FISCAL NOTE

Date Requested: January 19, 2022
Time Requested: 03:24 PM
Agency: Insurance Commission
CBD Number: Version: Bill Number: Resolution Number:
1985 Introduced HB4259
CBD Subject: Economic Development


FUND(S):

0480, 1330

Sources of Revenue:

General Fund

Legislation creates:

Decreases Existing Revenue



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


House Bill 4259, if enacted, will create the Small Business Jumpstart Act and establish the transferability of tax credits, the requirements and the criteria that the Development Office would use to establish and maintain the program. §31-15D-13 establishes the amount of the credits that can be utilized at $20,000,000 per annum during years four, five, six and seven of the program. It also limits the total amount of tax credits to be not more than $80,000,000 for the life of the program. Accordingly, the fiscal impact of House Bill 4259, if enacted, could create a $80,000,000 reduction in general revenue funds upon full implementation. The OIC is unable to estimate any offsetting economic development impact that would result from the passage of HB 4259. Additionally, we do not know if the full amount of the available credits would be utilized in any given year. If the full amount of the credits are not utilized, then the reduction in general revenues would be less than the estimated potential $80,000,000.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2022
Increase/Decrease
(use"-")
2023
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 0 -80,000,000


Explanation of above estimates (including long-range effect):


House Bill 4259 creates credits to insurance premium taxes paid by insurance companies in years, four, five, six and seven of the program. HB 4259 specifies that the cap on the amount of credits that can be used per annum is $20,000,000. HB 4259 also specifies that the total amount of the credits available under the program are not to exceed $80,000,000 over the four year period. The OIC is not able to estimate how many credits that the Development Office would grant under the program, or any offsetting economic impact due to the implementation of the program. Accordingly, the best estimate is the statutorily specified credit allowed to estimate the potential reduction in premium tax revenue collections.



Memorandum


House Bill 4259, if enacted, would create the Small Business Jumpstart Act and establish the transferability of tax credits, the requirements and the criteria that the Development Office would use to establish and maintain the program. The Office of the Insurance Commissioner (OIC) estimates that the full implementation costs of HB 4259 may result in up to $80,000,000 of existing premium tax revenues that would not be collected by the OIC to pass through to General Revenue. HB 4259 would not impact the operations or expenses of the OIC. The OIC is not able to estimate the impact that the loss of the premium tax revenue would have to the current programs funded by the state's General Revenue Fund. §31-15D-13 establishes the amount of the credits that can be utilized at $20,000,000 per annum during years four, five, six and seven of the program and limits the total amount of tax credits to be not more than $80,000,000 for the life of the program. The OIC is unable to estimate any offsetting economic development impact that would result from the passage of HB 4259, and the WV Development Office should be consulted in that regard. If the full amount of the credits are not utilized, then the reduction to general revenue would be less than the estimated $80,000,000.



    Person submitting Fiscal Note: Melinda Kiss
    Email Address: Melinda.A.Kiss@wv.gov