SB 0844 - Fiscal Note

Fiscal Note - SB 0844 - Modifies registration requirements of business entities and permits electronic filing

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3403-06

BILL NO. Truly Agreed To And Finally Passed HCS for SB 844

SUBJECT: Business Organizations

TYPE: Original

DATE: May 5, 1998

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
General Revenue	$0	$0 to ($240,370)	$0 to ($82,117)
Total Estimated Net Effect on All State Funds	$0	$0 to ($240,370)	$0 to ($82,117)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of the Secretary of State (SOS) assume the proposed legislation would create the need to hire one CIS IV (1 FTE at $43,524 per year) to contract with vendors for hardware/software services, to work with annual hardware maintenance and software upgrades and to manage the system once it has been developed. In addition, they assume the need to purchase hardware and software as a one-time cost of $100,000 to $150,000, with ongoing annual costs of $17,000 to $25,000 for maintenance of hardware and upgrades to software. The costs would not be incurred until FY 00 for a total of $200,000 to $250,000 and costs of approximately $100,000 for subsequent years.

SOS officials noted they anticipate great demand for an electronic commerce transaction, where payment is combined with the filing, when one is available. Nationwide software standards (SET) have just recently been set, but as of yet, no software currently exists that complies with these standards that can perform the functions required by this legislation with adequate security. It is only when software is developed that complies with the SET standards that the SOS would feel secure in accepting filings and payment over the Internet.

Oversight assumes these SOS costs could be permissive and therefore, has ranged the costs from $0 to the amount stated by SOS.

Officials from the Office of Administration (COA), Department of Revenue (DOR) and the Office of the State Treasurer (STO) assume the proposal would have no fiscal impact on their agencies.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
GENERAL REVENUE FUND
Costs-Office of the Secretary of State (SOS)
Personal Service (1.0 FTE)	$0	($43,524)	($44,612)
Fringe Benefits	0	(12,200)	(12,505)
Expense and Equipment		(126,496)	(17,000)
		to	to0(184,646)(25,000)
Total Costs - SOS	$0	$0	$0
		to	to
		($240,370)	($82,117)
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
(continued)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND	$0	$0	$0
		to	to
		($240,370)	($82,117)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	0	0	0
FISCAL IMPACT - Small Business

This proposal could have a fiscal impact on small business, both in decreased paper filings and speed and ease of completing filings.

DESCRIPTION

The proposed legislation would make procedural changes relating to the registration of agents of limited liability companies, foreign registered limited liability partnerships, limited partnerships, and corporations.

The proposed legislation would permit electronic filing of documents with the Secretary of State's office and would permit fees to be paid through credit or debit cards or prepaid accounts.

This proposal contains an emergency clause.

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

Office of Administration

Department of Revenue

Office of the State Treasurer

Jeanne Jarrett, CPA

Director

May 5, 1998