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 to exempt Division of Natural Resources conservation officers’ retirement pensions from state income tax law. As written, this bill would increase the reducing modification for retirement income of Division of Natural Resources conservation officers from $2,000 to the total amount of retirement income received from the West Virginia Public Employees Retirement System. Additionally, the bill would make the increase applicable to all returns or amended returns filed after December 31, 2010. According to our interpretation that retired conservation officers would be eligible to apply the increased reducing modification to amended returns filed for tax years 2007, 2008 and 2009, passage of this bill would result in a reduction in the General Revenue Fund of roughly $400,000 in Fiscal Year 2011 and of roughly $150,000 in each succeeding year. 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. There would be no additional administrative costs for the State Tax Department associated with passage of this bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2010
Increase/Decrease
(use"-")
2011
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 -400,000 -400,000


Explanation of above estimates (including long-range effect):


Passage of this bill would increase the reducing modification for retirement income of Division of Natural Resources conservation officers from $2,000 to the total amount of retirement income received from the West Virginia Public Employees Retirement System. Additionally, the bill would make the increase applicable to all returns or amended returns filed after December 31, 2010. According to our interpretation that retired conservation officers would be eligible to apply the increased reducing modification to amended returns filed for tax years 2007, 2008 and 2009, passage of this bill would result in a reduction in the General Revenue Fund of roughly $400,000 in Fiscal Year 2011 and of roughly $150,000 in each succeeding year. 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. There would be no additional administrative costs for the State Tax Department associated with passage of this bill.



Memorandum


The stated purpose of this bill is to exempt Division of Natural Resources conservation officers’ retirement pensions from state income tax law. The proposed change reads in part as “ . . . retirement income received under the West Virginia Public Employees Retirement System by Division of Natural Resources conservation officers in the form of pensions and annuities, shall be subtracted from federal adjusted gross income to the extent included therein . . . ” As written, the bill would permit the subtraction of all Public Employees Retirement System retirement income regardless of whether the retirement income is attributable to the retiree’s work as a conservation officer or other work eligible for Public Employees Retirement System credit. If the intent is to provide the subtraction to only retirement income solely attributable to service as a conservation officer, additional qualifying language may be necessary.



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