FISCAL NOTE

Date Requested: February 10, 2023
Time Requested: 02:00 PM

3257	Comm. Sub.	SB522
Agency:	Tax & Revenue Department, WV State
CBD Number:	Version:	Bill Number:	Resolution Number:
CBD Subject:	Counties

FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Decreases Existing Revenue, Increases Existing Expenses

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

According to our interpretation of the intended purpose of this bill, beginning July 1, 2023, and ending on June 20, 2024, 30 percent of the State Property Transfer Tax would still be retained by the county per current statute. Beginning July 1, 2024, and ending June 30, 2025, an additional 35 percent of the State Property Transfer Tax would be retained by the county. Beginning July 1, 2025, the State Property Transfer Tax would be converted to a County Property Transfer Tax. The provisions of this bill also stipulate how the additional county property transfer taxes are to be used by the counties. In Fiscal Year 2024, “the additional 10 percent of the state excise tax retained” would be deposited into two separate funds. The first fund allows 50 percent of the county share of the State Property Transfer Tax to be used for improving election administration, infrastructure, and physical and cybersecurity in accordance with the minimum guidelines created by the Secretary of State. The remaining 50 percent would be allocated for other county clerk purposes, including, but not limited to, establishing, maintaining, and securing infrastructure to comply with the Uniform Real Property Electronic Recording Act. In Fiscal Year 2025, “the additional 35 percent of the state excise tax retained” shall be split evenly between the two previously mentioned county clerk fund uses. Beginning in Fiscal Year 2026 and each year thereafter, 90 percent of the former state excise tax shall be used for general county purposes and 10% shall be allocated between two separate funds for county clerk purposes related to election issues and requirements related to complying with the Uniform Real Property Electronic Recording Act. In comparison with current Law, passage of this bill would result in a reduction of $4.9 million to the General Revenue Fund in FY2025, $10.2 million in FY2026, $8.4 million in FY2027, $6.6 million in FY2028, $4.6 million in FY2029 and $2.4 million in FY2030. There would be no additional administrative costs incurred by the State Tax Department.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2023 Increase/Decrease (use"-")	2024 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):

Memorandum

There is some confusion in the way this bill changes from a 10 percent Property Transfer Tax reduction to 35 percent. It could be argued that that the 35 percent reductions applied in fiscal years 2024 and 2025, which implies that the aggregate 70 percent of those two years must combine with an aggregate of 30 percent from the previous three years to reach the desired 100 percent. This bill is silent regarding how the cumulative 20 percent from application of the fiscal year 2021 and 2022 increments is to be applied. Further, this bill could be clearer in terms of references to “state tax” and “state excise tax” if its intent is to make this a county tax. This bill does not provide a standard for determining when a county is using the additional excise tax to supplement county taxes and may be create problems in administration of this bill. The following language in subsection (b) of this bill may prove problematic if this bill is passed: “Provided further, that only one such state tax and one such county tax shall be paid on any one document.” .

Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov