COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         0382-05

Bill No.:          SCS for SB 22

Subject:           Political Subdivisions

Type:              Original

Date:               February 19, 2007

Bill Summary:            Modifies laws relating to political subdivisions.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 19 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

STORM WATER CONTROL:

Oversight assumes the provisions in Section 64.907 to be permissive and would have no fiscal impact without action by the governing body and with voter approval. This section allows for a tax, upon voter approval, on charges for storm water control. The proceeds of the tax would only be used for storm water control. Oversight assumes the tax would be applicable to political subdivisions subject to EPA rules concerning storm water discharges.

Officials of the Department of Natural Resources assume no fiscal impact to their department.

JEFFERSON COUNTY : ORDINANCE ENFORCEMENT: (Section 67.320)

Oversight assumes that currently, Jefferson County may adopt orders consistent with state law with penal provisions in the areas of traffic violations, solid waste management, and animal control. Under this section the county would be able to adopt such orders in any area covered by the county’s ordinances.

Oversight assumes that Jefferson County could expect an increase in fine revenue. In fiscal note 5300-01 of last session Jefferson County officials estimated an increase in revenue of $20,000 to $40,000 annually.

Officials of the Department of Elementary and Secondary Education assume the school districts in Jefferson County could realize a reduction in the amount of fine revenue. Officials did not estimate the amount of expected loss.

Oversight assumes any loss would be minimal, and less than $100,000 annually. Oversight assumes any loss to schools would be made up from the State’s School Monies Fund resulting in no fiscal impact to Jefferson County Schools.

ASSUMPTION (continued)

LOCAL OPTION SALES TAX:

Oversight assumes the following sections have the potential to impact the State’s General Revenue Fund. Sections 67.997, 67.2040, 67.2500, 67.2510, 92.500, and 94.950 are considered to be permissive and as written does not require certain defined local governments to initiate sales taxes for certain purposes. Before there would be fiscal impact, the governing body would have to place the question of imposing a sales tax to the voters of the defined district. Oversight is showing this because the Department of Revenue- Sales Tax Division would collect the tax, and would retain a 1% collection fee which would go into the State’s General Revenue Fund. Fiscal impact will be shown as $0 or a positive unknown. If none of the political subdivisions would impose a sales tax there would be no fiscal impact to the General Revenue Fund. If a tax were approved, the 1% collection fee would go into the General Revenue Fund. The amount is unknown.

Officials of the Department of Revenue assumes any costs could be handled with existing resources and assume no fiscal impact.

Officials of the Office of Administration - Information Technology stated that any cost could be handled with existing resources and assume no fiscal impact.

ST. CHARLES COUNTY CONVENTION AND SPORTS FACILITIES AUTHORITY

Section 67.1158 provides for a formula for the calculation of the amount of charges for sleeping rooms paid by transient guests to determine the room tax.

Officials of the St. Charles County Convention and Sports Authority stated that this proposal would increase revenue collections by an estimated $10,000 annually.

LOCAL OPTION TRANSIENT GUEST TAX:

Oversight assumes Sections 67.1003 and 67.1360 allows cities to impose, with voter approval, a transient guest tax. Oversight assumes the taxes to be permissive. Both would require action by the governing body with voter approval. Oversight will show income and costs to tourism funds as unknow. Oversight assumes costs would not exceed income resulting in a zero annual fund balance or an annual positive fund balance. For purposes of this fiscal note fiscal impact will be shown as $0.

ASSUMPTION (continued)

LOCAL OPTION TOURISM TAXES: AUDIT

Section 67.1181 requires political subdivisions that collect and expend tax revenues for advertising and tourism promotion to perform an audit at least every 5 years provided no other statutory auditing requirement exists. Cost of the audit would be paid from revenues for operating costs. The first audit would be completed by January 1, 2009.

Oversight will show costs to the County’s Tourism Fund as unknown. Oversight assumes costs would be minimal.

AMBULANCE DISTRICTS - BOARD MEMBERS: TRAINING

Section 190.053 requires ambulance board members first elected after January 1, 2008 to complete educational training.

Officials of the Department of Health and Senior Services stated this proposal would have no fiscal impact on their department’s appropriations. Officials assume ambulance districts would have some costs. Officials could not estimate cost.

Oversight assumes the amount of cost per ambulance district would depend upon the number of members requiring training, location of training, and whether board members would have to travel, require lodging, and meals. Oversight will show costs as $0 to (unknown).

ST. LOUIS: WATER AND SEWER SERVICES: (SECTION 250.140)

Officials of the Metropolitan St. Louis Sewer District stated that the service they provide is an unapplied for service. Officials stated that this means an application by the property owner is not received prior to the establishment of an account. Officials stated that they do not turn on and off service when tenants move in and out. All charges remain with the property and are the responsibility of the owner. This is in accordance with MSD ordinances.

Officials stated that since they are not an applied for service and without the means of easy shut-off particularly in the City of St. Louis where there are combined sewers as other utilities have, they are unable to track transient tenants as they move to collect their debts.

ASSUMPTION (continued)

While billed services have always remained with the property and the owner is ultimately responsible for the bill, the practice of billing tenants and not strictly the owner has been the substantial contributor over the last 20 years to the District’s over current outstanding $27 million in outstanding receivables and $26 million in bad debt allowance.

Officials estimate they would have one-time costs in fiscal year 2008 for programming and implementation costs. Officials estimate they would realize operational costs in 2008, 2009, and 2010. There would be one-time operational costs in FY 2008 of $114,200. There would be on-going costs in all three fiscal years. Total 3 year cost is estimated at $3,476,464.

FIRE PROTECTION DISTRICTS - BOARD MEMBERS: TRAINING

Section 321.162 requires board members of fire protection districts, first elected after January 1, 2008, to complete educational training.

Officials of the Department of Public Safety - Division of Fire Safety stated they currently have a training program that will meet the requirements outlined in this legislation and assume no fiscal impact.

Officials of the DeSoto Rural Fire Protection District stated that they would estimate their costs at $500 each year that an election was held, provided there were new board members elected. Officials assume if training were held within a reasonable traveling distance, costs would be less.

Oversight assumes costs of training for each fire protection district would depend upon the number of newly elected board members, the distance the members would have to travel to have training, would lodging be necessary, and the number of meals required. Oversight will show fiscal impact as $0 to (Unknown), and expects costs per fire district to be minimal.

LIABILITY OF THE STATE: (Section 537.610)

Officials of the Office of Administration made the following statement:

When a claim is brought against an agent, officer or employee of the state involving the operation of motor vehicle or dangerous condition of property, the maximum recovery against the state shall be reduced by any amount paid towards the claims by the state or public entity.

ASSUMPTION (continued)

Currently, the state legal expense fund, pursuant to Section 105.711 RSMo., provides for the payment of any claim or final judgment against the state pursuant to Section 537.600. The fund also extends coverage to agents, officers and employees of the state for conduct arising out of and performed in connection with his/her official duties with limitations to economic damages to any one claimant and up to $350,000 for noneconomic damages. The state legal expense fund shall be the exclusive remedy.

The proposed changes would allow for a reduction to the state legal expense fund payment made in accordance with Section 537.600 by any payment that has been made by a public entity. Potential savings cannot be determined at this time.

When a claim is brought against an agent, officer or employee of the state involving the operation of motor vehicle or dangerous condition of property, the maximum recovery against the state shall be reduced by any amount paid towards the claims by the state or public entity. The proposed changes to 537.610 paragraphs 3 and 4 would allow for a reduction to the state legal expense fund payment made by any payment that has been made by the state, its public entities, any officer, or employee of the state or its public entities, or anyone acting on their behalf. Potential savings to the state legal expense fund specific to these paragraphs cannot be determined at this time.

The state self-assumes its own liability protection under the state legal expense fund, Section 105.711, RSMo. It is a self-funding mechanism whereby funds are made available for the payment of any claim or judgment rendered against the state in regard to the waivers of sovereign immunity or against employees and specified individuals. Investigation, defense, negotiation or settlement of such claims is provided by the Office of the Attorney General. Payment is made by the Commissioner of Administration with the approval of the Attorney General.

Provides that should an operator of a state or political subdivision motor vehicle be deemed immune from liability because of official immunity or otherwise, then the state or political subdivision itself would also not be liable. The drafted language appears to have the effect of shielding the state from any liability for the operation of its motor vehicles. State employees cannot be held personally liable under Section 105.715 (5). Therefore the language as proposed in paragraph 5 that provides protetion to the state should the employee have immunity "because

ASSUMPTION (continued)

of official immunity or otherwise" would seem to protect the state as well from liability for the operation of motor vehicles. The average annual liability cost to the state (general revenue and all funds) through the state legal expense fund over the past three years is approximately $3,732,300. This cost would be avoided with the proposed changes to paragraph 5

Officials estimated there would be a savings to the General Revenue Fund in FY 2008 of $1,252,000; and $1,289,560 in FY 2009 and $1,328,247 in FY 2010.

Officials stated there would be savings to Other State Funds, however, they did not list or name the funds. Oversight will show savings to other funds. Office of Administration officials estimated savings in FY 2008 at $2,480,300; and $2,554,709 in FY 2009; and $2,631,350 in FY 2010.

Oversight assumes the State Conservation Fund would experience the same fiscal impact as other state departments. Oversight will show savings as unknown to the State Conservation Fund.

Officials of the Missouri Department of Transportation stated that this legislation makes changes to the states laws regarding sovereign immunity. Officials stated that:                    

Section 537.610.3, provides that the current $2,369,306 per occurrence and $355,396 per person caps for tort liability arising out of the negligent operation of a motor vehicle are rolled back to the $2 million per occurrence and $300,000 per person caps, which are the same caps that were in effect in 1999.                                                                                                                                                                                                                                                                     Section 537.610.4 that the current $2,369,306 per occurrence and $355,396 per person caps for liability arising out of any dangerous condition of property are rolled back to $2 million per occurrence and $300,000 per person, which are the same caps that were in effect in 1999.                                                                                                                                                Section 537.610.5 which provides that the liability of the state or its public entities for operation of a motor vehicle is vicarious to the liability of the operator of the vehicle and that if the operator of the vehicle owned or operated on behalf of the state is immune from liability, the state and its entities are also so immune.                                                                                                                                                                                                                                Officials stated there would be an unknown positive fiscal impact to the department of transprotation's Highway Fund.

ASSUMPTION (continued)

Officials of the Office of State Treasurer assume no fiscal impact to their office.

Officials of the Department of Economic Development - Public Service Commission assume no fiscal impact.

Officials of the Department of Corrections assume no fiscal impact.

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

Officials of the Department of Social Services assume no fiscal impact.

Officials of the State Tax Commission assume no fiscal impact.

Officials of the office of the Director of Administration of St. Louis County assume no fiscal impact.

Officials of the Little Blue Valley Sewer District assume no fiscal impact.

Officials of the office of the Boone County Collector assume no fiscal impact.

Officials of the Taney County Clerk’s office assume no fiscal impact.

Officials of the office of County Counselor of Jefferson County assumes no fiscal impact.

* Oversight assume costs of providing defined services would not exceed income, resulting in either a $0 or positive annual fund balance. Oversight assumes for purposes of this fiscal note a $0 annual fund balance.

FISCAL IMPACT - Small Business

Small business located within districts that impose voter approved sales taxes or certain businesses that would be required to collect a transient guest tax would have to collect and administer the

FISCAL DESCRIPTION

This proposal modifies the laws regarding political subdivisions.

Section 64.907 allows any political subdivision subject to EPA rules concerning storm water discharges to adopt rules necessary to comply with the federal rules, rather than only counties. Any such political subdivision is authorized to establish a storm water control utility to administer the rules and a tax, upon voter approval to be used for storm water control.

Section 67.320 Currently, Jefferson County may adopt orders with penal provisions consistent with state law in the areas of traffic violations, solid waste management, and animal control. Under this section the county would be able to adopt such orders in any area covered by the county’s ordinances.

Section 67.997 allows Perry County to impose, upon voter approval, a sales tax of up to one-fourth of 1% to equally fund senior services and youth programs.

Section 67.1158 Currently the St. County Convention and Sports Facilities Authority has the authority to impose a tax on the charges for all sleeping rooms paid by transient guests within the county. This section provides a formula to calculate the amount of charges for sleeping rooms paid by transient guests to determine the room tax.

Section 67.1181 requires political subdivisions that collect and expend tax revenues for advertising and tourism promotion to perform an audit at least every five years if no other statutory auditing requirement exists for such political subdivision. The political subdivision shall pay the actual cost of the audit from the revenues for operating costs. The first audit shall be completed by January 1, 2009.

67.1003 allows the City of Gladstone to impose, upon voter approval, a transient guest tax of up to 5% on hotel and motel rooms to be used for the promotion of tourism.

DESCRIPTION (continued)

67.1360 allows the City of Sullivan and the portion of the Sullivan C-2 School District located in Franklin County to levy a transient guest tax on charges for sleeping rooms paid by guest of hotels, motels, bed and breakfast inns, and campgrounds or docking facilities. The proposed tax must be approved by the voters and could not be less than 2% or greater than 5% per occupied room per night.

Section 67.2040 allows Pulaski County to impose, upon voter approval, a sales tax of one-eight of 1% to fund construction of a women’s and children’s shelter.

Sections 67.2500 and 67.2510 allows cities, towns, and villages within Clay County, Franklin County, and Jackson County to form a Theater, Cultural Arts, and Entertainment District. St. Charles County may also form a district. The current law provides for funding by a voter approved sales tax.

Section 92.500 allows the City of St. Louis to impose, upon voter approval, a sales tax for public safety.

Section 94.950 allows the City of Joplin to impose, upon voter approval, a sales tax of up to 0.5% to be used for operation, renovation, and construction of historical locations and museums for the purpose of tourism.

Section 190.053 requires members of ambulance district boards first elected after January 1, 2008, to complete educational training. The training shall be offered by a statewide association organized for the benefit of ambulance districts or approved by the State Advisory Council on Emergency Medical Services. The content of the training must include the duties of the ambulance district director, all ambulance district statutes and regulations, ethics and sunshine laws, financial and fiduciary responsibilities, and laws relating to the setting of tax rates and revenue limitations. If a board member does not receive the required training within one year of taking office, the board member shall not receive an attendance fee until the training is completed

Section 250.140 Currently, a St. Louis City property owner is only liable for an occupant’s delinquent water or sewer bill for up to 90 days of service.

Under this section, as of the effective date of this section a St. Louis City property owner would be liable for up to 120 days of service when the occupant’s bill is delinquent

DESCRIPTION (continued)

Section 321.162 requires members of fire protection district (FPD) boards first elected after January 1, 2008, to complete educational training. The content of the training will be determined by the State Fire Marshal but must include the duties of the FPD director, all FPD statutes and regulations, ethics and sunshine laws, financial and fiduciary responsibilities, and laws relating to the setting of tax rates and revenue limitations.

If a board member does not receive the required training within one year of taking office, the board member shall not receive an attendance fee until the training is completed.

Section 537.610 provides that the liability of the state or its public entities and any officer or employee thereof that arises from the operation of a motor vehicle, or from causing or contributing to cause a dangerous condition of property, shall be limited to two million dollars for a single occurrence, and limited to no more than three hundred thousand dollars for any one person for a single occurrence. The maximum allowable recovery for these types of claims shall also be reduced by any amount paid towards the claim by the state, its entities, or anyone acting on their behalf.

The section also provides that the state or its public entities are vicariously liable to the operator of the motor vehicle, and if the operator is found to be immune from liability, the state or its public entities shall also have no liability.

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 Treasurer

Office of State Courts Administrator

Missouri Department of Transportation

Missouri Department of Corrections

Department of Natural Resources

Department of Elementary and Secondary Education

Office of Administration - Commissioner

Office of Administration - Information Technology

Department of Public Safety - Fire Safety Division

SOURCES OF INFORMATION (continued)

State Tax Commission

Department of Social Services

Department of Health and Senior Services

Department of Revenue

Department of Economic Development - Public Service Commission

St. Louis County Director of Administration

Boone County Collector

Taney County Clerk

Jefferson County Counselor

DeSoto Fire Protection District

St. Charles County Convention and Sports Facilities Authority

Metropolitan St. Louis Sewer District

Little Blue Valley Sewer District

NOT RESPONDING

The County Commissions of:

Clay County

Johnson County

Jackson County Executive

Franklin County

Pulaski County

City Clerk/Administrators of:

Knob Knoster

Warrensburg

Gladstone

Joplin

St. Louis City

Boone County Fire Protection District

Central Co. Fire Protection District

Creve Coeur Fire Protection District

Hawk Point Fire Protection District

NOT RESPONDING (continued)

Hillsboro Fire Protection District

Lake St. Louis Fire Protection District

St. Charles County Ambulance District

Taney County Ambulance District

Valle Ambulance District

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                February 19, 2007