FISCAL NOTE
Date Requested: March 04, 2023
Time Requested: 03:33 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3257 |
Comm. Sub2 |
SB522 |
|
|---|
| CBD Subject: |
Counties |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
According to our interpretation of the intended purpose of this bill, beginning July 1, 2023, and ending on June 20, 2024, 30 percent of the State Property Transfer Tax would still be retained by the county per current statute. Beginning July 1, 2024, and ending June 30, 2025, an additional 35 percent of the State Property Transfer Tax would be retained by the county. Beginning July 1, 2025, the State Property Transfer Tax would be converted to a County Property Transfer Tax. This committee substitute simply adds language referring to the additional 35 percent of the State Property Transfer Tax to be used by the county beginning on July 1, 2025.
However, as written, the bill could be interpreted to return the additional tax to 10 percent on July 1, 2023, as opposed to 30 percent, and then increase than amount to 45 percent on July 1, 2024, and to 80 percent on July 1, 2025.
If the bill adheres to its intended purpose, passage of this bill would result in a loss of $4.9 million to the General Revenue Fund in FY2025, a loss of $10.2 million to the General Revenue Fund in FY2026, a loss of $8.4 million to the General Revenue Fund in FY2027, a loss of $6.6 million to the General Revenue Fund in FY2028, a loss of $4.6 million to the General Revenue Fund in FY2029, and loss of $2.4 million to the General Revenue Fund in FY2030.
The provisions of this bill also stipulate how the additional county property transfer taxes are to be used by the counties. In Fiscal Year 2024, “the additional 10 percent of the state excise tax retained” would be deposited into two separate funds. The first fund allows 50 percent of the county share of the State Property Transfer Tax to be used for improving election administration, infrastructure, and physical and cybersecurity in accordance with the minimum guidelines created by the Secretary of State. The remaining 50 percent would be allocated for other county clerk purposes, 0including, but not limited to, establishing, maintaining, and securing infrastructure to comply with the Uniform Real Property Electronic Recording Act. In Fiscal Year 2025, “the additional 35 percent of the state excise tax retained” shall be split evenly between the two previously mentioned county clerk fund uses. Beginning in Fiscal Year 2026 and each year thereafter, 90 percent of the former state excise tax shall be used for general county purposes and 10 percent shall be allocated between two separate funds for county clerk purposes related to election issues and requirements related to complying with the Uniform Real Property Electronic Recording Act.
There would be no additional administrative costs incurred by the State Tax Department.
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 |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation of the intended purpose of this bill, beginning July 1, 2023, and ending on June 20, 2024, 30 percent of the State Property Transfer Tax would still be retained by the county per current statute. Beginning July 1, 2024, and ending June 30, 2025, an additional 35 percent of the State Property Transfer Tax would be retained by the county. Beginning July 1, 2025, the State Property Transfer Tax would be converted to a County Property Transfer Tax. This committee substitute simply adds language referring to the additional 35 percent of the State Property Transfer Tax to be used by the county beginning on July 1, 2025.
However, as written, the bill could be interpreted to return the additional tax to 10 percent on July 1, 2023, as opposed to 30 percent, and then increase than amount to 45 percent on July 1, 2024, and to 80 percent on July 1, 2025.
If the bill adheres to its intended purpose, passage of this bill would result in a loss of $4.9 million to the General Revenue Fund in FY2025, a loss of $10.2 million to the General Revenue Fund in FY2026, a loss of $8.4 million to the General Revenue Fund in FY2027, a loss of $6.6 million to the General Revenue Fund in FY2028, a loss of $4.6 million to the General Revenue Fund in FY2029, and loss of $2.4 million to the General Revenue Fund in FY2030.
The provisions of this bill also stipulate how the additional county property transfer taxes are to be used by the counties. In Fiscal Year 2024, “the additional 10 percent of the state excise tax retained” would be deposited into two separate funds. The first fund allows 50 percent of the county share of the State Property Transfer Tax to be used for improving election administration, infrastructure, and physical and cybersecurity in accordance with the minimum guidelines created by the Secretary of State. The remaining 50 percent would be allocated for other county clerk purposes, including, but not limited to, establishing, maintaining, and securing infrastructure to comply with the Uniform Real Property Electronic Recording Act. In Fiscal Year 2025, “the additional 35 percent of the state excise tax retained” shall be split evenly between the two previously mentioned county clerk fund uses. Beginning in Fiscal Year 2026 and each year thereafter, 90 percent of the former state excise tax shall be used for general county purposes and 10 percent shall be allocated between two separate funds for county clerk purposes related to election issues and requirements related to complying with the Uniform Real Property Electronic Recording Act.
There would be no additional administrative costs incurred by the State Tax Department.
Memorandum
This bill does not accomplish its purpose. There are conflicting and ambiguous provisions in this bill.
Some confusion is caused by the way the bill makes the change from 10 percent increments to 35 percent increments. The current language of §11-22-2(a) starts the transition “beginning July 1, 2021,” and then continues the transition via proviso that “beginning July 1, in every year thereafter . . ..” The first year under that continuing proviso (2022) has passed, with that 10 percent increment applied. However, the timing of this bill occurs prior to July 1, 2023. The bill’s alteration of the “beginning July 1, in every year thereafter” proviso by adding “2024” after “July 1” throws doubt on what happens on July 1, 2023. The only indication that the 10 percent increment originally anticipated to occur on July 1, 2023, remains intact comes in new subdivision (c)(1). There may also be an inference taken from the 35 percent increments applied in 2024 and 2025, which implies that the aggregate 70 percent of those two years must combine with an aggregate of 30 percent from the previous three years to reach the desired 100 percent.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov