SENATE BILL No. 987

 

 

February 29, 2012, Introduced by Senators BRANDENBURG, KOWALL and BIEDA and referred to the Committee on Finance.

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending section 476a (MCL 500.476a), as amended by 2007 PA 187.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 476a. (1) Beginning August 3, 1987, whenever, by a law in

 

force outside of this state or country, a domestic insurer or agent

 

of a domestic insurer is required to make a deposit of securities

 

for the protection of policyholders or otherwise, or to make

 

payment for taxes, fines, penalties, certificates of authority,

 

valuation of policies, or otherwise, or a special burden or other

 

burden is imposed, greater in the aggregate than is required by the

 

laws of this state for a similar alien or foreign insurer or agent

 

of an alien or foreign insurer, the alien or foreign insurer of

 

that state or country is required, as a condition precedent to its

 

transacting business in this state, to make a like deposit for like


 

purposes with the state treasurer of this state, and to pay to the

 

revenue commissioner for taxes, fines, penalties, certificates of

 

authority, valuation of policies, and otherwise an amount equal in

 

the aggregate to the charges and payments imposed by the laws of

 

the other state or country upon a similar domestic insurer and the

 

agents of a domestic insurer, regardless of whether a domestic

 

insurer or agent of a domestic insurer is actually transacting

 

business in that state or country. For fire department or salvage

 

corps taxes or other local taxes the amount shall be computed by

 

the revenue commissioner by dividing the total of the payments made

 

by domestic insurers in that state or country by the gross premium

 

received by domestic insurers in that state or country less return

 

premiums. The commissioner shall revoke the certificate of

 

authority of an alien or foreign insurer refusing for 30 days to

 

make payment of fees or taxes as required by this chapter. Except

 

as provided in subsections (3) and (4) and (5), for purposes of

 

this section, an insurer organized under the laws of a state or

 

country other than these United States shall be considered an

 

insurer of the state in which its general deposit for the benefit

 

of its policyholders is made.

 

     (2) The purpose of this section is to promote the interstate

 

business of domestic insurers by deterring other states from

 

enacting discriminatory or excessive taxes. To achieve this purpose

 

and to avoid weakening the intended deterrent effects, credits

 

against the tax imposed under this act are not permitted except as

 

provided under subsection (3).

 

     (3) For tax years that begin after December 31, 2013 and for


 

each tax year thereafter through the 2023 tax year, an insurer may

 

credit against the tax imposed under this section an amount equal

 

to the amount of the credit the insurer would be eligible to claim

 

for a PTP certificate during the respective tax year under section

 

645 of the income tax act of 1967, 1967 PA 281, MCL 206.645, if

 

that insurer was paying the tax imposed under part 2 of the income

 

tax act of 1967, 1967 PA 281, MCL 206.601 to 206.699. The credit

 

allowed under this subsection is not related to the business of

 

insurance or the calculation of any special burden and shall not be

 

construed as authorizing the application of any other credit

 

against the tax imposed by this section.

 

     (4) (3) Subsection (4) (5) does not apply to a domestic

 

insurer that is owned or controlled, directly or indirectly, by an

 

alien or foreign insurer who prior to 1998 and with the

 

commissioner's approval did not keep books, records, and files or

 

true copies thereof in this state.

 

     (5) (4) For purposes of this section, the state treasurer,

 

after consultation with the commissioner, shall determine that a

 

domestic insurer is an alien or foreign insurer domiciled in a

 

state or country determined by the state treasurer if the insurer

 

does not comply with all of the following:

 

     (a) Maintain its principal place of business in this state.

 

     (b) Maintain in this state officers and personnel responsible

 

for and knowledgeable of the company's operation, books, records,

 

administration, and annual statement.

 

     (c) Conduct in this state a substantial portion of its

 

underwriting, sales, claims, legal, and, if applicable, medical


 

operations relating to Michigan policyholders and certificate

 

holders.

 

     (d) Comply with section 5256(1)(a) and (2) through (6). (7).

 

The commissioner shall inform the state treasurer when a domestic

 

insurer is not in compliance with section 5256(1)(a) or (2) through

 

(6).(7).

 

     (6) (5) Taxes collected pursuant to this section are subject

 

to section 22d of the former single business tax act, 1975 PA 228,

 

or section 243 of the Michigan business tax act, 2007 PA 36, MCL

 

208.1243, or section 643 of the income tax act of 1967, 1967 PA

 

281, MCL 206.643.

 

     (7) (6) The state treasurer shall administer the tax

 

prescribed by this section in the manner provided in 1941 PA 122,

 

MCL 205.1 to 205.31.

 

     (8) (7) The requirements of section 28 of 1941 PA 122, MCL

 

205.28, that prohibit an employee or an authorized representative

 

or former employee or authorized representative or anyone connected

 

with the department of treasury from divulging any facts or

 

information obtained in connection with the administration of

 

taxes, do not apply to disclosure of the tax return prescribed in

 

this act.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 96th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 985                    ____ (request no.

 

04158'11).

 

     (b) Senate Bill No. 986                    ____ (request no.


 

04158'11 a).