84R7793 KKR-F
By: Sheets H.B. No. 3205
A BILL TO BE ENTITLED
AN ACT
relating to repealing the maintenance tax and creating an overhead
assessment for certain insurers participating in the workers'
compensation system; imposing an assessment.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 3, Insurance Code, is amended by adding
Subtitle F to read as follows:
SUBTITLE F. OVERHEAD ASSESSMENTS
CHAPTER 291. WORKERS' COMPENSATION INSURANCE OVERHEAD ASSESSMENT
Sec. 291.001. OVERHEAD ASSESSMENT IMPOSED. (a) An
overhead assessment is imposed on each authorized insurer with
gross premiums subject to assessment under Section 291.003,
including a:
(1) stock insurance company;
(2) mutual insurance company;
(3) reciprocal or interinsurance exchange; and
(4) Lloyd's plan.
(b) The overhead assessment required by this chapter is in
addition to other taxes imposed that are not in conflict with this
chapter.
Sec. 291.002. MAXIMUM RATE; ANNUAL ADJUSTMENT. (a) The
rate of assessment set by the commissioner may not exceed 0.6
percent of the gross premiums subject to the overhead assessment
under Section 291.003.
(b) The commissioner shall annually adjust the rate of
assessment of the overhead assessment so that the assessment
imposed that year, together with any unexpended funds produced by
the assessment, produces the amount the commissioner determines is
necessary to pay the expenses during the succeeding year of
regulating workers' compensation insurance.
Sec. 291.003. PREMIUMS SUBJECT TO OVERHEAD ASSESSMENT. (a)
An insurer shall pay an overhead assessment under this chapter on
the correctly reported gross workers' compensation insurance
premiums from writing workers' compensation insurance in this
state, including the modified annual premium of a policyholder that
purchases an optional deductible plan under Subchapter E, Chapter
2053.
(b) The rate of assessment shall be applied to the modified
annual premium before application of a deductible premium credit.
Sec. 291.004. OVERHEAD ASSESSMENT DUE DATES. (a) The
insurer shall pay the overhead assessment annually or semiannually.
(b) The comptroller may require semiannual payment only
from an insurer whose overhead assessment liability under this
chapter for the previous tax year was at least $2,000.
(b-1) For the initial overhead assessment imposed on or
after January 1, 2016, the comptroller may require semiannual
payment under Subsection (b) from an insurer whose maintenance tax
liability for the previous tax year under former Chapter 255 was at
least $2,000. This subsection expires September 1, 2017.
Sec. 291.005. APPLICABILITY OF OTHER LAW. The requirements
of Chapter 251 apply to overhead assessments imposed under this
chapter.
Sec. 291.006. RECOVERY OF OVERHEAD ASSESSMENT. An insurer
may recover an overhead assessment paid by the insurer under this
chapter by:
(1) reflecting the overhead assessment as an expense
in a rate filing required under this code; or
(2) charging the insurer's policyholders.
SECTION 2. Section 402.076(b), Labor Code, is amended to
read as follows:
(b) The operations of the division under this section are
funded through the overhead assessment [maintenance tax assessed]
under Section 403.002.
SECTION 3. The heading to Section 403.002, Labor Code, is
amended to read as follows:
Sec. 403.002. OVERHEAD ASSESSMENT [MAINTENANCE TAXES].
SECTION 4. Sections 403.002(a), (b), and (c), Labor Code,
are amended to read as follows:
(a) Each insurance carrier, other than a governmental
entity, shall pay an annual overhead assessment [maintenance tax]
to pay the costs of administering this subtitle and to support the
prosecution of workers' compensation insurance fraud in this state.
(b) The overhead assessment may not exceed an amount equal
to two percent of the correctly reported gross workers'
compensation insurance premiums, including the modified annual
premium of a policyholder that purchases an optional deductible
plan under Subchapter E, Chapter 2053 [Article 5.55C], Insurance
Code. The rate of the overhead assessment shall be applied to the
modified annual premium before application of a deductible premium
credit.
(c) A workers' compensation insurance company is assessed
[taxed] at the rate established under Section 403.003. The
overhead assessment [tax] shall be collected in the manner provided
for collection of other assessments [taxes] on gross premiums from
a workers' compensation insurance company as provided in Chapter
291 [255], Insurance Code.
SECTION 5. Section 403.003, Labor Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) The commissioner of insurance shall set and certify to
the comptroller the rate of the overhead [maintenance tax]
assessment taking into account:
(1) any expenditure projected as necessary for the
division and the office of injured employee counsel to:
(A) administer this subtitle during the fiscal
year for which the rate of assessment is set; and
(B) reimburse the general revenue fund as
provided by Section 201.052, Insurance Code;
(2) projected employee benefits paid from general
revenues;
(3) a surplus or deficit produced by the overhead
assessment [tax] in the preceding year;
(4) revenue recovered from other sources, including
reappropriated receipts, grants, payments, fees, gifts, and
penalties recovered under this subtitle; and
(5) expenditures projected as necessary to support the
prosecution of workers' compensation insurance fraud.
(a-1) For the initial overhead assessment imposed on or
after January 1, 2016, the commissioner of insurance shall take
into account under Subsection (a)(3) a surplus or deficit produced
by the maintenance tax under former Chapter 255, Insurance Code, in
the preceding year. This subsection expires September 1, 2017.
SECTION 6. Section 403.004, Labor Code, is amended to read
as follows:
Sec. 403.004. COLLECTION OF OVERHEAD ASSESSMENT [TAX] AFTER
WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
insurance immediately shall proceed to collect overhead
assessments [taxes] due under this chapter from an insurance
carrier that withdraws from business in this state, using legal
process as necessary.
SECTION 7. Chapter 403, Labor Code, is amended by adding
Section 403.0041 to read as follows:
Sec. 403.0041. COLLECTION OF MAINTENANCE TAXES AFTER
WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
insurance immediately shall proceed to collect prior maintenance
taxes due under former Chapter 255, Insurance Code, from an
insurance carrier that withdraws from business in this state, using
legal process as necessary.
SECTION 8. Section 403.005, Labor Code, is amended to read
as follows:
Sec. 403.005. OVERHEAD ASSESSMENT [TAX] RATE. The
commissioner of insurance shall annually adjust the rate of the
overhead assessment [of the maintenance tax] imposed under Section
403.003 so that the overhead assessment [tax] imposed that year,
together with any unexpended funds produced by the overhead
assessment [tax], produces the amount the commissioner of insurance
determines is necessary to pay the expenses of administering this
subtitle.
SECTION 9. Section 403.007(e), Labor Code, is amended to
read as follows:
(e) If the commissioner determines that the funding under
Subsection (a) is not adequate to meet the expected obligations of
the subsequent injury fund established under Section 403.006, the
fund shall be supplemented by the collection of an overhead
assessment [a maintenance tax] paid by insurance carriers, other
than a governmental entity, as provided by Sections 403.002 and
403.003. The rate of assessment must be adequate to provide 120
percent of the projected unfunded liabilities of the fund for the
next biennium as certified by an independent actuary or financial
advisor.
SECTION 10. Chapter 403, Labor Code, is amended by adding
Section 403.009 to read as follows:
Sec. 403.009. RECOVERY OF OVERHEAD ASSESSMENT. An insurer
may recover an overhead assessment paid by the insurer under this
chapter by:
(1) reflecting the overhead assessment as an expense
in a rate filing; or
(2) charging the insurer's policyholders.
SECTION 11. The heading to Section 405.003, Labor Code, is
amended to read as follows:
Sec. 405.003. FUNDING; MAINTENANCE TAX; OVERHEAD
ASSESSMENT.
SECTION 12. Sections 405.003(a), (b), (c), and (d), Labor
Code, are amended to read as follows:
(a) The group's duties under this chapter are funded through
the imposition of an overhead assessment and [of] a maintenance
tax, as applicable, collected annually from all insurance carriers,
and self-insurance groups that hold certificates of approval under
Chapter 407A, except governmental entities.
(b) The department shall set the rate of the overhead
assessment and maintenance tax based on the expenditures authorized
and the receipts anticipated in legislative appropriations. The
[tax] rate of the overhead assessment for insurance companies may
not exceed one-tenth of one percent of the correctly reported gross
workers' compensation insurance premiums. The tax rate for
certified self-insurers may not exceed one-tenth of one percent of
the total tax base of all certified self-insurers, as computed
under Section 407.103(b). The tax rate for self-insurance groups
described by Subsection (a) may not exceed one-tenth of one percent
of the group's gross premium for the group's retention, excluding
premium collected by the group for excess insurance.
(c) The overhead assessment [tax] imposed under Subsection
(a) is in addition to all other assessments and taxes imposed on
those insurance carriers for workers' compensation purposes.
(d) The overhead assessment and tax, as applicable, on
insurance companies and on self-insurance groups described by
Subsection (a) shall be assessed, collected, and paid in the same
manner and at the same time as the overhead assessment [maintenance
tax] established for the support of the department under Chapter
291 [255], Insurance Code. The tax on certified self-insurers
shall be assessed, collected, and paid in the same manner and at the
same time as the self-insurer maintenance tax collected under
Section 407.104.
SECTION 13. Chapter 405, Labor Code, is amended by adding
Section 405.0031 to read as follows:
Sec. 405.0031. RECOVERY OF OVERHEAD ASSESSMENT. An insurer
may recover an overhead assessment paid by the insurer under this
chapter by:
(1) reflecting the overhead assessment as an expense
in a rate filing; or
(2) charging the insurer's policyholders.
SECTION 14. Sections 407.103(c) and (d), Labor Code, are
amended to read as follows:
(c) The tax liability of a certified self-insurer under this
section is the tax base computed under Subsection (b) multiplied by
the overhead assessment rate for [assessed] workers' compensation
insurance companies under Sections 403.002 and 403.003.
(d) In setting the rate of the overhead [maintenance tax]
assessment for insurance companies, the commissioner of insurance
may not consider revenue or expenditures related to the operation
of the self-insurer program under this chapter.
SECTION 15. Sections 407A.301(b), (c), and (e), Labor Code,
are amended to read as follows:
(b) The tax liability of a group under Subsections (a)(1)
and (2) is based on gross premium for the group's retention
multiplied by the overhead assessment rate for [assessed] insurance
carriers under Sections 403.002 and 403.003.
(c) The tax liability of a group under Subsection (a)(3) is
based on gross premium for the group's retention multiplied by the
overhead assessment rate for [assessed] insurance carriers under
Section 405.003.
(e) The tax under this section shall be collected by the
comptroller as provided by Section 201.051 and in the manner of the
collection of an overhead assessment under Chapter 291 [255],
Insurance Code.
SECTION 16. Sections 407A.302(a) and (c), Labor Code, are
amended to read as follows:
(a) Subject to Subsection (b), each group shall pay the
maintenance tax at the rate and in the manner prescribed [imposed]
under Chapter 291 [255], Insurance Code, for the administrative
costs incurred by the department in implementing this chapter.
(c) The maintenance tax assessed under this section [is
subject to Chapter 255, Insurance Code, and] shall be collected by
the comptroller in the manner provided for an overhead assessment
by Chapter 291, Insurance Code [that chapter].
SECTION 17. Chapter 255, Insurance Code, is repealed.
SECTION 18. This Act takes effect January 1, 2016.