FISCAL NOTE



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 provide for a credit against West Virginia personal income tax liability in the amount of payments made on student loans. Passage of this bill would result in a $10.0 million loss to the General Revenue Fund in fiscal year 2011. The loss would expand each year until reaching $114.0 million upon full implementation in fiscal year 2019. Additional administrative costs to the State Tax Department would be about $20,500 in fiscal year 2011, as the bill is retroactive. Thereafter, there would be no additional administrative costs.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2010
Increase/Decrease
(use"-")
2011
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 20,500 0
Personal Services 0 20,500 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 -10,000,000 -114,000,000


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


Passage of this bill would result in a $10.0 million loss to the General Revenue Fund in fiscal year 2011. The loss would expand each year until reaching $114.0 million upon full implementation in fiscal year 2019. The tax credit would generally equal 100 percent of the amount of principle and interest paid on student loans for a period of ten years. Additional administrative costs to the State Tax Department would be about $20,500 in fiscal year 2011, as the bill is retroactive. Thereafter, there would be no additional administrative costs.



Memorandum


The stated purpose of this bill is to provide for a credit against West Virginia personal income tax liability in the amount of payments made on student loans. The bill indicates that Internal Revenue Service Form 1098-E shall be used to provide the necessary information relating to the identity of the graduate claiming the credit and the qualified student loan interest amount. The information appearing on the referenced form only includes this information and does not include any information on the total payments made on student loans. The proposed bill does not restrict the credit to graduates of West Virginia institutions of higher learning. Also, the credit is made available for graduates graduating on and after January 1, 2009. The retroactive effective date creates administrative issues and additional cost for the State Tax Department.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov