SB616 HFIN AM 3-10 AC

The Committee on Finance moved to amend the bill on page two, following the enacting clause, by striking the remainder of the bill and inserting in lieu thereof the following:

“That §4-11A-18 of the Code of West Virginia, 1931, as amended, be amended and reenacted; that §5-16-3 and §5-16-5 of said code be amended and reenacted; that §5-16D-1 and §5-16D-6 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §5-16D-7; that §11-10-5d of said code be amended and reenacted; that §11-21-96 of said code be amended and reenacted; that §11B-2-20 of said code be amended and reenacted; and that §18-9A-24 of said code be amended and reenacted, all to read as follows:

CHAPTER 4. THE LEGISLATURE.

ARTICLE 11A. LEGISLATIVE APPROPRIATION OF TOBACCO SETTLEMENT FUNDS.

§4-11A-18. Dedication of personal income tax proceeds as replacement moneys for anticipated tobacco master settlement agreement proceeds to the Old Fund and to the West Virginia Retiree Health Benefit Fund.

(a) There is hereby dedicated an annual amount of $50,400,000 from annual collections of the tax imposed by article twenty-one, chapter eleven of this code as a portion of the revenue source dedicated to satisfy the Old Fund liabilities as they occur to provide a dollar for dollar replacement of the first $30 million received pursuant to section IX(c)(1) of the master settlement agreement and the anticipated strategic compensation payments to be received pursuant to section IX(c)(2) of the master settlement agreement as previously dedicated to the Old Fund prior to the sale of state's share to the Tobacco Settlement Finance Authority. No portion of this amount may be pledged for payment of debt service on revenue bonds issued pursuant to article two-d, chapter twenty-three of this code.

(b) Notwithstanding any other provision of this code to the contrary, beginning immediately after the sale of the state's share to the Tobacco Settlement Finance Authority, $50,400,000 from collections of the tax imposed by article twenty-one, chapter eleven of this code shall be deposited each calendar year to the credit of the Old Fund created in article two-d, chapter twenty-three of this code in accordance with the following schedule. Each calendar month, except for July, August and September each year, $5,600,000 shall be transferred, on or before the twenty-eighth day of the month, to the Workers' Compensation Debt Reduction Fund created in article two-d, chapter twenty-three of this code. The transfers pursuant to this section are in addition to the transfers pursuant to section ninety-six, article twenty-one, chapter eleven of this code.

(c) Expiration. The transfers required by this section shall continue to be made until the Governor certifies to the Legislature that an independent actuary study determined that the unfunded liability of the Old Fund, as defined in chapter twenty-three of this code, has been paid or provided for in its entirety. After the Governor certifies to the Legislature that the unfunded liability has been paid or provided for in its entirety as required by this subsection, the amounts deposited pursuant to subsection (b) of this section, shall thereafter be deposited, in accordance with the schedule provided in subsection (b) of this section, into the West Virginia Retiree Health Benefit Trust Fund, until the Governor certifies to the Legislature that an independent actuarial study determined that the unfunded liability of the West Virginia Retiree Health Benefit Trust Fund, as created in section two, article sixteen-d, chapter five of this code has been provided for in its entirety. No transfer pursuant to this section shall be made thereafter.

CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,

SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD

OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,

OFFICES, PROGRAMS, ETC.

ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.

§5-16-3. Composition of Public Employees Insurance Agency; appointment, qualification, compensation and duties of Director of Agency; employees; civil service coverage.

(a) The Public Employees Insurance Agency consists of the Director, the Finance Board, the Advisory Board and any employees who may be authorized by law. The Director shall be appointed by the Governor, with the advice and consent of the Senate, and serves at the will and pleasure of the Governor. The Director shall have at least three years' experience in health or governmental health benefit administration as his or her primary employment duty prior to appointment as director. The Director shall receive actual expenses incurred in the performance of official business. The Director shall employ any administrative, technical and clerical employees required for the proper administration of the programs provided in this article. The Director shall perform the duties that are required of him or her under the provisions of this article and is the Chief Administrative Officer of the Public Employees Insurance Agency. The Director may employ a deputy director.

(b) Except for the Director, his or her personal secretary, the Deputy Director and the Chief Financial Officer, all positions in the Agency shall be included in the classified service of the civil service system pursuant to article six, chapter twenty-nine of this code.

(c) The Director is responsible for the administration and management of the Public Employees Insurance Agency as provided in this article and in connection with his or her responsibility may make all rules necessary to effectuate the provisions of this article. Nothing in section four or five of this article limits the Director's ability to manage on a day-to-day basis the group insurance plans required or authorized by this article, including, but not limited to, administrative contracting, studies, analyses and audits, eligibility determinations, utilization management provisions and incentives, provider negotiations, provider contracting and payment, designation of covered and noncovered services, offering of additional coverage options or cost containment incentives, pursuit of coordination of benefits and subrogation or any other actions which would serve to implement the plan or plans designed by the Finance Board. The Director is to function as a benefits management professional and should avoid political involvement in managing the affairs of the Public Employees Insurance Agency.

(d) On July 1, 2011, and every year thereafter, the Director shall provide the Joint Committee on Government and Finance a progress report on the implementation of the following payment and delivery system reforms:

(1) The establishment of accountable care organizations that will be responsible for the quality of care provided to employees and/or retired employees. The report will include the number and type of medical providers that are participating in the accountable care organizations, the number of covered lives participating in the accountable care organizations, the quality measures mutually adopted by the director and the accountable care organizations, the results in changes in these quality measures, and how the agency is reimbursing the accountable care organizations. To the maximum extent possible, the Director shall establish accountable care organizations in conjunction with Medicaid and private health insurance carriers.

(2) The number of federally qualified health centers and private physician offices that are accredited as medical homes by the National Committee for Quality Assurance, the number of employees and/or retired employees who use these medical homes, the amount of payment by the agency to medical homes for care coordination and other services, the saving, if any, in reduced emergency room use, hospital admissions or other services by employees and/or retired employees who use medical homes, the quality measures mutually adopted by the director and the medical homes, and the results in changes in these quality measures. To the maximum extent possible, the Director shall establish medical homes in conjunction with Medicaid and private health insurance carriers.

(3) The number of federally qualified health centers and private physician offices that accept a capitated reimbursement rate for providing employees and retired employees preventive and primary care, the quality measures mutually adopted by the director and the federally qualified health centers or private physician offices, the results in changes in these quality measures, and any cost saving from the use of capitated reimbursement rates.

(4) The number of employees and retired employees who are admitted to a hospital and after having been admitted to a hospital for more than twenty-four hours acquires an infection, the cost of treating these infections, and the steps taken by the Director to limit or eliminate the payment by the agency for treating hospital acquired infections.

(5) The number of employees and retired employees who are re-admitted to a hospital for the same diagnosis related group illness within thirty days of being discharged by a hospital in the state or another state. If the agency determines that a hospital has a re-admission rate above the national average, the agency shall conduct a random chart review to determine whether the hospital is appropriately coordinating the care of employees and retired employees being discharged from the hospital, documentation on the steps taken by the agency to reduce the number of employees and retired employees who are re-admitted within a thirty day period for the same diagnosis related group, and the cost savings, if any, related to this corrective action.

(6) The steps taken by the Director to identify high performing and low performing hospitals and physicians, the action taken to promote the use of high performing hospitals and doctors and discourage use of low performing hospitals and physicians by employees and retired employees, and the cost savings for promoting the use of high performing hospitals and physicians. The Director may use claims data from the agency, Medicaid, Medicare or private health insurance carriers to determine high and low performing hospitals and physicians.

(7) The number of employees and retired employees who have multiple chronic illnesses and the steps taken by the Director to coordinate the care of these patients and any savings from this coordination of care.

(8) The number and cost of generic drugs filled for employees and retired employees during the previous three months, and the number and cost of brand name prescription drugs filled for employees and retired employees during the previous three months. If the percentage of generic drugs filled in relation to the total number of prescription drugs filled during the previous three months is less than eighty percent, the Director shall include in the progress report what steps are being taken to increase the use of generic drugs. If the total expenditure for employee prescription drug expenditures or the total expenditure for retiree employees increases by more than six percent from one quarter to the next quarter, the Director shall include in the progress reports steps he or she is taking to reduce the total prescription drugs expenditure for employees and for retired employees.

(9) The Director shall include in the progress report any additional cost containment measures that he or she believes are warranted.

(e) Notwithstanding any provision of this code to the contrary, the Director may decrease copayments or coinsurance rates and the Board may decrease or increase copayments or coinsurance rates throughout the plan year in order to encourage the use of accountable care organizations, medical homes, federally qualified health centers and private physician offices that accept capitated rates for preventive and primary care, and the use of high performing hospitals and physician.

§5-16-5. Purpose, powers and duties of the finance board; initial financial plan; financial plan for following year; and annual financial plans.

(a) The purpose of the finance board created by this article is to bring fiscal stability to the Public Employees Insurance Agency through development of annual financial plans and long-range plans designed to meet the agency's estimated total financial requirements, taking into account all revenues projected to be made available to the agency and apportioning necessary costs equitably among participating employers, employees and retired employees and providers of health care services.

(b) The finance board shall retain the services of an impartial, professional actuary, with demonstrated experience in analysis of large group health insurance plans, to estimate the total financial requirements of the Public Employees Insurance Agency for each fiscal year and to review and render written professional opinions as to financial plans proposed by the finance board. The actuary shall also assist in the development of alternative financing options and perform any other services requested by the finance board or the director. All reasonable fees and expenses for actuarial services shall be paid by the Public Employees Insurance Agency. Any financial plan or modifications to a financial plan approved or proposed by the finance board pursuant to this section shall be submitted to and reviewed by the actuary and may not be finally approved and submitted to the Governor and to the Legislature without the actuary's written professional opinion that the plan may be reasonably expected to generate sufficient revenues to meet all estimated program and administrative costs of the agency, including incurred but unreported claims, for the fiscal year for which the plan is proposed. The actuary's opinion on the financial plan for each fiscal year shall allow for no more than thirty days of accounts payable to be carried over into the next fiscal year. The actuary's opinion for any fiscal year shall not include a requirement for establishment of a reserve fund.

(1) Maximum levels of reimbursement which the Public Employees Insurance Agency makes to categories of health care providers;

(2) Any necessary cost-containment measures for implementation by the director;

(3) The levels of premium costs to participating employers; and

(4) The types and levels of cost to participating employees and retired employees.

The financial plans may provide for different levels of costs based on the insured’s ability to pay, as evidenced by the insured member’s and any covered insureds’ West Virginia income tax return. The finance board may establish different levels of costs to retired employees based upon length of employment with a participating employer, ability to pay or other relevant factors. The financial plans may also include optional alternative benefit plans with alternative types and levels of cost. The finance board may develop policies which encourage the use of West Virginia health care providers.

In addition, the finance board may allocate a portion of the premium costs charged to participating employers to subsidize the cost of coverage for participating retired employees, on such terms as the finance board determines are equitable, and financially responsible and consistent with the following:

The finance board may include in the financial plans a subsidy for the cost of coverage for retired employees who were hired before July 1, 2010, not to exceed on average $2,340 per member per year which may not be escalated more than four percent per year: Provided, That if a retiree is not sixty-five years of age or older, the subsidy may not exceed on average $3,960 per member per year which may not be escalated more than two percent per year. If the finance board includes in the financial plan any subsidy pursuant to this section, it must include a schedule of premium subsidies based on, at a minimum, (1) the financial need as determined by a retiree’s and any covered insureds’ entire income as evidenced by the retiree’s and any covered insureds’ West Virginia income tax return; and (2) the retiree’s number of years of service.

(d)(1) The finance board shall prepare an annual financial plan for each fiscal year during which the finance board remains in existence. The finance board chairman shall request the actuary to estimate the total financial requirements of the Public Employees Insurance Agency for the fiscal year.

(2) The finance board shall prepare a proposed financial plan designed to generate revenues sufficient to meet all estimated program and administrative costs of the Public Employees Insurance Agency for the fiscal year. The proposed financial plan shall allow for no more than thirty days of accounts payable to be carried over into the next fiscal year. Before final adoption of the proposed financial plan, the finance board shall request the actuary to review the plan and to render a written professional opinion stating whether the plan will generate sufficient revenues to meet all estimated program and administrative costs of the Public Employees Insurance Agency for the fiscal year. The actuary's report shall explain the basis of its opinion. If the actuary concludes that the proposed financial plan will not generate sufficient revenues to meet all anticipated costs, then the finance board shall make necessary modifications to the proposed plan to ensure that all actuarially determined financial requirements of the agency will be met.

(3) Upon obtaining the actuary's opinion, the finance board shall conduct one or more public hearings in each congressional district to receive public comment on the proposed financial plan, shall review the comments and shall finalize and approve the financial plan.

(4) Any financial plan shall be designed to allow thirty days or less of accounts payable to be carried over into the next fiscal year. For each fiscal year, the Governor shall provide his or her estimate of total revenues to the finance board no later than October 15, of the preceding fiscal year: Provided, That, for the prospective financial plans required by this section, the Governor shall estimate the revenues available for each fiscal year of the plans based on the estimated percentage of growth in general fund revenues. The finance board shall submit its final, approved financial plan, after obtaining the necessary actuary's opinion and conducting one or more public hearings in each congressional district, to the Governor and to the Legislature no later than January 1, preceding the fiscal year. The financial plan for a fiscal year becomes effective and shall be implemented by the director on July 1, of the fiscal year. In addition to each final, approved financial plan required under this section, the finance board shall also simultaneously submit financial statements based on generally accepted accounting practices (GAAP) and the final, approved plan restated on an accrual basis of accounting, which shall include allowances for incurred but not reported claims: Provided, however, That the financial statements and the accrual-based financial plan restatement shall not affect the approved financial plan.

(e) The provisions of chapter twenty-nine-a of this code shall not apply to the preparation, approval and implementation of the financial plans required by this section.

(f) By January 1 of each year, the finance board shall submit to the Governor and the Legislature a prospective financial plan, for a period not to exceed five years, for the programs provided in this article. Factors that the board shall consider include, but are not limited to, the trends for the program and the industry; the medical rate of inflation; utilization patterns; cost of services; and specific information such as average age of employee population, active to retiree ratios, the service delivery system and health status of the population.

(g) The prospective financial plans shall be based on the estimated revenues submitted in accordance with subdivision (4), subsection (d) of this section and shall include an average of the projected cost-sharing percentages of premiums and an average of the projected deductibles and copays for the various programs. Beginning in the plan year which commences on July 1, 2002, and in each plan year thereafter, until and including the plan year which commences on July 1, 2006, the prospective plans shall include incremental adjustments toward the ultimate level required in this subsection, in the aggregate cost-sharing percentages of premium between employers and employees, including the amounts of any subsidization of retired employee benefits. Effective in the plan year commencing on July 1, 2006, and in each plan year thereafter, the aggregate premium cost-sharing percentages between employers and employees, including the amounts of any subsidization of retired employee benefits, shall be at a level of eighty percent for the employer and twenty percent for employees, except for the employers provided in subsection (d), section eighteen of this article whose premium cost-sharing percentages shall be governed by that subsection. After the submission of the initial prospective plan, the board may not increase costs to the participating employers or change the average of the premiums, deductibles and copays for employees, except in the event of a true emergency as provided in this section: Provided, That if the board invokes the emergency provisions, the cost shall be borne between the employers and employees in proportion to the cost-sharing ratio for that plan year: Provided, however, That for purposes of this section, "emergency" means that the most recent projections demonstrate that plan expenses will exceed plan revenues by more than one percent in any plan year: Provided further, That the aggregate premium cost-sharing percentages between employers and employees, including the amounts of any subsidization of retired employee benefits, may be offset, in part, by a legislative appropriation for that purpose.

(h) The finance board shall meet on at least a quarterly basis to review implementation of its current financial plan in light of the actual experience of the Public Employees Insurance Agency. The board shall review actual costs incurred, any revised cost estimates provided by the actuary, expenditures and any other factors affecting the fiscal stability of the plan and may make any additional modifications to the plan necessary to ensure that the total financial requirements of the agency for the current fiscal year are met. The finance board may not increase the types and levels of cost to employees during its quarterly review except in the event of a true emergency.

(i) For any fiscal year in which legislative appropriations differ from the Governor's estimate of general and special revenues available to the agency, the finance board shall, within thirty days after passage of the budget bill, make any modifications to the plan necessary to ensure that the total financial requirements of the agency for the current fiscal year are met.

ARTICLE 16D. RETIREMENT HEALTH BENEFIT TRUST FUND.

§5-16D-1. Definitions.

As used in this article, the term:

(a) “Actuarial accrued liability” means that portion, as determined by a particular actuarial cost method, of the actuarial present value of fund obligations and administrative expenses which is not provided by future normal costs.

(b) “Actuarial cost method” means a method for determining the actuarial present value of the obligations and administrative expenses of the fund and for developing an actuarially equivalent allocation of the value to time periods, usually in the form of a normal cost and an actuarial accrued liability. Acceptable actuarial methods are the aggregate, attained age, entry age, frozen attained age, frozen entry age and projected unit credit methods.

(c) “Actuarially sound” means that calculated contributions to the fund are sufficient to pay the full actuarial cost of the fund. The full actuarial cost includes both the normal cost of providing for fund obligations as they accrue in the future and the cost of amortizing the unfunded actuarial accrued liability over a period of no more than thirty years.

(d) “Actuarial present value of total projected benefits” means the present value, at the valuation date, of the cost to finance benefits payable in the future, discounted to reflect the expected effects of the time value of money and the probability of payment.

(e) “Actuarial assumptions” means assumptions regarding the occurrence of future events affecting the fund such as mortality, withdrawal, disability and retirement; changes in compensation and offered post-employment benefits; rates of investment earnings and other asset appreciation or depreciation; procedures used to determine the actuarial value of assets; and other relevant items.

(f) “Actuarial valuation” means the determination, as of a valuation date, of the normal cost, actuarial accrued liability, actuarial value of assets and related actuarial present values for the fund.

(g) “Administrative expenses” means all expenses incurred in the operation of the fund, including all investment expenses.

(h) “Annual required contribution” means the amount employers must contribute in a given year to fully fund the trust, as determined by the actuarial valuation in accordance with requirements of generally accepted accounting principles. This amount shall represent a level of funding that if paid on an ongoing basis is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities of the plan over a period not to exceed thirty years.

(i) “Board” means the Public Employees Insurance Agency Finance Board created in section four, article sixteen of this chapter.

(j) “Contractually required contribution” means an amount determined annually by the board to be billed to each employer, which amount shall at least equal the minimum annual employer payment and may be any amount up to, but may not exceed, the employer annual required contribution.

(j) (k) “Cost-sharing multiple employer plan” means a single plan with pooling (cost-sharing) arrangements for the participating employers. All risk, rewards, and costs, including benefit costs, are shared and not attributed individually to the employers. A single actuarial valuation covers all plan members and the same contribution rate applies for each employer.

(k) (l) “Covered health care expenses” means all actual health care expenses paid by the health plan on behalf of fund beneficiaries. Actual health care expenses include claims payments to providers and premiums paid to intermediary entities and health care providers by the health plan.

(l) (m) “Employer” means any employer as defined by section two, article sixteen of this chapter which has or will have retired employees in any Public Employees Insurance Agency health plan.

(m) (n) “Employer annual required contribution” means the portion of the annual required contribution which is the responsibility of that particular employer.

(n) (o) “Fund” means the West Virginia Retiree Health Benefit Trust Fund established under this article.

(o) (p) “Fund beneficiaries” means all persons receiving post-employment health care benefits through the health plan.

(p) (q) “Health plan” means the health insurance plan or plans established under article sixteen of this chapter.

(q) (r) “Minimum annual employer payment” means the annual amount paid by employers which, when combined with the retirees’ contributions on their premiums that year, provide sufficient funds such that the annual finance plan of the finance board will cover all projected retiree covered health care expenses and related administrative costs for that year. The finance board shall develop the minimum annual employer payment as part of its financial plan each year as addressed in section five, article sixteen of this chapter.

(r) (s) “Normal cost” means that portion of the actuarial present value of the fund obligations and expenses which is allocated to a valuation year by the actuarial cost method used for the fund.

(s) (t) “Obligations” means the administrative expenses of the fund and the cost of covered health care expenses incurred on behalf of fund beneficiaries.

(t) (u)“Other post-employment benefits” or “retiree post-employment health care benefits” means those benefits as addressed by governmental accounting standards board statement no. 43 or any subsequent governmental standards board statement that may be applicable to the fund.

(u) (v) “Plan for other post-employment benefits” means the fiscal funding plan for retiree post-employment health care benefits as it relates to governmental accounting standards board statement no. 43 or any subsequent governmental accounting standards board statements that may be applicable to the fund.

(v) (w) “Retiree” means retired employee as defined by section two, article sixteen of this chapter.

(w) (x) “Retirement system” or “system” means the West Virginia Consolidated Public Retirement Board created and established by article ten of this chapter and includes any retirement systems or funds administered or overseen by the Consolidated Public Retirement Board.

(x) (y) “Unfunded actuarial accrued liability” means for any actuarial valuation the excess of the actuarial accrued liability over the actuarial value of the assets of the fund under an actuarial cost method used by the fund for funding purposes.

§5-16D-6. Mandatory employer contributions.

(a) The board shall annually set the total annual required contribution sufficient to maintain the fund in an actuarially sound manner in accordance with generally accepted accounting principles.

(b) The board shall annually allocate to the respective employers the employer’s portion of the annual required contribution, which allocated amount is the “employer annual required contribution”.

(c) The board may apportion the annual required contribution into various components. These components may include the amortized unfunded actuarial accrued liability, the total normal cost, the contractually required contributions, the employer annual required contribution and the lesser included minimum annual employer payment. In the board’s annual apportionment of the annual required contribution, any amounts of the minimum annual employer payment apportioned to reduce the amortized unfunded actuarial accrued liability shall not be treated as premium by the board in the finance plan but, rather, shall be treated as contributions to prefund other post-employment benefits.

(d) Employers shall make annual contributions to the fund in, at least, the amount of the minimum annual employer payment rates established by the board.

(e) The Public Employees Insurance Agency shall bill each employer for the employer annual contractually required contribution and the included minimum annual employer payment. The Public Employees Insurance Agency shall annually collect the contractually required contribution and the included minimum annual employer payment. The Public Employees Insurance Agency shall, in addition to the minimum annual employer payment contractually required contribution, collect any amounts the employer elects to pay toward the employer annual required contribution. Subject to section twenty-four, article nine-a, chapter eighteen of this code, any employer annual contractually required contribution amount not satisfied by the respective employer shall remain the liability of that employer until fully paid.

§5-16D-7. Select Committee on Other Post Employment Benefits.

(a) Pursuant to the authority contained in section one, article one, chapter four of this code, the presiding officers of each house of the Legislature may appoint a joint committee to study the effects of the amendments to this code relating to other post employment benefits made during the regular session of the Legislature 2011.

(b) Once formed, the select committee shall specifically monitor the effects on retirees and non-state employers in regards to other post employment benefit costs. The committee shall also work with the public employees insurance agency and the finance board to propose a plan to the Legislature that would provide some alternative benefit for plan employees for whom there is no post employment health benefit.

CHAPTER 11. TAXATION.

ARTICLE 10. WEST VIRGINIA TAX PROCEDURE AND ADMINISTRATION ACT.

§11-10-5d. Confidentiality and disclosure of returns and return information.

(a) General rule. -- Except when required in an official investigation by the Tax Commissioner into the amount of tax due under any article administered under this article or in any proceeding in which the Tax Commissioner is a party before a court of competent jurisdiction to collect or ascertain the amount of such tax and except as provided in subsections (d) through (n) (o), inclusive, of this section, it shall be is unlawful for any officer, employee or agent of this state or of any county, municipality or governmental subdivision to divulge or make known in any manner the tax return, or any part thereof, of any person or disclose information concerning the personal affairs of any individual or the business of any single firm or corporation, or disclose the amount of income, or any particulars set forth or disclosed in any report, declaration or return required to be filed with the Tax Commissioner by any article of this chapter imposing any tax administered under this article or by any rule or regulation of the Tax Commissioner issued thereunder, or disclosed in any audit or investigation conducted under this article. For purposes of this article, tax returns and return information obtained from the Tax Commissioner pursuant to an exchange of information agreement or otherwise pursuant to the provisions of subsections (d) through (n) (o), inclusive, of this section which is in the possession of any officer, employee, agent or representative of any local or municipal governmental entity or other governmental subdivision is subject to the confidentiality and disclosure restrictions set forth in this article: Provided, That such officers, employees or agents may disclose the information in an official investigation, by a local or municipal governmental authority or agency charged with the duty and responsibility to administer the tax laws of the jurisdiction, into the amount of tax due under any lawful local or municipal tax administered by that authority or agency, or in any proceeding in which the local or municipal governmental subdivision, authority or agency is a party before a court of competent jurisdiction to collect or ascertain the amount of the tax. Unlawful disclosure of the information by any officer, employee or agent of any local, municipal or governmental subdivision is subject to the sanctions set forth in this article.

(b) Definitions. -- For purposes of this section:

(1) Background file document. -- The term "background file document", with respect to a written determination, includes the request for that written determination, any written material submitted in support of the request and any communication (written or otherwise) between the State Tax Department and any person outside the State Tax Department in connection with the written determination received before issuance of the written determination.

(2) Disclosure. -- The term "disclosure" means making known to any person in any manner whatsoever a return or return information.

(3) Inspection. -- The terms "inspection" and "inspected" means any examination of a return or return information.

(4) Return. -- The term "return" means any tax or information return or report, declaration of estimated tax, claim or petition for refund or credit or petition for reassessment that is required by, or provided for, or permitted under the provisions of this article (or any article of this chapter administered under this article) which is filed with the Tax Commissioner by, on behalf of, or with respect to any person and any amendment or supplement thereto, including supporting schedules, attachments or lists which are supplemental to, or part of, the return so filed.

(5) Return information. -- The term "return information" means:

(A) A taxpayer's identity; the nature, source or amount of his or her income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, over assessments or tax payments, whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, or any other data received by, recorded by, prepared by, furnished to or collected by the Tax Commissioner with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) or by any person under the provisions of this article (or any article of this chapter administered under this article) for any tax, additions to tax, penalty, interest, fine, forfeiture or other imposition or offense; and

(B) Any part of any written determination or any background file document relating to such written determination. "Return information" does not include, however, data in a form which cannot be associated with or otherwise identify, directly or indirectly, a particular taxpayer. Nothing in the preceding sentence, or in any other provision of this code, shall be construed to require the disclosure of standards used or to be used for the selection of returns for examination or data used or to be used for determining such standards.

(6) Tax administration. -- The term "tax administration" means:

(A) The administration, management, conduct, direction and supervision of the execution and application of the tax laws or related statutes of this state and the development and formulation of state and local tax policy relating to existing or propose date proposed state and local tax laws and related statutes of this state; and

(B) Includes assessment, collection, enforcement, litigation, publication and statistical gathering functions under the laws of this state and of local governments.

(7) Taxpayer identity. -- The term "taxpayer identity" means the name of a person with respect to whom a return is filed, his or her mailing address, his or her taxpayer identifying number or a combination thereof.

(8) Taxpayer return information. -- The term "taxpayer return information" means return information as defined in subdivision (5) of this subsection which is filed with, or furnished to, the Tax Commissioner by or on behalf of the taxpayer to whom such return information relates.

(9) Written determination. -- The term "written determination" means a ruling, determination letter, technical advice memorandum or letter or administrative decision issued by the Tax Commissioner.

(c) Criminal penalty. -- Any officer, employee or agent (or former officer, employee or agent) of this state or of any county, municipality or governmental subdivision who violates this section shall be is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $1,000 or imprisoned confined in jail for not more than one year, or both fined and confined, together with costs of prosecution.

(d) Disclosure to designee of taxpayer. -- Any person protected by the provisions of this article may, in writing, waive the secrecy provisions of this section for such purpose and such period as he or she shall therein state. The Tax Commissioner may, subject to such requirements and conditions as he or she may prescribe, thereupon release to designated recipients such taxpayer's return or other particulars filed under the provisions of the tax articles administered under the provisions of this article, but only to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person. However, return information shall not be disclosed to such person or persons if the Tax Commissioner determines that such disclosure would seriously impair administration of this state's tax laws.

(e) Disclosure of returns and return information for use in criminal investigations. -

(1) In general. -- Except as provided in subdivision (3) of this subsection, any return or return information with respect to any specified taxable period or periods shall, pursuant to and upon the grant of an ex parte order by a federal district court judge, federal magistrate or circuit court judge of this state, under subdivision (2) of this subsection, be open (but only to the extent necessary as provided in such order) to inspection by, or disclosure to, officers and employees of any federal agency, or of any agency of this state, who personally and directly engaged in:

(A) Preparation for any judicial or administrative proceeding pertaining to the enforcement of a specifically designated state or federal criminal statute to which this state, the United States or such agency is or may be a party;

(B) Any investigation which may result in such a proceeding; or

(C) Any state or federal grand jury proceeding pertaining to enforcement of such a criminal statute to which this state, the United States or such agency is or may be a party. Such inspection or disclosure shall be solely for the use of such officers and employees in such preparation, investigation or grand jury proceeding.

(2) Application of order. -- Any United States attorney, any special prosecutor appointed under Section 593 of Title 28, United States Code, or any attorney in charge of a United States justice department criminal division organized crime strike force established pursuant to Section 510 of Title 28, United States Code, may authorize an application to a circuit court judge or magistrate, as appropriate, for the order referred to in subdivision (1) of this subsection. Any prosecuting attorney of this state may authorize an application to a circuit court judge of this state for the order referred to in said subdivision. Upon the application, the judge or magistrate may grant such order if he or she determines on the basis of the facts submitted by the applicant that:

(A) There is reasonable cause to believe, based upon information believed to be reliable, that a specific criminal act has been committed;

(B) There is reasonable cause to believe that the return or return information is or may be relevant to a matter relating to the commission of such act; and

(C) The return or return information is sought exclusively for use in a state or federal criminal investigation or proceeding concerning such act and the information sought to be disclosed cannot reasonably be obtained, under the circumstances, from another source.

(3) The Tax Commissioner may not disclose any return or return information under subdivision (1) of this subsection if he or she determines and certifies to the court that the disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation.

(f) Disclosure to person having a material interest. -- The Tax Commissioner may, pursuant to legislative regulations promulgated by him or her, and upon such terms as he or she may require, disclose a return or return information to a person having a material interest therein: Provided, That such disclosure shall only be made if the Tax Commissioner determines, in his or her discretion, that the disclosure would not seriously impair administration of this state's tax laws.

(g) Statistical use. -- This section shall not be construed to prohibit the publication or release of statistics so classified as to prevent the identification of particular returns and the items thereof.

(h) Disclosure of amount of outstanding lien. -- If notice of lien has been recorded pursuant to section twelve of this article, the amount of the outstanding obligation secured by such lien may be disclosed to any person who furnishes written evidence satisfactory to the Tax Commissioner that such person has a right in the property subject to the lien or intends to obtain a right in such property.

(i) Reciprocal exchange. -- The Tax Commissioner may, pursuant to written agreement, permit the proper officer of the United States, or the District of Columbia or any other state, or any political subdivision of this state, or his or her authorized representative, who is charged by law with responsibility for administration of a similar tax, to inspect reports, declarations or returns filed with the Tax Commissioner or may furnish to such officer or representative a copy of any document, provided any other jurisdiction grants substantially similar privileges to the Tax Commissioner or to the Attorney General of this state: Provided, That pursuant to written agreement the Tax Commissioner may provide to the assessor of any county, sheriff of any county, or the mayor of any West Virginia municipality the federal employer identification number of any business being carried on within the jurisdiction of the requesting assessor, sheriff or mayor. The disclosure shall be only for the purpose of, and only to the extent necessary in, the administration of tax laws: Provided, That the information may not be disclosed to the extent that the Tax Commissioner determines that such disclosure would identify a confidential informant or seriously impair any civil or criminal tax investigation.

(j) Exchange with municipalities. -- The Tax Commissioner shall, upon the written request of the mayor or governing body of any West Virginia municipality, allow the duly authorized agent of the municipality to inspect and make copies of the state business and occupation tax return filed by taxpayers of the municipality and any other state tax returns (including, but not limited to, consumers sales and services tax return information and health care provider tax return information) as may be reasonably requested by the municipality. Such inspection or copying shall include disclosure to the authorized agent of the municipality for tax administration purposes of all available return information from files of the tax department relating to taxpayers who transact business within the municipality. The Tax Commissioner shall be permitted to inspect or make copies of any tax return and any return information or other information related thereto in the possession of any municipality or its employees, officers, agents or representatives that has been submitted to or filed with the municipality by any person for any tax including, but not limited to, the municipal business and occupation tax, public utility tax, municipal license tax, tax on purchases of intoxicating liquors, license tax on horse racing or dog racing and municipal amusement tax.

(k) Release of administrative decisions. -- The Tax Commissioner shall release to the public his or her administrative decisions, or a summary thereof: Provided, That unless the taxpayer appeals the administrative decision to circuit court or waives in writing his or her rights to confidentiality, any identifying characteristics or facts about the taxpayer shall be omitted or modified to an extent so as to not disclose the name or identity of the taxpayer.

(l) Release of taxpayer information. -- If the Tax Commissioner believes that enforcement of the tax laws administered under this article will be facilitated and enhanced thereby, he or she shall disclose, upon request, the names and address of persons:

(A) Who have a current business registration certificate.

(B) Who are licensed employment agencies.

(D) Who are licensed to sell drug paraphernalia.

(E) Who are distributors of gasoline or special fuel.

(F) Who are contractors.

(G) Who are transient vendors.

(H) Who are authorized by law to issue a sales or use tax exemption certificate.

(I) Who are required by law to collect sales or use taxes.

(J) Who are foreign vendors authorized to collect use tax.

(K) Whose business registration certificate has been suspended or canceled or not renewed by the Tax Commissioner.

(L) Against whom a tax lien has been recorded under section twelve of this article (including any particulars stated in the recorded lien).

(M) Against whom criminal warrants have been issued for a criminal violation of this state's tax laws.

(N) Who have been convicted of a criminal violation of this state's tax laws.

(m) Disclosure of return information to child support enforcement division. --

(1) State return information. -- The Tax Commissioner may, upon written request, disclose to the child support enforcement division created by article two, chapter forty-eight-a of this code:

(A) Available return information from the master files of the tax department relating to the Social Security account number, address, filing status, amounts and nature of income and the number of dependents reported on any return filed by, or with respect to, any individual with respect to whom child support obligations are sought to be enforced; and

(B) Available state return information reflected on any state return filed by, or with respect to, any individual described in paragraph (A) of this subdivision relating to the amount of the individual's gross income, but only if such information is not reasonably available from any other source.

(2) Restrictions on disclosure. -- The Tax Commissioner shall disclose return information under subdivision (1) of this subsection only for purposes of, and to the extent necessary in, collecting child support obligations from and locating individuals owing such obligations.

(n) Disclosure of names and addresses for purposes of jury selection. -- The Tax Commissioner shall, at the written request of a circuit court or the chief judge thereof, provide to the circuit court within thirty calendar days a list of the names and addresses of individuals residing in the county or counties comprising the circuit who have filed a state personal income tax return for the preceding tax year. The list provided shall set forth names and addresses only. The request shall be limited to counties within the jurisdiction of the requesting court.

The court, upon receiving the list or lists, shall direct the jury commission of the appropriate county to merge the names and addresses with other lists used in compiling a master list of residents of the county from which prospective jurors are to be chosen. Immediately after the master list is compiled, the jury commission shall cause the list provided by the Tax Commissioner and all copies thereof to be destroyed and shall certify to the circuit court and to the Tax Commissioner that the lists have been destroyed.

(o) Disclosure of return information to Public Employees Insurance Agency. --

(1) The Tax Commissioner may, upon written request by the Finance Board of the Public Employees Insurance Agency, disclose to the Finance Board, all available return information from the master files of the tax department relating to the Social Security account number, address, filing status, amounts and nature of income and the number of dependents reported on any return filed by, or with respect to, any individual receiving coverage from the Public Employees Insurance Agency. The Tax Commissioner may authorize disclosures authorized by this subsection in the form of regular, automated exchanges.

(2) Restrictions on disclosure. -- The Tax Commissioner shall disclose return information under subdivision (1) of this subsection only for purposes of, and to the extent necessary in, establishing income for all family wage earners covered by the Public Employees Insurance Agency to determine total income sliding scale premiums.

ARTICLE 21. PERSONAL INCOME TAX.

§11-21-96. Dedication of personal income tax proceeds.

(a) There is hereby dedicated an annual amount of $45 million from annual collections of the tax imposed by this article for payment of the unfunded liability of the current workers compensation fund. No portion of this amount may be pledged for payment of debt service on revenue bonds issued pursuant to article two-d, chapter twenty-three of this code.

(b) Notwithstanding any other provision of this code to the contrary, beginning in January 2006, $45 million from collections of the tax imposed by this article shall be deposited each calendar year to the credit of the old fund created in article two-c, chapter twenty-three of this code, in accordance with the following schedule. Each calendar month, except for July, August and September each year, $5 million shall be transferred, on or before the twenty-eighth day of the month, to the workers' compensation debt reduction fund created in article two-d, chapter twenty-three of this code.

(c) Expiration. The transfers required by this section shall continue to be made until the Governor certifies to the Legislature that an independent actuary actuarial study determined that the unfunded liability of the old fund, as defined in chapter twenty-three of this code, has been paid or provided for in its entirety. Thereafter, the $45 million transferred pursuant to this section to the credit of the old fund shall be transferred in accordance with the same schedule into West Virginia Retiree Health Benefit Trust Fund, until the Governor certifies to the Legislature that an independent actuarial study determined that the unfunded liability of the West Virginia Retiree Health Benefit Trust Fund, as created in chapter five, article sixteen-D, section two of this code has been provided for in its entirety. No transfer pursuant to this section shall be made thereafter.

CHAPTER 11B. DEPARTMENT OF REVENUE.

ARTICLE 2. STATE BUDGET OFFICE.

§11B-2-20. Reduction of appropriations; powers of Governor; Revenue Shortfall Reserve Fund and permissible expenditures therefrom uses thereof.

(a) Notwithstanding any provision of this section, the Governor may reduce appropriations according to any of the methods set forth in sections twenty-one and twenty-two of this article. The Governor may, in lieu of imposing a reduction in appropriations, request an appropriation by the Legislature from the Revenue Shortfall Reserve Fund established in this section.

(b) A Revenue Shortfall Reserve Fund is hereby continued within the State Treasury. The Revenue Shortfall Reserve Fund shall be funded as set forth in this subsection from surplus revenues, if any, in the State Fund, General Revenue, as the surplus revenues may accrue from time to time. Within sixty days of the end of each fiscal year, the secretary shall cause to be deposited into the Revenue Shortfall Reserve Fund the first fifty percent of all surplus revenues, if any, determined to have accrued during the fiscal year just ended. The Revenue Shortfall Reserve Fund shall be funded continuously and on a revolving basis in accordance with this subsection up to an aggregate amount not to exceed ten percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended. If at the end of any fiscal year the Revenue Shortfall Reserve Fund is funded at an amount equal to or exceeding ten percent of the State's General Revenue Fund budget for the fiscal year just ended, then there shall be no further obligation of the secretary under the provisions of this section to apply any surplus revenues as set forth in this subsection until that time the Revenue Shortfall Reserve Fund balance is less than ten percent of the total appropriations from the state fund, general revenue.

(c) Not earlier than November 1 of each calendar year, if the state's fiscal circumstances are such as to otherwise trigger the authority of the Governor to reduce appropriations under this section or section twenty-one or section twenty-two of this article, then in that event the Governor may notify the presiding officers of both houses of the Legislature in writing of his or her intention to convene the Legislature pursuant to section nineteen, article VI of the Constitution of West Virginia for the purpose of requesting the introduction of a supplementary appropriation bill or to request a supplementary appropriation bill at the next preceding regular session of the Legislature to draw money from the surplus Revenue Shortfall Reserve Fund to meet any anticipated revenue shortfall. If the Legislature fails to enact a supplementary appropriation from the Revenue Shortfall Reserve Fund during any special legislative session called for the purposes set forth in this section or during the next preceding regular session of the Legislature, then the Governor may proceed with a reduction of appropriations pursuant to sections twenty-one and twenty-two of this article. Should any amount drawn from the Revenue Shortfall Reserve Fund pursuant to an appropriation made by the Legislature prove insufficient to address any anticipated shortfall, then the Governor may also proceed with a reduction of appropriations pursuant to sections twenty-one and twenty-two of this article.

(d) Upon the creation of the fund, the Legislature is authorized and may make an appropriation from the Revenue Shortfall Reserve Fund for revenue shortfalls, for emergency revenue needs caused by acts of God or natural disasters or for other fiscal needs as determined solely by the Legislature.

(e) Prior to October 31, in any fiscal year in which revenues are inadequate to make timely payments of the state's obligations, the Governor may by executive order, after first notifying the presiding officers of both houses of the Legislature in writing, borrow funds from the Revenue Shortfall Reserve Fund. The amount of funds borrowed under this subsection shall not exceed one and one-half percent of the general revenue estimate for the fiscal year in which the funds are to be borrowed, or the amount the Governor determines is necessary to make timely payment of the state's obligations, whichever is less. Any funds borrowed pursuant to this subsection shall be repaid, without interest, and redeposited to the credit of the Revenue Shortfall Reserve Fund within ninety days of their withdrawal.

(f) There is hereby created in the State Treasury the “Revenue Shortfall Reserve Fund - Part B.” The Revenue Shortfall Reserve Fund - Part B shall consist of moneys transferred from the West Virginia Tobacco Settlement Medical Trust Fund pursuant to the provisions of section two, article eleven-a, chapter four of this code, repayments made of the loan from the West Virginia Tobacco Settlement Medical Trust Fund to the physician's mutual insurance company pursuant to the provisions of article twenty-f, chapter thirty-three of this code, and all interest and other return earned on the moneys in the Revenue Shortfall Reserve Fund - Part B. Moneys in the Revenue Shortfall Reserve Fund - Part B may be expended solely for the purposes set forth in subsection (d) of this section, subject to the following conditions:

(1) No moneys in the Revenue Shortfall Reserve Fund - Part B nor any interest or other return earned thereon may be expended for any purpose unless all moneys in the Revenue Shortfall Reserve Fund described in subsection (b) of this section have first been expended, except that the interest or other return earned on moneys in the Revenue Shortfall Reserve Fund - Part B may be expended as provided in subdivision (2) of this subsection; and

(2) Notwithstanding any other provision of this section to the contrary, the Legislature may appropriate any interest and other return earned thereon that may accrue on the moneys in the Revenue Shortfall Reserve Fund - Part B after June 30, 2025, for expenditure for the purposes set forth in section three, article eleven-a, chapter four of this code; and

(3) Any appropriation made from Revenue Shortfall Reserve Fund - Part B shall be made only in instances of revenue shortfalls or fiscal emergencies of an extraordinary nature.

(g) Subject to the conditions upon expenditures from the Revenue Shortfall Reserve Fund - Part B prescribed in subsection (f) of this section, in appropriating moneys pursuant to the provisions of this section, the Legislature may in any fiscal year appropriate from the Revenue Shortfall Reserve Fund and the Revenue Shortfall Reserve Fund - Part B a total amount up to, but not exceeding, ten percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended.

(h) (1) Of the moneys in the Revenue Shortfall Reserve Fund, $100 million, or such greater amount as may be certified as necessary by the director of the budget for the purposes of subsection (e) of this section, shall be made available to the West Virginia Board of Treasury Investments for management and investment of the moneys in accordance with the provisions of article six-c, chapter twelve of this code. All other moneys in the Revenue Shortfall Reserve Fund shall be made available to the West Virginia Investment Management Board for management and investment of the moneys in accordance with the provisions of article six, chapter twelve of this code. Any balance of the Revenue Shortfall Reserve Fund including accrued interest and other return earned thereon at the end of any fiscal year shall not revert to the general fund but shall remain in the Revenue Shortfall Reserve Fund for the purposes set forth in this section.

(2) All of the moneys in the Revenue Shortfall Reserve Fund - Part B shall be made available to the West Virginia Investment Management Board for management and investment of the moneys in accordance with the provisions of article six, chapter twelve of this code. Any balance of the Revenue Shortfall Reserve Fund - Part B, including accrued interest and other return earned thereon at the end of any fiscal year, shall not revert to the general fund but shall remain in the Revenue Shortfall Reserve Fund - Part B for the purposes set forth in this section.

(i) Notwithstanding any provision of this section to the contrary, on June 1, 2011, the Treasurer shall transfer into the West Virginia Retiree Health Benefit Trust Fund, as created in section two, article sixteen-d, chapter five of this code, $250 million from the balance of funds available in the Revenue Shortfall Reserve Fund - Part B to better capitalize the trust fund.

CHAPTER 18. EDUCATION.

ARTICLE 9A. PUBLIC SCHOOL SUPPORT.

§18-9A-24. Foundation allowance for public employees insurance fund.

(a) Beginning July 1, one thousand nine hundred ninety-five, and every year thereafter, The allowance to the Public Employees Insurance Agency for school employees shall be made in accordance with the following: The number of individuals employed by county boards of education as professional educators pursuant to section four or five-a of this article, whichever is less, plus the number of individuals employed by county boards of education as service personnel pursuant to section five or five-a of this article, whichever is less, plus the number of individuals employed by county boards as professional student support personnel pursuant to section eight of this article, multiplied by the average premium rate for all county board of education employees established by the Public Employees Insurance Agency Finance Board. The average premium rate for all county board of education employees shall be incorporated into each financial plan developed by the finance board in accordance with section five, article sixteen, chapter five of this code. Such The premiums shall include any proportionate share of retirees subsidy established by the finance board and the difference, if any, between the previous year's actual premium costs and the previous year's appropriation, if the actual cost was greater than the appropriation. The amount of the allowance provided in this subsection shall be paid directly to the West Virginia Public Employees Insurance Agency. Each county board shall reflect its share of the payment as revenue on its financial statements to offset its annual contractually required contribution expense.

(b) Notwithstanding any other provision of section six, article sixteen-d, chapter five of this code to the contrary, any amount of annual contractually required contribution allocated to and billed county boards on or after July 1, 2011, or any amount of the employer annual required contribution allocated and billed to the county boards prior to that date for employees who are employed as professional employees within the limits authorized by section four of this article, employees who are employed as service personnel within the limits authorized by section five of this article, and employees who are employed as professional student support personnel within the limits authorized by section eight of this article, is a liability of the state until fully paid: Provided, That nothing in this subsection requires any specific level of funding by the Legislature in any particular year: Provided, however, That assumption of liability pursuant to this section is not to be construed as creating an employer employee relationship between the state of West Virginia and any employee currently under the employ of a county board.

(b) (c) County boards of education shall be are responsible liable for payments to the Public Employees Insurance Agency the annual contractually required contribution billed county boards on or after July 1, 2011, or any amount of the employer annual required contribution allocated and billed to the county boards prior to that date for individuals who are employed as professional employees above and beyond those authorized by section four of this article, or five-a, whichever is less and individuals who are employed as service personnel above and beyond those authorized by section five of this article and individuals who are employed as professional student support personnel above and beyond those authorized by section eight of this article. and five-a whichever is less For each such employee, the county board of education shall forward to the Public Employees Insurance Agency an amount equal to the average premium rate established by the finance board in accordance with subsection (a) of this section: Provided, That the county board shall pay the actual employer premium costs for any county board employee paid from special revenues, federal or state grants, or sources other than state general revenue or county funds.

(c) (d) Prior to July 1, 1995, nothing in this article shall be construed to limit the ability of county boards of education to use funds appropriated to county boards of education pursuant to this article to pay employer premiums to the Public Employees Insurance Agency for employees whose positions are funded pursuant to this article. Funds appropriated to county boards of education pursuant to this article shall not be used to pay employer premiums for employees of such boards whose positions are not, or will not be within twenty months, funded by funds appropriated pursuant to this article.”.