Date Requested:March 25, 2005
Time Requested:12:16 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R1966 Intro HB3231
CBD Subject: Highway Infrastructure Improvement Proje
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 a credit against the severance tax to encourage private companies to make infrastructure improvements to highways, roads and bridges in this state; to limit the total amount of road and highway infrastructure improvement credits which can be certified by the Secretary of Transportation; to encourage greater capital investment in coal production and processing facilities; to increase economic opportunity in the state; and to authorize the claiming of the credits.
    
    The Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. The amount of the credit that can be taken annually is limited to twenty percent of a taxpayer’s annual Severance Tax liability. In 2004, the coal industry’s pre-credit Severance Tax liability was roughly $250 million. Therefore, the maximum allowable credit would be roughly $50 million.
    
    There would be minimal additional administrative costs to the Tax Department associated with passage of this bill.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 4,000 0 0
Personal Services 0 0 0
Current Expenses 4,000 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    The Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. The amount of the credit that can be taken annually is limited to twenty percent of a taxpayer’s annual Severance Tax liability. In 2004, the coal industry’s pre-credit Severance Tax liability was roughly $250 million. Therefore, the maximum allowable credit would be roughly $50 million.
    
    Additional administrative costs to the Tax Department would be for printing and promotional expenses related to notifying taxpayers of the change.


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