FISCAL NOTE

Date Requested: March 23, 2017
Time Requested: 11:24 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1402 Introduced HB2615
CBD Subject: Economic Development, Environment, Taxation


FUND(S):

General Revenue Fund

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.


    The stated purpose of this bill is to provide a tax credit for obtaining certain certifications by the United States Green Building Council Leadership in Energy and Environmental Design green building rating system or the Green Globes Building Initiative green building rating standard. The bill sets forth the amount of the credit, who may take the credit, the criteria for taking the credit and the amount of the credit. The bill also provides rulemaking authority and defines terms.
    
    According to the provisions of this bill, the amount of the tax credit available to any eligible taxpayer is equal to 100% of its cost in making renovations and improvements to its building to become certified by the United States Green Building Council Leadership in Energy and Environmental Design Green Building Rating System or the Green Globes Building Initiative Green Building Rating Standard, less any reimbursement of the cost which the taxpayer has received through any other means. The tax credit would be allowed against the Corporation Net Income Tax, Business Franchise Tax and Personal Income Tax liabilities. The Business Franchise Tax terminated on January 1, 2015. We cannot estimate the revenue impact of this bill because we do not know how many eligible taxpayers would qualify for this credit. However, the fiscal impact could be significant because the State could be responsible for 100% of the cost.
    
    Additional administrative costs incurred by the State Tax Department would be $23,000 in FY2019 and 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 0 0 23,000
Personal Services 0 0 5,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 18,000
2. Estimated Total Revenues 0 0 0


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


    According to the provisions of this bill, the amount of the tax credit available to any eligible taxpayer is equal to 100% of its cost in making renovations and improvements to its building to become certified by the United States Green Building Council Leadership in Energy and Environmental Design Green Building Rating System or the Green Globes Building Initiative Green Building Rating Standard, less any reimbursement of the cost which the taxpayer has received through any other means. The tax credit would be allowed against the Corporation Net Income Tax, Business Franchise Tax and Personal Income Tax liabilities. The Business Franchise Tax terminated on January 1, 2015. We cannot estimate the revenue impact of this bill because we do not know how many eligible taxpayers would qualify for this credit. However, the fiscal impact could be significant because the State could be responsible for 100% of the cost.
    
    Additional administrative costs incurred by the State Tax Department would be $23,000 in FY2019 and thereafter.
    



Memorandum


    The stated purpose of this bill is to provide a tax credit for obtaining certain certifications by the United States Green Building Council Leadership in Energy and Environmental Design green building rating system or the Green Globes Building Initiative green building rating standard. The bill sets forth the amount of the credit, who may take the credit, the criteria for taking the credit and the amount of the credit. The bill also provides rulemaking authority and defines terms.
    
    This credit is taken in the taxable year in which it receives certification. Unused credit is carried forward for the next three taxable years “following the unused credit year” until used or forfeited. It is not clear whether the proposed credit could be extended for five years.
    
    The internal references in subsection (c) of this bill need to be reviewed. There are references to “the credit allowed by this article” rather than to this section. Subsection (5) incorrectly references subsections and section.
    
    



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