1-1     By:  McReynolds, et al. (Senate Sponsor - Duncan)     H.B. No. 2604
 1-2           (In the Senate - Received from the House April 26, 2001;
 1-3     April 27, 2001, read first time and referred to Committee on
 1-4     Finance; May 9, 2001, reported favorably by the following vote:
 1-5     Yeas 11, Nays 0; May 9, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to assistance to certain volunteer fire departments and to
 1-9     the imposition of an assessment on certain insurers to finance that
1-10     assistance.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Chapter 614, Government Code, is amended by
1-13     adding Subchapter F to read as follows:
1-14      SUBCHAPTER F.  RURAL VOLUNTEER FIRE DEPARTMENT ASSISTANCE PROGRAM
1-15           Sec. 614.071.  DEFINITIONS.  In this subchapter:
1-16                 (1)  "Director" means the director of the Texas Forest
1-17     Service of The Texas A&M University System.
1-18                 (2)  "Fund" means the volunteer fire department
1-19     assistance fund.
1-20                 (3)  "Program" means the Rural Volunteer Fire
1-21     Department Assistance Program.
1-22                 (4)  "Service" means the Texas Forest Service of The
1-23     Texas A&M University System.
1-24                 (5)  "Part-paid fire department" means a fire
1-25     department operated by its members, some of whom are volunteers and
1-26     not more than 20 of whom are paid.
1-27                 (6)  "Volunteer fire department" means a fire
1-28     department operated by its members, including a part-paid fire
1-29     department, that is operated on a not-for-profit basis, including a
1-30     department that is exempt from federal income tax under Section
1-31     501(a), Internal Revenue Code of 1986, by being listed as an exempt
1-32     organization in  Section 501(c)(3) of that code.
1-33           Sec. 614.072.  ADMINISTRATION OF PROGRAM.  (a)  The Texas
1-34     Forest Service shall administer the program established under this
1-35     subchapter, and the director may adopt rules necessary to assist
1-36     volunteer fire departments in paying for equipment and training of
1-37     personnel.
1-38           (b)  The service may employ staff to administer the program. 
1-39           (c)  The director shall:
1-40                 (1)  determine reasonable criteria and qualifications
1-41     for the distribution of money from the volunteer fire department
1-42     assistance fund; and
1-43                 (2)  establish a procedure for reporting and processing
1-44     requests for money from the fund.
1-45           (d)  A volunteer fire department may not be denied assistance
1-46     from the fund solely because the department receives funds from a
1-47     political subdivision.
1-48           (e)  The director shall prepare an annual written report on
1-49     the activity, status, and effectiveness of the fund and shall
1-50     submit the report to the lieutenant governor, the speaker of the
1-51     house of representatives, and the comptroller before November 1 of
1-52     each year.
1-53           (f)  Any assistance or benefits provided under this
1-54     subchapter to a volunteer fire department or a firefighter who is a
1-55     member of a volunteer fire department may not be considered
1-56     compensation, and a firefighter receiving assistance under this
1-57     subchapter may not be considered to be in the paid service of any
1-58     governing body.
1-59           (g)  Administration costs associated with the program during
1-60     a state fiscal year may not exceed seven percent of the total
1-61     revenue collected from the assessment under Article 5.102,
1-62     Insurance Code, during the previous fiscal year.
1-63           Sec. 614.073.  REQUESTS FOR ASSISTANCE.  (a)  A request for
1-64     assistance from the fund shall be submitted to the director.
 2-1           (b)  On receiving a request for assistance, the director
 2-2     shall determine whether to provide assistance and the amount of the
 2-3     assistance to be provided, if any, based on the criteria developed
 2-4     under Section 614.072.  A written copy of the decision shall be
 2-5     sent to the requestor.
 2-6           Sec. 614.074.  FUND.  (a)  The volunteer fire department
 2-7     assistance fund is an account in the general revenue fund and is
 2-8     composed of money collected under Article 5.102, Insurance Code,
 2-9     and contributions to the fund from any other source.
2-10           (b)  Money in the fund may be used only for a purpose under
2-11     this subchapter.
2-12           SECTION 2. Subchapter M, Chapter 5, Insurance Code, is
2-13     amended by adding Article 5.102 to read as follows:
2-14           Art. 5.102.  ASSESSMENT FOR RURAL FIRE PROTECTION
2-15           Sec. 1.  DEFINITIONS. In this article:
2-16                 (1)  "Insurer" means an insurer authorized to engage in
2-17     business in this state, including a stock company, mutual, farm
2-18     mutual, county mutual, Lloyd's plan, or reciprocal or
2-19     interinsurance exchange.
2-20                 (2)  "Net direct premium" means the gross direct
2-21     premium written and reported by an insurer on annual financial
2-22     statements on:
2-23                       (A)  policies of:
2-24                             (i)  homeowner's insurance;
2-25                             (ii)  fire insurance;
2-26                             (iii)  farm and ranch owner's insurance;
2-27                             (iv)  private passenger automobile physical
2-28     damage insurance; and
2-29                             (v)  commercial automobile physical damage
2-30     insurance; and
2-31                       (B)  the nonliability portion of a commercial
2-32     multiple peril policy.
2-33           Sec. 2.  APPLICABILITY. This article applies only to an
2-34     insurer that writes an insurance policy described by Section 1(2)
2-35     of this article.
2-36           Sec. 3.  ASSESSMENT. (a)  The comptroller shall assess all
2-37     insurers in an amount that totals $15 million for each 12-month
2-38     period.  Each insurer shall pay a portion of the assessment in the
2-39     proportion that the insurer's net direct premiums for the period
2-40     for which the assessment is made bear to the aggregate net direct
2-41     premiums written in this state for that period.
2-42           (b)  The comptroller shall assess the insurers on or before
2-43     September 1 of each year.
2-44           (c)  An insurer shall pay the amount assessed under this
2-45     section on or after the 60th day after the date the comptroller
2-46     assesses the insurer.
2-47           (d)  An insurer may recover an assessment under this section
2-48     by:
2-49                 (1)  reflecting the assessment as an expense in a rate
2-50     filing required under this code; or
2-51                 (2)  charging the insurer's policyholders.
2-52           (e)  An insurer that recovers an assessment under this
2-53     section from the insurer's policyholders shall provide a notice to
2-54     each policyholder of the amount of the assessment being recovered.
2-55     The notice required by this subsection may be included on a
2-56     declarations page, renewal certificate, or billing statement.  The
2-57     commissioner by rule may adopt a form for providing notice under
2-58     this subsection.
2-59           (f)  The comptroller shall credit assessments collected under
2-60     this article to the volunteer fire department assistance fund
2-61     created under Section 614.074, Government Code.
2-62           Sec. 4.  RULES; COOPERATION. (a)  The comptroller and the
2-63     commissioner shall adopt rules as necessary to implement this
2-64     article.
2-65           (b)  The comptroller and the department shall cooperate as
2-66     necessary to implement this article.
2-67           Sec. 5.  EXPIRATION. This article expires September 1, 2011.
2-68           SECTION 3.  (a)  This Act takes effect July 1, 2001, if it
2-69     receives a vote of two-thirds of all the members elected to each
 3-1     house, as provided by Section 39, Article III, Texas Constitution.
 3-2           (b)  If this Act does not receive the vote necessary for
 3-3     effect on July 1, 2001, this Act takes effect September 1, 2001.
 3-4           (c)  The director of the Texas Forest Service may not grant a
 3-5     request for assistance under Subchapter F, Chapter 614, Government
 3-6     Code, as added by this Act, before September 1, 2002.
 3-7           (d)  The comptroller of public accounts shall make the first
 3-8     assessment under Article 5.102, Insurance Code, as added by this
 3-9     Act, in 2002.
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