COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 2994-06
Bill No.: Perfected SS for SS for SB 718
Subject: Administrative Rules; Boards, Commissions, Committees, Councils; Business and Commerce; Corporations; Economic Development Dept.; General Assembly; Governor & Lt. Governor
Type: Original
Date: March 10, 2004
FISCAL SUMMARY
| FUND AFFECTED | FY 2005 | FY 2006 | FY 2007 |
|
General Revenue * |
($22,413 to Unknown) | ($22,413 to Unknown) | (Unknown) |
| Total Estimated
Net Effect on General Revenue Fund * |
($22,413 to UNKNOWN) | ($22,413 to UNKNOWN) | (UNKNOWN) |
* could exceed $100,000 per year.
| FUND AFFECTED | FY 2005 | FY 2006 | FY 2007 |
|
Various * |
(Unknown) | ($63,968 to Unknown) | ($57,132 to Unknown) |
| Total Estimated
Net Effect on Other State Funds * |
(UNKNOWN) | ($63,968 to UNKNOWN) | ($57,132 to UNKNOWN) |
* could exceed $100,000 per year.
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 9 pages.
| FUND AFFECTED | FY 2005 | FY 2006 | FY 2007 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2005 | FY 2006 | FY 2007 |
| Local Government | $0 | $0 | $0 |
ASSUMPTION
Officials from the Office of the Governor, the Office of the Lieutenant Governor, the Office of the Secretary of State, the Office of the State Treasurer, the Missouri House of Representatives, the Office of State Courts Administrator, the Office of Administration, Division of Budget and Planning, the Department of Conservation, the Department of Insurance, the Department of Public Safety, Missouri Highway Patrol, the Department of Elementary and Secondary Education, the Missouri Gaming Commission, the Missouri State Employees Retirement System, and the Missouri Senate on behalf of the Joint Committee on Administrative Rules assume this proposal would have no impact on their organizations.
Officials from the Department of Revenue (DOR) assume this proposal would create additional requirements for the department, which are not currently included in the Governor's Executive Order. The department does not anticipate the need for additional FTE, and will not request one at this time. However, if the department is wrong in its assumption, one Management Analyst will be requested during the normal budget process.
ASSUMPTIONS (continued)
Officials from the Department of Labor and Industrial Relations assumed the impact of this proposal on their organization is unknown but expected to be less than $100,000 per year.
Officials from the Department of Social Services, Division of Medical Services (DMS) assume this proposal could require their organization to hold a hearing on every proposed rule, to purchase newspaper advertising for proposed rules, and to report all existing rules in the first year the proposal would be in effect. DMS assume there would be an unknown cost greater than $100,000 for this proposal.
Officials from the Department of Public Safety, the Office of the Attorney General, the Department of Higher Education, and the Department of Transportation assume there would be an unknown cost for this proposal.
In response to a previous version of the proposal, officials from the Missouri Senate, the Office of the State Auditor, the Office of Administration; Office of the Deputy Commissioner and Division of Facilities Management, the Department of Agriculture; Division of Agriculture Business Development, the Department of Health and Senior Services, the State Tax Commission, the Public School Retirement System, the Office of State Public Defender, the Missouri Consolidated Health Care Plan, and the Missouri Ethics Commission, assumed the proposal would have no impact on their organizations.
In response to a previous version of the proposal, officials from the Office of Administration, Division of Purchasing and Materials Management assumed the impact of this proposal on their organizations is unknown.
In response to a previous version of the proposal, officials from the Department of Natural Resources (DNR) stated that due to uncertainties with the number of instances in which a state rule may be appealed by a small business, DNR was unable to determine the fiscal impact of this legislation.
In response to a previous version of the proposal, officials from the Department of Mental Health, Office of Quality Management, assumed any additional cost to their organization could be absorbed with existing resources.
ASSUMPTIONS (continued)
In response to a previous version of the proposal, officials from the Department of Economic Development, Office of the General Counsel, stated that they are unable to determine the impact this proposal would have on their organization.
In response to a previous version of the proposal, officials from the Department of Economic Development, Division of Community and Economic Development, (CED) assume that meeting the obligations imposed by this proposal would require an additional one-half FTE attorney plus expense and equipment and office space.
Oversight assumes CED would not need additional FTE as a result of this proposal.
In response to a previous version of the proposal, officials from the Office of Administration, Division of Design and Construction, (OADC) assume this proposal would require two additional FTE, one of which would be a Contract Specialist, and the other a Senior Office Support Assistant. OADC estimated annual salaries and benefits for the two positions at approximately $75,000.
Oversight assumes OADC would not need additional FTE as a result of this proposal.
In response to a similar proposal (SB 873) from 2000, the Office of the Secretary of State stated the proposal would require agencies to file proposed rules and a small business impact statement with the small business regulatory review board. The impact statement is not currently filed with proposals of rule-making submitted to the Secretary of State. If the impact statements must be published then the Secretary would publish 1,405 additional pages in the Missouri Register each year, assuming 1,125 proposed rules with 1.25 page impact statements, at a cost of $31,635 per year. It is assumed that the impact statements would not have to be published.
The proposal would require agency rules be reviewed. Rules could be amended or rescinded. If seven percent (7%) of rules would be changed during initial reviews, 350 Code pages would be published. Approximately 175 Register pages would be published. Costs for publication in future years would depend upon the number of rules changed due to reviews. Costs for the first two fiscal years are estimated at $22,413.
ASSUMPTIONS (continued)
In response to a similar proposal in the previous session, officials from the Missouri Public Service Commission (PSC) state they currently provide a small business economic impact statement in accordance with Executive Order 96-18. However, the proposed bill not only would require this agency to state whether the rule will affect small business, but if small business is affected it must also give the availability and practicability of less restrictive alternatives. This would, in effect, require the drafting of several rule proposals. These multiple proposals would entail additional time and expense for the various departments as well as for senior supervisory personnel who must review the rules.
The proposal may also cost the PSC additional time and expense in defending current rules before the Board. This defense would likely involve the efforts of higher-salaried personnel, such as engineers, accountants, financial analysts and legal staff in addition to senior supervisory personnel. The level of cost could vary widely dependant upon the content of each new rule and the number of current rules that are subject to complaint. Because of a number of unknown variables, the increased costs of proposing alternatives to new rules and reviewing and defending current rules cannot be determined at this time, but it is clear there would be additional costs incurred due to this proposed legislation.
In response to a similar proposal in the previous session, officials from the Department of Economic Development - Division of Professional Registration (DPR) stated they currently process and prepare hundreds of rules annually (including rule fiscal notes) for all 37 boards and the division. DPR assumed that the preparation of this additional information (small business impact statement) will require a significant additional amount of time for research and preparation. DPR assumed the need for an additional Budget Analyst II (at $37,488) to assist DPR's Director of Budget and Legislation with the research and preparation that will be required to prepare a small business impact statement. DPR stated the expenses resulting from this proposal (estimated to be roughly $60,000 per year) will be billed back to the various board funds in accordance with the Division's Cost Allocation Plan.
Oversight has shown an unknown cost to "various state agencies" for costs associated with holding public hearings on proposed rules and rule changes, review of the agency's rules to determine if they may impact small business, and other administrative issues that may arise as a result of this proposal. This unknown cost is intended to include costs for organizations which reported unknown cost and costs for organizations which were unable to estimate the costs to their organizations. This cost is expected to exceed $100,000 per year.
| FISCAL IMPACT - State Government | FY 2005
(10 Mo.) |
FY 2006 | FY 2007 |
| GENERAL REVENUE FUND | |||
| Costs - various state agencies that estimated an unknown fiscal impact for administrative costs including additional hearings, review of all rules, small business impact statements, appeals, reports and judicial reviews |
(Unknown) |
(Unknown) |
(Unknown) |
| Costs - Secretary of State | |||
| Publication of Rules | ($22,413) | ($22,413) | (Unknown) |
| ESTIMATED NET EFFECT TO THE GENERAL REVENUE FUND | ($22,413 to Unknown) | ($22,413 to Unknown) |
(Unknown) |
| VARIOUS OTHER STATE FUNDS | |||
| Costs - Professional Registration | |||
| Personal Service (1 FTE) | $0 | ($39,386) | ($40,370) |
| Fringe Benefits | $0 | ($15,940) | ($16,338) |
| Expense and Equipment | $0 | ($8,642) | ($424) |
| Total Costs - Professional Registration | $0 | ($63,968) | ($57,132) |
| Costs - various state agencies
that estimated an unknown fiscal impact for administrative costs including additional hearings, review of all rules, small business impact statements, appeals reports and judicial reviews |
(Unknown) |
(Unknown) |
(Unknown) |
| ESTIMATED NET EFFECT TO VARIOUS OTHER STATE FUNDS |
(UNKNOWN) |
($63,968 TO UNKNOWN) | ($57,132 TO UNKNOWN) |
| FISCAL IMPACT - Local Government | FY 2005
(10 Mo.) |
FY 2006 | FY 2007 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
This proposal could impact small businesses by modifying regulatory practices of state agencies.
DESCRIPTION
This proposal would create the "Small Business Regulatory Fairness Board" to serve as liaison between agencies and small businesses. All members of the board except the chair of the minority business advocacy commission would be current or former owners or officers of small businesses. The board would review and evaluate state agency rules and procedures which affected small businesses and petition a state agency for the modification of rules which it believes create a significant burden on small business.
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
Missouri Senate
Missouri House of Representatives
Office of the Governor
Office of the Lieutenant Governor
Office of the Secretary of State
Office of the State Auditor
Office of the State Treasurer
Office of State Courts Administrator
SOURCES OF INFORMATION (continued)
Office of Administration
Office of the Deputy Commissioner
Division of Facilities Management
Division of Purchasing and Materials Management
Division of Design and Construction
Division of Budget and Planning
Department of Agriculture
Division of Agriculture Business Development
Department of Elementary and Secondary Education
Department of Health and Senior Services
Department of Insurance
Department of Public Safety
Capitol Police
Missouri State Water Patrol
Missouri Highway Patrol
Division of Alcohol and Tobacco Control
State Emergency Management Agency
State Tax Commission
Missouri Gaming Commission
Public School Retirement System
Office of State Public Defender
Missouri Consolidated Health Care Plan
Missouri Ethics Commission
Department of Economic Development
Office of the General Counsel
Department of Economic Development
Community and Economic Development
SOURCES OF INFORMATION (continued)
Department of Mental Health
Office of Quality Management
Office of the Attorney General
Department of Conservation
Department of Higher Education
Department of Public Safety
Office of the Director
Division of Fire Safety
Missouri Veterans Commission
Department of Transportation
Department of Labor and Industrial Relations
Department of Social Services
Division of Medical Services
Joint committee on Administrative Rules
Mickey Wilson, CPA
Director
March 10, 2004