COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 3416-01
Bill No.: SB 848
Subject: Education, Higher, Liability, Licenses - Professional
Type: Original
Date: March 1, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| General Revenue * | ($86,614) | ($79,282) | ($81,803) |
| Total Estimated
Net Effect on All State Funds * |
($86,614) | ($79,282) | ($81,803) |
* net of offsetting revenues and expenditures.
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 7 pages.
ASSUMPTION
Officials from the Department of Insurance (INS) assume no fiscal impact.
Officials from the Office of State Courts Administrator assume the proposal would result in no fiscal impact to the courts.
Officials from the Department of Elementary and Secondary Education (DESE) assume the proposal would require additional work for the Teacher Certification section in DESE.
For in-state licensees, DESE anticipates 90-100 defaults per year. From out-of-state applicants, DESE also anticipates about 90-100 defaults from among the estimated 10,000 out-of-state applications received. Also, each hearing costs the department about $350. DESE would need approximately $70,000 to pay for the hearings ($350 per hearing cost X 200 hearings = $70,000).
Oversight assumes the individual appealing the decision would pay for the hearing. Oversight also assumes the result would be unknown additional revenues for appeal charges paid by the individual who requests a hearing, and unknown additional expenditures approximately equal to those revenues for appeal charges, for the costs of appeal hearings.
DESE officials assume three additional program specialists would be needed to handle the additional workload ($30,060 each): one additional program specialist would be needed to handle in-state licensees; two additional program specialists will be needed to handle out-of-state licensees. DESE officials also believe that fees for this information would be imposed by out-of-state agencies and loan-processing agencies. It is estimated that $100,000 would be needed annually for these costs.
The Oversight Division assumes this proposal would only apply to in-state applicants and agencies since it refers to loans guaranteed by the Department of Higher Education. Since out-of-state applicants would presumably not have loans guaranteed by the Department of Higher Education there would be no need for fees to out-of-state agencies or additional program specialists to process out-of-state applications. Oversight also assumes that one additional FTE could be located in existing space.
ASSUMPTION (continued)
Officials from the Department of Economic Development - Division of Professional Registration (DED-PR) stated they would request .5 Licensure Technician II plus employee benefits, related office space rental, and equipment, amounting to $20,626 for FY2003, $16,276 for FY 2004, and $16,683 for FY2005, to check each name provided by the Department of Higher Education against the licensing system to determine if each individual is currently licensed by a board or commission or is an applicant for a license. There were, per the Department of Higher Education, 11,138 student loan default claims during federal fiscal 1999. DED-PR officials estimate it would take ten minutes per name to check against the licensing system.
Officials from the Coordinating Board for Higher Education (CBH) stated they would request .5 Program Specialist plus employee benefits, related office space rental, and equipment, amounting to $23,794 for FY2003, $30,315 for FY 2004, and $20,823 for FY2005, to specifically monitor defaults and those making satisfactory arrangements for repayment, match MOSTARS computer records with licensee/registrant data bases at Division of Professional Registration, State Board of Education, Clerk of Supreme Court, and Department of Insurance, provide notification to the affected agencies of any matches, and provide monthly notification to the Department of Revenue and the Lottery Commission of names of those in default in order to garnish state payments.
Officials from the State Board of Law Examiners did not provide an estimate of fiscal impact.
In response to a similar proposal in the prior session, officials from the Missouri Lottery Commission, Office of Administration - Administrative Hearing Commission, and Department of Revenue assume the proposal would result in no fiscal impact to their agencies.
In response to a similar proposal in the prior session, officials from the Attorney General's Office (AGO) assume costs from the proposal are indeterminate. The AGO does not know how many licensure cases could arise from defaults on student loans. Oversight assumes the costs would be minimal and could be met with existing resources.
Oversight assumes the clerical and program specialist costs to the Department of Elementary and Secondary Education, the Department of Economic Development-division of Professional Registration, and the Coordinating Board for Higher Education would be paid from the state's general revenue fund since the requirements in this proposal were not required for the operations of the programs involved.
ASSUMPTION (continued)
In response to a similar proposal in the prior session, officials from the Secretary of State's Office (SOS) assume the rules, regulations and forms issued by the Department of Higher Education could require as many as 8 pages in the Code of State Regulations. For any given rule, roughly half again as many pages are published in the Missouri Register as in the Code because cost statements, fiscal notes and the like are not repeated in the Code. These costs are estimated. The estimated cost of a page in the Missouri Register is $23. The estimated cost of a page in the Code of State Regulations is $27. The actual costs could be more or less the SOS's estimated cost of $492 for FY 2002. The impact of this legislation in future years is unknown and depends upon the frequency and length of rules, filed, amended, rescinded or withdrawn. [(8 x $27) + (12 x $23) = $492]
Oversight assumes the SOS could absorb the costs of printing and distributing regulations elated to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
| FISCAL IMPACT - State Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| GENERAL REVENUE | |||
| Revenues - DESE hearing fees * | Unknown | Unknown | Unknown |
| Cost - DESE (1 FTE) | |||
| Personal Service | ($25,050) | ($30,950) | ($31,900) |
| Fringe Benefits | ($8,350) | ($10,300) | ($10,600) |
| Expense and Equipment | ($7,530) | ($309) | ($318) |
| Hearing costs * | (Unknown) | (Unknown) | (Unknown) |
| Total | ($40,930) | ($41,559) | ($43,136) |
| * expected to be offsetting, and less than $100,000 per year. | |||
| Cost - DED-PR ( 0.5 FTE) | |||
| Personal Service | ($10,460) | ($12,866) | ($13,188) |
| Fringe Benefits | ($3,568) | ($4,387) | ($4,497) |
| Expense and Equipment | ($7,862) | ($155) | ($159) |
| Total | ($21,890) | ($17,408) | ($17,844) |
| Cost - CBH (0.5 FTE) | |||
| Personal Service | ($11,958) | ($14,709) | ($15,076) |
| Fringe Benefits | ($4,306) | ($5,297) | ($5,429) |
| Expense and Equipment | ($7,530) | ($309) | ($318) |
| Total | ($23,794) | ($20,315) | ($20,823) |
| NET EFFECT ON GENERAL REVENUE FUND * | ($86,614) | ($79,282) | ($81,803) |
* expected to be less than $100,000 per year.
| FISCAL IMPACT - Local Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
The proposal would require the State Board of Education and Department of Economic Development, Division of Professional Registration, to refuse to grant any license or license renewal to any person if that person is in default on the repayment of any student loan guaranteed by the Department of Higher Education and has not made satisfactory arrangements to ensure voluntary repayment.
Within sixty days of the determination, the proposal would require the Department of Higher Education to provide the director of the Division of Professional Registration, State Board of Education, Clerk of the Supreme Court and director of the Department of Insurance the name of any person in default on the repayment of any student loan issued by the Department of Higher Education and who has not made satisfactory arrangements to ensure repayment.
The Department of Higher Education would be required to promulgate rules for determining when a person in default on a student loan has made satisfactory arrangements to ensure repayment of the loan. The Department of Higher Education would be authorized to garnish any state payment to a person in default on the repayment of a student loan.
Any attorney or counselor at law could be suspended from practice for avoiding in bad faith the repayment of any student loan administered by the Department of Higher Education.
The director of the Division of Professional Registration would be required to notify each board and commission in the division the names of every person regulated by such board or commission. The director would also be required to maintain a special indicator showing the status of the licensee with regard to repayment of student loans.
No board or commission in the Division of Professional Registration could grant or renew any license to a person in default on the repayment of a student loan, if satisfactory arrangements had not been made to ensure repayment.
The director of the Department of Insurance would be prohibited from issuing or renewing a license to any person in default on the repayment of a student loan, if satisfactory arrangements had not been made to ensure repayment.
DESCRIPTION - continued
The proposal would prohibit the Clerk of the Supreme Court from permitting any person from taking the bar examination, would prohibit a person from being admitted to the Missouri Bar and would prohibit an attorney from paying annual enrollment fees to renew a license to practice law, if the person is in default on a student loan.
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
Department of Insurance
Department of Elementary and Secondary Education
Office of State Courts Administrator
Department of Economic Development
Coordinating Board for Higher Education
State Board of Law Examiners
Mickey Wilson, CPA
Acting Director
March 1, 2002