HBA-KDB H.B. 3667 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3667 By: Cook Agriculture & Livestock 4/17/2001 Introduced BACKGROUND AND PURPOSE Fundraisers and donations are the primary source of revenue for rural volunteer fire departments in this state. Even though such fire departments operate with little or no reserve personnel funds, they respond to most of the wildland fires around the state. If there was a tax placed on fireworks, then there might be adequate funds to compensate such fire departments. House Bill 3667 establishes the rural volunteer fire department insurance program and imposes a two percent sales tax on fireworks. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill expressly delegates rulemaking authority to the director of the Texas Forest Service in SECTION 1 (Section 614.072, Government Code) of this bill. ANALYSIS House Bill 3667 amends the Government Code to establish the rural volunteer fire department insurance program (program). The bill requires the Texas Forest Service of The Texas A&M University System (service) to administer the program and authorizes the director of the service (director) to adopt rules necessary to assist rural volunteer fire departments in paying for worker's compensation and accidental death and disability insurance. The bill authorizes the service to employ staff to administer the program. The bill requires the director to determine reasonable criteria and qualifications for the distribution of money from the rural volunteer fire department insurance fund (fund) and to establish a procedure for reporting and processing requests for money from the fund. The bill prohibits such criteria and qualifications from including a prohibition on a volunteer fire department receiving funds from a political subdivision. The bill requires the director to prepare an annual written report on the activity, status, and effectiveness of the fund and to submit the report to the lieutenant governor, the speaker of the house of representatives, and the comptroller of public accounts (comptroller) before September 1 of each year. The bill prohibits any assistance or benefits provided to a volunteer fire department or firefighter who is a member of a volunteer fire department from being considered compensation and prohibits a firefighter receiving such assistance from being considered to be in the paid service of any governing body. The bill prohibits administration costs associated with the program during a state fiscal year from exceeding seven percent of the total revenue collected from the fireworks tax. The bill establishes and sets forth membership requirements of an advisory committee to help the director in regard to the administration of the program. The bill provides that the fund is an account in the general revenue fund and is composed of money collected from fireworks taxes and contributions to the fund from any other source. H.B. 3667 amends the Tax Code to provide that a tax is imposed on each sale at retail of fireworks, the tax rate is two percent of the sale price of the fireworks, and the fireworks tax is in addition to limited sales, excise, and use taxes. Provisions relating to limited sales, excise, and use taxes apply to the fireworks tax. The bill requires the comptroller to allocate the revenue from fireworks taxes, other than penalties and interest, to the fund. The bill prohibits the director from granting a request for assistance under the program before September 1, 2002. EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect October 1, 2001.