FISCAL NOTE
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund,Other Fund local property tax
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 exempt owners, other than corporations or partnerships, of one hundred acres or less of contiguously connected real property from payment of increased valuation and assessment as natural resources property on reserve coal properties. The bill defines “small property owner” as an owner of one hundred or less acres of real property that is not a corporate entity or partnership. It also requires an affidavit from the property owner that the coal will not be mined or the interest therein transferred. If the coal is subsequently mined, the owner will be assessed the increased rate plus interest before mining may continue.
Passage of this bill could result in a minimal revenue loss for State and a loss of $2.0 million for local governments.
The State Tax Department will incur a one-time cost of $50,000 for programming and administrative costs involved in designing and implementing the affidavit required. There would be no other additional administrative costs to local governments or the State Tax Department.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2010
Increase/Decrease
(use"-") |
2011
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 |
-2,000,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill could result in a minimal revenue loss for State and a loss of $2.0 million for local governments.
The State Tax Department will incur a one-time cost of $50,000 for programming and administrative costs involved in designing and implementing the affidavit required. There would be no other additional administrative costs to local governments or the State Tax Department.
Memorandum
The stated purpose of this bill is to exempt owners, other than corporations or partnerships, of one hundred acres or less of contiguously connected real property from payment of increased valuation and assessment as natural resources property on reserve coal properties. The bill defines “small property owner” as an owner of one hundred or less acres of real property that is not a corporate entity or partnership. It also requires an affidavit from the property owner that the coal will not be mined or the interest therein transferred. If the coal is subsequently mined, the owner will be assessed the increased rate plus interest before mining may continue.
West Virginia Constitution Article X, Section 1 requires property to be assessed in proportion to its value. Section 1 also authorizes the exemption of certain property. This bill exempts property that is not included in the listing authorized in the Constitution.
There also may be some problems in determining the tax liability if the coal is not mined by the first owner, but the property is sold to a second owner and that second owner mines the coal.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov