FISCAL NOTE

Date Requested: February 28, 2017
Time Requested: 01:24 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2699 Introduced SB477
CBD Subject: Governor -- Bills Requested By


FUND(S):

State Road Fund

Sources of Revenue:

Other Fund State Road Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


    The stated purpose of this bill is to increase the State Road Fund by increasing Division of Motor Vehicle administrative fees and motor fuel excise taxes, including titling, registration, driver licensing, identification card issuance and abstract fees. Every five years, the DMV fees will increase based on the U.S. Department of Labor Consumer Price Index. This bill increases the flat rate component of the motor fuel excise tax from 20.5 cents to 30.5 cents per invoice gallon of motor fuel and upon each gallon equivalent of alternative fuel. This bill also increases the minimum average wholesale sales price of motor fuel from $2.34 to $3.04. All changes are effective July 1, 2017.
    
    According to our interpretation, the proposed bill would increase (1) the flat rate of motor fuel to $0.305 per invoiced gallon; (2) the minimum average wholesale price of motor fuel other than alternative fuel to $3.04 per invoiced gallon, thereby raising the variable component of the Motor Fuel Excise Tax calculation to no less than $0.152 per invoiced gallon; and (3) various fees imposed by the West Virginia Division of Motor Vehicles (DMV). This fiscal note addresses only those increases related to the Motor Fuel Excise Tax; the West Virginia DMV will provide a revenue estimate of increased fees.
    
    With respect to the increase in the flat rate to $0.305 per invoiced gallon, it is anticipated this increase would yield $99.5 million in additional revenues in FY2018, $108.5 million in FY2019, and $109.1 million for each year thereafter. The increase in the variable rate component to $0.152 per invoiced gallon is expected to yield additional revenues of $44.9 million in FY2018, $49.0 million in FY2019, and $49.3 million for each year thereafter. In total, the proposed bill would increase State Road Fund collections by $144.4 million in FY2018, $157.5 million in FY2019, and $158.4 for each year thereafter.
    
    It is important to note this analysis reflects the introduced version of SB477. An analysis of the Committee Substitute for SB477 will be conducted separately.
    
    Additional costs incurred by the State Tax Department would be $14,000 for the remainder of FY2017 and $5,000 in FY2018. No additional costs are expected thereafter.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 14,000 5,000 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 14,000 5,000 0
2. Estimated Total Revenues 0 144,400,000 158,400,000


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


    According to our interpretation, the proposed bill would increase (1) the flat rate of motor fuel to $0.305 per invoiced gallon; (2) the minimum average wholesale price of motor fuel other than alternative fuel to $3.04 per invoiced gallon, thereby raising the variable component of the Motor Fuel Excise Tax calculation to no less than $0.152 per invoiced gallon; and (3) various fees imposed by the West Virginia Division of Motor Vehicles (DMV). This fiscal note addresses only those increases related to the Motor Fuel Excise Tax; the West Virginia DMV will provide a revenue estimate of increased fees.
    
    With respect to the increase in the flat rate to $0.305 per invoiced gallon, it is anticipated this increase would yield $99.5 million in additional revenues in FY2018, $108.5 million in FY2019, and $109.1 million for each year thereafter. The increase in the variable rate component to $0.152 per invoiced gallon is expected to yield additional revenues of $44.9 million in FY2018, $49.0 million in FY2019, and $49.3 million for each year thereafter. In total, the proposed bill would increase State Road Fund collections by $144.4 million in FY2018, $157.5 million in FY2019, and $158.4 for each year thereafter.
    
    It is important to note this analysis reflects the introduced version of SB477. An analysis of the Committee Substitute for SB477 will be conducted separately.
    
    Additional costs incurred by the State Tax Department would be $14,000 for the remainder of FY2017 and $5,000 in FY2018. No additional costs are expected thereafter.
    



Memorandum


    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov