SB 0775 - Fiscal Note

Fiscal Note - SB 0775 - Sales of land previously condemned by MoDOT shall be offered first to the previous owner

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3396-01

BILL NO. SB 775

SUBJECT: Transportation Department: Real Property

TYPE: Original

DATE: February 2, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
State Road Fund *	(Unknown)	(Unknown)	(Unknown)
Total Estimated Net Effect on All State Funds *	(Unknown)	(Unknown)	(Unknown)

*Could exceed ($100,000) in any one year.

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Transportation (DOT) assume that if the right-of-way involved only a partial taking, the owner of the property at the time of taking may no longer own the adjoining remainder. Therefore, they assume that there could be fiscal impact to DOT in the form of costs to search for owners or their heirs in order to offer the right of first refusal to repurchase the property. DOT would also expect some amount of reduced revenue by selling the property at the past acquisition price, rather than at current fair market value. The amount of costs cannot be estimated.

Oversight assumes that the legislation requires DOT to offer to resell acquired property to the original owner(s) or heirs at a cost not greater than the amount originally paid by DOT to the owner of the property. If the property's fair market value at the time DOT divests itself of the property is greater than the original amount paid by DOT for the property, and the owner(s) or heirs repurchase it at the original amount, then DOT could incur losses on the sale of the property, assuming it would have sold at fair market value otherwise. Oversight also assumes that since the legislation does not require DOT to search for original property owners or their heirs, public notification in newspapers would likely suffice. In reference to a similar proposal in the prior legislative session, DOT officials indicated that approximately 115 parcels are sold per year. Amounts of possible costs and losses to the State Road Fund cannot be reasonably estimated, but could exceed ($100,000) in total in any one year.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
STATE ROAD FUND
Costs-Department of Transportation
Public notification of potential sale of
properties	(Unknown)	(Unknown)	(Unknown)
Loss-Department of Transportation
Losses on sales of properties at original
amount paid by Department	(Unknown)	(Unknown)	(Unknown)
NET EFFECT ON STATE ROAD FUND*	(Unknown)	(Unknown)	(Unknown)
* Could exceed ($100,000) in any one year.
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

The proposal would require that the original property owner or such person's heirs have the right of first refusal to repurchase property acquired by the Department of Transportation for highway right-of-way if the Department later attempts to divest itself of the property. The repurchase price paid by the original owner or such person's heirs could not exceed the amount paid to the original owner by the Department for the property.

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 Transportation

Jeanne Jarrett, CPA

Director

February 2, 1998