HB4483 - Relating to the funding mechanism for the regulation of workers' compensation and workers' compensation insurance; authorizing surcharges.

  89R2192 RDR-F     By: Hefner H.B. No. 4483       A BILL TO BE ENTITLED   AN ACT   relating to the funding mechanism for the regulation of workers'   compensation and workers' compensation insurance; authorizing   surcharges.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Title 3, Insurance Code, is   amended to read as follows:   TITLE 3.  DEPARTMENT FUNDS, FEES, SURCHARGES, AND TAXES          SECTION 2.  The heading to Subtitle C, Title 3, Insurance   Code, is amended to read as follows:   SUBTITLE C.  INSURANCE MAINTENANCE TAXES AND SURCHARGES          SECTION 3.  Section 201.001(a), Insurance Code, is amended   to read as follows:          (a)  The Texas Department of Insurance operating account is   an account in the general revenue fund.  The account includes the   following:                (1)  taxes , surcharges, and fees received by the   commissioner or comptroller that are required by this code or other   law to be deposited to the credit of the account; and                (2)  money or credits received by the department or   commissioner from sales, reimbursements, and fees authorized by law   other than this code, including money or credits received from:                      (A)  charges for providing copies of public   information under Chapter 552, Government Code;                      (B)  the disposition of surplus or salvage   property under Subchapters C and D, Chapter 2175, Government Code;                      (C)  the sale of publications and other printed   material under Section 2052.301, Government Code;                      (D)  miscellaneous transactions and sources under   Section 403.011 or 403.012, Government Code;                      (E)  charges for postage spent to serve legal   process under Section 17.025, Civil Practice and Remedies Code;                      (F)  the comptroller involving warrants for which   payment is barred under Chapter 404, Government Code;                      (G)  sales or reimbursements authorized by the   General Appropriations Act; and                      (H)  the sale of property purchased with money   from the account or a predecessor fund or account.          SECTION 4.  Section 251.001(a), Insurance Code, is amended   to read as follows:          (a)  The commissioner shall annually determine the rate of   assessment of each maintenance tax or workers' compensation   surcharge imposed under this subtitle.          SECTION 5.  Section 251.002, Insurance Code, is amended to   read as follows:          Sec. 251.002.  DUTY TO ADVISE COMPTROLLER OF RATE.  The   commissioner shall advise the comptroller of the applicable rate of   assessment of a maintenance tax or workers' compensation surcharge   not later than the 45th day before the due date of the tax or   surcharge report for the period for which that tax or surcharge is   due.          SECTION 6.  Section 251.003, Insurance Code, is amended to   read as follows:          Sec. 251.003.  EFFECT OF LATE ADVISEMENT OF   RATE.  (a)  Except as provided by Subsection (b), if the   commissioner does not advise the comptroller of the applicable rate   of assessment of a maintenance tax or workers' compensation   surcharge by the date required by Section 251.002, the rate of   assessment is the rate applied in the previous tax or surcharge   period.          (b)  If the commissioner advises the comptroller of the   applicable rate of assessment of a maintenance tax or workers'   compensation surcharge after the tax or surcharge has been   assessed, the comptroller shall:                (1)  advise each taxpayer or surcharge payer in writing   of the amount of any additional taxes or surcharges due; or                (2)  refund any excess taxes or surcharges paid.          SECTION 7.  The heading to Section 251.004, Insurance Code,   is amended to read as follows:          Sec. 251.004.  DEPOSIT OF MAINTENANCE TAXES AND SURCHARGES .          SECTION 8.  Section 251.004(a), Insurance Code, is amended   to read as follows:          (a)  Except as provided by Subsection (b), maintenance taxes   collected under this subtitle and surcharges collected under   Chapter 255 shall be deposited in the general revenue fund and   reallocated to the Texas Department of Insurance operating account.          SECTION 9.  Chapter 255, Insurance Code, is amended to read   as follows:   CHAPTER 255.  WORKERS' COMPENSATION INSURANCE          Sec. 255.001.   SURCHARGE [ MAINTENANCE TAX ] IMPOSED.  (a)  A   surcharge [ maintenance tax ] is imposed on each authorized insurer   with gross premiums subject to the surcharge [ taxation ] under   Section 255.003, including a:                (1)  stock insurance company;                (2)  mutual insurance company;                (3)  reciprocal or interinsurance exchange; and                (4)  Lloyd's plan.          (b)  The surcharge [ tax ] required by this chapter is in   addition to [ other ] taxes or other surcharges  imposed that are not   in conflict with this chapter.          Sec. 255.002.  MAXIMUM RATE;  ANNUAL ADJUSTMENT.  (a)  The   sum of the rates [ rate ] of assessment for the surcharge imposed by   this chapter and the surcharges imposed by Chapters 403 and 405,   Labor Code, set by the commissioner , may not exceed 2.7 [ 0.6 ]   percent of the gross premiums subject to surcharges [ taxation under   Section 255.003 ].          (b)  The commissioner shall annually adjust the rate of   assessment of the surcharge [ maintenance tax ] so that the surcharge   [ tax ] imposed that year, together with any unexpended funds   produced by the surcharge [ tax ], produces the amount the   commissioner determines is necessary to pay the expenses during the   succeeding year of regulating workers' compensation insurance.          Sec. 255.003.  PREMIUMS SUBJECT TO SURCHARGE [ TAXATION ].     (a)  An insurer shall pay the surcharge [ maintenance taxes ] under   this chapter on the correctly reported gross workers' compensation   insurance premiums from writing workers' compensation insurance in   this state, including the modified annual premium of a policyholder   that purchases an optional deductible plan under Subchapter E,   Chapter 2053.          (b)  The rate of assessment for a surcharge shall be applied   to the modified annual premium before application of a deductible   premium credit.          Sec. 255.004.   SURCHARGE [ MAINTENANCE TAX ] DUE DATES.  (a)     The insurer shall pay the surcharge [ maintenance tax ] annually or   semiannually.          (b)  The comptroller may require semiannual payment only   from an insurer whose surcharge [ maintenance tax ] liability under   this chapter for the previous surcharge  [ tax ] year was at least   $2,000.           Sec.   255.005.     RECOVERY OF SURCHARGE. An insurer may   recover a surcharge under this chapter by:                 (1)     reflecting the surcharge as an expense in a rate   filing required under this code; or                 (2)  charging the insurer's policyholders.          SECTION 10.  Section 402.076(b), Labor Code, is amended to   read as follows:          (b)  The operations of the division under this section are   funded through the surcharge [ maintenance tax ] assessed under   Section 403.002.          SECTION 11.  Section 403.001(a), Labor Code, is amended to   read as follows:          (a)  Except as provided by Sections 403.006, 403.007, and   403.008, or as otherwise provided by law, money collected under   this subtitle, including surcharges and advance deposits for   purchase of services, shall be deposited in the general revenue   fund of the state treasury to the credit of the Texas Department of   Insurance operating account.          SECTION 12.  Section 403.002, Labor Code, is amended to read   as follows:          Sec. 403.002.   SURCHARGES  [ MAINTENANCE TAXES ].  (a)  Each   insurance carrier, other than a governmental entity, shall pay an   annual surcharge [ maintenance tax ] to pay the costs of   administering this subtitle and to support the prosecution of   workers' compensation insurance fraud in this state.          (b)  The rate of  assessment is applied to  [ may not exceed an   amount equal to two percent of ] the correctly reported gross   workers' compensation insurance premiums, including the modified   annual premium of a policyholder that purchases an optional   deductible plan under Subchapter E, Chapter 2053 [ Article 5.55C ],   Insurance Code.  The rate of assessment shall be applied to the   modified annual premium before application of a deductible premium   credit.          (c)  A workers' compensation insurance company is assessed   the surcharge [ taxed ] at the rate established under Section 403.003   and as limited by Section 255.002(a), Insurance Code .  The   surcharge [ tax ] shall be collected in the manner provided for   collection of other surcharges [ taxes ] on gross premiums from a   workers' compensation insurance company as provided in Chapter 255,   Insurance Code.          (d)  Each certified self-insurer shall pay a fee and   surcharge  [ maintenance taxes ] as provided by Subchapter F, Chapter   407.          SECTION 13.  The heading to Section 403.003, Labor Code, is   amended to read as follows:          Sec. 403.003.  RATE OF SURCHARGE [ ASSESSMENT ].          SECTION 14.  Section 403.003(a), Labor Code, is amended to   read as follows:          (a)  The commissioner of insurance shall set and certify to   the comptroller the rate of the surcharge,  [ maintenance tax   assessment ] taking into account:                (1)  any expenditure projected as necessary for the   division and the office of injured employee counsel to:                      (A)  administer this subtitle during the fiscal   year for which the rate of assessment is set; and                      (B)  reimburse the general revenue fund as   provided by Section 201.052, Insurance Code;                (2)  projected employee benefits paid from general   revenues;        &#xA [Text truncated for display. 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