FLOOR BOOK MEMORANDUM House Committee on the Judiciary
Committee Substitute for S.B. 187
Prepared by: Mark Adkins
(2/23/2015) Phone: 304-340-3133
email: mark.adkins@wvhouse.gov
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SPONSORS: Senator Snyder
TITLE: Authorizing Racing Commission promulgate legislative rule relating to thorobred racing.
DATE INTRODUCED: January 14, 2015; referred to the Committee on the Judiciary
SUMMARY ANALYSIS:
This is the bundled rules bill for the Department of Revenue. It contains the following rules:
A. Racing Commission (thoroughbred racing - 178 CSR 1);
B. State Tax Department (appointment of special assessors by the State Tax Commissioner - 110 CSR 1Q);
C. Insurance Commissioner (recognizing annuity mortality tables for use in determining reserve liabilities for annuities - 114 CSR 45);
D. Insurance Commissioner (annuity disclosure - 114 CSR 11E);
E. Alcohol Beverage Commission (nonintoxicating beer licensing and operations procedures - 176 CSR 1); and
F. Alcohol Beverage Commission (private club licensing - 175 CSR 2).
PROPOSED AMENDMENTS:
B. 110 CSR 1Q the Senate made the following amendments to the bill which were adopted into the committee substitute relating to this proposed rule:
1. On page one, subsection 3.1., after the word "For" by striking the word "all" and inserting in lieu thereof the word "each";
2. On page one, subsection 3.1., after the words "the Tax Commissioner shall" by striking the remainder of the sentence and inserting in lieu thereof the following, "notify, on or before the first day of the following tax year, the assessor and the county commission for the county from which the assessor is elected of that failure in writing, and instruct the assessor to make all necessary corrections;".
C. 114 CSR 45 (Insurance Commissioner):
The Senate approved an amendment correcting a spelling/word choice mistake in subsection 3.7., by striking out the word “Generation” and inserting in lieu thereof the word “Generational”.
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A. S.B. 187 - Racing Commission (thoroughbred racing - 178 CSR 1):
AGENCY: Department of Revenue
SUBJECT: Updating the Association of Racing Commissioners International Controlled Therapeutic Medication Schedule from Version 1.0 to Version 2.1 throughout the rule
The proposed rule amends a current legislative rule in an effort to create uniformity across the racing industries in neighboring states. The amendments update the Association of Racing Commissioners International Controlled Therapeutic Medication Schedule from Version 1.0 to Version 2.1 throughout the rule. The following is a synopsis of the additional substantive amendments.
§178-1-49:
This section addresses medications and prohibited substances. In addition to updating the medication schedule, the amendments add a subdivision that addresses multiple medications violations by a trainer and creates a point system for violations. (§178-1-49.3.m) The rule requires medical violation rulings to be posted on the Commission's website with a notation as to whether an appeal is pending. The points are assessed after all appeals have lapsed. The point system applies across all racing jurisdictions. The amendments also provide for additional suspensions based on the number of points across jurisdictions. These penalties are in addition to other penalties in code or rule and run consecutively. The amendments also provide for expungement of points after a certain amount of time, depending on the classification of the offense.
The amendments to this section also remove state specific language with regard to the use of non-steroidal anti-inflammatory drugs, Phenylbutazone, Flunixin and Ketoprofen, and instead require the Association of Racing Commissioners International Controlled Therapeutic Medication Schedule to govern. (§178-1-49.6)
§178-1-Tables D, E, and F:
These tables include the medication schedules and the classifications of substances. The amendments to these tables simply adopt the updated versions from the Association of Racing Commissioners International, including certain drug additions and threshold modifications.
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B. S.B. 186 - State Tax Department (appointment of special assessors by the State Tax Commissioner - 110 CSR 1Q):
AGENCY: Department of Revenue
SUBJECT: Authorizing the Tax Department to provide notice to assessors failing to follow applicable guidelines and the appointment of special assessors.
This proposed rule is new to the Code of State Regulations. For each tax year after the assessment date of July 1, 2013, the Tax Commissioner is required to give written notice to any assessor who is failing, neglecting, or refusing to list and assess all property in his or her county at 60% of its true and actual value and instruct the assessor to make all necessary corrections.
If corrections have not been made the following year, the Tax Commissioner shall appoint special assessors, unless the assessor can show that substantial progress has been made in meeting the standard. After 3 consecutive years of non-compliance, the Tax Commissioner is required to appoint special assessors.
The proposed rule lists the criteria the Tax Commissioner is to use in determining an assessor's compliance with the standards. They include, but are not limited to sale validity, appraisal uniformity and the appraisal evaluation. The proposed rule states that special assessors have all of the power and authority assessors have by law. They are to have full access to and complete use of the assessor's office and are to be paid salaries commensurate with their duties.
Further, the county must pay for the special assessors in accordance with this section.
Finally, the Senate made the following amendments to the bill which were adopted into the committee substitute relating to this proposed rule:
• On page one, subsection 3.1., after the word "For" by striking the word "all" and inserting in lieu thereof the word "each;";
• On page one, subsection 3.1., after the words "the Tax Commissioner shall" by striking the remainder of the sentence and inserting in lieu thereof the following, "notify, on or before the first day of the following tax year, the assessor and the county commission for the county from which the assessor is elected of that failure in writing, and instruct the assessor to make all necessary corrections;".
TITLE: This bill’s title appears to be within Constitutional parameters.
FISCAL NOTE: According to the State Tax Department, this proposed rule would result in a $10,000 increase in costs annually.
GOVERNMENT AGENCIES AFFECTED: State Tax Department
EFFECTIVE DATE: From passage
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C. S.B. 188 - Insurance Commissioner (recognizing annuity mortality tables for use in determining reserve liabilities for annuities - 114 CSR 45):
AGENCY: Department of Revenue
SUBJECT: This bill updates §114 CSR 45 to incorporate 2012 annuity mortality tables and specify the application of such tables.
The bill authorizes 114 CSR 45, an eight-page rule concerning the use of mortality tables to determine reserve liabilities for annuities (contracts providing income for a specified period of time or duration of life for a person or persons). The rule is based on the National Association of Insurance Commissioners’ (NAIC) “Model Rule For Recognizing A New Annuity Mortality Table For Use In Determining Reserve Liabilities for Annuities (Model 821)” as amended in 2012.
The bill updates the rule to incorporate 2012 annuity mortality tables and specify the application of such tables. If passed, the new 2012 generational mortality table, which is developed by the Society of Actuaries Committee on Life Insurance Research, would be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract (endowment payable if the designated person is alive at the end of the endowment period) issued on or after August 1, 2015.
The new annuity table is a “generational” table that contains factors that adjust the mortality rates annually based on expected mortality improvements. According to the Offices of the Insurance Commissioner (OIC), the update to the mortality table is necessary because of longer life expectancies so that insurers will maintain reasonable conservative reserves.
Finally, the Senate approved an amendment to the bill which was adopted into the committee substitute relating to this proposed rule which corrected a spelling/word choice mistake (in subsection 3.7., by striking out the word “Generation” and inserting in lieu thereof the word “Generational”).
TITLE: This bill’s title appears to be within Constitutional parameters.
FISCAL NOTE: The underlying fiscal note filed with the proposed rule with the Secretary of State indicated no fiscal impact.
GOVERNMENT AGENCIES AFFECTED: Insurance Commissioner
EFFECTIVE DATE: From passage
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D. S.B. 189 - Insurance Commissioner (annuity disclosure - 114 CSR 11E):
AGENCY: Department of Revenue
SUBJECT: Authorizing the Insurance Commissioner to promulgate a legislative rule relating to annuity disclosure.
The bill authorizes 114 CSR 11E concerning standards for the disclosure of certain minimum information about annuity contracts. Changes are based on a modification of the Annuity Disclosure Model Regulation by the National Association of Insurance Commissioners (NAIC).
The bill would exempt charitable gift annuities and funding agreements from the rule’s requirements and define “gift annuities” and “funding agreements” (p. 3). It defines “Buyer’s Guide” as the 2013 version of the guide as adopted by NAIC, as opposed to including a guide as an appendix to the rule (p. 3). According to the Options Industry Counsel (OIC), the buyer’s guide is free and the customer can receive a copy in print or electronic form from the producer (agent), the insurer, the OIC, and/or the NAIC website.
It also defines “illustration” and “market value adjustment” (MVA) (p. 4). Non-guaranteed elements is redefined as including dividends (p. 4). It would require disclosure documents to not just include the insurer’s name and address but also the website address and telephone number (p. 5).
The bill would permit a new rule section that provides detailed standards for annuity illustrations - illustrations that an insurer or producer may elect to provide to a consumer provided that the illustration is in compliance with the new rule section (pp. 6-15).
The bill would completely delete the current bill appendices: Appendix A. Buyer’s Guide (which explains what an annuity is, including the different kinds, interest rates, charges, benefits, tax treatment, and other considerations) and Appendix I. Equity-Indexed Annuities (which explains similar information as to equity-indexed annuities). Instead, the bill would permit a new Appendix A - entitled Annuity Illustration Example, which provides an example of an annuity illustration. (pp. 36-40).
TITLE: This bill’s title appears to be within Constitutional parameters.
FISCAL NOTE: The underlying fiscal note filed with the proposed rule with the Secretary of State indicated no fiscal impact.
GOVERNMENT AGENCIES AFFECTED: Insurance Commissioner
EFFECTIVE DATE: From passage
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E. S.B. 190 - Alcohol Beverage Commission (nonintoxicating beer licensing and operations procedures - 176 CSR 1):
AGENCY: Department of Revenue
SUBJECT: Authorizing the Alcohol Beverage Commission to promulgate a legislative rule relating to Nonintoxicating Beer Licensing and Operations Procedures.
The proposed rule amends a current legislative rule. The following is a synopsis of the substantive amendments:
§176-1-2:
This is the definitions section. The amendments to this section add definitions for "brand", "franchise agreement", "franchise distributor network" and "line extension". The amendments also add language to the definition of "brewer" or "manufacturer" and "growler".
§176-1-3:
This section addresses licenses. The amendments to this section add language to clarify licensing with regard to limited liability companies and brewpubs.
§176-1-4:
This section addresses nonintoxicating beer labels. The amendments to this section ensure that a product or brand must be registered and approved by the Commissioner before it can be sold in West Virginia.
§176-1-6:
This section addresses unlawful acts. Specifically, the amendments to this section relate to the pricing of nonintoxicating beer. The amendments require all brewers to file a price listing along with other information of all products each December. The price schedule required by brewers and manufacturers as to the product sold to distributors is required on a quarterly basis 90 days in advance of January 1, April 1, July 1 and October 1 in order to be effective for the quarter. Distributors must then file their wholesale prices 60 days before the quarter begins and they go into effect on the 10th day of the quarter. The amendments permit price adjustments pursuant to code upon 30 days notice to the Commissioner and following approval by the Commissioner.
§176-1-13:
This section addresses brewers. Specifically, the amendments to this section add language regarding line extensions and other aspects of franchise agreements. The new language requires all of a brewer's brands to be listed in the franchise agreement between the brewer and its distributers. The rule allows for amendments, which must be approved by the Commissioner. The rule requires the franchise agreement to give the distributor the authority to determine which brands and line extensions it chooses to distribute.
The amendments note that the brewers must have only one franchise distributor network and only one license, but allows for a brewer to have multiple distributor networks if it acquires a brand from another brewer. In that case, the brewer must use the selling brewer's franchise distributor network for those products unless the parties mutually agree to change the terms or the brewer terminates the distributor as provided by code and rule. Similar language is added for resident brewers, which are West Virginia brewers. The amendments also add language regarding the Commissioner's authority to investigate and review franchise agreements and registrations required by brewers.
The amendments also set up a process by which a brewer can obtain a written determination and request a hearing regarding that determination following certain adverse decisions by the Commissioner. If a brand or line extension is denied by the Commissioner then sale of the product is a violation and would subject the parties involved to penalties under this rule.
TITLE: This bill’s title appears to be within Constitutional parameters.
FISCAL NOTE: The underlying fiscal note filed with the proposed rule with the Secretary of State indicated no fiscal impact.
GOVERNMENT AGENCIES AFFECTED: Alcohol Beverage Commission
EFFECTIVE DATE: From passage
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F. S.B. 191 - Alcohol Beverage Commission (private club licensing - 175 CSR 2):
AGENCY: Department of Revenue
SUBJECT: Adding language to the definition of “public place” which authorizes the Alcohol Beverage Commission to promulgate a legislative rule to allow the sale of alcohol at certain NCAA facilities and in locations connected to or adjoining a licensed location.
The proposed rule amends a current legislative rule. The following is a synopsis of the substantive amendments:
§175-2-2:
This is the definitions section. Specifically, the amendment to this section adds language pertaining to the definition of "public place" with respect to where alcohol may be sold in order to permit alcohol at certain NCAA facilities and in locations connected to or adjoining a licensed location. (p. 2).
TITLE: This bill’s title appears to be within Constitutional parameters.
FISCAL NOTE: The underlying fiscal note filed with the proposed rule with the Secretary of State indicated no fiscal impact.
GOVERNMENT AGENCIES AFFECTED: Alcohol Beverage Commission
EFFECTIVE DATE: From passage