Date Requested:April 02, 2009
Time Requested:03:30 PM
Agency: Parkways, Economic Development & Tourism
CBD Number: Version: Bill Number: Resolution Number:
Comm. Sub. HB2894
CBD Subject: CREDITS FOR USERS OF WV TURNPIKE
FUND(S)
Turnpike Toll Revenues
Sources of Revenue
Other Fund Turnpike Toll Revenues
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

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

    Due to several internal drafting conflicts and ambiguities and at least one apparent conflict with existing law, it is difficult to estimate the precise fiscal impact this bill could have on the revenues of the Parkways Authority.
    
    As a reminder, the Parkways Authority must reimburse the Department of Tax and Revenue for the amount of tax revenue lost because of deductions. This bill continues that requirement.
    
    Passage of this bill could have significant fiscal impact on the Parkways Authority’s revenues.
    
    (1) The bill increases the maximum deduction from $1,200 to $1,500 per year, a 25% increase.
    (2) The bill’s mandated discount program and deduction go beyond the existing deduction law that keys primarily off the Parkways Authority Commuter (“PAC”) card commuter discount program. Under this program, it costs $285 a year per PAC card account or vehicle for unlimited travel through all three toll plazas. Current deduction law’s PAC card focus means that the $285/vehicle maximum PAC card commuter discounted cost becomes a per-vehicle cap, practically speaking, under the current tax deduction statute. This bill would permit this deduction to go farther allowing deductions for any 9-county resident paying through a transponder, even if not a PAC card commuter discount holder. The number of PAC card users who might file for a deduction was a finite fairly precise and well understood universe of users. Under this new bill, that would no longer be the case. Where the new bill would go further is it likely would pick up 9-county non-commercial users who don’t use the Turnpike frequently enough to purchase the $285/year unlimited travel PAC cards (for passage through all three toll plazas). This current commuter program provides the frequent noncommercial driver of a Class A vehicle that makes more than 40 trips per year with up to an 85% discount on their tolls. This proposed bill would pick up 9-county users who make a fair number of trips per year, but less than the 40 trips/year under current toll rates.
    (3) The bill mandates that the 9-county discount apply to all classes of vehicles using the toll road. This would mean even tractor trailers. That would be a big expansion in the deduction’s likely fiscal impact, since the current toll deduction law keys off of the PAC card commuter discount, as noted above. Thus, current law’s fiscal impact is limited to noncommercial users driving Class A vehicles (ordinary cars and pickup trucks). Again, the bill has some conflicting language. If the bill’s language said only “noncommercial” residents of the nine counties would be eligible, then that would mitigate the fiscal impact, compared to the fiscal impact of saying ALL classes of vehicles would have to receive the mandated 9-county discount. If tractor trailers and other heavy commercial vehicles must be eligible for the discount (which the bill also mandates), the increased fiscal impact could be significant.
    (4) It is not 100% clear whether the new deduction for the mandated 9-county discount is in addition to the existing deduction. If it is additional, this too could increase the fiscal impact.
    

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


Memorandum
Person submitting Fiscal Note:
Gregory C. Barr, General Manager
Email Address:
gbarr@wvturnpike.com
    The purpose of this Committee Substitute for House Bill #2894 is to establish a contiguous county transponder account discount program for certain noncommercial commuters and modifying the conditions for the tax modifications available to commuters participating in certain authority programs.
    
    The Parkways Authority has two major concerns regarding this bill: (1) it would not be satisfied by the proposed new WV E-ZPass transponder discount currently under consideration by the Authority; and (2) the Authority believes it is unconstitutional on its face. Additionally, there are several internal drafting conflicts and ambiguities and at least one apparent conflict with existing law.
    
    Discount Overview
    
    The bill mandates a very specific and brand new discount for just nine (9) southern West Virginia counties, which would be in addition to the existing PAC card commuter discount program. The proposed bill mandates that this new 9-county discount program must have various specific features, including:
    
    • Must apply to all classes of vehicles (including tractor trailers),
    • Must have a specific new name,
    • Must be a “prepaid” account, and,
    • Must only have account balance between $25 and $50.
    
    The new proposed WV E-ZPass account/transponder discount the Authority has been developing does not have these mandated features. Rather, the program would be available to anyone, anywhere and not just for residents of these nine counties. Also, it would not stipulate or mandate that the account balance be between $25 and $50.
    
    Potential Constitutional Violations
    
    The Authority believes that this bill, on its face, is very likely unconstitutional. The 9-counties-only language may violate the Constitution’s Equal Protection provisions as it blatantly favors residents of just nine southern WV counties (five of which are not contiguous to the Turnpike). As stated above, the new PAC card commuter discount program and WV E-ZPass transponder/account discount under consideration by the Authority AND the current deduction statute is, on its face, open to anyone regardless of residency.
    
    Bill has Conflicting and Ambiguous Language
    
    Several instances of this bill’s conflicting and ambiguous language were outlined in the Fiscal Note Summary. The following are some examples:
    
    • There is language saying only “noncommercial” residents get the 9-county discount vs. the “all classes of vehicles” (which would include large commercial trucks). Which prevails? This is contradictory on its face, and confusing and ambiguous at the very least.
    • There is less than 100% clarity as to whether the new 9-county discount/$1,500 maximum deduction replaces or is in addition to the existing $1,200 maximum deduction. While the Authority initially assumed it replaced the existing deduction, there is uncertainty in the way the bill is written.
    • Current law (§17-16A-29) requires a discount for all classes of vehicles if the Parkways raises tolls. This seems to have motivated the bill’s language indicating that “all classes of vehicles” shall be eligible for the 9-county discount. The contradictory language saying only “noncommercial” users are eligible would seem to conflict with the existing statute mandating discounts for all classes of vehicles if the Authority institutes a toll increase which is currently under consideration.
    • Depending upon which type of vehicles/users are eligible, itself ambiguous, does affect the increased fiscal impact of this bill.