CHAPTER 382

FORMERLY

HOUSE BILL NO. 685

AN ACT TO AMEND CHAPTERS 7 and 19, TITLE 18, AND CHAPTER 23, TITLE 19 OF THE DELAWARE CODE RELATING TO THE INSURANCE PREMIUMS TAX AND RELATED TAXES ON SELF-INSURERS AND TO DISTRI8UTIONS FROM SUCH TAXES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend §702 (a), Chapter 7, Title 18 of the Delaware Code by striking the phrase "(for the period July 1 through December 31 immediately preceding) and on or before September 1 (for the period January 1 through June 30 immediately preceding)" as it appears therein and substitute in lieu thereof the phrase each year".

Section 2. Amend §702, Chapter 7, Title 18 of the Delaware Code by striking subsection (d) of said Section In its entirety and substitute In lieu thereof a new subsection (d) to read as follows:

"(d) The taxes Imposed under this Section, Sections 703 and 707 of this Chapter, Section 1917 of Chapter 19, and Section 6914 of Chapter 69 of this Title shall be payable as follows:

Twenty-five percent of the estimated tax liability for the current year shall be paid on each April 1, June 15, September 15 of the current taxable year and the remaining balance to be paid on March 1 of the following year."

Section 3. Amend §702 (c), Chapter 7, Title 18 of the Delaware Code by striking said subsection In its entirety and substitute In lieu thereof a new subsection (c) to read as follows:

"(c) There shall be paid a tax at the rate of 1 3/4% on net premiums as shown on reports required to be filed under subsection (a) of this Section."

Section 4. Amend §702, Chapter 7, Title 18 of the Delaware Code by adding thereto a new subsection (f) to read as follows:

"(f) In the case of any underpayment of Installment of estimated tax required by this Section, there shall be added to the tax for the taxable year an amount determined at the rate of 1 1/2% per month, or fraction thereof, upon the amount of the underpayment for the period of the underpayment. The period of underpayment shall run from the date the tentative tax or Installment was required to be paid to the first day of the fourth month following the close of the taxable year, or the date on which paid, whichever is earlier.

For purposes of this ,.ubsection, the amount of the underpayment shall be the excess of.

(1) The amount of the estimated to Installment which would be required to be made If the estimated tax were equal to 80 percent of the tax shown on the report required under subsection (a) of this Section, over

(2) The amount, If any, of the estimated tax Installments paid on or before the last date prescribed for payment."

Section 5. Amend §707, Chapter 7, Title 18 of the Delaware Code, by striking the phrase the 1st of March of each year as It appears In subsection (a) of said Section and substitute in lieu thereof the phrase "at the same time as the premium tax and estimated payments as provided In section 702 of this Title".

Section 6. Amend §1911, Chapter 19, Title 18 of the Delaware Code by striking the phrase "On or before the first day of March of each year" and substitute In lieu thereof the phrase At or before the time specified in §702 of this Title for payment of premium tax and estimated payments".

Section 7. Amend §703, Chapter 7, Title 18 of the Delaware Code by striking the phrase "at the same time as the premium tad" as It appears therein and substitute In lieu thereof the phrase at the same time as the premium tax and estimated payments".

Section 8. Amend §2391, Chapter 23, Title 19 of the Delaware Code by adding thereto a new subsection (e) to read as follows:

"(e) The taxes imposed under this Section shall be payable as follows:

Twenty-five percent of the estimated tax liability for the current year shall be paid on each April 1, and June 15, September 15 of the current taxable year and the remaining balance on March 1 of the following year."

Section 9. Amend 52391, Chapter 23, Title 19 of the Delaware Code by adding thereto a new subsection (f) to read as follows:

"(f) In the case of any underpayment of Installment of estimated tax required by this Section, there shall be added to the tax for the taxable year an amount determined at the rate of 1 1/2% per month, or fraction thereof, upon the amount of the underpayment for the period of the underpayment. The period of underpayment shall run from the date the tentative tax or Installment was required to be paid to the first day of the fourth month following the close of the taxable year, or the date on which paid, whichever is earlier.

For purposes of this subsection, the amount of the underpayment shall be the excess of:

(1) The amount of the estimated tax Installment which would be required to be made If the estimated tax were equal to 80 percent of the tax shown on the report required under subsection (a) of this Section, over

(2) The amount, If any, of the estimated tax Installment paid on or before the last date prescribed for payment."

Section 10. Amend 5705, Chapter 7, Title 18 of the Delaware Code by redesignating subsections (c), (d), and (e) thereof respectively as subsections (d), (e), and (f) of said Section.

Section H. Amend §705, Chapter 7, Title 18 of the Delaware Code by adding thereto a new subsection (c) of said Section to read as follows:

"(c) On or before September 15 of each year The Insurance Commissioner shall ascertain and report to the State Treasurer, based on information contained In statements filed pursuant to this Section, the amount which equals 3/47. of the amount reflected In such statements as to the total premium obtained during the preceding calendar year for writing In Delaware the types of coverage stated In subsection (a) of this Section, and the State Treasurer shall pay such amount to the Treasurer of the City of Wilmington and to the fire companies registering as provided In subsection (d) of this Section, in the proportions stated In subsection (e) of this Section. Such payment shall be made by the State Treasurer from a special fund created for this purpose on or before the thirty-first day of October of each year. Payments to the special fund shall be made out of fees and taxes deposited with the State Treasurer by the Insurance Commissioner, not including those funds per section 707 of this Title."

Section 12. Amend §705 (b), Chapter 7, Title 18 of the Delaware Code by striking the phrase "three and three-quarters percent (3 3/4%)" and substitute In lieu thereof the phrase "three and three-quarters percent (3 3/4%) reduced by payments made pursuant to subsection (c) of this Section during the preceding year".

Section 13. Amend §705 (b), Chapter 7, Title 18 of the Delaware Code by striking the phrases "subsection (c)" and 'subsection (d)" as they appear therein and substitute In lieu thereof respectively the phrases 'subsection (d)" and 'subsection (e)".

Section 14. Amend §705 (e), Chapter 7, Title 18 of the Delaware Code by striking said subsection in its entirety and substitute in lieu thereof the following:

"(e) The Insurance Commissioner shall ascertain the proportions of the sums described in subsections (b) and (c) of this section and the actual amount thereby due to the Treasurer of the City of Wilmington and to the other fire departments registering with the Insurance Commissioner pursuant to subsection (d) and the State Treasurer shall then make payments in such amounts, which funds shall be used for assisting and maintaining the fire department or companies of this State. The payments to the City of Wilmington shall be used only for Its Firemen's Pension Fund of the Bureau of Fire in the City of Wilmington."

Section 15. Amend §708, Chapter 7, Title 18 of the Delaware Code by adding thereto the following sentence: "Distribution under this Section shall take place twice annually, on or before June 30 and December 31."

Section 16. This Act shall be effective for tax years commencing after December 31, 1988. Sections II, 12, 13, 14 and 15 shall be effective for distributions to be made from taxes, including estimated Installments, received after December 31, 1988.

Approved July 14, 1988.