L.R. NO. 4162-01
BILL NO. SB 903
SUBJECT: Economic Development Department; Governor & Lt. Governor; Veterans
TYPE: Original
DATE: March 3, 2000
Net Effect on All State Funds* * Subject to Appropriation Net Effect on All Federal Funds
FUND AFFECTED
FY 2001
FY 2002
FY 2003 General Revenue*
($1,384,462)
($1,431,148)
($1,390,437) to
($3,390,437) Veterans' Comm.
Capital Improvement
Trust Fund*
(unknown)
(unknown)
(unknown) Missouri Veterans
Business Council*
unknown
unknown
unknown Total Estimated
($1,384,462)
($1,431,148)
($1,390,437) to
($3,390,437)
FUND AFFECTED
FY 2001
FY 2002
FY 2003 None
Total Estimated
$0
$0
$0
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 6 pages.
ASSUMPTION
Officials from the Department of Economic Development (DED) assume the proposed legislation would create the Missouri Veterans Business Council with the DED and authorizes $2 million in tax credits. The DED is to conduct an outreach program for veterans wanting to start a new or expand an existing business, make grants and loans, and administer the tax credit program. The DED assumes the $2 million in tax credits are authorized beginning in January, 2002, and, therefore, would be claimed beginning in FY 2003.
The DED states there are 563,000 veterans in Missouri according to the Missouri Veterans Commission. The DED assumes that approximately half of those are of an age to start or operate a business. The DED assumes the Office of Veterans Business will be established within the DED. This office will have similar certification authority to the OA/Minority Procurement Office, however, this office will have more responsibility. The DED estimates it will need 10 FTE to coordinate the activities created by this proposal. The DED assumes it will provide technical assistance to veteran businesses, and will be responsible for financial and incentive packages.
The DED assumes that no promotion could begin without appropriation. The bill would go into effect in August of 2000 (FY 2001) and DED assumes the loans and grants could be made immediately upon funding of the program. Tax credit donations would not be in the Missouri Veterans Business Council Fund, but funds could be placed there from the Missouri Veterans Commission Capital Improvement Trust Fund.
The DED assumes the need for one (1) Market Development Program Coordinator, one (1) Clerk Typist II, one (1) Planner II, three (3) Economic Development Program Specialists II's, one (1) Accountant I, one (1) Public Information Specialist I, and two (2) National Marketing Specialists II's.
The DED also assumes there will be expenses associated with board meetings for the newly created Missouri Veterans' Business Council. There will be 15 board members and the DED assumes a minimum of 4 meetings per year. The annual expenses related to board meetings is estimated by the DED to be $14,620.
The DED also assumes an appropriation of $1,000,000 from the General Revenue Fund will be required to implement the Microloan program and to provide seed capital money for start-up veteran and disabled veteran owned businesses in each of the first three fiscal years.
Oversight assumes the DED could administer this program with an addition of two staff per specified office in Springfield, Kansas City, and St. Louis. Oversight also assumes the DED could contract out the necessary marketing services at a cost of $25,000 in the first year instead of retaining staff dedicated to that purpose.
ASSUMPTION (continued)
Officials from the Office of the Secretary of State (SOS) assume the proposed legislation would require the printing of additional pages in the Missouri Register and the Code of State Regulations and have estimated a publishing cost of $1,928 for FY 2001. Additionally, future costs are unknown and depends upon the frequency and length of rules filed, amended, rescinded or withdrawn.
While this bill alone would not require SOS to acquire additional staff, SOS assumes the
cumulative effect of other bills that require rulemaking 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 appropriations process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
Officials from the Office of the State Treasurer assume the proposed legislation would have no fiscal impact on their agency.
Officials from the Department of Public Safety, Missouri Veterans' Commission, the Office of Administration, and the Missouri Gaming Commission stated the proposed legislation would not fiscally impact their respective agencies.
Officials from the Department of Revenue (DOR) state that the number of taxpayers eligible for this credit is unknown at this time. The Division of Taxation, Personal Tax Bureau will need one Tax Processing Technician I for every 2,000 new credits claimed per year (processing) and one Tax Season Temporary for every 130,000 credits claimed per year (key entry). Also, one Tax Processing Technician I will be needed for six months for every 30,000 additional individual income tax errors generated from this legislation and one Tax Processing Tech I for every 3,000 pieces of correspondence generated from this legislation. The Business Tax Bureau will need one Tax Processing Tech I for every 3,680 credit claims received on corporate tax.
The DOR assumes this legislation will require modifications to the income and corporate tax systems and credit application system. The Division of Taxation estimates these modifications, including programming changes, will require 1,384 hours of contract labor, at a cost of $41,617. Modifications to the income tax return and schedules will be completed with existing resources. State Data Center charges will increase due to the additional storage and fields to be captured. Funding in the amount of $9,007 is requested for implementation costs and $451 will be needed
for on-going costs.
ASSUMPTION (continued)
Oversight assumes the DOR will make necessary programming changes in FY 2001 and that additional personnel will not be required to process the potential $2,000,000 of tax credit vouchers in FY 2003.
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(10 Mo.)
GENERAL REVENUE FUND
Loss - Income tax credits for contributions
to microloan program and revolving $0 $0 $0 to
loan fund ($2,000,000)
Costs - Department of Economic Development
Personal Service (6 FTE) ($186,900) ($229,885) ($235,632)
Fringe Benefits ($57,472) ($70,690) ($72,456)
Expense and Equipment ($140,090) ($79,949) ($82,349)
Total Costs - DED ($384,462) ($380,524) ($390,437)
Costs - Department of Revenue
Programming charges $0 ($50,624) $0
Loss - Appropriation to fund the Seed
Capital Funds and the
Microloan Program Funds ($1,000,000) ($1,000,000) ($1,000,000)
-SUBJECT TO APPROPRIATION--
ESTIMATED NET EFFECT TO ($1,384,462) ($1,431,148) ($1,390,437) to
GENERAL REVENUE FUND ($3,390,437)
VETERANS' COMMISSION CAPITAL
IMPROVEMENT TRUST FUND
Loss - Transfer to the Missouri Veterans' (unknown) (unknown) (unknown)
Business Council Fund
-SUBJECT TO APPROPRIATION-
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(continued) (10 Mo.)
MISSOURI VETERANS BUSINESS
COUNCIL FUND
Income - Transfer from the Veterans unknown unknown unknown
Capital Improvement Trust Fund
-SUBJECT TO APPROPRIATION-
FISCAL IMPACT - Local Government FY 2001 FY 2002 FY 2003
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Small Business
This proposal would be expected to have a direct fiscal impact on small businesses.
DESCRIPTION
This proposal establishes the Missouri Veterans' Business Council within the Department of Economic Development. The Council will consist of fifteen members each serving staggered terms of four years. Members of the council will be appointed by the Governor with the advice and consent of the Senate.
Duties of the Council include identifying and performing certification of veteran owned businesses and disabled veteran owned businesses, conducting initial reviews of state policies and programs as they impact veteran owned businesses and disabled veteran owned businesses, monitoring legislative proposals, providing public information, establishing a microloan revolving loan program, writing and accepting grants, developing an outreach program, maintaining working relationships with governmental agencies, providing seed capital money for start-up veteran and disabled veteran owned businesses, and administering the Missouri Veterans' Business Council Fund.
DESCRIPTION (continued)
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 Revenues.
SOURCES OF INFORMATION
Department of Economic Development
Department of Revenue
Office of the Secretary of State
State Treasurer's Office
Office of Administration
Missouri Veterans' Commission
Missouri Gaming Commission
Jeanne Jarrett, CPA
Director
March 3, 2000