Date Requested:February 11, 2005
Time Requested:02:52 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005r698 intro hb2202
CBD Subject: volunteer firemen exempt
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
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 provide a reduction in the tax obligation of volunteer firefighters who meet certain training and fire fighting qualifications. Under the provisions of this bill a volunteer fire fighter would receive a reduction of $100 for one year of qualified service, $250 for three years of qualified service and $500 for five or more years of qualified service.
    
    According to our interpretation, passage of this bill would reduce General Revenue Fund collections by approximately $5.3 million per year beginning in Fiscal Year 2006-2007. Absent an internal effective date, the provisions of this bill would become effective for the 2006 tax year. This bill provides for varying levels of tax reduction dependent upon the number of years of qualified service of the volunteer fire department member.
    
    Additional administrative costs for the Tax Department associated with this bill would be roughly $21,000 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 21,000 21,000 21,000
Personal Services 0 21,000 21,000
Current Expenses 10,000 0 0
Repairs and Alterations 0 0 0
Assets 11,000 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -5,300,000 -5,300,000
3. Explanation of above estimates (including long-range effect):
    The bill would provide a “tax reduction” on state personal income tax to members of volunteer fire departments. This bill provides for varying levels of tax reduction dependent upon the number of years of qualified service of the volunteer fire department member. According to available State data, over 11,700 volunteers may qualify for this exemption.
    
    Passage of this bill would reduce General Revenue Fund collections by approximately $5.3 million per year beginning in Fiscal Year 2006-2007. Absent an internal effective date, the provisions of this bill would become effective for the 2006 tax year.
    
    Additional administrative costs for the Tax Department associated with this bill would be for printing and equipment in Fiscal Year 2005 and for reviewing and processing claims for the tax reduction per year for each year thereafter.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to provide a reduction in the tax obligation of volunteer firefighters who meet certain training and fire fighting qualifications. Under the provisions of this bill a volunteer fire fighter would receive a reduction of $100 for one year of qualified service, $250 for three years of qualified service and $500 for five or more years of qualified service.
    
    The amount of the reduction ranges from $100 after one year of qualified service to $500 after five years of qualified service. The bill does not indicate how long the reduction is to last once achieved. The bill requires the State Fire Commission, in consulting with the State Firemen’s Association, to develop a “performance based point system” which would allow members of volunteer fire departments to meet the qualified service requirements. However, the bill does not really define “performance based point system,” but it does list various items a fire fighter must participate or attend as a minimum.