75R11172 DLF-F                           

         By Eiland                                             H.B. No. 3383

         Substitute the following for H.B. No. 3383:

         By Eiland                                         C.S.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

 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 15-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.