COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:4855H.01I Bill No.:HB 2197 Subject:Administrative Rules; State Departments Type:Original Date:February 12, 2024Bill Summary:This proposal requires a state agency to repeal two existing rules before
enacting a new one.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2025FY 2026FY 2027General Revenue* $0 or (Unknown)$0 or (Unknown)$0 or (Unknown)Total Estimated Net
Effect on General
Revenue$0 or (Unknown)$0 or (Unknown)$0 or (Unknown)
*Oversight assumes the fiscal impact to the state could reach the $250,000 threshold.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Other State Funds$0 or (Unknown)$0 or (Unknown)$0 or (Unknown)Total Estimated Net
Effect on Other State
Funds$0 or (Unknown)$0 or (Unknown)$0 or (Unknown)
Numbers within parentheses: () indicate costs or losses. L.R. No. 4855H.01I
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Federal Funds$0 or (Unknown)$0 or (Unknown)$0 or (Unknown)Total Estimated Net
Effect on All Federal
Funds$0 or (Unknown)$0 or (Unknown)$0 or (Unknown)
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2025FY 2026FY 2027Total 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 2025FY 2026FY 2027Local Government$0$0$0 L.R. No. 4855H.01I
Bill No. HB 2197
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Health and Senior Services (DHSS) state the proposed
legislation would create an indeterminable amount of time and effort for employees in the
Department of Health and Senior Services (DHSS), Division of Regulation and Licensure
(DRL). In any instance that a rule would need to be created or amended, additional time would
be spent determining if two existing rules could be rescinded, identifying which two rules would
be rescinded, and working to guide the rule rescission through the process. DRL cannot estimate
how many rules its staff will be required to promulgate, amend, or rescind as a result of future
legislation; therefore, the cost is unknown.
DHSS’ Division of Community and Public Health (DCPH) administers many programs funded
through federal and other dollars and if these dollars were not able to administer properly due to
a lack of rules, funding would be lost for these services. The costs are unknown as the proposed
legislation does not identify which rules would be affected and does not account for future rules.
The proposed legislation in HB 1961 would create an indeterminable amount of time and effort
to employees of the Division of Senior and Disability Services (DSDS). In any instance that a
rule would be created or amended, additional time would be spent determining if a
corresponding rule must be repealed, identifying which corresponding rule to repeal, and
working to guide the rule repeal through the process. DSDS cannot estimate how many rules
they will be required to promulgate, amend, or repeal as a result of this legislation; therefore,
cost is unknown.
The proposed legislation would create an indeterminate amount of time and effort for employees
in the Department of Health an Senior Services (DHSS), Division of Cannabis Regulation (DCR)
and could result in additional operating costs, a negative impact to public safety, or a decrease in
cannabis revenues. In the event that a rule would need to be created, DCR staff would need time
to first assess which two existing rules could be rescinded as well as time to assess the potential
impact to public safety as a result of rescinding the rules. Upon completion of that assessment,
staff time would be needed to complete the process to rescind the rule. Further, Article XIV
states that cannabis revenues in the Veterans Health and Care Fund (medical marijuana) and the
Veterans, Health and Community Reinvestment Fund (adult use) are to go first to DHSS to cover
its costs to administer the cannabis programs, then a percent is to go to the Department of
Revenue (DOR) to cover its costs associated with processing cannabis tax, and finally, any
remaining revenues in the funds are designated for transfers. DCR’s additional costs, associated
with rescinding rules and regulating the resultant impact on the regulated market, could affect the
amount of funds remaining for any potential transfers. In the event, the impact leads to
insufficient revenues in the funds to cover DHSS’ operating costs, then DHSS assumes its costs
would be paid from general revenue. DCR cannot estimate how many rules its staff will be L.R. No. 4855H.01I
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required to promulgate, amend, or rescind as a result of future legislation; therefore, the cost is
unknown.
Officials from Department of Mental Health (DMH)
Department of Mental Health (DMH) would require additional staffing. The Division of
Developmental Disabilities (DD) and the Division of Behavioral Health (DBH) would each
require one additional full-time management-level employee (Program Manager) to coordinate,
review, and evaluate existing and new rules, in consultation with General Counsel, to ensure
program efficiency and effectiveness. Each FTE salary is $92,915.52 plus fringe benefits and
associated expense and equipment costs.
In summary, this bill is projected to cost DMH $260,211 in FY 2025, $306,227 in FY 2026 and
$311,751 in FY 2027.
Officials from the Department of Corrections deferred to the Office of Administration.
Officials from the Office of Administration (OA) state this bill requires that, in order to adopt a
new rule, a state agency must rescind two of its existing rules. This means that if the bill passes,
a review of all rules will likely need to take place anytime a new rule is proposed. Finding
existing rules to rescind could also prove challenging in some instances given the administrative
functions that the various divisions within OA perform.
The Division of Personnel has 21 regulations. Anytime a new rule needs to be adopted, the
divisions will need to review existing rules to make recommendations. While it is difficult to
know how many new rules may need to be promulgated in a given year, this estimate was based
on 2 days (.008 FTE) of staff time for each regulation within the Division of Personnel given that
existing rules will require review and recommendations by division staff as well as the division
director.
Personnel Division Director: ($130,440 X .008) X 21 regulations=$21,914.
Personnel Staff: ($109,070 X .008) X 21 = $18,333
Total impact: $40,247
Purchasing only has two rules, so to amend one of them, they would need to repeal both,
meaning they have one rule (covering all of the current two). Then they would be stuck, because
they couldn’t enact another rule, even if required to by new legislation.
FMDC - This bill requires that, in order to adopt a new rule, a state agency must rescind two of
its existing rules. This means that if the bill passes, a review of all rules will likely need to take
place anytime a new rule is proposed. Finding existing rules to rescind could also prove
challenging in some instances given the administrative functions that the various divisions within
OA perform.
FMDC has 11 regulations. Anytime a new rule needs to be adopted, the divisions will need to
review existing rules in order to make recommendations. While it is difficult to know how many L.R. No. 4855H.01I
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new rules may need to be promulgated in a given year, this estimate was based on 2 days (.008
FTE) of staff time for each regulation within each division, given that existing rules will require
review and recommendations by division staff as well as that division’s director.
FMDC Division Director: ($130,440 X .008) X 11 regulations = $11,484
FMDC Staff: ($100,700 x .008) X 11 regulations = $11,479
Total impact: $22,963
At this time, it is believed that the additional staff time and resources can be absorbed by FMDC.
However, if there are multiple pieces of legislation passed where FMDC has responded that the
costs can be absorbed, FMDC would need to reevaluate to see if additional staff and associated
expenses would then be required.
Officials from the Department of Social Services (DSS), Division of Legal Services (DLS),
anticipate it would require one additional (1) attorney in order to meet the requirements of the
legislation.
Based on the total number of Orders of Rulemaking for DSS in the 2019 and 2020 Missouri
Register, DSS promulgates, amends, or rescinds approximately 60 regulations each year. Each
year approximately 70% are amendments (42), 17% are new rules (10), and 13% are rescissions
(8). Assuming that “rule proposed” means “proposed rule,” then the new Section 536.014.2,
RSMo, most likely only applies to new regulations and not amendments. Therefore, the proposed
legislation if enacted would require DSS to rescind approximately 20 regulations each year,
which is an increase of 12 recessions per year.
Officials from the Department of Revenue (DOR) state Section 536.175 require an agency to
review all their rules every five years (on an assigned schedule) and rescind or amend any rules
that are out of date or need updating. DOR underwent they five-year review during 2023. They
reviewed all 291 rules that DOR operates and rescinded 34 and have or are in the final process of
amending 67. An additional 5 new rules were proposed this year, due to legislation passed in the
last 2 legislative session. All the new rules involve the Taxation Division.
DOR proposes rules only when the General Assembly passes legislation that gives them rule-
making authority and the program they want implement does not clearly define in the statutes
how that is to happen. They also do a rule when the General Assembly adds language in a tax
credit or tax deduction saying the Department needs to create the rules. Example: They want the
agency to create the application form and approval process.
Under this proposal, if new legislation were passed that needed a rule to implement it, then 2
existing rules for current programs would have to be repealed potentially stopping those
programs. DOR notes that in recent months the majority of the rules proposed by the
Department have been to implement tax credits and tax deductions that the General Assembly
recently passed.
This proposal would have an unknown negative impact on DOR and the taxpayers. L.R. No. 4855H.01I
Bill No. HB 2197
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Officials from the Missouri Department of AgricultureDepartment of Labor and
Industrial Relations assume the proposal would have an unknown fiscal impact.
Oversight notes several state departments and agencies have stated that the proposal could have
a reaching impact on their operations. Some have assumed the need for additional FTE and
others have simply assumed an unknown amount of additional costs. Oversight assumes the
proposal could have a fiscal impact on state departments, agencies, commissions and/or boards
depending on what additional rules are proposed. Therefore, Oversight will reflect a generic $0
or (Unknown) fiscal impact to various state and federal funds for all fiscal years.
Officials from the Department of Commerce and Insurance, Department of Economic
Development, Department of Elementary and Secondary Education, Department of Higher
Education and Workforce Development, Department of Natural Resources, Department of
Public Safety, Missouri Department of Conservation, Missouri Department of
Transportation, Missouri National Guard, and the Office of the State Treasurer
assume the proposal would not fiscally impact their respective agencies.
In response to a similar proposal (HB 1961), officials from the Office of the State Courts
Administrator assumed no fiscal impact.
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.
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.
Officials from the Office of the Secretary of State (SOS) note 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. L.R. No. 4855H.01I
Bill No. HB 2197
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FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027GENERAL REVENUE FUNDCosts – various state departments,
agencies, commissions and/or boards:
potential additional cost/loss for
repealing two existing rules to propose
a new rule
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT TO
THE GENERAL REVENUE FUND
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
OTHER STATE FUNDSCosts – various state departments,
agencies, commissions and/or boards:
potential additional cost/loss for
repealing two existing rules to propose
a new rule
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT TO
OTHER STATE FUNDS
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
FEDERAL FUNDSCosts – various state departments,
agencies, commissions and/or boards:
potential additional cost/loss for
repealing two existing rules to propose
a new rule
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT TO
FEDERAL FUNDS
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown) L.R. No. 4855H.01I
Bill No. HB 2197
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FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027$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
This bill prohibits a rule proposed by a department, agency, commission, or board from taking
effect unless the entity proposing the rule also repeals at least two existing rules.
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 Health and Senior Services
Department of Mental Health
Department of Corrections
Office of Administration
Department of Labor and Industrial Relations
Department of Social Services
Attorney General’s Office
Office of Administration - Administrative Hearing Commission
Office of Administration - Budget and Planning
Department of Commerce and Insurance
Department of Economic Development
Department of Elementary and Secondary Education
Department of Higher Education and Workforce Development
Department of Natural Resources
Department of Revenue
Department of Public Safety
Missouri Department of Agriculture
Missouri Department of Conservation
Missouri Department of Transportation
Office of the State Public Defender L.R. No. 4855H.01I
Bill No. HB 2197
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Office of the Governor
Office of the State Auditor
Office of the State Courts Administrator
Julie MorffRoss StropeDirectorAssistant DirectorFebruary 12, 2024February 12, 2024