LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 21, 2001
TO: Honorable David Swinford, Chair, House Committee on
Agriculture & Livestock
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2604 by McReynolds (Relating to assistance to certain
volunteer fire departments and to the imposition of an
insurance premium surcharge to finance that
assistance.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2604, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Revenue Savings/(Cost) Savings/(Cost) Number of State *
* Gain/(Loss) from New from New Employees from *
* from New General Revenue General Revenue FY 2001 *
* General Revenue Dedicated--- Dedicated--- *
* Dedicated-- Volunteer Fire Volunteer Fire *
* Volunteer Fire Department Department *
* Department Assistance Fund Assistance Fund *
* Assistance Fund for Grants for *
* Administration *
* 2002 $10,319,000 $0 $(1,032,000) 20.0 *
* 2003 10,319,000 (9,287,000) (1,032,000) 20.0 *
* 2004 10,319,000 (9,287,000) (1,032,000) 20.0 *
* 2005 10,319,000 (9,287,000) (1,032,000) 20.0 *
* 2006 10,319,000 (9,287,000) (1,032,000) 20.0 *
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Fiscal Analysis
The bill would amend state law to create a volunteer fire department
assistance program and insurance premium surcharge.
The bill would amend the Government Code to create the Rural Volunteer
Fire Department Program, to be administered by the Texas Forest Service
of the Texas A&M University System. The director of the Texas Forest
Service would be authorized to adopt the rules necessary to assist
volunteer fire departments in paying for equipment and training
personnel, to establish criteria and qualifications for the distribution
of program funds to volunteer fire departments, and to establish a
procedure for reporting and processing requests for assistance.
The bill would establish GR Account-Volunteer Fire Department Assistance
as a dedicated account that only could be used for the purposes of the
bill. The account would consist of contributions and revenues collected
under the provisions of the bill.
The bill would require the director to submit an activity, status, and
effectiveness report to the Lieutenant Governor, the Speaker of the House
of Representatives, and the Comptroller before November 1 of each year.
The bill would add a new article to the Insurance Code to establish an
insurance policy surcharge for rural fire protection. The nonrefundable
surcharge would apply to a policy of homeowner's, renter's, residential
fire and allied lines, farm and ranch owner's, or commercial property
lines insurance that covered a structure located within an area served by
a volunteer fire department. The surcharge would be equal to $1 for
each month or part of a month covered by the policy. It would be payable
by the policyholder to the insurer at the time of policy issuance or
renewal. The insurer would remit the surcharge to the Comptroller for
deposit to the credit of the newly-created account.
The bill would take effect July 1, 2001, assuming that it received the
requisite two-thirds majority votes in both houses of the Legislature.
Otherwise, it would take effect October 1, 2001. The provisions relating
to the imposition of a policy surcharge only would apply to a policy
delivered, issued for delivery, or renewed on or after January 1, 2002.
The director of the Texas Forest Service could not grant a request for
assistance under this bill before September 1, 2002.
Methodology
The bill authorizes the Texas Forest Service to employ an undetermined
number of staff to administer the program. The Forest Service estimates
it will need 20 FTEs to administer the program. The agency also
estimates 10% of the volunteer fire department assistance funds generated
will be used to pay the salaries, benefits and operating costs needed to
administer the program.
The above estimated fiscal impact is based on data provided by the Texas
Department of Insurance regarding the number of policies on properties
located within the jurisdictions of volunteer fire departments. The
policy count was multiplied by twelve to put it at a yearly level and
was adjusted to account for lapses in coverage. The amount was
multiplied by the proposed $1 surcharge.
Local Government Impact
Upon successful grant petition of the Texas Forest Service, local
volunteer fire departments will gain additional funding resources for
equipment costs and personnel training out of the volunteer fire
department assistance fund.
Source Agencies: 304 Comptroller of Public Accounts, 576 Texas
Forest Service
LBB Staff: JK, CL, DB, JW