CHAPTER 229. COOPERATIVE AGREEMENTS WITH OTHER STATES

INSURANCE CODE

TITLE 3. DEPARTMENT FUNDS, FEES, AND TAXES

SUBTITLE B. INSURANCE PREMIUM TAXES

CHAPTER 229. COOPERATIVE AGREEMENTS WITH OTHER STATES

Sec. 229.001. DEFINITIONS. In this chapter:

(1) "Agent" includes:

(A) a surplus lines agent, as defined by Section 981.002;

(B) a person licensed as a surplus lines agent by another state;

and

(C) any other person who performs the acts of an agent, whether

through an oral, written, electronic, or other form of

communication, by soliciting, negotiating, procuring, or

collecting a premium on an insurance contract.

(2) "Insurer" has the meaning assigned by Section 101.002 and

includes:

(A) an insurer that does not hold a certificate of authority in

this state;

(B) an eligible surplus lines insurer; and

(C) an insurer that holds a certificate of authority in this

state but performs acts outside the scope of its authority under

the certificate.

(3) "Premium" includes:

(A) any consideration for insurance, including:

(i) a premium;

(ii) a membership fee;

(iii) an assessment; and

(iv) dues; or

(B) any other meaning of the term adopted in a cooperative

agreement.

(4) "Processing entity" means a processing center or

clearinghouse established under a cooperative agreement.

(5) "Stamping office" means the Surplus Lines Stamping Office of

Texas or similar stamping offices in other states.

Added by Acts 2007, 80th Leg., R.S., Ch.

932, Sec. 11, eff. June 15, 2007.

Renumbered from Insurance Code, Section 228.001 by Acts 2009,

81st Leg., R.S., Ch.

87, Sec. 27.001(60), eff. September 1, 2009.

Sec. 229.002. COOPERATIVE AGREEMENTS WITH OTHER STATES. (a)

The comptroller may enter into a cooperative agreement,

reciprocal agreement, or compact with another state for the

collection of insurance premium taxes imposed by Chapters 225 and

226 on a multistate basis. An agreement or amendment of an

agreement takes effect according to its terms, except that an

agreement or amendment may not take effect until the proposed

agreement or amendment is published in the Texas Register.

(b) An agreement may provide for:

(1) determining a base state and multistate allocation of

insurance premiums;

(2) tax reporting requirements;

(3) audit and refund claim procedures;

(4) exchange of information;

(5) requirements for reporting on a multistate basis;

(6) insurance and tax related terms and definitions;

(7) penalties, fees, administrative costs, and interest rates;

(8) audit assessment and refund claim limitation periods;

(9) procedures for collecting amounts due from agents,

insurers, or other persons and for collecting and forwarding the

amounts due to the jurisdiction to which the amount is owed;

(10) procedures for verifying refund claims by agents, insurers,

or other persons and for collecting those amounts from the

jurisdiction owing the refund amount;

(11) the temporary remittal of funds equal to the amounts due to

another jurisdiction, subject to appropriation of funds for that

purpose; and

(12) other provisions to facilitate the administration of the

agreement.

(c) The comptroller may, as required by the terms of an

agreement, provide to an officer of another state any information

that relates to the solicitation, negotiation, procurement,

placement, issuance, receipt, or collection of premiums by an

agent, insurer, or other person for an insurance contract or

policy that may be subject to the premium taxes imposed by

Chapter 225 or 226.

(d) An agreement may provide for each state to audit the records

of an agent, insurer, or other person based in this state to

determine if insurance premium taxes due each state that is a

party to the agreement are properly reported and paid. An

agreement may provide for each state to forward the findings of

an audit performed on an agent, insurer, or other person based in

this state to each other state in which the person has an

allocation of taxable premiums.

(e) For an agent, insurer, or other person who has an allocation

of taxable premiums in this state, the comptroller may use an

audit performed by another state that is a party to an agreement

with this state to make an assessment of insurance premium taxes

against the agent, insurer, or other person. An assessment made

by the comptroller under this subsection is prima facie evidence

that the amount shown as due is correct.

(f) An agreement entered into under this section does not affect

the comptroller's authority to audit any person under any other

law.

(g) An agreement entered into under this section prevails over

an inconsistent rule of the comptroller. Except as otherwise

provided by this section, a statute of this state prevails over

an inconsistent provision of an agreement entered into under this

section.

(h) The comptroller may segregate in a separate fund or account

the amount estimated to be due to other jurisdictions, amounts

subject to refund during the fiscal year, fees, and other costs

collected under the agreement. On a determination of an amount

held that is due to be remitted to another jurisdiction, the

comptroller may issue a warrant or make an electronic transfer of

the amount as necessary to carry out the purposes of the

agreement. An auditing cost, membership fee, or other cost

associated with the agreement may be paid from interest earned on

funds segregated under this subsection. Any interest earnings in

excess of the costs associated with the agreement shall be

credited to general revenue.

(i) The legislature finds that it is in the public interest to

enter into insurance tax and regulatory agreements with other

jurisdictions that may provide for the temporary remittal of

amounts due other jurisdictions that exceed the amounts collected

and for cooperation with other jurisdictions for the collection

of taxes imposed by this state under Chapters 225 and 226 and

similar taxes imposed under statutes of other jurisdictions on

insurance premiums. The comptroller shall ensure that reasonable

measures are developed to recover insurance taxes and other

amounts due this state during each biennium.

(j) The comptroller may enter into a cooperative agreement,

reciprocal agreement, or compact with another state to provide

for the collection of taxes imposed by this state and the other

states on insurances taxes that may be due the states and this

state based on a standardized premium allocation adopted by the

states under the agreement. The comptroller may also enter into

other cooperative agreements with surplus lines stamping offices

located in this state and other states in the reporting and

capturing of related tax information. In addition, the

comptroller may enter into cooperative agreements with processing

entities located in this state or other states related to the

capturing and processing of insurance premium and tax data.

(k) The comptroller may adopt rules as necessary to implement

this chapter. In adopting rules under this chapter, the

comptroller may not adopt a rule that does not specifically

implement this section.

Added by Acts 2007, 80th Leg., R.S., Ch.

932, Sec. 11, eff. June 15, 2007.

Renumbered from Insurance Code, Section 228.002 by Acts 2009,

81st Leg., R.S., Ch.

87, Sec. 27.001(60), eff. September 1, 2009.