Sources of Revenue:

General Fund,Other Fund local governments

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to dedicate the Property Transfer Tax to substance abuse treatment and regional jail support. According to the provisions of this bill, the State portion of the Property Transfer Tax is redesignated as the county’s tax, and that $1.10 per $500 of value excise tax on the transfer of real property becomes solely a county tax. The current county tax of up to $1.10 per $500 of value is also eliminated. The bill also authorizes county commissions to impose an additional excise tax. This additional tax may be less than or equal to the tax imposed by subsection (a) of §11-22-2 of the West Virginia Code. The funds are to be used in the county where it is collected. The bill states that fifty percent of the tax is to be used for support of regional jails, and fifty percent is to be used to support substance abuse treatment programs. County commissions, in conjunction with the county sheriff and the chief circuit court judge, shall determine how to disburse the funds associated with substance abuse treatment. The bill has no internal effective date; therefore, would take effect ninety days from passage. According to our interpretation, passage of this bill would reduce the State General Revenue Fund by roughly $8.5 million in FY2013. County revenue from the regular excise tax would remain the same. Additional revenue for regional jails and substance abuse treatment would be $8.5 million if all counties elected to impose the additional tax at the maximum rate. There would be no additional costs associated with this bill for the Tax Department.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2012 Increase/Decrease (use"-")	2013 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	-8,500,000	-8,500,000

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

According to the provisions of this bill, the State portion of the Property Transfer Tax is redesignated as the county’s tax, and that $1.10 per $500 of value excise tax on the transfer of real property becomes solely a county tax. The current county tax of up to $1.10 per $500 of value is also eliminated. The bill also authorizes county commissions to impose an additional excise tax. This additional tax may be less than or equal to the tax imposed by subsection (a) of §11-22-2 of the West Virginia Code. The funds are to be used in the county where it is collected. The bill states that fifty percent of the tax is to be used for support of regional jails, and fifty percent is to be used to support substance abuse treatment programs. County commissions, in conjunction with the county sheriff and the chief circuit court judge, shall determine how to disburse the funds associated with substance abuse treatment. The bill has no internal effective date; therefore, would take effect ninety days from passage. According to our interpretation, passage of this bill would reduce the State General Revenue Fund by roughly $8.5 million in FY2013. County revenue from the regular excise tax would remain the same. Additional revenue for regional jails and substance abuse treatment would be $8.5 million if all counties elected to impose the additional tax at the maximum rate. There would be no additional costs associated with this bill for the Tax Department.

Memorandum

The bill states that “fifty percent of the tax collected is to be used to support the regional jail serving the county and fifty percent to support substance abuse treatment.” However, the bill is unclear whether that refers to the total tax collected or the additional tax.

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