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. 3-10 * * * * *