TITLE: CONCERNING SCIENTIFIC AND CULTURAL FACILITIES DISTRICTS, AND, IN CONNECTION THEREWITH, AUTHORIZING THE INCLUSION OF ALL OF DOUGLAS COUNTY IN THE DENVER METROPOLITAN SCIENTIFIC AND CULTURAL FACILITIES DISTRICT AND AUTHORIZING THE CREATION OF SCIENTIFIC AND CULTURAL FACILITIES DISTRICTS THAT ARE NOT COTERMINOUS WITH COUNTY BOUNDARIES.

STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000
State Revenues General Fund Other Fund	$100,000*
State Expenditures General Fund* Other Fund	$100,000*
FTE Position Change	None	None
Special District Impact — Allows the area of Douglas County that is not currently included in the Denver Metropolitan Scientific and Cultural Facilities District to be included in the district.

*Subject to approval of the registered electors of the area proposed to be included in the district at the 1998, 2000, or 2002 General Election.

This bill allows the area of Douglas County that is not currently included in the Denver Metropolitan Scientific and Cultural Facilities District to be included in the district if:

• a proposal is initiated by: 1) a petition signed by certain eligible electors, or 2) the governing bodies of certain municipalities; or

• an election is conducted in accordance with statutory requirements for elections, and in accordance with certain other election and ballot requirements.

The bill requires the governing bodies of all municipalities in the area that is to be included in the district and the Douglas County Board of Commissioners to adopt resolutions calling for the election. The bill specifies the content of the resolution.

The bill states that a scientific and cultural facilities district, other than the Denver Metropolitan Scientific and Cultural Facilities District, may include a portion of one county, an entire county, or areas contained within multiple counties; except that no county shall include more than one scientific and cultural facilities district composed of areas located solely within that county. The bill will become effective upon the signature of the Governor.

The provisions of this bill will affect state revenue and expenditures, and local government revenue and expenditures, subject to approval of the registered electors of the district. Therefore, this bill is assessed as having a state and local government conditional fiscal impact.

The provisions of this bill will generate General Fund revenue during the first year the new portion of the district collects the sales tax. The Department of Revenue expenditures of $100,000 shown in the “State Expenditures” section of this fiscal note will be collected from the district by the department and reimbursed to the state General Fund as fee revenue.

Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

Upon approval of the registered electors of the portion of the county proposed to be within the district, the provisions of this bill will require the Department of Revenue to create a new sales tax form and to modify the sales tax data information system to support the collection and processing of sales tax for the area added to the district. The department will incur additional administrative and operating costs based upon the following assumptions:

• that part of Douglas County is already part of the Denver Metropolitan Scientific and Cultural Facilities District, and that upon approval of the voters, the balance of the county will be included in the scientific and cultural facilities district, but not the Regional Transportation District or the Denver Metropolitan Major League Baseball Stadium District;

• that the taxes for these three districts are currently collected as one tax for the entire area, and the boundaries of the areas are the same for each tax;

• that the boundaries of the scientific and cultural facilities district will change which will necessitate a new sales tax form to be developed for the portion of Douglas County that will be added to the scientific and cultural facilities district;

• that the department has determined it to more economical to develop a new sales tax form for the businesses in the portion of the county to be added to the district and to allow the businesses in the other existing districts to continue using current forms, than to create a new separate tax form for each tax in the three districts;

• the department estimates there are 1,019 new filings associated with the businesses that are in the portion of Douglas County to be added to the district;

• that this increase in the number of businesses in the district will increase the department’s annual field audit requirements;

• that the department will require 2,000 hours of software programming at a cost of $50 per hour (total General Fund cost of $100,000) to modify automatic edits, redesign the automatic redistribution of funds, modify the sales tax statistical subsystems, and modify the accounts receivable and payable systems.

The department will be able to absorb the costs of developing and distributing the new sales tax form, the additional data entry for the 1,019 new filings, and the additional field audit. However, the department will require $100,000 General Fund for additional programming expenditures. These costs will be incurred immediately following approval of the registered electors of the district. These costs will be reimbursed by the district to the General Fund.

This bill allows certain areas in the state to elect to form scientific and cultural facilities districts. This fiscal note cannot ascertain the revenue or expenditure impact of any other districts that may be created as a result of this bill.

Revenue. This bill allows the area of Douglas County that is not currently included in the Denver Metropolitan Scientific and Cultural Facilities District to be included in the district. The bill does not make this portion of Douglas County a part of the Regional Transportation District or the Denver Metropolitan Major League Baseball Stadium District. The portion added to the scientific and cultural facilities district would be subject to a sales tax at a rate of 0.1 percent.

During FY 1996-97, the portion of Douglas County currently within the district generated $502,445,206 in taxable sales. During FY 1996-97, the entirety of Douglas County generated $1,237,689,681 in taxable sales. Therefore, the portion to be added to the district generated $735,244, 475 in taxable sales, or $735,244 of sales tax revenue, during FY 1996-97.

Based upon anticipated inflation and a sales tax rate of 0.1 percent, the Department of Revenue estimates the portion of Douglas County to be added to the district will generate the following sales tax revenue:

The department recognizes that recent growth in Douglas County has generated taxable sales at a rate higher than projected inflation. Therefore, the potential sales tax revenue growth may actually be higher than the amounts shown above.

Expenditures. Section 1-5-506, C.R.S, states that the cost of conducting a nonpartisan election, including the cost of printing and supplies, shall be paid by the governing body calling the election. This bill requires the governing bodies of all municipalities in the area proposed to be included in the district to adopt resolutions calling the election. Therefore, the municipalities of the area proposed to be included in the district will be responsible for paying for the costs of the election.

Additionally, the Department of Revenue expenditures of $100,000 shown in the “State Expenditures” section of this fiscal note will be collected from the district by the department and reimbursed to the state General Fund as fee revenue.

This fiscal note would imply the Department of Revenue would require a General Fund appropriation of $100,000 for FY 1998-99 if approved by the registered electors of the area that is proposed to be included in the district at the 1998 General Election.