FISCAL NOTE
Date Requested: February 17, 2026
Time Requested: 01:39 PM |
| Agency: |
Auditor, State of WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3456 |
Introduced |
HB5640 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
State Funds
Sources of Revenue:
General Fund
Legislation creates:
Creates New Expense, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of proposed House Bill 5640 is to provide a tax sale process reform by creating two distinct legal tracks. Owner-Occupied property (people actively living in the home) and Non-Owner -Occupied property (abandoned, rental, speculative, or non-primary residence.
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 |
4,005,000 |
4,005,000 |
| Personal Services |
0 |
1,005,000 |
1,005,000 |
| Current Expenses |
0 |
3,000,000 |
3,000,000 |
| 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):
Our analysis of the proposed legislation shows both financial and legal issues encapsulated within the language of the Bill. We will discuss the potential legal issues in the Additional Comments Section of this Fiscal Note. In terms of cost factors, we believe the Bill would, in practice, require the State Auditor to bring a delinquent land tract up for sale with a Title Exam having been conducted. With an average of 10,000 tracts of land being brought up for sale annually, we believe doing so would carry significant upfront costs totaling at least $3 Million to engage attorneys in this area assuming the $300 per Title Exam set out in the Bill proves workable in practice. In reality, we believe these particular provisions of the Bill could carry a cost of $5 Million annually, but the actual costs would not be known until implementation highlighted the workability of the $300 limit for Title Examinations. The State Auditor does not have the wherewithal within current budgetary limitations to front-load this expense, regardless of subsequent reimbursement resulting from any eventual sale and would require an appropriation of State General Revenue funds. Also, Chapter 11A, Article 3, Section 54b of the proposed legislation would effectively require the State Auditor to establish a presence in the 55 counties of the State to conduct assessments of property tracts as either “Owner-Occupied” or “Non-Owner Occupied”. In order to implement this particular requirement and move these land tracts up for sale in a timely fashion, we believe at least 10 additional staff members would need to be added to the State Auditor’s Land Division staff having appropriate experience in evaluating properties. We believe these new staff members would require a salary of $67,000 annually, inclusive of fringe benefits resulting in a total cost of $670,000. Lastly, we estimate three additional new Land Division staff needed to meet the notice requirements of the Bill would carry a total cost $160,800, inclusive of fringe benefits and the addition of two new attorneys experienced in land sales and land purchases at a total cost of $174,200, inclusive of fringe benefits. In summary, we believe implementing the Bill would cost a total of $1,005,000 in new employee salaries and fringe benefits. As stated earlier, the additional costs of these staff hires would also require an appropriation of State General Revenue funds.
Memorandum
We believe the provisions of the Bill significantly shift the duties of the State Auditor from their historically non-discretionary, ministerial nature to a significantly more discretionary nature. Accordingly, such change would potentially expose the State Auditor to become a Party in litigation efforts more frequently than has been the case in the past. Specifically, Chapter 11A, Article 3, Section 52 and Chapter 11A, Article 3, Section 55 of the proposed legislation shift the responsibility for identifying parties with a right to redeem and determination of who should receive notice from the Purchaser of the tract to the State Auditor. This change in responsibility will carry a substantial cost to implement as it will require additional staff within the Land Division and the hiring of two additional attorneys with extensive experience in land sale and land purchase transactions. Whereas under current law, the Purchaser assumes the legal liability for any Court determination where the notice requirements of State law were not met, under the Bill the State Auditor would share or assume this liability. We have no ability to determine what, if any, costs might accrue to the taxpayers of the State assuming any Court of competent jurisdiction should find the State Auditor did not comply with the provisions of the Bill and therefore, was subject to a financial judgment related thereto.
Person submitting Fiscal Note: Michael E. Sizemore, CPA
Email Address: Mike.Sizemore@wvsao.gov