Sources of Revenue:

Other Fund State Road 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 lower the excise tax on all fuels sold in this state by $0.05. The passage of this bill would reduce the flat rate portion of the Motor Fuels Excise Tax from the current 20.5 cents per gallon to 15.5 cents per gallon. As a result, the loss to the State Road Fund would be approximately $24.7 million in FY2006 and $59.3 million in FY2007, the first full year of effect. There would be no additional administrative costs to the Tax Department.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2005 Increase/Decrease (use"-")	2006 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	-24,700,000	-59,300,000

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

The passage of this bill would reduce the flat rate portion of the Motor Fuels Excise Tax from the current 20.5 cents per gallon to 15.5 cents per gallon. As a result, the loss to the State Road Fund would be approximately $24.7 million in FY2006 and $59.3 million in FY2007, the first full year of effect. There would be no additional administrative costs to the Tax Department.

Memorandum

The stated purpose of this bill is to lower the excise tax on all fuels sold in this state by $0.05. The bill reduces the flat rate component of the Motor Fuel Excise Tax by $.05 per gallon. Since there is no internal effective date, the rate reduction will become effective January 1, 2006 (see WV Code §11-10-5p). Additionally, the proviso reducing the rate effective August 1, 2007 would not be needed if this bill is enacted.

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