FISCAL NOTE

Date Requested: February 17, 2016
Time Requested: 10:52 AM
Agency: Environmental Protection, Department of
CBD Number: Version: Bill Number: Resolution Number:
2216 Introduced HB4567
CBD Subject: Natural Resources, Taxation


FUND(S):

0273

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


THIS LEGISLATION CREATES AN EXTRACTION TAX ON WATER FOR INDUSTRIAL USE (ESTIMATE $581M). THIS FEE WOULD GO TO THE STATE TREASURER TO BE DEPOSITED INTO THE WEST VIRGINIA FUTURE FUND. THIS BILL DOES NOT SPECIFY WHAT THIS FUND IS TO BE USED FOR OR WHO WILL HAVE ACCESS TO IT. THE LEGISLATION ALSO CREATES A TRUCKED TAX FOR INDUSTRIAL USE WATER HAULED OVER COUNTY ROADS (ESTIMATE $15.2M). THESE FUNDS WOULD BE DISTRIBUTED TO THE AFFECTED COUNTIES. THE DOLLAR ESTIMATES ARE CALCULATED USING THE UNITED STATES GEOLOGICAL SURVEY'S (USGS) WV ESTIMATES FOR CONSUMPTIVE WATER USE. EACH OF THESE TAXES WOULD BE COLLECTED BY THE STATE TAX DEPARTMENT MONTHLY AND DISTRIBUTED AS DESIGNATED. DEP WOULD BE RESPONSIBLE FOR THE WATER MONITORING SITES,EQUIPMENT AND ON-GOING OPERATION. THIS WILL HAVE SIGNIFICANT START UP COSTS FOR DEP INCLUDING, LAND ACQUISITION, CONSTRUCTION, HARDWARE AND SOFTWARE. THE COST WILL VARY DEPENDING ON THE NUMBER OF MONITORING SITES NEEDED. IT WILL ALSO REQUIRE ADDITIONAL STAFFING. THE LEGISLATION DOES PROPOSE A HYDRANT FEE TO HELP OFFSET THESE COSTS TO DEP.



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 0 1,826,856 662,856
Personal Services 0 421,952 421,952
Current Expenses 0 224,904 240,904
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 1,180,000 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


$1,180,000 OF THE ABOVE ESTIMATE IS START-UP COSTS TO ESTABLISH EACH MONITORING SITE AND WOULD BE MULITPLIED BY THE NUMBER OF SITES TO GET THE TOTAL COST. $67,440 IS THE ESTIMATE OF THE ANNUAL OPERATION COST OF EACH SITE AND WOULD BE MULITIPLIED BY THE NUMBER OF MONITORING SITES TO GET THE ANNUAL OPERATING COST TO DEP. THE COSTS FOR ADDITIONAL STAFFING IS ESTIMATED TO BE APPROXIMATELY $595,416 ANNUALLY. REVENUES FROM THE EXTRACTION TAX AND THE TRUCKED TAX DO NOT COME TO DEP AND IS NOT INCLUDED IN THE ABOVE ESTIMATES. THE ESTIMATE ALSO DOES NOT INCLUDE THE ESTABLISHMENT OF A HYDRANT FEE WHICH COULD HELP OFFSET THE COST TO DEP.



Memorandum


PREVIOUS CRADLE TO GRAVE WATER MONITORING LEGISLATION HAS IMPACTED STATE CODE CHAPTER 22, ARTICLE 26 RELATED TO WATER RESOURCES PROTECTION. THIS LEGISLATION CREATES A NEW SECTION OF CODE 22-6C. BECAUSE OF ITS LOCATION IN CODE, IT APPEARS TO BE RELATED TO THE OIL AND GAS INDUSTRY, HOWEVER THIS IS NOT STATED ANYWHERE IN THE LEGISLATION.



    Person submitting Fiscal Note: JEAN SHEPPARD
    Email Address: JEAN.J.SHEPPARD@WV.GOV