FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

A New Program



Fiscal Note Summary


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


    The stated purpose of this bill is to create incentives to encourage West Virginia workers to obtain the GED and incentives to encourage West Virginia employers to allow their employees to study for and obtain a GED.
    
    According to our interpretation, passage of this bill would result in a reduction in the General Revenue Fund of approximately $4.2 million per year. The credit provided in this bill would be available employers who encourage employees to obtain a general education degree (GED). The credit will apply to personal income tax liabilities, corporation net income tax and business franchise tax liabilities arising after December 31, 2005.
    
    Additional administrative cost to the State Tax Department associated with passage of this bill would be approximately $24,000 in Fiscal Year 2005.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 24,000 0 0
Personal Services 0 0 0
Current Expenses 23,000 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 1,000 0 0
2. Estimated Total Revenues 0 -4,200,000 -4,200,000


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


    The bill would provide for an employee to receive a minimum of five hours per week of paid release time to study for the general education degree and for the employer to be eligible for a tax credit. The eligible taxpayer may take the credit against Business Franchise Tax, and then either Personal Income Tax or the Corporation Net Income Tax. The credit is equal to half of the amount of wages paid to employees for study time up to a maximum of $1,250 per person taking the GED. There are over 3,300 persons taking the GED each year who might qualify for this program..
    
    According to our interpretation, passage of this bill would result in a reduction in the General Revenue Fund of approximately $4.2 million per year. The credit provided in this bill would be available employers who encourage employees to obtain a general education degree (GED). The credit will apply to personal income tax liabilities, corporation net income tax and business franchise tax liabilities arising after December 31, 2005.
    
    Additional administrative cost to the State Tax Department associated with passage of this bill would be approximately $24,000 in Fiscal Year 2005.
    



Memorandum


    The stated purpose of this bill is to create incentives to encourage West Virginia workers to obtain the GED and incentives to encourage West Virginia employers to allow their employees to study for and obtain a GED.
    
    The bill enacts W. Va. Code §§ 11-13V-1 and 11-13V-2 to provide to eligible taxpayers (employers) tax credits to defray salary release time to encourage employees to obtain a general education degree (GED). This degree is normally obtained as a substitute for a high school diploma by a person that did not finish high school.
    
    If this bill is passed it would replace W Va. Code § 11-13V, "Workers' Compensation Debt Reduction Act of 2005", which was created in the 1st Special Session 2005.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kpetry@tax.state.wv.us