H. B. 110
(By Mr. Speaker, (Mr. Thompson) and Delegate Armstead)
[By Request of the Executive]
[Introduced May 31, 2009; referred to the
Committee on Finance.]
A BILL to amend the Code of West Virginia, 1931, as 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 and §44-16-6,
all relating to the future support of children with autism;
creating a personal income tax modification to adjusted gross
income for parents and guardians contributing to a qualified
trust fund; providing for limitations on amount of
modification earned and taken; specifying modification
carryforward and treatment of modification carryforward;
specifying personal income tax treatment of deposits, earnings
and withdrawals of trust funds; specifying effective date for
tax modification; providing rulemaking authority for use and
administration of qualified trust funds and requirements for
claiming the tax modification; specifying tax assessment for modification improperly taken; addressing statute of
limitations; defining terms; specifying criteria for creating
a qualified trust for a child with autism; establishing
eligibility criteria; providing for creation of trust accounts
for a child with autism; creating the West Virginia Children
With Autism Trust Board; requiring board certification of
certain information; setting forth membership of the board;
setting forth duties and responsibilities of the board;
granting rule making authority to the board; providing for
reimbursement of board members' expenses; exempting identities
of trust fund beneficiaries, account owners or donors from
chapter twenty-nine-b of the code; and providing an effective
date.
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 and §44-16-6, all
to read as follows:
CHAPTER 11. TAXATION.
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-12i. Decreasing modification reducing federal adjusted
gross income for qualifying contribution to a qualified trust maintained for the benefit of a
child with autism; effective date.
(a) In addition to amounts authorized to be subtracted from
federal adjusted gross income pursuant to section twelve of this
article, a modification reducing federal adjusted gross income is
hereby authorized in the amount of any qualifying contribution to
a qualified trust maintained for the benefit of a child with autism
by the parent or guardian of a child with autism, up to a maximum
of $1,000 per year for individual filers and persons who are
married but filing separately, and $2,000 per year for persons who
are married and filing jointly, but only to the extent the amount
is not allowable as a deduction when arriving at the taxpayer's
federal adjusted gross income for the taxable year in which the
payment is made. This modification is available regardless of the
type of return form filed. The taxpayer may elect to carry forward
the modification over a period not to exceed four tax years,
beginning in the tax year in which the payment was made: Provided,
That the amount of the decreasing modification, in combination with
all other decreasing modifications authorized pursuant to this
article shall in no event reduce taxable income below zero. Any
unused decreasing modification carryforward amount remaining after
the four-year carryforward period is forfeited. The accrued
deposits and earnings on the qualified trust account for a child
with autism 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. The provisions of
this section are effective for taxable years beginning on and after
January 1, 2011.
(b) The following definitions apply to this section:
(1) "Autism" means "autism" as that term is defined in section
one, article sixteen, chapter forty-four of this code.
(2) "Child with autism" means "child with autism" as that term
is defined in section one, article sixteen, chapter forty-four of
this code.
(3) "Guardian" means "guardian" as that term is defined in
section one, article sixteen, chapter forty-four of this code.
(4) "Parent" means a "parent" as that term is defined in
section one, article sixteen, chapter forty-four of this code.
(5) "Qualified trust for a child with autism" mean "qualified
trust for a child with autism" as that term is defined in section
one, article sixteen, chapter forty-four of this code.
(c) If it appears upon audit or otherwise that any person or
entity has taken the decreasing modification allowed under this
section and was not entitled to take the decreasing modification,
or has withdrawn funds from the qualified trust for a child with
autism in a way not consistent with the requirements of article
sixteen, chapter forty-four of this code, then an assessment shall be made and the income tax liability of the taxpayer shall be
recomputed disallowing the decreasing modification so taken. Such
assessment shall not be barred by any statute of limitations
otherwise applicable to the tax imposed pursuant to this article.
Amended returns shall be filed for any tax year for which the
decreasing modification was improperly taken. Any additional taxes
due under this chapter shall be remitted with the amended return or
returns filed with the Tax Commissioner, along with interest, as
provided in section seventeen, article ten of this chapter and such
other penalties and additions to tax as may be applicable pursuant
to the provisions of article ten of this chapter.
(d) Married parents who qualify for the modification provided
under this section and who file separate state tax returns shall
each receive the modification provided in this section in an amount
equal to the amount of contributions made by the parents into the
trusts, not to exceed $1,000 each.
(e) Joint guardians who qualify for the modification provided
under this section and who file separate state tax returns shall
each receive the modification provided in this section, in an
amount equal to the amount of contributions made by the guardians
into the trust, not to exceed $1,000 each.
(f) In the event the parents or guardians of a child with
autism, claiming the modification provided under this section,
become divorced or legally separated, each party shall be allowed to claim the amount of unused carryforward modification that
remains available under this section according to the terms of an
agreed property settlement approved by the divorce court which
specifically addresses the unused carryforward modification. In
the event that no property settlement specifically addressing the
unused carryforward modification exists relating to the divorce or
legal separation, then any unused carryforward modification
remaining at the time of the divorce or legal separation is granted
shall be evenly divided between the parties.
(g) The Tax Commissioner may propose rules necessary to carry
out the provisions of this section and to provide guidelines and
requirements to ensure uniform administrative practices statewide
to effect the intent of this section, all in accordance with the
provisions of article three, chapter twenty-nine-a of this code.
CHAPTER 44. ADMINISTRATION OF ESTATES AND TRUSTS.
ARTICLE 16. TRUSTS FOR CHILDREN WITH AUTISM.
§44-16-1. Definitions.
For purposes of this article, the following terms have the
meanings ascribed to them, unless the context clearly indicates
otherwise:
(a) "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.
(b) "Board" means the West Virginia Children with Autism Trust
Board created in section three of this article.
(c) "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
of the Social Security Disability Act for any reason.
(d) "Guardian" means a person lawfully invested with the power
and charged with the duty of taking care of another person and
managing the property and rights of another person who for some
peculiarity of status or defect of age, understanding or self
control is considered incapable of administering his or her own
affairs.
(e) "Parent" means a person who is another person's natural or
adoptive mother or father or who has been granted parental rights
by valid court order and whose parental rights have not been
terminated by a court of law.
(f) "Qualified trust for a child with autism" means a trust account for a child with autism that: (1) Is established at a
national bank, a state bank of a state of the United States or a
trust company that at all times is no less than adequately
capitalized as determined by standards adopted by United States
banking regulators and that is either regulated by state banking
laws of a state of the United States or is a member of the Federal
Reserve System; and (2) has been approved by the West Virginia
Children with Autism Trust Board, in accordance with this article.
(g) "Qualified trustee" means any person authorized by the
laws of this state or of the United States to act as a trustee, who
has been approved by the board to serve as the trustee of a
qualified trust for a child with autism.
(h) "Tax Commissioner" means the same as that term is used in
section one, article one, chapter eleven of this code.
§44-16-2. Creation of a qualified trust for a child with autism.
(a) Any parent or guardian of a child with autism may
establish a qualified trust for a child with autism. No account
shall qualify as a qualified trust for a child with autism until it
has been approved as such by the West Virginia Children with Autism
Trust Board established in section three of this article. The
board shall certify the establishment of each qualified trust to
the Tax Commissioner.
(b) To qualify for the tax deduction established in section
twelve-i, article twenty-one, chapter eleven, the parent or guardian seeking the tax deduction shall provide to the Tax
Commissioner certification that the qualified trust has been
authorized by the board and any other documentation required by the
Tax Commissioner.
§44-16-3. West Virginia Children with Autism Trust Board; creation
and composition of the trustee board; duties and
responsibilities; reimbursement of expenses.
(a) The "West Virginia Children with Autism Trust Board" is
created to qualify and oversee trust accounts created pursuant to
this article and held by approved banks or trust companies for
administration by qualified trustees.
(b) The West Virginia Children with Autism Trust Board shall
consist of the following governmental officials: The Tax
Commissioner or his or her designee, who shall serve as the chair,
the Secretary of the Department of Health and Human Resources as
set forth in article one, chapter five-f of this code, or his or
her designee, and the Commissioner of Banking as set forth in
article one, chapter thirty-one-a of this code, or his or her
designee. The board shall also consist of the following six public
members who shall be appointed by the Governor with advice and
consent of the Senate:
(1) An attorney at law, licensed to practice law in this state
pursuant to article two, chapter thirty of this code. The attorney should have extensive knowledge and experience in the creation,
management and administration of trusts;
(2) A counselor, licensed in this state pursuant to the
provisions of article thirty-one, chapter thirty of this code. The
counselor should have experience in the delivery of vocational,
rehabilitative or support services to persons with disabilities;
(3) A physician or psychiatrist, licensed in this state
pursuant to the provisions of article three, chapter thirty of this
code. Such physician or psychiatrist must have extensive knowledge
and experience in diagnosis and treatment of persons with autism;
(4) One public member with a background in advocacy on behalf
of persons with disabilities; and
(5) Two citizen members.
(c) Each of the appointments shall be for a period of five
years and appointees are eligible for reappointment at the
expiration of their terms. Of the public members of the board
first appointed, one shall be appointed for a term ending June 30,
2012, and a second for a four-year term. The remainder shall be
appointed for the full five-year terms as provided in this section.
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 may not be compensated in their
capacity as members, but shall be reimbursed for reasonable expenses incurred in the performance of their duties by the
Department of Administration. Expense payments are to be made from
the General Fund, and are made at the same rate paid to state
employees.
(e) The board shall meet at least once per month to review and
recommend to the Tax Department approval of proposed qualified
trust funds or to conduct other business as required by this
article or section twelve-i, article twenty-one, chapter eleven of
this code. Board meetings shall be held in person, by video
conference, or by teleconference, or a combination thereof. Five
members of the board shall constitute a quorum.
(f) Notwithstanding the provision of section four, article
six, chapter six of this code, the Governor may remove any board
member for incompetence, misconduct, gross immorality, misfeasance,
malfeasance or nonfeasance in office.
(g) The Department of Administration shall provide support
staff and office space for the board.
(h) Nothing in this section creates an obligation of State
General Revenue Funds: Provided, That funding for expenses and
offices of the West Virginia Children with Autism Trust Board shall
be paid, subject to appropriation.
(i) The board may propose rules for legislative approval and
may adopt procedural and interpretive rules in accordance with the provisions of article three, chapter twenty-nine-a of this code to
carry out the provisions of this article.
§44-16-4. Reports and account.
In addition to any other requirements of this article, the
board shall:
(a) Receive annual summary information on the financial
condition of qualified trust funds and statements on the qualified
trust funds and savings plan accounts from qualified trustees; and
(b) Prepare, or have prepared, by January 1, each year, an
annual report on the status of the program, including a summary of
the qualified trust funds, and provide a copy of the report to the
Joint Committee on Government and Finance and the Legislative
Oversight Commission on Health and Human Resources Accountability.
§44-16-5. Confidentiality.
Any information that would tend to disclose the identity of a
beneficiary, account owner or donor is exempt from the provisions
of the Freedom of Information Act, located in 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.
§44-16-6. Effective date.
This article is effective for years beginning on or after
January 1, 2011.
NOTE: This bill provides a tax deduction for creation of
trusts to support children with autism and sets forth the procedure
by which such trusts are created.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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