Master FIR (1988)

NOTE: As provided in LFC policy, this report is intended 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 in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

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

SPONSOR:	Atkins		DATE TYPED:	03/05/01		HB	646/HCPAC
SHORT TITLE:		Income Tax Credit for Pre-Marital Education				SB
					ANALYST:		Williams

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY01

FY02

$ (4,000.0)

$ (10,000.0)

Recurring

General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to SB 497, HB 771

SOURCES OF INFORMATION

LFC Files

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of HCPAC Amendments

The House Consumer Public Affairs Committee amendments clarify a qualifying program must be conducted by a certified marriage therapy representative.

Synopsis of Original Bill

The bill authorizes a premarital education or marriage maintenance program credit. The credit would be $100 upon completion of the program. The credit would be effective beginning tax year 2001. The program must:

•provide a minimum of six hours of education or counseling in no less than three separate sessions;
•be conducted by an official of a religious institution or designee or a license/certified marriage and family therapist, psychiatrist, psychologist, professional clinical mental health counselor, independent social worker or family life educator
•provide written certification on a TRD form

Significant Issues

Married couples could claim a $200 credit.

FISCAL IMPLICATIONS

The fiscal impact initially assumed approximately 250,000 married returns and 285,000 single and head of household returns have at least $100 in liability. If all of these taxpayers decided to participate in this program to reduce taxes, the bill could reduce recurring general fund revenues by $54,000.0. However, the fiscal impact could be reduced if the provisions of the bill were more restrictive and the taxpayers claiming the credit were only those people whose primary motivation was to seek counseling. In that case, TRD estimates the general fund revenue loss at $4,000.0 in FY02 and $10,000.0 in FY03.

ADMINISTRATIVE IMPLICATIONS

TRD reports minimal impact.

TECHNICAL ISSUES

TRD notes this approach as currently draft could be an incentive for tax avoidance.

TRD notes concerns regarding state support of religion, and suggests the credit be restricted to state-licensed therapists. Further, TRD suggests deleting the language allowing credits to be "spent" in a program sponsored by a religious group.

Premarital education, marriage maintenance and religious institution should be defined if included in the bill.

OTHER SUBSTANTIVE ISSUES

Due to the way the credit is structured, it would not benefit taxpayers without state tax liability.

AW/ar