SB 968

SENATE BILL NO. 968
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 476a and 476b (MCL 500.476a and
500.476b), 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), for purposes of this section, an insurer organized under the laws of a
state or country other than these United States shall
be considered is 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.
(3) Subsection (4)
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.
(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). The commissioner shall inform the state
treasurer when a domestic insurer is not in compliance with section 5256(1)(a)
or (2) through (6).
(5) Taxes collected
pursuant to under 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.
(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.
(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.
(8) For tax years that begin on and after January 1, 2027, an insurer
may claim a credit against the tax imposed under this section in an amount
equal to the amount of the state low-income housing tax credit the insurer
would be eligible to claim as a qualified taxpayer during the respective tax
year under section 679 of the income tax act of 1967, 1967 PA 281, MCL 206.679,
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. As used in this subsection,
"qualified taxpayer" and "state low-income housing tax
credit" mean those terms as defined under section 679 of the income tax
act of 1967, 1967 PA 281, MCL 206.679.
Sec. 476b. Authorized insurers are subject
to the tax as provided in section 476a if applicable or the former single business tax act, 1975 PA 228, or the
Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, 208.1519, or
part 2 of the income tax act of 1967, 1967 PA 281, MCL 206.601 to 206.699,
whichever is greater.
Enacting section 1.
This amendatory act does not take effect unless all of the following bills of
the 103rd Legislature are enacted into law:
(a)    Senate Bill No. 966.
(b)    Senate Bill No. 967.