GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	3 

SENATE BILL 432
Manufacturing and Labor Committee Substitute Adopted 6/20/91
Finance Committee Substitute #2 Adopted 7/2/91

Short Title:  Special Industrial Comm. Fund.	(Public)
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Sponsors:
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Referred to:  
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April 1, 1991

A BILL TO BE ENTITLED
AN ACT TO CREATE THE SPECIAL INDUSTRIAL COMMISSION FUND FOR THE OPERATION OF THE INDUSTRIAL COMMISSION AND TO DIRECT THAT A PORTION OF THE TAX PAID ON WORKERS' COMPENSATION PREMIUMS BE PAID TO THIS FUND.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 97-100 reads as rewritten:
"§ 97-100.  Rates for insurance; carrier to make reports for determination of solvency; tax upon premium; returned or canceled premiums; reports of premiums collected; wrongful or fraudulent representation of carrier punishable as misdemeanor; notices to carrier; employer who carries own risk shall make report on payroll.
(a)	The rates charged by all carriers of insurance, including the parties to any mutual insurance association writing insurance against the liability for compensation under this Article, shall be fair, reasonable, and adequate.
(b)	Each such insurance carrier shall report to the Commissioner of Insurance, in accordance with such reasonable rules as the Commissioner of Insurance may at any time prescribe, for the purpose of determining the solvency of the carrier and the adequacy of its rates; for such purpose the Commissioner of Insurance may inspect the books and records of such insurance carrier, and examine its agents, officers, and directors under oath.
(c)	Every person, partnership, association, corporation, whether organized under the laws of this or any other state or country, every mutual company or association and every other insurance carrier insuring employers in this State against liability for personal injuries to their employees, or death caused thereby, under the provisions of this Article, shall, as hereinafter provided, pay a tax upon the premium received, whether in cash or notes, in this State, or on account of business done in this State, for such insurance in this State, at the rate provided in the Revenue Act then in force, which tax shall be in lieu of all other taxes on such premiums, which tax shall be assessed and collected as hereinafter provided; provided, however, that such insurance carriers shall be credited with all canceled or returned premiums actually refunded during the year on such insurance.
(d)	Every such insurance carrier shall, for the six months ending December 31, 1929, and annually thereafter, make a return, verified by the affidavit of its president and secretary, or other chief officers or agents, to the Commissioner of Insurance, stating the amount of all such premiums and credits during the period covered by such return. Every insurance carrier required to make such return shall file the same with the Commissioner of Insurance on or before the first day of April after the close of the period covered thereby, and shall at the same time pay to the State Insurance Commissioner the tax provided in the Revenue Act then in force on such premium ascertained, as provided in subsection (c) hereof, less returned premium on canceled policies.
(e)	If any such insurance carrier shall fail or refuse to make the return required by this Article, the said Commissioner of Insurance shall assess the tax against such insurance carrier at the rate herein provided for, on such amount of premium as he may deem just, and the proceedings thereon shall be the same as if the return had been made.
(f)	If any such insurance carrier shall withdraw from business in this State before the tax shall fall due, as herein provided, or shall fail or neglect to pay such tax, the Commissioner of Insurance shall at once proceed to collect the same; and he is hereby empowered and authorized to employ such legal process as may be necessary for that purpose, and when so collected he shall pay the same into the State treasury. The suit may be brought by the Commissioner of Insurance, in his official capacity, in any court of this State having jurisdiction. Reasonable attorney's fees may be taxed as costs therein, and process may issue to any county of the State, and may be served as in civil actions, or in case of unincorporated associations, partnerships, interindemnity contracts, upon any agent of the parties thereto upon whom process may be served under the laws of this State.
(g)	Any person or persons who shall in this State act or assume to act as agent for any such insurance carrier whose authority to do business in this State has been suspended, while such suspension remains in force, or shall neglect or refuse to comply with any of the provisions of this section obligatory upon such person or party or who shall willfully make a false or fraudulent statement of the business or condition of any such insurance carrier, or false or fraudulent return as herein provided, shall be deemed guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than one hundred ($100.00) nor more than one thousand dollars ($1,000), or by imprisonment for not less than 10 nor more than 90 days, or both such fine and imprisonment in the discretion of the court.
(h)	Whenever by this Article, or the terms of any policy contract, any officer is required to give any notice to an insurance carrier, the same may be given by delivery, or by mailing by registered letter properly addressed and stamped, to the principal office or general agent of such insurance carrier within this State, or to its home office, or to the secretary, general agent, or chief officer thereof in the United States, or the State Insurance Commissioner.
(i)	Any insurance carrier liable to pay a tax upon premiums under this Article shall not be liable to pay any other or further tax upon such premiums, under any other law of this State.
(j)	Every employer carrying his own risk under the provisions of G.S. 97-93 shall, under oath, report to the Commissioner of Insurance his payroll, subject to the provisions of this Article. Such report shall be made in form prescribed by the Commissioner of Insurance, and at the times herein provided for premium reports by insurer. The Commissioner of Insurance shall assess against such payroll a maintenance fund tax computed by taking such percent of the basic premiums charged against the same or most similar industry or business taken from the manual insurance rate then in force in this State as is assessed in the Revenue Act against the insurance carriers for premiums collected on compensation insurance policies.  The Commissioner shall use the approved experience modifier of an employer in calculating the employer's maintenance fund tax liability under this subsection.  
(k)	Every group of two or more employers who have pooled their liabilities pursuant to G.S. 97-93 shall pay a tax upon premiums received in this State in the same manner as the tax is calculated and paid by insurance carriers insuring employers in this State and set forth in subsections (c), (d), (e), and (f) above.
(l)	A special fund in the Office of the State Treasurer, the Special Industrial Commission Fund, is created.  Twenty-two and five-tenths percent (22.5%) of the tax on premiums collected by the Commissioner of Insurance pursuant to subsections (d), (j), and (k) of this section, together with any assessments or taxes dedicated to the support of the Commission, shall be deposited in the Special Industrial Commission Fund.  Interest derived from the Fund shall be credited to the Fund.  Monies in the Fund shall only be spent pursuant to appropriation by the General Assembly.
The Special Industrial Commission Fund shall be subject to the provisions of the Executive Budget Act except that no unexpended surplus of the Fund shall revert to the General Fund.  All funds credited to the Fund shall be used for the operation of the North Carolina Industrial Commission.  The percentage of the tax on premiums credited to the Fund shall not be considered a special purpose obligation or assessment based on premium tax, or a dedicated special purpose tax based on premium tax, within the meaning of G.S. 105-228.8(e).  Appropriations and receipts to the Industrial Commission from the General Fund for the fiscal year 1991-92 shall be refunded to the General Fund from the Special Industrial Commission Fund.
The remaining seventy-seven and five-tenths percent (77.5%) of the tax on premiums collected by the Commissioner of Insurance under subsections (d), (j), and (k) of this section shall be credited to the General Fund."
Sec. 2.  This act becomes effective July 1, 1991, and applies to all taxes imposed on workers' compensation premiums that are collected on or after that date.