Current Status Bill Number:1120 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19960213 Primary Sponsor:McConnell All Sponsors:McConnell Drafted Document Number:pt\2236jm.96 Residing Body:Senate Current Committee:Banking and Insurance Committee 02 SBI Subject:Municipal license fees, taxes under insurance law
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19960213 Introduced, read first time, 02 SBI
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND SECTION 38-7-160, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MUNICIPAL LICENSE FEES AND TAXES UNDER THE STATE'S INSURANCE LAW, SO AS TO, AMONG OTHER THINGS, DELETE CERTAIN LANGUAGE AND PROVISIONS, PROVIDE THAT A MUNICIPAL LICENSE FEE SHALL NOT EXCEED TWO PERCENT OF THE PREMIUMS RECEIVED FROM RISKS LOCATED WITHIN THE LIMITS OF THE MUNICIPALITY, PROVIDE FOR CERTAIN EXCEPTIONS, AND REQUIRE THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO ESTABLISH A UNIFORM METHOD FOR COLLECTING AND DISTRIBUTING ANY PREMIUM-BASED TAXES OR FEES COLLECTED BY MUNICIPALITIES FROM INSURERS SO AS TO MEET CERTAIN CRITERIA.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-7-160 of the 1976 Code, as amended by Section 534 of Act 181 of 1993, is further amended to read:
"Section 38-7-160. (A) This title may not be construed as preventing any municipality from levying and collecting license fees or taxes in accordance with its ordinances. However, no municipality may charge a license fee to fire insurers or their agents licensed by the director or his designee in any other manner than on a percentage of the premiums collected in the municipality or realized from risks located within the limits of the municipality, or both, received by such companies in the preceding calendar year. the The license fee shall not to exceed two percent of the premiums collected in the municipality and realized from risks located in the municipality, except in cities of fifty thousand inhabitants or more, where not exceeding five percent may be charged. Preference must be given hereunder to the municipality wherein the insured property is located, and, if a license is levied against the insuring company on such basis, that company may not be subject to a similar license from a municipality wherein it may collect the premium for such transaction received from risks located within the limits of the municipality; however, in the case of life, accident, and health insurance premiums, the license fee shall not exceed seventy-five percent of such premiums.
(B) For purposes of this section, the location of a property insurance risk shall be determined by the address of the property being insured. The location of a casualty insurance risk shall be determined by the residence of the insured or, in a commercial policy, by the principal place of business of the insured. The location of a life, accident, and health insurance risk shall be determined by the address of the person being insured as stated in the policy or in any modification contained in the records of the insurer.
(C) The director shall establish a uniform method for collecting and distributing any premium-based taxes or fees collected by municipalities from insurers so as to meet the following criteria:
(1) On or before January 1 of each year in which the tax or fee is levied, municipalities levying such taxes or fees must file with the director certified copies of all ordinances, resolutions, and amendments thereto imposing such tax or fee. The filing of these certified copies shall be a condition of the validity and enforceability of the ordinance or resolution.
(2) On or before February 1 of each year in which the tax or fee is levied, the director shall furnish to each insurer a return which lists all municipalities in which such taxes or fees have been imposed for the then-current year, together with the applicable tax rate levied by each municipality.
(3) On or before May 31 of each year in which the tax or fee is levied, an insurer subject to such taxes or fees shall file a certified return with the director showing:
(a) the gross direct premiums received by the insurer during the preceding calendar year on risks located within the corporate limits of each municipality listed on the return;
(b) the amount of tax or fee payable to each municipality listed on the return; and
(c) the total aggregate amount of such taxes and fees for all municipalities listed on the return. Payment to the director of the total aggregate amount of such taxes and fees as reflected on the certified return shall be submitted with the return.
(4) After May 31 of each year in which the tax or fee is levied, the director shall distribute to each municipality, in accordance with the certified returns, the taxes or fees which are actually remitted to and collected by the director on behalf of each municipality.
(D) This section shall not be construed as authorizing or permitting municipalities to levy a license fee or tax on premiums of policies issued under the National Flood Insurance Program, the National Crop Insurance Program, worker's compensation insurance policies, and annuities, all of which shall be exempt from municipal license fees or taxes."
SECTION 2. This act takes effect January 1, 1997.