SB 0964 - Fiscal Note

Fiscal Note - SB 0964 - Moves Duties of Dept. of Insurance to Dept. of Econ. Develp.

L.R. NO.  3462-02
BILL NO.  SB 964
SUBJECT:  Department of Insurance, Department of Economic Development
TYPE:     Original
DATE:     March 19, 1996



                              FISCAL SUMMARY

                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

Insurance                               $100,000 to     $100,000 to
Dedicated                        $0        $300,000        $300,000

Total Estimated                         $100,000 to     $100,000 to
Net Effect on All                $0        $300,000        $300,000
State Funds


                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

None

Total Estimated
Net Effect on All
Federal Funds                    $0              $0              $0


                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

Local Government                 $0              $0              $0


                              FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Economic Development (DED) assumed that the
new Division of Insurance would bring with it its current funding.  The
proposal would impose additional administrative responsibilities on DED.
However, such responsibilities could be handled within current
appropriations.  Therefore, the fiscal impact to DED is zero.

Officials from the Department of Insurance (INS) stated that passage of this
legislation would have not have significant fiscal impact on their agency.
However, the passage of more than one similar proposal could require the INS
to request increased appropriations to cover cumulative administrative cost.

Oversight assumes that this proposal requires a "Type Three" transfer of the
Department of Insurance to the Department of Economic Development.  The
Department of Insurance would become an independent division within DED with
supervision by DED of  budgeting and reporting functions.  Fiscal impact
would result from the elimination of FTEs and reduction in the pay scales
resulting from the change from a Department to a Division. Positions such as
the Department Director, Designated Principal Assistants, Personnel Manager,
Budget Analyst and Data Processing Manager could be eliminated with DED staff
providing those functions. A number of current positions would require
adjustments in salary to allow for the reduction in status to a Division.
Oversight estimates savings from these changes will range from $100,000 to
$300,000.


FISCAL IMPACT - State Government    FY 1997       FY 1998       FY 1999
                                (10 Months)


INSURANCE  DEDICATED FUND

Savings - Department of Economic
Development-Division of Insurance

Personal Services                        $0   $100,000 to   $100,000 to
                                                 $300,000      $300,000

Estimated Net Effect on Insurance        $0   $100,000 to   $100,000 to
Dedicated Fund                                   $300,000      $300,000


FISCAL IMPACT  - Local Government   FY 1997       FY 1998       FY 1999
                                   (10 Mo.)

                                         $0            $0            $0


DESCRIPTION

This act moves the duties of the Department of Insurance to the Division of
Insurance within the Department of Economic Development.  All rules,
licenses, applications and other actions begun by the Department of Insurance
will continue in effect.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.


SOURCES OF INFORMATION

Department of Insurance
Department of Economic Development