HB 995/LM (BR 2580) - S. Riggs
AN ACT relating to local government insurance premium taxes.
Create new sections of KRS Chapter 65 relating to the collection and remittance of local government insurance premium taxes; establish definitions; repeals, reenacts, and amends KRS 91A.080 to limit the amount of premiums subject to the tax to the first 12 months of coverage for life insurance policies as prescribed; require insurance companies to select from 2 options as to how and when they will remit taxes as prescribed and prohibits further changes unless approved by the Commissioner of the Department of Insurance; establish an alternative method for the remittance of insurance tax to permit the Kentucky League of Cities and the Kentucky Association of Counties to act as tax administrators if so selected by insurance companies, prescribe the method for the calculation of the tax by determining the tax effective date of the policy and the premiums upon which the tax is to be based, permits a collection fee to be determined by administrative regulation as prescribed, prohibits the retaliation of insurers in other states by requiring like a tax to be placed upon their policies, permit any local government or tax administrator to request an examination of an insurer by the Department of Insurance as to the proper disbursement of the funds by the company, require the cost to be borne by the insurance company if additional tax is found to be due and establish willful failure to properly collect and remit the taxes as grounds for the revocation of a company's license; provide for the reporting and payment of the taxes and fees by the insurance companies and to the local governments on an annual and quarterly basis as described, prescribe the method the repayment of over payments for estimated taxes, establishes the administrator as a fiduciary for holding, investing and remitting the taxes and fees, require all funds including interest to be allocated to the local governments and provide for a credit of overpayments by the insurance companies towards future tax payments or permit a refund for amounts in excess of $1000, permit the administrator to recommend rules to the Commissioner for operation of program, require annual report by administrator, prohibit fee or tax to be levied on group health insurance for state employees, prohibit the county from levying a tax on public service companies paying ad valorem taxes, and require the crediting of city license fees or taxes against county fees or taxes if the county adopts their fee or tax after July 13, 1990; require those insurers who have opted for alternative remittance plans to file an information return to the administrators as prescribed; establish the 8-member Local Government Premiums Tax Administrator Advisory Council as prescribed to advise the Commissioner on issues impacting the administrators, and require the submission of an annual report by the administrators to the Commissioner as specified; require an annual audit of the administrator by the State Auditor and provides for the billing for the audit as specified; require the administrator to file a blanket faithful performance bond issued by an authorized corporate surety, payable to the local government, and prohibit the surety from terminating the bond without prior written approval of the commissioner as specified; and permit the Commissioner to revoke or suspend elections of insurers for alternative methods of payments if an insufficient number exists to provide adequate funding for the administrators and require a one-time fee be paid by specified insurers to help defray administrative costs for the administrator.
HB 995 - AMENDMENTS
HCA (1, S. Riggs) - Make technical corrections in Sections 2 and 4.
HCA (2, S. Riggs) - Amend definition of local government to exclude counties containing a city of the first class and cities of the first class.
HFA (1, A. Simpson) - Permit cities of the 2nd class with city manager forms of government to opt to receive their insurance premium taxes directly from insurers if the policy is adopted by ordinance prior to the effective date of the Act.
HFA (2, A. Simpson) - Permit cities in a county containing a city of the 2nd class with city manager forms of government to opt to receive their insurance premium taxes directly from insurers if the policy is adopted by ordinance prior to the effective date of the Act.
Mar 1-introduced in House
Mar 2-to Local Government (H)
Mar 3-posted in committee
Mar 9-reported favorably, 1st reading, to Calendar with committee amendments (1) and (2)
Mar 10-2nd reading, to Rules
Mar 15-floor amendments (1) and (2) filed
Mar 16-recommitted to Appropriations and Revenue (H)