First Substitute H.B. 386

Representative James A. Dunnigan proposes the following substitute bill:

1 INSURANCE DEPARTMENT FUNDING
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Insurance Code and tax provisions to address funding of the
10 Insurance Department.
11 Highlighted Provisions:
12 This bill:
13 . creates a restricted account within the General Fund known as the Insurance
14 Department Restricted Account from which the Legislature would appropriate for
15 operations of the department;
16 . addresses how revenues received by the department relate to the Insurance
17 Department Restricted Account;
18 . diverts premium taxes to the Insurance Department Restricted Account; and
19 . makes technical and conforming changes.
20 Monies Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 This bill takes effect on July 1, 2007.
24 This bill coordinates with S.B. 82, Amendments to Utah Comprehensive Health
25 Insurance Pool, to address the order in which transfers of premium taxes are made.

26 Utah Code Sections Affected:
27 AMENDS:
28 31A-3-103, as last amended by Chapter 117, Laws of Utah 2006
29 ENACTS:
30 59-9-107, Utah Code Annotated 1953
31
32 Be it enacted by the Legislature of the state of Utah:
33 Section 1. Section 31A-3-103 is amended to read:
34 31A-3-103. Fees -- Insurance Department Restricted Account.
35 (1) For purposes of this section:
36 (a) "Regulatory fee" is as defined in Section 63-38-3.2 .
37 (b) "Services" means functions that are reasonable and necessary to enable the
38 commissioner to perform the duties imposed by this title including:
39 (i) issuing and renewing licenses and certificates of authority;
40 (ii) filing policy forms;
41 (iii) reporting agent appointments and terminations; and
42 (iv) filing annual statements.
43 (c) Fees related to the renewal of licenses may be imposed no more frequently than
44 once each year.
45 (2) (a) A regulatory fee charged by the department shall be set in accordance with
46 Section 63-38-3.2 .
47 (b) Fees shall be set and collected for services provided by the department.
48 (3) (a) For a fee authorized by this chapter that is not a regulatory fee, the department
49 may adopt a schedule of fees provided that each fee in the schedule of fees is:
50 (i) reasonable and fair; and
51 (ii) submitted to the Legislature as part of the department's annual appropriations
52 request.
53 (b) If a fee schedule described in Subsection (3)(a) is submitted as part of the
54 department's annual appropriations request, the Legislature may, in a manner substantially
55 similar to Section 63-38-3.2 :
56 (i) approve any fee in the fee schedule;

57 (ii) (A) increase or decrease any fee in the fee schedule; and
58 (B) approve any fee in the fee schedule as changed by the Legislature; or
59 (iii) reject any fee in the fee schedule.
60 [(c) (i) Except as provided in Subsection (3)(c)(ii), a fee approved by the Legislature
61 pursuant to this Subsection (3) shall be deposited into the General Fund for appropriation by
62 the Legislature.]
63 [(ii)] (c) A fee approved by the Legislature pursuant to this Subsection (3) that relates
64 to the use of electronic or other similar technology to provide the services of the department
65 shall be deposited into the General Fund as a dedicated credit to be used by the department to
66 provide services through use of electronic commerce or other similar technology.
67 (4) The commissioner shall separately publish the schedule of fees approved by the
68 Legislature and make it available upon request for $1 per copy. This fee schedule shall also be
69 included in any compilation of rules promulgated by the commissioner.
70 (5) The commissioner shall, by rule, establish the deadlines for payment of any fee
71 established by the department in accordance with this section.
72 (6) (a) There is created a restricted account within the General Fund known as the
73 "Insurance Department Restricted Account."
74 (b) (i) Except as provided in Subsection (6)(b)(ii), the Insurance Department Restricted
75 Account shall consist of:
76 (A) all fees authorized by this section;
77 (B) all other funds or money received by the department including reimbursements for
78 examination costs incurred by the department; and
79 (C) premium taxes deposited into the Insurance Department Restricted Account under
80 Section 59-9-107 .
81 (ii) Monies received by the department pursuant to the following shall be deposited and
82 held in accordance with the statute creating the revenue source or fund and may not be
83 deposited into the Insurance Department Restricted Account:
84 (A) Subsection (3)(c);
85 (B) Section 31A-3-104 ;
86 (C) Section 31A-3-304 ;
87 (D) Section 31A-23a-415 ;

88 (E) Chapter 29, Comprehensive Health Insurance Pool Act;
89 (F) Chapter 31, Insurance Fraud Act;
90 (G) Chapter 35, Bail Bond Act;
91 (H) Section 59-9-105 ; and
92 (I) Subsection 63-38a-105 (7).
93 (c) The Legislature shall appropriate funds from the Insurance Department Restricted
94 Account each fiscal year to the department when the Legislature considers the department's
95 annual budget.
96 (d) Monies in the Insurance Department Restricted Account:
97 (i) may only be used as appropriated by the Legislature to fund the department; and
98 (ii) may not be diverted, appropriated, or used for a purpose that is not related to the
99 department.
100 (e) At the end of each fiscal year:
101 (i) the difference between the amount appropriated from the Insurance Department
102 Restricted Account and the amount spent by the department shall lapse to the General Fund;
103 and
104 (ii) any balance in the Insurance Department Restricted Account shall be transferred to
105 the General Fund.
106 Section 2. Section 59-9-107 is enacted to read:
107 59-9-107. Deposit of taxes.
108 (1) As used in this section, "Insurance Department premium tax revenue" means 2.9%
109 of the taxes or assessments collected under this part:
110 (a) after subtracting the amounts transferred under:
111 (i) Section 49-16-301 ;
112 (ii) Section 53-7-204.2 ; and
113 (iii) Subsection 59-9-101 (2); and
114 (b) before any other transfer or restriction on use provided for by statute.
115 (2) Beginning July 1, 2007, the commission shall promptly remit Insurance Department
116 premium tax revenue to the state treasurer for credit to the Insurance Department Restricted
117 Account.
118 Section 3. Effective date.

119 This bill takes effect on July 1, 2007.
120 Section 4. Coordinating H.B. 386 with S.B. 82 -- Substantive changes.
121 If this H.B. 386 and S.B. 82, Amendments to Utah Comprehensive Health Insurance
122 Pool, both pass, it is the intent of the Legislature that the Office of Legislative Research and
123 General Counsel in preparing the Utah Code database for publication modify Subsection
124 59-9-101 (1)(e)(ii)(A) to read:
125 "(A) the amount of premium tax revenue available after the allocation of the premium
126 taxes required by Sections 49-16-301 , 53-7-204.2 , and 59-9-107 ; and".