COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3502-02

Bill No.:          HCS for SB 845

Subject:           Political Subdivisions

Type:              Original

Date:               May 2, 2008

Bill Summary: This proposal modifies laws relating to political subdivisions. 

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 24 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Sections 67.175, 94.900, and 94.902 - Public Safety Sales Tax - Cass County, City of Harrisonville, and City of Raytown:

In response to similar legislation of this session, (in fiscal notes nos. 5091-01, HB 2150, Cass County), (fiscal note 2173-02, HB 1867, City of Harrisonville), the following impact statements were made:

Officials of the Department of Revenue - Sales Tax Division assume no fiscal impact to the department.

Oversight assumes this proposal is enabling legislation and would have no fiscal impact unless the governing body would request the voters of their county to approve the imposition of a sales tax. Should voters approve the imposition of a sales tax the county could expect revenue to be generated from the sales tax, and there would be the costs of providing public safety programs.

Oversight assumes the Department of Revenue would collect the sales tax and retain a 1% collection fee which would be deposited into the State’s General Revenue Fund.

Oversight assumes the annual public safety fund balance would be either a positive unknown or a zero.

Oversight has no way to determine if any county would receive voter approval to impose a public safety sales tax; therefore, for the purposes of this fiscal note fiscal impact will be shown as zero.

Sections 67.1360, 94.271, 94.1011 - Transient Guest Taxes:

These sections provide for a voter approved transient guest tax to be imposed on all types of sleeping rooms, which includes hotels, motels, camping parks, etc.. Section 67.1360 would allow the cities of Sugar Creek, and Charleston to impose a voter approved transient guest tax for the promotion of tourism. Section 94.271 allows for the City of Grandview to impose a guest tax for the promotion of tourism, and for capital improvements. Section 94.1011 allows the City of Waynesville to impose a transient guest tax for the purpose of constructing and maintaining a multi-purpose convention and conference center.

ASSUMPTION (continued)

In response to similar legislation of this session, fiscal notes nos. 5303-02, SB 1209, and 3173-02, HB 1867, the following fiscal impact statements were made:

Officials of the Department of Economic Development - Tourism Division assume no fiscal impact to their department.

Oversight sent the Cites of Sugar Creek, Waynesville, Charleston, and Grandview a response request, and none have responded.

Oversight assumes these sections are permissive. Fiscal impact would not be realized without action by the local governing body and with voter approval. Oversight assumes this proposal as written does not require that a transient guest tax be imposed, therefore, Oversight will show fiscal impact as $0.

Section 57.278, 57.280, 488.435, and 650.350 - Deputy Sheriff Salary Supplementation Fund:

In response to identical legislation, fiscal note 4974, HB 2171, the following fiscal impact statements were issued:

Officials from the Department of Public Safety - Director’s Office (DPS) assume that since MoSMART falls under DPS, and is responsible for oversight, there is the need for an additional accountant to provide this tracking/monitoring. DPS does not agree that there would be no administrative costs as there will be processing of payments to a possible 101 counties, on a specific monthly/quarterly basis, and there will be administrative costs related to this processing/tracking.

DPS assumes the need for an additional Accountant II (at $42,084 annually) to administer the new fund. DPS assumes a total cost of the FTE (salary, fringe benefits and expense and equipment) of roughly $70,000 per year.

Oversight assumes with the new language added to Subsection 650.350.4, DPS must administer the new fund with existing resources.

ASSUMPTION (continued)

Officials from the Office of the State Courts Administrator (CTS) state the proposed legislation would create the "Deputy Sheriff Salary Supplementation Fund". The sheriff shall receive an additional $10 for service of any summons, writ, subpoena, or other order of the court. While there are still problems interpreting the intent of these provisions, we are providing a response based on what we think the intent is.

In 2007, approximately 135,476 summonses were served by a sheriff. This number does not include the 21st, 25th, or 31st circuits. These circuits were not on JIS, the court automation program, for the entire 2007 year. It is estimated these circuits would increase the total number an additional 30% to approximately 176,119 summonses. The sheriff fee will generate approximately $1,761,190 for sheriff departments. This estimate does not include possible revenues from service on a writ or order of the court.

Depending on how the legislation is implemented, there may be a cost, but there is no way to quantify the cost at this time. Any significant increase would be reflected in future budget requests.

Officials for the Office of the State Treasurer assume the proposal would not fiscally impact their agency.

In response to a similar proposal from this year (SB 935), officials from the Boone County Sheriff’s Department (BCSD) stated using 2006 figures, 12,454 papers were served by the BCSD, so approximately $124,540.00 could go to the state treasury for this fund. However, no minimum salary is outlined by this bill to indicate when a deputy's salary qualifies to be supplemented by this fund. Boone County deputies receive more competitive pay than most Sheriff's Departments in this state and therefore would likely not qualify to receive supplemental income from this fund. Therefore, the BCSD estimates an income and outflow of $124,540 as a result of this proposal as this would be revenue generated by Boone County that would likely not come back to Boone County because our deputies likely won't qualify to receive supplemental income.

Oversight will utilize revenue estimates provided by CTS in the fiscal note. This amount could be understated, since CTS stated the estimate did not include possible revenues from service on a writ or order of the court.

ASSUMPTION (continued)

Oversight will show a gross amount of income collected by the county sheriff departments and then this revenue being transferred to the new state Deputy Sheriff Salary Supplementation Fund. These proceeds will then be transferred back to various county sheriff departments. Oversight assumes some counties will receive back more funds from the new state fund than what they collected, and conversely, Oversight assumes some counties will receive back zero or very little compared to the amount of revenue they collected and remitted to the new state fund.

Section 108.250 - Fees State Auditor receives for registering bonds:

Officials from the Office of Administration and Secretary of State's Office assume no fiscal impact to their agency.

Officials from the State Auditor's Office (SAU) assume using the new method as proposed by this legislation the amount paid for the bonds registered by the auditor's office in FY 07 would have been $186,185. Under the current method the state auditor's office was paid $1,013,252 in FY 07 for bond registration leaving a difference of $826,767. Since the number of bond registrations can vary each year, we also calculated these amounts for FY 06. Based on the same methodology above, the legislation would have resulted in a total fee of $210,784 in FY 06. During that same year (FY 06), the auditor's office was paid $1,231,169 for bond registration resulting in a difference of $1,020,385. While it is difficult to pinpoint an exact cost of this legislation, the General Revenue funding reduction is likely to fall between $826,767 and $1,020,385.

Oversight assumes based on information received from the State Auditor's Office the number of bond issues has been consistent. Although, this in not an indication of what bond issues will be in the future, it appears there would be a loss of fees to register bonds. Oversight assumes this loss to be unknown but expected to exceed $500,000.

137.115 - Changes way County Assessor values Modified Vehicles used for disabled people:

Officials of the Missouri State Tax Commission assume this proposal reduces the assessment percentage of value for certain motor vehicles. Currently all motor vehicles are assessed at 33 1/3 % of their value. This proposal provides that motor vehicles that are "modified" to transport persons who are physically disabled will be assessed at 12 % of the vehicle's value. This change will result in a loss of revenue to the local political subdivisions.

ASSUMPTION (continued)

The State Tax Commission is unable to project the fiscal impact of this legislation on the local political subdivisions because they do not know the number of vehicles or their assessed value that will be eligible for this reduced assessment.

The Department of Revenue records indicate there are nearly 100,000 vehicles that display disabled license plates and over 200,000 individuals have been issued disabled placards.

This legislation states that vehicles that are "modified" to transport a physically disabled persons would be assessed at a lower percentage rate. However, it does not describe what must be done to the vehicle in order for it to qualify as a vehicle that has been modified.

Oversight assumes this proposal would reduce tax income to local political subdivisions that run a levy via the property tax system. Oversight assumes there would be some loss of income to the Missouri State Blind Pension Trust Fund. Oversight will show fiscal impact as unknown.

Section 190.056 - Recall procedure for Ambulance District Board members:

In response to identical legislation of this session, fiscal note 4785-01, HB 1936, the following fiscal impact statements were made:

Officials of the Office of Secretary of State - Elections Division assume no fiscal impact to their office.

Officials of the Department of Health and Senior Services assume no fiscal impact.

Officials of the Platte County Board of Elections Commission assume fiscal impact would depend on the number of petitions filed to their board. Impact would be administrative reviewing recall petitions. Officials assume little or no fiscal impact.

Officials of the Taney County Ambulance District assume insignificant or no fiscal impact.

Oversight assumes this proposal could have fiscal impact to ambulance districts if one would have a board member recalled and an election were held to remove and if the member is removed to replace the member recalled. The amount of costs would be unknown and would depend upon the size of the district, how many other political subdivisions are holding an election at the same time and other variables.

ASSUMPTION (continued)

Oversight will show fiscal impact to ambulance districts unknown costs for an election. Many districts may never have a recall election due to the narrow time frame within which a member could be recalled.

Section 302.341 - Revises provisions relating to moving traffic violation revenues:

Officials of the Office of the State Auditor assume any costs of this proposal could be absorbed due to permissive language of Section 302.341. Officials assume no fiscal impact.

Officials of the Office of Secretary of State - Rules Division stated that many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The Secretary of State’s office is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to Secretary of State’s office for Administrative Rules is less than $2,500. The Secretary of State’s office recognizes that this is a small amount and does not expect that additional funding would be required to meet these costs. However, we also recognize that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what our office can sustain with our core budget. Therefore, we reserve the right to request funding for the cost of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the governor.

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.

Officials of the Department of Revenue assume there would be minimal fiscal impact to the department. The department would need to promulgate rules regarding how to administer the program.

Officials of the Office of State Courts Administrator assume this proposal would increase the amount of excess revenues generated by fines for moving traffic violations that municipalities must send to the Department of Revenue. Currently, it is any amount in excess of 45% of its total annual general operating budget; the legislation would change that to in excess of 35%.

ASSUMPTION (continued)

Officials stated the additional amount of money that would go to the Department of Revenue is unknown. Officials assume no fiscal impact to the Courts.

Officials of the Department of Elementary and Secondary Education assume no fiscal impact to the state or to local schools.

Oversight assumes there is no state cost to the foundation formula associated with this proposal. Although the amendments to current law should result in additional remittance to DOR, it is unknown how much DOR would distribute to schools. To the extent fine revenues exceed 2006-2007 collections, any increase in this money distributed to schools increases the deduction in the foundation formula the following year. Therefore the affected districts will see an equal decrease in the amount of funding received through the formula the following year; unless the affected districts are hold-harmless, in which case the districts will not see a decrease in the amount of funding received through the formula (any increase in fine money distributed to the hold-harmless districts will simply be additional money). An increase in the deduction (all other factors remaining constant) reduces the cost to the state of funding the formula. Cities in Jackson County would not be subject to the provisions of subsection 2 of this proposal until 2010.

Oversight assumes that as of January, 2007 there were 181 hold harmless school districts; therefore, the full amount of fine collection will not result in an equal savings to General Revenue.

In response to identical legislation of this session, fiscal note 3910-01, HB 1470, the following fiscal impact statements were made.

Officials of the City of West Plains assume this proposal would not have any impact on their city.

Officials of the City of Webb City assume depending on the number of citations issued, cities could have some negative fiscal impact.

Officials of the City of Centralia assume no fiscal impact.

ASSUMPTION (continued)

Section 311.489 - Kansas City Festival District:

Officials from the Department of Public Safety - Alcohol and Tobacco Control (ATC) state this bill would allow for a new license type for promotional associations within a festival district. The festival district must include three or more alcohol licensed businesses and a common area and must be closed to traffic. The promotional association would be required to submit a plan to the city with details about the event and would be permitted to sell liquor for consumption within the district common including on Sunday. Customers would be permitted to leave the licensed establishment with an alcoholic beverage and consume it within the festival district. Minors allowed at the event must be easily distinguished from persons of legal age. The ATC would need an additional Agent to conduct party patrols and walk-throughs during festival events to assure that alcohol is not being provided to underage patrons outside the licensed establishments in the festival district, and that sales are not made to intoxicated persons. Any new license type that increases the availability of alcohol would require additional enforcement staff.

The ATC assumes an annual fee revenue resulting from this proposal of $900 per year (three licenses) to the General Revenue Fund as well as $1,350 (150% of state fee) to cities and $900 (100% of state fee) to counties.

The ATC assumes a total cost of the additional FTE to be $70,007 in FY 2009 (which includes the purchase of a $16,000 vehicle), and roughly $60,000 per year thereafter.

Officials from the City of Kansas City did not respond to our request for fiscal impact; however, in response to a similar proposal from 2007 (HB 736), Kansas City assumed no fiscal impact.

This proposal could increase Total State Revenues.

ASSUMPTION (continued)

Section 320.302 - Collection of Volunteer Fire Association Fees:

In response to identical legislation of this session, fiscal note 4373-02, HB 2201, the following fiscal impact statements were made:

Officials of the Department of Public Safety - Fire Safety assume no fiscal impact to their agency.

Officials of the Callaway and Cole County Collector’s Offices assume no fiscal impact.

Officials of the Boone County Collector’s Office assume if they were to collect subscriber fees of volunteer fire departments they would have costs of billing, collection, mailing and distribution of the fees.

Officials of the Southern Iron County Fire Protection District assume no fiscal impact.

Officials of the City of Centralia assume no fiscal impact.

Oversight assumes this proposal, as written, is enabling legislation and would require a citizen petition to the County Commission, and would require voter approval before there would be fiscal impact.

Oversight assumes if a County would collect the membership fees for a volunteer fire department the County Collector would have some administrative fiscal impact from preparing

the personal property tax bill to include the membership fee. Oversight assumes the Collector would have some programming costs to include the fee on the tax bill.

Oversight assumes that the Collector would realize some administrative impact in distribution of the fee. Oversight assumes that impact would be insignificant.

Oversight for the purposes of this fiscal note assumes any additional costs would be insignificant and will show fiscal impact as zero.

Oversight would note that this proposal does not provide for a collection fee to go to the Collector or the County.

ASSUMPTION (continued)

Section 473.745 - City of St. Louis - Public Administrator:

In response to almost identical legislation of this session, fiscal note 5355-01, HB 2367, the following fiscal impact statements were made:

Officials of the City of St. Louis - Budget Division stated that the City Public Administrator estimated the costs of up to $200,000 annually.

Officials stated that the proposed legislation would require the City of St. Louis to cover the expenses of the Public Administrator. Costs would be paid from the City’s General Revenue Fund.

In response to similar legislation, fiscal note 5311-02, St. Louis City officials stated that estimates they received from the Public Administrator’s office estimated total annual costs of office operations and salaries at or around $435,000, and annual revenues from fees, etc. at $260,000, resulting in a City subsidy of that office of around $175,000. Since annual fee collections vary the officials estimate costs of up to $200,000 annually.

Oversight assumes no state fiscal impact.

Section 487.466 - Jackson County Drug Court Judge:

The proposal removes the requirement that the state be reimbursed by Jackson County for the salary and benefits of the drug court commissioner in the sixteenth judicial circuit.

Officials from the Office of State Courts Administrator (CTS) assume, beginning August 28, 2008, the proposed legislation would remove the requirement that the state be reimbursed by Jackson County for salary and benefits of the drug court commissioner in the 16th judicial circuit. The compensation for a drug court commissioner is the same as for an associate circuit judge ($106,181 per year plus fringe benefits). CTS assumes the total cost of the legislation to be approximately $163,000 in FY 09 and approximately $200,000 in subsequent years.

Oversight assumes the proposal does not address the current payment of equipment and expenses of the drug court commissioner. Therefore, the fiscal note does not reflect any cost or savings to equipment and expenses.

ASSUMPTION (continued)

Oversight assumes the proposal would result in savings to Jackson County because they would no longer be required to reimburse the state for the salary and benefits of the drug court commissioner. Oversight assumes the savings to be approximately $162,000 in FY 09 and approximately $200,000 in subsequent years.

Officials from Jackson County did not respond to Oversight’s request for fiscal impact.

Section 546.902 - Municipalities in St. Charles County:

Officials of the Office of State Courts Administrator assume no fiscal impact to the Courts.

Officials of the Department of Highways and Transportation assume no fiscal impact.

In response to similar legislation of this session, fiscal note 4649-01, SB 1018, the following fiscal impact statement was provided by the City of Wentzville.

Officials of the City of Wentzville assume their fine revenues would stand to increase since the limit is being doubled. Officials stated they have no way of knowing how much increase in fine revenues would be since the decision of the amount of fine is determined by the Municipal Court Judge.

Oversight assumes this proposal increases the maximum fine allowed for ordinance violations.

Oversight has no way of determining the amount of revenue that would be generated from the new cap on fines. The amount would be determined by the Municipal Court Judge. Oversight will show fiscal impact to certain cities as $0 or Unknown.

Oversight would note that the current maximum allowed for ordinance violations in 3^rd and 4^th class cities is $500. Oversight did not find a maximum for Towns and Villages.

Oversight assumes no state fiscal impact.