RS12 HB 499 - KEY VOTE - Insurance Premium Tax Hike
HB 499 was originally a tax amnesty bill which we're pretty indifferent about.
The House Committee Substitute, however added a few tax and fee increases, including an elimination of the sunset on the waste tire fee, and a new provision setting insurance premium taxes based on bonus programs for firefighters and police in Kentucky called the Firefighters Foundation Program Fund and the Kentucky Law Enforcement Foundation Program Fund.
The Senate reinstated the sunset, but we're still concerned about the indexing of the insurance premium tax.
Originally, the Kentucky Law Enforcement Foundation Program Fund (KLEFPF) was created to encourage Kentucky peace officers to received certified training. It was and is funded through an assessment on property insurance, and the revenues from this assessment are split between the KLEFPF and a similar program for firefighters. Later, this training became mandatory, but the bonus remained.
Through the years, more and more peace officers have been added as eligible for the program, all under the suggestion that the fund runs a surplus. HB 499 HCS adds this language:
Section 24. Insurance Surcharge Rate: Pursuant to KRS 136.392, the insurance surcharge rate shall be calculated at a rate to provide sufficient funds in the 2012-2014 fiscal biennium for the Firefighters Foundation Program Fund and the Kentucky Law Enforcement Foundation Program Fund. The calculation of sufficient funds for those programs shall include any Restricted Funds carried forward from fiscal years 2011-2012 and 2012-2013 as provided by the General Assembly.
Now, the premium tax will rise with the demand for this ever-expanding bonus program, and that is a tax hike, which means we will KEY VOTE the entire bill.