FISCAL NOTE
FUND(S):
General Revenue Fund, Municipal Pensions Security Fund
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
A New Program,A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to modify statutory provisions through which the state provides assistance to certain political subdivision activities involving municipal policemen’s and firemen’s pensions and relief systems and volunteer fire departments.
According to our interpretation, this bill alters the definition of a “qualifying municipality” for purposes of the alternative municipal sales and service tax, alternative municipal use tax and pension relief municipal occupational tax. Under the provisions of this bill, a “qualifying municipality” would be a municipality in which the weighted average of the percentages to which its policeman’s and firemen’s pension and relief funds are fully funded is 50 percent or less, up from 3 percent or less in current law. Additionally, the bill creates a modification to reduce federal adjusted gross income for purposes of the Personal Income Tax. The modification would be equal to the payment of insurance policy premium surcharges imposed for the purpose of providing additional revenue for volunteer fire departments. The bill also makes a number of changes involving pensions, insurance, and volunteer fire departments that are beyond the purview of the State Tax Department.
The State Tax Department does not have access to the information necessary to accurately estimate the potential local tax revenue impact of this bill. The additional insurance premium tax surcharge may generate roughly $15 million in additional special fund revenue, according to the Insurance Commission. The new decreasing modification against Personal Income Tax would reduce State General Revenue by less than $1 million per year.
Assuming that all Personal Income Tax returns with the specified decreasing modification would be accepted as filed, additional administrative costs to the State Tax Department associated with this bill would be minimal. However, any requirement to verify the modification would result in significant additional administrative costs. Several other State and local agencies, including the newly created Municipal Pensions Oversight Board, may have additional administrative expenses associated with 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):
According to our interpretation, this bill alters the definition of a “qualifying municipality” for purposes of the alternative municipal sales and service tax, alternative municipal use tax and pension relief municipal occupational tax. Under the provisions of this bill, a “qualifying municipality” would be a municipality in which the weighted average of the percentages to which its policeman’s and firemen’s pension and relief funds are fully funded is 50 percent or less, up from 3 percent or less in current law. Additionally, the bill creates a modification to reduce federal adjusted gross income for purposes of the Personal Income Tax. The modification would be equal to the payment of insurance policy premium surcharges imposed for the purpose of providing additional revenue for volunteer fire departments. The bill also makes a number of changes involving pensions, insurance, and volunteer fire departments that are beyond the purview of the State Tax Department.
The State Tax Department does not have access to the information necessary to accurately estimate the potential local tax revenue impact of this bill. The additional insurance premium tax surcharge may generate roughly $15 million in additional special fund revenue, according to the Insurance Commission. The new decreasing modification against Personal Income Tax would reduce State General Revenue by less than $1million per year.
Assuming that all Personal Income Tax returns with the specified decreasing modification would be accepted as filed, additional administrative costs to the State Tax Department associated with this bill would be minimal. However, any requirement to verify the modification would result in significant additional administrative costs. Several other State and local agencies, including the newly created Municipal Pensions Oversight Board, may have additional administrative expenses associated with this bill.
Memorandum
The stated purpose of this bill is to modify statutory provisions through which the state provides assistance to certain political subdivision activities involving municipal policemen’s and firemen’s pensions and relief systems and volunteer fire departments.
As written, this bill proposes to change a term used in W. Va. Code §8-13C-3(a)(3) from “federal adjusted gross income” to “federal gross income.” The term “federal gross income” is not defined in the bill or in general common use.
The bill makes a change in W. Va. Code §8-15-8b(a) that implies that instead of 12 subdivisions in the section that there are 13, however, it appears that the bill actually reduces the number of subdivisions to 11.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us