FISCAL NOTE



FUND(S):

Clean Coal Technology Research Fund

Sources of Revenue:

Other Fund see above

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 to impose a severance tax on the generation of wind power into a renewable energy resource at rate of $4 for every megawatt-hour; creating the “Clean Coal Technology Research Fund”; dedicating the tax proceeds to be expended on clean coal technology research; and authorizing the Division of Natural Resources, with oversight from the West Virginia clean coal technology council, to expend these proceeds with legislative approval. According to our interpretation, passage of the bill would provide roughly $3 million to $4 million per year for the Clean Coal Technology Research Fund. Incorporation of the proposed tax into the State Tax Department’s Integrated Tax System would result in substantial additional administrative costs in the year the tax was implemented, but thereafter the additional administrative costs associated with passage of this bill would be minimal. The Division of Natural Resources and the Clean Coal Technology Council may also incur additional administrative costs associated with passage of this bill.



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 0


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


Passage of this bill would impose of this bill to impose a severance tax on the generation of wind power at a rate of $4 for every megawatt-hour. The funds would be dedicated to the Clean Coal Technology Research Fund and would be expended on clean coal technology research. According to our interpretation, passage of the bill would provide roughly $3 million to $4 million per year for the Clean Coal Technology Research Fund. Incorporation of the proposed tax into the State Tax Department’s Integrated Tax System would result in substantial additional administrative costs in the year the tax was implemented, but thereafter the additional administrative costs associated with passage of this bill would be minimal. The Division of Natural Resources and the Clean Coal Technology Council may also incur additional administrative costs associated with passage of this bill.



Memorandum


The stated purpose of this bill to impose a severance tax on the generation of wind power into a renewable energy resource at rate of $4 for every megawatt-hour; creating the “Clean Coal Technology Research Fund”; dedicating the tax proceeds to be expended on clean coal technology research; and authorizing the Division of Natural Resources, with oversight from the West Virginia clean coal technology council, to expend these proceeds with legislative approval. This bill proposes to impose a tax on electric power generation from wind powered under the Severance Tax Statute (i.e., W. Va. Code §11-13A-1 et seq.), while most other taxes on electric power generation are taxed under the Business and Occupation Tax Statute (i.e., W. Va. Code §11-13-1 et seq.). The bill refers to the “severing of wind power,” however, this term could be subject to substantial interpretation, including an interpretation that “severing of wind power”is not plausible.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov