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 bill is to enact the Food Security Act. It will provide a tax credit for a qualified donation or bargain sale of a fee interest in real property or a conservation or preservation easement located in West Virginia, by a landowner taxpayer to a public or private conservation agency. As written, this bill would provide a tax credit against the Personal Income Tax or Corporation Net Income Tax of a taxpayer making a qualified donation. The amount of the credit would be a percentage of the fair market value of the qualified donation. The percentage used in the credit calculation and approval of the credit would be determined by the West Virginia Agricultural Land Protection Authority. The bill also states that credit transfer and carry forward provisions would be determined through rules promulgated by the West Virginia Agricultural Land Protection Authority. The State Tax Department does not have access to the data necessary to accurately estimate the revenue reduction that would result from this credit program. Additional administrative costs to the State Tax Department associated with this bill would be minimal. However, due to the program administration responsibilities assigned via this bill, the West Virginia Agricultural Land Protection Authority may incur additional administrative costs.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2008 Increase/Decrease (use"-")	2009 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):

As written, this bill would enact the Food Security Act and would provide a tax credit against the Personal Income Tax or Corporation Net Income Tax of a taxpayer making a qualified donation or bargain sale of a fee interest in real property or a conservation or preservation easement located in West Virginia, by a landowner taxpayer to a public or private conservation agency. The amount of the credit would be a percentage of the fair market value of the qualified donation. The percentage used in the credit calculation and approval of the credit would be determined by the West Virginia Agricultural Land Protection Authority. The bill also states that credit transfer and carry forward provisions would be determined through rules promulgated by the West Virginia Agricultural Land Protection Authority. The State Tax Department does not have access to the data necessary to accurately estimate the revenue reduction that would result from this credit program. Additional administrative costs to the State Tax Department associated with this bill would be minimal. However, due to the program administration responsibilities assigned via this bill, the West Virginia Agricultural Land Protection Authority may incur additional administrative costs.

Memorandum

The stated purpose of this bill is to enact the Food Security Act. It will provide a tax credit for a qualified donation or bargain sale of a fee interest in real property or a conservation or preservation easement located in West Virginia, by a landowner taxpayer to a public or private conservation agency. As written, this bill would provide a tax credit of an amount that would be a percentage of the fair market value of the qualified donation. The percentage used in the credit calculation and approval of the credit would be determined by the West Virginia Agricultural Land Protection Authority. It appears that the West Virginia Agricultural Land Protection Authority would have considerable discretion in determining the amount of the tax credit. The bill also states that credit transfer and carry forward provisions would be determined through rules promulgated by the West Virginia Agricultural Land Protection Authority. Also, the bill provides that the tax credit would be available for taxable years beginning on and after January 1, 2009 but does not set a deadline for the West Virginia Agricultural Land Protection Authority and its consulting commission to have rules proposed and in place. Additionally, reference is made to “the tax credits fiscal cap imposed by the Legislature during the fiscal year”; however, information on the monetary level of the fiscal cap was not included.

Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us