Date Requested: January 24, 2015
Time Requested: 09:59 AM
Agency: Transportation, Department of
CBD Number: Version: Bill Number: Resolution Number:
2387 Introduced SB266
CBD Subject: Tax


FUND(S):



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 West Virginia Department of Transportation, Division of Highways (WVDOH) receives revenue from various source to help maintain and operate the road system in West Virginia. One of the revenue sources is through the exemption on purchases of certain materials by a second party in the construction and maintenance of a highway project. The proposed legislation would eliminate the refundable exemption in State Fiscal Year 2015 and thus, would reduce revenue into the State Road Fund by $12.1 million. In consideration of revenues to date being higher than projected, the elimination of this exemption for State Fiscal Year 2015 will not affect the highway program as planned for State Fiscal Year 2015.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
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):


     See Fiscal Note Summary above for information regarding the fiscal impact of this bill on the State of West Virginia.
    



Memorandum


    The WVDOH prepares a six year transportation program of capital projects called the Statewide Transportation Improvement Program (STIP) as well as an annual Budget Request which also covers six years. Revenues are tracked continuously as well as the forecast of expenditures to maintain adequate cash reserves in the State Road Fund to meet WVDOH on-going and planned obligations. For SFY 2015 the revenues to the State Road Fund from Motor Fuel, Registration, and the Privilege Tax are collectively 8.4% higher than anticipated. This equates to an additional $32.2 million more revenue to the State Road Fund for the current State Fiscal Year. Due to the decrease in the variable portion of the state gas tax rate as a result of the decline in the wholesale price of gas, it is expected the revenue from the motor fuel tax will decrease by $6 million for SFY 2015. In consideration of the increase in revenues to date ($32.2 mill) and the projected decline in receipts through June 30, 2015 of $6 mill, the State Road Fund balance is still projected to gain $26.2 million more in revenue for SFY 2015 than planned. Therefore, the loss of the $12.2 million in revenue as a result of this legislation will not negatively affect the planned program for the WVDOH.



    Person submitting Fiscal Note: Lorrie Hodges
    Email Address: lorrie.a.hodges@wv.gov