SB 0849 - Fiscal Note

Fiscal Note - SB 0849 - Specifies original assessment of distributable property of freight line companies; director of revenue to collect tax

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3303-02

BILL NO. Perfected SCS for SB 849

SUBJECT: Taxation and Revenue-Property: Railroads

TYPE: Original

DATE: March 26, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
General Revenue	$0	$13,953	$16,253
Blind Pension	$0	$0	$0
Total Estimated Net Effect on All State Funds	$0	$13,953	$16,253

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
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	$100,000	$100,000

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the State Tax Commission estimate that the 5% of freight line companies which are too small to be taxed by counties now and would be subject to a statewide tax. They estimate an additional $100,000 per year would be collected for local governments, although the distribution of taxes could be changed. They noted that the distribution of tax to the Blind Pension Fund would yields the same amount to the Fund as the separately collected taxes do, now. They also assume that the Commission would undertake duties under terms of this proposal with existing resources.

Assuming an average aggregate local tax rate of $5.87, it is estimated that freight line company taxes amount to about $1,960,000 per year. The amount collected under terms of this proposal would be about $2,060,000 per year and 1% of that amount would be retained for general revenue.

Officials of the Department of Revenue stated they would request overtime and a personal computer to carry out Department duties under terms of this proposal.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(6 Mo.)
GENERAL REVENUE FUND
Income-Department of Revenue (DOR)
Collection Fee	$0	$20,600	$20,600
Cost-Department of Revenue (DOR)
Overtime	$0	($4,347)	($4,347)
Equipment and Expense	0	( 2,300)	0
Administrative costs to DOR	$0	($6,647)	($4,347)
NET EFFECT ON GENERAL
REVENUE FUND	$0	$13,953	$16,253
BLIND PENSION FUND
Income-Department of Revenue (DOR)
Distribution	$0	$10,000	$10,000
Loss-Distributions from counties	$0	($10,000)	($10,000)
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(6 Mo.)
NET EFFECT ON BLIND
PENSION FUND	$0	$0	$0
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(6 Mo.)
POLITICAL SUBDIVISIONS
Income - Increased collections from
freight line companies	$0	$100,000	$100,000

FISCAL IMPACT - Small Business

This proposal could affect small businesses which are freight line companies.

DESCRIPTION

This proposal would give the State Tax Commission the exclusive power of original assessment of the distributable property of freight line companies, replace local taxation of those companies with a system using a statewide tax rate levied and collected by the Department of Revenue.

Taxes would be deposited in to the County Private Car Tax Trust Fund and, after a distribution to the Blind Pension Fund, distributed to each county in proportion to the mainline track mileage located in that county. Counties would give 70% of the revenues to school districts and 30% to county general revenue.

The proposal also contains provisions for reverting to the existing method of taxing freight line companies if a court rules the provisions of this proposal are ruled not enforceable.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. The proposal would affect total state revenue.

SOURCES OF INFORMATION

Department of Revenue

State Tax Commission

Jeanne Jarrett, CPA

Director

March 26, 1998