COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1305H.03P Bill No.:Perfected for HCS for HB 471 Subject:State Employees; State Departments Type:Original Date:April 13, 2023Bill Summary:This proposal allows state agencies to create incentive programs for
employees.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026
General Revenue*
$0 $0 to (Could exceed
$369,086,226)
$0 to (Could exceed
$369,086,226)
Total Estimated Net
Effect on General
Revenue $0
$0 to (Could exceed
$369,086,226)
$0 to (Could exceed
$369,086,226)
*Oversight notes the fiscal impact depends on numerous factors, including an appropriation(s)
for the program, formally adopted policies by the state departments, and the number of
employees meeting the targets outlined in the adopted policies. All of these considered, the
fiscal impact could be substantially less than the stated amounts. As the criteria would have to be
stated in writing at least one year before the retention or achievement payments are made,
Oversight will not reflect a potential fiscal impact until FY 2025.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Other State Funds*$0 $0 to (Could exceed
$228,823,015)
$0 to (Could exceed
$228,823,015)
Total Estimated Net
Effect on Other State
Funds $0
$0 to (Could exceed
$228,823,015)
$0 to (Could exceed
$228,823,015)
Numbers within parentheses: () indicate costs or losses. L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 2 of
April 13, 2023
KC:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Federal Funds$0 $0 to (Could exceed
$148,171,669)
$0 to (Could exceed
$148,171,669)
Total Estimated Net
Effect on All Federal
Funds $0
$0 to (Could exceed
$148,171,669)
$0 to (Could exceed
$148,171,669)
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total 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 2024FY 2025FY 2026Local Government$0$0$0 L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 3 of
April 13, 2023
KC:LR:OD
FISCAL ANALYSIS
ASSUMPTION
§105.1750 – Personnel Incentive Program
In response to a previous version, officials from the Office of Administration – Office of
Personnel (OA) stated if this proposal was implemented statewide, the proposal could have a
potential impact of $0 to $746,080,910. The Office of Administration, Division of Personnel
based this information on various turnover percentage rates within the executive branch from
November 30, 2022 data.
The Division of Personnel assumes that, if this proposal was passed, state agencies could pay out
bonuses of up to 20% once every other year. Following this assumption as well as assuming 0%
turnover, the potential cost would be up to $746,080,910 with total regular payroll with fringe
benefits.
The potential cost using a turnover rate of 27.4% would be $541,895,659.00 with total regular
payroll with fringe benefits. The potential cost using a turnover rate of 58.6% (percentage of
turnover for employees with less than two years of services) would be $308,767,684.00 with
total regular payroll with fringe benefits. Office of Administration, Division of Personnel based
this impact purely on longevity requirements, assuming the max of 20% with no consideration
for other written criteria that would affect eligibility.
OA assumes the cost will be split as follows
General Revenue (49.47%): $369,086,226
Federal Funds (19.86%): $148,171,669
Other Funds (30.67%): $228,823,015
Total (100%): $746,080,910
Oversight will use the cost estimate provided by OA to reflect the potential cost as a result of
this proposal for the executive branch of government. However, Oversight assumes this
legislation applies to all branches of government and will reflect the cost estimate as “could
exceed” to capture potential cost to the legislative and judicial branches.
Oversight also assumes this legislation will not be mandated and therefore will reflect the fiscal
impact as $0 (the program is not utilized) to “Could exceed” the max 20% cost estimate provided
by OA split between the General Revenue Fund, Federal Funds and Other Funds beginning in
FY 25.
Officials from the Department of Economic Development (DED) assume this legislation
creates a retention or achievement payment not to exceed 20% of base salary to be awarded on L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 4 of
April 13, 2023
KC:LR:OD
completion of the retention period and not more frequently than biennially. This may result in the
need for additional Personal Service funding to cover these increases; however, it is difficult to
determine an estimated cost. DED estimated 25% of the department's FTE receiving the payment
and then calculated the 20% increase.
Estimated costs:
General Revenue - $0 to $248,009
Federal - $0 to $174,683
Other - $0 to $92,841
Total - $0 to $515,533
In response to a previous version, officials from the Department of Labor and Industrial
Relations assumed this proposal will have a fiscal impact on their department.
In response to a previous version, officials from the Department of Revenue (DOR) stated this
legislation would allow the Department to provide monetary incentives for employee retention
and reward, not to exceed 20% of salary, and such payment would not be in violation of the
Missouri Constitution. If passed, the Department would request appropriate funding for this
incentive program through the appropriations process.
Officials from the Department of Public Safety - Missouri Highway Patrol anticipate a fiscal
impact if it implemented an incentive program under the proposed legislation, to assist with
recruiting, hiring, and retention. At this time, the Patrol has not researched a methodology to
implement an incentive program. The most likely affected funds have been listed within this
response, however, the actual impact to each fund is unknown. Factors influencing the fiscal
impact would be the number of personnel granted the incentive. It is estimated the fund most
affected by House Bill 471 would be the Highway Fund (0644).
In response to a previous version, officials from the Office of the State Public Defender assume
to provide an incentive program of a 1% salary increase per successful year of service, the
annual current cost to SPD would be approximately $1,500,000.
Officials from the Missouri Lottery Commission assume this proposal this proposal will cost
the state $1.5 million in year 1, $1.8 million in year 2 and $1.8 million in year 3. The proposal
authorizes bonuses to encourage employee retention or to award exceptional achievement, not to
exceed 20% of base salary and not more frequently than annually. The Lottery’s base salary
$8.8 million after the Governor’s 8.7% statewide pay increase, times 20% is $1.8 million.
The Lottery would need additional personal services appropriation authority to implement this
program. Without additional appropriation authority, they could only offer 1%-2% of base
salary, or approximately $40k to $80k per year in bonuses.
Officials from the Department of Economic DevelopmentDepartment of Public Safety
(Alcohol & Tobacco Control, Fire Safety, Gaming Commission, , State Emergency L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 5 of
April 13, 2023
KC:LR:OD
Management Agency and Veterans Commission), the Department of Social Services, the
Department of Elementary and Secondary Education, the Department of Higher Education
and Workforce Development, the Missouri Department of Transportation, the Joint
Committee on Administrative Rules, the Missouri Consolidated Health Care Plan, the
Missouri the Missouri House of Representatives, the Office of the State Courts
Administrator, the Office of the Lieutenant Governor the Office of the State Auditor, the
Missouri Office of Prosecution Services the Missouri Senate, Office of Administration -
Budget and Planning the Office of the Secretary of State the State Tax Commission each
assume the proposal will have no fiscal impact on their respective organizations.
In response to a previous version, officials from the Attorney General’s Office, Department of
Public Safety – Capitol Police, Missouri National GuardOffice of the Governor,
Department of Conservation, and the Missouri Ethics Commission assumed 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 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.
Officials from the Department of Commerce and Insurance, the Department of Health and
Senior Services, the Department of Mental Health, the Department of Natural Resources,
the Department of Corrections, the Department of Public Safety – Directors Office and the
Missouri Department of Agriculture defer to the Office of Administration for the potential
fiscal impact of this proposal.
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
In response to a previous version, 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. 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.
House Amendment 1 L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 6 of
April 13, 2023
KC:LR:OD
§105.1750
Oversight assumes House Amendment 1 defines that the retention or achievement payments
described in section 105.1750, will not apply to any public employee holding a position of
employment for which the salary is set by statute. Oversight assumes OA’s original response to
a previous version of this proposal may have included salaries set in statute in their estimate.
However, for fiscal note purposes, Oversight will still range the fiscal impact as $0 to (Could
exceed) the estimate provided by OA due to the numerous factors, including an appropriation(s)
for the program, formally adopted policies by the state departments, and the number of
employees meeting the targets outlined in the adopted policies.
§168.093
Oversight assumes House Amendment 1 allows for a school district to award an employee for
exceptional employment achievement or to encourage retention. Oversight notes the amendment
does not outline how much should be awarded or how often the award will be given. Oversight
assumes this legislation will not be mandated and therefore will reflect the fiscal impact as $0
(the program is not utilized) to “unknown” to local school districts.
House Amendment 2
§168.100
Officials from the Department of Elementary and Secondary Education assume House
Amendment 1 will have no fiscal impact on their organization. Oversight does not have any
information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for
this section.
Oversight assumes this proposal would allow school districts the flexibility to increase the pay
for teaching positions that are more difficult to fill. Oversight notes there could be increased
costs for school districts if teachers in hard-to-staff subject areas receive differentiated placement
on the salary schedule to increase compensation; however, this is at the discretion of the school
districts.
Oversight did not receive any responses from school districts related to the fiscal impact of this
proposal. Oversight has presented this fiscal note on the best current information available. Upon
the receipt of additional responses, Oversight will review to determine if an updated fiscal note
should be prepared and seek the necessary approval to publish a new fiscal note. L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 7 of
April 13, 2023
KC:LR:OD
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUE Cost – OA §105.1750 (p.3)
Incentive Programs
$0$0 to (Could
exceed
$369,086,226)
$0 to (Could
exceed
$369,086,226)
ESTIMATED NET EFFECT TO
THE GENERAL REVENUE FUND
$0$0 to (Could
exceed
$369,086,226)
$0 to (Could
exceed
$369,086,226)
OTHER STATE FUNDS Cost – OA §105.1750 (p.3)
Incentive Programs
$0$0 to (Could
exceed
$228,823,015)
$0 to (Could
exceed
$228,823,015)
ESTIMATED NET EFFECT TO
OTHER STATE FUNDS
$0$0 to (Could
exceed
$228,823,015)
$0 to (Could
exceed
$228,823,015)
FEDERAL FUNDS Cost – OA §105.1750 (p.3)
Incentive Programs
$0$0 to (Could
exceed
$148,171,669)
$0 to (Could
exceed
$148,171,669)
ESTIMATED NET EFFECT TO
FEDERAL FUNDS
$0$0 to (Could
exceed
$148,171,669)
$0 to (Could
exceed
$148,171,669) L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 8 of
April 13, 2023
KC:LR:OD
FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026SCHOOL DISTRICTSCosts - differentiated placement of
hard-to-staff teachers on the salary
schedule - §168.110 (p.6)
$0 to
(Unknown)
$0 to
(Unknown)
$0 to
(Unknown)
Cost – Incentive Programs
§168.093 (p.6)
$0 to
(Unknown)
$0 to
(Unknown)
$0 to
(Unknown)
ESTIMATED NET EFFECT ON
SCHOOL DISTRICTS
$0 to
(Unknown)
$0 to
(Unknown)
$0 to
(Unknown)
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
In order to encourage retention or exceptional employment achievement, this bill provides for
personnel payments to be made according to specific, written criteria, predetermined and
approved by the department director in writing, at least one year prior to the exceptional
employment achievement. The payments authorized by the bill shall not exceed 20% of the
employee's base wages or salary and are awarded upon the completion of the retention period in
question and not more frequently than annually. The payments indicated in the bill are not
considered as a bonus in violation of Article III, Section 39 of the Missouri Constitution.
The bill also addresses differential pay for difficult-to-fill teaching positions and allows school
districts to make payments for exceptional employment achievement.
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
Attorney General’s Office
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 L.R. No. 1305H.03P
Bill No. Perfected HCS for HB 471
Page 9 of
April 13, 2023
KC:LR:OD
Department of Mental Health
Department of Natural Resources
Department of Corrections
Department of Labor and Industrial Relations
Department of Revenue
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
Local Government Employees Retirement System
Missouri Consolidated Health Care Plan
Missouri Department of Agriculture
Missouri Department of Conservation
Missouri Ethics Commission
Missouri House of Representatives
Office of the Lieutenant Governor
Missouri Department of Transportation
Missouri State Employee's Retirement System
MoDOT & Patrol Employees’ Retirement System
Missouri Office of Prosecution Services
Office of Administration - Budget and Planning
Facilities Management, Design and Construction
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
Public Schools and Education Employee Retirement Systems
State Tax Commission
Julie MorffRoss StropeDirectorAssistant DirectorApril 13, 2023April 13, 2023