FISCAL NOTE
Date Requested: January 11, 2023
Time Requested: 10:25 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1597 |
Introduced |
SB7 |
|
|---|
| CBD Subject: |
|
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|
FUND(S):
General Revenue Fund, State Road Fund
Sources of Revenue:
General Fund State Road Fund
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to return to the Division of Highways the sales tax collected from contractors for materials used in highways construction and maintenance projects.
According to our interpretation, this bill would reinstate an annual revenue transfer from the General Revenue Fund to the State Road Fund equal to a calculation of 40 percent of total gross funds expended by the Division of Highways during the fiscal period for acquisition of materials used by contractors for construction and maintenance of highway projects. The amendments would be effective upon passage of the bill, and the transfers would be required on or after January 1, 2023. Even though the proposed provisions are located among various sales tax exemptions, the proposed change does not create an additional sales tax exemption.
Based on estimates received from the West Virginia Division of Highways, the proposed legislation would decrease General Revenue Fund collections by as much as $19.5 million in FY2023, $23.8 million in FY2024, and $24.2 million in FY2025. The legislation was unclear as
to whether the reimbursement would cover the entire FY2023 period or the period on and after January 1, 2023. It is anticipated that future transfers would vary considerably from year to year.
There would be no additional administrative costs.
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 |
-19,500,000 |
-23,800,000 |
-24,200,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill would reinstate an annual revenue transfer from the General Revenue Fund to the State Road Fund equal to a calculation of 40 percent of total gross funds expended by the Division of Highways during the fiscal period for acquisition of materials used by contractors for construction and maintenance of highway projects. The amendments would be effective upon passage of the bill, and the transfers would be required on or after January 1, 2023. Even though the proposed provisions are located among various sales tax exemptions, the proposed change does not create an additional sales tax exemption.
Based on estimates received from the West Virginia Division of Highways, the proposed legislation would decrease General Revenue Fund collections by as much as $19.5 million in FY2023, $23.8 million in FY2024, and $24.2 million in FY2025. The legislation was unclear as
to whether the reimbursement would cover the entire FY2023 period or the period on and after January 1, 2023. It is anticipated that future transfers would vary considerably from year to year.
There would be no additional administrative costs.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov