FISCAL NOTE

Date Requested: January 31, 2018
Time Requested: 01:19 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2288 Introduced SB441
CBD Subject: Taxation


FUND(S):

Medicaid State Share Fund

Sources of Revenue:

Other Fund Medicaid State Share Fund

Legislation creates:





Fiscal Note Summary


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


    The stated purpose of this bill is to extend the directed payment program tax on certain eligible acute care hospitals for three years.
    
    According to our interpretation, the proposed bill would extend the current Acute Care Tax rate of 0.75 percent through June 30, 2021. Absent this bill, the Acute Care Tax as codified in West Virginia Code §11-27-38 would expire June 30, 2018, with the final quarterly payment accruing in July 2018. Passage of this bill would continue the Acute Care Tax through FY2021 and is expected to yield roughly $30.6 million in collections in FY2019, $31.4 million in FY2020, and $32.2 million in FY2021. Per the language of the proposed bill, the Acute Care Tax at the rate of 0.75 percent of gross receipts would expire June 30, 2021, with the final quarterly payment of approximately $8.1 million accruing in July 2021.
    
    No additional costs are expected to 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, the proposed bill would extend the current Acute Care Tax rate of 0.75 percent through June 30, 2021. Absent this bill, the Acute Care Tax as codified in West Virginia Code §11-27-38 would expire June 30, 2018, with the final quarterly payment accruing in July 2018. Passage of this bill would continue the Acute Care Tax through FY2021 and is expected to yield roughly $30.6 million in collections in FY2019, $31.4 million in FY2020, and $32.2 million in FY2021. Per the language of the proposed bill, the Acute Care Tax at the rate of 0.75 percent of gross receipts would expire June 30, 2021, with the final quarterly payment of approximately $8.1 million accruing in July 2021.
    
    No additional costs are expected to be incurred by the State Tax Department.
    



Memorandum


    The stated purpose of this bill is to extend the directed payment program tax on certain eligible acute care hospitals for three years.
    
    There may be a title defect in that the bill title refers to the “directed payment program tax,” which is not what the tax is called in statute.
    
    



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