Date Requested: March 05, 2015
Time Requested: 03:01 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2736 Introduced x
CBD Subject: Military and Veterans


FUND(S):

General Revenue Fund, West Virginia Veteran's Program Fund, Fire Marshall Fees 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 legalize and regulate the selling of fireworks, to create the West Virginia Veterans Program Fund, to impose a special fee on the sale of fireworks, and to use the proceeds for the Veterans Program Fund (as well as other funds).
    
    According to our interpretation, the bill will raise approximately $3.3 million in total revenue. The bill will raise $2.5 million from the 20 percent user fee and $800,000 from the Consumer Sales and Use Tax. The user fee revenue is to be allocated as follows: 50 percent to the West Virginia Veterans Program Fund ($1.3 million), 25 percent to the Fire Protection Fund ($600,000), and 25 percent to the Fire Marshall Fees Fund ($600,000). This money is in addition to the revenue gained through the fees from certificates and registration that the Fire Marshall may collect. There is no internal effective date for the tax changes proposed by this bill. The provisions of West Virginia Code 11-10-5p would control the effective date. Under these provisions, the effective date would be January 1, 2016. Given the seasonal nature of these types of sales, we would expect about $270,000 in FY2016 and a full-year of receipts beginning in FY2017. Revenue to the funds would be split accordingly.
    
    Administrative costs to the Tax Department would be $125,000 in FY2016 and $50,000 in each subsequent fiscal year. The bill allows the Tax Department to collect a fee to administer the fees of one percent. The Tax Department will collect approximately $25,000 for this administration in a full fiscal year of collections. The Tax Department will only collect $2,700 in administrative fees in FY2016.



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 0 130,000 50,000
Personal Services 0 50,000 50,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 80,000 0
2. Estimated Total Revenues 0 -270,000 -3,300,000


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


    According to our interpretation, the bill will raise approximately $3.3 million in total revenue. The bill will raise $2.5 million from the 20 percent user fee and $800,000 from the Consumer Sales and Use Tax. The user fee revenue is to be allocated as follows: 50 percent to the West Virginia Veterans Program Fund ($1.3 million), 25 percent to the Fire Protection Fund ($600,000), and 25 percent to the Fire Marshall Fees Fund ($600,000). This money is in addition to the revenue gained through the fees from certificates and registration that the Fire Marshall may collect. There is no internal effective date for the tax changes proposed by this bill. The provisions of West Virginia Code 11-10-5p would control the effective date. Under these provisions, the effective date would be January 1, 2016. Given the seasonal nature of these types of sales, we would expect about $270,000 in FY2016 and a full-year of receipts beginning in FY2017. Revenue to the funds would be split accordingly.
    
    Administrative costs to the Tax Department would be $125,000 in FY2016 and $50,000 in each subsequent fiscal year. The bill allows the Tax Department to collect a fee to administer the fees of one percent. The Tax Department will collect approximately $25,000 for this administration in a full fiscal year of collections. The Tax Department will only collect $2,700 in administrative fees in FY2016.



Memorandum


    The stated purpose of this bill is to legalize and regulate the selling of fireworks, to create the West Virginia Veterans Program Fund, to impose a special fee on the sale of fireworks, and to use the proceeds for the Veterans Program Fund (as well as other funds).
    
    The bill eliminates the Sparkler and Novelty Registration Fee.
    
    It is unclear why the certificates for consumer fireworks are on a separate schedule from the sparkling devices. Retailers who have a certificate for consumer fireworks may also sell sparklers and novelties without obtaining an additional registration for those items. A certificate of registration is required for each location and must be displayed.
    
    It is important to note the NFPA website currently has a notice that the 2013 edition of NFPA 1124 is provided for historical reference only as the edition was temporarily withdrawn by the Standards Council. Also, NFPA is not publically available.
    
    The proposed bill does not address any registration process for manufacturers, wholesalers or distributors, other than stating that a person may not produce or transport a firework that is a new explosive and that is either a division 1.3 or 1.4 explosive unless the first meet the requirements of 49 CFR 173.56(2)(j), which is likely a typo.
    
    The bill does not state how the application fees which are collected by the Fire Marshall are to be used, but the fees do not appear to go into the West Virginia Veterans Program Fund.
    



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