Road Fund

Sources of Revenue:

Special Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

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.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 149,550 149,550 103,000
Personal Services 120,600 120,600 30,000
Current Expenses 28,950 34,150 77,400
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 254,000 254,000 129,000

Explanation of above estimates (including long-range effect):

    Estimated Cost:
    First Year
     Personal Services - Equivalent of 4 employees $84,000
     Benefits 36,600
     ID Card 1.89 @ 5,000 9,450
     Advertising 7,000
     Test 5,000
     Printing Forms 2,500
     Telephones 5,000
     Total $149,550
    Second, Third & Fourth Years
     Personal Services $21,000
     Benefits 9,000
     ID Cards 7,900
     Postage 3,000
     Envelopes 600
     Telephone 1,500
     Background Investigation $25.00 60,000
     Total $103,000
    Estimated Revenues
    First Year
     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



    Person submitting Fiscal Note: Richard M. Johnston
    Email Address: