Item 278 | First Year - FY1997 | Second Year - FY1998 |
|---|---|---|
| Federal Retiree Tax Reserve (73100) | $62,930,855 | $62,583,565 |
| Fund Sources: | ||
| General | FY1997 $62,930,855 | FY1998 $62,583,565 |
Authority: Chapter 5, 1994 Special Session I, Acts of Assembly, Chapters 47, 185, and 203, 1995 Acts of Assembly, and Chapter 719, 1996 Acts of Assembly.
1. Notwithstanding any other provision of law, on or before July 31, 1996 and July 31, 1997 respectively, the State Comptroller shall make the following payments from this appropriation:
a. $61,190,095 the first year and $61,190,095 the second year into the Federal Retiree Tax Reserve I created pursuant to Enactment No. 2, §§ 1.B. and 3.B. of Chapter 5 of the 1994 Acts of Assembly, Special Session I, less an amount estimated at $71,185 the first year and $71,185 the second year, which is to be transferred to the general fund in accordance with §3-1.01 of this act. The amount of $71,185 is attributable to taxpayers who waived payments pursuant to Enactment No. 2, § 1.F.2 and F.3, of the cited Chapter. The amount of this payment is in accordance with Paragraph 4 of this item.
b. $1,241,351 the first year and $1,072,575 the second year into the Federal Retiree Tax Reserve II created pursuant to Enactment No. 1, § 1.3., of Chapters 185 and 203 of the 1995 Acts of Assembly.
c. Contingent upon passage of House Bill 292 of the 1996 Session, the Governor may direct the transfer of unobligated Executive Department agency balances that exist on June 30, 1996, other than those of the institutions of higher education, to a special fund or to a trust fund or other legal entity established by the Tax Commissioner for the purpose of making the first and second annual settlement payments to certain retired federal and military retirees who meet the conditions set forth in House Bill 292.$499,409 the first year and $320,895 the second year into the Federal Retiree Tax Reserve III, notwithstanding Enactment No. 1, §1.3 of Chapter 719 of the 1996 Acts of Assembly. Should actual payments made from the Federal Retiree Tax Reserve III on March 31, 1997 and 1998 exceed these amounts, the Director of the Department of Planning and Budget is authorized to transfer required amounts from the unappropriated general fund balance in this act or, upon written approval of the Governor, from unobligated balances in other items in this act for Executive Department agencies, to ensure that payments are made to claimants. Should actual payments made from the Federal Retiree Tax Reserve III on March 31, 1997 and 1998 be less than the appropriated amounts, the excess shall revert to the general fund on June 30, 1997 and 1998.
2. It is the intent of the General Assembly that all funds necessary to make the required payments be from revenues collected during the fiscal years 1997 and 1998 respectively. However, earnings on investments of the reserves related to the Federal Retiree Tax Reserve I and Reserve II shall be credited to the reserves as if the payments had been made on July 1 each year.
3. All earnings on investment of the reserves related to the Federal Retiree Tax Reserve I and Reserve II shall be held in the reserves and reinvested until the final payments to taxpayers are made on March 31, 1999. Earnings on the reserves shall be calculated as provided by the cited Chapter 5.Notwithstanding the provisions of Chapter 5 cited above, effective July 1, 1996, earnings related to the Federal Retiree Tax Reserve I and Reserve II shall be calculated at a rate equal to the composite yield on the General Account of the Commonwealth, as calculated monthly by the Department of the Treasury, or at a rate of 4%, whichever is greater. The Department of Accounts will retroactively credit interest to the reserves at a rate equal to the composite yield since inception of the funds.
4. It is hereby acknowledged that the special litigation reserve fund established by Chapter 47 of the 1995 Acts of Assembly is rendered unnecessary by the decision of the Supreme Court of Virginia on September 15, 1995, in the case of Harper et al. vs Virginia Department of Taxation. The above appropriation for the Federal Retiree Tax Reserve I therefore excludes $8,809,905 each year from the sum of $70,000,000 specified in Enactment No. 1, §§ 1.B. and 3.B. of the cited Chapter 5. Such amount reflects the claims of taxpayers opting out of the settlement which would have been deposited into the special litigation reserve fund had such litigation not been resolved. Authority is provided in § 3-1.01GG of HB 29 of the 1996 Session for transfer of the special litigation reserve fund to the general fund.