ENGROSSED

Senate Bill No. 485

(By Senators Minard, Jenkins, Minear, Sharpe and Ross)

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[Introduced February 11, 2003; referred to the Committee on Banking and Insurance; and then to the Committee on Finance.]

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A BILL to amend article forty-three, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section four-a, relating to the authority of the commissioner to enter into agreements and compromises.

Be it enacted by the Legislature of West Virginia:
That article forty-three, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section four-a, to read as follows:
ARTICLE 43. INSURANCE TAX PROCEDURES ACT.
§33-43-4a. Agreements and compromises.
(a) Closing agreements authorized. -- Prior to commencing any civil action, the commissioner is authorized to enter into an agreement in writing with any person relating to the liability of such person (or of the person or estate for whom he or she acts) in respect of any tax (including any surcharge, interest, additional tax, fee, fine or penalty) administered by the commissioner under this chapter for any taxable period.
(b) Finality of closing agreement. -- If a closing agreement is entered into by the commissioner, the agreement shall be final and conclusive and, except upon a showing of fraud or malfeasance or misrepresentation of a material fact:
(1) The matters so agreed upon shall not be reopened or the agreement modified by any officer, employee or agent of this state; and
(2) In any civil action or administrative proceeding, the closing agreement or any determination, assessment, collection, payment, abatement, refund or credit made in accordance therewith shall not be annulled, modified, set aside or disregarded.
(c) Compromises authorized. -- The commissioner may compromise all or part of any civil case arising under the provisions of this article. In all such matters involving issues in respect of tax liability in controversy of fifteen thousand dollars or more for one or all of the years involved in such matter, claim or case, the commissioner shall seek the written recommendation of the attorney general before entering into such compromise. Any liability for tax (including any surcharge, interest, additional tax, fee, fine or penalty) may be compromised upon consideration of the terms and conditions of the compromise agreement in light of any or all of the following:
(1) Doubt as to liability;
(2) Doubt as to collectibility;
(3) Strength of the taxpayer's defenses to the assessment of the tax, surcharge, interest, additional tax, fee, fine or penalty;
(4) Age of the dispute;
(5) The anticipated time and resources which will be required to develop the civil action for adjudication; and
(6) Any other factor(s) relevant to the determination of whether citizens of the state of West Virginia are best served by entering into a compromise agreement.
(d) Record of agreement. -- Whenever a closing agreement is made by the commissioner under subsections (a) and (b) of this section, there shall be placed on file in the commissioner's office the opinion of the commissioner's legal counsel (with his or her reasons therefor), together with a statement of:
(1) The amount of tax, surcharge, additional tax, fee and interest assessed;
(2) The anticipated fine or penalty imposed by law on the person against whom the tax, surcharge, additional tax, fee and interest was assessed; and
(3) The amount actually paid in accordance with the terms of the closing agreement.
(e) Record of compromise. -- Whenever a compromise is made by the commissioner under subsection (c) of this section, there shall be placed on file in the commissioner's office the opinion of the commissioner's legal counsel (with his or her reasons therefor) and any written recommendation of the attorney general received pursuant to said subsection, together with a statement of:
(1) The amount of tax, surcharge, additional tax, fee and interest assessed;
(2) The anticipated fine or penalty imposed by law on the person against whom the tax, surcharge, additional tax, fee and interest was assessed; and
(3) The amount actually paid in accordance with the terms of the compromise.
Notwithstanding the foregoing provisions of this subsection and subsection (d) of this section, no opinion of the commissioner's legal counsel nor written recommendation of the attorney general shall be required with respect to any closing agreement or compromise of any civil case in which the amount of tax assessed (including any surcharge, interest, additional tax, fee, fine or penalty) is less than one thousand dollars.
(f) Report to Legislature. -- The commissioner shall submit to the speaker of the House of Delegates, the president of the Senate and the legislative auditor a quarterly report summarizing the issues and amounts of liabilities contained in the agreements and compromises into which he or she has entered pursuant to this section. The report shall be in a form which preserves the confidentiality of the identity of the taxpayers involved in the agreements and compromises. Notwithstanding any other provision of law to the contrary, the agreements and compromises entered into pursuant to this section shall be subject to audit, in their entirety, by the legislative auditor.