By Uher                                         H.B. No. 2736

      75R8648 CAG-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the operation of a nonprofit state association of

 1-3     counties and related entities.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Chapter 81, Local Government Code,

 1-6     is amended by adding Section 81.0265 to read as follows:

 1-7           Sec. 81.0265.  OVERSIGHT OF ASSOCIATION OF COUNTIES.  (a)  In

 1-8     this section:

 1-9                 (1)  "Association" means a nonprofit state association

1-10     of counties funded in whole or in part by fees or dues paid by a

1-11     county under Section 81.026.

1-12                 (2)  "Related entity" means any other person that:

1-13                       (A)  the association controls in any manner;

1-14                       (B)  operates out of the same offices or building

1-15     as the association;

1-16                       (C)  shares with the association any employee of

1-17     the association; or

1-18                       (D)  operates a program for the association,

1-19     including a risk pool or other insurance program.

1-20           (b)  The commissioners court of a county may not spend money

1-21     for membership fees or dues under Section 81.026 unless the

1-22     association  complies with the requirements of this section.

1-23           (c)  An association and any related entity shall annually

1-24     file with the secretary of state a designation of the status of the

 2-1     association or related entity, including whether the association or

 2-2     entity performs any public function that entitles the association

 2-3     or entity to the protection of any statute.

 2-4           (d)  Not later than the 10th day after the end of an

 2-5     association's fiscal year, the association shall file a report of

 2-6     the financial condition of the association and any related entity.

 2-7     The governor may establish rules for the submission of the reports.

 2-8           (e)  If an association or a related entity intends to file a

 2-9     suit against a county that is a member of the association or

2-10     entity, the association or entity shall, not later than the 30th

2-11     day before the date the suit is filed, give written notice of the

2-12     intention to file suit to:

2-13                 (1)  the governing board of the association or entity;

2-14     and

2-15                 (2)  the county.

2-16           (f)  Not later than the 30th day before the date an

2-17     association or a related entity changes the terms of any bylaws or

2-18     terms of any contract with a county, the association or entity

2-19     shall give written notice to each county affected by the change.

2-20           (g)  The governor shall adopt rules relating to the operation

2-21     and oversight of an association or a related entity. The governor

2-22     may adopt annual audit or reporting requirements for the

2-23     association or related entity.

2-24           (h)  If an association or a related entity operates a risk

2-25     pool or an insurance program, the association or entity must comply

2-26     with the requirements of Section 172.006.

2-27           SECTION 2.  Section 172.006(b), Local Government Code, is

 3-1     amended to read as follows:

 3-2           (b)  A pool may be administered by a staff employed by the

 3-3     pool, an entity created by the political subdivision or group of

 3-4     political subdivisions participating in the pool, or a third party

 3-5     administrator.  The individual responsible for administration of

 3-6     the pool, whether employed by the pool, an entity created by the

 3-7     political subdivision or a group of political subdivisions

 3-8     participating in the pool, or a third party administrator:

 3-9                 (1)  must hold a bachelor's degree in a field relating

3-10     to insurance or finance or hold the professional designation of:

3-11                       (A)  Chartered Property Casualty Underwriter

3-12     granted by the American Institute for Property and Liability

3-13     Underwriters;

3-14                       (B)  Certified Insurance Counselor granted by the

3-15     Society of Certified Insurance Counselors; or

3-16                       (C)  Associate in Risk Management granted by the

3-17     Insurance Institute of America;

3-18                 (2)  must have at least 10 years experience in

3-19     administration of risk pools, commercial insurance, or risk

3-20     management; and

3-21                 (3)  during each calendar year, shall participate in a

3-22     minimum of 20 hours of continuing education that:

3-23                       (A)  is acceptable to the trustees of the risk

3-24     pool; and

3-25                       (B)  relates to professional insurance, risk

3-26     management, or administration of risk pools.

3-27           SECTION 3.  (a)  An individual responsible for administration

 4-1     of a risk pool under Section 172.006, Local Government Code, is not

 4-2     required to satisfy the requirements of Sections 172.006(b)(1) and

 4-3     (2), Local Government Code, as added by this Act, before January 1,

 4-4     1998, or the requirements of Section 172.006(b)(3), Local

 4-5     Government Code, as added by this Act, before December 31, 1998.

 4-6           (b)  The change in law made by this Act to Section

 4-7     172.006(b), Local Government Code, applies only to the

 4-8     qualifications of an individual who is  responsible for

 4-9     administration of a risk pool under a contract entered into or

4-10     renewed on or after the effective date of this Act.  The

4-11     qualifications of an individual who is  responsible for

4-12     administration of a risk pool under a contract entered into or

4-13     renewed before the effective date of this Act are governed by the

4-14     law as it existed immediately before the effective date of this

4-15     Act, and that law is continued in effect for that purpose.

4-16           SECTION 4.  (a)  This Act takes effect September 1, 1997.

4-17           (b)  The governor shall, not later than January 1, 1998,

4-18     establish a method for reviewing the financial records of a

4-19     nonprofit state association of counties under Section 81.0265,

4-20     Local Government Code, as added by this Act.

4-21           SECTION 5.  The importance of this legislation and the

4-22     crowded condition of the calendars in both houses create an

4-23     emergency and an imperative public necessity that the

4-24     constitutional rule requiring bills to be read on three several

4-25     days in each house be suspended, and this rule is hereby suspended.