§ 9111-C — Temporary franchise tax on certain insurance companies

§ 9111-c. Temporary franchise tax on certain insurance companies. (a)\nImposition. (1) For the privilege of conducting business in this state\nand in addition to any other requirements therefor, every insurance\ncompany subject to the franchise tax imposed by subdivision (a) of\nsection fifteen hundred ten of the tax law, other than insurance\ncompanies whose premiums are received solely as consideration for\naccident and health insurance policies, shall pay a franchise tax of two\npercent of all gross direct premiums, less return premiums thereon,\nwritten during the "event year" as such term is defined in the following\nsentence on risk located or residing in this state. For the purposes of\nthis section, "event year" shall mean (A) the calendar year preceding\nany calendar year in which the association fails to make transfers and\ndeposits to the miscellaneous special revenue fund that have been\nauthorized by subsections (a) and (b) of section five thousand five\nhundred sixteen-f of this chapter or (B) the calendar year preceding the\nyear in which a final judicial determination invalidating some or all of\nthe provisions of such section five thousand five hundred sixteen-f\nrequires a return from the miscellaneous special revenue fund of any or\nall of the amounts transferred and deposited in such miscellaneous\nspecial revenue fund pursuant to such section five thousand five hundred\nsixteen-f.\n (2) Determination of direct premiums general provisions. (A) The term\n"premium" includes all amounts received as consideration for insurance\ncontracts or reinsurance contracts, other than for annuity contracts,\nand shall include premium deposits, assessments, policy fees, membership\nfees, and every other compensation for such contract. In ascertaining\nthe amount of direct premiums upon which a tax is payable under this\nsection there shall be first determined the amount of total gross\npremiums or deposit premiums or assessments, less return thereon, on all\npolicies, certificates, renewals, policies subsequently cancelled,\ninsurance and reinsurance executed, issued or delivered on property or\nrisks located or resident in this state, including premiums for\nreinsurance assumed, and also including premiums written, procured or\nreceived in this state on business which cannot specifically be\nallocated or apportioned and reported as taxable premiums or which have\nbeen used as a measure of a tax on business of any other state or\nstates. Provided, however, in the case of special risk premiums, direct\npremiums shall include only those premiums written, procured or received\nin this state on property or risks located or resident in this state.\nThe reporting of premiums for the purpose of the tax imposed by this\nsection shall be on a written basis or on a paid-for basis consistent\nwith the basis required by the annual statement filed with the\nsuperintendent pursuant to section three hundred seven of this chapter.\n (B) The term "gross direct premiums," as used in this section, shall\nnot include premiums for policies issued pursuant to section four\nthousand two hundred thirty-six of this chapter and premiums for\ninsurance upon hulls, freights, or disbursements, or upon goods, wares,\nmerchandise and all other personal property and interests therein, in\nthe course of exportation from, importation into any county, or\ntransportation coastwide, including transportation by land or water from\npoint of origin to final destination in respect to, appertaining to, or\nin connection with, any and all risks or perils of navigation, transit\nor transportation, and while being prepared for, and while awaiting\nshipment and during any delays, storage, transshipment or reshipment\nincident thereto, including war risks and marine builder's risks.\n (C) After determining the amount of total gross premiums, less returns\nthereon, as provided in this subsection, there shall be deducted the\nfollowing items:\n (i) Such premiums, less return premiums thereon, which have been\nreceived by way of reinsurance from corporations or other insurers\nauthorized to transact business in this state;\n (ii) Dividends on such direct business, including unused or unabsorbed\nportions of premium deposits paid or credited to policyholders, but not\nincluding deferred dividends paid in cash to policyholders on maturing\npolicies, nor cash surrender values.\n (D) In determining the amount of direct premiums taxable in this\nstate, all such premiums written, procured, or received in this state\nshall be deemed written on property or risks located or resident in this\nstate except such premiums as are properly allocated or apportioned and\nreported as taxable premiums or which have been used as a measure of a\ntax of any other state or states, provided, however, in the case of\nspecial risk premiums, direct premiums shall include only those premiums\nwritten, procured or received in this state on property or risks located\nor resident in this state.\n (b) Payment. Taxes due under this section shall be paid to the\nsuperintendent in such manner as the superintendent shall prescribe. The\ntax shall be paid in two installments. The first installment shall be\ndue in thirty days of the time at which the superintendent determines\nsuch tax is to be paid and shall be no less than ninety percent of the\ntax ultimately determined to be due under this section. The balance of\nany tax due shall be paid on the next succeeding March twenty-fifth. The\nsuperintendent is hereby authorized and directed to deposit payments\nmade under this section, and any interest and penalties thereon, into\nthe miscellaneous special revenue fund.\n (c) Returns and reports. A return, in a form prescribed by the\nsuperintendent, shall accompany the tax payment due March twenty-fifth.\nIn addition, the superintendent may prescribe a return to accompany the\nfirst installment.\n (d) Interest and penalties. (1) Interest. If any amount of tax is not\npaid on or before the date prescribed for payment thereof in paragraph\ntwo of this subsection, interest on such amount of tax at the\nunderpayment rate set by the commissioner of taxation and finance\npursuant to section one thousand ninety-six of the tax law, plus one\npercentage point, shall be paid to the superintendent for the period\nfrom the date prescribed for payment until the date paid.\n (2) Underpayment penalty. If the amount of tax paid by March\ntwenty-fifth is less than ninety-five percent of the tax ultimately\ndetermined to be due pursuant to this section, a penalty is hereby\nimposed equal to one hundred percent of the difference between the\namount of tax actually paid and ninety-five percent of the tax\nultimately determined to be due. In addition, this penalty shall bear\ninterest at the rate set forth in paragraph one of this subsection for\nthe period from the due date until the date the penalty is paid.\n (e) Coordination with other laws. Notwithstanding the provisions of\nsection one thousand one hundred twelve of this chapter, taxes paid\npursuant to this section shall not be considered in the calculation of\nreciprocal taxes due this state pursuant to section one thousand one\nhundred twelve of this chapter. Notwithstanding the provisions of\nsubdivision (c) of section fifteen hundred eleven of the tax law, taxes\npaid to other states on account of the imposition of the tax imposed by\nthis section shall not be included in the calculation of the tax credit\nprovided for by subdivision (c) of section fifteen hundred eleven of the\ntax law.\n (f) Return of excess collections. In the event that total collections\nfrom the assessment levied pursuant to this section shall exceed the\namount required to be transferred and deposited by the medical\nmalpractice insurance association into the miscellaneous special revenue\nfund pursuant to section five thousand five hundred sixteen-f of this\nchapter, amounts in excess of such amount shall be returned to the\ncompanies that paid such assessment on a pro rata basis. Provided,\nfurther, that the amount required to be so transferred and deposited as\nused in the preceding sentence shall be reduced by the "retained\namount", if any, as such term is defined in the following sentence. For\nthe purposes of this section, the term "retained amount", shall mean any\namount paid into the miscellaneous special revenue fund in accordance\nwith the provisions of section five thousand five hundred sixteen-f of\nthis chapter which is not the subject of any state or federal judicial\nchallenge at the time the calculation of amounts to be returned to\ninsurers pursuant to this subsection is to be made.\n (g) Conditional application of tax. The provisions of subsections (a)\nthrough (e) of this section shall apply to all premiums written during\nthe "event year" as such term is defined in paragraph one of subsection\n(a) of this section. Provided, however, that if the portion of amounts\nreceived by the miscellaneous special revenue fund from the medical\nmalpractice insurance association pursuant to the requirements of\nsection five thousand five hundred sixteen-f of this chapter is not less\nthan the amount required to be transferred and deposited to the\nmiscellaneous special revenue fund pursuant to section five thousand\nfive hundred sixteen-f of this chapter then the superintendent shall\ncertify to the commissioner of taxation and finance no later than\nFebruary fifth following the calendar year in which transfer and deposit\nis required to be made by the medical malpractice insurance association\nthat the required transfer and deposit of such amounts has been made to\nand received by the miscellaneous special revenue fund and in such event\nthe tax otherwise imposed by subsections (a) through (e) of this section\nshall not be imposed and the provisions of such subsections (a) through\n(e) shall in such event not be applied. Provided further, however, that\nif there is a final judicial determination invalidating some or all of\nthe provisions of section five thousand five hundred sixteen-f of this\nchapter and requiring a return from the miscellaneous special revenue\nfund of any or all of the amounts transferred and deposited to it\npursuant to such section five thousand five hundred sixteen-f, then the\ntax imposed pursuant to the provisions of subsections (a) through (e) of\nthis section shall be reinstated and the provisions of such subsections\n(a) through (e) shall in such event be applied. In such event, the\nsuperintendent shall notify the commissioner of taxation and finance\nthat such amounts have been returned from the miscellaneous special\nrevenue fund and the taxes imposed pursuant to subsections (a) through\n(e) of this section as modified by subsection (f) of this section shall\nbe due and payable within thirty days of such notification.\n (h) Judicial review. Notwithstanding any other law:\n (1) Application for judicial review of final determination time\nlimitation; deposit; undertaking. Any final determination of the amount\nof any tax payable under subsections (a) through (e) of this section\nshall be reviewable for error, illegality or unconstitutionality or any\nother reason whatsoever by a proceeding under article seventy-eight of\nthe civil practice law and rules if application therefor is made to the\nsupreme court within four months after the giving of the notice of such\nfinal determination, provided, however, that any such proceeding under\narticle seventy-eight of the civil practice law and rules shall not be\ninstituted unless (A) the amount of any tax sought to be reviewed, with\nsuch interest and penalties thereon as may be provided for by such law,\nshall be first deposited with the superintendent and there is filed an\nundertaking, issued by a surety company authorized to transact business\nin this state and approved by the superintendent as to solvency and\nresponsibility, in such amount as a justice of the supreme court shall\napprove to the effect that if such proceeding be dismissed or the tax\nconfirmed the petitioner will pay all costs and charges which may accrue\nin the prosecution of such proceeding or (B) at the option of the\npetitioner, such undertaking may be in sum sufficient to cover the\ntaxes, interest and penalties stated in such determination, plus the\ncosts and charges which may accrue against it in the prosecution of the\nproceeding, in which event the petitioner shall not be required to\ndeposit such taxes, interest or penalties as a condition precedent to\nthe application.\n (2) Judicial review of superintendent's denial of timely application\nfor refund or revision, time limitation; undertaking. Where any tax\nimposed under such subsections (a) through (e) of this section is\nasserted to have been erroneously, illegally or unconstitutionally\nassessed or collected and application for the refund or revision thereof\ntimely made to the superintendent, and the superintendent shall have\nmade a determination denying such refund or revision, such determination\nshall be reviewable by a proceeding under article seventy-eight of the\ncivil practice law and rules, provided (A) that such proceeding is\ninstituted within four months after giving of the notice of such denial,\n(B) that a final determination of tax due was not previously made, and\n(C) that an undertaking is filed with the superintendent in such amount\nand with such sureties as a justice of the supreme court shall approve\nto the effect that if such proceeding be dismissed, or the tax\nconfirmed, the petitioner will pay all costs and charges which may\naccrue in the prosecution of such proceeding.\n (3) Exception. Action for declaratory judgment; time limitation;\ndeposit; undertaking. Except as provided in paragraphs one and two of\nthis subsection, no determination or proposed determination of tax\nimposed under subsections (a) through (e) of this section shall be\nenjoined or reviewed by an action for declaratory judgment, an action\nfor money had and received or by any action or proceeding under article\nseventy-eight of the civil practice law and rules, provided, however,\nthat a taxpayer may proceed by declaratory judgment, if suit is\ninstituted within thirty days after issuance of a notice of tax due and\nthe amount of the tax in controversy, with such interest and penalties\nthereon as may be provided by such law, shall be deposited with the\nsuperintendent and there is filed an undertaking, issued by a surety\ncompany authorized to transact business in this state and approved by\nthe superintendent as to solvency and responsibility, in such amount as\na justice of the supreme court shall approve to the effect that if such\nproceeding be dismissed or the tax confirmed the petitioner will pay all\ncosts and charges which may accrue in the prosecution of such proceeding\nor at the option of the petitioner, such undertaking may be in a sum\nsufficient to cover the taxes, interest and penalties stated in such\nnotice, plus the costs and charges which may accrue against it in the\nprosecution of the proceeding, in which event the petitioner shall not\nbe required to deposit such taxes, interest or penalties as a condition\nprecedent to the application.\n (4) Venue for any action or proceeding. Venue for any declaratory\njudgment action, article seventy-eight proceeding or any other action or\nproceeding in relation to this section shall be in the supreme court,\nAlbany county, and any such action or proceeding shall be entitled to a\npreference both at trial and in any appeal.\n