FISCAL NOTE

Date Requested: February 08, 2019
Time Requested: 11:26 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2910 Introduced HB2927
CBD Subject: Taxation


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Decreases Existing Revenue, Increases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The stated purpose of this bill is to establish an annual $1,000 tax credit for family members that take custody of a child of a family member that is unable to take care of the child and a court has granted physical custody of a child to that family member. The proposed bill would establish an annual personal income tax credit to eligible family members who are awarded physical custody of a child when they are removed from the home of a parent or guardian due to abused or neglect. The value of the credit is equal to $1,000 for each child that is in the physical custody of the eligible family member for a period of 90 days or longer. Eligible family members include a grandparent, great grandparent, aunt, uncle, great-aunt, great-uncle or adult sibling. According to our interpretation of this bill General Revenue fund collections will be reduced by roughly $3.0 million in FY 2020 and each fiscal year thereafter. Additional administrative costs incurred by the State Tax Department would be $35,000 in FY2020 and $20,000 for each fiscal year thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 35,000 20,000
Personal Services 0 20,000 20,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 15,000 0
2. Estimated Total Revenues 0 -3,000,000 -3,000,000


Explanation of above estimates (including long-range effect):


The proposed bill would establish an annual personal income tax credit to eligible family members who are awarded physical custody of a child when they are removed from the home of a parent or guardian due to abused or neglect. The value of the credit is equal to $1,000 for each child that is in the physical custody of the eligible family member for a period of 90 days or longer. Eligible family members include a grandparent, great grandparent, aunt, uncle, great-aunt, great-uncle or adult sibling. According to our interpretation of this bill General Revenue fund collections will be reduced by roughly $3.0 million in FY 2020 and each fiscal year thereafter. Additional administrative costs incurred by the State Tax Department would be $35,000 in FY2020 and $20,000 for each fiscal year thereafter.



Memorandum


The stated purpose of this bill is to establish an annual $1,000 tax credit for family members that take custody of a child of a family member that is unable to take care of the child and a court has granted physical custody of a child to that family member. The bill’s title is somewhat misleading, as it refers only to “children of addicted parents.” In fact, the scope of the bill is much broader than that and applies to any finding of abuse or neglect under the Child Welfare law definitions contained in W. Va. Code §49-1-201, which is referenced in the body of the proposed statute. The bill’s title refers to “directing the Tax Commissioner to promulgate rules,” implying that rule-making is mandatory. However, the language of the bill itself makes the promulgation of rules optional. The title of the bill makes no reference to the tax against which the credit is to be applied, though the text of the proposed statute refers to “the tax imposed by this article,” i.e., Article 21, chapter 11, the personal income tax.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov