FISCAL NOTE
Date Requested: March 02, 2022
Time Requested: 09:12 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2809 |
Comm. Sub. |
HB4692 |
|
|---|
| CBD Subject: |
Taxation |
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|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local governments
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to revise the West Virginia Tax Increment Financing Act.
The State Tax Department cannot quantify the local or state tax revenue impact of this proposal. For tax increment financing districts that are extended, the local government entities in that county would be denied property taxes on the increment for an additional period of up to ten years (fifteen years versus five years under current law). Under the assumption that an extension of a district would produce additional economic activity both within the district and in adjacent areas that would not have occurred absent the extension, the fiscal impact on all affected governments would not be negatively impacted. For some districts, an extension would enhance their ability to fully repay outstanding bonds.
There are currently 42 separate property tax increment financing districts in West Virginia that would potentially qualify. Some of these districts began operating as far back as 2003.
Additional administrative costs to the State Tax Department would be minimal. Additional costs to local governments cannot be determined.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| 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):
The State Tax Department cannot quantify the local or state tax revenue impact of this proposal. For tax increment financing districts that are extended, the local government entities in that county would be denied property taxes on the increment for an additional period of up to ten years (fifteen years versus five years under current law). Under the assumption that an extension of a district would produce additional economic activity both within the district and in adjacent areas that would not have occurred absent the extension, the fiscal impact on all affected governments would not be negatively impacted. For some districts, an extension would enhance their ability to fully repay outstanding bonds.
There are currently 42 separate property tax increment financing districts in West Virginia that would potentially qualify. Some of these districts began operating as far back as 2003.
Additional administrative costs to the State Tax Department would be minimal. Additional costs to local governments cannot be determined.
Memorandum
The purpose of this bill is to revise the West Virginia Tax Increment Financing Act.
The provisions of this bill would increase the current law extension for certain qualified older districts from a period of up to five years to a period of up to fifteen years. All other districts are limited to thirty years under current law. The provisions of this bill would remove that limitation when two or more districts are combined, but the bill does not set any alternative limitation on such combined districts. That means that there would be no limitations on the lifespan of a combined district.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov