FISCAL NOTE
FUND(S):
Fire and Casualty Premium Insurance surcharges 33-3-14d and 33-3-33
Sources of Revenue:
Special Fund
Legislation creates:
A New Program,A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB667 impacts state government revenue in two distinct ways. First, the bill directs .10 of one percent currently allocated to the Teachers Retirement System from the one percent surcharge on fire and casualty premiums (WV Code §33-3-14d) collected by the Insurance Commissioner to be redirected to Municipal Policemen’s and Firemen’s Pension and Relief funds as it was in 1990. In Fiscal Year 2007 that total was $2.65 million. In Fiscal Year 2008, that number is estimated to be $2.65 million.
The second change is an increase in collections of .45 of one percent up from the current .55 of one percent additional surcharge on fire and casualty premiums (WV Code 33-3-33) collected by the Insurance Commissioner. This additional .45% collection will be directed to the WV Municipal Pensions Security Fund. These funds will be invested with the Investment Management Board by the WV Municipal Pensions Oversight Board with one fifth of the fund, including interest earned therein, being allocated to municipal policemen’s and firemen’s pension and relief funds on an annual basis starting after five years, provided the members of the plans are contributing nine and one half percent of their salaries into their retirement plan. For Calendar Year 2009, collections of the .45% are estimated to be $12.68 million which will be invested with the IMB for five years before distribution to municipal pension plans. The estimated earnings on these funds plus collections from the other 4 years plus interest is projected to generate approximately $20.00 million dollars each year for municipal pension plans.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2008
Increase/Decrease
(use"-") |
2009
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 |
2,650,000 |
2,650,000 |
15,330,000 |
| 2. Estimated Total Revenues |
2,650,000 |
2,650,000 |
15,330,000 |
Explanation of above estimates (including long-range effect):
The $2.65 million for FY08 and FY09 represent a redirection of funds from the Teachers Retirement System to the Municipal Policemen’s and Firemen’s Pension and Relief funds. This change will put back in place the distribution that occurred prior to 1990 for these revenues.
The $12.68 million dollars that will be generated from the .45% of one percent premium surcharge (33-3-33) will be invested by the IMB for five years and then be distributed (one fifth of the total fund) to municipal policemen’s and firemen’s pensions and relief funds with the interest earned therein from 5 years worth of collections and interest. The $12.68 million figure does not include any interest earned therein for the 5 years the bill would require the funds to be invested with the Investment Management Board prior to distribution.
Memorandum
The bill creates an oversight board which would have the ability to hire staff and enter into contracts. This fiscal note does not contemplate costs for this oversight board.
Person submitting Fiscal Note: Blair Taylor
Email Address: blair.taylor@wvsto.com