BILL ANALYSIS

 

 

 

H.B. 4401

By: Vo

Transportation

Committee Report (Unamended)

 

 

 

BACKGROUND AND PURPOSE

 

Under current statute, insurers must pay a specified fee for each motor vehicle policy issued or renewed by the insurer. Currently, the Motor Vehicle Crime Prevention Authority (MVCPA) is responsible for collecting these fees and administering refunds. H.B. 4401 aims to resolve longstanding procedural gaps in due process, voluntary disclosure, and refund claims for MVCPA fees by moving the administration, collection, and enforcement of those fees to the purview of the comptroller of public accounts. These changes seek to improve efficiency, streamline compliance, and offer greater clarity and certainty for insurers and stakeholders.

 

CRIMINAL JUSTICE IMPACT

 

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that rulemaking authority is expressly granted to the comptroller of public accounts in SECTION 2 of this bill.

 

ANALYSIS

 

H.B. 4401 amends the law to require the comptroller of public accounts to administer and enforce provisions relating to the administration, collection, and reporting of certain fees collected from insurers under statute relating to the Motor Vehicle Crime Prevention Authority (MVCPA), except as provided by other applicable statute. The bill authorizes the comptroller to do the following:

·       adopt rules to implement the administration, collection, reporting, and enforcement responsibilities assigned to the comptroller under state law or another state insurance law; and

·       prescribe appropriate report forms, establish or alter tax report due dates not otherwise specifically prescribed by provisions relating to the MVCPA or other state law, and otherwise adapt the functions transferred to the comptroller to increase efficiency and cost-effectiveness.

The bill establishes that a rule adopted by the comptroller that relates to the administration, collection, reporting, or enforcement of fees imposed under provisions relating to the MVCPA prevails over a conflicting rule, policy, or procedure established by the MVCPA.

 

H.B. 4401 makes general provisions and enforcement and collection provisions regarding state taxation under the Tax Code applicable to the administration, collection, and enforcement by the comptroller of fees and assessments under provisions relating to the MVCPA. Except as otherwise provided by the provisions relating to the MVCPA, the powers granted to the comptroller under the applicable provisions of the Tax Code do not limit and are exclusive of the powers granted to the comptroller in relation to fees and assessments under provisions relating to the MVCPA.

 

H.B. 4401 requires the MVCPA to reimburse the appropriate portion of the MVCPA's funds for the amount of expenses incurred by the comptroller in administering fees imposed under provisions relating to the MVCPA. The bill requires the comptroller to certify to the MVCPA the total amount of expenses estimated to be required to perform the comptroller's duties under provisions relating to the MVCPA for each fiscal biennium and to provide copies of the certification to the budget division of the governor's office and to the Legislative Budget Board. The bill requires the amount certified by the comptroller to be transferred from the MVCPA's operating account to the appropriate portion of the general revenue fund.

 

H.B. 4401 requires the MVCPA and the comptroller to cooperate fully in performing their respective duties under provisions relating to the MVCPA. The bill establishes that, except as otherwise specifically provided, for a report, including a fee report, or payment that is required to be filed or made in the offices of the comptroller and that is delivered by USPS to the offices of the comptroller after the date on which the report or payment is required to be filed or made, the date of filing or payment is the date of the following:

·       the postal service postmark stamped on the cover in which the report or payment is mailed; or

·       any other evidence of mailing authorized by USPS reflected on the cover in which the report or payment is mailed.

 

H.B. 4401 amends the Transportation Code to replace the authorization for the MVCPA to make determinations regarding the sufficiency of payments made by an insurer of fees collected under applicable provisions with a requirement for the comptroller to make those determinations. Accordingly, the bill revises the provision authorizing the MVCPA, pursuant to such a determination, to notify the comptroller that payments made by an insurer are sufficient and request the comptroller to draw warrants on the funds available to the MVCPA for the purpose of refunding money to an insurer as follows:

·       replaces the authorization for the MVCPA to notify the comptroller that payments made by an insurer are sufficient with an authorization for the comptroller to notify an insurer that payments made by an insurer are sufficient or have been overpaid; and

·       replaces the authorization for the MVCPA to request the comptroller to draw warrants on the funds available to the MVCPA for the purpose of refunding money to an insurer with an authorization for the comptroller to draw such warrants.

 

H.B. 4401 removes the requirement for such determinations to be performed in accordance with procedures set forth in rules adopted by the MVCPA and the provision establishing that the question of eligibility for a refund is not a contested case under the Administrative Procedure Act. The bill makes applicable to refund requests the procedures in general provisions and enforcement and collection provisions regarding state taxation in the Tax Code. The bill removes the authorization for the MVCPA to recover from an insurer requesting a refund any costs associated with a denied or improperly requested refund.

 

H.B. 4401 revises the following provisions relating to a fee imposed on an insurer by replacing the applicable entity subject to those provisions from the MVCPA to the comptroller:

·       the requirement for an insurer to pay to the applicable entity a fee equal to $5 multiplied by the total number of motor vehicle years of insurance for insurance policies delivered, issued for delivery, or renewed by the insurer;

·       the authorization for the applicable entity to audit or contract for the audit of such fees paid by an insurer;

·       the requirement for a determination under provisions relating to such fees to be made in accordance with procedures the applicable entity adopts by rule;

·       the authorization for an insurer assessed a penalty or interest under provisions relating to such fees to appeal the assessment to the applicable entity; and

·       the requirement for the applicable entity to notify the Texas Department of Insurance of any insurer that fails to pay the required fee.

The bill makes applicable to such appeals the procedures in general provisions and enforcement and collection provisions regarding state taxation in the Tax Code and removes the provision establishing that an appeal is not a contested case under the Administrative Procedure Act. The bill requires the comptroller to annually prepare a report accounting for all fees received under provisions relating to the MVCPA during the preceding fiscal year.

 

EFFECTIVE DATE

 

January 1, 2025.