FISCAL NOTE
Date Requested: February 17, 2026
Time Requested: 12:30 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2821 |
Comm. Sub. |
SB389 |
|
|---|
| CBD Subject: |
Economic Development |
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|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
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 the original bill was to sunset the historic rehabilitation credits in their current disperse locations in the code, provide continued eligibility to current recipients, and to replace those sections with a cohesive article that is easier to utilize and administer.
Per our interpretation, the bill would create a new article, §11-13NN, “The West Virginia Historic Rehabilitated Building Tax Credit Act” and provide a sunset for the current rehabilitation credits outlined under §11-21-8a through 8h and §11-24-23a through 23g. The new article reorganizes and clarifies the credit’s requirements, sets forth procedures to claim the credit, and provides for the recapture of the credit. Additionally, under “Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities,” the bill removes “real estate” from the definition of “Certified capital addition property” and, effective January 1, 2027, requires that capital additions to manufacturing facilities be located in the same county as the manufacturing facility being added to. The bill also amends the tax treatment of certified capital addition property by removing language referencing the value of land.
For “Certified Historic Structures”, the credit percentage is retained at 25 percent of qualified rehabilitation expenditures. The credit percentage for “Residential Certified Historic Structures” is increased from 20 percent to 25 percent of eligible rehabilitation expenses in the rehabilitation of a certified historic structure. In addition, the carry forward period for “Certified Historic Structures” is decreased from the next 10 years to the next 5 tax years following the first tax year for which the credit entitlement is authorized.
The provisions of §11-13NN are effective for all applications received by the State Historic Preservation Officer on or after June 30, 2026, and any prior application for which Part 2-Description of Rehabilitation, including amendments, was not approved by the National Park Service or by the State Historic Preservation Officer prior to June 30, 2026. Section §11-21-8i sunsets the credits allowed under §11-21-8a and §11-21-8g for projects who have not submitted a Part 3-Request for Certification of Completed Work, including amendments, to the State Historic Preservation Officer as of June 30, 2026. Section §11-24-23h sunsets the credits allowed under §11-24-23a for projects who have not submitted a Part 3-Request for Certification of Completed Work, including amendments, to the State Historic Preservation Officer as of June 30, 2026.
The amendments to Article 6F, Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities, would clarify that certified capital addition property for appraising qualified capital additions to manufacturing facilities is limited to personal property.
Based on our interpretation, the provisions of the new article §11-13NN, if passed, would cause an average decline in General Revenue Fund collections of roughly $90,000 per year beginning in FY2027. The decline is attributable to the increased credit percentage for “Residential Certified Historic Structures” and some anticipated growth in usage of the credit. Claims related to “Residential Certified Historic Structures” vary considerably from year to year; therefore, an average decline is used for estimation purposes.
Based on our interpretation, the amendments to §11-6F, Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities, would have no impact on existing Property Tax revenue for the State or local governments. Future Property Tax preferences for qualified capital additions would be limited to personal property within the county of an addition to an existing facility.
Additional costs incurred by the State Tax Division would be $1,100 in FY2026, $46,450 in FY2027 and $44,800 in subsequent fiscal years. Counties could incur additional costs in processing and ensuring compliance with the Property Tax preferences.
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 |
1,100 |
46,450 |
44,800 |
| Personal Services |
0 |
44,800 |
44,800 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
1,100 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-90,000 |
-90,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the bill would create a new article, §11-13NN, “The West Virginia Historic Rehabilitated Building Tax Credit Act” and provide a sunset for the current rehabilitation credits outlined under §11-21-8a through 8h and §11-24-23a through 23g. The new article reorganizes and clarifies the credit’s requirements, sets forth procedures to claim the credit, and provides for the recapture of the credit. Additionally, under “Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities,” the bill removes “real estate” from the definition of “Certified capital addition property” and, effective January 1, 2027, requires that capital additions to manufacturing facilities be located in the same county as the manufacturing facility being added to. The bill also amends the tax treatment of certified capital addition property by removing language referencing the value of land.
For “Certified Historic Structures”, the credit percentage is retained at 25 percent of qualified rehabilitation expenditures. The credit percentage for “Residential Certified Historic Structures” is increased from 20 percent to 25 percent of eligible rehabilitation expenses in the rehabilitation of a certified historic structure. In addition, the carry forward period for “Certified Historic Structures” is decreased from the next 10 years to the next 5 tax years following the first tax year for which the credit entitlement is authorized.
The provisions of §11-13NN are effective for all applications received by the State Historic Preservation Officer on or after June 30, 2026, and any prior application for which Part 2-Description of Rehabilitation, including amendments, was not approved by the National Park Service or by the State Historic Preservation Officer prior to June 30, 2026. Section §11-21-8i sunsets the credits allowed under §11-21-8a and §11-21-8g for projects who have not submitted a Part 3-Request for Certification of Completed Work, including amendments, to the State Historic Preservation Officer as of June 30, 2026. Section §11-24-23h sunsets the credits allowed under §11-24-23a for projects who have not submitted a Part 3-Request for Certification of Completed Work, including amendments, to the State Historic Preservation Officer as of June 30, 2026.
The amendments to Article 6F, Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities, would clarify that certified capital addition property for appraising qualified capital additions to manufacturing facilities is limited to personal property. The removal of language referencing the value of land from the tax treatment of certified capital addition property would reduce the value of capital addition property, for purposes of ad valorem property taxation, to its salvage value.
Based on our interpretation, the provisions of the new article §11-13NN, if passed, would cause an average decline in General Revenue Fund collections of roughly $90,000 per year beginning in FY2027. The decline is attributable to the increased credit percentage for “Residential Certified Historic Structures” and some anticipated growth in usage of the credit. Claims related to “Residential Certified Historic Structures” vary considerably from year to year; therefore, an average decline is used for estimation purposes.
Based on our interpretation, the amendments to §11-6F, Special Method for Appraising Qualified Capital Additions to Manufacturing Facilities, would have no impact on existing Property Tax revenue for the State or local governments. Future Property Tax preferences for qualified capital additions would be limited to personal property within the county of an addition to an existing facility.
Additional costs incurred by the State Tax Division would be $1,100 in FY2026, $46,450 in FY2027 and $44,800 in subsequent fiscal years. Counties could incur additional costs in processing and ensuring compliance with the Property Tax preferences.
Memorandum
The stated purpose of the original bill was to sunset the historic rehabilitation credits in their current disperse locations in the code, provide continued eligibility to current recipients, and to replace those sections with a cohesive article that is easier to utilize and administer.
The provisions of §11-13NN are effective for “all applications received by the State Historic Preservation Officer on or after June 30, 2026, and any prior application for which Part 2-Description of Rehabilitation, including amendments, was not approved by the National Park Service or by the State Historic Preservation Officer prior to June 30, 2026.” This language is not in sync with the termination of the current credits in §11-21-8i and §11-24-23h which sunsets the credits effective June 30, 2026 for any application for which a Part 3 – Request for Certification of Completed Work, including amendments, was not received by the State Historic Preservation Office as of the effective date of the provisions of §11-13NN.
Person submitting Fiscal Note: Peter Shirley
Email Address: RADfiscal@wv.gov