating costs of alternative
fuel vehicles $21,840 $48,048 $91,728
Costs
Additional cost to purchase
alternative fuel vehicles (525,000) (630,000) (1,050,000)
Estimated Effect on -
ALL STATE FUNDS ($503,160) ($581,952) ($958,272)
GENERAL REVENUE FUND
Savings - DOR
due to purchasing fewer alternative
fuel vehicles $12,400 $15,500 $0
HIGHWAY FUND
Loss - DHT
Reduced fuel tax collections (Unknown) (Unknown) (Unknown)
FEDERAL FUNDS
Loss- DHT (Unknown) (Unknown) (Unknown)
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
0 0 0
DESCRIPTION
This bill modifies the Fuel Conservation for State Vehicles Program. Rather
than require a 20% reduction in fuel consumption by state vehicles by 1997,
state agencies must meet minimum guidelines for efficient vehicle fleet
management established by the Department of Natural Resources. The
guidelines will be revised every 2 years and will minimally require each
agency's overall vehicle fleet fuel efficiency to equal the efficiency that
would be achieved if each vehicle in the fleet met the federal Corporate
Average Fuel Economy (CAFE) standard. State agencies must submit a fleet
efficiency plan that meets these guidelines or may only purchase vehicles
that meet or exceed the CAFE standard and have a life cycle cost that is
equal to or less than the average for the vehicle class.
The bill also changes requirements for purchase and use of state vehicles
capable of using alternative fuels. These vehicles must comprise 10% of
state agency fleet purchases between July 1, 1994, and July 1, 1996, 30% of
purchases between July 1, 1996 and July 1, 1998, and 50% of purchases during
each biennial period thereafter. Vehicles purchased before July 1, 1994, or
in excess of a biennial goal may be credited toward any future goal. The
requirement that the cost of these vehicles not exceed the cost of
conventional vehicles by more than 5% is repealed.
Rather than require 30% of state-owned alternative fuel vehicles to operate
solely on an alternative fuel by 2002, at least 30% of fuel purchased
annually for alternative fuel vehicles must be alternative fuel by 2000.
Alternative fuel used in non-fleet vehicles may be credited toward an
agency's annual goal.
This legislation is not federally mandated, would not duplicate any other
program. Additional capital improvements in the form of fueling stations may
be necessary as state agencies acquire more alternative fuel vehicles.
SOURCES OF INFORMATION
Department of Natural Resources
Department of Agriculture
Department of Revenue
Missouri Lottery Commission
Office of Administration
Department of Highways and Transportation
Department of Conservation
Department of Corrections
Department of Social Services
Department of Public Safety
Liquor Control Division
State Emergency Management Agency
Division of Highway Safety
Missouri Highway Patrol
Missouri Water Patrol
Missouri Veteran's Commission