FISCAL NOTE
Date Requested: January 11, 2023
Time Requested: 10:25 PM |
| Agency: |
Highways, Division of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1597 |
Introduced |
SB7 |
|
|---|
| CBD Subject: |
|
|---|
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FUND(S):
State Road Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Revenue From Existing Sources
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
Senate Bill 7 will return sales tax collected from contractors for materials used on highway construction and maintenance projects back to the Division of Highways.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
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 |
8,000,000 |
23,800,000 |
24,200,000 |
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.
No additional costs to the agency should SB7 pass.
Upon passage of this bill, the Division of Highways would be refunded for sales tax we are paying through agreements with contractors.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
As a State agency, the Division of Highways is exempt from paying sales tax. However, for materials used on road construction or maintenance projects obtained through contractor agreements, there is sales tax included. In essence, when the Division of Highways pays contract invoices, we are paying sales tax for materials used.
SB 7 allows for the reimbursement of this tax to be deposited back into the State Road Fund. The amount will vary from year to year, based on the amount of work contracted. The last reimbursement in 2017 was $11.3M. With the increase in expenditures due to the Roads to Prosperity program as well as the new federal Infrastructure Bill, this could be anywhere from $15M to $25M per year.
Person submitting Fiscal Note: Lorrie Hodges
Email Address: lorrie.a.hodges@wv.gov