FISCAL NOTE

Date Requested: February 15, 2017
Time Requested: 01:17 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1940 Introduced HB2451
CBD Subject:


FUND(S):

General Revenue Fund, local governments

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


The stated purpose of this bill is to establish a specific valuation of managed timberland and timberland that is not managed timberland for ad valorem property tax purposes. The bill provides remedies to persons aggrieved by the valuations and for compliance inspections and notice of revocation. The bill provides for appeals and an effective date. The proposed bill would alter the formula used for calculating property taxes on managed timberland, a formula designed to provide a tax preference for such property as contemplated by the voter ratified 1946 Forestry Amendment to the West Virginia Constitution. Under current Law and current rules, managed timberland contributes slightly less than $5 million in annual property taxes statewide ranging from a low of $0 in Brooke County and Hancock County to a high of roughly $400,000 in Nicholas County. The proposed formula valuation changes would possibly increase tax yield in some counties and decrease tax yield in other counties. However, the State Tax Department is unable to estimate the full tax impact of this bill because of a lack of available information associated with the re-mapping of all parcels. In some counties, valuations will gradually decrease over a period of years. The State Tax Department would incur $25,000 in additional costs for remapping the parcels. There would be no additional costs to local governments.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 25,000 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 25,000 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


The proposed bill would alter the formula used for calculating property taxes on managed timberland, a formula designed to provide a tax preference for such property as contemplated by the voter ratified 1946 Forestry Amendment to the West Virginia Constitution. Under current Law and current rules, managed timberland contributes slightly less than $5 million in annual property taxes statewide ranging from a low of $0 in Brooke County and Hancock County to a high of roughly $400,000 in Nicholas County. The proposed formula valuation changes would possibly increase tax yield in some counties and decrease tax yield in other counties. However, the State Tax Department is unable to estimate the full tax impact of this bill because of a lack of available information associated with the re-mapping of all parcels. In some counties, valuations will gradually decrease over a period of years. The State Tax Department would incur $25,000 in additional costs for remapping the parcels. There would be no additional costs to local governments.



Memorandum


The stated purpose of this bill is to establish a specific valuation of managed timberland and timberland that is not managed timberland for ad valorem property tax purposes. The bill provides remedies to persons aggrieved by the valuations and for compliance inspections and notice of revocation. The bill provides for appeals and an effective date. The bill defines many terms, but the title fails to mention definitions are included. This is a title defect. Various terms are not used consistently throughout the bill.



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