FISCAL NOTE

Date Requested: January 16, 2018
Time Requested: 11:25 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1693 Introduced HB4144
CBD Subject: Governor -- Bills Requested By


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Increases Revenue From Existing Sources



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The stated purpose of this bill is to provide a date after which no further Film Tax Credits will be issued, while allowing tax credits issued prior to a certain date to be grandfathered, and winding up the operations of the WV Film Office.
    
    According to our interpretation, passage of this bill would result in all operations of the West Virginia Film Office to cease effective July 1, 2018. The Division of Tourism would settle, finalize and conclude business related to outstanding film credits issued prior to this date.
    
    Based on recent trends, passage of this bill will result in a minimal increase to the General Revenue Fund in FY2019 and gradually rising to a peak of roughly $3 million to $4 million by FY2021 at the latest. Current law allocates up to $5 million per year in tax credits for qualified film production. The total amount allotted in most years tends to fall below the cap. In addition, there is significant delay between the allotment of tax credits and their utilization on tax returns given that most of these tax credits are sold to third parties.
    
    No additional administrative costs would be incurred by the State Tax Department.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
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):


    According to our interpretation, passage of this bill would result in all operations of the West Virginia Film Office to cease effective July 1, 2018. The Division of Tourism would settle, finalize and conclude business related to outstanding film credits issued prior to this date.
    
    Based on recent trends, passage of this bill will result in a minimal increase to the General Revenue Fund in FY2019 and gradually rising to a peak of roughly $3 million to $4 million by FY2021 at the latest. Current law allocates up to $5 million per year in tax credits for qualified film production. The total amount allotted in most years tends to fall below the cap. In addition, there is significant delay between the allotment of tax credits and their utilization on tax returns given that most of these tax credits are sold to third parties.
    
    No additional administrative costs would be incurred by the State Tax Department.
    
    



Memorandum


    



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