Office of House Bill AnalysisH.B. 3079
By: Smithee


Under current law, insurance companies receive tax rebates for examination
expenses incurred out of state, paid to another state, or paid in a
different taxable year.  The comptroller of public accounts recommends
changes to certain provisions of the Insurance Code relating to taxes,
fees, and assessments of insurance carriers to simplify and clarify these
provisions and codify state policies.  House Bill 3079 amends provisions
relating to taxes, fees, and assessments paid by insurance companies.   


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


House Bill 3079 amends the Insurance Code to provide that the amount of
assessments to be paid  by any insurance corporation or association and all
examination and evaluation or valuation fees to be paid by an insurance
carrier or a title insurance company in each taxable year to or for the use
of the State of Texas is required to be allowed as a credit on the amount
of premium taxes  to be paid except that a credit on or offset to the
amount of premium taxes is prohibited from being allowed on:  

 _examination expenses incurred by representatives of the department that
are directly attributable to an examination of the books, records,
accounts, or principal offices of a domestic insurance company located
outside this state;  

 _examination expenses or fees paid to a state other than this state; or 

 _examination expenses paid in a different taxable year (Art. 1.16; Art.
4.10, Sec. 13; Art. 4.11, Sec. 8; and Art. 9.59, Sec. 7).   

The bill reduces the annual tax imposed on each reciprocal exchange
transacting business in this state from 1.7 percent to 1.6 percent of its
gross receipts (Art. 4.11B, Sec. 2).  The bill prohibits a rate of
assessment of a maintenance tax on inland marine or home warranty insurance
coverage from exceeding one and onefourth percent of the correctly reported
gross premiums (Art. 5.49).  The bill subjects county mutual insurance
companies to an assessment for the office of public insurance counsel (Art.

H.B. 3079 requires the agent of an unauthorized insurer to pay to the
comptroller of public accounts a premium receipts tax of 4.85 percent of
gross premiums charged for insurance on a subject resident, located, or to
be performed in this state (Sec. 101.251).   

The bill amends the Tax Code to require the comptroller rather than the
State Board of Insurance to keep detailed records of protest payments
relating to the taxes collected by the comptroller imposed by the Insurance
Code or other insurance laws of this state (Sec. 112.058).   

 The bill removes provisions in the Insurance Code regarding the tax
options of a reciprocal exchange (SECTION 10).   


January 1, 2002.