Bill Text: WV HB2862 | 2018 | Regular Session | Introduced
Bill Title: Establishing the “Stay in State” tax credit
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2018-01-10 - To House Education [HB2862 Detail]
Download: West_Virginia-2018-HB2862-Introduced.html
FISCAL
NOTE
WEST virginia Legislature
2017 regular session
By
[
to the Committee on Education then Finance.
A BILL to amend the Code of West Virginia, 1931, as amended,
by adding thereto a new section, designated §11-21-25; to amend said code by
adding thereto a new section, designated §18-2-41; and to amend said code by
adding thereto a new section, designated §18B-2A-9, all relating to
establishing the “Stay in State” tax credit against personal income for higher
education tuition for certain state residents; creating credit for student loan
payments for all in-state community college, college or university
undergraduates and their in-state employers against personal income tax;
establishing conditions and qualifications for the tax credit; providing
methodology for calculating credit; providing for graduate and employer
eligibility for payments against student loans for employees; defining terms;
and providing that the board of education, State Board of Education and
governing boards of colleges promotion of the program.
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 §11-21-25; that said code be amended by adding thereto a new
section, designated §18-2-41; and that said code be amended by adding thereto
a new section, designated §18B-2A-9, all to read as follows:
CHAPTER 11. TAXATION.
ARTICLE 21. PERSONAL
INCOME TAX.
§11-21-25. Stay in State Tax Credit.
(a) Credit allowed.-- To promote the retention of recent in-state
college graduates, there is hereby created a tax credit for repayment of
student loans against West Virginia personal income tax, available to those
individuals that remain in West Virginia following graduation from an
accredited West Virginia community college, college or university. A qualified individual or an employer of a
qualified individual is allowed a credit against the tax imposed by this
article in accordance with the provisions of this section.
(b) A taxpayer entitled to the credit for any
taxable year may carry over and apply to the tax liability for any one or more
of the next succeeding ten years the portion, as reduced from year to year, of
any unused credits.
(c) A taxpayer may claim
a credit based on loan payments actually made to a relevant lender or lenders
under this section only with respect to loans that are part of the qualified
individual's financial aid package and, for tax years beginning on or after
January 1, 2018, only with respect to loan payment amounts paid by the taxpayer
during that part of the taxable year that the qualified individual worked in
this state. Payment of loan amounts in excess of the amounts due during the
taxable year does not qualify for the credit. Refinanced loans that are part of
the qualified individual's financial aid package are eligible for the credit
under this section if the refinanced loans remain separate from other debt,
including debt incurred in an educational program other than the degree program
for which a credit is claimed under this section. Forbearance or deferment of
loan payments does not affect eligibility for the credit under this section.
(d) Except as provided
in subsection (g), the credit under this section may not reduce the tax
otherwise due under this part to less than zero.
(e) Calculation of the credit. The credit with respect to a qualified
individual is equal to the amount determined under subdivision (1) or subdivision
(2), whichever is less, multiplied by the proration factor:
(1) The benchmark loan
payment multiplied by the number of months during the taxable year in which the
taxpayer made loan payments; or
(2) The monthly loan
payment amount multiplied by the number of months during the taxable year in
which the taxpayer made loan payments.
(f) The credit under
subsection (e) for an individual who transferred to an accredited West Virginia
community college, college or university from an accredited non West Virginia
community college, college or university on or after January 1, 2017, and who
earned no more than thirty credit hours of course work toward the degree at an
accredited non West Virginia community college, college or university is equal
to fifty percent of the amount otherwise determined under this section in the
case of an associate degree and equal to seventy-five percent of the amount
otherwise determined under this section in the case of a bachelor's degree.
(g) Notwithstanding
subsection (d), the credit under this subsection is refundable to the extent
the credit is based on loans included in the financial aid package acquired to
obtain a bachelor's degree or associate degree in science, technology,
engineering or mathematics. For
purposes of this subsection, the proration factor is the amount derived by
dividing the total number of academic credit hours earned for a bachelor's or
associate degree on or after January 1, 2014, by the total number of academic
credit hours earned for the bachelor's or associate degree.
(h) Employer eligible to the credit.-- An employer may qualify for the
credit for a qualified employee. A
taxpayer constituting an employer making loan payments directly to a lender
during the taxable year on loans included in a qualified employee's financial
aid package may claim a credit equal to the benchmark loan payment or the
actual monthly loan payment made by the employer on the loans, whichever is
less, multiplied by the number of months during the taxable year the employer
made loan payments on behalf of the qualified employee during the term of
employment. The credit under this subsection may not be claimed with respect to
months of the taxable year during which the employee was not a qualified
employee. If the qualified employee is employed on a part-time basis during the
taxable year, the credit with respect to that employee is limited to fifty
percent of the credit otherwise determined under this subsection.
(i) The department shall
assist the Governing Boards of West Virginia community colleges, colleges and
universities with their participation in the “Stay in State Tax Credit” as
provided in section nine, article two-a, chapter eighteen-b of this code. The department shall provide to the boards
appropriate materials and assistance needed to educate students on how to
qualify and retain eligibility for the credit.
(j) The following
definitions apply to this section:
(1) "Accredited non
West Virginia community college, college or university" means an
institution located outside the state that is accredited by a regional
accrediting association or approved by the United States Secretary of
Education, under section one thousand ninety-nine-b, title twenty of the United
States Code;
(2) "Accredited West Virginia community
college, college or university" means an institution located in West
Virginia that awards baccalaureate degrees and which holds accreditation by an
accrediting agency or association approved by the United States Secretary of
Education, under section one thousand ninety-nine-b, title twenty of the United
States Code;
(3) "Benchmark loan
payment" means the monthly loan payment for the amount of the principal
cap paid over ten years at the interest rate for federally subsidized Stafford
loans under 20 United States Code, Section 1077a applicable during the
individual's last year of enrollment at an accredited West Virginia community
college, college or university;
(4) "Full
time" employment means employment with a normal workweek of thirty-two
hours or more.
(5) "Principal cap" means:
(A) For an individual
obtaining a bachelor's degree and graduating from an accredited West Virginia
community college, college or university, the average in-state tuition and
mandatory fees for attendance for the academic year ending during the calendar
year prior to the year of graduation multiplied by four; and
(B) For an individual
obtaining an associate degree and graduating from an accredited West Virginia
community college, college or university, the average in-state tuition and
mandatory fees for attendance for the academic year ending during the calendar
year prior to the year of graduation multiplied by two.
(6) “Qualified person”
means:
(A) A West Virginia
resident that attended, and obtained an associate or a bachelor's degree from,
a West Virginia community college, college or university on or after January 1,
2018. The person need not obtain the degree from the institution in which that
person originally enrolled, as long as all course work toward the degree is
performed at the West Virginia community college, college or university, except
that an individual who transfers to a West Virginia community college, college
or university on or after January 1, 2017, from outside the state and earned no
more than thirty credit hours of course work toward the degree at an accredited
non West Virginia community college, college or university on or after January
1, 2018, and prior to the transfer is eligible for the credit if all other
eligibility criteria are met. Program eligibility for such a person must be
determined as if the commencement of course work at the relevant accredited
community college, college or university was the commencement of course work
for the degree program as a whole;
(B) Was a West Virginia
resident while in attendance at the West Virginia community college, college or
university. For purposes of this
paragraph:
(C) Lived in West
Virginia while pursuing the degree, excepting periods when it was reasonably
necessary for the individual to live elsewhere as part of the relevant
institution's academic programs or while pursuing course work at an accredited
community college, college or university;
(D) During the taxable
year, was a resident individual; and
(E) Worked during the
taxable year for tax years at least part time for an employer or self-employed
and was, during the taxable year, deployed for military service in the United
States Armed Forces, including the National Guard and the Reserves of the
United States Armed Forces; and
(7) ”Qualified student
loan” means a loan taken out in the name of the taxpayer claiming the credit
authorized by this section, and used solely to pay qualified education expenses
for education resulting in the award of a baccalaureate degree at an accredited
West Virginia community college, college or university.
CHAPTER 18. EDUCATION.
ARTICLE 2. STATE BOARD
OF EDUCATION.
§18-2-41. Promoting
student awareness of “Stay in State Tax Credit.”
The State Board of
Education shall notify superintendents about the program annually and encourage
the superintendents to publicize the availability of the program among
students, parents and school staff, and may provide summary and documentary
materials explaining the program to students and encouraging student
participation.
CHAPTER 18B. HIGHER
EDUCATION.
ARTICLE 1. GOVERNANCE.
§18B-2A-9. Governing
Boards to provide notification of Stay in State Tax Credit eligibility.
(a) Each Governing Board
of a West Virginia community college, college or university shall provide
information about the “Stay in State Tax Credit” as provided in section
twenty-five, article twenty-one, chapter eleven of this code, promoting the
program in financial aid award materials, entrance interviews, exit interviews,
and materials listing financial aid resources.
(b) Each board shall
document for students information relating to the Stay in State tax credit,
including, once an eligible student has earned the degree, the total principal
of eligible loans the student received as part of that student's financial aid
package related to course work completed at an accredited West Virginia
community college, college or university.
Each board shall provide an original or certified copy to the student
and shall retain a copy of the documentation in its files for at least ten years
after the student graduates.
NOTE: The purpose of this bill is
to establish the “Stay in the state Act” tax credit that allows residents of
this state who remain in state after graduating with an undergraduate or associate degree from a state institution to
be granted a tax credit for the total cost of tuition and interest for student
loans used to obtain their degree; this tax credit is against personal property
tax in West Virginia and is awarded over a ten-year period; employers are also
allowed to claim the credit for employees that qualify for the credit; and
in-state high schools, colleges and universities are required to inform and
assist students with obtaining the tax credit.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.