78R5495 AJA-F

By:  Farrar                                                       H.B. No. 1128



A BILL TO BE ENTITLED

AN ACT

relating to the premium tax on certain life, health, and accident 
insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 2(c), Article 4.11, Insurance Code, is 
amended to read as follows:
	(c)  "Gross premiums" are the total gross amount of all 
premiums, membership fees, assessments, dues, and any other 
considerations for such insurance received during the taxable year 
on each and every kind of such insurance policy or contract covering 
persons located in the State of Texas and arising from the types of 
insurance specified in Section 1 of this article, but deducting 
returned premiums, any dividends applied to purchase paid-up 
additions to insurance or to shorten the endowment or premium 
payment period, and excluding those premiums received from 
insurance carriers for reinsurance and there shall be no deduction 
for premiums paid for reinsurance.  For purposes of this article, a 
stop-loss or excess loss insurance policy issued to a health 
maintenance organization, as defined under Chapter 843 of this code 
[the Texas Health Maintenance Organization Act (Chapter 20A, 
Vernon's Texas Insurance Code)], shall be considered reinsurance.  
Such gross premiums shall not include premiums received from the 
Treasury of the State of Texas or from the Treasury of the United 
States for insurance contracted for by the state or federal 
government for the purpose of providing welfare benefits to 
designated welfare recipients or for insurance contracted for by 
the state or federal government in accordance with or in 
furtherance of the provisions of Title 2, Human Resources Code, or 
the Federal Social Security Act.  The gross premiums receipts so 
reported shall not include the amount of premiums paid on group 
health, accident, and life policies in which the group covered by 
the policy consists of a single nonprofit trust established to 
provide coverage primarily for employees of:
		(1)  a municipality, county, [or] hospital district, or 
another political subdivision of [in] this state;  or
		(2)  a county or municipal hospital, without regard to 
whether the employees are employees of the county or municipality 
or another entity operating the hospital on behalf of the county or 
municipality.
	SECTION 2.  (a) This Act takes effect January 1, 2004.                         
	(b)  The change in law made by this Act applies only to a 
premium tax imposed under Article 4.11, Insurance Code, as amended 
by this Act, beginning January 1, 2004.  A tax imposed under that 
article before January 1, 2004, is governed by the law that existed 
in the tax year in which that tax was imposed, and that law is 
continued in effect for that purpose.