SB 0500 - Fiscal Note

Fiscal Note - SB 0500 - Clarifies Provisions of the Hancock Refund

L.R. NO.  2328-02
BILL NO.  Truly Agreed and Finally Passed SB 500
SUBJECT:  Amendment; Income Tax; Taxation; Income Tax
TYPE:     Original
DATE:     May 22, 1996



                              FISCAL SUMMARY

                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

None

Total Estimated
Net Effect on All
State Funds                      $0              $0              $0


                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999


Total Estimated
Net Effect on All
Federal Funds                    $0              $0              $0


                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

Local Government                 $0              $0              $0


                              FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Revenue (DOR), Office of Administration (OA)
and State Auditor's Office (SAU) assume this proposal would not fiscally
impact their agencies.


FISCAL IMPACT - State Government     FY 1997   FY 1998   FY 1999
                                    (10 Mo.)

                                           0         0         0


FISCAL IMPACT  - Local Government    FY 1997   FY 1998   FY 1999
                                    (10 Mo.)

                                           0         0         0


DESCRIPTION

This act clarifies certain provisions of Article X, Section 18 of the
Missouri Constitution, commonly known as the Hancock limitation. The Office
of Administration is to certify the amount of excess revenue to be refunded
and certify annually to the General Assembly an itemized listing and
definitions of all sources and dollar amounts of total state revenue. Once a
source of revenue has been certified as total state revenue, it is to remain
total state revenue unless the source is subsequently excluded from total
state revenue pursuant to Article X Section 18 (c) of the Missouri
Constitution. The amount of excess revenue to be refunded is subject to
appeal as provided in Article X, Section 23 of the Missouri Constitution.
Section 136.400 clarifies that "excess revenue" is to be calculated from
Section 18, paragraph (a).  By using this paragraph, no mention of a 1%
threshold is made and therefore the total amount collected in excess of the
limit will be refunded.  One percent will not be held back. Section 136.405
closes the seemingly open-ended period in which annual returns may be filed.
Returns which shall be used for calculating refund amounts are those returns
which are filed by June 30 following the close of such fiscal year in which
the limit was exceeded.  Amended returns filed after June 30 are not
included.  Returns filed for any part of a year are included, but
modifications of such returns are not.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.


SOURCES OF INFORMATION

Department of Revenue
Office of Administration
State Auditor's Office