COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         0086-02

Bill No.:          SCS for HB 69

Subject:           Counties: Tourism, Culture, Entertainment, Taxation and Revenue

Type:              Original

Date:               April 13, 2007

Bill Summary:            This proposal permits the creation of theater, cultural arts, and entertainment districts in certain counties and authorizes transient guest taxes in certain cities.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 6 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

City of Kansas City officials assume no fiscal impact.

In response to almost identical legislation, fiscal note 0259-04 HCS for SB 81, the following entities made the following fiscal impact statements:

Officials from the Office of the State Courts Administrator assume the proposal would not have a fiscal impact on the courts.

Officials from the counties of Clay, Jackson, Boone, Franklin and Jasper as well as the cities of Gladstone and Sullivan did not respond to our request for fiscal impact.

Officials from the Department of Revenue (DOR) state this legislation will not have a fiscal impact on their agency. However, the department has included some comments from Office of Administration ITSD - DOR .

Office of Administration Information Technology (ITSD DOR) estimates the IT portion of this request can be accomplished within existing resources, however; if priorities shift, additional FTE/overtime would be needed to implement. Office of Administration Information Technology (ITSD DOR) estimates that this legislation could be implemented utilizing 2 existing CIT III for 2 months at a rate of $16,744. 

Oversight assumes the proposal is permissive in nature. It allows local political subdivisions to create a theater, cultural arts and entertainment districts as well as allows certain cities to impose a transient guest tax. Oversight will assume a $0 to unknown fiscal impact to local political subdivisions. These taxes are subject to voter approval. Oversight will also assume DOR may retain 1 percent of the potential sales tax revenue generated within the new theater, cultural arts and entertainment districts.

Oversight assumes that in both the districts allowed by this proposal that the annual costs of promoting allowed projects would not exceed annual income from either a sales tax or a transient guest tax resulting in either an annual positive fund balance or a zero fund balance. For purposes of this fiscal note annual fund balances will be shown as zero.

This proposal could increase Total State Revenues.

* Oversight assumes annual costs of programs would not exceed annual income resulting in either a positive fund balance or a zero fund balance.       

FISCAL IMPACT - Small Business

Small businesses within the new districts or small business that offer sleeping rooms in certain cities may be required to collect an account for the additional tax, dependent upon governing body action and with voter approval.

FISCAL DESCRIPTION

Currently, only St. Charles County and its municipalities are allowed to form a theater, cultural arts, and entertainment district. This bill allows the governing body of any county or city that has adopted transect-based zoning under Chapter 89, RSMo, and the counties of Boone, Jasper Franklin, Clay, or Jackson and their municipalities to form a district.

The bill also:

(1) Allows the district to fund infrastructure projects;

(2) Reduces the number of contiguous acres the district must include from 50 to 25;

(3) Requires, instead of allows, the governing body of the city or county in which a district is proposed to pass a resolution describing the district when a petition for its creation is filed;

(4) Allows the City of Sullivan and the portion of the Sullivan C-2 School District located in Franklin County to impose a transient guest tax of up to 5%; and

(5) This bill specifies that in Pulaski County, for the purpose of collecting a transient guest tax, the term "transient guest" means a person who occupies a room in a hotel or motel for 90

days or less during any calendar quarter.

(6) Repeals the duplicate of Section 67.2505.

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

Office of the State Courts Administrator

Department of Revenue

Kansas City - Office of the City Attorney

NOT RESPONDING

Counties of :

Boone

Jasper

Clay

Jackson

Franklin

Cities of :

Gladstone

Sullivan

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                April 13, 2007