Master FIR (1988)

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F I S C A L I M P A C T R E P O R T

SPONSOR:	Cisneros		DATE TYPED:	2-2-99		HB
SHORT TITLE:		IRB Reporting Requirements				SB	60
					ANALYST:		Taylor

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY99	FY2000	Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
NFI	NFI	NFI	N.A.	LOCAL

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB-245

SOURCES OF INFORMATION

Department of Finance and Administration, Local Government Division

SUMMARY

Synopsis of Bill

Senate Bill 60 proposes to impose reporting requirements on municipalities and counties that issue Industrial Revenue Bonds (IRB's). It also requires that the fiscal impacts resulting from the issuance of IRB's be considered.

Cities and Municipalities issuing IRB's would have to report the following information to the Local Government Division of the Department of Finance and Administration:

the company benefitting from the issuance of the bond and the bond authorization date;
the amount of the bond;
a description of bond financed project;
the terms of the bond;
whether interest of the bonds is excludable from gross income for federal income tax purposes;
the general provisions of any payment in lieu of taxes agreement.

Municipalities issuing bonds after July 1, 1999 are also required to issue an annual report to the local government division as long as the bonds are outstanding. The report would include information as to:

the number of full-time, part-time and temporary employees as of the end of preceding year;
aggregate data on the city and county of residence of those employees.

The bill would also require that the county of city issuing the bonds consider the fiscal impact from issuing the bonds on the city and any other governmental entity.

FISCAL IMPLICATIONS

There is no immediate revenue to the state government. However, the reporting requirements included in the bill add transparency to the issuance of IRB's which may affect the IRB issuance decision process. The provisions that the issuing body consider the fiscal impacts of the bond issuance on its own finances as well as the finances of other local governments may be particularly important for school districts which may be faced with the loss of property tax revenues based on the decision of another governing body. While this legislation does not prevent such happenings, it enables all affected bodies to have the potential fiscal impacts considered. The requirements regarding employment may also be important as a way to gauge whether the benefits promised from the project were in fact realized.

ADMINISTRATIVE IMPLICATIONS

The DFA Local Government Division reports that the administrative impacts on the agency will be minor.

BT/gm