LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 2, 1997
TO: Honorable Keith Oakley, Chair IN RE: House Bill No. 1200
Committee on Public Safety By: Cuellar/et al.
House
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
or personal identification certificate.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by HB1200-As Introduced
Implementing the provisions of the bill would result in a net
positive impact of $264,034,000 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 remove the requirement
that driver's licenses and personal identification certificates
issued by the Department of Public Safety (DPS) expire on the
fourth anniversary of the date of application. It would change
the expiration date of a driver's license and personal identification
certificate from the fourth anniversary of the date of the application
to the 60th birthday of the license or personal identification
certificate holder.
The bill would require the Department
of Public Safety to reissue a license or certificate of a holder
who is under 60 years old without charge at 12-year intervals
to include changes in the pertinent information shown on the
license or certificate, however the bill would not require the
license or certificate holder to return to a DPS office prior
to the document's expiration if pertinent information remains
correct.
The bill would also change the license and certificate
fee structure. Those at least 18 years old, but younger than
25 years old would pay $85; those at least 25 years old, but
younger than 35 years old would pay $75; those at least 35 years
old, but younger than 45 years old would pay $60; those at least
45 years old, but younger than 50 years old would pay $40; those
at least 50 years old, but younger than 55 years old would pay
$20; and those at least 55 years old would pay $16. It would
also set the four-year license renewal fee at $16 for those
60 and older, and change the renewal fee of a personal identification
certificate to $5 for a person 60 years old or older.
Department
of Public Safety would also be required to provide, at the request
of a license or certificate applicant, an installment payment
plan over a one-year period.
Currently, the cost of a Class
C driver's license is $16 for an original license and $10 for
a replacement license. The cost of an identification card is
$5 for those 65 years or older and $10 for those younger than
65. The cost for a renewal or duplicate identification card
is $10.
The bill would take effect September 1, 1997.
Methodolgy
The bill would partially implement the Texas Performance Review
(TPR) recommendation GG17 to authorize the establishment of
an extended driver's license program in Texas. The original
TPR recommendation called for Department of Public Safety issuance
of extended driver's licenses and conversion to an on-site licensing
procedure. This bill focuses on the issuance of extended driver's
licenses.
This estimate assumes that in fiscal 1998 the 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 $72.5 million in driver's license
fees and renewal and duplicate personal identification fees
in fiscal 1998.
Based on estimates of driver's 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. Using the 20.5
percent replacement license and 79.5 percent original license
ratio, it is estimated the DPS would generate $203.4 million
in Class C license fees and renewal and duplicate personal identification
fees in fiscal 1998.
The Department of Public Safety also
issues an estimated 400,000 original personal identification
cards in a year, but does not provide data by age group except
for those age 65 and older. The fees generated by the proposed
change in the law as it relates to original personal identification
cards would add some revenue to the General Revenue Fund.
The
forecasted increase in revenues is based on the Comptroller s
estimates for growth rates in the amount of driver's license
revenue under the current system as compared to the proposed
system. After the four year extended driver's license conversion
period, which would conclude in fiscal 2002, the revenue from
the issuance of Class C licenses and personal identification
cards under the proposed fee structure would be expected to
drop, reflecting the elimination of renewals except for those
license and card holders aged 60 and above. This estimate attempts
to take into account new Texas drivers by subtracting the estimate
of Class C licenses issued under the current system in 2002
from the licenses issued in 2001. In addition, this estimate
assumes the same 20.5 percent ratio of replacement licenses.
During the first four years of establishing the program,
DPS would need to augment personnel in three areas: 1) Information
Management Service, to rewrite computer programs that designate
fees and expiration dates designated by current statue 2) Central
Cash Receiving, as an approximated 1,800,000 individuals' installment
payments are received and processed for deposit, and 3) the
License Issuance Bureau, as that unit traces the status of unpaid
installments. Otherwise, DPS's headquarters and field operations
would remain static for the next four years as the current renewal
cycle is completed. Once the extended driver's license conversion
process is complete, a portion of the DPS's $51.3 million driver's
license issuance budget could be reduced, depending on reduction
in foot traffic at the DPS offices after 2001. It is estimated
that traffic into DPS offices would drop by more than 50 percent
in 2002. This estimate assumes a 25 percent reduction in the
number of employees responsible for driver's license issuance
in 2002.
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 Probable Change in Number
Gain/(Loss) from Savings/(Cost) of State
General Revenue from State Employees from
Fund Highway Fund FY 1997
0001 0006
1998 $130,910,000 ($4,381,230) 65.0
1998 133,124,000 (3,151,308) 65.0
2000 135,367,000 719,246 50.0
2001 139,973,000 719,246 50.0
2002 (52,268,000) 10,336,000 (500.0)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $130,910,000
1999 133,124,000
2000 135,367,000
2001 139,973,000
2002 (52,268,000)
During the 74th Legislature, Senate Bill 1504 became law and
created a program whereby courts that handle traffic offense
cases can contract with DPS to deny renewal of the driver's
license of a person who fails to appear to answer to a charge
of a traffic violation. According to DPS, by 2002, that program
is expected to generate approximately $5,000,000 annually to
the state's General Revenue Fund. If drivers' licenses were
to be issued for the potential number of years that the bill
allows, denial of driver's license renewal would cease to be
an effective deterrent to failing to appear for traffic summons.
The
future impact of the bill would change in FY2010. That year
will be the beginning of a 4 year period during which DPS would
issue free documents to update information at the 12 year intervals
specified in the bill. The issuance of the free documents would
generate no revenue, but would increase the workload in field
driver's license offices and in the License Issuance Bureau.
At this point, no driver's license vendor (manufacturer) is
willing to guarantee that the license they issue will be durable
for 12 years. According to DPS, there could be additional costs
associated with any such program if the license and its various
components (digital photo, digital signature, magnetic strip)
fail to survive the 12 year update period, and DPS is required
to replace those licenses without fee.
Local Impact
The 74th Legislature passed Senate Bill 1504,
which allows local courts that adjudicate violations of the
state's traffic laws to contract with DPS to deny renewal of
a driver's license to a person who fails to appear to answer
to charges of traffic law violations. According to DPS, The
"Failure to Appear" program, with its database and denial sanctions,
is projected to assist local units of government with collections
of approximately $37,000,000 annually in fine related revenue
by 2002. If driver's licenses were to be issued for the potential
number of years that the bill allows, denial of driver's license
renewal would cease to be an effective deterrent to failing
to appear for traffic summons.
Source: Agencies: 304 Comptroller of Public Accounts
405 Department of Public Safety
LBB Staff: JK ,CB ,RS