FISCAL NOTE



FUND(S):

Special Revenue

Sources of Revenue:

Special Fund

Legislation creates:

A New Program,A New Fund



Fiscal Note Summary


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


As provided in the note to House Bill 4375, the purpose of this bill is to establish the West Virginia Voluntary Employee Retirement Accounts Program in new Article 10E of W.Va. Code Chapter 5. The bill establishes findings, defines terms, and provides for liberal construction. In addition to requiring compliance with federal and state law, all federal approvals and filings must be received and made before operations begin. The bill provides for plan administration, rules, and the trust. The bill prohibits assignment, except for qualified domestic relations orders. The bill authorizes investments. The bill specifies that the corpus, assets and earnings of trust do not constitute public funds. The bill defers compensation from federal, state and municipal income taxes. The bill authorizes collection of fees. The bill creates the administration account and authorizes payment of program costs. The bill transfers up to $3 million from the Unclaimed Property Trust Fund to the West Virginia Voluntary Employee Retirement Accounts Program. The bill requires reimbursement to the Unclaimed Property Trust Fund by June 30, 2024. The bill specifies the state and the Treasurer are not liable for losses or changes in value. The bill specifies certain information is confidential. The bill requires payroll information be provided to the Treasurer. The bill requires audits. Creation of the Voluntary Employee Retirement Accounts Program (the “Program”), a multi-employer retirement program for small businesses in West Virginia, should encourage development of small businesses in West Virginia, but the extent to which the general or special revenues of the state will be enhanced is not quantifiable at this time. There will be no costs to the general revenue fund of the State of West Virginia. Up to $3 million of the initial costs for the Program will come from the Unclaimed Property Trust Fund. The legislation allows the transfer of moneys from the Unclaimed Property Trust Fund as needed to create, establish, manage and monitor the Program. Amounts borrowed are required to be paid in ten years, by June 30, 2024. Costs to create, establish, manage and monitor the Program are estimated to be around $3 million over a period of 5 to 6 years, at which time, the Program is expected to begin generating sufficient fees to cover its own costs and to begin the repayment to the Unclaimed Property Trust Fund. Year 1 of operation is expected to require moneys of around $325,000 to be borrowed from the Trust Fund. This would enable the hiring of employees, consultants and counsel necessary to begin the creation and establishment of the Program. Costs in following years are expected to increase as contracts are awarded and the Program begins operations.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
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):


See Section 1 above.



Memorandum






    Person submitting Fiscal Note: Diana Stout
    Email Address: diana.stout@wvsto.com