DRIVER RESPONSIBILITY FEES
Senate Bill 166 (Substitute S-1)
Sponsor: Sen. Bruce Caswell
House Committee: Transportation
Senate Committee: Appropriations
Complete to 9-27-11
A SUMMARY OF SENATE BILL 166 AS PASSED BY THE SENATE 7-8-11
Public Act 165 of 2003 amended the Michigan Vehicle Code to establish "driver responsibility fees" for drivers who accumulate a certain number of points on their licenses or who commit certain specified offenses. These are in addition to the penalties for committing the offenses. Senate Bill 166 would amend the section of the Vehicle Code dealing with those fees (MCL 257.732a) to do the following:
Fees Being Eliminated
The driver responsibility fees being eliminated as of October 1, 2011, are:
-- The $150 fee per year for two consecutive years for operating without a valid license, having more than one license, or failing to surrender licenses from other states.
-- The $200 fee per year for two consecutive years for failure to produce proof of insurance, or knowingly providing false evidence of insurance.
-- The $100 fee per year for two consecutive years for the accumulation of seven or more points within a two-year period, and the extra $50 for each additional point over seven points.
--The $500 fee per year for two consecutive years would no longer apply to violations of mandatory insurance provisions in the Insurance Code. (See below for the offenses this fee would continue to be imposed on.)
Fees Remaining in Place
--The $1,000 fee per year for two consecutive years for a variety of serious offenses remains in place with no substantive change. (See the later description of which offenses this fee applies to.)
--The $500 fee per year for two consecutive years remains in place for a variety of alcohol-related and controlled substance violations and reckless driving. (See the later description of which offenses this fee applies to.)
DETAILED EXPLANATION:
o Currently, there is a $1,000 driver responsibility fee assessed each year for two consecutive years for certain moving violations. The bill would not make any substantive change to this provision. The $1,000 fee would continue to apply to:
· Manslaughter, negligent homicide, or a felony resulting from the operation of a motor vehicle, off-road vehicle (ORV), or snowmobile.
· A moving violation subject to criminal penalties that results in injury or death to a person working in a construction zone or operating an implement of husbandry on a highway; or causing injury or death to a police officer, fire-fighter, or other emergency response personnel in the immediate area of a stationary authorized emergency vehicle.
· Operating a motor vehicle or ORV while intoxicated; or causing the death or serious impairment of a body function of another person while driving under the influence or while visibly impaired due to the consumption of alcohol or a controlled substance (OWI).
· Failing to stop and disclose identity at the scene of an accident when required by law.
· Fleeing or eluding an officer.
· A moving violation that causes serious impairment of a body function or death, or reckless driving causing serious impairment of a body function or death.
o There is currently a $500 driver responsibility fee assessed each year for two consecutive years for certain violations. Fees of $500 would continue to be assessed for two consecutive years for the following violations:
· Operating under the influence or while visibly impaired due to the consumption of alcohol or a controlled substance.
· Driving with any bodily alcohol content if under the age of 21.
· Operating under the influence of alcohol or a controlled substance or OWI with a passenger under 16.
· Operating with any bodily amount of a Schedule 1 drug or cocaine.
· Reckless driving.
FISCAL IMPACT:
Driver Responsibility Fee Overview
Driver Responsibility Fee revenue is required to be deposited into the State General Fund. If the amount of collections is high enough, revenue is also deposited into the Fire Protection Fund, which is used for Fire Protection Grants funded within the Department of Energy, Labor, and Economic Growth. Public Act 165 of 2003 provides that if Driver Responsibility Fee collections exceed $65.0 million, then $3.5 million of the revenue is to be deposited into the Fire Protection Fund. The act also provides that an additional $5.0 million may be deposited if collections exceed $100.0 million, for a potential total deposit of $8.5 million.
In FY 2009-10, approximately $122.7 million net revenue was generated through the collection of Driver Responsibility Fees after collection costs. Of the $122.7 million in revenue, $114.2 million was deposited into the State General Fund and $8.5 million funding was dedicated for Fire Protection Grants. According to the May Consensus Revenue Estimating Conference, general fund revenue projections for Driver Responsibility Fee collections were $108.0 million for both FY 2010-11 and FY 2011-12.
While the overall collection rate since the inception of the Driver Responsibility Fee program has been around 50.0 percent, the FY 2009-10 collection rate was approximately 56.0 percent.
Senate Bill 166 Analysis
The provisions of Senate Bill 166 would reduce revenue to the State General Fund by an indeterminate amount by eliminating specified Driver Responsibility Fee assessments for certain assessment categories after September 30, 2011.
Under this analysis, three collection rate scenarios are provided. The assumption for the low-end scenario is an assessment collection rate of 40.0 percent. The assumption for the middle scenario is an assessment collection rate of 50.0 percent. Lastly, the assumption for the high-end scenario is an assessment collection rate of 60.0 percent. The various scenarios are provided due to the lack of data collected on driver responsibility fee collection rates. Specifically, despite having data on the overall collection rate for driver responsibility fees, collection rates for specific offenses are not available.
Based on the most recent data available (FY 2009-10), estimated revenue loss under SB 166 ranges from a low-end scenario of $11.3 million to a high-end scenario of $17.0 million in the first year after enactment. The following table provides a breakdown of the individual assessment category and the estimate of first year revenue loss under each of the three assessment collection rate scenarios:
|
Collection Rate |
|||
|
Assessment Category |
40% |
50% |
60% |
|
7+ points on Driving Record |
$2,205,800 |
$2,757,200 |
$3,308,600 |
|
Driving Without Valid License |
1,068,000 |
1,335,000 |
1,602,000 |
|
No Proof of Insurance |
7,296,000 |
9,120,000 |
10,944,000 |
|
Failure to have Insurance |
740,000 |
925,000 |
1,110,000 |
|
TOTAL |
$11,309,800 |
$14,137,200 |
$16,964,600 |
Beginning in the second year after the effective date of the bill, the revenue loss would rise to a range of $22.6 million to $34.0 million annually due to the fact that driver responsibility fees are assessed for two years for each assessment category.
As is stated above, under statute, if driver responsibility fee collections exceed $100.0 million, the first $5.0 million over that threshold is deposited in the Fire Protection Fund for fire protection grants to locals. The elimination of these assessment categories and corresponding loss of revenue may drop collections enough to lower the amount deposited in the Fire Protection Fund.
Chris Couch
Fiscal Analyst: Ben Gielczyk
■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.