BILL ANALYSIS H.B. 1832 By: Turner, Bob 4-19-95 Committee Report (Unamended) BACKGROUND Volunteer fire departments (VFD's) serve rural and some suburban areas of Texas. Since few programs exist to help them, most are under-funded. They survive only on what revenue they can raise through local fundraisers such as bake sales and charity barbecues. This shortage of financial resources makes it difficult for them to get new equipment and maintain what equipment they have. It also deters potential members from joining VFD's because of the time and effort necessary to raise money to support the department. VFD's pay for more than just fire trucks, hoses, and helmets. They must also buy liability insurance, at the very minimum for their vehicles, since Texas law requires it of all cars and trucks. VFD liability insurance, however, is very expensive. A survey of 519 VFD's in Texas found that they had paid close to $4.5 million in premiums over a three year period in the early 1990's (approximately $600 per truck per year) but had claims for only $264,000. Fire trucks are driven infrequently - they rarely leave the station unless they are on their way to a fire - so they have few opportunities to get into accidents. A nearby state has found, in fact, that most of the claims against VFD's come from their own volunteers whose cars get bumped by fire trucks at the scene of the fire. PURPOSE The purpose of this Legislation is to assist Volunteer Fire Departments by allowing them, through the local citizenry, to petition their commissioner's court to be designated as an Emergency Services District without taxing authority. This would allow them to be considered units of local governments for the purposes of liability. This would also limit their liability to $100,000 per person, $300,000 for total personal injury, and $100,000 for property damage per accident. This legislation also sets forth the process to convert a direct without taxing authority to a district with taxing authority. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 775, Health and Safety Code, by adding Sections 775.0111 and 775.0121. Section 775.0111 sets up the procedure to petition for the creation of an Emergency Services District without taxing authority located wholly in one county. This would require a petition signed by 100 qualified voters who own taxable property in the proposed district or, if there are fewer than 100 qualified voters who own taxable real property, a petition signed by a majority of those voters. This section also specifies the name of the proposed district to be the " County Emergency Services District No. ," with the name of the county and the proper number inserted. Section 775.0121 sets up the procedure for creating an Emergency Services District without taxing authority that is located in more than one county. This procedure requires that the county judge of each county in which the district is proposed is to receive a petition with at least 100 qualified voters who own taxable real property in the proposed district. If there are fewer than 100 qualified voters who own taxable real property, then a petition signed by a majority of those voters is necessary. This section also specifies the name of the district as being the " Emergency Services District No. ," with the name of the county and the proper consecutive number inserted. SECTION 2. Amends Section 775.013(a), Health and Safety Code, by adding Sections 775.0111 and 775.0121, Health and Safety Code. These are similar to the provisions found in 775.011 and 775.012 which deal with the required information on the petitions to create a district with taxing authority. These new sections also add the requirement to those petitions that they show whether or not the proposed district will have taxing authority. SECTION 3. Amends Section 775.015(c), Health and Safety Code, which deals with the hearing associated with the creation of an Emergency Services District. Requires the county clerk to state in the notice of the hearing whether or not the proposed district is to have taxing authority. SECTION 4. Amends Section 775.017, Health and Safety Code, by adding new Subsections (c) and (d) and relettering existing (c). New Subsection (c) requires that, after the hearing on a petition to create a district without taxing authority, the commissioner's court finds that the proposed district meets the requirement that is feasible and that it will promote the public safety, welfare, health, and convenience as prescribed by Subsection (a), the commissioner's court shall order the creation of the district. The district is created on the date specified on the order, except as provided by Subsection (d). A district without taxing authority is not required to have a confirmation election. New Subsection (d) requires that, if the proposed district is located in more than one county, the commissioners court order creating the proposed district is not effective until the commissioners court of each county has ordered the district's creation. Old Subsection (c) is relettered to new Subsection (e). SECTION 5. Amends Section 775.018(a), Health and Safety Code, to add language which excludes proposed districts without taxing authority from this subsection which requires a confirmation election to be held to confirm a district's boundaries and to authorize a tax. SECTION 6. Amends Section 775.031(a), Health and Safety Code, by adding language to (5) that would allow only those districts with taxing authority to impose and collect taxes. SECTION 7. Amends the heading to Subchapter D, Chapter 775, Health and Safety Code, to read "EXPANSION, CONVERSION, OR DISSOLUTION OF DISTRICT". SECTION 8. Amends Subchapter D, Chapter 775, Health and Safety Code, by adding Section 775.056. This section deals with the procedure necessary to convert a district without taxing authority into a district with taxing authority. (a) Qualified voters who own taxable real property may petition, in the same manner as was used for the creation of the district without taxing authority, to have the district converted to a district with taxing authority. (b) On receipt of such petition for conversion on the proper form, the commissioner's court shall set and hold a hearing on the petition as provided by Sections 775.015 and 775.016. The commissioners court shall grant or deny the petition as provided by Section 775.017. If the petition is granted, the commissioner's court shall order a confirmation election as provided by Section 775.018. (c) The conversion of a district from a district with taxing authority to a district without taxing authority does not affect the district's obligations or outstanding indebtedness. SECTION 9. Amends Section 775.071, Health and Safety Code, by excluding a district without taxing authority from the requirement of imposing an ad valorem tax; provisions for the reduction in the ad valorem tax rate; the adoption of a sales and use rate; provisions for the election concerning a sales and use tax; provisions concerning the change in boundary or effective date of a sales and use tax; the requirement in the section dealing with the authorization of bonds and notes for the imposition of a tax; and the section dealing with the election to approve bonds and notes. SECTION 10. Amends Section 775.076(b), Health and Safety Code, allowing the board of a district without taxing authority to issue bonds and notes in one or more issues or series that are payable from and secured by liens on and pledges of all or part of the district's revenues, income, or receipts. SECTION 11. Amends Section 775.078, Health and Safety Code, by adding a Subsection (e) which would prohibit a district that does not have taxing authority from issue bond anticipation notes secured by taxes. SECTION 12. Emergency Clause. SUMMARY OF COMMITTEE ACTION HB 1832 was considered by the County Affairs Committee in a public hearing on 4/19/95. Representative B. Turner opened. The following people testified for HB 1832: Mike Fisher, representing himself; and Charlie Hester, representing himself; and John Lee Cook, representing himself and the North Central Texas Fire Chief's Association; and Tony Korioth, representing himself and the TML Intergovernmental Risk Pool. The chair recognized the following people to testify neutrally on HB 1832: Bobby Young, representing himself; and A.R. "Babe" Schwartz, representing Regnier and Associates Insurance Agency. Representative B.Turner closed. HB 1832 was left pending. HB 1832 was laid out as pending business and reported favorably with the recommendation that it do pass and be printed, by the record vote of 6 ayes, 0 nays, 0 pnv, 3 absent.