FISCAL NOTE
Date Requested: January 31, 2022
Time Requested: 04:09 PM |
| Agency: |
Insurance Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2242 |
Introduced |
SB513 |
|
|---|
| CBD Subject: |
Public Safety |
|---|
|
FUND(S):
7158 Fire Protection Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Revenue From Existing Sources, Creates New Program, Creates New Fund: Fire Service Recruitment and Retention Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Senate Bill 513, if enacted would establish a new Fund to be known as the Fire Service Recruitment and Protection Fund that will be held by the State Treasurer and administered by the State fire Commission. SB 513 would also create a new grant program for the purpose of providing grants to volunteer and part-volunteer fire companies and departments and their members for the purpose of recruiting and retaining volunteer firefighters.
Senate Bill 513, if enacted would increase the policyholder surcharge on fire and casualty insurance policies sold in WV from the current level of .55% to one percent (1%) effective July 1, 2022. The Offices of the Insurance Commissioner estimates that the fiscal impact of SB 513 would be an increase in revenues collected from fire and casualty insurance policyholders of approximately $11,801,658 per year.
The Offices of the Insurance Commissioner is unable to estimate any increased costs to the State Fire Commission or to any other entity to administer the program.
Please see the memorandum section of this fiscal note for additional details.
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 |
11,801,658 |
11,801,658 |
Explanation of above estimates (including long-range effect):
Proposed additional surcharge revenue generated with the .45% increase in the Fire & Casualty Surcharge §33-3-33c
Proposed 1% Current .55%
Total Premiums $150,562,922.12
Cancelations $ (8,547,306.95)
fees $ 10,687,710.94
$152,703,326.11 $152,703,326.11
Proposed surcharge 1.00% 0.55%
$1,527,033.26 $839,868.29
Total Company Premiums 2,469,887,292 $2,469,887,292.00
Proposed surcharge 1.000% 0.55%
Premium Revenue $24,698,872.92 $13,584,380.11
TOTAL Revenue $26,225,906.18 $14,424,248.40
Increase $11,801,657.78
Memorandum
If enacted, Senate Bill 513 would increase the policy surcharge paid by WV policyholders of fire and casualty insurance policies from the current level of .55% to 1%.
The increase in the surcharge levied would result in estimated total revenue of $26,255,906 per year, which is an increase of $11,801,658 over the current $14,424,248 surcharge paid annually by the policyholders.
Senate Bill 513 would establish a new Fund and a new program to be administered by the State Fire Commission and to be audited by the Legislative Auditor. They should be consulted regarding their cost estimates to administer and audit the program.
The current language in the proposed SB 513 would create inconsistencies with
§33-12c-7 and that section of the code should be reviewed for compatibility with the provisions of SB 513.
The proposed effective date of July 1, 2022 would create hardships on the OIC and all fire and casualty insurance companies who write business in WV because the companies report and are taxed on a calendar year basis and the tax forms would have to be altered and redistributed at mid year. This will also require technological updates for both the Insurance Commissioner and the companies. The preferred effective date for any premium tax or premium surcharge changes would be on January 1st (prospectively), which is the start of the new tax year for insurance companies.
Person submitting Fiscal Note: Melinda Kiss
Email Address: Melinda.A.Kiss@wv.gov