|Date Requested:March 10, 2005
Time Requested:01:04 PM
| FUND(S) |
Sources of Revenue
Legislation creates:Neither Program nor Fund
Effect this measure will have on costs and revenues of state government.
| The purpose of this bill is to authorize the Division of Motor Vehicles to establish a system to license persons employed as motor vehicle salespersons.
Applicants will complete an application, successfully pass a written test, pass a background check, and p-ay the applicable fees. All salespersons employed by a dealership on March 1, 2006, will be exempt from the background investigation.
Each appliant will pay an initial fee of $25.00 and an additional $25.00 if they are required to have a background check completed.
Successful applicants will be issued a photo identification card, which will be valid for five years. The renewal fee will be $10.00.
During fiscal year 2004, there were 1,800 dealerships that employed approximately 5,000 salespersons.
Revenue generated from the initial application based on 5,000 salespersons will be $125,000.
The Division conducted a survey of the number of employees hired by dealerships. According to the responses from the dealerships, approximately 2,400 persons with no previous experience will enter the automobile sales workforce each year. These new hires will generate $120,000. In addition, there are approximately 1,800 salesperons who transfer from one dealership to another in any given year. Revenue created from transfers is a $5.00 transfer fee. The total estimated revenue the first year is $254,000.
The Division will renew salespersons licenses every five years. As a result the second and subsequent years $129,000 will be generated from transfer of licenses and new hires to the industry. Assuming the Division's survey results are consistent for long term use, the number of transfers would be 1,800 and new hires would be 2,400 per year.
Total estimated revenue the second and subsequent years would be $129,000.
The Division estimates that this program will require the equivalent of four full-time employees throughout the state during the first year. The Division will utilize its network of Regional Offices to test and license these applicants. After the first year, the number of employees should be reduced to the equivalent of one employee.
The first year cost is estimated $149,550. Second and subsequent years the cost is estimated $103,000.
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||149,550||149,550||103,000|
|Repairs and Alterations||0||0||0|
|2. Estimated Total Revenues||254,000||254,000||129,000|
3. Explanation of above estimates (including long-range effect):
Personal Services - Equivalent of 4 employees $84,000
ID Card 1.89 @ 5,000 9,450
Printing Forms 2,500
Second, Third & Fourth Years
Personal Services $21,000
ID Cards 7,900
Background Investigation $25.00 60,000
Initial Application Fee $25.00 x 5,000 $125,000
New Hires $50.00 x 2,400 120,000
Transfers $ 5.00 x 1,800 9,000
Total First Year Revenue $254,000
Second, Third & Fourth Year
New Hires $50.00 x 2,400 $120,000
Transfers $ 5.00 x 1,800 9,000
Total Second Year Revenue $129,000