SB 0393 - Fiscal Note

Fiscal Note - SB 0393 - Modifies provisions pertaining to driver's and nondriver's licenses

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 1717-01

BILL NO.: SB 393

SUBJECT: Licenses - Drivers's: Revenue Department

TYPE: Original

DATE: February 22, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Highway Fund	($17,500)	$6,975,144	$6,975,144
Total Estimated Net Effect on All State Funds	($17,500)	$6,975,144	$6,975,144

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	$0	$2,325,048	$2,325,048

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 modifications to the driver's license and nondriver's license computer programs and estimate expenses of $17,500 for the necessary modifications. This would be necessary to extend the renewal period for driver's licenses and nondriver's licenses from three to six years and mandate the license expire on the applicant's birthday.

The provisions of this proposal would extend the renewal period for driver's licenses and nondriver's licenses from three to six years. The fee for the licenses have been increased accordingly. For example, the current fee for a three year driver's license is $7.50; the fee for the six year license will be $15. Therefore, it is believed the impact of this portion of the proposal would be revenue neutral.

The provision of the proposal that lowers the fee for a nondriver's license from $7.50 ($2.50 per year) to $6 ($1 per year), will result in a loss in revenue to the Highway Fund, Cities and County Aid Road Trust Fund. Currently, a nondriver's license costs $7.50 ($2.50 per year). This proposal changes that fee to $6 ($1 per year). Therefore, there would be a $1.50 revenue decrease to the Highway Fund, Cities and County Aid Road Trust Fund of $211,379 annually (140,919 x $1.5O).

Oversight assumes the component of the proposal relating to changes in the renewal time period for licensees would have a fiscal impact for other licensee classifications, in addition to the nondriver's licenses. It would result in an initial increase in revenue for all classifications for the first three years, except for nondriver's licenses. However, in the fourth year, there would be a revenue loss when those same individuals that would be renewing their licenses under current law would not need to renew until after the sixth year. For purposes of this fiscal note, the revenue loss is not shown, since it is outside the time period presented in the fiscal note. Oversight based the revenue increase on the number of licensed drivers for the various classifications from information obtained from the DOR. Estimated increases to revenue would be approximately $9,000,000 annually.

Officials from the Department of Transportation (DHT) assume Section 302.177.6 states that "In order to ease the transition to a system of six-year driver's licenses and six-year non-driver's licenses, the Director shall have the authority to stagger the expiration date of driver's licenses and non-driver's licenses being issued or renewed over a six-year period." As it is written, we are unable to provide an estimate of the fiscal impact of this legislation on DHT because it is unclear how the expiration date will be staggered.

DESCRIPTION (continued)

Long-Range Implications:

DOR estimates that upon full transition to a six year license, there would be a 42% reduction (8.25 FTE) in the staff currently responsible for license transaction processing. It is projected that this savings would not occur until FY 04, since sufficient staff must be retained to accommodate the current three year renewal cycle.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
		(12 Mo.)
HIGHWAY FUND
Income-Department of Revenue (DOR)
Increase in License Revenues	$0	$7,133,678	$7,133,678
Costs-DOR
Computer Programming/Other Expense	($17,500)	$0	$0
Loss-DOR
Decrease in License Revenue (Nondriver's licenses)	$0	($158,534)	($158,534)
ESTIMATED NET EFFECT
ON HIGHWAY FUND	($17,500)	$6,975,144	$6,975,144
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
		(12 Mo.)
LOCAL
Income-Cities
Increase in License Revenues	$0	$1,426,736	$1,426,736
Income-County Aid Road Trust Fund
Increase in License Revenues	$0	$951,157	$951,157
Loss-Cities
Decrease in License Revenue (Nondriver's licenses)	$0	($31,707)	($31,707)
Loss-County Aid Road Trust Fund
Decrease in License Revenue (Nondriver's licenses)	$0	($21,138)	($21,138)
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
		(12 Mo.)
ESTIMATED NET EFFECT
ON LOCAL GOVERNMENT	$0	$2,325,048	$2,325,048

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 require all applicant's for a driver's license to take and successfully complete a sign recognition test before a license may be issued. All applicants, 21 years or older, for a chauffeur's or operator's license will be issued a license for 6 years and will expire at the person's date of birth. The fee for a chauffeur's license is doubled from $15 to $30. The fee for an operator's license is doubled from $7.50 to $15. Applicants between 18 and 21 who apply for a chauffeur's license will be issued a 3 year license that will expire on the applicant's date of birth. The fee is $15. Applicants under the age of 21 who apply for an operator's license will be issued a 3 year license that will expire on the applicant's date of birth. Nondriver's licenses will be issued for a period of 6 years and will expire on the person's date of birth. The fee would be changed to $6.00. A person reaching the age of 70 will be issued a nonexpiring nondriver's license. The fee for a commercial driver's license (CDL) is doubled from $20 to $40. A duplicate CDL will cost $20. All applicants for a CDL, 21 years of age or older, will be issued a 6 year license expiring on the applicant's date of birth. Applicants between the age of 18 and 21 will be issued a 3 year CDL expiring on the applicant's date of birth. The fee is $20.

The proposal would become effective July 1, 2000.

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

Jeanne Jarrett, CPA

Director

February 22, 1999