Fiscal Note - SB 0140 - Tightens Law On Financial Responsibility For Motor Vehicles
L.R. NO. 0516-11
BILL NO. HS for HCS for SCS for SB 140 with HA's 1, 2, 3, 4, 6, 7, & 8
SUBJECT: Motor Vehicles: Insurance
TYPE: Original
DATE: May 15, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Highway Fund $1,123,540 $1,486,698 $1,478,683
State School
Moneys Fund $0 $0 $0
General Revenue
Fund* ($253,441) ($266,450) ($273,245)
Total Estimated
Net Effect on All
State Funds* $870,099 $1,220,248 $1,205,438
*Cost to Courts Administrator is not included in the total, could exceed
$100,000 annually.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $1,583,877 $1,900,655 $1,900,655
FISCAL ANALYSIS
ASSUMPTION
No fiscal impact would be expected on the budgets of the Department of
Insurance (INS), Mo. Division of Highway Safety (DHS), or the Mo. Highway
Patrol (MHP) as a result of this legislation.
Staff from the Office of State Public Defender (SPD) stated that the Division
of Insurance reports there are 407,031 uninsured vehicles in this state. SPD
estimates that if 1/2 of 1% of these vehicles are stopped by law enforcement
officials are uninsured and are eligible for SPD's services, the SPD
estimates they could see an additional 2,000 misdemeanor cases. SPD has
requested 4 FTE Assistant Public Defenders, 1.50 FTE Paralegal and 1 FTE
Secretary.
Officials from Office of State Courts Administrator (CTS) stated that the
number of drivers who are not insured appears to be significant and further
the nondiscretionary fines would make many more cases more protracted. CTS
stated that without data on the number of cases, it is not possible to be
specific, however, CTS would expect the cost to the General Revenue Fund to
easily exceed $100,000 annually.
Officials from the Department of Revenue (DOR) - Driver's License Bureau
(DLB) stated that based on 303.026.3, which states the director may use a
variety of sampling techniques, DOR has adopted the "officer notice" method
as the sampling procedure as it is felt this is the most effective and
efficient way to identify and suspend the uninsured driver and owner.
DOR has received approximately 75,000 officer notices per year and action has
been instituted on approximately 15,000 or 20% of all officer notices
received. DOR received appropriations from the General Assembly to hire 6
FTE to handle case establishment, telephone inquiries, correspondence,
walk-in customer assistance, court orders, and reinstatements. All
administrative hearing responsibilities were absorbed within the existing
administrative hearing area which had been performing security suspension
hearings only.
It has yet to be determined if DOR will randomly select 1% of the General
Registration Computer File or increase officer notice production. Either
way, DOR must process an additional 30,000 documents per year (45,000
registrations - 15,000 officer notices currently processed).
If 6 FTE can process 15,000 documents DOR assumes an additional 12 FTE would
be needed to process 30,000 documents. DOR will also request an additional
administrative hearing officer and .50 Clerk Typist III. The total FTE
needed for this bureau is 13.5. DLB would also require equipment and
expenses for these 13.5 FTE.
Officials of the Motor Vehicle Bureau (MVB), state that additional reject
notices are expected due to the applicant not forwarding the insurance
identification card to the Motor Vehicle Bureau at the time of registration.
During FY96, the MVB, Central Branch processed 57,700 registrations which
would be affected by this proposal. It is estimated that approximately 80%
of these would be rejected the first year, 40% in FY99 and 30% in FY00 with a
2% growth rate in transactions per year.
Accordingly, MVB officials would request three (3) Clerk Typist II's for 100%
of the time for 10 months in FY98, two (2) Clerk Typist II's for FY99, and
one (1) Clerk Typist III for FY2000, two (2) Telephone Information Operators
(TIO) for 100% of the time in FY98, and would reduce to one (1) TIO for each
year thereafter. Due to the volume of calls currently processed by the
Telephone Information Operators, DOR assumes they would be unable to absorb
the additional calls. According to DOR, the proposal would impact 4.5
million of the registrations and that, at a conservative level, 1% of the
applicants would inquire to the Central Office.
DOR stated they would require the services of one (1) assistant counsel and
expense and equipment to handle legal issues and challenges associated with
this proposal and work directly with the DLB in implementing the legislation.
Oversight assumes that DOR's estimate of the percentage of registrations
which would be rejected annually as a result of this legislation is high
based on the assumption that currently, instructions, forms, etc., are mailed
to applicants explaining what documents are required. Oversight would not
anticipate an appreciable increase in rejects due to this legislation.
Therefore, the 3 Clerk Typist II's and expense and equipment requested by MVB
have not been included in the fiscal estimate.
REVENUE IMPACT
This proposal requires a $1,000 reinstatement fee to be paid by individuals
who have had their driving privilege suspended as a result of an auto
accident. The current reinstatement fee for this type of suspension is $20.
Therefore a $980 ($1,000 - $20 already received) will be used in the
calculation to arrive at additional anticipated revenue.
In FY96 there were 7,541 security suspensions of the safety responsibility
law. The compliance percentage for FY96 is 35%.
7541 x 35% = 2,639
2,639 x $980 = $2,586,220
2,586,220 / 12 months = $215,518 x 10 months = $2,155,183
FY98 (10 months)
2,155,183 x 75% = $1,616,387 Highway Fund
2,155,183 x 15% = $323,279 City Highway Funds
2,155,183 x 10% = $215,518 County Aid Road Trust Fund
FY99 & FY2000
2,586,220 x 75% = $1,939,665 Highway Fund
2,586,220 x 15% = $387,933 City Highway Funds
2,586,220 x 10% = $258,622 County Aid Road Trust Fund
For purposes of this fiscal estimate, DOR assumes the additional $100 fine
provided for in Section 303.024.5 (failure to show proof of insurance to
officer) would be collected by the court and disbursed to the schools.
Oversight assumes there would be 5000 fines collected from this provision
with an estimated income of $500,000.
Section 303.025.1 provides for a minimum $100 fine for operating a vehicle
without owner financial responsibility. Oversight assumes there would be
7,541 fines collected by the courts from this provision that would be
disbursed to schools in the amount of $754,100.
$ 500,000
$ 754,100
$ 1,254,100 School Moneys Fund
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Cost-State Public Defender (SPD)
Personal Service (6.50 FTE) ($152,285) ($187,385) ($192,070)
Fringe Benefits ($43,447) ($53,461) ($54,798)
Expense and Equipment ($57,709) ($25,609) ($26,377)
Cost to SPD ($253,441) ($266,450) ($273,245)
Cost - Office of State
Courts Administrator (CTS) (Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND* ($253,441) ($266,450) ($273,245)
*Does not include CTS costs which could exceed $100,000 annually.
HIGHWAY FUND
Income - Department of Revenue (DOR)
Reinstatement Fees $1,616,387 $1,939,665 $1,939,665
Cost - Department of Revenue (DOR)
Personal Service (15.5 FTE) ($244,345) ($283,221) ($290,303)
Fringe Benefits ($69,712) ($80,803) ($82,823)
Expense and Equipment ($178,790) ($88,943) ($87,856)
Total Costs to DOR ($492,847) ($452,967) ($460,982)
ESTIMATED NET EFFECT ON
HIGHWAY FUND $1,123,540 $1,486,698 $1,478,683
STATE SCHOOL MONEYS FUND
Income - Fines $1,045,080 $1,254,100 $1,254,100
Cost - Distribution to School
Districts ($1,045,080) ($1,254,100) ($1,254,100)
ESTIMATED NET EFFECT ON
STATE SCHOOL MONEYS FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
LOCAL FUNDS
Income:
School Moneys Fund $1,045,080 $1,254,100 $1,254,100
County Aid Road Trust Fund $215,518 $258,622 $258,622
City Highway Funds $323,279 $387,933 $387,933
ESTIMATED NET EFFECT ON
LOCAL FUNDS $1,583,877 $1,900,655 $1,900,655
FISCAL IMPACT - Small Business
No direct fiscal impact to small business would be expected as a result of
this proposal.
DESCRIPTION
The proposed legislation would enhance the current penalty for failure to
maintain financial responsibility for a motor vehicle, and create several new
penalties with mandatory fines or prison sentences. Persons guilty of
driving while suspended or revoked for failure to maintain financial
responsibility may not receive a suspended sentence or pay a fine in lieu of
imprisonment or be eligible for probation or parole until he/she performs a
community service.
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
State Courts Administrator
Department of Insurance
Department of Public Safety
Highway Patrol
Highway Safety
State Public Defender
This Fiscal Note is not an official copy and should not be quoted or cited.