COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 4496H.01I Bill No.: HB 2050 Subject: Professional Registration and Licensing; Contracts and Contractors Type: Original Date: February 14, 2022Bill Summary:This proposal establishes the Missouri Statewide Mechanical Contractor
Licensing Act.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on General
Revenue
$0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Professional
Registration Fees
Fund (0689)
($318,716)$0$0
Missouri Mechanical
Contractor Licensing
Fund ($0)$412,435($271,572)
Total Estimated Net
Effect on Other State
Funds ($318,716) $412,435($271,572)
Numbers within parentheses: () indicate costs or losses. L.R. No. 4496H.01I
Bill No. HB 2050
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2023FY 2024FY 2025Professional
Registration Fees
Fund
3 FTE3 FTE3 FTE
Total Estimated Net
Effect on FTE3 FTE3 FTE3 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Local Government$0 or (Unknown)$0 or (Unknown)$0 or (Unknown) L.R. No. 4496H.01I
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FISCAL ANALYSIS
ASSUMPTION
Section 324.950-324.983 - Missouri Statewide Mechanical Contractor Licensing Act
Officials from the Department of Commerce and Insurance (DCI) assume the following:
Licensee/Revenue
2,000 Estimated Licensees (US Labor census & Mechanical Engineers Association)
$350.00 Initial License Fee
$350.00 Renewal License Fee
Biennial Renewal Cycle
∙
one license holder per corporation, firm, institution, organization, or company will
register with the department.
∙
∙
∙
fees will not be collected until FY 2025.
∙
fees will be adjusted accordingly.
In summary, DCI assumes a revenue of $700,000 (2,000 x $350) in FY 2024 and $21,000 (2,000
x 3% x $350) in FY 2025 to the Missouri Mechanical Industry Licensing Fund to provide for the
implementation of the changes in this proposal.
The following board-specific expenses are being calculated to determine the additional
appropriation needed by the division to support the board and to assist in calculating the
anticipated license and renewal fees.
Staffing
1 FTE Principal Assistant at $68,400 annually needed to serve as the senior executive officer of
the registration agency.
1 FTE Customer Service Representative at $30,700 annually needed to provide technical
support, process applications for licensure, and respond to inquiries related to the licensure law
and/or rules and regulations.
1 FTE Non-Commissioned Investigator at $46,000 annually needed to conduct investigations
and inspections, serve notices, and gather information required by the board. L.R. No. 4496H.01I
Bill No. HB 2050
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Complaints and Investigations
It is estimated the board will receive approximately 33 complaints. The division does not
anticipate receiving any complaints until FY 2024. It is estimated 15% of the complaints filed
will require field investigations with 50% requiring overnight travel. A car is needed to conduct
investigations and will need to be eventually replaced based upon usage. Therefore, the vehicle
cost is considered an ongoing expense and appropriation need.
In summary, DCI assumes a cost of $318,715 in FY 2023, $287,565 in FY 2024 and $292,573 in
FY 2025 to provide for the implementation of the changes in this proposal.
Oversight will reflect the DCI estimated revenues and cost. Oversight will reflect the board-
specific expenses to the Professional Registration Fees Fund. Oversight assumes the revenue
collected from the licensure fees will be deposited into the Missouri Mechanical Contractor
Licensing Fund and then will be transferred to the PR Fees Fund resulting in an estimated net
effect of zero to the PR Fees Fund in FY 24 and FY 25. Oversight notes the PR Fees Fund
Balance at the end of December 2021 was $631,930
Officials from the City of Kirksville state that if this proposal passes, it would impact the
contractor testing requirements of the City. The decrease in revenues would be less than $1,000
annually, however, the more significant impact would be the loss of oversight on projects
completed by out-of-town contractors who fail to notify the City of work being completed and
fail to follow the City's municipal code. The bill only requires one contractor be licensed in a
firm, but does not specify that contractor be on the job site for all work completed. In addition,
with the proposed State license valid for two years, contractors do not need to show proof of
liability or worker's compensation insurance when completing a project for a citizen. This could
leave citizens vulnerable to losses.
Oversight assumes there could be a potential loss to local municipalities that currently license
mechanical contractors as this legislation would require them to recognize a statewide license for
the purposes of performing contracting work or obtaining permits to perform work within the
political subdivision. Oversight assumes the Department of Revenue shall withhold any moneys
the noncompliant political subdivision would otherwise be entitled to from local sales tax, until
the director has received notice from the division that the political subdivision is in compliance
with this section.
Officials from the Office of Administration - Administrative Hearing Commission, the
Department of Revenue, the Missouri Department of Agriculture, the Office of the State
Public Defender, the Office of the State Treasurer, Kansas City, and the City of Springfield
each assume the proposal will have no fiscal impact on their respective organizations.
In response to a similar proposal from last year (HB 500), officials from the Office of the State
Courts Administrator and the Missouri Office of Prosecution Services each assumed the
proposal will have no fiscal impact on their respective organizations. Oversight does not have L.R. No. 4496H.01I
Bill No. HB 2050
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any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note
for these agencies.
Oversight notes that the above mentioned agencies have stated the proposal would not have a
direct fiscal impact on their respective organizations. Oversight does not have any information
to the contrary. Therefore, Oversight will reflect a zero impact on the fiscal note for these
agencies.
Oversight only reflects the responses received from state agencies and political subdivisions;
however, other cities and counties were requested to respond to this proposed legislation but did
not. A listing of political subdivisions included in the Missouri Legislative Information System
(MOLIS) database is available upon request. L.R. No. 4496H.01I
Bill No. HB 2050
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FISCAL IMPACT – State
Government
FY 2023
(10 Mo.)
FY 2024FY 2025PR FEES FUND (0689)Transfer In - from
Missouri Mechanical
Contractor Licensing
$0$287,565$292,572Cost - DCI Salaries($120,917)($148,002)($150,962) Fringe Benefits($77,524)($94,001)($94,993) Equipment and Expense($92,462)($16,550)($16,880) Other Fund Cost ($27,813)($29,012)($29,737)Total Cost - DCI($318,716)($287,565)($292,572) FTE Change - DCI3 FTE3 FTE3 FTEESTIMATED NET
EFFECT TO THE PR
FEES FUND
($318,716)$0$0Estimated Net FTE
Change to the PR Fees3 FTE3 FTE3 FTE
MISSOURI
MECHANICAL
CONTRACTOR
LICENSING FUND
Revenue - DCI
Licensing Fee
$0$700,000$21,000Transfer Out - to PR Fee
Fund (0689)
$0($287,565)($292,572)ESTIMATED NET
EFFECT ON THE
MISSOURI
MECHANICAL
CONTRACTOR
LICENSING FUND
$0$412,435($271,572) L.R. No. 4496H.01I
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FISCAL IMPACT –
Local Government
FY 2023
(10 Mo.)
FY 2024FY 2025LOCAL
POLITICAL
SUBDIVISIONS
Loss
Potential loss of
licensing fees
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET
EFFECT ON
LOCAL
POLITICAL
SUBDIVISIONS
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
FISCAL IMPACT – Small Business
This small business mechanical contractors would be impacted by this proposal
FISCAL DESCRIPTION
This act shall be known as the Missouri Statewide Mechanical Contractor Licensing Act.
Under this act, the statewide mechanical license for mechanical contractors shall be regulated by
the Division of Professional Registration, within the Department of Commerce and Insurance.
This act creates the Office of Mechanical Contractors within the Division, to carry out the
provisions of this act.
Applicants for a statewide mechanical license must meet certain criteria set forth in the act. A
corporation, firm, institution, organization, company, or representative seeking to engage in
mechanical contracting, is required to employ at least one license holder. A statewide licensed
mechanical contractor may represent only one entity at a time.
A mechanical contractor shall have one license holder responsible for offering field employees
eight contact hours of industry training each year, and mechanical contractors shall be
responsible for providing proof of such training to the Division upon request.
In the event of a loss of a license holder, a mechanical contractor shall remain in good standing
with the Division for six months after notifying the Division of such change. Within the six
month period, a new license holder shall be registered with the Division. If no license holder is L.R. No. 4496H.01I
Bill No. HB 2050
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registered within such six month period, the Division shall declare the mechanical contractor
inactive.
Political subdivisions may establish their own local mechanical contractor's license, but shall
recognize a statewide license in lieu of a local license for the purposes of performing contracting
work or obtaining permits to perform work within such political subdivision. No political
subdivision may require the employees of a statewide licensed mechanical contractor or its
subcontractors or manufacturers' representatives to obtain journeymen licenses, apprenticeship
licenses, or occupational licenses that require passing any examination or any special
requirements to assess proficiency.
If a political subdivision does not recognize a statewide license in lieu of a local license, a
statewide mechanical contractor licensee may file a complaint with the Division, which may
investigate such complaint. If the Division finds that the political subdivision failed to recognize
a statewide license, the Division shall notify the political subdivision of such violation and grant
them 30 days to comply. If after 30 days the political subdivision does not comply, the Division
shall notify the director of the Department of Revenue, who shall withhold any moneys the
political subdivision would otherwise be entitled to from local sales tax until the political
subdivision is in compliance.
This act establishes the Missouri Mechanical Contractor Licensing Fund in the state treasury,
which shall be expended for the administration of this act.
Mechanical contractor licenses shall expire on a renewal date established by the Division. The
Division shall, prior to the renewal date, mail a renewal notice to the last known address of each
person licensed under this act. Failure to provide the Division with the information required for
renewal or to pay the required fee shall result in the license being declared inactive. The license
shall remain inactive until the licensee applies for reinstatement and pays the required fees, so
long as the application for reinstatement is received within two years of the renewal date.
Any person operating as a mechanical contractor in a political subdivision shall not be required
to possess a statewide license to operate as a mechanical contractor in such political subdivision.
The Division may refuse to issue any certificate of registration or license, and may cause a
complaint to be filed with the Administrative Hearing Commission against any holder of a
certificate of registration or license for causes set forth in the act. Upon a finding by the
Administrative Hearing Commission that grounds for disciplinary action are met, the Division
may censure or place such a person on probation for a period not to exceed five years, or may
suspend, for a period not to exceed three years, or revoke any license. Upon a judicial or
administrative finding of a violation of this act, the Division may assess fines up to $5,000.
Any person who knowingly violates the provisions of this act is guilty of a Class B
misdemeanor. L.R. No. 4496H.01I
Bill No. HB 2050
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The provisions of this act shall not apply to service work or installation of chimney sweeps,
outdoor cooking appliances, outdoor fire pits, and outdoor gas lanterns.
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 Commerce and Insurance
Department of Revenue
Office of the State Treasurer
Office of the State Courts Administrator
Office of the State Public Defender
Office of Prosecution Services
Office of Administration
Administrative Hearing Commission
City of Kansas City
City of Springfield
City of Kirksville
Julie MorffRoss StropeDirectorAssistant DirectorFebruary 14, 2022February 14, 2022