FISCAL NOTE

Date Requested: January 31, 2018
Time Requested: 02:19 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2368 Amendment - HJUD HB2379
CBD Subject: Taxation


FUND(S):

General Revenue Fund, local governments

Sources of Revenue:

General Fund local property tax

Legislation creates:

Decreases Existing Revenue



Fiscal Note Summary


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


    The purpose of this bill is to establish the Wireless Technology Business Property Valuation Act.
    
    Under the provisions of this bill, antenna and all associated equipment used for the purposes of transmitting cellular or wireless signals for communications purposes constructed or erected between July 1, 2018 and July 1, 2023, would be valued at salvage value for five years immediately following the date of erection. The estimated revenue loss associated with this proposal would be $500,000 in the first year and reach $2.5 million by the fifth year. The revenue loss would decrease in the following four years as the limited time valuation expires. The estimated fifth year revenue loss would be roughly $740,000 to the State General Revenue Fund, $910,000 to local county school boards, $670,000 to county commissions and $180,000 to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2017 Tax Year publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
    
    Additional administrative costs for the State Tax Department would be minimal. Additional costs for local governments cannot be estimated.
    



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):


    Under the provisions of this bill, antenna and all associated equipment used for the purposes of transmitting cellular or wireless signals for communications purposes constructed or erected between July 1, 2018 and July 1, 2023, would be valued at salvage value for five years immediately following the date of erection. The estimated revenue loss associated with this proposal would be $500,000 in the first year and reach $2.5 million by the fifth year. The revenue loss would decrease in the following four years as the limited time valuation expires. The estimated fifth year revenue loss would be roughly $740,000 to the State General Revenue Fund, $910,000 to local county school boards, $670,000 to county commissions and $180,000 to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2017 Tax Year publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
    
    Additional administrative costs for the State Tax Department would be minimal. Additional costs for local governments cannot be estimated.
    



Memorandum


    The purpose of this bill is to establish the Wireless Technology Business Property Valuation Act.
    
    The bill incorrectly assumes that cell towers are locally assessed but in practice towers owned by cellular service providers are assessed by the Board of Public Works. The bill also incorrectly defines an antenna as a tower when, in fact, a cellular tower normally hosts several antennae.
    



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