Report Title:

Insurance Premium Tax; Workers' Compensation

Description:

Appropriates .5% of the taxes paid on the gross premiums derived from workers' compensation insurance to the Department of Labor and Industrial Relations Workers' Compensation Division. Establishes Workers' Compensation Special Fund.

HOUSE OF REPRESENTATIVES

H.B. NO.

1969

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to insurance.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§386- Workers' compensation administration special fund. (a) There is established a special fund for the administration of workers' compensation claims by the department to be called the workers' compensation administration special fund, into which shall be deposited:

(1) All revenues generated from the premium tax as described under section 431:7-202(a);

(2) Any general fund appropriations to the workers' compensation administration special fund; and

(3) All accrued interest from this fund.

(b) This fund shall be used to pay the costs incurred in administering workers' compensation claims by the disability compensation division of the department of labor and industrial relations. Costs may include but not be limited to:

(1) Costs related to information and public education;

(2) Costs related to closed claims studies;

(3) Infrastructure, support, and staff costs to investigate and adjudicate workers' compensation claims on a more timely basis;

(4) Computer system upgrades;

(5) Studies and evaluations relating to workers' compensation claims and workers' compensation insurance;

(6) Costs related to administrative contracts with personnel necessary to carry out the purposes of this section; and

(7) Any other office expenses necessary to carry out the purposes of this section.

The director shall submit a complete and detailed report on the status of the fund's administration and expenditures to the legislature no later than twenty days prior to the convening of each regular legislative session.

The director may adopt rules in accordance with chapter 91 to effectuate the purposes of this section."

SECTION 2. Section 431:7-202, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each authorized insurer, except with respect to all life insurance contracts, ocean marine insurance contracts, and real property title insurance contracts, shall pay to the director of finance through the commissioner a tax of 4.265 per cent on the gross premiums written from all risks or property resident, situated, or located within this State, during the year ending on the preceding December 31, less return premiums (but not including dividends paid or credited to policyholders), and less any reinsurance accepted (the tax upon such business being payable by the direct writing insurer)[.]; provided that 0.5 per cent of taxes paid on the gross premiums derived from workers' compensation insurance shall be paid by the director of finance into the workers' compensation administration special fund established in section 386- .

All premiums written, procured, or received in the State shall be presumed to have been from risks or property resident, situated, or located within the State. This presumption may be rebutted as to any premium:

(1) By showing that it has been properly allocated or apportioned and reported as a taxable premium of another state or other appropriate taxing authority; or

(2) By facts as to the residence, situation, or location of the risks or property, conclusively showing the nontaxability of the premium."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and shall apply to tax years beginning after December 31, 2005.

INTRODUCED BY:

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