HF 2042

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; reducing the rate of the 
  1.3             insurance premiums tax; amending Minnesota Statutes 
  1.4             2000, section 297I.05, subdivisions 1, 4, 9, 10, 12. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2000, section 297I.05, 
  1.7   subdivision 1, is amended to read: 
  1.8      Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] Except as 
  1.9   otherwise provided in this section, a tax is imposed on every 
  1.10  domestic and foreign insurance company.  The rate of tax is 
  1.11  equal to two 1.75 percent of all gross premiums less return 
  1.12  premiums on all direct business received by the insurer or 
  1.13  agents of the insurer in Minnesota, in cash or otherwise, during 
  1.14  the year. 
  1.15     [EFFECTIVE DATE.] This section is effective for premiums 
  1.16  received after June 30, 2001. 
  1.17     Sec. 2.  Minnesota Statutes 2000, section 297I.05, 
  1.18  subdivision 4, is amended to read: 
  1.19     Subd. 4.  [MUTUAL PROPERTY AND CASUALTY COMPANIES WITH 
  1.20  TOTAL ASSETS LESS THAN $1,600,000,000 ON DECEMBER 31, 1989.] A 
  1.21  tax is imposed on mutual property and casualty companies that 
  1.22  had total assets greater than $5,000,000 at the end of the 
  1.23  calendar year but that had total assets less than $1,600,000,000 
  1.24  on December 31, 1989.  The rate of tax is equal to: 
  1.25     (1) two 1.75 percent of gross premiums less return premiums 
  2.1   on all direct business received by the insurer or agents of the 
  2.2   insurer in Minnesota for life insurance, in cash or otherwise, 
  2.3   during the year; and 
  2.4      (2) 1.26 percent of gross premiums less return premiums on 
  2.5   all other direct business received by the insurer or agents of 
  2.6   the insurer in Minnesota, in cash or otherwise, during the year. 
  2.7      [EFFECTIVE DATE.] This section is effective for premiums 
  2.8   received after June 30, 2001. 
  2.9      Sec. 3.  Minnesota Statutes 2000, section 297I.05, 
  2.10  subdivision 9, is amended to read: 
  2.11     Subd. 9.  [TAX ON PERSONS, FIRMS, OR CORPORATIONS LICENSED 
  2.12  TO PROCURE INSURANCE FROM UNLICENSED FOREIGN COMPANIES.] (a) A 
  2.13  tax is imposed on any person, firm, or corporation licensed 
  2.14  under section 60A.19, subdivision 8.  The rate of tax is equal 
  2.15  to two 1.75 percent of gross premiums paid in the year less 
  2.16  return premiums received in the year. 
  2.17     (b)(1) Money collected under this subdivision must be paid 
  2.18  to a municipality or a fire department relief association if: 
  2.19     (i) the money is attributable to fire, lightning, or 
  2.20  sprinkler insurance premiums paid by an owner to insure 
  2.21  property; and 
  2.22     (ii) the property is in a municipality that has an 
  2.23  organized fire department, a partly paid fire department, or a 
  2.24  volunteer fire department. 
  2.25  The money must be paid to the municipality where the insured 
  2.26  property is located, or to the municipality's fire department 
  2.27  relief association.  The money to be paid includes penalties and 
  2.28  interest collected because a property owner failed to pay on 
  2.29  time the taxes due under this subdivision.  
  2.30     (2) This paragraph does not apply to taxes paid under this 
  2.31  subdivision that are attributable to premiums paid on property 
  2.32  if:  
  2.33     (i) the property is owned and occupied exclusively as a 
  2.34  homestead, and the owner carries insurance on the property; or 
  2.35     (ii) the property is exempt under section 550.37 and the 
  2.36  owner carries insurance on the property. 
  3.1      [EFFECTIVE DATE.] This section is effective for premiums 
  3.2   received after June 30, 2001. 
  3.3      Sec. 4.  Minnesota Statutes 2000, section 297I.05, 
  3.4   subdivision 10, is amended to read: 
  3.5      Subd. 10.  [TAX ON PERSONS, FIRMS, OR CORPORATIONS 
  3.6   PROCURING INSURANCE FROM AN INELIGIBLE COMPANY.] (a) A tax is 
  3.7   imposed on each insured in this state who procures, causes to be 
  3.8   procured, or continues or renews insurance with an ineligible 
  3.9   surplus lines insurer or any self-insurer in this state who 
  3.10  procures or continues excess of loss, catastrophe, or other 
  3.11  insurance upon a subject of insurance resident, located, or to 
  3.12  be performed within this state, other than insurance procured 
  3.13  pursuant to section 60A.201 or 60A.209, subdivision 1, equal to 
  3.14  two 1.75 percent of gross premiums less return premiums paid for 
  3.15  such insurance. 
  3.16     (b) If the insurance described in paragraph (a) also covers 
  3.17  a subject of insurance residing, located, or to be performed 
  3.18  outside this state, for the purposes of this subdivision, a 
  3.19  proper pro rata portion of the entire premium payable for all of 
  3.20  that insurance must be allocated according to the subjects of 
  3.21  insurance residing, located, or to be performed in this state. 
  3.22     (c) For the purposes of this subdivision, insurance placed 
  3.23  with an ineligible surplus lines insurer is considered to be 
  3.24  procured, continued, or renewed in this state if: 
  3.25     (1) it was procured through negotiations occurring in whole 
  3.26  or in part within or from outside this state; 
  3.27     (2) it was procured by an application made in whole or in 
  3.28  part within or from outside this state; or 
  3.29     (3) premiums for it are paid from within this state 
  3.30  directly or indirectly, in whole or in part. 
  3.31     [EFFECTIVE DATE.] This section is effective for premiums 
  3.32  received after June 30, 2001. 
  3.33     Sec. 5.  Minnesota Statutes 2000, section 297I.05, 
  3.34  subdivision 12, is amended to read: 
  3.35     Subd. 12.  [OTHER ENTITIES.] (a) A tax is imposed equal 
  3.36  to two 1.75 percent of: 
  4.1      (1) gross premiums less return premiums written for risks 
  4.2   resident or located in Minnesota by a risk retention group; 
  4.3      (2) gross premiums less return premiums received by an 
  4.4   attorney in fact acting in accordance with chapter 71A; 
  4.5      (3) gross premiums less return premiums received pursuant 
  4.6   to assigned risk policies and contracts of coverage under 
  4.7   chapter 79; 
  4.8      (4) the direct funded premium received by the reinsurance 
  4.9   association under section 79.34 from self-insurers approved 
  4.10  under section 176.181 and political subdivisions that 
  4.11  self-insure; 
  4.12     (5) gross premiums less return premiums received by a 
  4.13  nonprofit health service plan corporation authorized under 
  4.14  chapter 62C; and 
  4.15     (6) gross premiums less return premiums paid to an insurer 
  4.16  other than a licensed insurance company or a surplus lines 
  4.17  licensee for coverage of risks resident or located in Minnesota 
  4.18  by a purchasing group or any members of the purchasing group to 
  4.19  a broker or agent for the purchasing group. 
  4.20     (b) A tax is imposed on the state fund mutual insurance 
  4.21  company established under chapter 176A.  The tax must be 
  4.22  computed in the same manner as mutual insurance companies under 
  4.23  subdivisions 1, 3, and 4. 
  4.24     (c) A tax is imposed on a joint self-insurance plan 
  4.25  operating under chapter 60F.  The rate of tax is equal to two 
  4.26  1.75 percent of the total amount of claims paid during the fund 
  4.27  year, with no deduction for claims wholly or partially 
  4.28  reimbursed through stop-loss insurance. 
  4.29     (d) A tax is imposed on a joint self-insurance plan 
  4.30  operating under chapter 62H.  The rate of tax is equal to two 
  4.31  1.75 percent of the total amount of claims paid during the 
  4.32  fund's fiscal year, with no deduction for claims wholly or 
  4.33  partially reimbursed through stop-loss insurance. 
  4.34     (e) A tax is imposed equal to the tax imposed under section 
  4.35  297I.05, subdivision 5, on the gross premiums less return 
  4.36  premiums on all coverages received by an accountable provider 
  5.1   network or agents of an accountable provider network in 
  5.2   Minnesota, in cash or otherwise, during the year. 
  5.3      [EFFECTIVE DATE.] This section is effective for premiums 
  5.4   received after June 30, 2001.