Fiscal Note - SB 0427 - Authorizes Creation of Community Improvement Districts Upon Petition by Owners of Property
L.R. NO. 1693-02
BILL NO. SB 427
SUBJECT: Economic Development: Community Improvement Districts
TYPE: Original
DATE: March 3, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue ($93,577) $0 or Unknown $0 or Unknown
Total Estimated
Net Effect on All
State Funds ($93,577) $0 or Unknown $0 or Unknown
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials of the State Tax Commission and the Department of Economic
Development stated the proposal would not affect their agencies. Tax
Commission officials also noted that the proposal should not add
significantly to duties of county assessors and collectors and provides for
fees to reimburse those officials.
Officials of the Department of Revenue (DOR) indicate that the state sales
tax system would need to be modified to allow for collection of taxes imposed
within districts that are not full cities or counties. The present
computerized collection system recognizes local taxes based only on municipal
or county boundaries. Officials assume that the effective date of new sales
taxes could be as early as January 1, 1998, which may not allow sufficient
time to thoroughly design, test and implement the new system. In addition to
utilizing seven existing programmers within the Information Systems Division,
DOR would request one Programmer Analyst II, related equipment and expense
costs, overtime costs and state data center costs for the required system
modification. They would utilize one-fourth of this FTE on an ongoing basis
to maintain the system.
DOR officials also assume that if new community improvement districts are
formed, within the Division of Taxation and Collection they would need two
Tax Processing Technician I positions for registration of accounts with the
districts, file maintenance, maintaining the distribution system for
distribution to districts, and taxpayer assistance. Officials assume that
annual overtime costs as well as costs to mail notices to motor vehicle
dealers and process rejected title applications (as a result of incorrect
calculation of taxes due on motor vehicle transactions by customers unaware
of additional tax) would be incurred by the Division of Motor Vehicles and
Drivers Licensing. Related postage costs would be incurred by the Division
of Administration. Total costs estimated for the Division of Taxation and
Collection, Division of Motor Vehicles and Drivers Licensing and the Division
of Administration are $36,235 for FY 1998, $49,968 for FY 1999, and $51,214
for FY 2000.
DOR officials also note that additional revenues could be generated for the
state general revenue fund as a result of the department's 1% collection fee
on sales taxes and that local governments could also generate additional
sales tax revenues if community improvement districts are formed.
Oversight assumes that DOR would incur costs for revising its computer
collection system as a result of this proposal. Costs are reflected for one
Programmer Analyst II, related fringe benefits, overtime, equipment and
expense, including state data center costs of $28,805 for FY 1998. Any costs
incurred after initial revision of the computer system should be able to be
absorbed within DOR's budget. In addition Oversight assumes that the number
of community development districts that would be established outside of
normal city/county boundaries would be minimal in any given fiscal year and
that DOR's administrative costs in its other divisions would likely be
initially minimal as well. Oversight assumes that as the number of community
development districts imposing sales taxes increases, DOR would request
additional appropriations through the normal budget process. Oversight also
assumes that additional revenues could be generated beginning in April of
1998 at the earliest, since the proposal would require mail-in elections. Any
additional revenues to the state for its 1% collection fee and to the
community improvement districts (local governments) are dependent on whether
new districts are formed. Therefore, revenues are shown at $0 or Unknown for
both the state and local governments beginning in FY 1998.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Income-Department of Revenue
1% collection fee $0 $0 $0
or or or
Unknown Unknown Unknown
Cost-Department of Revenue (DOR)
Personal Service (1 FTE and Overtime) $54,919 $0 $0
Fringe Benefits 4,378 0 0
Expense and Equipment 34,260 0 0
Administrative Costs to DOR ($93,557) $0 $0
NET EFFECT ON GENERAL
REVENUE FUND ($93,557) $0 $0
OR OR
UNKNOWN UNKNOWN
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
CITIES AND COUNTIES
Income - Payments by Community
Improvement Districts to Cities, City Clerks,
County Assessors, and County Collectors $0 $0 $0
to to to
Unknown Unknown Unknown
Costs - Services to Community
Improvement Districts by Cities, City Clerks,
County Assessors, and County Collectors ($0 ($0 ($0
to to to
Unknown) Unknown) Unknown)
NET EFFECT ON CITIES AND
COUNTIES $0 $0 $0
COMMUNITY IMPROVEMENT
DISTRICTS
Income-Sales Taxes, Property Taxes,
Business Licenses, and Special Assessments $0 $0 $0
to to to
Unknown Unknown Unknown
Costs-Payments to Cities, City Clerks,
County Assessors and County Collectors ($0 ($0 ($0
to to to
Unknown) Unknown) Unknown)
Projects and Bonded Indebtedness ($0 ($0 ($0
to to to
Unknown) Unknown) Unknown)
NET EFFECT ON COMMUNITY
IMPROVEMENT DISTRICTS $0 $0 $0
FISCAL IMPACT - Small Business
Small businesses in Community Improvement Districts could be affected by
special assessments and taxes levied by the districts and by improvements
made by the districts as a result of this proposal.
DESCRIPTION
This proposal would authorize cities to establish, after presentation of
proper petitions and public hearings, community improvement districts.
Districts could be political subdivisions or not-for-profit corporations.
Not-for-profit corporations would comply with all applicable provisions of
the state's statutes governing not-for-profit corporations (chapter 355,
RSMo).
Community improvement districts which were political subdivisions would have
certain authorities, including authority to purchase real property within
their boundaries, to levy and collect special assessments, property taxes and
sales taxes, and to borrow money and issue obligations (which would not be
considered a general obligation of the district, the State of Missouri, or
any political subdivision of the State).
Special assessments, taxes and business license fees would not be assessed
unless approved by qualified voters of the district at mail-in elections.
This legislation is not federally mandated, would not duplicate any other
program, would not require additional capital improvements or rental space,
and could affect total state revenue.
SOURCES OF INFORMATION
Department of Economic Development
Department of Revenue
State Tax Commission
This Fiscal Note is not an official copy and should not be quoted or cited.