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


Office of House Bill AnalysisC.S.H.B. 3667
By: Cook
Agriculture & Livestock
4/24/2001
Committee Report (Substituted)



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.  C.S.H.B. 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

C.S.H.B. 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 payment of
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 the
director, in developing such criteria and qualifications, from prohibiting
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. 

C.S.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.  The bill sets forth exceptions to the applicability
of the fireworks tax. 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. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3667 modifies the original bill by adding exceptions to the
applicability of the fireworks tax.  The substitute modifies the definition
of "fireworks" as any composition or device that is designed to produce a
visible or audible effect by combustion, explosion, deflagration, or
detonation that classified by the United States Department of
Transportation in the Code of Federal Regulation as of September 1, 1999,
rather than September 1, 2001.  The substitute conforms the original bill
to Texas Legislative Council style and format.