84R7793 KKR-F
	By: Sheets	H.B. No. 3205

	A BILL TO BE ENTITLED
	AN ACT
	relating to repealing the maintenance tax and creating an overhead
	assessment for certain insurers participating in the workers'
	compensation system; imposing an assessment.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Title 3, Insurance Code, is amended by adding
	Subtitle F to read as follows:
	SUBTITLE F. OVERHEAD ASSESSMENTS
	CHAPTER 291.  WORKERS' COMPENSATION INSURANCE OVERHEAD ASSESSMENT
	Sec. 291.001.  OVERHEAD ASSESSMENT IMPOSED.  (a)  An
	overhead assessment is imposed on each authorized insurer with
	gross premiums subject to assessment under Section 291.003,
	including a:
	(1)  stock insurance company;
	(2)  mutual insurance company;
	(3)  reciprocal or interinsurance exchange; and
	(4)  Lloyd's plan.
	(b)  The overhead assessment required by this chapter is in
	addition to other taxes imposed that are not in conflict with this
	chapter.
	Sec. 291.002.  MAXIMUM RATE; ANNUAL ADJUSTMENT. (a) The
	rate of assessment set by the commissioner may not exceed 0.6
	percent of the gross premiums subject to the overhead assessment
	under Section 291.003.
	(b)  The commissioner shall annually adjust the rate of
	assessment of the overhead assessment so that the assessment
	imposed that year, together with any unexpended funds produced by
	the assessment, produces the amount the commissioner determines is
	necessary to pay the expenses during the succeeding year of
	regulating workers' compensation insurance.
	Sec. 291.003.  PREMIUMS SUBJECT TO OVERHEAD ASSESSMENT. (a)
	An insurer shall pay an overhead assessment 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 shall be applied to the modified
	annual premium before application of a deductible premium credit.
	Sec. 291.004.  OVERHEAD ASSESSMENT DUE DATES. (a) The
	insurer shall pay the overhead assessment annually or semiannually.
	(b)  The comptroller may require semiannual payment only
	from an insurer whose overhead assessment liability under this
	chapter for the previous tax year was at least $2,000.
	(b-1)  For the initial overhead assessment imposed on or
	after January 1, 2016, the comptroller may require semiannual
	payment under Subsection (b) from an insurer whose maintenance tax
	liability for the previous tax year under former Chapter 255 was at
	least $2,000. This subsection expires September 1, 2017.
	Sec. 291.005.  APPLICABILITY OF OTHER LAW. The requirements
	of Chapter 251 apply to overhead assessments imposed under this
	chapter.
	Sec. 291.006.  RECOVERY OF OVERHEAD ASSESSMENT. An insurer
	may recover an overhead assessment paid by the insurer under this
	chapter by:
	(1)  reflecting the overhead assessment as an expense
	in a rate filing required under this code; or
	(2)  charging the insurer's policyholders.
	SECTION 2.  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 overhead assessment [maintenance tax assessed]
	under Section 403.002.
	SECTION 3.  The heading to Section 403.002, Labor Code, is
	amended to read as follows:
	Sec. 403.002.  OVERHEAD ASSESSMENT [MAINTENANCE TAXES].
	SECTION 4.  Sections 403.002(a), (b), and (c), Labor Code,
	are amended to read as follows:
	(a)  Each insurance carrier, other than a governmental
	entity, shall pay an annual overhead assessment [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 overhead assessment 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 the overhead assessment shall be applied to the
	modified annual premium before application of a deductible premium
	credit.
	(c)  A workers' compensation insurance company is assessed
	[taxed] at the rate established under Section 403.003.  The
	overhead assessment [tax] shall be collected in the manner provided
	for collection of other assessments [taxes] on gross premiums from
	a workers' compensation insurance company as provided in Chapter
	291 [255], Insurance Code.
	SECTION 5.  Section 403.003, Labor Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  The commissioner of insurance shall set and certify to
	the comptroller the rate of the overhead [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;
	(3)  a surplus or deficit produced by the overhead
	assessment [tax] in the preceding year;
	(4)  revenue recovered from other sources, including
	reappropriated receipts, grants, payments, fees, gifts, and
	penalties recovered under this subtitle; and
	(5)  expenditures projected as necessary to support the
	prosecution of workers' compensation insurance fraud.
	(a-1)  For the initial overhead assessment imposed on or
	after January 1, 2016, the commissioner of insurance shall take
	into account under Subsection (a)(3) a surplus or deficit produced
	by the maintenance tax under former Chapter 255, Insurance Code, in
	the preceding year. This subsection expires September 1, 2017.
	SECTION 6.  Section 403.004, Labor Code, is amended to read
	as follows:
	Sec. 403.004.  COLLECTION OF OVERHEAD ASSESSMENT [TAX] AFTER
	WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
	insurance immediately shall proceed to collect overhead
	assessments [taxes] due under this chapter from an insurance
	carrier that withdraws from business in this state, using legal
	process as necessary.
	SECTION 7.  Chapter 403, Labor Code, is amended by adding
	Section 403.0041 to read as follows:
	Sec. 403.0041.  COLLECTION OF MAINTENANCE TAXES AFTER
	WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
	insurance immediately shall proceed to collect prior maintenance
	taxes due under former Chapter 255, Insurance Code, from an
	insurance carrier that withdraws from business in this state, using
	legal process as necessary.
	SECTION 8.  Section 403.005, Labor Code, is amended to read
	as follows:
	Sec. 403.005.  OVERHEAD ASSESSMENT [TAX] RATE. The
	commissioner of insurance shall annually adjust the rate of the
	overhead assessment [of the maintenance tax] imposed under Section
	403.003 so that the overhead assessment [tax] imposed that year,
	together with any unexpended funds produced by the overhead
	assessment [tax], produces the amount the commissioner of insurance
	determines is necessary to pay the expenses of administering this
	subtitle.
	SECTION 9.  Section 403.007(e), Labor Code, is amended to
	read as follows:
	(e)  If the commissioner determines that the funding under
	Subsection (a) is not adequate to meet the expected obligations of
	the subsequent injury fund established under Section 403.006, the
	fund shall be supplemented by the collection of an overhead
	assessment [a maintenance tax] paid by insurance carriers, other
	than a governmental entity, as provided by Sections 403.002 and
	403.003.  The rate of assessment must be adequate to provide 120
	percent of the projected unfunded liabilities of the fund for the
	next biennium as certified by an independent actuary or financial
	advisor.
	SECTION 10.  Chapter 403, Labor Code, is amended by adding
	Section 403.009 to read as follows:
	Sec. 403.009.  RECOVERY OF OVERHEAD ASSESSMENT. An insurer
	may recover an overhead assessment paid by the insurer under this
	chapter by:
	(1)  reflecting the overhead assessment as an expense
	in a rate filing; or
	(2)  charging the insurer's policyholders.
	SECTION 11.  The heading to Section 405.003, Labor Code, is
	amended to read as follows:
	Sec. 405.003.  FUNDING; MAINTENANCE TAX; OVERHEAD
	ASSESSMENT.
	SECTION 12.  Sections 405.003(a), (b), (c), and (d), Labor
	Code, are amended to read as follows:
	(a)  The group's duties under this chapter are funded through
	the imposition of an overhead assessment and [of] a maintenance
	tax, as applicable, collected annually from all insurance carriers,
	and self-insurance groups that hold certificates of approval under
	Chapter 407A, except governmental entities.
	(b)  The department shall set the rate of the overhead
	assessment and maintenance tax based on the expenditures authorized
	and the receipts anticipated in legislative appropriations. The
	[tax] rate of the overhead assessment for insurance companies may
	not exceed one-tenth of one percent of the correctly reported gross
	workers' compensation insurance premiums. The tax rate for
	certified self-insurers may not exceed one-tenth of one percent of
	the total tax base of all certified self-insurers, as computed
	under Section 407.103(b). The tax rate for self-insurance groups
	described by Subsection (a) may not exceed one-tenth of one percent
	of the group's gross premium for the group's retention, excluding
	premium collected by the group for excess insurance.
	(c)  The overhead assessment [tax] imposed under Subsection
	(a) is in addition to all other assessments and taxes imposed on
	those insurance carriers for workers' compensation purposes.
	(d)  The overhead assessment and tax, as applicable, on
	insurance companies and on self-insurance groups described by
	Subsection (a) shall be assessed, collected, and paid in the same
	manner and at the same time as the overhead assessment [maintenance
	tax] established for the support of the department under Chapter
	291 [255], Insurance Code.  The tax on certified self-insurers
	shall be assessed, collected, and paid in the same manner and at the
	same time as the self-insurer maintenance tax collected under
	Section 407.104.
	SECTION 13.  Chapter 405, Labor Code, is amended by adding
	Section 405.0031 to read as follows:
	Sec. 405.0031.  RECOVERY OF OVERHEAD ASSESSMENT. An insurer
	may recover an overhead assessment paid by the insurer under this
	chapter by:
	(1)  reflecting the overhead assessment as an expense
	in a rate filing; or
	(2)  charging the insurer's policyholders.
	SECTION 14.  Sections 407.103(c) and (d), Labor Code, are
	amended to read as follows:
	(c)  The tax liability of a certified self-insurer under this
	section is the tax base computed under Subsection (b) multiplied by
	the overhead assessment rate for [assessed] workers' compensation
	insurance companies under Sections 403.002 and 403.003.
	(d)  In setting the rate of the overhead [maintenance tax]
	assessment for insurance companies, the commissioner of insurance
	may not consider revenue or expenditures related to the operation
	of the self-insurer program under this chapter.
	SECTION 15.  Sections 407A.301(b), (c), and (e), Labor Code,
	are amended to read as follows:
	(b)  The tax liability of a group under Subsections (a)(1)
	and (2) is based on gross premium for the group's retention
	multiplied by the overhead assessment rate for [assessed] insurance
	carriers under Sections 403.002 and 403.003.
	(c)  The tax liability of a group under Subsection (a)(3) is
	based on gross premium for the group's retention multiplied by the
	overhead assessment rate for [assessed] insurance carriers under
	Section 405.003.
	(e)  The tax under this section shall be collected by the
	comptroller as provided by Section 201.051 and in the manner of the
	collection of an overhead assessment under Chapter 291 [255],
	Insurance Code.
	SECTION 16.  Sections 407A.302(a) and (c), Labor Code, are
	amended to read as follows:
	(a)  Subject to Subsection (b), each group shall pay the
	maintenance tax at the rate and in the manner prescribed [imposed]
	under Chapter 291 [255], Insurance Code, for the administrative
	costs incurred by the department in implementing this chapter.
	(c)  The maintenance tax assessed under this section [is
	subject to Chapter 255, Insurance Code, and] shall be collected by
	the comptroller in the manner provided for an overhead assessment
	by Chapter 291, Insurance Code [that chapter].
	SECTION 17.  Chapter 255, Insurance Code, is repealed.
	SECTION 18.  This Act takes effect January 1, 2016.