COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 4095-11
BILL NO.: CCS for HS for HCS for SCS for SB 894
SUBJECT: County Officials: Property, Real and Personal
TYPE: Original
DATE: June 5, 2000
FISCAL SUMMARY
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| General Revenue | ($1,187,214) | ($1,254,898) | ($1,261,212) |
| State School Moneys | $0 | $0 | $0 |
| Missouri Agricultural Products Marketing Development | $0 | $0 | $0 |
| Insurance Dedicated | ($194,554) | ($79,811) | ($82,691) |
| Insurance Examiners | ($49,957) | ($51,396) | ($52,713) |
| Total Estimated
Net Effect on All State Funds |
($1,431,725) | ($1,386,105) | ($1,396,616) |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 15 pages.
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government | Up to $75,000 | Up to $25,741,000 | Up to $25,741,000 |
ASSUMPTION
New Generation Agricultural Cooperatives Eligible for Neighborhood Assistance Program Tax Credits - Sections 32.105 and 32.110
Officials of the Department of Economic Development stated that reserving $2.5 million of credits each year from FY's 2002 to 2006 to eligible cooperatives and farmer's markets could be administered with existing resources.
County Assessor Mileage Reimbursement Rate - Section 53.135
Oversight assumes there would be an increase in mileage reimbursement rates for assessors where if the highest reimbursement rate paid county officers exceeded fifteen cents per mile. Oversight cannot say what the fiscal impact to any specific third or fourth class county would be and assumes the overall fiscal impact would be an unknown increase in costs to counties.
Clay County Park Rangers - Section 64.337
Officials of the Department of Elementary and Secondary Education stated that any additional fine money distributed through the County's School Fund, would be a savings to the State's Schools Moneys Fund. The amount of savings is unknown however, officials assume it would be less than $100,000 annually.
Oversight assumes that any increase in fines which would go to school districts would be offset by reduced payments to those districts through the State's Foundation Formula. Oversight also assumes that the effects on the Formula would not be material.
Officials of the Department of Natural Resources and the Department of Public Safety assumed there would be no state fiscal impact.
ASSUMPTION (continued)
Clay County Marina - Section 64.342
Oversight notes that the proposal would not affect any sources of government revenue and assumes it would allow Clay County to build and operate a marina within any area contiguous to a lake. This could cause a reallocation of County resources.
Township Planning and Zoning - Section 64.725
Oversight assumes this proposal is permissive and would have no state fiscal impact. Counties would have no fiscal impact without action by their governing body with voter approval.
County Sales Tax Rates - Section 67.547
Officials of the Department of Revenue stated that adding another possible tax rate would not affect their agency, administratively.
Allowed Uses of Law Enforcement Sales Tax Proceeds - Section 67.582
Officials of the Department of Revenue stated that this part of the proposal would not change the amount of tax collected or affect the Department, administratively.
Allowed Uses of Capital Improvement Sales Tax Proceeds - Section 67.700
Officials of the Department of Revenue stated that this part of the proposal would not affect the Department, administratively.
Allowing Trash to be Declared a Nuisance - Section 71.285
Department of Natural Resources officials stated that the department does not anticipate a significant amount if additional trash going to landfills as a result of the proposed legislation.
Officials estimate that most of the trash that could be removed as a result of the trash control ordinances being enforced would have eventually been disposed of at landfills anyway, so there would be no fiscal impact to the Department from this proposal.
However, if this proposal does result in additional trash being disposed of in the landfills, that waste would be subject to a tonnage fee. The current rate per ton at landfills and transfer stations is $1.85. The current rate at demolition landfills is $1.23.
ASSUMPTION (continued)
Registration of Agents for Owners of Real Estate - Section 82.817
Oversight assumes these provisions concerning registration requirements are technical in nature and would not directly affect any source of revenue for the City of St.. Louis.
Reduction in Size of Planned Industrial Expansion Authorities - Section 100.331
Oversight assumes that reducing the size of planned industrial expansion authorities would not have any direct fiscal impact on political subdivisions.
Small Business and Community Bank Tax Credit - Section 135.403
Officials of the Department of Economic Development stated that these provisions would cause a net one-time savings of $4,800,000 in FY 2001. The proposal would delete $6,000,000 in credits available as a result of investments in community banks and community development corporations; however $1,200,000 has already been used. (The proposal replace those credits by making available $500,000 per year in credits authorized in sections 32.110 and 32.115 for community banks and community development corporations and the proposal reduces the total amount of credits authorized in this section back to $13,000,000 from $19,000,000.)
Rehabilitation and Construction of Residences in Distressed Areas Tax Credit - Section 135.484
Officials of the Department of Economic Development stated that these provisions are technical and would have no fiscal impact.
Property Tax Rates and Tax Rate Ceilings - Section 137.063
Officials from the State Auditor's Office stated that they anticipate carrying out duties outlined in this proposal without additional resources (except for referring cases to the Attorney General, they are already carrying out those duties). Officials from the Office of the Attorney General noted that the effect on their agency would depend upon how many cases were referred for injunctive relief. They would request resources, if needed, through budget decision items.
Department of Elementary and Secondary Education officials noted, in a response to a similar proposal, that the proposal would decrease tax rates, which would increase the amount needed to fully fund the Foundation Formula. They also noted that 1) "on the formula" districts would recoup their losses through state payments, and 2) "hold harmless" districts would not recover losses through additional payments through the Foundation Formula.
ASSUMPTION (continued)
Officials of the State Tax Commission note that each penny of property tax brings in about $6,500,000. They also note that the amount of current "rounds up" and "not roll backs" vary from subdivision to subdivision. They also noted that provisions allowing the Auditor and Attorney General could also cause reductions in tax rates which are currently above tax rate ceilings, which would reduce taxes paid.
Oversight notes that losses statewide could range from $65,000 to $6,500,000 just for provisions affecting rounding, but assumes that the average loss would be one-half cent. There could be additional effects from adjustment in rates due to injunctive relief or the threat of injunction.
Payment of Assessment Costs - Section 137.721
Oversight assumes that the proposal would not affect the total amount of property tax collected in any affected county. Affected county collectors would retain more money than under current law. (The proposal seems designed to keep assessment funds and collectors in counties newly reaching first classification status from receiving less money than they received right before a county became first classification.)
Payments for Delinquent Property Taxes - Sections 139.053, 140.110 and 140.160
Officials of the State Tax Commission and the Department of Economic Development - Division of Finance stated that the proposal would not affect their agencies or any source of state funds.
Allowing Clay and Buchanan Counties to Establish Land Trusts - Section 141.220
Officials of the State Tax Commission stated, in a response to a similar proposal, that the proposal would have no direct fiscal impact on their agency or on state funds.
Provisions Relating to Delinquent Tax Sales and Court Administrators' Deeds - Sections 141.540, 141.550 and 141.610
Oversight assumes that setting a time (10:00 a.m.) for sales of land with tax liens, requiring that bidders at such sales meet certain criteria, and allowing court administrators' deeds (as well as sheriffs' deeds) to be proof that all required actions have been taken under terms of the land tax collection law would not have any direct fiscal impact on political subdivisions.
Marketing Missouri Agricultural Products - Sections 261.032 to 261.038
ASSUMPTION (continued)
Officials from the Department of Agriculture (AGR) assumed that the Market Development Division would request two FTE, along with appropriate monies for equipment and expenses and development of a web site. AGR would request an Agriculture Promotion Specialist (at $27,468 annually) and a Program Coordinator (at $40,536 annually) to contact companies and distributors, identify and promote products, conduct consumer surveys, create and submit statewide promotional ideas, develop a matching funds program, and administer an e-commerce web site.
AGR officials could not provide an estimate of how much revenue would be generated from the Producer's Choice trademark fees.
In response to similar legislation from this year, officials from the Office of Secretary of State
(SOS) assumed there would be costs due to additional publishing duties related to the Department of Agriculture's authority to promulgate rules, regulations, and forms. The SOS
estimates the division could require approximately 28 new pages of regulations in the Code of State Regulations at a cost of $26.50 per page, and 42 new pages in the Missouri Register at a cost of $22.50 per page. Costs due to this proposal is estimated to be $1,687, however, the actual fiscal impact would be dependent upon the actual rule-making authority and may be more or less. Financial impact in subsequent fiscal years would depend entirely on the number, length, and frequency of the rules filed, amended, rescinded, or withdrawn. SOS does not anticipate the need for additional staff as a result of this proposal; however, the enactment of more than one similar proposal may, in the aggregate, necessitate additional staff.
Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
Oversight assumes the General Assembly would appropriate $1,300,000 in FY 2002, $1,000,000 in FY 2003 and $750,000 in FY's 2004 to 2006 from general revenue to the Missouri Agricultural Products Marketing Development Fund. Oversight also assumes AGR would spend the entire appropriations and trademark fee revenues in those years on the two FTE required for this proposal as well as promotional expenditures and e-commerce expenses. The net effect to the Fund would, theoretically, be $0 each year.
Organic Farming - Section 261.110
Officials from the Department of Agriculture (AGR) stated the requirement that they certify ASSUMPTION (continued)
organic producers (farmers) to enable them to label, advertise and sell their produce and other commodities as organic products would cause them to request a Program Coordinator (at $40,536 annually) and four Field Inspectors (each at $32,952 annually). The Program Coordinator would administer this program, develop standards for identifying organic products and carry out these standards to certify Missouri organic producers. The inspectors would carry out on-site inspections of organic producers and would be housed at regional
offices.
AGR officials stated there are approximately 2,000 organic producers in Missouri and the number would likely increase with state certification.
They note that the Program Coordinator requested for the AgriMissouri labeling program could not also coordinate the Missouri organic producers program and have requested two separate positions.
Oversight assumes the Department of Agriculture would not need additional rental space for the FTE requested for the proposal.
Joint Municipal Utility Commissions - Sections 393.705 to 393.715
Officials of the Department of Economic Development - Public Service Commission assume the proposal would have no fiscal impact on their agency.
Officials of the Department of Natural Resources assume the proposal would not affect that agency administratively but note that the proposal would allow two or more municipalities, public water supply districts, sewer districts, nonprofit water companies or nonprofit sewer companies to enter into a joint contract. Under the State Revolving Fund (SRF) loan program, not-for-profit companies are not eligible under the wastewater (clean water) program, though they are under the drinking water SRF program. Officials note it is unclear at this time whether or not the inclusion of a not-for-profit as a member of a municipal corporation would disqualify that corporation from participating in the wastewater SRF.
Research and Development Tax Credit - Section 620.1039
Officials of the Department of Economic Development stated that the proposal would change the program from an entitlement program to a discretionary program, allow the credits to be
transferred, allow 40% of credits earned but not redeemed for 1996 to 1999 be transferred, and decrease the annual credit cap from $10 million to $9.7 million per year. (Transferability is ASSUMPTION (continued)
designed to increase use by small businesses.) Fiscal impact is projected at a positive $300,000 per year which will be offset by the transfers of an estimated $6.0 million earned credits in fiscal year 2001 for a net impact of a negative $5.7 million and then a positive impact of $300,000 per year in subsequent years.
Franklin County Water Districts - Section 1
Oversight notes that the districts which might lose customers would be recompensed for any expenses incurred to serve those customers and would therefore not be fiscally affected.
Officials of the Department of Natural Resources stated this part of the proposal would not fiscally affect their agency.
Corrective Action Plan Verifications - Section 2
Officials of the Department of Natural Resources noted that the Department currently verifies that corrective action plans have been effected. They do not expect the condition that verifications be done within specified time frames to cause the need for additional resources.
Property Taxation in Junior College Districts - Section 178.870
According to the State Auditor's Review of 1999 Property Tax Rates the assessed value of the East Central Community College District was $918,388,550 and that assessed value had increased by 13.1% since 1997. Under current law the maximum tax rate the District could impose without voter approval would drop from $.20/$100 assessed value to $.10/$100 assessed value when the District's assessed value reached $1 billion. The district could benefit by up to $1,000,000 per year under terms of this proposal.
Title Insurance - Sections 381.003 to 381.125
Officials from the Department of Insurance (INS) stated the proposal would add to current regulation of rate filings, licensing of rating organizations, continuing education of agents and oversight of rating organizations. They anticipate new revenue for the Insurance Dedicated Fund. Revenue from a continuing education filing fee (3,000 title agents @ $10 x 3,000 = $30,000), a filing fee for title courses ($50 x 100 = $5,000), and a licensing fee for rating organizations (2 x $1,500 = $3,000) would total $38,000 annually. Revenue losses would be due to allowing licensed agents to name employees on the agent's license rather than individually licensing them (330 agent licenses @ $25 for a two-year license= $4,125 annually) and allowing attorneys who ASSUMPTION (continued)
issue title insurance as part of a law practice but do not operate a title insurance business separate from the law practice to be licensed as agents only ($75 x 30 for a two-year license = $1,125 annually).
INS officials would request one Research Analyst, one Licensing Technician, half-time Actuary, and one Financial Analyst II. Officials also expect to contract for modifying the Oracle system due to the renewal process for title agents and continuing education requirements ($22,250 - 178 hours x $125) and to automate naming and listing of employees acting on behalf of agents (required in 331.115.2). These one-time costs would be approximately $95,000.
All costs except for the Fiscal Analyst would be to the Insurance Dedicated Fund. The Fiscal Analyst would be paid from the Insurance Examiner Fund.
| FISCAL IMPACT - State Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| GENERAL REVENUE FUND | |||
| Savings - Community Bank Tax Credit | $4,800,000 | $0 | $0 |
| Savings - Research and Development Tax Credit | $0 | $300,000 | $300,000 |
| Cost - Research and Development Tax Credit | ($5,700,000) | $0 | $0 |
| Cost - Department of Elementary and Secondary Education | |||
| Increased transfers to State School Moneys Fund | $0 | (Unknown) | (Unknown) |
| Cost - Transfer to Missouri Agricultural Products Marketing Development Fund | $0 | ($1,300,000) | ($1,000,000) |
| Cost - Department of Agriculture (AGR) (Organic Farm Certifications) | |||
| Personal Service (5 FTE) | $147,152 | $181,069 | $185,596 |
| Fringe Benefits | $45,249 | $55,679 | $57,071 |
| Expense and Equipment | $94,813 | $18,150 | $18,545 |
| Administrative Costs to AGR | ($287,214) | ($254,898) | ($261,212) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND | ($1,187,214) | ($1,254,898) | ($1,261,212) |
| STATE SCHOOL MONEYS FUND | |||
| Income - Increased transfers from General Revenue Fund | $0 | Unknown | Unknown |
| Cost - Increased distributions to school districts | $0 | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON STATE SCHOOL MONEYS FUND | $0 | $0 | $0 |
| MISSOURI AGRICULTURAL PRODUCTS MARKETING DEVELOPMENT FUND | |||
| Income - Transfer from general revenue | $0 | $1,300,000 | $1,000,000 |
| Income - Trademark use fees | $0 | unknown | unknown |
| Cost - Department of Agriculture (AGR) | |||
| Personal Service (2 FTE) | $0 | $71,447 | $73,233 |
| Fringe Benefits | $0 | $21,970 | $22,519 |
| Expense and Equipment | $0 | $79,919 | $256,674 |
| Administrative Costs to AGR | $0 | ($173,336) | ($121,426) |
| Cost - AgriMissouri promotions | $0 | (unknown) | (unknown) |
| ESTIMATED NET EFFECT ON THE MISSOURI AGRICULTURAL PRODUCTS MARKETING DEVELOPMENT FUND | $0 | $0 | $0 |
| INSURANCE DEDICATED FUND | |||
| Revenue - Department of Insurance (INS) | |||
| Filing and license fees | $38,000 | $38,000 | $38,000 |
| Loss - Department of Insurance | |||
| License fees | ($5,250) | ($5,250) | ($5,250) |
| Costs - Department of Insurance | |||
| Personal Service (2.5 FTE) | $61,735 | $75,964 | $77,863 |
| Fringe Benefits | $18,983 | $23,359 | $23,943 |
| Contract Computer Programming | $117,200 | $0 | $0 |
| Expense and Equipment | $29,386 | $13,238 | $13,635 |
| Administrative Cost to INS | ($227,304) | ($112,561) | ($115,441) |
| ESTIMATED NET EFFECT ON INSURANCE DEDICATED FUND |
($194,554) |
($79,811) |
($82,691) |
| INSURANCE EXAMINERS FUND | |||
| Cost - Department of Insurance | |||
| Personal service (1 FTE) | $28,135 | $34,620 | $35,486 |
| Fringe benefits | $8,652 | $10,646 | $10,914 |
| Expense and equipment | $13,170 | $6,130 | $6,313 |
| Administrative Cost to INS | ($49,957) | ($51,396) | ($52,713) |
| ESTIMATED NET EFFECT ON INSURANCE EXAMINERS FUND |
($49,957) |
($51,396) |
($52,713) |
| FISCAL IMPACT - Local Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| POLITICAL SUBDIVISIONS | |||
| Income to Kansas City - Increased Levies | $0 | $0 to $24,666,000 | $0 to $24,666,000 |
| Income to Kansas City - Increased Fines | $0 to $25,000 | $0 to $25,000 | $0 to $25,000 |
| Savings to Kansas City - Reduced Cost for Handling Yard Waste | $50,000 | $50,000 | $50,000 |
| Income - Increased distributions from State School Moneys Fund | $0 | Unknown | Unknown |
| Income - East Central Community College District | $0 | $0 to $1,000,000 | $0 to $1,000,000 |
| Cost to Counties - Assessor Mileage Reimbursements | (Unknown) | (Unknown) | (Unknown) |
| Income - Increased distribution from State School Moneys Fund | $0 | unknown | unknown |
| Cost - Decreased property tax collections | $0 | ($3,250,000 to unknown) | ($3,250,000 to unknown) |
| ESTIMATED NET EFFECT ON POLITICAL SUBDIVISIONS | Up to $75,000 | Up to $25,741,000 | Up to $25,741,000 |
FISCAL IMPACT - Small Business
Small businesses could be affected by various tax credit proposals, agribusiness proposals and property tax provisions. Some title insurers would be affected by the revised license and filing fees in the title insurance provisions.
DESCRIPTION
Section a of this proposal would:
1) allow Clay and Buchanan counties to establish land trusts to administer the management, sale, and disposition of tax-delinquent lands;
2) reduce the size of planned industrial expansion authority commissions;
3) allow Clay County to construct and maintain a marina;
4) allow Clay County to appoint park rangers;
5) set standards for prospective purchasers of property at delinquent tax sales, and allow court administrators' as well as sheriffs' deeds to be accepted as proof that all activities required to take liens on land under terms of the land collection law have been properly executed;
6) change travel reimbursement for assessors in third and fourth classification counties from $.15 per mile to the same reimbursement paid to other county officials and eliminate the reimbursement cap of $2,250 per year;
7) allow municipalities to declare trash accumulated in violation of ordinances a nuisance and, after proper notice, to order property owners to remove the trash (Current law covers weeds, only);
8) require county collectors to apply real property tax payments to delinquent taxes on the parcels in question before applying the payment to current taxes. However, payments of real property taxes by financial institutions from escrow accounts would be applied to current taxes. (Under current law real and personal property tax payments must be applied to delinquent taxes DESCRIPTION (continued)
before being applied to current taxes due.);
9) make an exception to the three-year statute of limitations on proceedings to collect delinquent property taxes. The three-year period would not begin tolling on property which had been tax-exempt and became taxable until the revised title for the land was recorded in the office of the Recorder of Deeds;
10) allow township boards to appoint temporary planning commissions which could establish plans which would only, with voter approval, affect a township (under current law, a county commission is authorized to appoint a temporary planning commission which may create a planning proposal for the county);
11) require property taxing authorities to express tax rates in fractions equal to the nearest one/one hundredth of a cent;
12) require the State Auditor to review proposed tax rates of property taxing authorities and, if the Auditor believed a rate submitted did not comply with state law, require the Auditor to enforce recalculated rates including, in specified circumstances, referring perceived violations to the Attorney General for injunctive relief;
13) permit new generation cooperatives formed in Missouri to receive Neighborhood Assistance tax credits and allow organizations which perform community service or economic development activities to qualify as neighborhood organizations by contributing to the construction of a building used to sell agricultural food products produced in Missouri by members of a new generation cooperative, but are limited to $2.5 million in tax credits for fiscal years 2002 through 2006;
14) create the "Missouri Agricultural Products Marketing Development Fund" to market and promote products of Missouri, create, within the Department of Agriculture, a Citizens' Advisory Commission for Marketing Missouri Agricultural Products to establish guidelines for spending by the Marketing Division of the Department and agriculture marketing advancement initiatives, require the Division develop a web site to foster the marketing of value-added agriculture products over the internet, and require the Department to develop standards and labeling for organic farming;
15) allow non-profit water and sewer companies to enter into joint contracts for the purpose of establishing joint municipal utility commissions;
DESCRIPTION (continued)
16) change the application of the research and development tax credit authorized in section 620.1039 by making new credit grants discretionary and by making some credits already granted transferrable, repeal $6,000,000 in community bank and community development credits authorized in section 135.403, and allocate $500,000 per year for community bank and community development programs from credits authorized in sections 32.110 and 32.115 (effective January 1, 2001);
17) allow certain customers to withdraw from Franklin County water districts; and,
18) establish time frames for the Department of Natural Resources to verify compliance with corrective action plans and to issue letters certifying completion of and compliance with those plans.
Section C of this proposal would change the tax rates Community College Districts could impose without voter approval at various levels of assessed valuation. Generally speaking, compared to current law, districts with higher assessed valuations could assess higher tax rates.
Section D of this proposal would enact the Missouri Title Insurance Act. In its main provisions, the proposal would: (1) Expand the "definitions" section of the Act; (2) Change the current definition of the admitted asset value of title plans by allowing inclusion of a company's investment in title plants; (3) Subject all title insurers to the Missouri Uniform Insurers Liquidation Act exempt for exemptions set out in the proposal; (4) Allow the courts increased authority in the event of a title insurer's liquidation; (5) Allow rate filings by a rate service organization organized and licensed by the Department of Insurance; (6) Require the Department of Insurance to review and approve rate filings before accepting them and to hold hearings before rejecting rate filings; (7) Require the Department to license rating organizations (and specifies fees for the licenses); (8) Allow licensed agents or agencies to name employees to act on their behalf an be either individually licensed or named on the employing agent's license.(individual employees of title insurers need not be licensed); and, (9) Require agents to, with certain exceptions, complete courses every two years to comply with continuing education requirements, require the Department to set standards for approve courses, and set fees for agents taking courses.
Section D of the proposal has an effective date of January 1, 2001.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. This proposal would affect Total State Revenue.
SOURCES OF INFORMATION
Department of Agriculture
Department of Economic Development
Department of Economic Development - Division of Finance
Department of Economic Development - Missouri Housing Development Commission
Department of Elementary and Secondary Education
Department of Insurance
Department of Natural Resources
Department of Revenue
State Tax Commission
Attorney General
State Auditor
Jeanne Jarrett, CPA
Director
June 5, 2000