House of Representatives

H.B. 2517

department of insurance; budget recoupment

Sponsors: Representative Carpenter

X	Committee on Financial Institutions and Insurance
	Caucus and COW	This bill as introduced contains PROP 108 and Emergency clauses.
	As Passed the House

HB 2517 amends A.R.S. 20-167 to increase the fees and fee ranges charged by the Department of Insurance.

HB 2517 has a proposed strike-everything amendment.

The proposed strike-everything amendment reduces the premium tax rate imposed on insurance companies transacting business in this state from 2.0 to 1.7.

Overview

Insurance companies transacting business in Arizona are required to pay an insurance premium tax in lieu of a corporate income tax. The premium tax is applied against net insurance premiums and not profits such as the corporate income tax. The premium tax collected in FY 2000 raised approximately $160 million in tax revenue and about $150 million in FY 1999.

Provisions

· Changes the premium tax rate imposed on insurance companies transacting business in this state from 2.0 percent to 1.7 per cent over two years.

· Each month from March through August, insurance companies are required to pay an amount equal to 15 per cent of the amount paid during the preceding calendar year. The strike-everything amendment reduces this by 15 percent for calendar years 2002 and 2003.

· Establishes an effective date of December 31, 2001 for the first reduction from 2.0 to 1.85.

· Establishes an effective date of December 31, 2002 for the rate reduction from 1.85 to 1.7.

· States that the Director may require insurers to demonstrate that the reduction in premium tax results in either lower rates or an increase in policy benefits for insureds.

---------- DOCUMENT FOOTER ---------

44th Legislature

Second Regular Session 2 February 27, 2001

---------- DOCUMENT FOOTER ---------