The bill, as amended by the House Committee on Finance, February 11, 1998, would allow the Department of Revenue (DOR) and county clerks and recorders to increase fees charged for issuing a motor vehicle title to persons without liens from $5.50 to $6.50. The bill also increases the fees for issuing a duplicate title from $6.50 to $7.50. Persons with liens on a motor vehicle title would still be assessed the current $5.50 fee. The amendment also states that the DOR should phase-in a program over a three-year period that would allow county clerks and recorders to issue motor vehicle titles at the county clerks offices. This bill would become effective July 1, 1998.

STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000	FY 2000/2001
State Revenues General Fund Highway Users Tax Fund (HUTF)* Highway Users Tax Fund (HUTF) Distributive Data Processing Fund (DDP)	*($161,175) 400 19,000	*($161,175) 400 19,000	*($161,175) 400 19,000
State Expenditures General Fund Distributive Data Processing Fund	*(130,870)	(164,284)	(625,227)
FTE Position Change	*(0.6 FTE)	(2.0 FTE)	(10.6 FTE)
Local Government Impact — Increased fees for issuing motor vehicle titles and duplicate titles.

The bill increases the fees that the state or its agents may charge for issuing duplicate motor vehicle titles and for issuing motor vehicle titles to persons without liens on titles by $1.00. The current fee distribution would not change for transactions conducted by DOR. The estimated $400 in revenue from titles issued without liens would flow to the Highway Users Tax Fund. The revenues generated from issuing duplicate titles issued would be deposited into the Distributive Data Processing Fund (DDP) by an estimated $19,000 in FY 1998-99 and FY 1999-00.

* Under current law, the DOR is authorized to issue titles overnight to motor vehicle dealers for a $25 fee. The DOR issued 25,787 of these overnight titles. Approximately 25 percent or 6,447 of these titles issued overnight are Colorado to Colorado titles. The bill would allow county clerks to issue these titles to dealers for $1.00. It is assumed that this 25 percent would go to the county clerk’s office for the title rather than the DOR. This would reduce the revenue to the HUTF by approximately $161,175. It should be noted that the DOR was in the process of implementing a program to allow county clerks to begin to issue Colorado to Colorado titles by July 1998. This revenue loss would have been realized without this provision in the bill.

Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

Computer programming changes that would be required by this bill would be completed during the normal review and reprogramming of the Department of Revenue’s computer programs. The bill would require state agencies to pay an additional fee for every vehicle that they were getting a duplicate title for or getting a title that did not have a lien. It is assumed that the estimated $400 in FY 1998-99 would be minimal within each agency and the amount would be absorbed within existing resources.

In FY 1998-99, the DOR would experience some reductions in operating costs for having the county clerks issue Colorado to Colorado titles without liens. It is assumed that the counties will not be able to do all titles. Currently, county clerks issue duplicate certificates of title. However, county clerks forward 12 percent of those to the DOR for processing. It is assumed that 12 percent of all titles would be forwarded to the DOR for processing. The DOR would also continue to verify these titles for an additional year to ensure that the credibility of the title database is ensured during the transition. The DOR would also continue to archive documents, track vehicle titles, and respond to citizen inquires. The department would experience lower mailing costs and some reduction in handling costs for printing titles and placing the titles in envelopes. The amount of the reduction in FY 1998-99, is estimated to be 0.6 FTE and $130,870. It should be noted that the DOR was in the process of implementing a plan to allow county clerks to begin to issue Colorado to Colorado titles by July 1998. This expenditure reduction would have been realized without this provision of this bill.

The workload for DOR Motor Vehicles Titles Section would be reduced in FY 1999-00, by an estimated 1.4 FTE and $33,414 DDP. The lower mailing and operating costs identified in FY 1998-99 would also continue. The total estimated reduction would be 2.0 FTE and $164,284 DDP ($33,414 + $130,870).

In FY 2000-01, the DOR would, if the county clerks were to assume issuing the remaining titles, experience an additional workload reduction. The titles section reduction is estimated to be 7.2 FTE and $167,069 DDP. The estimated mailing and handling cost reductions would be 1.4 FTE and $293,873 DDP. The total reduction in FY 2000-01, is estimated to be 10.6 FTE (0.6 + 1.4 + 1.4 + 7.2) and $625,227 DDP ($130,871 + $33,414 + $167,069 + $293,873).

The total estimated reductions to the DOR mail room in FY 2000-01 is 2.0 FTE and $424,744. The total estimated reductions to the DOR Motor Vehicle Titles Section in FY 2000-01 is 8.6 FTE and $200,483.

Pursuant to Section 2-2-322, C.R.S., which requires legislative service agency review of legislative measures which include the creation or increase of any fee collected by a state agency, the following analysis is provided.

For transactions conducted at the county clerk and recorders office, county clerks and recorders would receive all of the $1.00 increase in fees from issuing motor vehicle titles to persons without liens on the vehicle and for issuing duplicate titles. This would generate approximately $610,000 in FY 1998-99 and FY 1999-00 to county clerks.

County clerks and recorders would also have an increased workload from issuing motor vehicle titles. This increased workload would create a need for additional FTE in some county clerks offices. The amount of the increase to any one county has not been estimated.

This fiscal note implies that the Department of Revenue would require a reduction of 0.6 FTE and $130,871 in Distributive Data Processing Fund spending authority for FY 1998-99 to implement this bill.

2. That the Department of Revenue would issue 19,000 duplicate titles and 400 titles (issued to state vehicles) without liens in FY 1998.

3. That county clerks and recorders will issue 60,000 duplicate titles and 550,000 titles to persons without lines in FY 1998.

4. That county clerks forward 12 percent of the duplicate titles to the state for processing.

5. That county clerks will forward 12 percent of all titles to the DOR for processing.

6. That the county clerks will assume issuing Colorado to Colorado motor vehicle titles in FY 1998-99.

7. That the county clerks will assume issuing Manufacturer’s Statements of Origin for motor vehicle in FY 1999-00.

8. That the county clerks will assume issuing all other motor vehicle titles in FY 2000-01.

9. That 25 percent of all motor vehicle dealer requests for overnight titles are Colorado to Colorado titles.

10. That the $25 fee for titles issued to motor vehicle dealers for overnight service is not authorized to the county.

FEE IMPACT ON INDIVIDUALS, FAMILIES OR BUSINESS
Type of Fee (identify each fee separately)	Current Fee	Proposed Fee	Fee Change	# of Affected Individuals, Families or Business	Total Fee Impact
Duplicate Motor Vehicle Title	$5.50	$1.00	$1.00	79,000	$79,000
Motor Vehicle Title w/o lien	$6.50	$1.00	$1.00	550,400	$550,400
TOTAL					$629,400