LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 20, 1999
TO: Honorable John Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3304 by Thompson (Relating to the books and records of
insurers.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3304, As Introduced: negative impact of $(1,087,210) through *
* the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(310,000) *
* 2001 (777,210) *
* 2002 (764,076) *
* 2003 (764,076) *
* 2004 (764,076) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Revenue Savings/(Cost) Revenue Number of State *
* Gain/(Loss) from Texas Gain/(Loss) Employees from *
* from General Department of from Texas FY 1999 *
* Revenue Fund Insurance Department of *
* 0001 Operating Insurance *
* Account/ Operating *
* GR-Dedicated Account/ *
* 0036 467210GR- *
* Dedicated *
* 0036 *
* 2000 $(310,000) $(467,210) $467,210 3.0 *
* 2001 (777,210) (454,076) 454,076 3.0 *
* 2002 (764,076) (454,076) 454,076 3.0 *
* 2003 (764,076) (454,076) 454,076 3.0 *
* 2004 (764,076) (454,076) 454,076 3.0 *
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Fiscal Analysis
The bill would amend Article 1.28, Texas Insurance Code removing the
Texas Department of Insurance's (TDI) authority to disapprove the
relocation of a domestic insurer s books and records outside the State of
Texas; permitting the maintenance of books and records at non-affiliated
branch or agency offices; and permitting examination expenses directly
attributable to the examination of a domestic insurer located outside
Texas to be credited or offset against premium taxes paid to the State of
Texas.
The bill would also add Section 2(b) to Article 1.28 requiring companies
to reimburse the State for examination expenses directly attributable to
the examination of a domestic insurer located outside Texas at the
completion of the examination, with such reimbursements deposited in and
expended through the General Revenue-Dedicated Texas Department of
Insurance Operating Account #36.
The act would take effect September 1, 1999.
Methodology
TDI estimates the need for $262,500 in annual travel costs, and three
additional FTEs and associated operating costs in 2000 through 2004 for
increased out-of-state examinations to be paid out of General
Revenue-Dedicated Texas Department of Insurance Operating Account #36.
TDI estimates these costs will be recovered through exam billings and
overhead assessments to be deposited into General Revenue-Dedicated Texas
Department of Insurance Operating Account #36.
The Comptroller of Public Accounts estimates the above examination costs
will be claimed as premium tax offsets, thereby reducing deposits to
General Revenue in 2001 through 2004. These offsets would begin in 2001
based on the assumption of a one year lag before companies take these
tax deductions. The Comptroller's office also estimates the bill would
result in an annual decrease to General Revenue of approximately
$310,000 due to the allowance of premium tax credits in 2000 through
2004.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Department of Insurance, 304 Comptroller of
Public Accounts
LBB Staff: JK, TH, DP