Part 1.
COMPTROLLER OF PUBLIC ACCOUNTS
Chapter 3.
TAX ADMINISTRATION
Subchapter GG. INSURANCE TAX
34 TAC §3.834
The Comptroller of Public Accounts proposes a new §3.834,
concerning volunteer fire department assistance fund assessment. In 2001,
the Texas Legislature created the Rural Volunteer Fire Department Assistance
Program under Government Code, §614.074, to assist rural volunteer fire
departments with funding for equipment and training. To finance the program,
the comptroller is required to collect an assessment totaling $15 million
per year from certain insurers, beginning in 2002, and ending September 1,
2011. This new section provides information regarding the insurers that are
required to pay the assessment, the types of policies on which the assessment
is based, and the computation of each insurer's assessment. The section also
establishes the date by which the comptroller will send insurers notification
of the amount of their assessment and the due date for payment of the assessment.
James LeBas, Chief Revenue Estimator, has determined that for the first
five-year period the rule will be in effect, there will be no significant
revenue impact on the state or units of local government.
Mr. LeBas also has determined that for each year of the first five years
the rule is in effect, the public benefit anticipated as a result of enforcing
the rule will be in providing new information regarding tax responsibilities.
This rule is adopted under Tax Code, Title 2, and does not require a statement
of fiscal implications for small businesses. The proposed new rule would benefit
the public by clarifying assessment payment responsibilities and by providing
specific assessment collection information to insurers. There is no anticipated
economic cost to the public.
Comments on the proposal may be submitted to Bryant K. Lomax, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This new section is proposed under Tax Code, §111.002 and §111.0022,
which provides the comptroller with the authority to prescribe, adopt, and
enforce rules relating to the administration and enforcement of the provisions
of the Tax Code, Title 2, and taxes, fees, or other charges which the comptroller
administers under other law. This rule also affects Insurance Code, Chapter
5, Article 5.102.
The new rule implements Insurance Code, Chapter 5, Article 5.102.
§3.834.Volunteer Fire Department Assistance Fund Assessment.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Assessment date--The date on which the Texas Department
of Insurance (TDI) provides the comptroller with the database of authorized
insurers.
(2)
Insurer--An insurance entity that is authorized to engage
in business in this state, including a stock company, mutual, farm mutual,
county mutual, Lloyd's plan, or reciprocal or interinsurance exchange, as
of the assessment date.
(3)
Net direct premium--The gross direct premium written by
an insurer, as reported to TDI on the insurer's Annual Statement State Page
for:
(A)
policies of:
(i)
homeowner's insurance;
(ii)
fire insurance;
(iii)
farm and ranch owner's insurance;
(iv)
private passenger automobile physical damage insurance;
and
(v)
commercial automobile physical damage insurance; and
(B)
the nonliability portion of a commercial multiple peril
policy.
(4)
Twelve-month period--The time period from January 1 through
December 31, which is the same as the tax year and annual statement period.
(b)
Calculation of the assessment. The comptroller will use
the following formula to calculate the amount of each insurer's assessment:
Figure: 34 TAC §3.834(b)
(c)
Billing date and due date.
(1)
The comptroller will bill the assessment on or before May
31.
(2)
Payment of the assessment is due by August 1.
(d)
Enforcement provisions. Tax Code, Title 2, Subtitles A
and B, apply to the comptroller's administration, collection, and enforcement
of the assessment under Insurance Code, Article 5.102.
(e)
Disallowance of assessment as a credit. Insurance Code,
Article 5.102, does not provide for use of the assessment as a credit against
premium or maintenance tax.
(f)
Disallowance of assessment for retaliatory purposes. The
assessment may not be included on the retaliatory tax worksheet.
(g)
Recoupment of assessment. An insurer may recover an assessment
under this section as provided under the Insurance Code, Chapter 5, Article
5.102.
(h)
Assessment Final. The amount that is assessed an insurer
under Insurance Code, Article 5.102, is final as of the assessment date. The
comptroller will not recalculate the amount due under this section to reflect
any changes in an insurer's Texas net direct premium. The assessment under
Insurance Code, Article 5.102, is not a deficiency determination under Tax
Code, §111.008.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on July 2, 2002.
TRD-200204169
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Earliest possible date of adoption: August 18, 2002
For further information, please call: (512) 475-0387
Chapter 63.
BOARD OF TRUSTEES
Part 4.
EMPLOYEES RETIREMENT SYSTEM OF TEXAS