S.B. 416 would amend existing law concerning the tax credits a qualified insurance company may claim under the High Performance Incentive Program, the Kansas Enterprise Zone Act, and the Kansas Community Services Program Act. The bill also would amend existing law authorizing tax credits to eligible insurance companies for making buildings or facilities more accessible to persons with disabilities.
The bill would reflect the Legislature's action in 1997 to abolish the privilege tax on domestic insurance companies (equal to 5 percent of net income) and expand the magnitude of the premium tax (from 1 to 2 percent) on such companies. Specifically, the bill would delete references to the law imposing privilege taxes on insurance companies which was repealed in 1997. Moreover, the bill would allow insurance companies to claim tax credits against the premium tax and fees. Prior to the Legislature's action in 1997, companies could claim tax credits against the privilege tax.
Finally, the bill would delete reference to the Blueprint for Investment in Kansas Children and Families in the definition of "community services" in the Kansas Community Services Program Act.
S.B. 416 is an outgrowth of a recommendation by the Task Force on the Kansas Insurance Industry for the standing Tax and Economic Development committees to examine whether economic incentives, such as tax credits against premium taxes, can be used to encourage investment in and by insurance companies.
The Committee's amendments would expand the purposes for which the tax credits could be claimed, to include investments in: community service organizations or governmental entities providing community services under the Community Service Program Act and modifications to buildings or facilities to improve accessibility to persons with disabilities.
The Committee also amended the bill to delete reference to the Blueprint for Investment in Kansas Children and Families in the definition of "community services." This amendment, proposed by the Kansas Department of Commerce and Housing, would have the effect of decoupling community service activities from objectives set forth in the Blueprint and leaving the determination of eligible activities to individual communities. As previously noted, business firms may receive tax credits for contributions to community service organizations or governmental entities engaging in such services. The Committee was apprised that the Corporation for Change, which was abolished by the 1997 Legislature, had been statutorily responsible for reviewing and monitoring progress in implementation of the Blueprint.
The Division of the Budget's fiscal note on the introduced version of the bill assumes the bill would reduce state revenues. The Division requested fiscal impact statements from the Department of Revenue and the Department of Insurance but, as of January 20, 1998, had not received either one.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.