Date Requested:February 11, 2005
Time Requested:02:55 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005r873 intro hb2280
CBD Subject: economic fairness act
FUND(S)
General Revenue Fund, local governments
Sources of Revenue
General Fund,Other Fund local governments
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 create the economic fairness act and encourage economic development in counties with high unemployment.
    
    Based upon our interpretation of this bill, passage of this bill would result in a reduction in the General Revenue Fund of up to $2.5 million per year beginning in Fiscal Year 2006. The bill provides for a partial refund of the Personal Income Tax collections from the five counties with the highest average unemployment during the previous three years. Each of the five designated counties would receive additional revenues equal to 20 percent of Personal Income Tax collections attributable to the county or $500,000, whichever is less. As written, the bill requires the designated counties to submit an economic development plan to the West Virginia Economic Development Authority. Upon approval of the economic development plan by the West Virginia Economic Development Authority, the funds would be released to the county for economic development purposes.
    
    There would be no additional administrative costs to the State Tax Department associated with this bill.
    

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 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 -2,500,000
3. Explanation of above estimates (including long-range effect):
    As written, the bill would result in a reduction in the General Revenue fund of up to $2.5 million annually. The five counties with the highest average unemployment during the previous three years would each receive the lesser of $500,000 or 20 percent of the Personal Income Tax collections attributable to the county.
    
    There would be no additional administrative costs to the State Tax Department associated with this bill.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to create the economic fairness act and encourage economic development in counties with high unemployment.
    
    As written, the bill requires the Tax Commissioner to “refund” to five designated counties “twenty percent of their personal income tax collections from the previous year.” The generally understood meaning of the term “refund” is to return tax collected to the taxpayer. Other than remitting tax withheld from their employees, counties generally do not pay or collect personal income taxes.