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H0828...............................................by REVENUE AND TAXATION
INSURANCE - SURPLUS LINES - Amends existing law to revise the rate of tax
on surplus lines; and to provide a correct code reference.
03/09 House intro - 1st rdg - to printing
03/10 Rpt prt - to 2nd rdg
03/11 2nd rdg - to 3rd rdg
03/12 3rd rdg - PASSED - 64-0-6
AYES -- Andersen, Barrett, Bauer, Bayer, Bell, Black, Block, Boe,
Bolz, Bradford, Campbell, Cannon, Collins, Crow, Deal, Denney,
Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Field(23),
Gagner, Garrett, Harwood, Jaquet, Jones, Kellogg, Kulczyk, Lake,
Langford, Langhorst, Martinez, McGeachin, McKague, Meyer, Miller,
Mitchell, Naccarato, Nielsen, Pasley-Stuart, Raybould, Ridinger,
Ring, Ringo, Roberts, Robison, Rydalch, Sali, Sayler, Schaefer,
Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass,
Stevenson, Trail, Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- Barraclough, Bedke, Clark, Cuddy, Henbest,
Moyle
Floor Sponsor - Collins
Title apvd - to Senate
03/15 Senate intro - 1st rdg - to Loc Gov
03/18 Rpt out - rec d/p - to 2nd rdg
03/19 2nd rdg - to 3rd rdg
Rls susp - PASSED - 35-0-0
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Maxand),
Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk,
Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Compton
Title apvd - to House
03/20 To enrol - Rpt enrol - Sp signed - Pres signed
03/22 To Governor
04/02 Governor signed
Session Law Chapter 387
Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 828
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO INSURANCE; AMENDING SECTION 41-1229, IDAHO CODE, TO REVISE THE
3 RATE OF TAX ON SURPLUS LINES; AND AMENDING SECTION 41-1233, IDAHO CODE, TO
4 PROVIDE A CORRECT CODE REFERENCE.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 41-1229, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 41-1229. TAX ON SURPLUS LINES. (1) On or before the first day of March of
9 each year each broker shall remit to the director a tax on the premiums,
10 exclusive of sums collected to cover federal and state taxes and examination
11 fees, on surplus line insurance subject to tax transacted by him with unautho-
12 rized insurers during the preceding calendar year as shown by his annual
13 statement filed with the director, and at the following rates:
14 BEGINNING EFFECTIVE DATE OF POLICY RATE
15 January 1, 1987 through July 31, 1987 3%
16 August 1, 1987 through July 31, 1988 3.663%
17 August 1, 1988 through December 31, 1994 3%
18 January 1, 1995, and thereafter 2.75%
19 (a) For calendar years 2004, 2005 and 2006, beginning with the effective
20 date of the policy, two and seventy-five hundredths percent (2.75%); and
21 (b) For calendar year 2007 and thereafter, beginning with the effective
22 date of the policy, one and five-tenths percent (1.5%).
23 Such tax shall be in lieu of all other taxes upon such insurers with respect
24 to the business so reported.
25 (2) If a surplus line policy covers risks or exposures only partially in
26 this state, the tax so payable shall be computed upon the proportion of the
27 premium which is properly allocable to the risks or exposures located in this
28 state.
29 SECTION 2. That Section 41-1233, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 41-1233. REPORT AND TAX OF INDEPENDENTLY PROCURED COVERAGES. (1) Every
32 insured who in this state procures or causes to be procured or continues or
33 renews insurance in an unauthorized foreign insurer, or any self-insurer who
34 in this state so procures or continues excess loss, catastrophe or other
35 insurance, upon a subject of insurance resident, located or to be performed
36 within this state, other than insurance procured through a surplus line broker
37 pursuant to the surplus line law of this state or exempted from tax pursuant
38 to section 41-1212, Idaho Code, shall within thirty (30) days after the date
2
1 such insurance policy was so received by the insured, continued or renewed
2 file a written report of the same with the surplus line association on forms
3 designated by the director and furnished to the insured upon request. The
4 report shall show the name and address of the insured or insureds, name and
5 address of the insurer, the subject of the insurance, a general description of
6 the coverage, the amount of premium currently charged therefor, and such addi-
7 tional pertinent information as the director reasonably requests. If the
8 insurance covers also a subject of insurance resident, located or to be per-
9 formed outside this state a proper pro rata portion of the entire premium pay-
10 able for all such insurance shall be allocated to this state for the purposes
11 of this section.
12 (2) Any insurance in an unauthorized insurer procured through negotia-
13 tions or an application in whole or in part occurring or made within or from
14 within this state, or for which premiums in whole or in part are remitted
15 directly or indirectly from within this state, shall be deemed to be insurance
16 procured or continued or renewed in this state within the intent of subsection
17 (1) of this section.
18 (3) The insured with respect to the obligation, chose in action, or right
19 represented by such insurance shall be subject to chapter 4, title 41 section
20 41-1229, Idaho Code, as it pertains to premium tax. Within thirty (30) days
21 after the insurance policy was so received by the insured, continued or
22 renewed, and coincidentally with the filing with the surplus line association
23 of the report provided for in subsection (1) of this section, the insured
24 shall pay the amount of the tax to the director and a stamping fee to the sur-
25 plus line association.
26 (4) The tax imposed hereunder if delinquent shall bear interest at the
27 rate of six percent (6%) per annum, compounded annually.
28 (5) The tax shall be collectible from the insured by civil action brought
29 by the director, or by distraint.
30 (6) This section does not abrogate or modify any provision of sections
31 41-1201 (representing or aiding unauthorized insurer prohibited), 41-1202
32 (representing or aiding unauthorized insurer prohibited -- penalty), or
33 41-1203 (suits by unauthorized insurer prohibited), Idaho Code.
34 (7) This section does not apply as to life or disability insurances.
STATEMENT OF PURPOSE
RS 14253
This legislation is a trailer bill for House Bill 724. House
Bill 724 failed to uniformly change the rate for surplus line
insurance premium taxes which is addressed in both Idaho Code
Sections 41-1229 and 41-1233. The premium tax change for surplus
lines is being done in one step to avoid confusion for premium tax
payers and to save reprogramming costs each year.
FISCAL IMPACT
The Fiscal Impact statement for House Bill 724 said:
The projections by the Idaho Department of Insurance assume an
estimated growth rate of 5.0 percent and the graduated adjustment
of all premium tax rates to 1.50 percent over six years. The
fiscal impact to the state general fund is estimated to be
positive over the six-year implementation period.
The projected net difference to the General Fund revenue:
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
$1,008,190 $868,556 $729,204 $725,254 $969,273 $1,659,210
Contact
Name: Woody Richards
Surplus Lines Association
Phone: (208) 385-5451
STATEMENT OF PURPOSE/FISCAL NOTE H 828