Bill Summary – FastDemocracy

LEGISLATIVE SERVICES AGENCY
                OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
                                     200 W. Washington St., Suite 301
                                          Indianapolis, IN 46204
                                              (317) 233-0696
                                                 iga.in.gov
                                FISCAL IMPACT STATEMENT
LS 6736                                                             NOTE PREPARED: Apr 12, 2021
BILL NUMBER: HB 1356                                                BILL AMENDED: Apr 8, 2021
SUBJECT: Permanent Trailer Registration.
FIRST AUTHOR: Rep. Wesco                                            BILL STATUS: Enrolled
FIRST SPONSOR: Sen. Doriot
FUNDS AFFECTED:            GENERAL                                  IMPACT: State & Local
                         X DEDICATED
                           FEDERAL
Summary of Legislation: This bill defines "permanent registration" for purposes of motor vehicles. It
provides that the owner of a trailer that weighs 3,000 pounds or less may apply to the Bureau of Motor
Vehicles (BMV) for a permanent registration for a fee of $82. The bill also requires the owner of a trailer
that applies to the BMV for a permanent registration to pay twice the amount of the surtax otherwise due
when the owner obtains a permanent registration. It provides that the owner of a trailer that obtains a
permanent registration is not subject to additional surtax payments.
Effective Date: July 1, 2021.
Explanation of State Expenditures: This bill will require BMV computer systems to be changed to allow
for a new registration type effective during FY 2022. Changes in workload are within the routine
administrative function of the agency and any potential increases in agency expenditures are expected to be
minimal and provided from the BMV Commission Fund.
Explanation of State Revenues: Summary - This bill is expected to increase revenue to the State Highway
Fund (by way of the Motor Vehicle Highway Account) in FY 2022 to the extent individuals select the new
permanent trailer registration. It is estimated that by 2037, the State Highway Fund will experience net
revenue losses from trailer registration fees.
Beginning in FY 2023, the bill is also expected to result in minor revenue losses to the following funds; State
Construction Fund, BMV Technology Fund, Highway Road and Street Fund, Crossroads 2000 Fund,
Integrated Public Safety Communication Fund, and BMV Commission Fund.
HB 1356                                               1
Additional Information - The BMV reports there are 424,000 trailers with weights up to 3,000 lbs registered
with the state. It is unknown how many of these trailers will request a permanent registration with the BMV.
The price for an annual registration of a trailer is $16.35 and as proposed, the permanent registration fee is
$82. The distribution of revenue from these fees varies only by increasing the distribution to the Motor
Vehicle Highway Account (MVHA) by $65.65 per permanent trailer registration in the first year in which
a lifetime registration is requested.
In each succeeding year after a permanent registration has been paid, the State Construction Fund, BMV
Technology Fund, Highway Road and Street Fund, Crossroads 2000 Fund, Integrated Public Safety
Communication Fund, and BMV Commission Fund lose a total of $12 per registration that was converted
from an annual to permanent registration. The MVHA will begin losing revenue from lifetime trailer
registrations approximately 15 years after an annual registration is converted to permanent.
During the first year the registration is offered, for every 1,000 individuals who select a permanent trailer
registration who otherwise would have paid for an annual trailer registration, the MVHA will receive
approximately $65,400 in additional revenue beginning in FY 2022 and will experience its first revenue loss
from permanent trailer registrations in FY 2037. The MVHA will receive additional revenue to the extent
additional trailer owners select a permanent registration in years after the new registration type is first
offered.
Beginning in FY 2023, for every 1,000 individuals who select a permanent trailer registration, the following
table shows the bill’s impact on other funds that receive a distribution of trailer registration fees.
                                                                         Revenue Loss starting in
          Distribution Fund                                  Fee         FY 2023 for every 1,000
                                                                       trailer lifetime registrations
          State Construction Fund                           $0.25                 ($250)
          BMV Technology Fund                               $0.50                 ($500)
          Highway Road and Street Fund                      $2.90                ($2,900)
          Crossroads 2000 Fund                              $4.00                ($4,000)
          Integrated Public Safety Communication Fund       $1.25                ($1,250)
          BMV Commission Fund                               $3.10                ($3,100)
          Total                                            $12.00               ($12,000)
Changes in revenue amounts to the Highway Road and Street Fund as well as the MVHA will impact
distributions to the State Highway Fund as well as local units of government. The State Highway Fund (the
main funding source for the Indiana Department of Transportation) receives 62% of the revenue deposited
in the MVHA and 63% of the revenue deposited in the Highway Road and Street Account.
Explanation of Local Expenditures:
HB 1356                                               2
Explanation of Local Revenues: Changes in revenue amounts to the Highway Road and Street Fund and
the MVHA will impact distributions to local units of government. Local units of government receive 38%
of the revenue deposited in the MVHA and 37% of the revenue deposited in the Highway Road and Street
Account.
Excise Tax Collections: To the extent individuals request a permanent trailer registration, county and
municipal excise tax revenue collections would increase in the first year of the registration, but counties and
municipalities would experience net revenue losses at earliest during CY 2024. The bill’s total impact on
local revenue is indeterminable.
The BMV reports excise tax will still be collected annually on permanent trailers. For CY 2019, a total of
422,200 trailers with a maximum weight of 3,000 lbs registered with the BMV and remitted a total of $3.4
M in county excise tax and $0.3 M in municipal excise tax. The total number of annually registered trailers
that would shift to a permanent trailer registration as well as the number of unregistered trailers that would
be registered as a permanent trailer registration are currently unknown.
State Agencies Affected: BMV; INDOT.
Local Agencies Affected: Recipients of MVHA and Highway Road and Street funding.
Information Sources: Matt Organ, BMV; Tamytha Cooper, BMV.
Fiscal Analyst: Bill Brumbach, 317-232-9559.
HB 1356                                               3
Statutes affected: 
1. Introduced House Bill (H): 9-18.1-5-8
2. House Bill (H): 9-18.1-5-8
3. House Bill (H): 9-18.1-5-8
4. House Bill (S): 9-18.1-5-8
5. House Bill (S): 9-18.1-5-8
6. Engrossed House Bill (S): 6-3.5-4-2, 6-3.5-4-7, 6-3.5-10-2, 6-3.5-10-7, 9-18.1-5-8
7. Enrolled House Bill (H): 6-3.5-4-2, 6-3.5-4-7, 6-3.5-10-2, 6-3.5-10-7, 9-18.1-5-8