BILL ANALYSIS
C.S.H.B. 2603
By: Kubiak (Armbrister)
Economic Development
05-24-95
Senate Committee Report (Substituted)
BACKGROUND
The Civil Practice and Remedies Code does not currently include
volunteer fire departments in the definition of "governmental
units." This means that the current liability for a volunteer fire
department is not capped as it is with governmental units. This
creates a financial burden for most volunteer fire departments.
PURPOSE
As proposed, C.S.H.B. 2603 provides that liability of a volunteer
fire department is limited to money damages in a maximum amount of
$100,000 for each person and $300,000 for each single occurrence
for bodily injury or death and $100,000 for each single occurrence
for injury to or destruction of property.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the director of the Texas Forest Service under SECTION 1 (Sec.
3(b), Article 21.61, Insurance Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 21E, Insurance Code, by adding Article
21.61, as follows:
Art. 21.61. VOLUNTEER FIRE DEPARTMENT MOTOR VEHICLE SELF-INSURANCE PROGRAM.
Sec. 1. DEFINITIONS. Defines "fund," "program," "service,"
and "volunteer fire department."
Sec. 2. ADMINISTRATION OF PROGRAM. (a) Requires the Texas
Forest Service (service) to administer the volunteer fire
department motor vehicle self-insurance program (program)
established under this article.
(b) Authorizes the service to employ staff to administer
the program.
Sec. 3. SELF-INSURANCE PROGRAM. (a) Sets forth certain
goals and duties for which the service is required to
establish the program.
(b) Authorizes the director of the service to adopt rules
to implement and administer the program.
Sec. 4. SELF-INSURANCE COVERAGE. (a) Requires the program
to establish a self-insurance pool to provide coverage for
motor vehicles used for fire fighting by a volunteer fire
department.
(b) Authorizes the coverage to indemnify an official,
employee, member, or volunteer of a volunteer fire
department for liability arising from the use of a covered
motor vehicle in the performance of the fire fighting
duties of the official, employee, member, or volunteer.
Requires the coverage to be subject to a maximum limit of
$100,000 for damages for bodily injury, death, or property
damage arising out of a single occurrence.
(c) Authorizes the director of the service to establish
eligibility requirements for participation in coverage
under this section and equipment and safety standards for
the motor vehicle to be covered under this section.
(d) Requires a volunteer fire department to submit a
written request to the program to participate in coverage
provided under this section. Requires the director of the
program to approve the request if each motor vehicle to be
covered meets the eligibility requirements and equipment
and safety standards established under Subsection (c) of
this section.
Sec. 5. FUND. (a) Provides that the volunteer fire
department self-insurance fund is an account in the general
revenue fund.
(b) Provides that the fund is composed of money collected
under Section 6 of this article and interest accruing on
money in the fund.
(c) Authorizes money in the fund to be expended in
accordance with legislative appropriation only for
administration of this article or funding self-insurance
under the program.
(d) Authorizes self-insurance coverage provided under
Section 4 of this article to be funded only from money
available from the fund.
(e) Requires coverage limits of self-insurance provided
under Section 4 of this article to be based on the
liquidity of the fund after deduction of the cost of
administration of this article.
(f) Provides that the state's liability for a loss
covered by self-insurance provided under this article is
limited to the assets of the fund, and the state is not
otherwise liable for that loss.
Sec. 6. SELF-INSURANCE FEE. (a) Authorizes the levy and
collect a reasonable fee from participating volunteer fire
departments to provide self-insurance coverage under this
article. Requires the service to consider the amount that
could be charged to the volunteer fire department for
similar insurance coverage provided to the department in
accordance with this code, in establishing the amount of the
fee.
(b) Requires the fees collected under this section to be
deposited to the credit of the fund.
Sec. 7. REPRESENTATION OF INSURED. (a) Authorizes the
service to employ an attorney to represent a volunteer fire
department or an official, employee, member, or volunteer of
a volunteer fire department in a liability action for which
insurance coverage is provided under this article.
(b) Prohibits the attorney general from providing the
services described by Subsection (a) of this section.
SECTION 2. Amends Section 101.001, Civil Practice and Remedies
Code, by amending Subdivision (2) and by adding Subdivision (6), to
redefine "governmental unit" to include a volunteer fire
department. Defines a "volunteer fire department" to mean a
department that is operated by its members; and exempt from federal
income tax under the Internal Revenue Code of 1986 by being listed
as an exempt organization in that same code.
SECTION 3. Amends Section 101.023, Civil Practice and Remedies
Code, by adding Subsection (d), to provide that except as provided
by Section 78.001, liability of a volunteer fire department under
this chapter is limited to money damages in a maximum amount of
$100,000 for each person and $300,000 for each single occurrence
for bodily injury or death and $100,000 for each single occurrence
for injury to or destruction of property.
SECTION 4. Effective date: September 1, 1995.
SECTION 5. (a) Prohibits the volunteer fire department motor
vehicle self-insurance program established under Section 3, Article
21.61, Insurance Code, as added by this Act, from providing
insurance coverage under Section 4 of the article before January 1,
1996.
(b) Authorizes the volunteer fire department self-insurance
fund established under Section 5, Article 21.61, Insurance
Code, to include amounts appropriated to the fund until August
31, 1997. Requires the initial self-insurance fee set under
Section 6, Article 21.61, as added by this Act, to be
established in an amount sufficient to refund to the general
revenue fund any appropriation made to the volunteer fire
department self-insurance fund. Requires the refund
contemplated by this subsection to be made not later than
August 31, 1997.
SECTION 6. Makes application of this Act prospective.
SECTION 7. Emergency clause.