HBA-LCA C.S.H.B. 2481 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2481 By: Jones, Jesse Urban Affairs 5/7/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the state's larger municipalities place restrictions on which insurance companies a taxicab company within their jurisdictions may use. These restrictions may be unfair for small to mid-sized companies. C.S.H.B. 2481 regulates municipal requirements for taxicab insurance by requiring that taxicab companies purchase insurance from reliable insurers licensed to do business in Texas, and authorizes a municipality to adopt an ordinance regarding the rating and financial strength of an insurance company providing taxicab insurance, and provides that these provisions apply only to a municipality with a population of one million, located in a county with a population of more than 1.5 million. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 215.004, Local Government Code, by redesignating Subsection (c) as Subsection (f) and amending that subsection, and by adding new Subsections (c)-(e), as follows: (c) Provides that insurance required by an ordinance under Subsection (b) for a passenger taxicab transportation service must be obtained from a reliable insurance company authorized to do business in this state, unless an ordinance permits the service to be self-insured in accordance with applicable state statutes. (d) Authorizes a municipality to adopt an ordinance regarding the rating and financial strength, including capital and surplus, of an insurance company described under Subsection (c). Sets forth the requirements for an insurance company to meet in satisfying an ordinance under this subsection. (e) Provides that Subsections (c) and (d) apply only to a municipality with a population of more than one million, located in a county with a population of more than 1.5 million. (f) Makes conforming changes. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original in SECTION 1 (Section 215.004, Local Government Code), as follows: In the original, proposed Subsection (c) provided that unless a taxicab transportation service is self-insured, in compliance with state law, the insurance required under an ordinance adopted under Subsection (b) must be obtained from a reliable company licensed to do business in the state. The original proposed Subsection (c) set forth the conditions under which a municipality may find an insurer out of compliance. In the substitute Subsection (c) specifies that the exception regarding self insurance in compliance with state law is applicable if permitted by a municipal ordinance. Subsection (c) of the substitute also removes the provision regarding the municipality's authority to find an insurance company out of compliance with an ordinance adopted under Subsection (b). The original proposed Subsection (d) authorized a municipality to require written certification that for any portion of insurance required for an ordinance adopted under Subsection (b) in excess of 10 percent of the insurer's capital and surplus, the insurance has certain reinsurance for which credit may be taken. The substitute adds a new Subsection (d), authorizing a municipality to adopt an ordinance regarding the rating and financial strengths of an insurance company described by Subsection (c), and provides the requirements for the satisfaction of such an ordinance by an insurance company. The original proposed Subsection (e) prohibited a municipality, except as provides by Subsections (c) and (d), from regulating, under this section or a general law, passenger taxicab transportation services with regard to the insurer's insuring a taxicab in the municipality. In the substitute Subsection (e), provides that Subsections (c) and (d) apply only to a municipality with a population of more than one million, located in a county with a population of more than 1.5 million. The substitute modifies the original in Subsection (f) to make a conforming change.