FISCAL NOTE
FUND(S):
Volunteer Fire Department Worker's Compensation Premium Subsidy Fund
Sources of Revenue:
Special Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The proposed legislation will require dedicated funding totaling $2,975,000.00 for the year ending June 30, 2014, and at least $3,600,000.00 in Fiscal Years 2015 and 2016.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2013
Increase/Decrease
(use"-") |
2014
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 |
2,975,000 |
3,600,000 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The proposed legislation clarifies the various terms used in existing law and appears to make that clarifying language retroactive to workers’ compensation premium subsidy claims since July 1, 2011. Therefore, it raises the possibility upon passage for volunteer fire companies to resubmit claims for workers’ compensation premium subsidy for other emergency services previously not covered for Fiscal Years 2012 and 2013. Our office estimates a potential payout of $475,000 for claims of these types. Also, the Office of the West Virginia Insurance Commissioner has estimated $600,000 in additional premium subsidy claims, if the clarifying legislation provisions should apply only to claims likely to be submitted during Fiscal Year 2014 and we believe this cost estimate to be reliable.
In addition, the subsidy payout experience has increased since October 1, 2012 from an annualized $1.9 Million to an annualized $2.6 Million. The State Auditor’s Office now estimates a funding shortfall in the existing legislation through June 30, 2014 which will approximate $1.5 Million. Lastly, required audits of the initial premium calculations are now expected to add at least $400,000 to the cost of the existing program. Collectively, we estimate the costs of the proposed legislation, inclusive of the additional funding needs to carry the program through June 30, 2014 will require $2,975,000 in additional new funding under the assumption that any unexpended funds remaining in Fund 0116 as of June 30, 2013 would be reappropriated for expenditure in Fiscal Year 2014.
The proposed legislation also appears to provide for the continuation of the Workers’ Compensation Subsidy Program through June 30, 2016. At this time, our estimate of the annualized costs of the legislation in Fiscal Years 2015 and 2016 would be at least $3,600,000 and would include our current annualized subsidy payout of $2,600,000 plus $600,000 for previously uncovered premiums and $400,000 for required audit adjustments on premiums.
Memorandum
Person submitting Fiscal Note: MIke Sizemore / Charles Perdue
Email Address: charles.perdue@wvsao.gov