73rd OREGON LEGISLATIVE ASSEMBLY--2005 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3525
Senate Bill 1036
Sponsored by COMMITTEE ON RULES
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Imposes motor vehicle liability insurance surcharge. Limits
surcharge to that portion of insurer's gross amount of premiums
not allocable to insurance mandated to lawfully own, operate or
use motor vehicle. Requires Director of Department of Consumer
and Business Services to collect surcharge.
Establishes Motor Vehicle Insurance Surcharge Fund.
Continuously appropriates surcharge moneys from Motor Vehicle
Insurance Surcharge Fund to Department of State Police for state
police patrol services.
Applies surcharge to premiums from policies issued or renewed
on or after January 1, 2006.
A BILL FOR AN ACT
Relating to insurance surcharges; creating new provisions;
amending ORS 731.292, 731.836, 731.840 and 735.470;
appropriating money; and providing for revenue raising that
requires approval by a three-fifths majority.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 8 of this 2005 Act are added to
and made a part of ORS chapter 731. + }
SECTION 2. { + As used in sections 2 to 8 of this 2005 Act:
(1) 'Gross amount of premiums' has the meaning given that term
in ORS 731.808.
(2) 'Insurer of motor vehicles' means an insurer that issues
motor vehicle liability policies designed to insure motor
vehicles or drivers of motor vehicles against damages for
liability on account of accidents arising out of the ownership,
operation, maintenance or use of motor vehicles. + }
SECTION 3. { + (1) For the privilege of insuring motor
vehicles in this state, each insurer of motor vehicles in this
state shall pay a surcharge of ___ percent of that portion of the
annual gross amount of premiums written by the insurer or the
insurance producers of the insurer from motor vehicle insurance
in this state that is derived from insurance coverage in excess
of the coverage required to comply with the minimum financial and
future responsibility requirements of ORS chapter 806 or other
mandatory coverage required to lawfully own, operate or use a
motor vehicle in this state.
(2) The Director of the Department of Consumer and Business
Services shall adopt rules that annually require insurers to
report:
(a) The gross amount of premiums written by the insurer for the
year; and
(b) That portion of the gross amount of premiums that is
allocable to motor vehicle insurance coverage that exceeds the
coverage required to comply with the minimum financial and future
responsibility requirements of ORS chapter 806 or other mandatory
coverage required to lawfully own, operate, maintain or use a
motor vehicle in this state.
(3) The surcharge imposed under this section is in addition to
and not in lieu of any tax, assessment or other surcharge imposed
on an insurer. An offset against corporate excise taxes imposed
under ORS chapter 317 may not be made for the surcharge imposed
under this section.
(4) Notwithstanding subsection (1) of this section, each
insurer subject to a surcharge under this section may retain ___
percent of the insurer's surcharge obligation each year as
compensation for administrative costs incurred by the insurer
under sections 2 to 8 of this 2005 Act. + }
SECTION 4. { + Notwithstanding section 3 of this 2005 Act, the
surcharge imposed under section 3 of this 2005 Act may not exceed
3.6 percent of the annual gross amount of premiums written by an
insurer of motor vehicles or the insurance producers of the
insurer from all motor vehicle liability insurance. + }
SECTION 5. { + (1) The surcharge imposed under section 3 of
this 2005 Act shall be paid on or before April 1 of each year.
(2) The surcharge shall be paid by an insurer of motor vehicles
to the Director of the Department of Consumer and Business
Services.
(3) At the time of payment of the surcharge, the insurer shall
file a return on a form prescribed by the director, containing
any information required by the director. + }
SECTION 6. { + If an insurer of motor vehicles ceases to do
business in this state, ceases to issue motor vehicle insurance
policies or otherwise ceases to collect premiums on motor vehicle
liability insurance policies, the insurer shall determine the
amount of surcharge due under section 3 of this 2005 Act,
immediately file a return reporting the amount of surcharge due
and pay the surcharge due. + }
SECTION 7. { + (1) Every insurer of motor vehicles with a
surcharge obligation under section 3 of this 2005 Act shall
prepay the surcharge imposed for the current calendar year if the
total surcharge obligation under section 3 of this 2005 Act for
the preceding calendar year was $400 or more.
(2) The Director of the Department of Consumer and Business
Services shall credit prepayments toward the surcharge
obligations of the insurer under section 3 of this 2005 Act for
the current calendar year.
(3) The amounts of the prepayments shall be percentages of the
insurer's surcharge obligation based on the preceding calendar
year's business and shall be paid to the director by the
following due dates and in the following amounts:
(a) On or before June 15, 45 percent;
(b) On or before September 15, 25 percent; and
(c) On or before December 15, 25 percent.
(4) The effect of transferring policies of insurance from one
insurer to another insurer is to transfer the surcharge
prepayment obligation with respect to such policies.
(5) On or before June 1 of each year, the director shall notify
each insurer required to make prepayments in that year of the
amount of each prepayment and shall provide prepayment remittance
forms to be used by the insurer. However, an insurer's
responsibility to make prepayments is not affected by failure of
the director to send, or the insurer to receive, the notice or
the remittance forms. + }
SECTION 8. { + If the Director of the Department of Consumer
and Business Services determines that the surcharge paid by an
insurer of motor vehicles under section 3 of this 2005 Act is
incorrect, the director shall charge or credit the insurer with
the difference between the correct amount of surcharge and the
amount actually paid. + }
SECTION 9. { + Notwithstanding section 7 of this 2005 Act, for
the year beginning January 1, 2006, in lieu of the prepayment of
surcharges under section 7 of this 2005 Act, each insurer of
motor vehicles with a surcharge obligation under section 3 of
this 2005 Act for the year shall estimate the amount of the
surcharge and shall pay the following amounts to the Director of
the Department of Consumer and Business Services:
(1) On or before June 15, 2006, 45 percent of the estimate;
(2) On or before September 15, 2006, 25 percent of the
estimate; and
(3) On or before December 15, 2006, 25 percent of the
estimate. + }
SECTION 10. ORS 731.292 is amended to read:
731.292. (1) Except as provided in subsections { - (2) and
(3) - } { + (2), (3) and (4) + } of this section, all fees,
charges and other moneys received by the Department of Consumer
and Business Services or the Director of the Department of
Consumer and Business Services under the Insurance Code shall be
deposited in the fund created by ORS 705.145 and are continuously
appropriated to the department for the payment of the expenses of
the department in carrying out the Insurance Code.
(2) All taxes, fines and penalties paid pursuant to the
Insurance Code shall be paid to the director and after deductions
of refunds shall be paid by the director to the State Treasurer,
at the end of every calendar month or more often in the
director's discretion, for deposit in the General Fund to become
available for general governmental expenses.
(3) All premium taxes received by the director pursuant to ORS
731.820 shall be paid by the director to the State Treasurer for
deposit in the State Fire Marshal Fund.
{ + (4) All surcharges received by the director pursuant to
sections 2 to 8 of this 2005 Act shall be paid by the director to
the State Treasurer for deposit in the Motor Vehicle Insurance
Surcharge Fund established under section 15 of this 2005 Act. + }
SECTION 11. ORS 731.836 is amended to read:
731.836. The Director of the Department of Consumer and
Business Services shall commence an action for the recovery of
taxes { + or surcharges + } payable under ORS 731.820, 731.824,
731.828 and 731.859 { + and section 3 of this 2005 Act + } not
later than the later of the following:
(1) Five years after the date such taxes { + or surcharges + }
were payable to the director under such sections; or
(2) Three years after the date on which the report of
examination by the domiciliary state of the insurer, disclosing
that such taxes { + or surcharges + } were owing by the insurer
under such sections, was filed with the director.
SECTION 12. ORS 731.840 is amended to read:
731.840. (1) The retaliatory tax imposed upon a foreign or
alien insurer under ORS 731.854 and 731.859, or the corporate
excise tax imposed upon a foreign or alien insurer under ORS
chapter 317, is in lieu of all other state taxes upon premiums,
taxes upon income, franchise or other taxes measured by income
that might otherwise be imposed upon the foreign or alien insurer
except the fire insurance premiums tax imposed under ORS
731.820 { + , the motor vehicle insurance surcharge imposed under
section 3 of this 2005 Act + } and the tax imposed upon wet
marine and transportation insurers under ORS 731.824 and 731.828.
However, all real and personal property, if any, of the insurer
shall be listed, assessed and taxed the same as real and personal
property of like character of noninsurers. Nothing in this
subsection shall be construed to preclude the imposition of the
assessments imposed under ORS 656.612 upon a foreign or alien
insurer.
(2) Subsection (1) of this section applies to a reciprocal
insurer and its attorney in its capacity as such.
(3) Subsection (1) of this section applies to foreign or alien
title insurers and to foreign or alien wet marine and
transportation insurers issuing policies and subject to taxes
referred to in ORS 731.824 and 731.828.
(4) The State of Oregon hereby preempts the field of regulating
or of imposing excise, privilege, franchise, income, license,
permit, registration, and similar taxes, licenses and fees upon
insurers and their insurance producers and other representatives
as such, and:
(a) No county, city, district, or other political subdivision
or agency in this state shall so regulate, or shall levy upon
insurers, or upon their insurance producers and representatives
as such, any such tax, license or fee; except that whenever a
county, city, district or other political subdivision levies or
imposes generally on a nondiscriminatory basis throughout the
jurisdiction of the taxing authority a payroll, excise or income
tax, as otherwise provided by law, such tax may be levied or
imposed upon domestic insurers; and
(b) No county, city, district, political subdivision or agency
in this state shall require of any insurer, insurance producer or
representative, duly authorized or licensed as such under the
Insurance Code, any additional authorization, license, or permit
of any kind for conducting therein transactions otherwise lawful
under the authority or license granted under this code.
SECTION 13. ORS 735.470 is amended to read:
735.470. (1) The surplus lines licensee shall pay the Director
of the Department of Consumer and Business Services an amount
equal to the tax { - which - } { + that + } would have been
imposed under ORS 731.816 (1993 Edition) if that section were in
effect and operative, and the { - tax which is - } { + amount
of taxes and surcharges that are + } imposed by ORS 731.820 { +
and section 3 of this 2005 Act + }, on authorized insurers for
the premiums shown in the report required by ORS 735.465. The tax
shall be collected by the surplus lines licensee as specified by
the director, in addition to the full amount of the gross premium
charged by the insurer for the insurance. The tax on any portion
of the premium unearned at termination of insurance having been
credited by the state to the licensee shall be returned to the
policyholder directly by the surplus lines licensee or through
the producing insurance producer, if any. The surplus lines
licensee is prohibited from absorbing such tax and from rebating
for any reason, any part of such tax.
(2) The surplus lines tax is due quarterly on the 45th day
following the calendar quarter in which the premium is collected.
The tax shall be paid to and reported on forms prescribed by the
director or upon the director's order paid to and reported on
forms prescribed by the surplus lines association.
(3) Notwithstanding subsection (2) of this section, if a
surplus lines license is terminated or nonrenewed for any reason,
the taxes described in this section are due on the 30th day after
the termination or nonrenewal.
(4) In applying ORS 731.816 (1993 Edition) for purposes of this
section, the rate shall be two percent rather than two and
one-quarter percent.
(5) The director by rule shall establish procedures for { + :
(a) + } Payment of taxes on the Oregon portion of risks covered
by surplus lines insurance policies transacted outside this state
that cover risks with exposures both in this state and outside
this state { + ; and + }
{ + (b) With respect to the surcharge imposed by section 3 of
this 2005 Act, determining the amount of surcharge payable by
surplus lines licensees so that the amount is consistent with the
surcharge imposed by section 3 of this 2005 Act on insurers of
motor vehicles who are not surplus lines licensees + }.
SECTION 14. { + Sections 2 to 8 of this 2005 Act and the
amendments to ORS 731.292, 731.836, 731.840 and 735.470 by
sections 10 to 13 of this 2005 Act apply to motor vehicles
liability policies that are issued or renewed on or after the
effective date of this 2005 Act. + }
SECTION 15. { + (1) The Motor Vehicle Insurance Surcharge Fund
is established, separate and distinct from the General Fund.
Interest earned by the Motor Vehicle Insurance Surcharge Fund
shall be credited to the Motor Vehicle Insurance Surcharge Fund.
(2) Moneys in the Motor Vehicle Insurance Surcharge Fund shall
be distributed quarterly as follows:
(a) Amounts needed to reimburse the Department of Consumer and
Business Services for expenses in administering section 3 of this
2005 Act are continuously appropriated to the department;
(b) Amounts needed to reimburse the General Fund for reductions
in revenue caused by the effect of sections 1 to 8 of this 2005
Act on the retaliatory tax imposed under ORS 731.854 and 731.859
shall be transferred to the General Fund; and
(c) The remaining balance is continuously appropriated to the
Department of State Police for the purpose of funding Patrol
Services Division activities and operations. + }
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