FISCAL NOTE



FUND(S):

Special Reclamation Fund, Special Reclamation Water Trust Fund

Sources of Revenue:

Special 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 continue and reimpose the special reclamation tax, provide for periodic legislative review, and remove the additional tax on clean coal. According to our interpretation, this bill eliminates a permanent $0.07 per ton tax, makes a temporary $0.074 per ton tax permanent and increases the tax rate by $0.07 per ton. The result is that the net tax rate effective July 1, 2009 will be $0.144 per ton, the same as for the July 1, 2008 to June 30, 2009 period, but $0.074 per ton greater than the rate would have been without the proposed change. The combined tax rate of $0.144 per ton will yield roughly $10.7 million per year in additional revenue compared to current law. Since the due date for the tax returns for the Special Reclamation Tax is the end of the month following the month the taxable activity occurs, Fiscal Year 2010 revenue from the additional tax will be only roughly $9.8 million (i.e., the amount attributable to eleven months). The additional revenue is to be allocated by the Secretary of the Department of Environmental Protection to the Special Reclamation Fund and Special Reclamation Water Trust Fund. The bill also changes the periodic Legislature review from an annual basis to every five years. Additional administrative costs to the State Tax Department associated with this bill would be minimal.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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 9,800,000 10,700,000


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


Passage of this bill would eliminate a permanent $0.07 per ton tax, makes a temporary $0.074 per ton tax permanent and increases the tax rate by $0.07 per ton. The result is that the net tax rate effective July 1, 2009 will be $0.144 per ton, the same as for the July 1, 2008 to June 30, 2009 period, but $0.074 per ton greater than the rate would have been without the proposed change. The combined tax rate of $0.144 per ton will yield roughly $10.7 million per year in additional revenue compared to current law. Since the due date for the tax returns for the Special Reclamation Tax is the end of the month following the month the taxable activity occurs, Fiscal Year 2010 revenue from the additional tax will be only roughly $9.8 million (i.e., the amount attributable to eleven months). The additional revenue is to be allocated by the Secretary of the Department of Environmental Protection to the Special Reclamation Fund and Special Reclamation Water Trust Fund. The bill also changes the periodic Legislature review from an annual basis to every five years. Additional administrative costs to the State Tax Department associated with this bill would be minimal.



Memorandum






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