By Smithee                                            H.B. No. 3027

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to recoupment of certain professional liability discounts

 1-3     in lieu of reimbursement under Chapter 110, Civil Practice and

 1-4     Remedies Code; and declaring an emergency.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Article 5.15-1, Insurance Code, is amended by

 1-7     adding Section 10 to read as follows:

 1-8           Sec. 10.  PREMIUM DISCOUNT RECOUPMENT.  (a)  Eligibility.

 1-9     Effective January 1, 1999, each insurer that has filed and issued

1-10     premium discounts to health care professionals pursuant to Article

1-11     5.15-4 of this code shall be eligible to elect to receive a premium

1-12     tax credit in lieu of indemnification for claims filed with the

1-13     Attorney General under Chapter 110, Civil Practice and Remedies

1-14     Code.

1-15           (b)  Amount of Tax Credit.  An eligible company may elect to

1-16     recoup premium discounts issued to eligible health care

1-17     professionals in lieu of indemnification from the State of Texas

1-18     for claims filed under Chapter 110, Civil Practice and Remedies

1-19     Code.  Such election shall be made as a credit that is part of the

1-20     annual premium tax return filed on or before March 1, 1999.  An

1-21     insurer may credit the total amount of any discounts issued less

1-22     any reimbursements received prior to January 1, 1999, by the

1-23     insurer for claims filed under Chapter 110, Civil Practice and

1-24     Remedies Code, against its premium tax under Article 4.10 of this

 2-1     code.  The tax credit herein authorized shall be allowed at a rate

 2-2     not to exceed 20 percent of the credit per year for five or more

 2-3     successive years following the initial election made in March 1999.

 2-4     The balance of payments due the insurer and not claimed as a tax

 2-5     credit may be reflected in the books and records of the insurer as

 2-6     an admitted asset for all purposes, including exhibition in annual

 2-7     statements pursuant to Article 6.12 of this code.  The tax credit

 2-8     allowed in any one year may not exceed the premium tax due in that

 2-9     year.

2-10           (c)  An eligible insurer that elects to receive tax credits

2-11     shall not be eligible to file claims for indemnity under Chapter

2-12     110, Civil Practice and Remedies Code after January 1, 1999.  Any

2-13     claims of an eligible insurer filed with the Attorney General prior

2-14     to January 1, 1999, that have not been reimbursed shall also be

2-15     deemed to have been waived by the insurer by making its election.

2-16     An insurer that elects not to recoup its discount through tax

2-17     credit will continue to remain eligible for indemnification of

2-18     eligible claims under Chapter 110, Civil Practice and Remedies

2-19     Code.

2-20           (d)  The elections provided herein shall not affect the right

2-21     of a self-insurance trust created under Article 21.49-4 of this

2-22     code from seeking indemnification for eligible claims.

2-23           (e)  The provisions of Article 21.46 of this code shall not

2-24     apply to the credits authorized herein.

2-25           SECTION 2.  This Act takes effect September 1, 1997.

2-26           SECTION 3.  The importance of this legislation and the

2-27     crowded condition of the calendars in both houses create an

 3-1     emergency and an imperative public necessity that the

 3-2     constitutional rule requiring bills to be read on three several

 3-3     days in each house be suspended, and this rule is hereby suspended,

 3-4     and that this Act take effect and be in force from and after its

 3-5     passage, and it is so enacted.