Date Requested:February 13, 2013
Time Requested:06:46 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2005 Introduced SB141
CBD Subject: EXCISE TAX ON TRANSFER OF REAL PROPERTY
FUND(S)
General Revenue Fund, Local Governments
Sources of Revenue
General Fund,Other Fund Local Governments
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

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

     The purpose of this bill is to redistribute an existing excise tax paid upon the transfer of real property so that the tax is paid to the county where the property is situate instead of to the state. The bill requires counties to dedicate the excise to support regional jails and substance abuse programs incrementally over a five-year period.
    
     According to the provisions of the bill, the state portion of the Excise Tax On the Privilege of Transferring Real Property would be rededicated to the counties where the property is situated. The bill does not provide for incremental transfers over a five-year period as the purpose indicates. Due to the lack of an effective date, collections will go directly to the counties effective thirty days from passage. Collections are to be dedicated to substance abuse programs and regional jails as determined by the county commission, in consultation with the sheriff and the chief circuit court judge. There would be no increase in the amount of Property Transfer Tax collected. The revenue gains for counties are offset by revenue losses to the State General Revenue Fund. The projected loss to the State General Revenue Fund in FY2014 is $10.3 million.
    
     There would be no additional costs to the State Tax Department.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
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 -10,300,000
3. Explanation of above estimates (including long-range effect):
     The purpose of this bill is to redistribute an existing excise tax paid upon the transfer of real property so that the tax is paid to the county where the property is situate instead of to the state. The bill requires counties to dedicate the excise to support regional jails and substance abuse programs incrementally over a five-year period.
    
     According to the provisions of the bill, the state portion of the Excise Tax On the Privilege of Transferring Real Property would be rededicated to the counties where the property is situated. The bill does not provide for incremental transfers over a five-year period as the purpose indicates. Due to the lack of an effective date, collections will go directly to the counties effective thirty days from passage. Collections are to be dedicated to substance abuse programs and regional jails as determined by the county commission, in consultation with the sheriff and the chief circuit court judge. There would be no increase in the amount of Property Transfer Tax collected. The revenue gains for counties are offset by revenue losses to the State General Revenue Fund. The projected loss to the State General Revenue Fund in FY2014 is $10.3 million.
    
     There would be no additional costs to the State Tax Department.
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The title and purpose of the bill indicate that the Property Transfer Tax will be rededicated over a five year period; however, the bill provides no such mechanism for the incremental changes. Therefore, because the bill lacks an internal effective, the Property Transfer Tax will begin being transferred thirty days from passage.
    
     The bill makes suggestions on possible treatment options, however it does not provide any rules or means to check the use of the funds.