Date Requested:January 27, 2011
Time Requested:05:47 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2137 Introduced HB2869
CBD Subject: REDUCED RATES FOR CERTAIN WATER UTILITY
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 reduced rates for low-income residential customers of privately owned water utilities.
    
    As written, this bill would permit the Public Service Commission to authorize a privately owned water utility to voluntarily implement a rate structure providing reduced rates and charges for residential utility customers receiving (1) Social Security Supplemental Security Income (SSI); (2) Temporary Assistance for Needy Families (TANF); (3) Temporary Assistance for Needy Families - Unemployed Parent Program (TANF-UP); or (4) food stamps if the food stamp recipients are sixty years of age or older. The bill also provides for the reimbursement to the privately owned water utilities of revenue deficiencies attributable to the reduced rates via a tax credit. The tax credit may be used to offset Business and Occupation Tax or Corporation Net Income Tax. According to the interpretation of the State Tax Department, in the absence of an internal effective date, the credit would be first applicable to tax years beginning after enactment of the bill.
    
    Based upon feedback from the Public Service Commission, passage of this bill will result in an annual reduction in the General Revenue Fund of roughly $200,000 beginning in FY2013. The revenue reduction would be attributable to claims of the credit by privately owned water utilities.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill will be minimal. The Public Service Commission may incur additional administrative costs associated with passage of this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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 -200,000
3. Explanation of above estimates (including long-range effect):
    As written, this bill would permit the Public Service Commission to authorize a privately owned water utility to voluntarily implement a rate structure providing reduced rates and charges for residential utility customers receiving (1) Social Security Supplemental Security Income (SSI); (2) Temporary Assistance for Needy Families (TANF); (3) Temporary Assistance for Needy Families - Unemployed Parent Program (TANF-UP); or (4) food stamps if the food stamp recipients are sixty years of age or older. The bill also provides for the reimbursement to the privately owned water utilities of revenue deficiencies attributable to the reduced rates via a tax credit. The tax credit may be used to offset Business and Occupation Tax or Corporation Net Income Tax. According to the interpretation of the State Tax Department, in the absence of an internal effective date, the credit would be first applicable to tax years beginning after enactment of the bill.
    
    Based upon feedback from the Public Service Commission, passage of this bill will result in an annual reduction in the General Revenue Fund of roughly $200,000 beginning in FY2013. The revenue reduction would be attributable to claims of the credit by privately owned water utilities.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill will be minimal. The Public Service Commission may incur additional administrative costs associated with passage of this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to provide reduced rates for low-income residential customers of privately owned water utilities.
    
    Although the bill’s stated purpose is to provide reduced rates for low-income residential customers of privately owned water utilities, the bill, as written, appears to provide a tax incentive by way of a tax credit to water utilities that voluntarily implement a rate design featuring reduced rates for residential utility customers receiving certain assistance.
    
    The bill amends a number of West Virginia Code Sections to extend an existing credit available to natural gas and electric utilities to water utilities. However, the bill does not amend those Section titles including “natural gas” and “electric” to also include “water.”