SB 0267 - Fiscal Note

Fiscal Note - SB 0267 - Creates a graduated licensing system in order to obtain a driver's license

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 0482-01

BILL NO.: SB 267

SUBJECT: Drivers's License

TYPE: Original

DATE: February 6, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Highway Fund	($238,227)	$27,730	$27,730
Total Estimated Net Effect on All State Funds	($238,227)	$27,730	$27,730

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
Local Government	($56,423)	$10,417	$10,417

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 5 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Revenue (DOR) assume the proposal would require computer programmer modifications to the MO driver's license computer system, the electronic and application interface systems. It is estimated it would take a total of 375 hours to complete the required modifications at $125 per hour, resulting in a cost of $46,875.

Additionally, the DOR would incur additional postage and forms costs due to a change in the point system for provisional licenses. Under the current MO Point System Law, a person must accumulate eight points within an 18 month period before their MO Driver's License can be suspended. However, this proposal would mandate a suspension for provisional licensees when three points have been accumulated. Therefore, this new suspension process would generate additional suspension and reinstatement notices that must be customized to this unique suspension type.

DOR officials estimate additional suspensions would be issued as a result of this proposal. However, the proposal is silent on whether a reinstatement fee would be assessed. DOR assumes a $20 reinstatement fee for purposes of this fiscal note, which is consistent with the fee mandated for other point system suspensions and revocations. However, the increase to the Highway Fund, Cities and CART from this reinstatement fee is expected to be minimal.

This proposal would mandate that a person obtain a provisional license at the age of 16 and the fee for the provisional license would be $1. Currently, an individual must pay a fee of $7.50 when obtaining a driver's license at the age of 16. Therefore, this would result in a loss of revenue to the Highway Fund, Cities and CART. Based on the $6.50 difference in the fee for a driver's license of $7.50 and the fee for a provisional permit of $1.00, the annual revenue loss would be $270,829 (41,666 sixteen year old individuals x $6.50).

Officials from the Department of Transportation (DHT) assume there would be an initial loss in revenue in the first year from changing the regular driver's license which costs $7.50 each to a provisional license which costs $1.00 each for sixteen year old drivers. In subsequent years, there would be a gain from the $1.00 cost of a provisional license which will eventually recoup the loss from the first year. DHT officials assume the revenue loss for FY 00 would be sustained over a nine month period, resulting in a decrease in revenue of $146,298 for FY 00 on the Road Fund. The $1.00 cost for a provisional license would result in a gain of $30,160 for FY 01 and $30,311 for FY 02. The estimated loss of revenue to cities and counties would be $48,766 for FY 00. For FY 01 and FY 02, there would be an estimated gain of $10,053 and $10,103, respectively.

DESCRIPTION (continued)

Information provided by DOR and DHT resulted in a discrepancy of fiscal impact. For purposes of this fiscal note, Oversight utilized the number of licensees provided by DOR and applied the methodology utilized by DHT. Oversight assumes there would be an initial annual revenue loss in FY 00 of the $6.50 difference in the fee for a provisional permit and the fee for a driver's license, based on 41,666 sixteen year old individuals. Also, Oversight assumes there would be a gain in subsequent years of the $1 fee for the provisional permit. The loss from the first year would be recouped in the second year when those same individuals from the first year obtain a full license and pay the $7.50 fee. Initially, the sixteen year olds would be paying the $1 fee, rather than the $7.50 fee. However, in the second and subsequent years, those same individuals would be paying the $7.50 fee for a full license. Additionally, sixteen year olds would be paying the $1 fee for the provisional license that same year. The end result would be that in a two year time period, an individual would have paid an additional $1 to ultimately receive a full license. Oversight's calculation results in a total revenue loss of $225,691 in the first year and a total revenue gain of $41,666 in subsequent years.

Officials from the Department of Elementary and Secondary Education (DES) assume the proposed legislation would create the need for DES to rewrite and reprint the Driver's Education Curriculum Guides and estimate the cost to be less than $25,000 in FY 00. Oversight assumes such costs could be absorbed with existing resources.

Officials from the Office of State Courts Administrator (CTS), Department of Public Safety - Missouri State Highway Patrol (MHP), Office of State Public Defender (SPD) and the Office of Prosecution Services (OPS) assume the proposed legislation would have either no or minimal fiscal impact on their agencies.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
HIGHWAY FUND
Income-Department of Revenue (DOR)
Increase in License Revenue	$0	$31,250	$31,250
Costs-DOR
Computer Programming/Other Expense	($68,959)	($3,520)	($3,520)
Loss-DOR
Decrease in License Revenue	($169,268)	$0	$0
ESTIMATED NET EFFECT
ON HIGHWAY FUND	($238,227)	$27,730	$27,730
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
LOCAL
Income-Cities
Increase in License Revenue	$0	$6,250	$6,250
Income-County Aid Road Trust Fund
Increase in License Revenue	$0	$4,167	$4,167
Loss-Cities
Decrease in License Revenue	($33,854)	$0	$0
Loss-County Aid Road Trust Fund
Decrease in License Revenue	($22,569)	$0	$0
ESTIMATED NET EFFECT
ON LOCAL GOVERNMENT	($56,423)	$10,417	$10,417
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

The proposed legislation would provide for a graduated licensing system in order to obtain a driver's license. A person under the age of 18 would be required to go through a three-step process in order to get a driver's license. The first stage would be a temporary instruction permit for a person who is at least 15 l/2 years old. Next, a person who is at least sixteen years old would apply for a provisional permit and pay a $1 fee. Finally, a person who is at least seventeen years old would apply for a full driver's license. Certain conditions apply to each stage of the process. A person who has obtained the age of seventeen prior to the effective date of this legislation would be issued a driver's license without completing stages one and two.

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

This legislation would affect Total State Revenues.

SOURCES OF INFORMATION

Department of Revenue

Department of Transportation

Department of Elementary and Secondary Education

Office of State Courts Administrator

Department of Public Safety - Missouri State Highway Patrol

Office of State Public Defender

Office of Prosecution Services

Jeanne Jarrett, CPA

Director

February 6, 1999