Date Requested:March 25, 2005
Time Requested:02:43 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R2022 Intro HB3309
CBD Subject: Mental-Health Retardation Centers
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund,Special 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 exempt Mental-Health Retardation Centers from payment of the privilege tax while providing that Mental-Health Retardation Centers are covered by the Board of Risk and Insurance Management without the requirement to pay a premium.
    
    As written, this bill proposes to exempt mental health-mental retardation centers from the State Business and Occupation Tax imposed in Article 13, Chapter 11 of the West Virginia Code. Since mental health-mental retardation centers are currently not subject to the State Business and Occupation Tax, there would be no impact on the State General Revenue Fund.
    
    However, assuming it was intended to exempt mental health-mental retardation centers from the Health Care Provider Tax set forth in W. Va. Code 11-27-10, passage of such an exemption would reduce the Medicaid State Share fund by roughly $3 million per year. Unless alternative state matching funds are provided to the Medicaid State Share Fund, federal Medicaid matching funds could also decrease by roughly $9 million per year from the exemption for mental health-mental retardation centers.
    
    Additional administrative costs to the Tax Department would be minimal. Any additional administrative costs would be attributable to notifying taxpayers of the change. The Board of Risk and Insurance Management may incur additional costs due to the exemption from payment of premiums as proposed in the 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 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 -12,000,000 -12,000,000
3. Explanation of above estimates (including long-range effect):
    As written, this bill proposes to exempt mental health-mental retardation centers from the State Business and Occupation Tax imposed in Article 13, Chapter 11 of the West Virginia Code. Since mental health-mental retardation centers are currently not subject to the State Business and Occupation Tax, there would be no impact on the State General Revenue Fund.
    
    However, assuming it was intended to exempt mental health-mental retardation centers from the Health Care Provider Tax set forth in W. Va. Code 11-27-10, passage of such an exemption would reduce the Medicaid State Share fund by roughly $3 million per year. Unless alternative state matching funds are provided to the Medicaid State Share Fund, federal Medicaid matching funds could also decrease by roughly $9 million per year from the exemption for mental health-mental retardation centers.
    
    Additional administrative costs to the Tax Department would be minimal. Any additional administrative costs would be attributable to notifying taxpayers of the change. The Board of Risk and Insurance Management may incur additional costs due to the exemption from payment of premiums as proposed in the bill.
    
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to exempt Mental-Health Retardation Centers from payment of the privilege tax while providing that Mental-Health Retardation Centers are covered by the Board of Risk and Insurance Management without the requirement to pay a premium.
    
    As written, the bill may not accomplish it stated intent. This bill proposes to exempt mental health-mental retardation centers from the State Business and Occupation Tax imposed in Article 13, Chapter 11 of the West Virginia Code. However, mental health-mental retardation centers are currently not subject to the State Business and Occupation Tax. Providers of intermediate care facility services for the mentally retarded are subject to the privilege tax set forth in W. Va. Code 11-27-10.