78R12902 DLF-F


By:  Delisi                                                       H.B. No. 3550

Substitute the following for H.B. No. 3550:                                   

By:  Eiland                                                   C.S.H.B. No. 3550


A BILL TO BE ENTITLED
AN ACT
relating to the applicability of certain premium, maintenance, and other insurance-related taxes to certain benefit plans. 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)(1) "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. (2) 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. (3) Gross [Such gross] premiums as described by this subsection 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, as amended. (3-a) On and after January 1, 2004, but before January 1, 2006, Subdivision (3) of this subsection does not apply, and this subdivision applies. "Gross premiums" as described by this subsection do not include premiums received from the Treasury of the United States for insurance contracted for by the federal government in accordance with or in furtherance of the provisions of Title XVIII of the Federal Social Security Act, as amended. This subdivision expires December 31, 2005. (4) The gross premiums receipts [so] reported under this article 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: (A) [(1)] a municipality, county, or hospital district in this state; or (B) [(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. Article 4.17(a), Insurance Code, is amended to read as follows: (a)(1) The commissioner shall annually determine the rate of assessment of a maintenance tax to be paid on an annual, semiannual, or other periodic basis, as determined by the comptroller. The rate of assessment may not exceed .04 percent of the correctly reported gross premiums of life, health, and accident insurance coverages and the gross considerations for annuity and endowment contracts collected by all authorized insurers writing life, health, and accident insurance, annuity, or endowment contracts in this state. The comptroller shall collect the maintenance tax. (2) For purposes of this article, the gross premiums on which an assessment is based may not include premiums received from this state or the United States for insurance contracted for by this state or the United States for the purpose of providing welfare benefits to designated welfare recipients or for insurance contracted for by this state or the United States in accordance with or in furtherance of Title 2, Human Resources Code, or the federal Social Security Act (42 U.S.C. Section 301 et seq.), as amended. (3) On and after January 1, 2004, but before January 1, 2006, Subdivision (2) of this subsection does not apply, and this subdivision applies. The gross premiums on which an assessment is based may not include premiums received from the United States for insurance contracted for by the United States in accordance with or in furtherance of Title XVIII of the federal Social Security Act, as amended. This subdivision expires December 31, 2005. SECTION 3. Article 27.05, Insurance Code, is amended to read as follows: Art. 27.05. EXEMPTION FROM PREMIUM TAX. (a) The issuer of a children's health benefit plan is not subject to the premium tax imposed by Article 4.11 of this code or the tax on revenues imposed under Section 33, Texas Health Maintenance Organization Act (Article 20A.33, Vernon's Texas Insurance Code), with respect to money received for coverage provided under that plan. (b) On and after January 1, 2004, but before January 1, 2006, this article does not apply. This subsection expires December 31, 2005. SECTION 4. Subchapter D, Chapter 62, Health and Safety Code, is amended by adding Section 62.158 to read as follows: Sec. 62.158. STATE TAXES. The commission shall ensure that any experience rebate or profit-sharing for health plan providers under the child health plan is calculated by treating premium, maintenance, and other taxes under the Insurance Code and any other taxes payable to this state as allowable expenses for purposes of determining the amount of the experience rebate or profit-sharing. SECTION 5. Subchapter A, Chapter 533, Government Code, is amended by adding Section 533.0132 to read as follows: Sec. 533.0132. STATE TAXES. The commission shall ensure that any experience rebate or profit-sharing for managed care organizations is calculated by treating premium, maintenance, and other taxes under the Insurance Code and any other taxes payable to this state as allowable expenses for purposes of determining the amount of the experience rebate or profit-sharing. SECTION 6. The change in law made by this Act to Articles 4.11 and 4.17, Insurance Code, applies only to a tax report originally due on or after January 1, 2004. SECTION 7. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2003.