1-1 AN ACT
1-2 relating to certain insurance 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, is
1-5 amended by adding Subsection (f) to read as follows:
1-6 (f) In this section, "premium" includes any premium,
1-7 membership fee, dues, or other consideration for insurance.
1-8 SECTION 2. Section 10, Article 4.10, Insurance Code, is
1-9 amended to read as follows:
1-10 Sec. 10. RATE OF TAX. There is imposed on each [such]
1-11 insurance carrier subject to this article an annual tax equal to
1-12 1.6 percent [3.5%] of its premium receipts. [Any insurance carrier
1-13 may qualify for a tax rate lower than the 3.5% imposed by this
1-14 article. Such qualification for a lower rate can be accomplished
1-15 in the following two ways:]
1-16 [(a) If such insurance carrier for the year ending
1-17 December 31 preceding owns Texas investments in an amount in total
1-18 value which is not less than 85% nor more than 90% of the amount
1-19 such insurance carrier owned in the comparison state in similar
1-20 investments as herein defined, the tax imposed shall be equal to
1-21 2.4% of its gross premium receipts.]
1-22 [(b) If such insurance carrier for the year ending
1-23 December 31 preceding owns Texas investments in an amount in total
1-24 value which is in excess of 90% of the amount such insurance
2-1 carrier owned in the comparison state in similar investments as
2-2 herein defined, the tax imposed shall be equal to 1.6% of its gross
2-3 premium receipts.]
2-4 SECTION 3. Section 4, Article 9.59, Insurance Code, is
2-5 amended to read as follows:
2-6 Sec. 4. RATE OF TAX. There is imposed on all premium on
2-7 title insurance an annual tax equal to 1.35 [two] percent [(2.0%)].
2-8 [Any title insurance company may remit on a tax rate lower
2-9 than the two percent (2.0%) imposed by this article. If such title
2-10 insurance company as of the preceding December 31 owns Texas
2-11 investments in an amount in total value which is in excess of
2-12 ninety percent (90%) of the amount such title insurance company
2-13 owned in the comparison state in similar investments as herein
2-14 defined, the tax imposed shall be equal to 1.3 percent (1.3%) of
2-15 premium.]
2-16 SECTION 4. Article 21.46, Insurance Code, is amended to read
2-17 as follows:
2-18 Art. 21.46. RETALIATORY PROVISIONS; PAYMENT OF TAXES, FINES,
2-19 PENALTIES, ETC.; CONDITION PRECEDENT TO DOING BUSINESS IN STATE;
2-20 EXEMPTIONS[.]
2-21 Sec. 1. RETALIATORY TAX [A. Retaliatory tax]. (a) Whenever
2-22 by the laws of any other state or territory of the United States
2-23 any taxes, including maintenance or similar regulatory fees, income
2-24 and corporate franchise, licenses, fees, fines, penalties, deposit
2-25 requirements or other obligations, prohibitions or restrictions are
2-26 imposed upon any insurance company that is organized in this State
2-27 and licensed and is [actually] doing business or that may do
3-1 business in such other state or territory which, in the aggregate
3-2 are in excess of the aggregate of the taxes, including maintenance
3-3 or similar regulatory fees, income and corporate franchise,
3-4 licenses, fees, fines, penalties, deposit requirements or other
3-5 obligations, prohibitions or restrictions directly imposed upon a
3-6 similar insurance company of such other state or territory doing
3-7 business in this State, the comptroller shall impose upon and
3-8 collect from any similar company of such state or territory in the
3-9 same manner and for the same purpose, the same taxes, licenses,
3-10 fees, fines, penalties, deposit requirements or other obligations,
3-11 prohibitions or restrictions; provided, however, the aggregate of
3-12 taxes, licenses, fees, fines, penalties or other obligations
3-13 imposed by this State pursuant to this Article on an insurance
3-14 company of another state or territory shall not exceed the
3-15 aggregate of such charges imposed by such other state or territory
3-16 on a similar insurance company of this State that may be [actually]
3-17 licensed and doing business.
3-18 (b) Whenever under the law of any state or territory the
3-19 rate of taxation is reduced or a tax credit is granted to any such
3-20 company making investments in the state or territory, having
3-21 maintained offices in the state or territory, or meeting some other
3-22 similar requirements of the state or territory, those laws shall be
3-23 applied in the same manner in this state in the determination of
3-24 the aggregate obligations under this Article.
3-25 (b-1) Whenever [therein; provided, further, that wherever]
3-26 under any law of this State the basic rate of taxation of any
3-27 insurance company of another state or territory is reduced if any
4-1 such insurance company has made investments in Texas securities
4-2 then in computing the aggregate Texas premium tax burdens of any
4-3 such insurance company of any other state or territory each shall
4-4 for purposes of comparison with the premium tax laws of its home
4-5 state be considered to have assumed and paid an aggregate premium
4-6 tax burden equal to the basic rate. This subsection expires
4-7 December 31, 1999.
4-8 (c) For[; provided, further, that for] the purpose of this
4-9 Section, an alien insurer shall be deemed a company of the State
4-10 designated by it wherein it:
4-11 (1) has [(a)] established its principal office or
4-12 agency in the United States;
4-13 (2) [, or (b)] maintains the largest amount of its
4-14 assets held in trust or on deposit for the security of its
4-15 policyholders or policyholders and creditors in the United States;
4-16 [,] or
4-17 (3) [(c) in which it] was admitted to do business in
4-18 the United States.
4-19 (d) The tax collected by the comptroller under this Article
4-20 shall be deposited in the State Treasury to the credit of the
4-21 general revenue fund. The comptroller shall prescribe the due date
4-22 for the filing of the report and payment of the tax under this
4-23 Article. The comptroller may adopt rules concerning the
4-24 administration and collection of taxes under this Article.
4-25 (e) The provisions of this Section shall not apply to ad
4-26 valorem taxes on real or personal property, [or to] personal income
4-27 taxes, sales taxes, or to surcharges that insurers may recoup
5-1 directly from policyholders.
5-2 (f) The provisions of this Act shall not apply to a company
5-3 of any other state doing business in this State if fifteen per cent
5-4 (15%) or more of the voting stock of said company is owned by a
5-5 corporation organized under the laws of this State, and domiciled
5-6 in this State; however, the prior provisions of this Act shall
5-7 apply without exception to any and all person or persons, company
5-8 or companies, firm or firms, association or associations, group or
5-9 groups, corporation or corporations, or any insurance organization
5-10 or organizations of any kind, which did not qualify as a matter of
5-11 fact, under the exception of this paragraph, on or before January
5-12 29, 1957.
5-13 (g) The provisions of this Section shall not apply to
5-14 special purpose assessments, such as guaranty association
5-15 assessments, high risk health pool assessments, joint underwriting
5-16 association (JUA) assessments, windstorm association assessments,
5-17 or other similar assessments, both under the laws of this State and
5-18 under the laws of any other state or territory. Any tax offset or
5-19 credit related to such assessments that is offset or credited in
5-20 computing aggregate taxes under this Section for this State and any
5-21 other state or territory, shall, for purposes of this Section, be
5-22 treated as a tax paid both under the laws of this State and under
5-23 the laws of any other state or territory.
5-24 Sec. 2. OTHER RETALIATORY PROVISIONS [B]. Should the
5-25 insurance department, commissioner, director, or other similar
5-26 insurance regulatory official of any other state or territory of
5-27 the United States impose any sanctions, fines, penalties, financial
6-1 or deposit requirements, prohibitions, restrictions, regulatory
6-2 requirements, or other obligations of any kind upon any insurance
6-3 company organized or chartered in this state and licensed to
6-4 transact business in such other state or territory, because of the
6-5 failure of the Texas Department of Insurance to obtain, maintain,
6-6 or receive accreditation certification or any similar form of
6-7 approval, compliance, or acceptance from, by, or as a member of the
6-8 National Association of Insurance Commissioners, or any committee,
6-9 task force, working group, or advisory committee thereof, or
6-10 because of the failure of the Texas Department of Insurance to
6-11 comply with any directive, financial annual statement requirement,
6-12 model act or regulation, market conduct or financial examination
6-13 report or requirement, or any report of any kind of the National
6-14 Association of Insurance Commissioners, or any committee, task
6-15 force, working group, or advisory committee thereof, the Texas
6-16 Department of Insurance shall, without exception or exclusion,
6-17 impose upon any and all insurance companies organized or chartered
6-18 in such other state or territory and licensed to do business in
6-19 this state the same sanctions, fines, penalties, deposit
6-20 requirements, prohibitions, restrictions, or other obligations
6-21 imposed upon the insurance company of this state.
6-22 SECTION 5. The following laws are repealed:
6-23 (1) Sections 7, 8, and 9, Article 4.10, Insurance
6-24 Code; and
6-25 (2) Sections 13 and 14, Article 9.59, Insurance Code.
6-26 SECTION 6. Section 12(f), Article 1.14-1, Insurance Code, as
6-27 added by this Act, and Section 1(a), Article 21.46, Insurance Code,
7-1 as amended and redesignated by this Act, clarify the law as it
7-2 existed immediately before the effective date of this Act and may
7-3 not be interpreted to imply that the law as it existed immediately
7-4 before the effective date of this Act is inconsistent with the law
7-5 as amended by this Act.
7-6 SECTION 7. (a) The change in law made by Sections 2, 3, and
7-7 5 of this Act applies only to a premium tax imposed under Articles
7-8 4.10 and 9.59, Insurance Code, as amended by this Act, beginning
7-9 with the tax year that begins January 1, 2000. Taxes imposed under
7-10 those articles for tax years that begin before January 1, 2000, are
7-11 governed by the law that existed in the tax year in which those
7-12 taxes were imposed and that law is continued in effect for that
7-13 purpose.
7-14 (b) The change in law made by Section 1(b), Article 21.46,
7-15 Insurance Code, as added by this Act, and by the expiration of
7-16 Section 1(b-1), Insurance Code, as amended and redesignated by this
7-17 Act, applies only beginning with the tax year that begins on
7-18 January 1, 2000.
7-19 SECTION 8. The importance of this legislation and the
7-20 crowded condition of the calendars in both houses create an
7-21 emergency and an imperative public necessity that the
7-22 constitutional rule requiring bills to be read on three several
7-23 days in each house be suspended, and this rule is hereby suspended,
7-24 and that this Act take effect and be in force from and after its
7-25 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1837 was passed by the House on April
22, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1837 on May 20, 1999, by the
following vote: Yeas 144, Nays 1, 1 present, not voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1837 was passed by the Senate, with
amendments, on May 18, 1999, by the following vote: Yeas 30, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor