FISCAL NOTE TO

ASSEMBLY, No. 506

STATE OF NEW JERSEY

DATED: OCTOBER 2, 1996

      Assembly Bill No. 506 of 1996 would permit the Director of the Division of Motor Vehicles (DMV) to issue, without cost, driver licenses and annual passenger vehicle or noncommercial truck registrations to volunteer firefighters or volunteer first aid or rescue squad members.

      The DMV estimates that this proposal would have first year costs of about $1.025 million, $ 900,000 in lost revenue and $125,000 for new staff to review and process applications from prospective, eligible volunteers. To derive the revenue loss estimate, the DMV used, as a factor, the 15,000 permits issued to members of volunteer fire companies or volunteer first aid or rescue squads authorizing such members to display emergency blue lights on vehicles driven by them. Additional assumptions regarding the age and weight class of vehicles that would be exempt from annual registration were made by DMV using weighted averages based on the number of registrations for each vehicle class.

      Although the Office of Legislative Services (OLS) agrees with the methodology used by DMV, OLS believes that the DMV use of the number of "blue light" permits underestimates the cost to the State. According to the Bureau of Fire Safety, Department of Community Affairs, the 1992 New Jersey Fire Department Directory published by the bureau estimated that the State had about 35,000 volunteer firefighters. A subsequent discussion with the bureau on the number of volunteer firefighters indicated that a current estimate of 35,000 to 40,000 would be reasonably accurate. Regarding members of first aid and rescue squads, the Department of Health and Senior Services estimates that there are about 18,000 active volunteers. Consequently, this bill is more likely to affect between 53,000 and 58,000 people, not just the 15,000 who have "blue light" permits.

      Assuming that an average 55,000 people would be eligible for free driver licenses and vehicle registrations, OLS believes that the loss of revenue to the State would be comprised of the following:

      1. Driver licenses - $16 for four years or an average $4 per year:

                      (55,000 volunteers) ($4) = $220,000 per year

      2. Vehicle registrations - proportional to DMV methodology:                         15,000 "blue light" permits = $830,000 per year, then

                        55,000 volunteers = $3,043,000 per year

      In addition, if DMV anticipates a first year need for $125,000 for new staff to review and process applications for 15,000 "blue light" permit holders, these first year expenses could possibly double or triple to adequately accommodate 55,000 applications.

            Consequently, OLS estimates that the initial cost to the State could be closer to $3.63 million, $3.26 million in revenue losses and $375,000 in new staff expenses. However, the cost would begin to decrease in January 1997 as the surcharge on vehicle registrations is gradually reduced by half over a four year period pursuant to section 17 of P.L.1995, c.108 (C.17:33B-63) and as the initial number of eligible applicants are processed. Once the surcharge is reduced as directed by the referenced law and the eligible applicants initially processed, the cost to the State is likely to be about $3.2 million by FY 2001.

This fiscal note has been prepared pursuant to P.L.1980, c.67.