Bill Text: VA HB1159 | 2024 | Regular Session | Prefiled
Bill Title: Income tax, state; distribution of revenues to localities, funds for local school construction.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-02-13 - Left in Finance [HB1159 Detail]
Download: Virginia-2024-HB1159-Prefiled.html
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 58.1-320.1 as follows:
§58.1-320.1. Distribution of income tax revenue for school construction purposes.
A. One percent of all resident income tax revenues shall be distributed to localities to be used solely for capital projects for the construction or renovation of schools in each such locality. For purposes of this section, "resident income tax revenues" means the amount of individual income tax revenues collected pursuant to this article from individuals who are residents of a locality or part-year residents of a locality, for the portion of a taxable year in which a part-year resident resided in such locality.
B. All resident income tax revenues collected by the Tax Commissioner under this section shall be paid into the state treasury to the credit of a special fund that is hereby created on the Comptroller's books for each locality under the name "Collections of Additional Local Income Taxes in ____ (INSERT NAME OF THE LOCALITY)." A separate fund shall be created for each locality.
C. The distribution of revenues required by this section shall be based upon the net individual income tax revenue collected for residents and part-year residents of a locality in each taxable year. As soon as practicable after the close of each taxable year, the Comptroller shall draw his warrant on the State Treasurer in the proper amount in favor of each locality, and such payments shall be charged to the account of the locality under its special fund created by this section.
D. In the event that any revenues distributed to localities are used for any purpose other than for capital projects for the construction or renovation of schools, the locality shall repay such revenues to the Department of Taxation, and such revenues shall revert to the general fund.
E. 1. Except as provided in subdivision 2, any locality receiving a distribution of resident income tax revenues pursuant to this section shall not reduce the total amount of its annual appropriation for public school purposes, including capital projects for the construction or renovation of schools, below the total amount it appropriated for such purposes for its most recent fiscal year ending prior to July 1, 2024.
2. A locality may reduce its total amount of appropriation below the level required by subdivision 1 if the locality reduces its rate of tax imposed on machinery and tools pursuant to Article 2 (§58.1-3507 et seq.) of Chapter 35 or license taxes pursuant to Chapter 37 (§58.1-3700 et seq.) below its tax rate during its most recent fiscal year ending prior to July 1, 2024. However, any reduction in such appropriation shall be limited to the amount of revenue lost from the reduction in tax rates on machinery and tools or license taxes, as applicable.
