Legislative proposals by House Ways and Means Committee Chair Dave Camp would expand the scope of the unrelated business taxable income rules so that state and local pension funds would be subject to tax on certain investment income, including, in some instances, income from investment funds.
After several months of hearings on comprehensive tax reform, on February 26, 2014, Representative Camp released a proposal referred to as the Tax Reform Act of 2014. The following is a summary of certain proposed changes that would affect state and local pension fund investments. We have also prepared summaries of other provisions of the proposal relevant to other topical areas — please check our website for additional summaries. Although the Tax Reform Act of 2014 has not yet been formally introduced as a bill, and its prospects for passage are uncertain at this point, given the significant nature of the proposed reforms, we will monitor progress of the proposals and provide updates as warranted.