Legislative Report 13-19 June 7, 2013 House Tax Reform Measure Moves Forward The House of Representatives this week advanced House Bill 998, the Tax Simplification and Reduction Act. This bill is the House version of tax reform. House Bill 998, unlike one of the Senate’s Tax Reform proposals, does not extend the state income tax to Social Security benefits nor does it not apply state sales taxes to groceries and prescription medications. The House bill did generate some controversy with regard to proposed limits on deductions for home mortgage interest, charitable contributions, and property taxes paid on residential dwellings. The bill was temporarily de-railed on Wednesday when a majority of House Appropriations Committee members rejected a proposed committee substitute that retained the $25,000 cap on mortgage interest, contributions, and home property taxes. House leaders conducted a series of meetings on Wednesday to build support for HB 998. The bill was again before the Appropriations Committee. The Tax Simplification and Reduction Act, with a modified deductions cap that excludes charitable contributions was approved by the committee. On Friday, House Bill 998 was approved by the House on second reading and will be scheduled for third reading next week. Please note that a summary of the major personal income tax provisions of House Bill 998 are posted on the General Assembly web page at ncleg.net/House/House.html (see Tax Simplification and Reduction Act Plan Components). Committee Activity This Week Senate Bill 558: Treasurer’s Investments (Primary Sponsor- Senator Hise) This bill gives the State Treasurer greater flexibility in the choice of investment instruments for the assets of the state and local governmental retirement systems. The purpose is to allow further diversification of the investment portfolios for the retirement systems. The bill modifies the separate percentage limitations on five categories of investments and establishes a group percentage limit. The investment categories generally are referred to as alternative and include: various trusts including real estate trusts; securities, including asset-backed securities; limited liability vehicles; and inflation-linked bonds, timberlands, and commodities. The percentage of the assets of the retirement systems that may be invested collectively in these categories is increased from 34% to 40% of retirement system assets. Furthermore, the Treasurer may not invest more than 15% of retirement system assets in any one category of the alternative investments. The bill also requires the State Treasurer to include information in the regular quarterly investment reports describing how increases of 3% or more in the market value of any of the alternative investments complies with the statutory duties of the Treasurer as fiduciary for the retirement systems. SB 558 was approved by the House Committee on State Personnel on Wednesday. The bill has not yet been scheduled for further action.
Posted on: Sat, 08 Jun 2013 16:23:51 +0000
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