COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1166H.07C Bill No.:HCS for SS for SB 181 Subject:Insurance - General; Workers Compensation; Banks and Financial Institutions;
Department of Commerce and Insurance; Insurance - Property; Mortgages and
Deeds
Type:Original Date:April 14, 2023Bill Summary:This proposal modifies provisions relating to contractual agreements.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Division of Finance
Fund $85 to $335$85 to $335$85 to $335
Total Estimated Net
Effect on Other State
Funds$85 to $335$85 to $335$85 to $335
Numbers within parentheses: () indicate costs or losses. L.R. No. 1166H.07C
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
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. 1166H.07C
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Commerce and Insurance (DCI) – Division of Finance
(DOF) assume the following:
Section 361.749
DOF assumes this section creates a registration requirement for businesses that provided earned
wage access services with an annual registration fee of $1,000 due on July 1 each year. For the
purposes of this estimate, DOF assumes ten providers would register and renew annually,
generating $10,000 in revenue each fiscal year.
DOF is required to create forms and processes for initial registrations and reporting changes
material to the registrant’s information. The Division would also issue certificates of registration.
Development of and revisions to forms and processes for the program is estimated to take 40
hours annually at $25.00 per hour for a cost of $1,000. Additionally, DOF assumes registration
would be allowed via paper and electronically, which would require website development and
maintenance at a cost of $75 per hour, for an estimated 40 hours annually, resulting in a cost of
$3,000.
Review of registration applications by a Consumer Credit Examiner would take approximately
one hour each, at an average of $43.63 per hour. The processing and issuance of registration
certificates by an Administrative Office Support Assistant would require an hour each at $20.76
per hour. The total processing cost for each registration would be $64.39. For the estimated 10
registrants, the estimated total annual cost is $644.
Subsection 361.749.7
DOF assumes this subsection allows the Commissioner or a representative to make necessary
investigations. The Division assumes each registrant would be examined every two years
resulting in five examinations each year. Each exam is expected to take an estimated sixteen
hours. At an average hourly rate of $43.63, DOF estimates examination expenses at $9,865
annually.
The Commissioner of the Division of Finance is also granted power to promulgate any necessary
rules for administration of this section in Subsection nine. Promulgation and revision of
administrative rules would require an estimated 40 hours annually by Associate Legal Counsel X
$43.27 per hour = $1,731.
Subsection ten allows for the imposition of penalties for failure to comply with this section. DOF L.R. No. 1166H.07C
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assumes registrants would be compliant, and therefore, assumes no income from penalties.
In summary, DCI assumes a net income of $135 from this section in each year to provide for the
implementation of the changes in this proposal to the Division of Finance Fund.
Sections 436.550 – 436.570 - Consumer Legal Funding Model Act
Section 436.570
DOF assumes section 436.570 requires consumer legal finance companies to be licensed by the
Division of Finance. Applicants would be required to submit an initial application fee of $550
and an annual license renewal fee $550. For the purposes of this estimate, DOF has assumed the
same number of businesses would participate in this program as are currently licensed under
Chapter 367 which would generate revenue of $5,500-$8,250 annually, which would be credited
to the Division of Finance Fund (0550).
Processing of applications and licenses and overhead costs are estimated at $150 per license. For
10-15 licensees, the estimated annual cost is ($1,500-$2,250). Additional hours and costs would
be necessary if hearings are requested. For the purposes of this estimate, DOF assumes there
would be no hearings required for Consumer Legal Funding Licensees.
Subsection 12 makes each licensee subject to an examination by DOF every two years. DOF
assumes that these exams would be divided so that one-half of the licensees would be examined
each year. Examinations are estimated to take 8.53-9.53 hours at an hourly rate of $85.00 per
hour for personal services and expenses. For 5-8 examinations per year, the estimated cost is
($4,050-$5,800).
DOF is allowed to impose administrative fines of up to $1,000 on Consumer Legal Funding
companies that knowingly and willfully violate these sections. For the purposes of this estimate,
DOF assumes there will be no violations of these sections.
DOF assumes the workload for Sections 436.550-436.572 would be shifted to existing staff,
replacing the workload lost from Chapter 367 licenses and paid by the Division of Finance Fund
(0550). L.R. No. 1166H.07C
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Listed below is a summary of revenue and expenses to the Division of Finance Fund as estimated
by DCI:
Revenue/ExpensesFY 2024FY 2025FY 2026Licenses (Chapter 436)$5,550 -
$8,250
$5,550 -
$8,250
$5,550 -
$8,250
Processing &
Applications/Administrative
Cost
($1,500) –
($2,250)
($1,500) –
($2,250)
($1,500) –
($2,250)
Investigations &
Examinations
($4,050) –
($5,800)
($4,050) –
($5,800)
($4,050) –
($5,800)
Chapter 367 Revenue Loss($5,000-
$7,500)
($5,000-
$7,500)
($5,000-
$7,500)
Chapter 367 Savings$5,000 -
$7,500
$5,000 -
$7,500
$5,000 -
$7,500
Total Expenses – Division
of Finance Fund
($50) –
$200
($50) –
$200
($50) –
$200
Oversight does not have any information to the contrary. Therefore, Oversight will reflect the
fiscal impact as estimated by DCI-DOF.
Bill as whole:
In response to a similar proposal from this year (HCS for HB 628), officials from the Office of
the State Public Defender (SPD) stated the proposed legislation creates a new offense under
section 290.686 which could result in additional cases eligible for SPD representation. The
number of additional cases is unknown and as a result the fiscal impact is unknown.
Oversight notes in FY22 the SPD was appropriated moneys for 53 additional FTE. Oversight
assumes this proposal will create a minimal number of new cases and that the SPD can absorb
the additional caseload required by this proposal with current staff and resources. Therefore,
Oversight will reflect no fiscal impact to the SPD for fiscal note purposes. However, if multiple
bills pass which require additional staffing and duties, the SPD may request funding through the
appropriation process.
In response to a similar proposal from this year (HB 759), officials from the Department of
Labor and Industrial Relations deferred to the Department of Commerce and Insurance for the
potential fiscal impact of this proposal.
Officials from the Attorney General’s Office, the Department of Corrections and the
Department of Public Safety - Missouri Highway Patrol 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. L.R. No. 1166H.07C
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Oversight notes Sections 287.900 – 287.920 RSMo, creating the Missouri Employers Mutual
Insurance Company were established in law in 1993 (SB 251) and the sections have not been
altered in subsequent years. The repeal of these sections and the repeal and reenactment of
sections 287.690 and 375.1275 have a delayed effective date of January 1, 2025.
Rule Promulgation
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.
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026DIVISION OF FINANCE FUND
(0550)
Revenue – DCI
Registration Fees
§361.749.2 (p.3-4)$10,000$10,000$10,000
Revenue – DCI
Licenses Fees
§§436.550-436.572 (p.5)
$5,550 to
$8,250
$5,550 to
$8,250
$5,550 to
$8,250
Savings – DCI
Chapter 367 Administrative Cost
§§436.550-436.572 (p.5)
$5,000 to
$7,500
$5,000 to
$7,500
$5,000 to
$7,500
Cost – DCI
Administrative Cost
§361.479 (p.3-4) ($9,865)($9,865)($9,865) L.R. No. 1166H.07C
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Loss – DCI
Chapter 367 Licenses Fee
§§436.550-436.572 (p.5)
($5,000) to
($7,500)
($5,000) to
($7,500)
$5,000 to
$7,500
ESTIMATED NET EFFECT TO
THE DIVISION OF FINANCE
FUND (0550)$85 to $335$85 to $335$85 to $335
FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0
FISCAL IMPACT – Small Business
A direct fiscal impact to a business that engages in the business of earned wage access services
would be expected as a result of this proposal.
FISCAL DESCRIPTION
Establishes provisions relating to consumer activities regulated by the division of finance.
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
Office of the Secretary of State
Department of Commerce and Insurance
Joint Committee on Administrative Rules
Missouri Office of Prosecution Services
Office of the State Public Defender
Department of Public Safety - Missouri Highway Patrol
Office of the State Courts Administrator
Julie MorffRoss StropeDirectorAssistant DirectorApril 14, 2023April 14, 2023