By: Montford S.B. No. 641
A BILL TO BE ENTITLED
AN ACT
1-1 relating to administration and collection of certain insurance
1-2 taxes.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 12, Article 1.14-1, Insurance Code, as
1-5 amended by Section 3.05, Chapter 685, and Section 7, Chapter 999,
1-6 Acts of the 73rd Legislature, 1993, is reenacted to reconcile the
1-7 amendments made by those acts and amended to read as follows:
1-8 Sec. 12. Independently procured insurance tax. (a) Every
1-9 insured who procures <or causes to be procured or continues or
1-10 renews> insurance in accordance with Section 2(b)4 of this Article
1-11 must <with any unauthorized insurer, or any insured or self-insurer
1-12 who so procures or continues excess loss, catastrophe or other
1-13 insurance, upon a subject of insurance resident, located or to be
1-14 performed within this state, other than insurance procured through
1-15 a surplus lines agent pursuant to the surplus lines law of this
1-16 state shall, within 60 days after the date such insurance was so
1-17 procured, continued or renewed or before a date prescribed by the
1-18 comptroller,> file a report <of the same> with the comptroller and
1-19 pay an independently procured insurance tax of 4.85 percent <in
1-20 writing and upon forms designated by the comptroller and furnished
1-21 to such an insured upon request. The report shall show the name
1-22 and address of the insured or insureds, name and address of the
1-23 insurer, the subject of the insurance, a general description of the
1-24 coverage, the amount of premium currently charged therefor, and
2-1 such additional pertinent information as is reasonably requested by
2-2 the comptroller>.
2-3 (b) <A report must be filed with the comptroller within 60
2-4 days after the date the insurance was independently procured or
2-5 before a date prescribed by the comptroller. The report must be
2-6 made in writing on forms provided by the comptroller. The report
2-7 must contain the name and address of the insured or insureds, the
2-8 name and address of the insurer, the subject of the insurance, a
2-9 general description of the coverage, the amount of premium charged,
2-10 and any additional information which the comptroller requests.>
2-11 <(c)> The report shall be filed and any tax due shall be
2-12 paid by the insured or by any other person designated by the
2-13 insured. The report and tax are due on or before March 1 of the
2-14 calendar year after the calendar year in which the insurance was
2-15 procured, continued, or renewed or on another date prescribed by
2-16 the comptroller <There is hereby levied upon the obligation, chose
2-17 in action, or right represented by the premium charged for such
2-18 insurance, a premium receipts tax of 3.85 percent of gross premiums
2-19 charged for such insurance. The term "premium" shall include all
2-20 premiums, membership fees, assessments, dues and any other
2-21 consideration for insurance. Such tax shall be in lieu of all
2-22 other insurance taxes. The insured shall, before March 1 next
2-23 succeeding the calendar year in which the insurance was so
2-24 procured, continued or renewed or another date prescribed by the
2-25 comptroller, pay the amount of the tax to the comptroller, on a
2-26 form prescribed by the comptroller. In event of cancellation and
2-27 rewriting of any such insurance contract the additional premium for
3-1 premium receipts tax purposes shall be the premium in excess of the
3-2 unearned premium of the canceled insurance contract>.
3-3 (c) <(d)> If a policy covers risks or exposures only
3-4 partially in this state, the tax payable shall be computed on the
3-5 portions of the premium which are properly allocated <allocable> to
3-6 the risks or exposures located in this state<. In determining the
3-7 amount of premiums taxable in this state, all premiums written,
3-8 procured or received in this state and all premiums on policies
3-9 negotiated in this state shall be deemed written on property or
3-10 risks located or resident in this state, except such premiums as
3-11 are properly allocated or apportioned and reported as taxable
3-12 premiums of any other state or states. Premiums on risks or
3-13 exposures which are properly allocated to federal waters,
3-14 international waters or under the jurisdiction of a foreign
3-15 government shall not be taxable>.
3-16 (d) <(e)> If the insured fails to withhold from the premium
3-17 the amount of tax herein levied, the insured shall be liable for
3-18 the amount thereof and shall pay the same to the comptroller within
3-19 the time stated in Subsection (b) <Paragraph (c)>. If the tax
3-20 prescribed by this subsection is not paid within the time stated in
3-21 Subsection (b) <Paragraph (c)>, Subtitles A and B, Title 2, Tax
3-22 Code, <and their subsequent amendments,> apply.
3-23 (e) <(g)> This section shall not be construed or deemed to
3-24 abrogate or modify any provision of this Article. This section
3-25 does not apply as to individual life or individual disability
3-26 insurance.
3-27 SECTION 2. Subsection (a), Section 12, Article 1.14-2,
4-1 Insurance Code, is amended to read as follows:
4-2 (a) The premiums charged for surplus lines insurance are
4-3 subject to a premium receipts tax of 4.85 percent of gross premiums
4-4 charged for such insurance. The term premium includes all
4-5 premiums, membership fees, assessments, dues or any other
4-6 consideration for insurance. Such tax shall be in lieu of all
4-7 other insurance taxes. The surplus lines agent shall collect from
4-8 the insured the amount of the tax at the time of delivery of the
4-9 cover note, certificate of insurance, policy or other initial
4-10 confirmation of insurance, in addition to the full amount of the
4-11 gross premium charged by the insurer for the insurance. No agent
4-12 shall absorb such tax nor shall any agent, as an inducement for
4-13 insurance or for any other reason, rebate all or any part of such
4-14 tax or his commission. The surplus lines agent shall report to the
4-15 comptroller on or before March 1 <within 30 days from the 1st day
4-16 of January and July> of each year the amount of gross premiums
4-17 received <paid> for such insurance placed through an eligible
4-18 surplus lines insurer during the calendar year ending on the
4-19 preceding December 31 <him in nonlicensed insurers,> and shall pay
4-20 to the comptroller the tax as provided for by this Article. If a
4-21 surplus lines policy covers risks or exposures only partially in
4-22 this state, the tax payable shall be computed on the portions of
4-23 the premium which are properly allocated <allocable> to the risks
4-24 or exposures located in this state. In determining the amount of
4-25 premiums taxable in this state, all premiums written, procured, or
4-26 received in this state and all premiums on policies negotiated in
4-27 this state shall be deemed written on property or risks located or
5-1 resident in this state, except such premiums as are properly
5-2 allocated or apportioned and reported as premiums which may be
5-3 subject to taxation by any other state or states <or by a foreign
5-4 jurisdiction>. Premiums that are properly allocated to any other
5-5 state or states that are specifically exempt from taxation under
5-6 the regulations of that state or states are not taxable in this
5-7 state. Premiums on risks or exposures which are properly allocated
5-8 to federal waters, international waters or under the jurisdiction
5-9 of a foreign government shall not be taxable by this state. In
5-10 event of cancellation and rewriting of any surplus lines insurance
5-11 contract the additional premium for premium receipts tax purposes
5-12 shall be the premium in excess of the unearned premium of the
5-13 canceled insurance contract.
5-14 SECTION 3. Section 5, Article 4.10, Insurance Code, is
5-15 amended to read as follows:
5-16 Sec. 5. GROSS PREMIUM RECEIPTS DEFINED. Gross premium
5-17 receipts referred to herein are the total gross amount of premiums
5-18 actually written during <received for> the taxable year on each and
5-19 every kind of insurance or risk written upon property or risks
5-20 located in the State of Texas (except premium receipts under
5-21 Section 2), except premiums actually written by <received from>
5-22 other licensed companies for reinsurance, less return premiums and
5-23 dividends paid policyholders with no deduction for premiums paid
5-24 for reinsurance.
5-25 SECTION 4. Article 8.21, Insurance Code, is amended to read
5-26 as follows:
5-27 Art. 8.21. FEES. The department <Board> shall charge for
6-1 filing the annual statement required by this chapter, a fee of
6-2 Twenty ($20.00) Dollars. The comptroller shall collect the fee.
6-3 SECTION 5. Article 16.22, Insurance Code, is amended to read
6-4 as follows:
6-5 Art. 16.22. FEES. (a) For the renewal and extension of the
6-6 granting of any charter, the department <Board> shall charge and
6-7 collect a filing fee of Ten ($10.00) Dollars and a like amount for
6-8 any amendment to the charter of any such company.
6-9 (b) The department <Board> shall charge and collect a fee of
6-10 One ($1.00) Dollar for the issuance of a certificate of authority
6-11 or renewal thereof to all companies operating under this chapter.
6-12 The department<, and for filing such annual statement required by
6-13 the Board, it> shall charge a filing fee of Twenty ($20.00) Dollars
6-14 for filing an annual statement required by the department. The
6-15 comptroller shall collect the annual statement filing fee. <Fees
6-16 collected under this article shall be deposited in the State
6-17 Treasury to the credit of the State Board of Insurance operating
6-18 fund. Article 1.31A of this code applies to fees collected under
6-19 this article.>
6-20 SECTION 6. Article 17.21, Insurance Code, is amended to read
6-21 as follows:
6-22 Art. 17.21. FEES. (a) The department <Board> shall charge
6-23 and collect a fee of One ($1.00) Dollar for the issuance of a
6-24 certificate of authority or renewal thereof to all companies
6-25 operating under this chapter.
6-26 (b) The department<, and for filing each annual statement,
6-27 it> shall charge a filing fee of Twenty ($20.00) Dollars for filing
7-1 each annual statement. The comptroller shall collect the filing
7-2 fee.
7-3 SECTION 7. Article 19.11, Insurance Code, is amended to read
7-4 as follows:
7-5 Art. 19.11. FEES AND TAXES. The schedule of fees set out in
7-6 Article 4.07 of this Code, so far as pertinent, shall apply to
7-7 reciprocal exchanges and their attorneys in fact. Said exchanges
7-8 shall be subject to the provisions of Articles <Article 7064 and of
7-9 Article 7064a of the Revised Civil Statutes of Texas and of
7-10 Article> 4.02, <and of Article> 4.04, 4.10, 4.11, <and of Article>
7-11 5.12, <and of Article> 5.24, <and of Article> 5.49, and <of
7-12 Article> 5.68 of this Code. The comptroller shall collect the
7-13 taxes and the annual statement filing fee.
7-14 SECTION 8. Subsection (a), Section 32, Texas Health
7-15 Maintenance Organization Act (Article 20A.32, Vernon's Texas
7-16 Insurance Code), is amended by adding Subdivision (4) to read as
7-17 follows:
7-18 (4) Notwithstanding Subdivision (1) of this
7-19 subsection, the comptroller shall collect the annual report filing
7-20 fee prescribed by Subdivision (1)(B) of this subsection.
7-21 SECTION 9. Subsection A, Article 21.46, Insurance Code, is
7-22 amended to read as follows:
7-23 A. RETALIATORY TAX: Whenever by the laws of any other state
7-24 or territory of the United States any taxes, including income and
7-25 corporate franchise, licenses, fees, fines, penalties, deposit
7-26 requirements or other obligations, prohibitions or restrictions are
7-27 imposed upon any insurance company organized in this State and
8-1 licensed and actually doing business in such other state or
8-2 territory which, in the aggregate are in excess of the aggregate of
8-3 the taxes, including income and corporate franchise, licenses,
8-4 fees, fines, penalties, deposit requirements or other obligations,
8-5 prohibitions or restrictions directly imposed upon a similar
8-6 insurance company of such other state or territory doing business
8-7 in this State, the comptroller <State Board of Insurance> shall
8-8 impose upon and collect from any similar company of such state or
8-9 territory in the same manner and for the same purpose, the same
8-10 taxes, licenses, fees, fines, penalties, deposit requirements or
8-11 other obligations, prohibitions or restrictions; provided, however,
8-12 the aggregate of taxes, licenses, fees, fines, penalties or other
8-13 obligations imposed by this State pursuant to this Article on an
8-14 insurance company of another state or territory shall not exceed
8-15 the aggregate of such charges imposed by such other state or
8-16 territory on a similar insurance company of this State actually
8-17 licensed and doing business therein; provided, further, that
8-18 wherever under any law of this State the basic rate of taxation of
8-19 any insurance company of another state or territory is reduced if
8-20 any such insurance company has made investments in Texas securities
8-21 then in computing the aggregate Texas premium tax burdens of any
8-22 such insurance company of any other state or territory each shall
8-23 for purposes of comparison with the premium tax laws of its home
8-24 state be considered to have assumed and paid an aggregate premium
8-25 tax burden equal to the basic rate; provided, further, that for the
8-26 purpose of this Section, an alien insurer shall be deemed a company
8-27 of the State designated by it wherein it has
9-1 (a) established its principal office or agency in the
9-2 United States, or
9-3 (b) maintains the largest amount of its assets held in
9-4 trust or on deposit for the security of its policyholders or
9-5 policyholders and creditors in the United States, or
9-6 (c) in which it was admitted to do business in the
9-7 United States.
9-8 The tax <Licenses and fees> collected by the comptroller
9-9 <State Board of Insurance> under this Article shall be deposited in
9-10 the State Treasury to the credit of the general revenue fund. The
9-11 comptroller shall prescribe the due date for the filing of the
9-12 report and payment of the tax under this Article.
9-13 The provisions of this Section shall not apply to ad valorem
9-14 taxes on real or personal property or to personal income taxes.
9-15 The provisions of this Act shall not apply to a company of
9-16 any other state doing business in this State if fifteen per cent
9-17 (15%) or more of the voting stock of said company is owned by a
9-18 corporation organized under the laws of this State, and domiciled
9-19 in this State; however, the prior provisions of this Act shall
9-20 apply without exception to any and all person or persons, company
9-21 or companies, firm or firms, association or associations, group or
9-22 groups, corporation or corporations, or any insurance organization
9-23 or organizations of any kind, which did not qualify as a matter of
9-24 fact, under the exception of this paragraph, on or before January
9-25 29, 1957.
9-26 SECTION 10. Article 23.08, Insurance Code, is amended to
9-27 read as follows:
10-1 Art. 23.08. FEES. The commissioner shall charge a fee
10-2 determined by the commissioner in an amount not to exceed $400 for
10-3 filing the annual statement of each corporation operating under
10-4 this chapter; an application fee determined by the commissioner in
10-5 an amount not to exceed $3,000 for each corporation applying under
10-6 this chapter which includes the fee for the issuance of a
10-7 certificate of authority; and a fee determined by the commissioner
10-8 in an amount not to exceed $100 for the issuance of each additional
10-9 certificate of authority and amendment of a certificate of
10-10 authority to the corporation. The commissioner shall, within the
10-11 limits fixed by this article, prescribe the fees to be charged
10-12 under this article. The comptroller shall collect the annual
10-13 statement filing fee <fees collected by the commissioner under this
10-14 article shall be deposited in the State Treasury to the credit of
10-15 the Texas Department of Insurance operating fund, and Article 1.31A
10-16 of this code applies to fees collected under this article>.
10-17 SECTION 11. This Act takes effect September 1, 1995, and
10-18 applies to a fee or tax that becomes due on or after that date. A
10-19 fee or tax imposed that becomes due before the effective date of
10-20 this Act is governed by the law in existence when the fee or tax
10-21 became due, and that law is continued in effect for that purpose.
10-22 SECTION 12. The importance of this legislation and the
10-23 crowded condition of the calendars in both houses create an
10-24 emergency and an imperative public necessity that the
10-25 constitutional rule requiring bills to be read on three several
10-26 days in each house be suspended, and this rule is hereby suspended.