FISCAL NOTE

Date Requested: February 11, 2015
Time Requested: 12:35 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2533 Introduced HB2679
CBD Subject: Resolutions (Interim Study)


FUND(S):

General Revenue Fund

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 create the Good Jobs First Act. The bill requires the reporting of job creation and retention data, tax credit data, and property tax redemptions, abatements, and exemptions to the Department of Revenue. It requires the Department of Revenue to report the data to the Legislature and to publish the reports on the Internet. As written, effective July 1, 2016, this bill would provide for additional reporting on certain tax credits, grants and loans for development assistance. The bill defines “development assistance” to mean “any tax credit administered by the Tax Department that has a job creation or retention qualification or job reporting requirement, or any direct economic development loan or grant administered by the West Virginia Economic Development Authority, the Development Office or the West Virginia Infrastructure and Jobs Development Council.” The bill requires the Department of Revenue to issue tracking numbers for each application for development assistance submitted to a granting body and requires the State Tax Department to obtain a tracking number from the Department of Revenue for each tax return for which a development assistance tax credit is claimed before the tax credit is granted or administered. The bill specifies the information that each granting body is to provide to the Department of Revenue. The bill also requires each Property Tax levying body to report to the Department of Revenue specific information on each assessment valuation determination of real or personal property for an amount less than the fair market value that it made for the purpose of development assistance during the previous tax year. Additionally, the bill requires the Department of Revenue to annually compile and publish written and electronic reports on the information it receives from the reports required by the bill. According to our interpretation, this bill provides for changes in reporting development assistance but will not directly impact revenue. The Department of Revenue and the State Tax Department will incur additional administrative costs associated with passage of this bill of roughly $200,000 in the year following passage of the bill and roughly $150,000 per year thereafter. The Department of Commerce and some other State agencies may incur additional administrative costs due to passage of this bill. Local Property Tax levying bodies will incur additional administrative costs attributable to passage of this bill. Due to the depth of information required to be reported, taxpayers receiving development assistance will incur additional compliance costs attributable to passage of this bill.



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 0 200,000 150,000
Personal Services 0 150,000 150,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 30,000 0
Other 0 20,000 0
2. Estimated Total Revenues 0 0 0


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


As written, effective July 1, 2016, this bill would provide for additional reporting on certain tax credits, grants and loans for development assistance. The bill defines “development assistance” to mean “any tax credit administered by the Tax Department that has a job creation or retention qualification or job reporting requirement, or any direct economic development loan or grant administered by the West Virginia Economic Development Authority, the Development Office or the West Virginia Infrastructure and Jobs Development Council.” The bill requires the Department of Revenue to issue tracking numbers for each application for development assistance submitted to a granting body and requires the State Tax Department to obtain a tracking number from the Department of Revenue for each tax return for which a development assistance tax credit is claimed before the tax credit is granted or administered. The bill specifies the information that each granting body is to provide to the Department of Revenue. The bill also requires each Property Tax levying body to report to the Department of Revenue specific information on each assessment valuation determination of real or personal property for an amount less than the fair market value that it made for the purpose of development assistance during the previous tax year. Additionally, the bill requires the Department of Revenue to annually compile and publish written and electronic reports on the information it receives from the reports required by the bill. According to our interpretation, this bill provides for changes in reporting development assistance but will not directly impact revenue. The Department of Revenue and the State Tax Department will incur additional administrative costs associated with passage of this bill of roughly $200,000 in the year following passage of the bill and roughly $150,000 per year thereafter. The Department of Commerce and some other State agencies may incur additional administrative costs due to passage of this bill. Local Property Tax levying bodies will incur additional administrative costs attributable to passage of this bill. Due to the depth of information required to be reported, Taxpayers receiving development assistance will incur additional compliance costs attributable to passage of this bill.



Memorandum


The stated purpose of this bill is to create the Good Jobs First Act. The bill requires the reporting of job creation and retention data, tax credit data, and property tax redemptions, abatements, and exemptions to the Department of Revenue. It requires the Department of Revenue to report the data to the Legislature and to publish the reports on the Internet. The proposed bill proposes a system by which agencies report to the Department of Revenue which, in turn, reports to the Legislature. All reports are published on-line. The proposed bill fails to address any concerns with taxpayer information which may be protected under W.Va. Code §11-10-5d and other laws.



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