FISCAL NOTE

Date Requested: February 06, 2020
Time Requested: 02:09 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1856 Introduced HB4733
CBD Subject: Economic Development


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

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 extend tax credits for certain tourism development and expansion projects authorized under the West Virginia Tourism Development Act. The bill also limits eligibility. According to our interpretation, use of the Tourism Development Credit would be subject to additional eligibility requirements. Under the provisions of the bill, a credit applicant cannot receive further tax credits until all annual reports have been submitted. A company applying for the Tourism Credit that owns or is owned by a controlling interest in another company operating in West Virginia that is not in compliance with state and federal laws is prohibited from being an eligible taxpayer for this credit. Further, to avoid the appearance of a conflict of interest and undue influence over receipt of tax credits, no company owned by a state-wide elected or appointed official that oversees, directs or supervises the State Development Office would be eligible for a tax credit. Passage of this bill would have no significant impact on revenues. Additional administrative costs incurred by the State Tax Department would be $25,000 in FY2021 and thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 25,000 25,000
Personal Services 0 25,000 25,000
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):


According to our interpretation, use of the Tourism Development Credit would be subject to additional eligibility requirements. Under the provisions of the bill, a credit applicant cannot receive further tax credits until all annual reports have been submitted. A company applying for the Tourism Credit that owns or is owned by a controlling interest in another company operating in West Virginia that is not in compliance with state and federal laws is prohibited from being an eligible taxpayer for this credit. Further, to avoid the appearance of a conflict of interest and undue influence over receipt of tax credits, no company owned by a state-wide elected or appointed official that oversees, directs or supervises the State Development Office would be eligible for a tax credit. Passage of this bill would have no significant impact on revenues. Additional administrative costs incurred by the State Tax Department would be $25,000 in FY2021 and thereafter.



Memorandum


The stated purpose of this bill is to extend tax credits for certain tourism development and expansion projects authorized under the West Virginia Tourism Development Act. The bill also limits eligibility. Pursuant to passage of SB 2001 in the 2019 Second Special Session, effective December 16, 2019, W. Va. Code ยง5B-2E-11 was amended to include language that the State Development Office would not accept any new project application after December 31, 2025 and that all applications submitted prior to January 1, 2026, that have been previously approved or not approved would be considered not approved and would be null and void as of January 1, 2026. This bill uses the pre-SB 2001 language which made the application deadline December 31, 2019 and the null and void date January 1, 2020.



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