By: Jackson S.B. No. 1682
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the taxes and fees administered by the Comptroller
1-3 related to the Insurance Code.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 1.16(b), Insurance Code, is amended to
1-6 read as follows:
1-7 (b) Assessments for the expenses of such domestic
1-8 examination which shall be sufficient to meet all the expenses and
1-9 disbursements necessary to comply with the provisions of the laws
1-10 of Texas relating to the examination of insurance companies and to
1-11 comply with the provisions of this Article and Articles 1.17 and
1-12 1.18 of this Code, shall be made by the State Board of Insurance
1-13 upon the corporations or associations to be examined taking into
1-14 consideration annual premium receipts, and/or admitted assets that
1-15 are not attributable to 90 percent of pension plan contracts as
1-16 defined in Section 818(a) of the Internal Revenue Code of 1986 (26
1-17 U.S.C. Section 818(a)), and/or insurance in force; provided such
1-18 assessments shall be made and collected as follows: (1) expenses
1-19 attributable directly to a specific examination including
1-20 employees' salaries and expenses and expenses provided by Article
1-21 1.28 of this Code shall be collected at the time of examination;
1-22 (2) assessments calculated annually for each corporation or
1-23 association which take into consideration annual premium receipts,
2-1 and/or admitted assets that are not attributable to 90 percent of
2-2 pension plan contracts as defined in Section 818(a) of the Internal
2-3 Revenue Code of 1986 (26 U.S.C. Section 818(a)), and/or insurance
2-4 in force shall be assessed annually for each such corporation or
2-5 association. In computing the assessments, the board may not
2-6 consider insurance premiums for insurance contracted for by a state
2-7 or federal governmental entity to provide welfare benefits to
2-8 designated welfare recipients or contracted for in accordance with
2-9 or in furtherance of Title 2, Human Resources Code, or the federal
2-10 Social Security Act (42 U.S.C. Section 301 et seq.). The amount of
2-11 the assessments paid in each taxable year to or for the use of the
2-12 State of Texas by any insurance corporation or association hereby
2-13 affected shall be allowed as a credit on the amount of premium
2-14 taxes to be paid by any such insurance corporation or association
2-15 for such taxable year except that a credit on or offset to the
2-16 amount of premium taxes may not be allowed on: (1) examination
2-17 expenses incurred by representatives of the department that are
2-18 directly attributable to an examination of the books, records,
2-19 accounts, or principal offices of a domestic insurance company
2-20 located outside this state; (2) examination expenses or fees paid
2-21 to a state other than this state; or (3) examination expenses paid
2-22 in a different taxable year [as provided by Article 1.28 of this
2-23 Code].
2-24 SECTION 2. Article 4.10 Section 13, Insurance Code, is
2-25 amended to read as follows:
2-26 Sec. 13. The amount of all examination and evaluation fees
3-1 paid in each taxable year to or for the use of the State of Texas
3-2 by an insurance carrier shall be allowed as a credit on the amount
3-3 of premium taxes due under this article except that a credit on or
3-4 offset to the amount of premium taxes may not be be allowed
3-5 on: (1) examination expenses incurred by representatives of the
3-6 department that are directly attributable to an examination of the
3-7 books, records, accounts, or principal offices of a domestic
3-8 insurance company located outside this state; (2) examination
3-9 expenses or fees paid to a state other than this state; or (3)
3-10 examination expenses paid in a different taxable year [as provided
3-11 by Article 1.28 of this code]. Any credit allowed by the
3-12 provisions of this section is in addition to any other credits
3-13 allowable by statute.
3-14 SECTION 3. Article 4.11 Section 8, Insurance Code, is
3-15 amended to read as follows:
3-16 Sec. 8. The amount of all examination and valuation fees
3-17 paid during each tax year to or for the use of the State of Texas
3-18 by an insurance carrier shall be allowed as a credit on the amount
3-19 of premium taxes due under this article except that a credit on or
3-20 offset to the amount of premium taxes may not be be allowed
3-21 on: (1) examination expenses incurred by representatives of the
3-22 department that are directly attributable to an examination of the
3-23 books, records, accounts, or principal offices of a domestic
3-24 insurance company located outside this state; (2) examination
3-25 expenses or fees paid to a state other than this state; or (3)
3-26 examination expenses paid in a different taxable year [as provided
4-1 by Article 1.28 of this code]. Any credit allowed by the
4-2 provisions of this section is in addition to any other credits
4-3 allowable by statute.
4-4 SECTION 4. Article 4.11B Sections 2(a)-(b), Insurance Code,
4-5 are amended to read as follows:
4-6 (a) There is imposed on each reciprocal exchange transacting
4-7 business in this state an annual tax equal to 1.6 [1.7] percent of
4-8 its gross premium receipts.
4-9 (b) Except for the tax rate[,] and the amount of taxes
4-10 imposed[, and the investment provisions], Article 4.10 of this code
4-11 applies to the imposition, computation, and administration of the
4-12 tax imposed under this article in the same manner that Article
4-13 4.10, Insurance Code, applies to the taxes imposed under that
4-14 article.
4-15 SECTION 5. Article 5.49(a), Insurance Code, is amended to
4-16 read as follows:
4-17 (a) The State of Texas by and through the commissioner shall
4-18 annually determine the rate of assessment of a maintenance tax to
4-19 be paid on an annual or semiannual basis, as determined by the
4-20 comptroller. The rate of assessment may not exceed one and
4-21 one-fourth percent of the correctly reported gross premiums of
4-22 fire, lightning, tornado, windstorm, hail, smoke or smudge,
4-23 cyclone, earthquake, volcanic eruption, rain, frost and freeze,
4-24 weather or climatic conditions, excess or deficiency of moisture,
4-25 flood, the rising of the waters of the ocean or its tributaries,
4-26 inland marine, home warranty, bombardment, invasion, insurrection,
5-1 riot, civil war or commotion, military or usurped power, any order
5-2 of a civil authority made to prevent the spread of a conflagration,
5-3 epidemic, or catastrophe, vandalism or malicious mischief, strike
5-4 or lockout, explosion as defined in Article 5.52 of this code,
5-5 water or other fluid or substance resulting from the breakage or
5-6 leakage of sprinklers, pumps, or other apparatus erected for
5-7 extinguishing fires, water pipes, or other conduits or containers
5-8 insurance coverage collected by all authorized insurers writing
5-9 those types of insurance in this state. The comptroller shall
5-10 collect the maintenance tax.
5-11 SECTION 6. Article 9.59 Section 7, Insurance Code, is
5-12 amended to read as follows:
5-13 Sec. 7. The amount of all examination and evaluation fees
5-14 paid in each taxable year to or for the use of the State of Texas
5-15 by a title insurance company shall be allowed as a credit on the
5-16 amount of premium taxes due under this article except that a credit
5-17 on or offset to the amount of premium taxes may not be be allowed
5-18 on: (1) examination expenses incurred by representatives of the
5-19 department that are directly attributable to an examination of the
5-20 books, records, accounts, or principal offices of a domestic
5-21 insurance company located outside this state; (2) examination
5-22 expenses or fees paid to a state other than this state; or (3)
5-23 examination expenses paid in a different taxable year [as provided
5-24 by Article 1.28 of this code]. Any credit allowed by this section
5-25 is in addition to any other credits allowed by law.
5-26 SECTION 7. Article 17.22(a), Insurance Code, is amended to
6-1 read as follows:
6-2 (a) County mutual insurance companies shall be exempt from
6-3 the operation of all insurance laws of this state, except such laws
6-4 as are made applicable by their specific terms or as in this
6-5 Chapter specifically provided. In addition to such other Articles
6-6 as may be made to apply by other Articles of this Code, county
6-7 mutual insurance companies shall be subject to:
6-8 (1) Subdivision 7 of Article 1.10 of this Code; and
6-9 (2) Articles 1.15, 1.15A, 1.16, 1.24, 1.35B, 2.04,
6-10 2.05, 2.08, 2.10, 4.10, 5.12, 5.37, 5.38, 5.39, 5.40, 5.49, 21.21,
6-11 and 21.49 of this Code.
6-12 SECTION 8. Section 101.251(b), Insurance Code, is amended to
6-13 read as follows:
6-14 (b) Except as provided by Subsection (j), an unauthorized
6-15 insurer or the agent of the unauthorized insurer shall pay to the
6-16 comptroller, on a form prescribed by the comptroller, a premium
6-17 receipts tax of 4.85 percent of gross premiums charged for
6-18 insurance on a subject resident, located, or to be performed in
6-19 this state.
6-20 SECTION 9. Section 112.058(b), Tax Code, is amended to read
6-21 as follows:
6-22 (b) A protest payment relating to each tax collected by the
6-23 comptroller that is imposed by [Articles 1.14-1, 1.14-2, 4.10,
6-24 4.11, 14.42, 21.46, and 23.08,] the Insurance Code or other
6-25 insurance law of this state, [or by Section 28, Article 8306,
6-26 Revised Statutes, or by Section 33, Texas Health Maintenance
7-1 Organization Act (Article 20A-33, Vernon's Texas Insurance Code),]
7-2 shall be handled as follows:
7-3 (1) [All protest payments made pursuant to
7-4 requirements for the quarterly prepayment of premium tax or
7-5 pursuant to the requirements for annual premium tax that become due
7-6 after August 15, 1985, but before November 15, 1989, shall not be
7-7 placed in the suspense account, but shall immediately be deposited
7-8 in the General Revenue Fund.]
7-9 [(2)] All protest payments made pursuant to
7-10 requirements for the quarterly prepayment of premium tax or
7-11 pursuant to the requirement for annual premium tax that become due
7-12 on or after November 15, 1989, are governed by Subchapter J,
7-13 Chapter 403, Government Code.
7-14 (2) The comptroller shall keep detailed records of
7-15 protest payments relating to the taxes collected by the comptroller
7-16 imposed by the Insurance Code or another insurance law of this
7-17 state.
7-18 [(3) The State Board of Insurance shall keep detailed
7-19 records of protest payments covered by Subdivision (1) relating to
7-20 the tax imposed by Articles 1.14-1, 1.14-2, 4.10, 4.11, 14.42,
7-21 21.46, and 23.08, Insurance Code, or by Section 28, Article 8306,
7-22 Revised Statutes, or by Section 33, Texas Health Maintenance
7-23 Organization Act (Article 20A-33, Vernon's Texas Insurance Code).]
7-24 SECTION 10. Article 4.11C, Insurance Code, and Section
7-25 112.058(c), Tax Code, are repealed.
7-26 SECTION 11. This act takes effect January 1, 2002.