FISCAL NOTE
Date Requested: February 12, 2025
Time Requested: 09:29 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1923 |
Introduced |
SB77 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, 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 provide that the coal severance tax shall go to the respective county that produced the coal.
According to our interpretation, passage of this bill would transfer all State coal severance tax collections to the county commissions in counties where coal is produced for any coal sales occurring on or after July 1, 2025. The fiscal consequences of this proposed change will vary significantly from year to year based on the fortunes of the coal industry. However, based on the quarterly coal sharing tax distributions for the past four quarters, the State general revenue fund would have lost roughly $220 million and county commissions where coal is produced (i.e. 20 in the past year) would have collectively gained $220 million. In addition to various State general revenue fund programs, a portion of the State coal severance tax currently funds infrastructure bonds.
Over the past year, coal sales occurred in only 20 out of the State’s 55 counties with just 5 counties accounting for 70 percent of all production. The provisions of this bill would further enhance county commission severance tax revenues for roughly 20 county commissions in the State. Based on activity over the past year, Marshall County would receive the greatest benefit increase of $58 million, followed by Wetzel County ($34 million), Logan County ($24 million), Wyoming County ($20 million), and Raleigh County ($18 million).
Additional administrative costs incurred by the State Tax Department would be $11,000 in FY2025.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
11,000 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
11,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-220,000,000 |
-220,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, passage of this bill would transfer all State coal severance tax collections to the county commissions in counties where coal is produced for any coal sales occurring on or after July 1, 2025. The fiscal consequences of this proposed change will vary significantly from year to year based on the fortunes of the coal industry. However, based on the quarterly coal sharing tax distributions for the past four quarters, the State general revenue fund would have lost roughly $220 million and county commissions where coal is produced (i.e. 20 in the past year) would have collectively gained $220 million. In addition to various State general revenue fund programs, a portion of the State coal severance tax currently funds infrastructure bonds.
Over the past year, coal sales occurred in only 20 out of the State’s 55 counties with just 5 counties accounting for 70 percent of all production. The provisions of this bill would further enhance county commission severance tax revenues for roughly 20 county commissions in the State. Based on activity over the past year, Marshall County would receive the greatest benefit increase of $58 million, followed by Wetzel County ($34 million), Logan County ($24 million), Wyoming County ($20 million), and Raleigh County ($18 million).
Additional administrative costs incurred by the State Tax Department would be $11,000 in FY2025.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov