Date Requested: May 24, 2017
Time Requested: 11:06 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
4021 Introduced HB108
CBD Subject: Governor -- Bills Requested By


FUND(S):

State Road Fund

Sources of Revenue:

Other Fund State Road Fund

Legislation creates:

Increases Revenue From Existing Sources, Increases Existing Expenses



Fiscal Note Summary


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


    The stated purpose of this bill is to increase the funding for the State Road Fund. The bill increases Division of Motor Vehicles administrative fees and motor fuel excise taxes, increase rate of consumers sales and service tax on sales of motor vehicles, increases the minimum average wholesale price of motor fuels for purposes of the five percent variable fuel tax on a certain date, and increases administrative DMV fees every five years on September 1 based on the US Department of Labor, Bureau of Labor Statistics most current Consumer Price Index, imposing annual registration fee for certain alternative fuel vehicles and specified effective dates.
    
    According to our interpretation, the proposed bill would increase (1) the flat rate of motor fuel to $0.22 per invoiced gallon; (2) the minimum average wholesale price of motor fuel other than alternative fuel to $3.04 per invoiced gallon, thereby raising the variable component of the Motor Fuel Excise Tax calculation to no less than $0.152 per invoiced gallon; (3) the rate of consumer sales and service tax on sales of motor vehicles to 6 percent; and (4) various fees imposed by the West Virginia Division of Motor Vehicles (DMV). This fiscal note addresses only those increases related to the Motor Fuel Excise Tax; the West Virginia DMV will provide a revenue estimate of increased fees and Motor Vehicle Sales Tax.
    
    With respect to the increase in the flat rate to $0.22 per invoiced gallon, it is anticipated this increase would yield $14.9 million in additional revenues in FY2018, $16.2 million in FY2019, and $16.3 million for each year thereafter. The increase in the variable rate component to $0.152 per invoiced gallon is expected to yield additional revenues of $44.9 million in FY2018, $49.0 million in FY2019, and $49.3 million for each year thereafter. In total, the proposed bill is expected to increase State Road Fund collections by $59.8 million in FY2018, $65.2 million in FY2019, and $65.6 million for each year thereafter.
    
    Additional costs incurred by the State Tax Department would be $10,000 for the remainder of FY2017 and $5,000 in FY2018. No additional costs are expected thereafter.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 10,000 5,000 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 10,000 5,000 0
2. Estimated Total Revenues 0 59,800,000 65,200,000


Explanation of above estimates (including long-range effect):


    According to our interpretation, the proposed bill would increase (1) the flat rate of motor fuel to $0.22 per invoiced gallon; (2) the minimum average wholesale price of motor fuel other than alternative fuel to $3.04 per invoiced gallon, thereby raising the variable component of the Motor Fuel Excise Tax calculation to no less than $0.152 per invoiced gallon; (3) the rate of consumer sales and service tax on sales of motor vehicles to 6 percent; and (4) various fees imposed by the West Virginia Division of Motor Vehicles (DMV). This fiscal note addresses only those increases related to the Motor Fuel Excise Tax; the West Virginia DMV will provide a revenue estimate of increased fees and Motor Vehicle Sales Tax.
    
    With respect to the increase in the flat rate to $0.22 per invoiced gallon, it is anticipated this increase would yield $14.9 million in additional revenues in FY2018, $16.2 million in FY2019, and $16.3 million for each year thereafter. The increase in the variable rate component to $0.152 per invoiced gallon is expected to yield additional revenues of $44.9 million in FY2018, $49.0 million in FY2019, and $49.3 million for each year thereafter. In total, the proposed bill is expected to increase State Road Fund collections by $59.8 million in FY2018, $65.2 million in FY2019, and $65.6 million for each year thereafter.
    
    Additional costs incurred by the State Tax Department would be $10,000 for the remainder of FY2017 and $5,000 in FY2018. No additional costs are expected thereafter.
    



Memorandum


    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov