Date Requested:February 15, 2011
Time Requested:04:13 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1852 Introduced HB3131
CBD Subject: RECLAIMED COAL SLURRY
FUND(S)
General Revenue Fund, local governments
Sources of Revenue
General Fund,Other Fund local government revenue
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 impose a ten-year moratorium on severance taxes on the extraction and recovery of material from refuse, gob piles or other sources of waste coal to produce energy.
    
    As written, this bill indicates that “for tax years 2011 through and including 2020, no severance tax may be imposed upon any business or person for the privilege of engaging or continuing within this state in the business of extracting and recovering material from a slurry pond, a refuse, gob pile or other sources of waste coal . . . ”
    
    Although the current Severance Tax law at WV Code §11-13A-3e imposes a tax on the privilege of extracting and recovering material from refuse, gob piles or other sources of waste coal to produce coal, the bill also references the taxes imposed by WV Code §11-13A-3 (which includes the tax on coal), WV Code §11-13A-6 (the additional tax on coal for the benefit of counties and municipalities), and WV Code §11-12B-3 (the Minimum Severance Tax on Coal).
    
    If the proposed ten-year moratorium is limited to the current waste coal tax levied via WV Code §11-13A-3e, annual distributions of waste coal tax revenue to waste coal producing counties during the moratorium period would be reduced by roughly $600,000. However, if the moratorium applies to the taxes imposed by WV Code §11-13A-3, WV Code §11-13A-6, and WV Code §11-12B-3, the annual revenue reduction for the State and every county and city would be substantial.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.
    

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 0
3. Explanation of above estimates (including long-range effect):
    As written, this bill indicates that “for tax years 2011 through and including 2020, no severance tax may be imposed upon any business or person for the privilege of engaging or continuing within this state in the business of extracting and recovering material from a slurry pond, a refuse, gob pile or other sources of waste coal . . . ”
    
    Although the current Severance Tax law at WV Code §11-13A-3e imposes a tax on the privilege of extracting and recovering material from refuse, gob piles or other sources of waste coal to produce coal, the bill also references the taxes imposed by WV Code §11-13A-3 (which includes the tax on coal), WV Code §11-13A-6 (the additional tax on coal for the benefit of counties and municipalities), and WV Code §11-12B-3 (the Minimum Severance Tax on Coal).
    
    If the proposed ten-year moratorium is limited to the current waste coal tax levied via WV Code §11-13A-3e, annual distributions of waste coal tax revenue to waste coal producing counties during the moratorium period would be reduced by roughly $600,000. However, if the moratorium applies to the taxes imposed by WV Code §11-13A-3, WV Code §11-13A-6, and WV Code §11-12B-3, the annual revenue reduction for the State and every county and city would be substantial.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to impose a ten-year moratorium on severance taxes on the extraction and recovery of material from refuse, gob piles or other sources of waste coal to produce energy.
    
    As written, this bill indicates that “for tax years 2011 through and including 2020, no severance tax may be imposed upon any business or person for the privilege of engaging or continuing within this state in the business of extracting and recovering material from a slurry pond, a refuse, gob pile or other sources of waste coal . . . ” In addition to the current Severance Tax law at WV Code §11-13A-3e that imposes a tax on the privilege of extracting and recovering material from refuse, gob piles or other sources of waste coal to produce coal, the bill also references the taxes imposed by WV Code §11-13A-3 (which includes the tax on coal), WV Code §11-13A-6 (the additional tax on coal for the benefit of counties and municipalities), and WV Code §11-12B-3 (the Minimum Severance Tax on Coal). The scope and application of the proposed moratorium could be subject to a broader interpretation than intended.