1-1     By:  Smithee (Senate Sponsor - Cain)                  H.B. No. 3027

 1-2           (In the Senate - Received from the House May 2, 1997;

 1-3     May 5, 1997, read first time and referred to Committee on Finance;

 1-4     May 16, 1997, reported favorably by the following vote:  Yeas 11,

 1-5     Nays 0; May 16, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to recoupment of certain professional liability discounts

 1-9     in lieu of reimbursement under Chapter 110, Civil Practice and

1-10     Remedies Code; and declaring an emergency.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Article 5.15-1, Insurance Code, is amended by

1-13     adding Section 10 to read as follows:

1-14           Sec. 10.  PREMIUM DISCOUNT RECOUPMENT.  (a)  Eligibility.

1-15     Effective January 1, 1999, each insurer that has filed and issued

1-16     premium discounts to health care professionals pursuant to Article

1-17     5.15-4 of this code shall be eligible to elect to receive a premium

1-18     tax credit in lieu of indemnification for claims filed with the

1-19     Attorney General under Chapter 110, Civil Practice and Remedies

1-20     Code.

1-21           (b)  Amount of Tax Credit.  An eligible company may elect to

1-22     recoup premium discounts issued to eligible health care

1-23     professionals in lieu of indemnification from the State of Texas

1-24     for claims filed under Chapter 110, Civil Practice and Remedies

1-25     Code.  Such election shall be made as a credit that is part of the

1-26     annual premium tax return filed on or before March 1, 1999.  An

1-27     insurer may credit the total amount of any discounts issued less

1-28     any reimbursements received prior to January 1, 1999, by the

1-29     insurer for claims filed under Chapter 110, Civil Practice and

1-30     Remedies Code, against its premium tax under Article 4.10 of this

1-31     code.  The tax credit herein authorized shall be allowed at a rate

1-32     not to exceed 20 percent of the credit per year for five or more

1-33     successive years following the initial election made in March 1999.

1-34     The balance of payments due the insurer and not claimed as a tax

1-35     credit may be reflected in the books and records of the insurer as

1-36     an admitted asset for all purposes, including exhibition in annual

1-37     statements pursuant to Article 6.12 of this code.  The tax credit

1-38     allowed in any one year may not exceed the premium tax due in that

1-39     year.

1-40           (c)  An eligible insurer that elects to receive tax credits

1-41     shall not be eligible to file claims for indemnity under Chapter

1-42     110, Civil Practice and Remedies Code after January 1, 1999.  Any

1-43     claims of an eligible insurer filed with the Attorney General prior

1-44     to January 1, 1999, that have not been reimbursed shall also be

1-45     deemed to have been waived by the insurer by making its election.

1-46     An insurer that elects not to recoup its discount through tax

1-47     credit will continue to remain eligible for indemnification of

1-48     eligible claims under Chapter 110, Civil Practice and Remedies

1-49     Code.

1-50           (d)  The elections provided herein shall not affect the right

1-51     of a self-insurance trust created under Article 21.49-4 of this

1-52     code from seeking indemnification for eligible claims.

1-53           (e)  The provisions of Article 21.46 of this code shall not

1-54     apply to the credits authorized herein.

1-55           SECTION 2.  This Act takes effect September 1, 1997.

1-56           SECTION 3.  The importance of this legislation and the

1-57     crowded condition of the calendars in both houses create an

1-58     emergency and an imperative public necessity that the

1-59     constitutional rule requiring bills to be read on three several

1-60     days in each house be suspended, and this rule is hereby suspended,

1-61     and that this Act take effect and be in force from and after its

1-62     passage, and it is so enacted.

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