Sources of Revenue:

General 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 promote development of municipal areas which are unusable without extraordinary expenditures. As written, this bill would apply to Downtown Redevelopment Districts. Specifically, the bill would extend the program to include reconditioning or restoration of publicly or privately owned landfills, solid waste facilities, or hazardous waste sites which would not otherwise be economically feasible for commercial development. Additionally, the bill provides that the required redevelopment expenditure of at least $50 million on the properties covered by the revision to the bill can be made within a 48-month period (for currently qualifying properties, the required expenditure must be made within 24 months) and that the reconditioning or restoration expenditure cannot exceed 25 percent of the total redevelopment expenditures. As provided by the current statute, the bonds issued for the redevelopment project would be repaid via a Special District Excise Tax. All businesses within the District would pay the Special District Excise Tax in lieu of the Consumers Sales and Service Tax. According to our interpretation, the General Revenue Fund would be reduced by an undetermined amount, to the extent that retail trade activities in the new redevelopment district(s) replace activities currently located elsewhere. Additional administrative costs for the State Tax Department associated with this bill could be significant depending on the number of districts and the number of business entities to be separately tracked within these districts.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2008 Increase/Decrease (use"-")	2009 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	0

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

Passage of this bill would extend the Downtown Redevelopment Districts program to include reconditioning or restoration of publicly or privately owned landfills, solid waste facilities, or hazardous waste sites which would not otherwise be economically feasible for commercial development. Additionally, the bill provides that the required redevelopment expenditure of at least $50 million on the properties covered by the revision to the bill can be made within a 48-month period (for currently qualifying properties, the required expenditure must be made within 24 months) and that the reconditioning or restoration expenditure cannot exceed 25 percent of the total redevelopment expenditures. As provided by the current statute, the bonds issued for the redevelopment project would be repaid via a Special District Excise Tax. All businesses within the District would pay the Special District Excise Tax in lieu of the Consumers Sales and Service Tax. According to our interpretation, the General Revenue Fund would be reduced by an undetermined amount, to the extent that retail trade activities in the new redevelopment district(s) replace activities currently located elsewhere. Additional administrative costs for the State Tax Department associated with this bill could be significant depending on the number of districts and the number of business entities to be separately tracked within these districts.

Memorandum

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