This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0509 - Increases Enforcement of Auto Liability Insurance
L.R. NO.  2215-02
BILL NO.  Perfected SB 509
SUBJECT:  Increases enforcement of auto liability
TYPE:     Original
DATE:     April 25, 1996

                              FISCAL SUMMARY

FUND AFFECTED              FY 1997             FY 1998           FY 1999

Highway Fund  ($1,418 to $101,418)    ($0 to $100,000)  ($0 to $100,000)

Total Estimated
Net Effect on All
State Funds   ($1,418 to $101,418)    ($0 to $100,000)  ($0 to $100,000)


FUND AFFECTED              FY 1997             FY 1998           FY 1999

Total Estimated
Net Effect on All
Federal Funds                   $0                  $0                $0


FUND AFFECTED              FY 1997             FY 1998           FY 1999

Local Government           Unknown             Unknown           Unknown

                              FISCAL ANALYSIS


No fiscal impact would be expected on the budget of the Department of
Insurance (INS).

For purposes of this fiscal note, the Department of Revenue (DOR) assumes the
term "affidavit" means a notarized statement.

Officials of the DOR, Motor Vehicle Bureau (MVB), stated that additional
reject notices are expected due to the applicant not forwarding the insurance
identification card to the Motor Vehicle Bureau at the time of registration.
During FY95, the MVB Central Branch processed 52,871 registrations which
would be affected by this legislation.  MVB estimated that approximately 80%
of these would be rejected the first year, 40% in FY98 and 30% in FY99 with a
2% growth rate in the total number of transactions each year.

MVB officials stated that during FY95 the fee offices processed approximately
3,205,303 registrations which would be affected by this legislation.  MVB
estimated that approximately 10% of these would be rejected the first year,
4% in FY98 and 2% in FY99 with a 2% growth rate in the total number of
transactions per year.
FY97: 3,269,409 x 10% x 10 months = 272,452
FY98: 3,334,797 x 4% = 133,392
FY99: 3,401,493 x 2% = 68,030

Based on the current production standard for an Examiner Clerk, MVB would
require six (6) examiner clerks for 100% of the time in FY97, four (4) in
FY98 and two (2) in FY99.

MVB anticipates that 1% of the 4.6 million registration applicants will call
Central Office with questions regarding registration applications.
Therefore, MVB requests two (2) additional telephone information specialists
(TIS) the first year and would reduce the TIS to one (1) for each year

Field Services Bureau (FSB) stated that in FY95, MVB processed 21% (941,370)
of the 4,482,713 registrations through Branch Offices.  FSB estimate that an
additional 1.25 minutes to each registration transaction time would be
required for the Branch Office Clerks to obtain an affidavit from each
registration applicant regarding financial responsibility.  Therefore, FSB
would require an additional eleven (11) FTE.

Information Systems Division (ISD) - This division would incur state data
center costs in the amount of $1,418.

Oversight assumes that DOR's estimate of the percentage of registrations
which would be rejected annually as a result of this legislation is high
based on the assumption that currently, instructions, forms, etc., are mailed
to applicants explaining what documents are required, therefore Oversight
would not anticipate an appreciable increase in rejects due to this

Oversight assumes that while notarization of the affidavit of insurance may
be desirable, it is not mandated by this legislation.  Therefore, Oversight
has not reflected costs for additional FTE and related expense and equipment
in this fiscal note.  If DOR chooses to require the affidavit to be notarized
by regulation, it is conceivable that there would be an increase in workload
that may justify 2-3 additional FTE.  Oversight assumes this would become a
budgetary issue.  Funds are provided for the state data center costs.


This proposal deletes the mandatory insurance requisite reinstatement fee of
$200, $400, or $800 and replaces it with a $20 fee.  This would result in a
loss to the Highway Fund, Cities, and County Aid Road Trust Fund.  However,
as statistics are not available on the total of $200, $400, and $800
reinstatement fees previously received, DOR reports an "unknown" revenue
loss.  DOR believes the costs to implement the legislation would exceed the
revenue generated.  However, Oversight assumes revenue loss would be less
than $100,000 to the Highway Fund.

FISCAL IMPACT - State Government     FY 1997   FY 1998   FY 1999
                                    (10 Mo.)

Cost - Department of Revenue
    Expense and Equipment           ($1,418)      ($0)      ($0)
Cost - Department of Revenue        ($1,418)      ($0)      ($0)

Loss - Department of Revenue
  Reinstatement Fees                  ($0 to    ($0 to    ($0 to
                                   $100,000) $100,000) $100,000)

HIGHWAY FUND                      ($1,418 TO    ($0 TO    ($0 TO
                                   $101,418) $100,000) $100,000)

FISCAL IMPACT  - Local Government    FY 1997   FY 1998   FY 1999
                                    (10 Mo.)


There would be an unknown loss to City Highway Fund and the County Aid Road

LOCAL FUND                           UNKNOWN   UNKNOWN   UNKNOWN


The proposed legislation would require the Department of Revenue to provide
notice 30 days prior to motor vehicle registration renewal that an insurance
ID card must be presented at the time of registration.  Vehicle owner must
sign an affidavit that insurance coverage will be maintained.  The motor
vehicle owner or operator who cancels insurance must notify the Department of
Revenue.  Reinstatement fees of $200, $400 and $800 would be reduced to $20.

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


Department of Revenue
Department of Insurance