Date Requested:February 11, 2005
Time Requested:02:46 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005r617 intro sb163
CBD Subject: fuel tax for needy
FUND(S)
No Fund Specified
Sources of Revenue
Other Fund No Fund Specified
Legislation creates:
A New Program

Fiscal Note Summary

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

    The stated purpose of this bill is to establish a one cent per gallon tax on off-road diesel fuel and heating fuel, and to establish a one-half percent tax on the consumption of propane, electricity and natural gas, with the tax revenue paying for a program to help pay fuel bills for the needy, a program to pay for prescription drugs for senior citizens and to supplement the United States Department of Energy Weatherization Program.
    
    According to our interpretation and based upon available data, passage of this bill would result in an increase of revenue of roughly $14.2 million per year. The bill provides for the allocation of the revenue as follows: to the Economic Opportunity Office to supplement the United States Department of Energy Weatherization Program 42 percent, or roughly $6 million per year; to the Department of Health and Human Resources for a program to help pay the fuel bills of needy persons 42 percent, or roughly $6 million per year and to the Department of Health and Human Resources for a program to help pay for prescription drugs for senior citizens 16 percent, or roughly $2.2 million per year.
    
    Additional administrative costs to the State Tax Department associated with this bill would be minimal. However, the other agencies involved in administering the indicated programs may have increased administrative costs. While the costs of administering this bill may be minimal, increased costs to the State and local governments, assuming that most of the tax is passed through to the end user, would be roughly $1.7 million per year.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 1,700,000 1,700,000
Personal Services 0 0 0
Current Expenses 0 1,700,000 1,700,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 14,200,000 14,200,000
3. Explanation of above estimates (including long-range effect):
    Passage of the bill would establish a one cent per gallon tax on off-road diesel fuel and heating fuel, and establish a one-half percent tax on the consumption of propane, electricity and natural gas.
    
    The new taxes would result in an increase of revenue of roughly $14.2 million per year. The bill provides for the allocation of the revenue as follows: to the Economic Opportunity Office to supplement the United States Department of Energy Weatherization Program 42 percent, or roughly $6 million per year; to the Department of Health and Human Resources for a program to help pay the fuel bills of needy persons 42 percent, or roughly $6 million per year and to the Department of Health and Human Resources for a program to help pay for prescription drugs for senior citizens 16 percent, or roughly $2.2 million per year.
    
    Additional administrative costs to the State Tax Department associated with this bill would be minimal. However, the other agencies involved in administering the indicated programs may have increased administrative costs. While the costs of administering this bill may be minimal, increased costs to the State and local governments, assuming that most of the tax is passed through to the end user, would be roughly $1.7 million per year.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to establish a one cent per gallon tax on off-road diesel fuel and heating fuel, and to establish a one-half percent tax on the consumption of propane, electricity and natural gas, with the tax revenue paying for a program to help pay fuel bills for the needy, a program to pay for prescription drugs for senior citizens and to supplement the United States Department of Energy Weatherization Program.
    
    Although the bill, as written, creates a new article, W. Va. Code ยงยง 11-14D-1 through 3, within the Chapter normally within the purview of the Tax Commissioner, the bill does not indicate whose responsibility it is to collect and administer the taxes. Also, the bill does not include the new taxes within the crimes and penalties provisions of Chapter 11, Article 9 or the procedure and administration provisions of Chapter 11, Article 10.
    
    While the bill specifies the intended allocation of the revenue, there is no information on the specific funds into which the revenue is to be deposited.