Date Requested:January 28, 2014
Time Requested:01:58 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1305 Introduced HB4351
CBD Subject: TAX EXPENDITURE SUNSETS
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 promote transparency in the tax expenditure process, and to provide a review process for tax expenditures.
    
     As written, this bill would repeal an existing requirement for a tax expenditure report with a three-year cycle to cover all tax expenditures and create a new report to cover on all expenditures annually. The bill includes language indicating that “a tax expenditure created on or after July 1, 2014 expires with the end of the tax year five years following the year in which it was created”and language indicating information the new tax expenditures must specify. The bill outlines necessary provisions for the renewal of a tax expenditure. Additionally, the bill would create the Tax Expenditure Sunset Review Committee. The Committee would evaluate each tax expenditure the year before the expenditure is to sunset and would prepare a report that would include recommendations regarding whether or not a tax expenditure should be renewed or be allowed to expire.
    
     Passage of this bill would not have any direct effect on revenue.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $325,000 in FY2015, and roughly $275,000 each year thereafter. The Tax Expenditure Sunset Review Committee would also incur additional administrative costs due to passage of this bill.

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 0 325,000 275,000
Personal Services 0 250,000 250,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 50,000 0
Other 0 25,000 25,000
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
     As written, this bill would repeal an existing requirement for a tax expenditure report with a three-year cycle to cover all tax expenditures and create a new report to cover on all expenditures annually. The bill includes language indicating that “a tax expenditure created on or after July 1, 2014 expires with the end of the tax year five years following the year in which it was created”and language indicating information the new tax expenditures must specify. The bill outlines necessary provisions for the renewal of a tax expenditure. Additionally, the bill would create the Tax Expenditure Sunset Review Committee. The Committee would evaluate each tax expenditure the year before the expenditure is to sunset and would prepare a report that would include recommendations regarding whether or not a tax expenditure should be renewed or be allowed to expire.
    
     Passage of this bill would not have any direct effect on revenue.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $325,000 in FY2015, and roughly $275,000 each year thereafter. The additional costs would include the hiring of five additional employees in order to prepare the annual report required of the State Tax Commissioner and Governor. The Tax Expenditure Sunset Review Committee would also 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