Issue review : impact on the insurance premium tax rate reduction .

In 2002, Senate File 2318, Insurance Premium Tax Reduction Act, the Iowa General Assembly approved a reduction in the insurance premium tax rate from 2 percent to 1 percent. The reduction was phased in at the rate of 1/4 percent annual increments over a five-year period, beginning with life and health insurance policy payments made on or after January 1st, 2003. Calendar year 2007 was the first year all premiums were taxed at 1 percent and fiscal year 2008 was the first full fiscal year at the 1 percent rate. Insurance premiums tax is paid only by insurance companies. The companies that benefit from the tax reduction are uniquely identified in government employment statistics. This allows for a unique opportunity to evaluate both the revenue impact and the employment impact of the tax rate reduction in Senate File 2318. This issue review focuses on the General Fund revenue impact of the rate reduction and the Iowa employment trends for the insurance industry since the rate reduction legislation was approved.

Iowa Department of Revenue & Finance, Agency Performance Plan

Annual Report, Agency Performance Plan

Iowa Finance Authority Agency Performance Plan

Agency Performance Plan

2002 Annual Report of the Iowa Railway Finance Authority

Railway finance report for the Iowa Department of Transportation.

2003 Annual Report of the Iowa Railway Finance Authority

Annual report for Iowa Railway Finance Authority. Annual Report produced by Iowa Department of Transportation.

Report of Recommendations to the Iowa Department of Revenue and Finance, June 30, 2002

State Agency Audit Report

Iowa Water Pollution Control Works and Drinking Water Facilities Financing Programs (Joint Programs of the Iowa Finance Authority and the Iowa Department of Natural Resources), June 30, 2002

State Agency Audit Report State Revolving Fund - Clean Water & Drinking Programs

Report of Recommendations to the Iowa Department of Revenue and Finance, June 30, 2003

State Agency Audit Report

Iowa Water Pollution Control Works and Drinking Water Facilities Financing Programs (Joint Programs of the Iowa Finance Authority and the Iowa Department of Natural Resources), Independent Auditor's Reports Financial Statements and Supplemental Information Schedule of Findings, June 30, 2003

State Agency Audit Report

2004 Annual Report of the Iowa Railway Finance Authority

Annual report for Iowa Railway Finance Authority. Annual Report produced by Iowa Department of Transportation.

Iowa Lottery Authority (Previously known as the Lottery Division of the Department of Revenue and Finance), Independent Auditor's Reports, Basic Financial Statements and Supplementary Information, Schedule of Findings, June 30, 2004

State Agency Audit Report

Influence of the Premium Subsidy on Farmers’ Crop Insurance Coverage Decisions, April 2005

The Agricultural Risk Protection Act greatly increased the expected marginal net benefit of farmers buying high-coverage crop insurance policies by coupling premium subsidies to coverage level. This policy change, combined with cross-sectional variations in expected marginal net benefits of high-coverage policies, is used to estimate the role that premium subsidies play in farmers’ crop insurance decisions. We use county data for corn, soybeans, and wheat to estimate regression equations that are then used to obtain insight into two policy scenarios. We first estimate that eventual adoption of actuarially fair incremental premiums, combined with current coupled subsidies, would increase farmers’ purchase of high-coverage policies by almost 400 percent from 1998 levels across the three crops and two plans of insurance included in the analysis. We then estimate that a return to decoupled subsidies would decrease farmers’ high-coverage purchase decisions by an average of 36 percent.

Iowa Water Pollution Control Works and Drinking Water Facilities Financing Programs, (Joint Programs of the Iowa Finance Authority and The Iowa Department of Natural Resources), Independent Auditor's Reports, Financial Statements and Supplemental Information, June 30, 2004

State Audit Reports

Iowa Finance Authority Performance Report, FY 2004

Agency Performance Report

Iowa Department of Revenue and Finance Performance Report, FY 2004

Agency Performance Report