Fiscal Note SB 109

FISCAL NOTE 2007-SB109A

SB 109 exempt from motor vehicle license fees certain motor vehicles used to transport children to and from certain head start programs.

SDCL 32-5-42 exempts from fees for registration buses and other motor vehicles owned by numerous entities. These entities include: the state, the federal government, counties, townships, municipalities, public or nonpublic schools, Indian mission schools, Indian tribes, and fire departments. This bill adds federally-funded Head Start programs to that list.

This change would also exempt the Head Start program from paying excise tax on the purchases of new buses and vehicles as per 32-5B-2(1).

After consultation with the Bureau of Finance and Management, the Department of Revenue and Regulation, and the Department of Education, pursuant to Joint rule 6C-1.1 of the South Dakota Legislature, it is estimated that Senate Bill 109 would have the following impact on the state's finances in FY2008:

Agency/Item	General Fund	Federal Funds	Other Funds	Total	FTE

Revenue:
Excise Tax (State)	($13,500)	$0	$0	($13,500)
License Fees (Counties)	($7,000)			($7,000)
Total Revenue	($20,500)	$0	$0	($20,500)

Expenses:	$0	$0	$0	$0

Net Impact	($20,500)	$0	$0	($20,500)	0.0

According to the Department of Education, there are six federally-funded Head Start programs serving 59 of the 66 counties in South Dakota. The six programs own a total of 29 buses and 140 other vehicles. The programs have reported that their bus license fees average $50 and the fees for other vehicles slightly less. (Of the $50 license fee, approximately $41 goes to the state, $8 to counties, and $1 to the waste fee for disposal of plates.)

The Department of Revenue and Regulation estimates, based upon the vehicles registered, that the loss of revenue ranges from $7,000 to approximately $20,500 depending upon excise tax revenues lost on each vehicle replaced by the Head Start programs.