COMMITTEE ON LEGISLATIVE RESEARCH OVERSIGHT DIVISION FISCAL NOTE L.R. No.:3408H.02C Bill No.:HCS for HJR 79 Subject:Constitutional Amendments Type:Original Date:January 23, 2022Bill Summary:This joint resolution modifies provisions for initiative petitions and referendums. FISCAL SUMMARY ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2023FY 2024FY 2025 General Revenue* $0 or (More than $7,000,000) $0$0Total Estimated Net Effect on General Revenue $0 or (More than $7,000,000)$0$0 *The potential fiscal impact of “(More than $7,000,000)” would be realized only if a special election were called by the Governor to submit this joint resolution to voters. ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net Effect on Other State Funds $0$0$0 Numbers within parentheses: () indicate costs or losses. L.R. No. 3408H.02C Bill No. HCS for HJR 79 Page 2 of January 23, 2022 SAK:LR:OD 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*$0$0 *Transfer out and transfer in net to zero if the Governor calls a special election. L.R. No. 3408H.02C Bill No. HCS for HJR 79 Page 3 of January 23, 2022 SAK:LR:OD FISCAL ANALYSIS ASSUMPTION Officials from the Office of the Secretary of State (SOS) assume the proposal increases the number of required signatures for a successful initiative petition. The current requirement of 8% (constitutional) or 5% (statutory) of voters from the previous gubernatorial election in six out of eight congressional districts will be about 171,000 or 107,000 signatures respectively for the 2022 petition cycle. The proposed change to require 10% (constitutional) or 5% (statutory) in all districts would increase that minimum number to over 300,000 (constitutional) or 150,000 (statutory), an approximately 75% increase for constitutional amendments and 40% for statutory measures. This increase in signatures would lead to an increase in pages submitted per petition and therefore an increase in processing costs when signatures are submitted for verification. The referendum petition submitted in 2017 contained over 250,000 valid signatures and cost approximately $32,000 in state resources to process for sufficiency, which SOS does with existing staff. Assuming that other petitions achieve a similar proportion of signatures above the minimum requirements, an increase of up to 75% in processing costs could reach or exceed $24,000 per petition expended between FY 2024 and FY 2025, which the agency would absorb. Based on an average amount of four petitions submitted for verification per election cycle, this would result in total increased costs of up to $96,000. This increase does not include resources expended by local election authorities, nor does it include any additional costs that the Secretary of State's Office could incur in order to continue to meet all statutory processing deadlines. Additionally, each year, a number of joint resolutions that would refer to a vote of the people a constitutional amendment and bills that would refer to a vote of the people the statutory issue in the legislation may be considered by the General Assembly. Unless a special election is called for the purpose, Joint Resolutions proposing a constitutional amendment are submitted to a vote of the people at the next general election. Article XII section 2(b) of the Missouri Constitution authorizes the Governor to order a special election for constitutional amendments referred to the people. If a special election is called to submit a Joint Resolution to a vote of the people, section 115.063.2 RSMo requires the state to pay the costs. The cost of the special election has been estimated to be $7 million based on the cost of the 2020 Presidential Preference Primary. The Secretary of State’s office is required to pay for publishing in local newspapers the full text of each statewide ballot measure as directed by Article XII, Section 2(b) of the Missouri Constitution and Section 116.230-116.290, RSMo. Funding for this item is adjusted each year depending upon the election cycle. A new decision item is requested in odd numbered fiscal years and the amount requested is dependent upon the estimated number of ballot measures that will be approved by the General Assembly and the initiative petitions certified for the ballot. In L.R. No. 3408H.02C Bill No. HCS for HJR 79 Page 4 of January 23, 2022 SAK:LR:OD FY 2014, the General Assembly changed the appropriation so that it was no longer an estimated appropriation. For the FY22 petitions cycle, the SOS estimates publication costs at $70,000 per page. This amount is subject to change based on number of petitions received, length of those petitions and rates charged by newspaper publishers. The Secretary of State’s office will continue to assume, for the purposes of this fiscal note, that it should have the full appropriation authority it needs to meet the publishing requirements. Because these requirements are mandatory, SOS reserves the right to request funding to meet the cost of publishing requirements if the Governor and the General Assembly again change the amount or continue to not designate it as an estimated appropriation. Oversight has reflected, in this fiscal note, the state potentially reimbursing local political subdivisions the cost of having this joint resolution voted on during a special election in fiscal year 2023. This reflects the decision made by the Joint Committee on Legislative Research that the cost of the elections should be shown in the fiscal note. The next scheduled statewide primary election is in August 2022 and the next scheduled general election is in November 2022 (both in FY 2023). It is assumed the subject within this proposal could be on one of these ballots; however, it could also be on a special election called for by the Governor (a different date). Therefore, Oversight will reflect a potential election cost reimbursement to local political subdivisions in FY 2023. Officials from the SOS also assume many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. 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 the 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. Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could require additional resources. In response to a previous version, officials from the St. Louis City Board of Elections assumed increased signature requirements and increased vote totals for passage of initiatives could result in commencement of fewer petitions. Fewer petitions would possibly require less staff and overtime for working of petitions resulting in potential savings. L.R. No. 3408H.02C Bill No. HCS for HJR 79 Page 5 of January 23, 2022 SAK:LR:OD In response to a previous version, officials from the St. Louis County Board of Elections assumed the proposal will have no fiscal impact on their organization. Officials from the Missouri Senate, Missouri House of RepresentativesPlatte County Board of Elections, Jackson County Board of Elections, and Greene County Clerk’s Office each assume the proposal will have no fiscal impact on their respective organizations. Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for these agencies. Oversight notes that any costs to the state or to local election authorities for implementing this proposal (increased number of signatures for verification) would be offset by fewer petitions that will meet the new higher thresholds and therefore, will result in fewer petitions to process. Oversight only reflects the responses received from state agencies and political subdivisions; however, other local election authorities and county clerks were requested to respond to this proposed legislation but did not. A general listing of political subdivisions included in Oversight’s database is available upon request. FISCAL IMPACT – State GovernmentFY 2023 (10 Mo.) FY 2024FY 2025GENERAL REVENUE FUNDTransfer Out – SOS – reimbursement of Local Election Authorities election costs if special election is called for by the Governor $0 or (More than $7,000,000)$0$0 ESTIMATED NET EFFECT ON GENERAL REVENUE FUND $0 or (More than $7,000,000)$0$0 L.R. No. 3408H.02C Bill No. HCS for HJR 79 Page 6 of January 23, 2022 SAK:LR:OD FISCAL IMPACT – Local GovernmentFY 2023 (10 Mo.) FY 2024FY 2025LOCAL POLITICAL SUBDIVISIONS Transfer In - Local Election Authorities reimbursement of election costs by State for a special election $0 or More than $7,000,000$0$0 Costs - Local Election Authorities cost of a special election if called for by the Governor $0 or (More than $7,000,000)$0$0 ESTIMATED NET EFFECT ON LOCAL POLITICAL SUBDIVISIONS$0$0$0 FISCAL IMPACT – Small Business No direct fiscal impact to small businesses would be expected as a result of this proposal. FISCAL DESCRIPTION Upon voter approval, this proposed Constitutional amendment would require an amendment to the state Constitution to achieve a two-thirds supermajority vote for passage. Amendments will take effect 30 days after the election if approved. The resolution specifies that the Constitutional phrase "legal voter" is defined as an individual who is a citizen of the United States, a resident of Missouri, who is properly registered to vote. The resolution also requires petition signatures to place a measure on the ballot as a Constitutional amendment to be collected in each Congressional district using a percentage requirement of 10%. Laws may be placed on the ballot using a percentage requirement of 5%. The resolution contains ballot language submitted to the voters under Chapter 116, RSMo. This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. L.R. No. 3408H.02C Bill No. HCS for HJR 79 Page 7 of January 23, 2022 SAK:LR:OD SOURCES OF INFORMATION Office of the Secretary of State Missouri House of Representatives Missouri Senate Jackson County Board of Elections Platte County Board of Elections St. Louis County Board of Elections St. Louis City Board of Elections Greene County Clerk’s Office Julie MorffRoss StropeDirectorAssistant DirectorJanuary 23, 2022January 23, 2022