SB 0144 - Fiscal Note

Fiscal Note - SB 0144 - Children under age 18 must attend school to have a driver's license

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 0249-02

BILL NO. SB 144

SUBJECT: Motor Vehicles; Licenses

TYPE: Original

DATE: February 1, 1999

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Highway Fund	($23,616)	$10,026	$8,994
General Revenue	($0 to $16,714,143)	($0 to $17,215,567)	($0 to $17,732,034)
Total Estimated Net Effect on All State Funds	($23,616 to $16,737,759)	$10,026 to ($17,205,541)	$8,994 to ($17,723,040)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Cities	$8,315	$9,978	$9,978
County Aid Road Trust Fund	$5,543	$6,652	$6,652
School Districts	$0 to ($7,322,225)	$0 to ($7,541,892)	$0 to ($7,768,149)
Total Estimated Net Effect on Local Funds	$13,858 to ($7,308,367)	$16,630 to ($7,525,262)	$16,630 to ($7,751,519)

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 5 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Revenue (DOR) assume this proposal would have a direct fiscal impact. The DOR assumes that the schools would furnish documentation of enrollment status on a form provided by the DOR in order to ensure that all data relative for license withdrawal/reinstatement is received. An SR-22 insurance certificate would not be a prerequisite for reinstatement. Statistics reflect that in FY97-98 there were 8,465 sixteen and seventeen year olds who withdrew from school. The number of students who withdrew and were licensed drivers is not known, but DOR assumes that 90% would have been licensed.

The DOR assumes that it would need 1.25 Clerk Typist II (1.25 FTE at $19,164 per year) with associated equipment and expense to process correspondence, suspensions, reinstatements, reinstatement fee accounting, telephone inquiries, special driving privileges and walk-in customer services. In addition, costs would be incurred for forms and postage and programming modifications in order to change the over-the-counter system. The verification sheet and issuance screen would need to be modified to include an edit for age and school graduation/attendance information. It was assumed that it would take 170 programming hours at a cost of $125 per hour to complete the change, for a total of $21,150 (170 x $125). Oversight eliminated the rental costs based on the assumption that the 1.25 FTE would be accommodated in existing office space.

The proposal would also result in the generation of revenue as a result of the $20 reinstatement fee. DOR assumed that 3,326 individuals would be reinstated and pay the $20 fee, resulting in annual revenue of $66,520. The revenue would be disbursed to the Highway Fund, Cities and County Aid Road Trust Fund.

Officials from the Department of Elementary & Secondary Education (DESE) assume it would experience an increase in the cost to fully fund the foundation formula due to an increase in attendance. Based on 1990 census, DESE assumes there would be approximately 13,000 students affected by increasing the compulsory attendance age to 18. The average cost per pupil is $3,949 and it was assumed that 50% of students would stay in school to get or keep their driver's license. The resulting annual additional state costs would be $25,668,500 (13,000 X 50% x $3,949 cost per pupil).

DESE assumes that local school districts would incur costs (i.e., for $1,730 per student for support services and $3,949 from increased state aid) as well. There would also be a cost for completion of verification of enrollment status forms; however, DES officials assume the districts could supply these forms with existing resources.

ASSUMPTION (continued)

Oversight assumes, based on FY 97-98 DESE data used by DOR, that only 8,465 sixteen and seventeen year olds dropped out of school. Furthermore, it was assumed from DESE's information that 50% of the students would stay in or return to school in order to qualify for a driver's license. Oversight ranged the following calculations from zero, since 50% of dropouts would be considered the maximum increase in attendance resulting from the proposal.

Increase in Foundation Formula

8,465 dropouts x $3,949 (average state cost per pupil) x 50% (attendance) = $16,714,143

Total Costs to School Districts

8,465 dropouts x ($3,949 + $1,730) x 50% (attendance) = $24,036,368

Officials from the Office of State Public Defender (SPD) assume that existing staff could provide representation for those 25-50 cases arising where indigent persons were accused of "submitting false information to the DOR for the purpose of obtaining a driver's license". However, passage of more than one similar proposal could result in the SPD requesting an increase in its appropriation in order to cover the cumulative costs of representing the indigent accused in the additional cases.

Officials from the Office of State Courts Administrator (CTS) and the Office of Prosecution Services (OPS) assume this proposal would result in either no or minimal fiscal impact to their agencies.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
HIGHWAY FUND
Income
Reinstatement Fee	$41,575	$49,890	$49,890
Costs-Department of Revenue (DOR)
Personal Service (1.25 FTE)	($20,462)	($25,168)	($25,797)
Fringe Benefits	(6,253)	(7,691)	(7,884)
Expense and Equipment	(38,476)	(7,005)	(7,215)
Total Costs-DOR	($65,191)	($39,864)	($40,896)
ESTIMATED NET EFFECT ON
HIGHWAY FUND	($23,616)	$10,026	$8,994
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
(continued)	(10 Mo.)
GENERAL REVENUE
Costs-Department of Elementary
& Secondary Education (DESE)
Fully Funded Foundation Formula
Related to Increased Attendance	($0 to	($0 to	($0 to
	$16,714,143)	$17,215,567)	$17,732,034)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND	($0 to	($0 to	($0 to
	$16,714,143)	$17,215,567)	$17,732,034)
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
LOCAL
Income-Cities
Reinstatement Fee	$8,315	$9,978	$9,978
Income-County Aid Road Trust Fund
Reinstatement Fee	$5,543	$6,652	$6,652
Income-School Districts
Funds from Foundation
Formula for Increased Attendance	$0 to	$0 to	$0 to
	$16,714,143	$17,215,567	$17,732,034
Costs-School Districts
Increased Attendance	($0 to	($0 to	($0 to
	$24,036,368)	$24,757,459)	$25,500,183)
ESTIMATED NET EFFECT ON
LOCAL FUNDS	$13,858 to	$16,630 to	$16,630 to
	($7,308,367)	($7,525,262)	($7,751,519)
FISCAL IMPACT - Small Business
This proposal would not be expected to have a direct fiscal impact on small businesses.

DESCRIPTION

The proposal would prohibit the Department of Revenue (DOR) from issuing an operator's license or temporary permit to an individual less than eighteen years of age without a diploma, other certification of graduation or documentation of enrollment and attendance in a state school, private school, home school or an approved course leading to a GED being provided. The proposal would outline who is responsible for providing verification of enrollment status to the DOR.

A school official (or parent when enrolled in a home school program) would be responsible for notifying the DOR when a child sixteen or older withdraws from a home school program, and the DOR would within five days of receipt of the notice, send a notice of suspension. The suspension would occur unless documentation of compliance with the provisions is provided within the 30 day period. The DOR could charge a reinstatement fee. These requirements would not be applicable to transfer situations. Any person who knowingly submits false information would be guilty of a class C misdemeanor. Special driving privileges could be granted in certain situations.

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

This proposal would impact Total State Revenues.

SOURCES OF INFORMATION

Department of Revenue

Department of Elementary & Secondary Education

State Public Defender

Office of State Courts Administrator

Office of Prosecution Services

Jeanne Jarrett, CPA

Director

February 1, 1999