Brief⁽¹⁾

H.B. 2639 would amend the Kansas insurance law which establishes the schedule of fees and taxes applicable to insurance companies doing business in this state. The bill would clarify that the tax applicable to nonprofit dental service corporations is "1% for tax year 1997, and 2% for all tax years thereafter."

Background

H.B. 2639 was requested by the Insurance Commissioner whose representative explained that the insurance tax reform bill enacted in 1997 inadvertently assessed for 1997, a 2 percent premium tax on Delta Dental Plan of Kansas, the only nonprofit dental service corporation in the state. All other insurance companies were taxed by that bill at the rate of 1 percent for 1997 and 2 percent for every year thereafter. H.B. 2639 would correct the error resulting from the 1997 enactment and treat Delta Dental as all other insurers are treated under the tax law.

Further, the representative of the Insurance Department requested that the bill be passed as quickly as possible so that Delta Dental can make the correct tax payment when it comes due in March 1998. A representative of Delta Dental also requested swift consideration of the bill. To expedite the bill's passage, the Committee recommended the bill be placed on the Consent Calendar.

While no fiscal note was available at the time the Committee acted on the bill, the Insurance Department representative commented during the hearing that passage would save Delta Dental approximately $70,000 on its 1997 taxes.

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.