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.