FISCAL NOTE
Date Requested: March 14, 2017
Time Requested: 01:27 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3201 |
Introduced |
HB3050 |
|
|---|
| CBD Subject: |
Energy |
|---|
|
FUND(S):
General Revenue Fund, Special County Revenue Accounts
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create a special revenue account for each county in the State of West Virginia for coal severance taxes; and make the funds in the special revenue account exclusively available for use by county governments.
According to our interpretation, passage of this bill would result in the reallocation of all tax collections associated with severance tax on coal, limestone and sandstone to producing counties. County severance tax revenues would increase by roughly $154 million or more each year. The State General Revenue Fund would lose roughly $151 million or more each year and non-producing coal counties and municipal governments would lose roughly $3 million per year attributable to their current twenty five percent share of the 0.35% tax portion of the coal severance tax allocation. There are currently 20 coal producing counties in West Virginia and the five largest producing counties account for roughly two-thirds of total coal production in the State.
Additional costs incurred by the State Tax Department would be $30,000 in FY2018 and $10,000 in fiscal years thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2017
Increase/Decrease
(use"-") |
2018
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
30,000 |
10,000 |
| Personal Services |
0 |
10,000 |
10,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
20,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-158,000,000 |
-173,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, passage of this bill would result in the reallocation of all tax collections associated with severance tax on coal, limestone and sandstone to producing counties. County severance tax revenues would increase by roughly $154 million or more each year. The State General Revenue Fund would lose roughly $151 million or more each year and non-producing coal counties and municipal governments would lose roughly $3 million per year attributable to their current twenty five percent share of the 0.35% tax portion of the coal severance tax allocation. There are currently 20 coal producing counties in West Virginia and the five largest producing counties account for roughly two-thirds of total coal production in the State.
Additional costs incurred by the State Tax Department would be $30,000 in FY2018 and $10,000 in fiscal years thereafter.
Memorandum
The stated purpose of this bill is to create a special revenue account for each county in the State of West Virginia for coal severance taxes; and make the funds in the special revenue account exclusively available for use by county governments.
The bill adds subsection (h) to W. Va. Code §11-13A-3 which creates a special revenue account for each county but does not specify that the accounts are in the Treasurer’s Office. The bill proposes that all the severance tax from each county will be deposited into the county fund where the coal was extracted. The funds are to be exclusively used by that county’s government and at its discretion.
The bill overrides, “notwithstanding any other provision of this code,” the additional tax on the severance of coal which distributes a small portion to all counties and municipalities which do not produce coal and a larger portion of the tax to coal producing counties under W. Va. Code §11-13A-6.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov