08RS HB524
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HB524

08RS

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HB 524/FN/LM (BR 1900) - S. Riggs, R. Rand, J. Bell, S. Brinkman, R. Crimm, T. Edmonds, J. Fischer, D. Osborne

     AN ACT relating to local insurance premium taxes and fees.
     Create new sections of KRS Chapter 91A to define "local government," "risk location system or program," and "tax period"; establish the method for the filing of amended returns and requests or assessments by any insurance company, local government, or policyholder for nonpayment, underpayment, or overpayment of any license fees or taxes imposed under Section 5 of this Act and the appeals from the denial or refusal thereof; permit an insurance company that has paid a license fee or tax imposed by a local government to request a refund or credit for any overpayment of the fee or tax or any payment when no tax was due within the time provided; permit any policyholder who has paid to an insurance company a license fee or tax imposed by a local government under Section 5 of this Act to request a refund or credit for an overpayment of a license fee or tax or any payment when no tax was due within the time provided; permit a local government to request the Office of Insurance to conduct an audit if the local government has a reasonable basis to believe that a license fee or tax imposed under Section 5 of this Act has not been paid or has been underpaid; require that any administrative hearing held pursuant to this section be conducted pursuant to KRS Chapter 13B; provide that if a refund or credit is received by an insurance company that passed the fee or tax on to the policyholder and the amount refunded or credited is not owed to another local government, the insurance company must pass the full amount of refund or credit on to the policyholder within 90 days of receipt of the refund or credit; require that information on specific policies and policyholders provided to local governments be considered confidential and proprietary information of an insurance company and shall not be disclosed or subject to the Open Records Act; require the Office of Insurance by January 1, 2009, to establish by administrative regulation criteria for the certification of risk location systems and programs; direct the Office of Insurance to test the risk location system or program to determine whether it will be certified upon application of a vendor or insurance company; direct the Office of Insurance to provide an option for an insurance company to apply for a written order by the executive director of the Office of Insurance that the insurance company has a limited number of risk locations not exceeding 100 in Kentucky that may be located by other means with an equivalent level of accuracy; direct the executive director of the Office of Insurance to appoint a local premium tax advisory council to provide advice and expertise on the imposition, administration, and collection of taxes and fees imposed pursuant to Section 5 of this Act; authorize the council to identify ways to make the system more efficient and effective for all parties; amend KRS 91A.080 to make technical changes; delete provision that prohibits a license fee or tax imposed upon premium receipts from including premiums received for insuring employers against liability for personal injuries to employees or death of employees under provisions of the workers' compensation act; permit an insurance company to appeal the findings of an audit and any assessment issued pursuant to the audit findings; permit a local government to assess a 10% penalty for a tax or fee not paid within 30 days after the due date; prohibit a license fee or tax to be applied to premiums received on workers' compensation policies, individual health insurance policies, Kentucky Access policies, or high deductible health plans; amend KRS 304.10-180 to provide that each broker shall be subject to the provisions of this Act as an insurance company.

HB 524 - AMENDMENTS


     HCS/FN/LM - Retain original provisions; require supporting documentation to be included in the request for refund or credit in Section 2(2)(a); authorize the executive director of the Office of Insurance to grant one extension of 30 days for the issuance of an order in Section 2(2)(d), (3)(c), and (4)(c); create paragraph (e) in Section 2(4) to permit the Office of Insurance to determine the scope of any examination; provide that violation of Section 2(8)(a) shall be a Class A misdemeanor; create a new paragraph (b) in Section 2(8) to establish an exception for local governments that have been certified by the IRS or its agent as being in compliance with IRS safeguard requirements and authorized to receive federal tax information; create a new paragraph (c) in Section 2(8) to provide that this subsection does not preclude the disclosure of information to the Office of Insurance or to the legal representative of the local government for purposes of administrative hearings or legal appeals therefrom nor shall it prohibit the local government from verifying the accuracy of the information with an individual policyholder; establish a $2,500 application fee in Section 3(2); change 100 to 200 in Section 3(3); provide for unavailability of a street address in Section 3(4)(d); add provision on failure of a risk location system in Section 3((5)(a) and (b); change examine to audit in Section 5(7)(a); delete the requirement that the Office of Insurance collect the penalty fee in Section 5(7)(c); provide that for purposes of Section 5(12) a consolidated local government, urban county government, charter county or unified local government shall be considered a county.

     HFA (1, A. Simpson) - Create a new section in Subtitle 12 of KRS Chapter 304 to require life insurers to state in their billings as a separate item the amount of the charge for local government premium taxes if local government premium taxes are included in the premium charge.

     HFA (2, A. Simpson) - Change "2002" to "2008" in Section 2(1); create a new paragraph (b) in Section 2(1) to provide that if an insurance company fails to prove its employed risk location systems or programs meet the requirements of Section 3 or fails to produce a copy of an Office of Insurance written order issued under Section 3(3), the policyholder may pursue any and all remedies provided by law prior to the effective date of this Act; increase from 2 to 5 years the time allowed for amended returns, requests for refunds or credits, and assessments in Section 2(1); change from "2010" to "2008" in Section 2(2)(c); delete paragraph (d) in Section 2(3); restrict application of Section 2(7) to payments made after December 31, 2008.

     HFA (3, A. Simpson) - Amend Section 2 to delete all references to a policyholder paying an insurance license fee or tax and filing an amended return or requesting an assessment thereon; and to delete the provision in Section 2 that this method of filing an amended return or requesting an assessment does not apply to any refund or credit from a local government affected by litigation pending on January 1, 2008.

     HFA (4, S. Riggs) - Delete "certification" and "certified" and replace with "verification" and "verified" in Section 3; delete everything in Section 3(1) after the first sentence.

     HFA (5, B. Montell) - Create a new section of KRS Charter 67 to ensure that charter county governments operate under the recall provisions pursuant to KRS 68.245 and KRS 132.027.

     HFA (6/Title, B. Montell) - Make title amendment.

     HFA (7, R. Rand) - Delete "certified" and replace it with "verified" in Section 1(2); delete language in Section 2(1) restricting the section to tax periods beginning after December 31, 2002; insert restrictive language in Section 2(1) before "All amended returns"; delete January 1, 2008 at the end of Section 2(1) and insert in lieu thereof "the effective date of this Act"; delete "2010" and replace with "2009" in Section 2(2)(c); delete Section 2(3)(d); require any collection fee retained by the insurance company to be included in the refund or credit in Section 2(6); establish a 10% penalty on a refund or credit if the insurance company cannot produce proof of the use of a risk location system; delete "certified" and "certification" and replace with "verified" and "verification" in Section 3; delete Section 3(1)(b) and (c); amend Section 5(15) to permit a county to impose a license fee or tax covering the entire county or to limit application to the unincorporated portions of the county; add Sections 7 and 8.

     HFA (8, S. Riggs) - Delete "certified" and replace it with "verified" in Section 1(2); delete language in Section 2(1) restricting the section to tax periods beginning after December 31, 2002; insert restrictive language in Section 2(1) before "All amended returns"; delete January 1, 2008 at the end of Section 2(1) and insert in lieu thereof "the effective date of this Act"; delete "2010" and replace with "2009" in Section 2(2)(c); delete Section 2(3)(d); require any collection fee retained by the insurance company to be included in the refund or credit in Section 2(6); establish a 10% penalty on a refund or credit if the insurance company cannot produce proof of the use of a risk location system; delete "certified" and "certification" and replace with "verified" and "verification" in Section 3; delete Section 3(1)(b) and (c); create subsection (6) in Section 4 to require an insurance company to use a verified risk location system or program during the calendar year if the total policies issued and renewed by the insurance company in Kentucky during the preceding calendar year is more than 2,000; amend Section 5(14) to permit a county to impose a license fee or tax covering the entire county or to limit application to the unincorporated portions of the county; add Sections 7 and 8 and 9.

     Feb 13-introduced in House
     Feb 15-to Local Government (H)
     Feb 19-posted in committee
     Mar 4-reported favorably, 1st reading, to Calendar with Committee Substitute
     Mar 5-2nd reading, to Rules
     Mar 6-floor amendment (1) filed to Committee Substitute
     Mar 7-floor amendment (2) filed to Committee Substitute
     Mar 10-posted for passage in the Regular Orders of the Day for Tuesday, March 11, 2008
     Mar 11-floor amendment (3) filed to Committee Substitute
     Mar 12-floor amendment (4) filed to Committee Substitute
     Mar 13-floor amendment (5) filed to Committee Substitute, floor amendment (6-title) filed
     Mar 17-floor amendment (7) filed to Committee Substitute
     Mar 19-floor amendment (8) filed to Committee Substitute
     Mar 20-3rd reading, passed 96-0 with Committee Substitute, floor amendments (6-title) and (8)
     Mar 21-received in Senate
     Mar 26-to State & Local Government (S)
     Mar 27-taken from committee State & Local Government (S); 1st reading; returned to State & Local Government (S)
     Mar 28-taken from committee State & Local Government (S); 2nd reading; returned to State & Local Government (S); reported favorably, to Rules as a Consent Bill
     Apr 2-posted for passage in the Consent Orders of the Day for April 2, 2008; 3rd reading, passed 37-0; received in House; enrolled, signed by each presiding officer; delivered to Governor
     Apr 14-signed by Governor (Acts Ch. 94)

Vote History
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