Texas 2015 - 84th Regular

Texas House Bill HB3205 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R7793 KKR-F
2	2	By: Sheets H.B. No. 3205
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to repealing the maintenance tax and creating an overhead
8	8	assessment for certain insurers participating in the workers'
9	9	compensation system; imposing an assessment.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Title 3, Insurance Code, is amended by adding
12	12	Subtitle F to read as follows:
13	13	SUBTITLE F. OVERHEAD ASSESSMENTS
14	14	CHAPTER 291. WORKERS' COMPENSATION INSURANCE OVERHEAD ASSESSMENT
15	15	Sec. 291.001. OVERHEAD ASSESSMENT IMPOSED. (a) An
16	16	overhead assessment is imposed on each authorized insurer with
17	17	gross premiums subject to assessment under Section 291.003,
18	18	including a:
19	19	(1) stock insurance company;
20	20	(2) mutual insurance company;
21	21	(3) reciprocal or interinsurance exchange; and
22	22	(4) Lloyd's plan.
23	23	(b) The overhead assessment required by this chapter is in
24	24	addition to other taxes imposed that are not in conflict with this
25	25	chapter.
26	26	Sec. 291.002. MAXIMUM RATE; ANNUAL ADJUSTMENT. (a) The
27	27	rate of assessment set by the commissioner may not exceed 0.6
28	28	percent of the gross premiums subject to the overhead assessment
29	29	under Section 291.003.
30	30	(b) The commissioner shall annually adjust the rate of
31	31	assessment of the overhead assessment so that the assessment
32	32	imposed that year, together with any unexpended funds produced by
33	33	the assessment, produces the amount the commissioner determines is
34	34	necessary to pay the expenses during the succeeding year of
35	35	regulating workers' compensation insurance.
36	36	Sec. 291.003. PREMIUMS SUBJECT TO OVERHEAD ASSESSMENT. (a)
37	37	An insurer shall pay an overhead assessment under this chapter on
38	38	the correctly reported gross workers' compensation insurance
39	39	premiums from writing workers' compensation insurance in this
40	40	state, including the modified annual premium of a policyholder that
41	41	purchases an optional deductible plan under Subchapter E, Chapter
42	42	2053.
43	43	(b) The rate of assessment shall be applied to the modified
44	44	annual premium before application of a deductible premium credit.
45	45	Sec. 291.004. OVERHEAD ASSESSMENT DUE DATES. (a) The
46	46	insurer shall pay the overhead assessment annually or semiannually.
47	47	(b) The comptroller may require semiannual payment only
48	48	from an insurer whose overhead assessment liability under this
49	49	chapter for the previous tax year was at least $2,000.
50	50	(b-1) For the initial overhead assessment imposed on or
51	51	after January 1, 2016, the comptroller may require semiannual
52	52	payment under Subsection (b) from an insurer whose maintenance tax
53	53	liability for the previous tax year under former Chapter 255 was at
54	54	least $2,000. This subsection expires September 1, 2017.
55	55	Sec. 291.005. APPLICABILITY OF OTHER LAW. The requirements
56	56	of Chapter 251 apply to overhead assessments imposed under this
57	57	chapter.
58	58	Sec. 291.006. RECOVERY OF OVERHEAD ASSESSMENT. An insurer
59	59	may recover an overhead assessment paid by the insurer under this
60	60	chapter by:
61	61	(1) reflecting the overhead assessment as an expense
62	62	in a rate filing required under this code; or
63	63	(2) charging the insurer's policyholders.
64	64	SECTION 2. Section 402.076(b), Labor Code, is amended to
65	65	read as follows:
66	66	(b) The operations of the division under this section are
67	67	funded through the overhead assessment [maintenance tax assessed]
68	68	under Section 403.002.
69	69	SECTION 3. The heading to Section 403.002, Labor Code, is
70	70	amended to read as follows:
71	71	Sec. 403.002. OVERHEAD ASSESSMENT [MAINTENANCE TAXES].
72	72	SECTION 4. Sections 403.002(a), (b), and (c), Labor Code,
73	73	are amended to read as follows:
74	74	(a) Each insurance carrier, other than a governmental
75	75	entity, shall pay an annual overhead assessment [maintenance tax]
76	76	to pay the costs of administering this subtitle and to support the
77	77	prosecution of workers' compensation insurance fraud in this state.
78	78	(b) The overhead assessment may not exceed an amount equal
79	79	to two percent of the correctly reported gross workers'
80	80	compensation insurance premiums, including the modified annual
81	81	premium of a policyholder that purchases an optional deductible
82	82	plan under Subchapter E, Chapter 2053 [Article 5.55C], Insurance
83	83	Code. The rate of the overhead assessment shall be applied to the
84	84	modified annual premium before application of a deductible premium
85	85	credit.
86	86	(c) A workers' compensation insurance company is assessed
87	87	[taxed] at the rate established under Section 403.003. The
88	88	overhead assessment [tax] shall be collected in the manner provided
89	89	for collection of other assessments [taxes] on gross premiums from
90	90	a workers' compensation insurance company as provided in Chapter
91	91	291 [255], Insurance Code.
92	92	SECTION 5. Section 403.003, Labor Code, is amended by
93	93	amending Subsection (a) and adding Subsection (a-1) to read as
94	94	follows:
95	95	(a) The commissioner of insurance shall set and certify to
96	96	the comptroller the rate of the overhead [maintenance tax]
97	97	assessment taking into account:
98	98	(1) any expenditure projected as necessary for the
99	99	division and the office of injured employee counsel to:
100	100	(A) administer this subtitle during the fiscal
101	101	year for which the rate of assessment is set; and
102	102	(B) reimburse the general revenue fund as
103	103	provided by Section 201.052, Insurance Code;
104	104	(2) projected employee benefits paid from general
105	105	revenues;
106	106	(3) a surplus or deficit produced by the overhead
107	107	assessment [tax] in the preceding year;
108	108	(4) revenue recovered from other sources, including
109	109	reappropriated receipts, grants, payments, fees, gifts, and
110	110	penalties recovered under this subtitle; and
111	111	(5) expenditures projected as necessary to support the
112	112	prosecution of workers' compensation insurance fraud.
113	113	(a-1) For the initial overhead assessment imposed on or
114	114	after January 1, 2016, the commissioner of insurance shall take
115	115	into account under Subsection (a)(3) a surplus or deficit produced
116	116	by the maintenance tax under former Chapter 255, Insurance Code, in
117	117	the preceding year. This subsection expires September 1, 2017.
118	118	SECTION 6. Section 403.004, Labor Code, is amended to read
119	119	as follows:
120	120	Sec. 403.004. COLLECTION OF OVERHEAD ASSESSMENT [TAX] AFTER
121	121	WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
122	122	insurance immediately shall proceed to collect overhead
123	123	assessments [taxes] due under this chapter from an insurance
124	124	carrier that withdraws from business in this state, using legal
125	125	process as necessary.
126	126	SECTION 7. Chapter 403, Labor Code, is amended by adding
127	127	Section 403.0041 to read as follows:
128	128	Sec. 403.0041. COLLECTION OF MAINTENANCE TAXES AFTER
129	129	WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
130	130	insurance immediately shall proceed to collect prior maintenance
131	131	taxes due under former Chapter 255, Insurance Code, from an
132	132	insurance carrier that withdraws from business in this state, using
133	133	legal process as necessary.
134	134	SECTION 8. Section 403.005, Labor Code, is amended to read
135	135	as follows:
136	136	Sec. 403.005. OVERHEAD ASSESSMENT [TAX] RATE. The
137	137	commissioner of insurance shall annually adjust the rate of the
138	138	overhead assessment [of the maintenance tax] imposed under Section
139	139	403.003 so that the overhead assessment [tax] imposed that year,
140	140	together with any unexpended funds produced by the overhead
141	141	assessment [tax], produces the amount the commissioner of insurance
142	142	determines is necessary to pay the expenses of administering this
143	143	subtitle.
144	144	SECTION 9. Section 403.007(e), Labor Code, is amended to
145	145	read as follows:
146	146	(e) If the commissioner determines that the funding under
147	147	Subsection (a) is not adequate to meet the expected obligations of
148	148	the subsequent injury fund established under Section 403.006, the
149	149	fund shall be supplemented by the collection of an overhead
150	150	assessment [a maintenance tax] paid by insurance carriers, other
151	151	than a governmental entity, as provided by Sections 403.002 and
152	152	403.003. The rate of assessment must be adequate to provide 120
153	153	percent of the projected unfunded liabilities of the fund for the
154	154	next biennium as certified by an independent actuary or financial
155	155	advisor.
156	156	SECTION 10. Chapter 403, Labor Code, is amended by adding
157	157	Section 403.009 to read as follows:
158	158	Sec. 403.009. RECOVERY OF OVERHEAD ASSESSMENT. An insurer
159	159	may recover an overhead assessment paid by the insurer under this
160	160	chapter by:
161	161	(1) reflecting the overhead assessment as an expense
162	162	in a rate filing; or
163	163	(2) charging the insurer's policyholders.
164	164	SECTION 11. The heading to Section 405.003, Labor Code, is
165	165	amended to read as follows:
166	166	Sec. 405.003. FUNDING; MAINTENANCE TAX; OVERHEAD
167	167	ASSESSMENT.
168	168	SECTION 12. Sections 405.003(a), (b), (c), and (d), Labor
169	169	Code, are amended to read as follows:
170	170	(a) The group's duties under this chapter are funded through
171	171	the imposition of an overhead assessment and [of] a maintenance
172	172	tax, as applicable, collected annually from all insurance carriers,
173	173	and self-insurance groups that hold certificates of approval under
174	174	Chapter 407A, except governmental entities.
175	175	(b) The department shall set the rate of the overhead
176	176	assessment and maintenance tax based on the expenditures authorized
177	177	and the receipts anticipated in legislative appropriations. The
178	178	[tax] rate of the overhead assessment for insurance companies may
179	179	not exceed one-tenth of one percent of the correctly reported gross
180	180	workers' compensation insurance premiums. The tax rate for
181	181	certified self-insurers may not exceed one-tenth of one percent of
182	182	the total tax base of all certified self-insurers, as computed
183	183	under Section 407.103(b). The tax rate for self-insurance groups
184	184	described by Subsection (a) may not exceed one-tenth of one percent
185	185	of the group's gross premium for the group's retention, excluding
186	186	premium collected by the group for excess insurance.
187	187	(c) The overhead assessment [tax] imposed under Subsection
188	188	(a) is in addition to all other assessments and taxes imposed on
189	189	those insurance carriers for workers' compensation purposes.
190	190	(d) The overhead assessment and tax, as applicable, on
191	191	insurance companies and on self-insurance groups described by
192	192	Subsection (a) shall be assessed, collected, and paid in the same
193	193	manner and at the same time as the overhead assessment [maintenance
194	194	tax] established for the support of the department under Chapter
195	195	291 [255], Insurance Code. The tax on certified self-insurers
196	196	shall be assessed, collected, and paid in the same manner and at the
197	197	same time as the self-insurer maintenance tax collected under
198	198	Section 407.104.
199	199	SECTION 13. Chapter 405, Labor Code, is amended by adding
200	200	Section 405.0031 to read as follows:
201	201	Sec. 405.0031. RECOVERY OF OVERHEAD ASSESSMENT. An insurer
202	202	may recover an overhead assessment paid by the insurer under this
203	203	chapter by:
204	204	(1) reflecting the overhead assessment as an expense
205	205	in a rate filing; or
206	206	(2) charging the insurer's policyholders.
207	207	SECTION 14. Sections 407.103(c) and (d), Labor Code, are
208	208	amended to read as follows:
209	209	(c) The tax liability of a certified self-insurer under this
210	210	section is the tax base computed under Subsection (b) multiplied by
211	211	the overhead assessment rate for [assessed] workers' compensation
212	212	insurance companies under Sections 403.002 and 403.003.
213	213	(d) In setting the rate of the overhead [maintenance tax]
214	214	assessment for insurance companies, the commissioner of insurance
215	215	may not consider revenue or expenditures related to the operation
216	216	of the self-insurer program under this chapter.
217	217	SECTION 15. Sections 407A.301(b), (c), and (e), Labor Code,
218	218	are amended to read as follows:
219	219	(b) The tax liability of a group under Subsections (a)(1)
220	220	and (2) is based on gross premium for the group's retention
221	221	multiplied by the overhead assessment rate for [assessed] insurance
222	222	carriers under Sections 403.002 and 403.003.
223	223	(c) The tax liability of a group under Subsection (a)(3) is
224	224	based on gross premium for the group's retention multiplied by the
225	225	overhead assessment rate for [assessed] insurance carriers under
226	226	Section 405.003.
227	227	(e) The tax under this section shall be collected by the
228	228	comptroller as provided by Section 201.051 and in the manner of the
229	229	collection of an overhead assessment under Chapter 291 [255],
230	230	Insurance Code.
231	231	SECTION 16. Sections 407A.302(a) and (c), Labor Code, are
232	232	amended to read as follows:
233	233	(a) Subject to Subsection (b), each group shall pay the
234	234	maintenance tax at the rate and in the manner prescribed [imposed]
235	235	under Chapter 291 [255], Insurance Code, for the administrative
236	236	costs incurred by the department in implementing this chapter.
237	237	(c) The maintenance tax assessed under this section [is
238	238	subject to Chapter 255, Insurance Code, and] shall be collected by
239	239	the comptroller in the manner provided for an overhead assessment
240	240	by Chapter 291, Insurance Code [that chapter].
241	241	SECTION 17. Chapter 255, Insurance Code, is repealed.
242	242	SECTION 18. This Act takes effect January 1, 2016.