FISCAL NOTE

Date Requested: February 10, 2020
Time Requested: 10:25 AM
Agency: Highways, Division of
CBD Number: Version: Bill Number: Resolution Number:
2985 Introduced SB734
CBD Subject: Roads and Transportation


FUND(S):

State Road Fund

Sources of Revenue:

Special Fund

Legislation creates:

Decreases Existing Expenses



Fiscal Note Summary


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


Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government. SB734 promotes fair treatment of West Virginia taxpayers and property owners in the acquisition of property by the Division of Highways (DOH). The bill authorizes DOH to acquire its right of way at fair market value/just compensation in much the same way an individual purchases a home. The DOH acquires a right of way for road purposes which necessary includes taking a sufficient depth to construct and support the roadway. DOH is bound to follow federal and state law and compensate property owners fairly for property taken for road construction while protecting the public funds allocated for that construction. In fact, federal and state law require the DOH to pay landowners as if the property is being purchased in fee simple (meaning the DOH would own everything from the surface to the center of the earth). However, despite paying a fee simple value, in the end the DOH only acquires a right of way "for state road purposes" pursuant WV Code §17-2A-17. West Virginia is fairly unique in this regard and many other states permit acquisitions to be in fee simple. To be clear- the DOH is only interested in efficiently acquiring property and paying owners fair value for the same. However, just because there is material that can be used to construct a road does not change the “highest and best possible use” of the property and should not change the value of the property and unjustly enrich the landowner at taxpayer expense. If there happens to be a valid, marketable mineral deposit, this change in the WV Code would not prevent that fact from properly being considered in valuations. It should also be noted that clarifying this law will be of great assistance in planning projects and road alignments because a big consideration in that process is “balancing out” the cut and fill that will be required. DOH also expects that this amended law will lower construction estimates and costs.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 -11,812,335
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):


Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years. $2,060,860 is the DOH estimated mineral/stone costs for five "Roads to Prosperity" projects. DOH cannot accurately predict the actual mineral/stone cost. However, $5,989,126 is the difference in a typical case between the appraised value of the property and the property owner's counter offer. Upon enactment of SB734, DOH could realize an average per case decrease in land acquisition costs of $11,812.335.28. This is based on data from the past two years for verdicts and settlements of condemnation cases where minerals/stone was present but it was a farm and not a quarry. In addition, there will be a substantial reduction of cost of litigation in condemnation cases.



Memorandum


Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form. SB734 will not impact coal, oil or natural gas.



    Person submitting Fiscal Note: Lorrie Hodges
    Email Address: lorrie.a.hodges@wv.gov