By Averitt                                            H.B. No. 1709
         77R5107 DLF-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to assessments used to fund the Health Insurance Risk
 1-3     Pool; authorizing a premium tax credit.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Article 3.77, Insurance Code, is amended by adding
 1-6     Section 13A to read as follows:
 1-7           Sec. 13A.  PREMIUM TAX CREDIT. (a)  One hundred percent of
 1-8     any assessment paid by an insurer under Section 13 of this article
 1-9     during any calendar year shall be allowed to that insurer as a
1-10     credit against its premium tax liability to this state for any
1-11     year.
1-12           (b)  The tax credit shall be allowed at a rate of 10 percent
1-13     per year for 10 successive years following the date of assessment
1-14     and, at the option of the insurer, may be taken over an additional
1-15     number of years.
1-16           (c)  An insurer may not be required to write off in any one
1-17     year an amount in excess of its premium tax liability to this state
1-18     accruing within that year or any succeeding year.
1-19           (d)  The balance of any unused tax credit not claimed in a
1-20     particular year may be reflected in the books and records of the
1-21     insurer as an admitted asset of the insurer for all purposes,
1-22     including exhibition in annual statements filed with the
1-23     department.
1-24           (e)  Available credit against premium tax allowed under this
 2-1     section may be transferred or assigned among or between insurers
 2-2     if:
 2-3                 (1)  a merger, acquisition, or total assumption of
 2-4     reinsurance among or between the insurers occurs; or
 2-5                 (2)  the commissioner by order approves the transfer or
 2-6     assignment.
 2-7           SECTION 2. (a)  The commissioner of insurance shall appoint
 2-8     an advisory committee to study funding for operational losses and
 2-9     other deficits of the health insurance risk pool established under
2-10     Article 3.77, Insurance Code, and to recommend appropriate
2-11     mechanisms for funding  as an alternative to assessments imposed
2-12     under Section 13 of that article.
2-13           (b)  The advisory committee appointed under this section must
2-14     be composed of representatives of health insurance companies,
2-15     health maintenance organizations, hospitals, physicians and other
2-16     health care providers, employers, persons insured through the
2-17     health insurance risk pool, and consumers of health benefit plan
2-18     coverage generally.
2-19           (c)  Not later than December 1, 2002, the advisory committee
2-20     appointed under this section shall report its findings and
2-21     recommendations to the commissioner of insurance, the speaker of
2-22     the house of representatives, and the lieutenant governor.
2-23           SECTION 3. Section 13A, Article 3.77, Insurance Code, as
2-24     added by this Act, applies only to an assessment paid by an insurer
2-25     under Section 13, Article 3.77, Insurance Code, on or after the
2-26     effective date of this Act. An assessment paid by an insurer before
2-27     the effective date of this Act is governed by the law as it exists
 3-1     immediately before the effective date of this Act, and that law is
 3-2     continued in effect for that purpose.
 3-3           SECTION 4. This Act takes effect September 1, 2001.