HBA-KDB H.B. 3667 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3667
By: Cook
Agriculture & Livestock
4/17/2001
Introduced



BACKGROUND AND PURPOSE 

Fundraisers and donations are the primary source of revenue for rural
volunteer fire departments in this state.  Even though such fire
departments operate with little or no reserve personnel funds, they respond
to most of the wildland fires around the state.  If there was a tax placed
on fireworks, then there might be adequate funds to compensate such fire
departments.  House Bill 3667 establishes the rural volunteer fire
department insurance program and imposes a two percent sales tax on
fireworks. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill
expressly delegates rulemaking authority to the director of the Texas
Forest Service in SECTION 1 (Section 614.072, Government Code) of this
bill. 

ANALYSIS

House Bill 3667 amends the Government Code to establish the rural volunteer
fire department insurance program (program).  The bill requires the Texas
Forest Service of The Texas A&M University System (service) to administer
the program and authorizes the director of the service (director) to adopt
rules necessary to assist rural volunteer fire departments in paying for
worker's compensation and accidental death and disability insurance.  The
bill authorizes the service to employ staff to administer the program. The
bill requires the director to determine reasonable criteria and
qualifications for the distribution of money from the rural volunteer fire
department insurance fund (fund) and to establish a procedure for reporting
and processing requests for money from the fund.    The bill prohibits such
criteria and qualifications from including a prohibition on a volunteer
fire department receiving funds from a political subdivision.  The bill
requires the director to prepare an annual written report on the activity,
status, and effectiveness of the fund and to submit the report to the
lieutenant governor, the speaker of the house of representatives, and the
comptroller of public accounts (comptroller) before September 1 of each
year.  The bill prohibits any assistance or benefits provided to a
volunteer fire department or firefighter who is a member of a volunteer
fire department from being considered compensation and prohibits a
firefighter receiving such assistance from being considered to be in the
paid  service of any governing body.  The bill prohibits administration
costs associated with the program during a state fiscal year from exceeding
seven percent of the total revenue collected from the fireworks tax.  The
bill establishes and sets forth membership requirements of an advisory
committee to help the director in regard to the administration of the
program.  The bill provides that the fund is an account in the general
revenue fund and is composed of money collected from fireworks taxes and
contributions to the fund from any other source. 

H.B. 3667 amends the Tax Code to provide that a tax is imposed on each sale
at retail of fireworks, the tax rate is two percent of the sale price of
the fireworks, and the fireworks tax is in addition to  limited sales,
excise, and use taxes.  Provisions relating to limited sales, excise, and
use taxes apply to the fireworks tax. The bill requires the comptroller to
allocate the revenue from fireworks taxes, other than penalties and
interest, to the fund.  The bill prohibits the director from granting a
request for assistance under the program before September 1, 2002. 

 EFFECTIVE DATE

July 1, 2001, or if the Act does not receive the necessary vote, the Act
takes effect October 1, 2001.