HB 120 -- INCOME TAX DEDUCTION FOR PENSIONS (Kreider)

Under current law, the income tax exemption for public and
private source pension income received is limited by maximum
adjusted gross income levels for the taxpayer.  Under current
levels, the exemption is limited to adjusted gross incomes of
$25,000 for single taxpayers and $32,000 for combined
taxpayers.  The maximum amount of exemption allowed is $6,000
for public source and $1,000 for private source.  This bill
extends the maximum adjusted gross income levels by phasing-out
the pension exemption amount by $1 for each $1 of income over
the maximum levels.

In addition, current law phases in the $6,000 deduction for
private pensions by tax year 2002.  This bill eliminates the
phase-in by allowing the full $6,000 private pension deduction
for tax year 1999.

FISCAL NOTE:  Estimated Net Loss to General Revenue Fund of
$70,800,000 in FY 2000, $71,000,000 in FY 2001, and $71,100,000
in FY 2002.

HB 120 -- INCOME TAX ON PENSIONS

CO-SPONSORS:  Kreider, Lawson, Thompson (72)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 17 to 0.

Under current law, the income tax exemption for public and
private source pension income received is limited by maximum
adjusted gross income levels for the taxpayer.  Under current
levels, the exemption is limited to adjusted gross incomes of
$25,000 for single taxpayers and $32,000 for combined taxpayers.
The maximum amount of exemption allowed is $6,000 for public
source and $1,000 for private source.  This bill extends the
maximum adjusted gross income levels by phasing-out the pension
exemption amount by $1 for each $1 of income over the maximum
levels.

FISCAL NOTE:  Estimated Net Loss to General Revenue Fund of $0
in FY 2000, $3,800,000 in FY 2001, and $5,800,000 in FY 2002.

PROPONENTS:  Supporters say that this bill will eliminate the
"dead drop off" of the pension deduction that could cause the
taxpayer to lose the entire pension deduction for one dollar of
income.

Testifying for the bill was Representative Kreider.

OPPONENTS:  There was no opposition voiced to the committee.

Bill Tucker, Assistant Director of Research

HB 120 -- Income Tax on Pensions

Co-Sponsors:  Kreider, Lawson, Thompson (72)

Under current law, the income tax exemption for public and
private source pension income received is limited by maximum
adjusted gross income levels for the taxpayer.  Under current
levels, the exemption is limited to adjusted gross incomes of
$25,000 for single taxpayers and $32,000 for combined taxpayers.
The maximum amount of exemption allowed is $6,000 for public
source and $1,000 for private source.  This bill extends the
maximum adjusted gross income levels by phasing-out the pension
exemption amount by $1 for each $1 of income over the maximum
levels.