NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Wilson

 

DATE TYPED:

2/18/03

 

HB

754

 

SHORT TITLE:

Education Programs Tax Credit

 

SB

 

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(1,000.0)

(2,000.0)

Recurring

General Fund

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

Duplicates SB671

 

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 754 provides a non-refundable personal income tax credit of $100 for each resident who completes a six hour/three session course of premarital education and counseling or “marriage maintenance” presented by a licensed therapist or an official representative of a religious institution. Written certification of completion, provided to the persons engaging in these programs, must be attached to a personal income tax return

 

FISCAL IMPLICATIONS

 

TRD notes that about 250,000 married returns and 285,000 single and head of household returns are filed annually showing at least $100 in liability. If the credit could be limited to its intended recipients – people who would actually participate in counseling except for the cost – it might cost the General Fund only $1 million or so. The incentive provided for tax avoidance, however, suggests the more realistically high “full year” figure. 

 

ADMINISTRATIVE IMPLICATIONS

 

TRD notes that the Department has no possible means of verifying the accuracy of the certificate, since attendance at sessions is largely a confidential matter. We would have no little but to accept the certificate at face value.

 

TECHNICAL ISSUES

 

TRD notes these technical issues:

 

·       A popular form of marriage maintenance is “couples’ weekend”. This form of counseling may or may not be eligible for this credit, since “three separate sessions” is not defined.

 

·       “Premarital education”, “marriage maintenance”, “religious institution”, or “separate sessions” are not defined or qualified. Almost any activity conducted by almost anyone could qualify if the stakes are sufficient.

 

 

OTHER SUBSTANTIVE ISSUES

 

Because this is a non-refundable credit, it will not benefit the approximately 25 percent of the state’s married population or the 40 percent of the state’s single and head of household population who do not have any tax liability.

 

SS/njw:sb