FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 08:15 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2168 |
Introduced |
SB243 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create a credit against the severance tax to encourage private companies to assist with the repair and recovery efforts following disasters in his state. The bill limits the total amount of repair and recovery effort credits which can be certified by the Secretary of the Department of Environmental Protection. The bill requires the Secretary of the Department of Environment Protection and the Tax Commissioner to propose legislative rules and emergency legislative rules for promulgation to implement the provisions of this bill. The bill would increase economic opportunity in this state. The bill authorizes the claiming of the credits. Finally, the bill provides for an effective date.
According to our interpretation of this bill, the proposed credit is equivalent to 100 percent of expenditures for repair or recovery efforts by a qualified taxpayer with a maximum program cap of $5 million. This credit may be taken in the year the repair and recovery efforts are completed, as certified by the Department of Environmental Protection. The credit may offset up to 20 percent of a taxpayer’s annual Severance Tax liability with credit remaining after the tenth year forfeited. Passage of this bill would reduce General Revenue Fund collections by up to the $5 million cap in the event of a qualifying emergency.
Additional administrative costs incurred by the State Tax Department would be $23,650 in FY2026 and $22,500 per year in FY2027 and thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
23,650 |
22,500 |
22,500 |
| Personal Services |
0 |
22,500 |
22,500 |
| Current Expenses |
1,650 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
22,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-5,000,000 |
-5,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, the proposed credit is equivalent to 100 percent of expenditures for repair or recovery efforts by a qualified taxpayer with a maximum program cap of $5 million. This credit may be taken in the year the repair and recovery efforts are completed, as certified by the Department of Environmental Protection. The credit may offset up to 20 percent of a taxpayer’s annual Severance Tax liability with credit remaining after the tenth year forfeited. Passage of this bill would reduce General Revenue Fund collections by up to the $5 million cap in the event of a qualifying emergency.
Additional administrative costs incurred by the State Tax Department would be $23,650 in FY2026 and $22,500 per year in FY2027 and thereafter.
Memorandum
The stated purpose of this bill is to create a credit against the severance tax to encourage private companies to assist with the repair and recovery efforts following disasters in his state. The bill limits the total amount of repair and recovery effort credits which can be certified by the Secretary of the Department of Environmental Protection. The bill requires the Secretary of the Department of Environment Protection and the Tax Commissioner to propose legislative rules and emergency legislative rules for promulgation to implement the provisions of this bill. The bill would increase economic opportunity in this state. The bill authorizes the claiming of the credits. Finally, the bill provides for an effective date.
This bill defines disaster to mean “any natural catastrophe” including but not limited to a hurricane, tornado, derecho, earthquake, landslide, mudslide, snowstorm, ice storm, fire, flood, or explosion regardless of cause. This term is unclear due to including the phrase “regardless of cause.” The bill defines disaster to be a “natural catastrophe” but permits any event to be called a catastrophe “regardless of cause”. If the cause of a disaster is manmade then it ceases to be a natural catastrophe akin to a hurricane or tornado. Some disasters like floods, fire, and explosions have non-natural causes. Permitting manmade catastrophes to be called natural disasters contravenes the language of the bill itself limiting catastrophes to natural causes.
Since this bill does not require the value of the equipment to be prorated based on its use during the disaster, a taxpayer could potentially purchase heavy equipment, use it briefly for recovery efforts, claim a credit for the full purchase price (effectively a 100% state subsidy), and then retain the asset for general business operations.
Proposed Section 11-13NN-5(d) authorizes the DEP Secretary to certify “no more than $5 million of expenditures” and mandates the Secretary to “cease accepting applications once the expenditure limit has been reached.” The text does not specify if this is an annual cap or a program lifetime cap. Without the phrase “per fiscal year”, the language implies the program terminates permanently once $5 million in total expenditures are certified.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov