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
  
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*  No significant fiscal implication to the State is anticipated.        *
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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