By Brimer H.B. No. 1837
76R2889 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain premium taxes.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 10, Article 4.10, Insurance Code, is
1-5 amended to read as follows:
1-6 Sec. 10. RATE OF TAX. There is imposed on each [such]
1-7 insurance carrier subject to this article an annual tax equal to
1-8 1.725 percent [3.5%] of its premium receipts. [Any insurance
1-9 carrier may qualify for a tax rate lower than the 3.5% imposed by
1-10 this article. Such qualification for a lower rate can be
1-11 accomplished in the following two ways:]
1-12 [(a) If such insurance carrier for the year ending
1-13 December 31 preceding owns Texas investments in an amount in total
1-14 value which is not less than 85% nor more than 90% of the amount
1-15 such insurance carrier owned in the comparison state in similar
1-16 investments as herein defined, the tax imposed shall be equal to
1-17 2.4% of its gross premium receipts.]
1-18 [(b) If such insurance carrier for the year ending
1-19 December 31 preceding owns Texas investments in an amount in total
1-20 value which is in excess of 90% of the amount such insurance
1-21 carrier owned in the comparison state in similar investments as
1-22 herein defined, the tax imposed shall be equal to 1.6% of its gross
1-23 premium receipts.]
1-24 SECTION 2. Sections 2, 5, 5G, and 5H, Article 4.11,
2-1 Insurance Code, are amended to read as follows:
2-2 Sec. 2. DEFINITIONS. In [The following definitions shall
2-3 apply to] this article:
2-4 (1) [(a)] "Carrier" means any insurer or group
2-5 hospital service plan transacting any such insurance business in
2-6 this state including companies operating under the provisions of
2-7 Chapters 3, 8, 11, 13, 15, 18, 19, 20, 20A, and 22 of the Insurance
2-8 Code but excluding local mutual aid associations, fraternal benefit
2-9 societies or associations, and societies that limit their
2-10 membership to one occupation.
2-11 (2) [(b) "Comparison state" is defined as the state
2-12 other than Texas in which a carrier owns the largest amount of
2-13 similar investments to those qualified and enumerated in Section 4
2-14 of this article.]
2-15 [(c)] "Gross premiums" are the total gross amount of all
2-16 premiums, membership fees, assessments, dues, and any other
2-17 considerations for such insurance received during the taxable year
2-18 on each and every kind of such insurance policy or contract
2-19 covering persons located in the State of Texas and arising from the
2-20 types of insurance specified in Section 1 of this article, but
2-21 deducting returned premiums, any dividends applied to purchase
2-22 paid-up additions to insurance or to shorten the endowment or
2-23 premium payment period, and excluding those premiums received from
2-24 insurance carriers for reinsurance and there shall be no deduction
2-25 for premiums paid for reinsurance. For purposes of this article, a
2-26 stop-loss or excess loss insurance policy issued to a health
2-27 maintenance organization, as defined under the Texas Health
3-1 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
3-2 Code), shall be considered reinsurance. Such gross premiums shall
3-3 not include premiums received from the Treasury of the State of
3-4 Texas or from the Treasury of the United States for insurance
3-5 contracted for by the state or federal government for the purpose
3-6 of providing welfare benefits to designated welfare recipients or
3-7 for insurance contracted for by the state or federal government in
3-8 accordance with or in furtherance of the provisions of Title 2,
3-9 Human Resources Code, or the Federal Social Security Act. The gross
3-10 premiums receipts so reported shall not include the amount of
3-11 premiums paid on group health, accident, and life policies in which
3-12 the group covered by the policy consists of a single nonprofit
3-13 trust established to provide coverage primarily for municipal or
3-14 county employees of this state.
3-15 (3) [(d) "Similar investments" means the same
3-16 character of property and investments described in Section 4 of
3-17 this article, located in a state other than Texas and originating
3-18 and existing with the same relationship to such state as the
3-19 location and relationship of such property is to the State of
3-20 Texas.]
3-21 [(e)] "Tax rate" means that rate specified in Section 5 of
3-22 this article as determined by the carrier's Texas investment
3-23 comparison state similar investments asset ratio.
3-24 (4) [(f)] "Tax year" is the calendar year, January 1
3-25 to December 31.
3-26 [(g) "Texas investments" are those investments described and
3-27 enumerated in Section 4 of this article.]
4-1 Sec. 5. TAX RATE [--1989]. (a) Except for gross premiums
4-2 on life insurance taxed under Section 5G of this article and gross
4-3 revenues of health maintenance organizations taxed under Subsection
4-4 (b) of this section and Section 5H of this article, [for the 1989
4-5 tax year and tax years preceding the 1989 tax year,] there is
4-6 imposed on each insurance carrier an annual tax equal to 1.9 [2.5]
4-7 percent of its gross premiums. [Any insurance carrier may qualify
4-8 for a tax rate lower than the 2.5 percent imposed by this article.
4-9 Such qualification for a lower rate can be accomplished in the
4-10 following manner:]
4-11 [(1) if such insurance carrier for the year ending
4-12 December 31 preceding owned Texas investments with admitted asset
4-13 value of less than or equal to 100 percent but more than or equal
4-14 to 90 percent of similar investments such insurance carrier owned
4-15 in the comparison state as herein defined, the tax imposed shall be
4-16 equal to 1.8 percent of its gross premiums; or]
4-17 [(2) if such insurance carrier for the year ending
4-18 December 31 preceding owned Texas investments with admitted asset
4-19 value of more than 100 percent of the amount such insurance carrier
4-20 owned in the comparison state in similar investments as herein
4-21 defined, the tax imposed shall be equal to 1.10 percent of its
4-22 gross premiums.]
4-23 (b) Except for gross revenues taxed under Section 5H of this
4-24 article, [for the tax years specified by Subsection (a) of this
4-25 section,] there is imposed on each health maintenance organization
4-26 operating under the Texas Health Maintenance Organization Act
4-27 (Chapter 20A, Vernon's Texas Insurance Code) an annual tax equal to
5-1 1.9 percent of [on] its gross amount of revenues collected for
5-2 issuance of health maintenance certificates or contracts [at the
5-3 rate provided by Subsection (a)(2) of this section].
5-4 Sec. 5G. TAX RATE ON CERTAIN LIFE INSURANCE. There is
5-5 imposed on each insurance carrier a tax on the first $450,000 of
5-6 its gross premiums on life insurance at a rate equal to one-half of
5-7 the rate paid by that insurance carrier under Section 5 [, 5A, 5B,
5-8 5C, 5D, 5E, or 5F] of this article [, as appropriate,] for the same
5-9 tax year.
5-10 Sec. 5H. TAX RATE ON CERTAIN GROSS REVENUES OF HEALTH
5-11 MAINTENANCE ORGANIZATIONS. There is imposed on each health
5-12 maintenance organization a tax on the first $450,000 of its gross
5-13 amount of revenues collected for issuance of health maintenance
5-14 certificates or contracts at a rate equal to one-half of the rate
5-15 paid by that health maintenance organization under Section 5 [, 5A,
5-16 5B, 5C, 5D, 5E, or 5F] of this article [, as appropriate,] for the
5-17 same tax year.
5-18 SECTION 3. Section 4, Article 9.59, Insurance Code, is
5-19 amended to read as follows:
5-20 Sec. 4. RATE OF TAX. There is imposed on all premium on
5-21 title insurance an annual tax equal to 1.35 [two] percent [(2.0%)].
5-22 [Any title insurance company may remit on a tax rate lower
5-23 than the two percent (2.0%) imposed by this article. If such title
5-24 insurance company as of the preceding December 31 owns Texas
5-25 investments in an amount in total value which is in excess of
5-26 ninety percent (90%) of the amount such title insurance company
5-27 owned in the comparison state in similar investments as herein
6-1 defined, the tax imposed shall be equal to 1.3 percent (1.3%) of
6-2 premium.]
6-3 SECTION 4. The following laws are repealed:
6-4 (1) Sections 7, 8, and 9, Article 4.10, Insurance
6-5 Code;
6-6 (2) Sections 4, 5A, 5B, 5C, 5D, 5E, and 5F, Article
6-7 4.11, Insurance Code; and
6-8 (3) Sections 13 and 14, Article 9.59, Insurance Code.
6-9 SECTION 5. The change in law made by this Act applies only
6-10 to a premium tax imposed under Articles 4.10, 4.11, and 9.59,
6-11 Insurance Code, as amended by this Act, beginning January 1, 2000.
6-12 Taxes imposed under those articles before January 1, 2000, are
6-13 governed by the law that existed in the tax year in which those
6-14 taxes were imposed and that law is continued in effect for that
6-15 purpose.
6-16 SECTION 6. The importance of this legislation and the
6-17 crowded condition of the calendars in both houses create an
6-18 emergency and an imperative public necessity that the
6-19 constitutional rule requiring bills to be read on three several
6-20 days in each house be suspended, and this rule is hereby suspended.