Date Requested:February 29, 2008
Time Requested:10:42 AM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
Amendment HB4496
CBD Subject: Voluntary Transfer of Assets from the TDC to theTRS
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

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

    As written, this bill as amended, sets forth the provisions for the election of members of the Teachers’ Defined Contribution Retirement System to transfer to the Teachers’ Retirement System. Provisions are also included for the transfer of member assets and payment of make-up contributions, if at least 70 percent of actively contributing members of the Teachers’ Defined Contribution Retirement System elect to transfer to the Teachers’ Retirement System. And, if the 70 percent member election threshold is met, the members making lump-sum make-up contributions would be allowed to reduce their federal adjusted gross income for purposes of the West Virginia Personal Income Tax by the amount of the lump-sum contribution. Affected taxpayers may also elect to carry forward the modification over a period not to exceed five years.
    
    According to our interpretation, the proposed Personal Income Tax decreasing modification for the lump-sum make-up contributions would reduce General Revenue Fund collections by a total of $6.2 million. Due to the permissible carry forward provision relating to the modification, the revenue impact may be split over five or more years. Other provisions in the bill, besides the Personal Income Tax decreasing modification, may have an impact on State revenue or expenditures.
    
    Assuming that all Personal Income Tax returns claiming the proposed decreasing modification would be accepted as filed, additional administrative costs to the State Tax Department attributable to passage of this bill would be minimal. However, if any verification of the decreasing modification claim is required, the additional administrative costs could be significant. The Consolidated Public Retirement Board may incur additional administrative costs attributable to passage of this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2008
Increase/Decrease
(use"-")
2009
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 -6,200,000
3. Explanation of above estimates (including long-range effect):
    As written, this bill as amended, sets forth the provisions for the election of members of the Teachers’ Defined Contribution Retirement System to transfer to the Teachers’ Retirement System. Provisions are also included for the transfer of member assets and payment of make-up contributions, if at least 70 percent of actively contributing members of the Teachers’ Defined Contribution Retirement System elect to transfer to the Teachers’ Retirement System. And, if the 70 percent member election threshold is met, the members making lump-sum make-up contributions would be allowed to reduce their federal adjusted gross income for purposes of the West Virginia Personal Income Tax by the amount of the lump-sum contribution. Affected taxpayers may also elect to carry forward the modification over a period not to exceed five years.
    
    According to our interpretation, the proposed Personal Income Tax decreasing modification for the lump-sum make-up contributions would reduce General Revenue Fund collections by a total of $6.2 million. Due to the permissible carry forward provisions relating to the modification, the revenue impact may be split over five or more years. Other provisions in the bill, besides the Personal Income Tax decreasing modification, may have an impact on State revenue or expenditures.
    
    Assuming that all Personal Income Tax returns claiming the proposed decreasing modification would be accepted as filed, additional administrative costs to the State Tax Department attributable to passage of this bill would be minimal. However, if any verification of the decreasing modification claim is required, the additional administrative costs could be significant. The Consolidated Public Retirement Board may incur additional administrative costs attributable to passage of this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us