SRC-HRD H.B. 2438 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 2438
By: Chisum (Bivins)
Economic Development
5-12-97
Engrossed


DIGEST 

Often small communities cannot support more than one volunteer fire
department.  When that  community is split by a state line, there is a
decision made for the volunteer department to be located on one side or
the other.  People from the community on both sides of the line volunteer
for the fire department, and the department responds to emergencies on
both  sides of the state line.  A problem arises for the volunteer fire
department when the insurance company does not recognize a department
across the state line.  In setting insurance rates,  the premiums can be
considerably higher if there is no fire suppression service taken into
account.      

This bill would require the insurance commissioner, in adopting fire
insurance rates for a municipality, to take  into account the nearby fire
department or volunteer fire department that provides fire suppression  in
a Texas municipality.  The department must be considered even if that
department is located across a state line or across the border with the
United Mexican States.
PURPOSE

As proposed, H.B. 2438 requires the insurance commissioner, in adopting
fire insurance rates for a municipality, to take into account the nearby
fire department or volunteer fire  department that provides fire
suppression in a Texas municipality.  The department must be considered
even if that department is located across a state line or across the
border with the United Mexican States.
RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 5C, Insurance Code, by adding Article 5.25-3, as
follows: 

Art. 5.25-3.  FIRE INSURANCE RATES AND FIRE SUPPRESSION RATINGS FOR BORDER
MUNICIPALITY.  Requires the insurance commissioner, in adopting fire
insurance rates or in assigning or evaluating a fire suppression rating
for a municipality at or near the border between this state and another
state or the United Mexican States, to take into account the existence and
capabilities of a fire department or volunteer fire department that serves
an adjoining or nearby municipality in the other state or the United
Mexican States and that by agreement or by long-standing practice provides
fire suppression services to the Texas municipality.   

SECTION 2. Emergency clause.
  Effective date: upon passage.