SB 0369 - Fiscal Note

Fiscal Note - SB 0369 - Establishes registration requirements for property tax consultants

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 1298-02

BILL NO. SB 369

SUBJECT: Property Tax Consultants: Licenses - Professional

TYPE: Original

DATE: February 8, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue	$123,994	($96,154)	$119,923
Total Estimated Net Effect on All State Funds	$123,994	($96,154)	$119,923

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None
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	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 5 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Economic Development (DED)-Professional Registration (DPR) assume the proposed legislation would result in potential licensure of 3,000 property tax consultants, based upon consultation with the Missouri State Tax Commission.

The projected revenue reflects a $75 fee for all categories of licensure, which has been set at a rate to offset the costs associated with operating the licensure program and council. Revenue for FY 00 would be $225,000 (3,000 x $75). A certificate of registration and a certificate of renewal of registration would be valid for two years from the date of issuance. In addition, a 3% growth rate has been estimated.

This proposal makes no provision to establish a fund for the collection of monies received or for the payment of expenses to administer the act. Therefore, it is assumed the licensing and regulation of property tax consultants will be funded by General Revenue.

DPR is requesting an additional 2 FTE to carry out duties generated by this proposal. The additional employees would include a .5 Principal Assistant (.5 FTE at $44,080 per year) to serve as senior executive officer of the licensing agency, a .5 Licensure Technician II (.5 FTE at $21,948 per year) to provide technical support directly to the Principal Assistant and to be responsible for processing applications for licensure, as well as respond to any inquiries relating to the licensure law or rules and regulations, a .5 Clerk IV (.5 FTE at $24,216 per year) to provide support for the Division's Technical Support Services, a .25 Account Clerk II (.25 FTE at $21,108 per year) to provide support for the Division's Central Accounting Section and a .25 Clerk Typist II (.25 FTE at $18,204 per year) to provide support to the Division's Central Cash Receiving Room to process renewals, scan all mail received and deposit all funds received.

It is assumed the Council would meet four times per year for two days each and that all meetings would be held in Jefferson City. Associated travel costs (mileage, lodging and meals) would be $8,347 per year. It is assumed there would be two meetings in FY 00.

DPR has based postage and printing costs on the actual FY 98 usage for a board of similar size and has estimated costs in FY 00 to be $18,510 and $13,800 in subsequent years. Additional costs would be incurred the first year for statute and rule mailings to applicants and for first year start up printing of rules and applications. Office and communication expenses and equipment are based on estimated existing costs within the Division.

Based on FY 98 complaints for an agency of similar type, DPR officials assume there would be 21 complaints filed each year, with an estimate of 15% of the complaints requiring investigation,

ASSUMPTION (continued)

resulting in 3 investigations. It is estimated that an average investigation would require approximately 30 hours of field work and would be handled by in-house staff and board members.

However, if it would be necessary to contract with outside professional experts, additional funding for expense and equipment would be needed. Travel costs to conduct the investigations are estimated at $765 annually. It is assumed the complaints and investigations would not start until FY 02.

It is assumed the Office of the Attorney General (AGO) would provide approximately 60 hours of assistance per year with rules, opinions and meetings. Based on an hourly cost of $58.04, the annual total would be $3,482. Also, it is estimated that 25% of the investigations (1 case) would be forwarded to the AGO for further action. It is assumed there would not be any cases until FY 02. Based on a cost of $5,400 per case, the annual cost would be $5,400.

It is assumed that existing staff would design, program, and implement a computer licensure program. However, if costs are higher than anticipated, further monies would be required.

It is assumed the Council would use a nationally standardized examination. However, if the Council would decide to develop its own examination, costs for such an examination would range from $10,000 to $50,000. It is assumed the Council would utilize a professional testing service to administer the exam, thus, all fees would be paid directly to the testing service by the exam applicant.

Officials from the Office of the Secretary of State (SOS) assume the proposed legislation would require the printing of additional pages in the Missouri Register and the Code of State Regulations and have estimated a publishing and distribution cost of $2,530.50 for FY 00. Additionally, future costs are unknown and depends upon the frequency and length of rules filed, amended, rescinded or withdrawn.

While this bill alone would not require SOS to acquire additional staff, SOS assumes the

cumulative effect of additional Register and Code publishing duties could, at some point, require additional staff. However, Oversight assumes SOS could increase fees to cover any additional costs, per Section 536.033, RSMo and therefore, has not included associated costs in the fiscal impact specifications below.

Officials from the Office of the Attorney General (AGO), Office of Administration - Administrative Hearing Commission (AHC), Department of Labor and Industrial Relations (DOL) and the Office of State Courts Administrator (CTS) assume the proposed legislation would have either minimal or no fiscal impact on their agencies.

FISCAL IMPACT - State Government							FY 2000	FY 2001	FY 2002
							(10 Mo.)
GENERAL REVENUE FUND
Income-Division of Professional Registration (DPR)
Licensure Fees/Renewals	$225,000	$6,750	$231,975
Costs-DPR
Personal Service (2 FTE)	($46,936)	($57,732)	($59,176)
Fringe Benefits	(14,344)	(17,643)	(18,084)
Expense and Equipment	(36,244)	(24,047)	(25,581)
Other Costs/AGO Costs	(3,482)	(3,482)	(9,211)
Total Costs - DPR	($101,006)	($102,904)	($112,052)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND	$123,994	($96,154)	$119,923
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	$0	$0	$0
FISCAL IMPACT - Small Business
It is expected that small businesses would have a direct fiscal impact as a result of this proposal.

DESCRIPTION

This bill would provide for the registration and licensing of property tax consultants. This act would prohibit individuals from performing property tax consulting services for compensation unless he or she is registered. Certain individuals would be exempt from the registration requirements.

The proposal would establish eligibility requirements and continuing education requirements. Certificates of registration would be valid for two years.

The Property Tax Consultants Advisory Council would be established within the Division of Professional Registration.

DESCRIPTION (continued)

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 affect Total State Revenues.

SOURCES OF INFORMATION

Department of Economic Development - Division of Professional Registration

Office of the Secretary of State

Office of the Attorney General

Office of Administration - Administrative Hearing Commission

Department of Labor and Industrial Relations

Office of State Courts Administrator

Jeanne Jarrett, CPA

Director

February 8, 1999