COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 3131-01
Bill No.: SB 769
Subject: Taxation and General Revenue; Revenue Department.
Type: Original
Date: February 4, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Various State Funds | $0 to Unknown | $0 to Unknown | $0 to Unknown |
| Total Estimated
Net Effect on All State Funds |
$0 to Unknown | $0 to Unknown | $0 to Unknown |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Local Government | $0 to Unknown | $0 to Unknown | $0 to Unknown |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Department of Economic Development (DED) state they authorize and issue tax credits while the Departments of Revenue and Insurance redeem them on tax returns. Specific law requires that DED issue some credits and that some credits have special characteristics. DED assumes it is unknown by what mechanism reduction of redeemed amounts would be achieved and what role DED would have, if any.
Officials from the Department of Social Services (DOS) state that placing a limit on tax credits would have no impact on DOS' work. The maternity home credit already has a limit, DOS' role in distressed communities is only to define the communities, and in the special needs adoption, DOS is involved in the adoption but has no control over the credit. Therefore, no impact is envisioned for the department.
Officials from the Department of Insurance (INS) state they are responsible for the following four tax credit programs: MO Property and Casualty Guaranty Assoc. (376.975 RSMo), MO Life and Health Guaranty Assoc (376.975), MO Health Insurance Pool Assessment (376.975 RSMo), and MO Examination Fee Credit (148.400 RSMo). Tax credits for these four programs total approximately $28 million annually. Credits are taken against premium tax paid under Chapter 148 RSMo. Premium taxes are split 50/50 between GR and County Foreign Insurance Fund. INS assumes that the amount needed to meet requirements under these programs will be appropriated for the credits. If an amount less than required is appropriated, it will result in increased revenues to GR and County Foreign Insurance Fund by a like amount.
Officials from the Office of Administration - Budget and Planning (BAP) state this bill limits the amount of tax credits redeemed in any fiscal year to an amount appropriated by the General Assembly. BAP states it is impossible to know the impact on revenues without knowing if the General Assembly is going to appropriate more, less, or the same amount as is currently spent on tax credits.
Officials from the Department of Revenue, Department of Agriculture, Department of Elementary and Secondary Education, Department of Higher Education, Department of Natural Resources and the Department of Public Safety each state this proposal would not result in a direct impact to their respective agencies.
Oversight assumes this proposal could result in an unknown positive impact to various state funds since previously uncapped tax credit programs could have an annual appropriation limit, therefore, limiting the amount of tax credits that could be utilized. If this proposal results in a reduction of tax
ASSUMPTION (continued)
credits being utilized against insurance premium tax liabilities, the County Foreign Insurance Fund, and ultimately the local school districts, would receive more money.
| FISCAL IMPACT - State Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| VARIOUS STATE FUNDS | |||
| Savings - Potential of previously uncapped tax credit programs being limited by appropriation from General Assembly |
$0 to Unknown |
$0 to Unknown |
$0 to Unknown |
| ESTIMATED NET EFFECT TO VARIOUS STATE FUNDS |
$0 to Unknown |
$0 to Unknown |
$0 to Unknown |
| FISCAL IMPACT - Local Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| LOCAL SCHOOL DISTRICTS | |||
| Savings - Potential of previously uncapped tax credit programs being limited by appropriation from General Assembly |
$0 to Unknown |
$0 to Unknown |
$0 to Unknown |
| ESTIMATED NET EFFECT TO LOCAL SCHOOL DISTRICTS |
$0 to Unknown |
$0 to Unknown |
$0 to Unknown |
FISCAL IMPACT - Small Business
This proposal could impact small businesses that receive tax credits, if those tax credit programs are limited by appropriation.
DESCRIPTION
This proposal limits the amount of tax credits which may be redeemed through any tax credit program to that amount appropriated for each tax credit program in any given fiscal year of the state.
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 Economic Development
Office of Administration - Budget and Planning
Department of Revenue
Department of Insurance
Department of Social Services
Department of Elementary and Secondary Education
Department of Natural Resources
Department of Public Safety
Mickey Wilson, CPA
Acting Director
February 4, 2002