By:  Cain                                             S.B. No. 1648

         Line and page numbers may not match official copy.

         Bill not drafted by TLC or Senate E&E.

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to recoupment of certain professional liability discounts

 1-2     in lieu of reimbursement under Chapter 110, Civil Practices and

 1-3     Remedies Code; and declaring an emergency.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Article 5.15-1, Insurance Code, is amended by

 1-6     adding Sec. 10 to read as follows:

 1-7           Sec. 10.  PREMIUM DISCOUNT RECOUPMENT.  (a)  Eligibility.

 1-8     Effective January 1, 1999, each insurer that has filed and issued

 1-9     premium discounts to health care professionals pursuant to Article

1-10     5.15-4 of this code shall be eligible to elect to receive a premium

1-11     tax credit in lieu of indemnification for claims filed with the

1-12     Attorney General under Chapter 110, Civil Practices and Remedies

1-13     Code.

1-14           (b)  Amount of Tax Credit.  An eligible company may elect to

1-15     recoup premium discounts issued to eligible health care

1-16     professionals in lieu of indemnification from the state of Texas

1-17     for claims filed under Chapter 110, Civil Practices and Remedies

1-18     Code.  Such election shall be made as a credit that is part of the

1-19     annual premium tax return filed on or before March 1, 1999.  An

1-20     insurer may credit the total amount of any discounts issued less

1-21     any reimbursements received prior to January 1, 1999 by the insurer

 2-1     for claims filed under Chapter 110, Civil Practices and Remedies

 2-2     Code, against its premium tax under Article 4.10 of this code.  The

 2-3     tax credit herein authorized shall be allowed at a rate not to

 2-4     exceed 20 percent of the credit per year for five or more

 2-5     successive years following the initial election made in March 1999.

 2-6     The balance of payments due the insurer and not claimed as a tax

 2-7     credit may be reflected in the books and records of the insurer as

 2-8     an admitted asset for all purposes, including exhibition in annual

 2-9     statements pursuant to Article 6.12 of this code.  The tax credit

2-10     allowed in any one year may not exceed the premium tax due in that

2-11     year.

2-12           (c)  An eligible insurer that elects to receive tax credits

2-13     shall not be eligible to file claims for indemnity under Chapter

2-14     110, Civil Practices and Remedies Code after January 1, 1999.  Any

2-15     claims of an eligible insurer filed with the Attorney General prior

2-16     to January 1, 1999 that have not been reimbursed shall also be

2-17     deemed to have been waived by the insurer by making its election.

2-18     An insurer that elects not to recoup its discount through tax

2-19     credit will continue to remain eligible for indemnification of

2-20     eligible claims under Chapter 110, Civil Practices and Remedies

2-21     Code.

2-22           (d)  The elections provided herein shall not affect the right

2-23     of a self-insurance trust created under Article 21.49-4 of this

2-24     code from seeking indemnification for eligible claims.

2-25           (e)  The provisions of Article 21.46 of this code shall not

 3-1     apply to the credits authorized herein.

 3-2           SECTION 2.  This Act takes effect September 1, 1997.

 3-3           SECTION 3.  EMERGENCY CLAUSE. The importance of this

 3-4     legislation and the crowded condition of the calendars in both

 3-5     houses create an emergency and an imperative public necessity that

 3-6     the constitutional rule requiring bills to be read on three several

 3-7     days in each house be suspended, and this rule is hereby suspended,

 3-8     and that this Act take effect and be in force from and after its

 3-9     passage, and it is so enacted.