FISCAL NOTE

Date Requested: February 10, 2021
Time Requested: 04:42 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1238 Introduced HB2212
CBD Subject:


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 reinstate a personal income tax adjustment to the gross income of certain retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee. For Tax Years which have been approved by the legislature, retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee from the federal Pension Benefit Guaranty Corporation (PBGC) are eligible to receive a personal income tax adjustment equal to the amount of pension income not received. This bill seeks to “reinstate the allowance of the decreasing modification” for Tax Year 2021 and Tax Year 2022. Current W.Va. Code §11-21-12d, which was amended during the 2019 legislative session, provides that the adjustment shall be effective beginning on January 1, 2020, and shall terminate for taxable years on and after January 1, 2023. Per our interpretation, the purpose of the bill has already been accomplished in current law; therefore, passage of the proposed legislation would not impact General Revenue Fund collections and there would be no additional administrative costs.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2021
Increase/Decrease
(use"-")
2022
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):


For Tax Years which have been approved by the legislature, retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee from the federal Pension Benefit Guaranty Corporation (PBGC) are eligible to receive a personal income tax adjustment equal to the amount of pension income not received. This bill seeks to “reinstate the allowance of the decreasing modification” for Tax Year 2021 and Tax Year 2022. Current W.Va. Code §11-21-12d, which was amended during the 2019 legislative session, provides that the adjustment shall be effective beginning on January 1, 2020, and shall terminate for taxable years on and after January 1, 2023. Per our interpretation, the purpose of the bill has already been accomplished in current law; therefore, passage of the proposed legislation would not impact General Revenue Fund collections and there would be no additional administrative costs.  



Memorandum


The stated purpose of this bill is to reinstate a personal income tax adjustment to the gross income of certain retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee. The purpose of the bill has already been accomplished in current law. There may be a question concerning the adequacy of the title. The title states that the tax adjustment is reinstated; but the adjustment currently exists with essentially the same termination date as the bill. In addition, the bill starts from a form of the statute prior to the amendment passed during the 2019 legislative session. The bill has no strike-throughs, but it would essentially remove the adjustment for Tax Year 2020 which is in current code.



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