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).