FUND(S):

General Revenue Fund, local governments

Sources of Revenue:

General Fund,Other Fund local property tax

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 clarify and exempt those homes for the aged or continuing care retirement communities operated by tax-exempt corporations from property tax.
    
    This exemption would result in an annual revenue loss of $320,000 for local levying bodies and a minimal decrease in General Revenue Fund collections. In addition, there would be a one-time collective loss of $4.3 million in potential revenue related to past taxes assessed by the counties and pending litigation in Cabell County and Monongalia County.
    
    There would be no additional administrative costs.



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 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 -320,000 -320,000


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


    This exemption would result in an annual revenue loss of $320,000 for local levying bodies and a minimal decrease in General Revenue Fund collections. In addition, there would be a one-time collective loss of $4.3 million in potential revenue related to past taxes assessed by the counties and pending litigation in Cabell County and Monongalia County.
    
    There would be no additional administrative costs.



Memorandum


    The stated purpose of this bill is to clarify and exempt those homes for the aged or continuing care retirement communities operated by tax-exempt corporations from property tax.
    
    A primary concern is whether the Legislature has the authority under West Virginia Constitution Article X, Section 1, to exempt the property of retirement homes from ad valorem taxation. Only property used for certain activities (i.e., educational, literary, scientific, religious or charitable purposes) may be exempted. It is the use of the property, not the status of the owner or the property, that determines exemption from property tax. Person submitting Fiscal Note: Mark Muchow
     Email Address: kpetry@tax.state.wv.us