LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 29, 1997
         
         
      TO: Honorable Kenneth Armbrister, Chair            IN RE:  House Bill No. 1200, As Engrossed
          Committee on State Affairs                              By: Cuellar/et al.
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB1200 ( Relating 
to the period of validity of and fees for a driver's license, 
learner's permit, or personal identification certificate. ) 
this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB1200-As Engrossed
         
Implementing the provisions of the bill would result in a net 
positive impact of $57,600,000 to General Revenue Related Funds 
through the biennium ending August 31, 1999.
         
The bill would make no appropriation but could provide the legal 
basis for an appropriation of funds to implement the provisions 
of the bill.
         
 
Fiscal Analysis
 
The bill would amend the Transportation Code to change the expiration 
date of a driver's license from the fourth anniversary of the 
date of the application to the sixth anniversary of the date 
of application beginning September 1, 1997.  Certificates issued 
to those persons 60 years of age or older would not expire. 
 Commercial driver's licenses or commercial driver learner's 
permits would expire six years after the applicant's next birthday. 
 

The bill would change the license and certificate fee structure. 
 The fee for the six-year driver's license would increase from 
the current $16 to $24.  The fee for a personal identification 
certificate would increase to $15 from the current $10 for a 
person under 60 years of age.  For a person 60 years of age 
or older, it would be $5.  

The bill would increase the commercial 
driver's license or commercial driver learner's permit fee from 
$40 to $60.  If a commercial driver's license or commercial 
driver learner's permit included authorization to operate a 
motorcycle or moped, the fee for the license or permit would 
be increased by $8.  

The bill states that the Department 
of Public Safety (DPS) by rule may provide for the staggered 
expiration of licenses, permits, and certificates so that a 
proportionate number of licenses, permits, and certificates 
would expire each year.  The fees would be prorated accordingly.
 
Methodolgy
 
This estimate assumes that in fiscal year 1998, DPS would issue 
4.7 million Class C driver's licenses and 245,000 renewal or 
duplicate identification cards.  Under current law, the DPS 
is expected to generate an estimated $70.1 million in drivers' 
license fees and an additional $2.45 million in personal identification 
fees in fiscal year 1998. 

Based on estimates of drivers' 
licenses obtained from the DPS and population projections made 
by the Comptroller of Public Accounts, about 20.5 percent of 
all Class C licenses issued are of the $10 replacement variety. 
 The remaining 79.5 percent are issued as original licenses. 
 The proposed fee structure would raise the fees generated by 
Class C licenses and personal identification cards.  Using the 
same ratio of 20.5 percent for replacement licenses and 79.5 
percent for original licenses, the DPS would be expected to 
generate an additional $28.6 million in Class C license and 
personal identification fees in fiscal year 1998, increasing 
to $30.6 million in 2001.  There would also be some revenue 
gain from the increase in fees for commercial drivers' licenses. 
 

Following the completion of the four year conversion period 
in 2002, the revenue from the issuance of Class C licenses and 
personal identification cards under the fee structure proposed 
by this bill could drop by $61.4 million.  A pattern of four 
years of revenue gains followed by two years of revenue losses 
relative to current law would continue for some period, even 
after factoring in revenue gains from new drivers.

Although 
the bill states that the DPS can stagger expiration dates for 
licenses, permits, and certificates and prorate the fees accordingly, 
this estimate includes no proration of fees.   
The probable fiscal implications of implementing the provisions 
of the bill during each of the first five years following passage 
is estimated as follows:
 
Five Year Impact:
 
Fiscal Year Probable Revenue   
            Gain/(Loss) from                                                                              
            General Revenue                                                                               
            Fund                                                                                          
            0001                                                                                           
       1998       $28,600,000                                                                        
       1998        29,000,000                                                                        
       2000        29,500,000                                                                        
       2001        30,600,000                                                                        
       2002      (61,400,000)                                                                        
 
 
         Net Impact on General Revenue Related Funds:
 

 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998          $28,600,000
               1999           29,000,000
               2000           29,500,000
               2001           30,600,000
               2002         (61,400,000)
 
          
No significant fiscal implication to units of local government 
is anticipated.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,JD ,CB ,MG