A1339

An Act concerning the tax on certain fire insurance premiums, and amending various sections of statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.54:18-1 is amended to read as follows:

54:18-1. Each insurer, not organized under the laws of the State of New Jersey, which takes fire insurance risks on property in this State, shall on or before March 1 in each year, for the period during the 12 months ending December 31 of the preceding year, cause to be made to the Treasurer of the New Jersey State Firemen's Association, on behalf of each municipality or fire district in this State, for any property on which the insurer has taken any fire insurance risk situate therein, a true return in writing, verified by the oath of an officer or representative of the insurer, showing the amount of all premiums received by or agreed to be paid to the insurer, for insurance underwritten by that insurer against loss or injury by fire upon real or personal property, except automobiles that are not stored for sale, including loss of use thereof in the municipality, or fire district. The return also shall contain the Insurance Services Office "ISO" numerical identification code or designation assigned by the New Jersey State Firemen's Association for such municipality or fire district. The insurer shall, on or before March 1 of each year, pay to the Treasurer of the New Jersey State Firemen's Association the sum of [2%] three percent upon the amount of all the premiums received or agreed to be paid during the 12 months ending December 31 of the preceding year.

If the insurer fails to comply herewith, and the failure is reported to the Commissioner of Banking and Insurance in writing, attested by the oath of the Treasurer of the New Jersey State Firemen's Association, then the commissioner shall forthwith revoke the certificate of authority issued to the insurer, and, until the provisions of this chapter have been complied with by the insurer, it shall not transact further business in this State.

(cf: P.L.1997, c.41, s.1)

2. R.S.54:18-2 is amended to read as follows:

54:18-2. If any person residing or having an office or place of business in this State, in the capacity either of agent, broker, or insurer shall effect, or cause to be effected, any insurance, or shall receive any application for the effecting of insurance upon property in any municipality or fire district in this State, and shall directly or indirectly place the insurance or cause the same to be placed in an insurer not organized under the laws of this State, the agent, broker or insurer shall make a return to the Treasurer of the New Jersey State Firemen's Association on behalf of the municipality or fire district in which the property is situate, as set forth in R.S.54:18-1, on or before March 1 in each year. The return shall contain an account, under oath, of all premiums received by such agent, broker or insurer, or by any other person for him, or agreed to be paid, during the 12 months ending December 31 of the preceding year, for insurance against loss or injury by fire upon real or personal property, except automobiles that are not stored for sale, including loss of use thereof in the municipality or fire district. The return also shall contain the Insurance Services Office "ISO" numerical identification code or designation assigned by the New Jersey State Firemen's Association of such municipality or fire district. The agent, broker or insurer shall, on or before March 1 of each year, pay to the Treasurer of the New Jersey State Firemen's Association the sum of [2%] three percent upon the amount of all the premiums received or agreed to be paid as aforesaid within the 12 months ending December 31 of the preceding year. The Treasurer of the New Jersey State Firemen's Association shall allocate the tax monies received to the appropriate local firemen's relief association incorporated and affiliated with the State association, collected on behalf of the municipality or fire district under the control thereof, and to the Board of Managers of the New Jersey Firemen's Home. Any monies received, allocated or paid by any agent, broker or insurer pursuant to the provisions of this chapter on behalf of any municipality or fire district that does not have a local firemen's relief association affiliated with the New Jersey State Firemen's Association shall be allocated to the New Jersey Firemen's Home in accordance with the provisions of section 7 of P.L.1997, c.41 (C.54:18-8).

(cf: P.L.1997, c.41, s.2)

3. Section 7 of P.L.1997, c.41 (C.54:18-8) is amended to read as follows:

7. All monies received by the Treasurer of the New Jersey State Firemen's Association from the [2%] three percent tax on fire insurance premiums paid by insurance companies not organized in this State, on behalf of municipalities or fire districts which do not have a duly incorporated local firemen's relief association affiliated with the State Association under R.S.43:17-2 et seq., shall be dedicated to the New Jersey Firemen's Home. Upon adoption of the budget, subject to the approval of the Governor, in accordance with R.S.30:7-1 et seq., these funds shall be allocated to the Board of Managers for the operation of the New Jersey Firemen's Home. A certified copy of the budget approved by the Governor shall be filed immediately with the Treasurer of the New Jersey State Firemen's Association.

The Treasurer of the New Jersey State Firemen's Association shall return to the general fund of the State Association the balance of the monies not required for the annual operation of the New Jersey Firemen's Home.

If there are not sufficient funds in the account for the annual operating expenses of the New Jersey Firemen's Home in accordance with R.S.30:7-1 et seq., the Board of Managers of the New Jersey Firemen's Home shall certify the amount of the deficiency to the Treasurer of the New Jersey State Firemen's Association. The certification shall be filed before the fiscal year for the New Jersey Firemen's Home commences. The certification shall set forth the specific sum necessary to fund the operational expenses of the New Jersey Firemen's Home. The operational budget shall include all necessary costs for the maintenance and operation of the home, including purchase of equipment. Upon receipt of the certification, the Treasurer of the New Jersey State Firemen's Association shall pay the certified amount to the New Jersey Firemen's Home no later than May 1 of each year.

The procedure set forth below shall be followed if the Board of Managers proposes a capital project consisting of a building addition to the New Jersey Firemen's Home or the construction of a new facility:

a. At least 30 days before the capital project is submitted to the Governor, the Board of Managers of the New Jersey Firemen's Home shall submit to the officers and executive committee of the New Jersey State Firemen's Association, a description of the proposed project, and costs thereof, including future operational costs. Within 30 days of receipt of the notice the officers of the New Jersey Firemen's Home and New Jersey State Firemen's Association shall approve or disapprove the funding necessary therefor. After the project has been approved or disapproved, the executive committee shall meet in a special executive session to confirm the action of the officers.

b. If the officers or the executive committee disapproves the proposed capital project, the board of managers or the officers may appeal to the Commissioner of Banking and Insurance who shall issue a final decision within 30 days, but in any event not later than November 1 of any year. The budget then shall be submitted to the Governor for approval pursuant to law.

(cf: P.L.1997, c.41, s.7)

4. This act shall take effect on the January 1 next following the date of enactment.

STATEMENT

This bill increases the tax rate on fire insurance premiums collected by out-of-state insurers from two percent to three percent.

Under current law, insurance companies not organized under New Jersey law that write fire insurance policies on New Jersey properties are required to pay a tax on two percent of the premiums received from such policies. Similarly, New Jersey-based agents, brokers, or insurers who place fire insurance with out-of-state companies are also required to pay tax on two percent of these premiums. In both cases, the tax is paid to the Treasurer of the New Jersey State Firemen's Association.