FISCAL NOTE

Date Requested: January 25, 2016
Time Requested: 01:54 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
1486 Introduced HB4210
CBD Subject: Energy


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 reduce the severance rate for coal mined by underground methods based on the length of belt line or distance travelled in the mine. The bill also provides that underground methods with coal mining operations that have belt lines or travel distances of three miles or 15,840 feet within the mine are small mining operations. The bill is subject to a three-year sunset provision. The State Tax Department was unable to gather statistical data regarding the number of qualifying underground mines or production potentially subject to the provisions of this bill. Permit regulators suggest that proper evaluation would take more than a month to complete. In addition, the provisions of this bill are ambiguous regarding whether the specified belt line or travel distances are maximum or minimum distances. Therefore, we are unable to accurately estimate the potential revenue decrease associated with this bill. The provisions would apply to some mines with average seam thickness greater than 45 inches. Thin-seam mines are already taxed at a lower rate. Additional administrative costs will be $26,500 for the remainder of FY2016. No additional costs are expected.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 26,500 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 26,500 0 0
2. Estimated Total Revenues 0 0 0


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


The State Tax Department was unable to gather statistical data regarding the number of qualifying underground mines or production potentially subject to the provisions of this bill. Permit regulators suggest that proper evaluation would take more than a month to complete. In addition, the provisions of this bill are ambiguous regarding whether the specified belt line or travel distances are maximum or minimum distances. Therefore, we are unable to accurately estimate the potential revenue decrease associated with this bill. The provisions would apply to some mines with average seam thickness greater than 45 inches. Thin-seam mines are already taxed at a lower rate. Additional administrative costs will be $26,500 for the remainder of FY2016. No additional costs are expected.



Memorandum


The stated purpose of this bill is to reduce the severance rate for coal mined by underground methods based on the length of belt line or distance travelled in the mine. The bill also provides that underground methods with coal mining operations that have belt lines or travel distances of three miles or 15,840 feet within the mine are small mining operations. The bill is subject to a three-year sunset provision. The proposed bill does not specify whether the distance travelled within a mine (3 miles or 15,840 feet) is a maximum or minimum distance. The bill also does not state an effective date.



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