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17103831D
SENATE BILL NO. 1545 Offered January 20, 2017 A BILL to amend and reenact §§2.2-1514, as it is currently effective and as it may become effective, 58.1-320, and 58.1-400 of the Code of Virginia and to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.13, relating to general fund surplus. ---------- Patron-- Vogel ---------- Referred to Committee on Finance ----------

Be it enacted by the General Assembly of Virginia:

1. That §§2.2-1514, as it is currently effective and as it may become effective, 58.1-320, and 58.1-400 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.13 as follows:

§2.2-1514. (Contingent expiration date) Assignment of general fund for nonrecurring expenditures.

A. As used in this section:

"The Budget Bill" means the "The Budget Bill" submitted pursuant to §2.2-1509, including any amendments to a general appropriation act pursuant to such section.

"Nonrecurring expenditures" means the acquisition or construction of capital outlay projects as defined in §2.2-1518, the acquisition or construction of capital improvements, the acquisition of land, the acquisition of equipment, or other expenditures of a one-time nature as specified in the general appropriation act.

B. At the end of each fiscal year, the Comptroller shall assign within his annual report pursuant to §2.2-813 as follows: (i) 67 percent of the remaining amount of the general fund balance that is not otherwise restricted, committed, or assigned by the general appropriation act for other usage within the general fund shall be assigned by the Comptroller for deposit into the Transportation Trust Fund established pursuant to § 33.2-1524 or a subfund thereof, and the (ii) if the remaining 33 percent is (a) $50 million or greater, such remaining amount shall not be assigned but shall be held in reserve for appropriation by the General Assembly or (b) less than $50 million, such remaining amount shall be assigned for nonrecurring expenditures. No such assignment shall be made unless the full amounts required for other restrictions, commitments, or assignments including but not limited to (i) (1) the Revenue Stabilization Fund deposit pursuant to §2.2-1829, (ii) (2) the Virginia Water Quality Improvement Fund deposit pursuant to §10.1-2128, but excluding any deposits provided under the Virginia Natural Resources Commitment Fund established under §10.1-2128.1, (iii) (3) capital outlay reappropriations pursuant to the general appropriation act, (iv) (4) (a) operating expense reappropriations pursuant to the general appropriation act, and (b) reappropriations of unexpended appropriations to certain public institutions of higher education pursuant to §23.1-1002, (v) (5) pro rata rebate payments to certain public institutions of higher education pursuant to §23.1-1002, (vi) (6) the unappropriated balance anticipated in the general appropriation act for the end of such fiscal year, and (vii) (7) interest payments on deposits of certain public institutions of higher education pursuant to §23.1-1002 are set aside. The Comptroller shall set aside amounts required for clauses (iv)(b), (v), and (vii) (4) (b), (5), and (7) beginning with the initial fiscal year as determined under §23.1-1002 and for all fiscal years thereafter.

C. The Governor shall include in "The Budget Bill" pursuant to §2.2-1509 recommended appropriations from the general fund or recommended amendments to general fund appropriations in the general appropriation act in effect at that time an amount for deposit into the Transportation Trust Fund or a subfund thereof, and an amount for nonrecurring expenditures equal to the amounts assigned by the Comptroller for such purposes pursuant to the provisions of subsection B. Such deposit to the Transportation Trust Fund or a subfund thereof shall not preclude the appropriation of additional amounts from the general fund for transportation purposes.

§2.2-1514. (Contingent effective date) Assignment of general fund for nonrecurring expenditures.

A. As used in this section:

"The Budget Bill" means the "The Budget Bill" submitted pursuant to §2.2-1509, including any amendments to a general appropriation act pursuant to such section.

B. At the end of each fiscal year, the Comptroller shall assign within his annual report pursuant to §2.2-813 as follows: (i) 67 percent of the remaining amount of the general fund balance that is not otherwise restricted, committed, or assigned by the general appropriation act for other usage within the general fund shall be assigned by the Comptroller for deposit into the Transportation Trust Fund established pursuant to §33.2-1524 or a subfund thereof, and the (ii) if the remaining 33 percent is (a) $50 million or greater, such remaining amount shall not be assigned but shall be held in reserve for appropriation by the General Assembly or (b) less than $50 million, such remaining amount shall be assigned for nonrecurring expenditures. No such assignment shall be made unless the full amounts required for other restrictions, commitments, or assignments including but not limited to (i) (1) the Revenue Stabilization Fund deposit pursuant to §2.2-1829, (ii) (2) the Virginia Water Quality Improvement Fund deposit pursuant to §10.1-2128, but excluding any deposits provided under the Virginia Natural Resources Commitment Fund established under §10.1-2128.1, (iii) (3) capital outlay reappropriations pursuant to the general appropriation act, (iv) (4) (a) operating expense reappropriations pursuant to the general appropriation act, and (b) reappropriations of unexpended appropriations to certain public institutions of higher education pursuant to §23.1-1002, (v) (5) pro rata rebate payments to certain public institutions of higher education pursuant to §23.1-1002, (vi) (6) the unappropriated balance anticipated in the general appropriation act for the end of such fiscal year, and (vii) (7) interest payments on deposits of certain public institutions of higher education pursuant to §23.1-1002 are set aside. The Comptroller shall set aside amounts required for clauses (iv) (b), (v), and (vii) (4) (b), (5), and (7) beginning with the initial fiscal year as determined under §23.1-1002 and for all fiscal years thereafter.

C. The Governor shall include in "The Budget Bill" pursuant to §2.2-1509 recommended appropriations from the general fund or recommended amendments to general fund appropriations in the general appropriation act in effect at that time an amount for deposit into the Transportation Trust Fund or a subfund thereof, and an amount for nonrecurring expenditures equal to the amount assigned by the Comptroller for such purpose pursuant to the provisions of subsection B. Such deposit to the Transportation Trust Fund or a subfund thereof shall not preclude the appropriation of additional amounts from the general fund for transportation purposes.

§58.1-320. Imposition of tax.

A. A tax is hereby annually imposed on the Virginia taxable income for each taxable year of every individual as follows:

Two percent on income not exceeding $3,000;

Three percent on income in excess of $3,000, but not in excess of $5,000;

Five percent on income in excess of $5,000, but not in excess of $12,000 for taxable years beginning before January 1, 1987;

Five percent on income in excess of $5,000 but not in excess of $14,000 for taxable years beginning January 1, 1987, through December 31, 1987;

Five percent on income in excess of $5,000 but not in excess of $15,000 for taxable years beginning January 1, 1988, through December 31, 1988;

Five percent on income in excess of $5,000 but not in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989;

Five percent on income in excess of $5,000 but not in excess of $17,000 for taxable years beginning January 1, 1990;

Five and three-quarters percent on income in excess of $12,000 for taxable years beginning before January 1, 1987;

Five and three-quarters percent on income in excess of $14,000 for taxable years beginning January 1, 1987, through December 31, 1987;

Five and three-quarters percent on income in excess of $15,000 for taxable years beginning January 1, 1988, through December 31, 1988;

Five and three-quarters percent on income in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989; and

Five and three-quarters percent on income in excess of $17,000 for taxable years beginning on and after January 1, 1990.

B. For taxable years beginning on and after January 1, 2017, if actual general fund revenues exceed the official forecast of general fund revenues by more than $500 million for that fiscal year, the five and three-quarters percent tax on Virginia taxable income in excess of $17,000 shall be reduced to five and one-half percent for the subsequent taxable year. In a taxable year in which such tax rate is five and one-half percent, if actual general fund revenues exceed the official forecast of general fund revenues by more than $450 million for that fiscal year, the five and one-half percent tax on Virginia taxable income in excess of $17,000 shall be reduced to five and one-quarter percent for the subsequent taxable year. In a taxable year in which such tax rate is five and one-quarter percent, if actual general fund revenues exceed the official forecast of general fund revenues by more than $450 million for that fiscal year, all Virginia taxable income in excess of $5,000 shall be taxed at a rate of five percent for all subsequent taxable years. The Secretary of Finance shall certify to the Governor and the General Assembly any general fund surplus triggering a change in the tax rate pursuant to this subsection by September 1 following the close of the fiscal year in which the surplus was recorded.

§58.1-339.13. Revenue surplus tax credit.

A. For taxable years beginning on and after January 1, 2017, there shall be allowed a refundable income tax credit against the tax levied pursuant to §58.1-320 in an amount that is equal to the quotient obtained by dividing (i) the amount held in reserve for appropriation in the calendar year that corresponds to the taxable year pursuant to clause (ii) of subsection B of § 2.2-1514 by (ii) the total number of Virginia individual income tax returns filed for the immediately preceding taxable year as estimated by the Tax Commissioner. For purposes of such computation, whenever married individuals filed a joint Virginia income tax returns, two returns shall be deemed to have been filed.

The credit may be claimed only by those individuals who were required under Virginia law to file an individual income tax return and filed such return for the immediately preceding taxable year.

B. For married individuals filing separate Virginia income tax returns, the credit claimed in aggregate by such individuals shall equal the amount of the refundable income tax credit.

C. The Tax Commissioner shall compute the amount of the refundable income tax credit rounded to the nearest whole dollar no later than August 31 of the calendar year. The Tax Commissioner shall as soon as practicable provide to the General Assembly and the Governor a written certification reporting the amount of the refundable income tax credit.

§58.1-400. Imposition of tax.

A. A tax at the rate of six percent is hereby annually imposed on the Virginia taxable income for each taxable year of every corporation organized under the laws of the Commonwealth and every foreign corporation having income from Virginia sources.

B. For taxable years beginning on and after January 1, 2017, if actual general fund revenues exceed the official forecast of general fund revenues by more than $50 million for that fiscal year, the tax imposed under this section shall be reduced by one percentage point for the subsequent taxable year. The Secretary of Finance shall certify to the Governor and the General Assembly any general fund surplus triggering a change in the tax rate pursuant to this subsection by September 1 following the close of the fiscal year in which the surplus was recorded.