FISCAL NOTE
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 Joint Resolution is to authorize the Legislature to issue and sell state bonds not exceeding the aggregate amount of two hundred fifty million dollars to be used for financing flood mitigation projects in this state. Part of the coal severance tax revenue is dedicated to the retirement of the bonds.
As written, this bill proposes that an amendment to the Constitution of the State of West Virginia be submitted to the voters of the State at the November 2006 general election. If ratified, the Legislature would have the authority to issue and sell State bonds totaling up to $250 million ($100 million on July 1, 2007; $100 million on July 1, 2008 and $50 million on July 1, 2009). The bill requires the Legislature to dedicate $22 million from the Severance Tax on coal to pay the interest and principal on the bonds.
According to our interpretation, the dedication of tax collections from the Severance Tax on coal to pay the bond principal and interest will reduce the General Revenue Fund by $22 million in FY 2008 and each year thereafter (up to 25 years). However, the reduction in the General Revenue Fund attributable to the dedication of collections from the Severance Tax on coal will be offset by an increase in Special Revenue.
There would be no additional administrative costs associated with this bill.
Fiscal Note Detail
| 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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Passage of this bill would place an amendment to the Constitution of the State of West Virginia before the voters of the State at the November 2006 general election. If ratified, the Legislature would have the authority to issue and sell State bonds totaling up to $250 million ($100 million on July 1, 2007; $100 million on July 1, 2008 and $50 million on July 1, 2009). The bill requires the Legislature to dedicate $22 million from the Severance Tax on coal to pay the interest and principal on the bonds.
According to our interpretation, the dedication of tax collections from the Severance Tax on coal to pay the bond principal and interest will reduce the General Revenue Fund by $22 million in FY 2008 and each year thereafter (up to 25 years). However, the reduction in the General Revenue Fund attributable to the dedication of collections from the Severance Tax on coal will be offset by an increase in Special Revenue.
There would be no additional administrative costs associated with this bill.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us