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 Autistic Children's Trust
Fund; creating a tax credit for parents and guardians
contributing to a qualified autistic children's 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 an autistic
child; tax treatment of income accrued and
subsequent withdrawals made from a qualified trust
maintained for the benefit of an autistic child.
(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 an autistic child into a trust
established for the future support of an autistic 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 AUTISTIC CHILDREN.
§44-16-1. Title.
This article is known and cited as the "West Virginia Autistic
Children's Trust Act".
§44-16-2. Legislative findings and purpose.
(a)The Legislature finds:
(1) Planning for and providing for the anticipated future
needs of autistic children with severe to moderate impairments in
their daily living will help autistic children maintain as much
independence as possible and adapt to changing circumstances and
expectations as they become adults.
(2) Parents and guardians of an autistic child provide
critical support for the autistic 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
autistic children 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 autistic children, 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 an autistic child's future benefit; and,
(4) To create a reasonable mechanism to provide for the future
needs of both minor and adult autistic children 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" means an "Autistic Child Trust Account"
established in accordance with the provisions of this Article.
(b) "Account owner" means the parent or guardian of an
autistic child who establishes an "Autistic Child Trust Account"
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) "Autistic child" 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 an Autistic Child Trust Account established by a parent or guardian of an autistic
child for the future maintenance and support of the autistic child.
(g) "Distribution" means any disbursement from an Autistic
Child 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 Autistic Child 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 Autistic Child Trust Account.
§44-16-4. Creation of Autistic Child Trust Account.
(a) Any parent or guardian of an Autistic child may establish
an Autistic Child Trust Account, to be managed or maintained for
the future benefit of an autistic child, upon the death of the
parent or guardian establishing the trust account, or upon the
autistic 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 Autistic Child 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 an autistic child 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 Autistic Child Trust
Account through the Treasurer; creation and
composition of the trustee advisory board; duties and
responsibilities; reimbursement of expenses.
(a) The "The West Virginia Autistic Children's Trust Fund" is
established within the accounts held by the State Treasurer for
administration.
(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 West Virginia Autistic Children's Trust Fund" shall
receive all payments from account owners on behalf of beneficiaries
of Autistic Children's Trusts or from any other source, public or
private. Earnings derived from the investment of moneys in the
Autistic Children's Trust Fund shall remain in the Autistic
Children's 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
Autistic Children's 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 West Virginia Autistic Children's Trust
Fund are limited to amounts available in the West Virginia Autistic
Children's Trust Fund.
(i) The West Virginia Autistic Children's 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 West Virginia Autistic Children's 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 West Virginia
Children's Autistic 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 autistic children's 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. Autistic children's trust fund program administrative
account.
(a) There is hereby created a special revenue account within
the state treasurer's office titled the "autistic children's 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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