Date Requested:March 08, 2013
Time Requested:11:52 AM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2639 Introduced HB2879
CBD Subject: CREATE THE COMMUTER RAIL ACCESS ACT
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 create the West Virginia Commuter Rail Access Act.
    
     As written, the provisions of this bill would create a State subsidy for commuter rail service in the form of a tax credit. This bill would require railroads to submit unpaid invoices for track access fees for any daily commuter trains in West Virginia to the West Virginia State Rail Authority. Upon verification by the West Virginia State Rail Authority, the railroad would be given a tax credit in an amount equal to the access fees that would have been charged. The railroad would receive the tax credit in lieu of invoicing the commuter rail line. The credit, which would commence July 1, 2014, would be used as an offset to the Corporation Net Income Tax.
    
     According to our interpretation and based upon information in the bill and information from the West Virginia State Rail Authority, the application of the proposed credit against the Corporation Net Income Tax would result in a reduction in the General Revenue Fund of roughly $250,000 in FY2015 and of roughly $770,000 in FY2016. The estimated reduction in the General Revenue Fund assumes that the Taxpayers to whom the proposed tax credit is granted would have sufficient Corporation Net Income Tax liability to fully use the awarded tax credit. The track fees are expected to increase by roughly 3 percent each year according to the West Virginia State Rail Authority. The tax credit and the resultant reduction in the General Revenue Fund would be expected to increase at the same rate.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. However, the West Virginia State Rail Authority may incur additional administrative costs due to passage of this bill.

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 -770,000
3. Explanation of above estimates (including long-range effect):
     As written, the provisions of this bill would create a State subsidy for commuter rail service in the form of a tax credit. This bill would require railroads to submit unpaid invoices for track access fees for any daily commuter trains in West Virginia to the West Virginia State Rail Authority. Upon verification by the West Virginia State Rail Authority, the railroad would be given a tax credit in an amount equal to the access fees that would have been charged. The railroad would receive the tax credit in lieu of invoicing the commuter rail line. The credit, which would commence July 1, 2014, would be used as an offset to the Corporation Net Income Tax.
    
     According to our interpretation and based upon information in the bill and information from the West Virginia State Rail Authority, the application of the proposed credit against the Corporation Net Income Tax would result in a reduction in the General Revenue Fund of roughly $250,000 in FY2015 and of roughly $770,000 in FY2016. The estimated reduction in the General Revenue Fund assumes that the Taxpayers to whom the proposed tax credit is granted would have sufficient Corporation Net Income Tax liability to fully use the awarded tax credit. The track fees are expected to increase by roughly 3 percent each year according to the West Virginia State Rail Authority. The tax credit and the resultant reduction in the General Revenue Fund would be expected to increase at the same rate.
    
     Under the assumption that the State Tax Department would not be expected to evaluate the effectiveness of this proposed tax credit program, additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. However, the West Virginia State Rail Authority may incur additional administrative costs due to passage of this bill
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov