Date Requested:February 16, 2005
Time Requested:01:14 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R200 Intro HB2198
CBD Subject: Severance Tax Expansion Reduced
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 provide that the reduction in the tax rate provided in this section applies to mines operating before the effective date of the applicable provision.
    
    According to our interpretation and based upon available data, passage of this bill would result in a reduction in the General Revenue Fund of approximately $1,000,000 in FY 2006 and approximately $2,500,000 in FY 2007 and each year thereafter. Passage of this bill would extend the reduced tax rate to coal produced from seams less than forty-five inches in average thickness within underground mines opened before April 13, 1997. Due to the lack of an internal effective date, the reduced rate would apply to tax years beginning on or after 90 days from passage of the bill.
    
    Additional administrative costs to the State Tax Department associated with this bill would be minimal. Any additional administrative costs would be attributable to notifying taxpayers of the change.

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 4,000 0 0
Personal Services 0 0 0
Current Expenses 4,000 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -1,000,000 -2,500,000
3. Explanation of above estimates (including long-range effect):
    According to our interpretation and based upon available data, passage of this bill would result in a reduction in the General Revenue Fund of approximately $1,000,000 in FY 2006 and approximately $2,500,000 in FY 2007 and each year thereafter. Passage of this bill would extend the reduced tax rate to coal produced from seams less than forty-five inches in average thickness within underground mines opened before April 13, 1997. Due to the lack of an internal effective date, the reduced rate would apply to tax years beginning on or after 90 days from passage of the bill.
    
    Additional administrative costs to the Tax Department would be approximately $4,000 for printing and promotion associated with notifying taxpayers of the change.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to provide that the reduction in the tax rate provided in this section applies to mines operating before the effective date of the applicable provision.
    
    The current code already applies a reduced tax rate to some mines producing coal from seams less than forty-five inches in average thickness, but mines that were producing from applicable veins prior to April 11, 1997 are excluded. Passage of this bill would result in the application of the reduced rate to all mines producing coal from seams less than forty-five inches in average thickness.