COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 3574-01
BILL NO.: SB 807
SUBJECT: Insurance - General; Taxation and Revenue - General
TYPE: Original
DATE: January 29, 2000
FISCAL SUMMARY
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| General Revenue | ($2,191,455) | ($2,191,455) | ($2,191,455) |
| County Foreign Insurance | $0 | $0 | $0 |
| Insurance Dedicated | ($41,267) | ($46,090) | ($47,259) |
| Total Estimated
Net Effect on All State Funds |
($2,232,722) | ($2,237,545) | ($2,238,714) |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government | ($2,191,455) | ($2,191,455) | ($2,191,455) |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Department of Revenue assume this proposal would not fiscally impact their agency.
Officials from the Office of Administration - Budget and Planning deferred to the estimates provided by the INS.
Officials from the Department of Insurance (INS) state that they based their estimate on only those credits specifically listed in 148.400 and not other tax credits including guaranty association and economic development tax credits. The six tax credits the department has used in estimating the loss of revenue on are Examination fees, personal property tax, income tax, franchise tax, valuation fees, and registration fees. The excess credits for 1997 and 1998 are known for three of the six tax credits: examination fees, valuation fees and registration fees. The tax credits carried forward are estimated based on this information.
Tax Credit Estimated Tax Carried Forward
Examination Fee $1,929,009
Personal Property Tax 2,322,848
Income Tax 60,389
Franchise Tax 12,648
Valuation Fees 21,432
Registration Fees 47,585
Total Annual Revenue Loss $4,382,911
In addition to one Accountant to verify and track the tax credits being carried forward, the department would need to re-write the premium tax credit sub-system using a relational database system to allow for accounting of the tax credits and carryover. This would require approximately 760 hours of programming and IT staff time to implement. The department would attempt to accomplish this using existing staff, but it may be necessary to contract for some of the programming time. Contract programming averages $125 per hour and additional appropriation may be requested if needed to implement this proposal.
| FISCAL IMPACT - State Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| GENERAL REVENUE FUND | |||
| Loss - Department of Insurance | |||
| Carryover of premium tax credits | ($2,191,455) | ($2,191,455) | ($2,191,455) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND |
($2,191,455) |
($2,191,455) |
($2,191,455) |
| COUNTY FOREIGN INSURANCE FUND | |||
| Savings - Department of Insurance | |||
| Less distributions to local political subdivisions |
$2,191,455 |
$2,191,455 |
$2,191,455 |
| Loss - Department of Insurance | |||
| Carryover of premium tax credits | ($2,191,455) | ($2,191,455) | ($2,191,455) |
| ESTIMATED NET EFFECT ON COUNTY FOREIGN INSURANCE FUND |
$0 |
$0 |
$0 |
| INSURANCE DEDICATED FUND | |||
| Costs - Department of Insurance | |||
| Personal service (1 FTE) | ($23,924) | ($29,439) | ($30,175) |
| Fringe benefits | ($10,642) | ($13,096) | ($13,423) |
| Expense and equipment | ($6,701) | ($3,555) | ($3,661) |
| Total Costs - Department of Insurance | ($41,267) | ($46,090) | ($47,259) |
| ESTIMATED NET EFFECT ON INSURANCE DEDICATED FUND |
($41,267) |
($46,090) |
($47,259) |
| FISCAL IMPACT - Local Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| LOCAL POLITICAL SUBDIVISIONS | |||
| Loss - Local Political Subdivisions | |||
| Less distributions from County Foreign Insurance Fund |
($2,191,455) |
($2,191,455) |
($2,191,455) |
| ESTIMATED NET EFFECT ON LOCAL POLITICAL SUBDIVISIONS |
($2,191,455) |
($2,191,455) |
($2,191,455) |
FISCAL IMPACT - Small Business
Small insurance companies that have unused premium tax credits would be fiscally impacted to the extent they could use the credits in future years.
DESCRIPTION
This proposal would allow insurance companies to carry forward premium tax credits if those credits were not used in the year accrued.
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 Revenue
Office of Administration
Division of Budget and Planning
Jeanne Jarrett, CPA
Director
January 29, 2000