FISCAL NOTE



FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

A New Program



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The stated purpose of this bill is to authorize a corporation net income tax credit for reducing charges for home heating fuel and propane gas provided to low-income residents. As written, this bill would provide for a tax credit to Corporation Net Income Tax filers that provide heating fuel or propane gas service to qualified low-income residential customers at special reduced rates. Similar to an existing program that provides a tax credit for reducing electric and natural gas rates for low-income customers, the credit proposed by this bill requires the Public Service Commission to certify the amount of the revenue deficiency incurred by the entity providing the special reduced rate. The State Tax Department does not have access to the data necessary to estimate the revenue impact of this proposed tax credit. The proposed tax credit legislation provides that a copy of the Public Service Commission certification of the revenue deficiency incurred by the taxpayer be attached to the annual return upon which the credit is claimed. However, the Public Service Commission does not generally regulate providers of home heating fuel and propane gas. If the State Tax Department is required to independently verify the amount of eligible credit, additional administrative costs to the State Tax Department could be significant. Additionally, the Public Service Commission may incur additional administrative cost due to this bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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):


As written, this bill would provide for a tax credit to Corporation Net Income Tax filers that provide heating fuel or propane gas service to qualified low-income residential customers at special reduced rates. Similar to an existing program that provides a tax credit for reducing electric and natural gas rates for low-income customers, the credit proposed by this bill requires the Public Service Commission to certify the amount of the revenue deficiency incurred by the entity providing the special reduced rate. The State Tax Department does not have access to the data necessary to estimate the revenue impact of this proposed tax credit. The proposed tax credit legislation provides that a copy of the Public Service Commission certification of the revenue deficiency incurred by the taxpayer be attached to the annual return upon which the credit is claimed. However, the Public Service Commission does not generally regulate providers of home heating fuel and propane gas. If the State Tax Department is required to independently verify the amount of eligible credit, additional administrative costs to the State Tax Department could be significant. Additionally, the Public Service Commission may incur additional administrative cost due to this bill.



Memorandum


The stated purpose of this bill is to authorize a corporation net income tax credit for reducing charges for home heating fuel and propane gas provided to low-income residents. As written, the proposed bill is based upon the provision of heating fuel and propane to “qualified low-income residential customers.” However, the bill does not adequately define “qualified low-income residential customers.” Also, the bill makes several references to Article 13G of the West Virginia Code. Although Article 13G of the West Virginia Code addresses a tax credit for reducing telephone utility rates for certain low-income residential customers, this may not be the appropriate reference. The proposed tax credit legislation provides that a copy of the Public Service Commission certification of the revenue deficiency incurred by the taxpayer be attached to the annual return upon which the credit is claimed. However, the Public Service Commission does not generally regulate providers of home heating fuel and propane gas.



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