Reduces the amount of the insurance premium tax credit for insurers who invest their assets in certain La. investments through July 1, 2017 (OR +$1,544,000 GF RV See Note)
Impact
The implications of HB 649 on state laws are significant, as it alters the financial architecture surrounding insurance premium taxation in Louisiana. By reducing tax credits, the state aims to modify the behavior of insurers regarding their investments in local financial institutions. The intended outcome is to encourage a more favorable investment environment that aligns with state economic objectives while potentially smoothing the state’s budget by decreasing tax expenditures related to these credits. The bill is positioned to impact economic growth by encouraging insurers to maintain or increase local investments despite the reduced tax benefits.
Summary
House Bill 649 aims to modify the insurance premium tax credits available to insurers who invest a portion of their total admitted assets in qualified Louisiana investments. The bill reduces the tax credit rates gradually based on the percentage of total admitted assets invested. For instance, the credit for investing 16% of assets decreases from 66% to 65%, and similar reductions apply to higher investment tiers. This bill reflects a strategic legislative effort to adjust financial incentives for insurance companies operating within the state.
Sentiment
Sentiment surrounding HB 649 appears mixed. Proponents argue that the changes are necessary for the state's long-term fiscal health, seeing the reductions as a pragmatic approach to balancing financial incentives with budgetary realities. However, critics express concern that lowering these credits might disincentivize insurers from investing in the local economy, therefore potentially undermining economic growth in the insurance sector. The discourse thus reflects a broader tension between fiscal prudence and economic stimulation.
Contention
Notable points of contention include the balance between reducing state expenditures on tax credits and fostering a vibrant investment climate for insurers in Louisiana. Opponents worry that the changes might have unintended consequences, leading to a decline in local investments that serve community needs. They argue that the bill might maintain or exacerbate barriers for insurers to engage meaningfully with local financial markets. This highlights a fundamental debate within the legislature about how best to leverage tax policy to benefit both the state and its local economies.
Provides an income tax credit for certain small employers which pay health insurance premiums for employees and reduces the amount of the premium tax credit for insurers which invest their assets in La. (OR DECREASE GF RV See Note)
Establishes a flat rate of insurance premium tax and provides relative to certain insurance premium tax credits and exemptions (RR SEE FISC NOTE GF RV)
Adds certain investments by businesses issuing life insurance policies to investments eligible for the insurance premium tax credit (OR DECREASE GF RV See Note)
Requests that the Bd. of Regents and the State Bd. of Elementary and Secondary Education, with the Taylor Foundation, La. Office of Student Financial Assistance, public postsecondary education management boards, and certain others, study certain issues relative to TOPS
Requests the Louisiana Workforce Commission and the Louisiana Department of Veterans Affairs to study employment practices and professional licensing requirements to benefit veterans in the workforce
Creates a task force to study meaningful oversight of the professional healthcare licensing boards statutorily created within the Department of Health and Hospitals.