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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 RATE15 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 41section 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