Date Requested:February 17, 2009
Time Requested:12:30 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R1675 Introduced SB273
CBD Subject: CREATE GED ASSISTANCE INCENTIVE TAX CREDIT
FUND(S)
General Revenue Fund
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 create incentives to encourage West Virginia workers to obtain the GED and incentives to encourage West Virginia employers to allow their employees to study for and obtain a GED.
    
    As written, this bill would provide a tuition waiver for employees and a tax credit for employers. Employees who have: been out of secondary school for at least three years; entered into a learning contract with an adult education center and their employer and completed the learning contract; and, has earned a GED within the preceding one-year period, are to be awarded a tuition discount of $250 per semester for a maximum of four semesters at West Virginia public institutions of higher education. Employers who enter into a learning contract with an employee and permit the employee paid release time to study for the GED would be eligible for a tax credit of up to $1,250 per eligible employee. The credit will apply to Personal Income Tax liabilities, Corporation Net Income Tax and Business Franchise Tax liabilities arising after December 31, 2009.
    
    According to our interpretation and based upon data from 2007, passage of this bill would result in a reduction in the General Revenue Fund of up to $2.0 million per year.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be approximately $36,000 in Fiscal Year 2010. Also, State higher education institutions may incur additional costs attributable to the tuition waiver provisions of the bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 36,000 0
Personal Services 0 0 0
Current Expenses 0 35,000 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 1,000 0
2. Estimated Total Revenues 0 0 -2,000,000
3. Explanation of above estimates (including long-range effect):
    As written, this bill would provide a tuition waiver for employees and a tax credit for employers. Employees who have: been out of secondary school for at least three years; entered into a learning contract with an adult education center and their employer and completed the learning contract; and, has earned a GED within the preceding one-year period, are to be awarded a tuition discount of $250 per semester for a maximum of four semesters at West Virginia public institutions of higher education. Employers who enter into a learning contract with an employee and permit the employee paid release time to study for the GED would be eligible for a tax credit of up to $1,250 per eligible employee. The credit will apply to Personal Income Tax liabilities, Corporation Net Income Tax and Business Franchise Tax liabilities arising after December 31, 2009.
    
    According to our interpretation and based upon data from 2007, passage of this bill would result in a reduction in the General Revenue Fund of up to $2.0 million per year.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be approximately $36,000 in Fiscal Year 2010. Also, State higher education institutions may incur additional costs attributable to the tuition waiver provisions of the bill.
    


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