This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0813 - Aviation: Airport assistance, airport authorities and jet fuel tax use
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2749-11
BILL NO. HCS for SCS for SB 813 and 864
SUBJECT: Aircraft and Airports
DATE: May 6, 1998
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS Net Effect on All State Funds
FUND AFFECTED
FY 1999
FY 2000
FY 2001 Aviation Trust Fund
$2,810,000
$3,570,000
$3,790,000 General Revenue
($2,817,825)
($3,570,000)
($3,790,000) Total Estimated
($7,825)
$0
$0
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 5 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Revenue (DOR) indicate that the Information Systems Division would be responsible for performing the computer changes necessary to deposit the specially-coded airline accounts in the Aviation Trust Fund rather than the funds to which the moneys are currently deposited. In order to accomplish these changes, the Division would require approximately $2,920 in overtime costs and $7,825 in state data center costs. Officials indicate that the Division of Taxation and Collection would manually process the sales and use tax payments with existing resources until the system changes are completed. Total one-time administrative costs that would be incurred by DOR would total $10,745 in FY 1999. Oversight assumes that the duties required to make necessary programming changes could be performed with existing resources. State data center costs are included to reflect necessary testing of programming revisions.
DOR officials also indicate that according to data maintained by their department, approximately $4.2 million in state sales and use tax on aviation jet fuel was collected in 1997. The portion of this amount deposited to the state's General Revenue Fund was approximately $3 million (other funds where taxes are credited are not affected by this proposal). A growth rate of 6% was applied to these figures based on the growth in jet fuel usage as tabulated by the U.S. Bureau of Census. The income to the Aviation Trust Fund as a result of this proposal is calculated at $3.372 million for a full FY 1999, or $2.81 million for ten months, $3.57 million for FY 2000, and $3.79 million for FY 2001, with corresponding losses to the General Revenue Fund.
In response to an earlier version of the proposal, officials of the Department of Transportation (DOT) based their response on data maintained by the DOR, and provided the same estimates of fiscal impact as DOR provided regarding the additional income to the Aviation Trust Fund and corresponding losses to the General Revenue Fund.
Department of Natural Resources (DNR) officials indicated that DOT has stated that the Aviation Trust Fund generates approximately $400,000 to $500,000 annually. In addition, the proposal states that beginning September 1, 1998 the revenue from sales and use tax on aviation jet fuel is to be deposited in the Aviation Trust Fund, although DNR officials do not have information concerning the additional amounts to be credited to the Fund. They also note that
DOT receives general revenue funding for related activities, for which the current amount should be approximately $642,000. As owner of Lee C. Fine Airport, DNR assumes that they would be included in the pool of potential applicants for available funds.
ASSUMPTION (continued)
State Tax Commission officials assume that the provision that decreases the minimum weight of aircraft defined as "commercial aircraft" for purposes of state tax commission assessment from ten-thousand pounds to seven-thousand pounds could impact the distribution of tax revenues among certain local governments, but that in total the amount allocated to local governments would remain the same. Officials indicate that commercial aircraft less than ten-thousand pounds are currently assessed by local governments, and the amounts collected are apportioned somewhat differently to various local governments than aircraft that are assessed by the state. Officials also assume there would be no state fiscal impact as a result of this provision.
Oversight assumes that the proposal would result in revenues from taxes on aviation jet fuel being credited to the Aviation Trust Fund rather than the General Revenue Fund. The proposal exempts amounts from being credited to the Aviation Trust Fund that are specifically designated under the Missouri Constitution or pursuant to section 144.701 for other purposes; therefore, Oversight assumes there would be no impact on tax revenues credited to the Conservation Sales Tax and Parks and Soils Sales Tax Funds or to the School District Trust Fund. The amount of revenues that would be credited to the Aviation Trust Fund as a result of this proposal are reflected based on information provided by DOR.
Oversight also assumes that additional grants could likely be made as a result of additional funding being made available in the Aviation Trust Fund and adding state educational institutions and state agencies owning airports, as well as privately-owned reliever airports, to those entities eligible to receive grant funds. However, since the proposal does not require additional grants to be made, Oversight assumes that any additional funds to be granted would be requested by DOT through the normal appropriation process.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| AVIATION TRUST FUND | |||
| Income-sales and use tax collections on | |||
| aviation jet fuel | $2,810,000 | $3,570,000 | $3,790,000 |
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (continued) | (10 Mo.) | ||
| GENERAL REVENUE FUND | |||
| Costs-Department of Revenue | |||
| Equipment and expense | ($7,825) | $0 | $0 |
| Loss-sales and use tax collections on aviation | |||
| jet fuel | (2,810,000) | (3,570,000) | (3,790,000) |
|
ESTIMATED NET EFFECT ON | |||
| GENERAL REVENUE FUND | ($2,817,825) | ($3,570,000) | ($3,790,000) |
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| 0 | 0 | 0 | |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
The proposal would provide that all sales taxes on aviation jet fuel (except those otherwise designated in the Constitution or pursuant to section 144.701, RSMo) shall be placed in the aviation trust fund beginning September 1, 1998. The aviation trust fund may be used to assist FAA reliever airports and airports operated by certain state agencies and educational institutions. Operational assistance for existing control towers is allowed. The appropriation limit of $5 million is removed. The aviation trust fund may also be used for emergency aid following natural or manmade disasters.
The proposal would decrease the minimum weight of commercial aircraft for purposes of state tax commission assessment from ten-thousand pounds to seven-thousand pounds.
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 Transportation
Department of Natural Resources
Department of Revenue
State Tax Commission
Jeanne Jarrett, CPA
Director
May 6, 1998