FISCAL NOTE
Date Requested: March 18, 2017
Time Requested: 09:51 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3169 |
Introduced |
SB669 |
|
|---|
| CBD Subject: |
Public Service Commission, Taxation |
|---|
|
FUND(S):
General Revenue Fund, Select Special Funds
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to replace the wireless enhanced 911 fee with a telecommunications tax that results in slightly enhanced revenues for the tower fund, state police, office of emergency services, WV counties, and approximately $21 million to the state General Revenue Fund.
According to our interpretation, the proposed bill would remove the sales tax exemption on Telecommunications services and repeal the wireless enhanced 911 fee effective July 1, 2017. In total, estimated net revenue gains from the proposed changes are anticipated to be $22.4 million in FY2018 and $24.4 million in FY2019. The proposed bill would dedicate 35 percent of total collections to the General Revenue Fund, estimated to be roughly $19.3 million in FY2018 and $21.0 million in FY2019.
The balance would be transferred to the Public Service Commission (PSC) for distribution to the Enhanced 911 Wireless Tower Access Assistance Fund, West Virginia Interoperable Radio Project, West Virginia State Police, and county governments. With the exception of the Enhanced 911 Wireless Tower Access Assistance Fund, which would receive the same transfer in the proposed bill as in current Law, we estimate the other funds will benefit by a total of roughly $3.4 million for the first full year in FY2019. Most of this benefit would be realized by county governments ($2.8 million). The West Virginia Interoperable Radio Project and the West Virginia State Police would benefit by $0.4 million and $0.2 million, respectively. FY2018 benefits would be slightly reduced due to 11 months of collections of the new tax.
Additional administrative costs incurred by the State Tax Department are expected to be $10,000 in FY2018.
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 |
10,000 |
0 |
| Personal Services |
0 |
1,000 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
9,000 |
0 |
| 2. Estimated Total Revenues |
0 |
19,300,000 |
21,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill would remove the sales tax exemption on Telecommunications services and repeal the wireless enhanced 911 fee effective July 1, 2017. In total, estimated net revenue gains from the proposed changes are anticipated to be $22.4 million in FY2018 and $24.4 million in FY2019. The proposed bill would dedicate 35 percent of total collections to the General Revenue Fund, estimated to be roughly $19.3 million in FY2018 and $21.0 million in FY2019. We note the above table reflects the revenue gain of the General Revenue Fund only.
The balance would be transferred to the Public Service Commission (PSC) for distribution to the Enhanced 911 Wireless Tower Access Assistance Fund, West Virginia Interoperable Radio Project, West Virginia State Police, and county governments. With the exception of the Enhanced 911 Wireless Tower Access Assistance Fund, which would receive the same transfer in the proposed bill as in current Law, we estimate the other funds will benefit by a total of roughly $3.4 million for the first full year in FY2019. Most of this benefit would be realized by county governments ($2.8 million). The West Virginia Interoperable Radio Project and the West Virginia State Police would benefit by $0.4 million and $0.2 million, respectively. FY2018 benefits would be slightly reduced due to 11 months of collections of the new tax.
Additional administrative costs incurred by the State Tax Department are expected to be $10,000 in FY2018.
Memorandum
The stated purpose of this bill is to replace the wireless enhanced 911 fee with a telecommunications tax that results in slightly enhanced revenues for the tower fund, state police, office of emergency services, WV counties, and approximately $21 million to the state General Revenue Fund.
The proposed bill requires the Tax Commissioner to transfer 65 percent of revenues collected to the Public Service Commission (PSC). However, it is unclear whether the Tax Commissioner, rather than the State Treasurer, has the authority to do so.
The proposed bill also contains grammatical errors. West Virginia Code §11-15-3d(c) contains a subject/verb agreement error and West Virginia Code §24-6-6b(a)(1) lacks a main verb. Subdivision (3) of that section could benefit from replacing “West Virginia State Police” with “Division of Public Safety” as that is how the organization is styled in other sections of Code.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov