Date Requested:January 09, 2014
Time Requested:12:28 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1036 Introduced SB34
CBD Subject: REINTRO 2013-362REAL PROPERTY TRANSFER TAX
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 stated purpose of this bill is to incrementally redistribute an existing excise tax on the transfer of real property so that, over the course of five years, all money collected will be paid to the county where the property is situated instead of to the state. The bill requires that moneys paid to counties be exclusively dedicated to regional jails. The bill also makes stylistic changes.
    
     According to the provisions of the bill, the state portion of the Excise Tax on the Privilege of Transferring Real Property would be redistributed to the counties where the property is situated. The bill does provide for incremental transfers over a five-year period as the purpose indicates. If the bill passes, commencing July 1, 2014 excise tax collections would be distributed in the following manner: (1) For the first year, 80 percent to the state and 20 percent to the county; (2) For the second year, 60 percent to the state and 40 percent to the county; (3) For the third year, 40 percent to the state and 60 percent to the county, (4) For the fourth year, 20 percent to the state and 80 percent to the county, and (5) for the fifth and each succeeding year, 100 percent to the county. Collections are to be dedicated to regional jails as determined by the county commission, in consultation with the sheriff and the chief circuit court judge.
    
     According to our interpretation, passage of the bill, would result in an increase in county revenue ranging from an additional $2.5 million in FY2015 to $12.7 million in FY2019. However, 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 rises from $2.5 million in FY2015 to $12.7 million in FY2019.
    
     Change in Change in
    FY State Revenue County Revenue
    2015 -$2,500,000 $2,500,000
    2016 -$5,680,000 $5,680,000
    2017 -$8,640,000 $8,640,000
    2018 -$10,400,000 $10,400,000
    2019 -$12,700,000 $12,700,000
    
    
     There would be no additional costs to the State Tax Department.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
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 -2,500,000 -12,700,000
3. Explanation of above estimates (including long-range effect):
     The stated purpose of this bill is to incrementally redistribute an existing excise tax on the transfer of real property so that, over the course of five years, all money collected will be paid to the county where the property is situated instead of to the state. The bill requires that moneys paid to counties be exclusively dedicated to regional jails. The bill also makes stylistic changes.
    
     According to the provisions of the bill, the state portion of the Excise Tax on the Privilege of Transferring Real Property would be redistributed to the counties where the property is situated. The bill does provide for incremental transfers over a five-year period as the purpose indicates. If the bill passes, commencing July 1, 2014 excise tax collections would be distributed in the following manner: (1) For the first year, 80 percent to the state and 20 percent to the county; (2) For the second year, 60 percent to the state and 40 percent to the county; (3) For the third year, 40 percent to the state and 60 percent to the county, (4) For the fourth year, 20 percent to the state and 80 percent to the county, and (5) for the fifth and each succeeding year, 100 percent to the county. Collections are to be dedicated to regional jails as determined by the county commission, in consultation with the sheriff and the chief circuit court judge.
    
     According to our interpretation, passage of the bill, would result in an increase in county revenue ranging from an additional $2.5 million in FY2015 to $12.7 million in FY2019. However, 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 rises from $2.5 million in FY2015 to $12.7 million in FY2019.
    
    
     Change in Change in
    FY State Revenue County Revenue
    2015 -$2,500,000 $2,500,000
    2016 -$5,680,000 $5,680,000
    2017 -$8,640,000 $8,640,000
    2018 -$10,400,000 $10,400,000
    2019 -$12,700,000 $12,700,000
    
    
     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