74th OREGON LEGISLATIVE ASSEMBLY--2007 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 1723
House Bill 2215
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski)
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 gross amount of premiums not
allocable to insurance mandated to lawfully own, operate,
maintain or use motor vehicle. Requires Director of Department of
Consumer and Business Services to collect surcharge.
Establishes Motor Vehicle Insurance Surcharge Fund.
Continuously appropriates fund to Department of State Police for
state police patrol services.
Applies surcharge to premiums for policies issued or renewed on
or after effective date of Act.
A BILL FOR AN ACT
Relating to insurance surcharges; creating new provisions;
amending ORS 731.292, 731.836 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 5 of this 2007 Act are added to
and made a part of ORS chapter 731. + }
SECTION 2. { + As used in sections 2 to 5 of this 2007 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 insurance 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. The surcharge shall be a percentage
of the gross amount of premiums that are derived from the motor
vehicle liability insurance policies covering direct domestic
risks during each calendar year quarter in excess of the coverage
required to comply with the minimum financial and future
responsibility requirements of ORS chapter 806, the uninsured
motorist coverage requirements in ORS 742.502 and the personal
injury protection benefit requirements in ORS 742.520. The
Director of the Department of Consumer and Business Services
shall determine the percentage rate for the surcharge annually.
The rate shall be determined so that the amount to be collected
each year is the amount estimated to be required in the Motor
Vehicle Insurance Surcharge Fund for distribution under section
10 of this 2007 Act. In determining the percentage rate, the
director must use the most recent premium data approved by the
director.
(2) Notwithstanding subsection (1) of this section, the
surcharge imposed may not exceed four 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.
(3) Not later than the 45th day after the end of each calendar
year quarter, each insurer of motor vehicles shall pay to the
director the amount of the surcharge owing for the quarter and
shall file with the payment a verified report of all motor
vehicle liability insurance policies issued or renewed in this
state during that quarter on a form prescribed by the director.
The report shall include, in addition to any other information
required by the director:
(a) The gross amount of premiums that are derived from the
motor vehicle liability insurance policies covering direct
domestic risks during that calendar year quarter by the insurer;
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, the uninsured
motorist coverage requirements in ORS 742.502 and the personal
injury protection benefit requirements in ORS 742.520 required to
lawfully own, operate, maintain or use a motor vehicle in this
state.
(4) If the director determines that the surcharge paid by an
insurer of motor vehicles under this section is incorrect, the
director shall charge or credit the insurer with the difference
between the correct amount of surcharge and the amount actually
paid.
(5) Each 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. Surcharges collected under this section may
not be considered gross premiums for any purpose.
(6) Each surcharge imposed under this section shall be
separately stated on premium billing statements. + }
SECTION 4. { + On or before April 1 of each year, each insurer
of motor vehicles that owed any surcharge under section 3 of this
2007 Act during the preceding year shall submit an annual report
to the Director of the Department of Consumer and Business
Services, on a form prescribed by the director, that reconciles
any underpayment or overpayment of surcharges during the
preceding year. The director shall verify the amounts of
surcharges underpaid or overpaid and collect or return any
difference so determined. + }
SECTION 5. { + 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 2007 Act,
immediately file a return reporting the amount of surcharge due
and pay the surcharge due. + }
SECTION 6. { + The first calendar year quarter for which a
surcharge must be paid under section 3 of this 2007 Act is the
quarter ending on March 31, 2008. + }
SECTION 7. 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 5 of this 2007 Act shall be paid by the director to
the State Treasurer for deposit in the Motor Vehicle Insurance
Surcharge Fund established under section 10 of this 2007 Act. + }
SECTION 8. 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 2007 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 9. 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 2007 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 { + :
(a) + } For 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
2007 Act, for 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 2007 Act on insurers of
motor vehicles who are not surplus lines licensees + }.
SECTION 10. { + (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 sections 2 to 5
of this 2007 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 2 to 5 of this 2007
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, not to exceed $20 million in any
year, is continuously appropriated to the Department of State
Police for the purpose of funding patrol services activities and
operations.
(3) Any balance remaining after distribution under subsection
(2) of this section shall be transferred to the General Fund. + }
SECTION 11. { + Sections 2 to 5 of this 2007 Act and the
amendments to ORS 735.470 by section 9 of this 2007 Act apply to
motor vehicle liability insurance policies that are issued or
renewed on or after the effective date of this 2007 Act. + }
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