FISCAL NOTE
Date Requested: March 07, 2018
Time Requested: 10:47 AM |
| Agency: |
Insurance Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2772 |
Engrossed |
HB4628 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
7162
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
If enacted, House Bill 4628 would reduce revenues directed to the Worker’s Compensation Old Fund, 7162. The estimated impact of the revenue reduction due to the 75% redirection would be approximately $13 to $13.5 million during the first half of fiscal year 2019. Additionally, the debt reduction surcharges would cease as of January 1, 2019 so the Old Fund’s revenues would decrease
by an additional $4.3 million for the second half of fiscal year 2019.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-17,300,000 |
0 |
Explanation of above estimates (including long-range effect):
To estimate the amount of revenue redirected from the Worker’s Compensation Old Fund to the General Revenue Fund during fiscal year 2019, the OIC analyzed the amounts collected from debt reduction surcharges in prior years and year to date during the current fiscal year.
We estimate the impact of HB 4628 to be as follows:
FY19 – 7/1/18 to 12/31/18 collections from insured employers @75% = $10,150,000
FY19 – 7/1/18 to 12/31/18 collections from self-insured employers @75% = $ 3,100,000
The 75% of the combined total of both insured and self-insured employers would be approximately $13,250,000 of redirected revenue.
Additionally, subsequent to December 31, 2018 the debt reduction surcharges would cease. Accordingly, the Old Fund revenues for the remainder of fiscal year 2019 would decrease by an estimated $4.3 million between January 1, 2019 and June 30, 2019.
Memorandum
HB 4628 would redirect 75% of debt reduction surcharge revenues from the Worker’s Compensation Old Fund to the General Revenue Fund during the first half of fiscal year 2019.
On January 1, 2019 the debt reduction surcharges would cease.
The OIC estimates the impact of the redirection to be in the range of $13 to $13.5 million.
The amount will vary due to normal payroll fluctuations and rating plans used by the carriers.
The OIC estimates the amount of revenue reduction during the second half of fiscal year 2019 to be approximately $4.3 million based on prior year collections for that time period.
Person submitting Fiscal Note: Melinda Ashworth Kiss
Email Address: Melinda.A.Kiss@wv.gov