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
2-1 qualifies for a certificate of compliance that is evidence of
2-2 insurability of the structure by the Association.
2-3 SECTION 3. Article 21.49, Insurance Code, is amended by
2-4 adding Section 8E to read as follows:
2-5 Sec. 8E. RATE ROLLBACK. (a) This section applies only to
2-6 policies or coverages that are issued by the association to cover
2-7 new residential construction, excluding additions or repairs to
2-8 existing structures, built to the standards of a new building code.
2-9 (b) The commissioner shall hold a rulemaking hearing under
2-10 Chapter 2001, Government Code, to determine the percentage of
2-11 equitable across-the-board reductions in insurance rates required
2-12 for Texas windstorm and hail insurance coverage written by the
2-13 association.
2-14 (c) Not later than the 180th day after the date a building
2-15 code is implemented, the commissioner shall issue an order
2-16 mandating the appropriate rate reductions.
2-17 (d) If, before the 181st day after the date a new building
2-18 code is implemented, the commissioner has not issued an order
2-19 establishing rate reductions for Texas windstorm and hail insurance
2-20 on new residential construction built to the standards of a new
2-21 building code, or the order has not become final because of
2-22 judicial intervention or any other reason, the commissioner shall
2-23 require a six percent across-the-board reduction.
2-24 (e) Notwithstanding Article 1.33B of this code, a hearing
2-25 under this section shall be held before the commissioner or the
2-26 commissioner's designee.
2-27 SECTION 4. The importance of this legislation and the
3-1 crowded condition of the calendars in both houses create an
3-2 emergency and an imperative public necessity that the
3-3 constitutional rule requiring bills to be read on three several
3-4 days in each house be suspended, and this rule is hereby suspended,
3-5 and that this Act take effect and be in force from and after its
3-6 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3383 was passed by the House on May
1, 1997, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 3383 on May 24, 1997, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3383 was passed by the Senate, with
amendments, on May 21, 1997, by the following vote: Yeas 30, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor