COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 0426-02
Bill No.: SB 92
Subject: Health Department; Health, Public; Housing; Landlords and Tenants; Licenses- Miscellaneous; Property, Real and Personal; Waste-Hazardous
Type: Original
Date: April 8, 2003
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| General Revenue | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on General Revenue Fund* |
(Unknown) | (Unknown) | (Unknown) |
*Could exceed $100,000 in a given fiscal year.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Insurance Dedicated Fund | ($79,975) | ($115,499) | ($118,422) |
| Lead Paint Removal Fund | $0 | $0 | $0 |
| Lead-Safe or Lead-Free Property Revolving Loan Fund | $0 | $0 | $0 |
| Total Estimated
Net Effect on Other State Funds |
($79,975) | ($115,499) | ($118,422) |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 10 pages.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Local Government | $0 | $0 | $0 |
ASSUMPTION
Officials from the Office of Administration - Division of Design and Construction, the State Treasurer's Office, the State Auditor's Office, the Department of Labor and Industrial Relations, the Office of Administration - Facilities Management, the Missouri Senate, and the Department of Natural Resources state that this proposal would not fiscally impact their agencies.
Officials from the Department of Economic Development - Division of Professional Registration (DPR) state that this legislation requires the DPR to develop an educational program for all real estate brokers and salespersons on lead poisoning. The DPR states it does not currently develop or provide educational programs for any of the professional licensing groups and therefore, does not have the staff or resources available to do such. For purposes of this fiscal note, DPR assumes that the it will contract with an independent educational organization for the development and offering of the lead poisoning program. DPR furtther assumes all costs associated with the development and offering of this course will be passed ASSUMPTION (continued)
directly to the real estate brokers and salespersons (approximately 35,000 renewing licensees and 7,800 new licensees annually).
Officials from the Attorney General's Office (AGO) state that the AGO would be authorized to seek injunctive and other types of relief for violations of this proposal. The AGO assumes that the state would aggressively pursue violations. Depending upon the nature and extent of the problem, this legislation could result in the need for additional staff; however, at this time AGO assumes that costs could be absorbed with existing resources.
Officials from the Department of Social Services - Division of Medical Services (DMS) state the Centers for Medicare and Medicaid Services (CMS) require mandatory blood lead testing by either capillary or venous method at 12 months and 24 months of age regardless of risk. DMS follows this mandate and this proposal would support DMS's lead policy. Therefore, DMS assumes no fiscal impact.
Officials from the Department of Revenue (DOR) state if the property tax credit is considered in an entitlement program (Section 701.330.6), then any amounts paid to individuals that are included in the taxpayer's federal adjusted gross income will have to be subtracted when figuring the taxpayer's household income. A line will be added to the property tax credit for that subtraction and the department will need one tax season temporary employee for every 240,000 returns.
DOR assumes in order to process the credits (Section 701.341), the DOR estimates it will need one Tax Processing Technician for every 5,000 credit claims filed. Because the proposal does not specify who the administering and certifying agency will be, the DOR assumes the Department of Health and Senior Services will certify the credit to the taxpayer and to the department. If this assumption is incorrect, the DOR will need to request additional FTE.
Two employees, fringe benefits and related supplies is estimated to be $40,431 in FY 2004; $34,671 in FY 2005; and $35,539 in FY 2006.
The DOR assumes the MINITS and COINS systems will need to be modified. It is estimated that 1,384 hours of programming at a cost of $46,170 will be needed in FY 2004 only.
The DOR assumes the Department of Health and Senior Services, or OA B&P will estimate the revenue impact.
ASSUMPTION (continued)
Officials from the Department of Health and Senior Services (DOH) state that this proposal transfers statutory authority for all current childhood lead poisoning activities from the DOH to the Advisory Committee on Lead Poisoning Prevention. With this move, DOH would no longer be eligible to receive childhood lead poisoning prevention funding from the Centers for Disease
Control and Prevention (CDC). Therefore, federal dollars in the amount of approximately $622,000 would be unavailable to the State. Additionally, RSMo 701.326 requires DHSS to maintain a lead poisoning information reporting system and the DOH assumes assumes that these DOH activities would continue. It is assumed that General Revenue would be required to support these activities since CDC funding would not be available. Resources required to continue these activities are based upon current operating capacity and resources.
Research Analyst - Currently paid 100% CDC funding. Loss of that funding would require 1/2 General Revenue and 1/2 federal Medicaid match.
RSMo 701.326.5 requires DHSS to establish and maintain a list of affected properties. A Epidemiology Specialist is currently providing those services.
The DOH additionally assumes that licensing and accreditation activities would continue by the DOH, therefore, there would be no additional fiscal impact for these activities.
Oversight assumes that the Advisory Committee on Lead Poisoning Prevention would remain in the Department of Health. This committee was originally formed by SB 232 in 1993 and the related fiscal note assumed the committee was in Department of Health and the committee would use funds from the Missouri Public Health Services Fund. This proposal stipulates the program will be subject to appropriations, so no new fiscal impact is presented. Oversight also assumes that the Director of Lead Poisoning Prevention will set fees for the registration of contractors at a level which will cover commission costs.
Officials from the Department of Insurance (INS) state this proposal requires all insurers issuing liability coverage to provide coverage for bodily injury caused by lead-based paint exposure. The INS states insurers would be required to file policy endorsement and rates providing coverage for lead-based paint exposure. These would be reviewed and approved by the INS. Policy form filings must be accompanied by a $50 filing fee which is deposited into the Insurance Dedicated fund. Currently there are 390 insurers writing "other liability" x $50/filing/company = $19,500.
Section 701.331 requires the INS to monitor the availability of lead-based paint exposure to personal injury and bodily injury liability coverage. If coverage is generally not available then the INS is to establish a market assistance plan or take other measure to assure the availability of such coverage that offers a liability limit which is at least $300,000 or shall require that such
ASSUMPTION (continued)
coverage be made available through a joint underwriting plan.
The INS currently does not have a joint underwriting plan for personal/commercial liability nor does the INS has a market assistance plan for personal/commercial liability coverage. The INS fiscal estimate assumes availability would not become an issue and we would not have to have either of these programs. If the INS was required to establish either of these programs additional staff would be needed.
The INS is also required to approve rates for lead-based paint exposure.
The INS estimates it would require one Insurance Product Analyst II to monitor the availability of coverage in the market, conduct surveys, collect and analyze other data on the availability of coverage. A half-time actuary would be required to review and approve rates according to basic criteria of excessive, inadequate and unfairly discriminatory.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| GENERAL REVENUE | |||
| Loss - Tax Credit for removal of lead-based paint |
(Unknown) |
(Unknown) |
(Unknown) |
| Costs - Department of Revenue | |||
| Personnel Costs (1.5 FTE) | ($23,837) | ($24,433) | ($25,044) |
| Fringe benefits | ($9,647) | ($9,888) | ($10,135) |
| Expense and Equipment | ($6,947) | ($350) | ($360) |
| Programming costs | ($46,170) | $0 | $0 |
| Total Costs - Department of Revenue | ($86,601) | ($34,671) | ($35,539) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE |
(Unknown) |
(Unknown) |
(Unknown) |
| INSURANCE DEDICATED FUND | |||
| Income - Department of Insurance | |||
| Filing fees | $19,500 | $0 | $0 |
| Costs - Department of Insurance | |||
| Personal Service (1.5 FTE) | ($61,203) | ($77,162) | ($79,091) |
| Fringe Benefits | ($24,769) | ($31,227) | ($32,008) |
| Expense and equipment | ($13,503) | ($7,110) | ($7,323) |
| Total Costs - Department of Insurance | ($99,475) | ($115,499) | ($118,422) |
| ESTIMATED NET EFFECT TO INSURANCE DEDICATED FUND |
($79,975) |
($115,499) |
($118,422) |
| LEAD PAINT REMOVAL FUND | |||
| Income - Department of Health and Senior Services | |||
| Registration fees | Unknown | Unknown | Unknown |
| Expenses - Department of Health and Senior Services | |||
| Accreditation activities | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON LEAD PAINT REMOVAL FUND |
$0 |
$0 |
$0 |
| LEAD-SAFE OR LEAD-FREE PROPERTY REVOLVING LOAN FUND | |||
| Income - Department of Health and Senior Services | |||
| Sale of bonds | Unknown | Unknown | Unknown |
| Donation and other bequests | Unknown | Unknown | Unknown |
| Costs - Department of Health and Senior Services | |||
| Residential assistance | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON LEAD-SAFE OR LEAD-FREE PROPERTY REVOLVING LOAN FUND |
$0 |
$0 |
$0 |
| FISCAL IMPACT - Local Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
Small business could be affected by this proposal.
DESCRIPTION
This proposal regulates the prevention and screening of lead poisoning in Missouri.
Real estate brokers and salespersons must be reasonably familiar with Sections 701.300 to 701.348, RSMo, to obtain and renew a license. An educational program will be developed to outline the duties and responsibilities (Section 339.185).
The proposal provides the necessary definitions relating to lead poisoning, including "affected property", "chewable surface", and "elevated blood lead" (Section 701.300).
The Advisory Committee on Lead Poisoning Prevention is established with members serving a term of four years. The Governor shall appoint a Director of Lead Poisoning Prevention that will chair the Committee. The Director shall establish a statewide program for the prevention, screening, diagnosis, and treatment of lead poisoning. Public service announcements, information pamphlets, and a training manual to accompany a "Lead-Safe Housing Awareness Seminar" will be produced. The Committee must establish a program for the early detection and screening of children under the age of six for elevated blood lead levels. The Director is responsible for maintaining a comprehensive record of all screenings, which will be indexed geographically and by owner (Section 701.302).
Affected properties must comply with the requirements for either a "lead-free" status or a "lead-safe" status on or before August 28, 2005. However, an owner of five or more affected properties may apply for an extension. An affected property is considered "lead-free" if the property was constructed after 1978 or an inspection report verifies that all interior surfaces are lead-free and all exterior surfaces were restored with a non-lead based paint. An affected property is considered "lead-safe" if the specified treatments listed in this section have been completed. Tenants must receive written notice at least 48 hours prior to any maintenance work and shall
DESCRIPTION (continued)
allow owners access to the affected property at reasonable times. If the tenant has to vacate the property for longer than 24 hours, the owner will be responsible for any reasonable expenses incurred. An owner of an affected property will not be liable for any damages arising from a tenant's refusal to vacate or allow access. An owner of "lead- free" property, that has lead-based paint on the exterior, must submit certification every 3 years to the Director verifying that the exterior is not chipping, peeling, or flaking (Section 701.310).
Contractors, supervisors, and inspectors must be accredited by the Director with the duration of accreditation lasting three years. The Director shall promulgate a schedule of fees for registration of contractors, supervisors, and inspectors, which will be placed in the Lead Paint Removal Fund and used for accreditation and registration purposes (Section 701.312).
Anyone failing to comply with the provisions of Sections 701.300 to 701.348, RSMo, will be guilty of a Class A misdemeanor. Any civil or criminal action taken by state or local officials pursuant to Sections 701.300 to 701.348 will be reported to the Director. The Director shall issue an annual report detailing enforcement actions, the identity of owners of affected properties, the nature of the actions, and a description of any civil or criminal penalties (Section 701.321).
Effective August 28, 2005, every person shall have a right to housing that is lead-free or lead-safe. Injunctive relief will be available provided that an owner of affected property receives written notice of the violations and fails to comply with the required standards within 30 days of the filing. Cases brought pursuant to Sections 701.300 to 701.348, RSMo, will be granted an accelerated hearing. Upon a determination by the court, the petitioner will be entitled to damages and attorney's fees (Section 701.325).
Affected property must be registered with the Director of the Department on the appropriate forms. Registration will be renewed every two years but owners must update any changes in registration information within 30 days of the change. All information provided by the owner shall be open to the public. The Director shall promulgate a schedule of fees for the registration of affected properties, which will be placed in the Lead Paint Removal Fund. Any owner of affected property that fails to pay the fees will be civilly liable for triple the cumulative amount of the fees or $150, whichever is greater. Any unpaid penalty will constitute a lien against the affected property (Section 701.326).
An owner or anyone acting on behalf of the owner may make a qualified offer to an individual provided that the affected property has been certified as "lead-free" or "lead-safe". Qualified offers must be made in writing and delivered by certified mail within 30 days upon receiving notification of an elevated blood level. A qualified offer is considered rejected if an individual
DESCRIPTION (continued)
does not accept it within 30 days. The acceptance of a qualified offer discharges the owner of any potential civil liability. A qualified offer shall include the payment of all reasonable expenses and costs incurred as specified in this section. Any misrepresentation in the qualified offer may result in criminal penalties (Section 701.330).
The liability insurance of affected properties shall include coverage for bodily injury caused by exposure to lead-based paint. The Department of Insurance shall approve the rates for coverage based on specified standards (Section 701.331).
The "Lead-Safe or Lead-Free Property Revolving Loan Fund" is created and will consist of proceeds received from the sale of bonds, state appropriations, and any donations or gifts. The Committee will issue bonds for the purpose of the maintaining the Fund. Upon the discretion of the Director, these funds shall be used for the purpose of bringing affected properties into compliance (Section 701.339).
Income tax credits are available to any individual, corporation, or other business entity that removes lead-based paint and repairs affected property. Any tax credit not used in the taxable year of certification may be carried forward and applied to the individual's tax liability for five years (Section 701.341).
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration
- Division of Design and Construction
- Facilities Management
State Treasurer's Office
State Auditor's Office
Department of Labor and Industrial Relations
Missouri Senate
Department of Natural Resources
Department of Economic Development
- Division of Professional Registration
Attorney General
Department of Social Services
- Division of Medical Services
Department of Revenue
Department of Insurance
Department of Health and Senior Services
Mickey Wilson, CPA
Director
April 8, 2003