BILL ANALYSIS


                                                     C.S.S.B. 641
                                                     By: Montford
                                                          Finance
                                                         04-04-95
                                   Committee Report (Substituted)
BACKGROUND

During the 73rd Legislature, tax administration functions were
transferred from the Department of Insurance to the State
Comptroller's Office.  After an evaluation of these functions, the
comptroller identified certain areas where improvement, in the
administration and collecting of insurance taxes, is needed.

PURPOSE

As proposed, C.S.S.B. 641 requires reports relating to the
efficient administration and collection of certain insurance taxes
to be filed with the comptroller.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Reenacts and amends Section 12, Article 1.14-1,
Insurance Code, as follows:

     Sec.  12.  INDEPENDENTLY PROCURED INSURANCE TAX.  (a) 
     Requires every insured who procures insurance in accordance
     with Section 2(b)4 of this Article to file a report with the
     comptroller and pay an independently procured insurance tax of
     4.85 percent.  Deletes additional requirements.
     
     (b)  Requires the report to be filed and any tax due to be
       paid by the insured or by any other person designated by the
       insured.  Provides that the report and tax are due on or
       before a certain date.  Deletes provisions regarding a
       premium receipts tax.  
       
       (c)  Requires the tax payable to be computed on the portions
       of the premium which are properly allocated to the risks or
       exposures located in this state if a policy covers risks or
       exposures only partially.  Deletes provisions regarding
       premiums that are taxable.
       
       (d)  Makes a nonsubstantive change.
       
       (e)  Redesignates existing Subsection (g).
        SECTION 2.       Amends Section 12(a), Article 1.14-2, Insurance
Code, as follows:

     (a)    Requires the surplus lines agent to report to the
     comptroller on or before March 1 of each year the amount of
     gross premiums received for such insurance placed through an
     eligible surplus lines insurer during the calendar year ending
     on the preceding December 31. Makes conforming changes.
     
     SECTION 3.     Amends Section 5, Article 4.10, Insurance Code, as
follows:

     Sec.  5.  GROSS PREMIUM RECEIPTS DEFINED.  Provides that gross
     premium receipts referred to herein are the total gross amount
     of premiums actually written and billed during the taxable
     year on each and every kind of insurance or risk written upon
     property or risks located in the State of Texas less return
     premiums and dividends paid policyholders with no deduction
     for premiums paid for reinsurance.
     
     SECTION 4.     Amends Article 8.21, Insurance Code, to require the
Texas Department of Insurance (department), rather than the State
Board of Insurance, to charge a fee of $20 for filing the annual
statement required by this chapter.  Requires the comptroller to
collect the fee. 

SECTION 5. Amends Article 16.22, Insurance Code, to make conforming
changes.

SECTION 6. Amends Article 17.21, Insurance Code, to make conforming
changes.

SECTION 7. Amends Article 19.11, Insurance Code, to require said
changes to be subject to the provisions of certain Articles of this
Code.  Requires the comptroller to collect the taxes and the annual
statement filing fee.

SECTION 8. Amends Section 32, Article 20A.32, Insurance Code (Texas
Health Maintenance Organization Act) by adding Subsection (a)(4),
to require the comptroller to collect the annual report filing fee
prescribed by Subsection (a)(1)(B) of this article.

SECTION 9. Amends Subsection A, Article 21.46, Insurance Code, to
require the comptroller to prescribe the due date for the filing of
the report and payment of the tax under this article.  Makes
conforming changes.

SECTION 10.    Amends Article 23.08, Insurance Code, to require the
comptroller to collect an annual statement filing fee.  Deletes
requirement that fees shall be deposited in the state treasury to
the credit of the department operating the fund.

SECTION 11.    Effective date:  September 1, 1995.  
           Makes application of this Act prospective.

SECTION 12.    Emergency clause.