SB 0483 - Fiscal Note

Fiscal Note - SB 0483 - Authorizes state income tax credit for cash contributions to school tuition organizations

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 2045-01

BILL NO.: SB 483

SUBJECT: Children and Minors; Education, Elementary and Secondary ; Revenue Department; Taxation and Revenue - General; Taxation and Revenue - Income

TYPE: Original

DATE: March 9, 1999

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue	(Unknown)	(Unknown)	(Unknown)
Total Estimated Net Effect on All State Funds	(UNKNOWN)	(UNKNOWN)	(UNKNOWN)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Revenue (DOR) state the number of taxpayers eligible for this credit is unknown at this time. The Division of Taxation and Collection would need one (1) Tax Processing Technician I for every 3,680 credits claimed per year. One (1) Tax Processing Technician I would be needed for every 20,000 additional income tax errors and one (1) Tax Processing Technician I for every 12,000 additional corporate tax errors generated from this proposal.

DOR states the proposal would require modifications to the income tax system and credit application system. The Division of Taxation and Collections estimates the modifications, including programming changes, would require 1,384 hours of overtime at a cost of $36,192. Modifications to the income tax return and schedules would be completed with existing resources. State Data Center charges would increase due to the additional storage and fields to be captured. Funding in the amount of $9,007 would be requested for implementation costs.

Office of Administration (COA) officials state there is no data available that would indicate how much would be contributed under this proposal.

Oversight assumes there would be an unknown cost fiscal impact on the revenues of the General Revenue Fund.

Officials from the Department of Elementary and Secondary Education did not respond to our fiscal impact request.

This proposal would result in a decrease in Total State Revenues.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(6 Mo.)
GENERAL REVENUE FUND
Loss - General Revenue Fund
School tuition organizations tax credits	(Unknown)	(Unknown)	(Unknown)
Cost - Department of Revenue
Reprogramming costs	$0	($48,818)	$0
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND	(UNKNOWN)	(UNKNOWN)	(UNKNOWN)
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(6 Mo.)
	$0	$0	$0
FISCAL IMPACT - Small Business

DESCRIPTION

This proposal would authorize, for taxable years beginning on or after January 1, 1999, a state income tax credit for cash contributions, not exceeding $500 per year, to a school tuition organization, defined as a charitable organization exempt from federal income tax that allocates at least 90% of its annual revenue for educational scholarships or tuition grants to children. The credit may be carried forward for up to five years. The credit would not be allowed if the contribution is part of the taxpayer's itemized deductions on the state income tax return for that taxable year.

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 Revenue

Office of Administration

Division of Budget and Planning

NOT RESPONDING: Department of Elementary and Secondary Education

Jeanne Jarrett, CPA

Director

March 9, 1999