Text: HSB00714 Text: HSB00716 Text: HSB00700 - HSB00799 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 135.120, Code 2001, is amended to read 1 2 as follows: 1 3 135.120 TAXATION OF ORGANIZED DELIVERY SYSTEMS. 1 4 Payments received by an organized delivery system licensed 1 5 by the director for health care services, insurance, 1 6 indemnity, or other benefits to which an enrollee is entitled 1 7 through an organized delivery system authorized under 1993 1 8 Iowa Acts, chapter 158, and payments by an organized delivery 1 9 system licensed by the director to providers for health care 1 10 services, to insurers, or corporations authorized under 1 11 chapter 514 for insurance, indemnity, or other service 1 12 benefits authorized under 1993 Iowa Acts, chapter 158, are not 1 13 premiums received and taxable under the provisions of section 1 14 432.1 for the first five years of the existence of the 1 15 organized delivery system, its successors or assigns, or the 1 16 first five years after July 1, 1996, whichever is the later. 1 17 After the first five years, the payments received shall be 1 18 considered premiums received and shall be taxable under the 1 19 provisions of section 432.1, subsection 1. However, payments 1 20 made by the United States secretary of health and human 1 21 services under contracts issued under section 1833 or 1876 of 1 22 the federal Social Security Act, section 4015 of the federal 1 23 Omnibus Budget Reconciliation Act of 1987, or chapter 249A for 1 24 enrolled members shall not be considered premiums received and 1 25 shall not be taxable under section 432.1. 1 26 Sec. 2. Section 432.1, subsection 1, paragraph a, Code 1 27 2001, is amended to read as follows: 1 28 a.Two percentThe applicable percent, as provided in 1 29 subsection 1A, of the gross amount of premiums received during 1 30 the preceding calendar year by every life insurance company or 1 31 association, not including fraternal beneficiary associations, 1 32 or the gross payments or deposits collected from holders of 1 33 fraternal beneficiary association certificates, on contracts 1 34 of insurance covering risks resident in this state during the 1 35 preceding year, including contracts for group insurance and 2 1 annuities and without including or deducting any amounts 2 2 received or paid for reinsurance. 2 3 Sec. 3. Section 432.1, Code 2001, is amended by adding the 2 4 following new subsection: 2 5 NEW SUBSECTION. 1A. The "applicable percent" for purposes 2 6 of subsection 1 of this section and section 432.2 is the 2 7 following: 2 8 a. For calendar years beginning before the 2003 calendar 2 9 year, two percent. 2 10 b. For the 2003 calendar year, one and three-fourths 2 11 percent. 2 12 c. For the 2004 calendar year, one and one-half percent. 2 13 d. For the 2005 calendar year, one and one-fourth percent. 2 14 e. For the 2006 and subsequent calendar years, one 2 15 percent. 2 16 Sec. 4. Section 432.1, subsection 2, Code 2001, is amended 2 17 to read as follows: 2 18 2.Two percentThe applicable percent, as provided in 2 19 subsection 2A, of the gross amount of premiums, assessments, 2 20 and fees received during the preceding calendar year by every 2 21 company or association other than life on contracts of 2 22 insurance other than life for business done in this state, 2 23 including all insurance upon property situated in this state, 2 24 after deducting the amounts returned upon canceled policies, 2 25 certificates and rejected applications but not including the 2 26 gross premiums, assessments and fees in connection with ocean 2 27 marine insurance authorized in section 515.48. 2 28 Sec. 5. Section 432.1, Code 2001, is amended by adding the 2 29 following new subsection: 2 30 NEW SUBSECTION. 2A. The "applicable percent" for purposes 2 31 of subsection 2 is the following: 2 32 a. For calendar years beginning before the 2004 calendar 2 33 year, two percent. 2 34 b. For the 2004 calendar year, one and three-fourths 2 35 percent. 3 1 c. For the 2005 calendar year, one and one-half percent. 3 2 d. For the 2006 calendar year, one and one-fourth percent. 3 3 e. For the 2007 and subsequent calendar years, one 3 4 percent. 3 5 Sec. 6. Section 432.1, subsection 4, Code 2001, is amended 3 6 to read as follows: 3 7 4. a. Each insurance company and association transacting 3 8 business in this state whose Iowa premium tax liability for 3 9 the preceding calendar year was one thousand dollars or more 3 10 shall remit on or before June 1, on a prepayment basis, an 3 11 amount equal to one-half of the premium tax liability for the 3 12 preceding calendar year. 3 13 b. In addition to the prepayment amount in paragraph "a", 3 14 each life insurance company or association which is subject to 3 15 tax under subsection 1 of this section and each mutual health 3 16 service corporation which is subject to tax under section 3 17 432.2 shall remit on or before June 30, on a prepayment basis, 3 18 an additional amount equal to the following percent of the 3 19 premium tax liability for the preceding calendar year as 3 20 follows: 3 21 (1) For prepayment in the 2004 calendar year, seventeen 3 22 percent. 3 23 (2) For prepayment in the 2005 calendar year, forty-six 3 24 percent. 3 25 (3) For prepayment in the 2006 and subsequent calendar 3 26 years, fifty percent. 3 27 c. In addition to the prepayment amount in paragraph "a", 3 28 each insurance company or association, other than a life 3 29 insurance company or association, which is subject to tax 3 30 under subsection 2 shall remit on or before June 30, on a 3 31 prepayment basis, an additional amount equal to the following 3 32 percent of the premium tax liability for the preceding 3 33 calendar year as follows: 3 34 (1) For prepayment in the 2005 calendar year, fifteen 3 35 percent. 4 1 (2) For prepayment in the 2006 calendar year, forty-two 4 2 percent. 4 3 (3) For prepayment in the 2007 and subsequent calendar 4 4 years, fifty percent. 4 5 d. The sums prepaid by a company or association under this 4 6 subsection shall be allowed as credits against its premium tax 4 7 liability for the calendar year during which the payments are 4 8 made. If a prepayment made under this subsection exceeds the 4 9 annual premium tax liability, the excess shall be allowed as a 4 10 credit against subsequent prepayment or tax liabilities. The 4 11 commissioner may suspend or revoke the license of a company or 4 12 association that fails to make a prepayment on or before the 4 13 due date. 4 14 Sec. 7. Section 432.2, Code 2001, is amended to read as 4 15 follows: 4 16 432.2 MUTUAL SERVICE CORPORATIONS. 4 17 Notwithstanding section 432.1, a hospital service 4 18 corporation, medical service corporation, pharmaceutical 4 19 service corporation, optometric service corporation and any 4 20 other service corporation operating under chapter 514 shall 4 21 pay as taxes to the director of revenue and finance an amount 4 22 equal totwo percentthe applicable percent, as provided in 4 23 section 432.1, subsection 1A, of the gross amount of payments 4 24 received during the preceding calendar year for subscriber 4 25 contracts covering residents in this state after deducting the 4 26 amounts returned to subscribers upon canceled subscriber 4 27 contracts and rejected applications. Section 432.1, 4 28 subsections 3 and 4, apply to the tax imposed by this section. 4 29 Sec. 8. Section 514B.31, Code 2001, is amended to read as 4 30 follows: 4 31 514B.31 TAXATION. 4 32 Payments received by a health maintenance organization for 4 33 health care services, insurance, indemnity, or other benefits 4 34 to which an enrollee is entitled through a health maintenance 4 35 organization authorized under this chapter and payments by a 5 1 health maintenance organization to providers for health care 5 2 services, to insurers, or corporations authorized under 5 3 chapter 514 for insurance, indemnity, or other service 5 4 benefits authorized under this chapter are not premiums 5 5 received and taxable under the provisions of section 432.1 for 5 6 the first five years of the existence of the health 5 7 maintenance organization, its successors or assigns. After 5 8 the first five years, the payments received shall be 5 9 considered premiums received and shall be taxable under the 5 10 provisions of section 432.1, subsection 1. However, payments 5 11 made by the United States secretary of health and human 5 12 services under contracts issued under section 1833 or 1876 of 5 13 the federal Social Security Act, section 4015 of the federal 5 14 Omnibus Budget Reconciliation Act of 1987, or chapter 249A for 5 15 enrolled members shall not be considered premiums received and 5 16 shall not be taxable under section 432.1. 5 17 EXPLANATION 5 18 This bill phases in a reduction of the state's gross 5 19 premiums tax rate from 2 percent to 1 percent for insurance 5 20 companies and associations, including mutual health insurance 5 21 corporations, HMOs, and organized health delivery systems. 5 22 For life and health insurance companies and associations, the 5 23 tax rate for the 2003 calendar year is 1.75 percent, for the 5 24 2004 calendar year the tax rate is 1.50 percent, and for the 5 25 2005 calendar year the tax rate is 1.25 percent, and beginning 5 26 with the 2006 calendar year the tax rate is 1 percent. For 5 27 insurance companies and associations other than life and 5 28 health insurance companies and associations, the tax rate for 5 29 the 2004 calendar year is 1.75 percent, for the 2005 calendar 5 30 year the tax rate is 1.50 percent, and for the 2006 calendar 5 31 year the tax rate is 1.25 percent, and beginning with the 2007 5 32 calendar year the tax rate is 1 percent. 5 33 Under current law, if the previous year's liability is 5 34 $1,000 or more, then the company must prepay 50 percent of 5 35 that amount by June 1. The bill increases the amount of 6 1 prepaid tax liability. Beginning with the 2004 calendar year, 6 2 the additional amount for life and health insurance companies 6 3 and associations is 17 percent of the previous year's 6 4 liability, for the 2005 calendar year it is 46 percent, and 6 5 for the 2006 and subsequent calendar years, it is 50 percent. 6 6 For insurance companies and associations other than life and 6 7 health, the bill increases the amount of prepaid tax 6 8 liability. Beginning with the 2005 calendar year, the 6 9 additional amount is 15 percent of the previous year's 6 10 liability, for the 2006 calendar year it is 42 percent, and 6 11 for the 2007 and subsequent calendar years, it is 50 percent. 6 12 This additional prepayment amount is due by June 30. 6 13 LSB 7114HC 79 6 14 mg/hk/91
Text: HSB00714 Text: HSB00716 Text: HSB00700 - HSB00799 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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