04RS HB503


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HB 503/LM (BR 153) - R. Crimm, J. Jenkins, M. Marzian, S. Riggs, M. Weaver

     AN ACT relating to local government insurance premium taxes.
     Amend 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 all insurance applications to contain information identifying the tax district to receive fees or taxes, and exempt agents from liability if such information is incorrect; create new sections of KRS Chapter 91A, relating to the collection and remittance of local government insurance premium taxes, to establish definitions; require insurance companies to select from two options as to how and when they will remit taxes as prescribed and prohibit 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 Department of Insurance to act as tax administrator 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; permit a collection fee to be determined by administrative regulation as prescribed; prohibit retaliation by insurers in other states by requiring a similar tax to be placed upon their policies; permit any local government or the 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; 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 for repayment of overpayments of estimated taxes, establish 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; 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 commissioner to promulgate administrative regulations for operation of the program; require an annual report by the administrator; require a one-time fee to be paid by specified insurers to help defray administrative costs for the administrator; prohibit fees or taxes to be levied on group health insurance for state employees; prohibit a county from levying a tax on public service companies paying ad valorem taxes; 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 Department of Insurance as prescribed; establish an eight-member Local Government Premiums Tax Administrator Advisory Council to advise the commissioner on issues impacting the program; require the submission of an annual report by the Department of Insurance to the council as specified; require an annual audit of the administrator by the State Auditor and provide 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; 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.

     Feb 12-introduced in House
     Feb 13-to Local Government (H)
     Feb 18-posted in committee

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