Text: SF02317 Text: SF02319 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 SENATE FILE 2318 1 2 1 3 AN ACT 1 4 RELATING TO THE TAX ON PREMIUMS AND SUBSCRIBER CONTRACT 1 5 PAYMENTS RECEIVED BY INSURANCE COMPANIES AND HEALTH SERVICE 1 6 CORPORATIONS BY PHASING IN A REDUCTION IN THE TAX AND 1 7 INCREASING THE PREPAYMENT OF THE TAX, PROVIDING FOR A STUDY, 1 8 AND INCLUDING AN EFFECTIVE DATE. 1 9 1 10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 11 1 12 Section 1. Section 135.120, Code 2001, is amended to read 1 13 as follows: 1 14 135.120 TAXATION OF ORGANIZED DELIVERY SYSTEMS. 1 15 Payments received by an organized delivery system licensed 1 16 by the director for health care services, insurance, 1 17 indemnity, or other benefits to which an enrollee is entitled 1 18 through an organized delivery system authorized under 1993 1 19 Iowa Acts, chapter 158, and payments by an organized delivery 1 20 system licensed by the director to providers for health care 1 21 services, to insurers, or corporations authorized under 1 22 chapter 514 for insurance, indemnity, or other service 1 23 benefits authorized under 1993 Iowa Acts, chapter 158, are not 1 24 premiums received and taxable under the provisions of section 1 25 432.1 for the first five years of the existence of the 1 26 organized delivery system, its successors or assigns, or the 1 27 first five years after July 1, 1996, whichever is the later. 1 28 After the first five years, the payments received shall be 1 29 considered premiums received and shall be taxable under the 1 30 provisions of section 432.1, subsection 1. However, payments 1 31 made by the United States secretary of health and human 1 32 services under contracts issued under section 1833 or 1876 of 1 33 the federal Social Security Act, section 4015 of the federal 1 34 Omnibus Budget Reconciliation Act of 1987, or chapter 249A for 1 35 enrolled members shall not be considered premiums received and 2 1 shall not be taxable under section 432.1. 2 2 Sec. 2. Section 432.1, subsection 1, paragraph a, Code 2 3 2001, is amended to read as follows: 2 4 a.Two percentThe applicable percent, as provided in 2 5 subsection 1A, of the gross amount of premiums received during 2 6 the preceding calendar year by every life insurance company or 2 7 association, not including fraternal beneficiary associations, 2 8 or the gross payments or deposits collected from holders of 2 9 fraternal beneficiary association certificates, on contracts 2 10 of insurance covering risks resident in this state during the 2 11 preceding year, including contracts for group insurance and 2 12 annuities and without including or deducting any amounts 2 13 received or paid for reinsurance. 2 14 Sec. 3. Section 432.1, Code 2001, is amended by adding the 2 15 following new subsection: 2 16 NEW SUBSECTION. 1A. The "applicable percent" for purposes 2 17 of subsection 1 of this section and section 432.2 is the 2 18 following: 2 19 a. For calendar years beginning before the 2003 calendar 2 20 year, two percent. 2 21 b. For the 2003 calendar year, one and three-fourths 2 22 percent. 2 23 c. For the 2004 calendar year, one and one-half percent. 2 24 d. For the 2005 calendar year, one and one-fourth percent. 2 25 e. For the 2006 and subsequent calendar years, one 2 26 percent. 2 27 Sec. 4. Section 432.1, subsection 2, Code 2001, is amended 2 28 to read as follows: 2 29 2.Two percentThe applicable percent, as provided in 2 30 subsection 2A, of the gross amount of premiums, assessments, 2 31 and fees received during the preceding calendar year by every 2 32 company or association other than life on contracts of 2 33 insurance other than life for business done in this state, 2 34 including all insurance upon property situated in this state, 2 35 after deducting the amounts returned upon canceled policies, 3 1 certificates and rejected applications but not including the 3 2 gross premiums, assessments and fees in connection with ocean 3 3 marine insurance authorized in section 515.48. 3 4 Sec. 5. Section 432.1, Code 2001, is amended by adding the 3 5 following new subsection: 3 6 NEW SUBSECTION. 2A. The "applicable percent" for purposes 3 7 of subsection 2 is the following: 3 8 a. For calendar years beginning before the 2004 calendar 3 9 year, two percent. 3 10 b. For the 2004 calendar year, one and three-fourths 3 11 percent. 3 12 c. For the 2005 calendar year, one and one-half percent. 3 13 d. For the 2006 calendar year, one and one-fourth percent. 3 14 e. For the 2007 and subsequent calendar years, one 3 15 percent. 3 16 Sec. 6. Section 432.1, subsection 4, Code 2001, is amended 3 17 to read as follows: 3 18 4. a. Each insurance company and association transacting 3 19 business in this state whose Iowa premium tax liability for 3 20 the preceding calendar year was one thousand dollars or more 3 21 shall remit on or before June 1, on a prepayment basis, an 3 22 amount equal to one-half of the premium tax liability for the 3 23 preceding calendar year. 3 24 b. In addition to the prepayment amount in paragraph "a", 3 25 each life insurance company or association which is subject to 3 26 tax under subsection 1 of this section and each mutual health 3 27 service corporation which is subject to tax under section 3 28 432.2 shall remit on or before June 30, on a prepayment basis, 3 29 an additional amount equal to the following percent of the 3 30 premium tax liability for the preceding calendar year as 3 31 follows: 3 32 (1) For prepayment in the 2003 calendar year, four 3 33 percent. 3 34 (2) For prepayment in the 2004 calendar year, twenty-one 3 35 percent. 4 1 (3) For prepayment in the 2005 and subsequent calendar 4 2 years, fifty percent. 4 3 c. In addition to the prepayment amount in paragraph "a", 4 4 each insurance company or association, other than a life 4 5 insurance company or association, which is subject to tax 4 6 under subsection 2 shall remit on or before June 30, on a 4 7 prepayment basis, an additional amount equal to the following 4 8 percent of the premium tax liability for the preceding 4 9 calendar year as follows: 4 10 (1) For prepayment in the 2003 and 2004 calendar years, 4 11 eleven percent. 4 12 (2) For prepayment in the 2005 calendar year, twenty-six 4 13 percent. 4 14 (3) For prepayment in the 2006 and subsequent calendar 4 15 years, fifty percent. 4 16 d. The sums prepaid by a company or association under this 4 17 subsection shall be allowed as credits against its premium tax 4 18 liability for the calendar year during which the payments are 4 19 made. If a prepayment made under this subsection exceeds the 4 20 annual premium tax liability, the excess shall be allowed as a 4 21 credit against subsequent prepayment or tax liabilities. The 4 22 commissioner may suspend or revoke the license of a company or 4 23 association that fails to make a prepayment on or before the 4 24 due date. 4 25 Sec. 7. Section 432.2, Code 2001, is amended to read as 4 26 follows: 4 27 432.2 MUTUAL SERVICE CORPORATIONS. 4 28 Notwithstanding section 432.1, a hospital service 4 29 corporation, medical service corporation, pharmaceutical 4 30 service corporation, optometric service corporation and any 4 31 other service corporation operating under chapter 514 shall 4 32 pay as taxes to the director of revenue and finance an amount 4 33 equal totwo percentthe applicable percent, as provided in 4 34 section 432.1, subsection 1A, of the gross amount of payments 4 35 received during the preceding calendar year for subscriber 5 1 contracts covering residents in this state after deducting the 5 2 amounts returned to subscribers upon canceled subscriber 5 3 contracts and rejected applications. Section 432.1, 5 4 subsections 3 and 4, apply to the tax imposed by this section. 5 5 Sec. 8. Section 514B.31, Code 2001, is amended to read as 5 6 follows: 5 7 514B.31 TAXATION. 5 8 Payments received by a health maintenance organization for 5 9 health care services, insurance, indemnity, or other benefits 5 10 to which an enrollee is entitled through a health maintenance 5 11 organization authorized under this chapter and payments by a 5 12 health maintenance organization to providers for health care 5 13 services, to insurers, or corporations authorized under 5 14 chapter 514 for insurance, indemnity, or other service 5 15 benefits authorized under this chapter are not premiums 5 16 received and taxable under the provisions of section 432.1 for 5 17 the first five years of the existence of the health 5 18 maintenance organization, its successors or assigns. After 5 19 the first five years, the payments received shall be 5 20 considered premiums received and shall be taxable under the 5 21 provisions of section 432.1, subsection 1. However, payments 5 22 made by the United States secretary of health and human 5 23 services under contracts issued under section 1833 or 1876 of 5 24 the federal Social Security Act, section 4015 of the federal 5 25 Omnibus Budget Reconciliation Act of 1987, or chapter 249A for 5 26 enrolled members shall not be considered premiums received and 5 27 shall not be taxable under section 432.1. 5 28 Sec. 9. GAAP. The department of revenue and finance and 5 29 the office of the auditor of state are directed to study the 5 30 impact this Act may have on the balance of the general fund of 5 31 the state according to generally accepted accounting 5 32 principles, especially the impact on the 2005-2006 fiscal 5 33 year. The report shall contain the data used and 5 34 recommendations made. The report shall be submitted to the 5 35 legislative council and its fiscal committee by August 15, 6 1 2002. 6 2 Sec. 10. EFFECTIVE DATE. Section 9 of this Act, being 6 3 deemed of immediate importance, takes effect upon enactment. 6 4 6 5 6 6 6 7 MARY E. KRAMER 6 8 President of the Senate 6 9 6 10 6 11 6 12 BRENT SIEGRIST 6 13 Speaker of the House 6 14 6 15 I hereby certify that this bill originated in the Senate and 6 16 is known as Senate File 2318, Seventy-ninth General Assembly. 6 17 6 18 6 19 6 20 MICHAEL E. MARSHALL 6 21 Secretary of the Senate 6 22 Approved , 2002 6 23 6 24 6 25 6 26 THOMAS J. VILSACK 6 27 Governor
Text: SF02317 Text: SF02319 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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