By McReynolds                                         H.B. No. 2604
         77R8748 AJA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to assistance to certain volunteer fire departments and to
 1-3     the imposition of an insurance premium surcharge to finance that
 1-4     assistance.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Chapter 614, Government Code, is amended by
 1-7     adding Subchapter F to read as follows:
 1-8      SUBCHAPTER F.  RURAL VOLUNTEER FIRE DEPARTMENT ASSISTANCE PROGRAM
 1-9           Sec. 614.071.  DEFINITIONS.  In this subchapter:
1-10                 (1)  "Director" means the director of the Texas Forest
1-11     Service of The Texas A&M University System.
1-12                 (2)  "Fund" means the volunteer fire department
1-13     assistance fund.
1-14                 (3)  "Program" means the Rural Volunteer Fire
1-15     Department Assistance Program.
1-16                 (4)  "Service" means the Texas Forest Service of The
1-17     Texas A&M University System.
1-18                 (5)  "Part-paid fire department" means a fire
1-19     department operated by its members, some of whom are paid and some
1-20     of whom are volunteers.
1-21                 (6)  "Volunteer fire department" means a fire
1-22     department operated by its members, including a part-paid fire
1-23     department, that is operated on a not-for-profit basis, including a
1-24     department that is exempt from federal income tax under Section
 2-1     501(a), Internal Revenue Code of 1986, by being listed as an exempt
 2-2     organization in  Section 501(c)(3) of that code.
 2-3           Sec. 614.072.  ADMINISTRATION OF PROGRAM.  (a)  The Texas
 2-4     Forest Service shall administer the program established under this
 2-5     subchapter, and the director may adopt rules necessary to assist
 2-6     volunteer fire departments in paying for equipment and training of
 2-7     personnel.
 2-8           (b)  The service may employ staff to administer the program. 
 2-9           (c)  The director shall:
2-10                 (1)  determine reasonable criteria and qualifications
2-11     for the distribution of money from the volunteer fire department
2-12     assistance fund; and
2-13                 (2)  establish a procedure for reporting and processing
2-14     requests for money from the fund.
2-15           (d)  A volunteer fire department may not be denied assistance
2-16     from the fund solely because the department receives funds from a
2-17     political subdivision.
2-18           (e)  The director shall prepare an annual written report on
2-19     the activity, status, and effectiveness of the fund and shall
2-20     submit the report to the lieutenant governor, the speaker of the
2-21     house of representatives, and the comptroller before November 1 of
2-22     each year.
2-23           (f)  Any assistance or benefits provided under this
2-24     subchapter to a volunteer fire department or a firefighter who is a
2-25     member of a volunteer fire department may not be considered
2-26     compensation, and a firefighter receiving assistance under this
2-27     subchapter may not be considered to be in the paid service of any
 3-1     governing body.
 3-2           Sec. 614.073.  REQUESTS FOR ASSISTANCE.  (a)  A request for
 3-3     assistance from the fund shall be submitted to the director.
 3-4           (b)  On receiving a request for assistance, the director
 3-5     shall determine whether to provide assistance and the amount of the
 3-6     assistance to be provided, if any, based on the criteria developed
 3-7     under Section 614.072.  A written copy of the decision shall be
 3-8     sent to the requestor.
 3-9           Sec. 614.074.  FUND.  (a)  The volunteer fire department
3-10     assistance fund is an account in the general revenue fund and is
3-11     composed of money collected under Article 5.44, Insurance Code, and
3-12     contributions to the fund from any other source.
3-13           (b)  Money in the fund may be used only for a purpose under
3-14     this subchapter.
3-15           SECTION 2. Subchapter C, Chapter 5, Insurance Code, is
3-16     amended by adding Article 5.44 to read as follows:
3-17           Art. 5.44.  POLICY SURCHARGE FOR RURAL FIRE PROTECTION. (a)
3-18     In this article, "volunteer fire department" has the meaning
3-19     assigned by Section 614.071, Government Code.
3-20           (b)  This article applies only to a policy of homeowner's,
3-21     renter's, residential fire and allied lines, farm and ranch
3-22     owner's, or commercial property lines insurance that covers a
3-23     structure located within an area served by a volunteer fire
3-24     department.
3-25           (c)  In addition to premium taxes, a nonrefundable surcharge
3-26     is assessed on each insurance policy to which this article applies
3-27     in an amount equal to $1 for each month or part of a month of
 4-1     coverage provided under the policy.
 4-2           (d)  The surcharge is payable at the time the insurance
 4-3     policy is issued or renewed.  An insurer may not issue or renew a
 4-4     policy before the surcharge on the issued or renewed policy is paid
 4-5     in full.
 4-6           (e)  The surcharge does not apply to an insurance policy the
 4-7     premiums of which are not included in the tax imposed by Article
 4-8     4.10 of this code.
 4-9           (f)  The surcharge assessed under Subsection (c) of this
4-10     article shall be paid by the policyholder to the insurer.  The
4-11     insurer shall collect the surcharge and send it to the comptroller
4-12     in the manner provided by rules adopted under this article.
4-13           (g)  The comptroller shall credit the revenue from the
4-14     surcharge assessed under Subsection (c) of this article to the
4-15     volunteer fire department assistance fund established by Section
4-16     614.074, Government Code.
4-17           (h)  The commissioner shall adopt rules as necessary to
4-18     implement this article.
4-19           SECTION 3.  (a)  This Act takes effect July 1, 2001, if it
4-20     receives a vote of two-thirds of all the members elected to each
4-21     house, as provided by Section 39, Article III, Texas Constitution.
4-22           (b)  If this Act does not receive the vote necessary for
4-23     effect on July 1, 2001, this Act takes effect October 1, 2001.
4-24           (c)  The director of the Texas Forest Service may not grant a
4-25     request for assistance under Subchapter F, Chapter 614, Government
4-26     Code, as added by this Act, before September 1, 2002.
4-27           (d)  Article 5.44, Insurance Code, as added by this Act,
 5-1     applies only to an insurance policy that is delivered, issued for
 5-2     delivery, or renewed on or after January 1, 2002.  A policy that is
 5-3     delivered, issued for delivery, or renewed before January 1, 2002,
 5-4     is governed by the law as it existed immediately before the
 5-5     effective date of this Act, and that law is continued in effect for
 5-6     that purpose.