FISCAL NOTE
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund,Other Fund local governments
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 impose a limitation on the salvage valuation of the facilities at a wind power project, to increase the electric generating capacity of wind turbines to 12%, and to provide a credit against the B&O Tax imposed on wind powered electricity generating units.
As written, this bill would establish for wind power projects that the total value of the facility assigned salvage value would be no greater than 79% of the total value of the facility and the bill provides that personal property at a wind power project, other than a wind turbine and tower, will not be accorded salvage valuation and will not be considered to be personal property that is a pollution control facility. Also, the bill would increase the taxable generating capacity, for purposes of the Business and Occupation Tax, on a generating unit utilizing a turbine powered primarily by wind from 5% of official capability to 12% of official capability for taxable periods beginning on or after January 1, 2008. Additionally, the bill would establish a tax credit for application against the Business and Occupation Tax on the taxable generating capacity of wind power projects. The credit would be equal to the amount of community contributions other than taxes or fees paid to local governments, including county school boards, in the county in which the wind power project is located. According to our interpretation, passage of this bill would result in an increase in local government revenue of roughly $50,000 per year due to the change in limitation on the salvage value of wind power projects. Meanwhile, the increase in revenue attributable to the change in the taxable generating capacity would be largely offset by the proposed tax credit. Thus, the change in the General Revenue Fund attributable to this bill would be minimal.
The State Tax Department would not incur any additional administrative costs due to passage of this bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
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 |
0 |
50,000 |
Explanation of above estimates (including long-range effect):
As written, this bill would establish for wind power projects that the total value of the facility assigned salvage value would be no greater than 79% of the total value of the facility and the bill provides that personal property at a wind power project, other than a wind turbine and tower, will not be accorded salvage valuation and will not be considered to be personal property that is a pollution control facility. Also, the bill would increase the taxable generating capacity, for purposes of the Business and Occupation Tax, on a generating unit utilizing a turbine powered primarily by wind from 5% of official capability to 12% of official capability for taxable periods beginning on or after January 1, 2008. Additionally, the bill would establish a tax credit for application against the Business and Occupation Tax on the taxable generating capacity of wind power projects. The credit would be equal to the amount of community contributions other than taxes or fees paid to local governments, including county school boards, in the county in which the wind power project is located. According to our interpretation, passage of this bill would result in an increase in local government revenue of roughly $50,000 per year due to the change in limitation on the salvage value of wind power projects. Meanwhile, the increase in revenue attributable to the change in the taxable generating capacity would be largely offset by the proposed tax credit. Thus, the change in the General Revenue Fund attributable to this bill would be minimal.
The State Tax Department would not incur any additional administrative costs due to passage of this bill.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us