FISCAL
NOTE
WEST virginia Legislature
2017 regular session
By
[
to the Committee on Pensions and Retirement then Finance.
A BILL to amend and
reenact §11-21-12 of
the Code of West Virginia, 1931, as amended; and to amend and reenact §20-7-1 of said code, all relating to pension benefits
exempt from state income taxation; and including Division of Natural Resources
police in the class of law-enforcement officers exempted.
Be it enacted by the
Legislature of West Virginia:
That §11-21-12 of the Code of West Virginia, 1931, as
amended, be amended and reenacted; and that §20-7-1 of said code be amended and reenacted, all to
read as follows:
CHAPTER 11. TAXATION.
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-12. West Virginia adjusted gross income of
resident individual.
(a) General. -- The
West Virginia adjusted gross income of a resident individual means his or her
federal adjusted gross income as defined in the laws of the United States for
the taxable year with the modifications specified in this section.
(b) Modifications
increasing federal adjusted gross income. -- There shall be added to
federal adjusted gross income unless already included therein the following
items:
(1) Interest income on
obligations of any state other than this state or of a political subdivision of
any other state unless created by compact or agreement to which this state is a
party;
(2) Interest or dividend
income on obligations or securities of any authority, commission or
instrumentality of the United States, which the laws of the United States
exempt from federal income tax but not from state income taxes;
(3) Any deduction allowed when determining federal adjusted
gross income for federal income tax purposes for the taxable year that is not
allowed as a deduction under this article for the taxable year;
(4) Interest on
indebtedness incurred or continued to purchase or carry obligations or
securities the income from which is exempt from tax under this article, to the
extent deductible in determining federal adjusted gross income;
(5) Interest on a
depository institution tax-exempt savings certificate which is allowed as an
exclusion from federal gross income under Section 128 of the Internal Revenue
Code, for the federal taxable year;
(6) The amount of a lump
sum distribution for which the taxpayer has elected under Section 402(e) of the
Internal Revenue Code of 1986, as amended, to be separately taxed for federal
income tax purposes; and
(7) Amounts withdrawn from a medical savings account
established by or for an individual under section twenty, article fifteen,
chapter thirty-three of this code or section fifteen, article sixteen of said
chapter that are used for a purpose other than payment of medical expenses, as
defined in those sections.
(c) Modifications
reducing federal adjusted gross income. -- There shall be subtracted from
federal adjusted gross income to the extent included therein:
(1) Interest income on
obligations of the United States and its possessions to the extent includable
in gross income for federal income tax purposes;
(2) Interest or dividend
income on obligations or securities of any authority, commission or
instrumentality of the United States or of the State of West Virginia to the
extent includable in gross income for federal income tax purposes but exempt
from state income taxes under the laws of the United States or of the State of
West Virginia, including federal interest or dividends paid to shareholders of
a regulated investment company, under Section 852 of the Internal Revenue Code
for taxable years ending after June 30, 1987;
(3) Any amount included in federal adjusted gross income
for federal income tax purposes for the taxable year that is not included in
federal adjusted gross income under this article for the taxable year;
(4) The amount of any
refund or credit for overpayment of income taxes imposed by this state, or any
other taxing jurisdiction, to the extent properly included in gross income for
federal income tax purposes;
(5) Annuities, retirement allowances, returns of
contributions and any other benefit received under the West Virginia Public
Employees Retirement System, the West Virginia State Teachers Retirement System
and all forms of military retirement, including regular Armed Forces, Reserves and National Guard, including
any survivorship annuities derived therefrom, to the extent includable in gross
income for federal income tax purposes: Provided, That notwithstanding any
provisions in this code to the contrary this modification shall be limited to
the first $2,000 of benefits received under the West Virginia Public Employees
Retirement System, the West Virginia State Teachers Retirement System and,
including any survivorship annuities derived therefrom, to the extent includable
in gross income for federal income tax purposes for taxable years beginning
after December 31, 1986; and the first $2,000 of benefits received under any
federal retirement system to which Title 4 U.S.C. §111 applies: Provided, however, That the total
modification under this paragraph shall not exceed $2,000 per person receiving
retirement benefits and this limitation shall apply to all returns or amended
returns filed after December 31, 1988;
(6) Retirement income
received in the form of pensions and annuities after December 31, 1979, under
any West Virginia police, West Virginia Firemen's
Retirement System or the West Virginia State Police Death, Disability and
Retirement Fund, the West Virginia State Police Retirement System, or
the West Virginia Deputy Sheriff Retirement System, or the West Virginia
Public Employees Retirement System if paid to police officers retired from the Division
of Natural Resources, including those formerly classified as conservation
officers, including any survivorship annuities derived from any of these
programs, to the extent includable in gross income for federal income tax
purposes;
(7) (A) For taxable years beginning after December 31, 2000,
and ending prior to January 1, 2003, an amount equal to two percent multiplied
by the number of years of active duty in the Armed
Forces of the United States of America
with the product thereof multiplied by the first $30,000 of military retirement
income, including retirement income from the regular Armed Forces, Reserves and National Guard paid by the
United States or by this state after December 31, 2000, including any
survivorship annuities, to the extent included in gross income for federal
income tax purposes for the taxable year.
(B) For taxable years beginning
after December 31, 2002, the first $20,000 of military retirement income,
including retirement income from the regular Armed
Forces, Reserves and National Guard paid by the United States or by this state
after December 31, 2002, including any survivorship annuities, to the extent
included in gross income for federal income tax purposes for the taxable year.
(C) In the event that any
of the provisions of this subdivision are found by a court of competent
jurisdiction to violate either the Constitution of this state or of the United
States, or is held to be extended to persons other than specified in this
subdivision, this subdivision shall become null and void by operation of law.
(8) Federal adjusted gross
income in the amount of $8,000 received from any source after December 31,
1986, by any person who has attained the age of sixty-five on or before the
last day of the taxable year, or by any person certified by proper authority as
permanently and totally disabled, regardless of age, on or before the last day
of the taxable year, to the extent includable in federal adjusted gross income
for federal tax purposes: Provided,
That if a person has a medical certification from a prior year and he or she is
still permanently and totally disabled, a copy of the original certificate is
acceptable as proof of disability. A copy of the form filed for the federal disability
income tax exclusion is acceptable: Provided, however, That:
(i) Where the total
modification under subdivisions (1), (2), (5), (6) and (7) of this subsection
is $8,000 per person or more, no deduction shall be allowed under this
subdivision; and
(ii) Where the total
modification under subdivisions (1), (2), (5), (6) and (7) of this subsection
is less than $8,000 per person, the total modification allowed under this
subdivision for all gross income received by that person shall be limited to
the difference between $8,000 and the sum of modifications under subdivisions
(1), (2), (5), (6) and (7) of this subsection;
(9) Federal adjusted gross
income in the amount of $8,000 received from any source after December 31,
1986, by the surviving spouse of any person who had attained the age of sixty-five
or who had been certified as permanently and totally disabled, to the extent
includable in federal adjusted gross income for federal tax purposes: Provided, That:
(i) Where the total
modification under subdivisions (1), (2), (5), (6), (7) and (8) of this
subsection is $8,000 or more, no deduction shall be allowed under this
subdivision; and
(ii) Where the total
modification under subdivisions (1), (2), (5), (6), (7) and (8) of this
subsection is less than $8,000 per person, the total modification allowed under
this subdivision for all gross income received by that person shall be limited
to the difference between $8,000 and the sum of subdivisions (1), (2), (5),
(6), (7) and (8) of this subsection;
(10) Contributions from any
source to a medical savings account established by or for the individual
pursuant to section twenty, article fifteen, chapter thirty-three of this code
or section fifteen, article sixteen of said chapter, plus interest earned on
the account, to the extent includable in federal adjusted gross income for
federal tax purposes: Provided,
That the amount subtracted pursuant to this subdivision for any one taxable
year may not exceed $2,000 plus interest earned on the account. For married individuals filing a joint
return, the maximum deduction is computed separately for each individual;
(11) For the 2006 taxable
year only, severance wages received by a taxpayer from an employer as the
result of the taxpayer's permanent termination from employment through a
reduction in force and through no fault of the employee, not to exceed
$30,000. For purposes of this
subdivision:
(i) The term "severance wages"
means any monetary compensation paid by the employer in the taxable year as a
result of permanent termination from employment in excess of regular annual
wages or regular annual salary;
(ii) The term "reduction in force" means a net reduction in the number of employees employed by the
employer in West Virginia, determined based on total West Virginia employment
of the employer's controlled group;
(iii) The term
"controlled group" means one or more chains of corporations connected
through stock ownership with a common parent corporation if stock possessing at
least fifty percent of the voting power of all classes of stock of each of the
corporations is owned directly or indirectly by one or more of the corporations
and the common parent owns directly stock possessing at least fifty percent of
the voting power of all classes of stock of at least one of the other
corporations;
(iv) The term
"corporation" means any corporation, joint-stock company or
association and any business conducted by a trustee or trustees wherein
interest or ownership is evidenced by a certificate of interest or ownership or
similar written instrument; and
(12) Any other income which this state is prohibited from
taxing under the laws of the United States.
(d) Modification for
West Virginia fiduciary adjustment. -- There shall be added to or
subtracted from federal adjusted gross income, as the case may be, the taxpayer's share, as beneficiary of an estate or trust, of the
West Virginia fiduciary adjustment determined under section nineteen of this
article.
(e) Partners and S
corporation shareholders. -- The amounts of modifications required to be
made under this section by a partner or an S corporation shareholder, which
relate to items of income, gain, loss or deduction of a partnership or an S
corporation, shall be determined under section seventeen of this article.
(f) Husband and wife.
-- If husband and wife determine their federal income tax on a joint return but
determine their West Virginia income taxes separately, they shall determine
their West Virginia adjusted gross incomes separately as if their federal
adjusted gross incomes had been determined separately.
(g) Effective date. --
(1) Changes in the language of this section enacted in the year 2000 shall
apply to taxable years beginning after December 31, 2000.
(2) Changes in the language
of this section enacted in the year 2002 shall apply to taxable years beginning
after December 31, 2002.
(3) Changes in the
language of this section enacted in the year 2017 apply to taxable years beginning
after December 31, 2017.
CHAPTER 20. NATURAL RESOURCES.
ARTICLE 7. LAW
ENFORCEMENT, MOTORBOATING, LITTER.
§20-7-1. Chief natural resources police officer;
natural resources police officers; special and emergency natural resources
police officers; subsistence allowance; expenses.
(a) The division's law-enforcement policies, practices and programs are
under the immediate supervision and direction of the division law-enforcement
officer selected by the director and designated as chief natural resources
police officer as provided in section thirteen, article one of this chapter.
(b) Under the supervision
of the director, the chief natural resources police officer shall organize,
develop and maintain law-enforcement practices, means and methods geared, timed
and adjustable to seasonal, emergency and other needs and requirements of the
division's comprehensive natural
resources program. All division personnel detailed and assigned to law-enforcement
duties and services under this section shall be known and designated as natural
resources police officers and are under the immediate supervision and direction
of the chief natural resources police officer except as otherwise
provided. All natural resources police officers shall be trained,
equipped and conditioned for duty and services wherever and whenever required
by division law-enforcement needs.
(c) The chief natural
resources police officer, acting under supervision of the director, is
authorized to select and appoint emergency natural resources police officers
for a limited period for effective enforcement of the provisions of this
chapter when considered necessary because of emergency or other unusual
circumstances. The emergency natural
resources police officers shall be selected from qualified civil service
personnel of the division, except in emergency situations and circumstances
when the director may designate officers, without regard to civil service
requirements and qualifications, to meet law-enforcement needs. Emergency natural resources police officers
shall exercise all powers and duties prescribed in section four of this article
for full-time salaried natural resources police officers except the provisions
of subdivision (8) of said section.
(d) The chief natural
resources police officer, acting under supervision of the director, is also
authorized to select and appoint as special natural resources police officers
any full-time civil service employee who is assigned to, and has direct
responsibility for management of, an area owned, leased or under the control of
the division and who has satisfactorily completed a course of training
established and administered by the chief natural resources police officer,
when the action is considered necessary because of law-enforcement needs. The powers and duties of a special natural
resources police officer, appointed under this provision, is the same within
his or her assigned area as prescribed for full-time salaried natural resources
police officers. The jurisdiction of the
person appointed as a special natural resources police officer, under this
provision, shall be limited to the division area or areas to which he or she is
assigned and directly manages.
(e) The Director of the
Division of Forestry is authorized to appoint and revoke Division of Forestry
special natural resources police officers who are full-time civil service
personnel who have satisfactorily completed a course of training as required by
the Director of the Division of Forestry.
The jurisdiction, powers and duties of Division of Forestry special
natural resources police officers are set forth by the Director of the Division
of Forestry pursuant to article three of this chapter, and articles one-a and
one-b, chapter nineteen of this code.
(f) The chief natural
resources police officer, with the approval of the director, has the power and
authority to revoke any appointment of an emergency natural resources police
officer or of a special natural resources police officer at any time.
(g) Natural resources
police officers are subject to seasonal or other assignment and detail to duty
whenever and wherever required by the functions, services and needs of the
division.
(h) The chief natural
resources police officer shall designate the area of primary residence of each
natural resources police officer, including himself or herself. Since the area of business activity of the
division is actually anywhere within the territorial confines of the State of
West Virginia, actual expenses incurred shall be paid whenever the duties are
performed outside the area of primary assignment and still within the state.
(i) Natural resources
police officers shall receive, in addition to their base pay salary, a minimum
monthly subsistence allowance for their required telephone service, dry
cleaning or required uniforms, and meal expenses while performing their regular
duties in their area of primary assignment in the amount of $130 each
month. This subsistence allowance does
not apply to special or emergency natural resources police officers appointed
under this section.
(j) After June 30, 2010, all those full time law-enforcement
officers employed by the Division of Natural Resources as conservation officers
shall be titled and known as natural resources police officers. Wherever used in this code the term "conservation officer," or its plural, means "natural resources police officer," or its plural, respectively.
(k) Notwithstanding any
provision of this code to the contrary, the provisions of subdivision six,
subsection c, section twelve, article twenty-one, chapter eleven of this code
are inapplicable to pensions of natural resources police officers paid through
the Public Employees Retirement System.
NOTE: The purpose of this bill is
to treat natural resources police like all other law enforcement and exempt
their pension benefits from state income tax.
Strike-throughs indicate language
that would be stricken from a heading or the present law, and underscoring
indicates new language that would be added.