FISCAL NOTE
Date Requested: January 29, 2018
Time Requested: 01:42 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2123 |
Introduced |
HB4341 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
PEIA
Sources of Revenue:
Special Fund
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to dedicate certain severance taxes to fund PEIA. Severance tax collections on natural gas are influenced by a variety of economic factors, which can lead to volatility in actual collections. It is PEIA’s understanding the current revenue estimate for the §11-13A-3a 5 percent natural gas severance tax is $164 million per year. PEIA has reviewed the bill and doesn’t understand the second underlined section of the bill referencing a 2 percent and 7 and one-half percent severed tax rate. Due to this lack of understanding of the bill, the total fiscal impact is unclear.
Severance taxes are currently deposited into and budgeted for expenditure by the General Revenue Fund. To provide for the severance taxes to fund PEIA, there must be offsetting reductions to non PEIA programs within the General Revenue budget.
Any additional revenue received by PEIA will be incorporated into PEIA’s financial plan at the discretion of the PEIA Finance Board. The Board will have options such as immediately reducing premiums, developing a premium stabilization reserve fund to help reduce future premium increases, or reducing member benefit costs through benefit enhancements.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
PEIA has reviewed the bill and doesn’t understand the second underlined section of the bill referencing a 2 percent and 7 and one-half percent severed tax rate. Due to this lack of understanding of the bill, the total fiscal impact is unclear.
Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov