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.