Date Requested:March 22, 2013
Time Requested:12:03 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2930 Introduced HB3068
CBD Subject: EXPAND PROPERTY APPRAISAL
FUND(S)
General Revenue Fund, Local Government Funds
Sources of Revenue
General Fund,Other Fund Local Property Tax Revenu
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 expand the property appraisal provisions of this article to include qualified capital additions to coal production facilities.
    
     As written, this bill would amend definitions used in the special method for appraising qualified capital additions to manufacturing facilities. The bill adds coal production facility (where “coal production facility” means any mine, preparation plant, loading facility, storage facility, building, complex of buildings and associated facilities and apparatus used for the performance of the act or process of exploring, developing, severing extracting, reducing to possession, washing, processing, loading for shipment and shipment for sale of any coal or coal product including any reclamation, waste disposal or environmental activities associated therewith) as a potential recipient of the special method for appraising qualified capital additions. Qualification for the special method for appraising qualified capital additions to a coal production facility would require new investment of at least $10 million at or within two miles of a coal production facility owned or operated by the person making the investment which previously had an original cost of at least $20 million and the capital addition consists of a facility used to increase the capacity of the coal production facility to store, handle, process or load coal. Also, according to our interpretation, coal reserves and other real estate upon which a coal production facility is located are not considered a part of the facility for purposes of the special method for appraising qualified capital additions.
    
     According to our interpretation, new investment in personal property at a coal production facility is required. Therefore the changes proposed in this bill will not diminish revenue from current sources as the special method of appraisal would be used for the “new” investment and would not apply to the existing facility, unless the existing property previously qualified for the current program.
    
     Additional administrative costs associated 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
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 0
3. Explanation of above estimates (including long-range effect):
     As written, this bill would amend definitions used in the special method for appraising qualified capital additions to manufacturing facilities. The bill adds coal production facility (where “coal production facility” means any mine, preparation plant, loading facility, storage facility, building, complex of buildings and associated facilities and apparatus used for the performance of the act or process of exploring, developing, severing extracting, reducing to possession, washing, processing, loading for shipment and shipment for sale of any coal or coal product including any reclamation, waste disposal or environmental activities associated therewith) as a potential recipient of the special method for appraising qualified capital additions. Qualification for the special method for appraising qualified capital additions to a coal production facility would require new investment of at least $10 million at or within two miles of a coal production facility owned or operated by the person making the investment which previously had an original cost of at least $20 million and the capital addition consists of a facility used to increase the capacity of the coal production facility to store, handle, process or load coal. Also, according to our interpretation, coal reserves and other real estate upon which a coal production facility is located are not considered a part of the facility for purposes of the special method for appraising qualified capital additions.
    
     According to our interpretation, new investment in personal property at a coal production facility is required. Therefore the changes proposed in this bill will not diminish revenue from current sources as the special method of appraisal would be used for the “new” investment and would not apply to the existing facility, unless the existing property previously qualified for the current program.
    
     Additional administrative costs associated to the State Tax Department associated with passage of this bill would be minimal.
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to expand the property appraisal provisions of this article to include qualified capital additions to coal production facilities.
    
     The bill includes the following statement: “That coal reserves and other real estate upon which a coal production facility is located area not considered a part of the facility for purposes of this article.” While it is assumed that the word “area” in the statement was meant to be “are,” as written, the statement could be interpreted differently than intended.