HBA-TBM H.B. 3079 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3079 By: Smithee Insurance 3/25/2001 Introduced BACKGROUND AND PURPOSE 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. RULEMAKING AUTHORITY 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. ANALYSIS 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. 17.22). 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). EFFECTIVE DATE January 1, 2002.