Date Requested:January 27, 2012
Time Requested:02:27 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2012R1801 Introduced HB4326
CBD Subject: FEDERAL GAS TAX COLLECTION
FUND(S)
State Road Fund
Sources of Revenue
Other Fund State Road 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 continued funding to the State Road Fund in the event the Federal Government eliminates or suspends the collection of federal gas taxes.
    
    As written, we are unable to accurately estimate the revenue impact to the State Road Fund associated with the passage of this bill because of lack of knowledge of future federal policies regarding the Federal Highway Trust Fund. Currently, the federal government imposes various taxes on motor fuel (e.g., 18.4 cents per gallon on gasoline) that are dedicated to the Federal Highway Trust Fund. Each state receives a matching portion of the Highway Trust Fund through the Federal Aid-Highway Program. If the federal government suspended or eliminated the taxes on motor fuel, there would be no immediate funding of the Highway Trust Fund unless Congress directed funds from other sources. As a result, each state could lose the matching funds available for highway projects. The passage of this bill may offset some of that loss, but it is unknown as to how or when such action may or may not take place. Since its inception in 1932, the federal gasoline tax has never been suspended or eliminated.
    
    Additional administrative costs to the State Tax Department are unknown because of the speculative nature of the bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
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):
    The stated purpose of this bill is to provide continued funding to the State Road Fund in the event the Federal Government eliminates or suspends the collection of federal gas taxes.
    
    As written, we are unable to accurately estimate the revenue impact to the State Road Fund associated with the passage of this bill because of lack of knowledge of future federal policies regarding the Federal Highway Trust Fund. Currently, the federal government imposes various taxes on motor fuel (e.g., 18.4 cents per gallon on gasoline) that are dedicated to the Federal Highway Trust Fund. Each state receives a matching portion of the Highway Trust Fund through the Federal Aid-Highway Program. If the federal government suspended or eliminated the taxes on motor fuel, there would be no immediate funding of the Highway Trust Fund unless Congress directed funds from other sources. As a result, each state could lose the matching funds available for highway projects. The passage of this bill may offset some of that loss, but it is unknown as to how or when such action may or may not take place. Since its inception in 1932, the federal gasoline tax has never been suspended or eliminated.
    
    Additional administrative costs to the State Tax Department are unknown because of the speculative nature of the bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to provide continued funding to the State Road Fund in the event the Federal Government eliminates or suspends the collection of federal gas taxes.
    
    The proposed bill states that “in the event 26 U.S.C. §4081 is suspended or eliminated, without substitution, by the Federal Government, the Tax Commissioner is hereby authorized to continue collection of all said taxes”. However, the West Virginia statute, article 14C, chapter 11 is not structured the same as the federal statute cited above. For this reason (among others), all parts of the tax must be specified. The proposed bill does not specify the point of taxation, the rate of taxation or the basis of the tax. There is no designation as to what fuels the tax is applicable and what, if any, exemptions there may be. The federal statute differs greatly from West Virginia’s Motor Fuel Excise Tax.