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Engrossed Committee Substitute House Bill 2868 History

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COM SUB 2 LINES
ENGROSSED

COMMITTEE SUBSTITUTE

FOR

H. B. 2868

(By Delegates Hunt, White, Webster, Perdue,

Paxton, Hatfield, Moore, Tabb, Spencer

and Wells)


(Originating in the Committee on Finance)

[March 26, 2009]


A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-21-12i; and amending said code by adding thereto a new article, designated §44- 16-1, §44-16-2, §44-16-3, §44-16-4, §44-16-5, §44-16-6, §44-16-7, §44-16-8 and §44-16-9, all relating to the creation and maintenance of the West Virginia Children With Autism Trust Fund; creating a tax credit for parents and guardians contributing to a qualified trust fund against personal income tax obligations; providing for the limited carryover of unused tax credits; providing for the tax effects of earnings, proceeds and distributions for qualifying trust funds; making legislative findings; establishing legislative purposes; definitions; providing for the creation of trust fund; establishing eligibility criteria; providing mechanism for disbursements and maintenance; creating administrative account; providing for administration through the State Treasurer; providing for establishment of advisory board; membership of board; establishing reporting requirements; providing rule-making authority .
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-21-12i; and to amend said code by adding thereto a new article, designated §44-16- 1, §44-16-2, §44-16-3, §44-16-4, §44-16-5, §44-16-6, §44-16-7, §44- 16-8 and §44-16-9; all to read as follows:
CHAPTER 11. TAXATION.


PART I. GENERAL.

ARTICLE 21. PERSONAL INCOME TAX.
§11-21-12i. Credit for qualifying contribution to a qualified trust maintained for the benefit of a child with autism; tax treatment of income accrued and subsequent withdrawals made from a qualified trust maintained for the benefit of a child with autism.

(a) Notwithstanding any other provision of this code, in addition to amounts authorized to be subtracted from federal adjusted gross income pursuant to this article, any contribution made by the parent or guardian of a child with autism into a trust established for the future support of the child, established in accordance with the provisions of article sixteen, chapter forty- four of this code, up to a maximum allowable credit of $2,000 per year, may be offset as a credit against any tax obligation owed to the state for personal income tax under this article during the year the contribution was made: Provided, That the amount of the credit taken in a taxable year shall in no event exceed the tax liability due for the taxable year. In the event that the personal tax obligation owed to the state for a given tax year is less than the tax credit allowed by this section, the amount of any unused credit may be carried forward and applied as an offset against any future personal income tax obligation owed by that person to the state in subsequent taxable years, for up to five years. Further, the accrued deposits and earnings on that account and the subsequent withdrawal of funds from that trust account, made in accordance with the provisions of article sixteen, chapter forty- four of this Code, shall not be treated as taxable income to either the trust or the beneficiary, for as long as the money is maintained and distributed in accordance with the provisions of that same article. The provisions of this section are effective for taxable years beginning after the thirty-first day of December, two thousand nine.
(b) The Tax Commissioner shall, by issuance of rules forthwith, provide guidelines to ensure uniform assessment practices statewide to effect the intent of this section.


CHAPTER 44. ADMINISTRATION OF ESTATES AND TRUSTS.

ARTICLE 16. PARENT OR GUARDIAN TRUSTS FOR Children With Autism.

§44-16-1. Title.
This article is known and cited as the "West Virginia Children with Autism Trust Act".
§44-16-2. Legislative findings and purpose.
(a)The Legislature finds:
(1) Planning for and providing for the anticipated future needs of a child with autism with severe to moderate impairments in their daily living will help the children maintain as much independence as possible and adapt to changing circumstances and expectations as they become adults.
(2) Parents and guardians of a child with autism provide critical support for the child, often at a high financial cost, and are concerned about providing for the child's continued welfare in the future, when they are no longer able to provide primary care and support for the child's special needs.
(3) Encouraging the development and setting aside private resources to address those anticipated special needs would allow children with autism to remain as self-sufficient as possible, while continuing to provide them with access to support and resources as needed, after their parents are no longer able to help care for them.
(4) Providing tax incentives to encourage savings and preplanning will promote the development of sufficient financial resources to meet the future needs of children with autism, and will ultimately benefit all West Virginia citizens.
(b) The purposes of this Act are as follows:
(1) To create a tax incentive to encourage and assist individuals and families in saving private funds for the anticipated future needs of children with autism, to maintain health, independence and quality of life;
(2) To provide secure private funding to meet the anticipated needs and support services on behalf of designated beneficiaries with autism that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under XIX of the Social Security Act, the supplemental security income program under title XVI of the Social Security Act, the beneficiary's employment, and other sources;
(3) To provide a support mechanism through the establishment of a trust that is intended to protect and preserve assets which have been set aside for the future benefit of a child with autism; and,
(4) To create a reasonable mechanism to provide for the future needs of both minors and adults with autism after their parents are deceased or are otherwise unable to care for the needs of their children.
§44-16-3. Definitions.
For purposes of this article, the following terms have the meanings ascribed to them, unless the context clearly indicates otherwise:
(a) "Account" or "Trust Account" means a "Trust Account for a Child with Autism" established in accordance with the provisions of this Article.

(b) "Account owner" means the parent or guardian of a child with autism who establishes an "Trust Account for a Child with Autism" with the Treasurer's office and makes payments or contributions into that account in accordance with the provisions of this article.
(c) "Autism" means a complex developmental disability and spectrum disorder, whose diagnosis must be clinically confirmed by qualified physicians and psychiatrists after extensive examination and testing, defined by a certain set of behaviors and symptoms which affects a person's ability to communicate and interact with others.
(d) "Child with Autism" means a child, under the age of eighteen, who has been clinically diagnosed as having autism to a degree to which it results in a moderate or severe impairment in two or more areas of daily living, as the terms "moderate impairment", "severe impairment" and "daily living" are defined under Title II or Title XVI of the Social Security Disability Act, or a child who has been clinically diagnosed with autism and has been determined to be disabled under either Title II or Title XVI the Social Security Disability Act for any reason.
(e) "Beneficiary" means the individual designated as a beneficiary at the time an account is established, and who is the only individual on whose behalf distributions may be requested and made from the account. Requests for withdrawals may be requested by the beneficiary who has reached the age of eighteen, or on behalf of the beneficiary by his or her appointed guardian in the event the beneficiary is unable or unwilling to manage distributions under the terms of the trust account.
(f) "Contribution" means any contribution to a Trust Account established by a parent or guardian of a child with autism for the future maintenance and support of the autistic child.
(g) "Distribution" means any disbursement from a Trust Account, made in accordance with the provisions of this article.
(h) "Qualified autism spectrum or disability expenses" means any expenses which are made for the benefit of an individual with autism who is a designated beneficiary of the trust, in accordance with the provisions of this article.
(i) "Treasurer" means the West Virginia state treasurer.
(j) "Trust" means the instrument of trust establishing the terms and conditions of the Trust Account created in accordance with the terms of this article.
(k) "Trustee" means the bank, the court-appointed guardian of the designated beneficiary, or the Treasurer, acting as the managing trustee of the Trust Account.

§44-16-4. Creation of The Trust Account for a Child with Autism.
(a) Any parent or guardian of a child with autism may establish a Trust Account for a Child with Autism, to be managed or maintained for the future benefit of the child, upon the death of the parent or guardian establishing the trust account, or upon the child reaching the age of eighteen, whichever comes first. The account shall be maintained with the Treasurer, and managed by either the Treasurer, an approved bank or a court appointed guardian.
(b) All contributions or other funds placed in said account shall be managed and invested by the Treasurer, and may be invested as part of a common trust fund or common investment fund managed by the Treasurer's office.
(c) The governing instrument creating the trust shall meet the following requirements:
(1) Contributions may be made into the Trust Account by a parent(s) or guardian establishing the account by cash contribution.
(2) Disbursements from the established trust account may only be made from the account for the purpose of paying qualified disability expenses of an individual who is a child with autism who is the designated beneficiary of the trust, and approved pursuant to legislative rules promulgated under this article.
(3) The following types of expenses, incurred to support the designated beneficiary after the named beneficiary has reached the age of eighteen or after the death of the parent or guardian who established the trust account, shall be treated as qualified disability expenses if made for the benefit of an individual with a disability who is a designated beneficiary of the trust:
(A)
Education. - Expenses for education, including tuition for preschool through post-secondary education, books, supplies, and educational materials related to such education, tutors, and special education services.
(B)
Housing. - Expenses for housing maintained for the beneficiary, separate and apart from the housing used by the parent or guardian who established the trust account while the parent or guardian is still alive, including rent, mortgage payments, home improvements and modifications, maintenance and repairs, real property taxes, and utility charges.
(C)
Transportation. - Expenses for transportation, including the use of mass transit, the purchase or modification of vehicles and moving expenses.
(D)
Employment support. - Expenses related to obtaining and maintaining employment, including job-related training, assistive technology, and personal assistance supports.
(E)
Health, prevention and wellness. - Expenses for the health and wellness, including premiums for health insurance, medical, vision and dental expenses, habilitation and rehabilitation services, durable medical equipment, therapy, respite care, long term services and supports, and nutritional management.
(F)
Life necessities. - Expenses for life necessities, including clothing, activities which are religious, cultural or recreational, supplies and equipment for personal care, community- based supports, communication services and devices, adaptive equipment, assistive technology, personal assistance supports, financial management and administrative services, expenses for oversight, monitoring or advocacy, and funeral and burial expenses.
(G)
Assistive technology and personal support services. - Expenses for assistive technology and personal support with respect to any item described in subparts (A) through (F).
§44-16-5. Establishment and Management of the Trust Account through the Treasurer; creation and composition of the trustee advisory board; duties and responsibilities; reimbursement of expenses.

(a) The "The West Virginia Children with Autism Trust Fund" is established within the accounts held by the State Treasurer for administration. As used in this section, the phrase "Trust Fund" shall mean the West Virginia Children with Autism Trust Fund.
(b) In administering and managing these trust accounts, the Treasurer may utilize the services of a five-person trustee advisory board, for the purpose of verifying that the trusts in question are established for qualifying beneficiaries, and to confirm that the requests for disbursements or distribution of the funds held in trust are for purposes permitted by the terms of the trust and this article. The trustee advisory board shall consist of five persons appointed by the governor, one of whom must be a licensed therapist with experience in the delivery of vocational, rehabilitative or support services to persons with disabilities; one of whom is a physician or psychiatrist who has experience in diagnosis and treatment of persons with autism; one of whom has a background in advocacy on behalf of persons with disabilities; and two citizen members.
(c) Each of the appointments shall be for a period of five years and are eligible for reappointment at the expiration of their terms. In the event of a vacancy among appointed members, the Governor shall appoint a person representing the same interests to fill the unexpired term.
(d) Members of the board shall serve without compensation. The Treasurer may pay all expenses, including travel expenses, actually incurred by board members in the conduct of their official duties. Expense payments are to be made from the administrative account, and are made at the same rate paid to state employees.
(e) The board shall meet at least twice each month to review and recommend approval of proposed trusts and the requested distribution of funds from any trust fund established in accordance with the provisions of this article. Individuals may appear in person at those scheduled meetings, or they may participate in such meetings by videoconference or teleconference.
(f) The Treasurer may provide support staff and office space for the board.
(g) The "Trust Fund" shall receive all payments from account owners on behalf of beneficiaries of the Trust Accounts or from any other source, public or private. Earnings derived from the investment of moneys in the Trust Fund shall remain in the Trust Fund held in trust in the same manner as payments, except as refunded, applied for purposes of the beneficiaries, and applied for purposes of maintaining and administering the trust.
(h) The corpus, assets and earnings of the West Virginia Trust Fund do not constitute public funds of the state and are available solely for carrying out the purposes of this article. The state has no obligation to any designated beneficiary or any other person as a result of
this article. All amounts payable from the Trust Fund are limited to amounts available in the Trust Fund.
(i) The Trust Fund shall continue in existence until terminated by the Legislature as it determines or by the board upon
determination that continued operation is infeasible. Upon termination of the trust and after payment of all fees, charges, expenses and penalties, the assets of the Trust fund are paid and distributed to the beneficiaries of the account, to the extent possible, on a pro rata basis as their interests may appear, and any assets unused in said account upon the death of a beneficiary shall revert to the beneficiary's estate.
(j)
Nothing in this subsection creates an obligation of state general revenue funds or requires any level of funding by the Legislature.
(k) To fulfill the charitable and public purpose of this article, neither the earnings nor the corpus of the Trust fund is subject to taxation by the state or any of its political subdivisions.
(l) Notwithstanding any provision of this code to the contrary, money in a qualified trust fund is exempt from creditor process and not subject to attachment, garnishment or other process; is not available as security or collateral for any loan, or otherwise subject to alienation, sale, transfer, assignment, pledge, encumbrance or charge; and is not subject to seizure, taking, appropriation or application by any legal or equitable process or operation of law to pay any debt or liability of any account owner, beneficiary or successor in interest.
§44-16-6. Trust fund program administrative account.

(a) There is hereby created a special revenue account within the state treasurer's office titled the "West Virginia Children with Autism trust fund program administrative account" for the purposes of receiving and disbursing the sums necessary to reimburse the treasurer and or members of the trustee advisory board for the reasonable and necessary expenses which they respectively incur in implementing, operating and maintaining the trust funds and program created by this article.
(b) The administrative account shall receive all fees and charges collected by the board. Expenditures from the fund are authorized from collections subject to appropriations made by the Legislature.
§44-16-7. Reports and account; annual audit.
(a) In addition to any other requirements of this article, the board shall:
(1) Provide annual summary information on the financial condition of the fund and statements on the trust funds and savings plan accounts to the respective account owners;
(2) Prepare, or have prepared, a quarterly report on the status of the program, including the trust funds and the administrative account, and provide a copy of the report to the joint committee on government and finance and the legislative oversight commission on education accountability; and
(b) All accounts of the board, including the trust funds, are subject to an annual external audit by an accounting firm, selected by the board, of which all members or partners assigned to head the audit are members of the American institute of certified public accountants. The audit shall comply with the requirements of section thirty-three, article two, chapter five-a of this code.
§44-16-8. Confidentiality.
Any information that would tend to disclose the identity of a beneficiary, account owner or donor is exempt from the provisions of chapter twenty-nine-b of this code. Nothing in this section prohibits disclosure or publication of information in a statistical or other form which does not identify the individuals involved or provide personal information. Account owners are permitted access to their own personal information.
§44-16-9. Rule-making.
The Treasurer shall propose for promulgation rules necessary to carry out the provisions of this article pursuant to chapter twenty-nine of this code.
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