Date Requested: January 27, 2015
Time Requested: 01:53 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
2492 Introduced SB339
CBD Subject: Tax


FUND(S):

Workers Compensation Debt Reduction Fund

Sources of Revenue:

General Fund,Special 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 reduce the additional tax on coal effective July 1, 2015.
    
    The bill would reduce the tax rate for the additional tax on coal from 56 cents to 28 cents. Passage of the bill would result in a revenue loss to the Workers’ Compensation Debt Reduction Fund by approximately $26.3 million in FY2016 and $28.7 million in subsequent years.
    
    According to W.Va. Code §11-13V-4, an independent certified actuary has to determine that the unfunded liability of the Workers’ Compensation Debt Reduction Fund has been paid or provided for in its entirety. The Governor also has to certify that the payment of the debt service has been provided. According to the Office of the Insurance Commissioner, the Workers’ Compensation Debt should be paid off by the end of calendar year 2016. This bill could delay that payoff date, thereby extending other temporary revenue dedications and temporary taxes on employers and others for a longer period of time.
    
    Additional administrative costs to the State Tax Department would be $60,000 in FY2015. There would be no additional administrative costs in subsequent years.



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 60,000 0 0
Personal Services 60,000 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 -26,300,000 -28,700,000


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


    The bill would reduce the tax rate for the additional tax on coal from 56 cents to 28 cents. Passage of the bill would result in a revenue loss to the Workers’ Compensation Debt Reduction Fund by approximately $26.3 million in FY2016 and $28.7 million in subsequent years.
    
    According to W.Va. Code §11-13V-4, an independent certified actuary has to determine that the unfunded liability of the Workers’ Compensation Debt Reduction Fund has been paid or provided for in its entirety. The Governor also has to certify that the payment of the debt service has been provided. According to the Office of the Insurance Commissioner, the Workers’ Compensation Debt should be paid off by the end of calendar year 2016. This bill could delay that payoff date, thereby extending other temporary revenue dedications and temporary taxes on employers and others for a longer period of time.
    
    Additional administrative costs to the State Tax Department would be $60,000 in FY2015. There would be no additional administrative costs in subsequent years.
    



Memorandum


    



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