FISCAL NOTE



FUND(S):

General Revenue Fund, West Virginia Jobs Investment Trust Fund

Sources of Revenue:

General Fund,Other Fund West Virginia Jobs Invest

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 extend and expand economic development programs of West Virginia Jobs Investment Trust Fund. The bill accomplishes this by extending the Millennium Fund and nonincentive tax credits for another five years and creating the West Virginia Capital Access Program II. The bill creates a new separate account designated as the West Virginia Capital Access Program Account consisting of three revolving programs. The bill defines terms. The bill limits investments and loans to an eligible business at any one time under the capital access program to $500,000. The bill extends new millennium fund and nonincentive tax credits. The bill increases the nonincentive tax credits from $30 million to $60 million. The bill permits promissory notes up to $6 million per year be issued in 2015, 2016, 2017, 2018 and 2019. The bill permits nonincentive tax credit commitments up to $6 million per year be issued in 2015, 2016, 2017, 2018 and 2019. The bill provides that the capital access program receive $5 million per year for three years. The bill sets forth how the funds are to be allocated. The bill gives the board the authority to reapportion and transfer funds among the three revolving programs. The bill provides for management and control of capital access program. The bill requires the board to appoint a subcommittee to administer and operate the capital access program. The bill sets forth who shall serve on that subcommittee. The bill grants the board additional powers. The bill sets forth how loans and investments may be used. The bill provides that program participants, and not the board, may make certain determinations. The bill provides that applications from program participants do not require the review or approval of the executive director. The bill authorizes rule-making. The bill deletes obsolete language. The bill makes technical corrections. As written, passage of this bill would increase the total allotment of nonincentive tax credits by an additional $30 million over five years between Fiscal Year 2015and FY2019. Previous allotments of $30 million in nonincentive tax credits between Fiscal Year 2001 and Fiscal Year 2005 is resulting in a decrease in General Revenue of $30 million generally spread out between Fiscal Year 2011 and Fiscal Year 2016 as tax credit claims came due ten years after issuance. The proposed additional $30 million General Revenue Fund dedication to venture capital in the form of additional nonincnetive tax credits will result in an additional $30 million decrease in General Revenue Fund collections between Fiscal Year 2025 and Fiscal Year 2030. Additional administrative costs to the State Tax Department would be $975 in FY2015. There would be no additional administrative costs to the State Tax Department in subsequent fiscal years. However, the Jobs Investment Trust Board may incur additional administrative costs.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 975 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 -30,000,000


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


As written, passage of this bill would increase the total allotment of nonincentive tax credits by an additional $30 million over five years between Fiscal Year 2015and FY2019. Previous allotments of $30 million in nonincentive tax credits between Fiscal Year 2001 and Fiscal Year 2005 is resulting in a decrease in General Revenue of $30 million generally spread out between Fiscal Year 2011 and Fiscal Year 2016 as tax credit claims came due ten years after issuance. The proposed additional $30 million General Revenue Fund dedication to venture capital in the form of additional nonincnetive tax credits will result in an additional $30 million decrease in General Revenue Fund collections between Fiscal Year 2025 and Fiscal Year 2030. Additional administrative costs to the State Tax Department would be $975 in FY2015. There would be no additional administrative costs to the State Tax Department in subsequent fiscal years. However, the Jobs Investment Trust Board may incur additional administrative costs.



Memorandum






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