COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:4855S.02A Bill No.:SCS for HB 2090, as amended Subject:Office of Administration; State Employees Type:Original Date:May 5, 2022Bill Summary:This proposal modifies provisions relating to the Office of Administration.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2023FY 2024FY 2025General Revenue
Fund*
($501,228,511) to
(could exceed
$501,372,151)
$5,489 $5,489Total Estimated Net
Effect on General
Revenue
($501,228,511) to
(could exceed
$501,372,151)
$5,489 $5,489
*FY 2023 includes ($143,640) which reflects programming to include the change into the current
SAM II accounting system. ITSD notes that there is a current effort underway to replace the
SAM II system, with two week payrolls likely to be included in the new system. If the proposed
changes can be delayed until the replacement system is implemented, there would be no fiscal
impact for this fiscal note. Oversight notes this change from semimonthly installments to
biweekly installments is “as designated by the Commissioner of Administration.” Therefore,
Oversight has ranged the fiscal impact from $0 (such designation change is not implemented
within the current SAM II system) to the estimated ITSD costs to make the change immediately.
* (§1 (SA1) - Includes $500 million tax credit and the cost to process the refunds per DOR’s
estimate (currently in Perfected HCS for HB 3021). L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Conservation
Commission Fund
$0 to (Unknown)$0$0Park, Soil & Waster
Fund
$0 to (Unknown)$0$0School District Trust
Fund
$0 to (Unknown)$0$0Total Estimated Net
Effect on Other State
Funds
$0 to (Unknown)$0$0
Numbers within parentheses: () indicate costs or losses.
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 2025Total Estimated Net
Effect on FTE 000
☒ 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 to (Unknown)$0$0 L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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FISCAL ANALYSIS
ASSUMPTION
Due to time constraints, Oversight was unable to receive some agency responses in a timely
manner and performed limited analysis. Oversight has presented this fiscal note on the best
current information that we have or on information regarding a similar bill(s). Upon the receipt
of agency responses, Oversight will review to determine if an updated fiscal note should be
prepared and seek approval to publish a new fiscal note.
Section 33.100 – Once every two week Pay Periods
In response to a previous version, officials from the Office of Administration
passed, it would be difficult to implement currently in SAM II-HR due to programming of the
payroll system. However, implementing a bi-weekly pay schedule in the future ERP is more
feasible. It is expected to be in place in 2024-2025. If the bill was to pass with “bi-weekly” as an
added possibility for frequency for State employees to be paid there would not be a cost in terms
of actual payroll. The salaries would be calculated by dividing by 26 pay periods versus 24 pay
periods.
Oversight notes in a similar proposal from last year (HB 407), officials from the Office of
Administration - Information Technology Services Division (ITSD) assumed the proposed
legislation would require state employees to be paid every 14 days. Currently, employees are
paid on the 15th of the month and the last day of the month, with adjustment for weekend and
holidays. The change would require modifications to SAM II. This effort would be a major
undertaking in the SAM II system requiring changes to many projects and systems. ITSD would
likely see impacts to data and reports along with other errors occur after implementation until all
the changes mature because of the complex program interaction and ability to test all possible
scenarios that could occur.
ITSD estimated a cost of $143,640 to the General Revenue Fund. The estimate assumes work
for project management coding and testing the changes. The business staff would need to be
heavily involved in the analysis and requirements gathering as well as the testing. ITSD has not
accounted for Business staff hours in this estimate.
Oversight notes ITSD assumes that every new IT project/system will be bid out because all their
resources are at full capacity. For this bill, ITSD assumes they will contract out project
management coding and testing the changes needed for SAM II. ITSD estimated the project
would take 1,512 hours at a contract rate of $95 for a total cost of $143,640. Oversight notes that
an average salary for a current IT Specialist within ITSD is approximately $54,641, which totals
roughly $85,000 per year when fringe benefits are added. Assuming that all ITSD resources are
at full capacity, Oversight assumes ITSD may (instead of contracting out the programming) hire
an additional IT Specialist to perform the work required from this bill; however, for fiscal note L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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purposes, Oversight will reflect the ITSD estimated cost of $143,640 in FY 2023. However, as
the bill states, the choice between biweekly, semimonthly, or monthly installments is “as
designated by the Commissioner of Administration.” Therefore, Oversight will range the cost
from $0 (OA Commissioner decides not to shift to biweekly pay installments, or a cost to include
upgrading the current SAM II system.
ITSD
payrolls likely to be included in the new system. If the proposed changes can be delayed until
the replacement system is implemented, (estimated to be 3-5 years) there would be no fiscal
impact for this fiscal note.
In response to a previous version, officials from the Department of Economic Development,
the Department of Elementary and Secondary Education the Department of Higher
Education and Workforce Development, the Department of Natural Resources the
Department of Corrections, the Department of Public Safety (Office of the Director,
Capitol Police, Alcohol & Tobacco Control, Fire Safety, Gaming Commission, Missouri
Highway Patrol Missouri National Guard, State Emergency Management Agency and
Veterans Commission), the Department of Social Services, the Office of the Governor, the
Missouri Lottery Commission, the Missouri Consolidated Health Care Plan, the
Department of Agriculture the Missouri Department of Conservation, the Missouri Ethics
Commission, the Missouri House of Representatives, the Office of Prosecution Services, the
Office of the State Courts Administrator, the Office of the State Auditor, the Missouri
Senate, the Office of the Secretary of State the Office of the State Public Defender, the
Office of the State Treasurer and theeach assumed the proposal will
have no fiscal impact on their respective organizations.
Oversight notes that the above mentioned agencies have stated the proposal would not have a
direct fiscal impact on their organizations. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact on the fiscal note for these agencies.
In response to a previous version, officials from the Department of Commerce and Insurance
the Department of Health and Senior Services and the Department of Mental Health
deferred to the Office of Administration for the potential fiscal impact of this proposal.
Sections 36.020 - 288.220 – Personnel Advisory Board
In response to a similar proposal from this year (SB 996), officials from the Office of
Administration (OA) stated the non-State employee members of the Personnel Advisory Board
(PAB) received per diem payments of $6,120, $5,040, and $5,307.84 in FY2019, FY2020, and
FY2021, respectively. The elimination of the PAB will eliminate these payments and therefore
have a positive fiscal impact of $5,489 (the average of those three figures) annually. L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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Additionally, while this proposal does not eliminate any FTE, this legislation would obviate the
need for numerous team members to spend hours preparing for and attending monthly PAB
meetings.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect an
annual savings to the General Revenue Fund of $5,489.
In response to a similar proposal from this year (SB 996), officials from the Attorney General’s
Office the Department of Commerce and Insurance, the Department of Economic
Development, the Department of Elementary and Secondary Education, the Department of
Higher Education and Workforce Development, the Department of Health and Senior
ServicesDepartment of Natural Resources, the Department of Corrections the
Department of Labor and Industrial Relations, the Department of Revenue the
Department of Public Safety (Office of the Director Capitol Police, Alcohol & Tobacco
Control, Fire Safety, Gaming Commission, Missouri Highway Patrol, Missouri National
Guard, State Emergency Management Agency and Veterans Commission the Department
of Social Services, the Office of the Governor, the Joint Committee on Public Employee
Retirement, the Missouri Lottery Commission, the Missouri Consolidated Health Care
Plan, the Department of Agriculture, the Missouri Department of Conservation, the
Missouri Ethics Commission, the Missouri House of Representatives the Department of
Transportation, the Office of Prosecution Services, the Office of Administration
(Administrative Hearing Commission and Budget and Planning), the Office of the State
Courts Administrator the Office of the State Auditor the Missouri Senate the Office of the
State Public Defender the Office of the State Treasurer and the State Tax Commission each
assumed the proposal will have no fiscal impact on their respective organizations for this
proposal.
Oversight notes that the above mentioned agencies have stated the proposal would not have a
direct fiscal impact on their organization. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact on the fiscal note for these agencies.
In response to a similar proposal from this year (SB 996), officials from the Department of
Mental Health deferred to the Office of Administration for the potential fiscal impact of this
proposal.
Rule Promulgation
In response to a similar proposal from this year (SB 996), officials from the Joint Committee on
Administrative Rules assumed this proposal is not anticipated to cause a fiscal impact beyond
its current appropriation.
In response to a similar proposal from this year (SB 996), officials from the Office of the
Secretary of State (SOS) noted many bills considered by the General Assembly include
provisions allowing or requiring agencies to submit rules and regulations to implement the act. L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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The SOS is provided with core funding to handle a certain amount of normal activity resulting
from each year's legislative session. The fiscal impact for this fiscal note to the SOS for
Administrative Rules is less than $5,000. The SOS recognizes that this is a small amount and
does not expect that additional funding would be required to meet these costs. However, the SOS
also recognizes that many such bills may be passed by the General Assembly in a given year and
that collectively the costs may be in excess of what the office can sustain with its core budget.
Therefore, the SOS reserves the right to request funding for the cost of supporting administrative
rules requirements should the need arise based on a review of the finally approved bills signed by
the governor.
Senate Amendment 1, as amended – Section 1 – Tax Credit
Officials from the Department of Revenue state this provision would give an automatic
nonrefundable tax credit to qualified taxpayers for their 2021 tax year tax return. A qualified
taxpayer is one who is subject to state income tax, has a Missouri state tax liability and cannot be
claimed as a dependent on another person’s return and is not delinquent on child support.
Additionally, in order to qualify a taxpayer must have a Missouri adjusted gross income of less
than $150,000 for an individual or less than $300,000 for those that file married filing combined.
This is a one-time credit that has a $500 million cap, is not allowed to be carried forward and
cannot be sold, transferred or assigned.
This will result in a loss to general revenue of $500 million.
The amount of the tax credit a qualified taxpayer can receive is an amount equal or less than their
tax liability up to $500 per individual or $1,000 for each married filing combined return. This
provision requires that if the amount claimed by all qualified taxpayers exceed the amount of the
cap, then the Department is to apportion the credit to all qualified taxpayers.
This provision allows all 2021 tax returns postmarked by October 17, 2022 to potentially be
eligible for the tax credit. Since this credit has a cap and is allowed to be apportioned, the
Department would not be able to determine the credit amount until after all the 2021 tax returns
that were postmarked prior to October 17, 2022 were received. This provision requires the
Department to add the tax credit to taxpayer’s accounts without the taxpayer being required to
submit additional paperwork. This would be a one-time adjustment to taxpayer’s accounts.
It should be noted that since this is a nonrefundable tax credit, the Department would not mail a
check to those qualified taxpayers that currently have an outstanding tax liability balance with
the Department. Those taxpayers would receive their credit as a downward adjustment of their
outstanding balance.
The Department assumes that starting November 1, 2022, the apportionment process would
begin. The Department is working to determine how best and most cost effective to handle the
apportionment of the credit. The Department is weighing the options of the computer being
programming to handle the majority of the work or whether staff members will have to do the L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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work manually. The estimate that if done electronically then this could cost as much as
$200,000 for the computer upgrades. If done manually, it may be able to be done with existing
staff but take a little longer to issue the credits.
Each year the Department processes approximately 3,200,000 individual income tax returns.
Over the last two tax years (2019 & 2020) 75% of the individual income tax filers that are
eligible for a refund (1,375,000) have received a refund check by direct deposit. Another
450,000 receive their refund by check and the remaining 1,375,000 owe the state money. They
assume that they could direct deposit into the accounts those they already direct deposit. For
those that currently receive a paper check or owe Missouri money (1,825,000) DOR doesn’t have
direct deposit information on them and would be required under this proposal to mail them a
refund check.
In order to mail the checks to those without direct deposit information, the Department notes that
they will need to have the checks printed by the state data center, and they would also need
envelopes and postage. Postage rates are set to increase July 1, 2022 and again on January 1,
2023. DOR estimates that the total piece cost is $0.5082. That includes the increased postage
rate in July of $0.4910 and the envelope cost as of 8/16/2022 (when it is expected to increase) of
$0.0172. The estimated mailing cost for the checks is $930,000. The state data center expects
the check printing costs are $0.057 per piece for an estimate of $104,000 for the 1,825,000
checks.
The Department notes that would it take 2 team members running the mail machine 258 hours to
get out the 1,825,000 checks. Given the Department only has one machine and other statutorily
required mailings go out each month, it could take up to eight weeks to process all the checks,
without overtime being paid.
It should be noted that the Department’s existing FY 2022 appropriation authority and the
estimated appropriation authority for FY 2023 does not currently include enough appropriation
authority to cover the Department’s administrative costs of this proposal or the tax check
amounts. Without additional appropriation authority the Department would not be able to issue
the tax credits under this proposal and the refunds issued during the course of a typical fiscal
year. Therefore, DOR will likely need additional appropriation authority.
Oversight will reflect the $500 Million in revenue decrease to the general revenue, programming
costs ($200,000) and mailing/postage costs ($1,034,000) in the fiscal note.
Oversight notes Senate Amendment 1 authorizes total tax credits of $500 million and will reflect
that cost to the General Revenue Fund. For fiscal note purposes, Oversight has included
responses to a similar proposal from this year (HCS for SCS for SB 908) from the Office of
Administration - Budget and Planning. Oversight will reflect a total cost of Up to $500,000,000
vs $1 billion as mentioned below. L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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In response to a similar proposal from this year (HCS for SCS for SB 908), officials from the
Office and Administration – Budget and Planning (B&P) assumed the proposal would create
a non-refundable tax credit for tax year 2021. A qualified taxpayer must be an individual who
filed an individual income tax return for tax year 2021 by October 17, 2022. Such individual
must have a Missouri income tax liability, cannot be claimed as a dependent, and may not be an
estate or trust.
For tax year 2021, qualifying individuals may receive a tax credit of up to $500 for an individual
or $1,000 for a married filing combined couple. The tax credit is non-refundable, cannot be
transferred or sold, and cannot be carried forward. B&P notes that because the tax credit is non-
refundable and cannot be carried forward, the amount of an individual’s tax credit will be limited
to their state income tax liability.
The total amount of tax credits that may be authorized is $1 billion. In the event that total tax
credits exceeds $1 billion, DOR must apportion all tax credits by the smallest uniform
percentage such that total redemptions do not exceed the $1 billion cap.
Using 2019 tax year data, the most current complete year, there were 1,579,708 individuals who
filed as single, 384,754 individuals who filed as head of household, and 1,248,788 married who
filed combined returns. Accounting for income tax liability, B&P estimates that total credits
claimed for the tax year 2019 would have been $1,320,433,036. Therefore, in order to remain
under the $1 billion redemption cap, B&P estimates that the tax credits would have had to been
apportioned to 75.7%. Using the above information, B&P estimates that the maximum tax credit
for an individual would have been $378.66 and the maximum tax credit for a married couple
would have been $757.33 for tax year 2019.
B&P notes that the number of filers for the tax year 2021 and an individual’s tax liability may be
significantly different from the number and liability for the tax year 2021. Therefore, the
maximum credit may also be significantly different.
B&P assumes that all tax credits under this provision will be paid during FY23. Therefore, B&P
estimates that this provision will reduce TSR and GR by $1 billion in FY23. This provision will
not impact TSR beyond FY23.
Senate Amendment 2 – Taxpayer Refund
Officials from the Department of Revenue state this provision would allow the Department to
issue a refund to a taxpayer if a court of law finds that a Department employee provided
incorrect information to the taxpayer. The Department estimates the fiscal impact to be less than
$100,000.
Oversight assumes Senate Amendment 2 allows for a refund to taxpayers if certain negligence
or incorrect information has occurred. Oversight will range the fiscal impact of $0 (no refunds
are issued) to an unknown cost to General Revenue Fund, Conservation Commission Fund, Park L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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& Soil Fund, School District Trust Fund and Local Governments. Oversight assumes the
taxpayer has to file for a refund by April 15, 2023 and therefore will only reflect the fiscal
impact range in FY 2023.
Senate Amendment 3 – COVID-19 vaccinations
Oversight assumes Senate Amendment 3 will have no fiscal impact on state or local
government. L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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FISCAL IMPACT – State GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025GENERAL REVENUECost Avoidance – OA (p. 4)
Elimination of the Personnel
Advisory Board
§§36.020 - 288.220
$5,489$5,489$5,489Cost - OA – ITSD §33.100 (p. 3)
Coding to move to payroll once every
two weeks
$0 or
($143,640)
$0$0Cost – B&P, DOR – non-refundable tax
credit (§2) p. 6 (SA 1)
(Up to
$500,000,000)$0$0
Cost – DOR (§2) p.6 (SA 1) Programming($200,000)$0$0 Mailing Costs($1,034,000)$0$0Total Costs – DOR($1,234,000)$0$0Cost – (SA 2) §136.370 p. 9$0 to
(Unknown)
$0 $0 ESTIMATED NET EFFECT TO
THE GENERAL REVENUE FUND
($501,228,511)
to (could
exceed
$501,372,151)
$5,489 $5,489CONSERVATION COMMISSION
FUND
Cost – (SA 2) §136.370 p. 9$0 to
(Unknown)
$0$0 L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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ESTIMATED NET EFFECT TO
THE CONSERVATION
COMMISSION FUND
$0 to
(Unknown)
$0 $0PARK, SOIL & WATER SALES
TAX FUND
Cost – (SA 2) §136.370 p. 9$0 to
(Unknown)
$0 $0 ESTIMATED NET EFFECT TO
PARK, SOIL & WATER SALES
TAX FUND
$0 to
(Unknown)
$0 $0 SCHOOL DISTRICT TRUST FUNDCost – (SA 2) §136.370 p. 9$0 to
(Unknown)
$0 $0 ESTIMATED NET EFFECT TO
SCHOOL DISTRICT TRUST FUND
$0 to
(Unknown)
$0 $0 FISCAL IMPACT – Local GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025LOCAL POLITICAL
SUBDIVISIONS
Cost – SA 2 §136.370 p. 9$0 to
(Unknown)
$0 $0 ESTIMATED NET EFFECT TO
LOCAL POLITICAL
SUBDIVISIONS
$0 to
(Unknown)
$0 $0
FISCAL IMPACT – Small Business
Certain small businesses could receive a sales tax refund as a result of this proposal (SA 2). L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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FISCAL DESCRIPTION
This bill modifies provisions relating to the Office of Administration.
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 Economic Development
Department of Elementary and Secondary Education
Department of Higher Education and Workforce Development
Department of Health and Senior Services
Department of Mental Health
Department of Natural Resources
Department of Corrections
Department of Public Safety
Department of Social Services
Office of the Governor
Joint Committee on Public Employee Retirement
Joint Committee on Administrative Rules
Missouri Lottery Commission
Legislative Research
Oversight Division
Missouri Department of Agriculture
Missouri Department of Conservation
Missouri Ethics Commission
Missouri House of Representatives
Office of the Lieutenant Governor
Missouri Office of Prosecution Services
Office of Administration
Office of the State Courts Administrator
Office of the State Auditor
Missouri Senate
Office of the Secretary of State
Office of the State Public Defender
Office of the State Treasurer
State Tax Commission L.R. No. 4855S.02A
Bill No. SCS for HB 2090, as amended
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Julie MorffRoss StropeDirectorAssistant DirectorMay 5, 2022May 5, 2022