FISCAL NOTE
Date Requested: March 19, 2021
Time Requested: 12:53 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3016 |
Introduced |
SB676 |
|
|---|
| CBD Subject: |
Roads and Transportation |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Other Fund State Road 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 require taxes collected from motor fuels that are used by off highway vehicles are to be used to map state roads using the graphic information system (GIS).
According to our interpretation, the bill, if passed, would redirect motor fuel excise tax collections attributable to off-highway vehicle use to pay for new graphic information system (GIS) mapping by the Division of Highways. The purpose of the mapping is to identify all public roads and their condition and surface type.
The Motor Fuel Excise Tax is a combination of a flat tax and a variable tax. The flat tax rate is equal to $0.205 per invoiced gallon of gasoline or, for alternative fuel, per each gasoline gallon equivalent. The variable component of the tax is the Consumers Sales and Service and Use Tax, which is based on 5 percent of the average wholesale price of motor fuels as determined by the State Tax Commissioner. As part of the “normal” tax base, motor fuel for use as a motor fuel for internal combustion engines not operated upon highways of this state is entitled to a refundable exemption from the flat rate component of the Motor Fuel Excise Tax. Therefore, motor fuels used in off-highway vehicles are only subject to the 5 percent Consumer Sales and Service and Use Tax. Based on our interpretation, the passage of the proposed legislation would redirect State Road Fund collections of $23.9 million in FY2022, and $26.1 million in subsequent fiscal years for use in GIS mapping.
Additional administrative costs incurred by the Motor Fuel Tax Administrative Fund would be $5,000 in FY2021 and in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
5,000 |
5,000 |
5,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
5,000 |
5,000 |
5,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the bill, if passed, would redirect motor fuel excise tax collections attributable to off-highway vehicle use to pay for new graphic information system (GIS) mapping by the Division of Highways. The purpose of the mapping is to identify all public roads, and their condition and surface type.
The Motor Fuel Excise Tax is a combination of a flat tax and a variable tax. The flat tax rate is equal to $0.205 per invoiced gallon or, for alternative fuel, per each gasoline gallon equivalent. The variable component of the tax is the Consumers Sales and Service and Use Tax, which is based on 5 percent of the average wholesale price of motor fuels as determined by the State Tax Commissioner. As part of the “normal” tax base, motor fuel for use as a motor fuel for internal combustion engines not operated upon highways of this state is entitled to a refundable exemption from the flat rate component of the Motor Fuel Excise Tax. Therefore, motor fuels used in off-highway vehicles are only subject to the 5 percent Consumer Sales and Service and Use Tax. Based on our interpretation, the passage of the proposed legislation would redirect State Road Fund collections for use in GIS mapping as follows $23.9 million in FY2022, and $26.1 million in subsequent fiscal years.
Additional administrative costs incurred by the Motor Fuel Tax Administrative Fund would be $5,000 in FY2021 and in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to require taxes collected from motor fuels that are used by off highway vehicles are to be used to map state roads using the graphic information system (GIS).
Revenue collected for Motor Fuel Excise taxes is not, for the most part, separated by use. However, there are per se and refundable exemptions from the Motor Fuel Excise taxes for specific uses of the fuel. The exemption commonly referred to as off-road vehicle use is one of 18 refundable exemptions from the flat rate component of the motor fuel tax. The eligible volumes and refund amounts attributable to each of the 18 exemptions are not necessarily distinct. The bill may be easier to administer if it provided for a stated amount of collections to be redirected to GIS mapping.
Other than funds deposited into the Motor Fuel General Tax Administration Fund and the payment of any refunds, motor fuel excise taxes are to be deposited to the State Road Fund and used “only for the purpose of construction, reconstruction, maintenance and repair of highways, matching of federal moneys available for highway purposes, and payment of the interest and sinking fund obligations on state bond issued for highway purposes.” It is unclear whether GIS mapping would be an allowable use of State Road Funds.
The bill does not have an eternal effective date; therefore, it would become effective 90 days from passage.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov