By Eiland, Stiles, Berlanga, Luna, Gray, H.B. No. 3383
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the Texas catastrophe property
1-3 insurance pool.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The legislature finds that:
1-6 (1) the cost of housing will increase in the first
1-7 tier coastal counties, as defined by Section 3, Article 21.49,
1-8 Insurance Code, with the implementation of any new building code
1-9 imposed under that article;
1-10 (2) increased costs will have a negative effect on
1-11 economic development for all coastal areas, driving growth further
1-12 inland where housing is more affordable;
1-13 (3) the new building code standards will lower the
1-14 risk of insurers that write business in the first tier coastal
1-15 counties; and
1-16 (4) legislative action in the public interest and
1-17 within the police power of the state is required to eliminate the
1-18 negative impact of new building code standards on consumers through
1-19 insurance rate reductions.
1-20 SECTION 2. Section 3, Article 21.49, Insurance Code, is
1-21 amended by adding Subsection (o) to read as follows:
1-22 (o) "New building code" means any new building standard,
1-23 specification, or guideline adopted by the commissioner after May
1-24 1, 1997, that must be met before any new residential construction
1-25 qualifies for a certificate of compliance that is evidence of
2-1 insurability of the structure by the Association.
2-2 SECTION 3. Article 21.49, Insurance Code, is amended by
2-3 adding Section 8E to read as follows:
2-4 Sec. 8E. RATE ROLLBACK. (a) This section applies only to
2-5 policies or coverages that are issued by the association to cover
2-6 new residential construction, excluding additions or repairs to
2-7 existing structures, built to the standards of a new building code.
2-8 (b) The commissioner shall hold a rulemaking hearing under
2-9 Chapter 2001, Government Code, to determine the percentage of
2-10 equitable across-the-board reductions in insurance rates required
2-11 for Texas windstorm and hail insurance coverage written by the
2-12 association.
2-13 (c) Not later than the 180th day after the date a building
2-14 code is implemented, the commissioner shall issue an order
2-15 mandating the appropriate rate reductions.
2-16 (d) If, before the 181st day after the date a new building
2-17 code is implemented, the commissioner has not issued an order
2-18 establishing rate reductions for Texas windstorm and hail insurance
2-19 on new residential construction built to the standards of a new
2-20 building code, or the order has not become final because of
2-21 judicial intervention or any other reason, the commissioner shall
2-22 require a six-percent across-the-board reduction.
2-23 (e) Notwithstanding Article 1.33B of this code, a hearing
2-24 under this section shall be held before the commissioner or the
2-25 commissioner's designee.
2-26 SECTION 4. (a) This section applies to each county of this
2-27 state that:
3-1 (1) has a population of 50,000 or more; and
3-2 (2) includes all or part of an island that borders the
3-3 Gulf of Mexico.
3-4 (b) Notwithstanding any law to the contrary, a building code
3-5 adopted on or after January 1, 1997, does not apply to a county
3-6 subject to this section.
3-7 (c) For purposes of this section, "building code" means any
3-8 new building standard, specification, interpretation, or guideline
3-9 adopted by the commissioner of insurance on or after January 1,
3-10 1997.
3-11 (d) This section expires June 1, 1999.
3-12 SECTION 5. The importance of this legislation and the
3-13 crowded condition of the calendars in both houses create an
3-14 emergency and an imperative public necessity that the
3-15 constitutional rule requiring bills to be read on three several
3-16 days in each house be suspended, and this rule is hereby suspended,
3-17 and that this Act take effect and be in force from and after its
3-18 passage, and it is so enacted.