FISCAL NOTE
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.
The stated purpose of this bill is treat natural resources police like all other law enforcement and exempt their pension benefits from state income tax.
As written, this bill would exempt all retirement income received from the West Virginia Public Employees Retirement System (PERS) for police officers (formerly conservation officers) who retire from the Department of Natural Resources. However, if the exemption proposed by this bill is restructured to only apply to the retirement income received from PERS that is attributable to service as a Natural Resources Police Officer, the annual reduction in the General Revenue Fund would be roughly $160,000 per year. Since the bill indicates the proposed change would apply to taxable years beginning after December 31, 2013, the first annual revenue impact would occur in Fiscal Year 2015.
The provisions of this bill would apply to an estimated 90 public sector retirees. However, other similarly situated retirees may seek the same special tax status.
If all Personal Income Tax returns with the proposed modification were accepted as filed, additional administrative costs for the State Tax Department associated with passage of this bill would be minimal. However, if the State Tax Department is required to audit returns to ensure that income beyond that attributable to a Taxpayer’s service as a Natural Resource Police Officer is not included in the exemption, additional administrative costs could be substantial.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2013
Increase/Decrease
(use"-") |
2014
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 |
-160,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill would exempt all retirement income received from the West Virginia Public Employees Retirement System (PERS) for police officers (formerly conservation officers) who retire from the Department of Natural Resources. However, if the exemption proposed by this bill is restructured to only apply to the retirement income received from PERS that is attributable to service as a Natural Resources Police Officer, the annual reduction in the General Revenue Fund would be roughly $160,000 per year. Since the bill indicates the proposed change would apply to taxable years beginning after December 31, 2013, the first annual revenue impact would occur in Fiscal Year 2015.
The provisions of this bill would apply to an estimated 90 public sector retirees. However, other similarly situated retirees may seek the same special tax status.
If all Personal Income Tax returns with the proposed modification were accepted as filed, additional administrative costs for the State Tax Department associated with passage of this bill would be minimal. However, if the State Tax Department is required to audit returns to ensure that income beyond that attributable to a Taxpayer’s service as a Natural Resource Police Officer is not included in the exemption, additional administrative costs could be substantial.
Memorandum
The stated purpose of this bill is treat natural resources police like all other law enforcement and exempt their pension benefits from state income tax.
In 2010, Division of Natural Resources conservation officers were given the new job title “natural resources police officers.” The statute that changed their job title also specified that Code section 11-21-12(c), which provided a modification reducing federal adjusted gross income for West Virginia personal income tax purposes for “any West Virginia police,” was not applicable to these “natural resources police officers.” This bill would remove that restriction, in effect, exempting payments from the Public Employees Retirement System (PERS) to natural resources police from West Virginia personal income tax, effective beginning tax year 2014. The modification would also apply to former conservation officers already receiving pension benefits from PERS.
Person submitting Fiscal Note: Mark B. Muchow
Email Address: Roger.D.Cox@wv.gov