FISCAL NOTE

Date Requested: February 09, 2017
Time Requested: 07:50 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1188 Introduced SB62
CBD Subject: Taxation


FUND(S):

Local Governments

Sources of Revenue:

Other Fund local governments

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 provide an option for certain governmental entities to extend the term of a tax increment financing district from a maximum of 30 years to a maximum of 40 years if tax increment financing obligations were issued for that district in the years leading up to the most recent United States economic recession. The Tax Department cannot quantify the local or state tax revenue impact of this proposal. For Tax Increment Financing Districts that are extended, the local government entities in that county would be denied property taxes on the increment for another 10 years. There would be no administrative costs to the Tax Department.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
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):


The Tax Department cannot quantify the local or state tax revenue impact of this proposal. For Tax Increment Financing Districts that are extended, the local government entities in that county would be denied property taxes on the increment for another 10 years. There would be no administrative costs to the Tax Department.



Memorandum


The stated purpose of this bill is to provide an option for certain governmental entities to extend the term of a tax increment financing district from a maximum of 30 years to a maximum of 40 years if tax increment financing obligations were issued for that district in the years leading up to the most recent United States economic recession. Giving Tax Increment Financing Districts (TIFs) the authority to terminate without paying the principal, interest, and other fees of the bonds issued may hurt the ability to issue the bonds. It is arguably contrary to the spirit of Article 10, Section 8 of the West Virginia Constitution, which requires the payment of indebtedness by counties and municipalities not to exceed 34 years.



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