FISCAL NOTE
Date Requested: February 05, 2016
Time Requested: 02:20 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1172 |
Introduced |
SB523 |
|
|---|
| CBD Subject: |
Natural Resources |
|---|
|
FUND(S):
Water for Public Works Fund
Sources of Revenue:
Special Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to tax water that is used in natural gas hydraulic fracturing. The bill creates a special fund and establishes how proceeds from that fund may be used.
Based on our interpretation, the proposed bill would generate at least $30.0 million in revenue for the Water for Public Works Fund in the first full year of implementation. This estimate is based on current trends and is subject to industry fluctuations and changes to drilling activity.
Additional administrative costs incurred by the State Tax Department would be $19,150 for the remainder of FY2016, $20,000 for FY2017, and $20,000 for each subsequent year.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
19,150 |
20,000 |
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 |
19,150 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
30,000,000 |
30,000,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would generate at least $30.0 million in revenue for the Water for Public Works Fund in the first full year of implementation. This estimate is based on current trends and is subject to industry fluctuations and changes to drilling activity.
Additional administrative costs incurred by the State Tax Department would be $19,150 for the remainder of FY2016, $20,000 for FY2017, and $20,000 for each subsequent year.
Memorandum
The stated purpose of this bill is to tax water that is used in natural gas hydraulic fracturing. The bill creates a special fund and establishes how proceeds from that fund may be used.
The proposed bill would benefit from additional provisions, including an effective date, definitions, form and record keeping requirements, method of calculation, and administration. Further, it would be beneficial to create a companion section in an appropriate area of the Code implementing the newly-created Water for Public Works Fund.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov