TITLE: CONCERNING AUTHORIZATION FOR INDIVIDUAL TAXPAYERS TO MAKE VOLUNTARY CONTRIBUTIONS ON STATE INDIVIDUAL INCOME TAX RETURN FORMS FOR THE NATIONAL WORLD WAR II MEMORIAL, AND MAKING AN APPROPRIATION IN CONNECTION THEREWITH.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues Cash Fund Exempt	Revenue Increase	Revenue Increase
State Expenditures Cash Fund Exempt	$61,200
FTE Position Change	0.0 FTE	0.0 FTE
Other State Impact: None
Effective Date: 90 days after adjournment; for income tax years commencing on or after January 1, 1999.
Appropriation Summary for FY 1999-2000: $61,200 CF Exempt to the Department of Revenue
Local Government Impact: None

This bill, as amended in the House Finance Committee, creates a voluntary income tax checkoff program to allow individuals to designate a contribution to the national World War II memorial. The voluntary contribution designation would be for income tax years commencing on or after January 1, 1999, but prior to January 1, 2002.

Earmarked contributions would be deposited in the National World War II Memorial Fund, which would be established in the State Treasury. The General Assembly would annually appropriate money from the fund to the Department of Revenue for its costs of administering the contributions.

The Department of Revenue would experience a one-time expenditure in FY 1999-00 in order to implement the new tax checkoff. These costs would be reimbursed from moneys donated to the program. Moneys donated to the program are considered cash fund exempt, as would the expenditures of the Department of Revenue to administer the program.

Currently, six income tax checkoffs appear on the 1998 individual income tax return for returns to be filed in 1999. These include: Colorado Non-Game and Endangered Wildlife Fund, Colorado Domestic Abuse Fund, Colorado Homeless Prevention Activities Fund, Colorado Child Care Improvement Fund, Colorado Special Olympics Fund, and the United States Olympic Committee Fund*. The number and value of contributions that would be made to benefit public education is unknown. Furthermore, the impact of adding one more tax checkoff to the income tax form will have on the number and amount of donations to the current list of six checkoff programs is unknown.

The table below identifies the number of income tax returns, the total donation, and the average donation that was recorded on income tax returns filed in 1998.

Tax Checkoff Name

Number

of Returns

Total

Donation

Average

Donation

Nongame Wildlife

Child Care Improvement

Special Olympics

Domestic Abuse

Homeless Prevention

Total

52,171

33,896

31,142

41,825

36,455

195,489

$408,823

188,538

190,538

270,615

238,566

$1,297,080

$7.84

5.56

6.12

6.47

6.54

$6.64

The addition of the individual income tax checkoff to benefit the national World War II memorial would require a new line on the income tax return for 1999 that will be filed by taxpayers in 2000. This would be handled as part of the annual rewrite process by the Department of Revenue. However, a key will have to be added to the income tax return system in order to track the contributions. The Information Technology Division of the Department of Revenue would require 900 hours of computer programming contract labor in order to accommodate the new checkoff. Based on an hourly rate of $68 per hour, total one-time programming costs would be $61,200 in FY 1999-00.

Since donations from the voluntary contribution program will not be received until after January 1, 2000, it is assumed that the Department of Revenue will require a cash advance from the cash fund to cover the up-front costs associated with making the necessary changes to accommodate the additional tax checkoff.

The fiscal note would imply that the Department of Revenue would require cash fund exempt spending authority from the National World War II Memorial Fund in the amount of $61,200 during FY 1999-00 in order to implement the provisions of the bill.