76R10982 DLF-D
By Brimer H.B. No. 1837
Substitute the following for H.B. No. 1837:
By Moreno of Harris C.S.H.B. No. 1837
A BILL TO BE ENTITLED
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) In this
2-22 section:
2-23 (1) "Similar type insurance company" means, for an
2-24 insurance company being compared to another company, that both
2-25 companies are licensed or might theoretically be licensed to write
2-26 the same type of insurance business, such as life, accident and
2-27 health, property and casualty, or title insurance.
3-1 (2) "Basic rate of taxation" means the highest tax
3-2 rate applicable to an insurance company under the law of the state.
3-3 (b) Whenever by the laws of any other state or territory of
3-4 the United States any mandatory provisions [taxes, including income
3-5 and corporate franchise, licenses, fees, fines, penalties, deposit
3-6 requirements or other obligations, prohibitions or restrictions]
3-7 are imposed upon any insurance company organized in this State and
3-8 that might theoretically be licensed and [actually] doing business
3-9 in such other state or territory which, in the aggregate, are in
3-10 excess of the aggregate of the mandatory provisions [taxes,
3-11 including income and corporate franchise, licenses, fees, fines,
3-12 penalties, deposit requirements or other obligations, prohibitions
3-13 or restrictions] directly imposed upon a similar type insurance
3-14 company of such other state or territory doing business in this
3-15 State, the comptroller shall impose upon and collect from any
3-16 similar type insurance company of such state or territory in the
3-17 same manner and for the same purpose, the same mandatory provisions
3-18 [taxes, licenses, fees, fines, penalties, deposit requirements or
3-19 other obligations, prohibitions or restrictions]; provided,
3-20 however, the aggregate of the mandatory provisions [taxes,
3-21 licenses, fees, fines, penalties or other obligations] imposed by
3-22 this State pursuant to this Article on an insurance company of
3-23 another state or territory shall not exceed the aggregate of such
3-24 charges imposed by such other state or territory on a similar type
3-25 insurance company of this State that might theoretically be
3-26 [actually] licensed and doing business therein. In this
3-27 subsection, "mandatory provisions" means:
4-1 (1) any periodic, insurance-related taxes, whether
4-2 income, corporate, or franchise; and
4-3 (2) licenses, fees, or other obligations, including
4-4 isolated fines, penalties, guaranty fund and other assessments net
4-5 of recoupments or tax credits, deposit requirements, or other
4-6 obligations, prohibitions, or restrictions.
4-7 (c) Wherever [; provided, further, that wherever] under any
4-8 law of this State the basic rate of taxation of any insurance
4-9 company of another state or territory is reduced if any such
4-10 insurance company has made investments in Texas securities then in
4-11 computing the aggregate Texas premium tax burdens of any such
4-12 insurance company of any other state or territory each shall for
4-13 purposes of comparison with the premium tax laws of its home state
4-14 be considered to have assumed and paid an aggregate premium tax
4-15 burden equal to the basic rate of taxation.
4-16 (d) The comptroller by rule may prescribe procedures for the
4-17 administration of this article, including an appropriate method of
4-18 comparing the highest aggregate rate of taxation that would be
4-19 imposed on an insurance company organized in this state to the
4-20 highest aggregate rate imposed on similar type insurance companies
4-21 organized in other states or territories.
4-22 (e) For [; provided, further, that for] the purpose of this
4-23 Section, an alien insurer shall be deemed a company of the State
4-24 designated by it wherein it:
4-25 (1) has [(a)] established its principal office or
4-26 agency in the United States;
4-27 (2) [, or (b)] maintains the largest amount of its
5-1 assets held in trust or on deposit for the security of its
5-2 policyholders or policyholders and creditors in the United
5-3 States;[,] or
5-4 (3) [(c) in which it] was admitted to do business in
5-5 the United States.
5-6 (f) The tax collected by the comptroller under this section
5-7 [Article] shall be deposited in the State Treasury to the credit of
5-8 the general revenue fund. The comptroller shall prescribe the due
5-9 date for the filing of the report and payment of the tax under this
5-10 section [Article].
5-11 (g) The provisions of this Section shall not apply to ad
5-12 valorem taxes on real or personal property or to personal income
5-13 taxes.
5-14 (h) The provisions of this section [Act] shall not apply to
5-15 a company of any other state doing business in this State if
5-16 fifteen per cent (15%) or more of the voting stock of said company
5-17 is owned by a corporation organized under the laws of this State,
5-18 and domiciled in this State; however, the prior provisions of this
5-19 Act shall apply without exception to any and all person or persons,
5-20 company or companies, firm or firms, association or associations,
5-21 group or groups, corporation or corporations, or any insurance
5-22 organization or organizations of any kind, which did not qualify as
5-23 a matter of fact, under the exception of this paragraph, on or
5-24 before January 29, 1957.
5-25 Sec. 2. OTHER RETALIATORY PROVISIONS [B]. Should the
5-26 insurance department, commissioner, director, or other similar
5-27 insurance regulatory official of any other state or territory of
6-1 the United States impose any sanctions, fines, penalties, financial
6-2 or deposit requirements, prohibitions, restrictions, regulatory
6-3 requirements, or other obligations of any kind upon any insurance
6-4 company organized or chartered in this state and licensed to
6-5 transact business in such other state or territory, because of the
6-6 failure of the Texas Department of Insurance to obtain, maintain,
6-7 or receive accreditation certification or any similar form of
6-8 approval, compliance, or acceptance from, by, or as a member of the
6-9 National Association of Insurance Commissioners, or any committee,
6-10 task force, working group, or advisory committee thereof, or
6-11 because of the failure of the Texas Department of Insurance to
6-12 comply with any directive, financial annual statement requirement,
6-13 model act or regulation, market conduct or financial examination
6-14 report or requirement, or any report of any kind of the National
6-15 Association of Insurance Commissioners, or any committee, task
6-16 force, working group, or advisory committee thereof, the Texas
6-17 Department of Insurance shall, without exception or exclusion,
6-18 impose upon any and all insurance companies organized or chartered
6-19 in such other state or territory and licensed to do business in
6-20 this state the same sanctions, fines, penalties, deposit
6-21 requirements, prohibitions, restrictions, or other obligations
6-22 imposed upon the insurance company of this state.
6-23 SECTION 5. The following laws are repealed:
6-24 (1) Sections 7, 8, and 9, Article 4.10, Insurance
6-25 Code; and
6-26 (2) Sections 13 and 14, Article 9.59, Insurance Code.
6-27 SECTION 6. Sections 1 and 4 of this Act clarify the law as
7-1 it existed immediately before the effective date of this Act and
7-2 may not be interpreted to imply that the law as it existed
7-3 immediately before the effective date of this Act is inconsistent
7-4 with the law as amended by this Act.
7-5 SECTION 7. The change in law made by Sections 2, 3, and 5 of
7-6 this Act applies only to a premium tax imposed under Articles 4.10
7-7 and 9.59, Insurance Code, as amended by this Act, beginning with
7-8 the tax year that begins January 1, 2000. Taxes imposed under
7-9 those articles for tax years that begin before January 1, 2000, are
7-10 governed by the law that existed in the tax year in which those
7-11 taxes were imposed and that law is continued in effect for that
7-12 purpose.
7-13 SECTION 8. The importance of this legislation and the
7-14 crowded condition of the calendars in both houses create an
7-15 emergency and an imperative public necessity that the
7-16 constitutional rule requiring bills to be read on three several
7-17 days in each house be suspended, and this rule is hereby suspended.