Sources of Revenue:

General 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 improve state emergency preparedness. The bill requires the Commissioner of Highways to erect signs on the interstate highways and other roadways relating to directions to emergency shelters. It requires the Office of Emergency Services to coordinate with local radio and television stations to broadcast public service announcements with information as to the location of emergency shelters. The bill provides tax credits for use of natural gas, propane, gasoline or diesel fueled emergency generators. And, the bill provides a protection from civil or criminal liability to persons who donate food during times of emergencies. As indicated in the stated purpose above, and in the bill itself, a number of changes in the West Virginia Code are proposed. This Fiscal Note only addresses the proposed tax credit. Other entities, such as the Division of Highways, may be expected to submit a Fiscal Note for the portions of the bill under their purview. As written, the bill would provide a tax credit to any Taxpayer who installs an emergency generator powered by natural gas, propane, gasoline, or diesel fuel on property located in West Virginia and owned by the taxpayer and used as a place of business or residence. The credit would be effective for qualifying generators installed after July 1, 2013. The amount of the tax credit would be equal to 30 percent of the cost to purchase and install the system, up to a maximum of $3,000, and would be applied against the Personal Income Tax, Business Franchise Tax, or Corporation Net Income Tax liability of the Taxpayer. The bill also provides for the carryover of tax credit in excess of the tax liability. The tax credit for purchase and installation of natural gas and propane generators would expire July 1, 2015. Assuming the termination language in the bill would be revised to apply to natural gas, propane, gasoline, or diesel fuel powered generators not just natural gas and propane generators and based upon available information, passage of this bill will result in a reduction in the General Revenue Fund of between $5 million and $6 million per year. Under the assumption that the State Tax Department would not be expected to evaluate the effectiveness of this proposed tax credit program, additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2013 Increase/Decrease (use"-")	2014 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):

As written, the bill would provide a tax credit to any Taxpayer who installs an emergency generator powered by natural gas, propane, gasoline, or diesel fuel on property located in West Virginia and owned by the taxpayer and used as a place of business or residence. The credit would be effective for qualifying generators installed after July 1, 2013. The amount of the tax credit would be equal to 30 percent of the cost to purchase and install the system, up to a maximum of $3,000, and would be applied against the Personal Income Tax, Business Franchise Tax, or Corporation Net Income Tax liability of the Taxpayer. The bill also provides for the carryover of tax credit in excess of the tax liability. The tax credit for purchase and installation of natural gas and propane generators would expire July 1, 2015. Assuming the termination language in the bill would be revised to apply to natural gas, propane, gasoline, or diesel fuel powered generators not just natural gas and propane generators and based upon available information, passage of this bill will result in a reduction in the General Revenue Fund of between $5 million and $6 million per year. Under the assumption that the State Tax Department would not be expected to evaluate the effectiveness of this proposed tax credit program, additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.

Memorandum

The stated purpose of this bill is to improve state emergency preparedness. The bill requires the Commissioner of Highways to erect signs on the interstate highways and other roadways relating to directions to emergency shelters. It requires the Office of Emergency Services to coordinate with local radio and television stations to broadcast public service announcements with information as to the location of emergency shelters. The bill provides tax credits for use of natural gas, propane, gasoline or diesel fueled emergency generators. And, the bill provides a protection from civil or criminal liability to persons who donate food during times of emergencies. As written, the bill states “Any taxpayer who installs or causes to be installed an emergency generator powered by natural gas or propane on property located in this state and owned by the taxpayer and used as a place of business or residence after July 1, 2013, shall be allowed a credit. . .” However, the bill does not specify whether or not the property powered by the generator must be “used as a place of business or residence’ by the owner in order to be eligible for the tax credit. Additionally, the bill states “No taxpayer may take a credit pursuant to this article for an emergency generator powered by natural gas or propane after July 1, 2015.” It is unclear if the stated termination date applies to the date of purchase/install of the generator or to the claiming of the tax credit. Throughout most of the bill, most references are made to “natural gas, propane, gasoline, or diesel,” however, the termination statement only references natural gas and propane. It is unclear if this was unintentional, or if the tax credit would extend indefinitely for gasoline and diesel fueled generators.

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