1-1                                   AN ACT
 1-2     relating to insurance for, and a fireworks sales tax for the
 1-3     support of, certain volunteer fire departments.
 1-5           SECTION 1.  Chapter 614, Government Code, is amended by
 1-6     adding Subchapter F to read as follows:
 1-8           Sec. 614.071.  DEFINITIONS.  In this subchapter:
 1-9                 (1)  "Director" means the director of the Texas Forest
1-10     Service.
1-11                 (2)  "Fund" means the rural volunteer fire department
1-12     insurance fund.
1-13                 (3)  "Partially paid fire department" means a fire
1-14     department operated by its members that includes:
1-15                       (A)  some volunteer members; and
1-16                       (B)  not more than 20 paid members.
1-17                 (4)  "Program" means the rural volunteer fire
1-18     department insurance program.
1-19                 (5)  "Service" means the Texas Forest Service, an
1-20     agency of The Texas A&M University System.
1-21                 (6)  "Volunteer fire department" means a fire
1-22     department operated by its members, including a partially paid fire
1-23     department, that:
1-24                       (A)  is operated on a not-for-profit basis,
 2-1     including a department exempt from federal income tax under Section
 2-2     501(a), Internal Revenue Code of 1986, by being listed as an exempt
 2-3     organization in  Section 501(c)(3) of that code; and
 2-4                       (B)  participates in a firefighter certification
 2-5     program administered:
 2-6                             (i)  under Section 419.071; or
 2-7                             (ii)  by the State Firemen's and Fire
 2-8     Marshals' Association of Texas.
 2-9           Sec. 614.072.  ADMINISTRATION OF PROGRAM.  (a)  The Texas
2-10     Forest Service shall administer the rural volunteer fire department
2-11     insurance program established under this subchapter.
2-12           (b)  The director may adopt rules necessary to assist rural
2-13     volunteer fire departments in the payment of workers' compensation
2-14     insurance and accidental death and disability insurance.
2-15           (c)  The service may employ staff to administer the program. 
2-16           (d)  The director shall, in consultation with the advisory
2-17     committee appointed under Section 614.073:
2-18                 (1)  determine reasonable criteria and qualifications
2-19     for the distribution of money from the  fund; and
2-20                 (2)  establish a procedure for reporting and processing
2-21     requests for money from the fund.
2-22           (e)  In developing the criteria and qualifications for the
2-23     distribution of money from the fund under Subsection (d), the
2-24     director may not prohibit a volunteer fire department from
2-25     receiving funds from a political subdivision.
2-26           (f)  The director shall prepare an annual written report on
2-27     the activity, status, and effectiveness of the fund and shall
 3-1     submit the report to the lieutenant governor, the speaker of the
 3-2     house of representatives, and the comptroller before September 1 of
 3-3     each year.
 3-4           (g)  Any assistance provided under this subchapter to a
 3-5     volunteer fire department or a firefighter who is a member of a
 3-6     volunteer fire department may not be considered compensation, and a
 3-7     firefighter receiving assistance under this subchapter may not be
 3-8     considered to be in the paid service of any governing body.
 3-9           (h)  Administration costs associated with the program during
3-10     a state fiscal year may not exceed seven percent of the total
3-11     revenue collected from the tax imposed under Chapter 161, Tax Code,
3-12     during the previous fiscal year.
3-13           Sec. 614.073.  ADVISORY COMMITTEE.  (a)  The director shall
3-14     appoint an advisory committee to advise the director in regard to
3-15     the administration of the program.
3-16           (b)  The advisory committee consists of five members as
3-17     follows:
3-18                 (1)  two members of the Texas Rural Fire Advisory
3-19     Council;
3-20                 (2)  two elected county officials; and
3-21                 (3)  one elected representative of a municipality with
3-22     a population of 10,000 or less.
3-23           (c)  The director shall appoint one advisory committee member
3-24     from each of the following geographic regions of the state: north,
3-25     south, east, west, and central.
3-26           Sec. 614.074.  REQUESTS FOR ASSISTANCE.  (a)  A request for
3-27     assistance from the fund shall be submitted to the director.
 4-1           (b)  On receiving a request for assistance, the director
 4-2     shall determine whether to provide assistance and the amount of the
 4-3     assistance to be provided, if any, based on the criteria developed
 4-4     in consultation with the  advisory committee under Section 614.072.
 4-5     A written copy of the decision shall be sent to the requestor and
 4-6     each member of the advisory committee.
 4-7           Sec. 614.075.  FUND.  (a)  The rural volunteer fire
 4-8     department insurance fund is an account in the general revenue fund
 4-9     and is composed of money collected under Chapter 161, Tax Code, and
4-10     contributions to the fund from any other source.
4-11           (b)  Money in the fund may be used only for a purpose under
4-12     this subchapter.
4-13           SECTION 2.  Subtitle E, Title 2, Tax Code, is amended by
4-14     adding Chapter 161 to read as follows:
4-15                         CHAPTER 161. FIREWORKS TAX
4-16           Sec. 161.001.  DEFINITION.  In this chapter, "fireworks"
4-17     means any composition or device that is designed to produce a
4-18     visible or audible effect by combustion, explosion, deflagration,
4-19     or detonation that is classified as Division 1.4G explosives by the
4-20     United States Department of Transportation in 49 C.F.R. Part 173 as
4-21     of September 1, 1999.
4-22           Sec. 161.002.  FIREWORKS SALES TAX. (a)  A tax is imposed on
4-23     each sale at retail of fireworks.
4-24           (b)  The tax rate is two percent of the sale price of the
4-25     fireworks.
4-26           (c)  The tax imposed under this chapter is in addition to the
4-27     tax imposed under Chapter 151.  The tax imposed by this  chapter
 5-1     does not apply to a sale unless the tax imposed under Chapter 151
 5-2     applies to the sale.
 5-3           Sec. 161.003.  EXCEPTIONS TO APPLICABILITY OF CHAPTER. This
 5-4     chapter does not apply to:
 5-5                 (1)  a toy pistol, toy cane, toy gun, or other device
 5-6     that uses a paper or plastic cap;
 5-7                 (2)  a model rocket or model rocket motor designed,
 5-8     sold, and used for the purpose of propelling a recoverable aero
 5-9     model;
5-10                 (3)  a propelling or expelling charge consisting of a
5-11     mixture of sulfur, charcoal, and potassium nitrate;
5-12                 (4)  a novelty or trick noisemaker;
5-13                 (5)  a pyrotechnic signaling device or distress signal
5-14     for marine, aviation, or highway use in an emergency situation;
5-15                 (6)  a fusee or railway torpedo for use by a railroad;
5-16                 (7)  the sale of a blank cartridge for use in a radio,
5-17     television, film, or theater production, for signal or ceremonial
5-18     purposes in athletic events, or for industrial purposes; or
5-19                 (8)  a pyrotechnic device for use by a military
5-20     organization.
5-21           Sec. 161.004.  APPLICATION OF OTHER PROVISIONS OF CODE. (a)
5-22     Except as provided by this chapter:
5-23                 (1)  the tax imposed by this chapter is  administered,
5-24     imposed, collected, and enforced in the same manner as the tax
5-25     under Chapter 151 is administered, imposed, collected, and
5-26     enforced; and
5-27                 (2)  the provisions of Chapter 151 applicable to the
 6-1     sales tax imposed under Subchapter C, Chapter 151, apply to the tax
 6-2     imposed by this  chapter.
 6-3           (b)  A change in the law relating to the taxation of the sale
 6-4     of fireworks under Chapter 151 also applies to the tax imposed by
 6-5     this chapter.
 6-6           Sec. 161.005.  ALLOCATION OF TAX. The comptroller shall
 6-7     allocate the revenue from taxes imposed by this chapter, other than
 6-8     penalties and interest, to the rural volunteer fire department
 6-9     insurance fund established by Section 614.075, Government Code.
6-10           SECTION 3.  (a)  This Act takes effect July 1, 2001, if this
6-11     Act receives a vote of two-thirds of all the members elected to
6-12     each house, as provided by Section 39, Article III, Texas
6-13     Constitution, for an effective date before the 91st day after the
6-14     last day of the legislative session.
6-15           (b)  This Act takes effect October 1, 2001, if this Act does
6-16     not receive a vote of two-thirds of all the members elected to each
6-17     house, as provided by Section 39, Article III, Texas Constitution,
6-18     for an effective date before the 91st day after the last day of the
6-19     legislative session.
6-20           (c)  The director of the Texas Forest Service may not grant a
6-21     request for assistance under Subchapter F, Chapter 614, Government
6-22     Code, as added by this Act, before September 1, 2002.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 3667 was passed by the House on May
         11, 2001, by a non-record vote.
                                                 Chief Clerk of the House
               I certify that H.B. No. 3667 was passed by the Senate on May
         18, 2001, by the following vote:  Yeas 28, Nays 2, 1 present, not
                                                 Secretary of the Senate
         APPROVED:  __________________________