SB 0287 - Fiscal Note

Fiscal Note - SB 0287 - Clarifies property tax exemption for property of not-for- profit agribusiness associations

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 1275-01

BILL NO. Perfected SB 287

SUBJECT: Taxation and Revenue-Property: Motor Vehicles

TYPE: Original

DATE: March 25, 1999

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Blind Pension	$0	(Unknown)	(Unknown)
Total Estimated Net Effect on All State Funds	$0	(Unknown)	(Unknown)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
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
Political Subdivisions	$0	($0 to Unknown)	($0 to Unknown)

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the State Tax Commission, Department of Agriculture and the Cole County Assessor stated that the proposal would not have meaningful administrative impact on their agencies. The Assessor did note that section 6 of article X of the state constitution lists property which the general assembly may exempt from property taxes.

Tax Commission officials, while assuming that net losses could be significant have no means of estimating the value of property of not-for-profit agribusiness associations.

Oversight notes that political subdivisions are required to adjust property tax rates to take into account changes in assessed valuation by section 137.073. Rates may be rolled back or "rolled up" to the tax rate ceiling. There will be three possible effects on political subdivisions:

1) Some subdivisions will have tax rates far enough below their tax rate ceilings that they will be able to "roll up" their rates enough to entirely offset losses due to the exemption;

2) Some subdivisions will be able to "roll up" their rates enough to partially offset losses due to the exemption; and

3) Some subdivisions will not be able to "roll up" tax rates because their rates are at their tax rate ceiling.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
BLIND PENSION FUND
Loss - Reduced Tax Collections	$0	($Unknown)	(Unknown)
NET EFFECT ON BLIND
PENSION FUND	$0	($Unknown)	(Unknown)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
POLITICAL SUBDIVISIONS
Income - Higher Tax Rates	$0	$0	$0
		to	to
		Unknown	Unknown
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
Loss - Reduced Personal Property Tax Collections	$0	(Unknown)	(Unknown)
NET EFFECT ON
POLITICAL SUBDIVISIONS	$0	($0	($0
		TO	TO
		UNKNOWN)	UNKNOWN)
FISCAL IMPACT - Small Business
This proposal would affect small businesses. Not-for-profit agribusiness associations could benefit from the proposal. Other businesses could pay higher taxes on other taxable property due to tax rate adjustments.

DESCRIPTION

The proposal would exempt property of not-for-profit agribusiness associations from property taxes.

This legislation is not federally mandated, would not duplicate any other program, would not

require additional capital improvements or rental space. It would affect Total State Revenue.

SOURCES OF INFORMATION

Cole County Assessor

Department of Agriculture

State Tax Commission

Jeanne Jarrett, CPA

Director

March 25, 1999