Colorado Legislative Council Staff
LOCAL
FISCAL NOTE
No State General Fund Impact
Local Government Expenditure Impact
Drafting Number: Prime Sponsor(s): |
LLS 98-735 Rep. T. Williams
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Date: Bill Status: Fiscal Analyst: |
February 3, 1998 House Local Government Steve Tammeus (866-2756) |
TITLE: CONCERNING A REQUIREMENT THAT CERTAIN LOCAL GOVERNMENT AUDITS DISPLAY INFORMATION RELATED TO GOVERNMENTAL COMMERCIAL ACTIVITIES.
Summary of Legislation
STATE FISCAL IMPACT SUMMARY |
FY 1998/99 |
FY 1999/2000 |
State Revenues General Fund Other Fund |
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State Expenditures General Fund Other Fund |
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FTE Position Change |
None |
None |
Local Government Impact — Requires local governments to incur additional expenses to account for costs of commercial activities and subject those costs to annual audit. |
This bill provides a definition of “commercial activity” and requires the annual audits of certain local governments to include exhibits to display the true costs, direct and indirect, of any activity that is a commercial activity. The exhibits shall be based upon a system of uniform accounting standards designed to fairly and accurately account for the costs and expenses of the commercial activity, including imputed costs for federal, state, and local tax obligations. The bill requires the audit to provide exhibits for the following:
• direct and allocable indirect labor and benefit costs;
• fair market value of leased or owned real estate;
• direct material costs;
• other costs, including manufacturing or operational costs such as utilities, parts, supplies, insurance, and depreciation; and
• selling, general administration expenses.
The bill will become effective on July 1, 1998. The provisions of this bill will not affect state revenue or expenditures. The bill will affect local government expenditures. Therefore, the bill is assessed as having a local government fiscal impact.
Local Government Impact
This fiscal note assumes that no local government currently accounts for the true costs of commercial activities to the extent this bill specifies. Local governments do not generally account for the fair market value of leased or owned real estate unless the property was recently acquired. Additionally, local governments are not currently required to account for the imputed costs of tax obligations. As a result, local governments will incur additional administrative costs to provide these exhibits, as well as additional costs to audit the exhibits.
Spending Authority
This fiscal note would imply that no new state appropriations or spending authority are required for FY 1998-99 to implement the provisions of this bill.
Departments Contacted
Local Affairs State Auditor
Omissions and Technical or Mechanical Defects
This bill specifies, in error, that the provisions of the bill apply to those entities listed in Section 29-1-602 (5) (b), C.R.S.
This fiscal note assumes the provisions of the bill are intended to apply to Section 29-1-603 (1), C.R.S.