SB 0803 - Fiscal Note

Fiscal Note - SB 0803 - Revises the licensing of bail bondsmen and licenses bounty hunters

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2944-01

BILL NO. SB 803

SUBJECT: Bail Bondsmen and Bounty Hunters: Licenses - Professional

TYPE: Original

DATE: February 3, 1998

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Prof. Bail Bondsman Licensing Bd. Admin.	$86,631	$126,695	$121,369
PR Fees	$12,757	$18,720	$11,037
Criminal Record System	$11,480	$11,480	$11,480
Partial Estimated Net Effect on All State Funds**	$110,868	$156,895	$143,886

Does not include the 3% fee retention, plus interest, per bond.

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 8 pages.

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Economic Development (DED)-Professional Registration (DPR) assume the proposed legislation would result in the licensure of 729 Bail Bondsmen and 91 Bail Bond Companies, with a projected annual growth rate of 3% for each. The number of potential licensees was based on the number of Bail Bond Agents and General Bail Bond Agents licensed by the Department of Insurance as of 1/09/97. On 1/30/98, the Department of Insurance verified the amount had stayed relatively the same as last year. The annual licensure fee for Bail Bondsmen would be set at $100 (per the proposal), and the annual licensure fee for Bail Bond Companies would be set at $1,000 (per the proposal).

It is assumed all revenue and expenses related to Professional Bail Bondsmen and Professional Bail Bond Companies would be deposited to and withdrawn from the "Professional Bail Bondsman Licensing Board Administration Fund".

Professional Bail Bondsmen would be required to submit to and pass, to the satisfaction of the Board, a written examination to be administered by the Board. The fee for the examination would be $25. Also, if the Professional Bail Bondsman applies for reexamination, the fee for such exam would be $15. For purposes of this fiscal note, DPR is assuming these fees would be paid directly to a testing service. It is assumed the Board would develop its own examination for professional Bail Bondsmen, with an estimated cost of $30,000.

DPR estimates there would be a total of 729 Surety Recovery Agents. The International Association of Bail Enforcement Agents stated it would be reasonable to assume there would be the same number of Surety Recovery Agents as Bail Bondsmen. Surety Recovery Agents would be licensed annually at a fee of $75, with a 3% growth rate.

It is assumed all revenue and expenses relating to Surety Recovery Agents would be deposited to and withdrawn from the PR Fees Fund, since no fund is named in this proposal.

To implement the legislation, DPR asserts the need for 1.5 additional FTE. These new

ASSUMPTION (continued)

employees would include a .5 Principal Assistant (.5 FTE at $41,000 per year) to serve as the senior executive officer of the Board and be responsible for overseeing the licensure and regulation program, a .5 Licensure Technician I (.5 FTE at $18,696 per year) to provide clerical and technical support directly to the Principal Assistant and the Board, and a .5 FTE Clerk Typist II (.5 FTE at $16,212 per year) to be added to the Division - Administration support pool and to the Division's Cash Receiving Room.

All expenses and personal services (except for the Bondsmen exam cost), would be split between the two funds in accordance with the number of licensees (47% for the PR Fees Fund to administer the Surety Recovery Agents Licensure Act and 53% for the Professional Bail Bondsman Licensing Board Administration Fund).

It is assumed the Board would meet four times per year for two days. Each of the seven members would be reimbursed for travel expenses (mileage, lodging and meals), for an annual total of $9,503 per year. It is assumed the Board would meet only two times in FY 99. This amount would be split between the two funds in accordance with the number of licensees.

DPR has based postage and printing costs on the actual FY 97 usage for the Chiropractic Board, a board of similar size and has estimated costs in FY 99 to be $21,799, and $14,029 in subsequent years. Additional costs would be incurred the first year for statute and rule mailings to applicants and for the first year for start up printing of rules, letterhead and envelopes. Office and communication expenses and equipment are based on estimated existing costs within the Division. This amount would be split between the two funds in accordance with the number of licensees.

Based on FY complaints for a the Chiropractor's Board, a board of similar size, DPR assumes there would be approximately 30 complaints filed with the Board each year. It is assumed the complaints and investigations would not start until FY 01. It is also estimated that 10% (3 investigations) of complaints filed would require field investigations. It is assumed that any professional expertise needed in an investigation would be handled by in-house staff and Board members. However, if there are substantially more complaints than estimated or additional legislation is passed or if it would be necessary to contract with outside professional experts, additional staffing, or expense and equipment would be needed. Total investigative travel expenses are estimated at $495 annually.

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.

ASSUMPTION (continued)

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 $56.39, the annual total would be $3,383. Also, it is estimated that 3 cases would be forwarded to the AGO for further action. It is assumed there would not be any cases until FY 01. Based on a cost of $5,400 per case, the annual cost would be $16,200.

DPR estimates that a criminal background check would cost $38 per licensee; however, it is assumed the licensee would pay the fee directly to the Missouri State Highway Patrol for a total of $31,160 ($38 x 820).

This legislation would allow a 3% retention, plus interest, of the $10 fee that defendants would be required to pay per bond. These funds would be deposited in the Professional Bail Bondsman Licensing Board Administration Fund. DPR is unable to estimate how much revenue this provision would generate for the fund, but estimates it could be a substantial amount.

Officials from the Department of Insurance (INS) assume license fees collected in the licensing of bail bondsmen would no longer be collected and deposited into the Insurance Dedicated Fund. However, this reduction in revenue should be offset by the reduction in expenditures for the printing and mailing of application forms, printing and mailing of licenses and investigations associated with complaints against bail bondsmen, resulting in a net fiscal impact of $0. License fees were established at $25 to cover expenditures. No additional personnel were awarded to INS when the licensing of bail bondsmen became effective in 1984. INS currently licenses approximately 800 Bail Bondsmen.

Officials from the Department of Public Safety-Missouri State Highway Patrol (MHP) assume the proposal would result in 820 criminal background checks per year. However, the Criminal Records and Identification Division estimates the division could absorb this without new FTE. The Criminal Records and Identification Division assumes they would collect $14 per state fingerprint check for an annual total revenue of $11,480 ($14 x 820).

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 one-time publishing and distribution cost of $3,025 for FY 1999. The actual financial impact could be substantially more or less than this estimate, depending on the actual rule making activity of the board. The impact in future years would depend upon the frequency and length of rules filed, amended 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 may, in the aggregate, necessitate additional staff. However, Oversight assumes SOS could increase fees to cover any additional costs, per Section

ASSUMPTION (continued)

536.033, RSMo.

Officials from the Office of the Attorney General (AGO), Department of Revenue (DOR), Administrative Hearing Commission (AHC), Office of the State Treasurer (STO), 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 1999	FY 2000	FY 2001
	(10 Mo.)
PROFESSIONAL BAIL BONDSMAN
LICENSING BOARD ADMIN. FUND
Income-Division of Professional Registration (DPR)
License Fees/Renewals (Bail Bondsmen)	$163,900	$169,100	$174,300
Income-Department of Revenue (DOR)
3% Fee Retention, Plus Interest per Bond	Unknown	Unknown	Unknown
Costs-DPR
Reimbursement to PR Fees Fund	($77,269)	($42,405)	($52,931)
PARTIAL ESTIMATED NET EFFECT
TO PROFESSIONAL BAIL BONDSMAN
LICENSING BOARD ADMIN. FUND**	$86,631	$126,695	$121,369
**Does not include the 3% fee retention, plus interest, per bond.
PR FEES FUND
Income-Division of Professional Registration (DPR)
Reimbursement from Professional Bail Bondsman
Licensing Board Administration Fund	$77,269	$42,405	$52,931
License Fees/Renewals (Surety Recovery Agents)	54,675	56,325	57,975
Total Income - DPR	$131,944	$98,730	$110,906
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
PR FEES FUND
Costs-DPR
Personal Service (1.5 FTE)	($32,406)	($39,875)	($40,872)
Fringe Benefits	(9,083)	(11,177)	(11,456)
Expense and Equipment	(74,315)	(25,474)	(26,765)
Other Costs/AGO	(3,383)	(3,484)	(20,776)
Total Costs - DPR	($119,187)	($80,010)	($99,869)
ESTIMATED NET EFFECT TO
PR FEES FUND	$12,757	$18,720	$11,037
CRIMINAL RECORD SYSTEM FUND
Income-Missouri State Highway Patrol
Fingerprint check revenue	$11,480	$11,480	$11,480
ESTIMATED NET EFFECT TO
CRIMINAL RECORD SYSTEM FUND	$11,480	$11,480	$11,480
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	$0	$0	$0

FISCAL IMPACT - Small Business

This proposal could result in a direct fiscal impact to small businesses.

DESCRIPTION

This proposal would repeal the entire subchapter relating to the regulation of bail bond agents and would create within the Division of Professional Registration the "Professional Bail Bondsman Licensing Board." The bill would contain provisions regarding; (1) The appointment and composition of board, terms of the members, and the authority and duties of the board; (2) The application, registration and licensing of bail bonding companies and bondsmen,

DESCRIPTION (continued)

examination requirements, and would set fees at $100 for professional bail bondsmen and $1,000 for a professional bail bond company; (3) The issuance and execution of appearance bonds by professional bail bonding companies and violations for solicitation by unlicensed persons; (4) Certain criteria to be met by applicants, which includes the submission of character references, finger prints, proof of competency and financial responsibility, and proof they have never been convicted of a felony or any offense involving moral turpitude; (5) The refusal to issue or renew licenses, and suspension and revocation of licenses due to the failure to comply with state laws; (6) Minimum compensation paid to and the acceptance of collateral by bonding companies; (7) Qualifications of persons wishing to act as sureties and forms to be used for non-licensed sureties; and (8) Intention of the bond, the binding authority of the bond forfeiture of bonds, failure to appear, surrendering of defendants, and arrest authority of sureties. Fees would be deposited into the newly created Professional Bail Bondsman Licensing Board Administration Fund.

The bill would also establish "The Surety Recovery Agent Licensure Act." The professional bail bondsmen licensing board would have the authority to license all surety recovery agents (bounty hunters), inspect training schools, appoint and examine inspectors, set fees, establish qualifications, issue licenses and credentials, require surety bonds and register non-resident surety agents, and promulgate rules.

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

This legislation could affect Total State Revenue.

SOURCES OF INFORMATION

Department of Economic Development-Professional Registration

Department of Insurance

Department of Public Safety-Missouri State Highway Patrol

Office of the Secretary of State

Office of the Attorney General

Department of Revenue

Administrative Hearing Commission

Office of the State Treasurer

Office of State Courts Administrator

Jeanne Jarrett, CPA

Director

February 3, 1998