FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 04:02 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2750 |
Introduced |
HB4006 |
|
|---|
| CBD Subject: |
Economic Development |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses, Creates New Fund: Industrial Utility Development Fund, MRO Career Pipeline & A&P Tech Traini
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to foster the operations and growth of all facets of the aerospace industry in West Virginia.
The bill would establish the West Virginia Aerospace and Advanced Manufacturing Growth Act, the West Virginia Job Development Investment Grant Program, the West Virginia MRO Workforce & Aviation Development Act, and the West Virginia MRO Workforce and Aviation Maintenance Education Act. Additionally, the bill updates W.Va. Code §11-6F, Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities to include Aerospace facilities.
This fiscal note only addresses the portions of the proposed bill involving State Tax Division administration. These provisions would include the proposed Aerospace Workforce Income Tax Credit(s) and the inclusion of the aerospace sector under the special method for appraising qualified capital additions to the manufacturing program.
The West Virginia MRO Workforce & Aviation Development Act creates the Aerospace Workforce Income Tax Credit (Aerospace Tax Credit) and the MRO Career Pipeline & A&P Technician Training Fund (MRO Fund). Per the bill, MRO stands for maintenance, repair, and overhaul and A&P stands for airframe and powerplant. The Aerospace Tax Credit allows an income tax credit of up to $5,000 per year for five years to a qualified employee who works for an MRO employer and up to $12,500 per qualified employee for the MRO employer. The MRO employer is eligible for a tax credit equal to 50 percent of tuition or credential costs paid toward A&P licensing, avionics certification, or aerospace engineering degrees. Additionally, an MRO employer, upon certification by the Division of Economic Development, who creates new employment, may receive rebates equal to five or ten percent of new annual payroll for a period of up to 10 years. The MRO Fund is to be created in the State Treasury and administered by the Secretary of Economic Development. The fund may be used for curriculum development, scholarships, equipment for training programs, and paid internship programs.
The bill updates the special method for appraising qualified capital additions to manufacturing facilities to include Aerospace facilities. The bill provides definitions for “Aerospace” and “Aerospace facility”.
There is no effective date given in the bill; therefore, it would become effective 90 days from passage.
According to our interpretation, the proposed employee income tax credit of $5,000 for each year of employment not to exceed five years would initially cost at least $2 million per year beginning in FY2027. The proposed employer income tax credit of $12,500 for each employee for a maximum of five years would initially cost at least $5 million per year beginning in FY2027. It is not possible to determine the impact of the employer credit of 50 percent of tuition or credential costs paid toward A&P licensing, avionics certification, or aerospace engineering degrees for their employees.
The reduction in Property Tax revenue due to the addition of Aerospace facilities under the special method for appraising manufacturing facilities cannot be determined. The cost of adding aerospace activities to the qualified capital additions to manufacturing program would initially be $0 because of the requirement for a $50 million addition to an existing investment with an original cost of at least $100 million requirement. However, there would be potential for future claims with some undetermined cost to local governments in terms of lower property tax revenues given that there are no geographic requirements for the new facility to be near the location of an existing facility.
Additional administrative costs incurred by the State Tax Division would be $46,150 in FY2027 and $22,500 in subsequent fiscal years.
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 |
0 |
46,150 |
22,500 |
| Personal Services |
0 |
22,500 |
22,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
22,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The bill would establish the West Virginia Aerospace and Advanced Manufacturing Growth Act, the West Virginia Job Development Investment Grant Program, the West Virginia MRO Workforce & Aviation Development Act, and the West Virginia MRO Workforce and Aviation Maintenance Education Act. Additionally, the bill updates W.Va. Code §11-6F, Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities to include Aerospace facilities.
This fiscal note only addresses the portions of the proposed bill involving State Tax Division administration. These provisions would include the proposed Aerospace Workforce Income Tax Credit(s) and the inclusion of the aerospace sector under the special method for appraising qualified capital additions to the manufacturing program.
The West Virginia MRO Workforce & Aviation Development Act creates the Aerospace Workforce Income Tax Credit (Aerospace Tax Credit) and the MRO Career Pipeline & A&P Technician Training Fund (MRO Fund). Per the bill, MRO stands for maintenance, repair, and overhaul and A&P stands for airframe and powerplant. The Aerospace Tax Credit allows an income tax credit of up to $5,000 per year for five years to a qualified employee who works for an MRO employer and up to $12,500 per qualified employee for the MRO employer. The MRO employer is eligible for a tax credit equal to 50 percent of tuition or credential costs paid toward A&P licensing, avionics certification, or aerospace engineering degrees. Additionally, an MRO employer, upon certification by the Division of Economic Development, who creates new employment, may receive rebates equal to five or ten percent of new annual payroll for a period of up to 10 years. The MRO Fund is to be created in the State Treasury and administered by the Secretary of Economic Development. The fund may be used for curriculum development, scholarships, equipment for training programs, and paid internship programs.
The bill updates the special method for appraising qualified capital additions to manufacturing facilities to include Aerospace facilities. The bill provides definitions for “Aerospace” and “Aerospace facility”.
There is no effective date given in the bill; therefore, it would become effective 90 days from passage.
According to our interpretation, the proposed employee income tax credit of $5,000 for each year of employment not to exceed five years would initially cost at least $2 million per year beginning in FY2027. The proposed employer income tax credit of $12,500 for each employee for a maximum of five years would initially cost at least $5 million per year beginning in FY2027. It is not possible to determine the impact of the employer credit of 50 percent of tuition or credential costs paid toward A&P licensing, avionics certification, or aerospace engineering degrees for their employees.
The reduction in Property Tax revenue due to the addition of Aerospace facilities under the special method for appraising manufacturing facilities cannot be determined. The cost of adding aerospace activities to the qualified capital additions to manufacturing program would initially be $0 because of the requirement for a $50 million addition to an existing investment with an original cost of at least $100 million requirement. However, there would be potential for future claims with some undetermined cost to local governments in terms of lower property tax revenues given that there are no geographic requirements for the new facility to be near the location of an existing facility.
Additional administrative costs incurred by the State Tax Division would be $46,150 in FY2027 and $22,500 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to foster the operations and growth of all facets of the aerospace industry in West Virginia.
There are typographical and formatting errors under §5B-13-6. Specifically, there are strikethroughs that appear to be remnants of the drafting process and not indicative of language removed from a statute. There are also references to a number of tax credits that were repealed several years ago as if they were active programs.
The definition of “withholdings” in §5B-13-2 is ambiguous. The bill states withholdings “means the amount withheld by a business from the wages of employees in eligible positions and, if applicable, expanded positions.” It is unclear whether this refers exclusively to amounts withheld for tax purposes. These ambiguities may cause significant problems as withholdings are directly used to determine the amount of the grant applicable to a business under article 13. This ambiguity may also increase administrative difficulties due to which stipulates that “if the Division [of Economic Development] finds that the business has manipulated or attempted to manipulate employee withholdings with the purpose of increasing the amount of a grant, the Division shall immediately terminate the agreement and take action to recapture any grant funds disbursed in any year in which the Division finds the business manipulated or attempted to manipulate employee withholdings with the purpose of increasing the amount of the grant.”
The condition in §5B-13-3(a)(1) requires that the project proposed will create a “net increase in employment in this state.” It is unclear whether “net increase in employment in this state” refers to the business’s net state employment or the total number of people employed in the state.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov