COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 3569-01
Bill No.: SB 866
Subject: Agriculture and Animals; Taxation and Revenue.
Type: Original
Date: January 23, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Insurance Dedicated | ($202,500) | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
($202,500) | $0 | $0 |
| 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 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Department of Agriculture state this proposal will not have a fiscal impact, other than making it easier to sell tax credits.
Officials from the Department of Revenue (DOR) state this legislation limits the New Generation Cooperative Incentive Tax Credit beginning January 1, 2003, by requiring the members eligible for the credit to own land in Missouri that produces a commodity or to be domiciled in Missouri. It also allows the tax credits to be claimed against quarterly estimated tax.
DOR assumes that modifications will be needed to allow for the estimated tax calculation. However, these changes are minimal and can be made with existing resources. DOR states the Office of Administration, Budget and Planning will estimate the revenue impact.
Officials from the Office of Administration, Budget and Planning did not respond to our request for fiscal impact.
Officials from the Department of Insurance (INS) state language in the proposal creates a cash equivalent that could be applied in multiple ways and/or times by the contributor. Currently, tax credits are applied to annual tax due, not quarterly. INS assumes extensive contract computer programming would be required to modify the tax credit database to allow for applying the tax credit to estimated quarterly payments. Contract computer programmer proficient in Mark IV language is estimated at $125 per hour. INS estimates that approximately 1,620 hours of programming would be needed to modify the current tax credit system for a cost of $202,500 ($125 x 1,620 hours) to the Insurance Dedicated Fund. Applying tax credits quarterly will also impact timing of revenue collections. Rather than collecting estimated payments throughout the year and applying credits at year end, payments would be reduced quarterly.
Officials from the Department of Natural Resources assume this proposal would have no direct fiscal impact on their department.
Oversight assumes the changes made to the New Generation Cooperative Incentive Tax Credit program and the Agricultural Product Utilization Contributor Tax Credit program will not change the annual cap of $6 million. According to Missouri Agricultural and Small Business Development Authority within AGR, roughly $4.5 million of the available credits were issued in FY 2000, and roughly $4.3 million of the available credits were issued in FY 2001. The fiscal note prepared for the enabling legislation for this program reflected a loss of state funds of $6 million annually starting in FY
ASSUMPTION (continued)
2000. Therefore, while this proposal may result in an increased utilization of the tax credit programs, Oversight assumes the cap on the programs has not changed from the $6 million reflected in the fiscal note for HB 888 in 1999, and therefore, assume no additional fiscal impact from utilization of the tax credits from the changes in these programs.
| FISCAL IMPACT - State Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| INSURANCE DEDICATED FUND | |||
| Costs - Department of Insurance
Programming expenses |
($202,500) |
$0 |
$0 |
| ESTIMATED NET EFFECT TO THE INSURANCE DEDICATED FUND |
($202,500) |
$0 |
$0 |
| FISCAL IMPACT - Local Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
This proposal may impact small businesses that participate in either the Agricultural Product Utilization Contributor Tax Credit or the New Generation Cooperative Incentive Tax Credit programs.
DESCRIPTION
This proposal would allow tax credits from the Agricultural Product Utilization Contributor Tax Credit or the New Generation Cooperative Incentive Tax Credit to be claimed either as a credit against the tax or the estimated quarterly tax.
DESCRIPTION (continued)
Beginning January 1, 2001, in order to claim the New Generation Cooperative Incentive Tax Credit the member must be domiciled in the state of Missouri or must own land in Missouri which produces a
commodity in certain amounts.
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 Agriculture
Department of Revenue
Department of Insurance
Department of Natural Resources
NOT RESPONDING: Office of Administration - Budget and Planning
Mickey Wilson, CPA
Acting Director
January 23, 2002