FISCAL NOTE
Date Requested: February 06, 2023
Time Requested: 09:11 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3454 |
Introduced |
SB562 |
|
|---|
| CBD Subject: |
Corporations |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General 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 enact laws authorizing the formation and operation of licensed and unlicensed private trust companies under West Virginia law and to make substantive changes to West Virginia’s rule against perpetuities by replacing its 90 year “wait and see” provision with a 1,000 “wait and see” provision to thereby permit dynastic, multigenerational trusts to be formed under West Virginia law, all in an effort to make West Virginia a more attractive situs for the formation and administration of trusts.
Based on our interpretation, the bill would allow for the creation of licensed and unlicensed private trust companies in West Virginia. A “Private Trust Company” is defined as a corporation or limited liability company that is exclusively owned by one or more family members; is organized or qualified to do business in this state; engages or proposes to engage in private trust business under this chapter with one or more family members; does not serve as a fiduciary for a person, entity, trust, or estate that is not a family member, except that it may serve as a fiduciary for up to 35 individuals who are not family members if the individuals are current or former employees of the private trust company or one or more trusts, companies, or other entities that are family members, and does not transact business with the general public. In addition, the bill amends the “Uniform Statutory Rule Against Perpetuities” to allow for trusts created on or after the effective date of the “West Virginia Private Trust Company Act” to have a “nonvested property interest or power of appointment” terms of up to 1,000 years.
Given that a Private Trust Company under this bill would need to maintain at least $50 million in trust assets, we assume that a very low number of Private Trust Companies would be formed. There is no internal effective date; therefore, if passed, the legislation would become effective 90 days from passage.
According to our interpretation, passage of the bill would result in minimal impact to the General Revenue Fund. There would be no additional administrative costs incurred by the State Tax Department.
0
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
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):
Based on our interpretation, the bill would allow for the creation of licensed and unlicensed private trust companies in West Virginia. A “Private Trust Company” is defined as a corporation or limited liability company that is exclusively owned by one or more family members; is organized or qualified to do business in this state; engages or proposes to engage in private trust business under this chapter with one or more family members; does not serve as a fiduciary for a person, entity, trust, or estate that is not a family member, except that it may serve as a fiduciary for up to 35 individuals who are not family members if the individuals are current or former employees of the private trust company or one or more trusts, companies, or other entities that are family members, and does not transact business with the general public. In addition, the bill amends the “Uniform Statutory Rule Against Perpetuities” to allow for trusts created on or after the effective date of the “West Virginia Private Trust Company Act” to have a “nonvested property interest or power of appointment” terms of up to 1,000 years.
Given that a Private Trust Company under this bill would need to maintain at least $50 million in trust assets, we assume that a very low number of Private Trust Companies would be formed. There is no internal effective date; therefore, if passed, the legislation would become effective 90 days from passage.
According to our interpretation, passage of the bill would result in minimal impact to the General Revenue Fund. There would be no additional administrative costs incurred by the State Tax Department.
Memorandum
The stated purpose of this bill is to enact laws authorizing the formation and operation of licensed and unlicensed private trust companies under West Virginia law and to make substantive changes to West Virginia’s rule against perpetuities by replacing its 90 year “wait and see” provision with a 1,000 “wait and see” provision to thereby permit dynastic, multigenerational trusts to be formed under West Virginia law, all in an effort to make West Virginia a more attractive situs for the formation and administration of trusts.
The bill does not address any potential matters requiring oversight by the West Virginia State Tax Department. The bill provides for some degree of regulatory oversight by the Commissioner of the West Virginia Division of Financial Institutions, and the State Auditor.
The bill has no internal effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov