SB 0541 - Fiscal Note

Fiscal Note - SB 0541 - Modifies motor vehicle emissions inspections for St. Louis area

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2087-03

BILL NO. Perfected SCS for SB 541 and 822

SUBJECT: Enhanced Inspection and Maintenance Program

TYPE: Original

DATE: March 25, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1998	FY 1999	FY 2000
Various State Funds	($237,228)	($201,827)	($203,379)
Air Pollution Control	($236,196)	($236,196)	($236,196)
Total Estimated Net Effect on All State Funds	($473,424)	($438,023)	($439,575)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1998	FY 1999	FY 2000
None	$0	$0	$0
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	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 10 pages.

FISCAL ANALYSIS

ASSUMPTION

The Office of the Attorney General assumes they would have no fiscal impact as a result of this proposal.

In a response to a previous version of this proposal, the Department of Revenue (DOR) assumes they would be require $5,183 to revise and distribute 12,500 Titling Manuals, and revise their internal policy manual.

Oversight assumes the process of revising policy and procedures manuals is an on-going process which can be absorbed with existing resources or addressed in the normal budget process.

The Department of Transportation (DHT) assumes the costs to carry out the requirements in this substitute could exceed the established maximum per-vehicle fee of $24. Because Section 643.350.6 allows the State Highway and Transportation Department Fund to be used to pay operational costs of the inspection program, there maybe an impact to the DOT. The DOT was unable to estimate the potential fiscal impact to the fund.

The DOT assumes this proposal requires a delay in implementation of the program until final disposition of legal action by the state against EPA. If this or other provisions of the bill make it difficult or impossible to meet requirements of the Federal Clean Air Act, the possibility of federal sanctions would arise, including withholding of substantial amounts of federal highway funds from the state.

The perfected proposal allows open burning in portions of a non-attainment area. The DHT assumes this will force the state to revise the state implementation plan for meeting clean air requirements, which raises the possibility of delay which could trigger sanctions. The potential loss of federal highway funds is estimated to be between $125 million to $400 million.

The Department of Public Safety - Highway Patrol (MHP) assumes they would require yearly costs of $48,000 for rental costs at the existing Quality Assurance Center, and the anticipated Quality Assurance Center.

They MHP would also request two Motor Vehicle Inspectors to perform emission and safety inspection duties at the additional Quality Assurance Center. They would also request six Troopers with standard equipment and expenses to perform criminal and fraud investigation duties related to the emissions inspection program.

ASSUMPTION (continued)

The MHP assumed they would purchase three covert vehicles to be used for testing. Each vehicle is estimated to cost $15,000. Additional costs for maintenance and mileage of $1,200 annually would be required. The MHP assumes they would require $20,000 for covert testing fees annually.

The MHP also assumes they would require $2,190 for inspections of MHP vehicles stationed in the non-attainment area.

The MHP assumes they would be required to develop a public information program. Costs for training tapes are estimated to be $2,000.

Oversight assumes costs of $24,000 annually for rent expenses of the existing Quality Assurance Center are not a result of this proposal. Therefore, Oversight has not included these costs.

Oversight also assumes the MHP is currently over the maximum number of partrolmen allowed in Section 43.050, RSMo. Therefore, Oversight assumes if any additional enforcement duties arise as a result of this proposal they will have to be redistributed within existing resources.

Oversight assumes there will be insufficient funds in the Missouri Air Emission Reduction Fund (MAER) to pay the MHP costs. Accordingly, Oversight assumes MHP costs will be born by "other state funds" as provided in section 643.350.6

The Department of Natural Resources (DNR) assumes this proposal is a modification of

SB 590 passed in the 1994 session. This legislation adds major new responsibility to oversee a large, enhanced, limited licensed I/M program in St. Louis

The legislation allows for the department to contract for management services for licensees in the program. At 643.310 3. (8), the department is required to approve and certify inspectors. It requires an annual review of licenses at Section 643.310 3(3). Lastly, this bill keeps the provisions of SB 590 for the review and auditing of repair shops for consumer protection. These duties will be performed by the staff already in core appropriations .

For certification of repair technicians, this fiscal note assumes DNR will meet this responsibility by accepting credentials from a national accreditation organization, such as the National Institute for Automotive Service Excellence, as meeting certification requirements. The department assumes no additional fiscal impact.

ASSUMPTION (continued)

With commission approval, any person with fleets of one hundred or more motor vehicles may establish emission inspection facilities to inspect vehicles that they own or lease. The department assumes that this change from five hundred to one hundred will not fiscally impact the department.

The DNR assumes current law provides an exclusion for Franklin county because its population is less than 100,000. This substitute eliminates this exclusion. This would allow for enhanced I/M in this county along with other St. Louis area counties. The DNR assumes no additional administrative fiscal impact for inclusion of Franklin county vehicles. With the inclusion of Franklin County in the enhanced inspection/maintenance program approximately 75,000 additional vehicles will be subject to this program. This amounts to approximately $1,800,000 (75,000 x $24) in additional revenues.

This proposed legislation changes the penalty provisions for excessive consumer waiting times. The maximum refund of $20 of the fee is eliminated. The $5 and $10 penalties remain. They depend on the length of time the vehicle owner must wait for an inspection. This revision does not fiscally impact the department.

Past fiscal note estimates have shown that the proposed legislation only provides adequate funding for approximately 39 single-lane inspection stations and 2 single-lane referee stations and that the probability of lost income to contractors/licensees resulting from excessive consumer waiting times is high.

The DNR has a core appropriation for 22 FTE in our FY 98 budget to carry-out an enhanced inspection and maintenance program in the non-attainment area. The original enhanced I/M fiscal note included staff to be hired in out years, if needed. The DNR had not included these staff in this fiscal note since their costs relate to previous requirements.

The legislation revises rulemaking authority and procedures. The department is uncertain of the fiscal impact of this revision.

The DNR assumes this legislation would give the state the option of using RFG to help meet air quality goals. This does not fiscally impact the department.

The DNR assumes as perfected this proposal exempts new motor vehicles not previously titled or registered from Bar90 emissions testing for two succeeding registrations. The revision to this exemption will reduce the number of annual vehicle inspections. The department estimates approximately 30,000 to 50,000 vehicles will be impacted under the existing Bar90 emissions

ASSUMPTION (continued)

program. Upon implementation of an enhanced inspection maintenance program (assuming the Bar90 emission program would then only apply to Franklin County) the number of vehicles impacted by this provision would be significantly reduced. Corresponding annual reduction of revenues to the Missouri Air Pollution Control Fund would be approximately $45,000 to $75,000 (approximately 60,000 vehicles x $0.75 state share of Bar 90 emission inspection fee to approximately 100,000 vehicles x $0.75 state share of BAR 90 emission inspection fee).

For purposes of this fiscal note, Oversight assumes the number of vehicles that would be impacted by this section would be average of DNR's estimate or 80,000. Therefore, the reduction in revenue would be $60,000 ($.75 inspection fee times 80,000 vehicles.)

The DNR assumes this proposal provides for the Bar90 emission sticker to be valid for the term of the sticker (i.e. does not require new inspection at time of transfer). The department estimates approximately 20 percent of the inspections conducted represents vehicles bought and sold. Therefore, this amendment reduces annual revenues for the Bar 90 emission inspection program by approximately 20 percent or approximately $176,196 ($880,980 FY 97 revenues x 20 percent). Upon implementation of an enhanced inspection maintenance program (assuming Bar90 emission program would then only apply to Franklin County) the number of vehicles impacted by this provision would be significantly reduced.

The DNR also assumes any unexpired sticker at time of sale or transfer provides evidence that the vehicle's emissions control system was inspected and approved. The department assumes vehicles purchased outside the nonattainment area (i.e. Bar 90 emission inspection not required) for use in the nonattainment area (i.e. Bar 90 emission inspection would be required) will require a Bar90 inspection because the existing safety inspection does not provide sufficient evidence to meet the requirements of section 307.366 RSMo.

The DNR assumes as perfected this proposal requires the DNR to provide businesses selling RFG an information pamphlet for customers explaining certain facts relating to RFG. The DNR assumes annual emission inspections of approximately 900,000 vehicles (vehicle owners potentially interested in RFG). It should be noted this number could even be higher considering transient vehicles driving through the area. The DNR further assumes that only 50% of these customers would take the pamphlet.

The DNR assumes the costs for printing and shipping are dependent on number of requests received for this information. Costs to provide and distribute the pamphlets would be approximately $0.20 per copy. Accordingly, based on approximately 450,000 pamphlets copied

ASSUMPTION (continued)

and distributed annually, the department's costs would be approximately $90,000 annually (450,000 pamphlets x $0.20 per pamphlets). It should be noted the department's costs will be greater if the number of pamphlets requested exceed our projections.

The DNR assumes this proposal would remove coverage of unincorporated Franklin county residents from the Open Burning Restrictions (10 CSR 10-5.070). It should be noted this would reduce emissions reduction credit for VOC's by approximately 0.72 tons per day.

Oversight assumes the DNR requested and received appropriations of $5,942,525 in FY 1998 and requested core appropriations of $4,201,588 in FY 1999 to fund 22 FTE and carry out the requirements of this proposal.

Oversight assumes including Franklin county in the Inspection and Maintenance Program would not create any additional revenue to the state as Oversight assumes the entire fee must be available to the contractors in order to attract contractor participation in the program.

FISCAL IMPACT - State Government	FY 1998	FY 1999	FY 2000
	(10 Mo.)
VARIOUS STATE FUNDS
Costs - Missouri Highway Patrol
Personal Service - (2 FTE)	($35,281)	($43,395)	($44,480)
Fringe Benefits	(15,157)	(18,642)	(19,109)
Expense and Equipment	(96,790)	(49,790)	(49,790)
Costs - DNR
printing and distributing pamphlets	($90,000)	($90,000)	($90,000)
ESTIMATED NET EFFECTS ON
VARIOUS STATE FUNDS	($237,228)	($201,827)	($203,379)
AIR POLLUTION CONTROL FUND
Loss - DNR and MHP
reduced collections of BAR90 inspection
stickers	($236,196)	($236,196)	($236,196)
FISCAL IMPACT - Local Government	FY 1998	FY 1999	FY 2000
	(10 Mo.)
	$0	$0	$0

FISCAL IMPACT - Small Business

This proposal is not expected to impact small businesses.

DESCRIPTION

This act modifies the motor vehicle emission inspection program for the greater St. Louis metropolitan area. The inspections were mandated in SB 590, from 1994, but have not been implemented.

The Missouri Highway Patrol and the Department of Natural Resources shall establish a public education program on existing vehicle maintenance requirements, attainment of federal air quality standards and the measures considered to satisfy the air quality standards. The Highway Patrol may provide enforcement procedures and personnel for the existing, BAR90 program.

All rules promulgated by the Air Conservation Commission shall be subject to the rulemaking provisions of chapter 536, RSMo.

The act allows the establishment of the enhanced emissions inspection program in any portion of an area not in compliance with federal air quality standards, also known as a nonattainment area.

Currently, the Missouri Air Conservation Commission is prohibited from establishing an enhanced I/M program under chapter 643 in any area where the Governor has "opted-in" to require reformulated gas (RFG) in that same area. The act removes this prohibition on the establishment of the enhanced I/M program in areas with RFG.

DESCRIPTION (continued)

The act requires the Department of Natural Resources and the Missouri Highway Patrol to enter into an interagency agreement covering all aspects of the administration and enforcement of any enhanced emissions inspection implemented under Chapter 643, RSMo.

The Department may license or contract to provide inspections stations and shall be exempted from state laws regarding site procurement. Service management, coordination and data processing may be provided by the Department or another person. Licenses shall be for up to seven years and shall be annually reviewed. A license may be suspended or revoked if the licensee is not meeting the requirements of the applicable law and rules.

The act removes authorization for the DNR to purchase inspection station facilities and lease them to the licensees. When establishing the number and location of inspection stations, public convenience shall be given first priority and financial viability of stations shall be considered.

The act requires that at least three inspection stations shall be capable of testing vehicles which are four-wheel-drive only. The act provides that the pressure and purge tests shall be nonintrusive and prohibits a vehicle from failing the inspection based solely on the visual inspection.

The inspection program shall include a remote sensing testing and approval program, also known as Clean Screen, if allowed by USEPA and if such program causes no more than a five percent reduction in total emissions reductions credits for the inspection program.

Existing law allows an organization of motor vehicle dealers to establish one or more inspection stations for inspecting only vehicles owned by members of the organization. The act broadens this provision to allow any person or organization to establish stations for inspecting only vehicles owned by the person or members of the organization. The minimum size of fleet for which the fleet operator may establish an inspection station for such fleet is lowered from five hundred to one hundred vehicles.

A motor vehicle dealer may sell a vehicle with prior inspection and approval within 120 days preceding the date of sale. A dealer may also sell a vehicle without prior inspection and approval. The act allows such a vehicle, if returned by the buyer for failing the emissions inspection, to be inspected and approved without the option for a waiver and then be returned to the buyer. The requirement for a dealer to provide a full refund if the vehicle is not returned with inspection and approval in five days is removed by the act.

DESCRIPTION (continued)

Inspectors must meet all training requirements established by the Department. Emission repair technicians must be certified by the Air Conservation Commission.

Repair costs may be applied toward reaching the waiver amount only if the repairs are performed by a certified repair technician.

The act requires a continuously-updated electronic display of the current waiting time at each station. The twenty dollar fee reduction for persons required to wait more than one hour for an inspection is removed by the act, and the maximum fee reduction shall be ten dollars for any person required to wait more than thirty minutes for an inspection. The waiting time shall begin when the vehicle is on the premises of the inspection station and available for inspection.

The Highway Patrol may assign personnel who are not highway patrol officers, known as "brown shirts", to investigate and enforce all emissions inspection programs.

This proposal exempts new motor vehicles not previously titled or registered from Bar90 emissions testing for two succeeding registrations.

It provides for the Bar90 emission sticker to be valid for the term of the sticker (i.e. does not require new inspection at time of transfer).

It also states that any unexpired sticker at time of sale or transfer provides evidence that the vehicle's emissions control system was inspected and approved.

This proposal revises DNR rulemaking authority and procedures.

This proposal requires the DNR to provide businesses selling RFG an information pamphlet for customers explaining certain facts relating to RFG at no cost to the business.

This proposal removes coverage of unincorporated Franklin county residents from the Open Burning Restrictions.

This legislation is not federally mandated, would not duplicate any other program and may require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of the Attorney General

Department of Natural Resources

Department of Public Safety - Highway Patrol

Department of Transportation

Department of Revenue

Jeanne Jarrett, CPA

Director

March 25, 1998