1-1     By:  Cook (Senate Sponsor - Armbrister)               H.B. No. 3667
 1-2           (In the Senate - Received from the House May 11, 2001;
 1-3     May 11, 2001, read first time and referred to Committee on Finance;
 1-4     May 11, 2001, reported favorably by the following vote:  Yeas 9,
 1-5     Nays 0; May 11, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to insurance for, and a fireworks sales tax for the
 1-9     support of, certain volunteer fire departments.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Chapter 614, Government Code, is amended by
1-12     adding Subchapter F to read as follows:
1-13      SUBCHAPTER F.  RURAL VOLUNTEER FIRE DEPARTMENT INSURANCE PROGRAM
1-14           Sec. 614.071.  DEFINITIONS.  In this subchapter:
1-15                 (1)  "Director" means the director of the Texas Forest
1-16     Service.
1-17                 (2)  "Fund" means the rural volunteer fire department
1-18     insurance fund.
1-19                 (3)  "Partially paid fire department" means a fire
1-20     department operated by its members that includes:
1-21                       (A)  some volunteer members; and
1-22                       (B)  not more than 20 paid members.
1-23                 (4)  "Program" means the rural volunteer fire
1-24     department insurance program.
1-25                 (5)  "Service" means the Texas Forest Service, an
1-26     agency of The Texas A&M University System.
1-27                 (6)  "Volunteer fire department" means a fire
1-28     department operated by its members, including a partially paid fire
1-29     department, that:
1-30                       (A)  is operated on a not-for-profit basis,
1-31     including a department exempt from federal income tax under Section
1-32     501(a), Internal Revenue Code of 1986, by being listed as an exempt
1-33     organization in  Section 501(c)(3) of that code; and
1-34                       (B)  participates in a firefighter certification
1-35     program administered:
1-36                             (i)  under Section 419.071; or
1-37                             (ii)  by the State Firemen's and Fire
1-38     Marshals' Association of Texas.
1-39           Sec. 614.072.  ADMINISTRATION OF PROGRAM.  (a)  The Texas
1-40     Forest Service shall administer the rural volunteer fire department
1-41     insurance program established under this subchapter.
1-42           (b)  The director may adopt rules necessary to assist rural
1-43     volunteer fire departments in the payment of workers' compensation
1-44     insurance and accidental death and disability insurance.
1-45           (c)  The service may employ staff to administer the program. 
1-46           (d)  The director shall, in consultation with the advisory
1-47     committee appointed under Section 614.073:
1-48                 (1)  determine reasonable criteria and qualifications
1-49     for the distribution of money from the  fund; and
1-50                 (2)  establish a procedure for reporting and processing
1-51     requests for money from the fund.
1-52           (e)  In developing the criteria and qualifications for the
1-53     distribution of money from the fund under Subsection (d), the
1-54     director may not prohibit a volunteer fire department from
1-55     receiving funds from a political subdivision.
1-56           (f)  The director shall prepare an annual written report on
1-57     the activity, status, and effectiveness of the fund and shall
1-58     submit the report to the lieutenant governor, the speaker of the
1-59     house of representatives, and the comptroller before September 1 of
1-60     each year.
1-61           (g)  Any assistance provided under this subchapter to a
1-62     volunteer fire department or a firefighter who is a member of a
1-63     volunteer fire department may not be considered compensation, and a
1-64     firefighter receiving assistance under this subchapter may not be
 2-1     considered to be in the paid service of any governing body.
 2-2           (h)  Administration costs associated with the program during
 2-3     a state fiscal year may not exceed seven percent of the total
 2-4     revenue collected from the tax imposed under Chapter 161, Tax Code,
 2-5     during the previous fiscal year.
 2-6           Sec. 614.073.  ADVISORY COMMITTEE.  (a)  The director shall
 2-7     appoint an advisory committee to advise the director in regard to
 2-8     the administration of the program.
 2-9           (b)  The advisory committee consists of five members as
2-10     follows:
2-11                 (1)  two members of the Texas Rural Fire Advisory
2-12     Council;
2-13                 (2)  two elected county officials; and
2-14                 (3)  one elected representative of a municipality with
2-15     a population of 10,000 or less.
2-16           (c)  The director shall appoint one advisory committee member
2-17     from each of the following geographic regions of the state: north,
2-18     south, east, west, and central.
2-19           Sec. 614.074.  REQUESTS FOR ASSISTANCE.  (a)  A request for
2-20     assistance from the fund shall be submitted to the director.
2-21           (b)  On receiving a request for assistance, the director
2-22     shall determine whether to provide assistance and the amount of the
2-23     assistance to be provided, if any, based on the criteria developed
2-24     in consultation with the  advisory committee under Section 614.072.
2-25     A written copy of the decision shall be sent to the requestor and
2-26     each member of the advisory committee.
2-27           Sec. 614.075.  FUND.  (a)  The rural volunteer fire
2-28     department insurance fund is an account in the general revenue fund
2-29     and is composed of money collected under Chapter 161, Tax Code, and
2-30     contributions to the fund from any other source.
2-31           (b)  Money in the fund may be used only for a purpose under
2-32     this subchapter.
2-33           SECTION 2.  Subtitle E, Title 2, Tax Code, is amended by
2-34     adding Chapter 161 to read as follows:
2-35                         CHAPTER 161. FIREWORKS TAX
2-36           Sec. 161.001.  DEFINITION.  In this chapter, "fireworks"
2-37     means any composition or device that is designed to produce a
2-38     visible or audible effect by combustion, explosion, deflagration,
2-39     or detonation that is classified as Division 1.4G explosives by the
2-40     United States Department of Transportation in 49 C.F.R. Part 173 as
2-41     of September 1, 1999.
2-42           Sec. 161.002.  FIREWORKS SALES TAX. (a)  A tax is imposed on
2-43     each sale at retail of fireworks.
2-44           (b)  The tax rate is two percent of the sale price of the
2-45     fireworks.
2-46           (c)  The tax imposed under this chapter is in addition to the
2-47     tax imposed under Chapter 151.  The tax imposed by this  chapter
2-48     does not apply to a sale unless the tax imposed under Chapter 151
2-49     applies to the sale.
2-50           Sec. 161.003.  EXCEPTIONS TO APPLICABILITY OF CHAPTER. This
2-51     chapter does not apply to:
2-52                 (1)  a toy pistol, toy cane, toy gun, or other device
2-53     that uses a paper or plastic cap;
2-54                 (2)  a model rocket or model rocket motor designed,
2-55     sold, and used for the purpose of propelling a recoverable aero
2-56     model;
2-57                 (3)  a propelling or expelling charge consisting of a
2-58     mixture of sulfur, charcoal, and potassium nitrate;
2-59                 (4)  a novelty or trick noisemaker;
2-60                 (5)  a pyrotechnic signaling device or distress signal
2-61     for marine, aviation, or highway use in an emergency situation;
2-62                 (6)  a fusee or railway torpedo for use by a railroad;
2-63                 (7)  the sale of a blank cartridge for use in a radio,
2-64     television, film, or theater production, for signal or ceremonial
2-65     purposes in athletic events, or for industrial purposes; or
2-66                 (8)  a pyrotechnic device for use by a military
2-67     organization.
2-68           Sec. 161.004.  APPLICATION OF OTHER PROVISIONS OF CODE. (a)
2-69     Except as provided by this chapter:
 3-1                 (1)  the tax imposed by this chapter is  administered,
 3-2     imposed, collected, and enforced in the same manner as the tax
 3-3     under Chapter 151 is administered, imposed, collected, and
 3-4     enforced; and
 3-5                 (2)  the provisions of Chapter 151 applicable to the
 3-6     sales tax imposed under Subchapter C, Chapter 151, apply to the tax
 3-7     imposed by this  chapter.
 3-8           (b)  A change in the law relating to the taxation of the sale
 3-9     of fireworks under Chapter 151 also applies to the tax imposed by
3-10     this chapter.
3-11           Sec. 161.005.  ALLOCATION OF TAX. The comptroller shall
3-12     allocate the revenue from taxes imposed by this chapter, other than
3-13     penalties and interest, to the rural volunteer fire department
3-14     insurance fund established by Section 614.075, Government Code.
3-15           SECTION 3.  (a)  This Act takes effect July 1, 2001, if this
3-16     Act receives a vote of two-thirds of all the members elected to
3-17     each house, as provided by Section 39, Article III, Texas
3-18     Constitution, for an effective date before the 91st day after the
3-19     last day of the legislative session.
3-20           (b)  This Act takes effect October 1, 2001, if this Act does
3-21     not receive a vote of two-thirds of all the members elected to each
3-22     house, as provided by Section 39, Article III, Texas Constitution,
3-23     for an effective date before the 91st day after the last day of the
3-24     legislative session.
3-25           (c)  The director of the Texas Forest Service may not grant a
3-26     request for assistance under Subchapter F, Chapter 614, Government
3-27     Code, as added by this Act, before September 1, 2002.
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