LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 26, 2001 TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: SB1682 by Jackson (Relating to the taxes and fees administered by the Comptroller related to the Insurance Code.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** This bill would amend several provisions in the Insurance Code and the Tax Code relating to insurance taxes, in order to either clarify existing Comptroller policy or conform statutory language to subsequent legislation. There would be no fiscal impact to the state. Sections 1, 2, 3, and 6 would amend Insurance Code Articles 1.16(b); 4.10, Section 13; 4.11, Section 8; and 9.59, Section 7 to clarify that premium tax credits for examination expenses may not be taken on such expenses: (1) incurred by Texas Department of Insurance representatives when the expenses are attributable to an examination of the books, records, accounts, or principal office of a domestic insurer located outside of the state, (2) paid to another state, or (3) paid in a different taxable year. Section 4 would amend Insurance Code Article 4.11B, Sections 2(a)-(b) to clarify that the applicable tax rate for reciprocal exchanges is 1.6 percent, not 1.7 percent, and to bring that part of the code in line with the legislative changes adopted under HB 1837, 76th Legislature, 1999. Section 5 would amend Insurance Code Article 5.49(a) to clarify that the insurance maintenance tax imposed by that article applies to inland marine and home warranty policies. Section 7 would amend Insurance Code Article 17.22(a) to clarify that county mutual insurance companies are subject to Insurance Code Article 1.35B, relating to the assessment for the Office of Public Insurance Council. Section 8 would amend Insurance Code Section 101.251(b) to clarify that the agent of an unauthorized insurer as well as the unauthorized insurer itself is liable for payment of the insurance premium tax. Section 9 would amend Tax Code Section 112.058(b) to clarify the collection and handling of protest payments and to conform that section of the code to the legislative changes adopted under HB 1461, 73rd Legislature, 1993. Section 10 would repeal Insurance Code Article 4.11C and Tax Code Section 112.058(c), relating to the insurance premium tax rate applicable to reciprocal exchanges and to the treatment of certain insurance maintenance tax protest payments, respectively. This bill would take effect January 1, 2002. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts, 454 Texas Department of Insurance LBB Staff: JK, SD, WP