FISCAL NOTE



FUND(S):

State Road Fund

Sources of Revenue:

Other Fund State Road 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 provide a framework for computation, payment and reporting of the Motor Fuel Excise Tax on alternative fuels. As written, the passage of this bill provides a mechanism for collection of alternative fuels under the Motor Fuel Excise Tax beginning on January 1, 2014. The bill defines “alternative fuel” as products commonly known as butane, propane, compressed natural gas, liquefied natural gas, liquefied petroleum gas, natural gas hydrocarbons and derivatives, among others, but does not include electricity. As more modern vehicles are being produced that use other forms of fuel besides gasoline and diesel, the passage of this bill allows for greater stability for State Road Fund revenue. Under current law, the use of these “alternative fuels” in an internal combustion engine for on-road use are not taxable under the Motor Fuel Excise Tax. The bill requires a “gallon equivalent” base unit so that alternative fuels are taxed at the equivalent unit as motor fuel. This bill provides a method for maintaining current Motor Fuel Excise Tax revenue within the State Road Fund in future years as the growth in alternative fuel vehicles become more significant within the State. Additional administrative costs to the State Tax Department would be $25,000 in FY2014 to implement the tax on alternative fuel. There would be no additional administrative costs thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 25,000 0
Personal Services 0 15,000 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 10,000 0
2. Estimated Total Revenues 0 0 0


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


As written, the passage of this bill provides a mechanism for collection of alternative fuels under the Motor Fuel Excise Tax beginning on January 1, 2014. The bill defines “alternative fuel” as products commonly known as butane, propane, compressed natural gas, liquefied natural gas, liquefied petroleum gas, natural gas hydrocarbons and derivatives, among others, but does not include electricity. As more modern vehicles are being produced that use other forms of fuel besides gasoline and diesel, the passage of this bill allows for greater stability for State Road Fund revenue. Under current law, the use of these “alternative fuels” in an internal combustion engine for on-road use are not taxable under the Motor Fuel Excise Tax. The bill requires a “gallon equivalent” base unit so that alternative fuels are taxed at the equivalent unit as motor fuel. This bill provides a method for maintaining current Motor Fuel Excise Tax revenue within the State Road Fund in future years as the growth in alternative fuel vehicles become more significant within the State. Additional administrative costs to the State Tax Department would be $25,000 in FY2014 to implement the tax on alternative fuel. There would be no additional administrative costs thereafter.



Memorandum






    Person submitting Fiscal Note: Mark B. Muchow
    Email Address: Roger.D.Cox@wv.gov