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F I S C A L I M P A C T R E P O R T

SPONSOR Taylor

DATE TYPED 2/11/05

HB 556

SHORT TITLE Improve MVD Customer Service

SB

ANALYST Rosen

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$4,000.0

Indeterminate Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB39 and HB201

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

No Responses Received From

Taxation and Revenue Department (TRD)

Governor’s Office (GO)

SUMMARY

Synopsis of Bill

House Bill 556 appropriates $4 million from the general fund to the motor vehicle division

(MVD) of TRD for expenditure in FY06 to improve customer service, including expansion of

staff and increasing salaries of staff. At least $800,000 of this appropriation shall be allocated

for municipal agents.

Significant Issues

MVD’s need for additional, recurring funding to increase effective staffing rates, reduce cus-

tomer wait times, reduce backlog of vehicle title searches, enable management to visit field of-

fices, and re-write the Motor Vehicle Code to improve code enforcement and fee collections is

House Bill 556 -- Page 2

clear. Withholding of federal road funds because of non-compliance with federal requirements

due to reduced staffing levels is a concern for MVD. Motor vehicle clerks are currently classi-

fied at grade 45 and paid a minimum of $9.63 per hour to provide a complex range of legal and

technical services related to the Motor Vehicle Code and the Tax Code with respect to the sale of

motor vehicles, boats, and trailers. Additional allocation of funds to municipal agents and in-

band pay increases to bring motor vehicle clerks to 85 percent of mid-point, or $11.38 per hour,

may reduce the current turnover rate of 33 percent, improve morale, and allow for better cus-

tomer service.

PERFORMANCE IMPLICATIONS

In FY04, MVD failed to meet its goal of a 15-minute average wait time in high-volume MVD

offices, reporting average wait times of more than 35 minutes. This bill may help MVD achieve

better performance results.

FISCAL IMPLICATIONS

The appropriation of $4 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the gen-

eral fund.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

The LFC FY06 budget recommendation for MVD included an additional $1.6 million in general

fund for an MVD expansion request for maintenance of its minimum service levels and an addi-

tional $3.8 million in other program revenues as a result of proposed MVD administrative ser-

vice fee increases ($2.8 million) and expected revenue from the equitable re-sale of MVD data

($1 million).

House Bill 39 increases MVD administrative fees from 50 cents to 1 dollar, expected to generate

approximately $1.2 million in revenue for municipalities, the state Road Fund and local govern-

ments.

HB201 raises MVD administrative fees from 50 cents to 2 dollars, expected to generate ap-

proximately $2.8 million in revenue for MVD.

JR/njw