Colorado Legislative Council Staff



No State General Fund Impact

Cash Fund Revenue and Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-538

Rep. May

Sen. Ament


Bill Status:

Fiscal Analyst:

January 8, 1998

House Transportation

Scott Nachtrieb (866-4752)


Summary of Legislation


FY 1998/99

FY 1999/2000

State Revenues

General Fund

Motor Vehicle Dealer Board Cash Fund

Lost interest earnings

Lost interest earnings

State Expenditures

General Fund

Motor Vehicle Dealer Board Cash Fund

See State Expenditures section

FTE Position Change



Local Government Impact — None

            The bill would continue the Motor Vehicle Dealer Board (MVDB) until July 1, 2003. The office of secretary/treasurer for the MVDB would be eliminated, but the board would elect a 1st vice-president and a 2nd vice-president instead of a single vice-president. The board would be allowed to conduct hearings using board members as hearing officers. Current law allows the board to use administrative law judges or the entire board. The sanctions that a board member may recommend when acting as a hearing officer would be limited to the denying or granting of a license under terms the hearing officer deems appropriate in a licensing hearing and imposing a probationary period of up to 12 months or a fine of up to $500 in a disciplinary hearing for each violation.

            The board would be authorized to issue letters of admonition and letters of reprimand for violations by licensees and to seek a resolution to disputes prior to beginning an investigation or hearing. The Colorado Rules of Civil Procedure for discovery would apply in proceedings conducted by the board. The board would no longer prescribe forms for the lease of a motor vehicle. The board could request the Attorney General make civil investigations and enforce civil violations of the board's rules and bring and defend civil suits. Annual licenses issued by the board would no longer expire on July 1, but the expiration dates would be modified so that approximately the same number of licenses would expire in each month of the year. The MVDB would no longer be required to notify a salesperson who was discharged or left employment that their license has been returned to the board. This bill would become effective July 1, 1998.

State Revenues

            The license fees the board collects are currently all collected in the month of July of each year. The bill authorizes the board to change the license due dates so that an equal number of licenses are due in each month throughout the year. Under current law, all the revenue the board receives comes in July. The funds would remain in the account and collect interest until expended by the board. It is estimated that dispersing the revenues collected throughout the year would result in a loss of interest earnings. The amount of interest earning the fund would lose has not been estimated.

State Expenditures

            The bill would apply the Colorado Rules of Civil Procedure to proceedings conducted by the board and adds a second appeal to the process. The current rules the board uses for discovery are not as extensive as those required in the bill. It is estimated that the cost of legal services for the new discovery rules would cost the board approximately $21,339. However, the Joint Budget Committee increased the legal services line for the board in last year’s Long Appropriations Bill. Based on that increase, the board would not require additional spending authority to implement the new rules of procedure or the new appeal process provided in this bill. The bill expands the persons that can conduct hearings to included individual board members. Current law allows the entire board to conduct hearings or the use of an administrative law judge. Board members are also authorized to settle issues before an investigation or hearing is required. Allowing the use of individual board members to conduct hearings and early settlements would reduce the costs of conducting hearings. The amount of the reduced cost would depend upon the utilization of the new procedures and the number of times the results of the hearing are appealed. No estimate is available of the savings from these provisions.

            Another provision in the bill, would allow the board to request the Attorney General make a civil investigation, enforce civil violations of the board’s rules, and defend civil lawsuits. These provisions would also increase the cost of legal services to the board. The number of times and the amount of time required if the board would utilize these provisions has not been estimated. The bill changes when a dealer obtains a license from the current July to any time during the year. This provision would eliminate the intense workload required in July to process all license applications. This workload would be dispersed throughout the year more equitably. The change would not require a change in the appropriation to the department. Two other provisions would have a minimal reduction in the operating costs of the board. The first is the elimination of the requirement that the board notify a salesperson that their license has been returned when the salesperson has been terminated or otherwise left employment with a dealer. The second minimal savings would be from the provision that eliminates the requirement that the board provide forms for the lease of motor vehicles to dealers.

Spending Authority

            This fiscal note implies that no additional spending authority would be required to implement the provisions of this bill for FY 1998-99.

Departments Contacted       Revenue