FISCAL NOTE
Date Requested: January 20, 2022
Time Requested: 02:07 PM |
| Agency: |
Insurance Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2120 |
Introduced |
HB4295 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
7152 Insurance Commission Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
House Bill 4295, if enacted, would transfer the State Office of the National Flood Insurance Program (NFIP) from the Offices of the Insurance Commissioner to the Division of Emergency Management effective July 1, 2022. HB 4295 would also dedicate funds collected from premium taxes on flood insurance policies to finance the operations and responsibilities of the State Office of the National Flood Insurance Program.
The Offices of the Insurance Commissioner (OIC) estimates that the transfer of the NFIP from the OIC to the Division of Emergency Management will result in a reduction of expenses of $182,700 annually at the OIC. See the memorandum section of this fiscal note for additional information.
The State Office of the National Flood Insurance Program was transferred from the former Division of Homeland Security and Emergency Services to the OIC in 2020 during the reorganization of the former Department of Military Affairs and Public Safety to the newly created Department of Homeland Security. During the past year, the Division of Emergency Management and the OIC have discussed the duties and responsibilities of the program and are in agreement that this program should be transferred back to the Division of Emergency Management.
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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 |
-182,700 |
-182,700 |
| Personal Services |
0 |
-136,620 |
-136,620 |
| Current Expenses |
0 |
-46,080 |
-46,080 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Currently, the NFIP Unit has two employees their combined salaries and benefits total $136,620 annually.
For fiscal year 2022, the NFIP unit has expended $23.040 in current expenses for the first six months of the year, so the OIC estimates that the total annual cost for current expenses will approximate $46,080 annually.
Salaries & Benefits $136,620
Current Expenses $ 46,080
Total expense reduction $182,700
Memorandum
House Bill 4295 seeks to transfer the State Office of the National Flood Insurance Program from the Offices of the Insurance Commissioner (OIC) to the Division of Emergency Management effective July 1, 2022.
The OIC estimates a reduction in existing expenses of $182,700 annually as a result of the enactment of HB4295. It should be noted that for the past and current fiscal years, the OIC has been the recipient of a Community Assistance Program (CAP) federal grant award that is administered under the State Support Services Element (SSSE) of the Federal Emergency Management Agency (FEMA). The fiscal year 2022 grant is for $146,900 and expires on June 30, 2022. The OIC has received reimbursement of $43,446 year to date under the grant award for fiscal year 2022. If the trend of expenses that are eligible under the grant continues for the remainder of the current year, the OIC can anticipate potential reimbursement for approximately $86,892 for the fiscal year. If the grant reimbursement is received, the total estimated expenditures of $182,700 would be reduced to a net expense of $95,808 for fiscal year 2022.
It should be noted that the current CAP federal grant expires on June 30, 2022, and is not transferable between the two state agencies, so the Division of Emergency Services would need to make application for the federal grant, if available for fiscal year 2023. The Department of Emergency Management should be contacted for their estimate of the cost of assuming the program and the related responsibilities.
House Bill 4295, if enacted, requires the State Treasurer to distribute funds from the flood insurance tax fund to finance the operations of the State Office of the National Flood Insurance Program. The OIC estimates the amount of funds generated by the flood insurance premium tax to be approximately $379,812 annually.
Person submitting Fiscal Note: Melinda Kiss
Email Address: Melinda.A.Kiss@wv.gov