1-1                                   AN ACT
 1-2     relating to assistance to certain volunteer fire departments and to
 1-3     the imposition of an assessment on certain insurers to finance that
 1-4     assistance.
 1-6           SECTION 1.  Chapter 614, Government Code, is amended by
 1-7     adding Subchapter F to read as follows:
 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 volunteers and
1-20     not more than 20 of whom are paid.
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           (g)  Administration costs associated with the program during
 3-3     a state fiscal year may not exceed seven percent of the total
 3-4     revenue collected from the assessment under Article 5.102,
 3-5     Insurance Code, during the previous fiscal year.
 3-6           Sec. 614.073.  REQUESTS FOR ASSISTANCE.  (a)  A request for
 3-7     assistance from the fund shall be submitted to the director.
 3-8           (b)  On receiving a request for assistance, the director
 3-9     shall determine whether to provide assistance and the amount of the
3-10     assistance to be provided, if any, based on the criteria developed
3-11     under Section 614.072.  A written copy of the decision shall be
3-12     sent to the requestor.
3-13           Sec. 614.074.  FUND.  (a)  The volunteer fire department
3-14     assistance fund is an account in the general revenue fund and is
3-15     composed of money collected under Article 5.102, Insurance Code,
3-16     and contributions to the fund from any other source.
3-17           (b)  Money in the fund may be used only for a purpose under
3-18     this subchapter.
3-19           SECTION 2. Subchapter M, Chapter 5, Insurance Code, is
3-20     amended by adding Article 5.102 to read as follows:
3-22           Sec. 1.  DEFINITIONS. In this article:
3-23                 (1)  "Insurer" means an insurer authorized to engage in
3-24     business in this state, including a stock company, mutual, farm
3-25     mutual, county mutual, Lloyd's plan, or reciprocal or
3-26     interinsurance exchange.
3-27                 (2)  "Net direct premium" means the gross direct
 4-1     premium written and reported by an insurer on annual financial
 4-2     statements on:
 4-3                       (A)  policies of:
 4-4                             (i)  homeowner's insurance;
 4-5                             (ii)  fire insurance;
 4-6                             (iii)  farm and ranch owner's insurance;
 4-7                             (iv)  private passenger automobile physical
 4-8     damage insurance; and
 4-9                             (v)  commercial automobile physical damage
4-10     insurance; and
4-11                       (B)  the nonliability portion of a commercial
4-12     multiple peril policy.
4-13           Sec. 2.  APPLICABILITY. This article applies only to an
4-14     insurer that writes an insurance policy described by Section 1(2)
4-15     of this article.
4-16           Sec. 3.  ASSESSMENT. (a)  The comptroller shall assess all
4-17     insurers in an amount that totals $15 million for each 12-month
4-18     period.  Each insurer shall pay a portion of the assessment in the
4-19     proportion that the insurer's net direct premiums for the period
4-20     for which the assessment is made bear to the aggregate net direct
4-21     premiums written in this state for that period.
4-22           (b)  The comptroller shall assess the insurers on or before
4-23     September 1 of each year.
4-24           (c)  An insurer shall pay the amount assessed under this
4-25     section on or after the 60th day after the date the comptroller
4-26     assesses the insurer.
4-27           (d)  An insurer may recover an assessment under this section
 5-1     by:
 5-2                 (1)  reflecting the assessment as an expense in a rate
 5-3     filing required under this code; or
 5-4                 (2)  charging the insurer's policyholders.
 5-5           (e)  An insurer that recovers an assessment under this
 5-6     section from the insurer's policyholders shall provide a notice to
 5-7     each policyholder of the amount of the assessment being recovered.
 5-8     The notice required by this subsection may be included on a
 5-9     declarations page, renewal certificate, or billing statement.  The
5-10     commissioner by rule may adopt a form for providing notice under
5-11     this subsection.
5-12           (f)  The comptroller shall credit assessments collected under
5-13     this article to the volunteer fire department assistance fund
5-14     created under Section 614.074, Government Code.
5-15           Sec. 4.  RULES; COOPERATION. (a)  The comptroller and the
5-16     commissioner shall adopt rules as necessary to implement this
5-17     article.
5-18           (b)  The comptroller and the department shall cooperate as
5-19     necessary to implement this article.
5-20           Sec. 5.  EXPIRATION. This article expires September 1, 2011.
5-21           SECTION 3.  (a)  This Act takes effect July 1, 2001, if it
5-22     receives a vote of two-thirds of all the members elected to each
5-23     house, as provided by Section 39, Article III, Texas Constitution.
5-24           (b)  If this Act does not receive the vote necessary for
5-25     effect on July 1, 2001, this Act takes effect September 1, 2001.
5-26           (c)  The director of the Texas Forest Service may not grant a
5-27     request for assistance under Subchapter F, Chapter 614, Government
 6-1     Code, as added by this Act, before September 1, 2002.
 6-2           (d)  The comptroller of public accounts shall make the first
 6-3     assessment under Article 5.102, Insurance Code, as added by this
 6-4     Act, in 2002.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 2604 was passed by the House on April
         25, 2001, by a non-record vote.
                                                 Chief Clerk of the House
               I certify that H.B. No. 2604 was passed by the Senate on May
         17, 2001, by the following vote:  Yeas 30, Nays 0, 1 present, not
                                                 Secretary of the Senate
         APPROVED:  __________________________