Texas 2009 - 81st Regular

Texas House Bill HB4409 Compare Versions

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1	1	H.B. No. 4409
2	2
3	3
4	4	AN ACT
5	5	relating to emergency preparation and management.
6	6	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
7	7	SECTION 1. Subchapter A, Chapter 418, Government Code, is
8	8	amended by adding Section 418.006 to read as follows:
9	9	Sec. 418.006. CIVIL LIABILITY. An officer or employee of a
10	10	state or local agency, or a volunteer acting at the direction of an
11	11	officer or employee of a state or local agency, is considered for
12	12	purposes of Section 431.085 to be a member of the state military
13	13	forces ordered into active service of the state by proper authority
14	14	and is considered to be discharging a duty in that capacity if the
15	15	person is performing an activity related to sheltering or housing
16	16	individuals in connection with the evacuation of an area stricken
17	17	or threatened by disaster.
18	18	SECTION 2. Section 418.043, Government Code, is amended to
19	19	read as follows:
20	20	Sec. 418.043. OTHER POWERS AND DUTIES. The division shall:
21	21	(1) determine requirements of the state and its
22	22	political subdivisions for food, clothing, and other necessities in
23	23	event of a disaster;
24	24	(2) procure and position supplies, medicines,
25	25	materials, and equipment;
26	26	(3) adopt standards and requirements for local and
27	27	interjurisdictional emergency management plans;
28	28	(4) periodically review local and interjurisdictional
29	29	emergency management plans;
30	30	(5) coordinate deployment of mobile support units;
31	31	(6) establish and operate training programs and
32	32	programs of public information or assist political subdivisions and
33	33	emergency management agencies to establish and operate the
34	34	programs;
35	35	(7) make surveys of public and private industries,
36	36	resources, and facilities in the state that are necessary to carry
37	37	out the purposes of this chapter;
38	38	(8) plan and make arrangements for the availability
39	39	and use of any private facilities, services, and property and
40	40	provide for payment for use under terms and conditions agreed on if
41	41	the facilities are used and payment is necessary;
42	42	(9) establish a register of persons with types of
43	43	training and skills important in disaster mitigation,
44	44	preparedness, response, and recovery;
45	45	(10) establish a register of mobile and construction
46	46	equipment and temporary housing available for use in a disaster;
47	47	(11) assist political subdivisions in developing
48	48	plans for the humane evacuation, transport, and temporary
49	49	sheltering of service animals and household pets in a disaster;
50	50	(12) prepare, for issuance by the governor, executive
51	51	orders and regulations necessary or appropriate in coping with
52	52	disasters;
53	53	(13) cooperate with the federal government and any
54	54	public or private agency or entity in achieving any purpose of this
55	55	chapter and in implementing programs for disaster mitigation,
56	56	preparation, response, and recovery; [and]
57	57	(14) define "individuals with special needs" in the
58	58	context of a disaster; and
59	59	(15) do other things necessary, incidental, or
60	60	appropriate for the implementation of this chapter.
61	61	SECTION 3. Subchapter F, Chapter 418, Government Code, is
62	62	amended by adding Section 418.126 to read as follows:
63	63	Sec. 418.126. PRE-EVENT DISASTER RESPONSE CONTRACTS. (a)
64	64	The General Land Office shall solicit proposals for and enter into
65	65	one or more pre-event contracts that may be activated by the office
66	66	in the event of a weather-related disaster declaration to obtain
67	67	services for debris removal from beaches as needed following the
68	68	disaster.
69	69	(b) The Texas Department of Transportation shall solicit
70	70	proposals for and enter into one or more pre-event contracts that
71	71	may be activated by the department in the event of a weather-related
72	72	disaster declaration to obtain services for debris removal from the
73	73	state highway system as needed following the disaster.
74	74	(c) The Texas Department of Housing and Community Affairs
75	75	shall solicit proposals for and enter into one or more pre-event
76	76	contracts that may be activated by the department in the event of a
77	77	weather-related disaster declaration to obtain temporary or
78	78	emergency housing as needed following the disaster.
79	79	(d) Services obtained under a pre-event contract under this
80	80	section may be paid for with money from the disaster contingency
81	81	fund under Section 418.073.
82	82	SECTION 4. Subtitle G, Title 10, Government Code, is
83	83	amended by adding Chapter 2311 to read as follows:
84	84	CHAPTER 2311. ENERGY SECURITY TECHNOLOGIES FOR CRITICAL
85	85	GOVERNMENTAL FACILITIES
86	86	Sec. 2311.001. DEFINITIONS. In this chapter:
87	87	(1) "Combined heating and power system" means a system
88	88	that:
89	89	(A) is located on the site of a facility;
90	90	(B) is the primary source of both electricity and
91	91	thermal energy for the facility;
92	92	(C) can provide all of the electricity needed to
93	93	power the facility's critical emergency operations for at least 14
94	94	days; and
95	95	(D) has an overall efficiency of energy use that
96	96	exceeds 60 percent.
97	97	(2) "Critical governmental facility" means a building
98	98	owned by the state or a political subdivision of the state that is
99	99	expected to:
100	100	(A) be continuously occupied;
101	101	(B) maintain operations for at least 6,000 hours
102	102	each year;
103	103	(C) have a peak electricity demand exceeding 500
104	104	kilowatts; and
105	105	(D) serve a critical public health or public
106	106	safety function during a natural disaster or other emergency
107	107	situation that may result in a widespread power outage, including
108	108	a:
109	109	(i) command and control center;
110	110	(ii) shelter;
111	111	(iii) prison or jail;
112	112	(iv) police or fire station;
113	113	(v) communications or data center;
114	114	(vi) water or wastewater facility;
115	115	(vii) hazardous waste storage facility;
116	116	(viii) biological research facility;
117	117	(ix) hospital; or
118	118	(x) food preparation or food storage
119	119	facility.
120	120	Sec. 2311.002. COMBINED HEATING AND POWER SYSTEMS. When
121	121	constructing or extensively renovating a critical governmental
122	122	facility or replacing major heating, ventilation, and
123	123	air-conditioning equipment for a critical governmental facility,
124	124	the entity with charge and control of the facility shall evaluate
125	125	whether equipping the facility with a combined heating and power
126	126	system would result in expected energy savings that would exceed
127	127	the expected costs of purchasing, operating, and maintaining the
128	128	system over a 20-year period. The entity may equip the facility
129	129	with a combined heating and power system if the expected energy
130	130	savings exceed the expected costs.
131	131	SECTION 5. Section 2210.001, Insurance Code, is amended to
132	132	read as follows:
133	133	Sec. 2210.001. PURPOSE. The primary purpose of the Texas
134	134	Windstorm Insurance Association is the provision of an [An]
135	135	adequate market for windstorm and[,] hail[, and fire] insurance in
136	136	the seacoast territory of this state. The legislature finds that
137	137	the provision of adequate windstorm and hail insurance is necessary
138	138	to the economic welfare of this state, and without that insurance,
139	139	the orderly growth and development of this state would be severely
140	140	impeded. This chapter provides a method by which adequate
141	141	windstorm and[,] hail[, and fire] insurance may be obtained in
142	142	certain designated portions of the seacoast territory of this
143	143	state. The association is intended to serve as a residual insurer
144	144	of last resort for windstorm and hail insurance in the seacoast
145	145	territory. The association shall:
146	146	(1) function in such a manner as to not be a direct
147	147	competitor in the private market; and
148	148	(2) provide windstorm and hail insurance coverage to
149	149	those who are unable to obtain that coverage in the private market.
150	150	SECTION 6. Section 2210.002, Insurance Code, is amended to
151	151	read as follows:
152	152	Sec. 2210.002. SHORT TITLE; SUNSET PROVISION. (a) This
153	153	chapter may be cited as the Texas Windstorm Insurance Association
154	154	Act.
155	155	(b) The association is subject to review under Chapter 325,
156	156	Government Code (Texas Sunset Act), but is not abolished under that
157	157	chapter. The association shall be reviewed during the period in
158	158	which state agencies abolished in 2015 are reviewed. The
159	159	association shall pay the costs incurred by the Sunset Advisory
160	160	Commission in performing the review of the association under this
161	161	subsection. The Sunset Advisory Commission shall determine the
162	162	costs of the review performed under this subsection, and the
163	163	association shall pay the amount of those costs promptly on receipt
164	164	of a statement from the Sunset Advisory Commission regarding those
165	165	costs. This subsection expires September 1, 2015.
166	166	SECTION 7. Subchapter A, Chapter 2210, Insurance Code, is
167	167	amended by adding Section 2210.0025 to read as follows:
168	168	Sec. 2210.0025. BIENNIAL REPORT TO LEGISLATURE. On or
169	169	before December 31 of each even-numbered year, the board of
170	170	directors shall submit to the commissioner, the appropriate
171	171	committees of each house of the legislature, and the Sunset
172	172	Advisory Commission a written report relating to the operations of
173	173	the association during the preceding biennium. The report must
174	174	include:
175	175	(1) any proposed changes in the laws relating to
176	176	regulation of the association and a statement of the reasons for the
177	177	changes; and
178	178	(2) any information regarding association operations
179	179	or procedures that is requested by the department to be addressed in
180	180	the report.
181	181	SECTION 8. Section 2210.003, Insurance Code, is amended by
182	182	adding Subdivision (3-a) and amending Subdivision (6) to read as
183	183	follows:
184	184	(3-a) "Catastrophe reserve trust fund" means the trust
185	185	fund established under Subchapter J.
186	186	(6) "Insurance" means Texas [fire and explosion
187	187	insurance and Texas] windstorm and hail insurance.
188	188	SECTION 9. Subsection (a), Section 2210.004, Insurance
189	189	Code, is amended to read as follows:
190	190	(a) Except as provided by Subsection (h), for purposes of
191	191	this chapter and subject to this section, "insurable property"
192	192	means immovable property at a fixed location in a catastrophe area
193	193	or corporeal movable property located in that immovable property,
194	194	as designated in the plan of operation, that is determined by the
195	195	association according to the criteria specified in the plan of
196	196	operation to be in an insurable condition against windstorm and
197	197	hail [or fire and explosion, as appropriate], as determined by
198	198	normal underwriting standards. The term includes property
199	199	described by Section 2210.209.
200	200	SECTION 10. Section 2210.005, Insurance Code, is amended to
201	201	read as follows:
202	202	Sec. 2210.005. DESIGNATION AS CATASTROPHE AREA [OR
203	203	INADEQUATE FIRE INSURANCE AREA]; REVOCATION OF DESIGNATION.
204	204	(a) After at least 10 days' notice and a hearing, the commissioner
205	205	may designate an area of the seacoast territory of this state as a
206	206	catastrophe area if the commissioner determines, unless such a
207	207	determination results in an adverse impact to the exposure of the
208	208	association, that windstorm and hail insurance is not reasonably
209	209	available to a substantial number of the owners of insurable
210	210	property located in that territory because the territory is subject
211	211	to unusually frequent and severe damage resulting from windstorms
212	212	or hailstorms.
213	213	(b) [After at least 10 days' notice and a hearing, the
214	214	commissioner may designate an area of this state as an inadequate
215	215	fire insurance area if the commissioner determines that fire and
216	216	explosion insurance is not reasonably available to a substantial
217	217	number of owners of insurable property located in that area.
218	218	[(c)] The commissioner shall revoke a designation made
219	219	under Subsection (a) [or (b)] if the commissioner determines, after
220	220	at least 10 days' notice and a hearing, that the applicable
221	221	insurance coverage is no longer reasonably unavailable to a
222	222	substantial number of owners of insurable property within the
223	223	designated territory.
224	224	(c) [(d)] If the association determines that windstorm and
225	225	hail insurance [or fire and explosion insurance] is no longer
226	226	reasonably unavailable to a substantial number of owners of
227	227	insurable property in a territory designated as a catastrophe area
228	228	[or inadequate fire insurance area, as applicable], the association
229	229	may request in writing that the commissioner revoke the
230	230	designation. After at least 10 days' notice and a hearing, but not
231	231	later than the 30th day after the date of the hearing, the
232	232	commissioner shall:
233	233	(1) approve the request and revoke the designation; or
234	234	(2) reject the request.
235	235	SECTION 11. Section 2210.008, Insurance Code, is amended to
236	236	read as follows:
237	237	Sec. 2210.008. DEPARTMENT ORDERS; GENERAL RULEMAKING
238	238	AUTHORITY. (a) The [After notice and hearing as provided by
239	239	Subsection (b), the] commissioner may issue any orders that the
240	240	commissioner considers necessary to implement this chapter[,
241	241	including orders regarding maximum rates, competitive rates, and
242	242	policy forms].
243	243	(b) The commissioner may adopt rules in the manner
244	244	prescribed by Subchapter A, Chapter 36, as reasonable and necessary
245	245	to implement this chapter [Before the commissioner adopts an order,
246	246	the department shall post notice of the hearing on the order at the
247	247	secretary of state's office in Austin and shall hold a hearing to
248	248	consider the proposed order. Any person may appear at the hearing
249	249	and testify for or against the adoption of the order].
250	250	(c) In rules adopted under this chapter, the commissioner
251	251	shall define the meaning of "alter" and "alteration" for purposes
252	252	of this chapter, specifically as used in Subchapters E and F.
253	253	SECTION 12. Subchapter A, Chapter 2210, Insurance Code, is
254	254	amended by adding Section 2210.009 to read as follows:
255	255	Sec. 2210.009. LIST OF PRIVATE INSURERS; INCENTIVE PLAN.
256	256	(a) The department shall maintain a list of all insurers that
257	257	engage in the business of property and casualty insurance in the
258	258	voluntary market in the seacoast territory.
259	259	(b) The department shall develop incentive programs in the
260	260	manner described by Section 2210.053(b) to encourage authorized
261	261	insurers to write insurance on a voluntary basis and to minimize the
262	262	use of the association as a means to obtain insurance.
263	263	SECTION 13. Section 2210.052, Insurance Code, is amended by
264	264	amending Subsections (a) and (d) and adding Subsection (e) to read
265	265	as follows:
266	266	(a) Each member of the association shall participate in
267	267	insured losses and operating expenses of the association, in excess
268	268	of premium and other revenue [the writings, expenses, profits, and
269	269	losses] of the association, in the proportion that the net direct
270	270	premiums of that member during the preceding calendar year bears to
271	271	the aggregate net direct premiums by all members of the
272	272	association, as determined using the information provided under
273	273	Subsection (b).
274	274	(d) Notwithstanding Subsection (a), a member, in accordance
275	275	with the plan of operation, is entitled to receive credit for
276	276	similar insurance voluntarily written in areas [an area] designated
277	277	by the commissioner. The member's participation in the insured
278	278	losses and operating expenses of the association in excess of
279	279	premium and other revenue [writings] of the association shall be
280	280	reduced in accordance with the plan of operation.
281	281	(e) Notwithstanding Subsections (a)-(d), an insurer that
282	282	becomes a member of the association and that has not previously been
283	283	a member of the association is not subject to participation in any
284	284	insured losses and operating expenses of the association in excess
285	285	of premium and other revenue of the association until the second
286	286	anniversary of the date on which the insurer first becomes a member
287	287	of the association.
288	288	SECTION 14. Subsection (b), Section 2210.056, Insurance
289	289	Code, is amended to read as follows:
290	290	(b) The association's assets may not be used for or diverted
291	291	to any purpose other than to:
292	292	(1) satisfy, in whole or in part, the liability of the
293	293	association on claims made on policies written by the association;
294	294	(2) make investments authorized under applicable law;
295	295	(3) pay reasonable and necessary administrative
296	296	expenses incurred in connection with the operation of the
297	297	association and the processing of claims against the association;
298	298	[or]
299	299	(4) satisfy, in whole or in part, the obligations of
300	300	the association incurred in connection with Subchapters B-1, J, and
301	301	M, including reinsurance, public securities, and financial
302	302	instruments; or
303	303	(5) make remittance under the laws of this state to be
304	304	used by this state to:
305	305	(A) pay claims made on policies written by the
306	306	association;
307	307	(B) purchase reinsurance covering losses under
308	308	those policies; or
309	309	(C) prepare for or mitigate the effects of
310	310	catastrophic natural events.
311	311	SECTION 15. Subsection (c), Section 2210.060, Insurance
312	312	Code, is amended to read as follows:
313	313	(c) Subsection (a) does not authorize the association to
314	314	indemnify a member of the association for participating in the
315	315	assessments made by [writings, expenses, profits, and losses of]
316	316	the association in the manner provided by this chapter.
317	317	SECTION 16. Chapter 2210, Insurance Code, is amended by
318	318	adding Subchapter B-1 to read as follows:
319	319	SUBCHAPTER B-1. PAYMENT OF LOSSES
320	320	Sec. 2210.071. PAYMENT OF EXCESS LOSSES; PAYMENT FROM
321	321	RESERVES AND TRUST FUND. (a) If an occurrence or series of
322	322	occurrences in a catastrophe area results in insured losses and
323	323	operating expenses of the association in excess of premium and
324	324	other revenue of the association, the excess losses and operating
325	325	expenses shall be paid as provided by this subchapter.
326	326	(b) The association shall pay losses in excess of premium
327	327	and other revenue of the association from available reserves of the
328	328	association and available amounts in the catastrophe reserve trust
329	329	fund.
330	330	Sec. 2210.072. PAYMENT FROM CLASS 1 PUBLIC SECURITIES;
331	331	FINANCIAL INSTRUMENTS. (a) Losses not paid under Section 2210.071
332	332	shall be paid as provided by this section from the proceeds from
333	333	Class 1 public securities authorized to be issued in accordance
334	334	with Subchapter M on or after the date of any occurrence or series
335	335	of occurrences that results in insured losses. Public securities
336	336	issued under this section must be repaid within a period not to
337	337	exceed 10 years, and may be repaid sooner if the board of directors
338	338	elects to do so and the commissioner approves.
339	339	(b) Public securities described by Subsection (a) shall be
340	340	issued as necessary in a principal amount not to exceed $1 billion
341	341	per year.
342	342	(c) If the losses are paid with public securities described
343	343	by this section, the public securities shall be repaid in the manner
344	344	prescribed by Subchapter M from association premium revenue.
345	345	(d) The association may borrow from, or enter into other
346	346	financing arrangements with, any market source, under which the
347	347	market source makes interest-bearing loans or other financial
348	348	instruments to the association to enable the association to pay
349	349	losses under this section or to obtain public securities under this
350	350	section. For purposes of this subsection, financial instruments
351	351	includes commercial paper.
352	352	Sec. 2210.073. PAYMENT FROM CLASS 2 PUBLIC SECURITIES. (a)
353	353	Losses not paid under Sections 2210.071 and 2210.072 shall be paid
354	354	as provided by this section from proceeds from Class 2 public
355	355	securities authorized to be issued in accordance with Subchapter M
356	356	on or after the date of any occurrence that results in insured
357	357	losses under this subsection. Public securities issued under this
358	358	section must be repaid within a period not to exceed 10 years, and
359	359	may be repaid sooner if the board of directors elects to do so and
360	360	the commissioner approves.
361	361	(b) Public securities described by Subsection (a) may be
362	362	issued as necessary in a principal amount not to exceed $1 billion
363	363	per year. If the losses are paid with public securities described
364	364	by this section, the public securities shall be repaid in the manner
365	365	prescribed by Subchapter M.
366	366	Sec. 2210.074. PAYMENT THROUGH CLASS 3 PUBLIC SECURITIES.
367	367	(a) Losses not paid under Sections 2210.071, 2210.072, and
368	368	2210.073 shall be paid as provided by this section from proceeds
369	369	from public securities authorized to be issued in accordance with
370	370	Subchapter M on or after the date of any occurrence that results in
371	371	insured losses under this subsection or through reinsurance as
372	372	described by Section 2210.075. Public securities issued under this
373	373	section must be repaid within a period not to exceed 10 years, and
374	374	may be repaid sooner if the board of directors elects to do so and
375	375	the commissioner approves.
376	376	(b) Public securities described by Subsection (a) may be
377	377	issued as necessary in a principal amount not to exceed $500 million
378	378	per year. If the losses are paid with public securities described by
379	379	this section, the public securities shall be repaid in the manner
380	380	prescribed by Subchapter M through member assessments as provided
381	381	by this section. The association shall notify each member of the
382	382	association of the amount of the member's assessment under this
383	383	section. The proportion of the losses allocable to each insurer
384	384	under this section shall be determined in the manner used to
385	385	determine each insurer's participation in the association for the
386	386	year under Section 2210.052. A member of the association may not
387	387	recoup an assessment paid under this subsection through a premium
388	388	surcharge or tax credit.
389	389	Sec. 2210.075. REINSURANCE. (a) Before any occurrence or
390	390	series of occurrences, an insurer may elect to purchase reinsurance
391	391	to cover an assessment for which the insurer would otherwise be
392	392	liable under Section 2210.074(b).
393	393	(b) An insurer must notify the board of directors, in the
394	394	manner prescribed by the association whether the insurer will be
395	395	purchasing reinsurance. If the insurer does not elect to purchase
396	396	reinsurance under this section, the insurer remains liable for any
397	397	assessment imposed under Section 2210.074(b).
398	398	SECTION 17. The heading to Subchapter C, Chapter 2210,
399	399	Insurance Code, is amended to read as follows:
400	400	SUBCHAPTER C. ASSOCIATION BOARD OF DIRECTORS; GENERAL
401	401	POWERS AND DUTIES OF BOARD OF DIRECTORS
402	402	SECTION 18. Section 2210.102, Insurance Code, is amended to
403	403	read as follows:
404	404	Sec. 2210.102. COMPOSITION. (a) The board of directors is
405	405	composed of [the following] nine members appointed by the
406	406	commissioner in accordance with this section.
407	407	(b) Four members must be [: (1) five] representatives of
408	408	the insurance industry.
409	409	(c) Four members must [different insurers who are members of
410	410	the association, elected by the members as provided by the plan of
411	411	operation;
412	412	[(2) two public representatives who are nominated by
413	413	the office of public insurance counsel and who], as of the date of
414	414	the appointment, [:
415	415	[(A)] reside in the first tier coastal counties. At
416	416	least one of the members appointed under this subsection must be a
417	417	[catastrophe area; and
418	418	[(B) are policyholders of the association; and
419	419	[(3) two] property and casualty agent who is licensed
420	420	under this code and is not a captive agent.
421	421	(d) One member must be a representative of an area of this
422	422	state that is not located in the seacoast territory with
423	423	demonstrated expertise in insurance and actuarial principles.
424	424	(e) All members must [agents, each of whom must:
425	425	[(A)] have demonstrated experience in insurance,
426	426	general business, or actuarial principles sufficient to make the
427	427	success of the association probable[;
428	428	[(B) maintain the agent's principal office, as of
429	429	the date of the appointment, in a catastrophe area; and
430	430	[(C) hold a license under Chapter 4051 as a
431	431	general property and casualty agent or a personal lines property
432	432	and casualty agent].
433	433	(f) Insurers who are members of the association shall
434	434	nominate, from among those members, persons to fill any vacancy in
435	435	the four board of director seats reserved for representatives of
436	436	the insurance industry. The board of directors shall solicit
437	437	nominations from the members and submit the nominations to the
438	438	commissioner. The nominee slate submitted to the commissioner
439	439	under this subsection must include at least three more names than
440	440	the number of vacancies. The commissioner shall appoint
441	441	replacement insurance industry representatives from the nominee
442	442	slate.
443	443	(g) The commissioner shall appoint one person to serve as a
444	444	nonvoting member of the board to advise the board regarding issues
445	445	relating to the inspection process. The commissioner may give
446	446	preference in an appointment under this subsection to a person who
447	447	is a qualified inspector under Section 2210.254. The nonvoting
448	448	member appointed under this section must:
449	449	(1) be an engineer licensed by, and in good standing
450	450	with, the Texas Board of Professional Engineers;
451	451	(2) reside in a first tier coastal county; and
452	452	(3) be knowledgeable of, and have professional
453	453	expertise in, wind-related design and construction practices in
454	454	coastal areas that are subject to high winds and hurricanes.
455	455	(h) [(b)] The persons appointed under Subsection (c)
456	456	[Subsections (a)(2) and (3)] must be from different counties.
457	457	SECTION 19. Section 2210.103, Insurance Code, is amended by
458	458	adding Subsection (c) to read as follows:
459	459	(c) A member of the board of directors may be removed by the
460	460	commissioner with cause stated in writing and posted on the
461	461	association's website. The commissioner shall appoint a
462	462	replacement in the manner provided by Section 2210.102 for a member
463	463	who leaves or is removed from the board of directors.
464	464	SECTION 20. Section 2210.104, Insurance Code, is amended to
465	465	read as follows:
466	466	Sec. 2210.104. OFFICERS. The board of directors shall
467	467	elect from the board's membership an executive committee consisting
468	468	of a presiding officer, assistant presiding officer, and
469	469	secretary-treasurer. [At least one of the officers must be a member
470	470	appointed under Section 2210.102(a)(2) or (3).]
471	471	SECTION 21. Section 2210.105, Insurance Code, is amended by
472	472	adding Subsection (d) to read as follows:
473	473	(d) Except for an emergency meeting, a meeting of the board
474	474	of directors shall be held at a location as determined by the board
475	475	of directors.
476	476	SECTION 22. Subchapter C, Chapter 2210, Insurance Code, is
477	477	amended by adding Section 2210.1051 to read as follows:
478	478	Sec. 2210.1051. MEETINGS OF BOARD OF DIRECTORS.
479	479	(a) Notwithstanding Chapter 551, Government Code, or any other
480	480	law, members of the board of directors may meet by telephone
481	481	conference call, videoconference, or other similar
482	482	telecommunication method. The board may use telephone conference
483	483	call, videoconference, or other similar telecommunication method
484	484	for purposes of establishing a quorum or voting or for any other
485	485	meeting purpose in accordance with this subsection and Subsection
486	486	(b). This subsection applies without regard to the subject matter
487	487	discussed or considered by the members of the board at the meeting.
488	488	(b) A meeting held by telephone conference call,
489	489	videoconference, or other similar telecommunication method:
490	490	(1) is subject to the notice requirements applicable
491	491	to other meetings of the board of directors;
492	492	(2) may not be held unless notice of the meeting
493	493	specifies the location of the meeting and a recording of the meeting
494	494	is posted on the association's website;
495	495	(3) must be audible to the public at the location
496	496	specified in the notice under Subdivision (2); and
497	497	(4) must provide two-way audio communication between
498	498	all members of the board attending the meeting during the entire
499	499	meeting, and if the two-way audio communication link with members
500	500	attending the meeting is disrupted so that a quorum of the board is
501	501	no longer participating in the meeting, the meeting may not
502	502	continue until the two-way audio communication link is
503	503	reestablished.
504	504	SECTION 23. Subchapter C, Chapter 2210, Insurance Code, is
505	505	amended by adding Section 2210.107 to read as follows:
506	506	Sec. 2210.107. PRIMARY BOARD OBJECTIVES. The primary
507	507	objectives of the board of directors are to ensure that the
508	508	association:
509	509	(1) operates in accordance with this chapter and
510	510	commissioner rules;
511	511	(2) complies with sound insurance principles; and
512	512	(3) meets all standards imposed under this chapter.
513	513	SECTION 24. Section 2210.151, Insurance Code, is amended to
514	514	read as follows:
515	515	Sec. 2210.151. ADOPTION OF PLAN OF OPERATION. With the
516	516	advice of the board of directors, the commissioner by rule shall
517	517	adopt the plan of operation to provide[:
518	518	[(1)] Texas windstorm and hail insurance in a
519	519	catastrophe area[; and
520	520	[(2) Texas fire and explosion insurance in an
521	521	inadequate fire insurance area].
522	522	SECTION 25. Subsection (a), Section 2210.152, Insurance
523	523	Code, is amended to read as follows:
524	524	(a) The plan of operation must:
525	525	(1) provide for the efficient, economical, fair, and
526	526	nondiscriminatory administration of the association; and
527	527	(2) include:
528	528	(A) a plan for the equitable assessment of the
529	529	members of the association to defray losses and expenses;
530	530	(B) underwriting standards;
531	531	(C) procedures for accepting and ceding
532	532	reinsurance;
533	533	(D) procedures for obtaining and repaying
534	534	amounts under any financial instruments authorized under this
535	535	chapter;
536	536	(E) procedures for determining the amount of
537	537	insurance to be provided to specific risks;
538	538	(F) [(E)] time limits and procedures for
539	539	processing applications for insurance; and
540	540	(G) [(F)] other provisions as considered
541	541	necessary by the department to implement the purposes of this
542	542	chapter.
543	543	SECTION 26. Section 2210.202, Insurance Code, is amended to
544	544	read as follows:
545	545	Sec. 2210.202. APPLICATION FOR COVERAGE. (a) A person who
546	546	has an insurable interest in insurable property may apply to the
547	547	association for insurance coverage provided under the plan of
548	548	operation and an inspection of the property, subject to any rules[,
549	549	including any inspection fee,] established by the board of
550	550	directors and approved by the commissioner. The association shall
551	551	make insurance available to each applicant in the catastrophe area
552	552	whose property is insurable property but who, after diligent
553	553	efforts, is unable to obtain property insurance through the
554	554	voluntary market, as evidenced by one declination from an insurer
555	555	authorized to engage in the business of, and writing, property
556	556	insurance providing windstorm and hail coverage in the first tier
557	557	coastal counties. For purposes of this section, "declination" has
558	558	the meaning assigned by the plan of operation and shall include a
559	559	refusal to offer coverage for the perils of windstorm and hail and
560	560	the inability to obtain substantially equivalent insurance
561	561	coverage for the perils of windstorm and hail. Notwithstanding
562	562	Section 2210.203(c), evidence of one declination is also required
563	563	with an application for renewal of an association policy.
564	564	(b) A [general] property and casualty agent [or a personal
565	565	lines property and casualty agent] must submit an application for
566	566	the insurance coverage on behalf of the applicant on forms
567	567	prescribed by the association. The application must contain a
568	568	statement as to whether the applicant has submitted or will submit
569	569	the premium in full from personal funds or, if not, to whom a
570	570	balance is or will be due. Each application for initial or renewal
571	571	coverage must also contain a statement that the agent possesses
572	572	proof of the declination described by Subsection (a) and proof of
573	573	flood insurance coverage or unavailability of that coverage as
574	574	described by Section 2210.203(a-1).
575	575	SECTION 27. Section 2210.203, Insurance Code, is amended by
576	576	adding Subsection (a-1) to read as follows:
577	577	(a-1) This subsection applies only to a structure
578	578	constructed, altered, remodeled, or enlarged on or after September
579	579	1, 2009, and only for insurable property located in areas
580	580	designated by the commissioner. Notwithstanding Subsection (a), if
581	581	all or any part of the property to which this subsection applies is
582	582	located in Zone V or another similar zone with an additional hazard
583	583	associated with storm waves, as defined by the National Flood
584	584	Insurance Program, and if flood insurance under that federal
585	585	program is available, the association may not issue an insurance
586	586	policy for initial or renewal coverage unless evidence that the
587	587	property is covered by a flood insurance policy is submitted to the
588	588	association. An agent offering or selling a Texas windstorm and
589	589	hail insurance policy in any area designated by the commissioner
590	590	under this subsection shall offer flood insurance coverage to the
591	591	prospective insured, if that coverage is available.
592	592	SECTION 28. Section 2210.204, Insurance Code, is amended by
593	593	amending Subsection (d) and adding Subsection (e) to read as
594	594	follows:
595	595	(d) If an insured requests cancellation of the insurance
596	596	coverage, the association shall refund the unearned premium, less
597	597	any minimum retained premium set forth in the plan of operation,
598	598	payable to the insured and the holder of an unpaid balance. The
599	599	property and casualty agent who submitted the application shall
600	600	refund the agent's commission on any unearned premium in the same
601	601	manner.
602	602	(e) For cancellation of insurance coverage under this
603	603	section, the minimum retained premium in the plan of operation must
604	604	be for a period of not less than 180 days, except for events
605	605	specified in the plan of operation that reflect a significant
606	606	change in the exposure or the policyholder concerning the insured
607	607	property, including:
608	608	(1) the purchase of similar coverage in the voluntary
609	609	market;
610	610	(2) sale of the property to an unrelated party;
611	611	(3) death of the policyholder; or
612	612	(4) total loss of the property.
613	613	SECTION 29. Subchapter E, Chapter 2210, Insurance Code, is
614	614	amended by adding Section 2210.2041 to read as follows:
615	615	Sec. 2210.2041. NONREFUNDABLE SURCHARGE. A nonrefundable
616	616	surcharge established under this chapter is not refundable under
617	617	this code for any reason or purpose.
618	618	SECTION 30. Section 2210.251, Insurance Code, is amended to
619	619	read as follows:
620	620	Sec. 2210.251. INSPECTION REQUIREMENTS. (a) Except as
621	621	provided by this section, to be considered insurable property
622	622	eligible for windstorm and hail insurance coverage from the
623	623	association, a structure that is constructed, altered, remodeled,
624	624	enlarged, or repaired or to which additions are made on or after
625	625	January 1, 1988, must be inspected or approved by the department for
626	626	compliance with the plan of operation.
627	627	(b) After January 1, 2004, for geographic areas specified by
628	628	the commissioner, the commissioner by rule shall adopt the 2003
629	629	International Residential Code for one- and two-family dwellings
630	630	published by the International Code Council. For those geographic
631	631	areas, the commissioner by rule may adopt a subsequent edition of
632	632	that code and may adopt any supplements published by the
633	633	International Code Council and amendments to that code.
634	634	(c) After January 1, 2004, a person must submit a notice of a
635	635	windstorm inspection to the unit responsible for certification of
636	636	windstorm inspections at the department before beginning to
637	637	construct, alter, remodel, enlarge, or repair a structure.
638	638	(d) A structure constructed, altered, remodeled, enlarged,
639	639	or repaired or to which additions were made before January 1, 1988,
640	640	that is located in an area that was governed at the time of the
641	641	construction, alteration, remodeling, enlargement, repair, or
642	642	addition by a building code recognized by the association is
643	643	insurable property eligible for windstorm and hail insurance
644	644	coverage from the association without compliance with the
645	645	inspection or approval requirements of this section or the plan of
646	646	operation.
647	647	(e) A structure constructed, altered, remodeled, enlarged,
648	648	or repaired or to which additions were made before January 1, 1988,
649	649	that is located in an area not governed by a building code
650	650	recognized by the association is insurable property eligible for
651	651	windstorm and hail insurance coverage from the association without
652	652	compliance with the inspection or approval requirements of this
653	653	section or the plan of operation if the structure was previously
654	654	insured by an insurer authorized to engage in the business of
655	655	insurance in this state and the structure is in essentially the same
656	656	condition as when previously insured, except for normal wear and
657	657	tear, and is without any structural change other than a change made
658	658	according to code. For purposes of this subsection, evidence of
659	659	previous insurance coverage must reflect coverage for the perils of
660	660	windstorm and hail for the property within the 12-month period
661	661	immediately preceding the date of the application for coverage
662	662	through the association and includes:
663	663	(1) a copy of a previous insurance policy;
664	664	(2) copies of canceled checks or agent's records that
665	665	show payments for previous policies; and
666	666	(3) a copy of the title to the structure or mortgage
667	667	company records that show previous policies.
668	668	(f) Notwithstanding any other provision of this section, a
669	669	residential structure insured by the association as of September
670	670	1, 2009, may continue coverage through the association subject to
671	671	the inspection requirements imposed under Section 2210.258.
672	672	(g) The department shall issue a certificate of compliance
673	673	for each structure that qualifies for coverage. The certificate is
674	674	evidence of insurability of the structure by the association.
675	675	(h) [(g)] The department may enter into agreements and
676	676	contracts as necessary to implement this section.
677	677	(i) [(h)] The department may charge a reasonable fee to
678	678	cover the cost of making building requirements and inspection
679	679	standards available to the public.
680	680	(j) The department shall charge a reasonable fee for each
681	681	inspection of each structure in an amount set by the commissioner.
682	682	(k) Without limitation of the department's authority to
683	683	otherwise enforce this chapter, the department shall monitor the
684	684	association's compliance with this subchapter.
685	685	(l) Except as otherwise provided by this subchapter, the
686	686	department may not consider any request that a structure be
687	687	certified as insurable property if, within six months after the
688	688	final inspection of a structure, the department has not received:
689	689	(1) fully completed documentation verifying that the
690	690	structure has been constructed, altered, remodeled, enlarged, or
691	691	repaired, or any addition to the structure has been made, in
692	692	compliance with the plan of operation; and
693	693	(2) full payment of all inspection fees owed to the
694	694	department, including any fees related to prior department
695	695	inspections.
696	696	(m) If a structure is rejected for coverage under Subsection
697	697	(l), a person may make a new request for certification and the
698	698	structure may be reinspected for compliance with the plan of
699	699	operation. A request for certification brought under this
700	700	subsection must meet the requirements of Subsection (l).
701	701	SECTION 31. Subchapter F, Chapter 2210, Insurance Code, is
702	702	amended by adding Sections 2210.258 and 2210.259 to read as
703	703	follows:
704	704	Sec. 2210.258. MANDATORY COMPLIANCE WITH BUILDING CODES;
705	705	ELIGIBILITY. (a) Notwithstanding any other provision of this
706	706	chapter, to be eligible for insurance through the association, all
707	707	construction, alteration, remodeling, enlargement, and repair of,
708	708	or addition to, any structure located in the catastrophe area that
709	709	is begun on or after the effective date of Sections 5 through 49,
710	710	H.B. No. 4409, Acts of the 81st Legislature, Regular Session, 2009,
711	711	must be performed in compliance with the applicable building code
712	712	standards, as set forth in the plan of operation.
713	713	(b) The association may not insure a structure described by
714	714	Subsection (a) until:
715	715	(1) the structure has been inspected for compliance
716	716	with the plan of operation in accordance with Section 2210.251(a);
717	717	and
718	718	(2) a certificate of compliance has been issued for
719	719	the structure in accordance with Section 2210.251(g).
720	720	Sec. 2210.259. SURCHARGE FOR CERTAIN NONCOMPLIANT
721	721	STRUCTURES. (a) A noncompliant residential structure insured by
722	722	the association as of September 1, 2009, under Section 2210.251(f)
723	723	that had been approved for insurability under the approval process
724	724	regulations in effect on September 1, 2009, is subject to an annual
725	725	premium surcharge in an amount equal to 15 percent of the premium
726	726	for insurance coverage obtained through the association. The
727	727	surcharge under this subsection applies to each policy issued or
728	728	renewed by the association on or after the effective date of
729	729	Sections 5 through 49, H.B. No. 4409, Acts of the 81st Legislature,
730	730	Regular Session, 2009, and is due on the issuance or renewal of the
731	731	policy.
732	732	(b) A premium surcharge collected under this section shall
733	733	be deposited in the catastrophe reserve trust fund. A premium
734	734	surcharge under this section is a separate nonrefundable charge in
735	735	addition to the premiums collected and is not subject to premium tax
736	736	or commissions. Failure to pay the surcharge by a policyholder
737	737	constitutes failure to pay premium for purposes of policy
738	738	cancellation.
739	739	SECTION 32. Subsections (c) and (d), Section 2210.351,
740	740	Insurance Code, are amended to read as follows:
741	741	(c) Except as provided by Subsection (d), as [As] soon as
742	742	reasonably possible after the filing has been made, the
743	743	commissioner in writing shall approve[, modify,] or disapprove the
744	744	filing. A filing is considered approved unless [modified or]
745	745	disapproved on or before the 30th day after the date of the filing.
746	746	If the commissioner disapproves a filing, the commissioner shall
747	747	state in writing the reasons for the disapproval and the criteria
748	748	the association is required to meet to obtain approval.
749	749	(d) The association may use a rate filed by the association
750	750	without prior commissioner approval if:
751	751	(1) the filing is made not later than the 30th day
752	752	before the date of any use or delivery for use of the rate;
753	753	(2) the filed rate does not exceed 105 percent of the
754	754	rate in effect on the date on which the filing is made;
755	755	(3) the filed rate does not reflect a rate change for
756	756	an individual rating class that is 10 percent higher than the rate
757	757	in effect for that rating class on the date on which the filing is
758	758	made; and
759	759	(4) the commissioner has not disapproved the filing in
760	760	writing, advising of the reasons for the disapproval and the
761	761	criteria the association is required to meet to obtain approval [If
762	762	at any time the commissioner determines that a filing approved
763	763	under Subsection (c) no longer meets the requirements of this
764	764	chapter, the commissioner may, after a hearing held on at least 20
765	765	days' notice to the association that specifies the matters to be
766	766	considered at the hearing, issue an order withdrawing approval of
767	767	the filing. The order must specify in what respects the
768	768	commissioner determines that the filing no longer meets the
769	769	requirements of this chapter. An order issued under this
770	770	subsection may not take effect before the 30th day after the date of
771	771	issuance of the order].
772	772	SECTION 33. Section 2210.352, Insurance Code, is amended to
773	773	read as follows:
774	774	Sec. 2210.352. MANUAL RATE FILINGS: ANNUAL FILING.
775	775	(a) Not later than August 15 of each year, the association shall
776	776	file with the department [for approval by the commissioner] a
777	777	proposed manual rate for all types and classes of risks written by
778	778	the association[. Chapter 40 does not apply to:
779	779	[(1) a filing made under this subsection; or
780	780	[(2) a department action with respect to the filing].
781	781	(a-1) The association may use a rate filed by the
782	782	association under this section without prior commissioner approval
783	783	if:
784	784	(1) the filing is made not later than the 30th day
785	785	before the date of any use or delivery for use of the rate;
786	786	(2) the filed rate does not exceed 105 percent of the
787	787	rate used by the association in effect on the date on which the
788	788	filing is made; and
789	789	(3) the filed rate does not reflect a rate change for
790	790	an individual rating class that is 10 percent higher than the rate
791	791	in effect for that rating class on the date on which the filing is
792	792	made.
793	793	(a-2) The association may not file to use a rate described
794	794	by Subsection (a-1) more than once per year.
795	795	(b) Except as provided by Subsection (a-1), before [Before]
796	796	approving or[,] disapproving[, or modifying] a filing under this
797	797	section, the commissioner shall provide all interested persons a
798	798	reasonable opportunity to:
799	799	(1) review the filing;
800	800	(2) obtain copies of the filing on payment of any
801	801	legally required copying cost; and
802	802	(3) submit to the commissioner written comments or
803	803	information related to the filing.
804	804	(c) Except as provided by Subsection (a-1), [The
805	805	commissioner shall schedule an open meeting not later than the 45th
806	806	day after the date the department receives a filing at which
807	807	interested persons may present written or oral comments relating to
808	808	the filing.
809	809	[(d) An open meeting under Subsection (c) is subject to
810	810	Chapter 551, Government Code, but is not a contested case hearing
811	811	under Chapter 2001, Government Code.
812	812	[(e) The department shall file with the secretary of state
813	813	for publication in the Texas Register notice that a filing has been
814	814	made under Subsection (a) not later than the seventh day after the
815	815	date the department receives the filing. The notice must include
816	816	information relating to:
817	817	[(1) the availability of the filing for public
818	818	inspection at the department during regular business hours and the
819	819	procedures for obtaining copies of the filing;
820	820	[(2) procedures for making written comments related to
821	821	the filing; and
822	822	[(3) the time, place, and date of the open meeting
823	823	scheduled under Subsection (c) at which interested persons may
824	824	present written or oral comments relating to the filing.
825	825	[(f) After the conclusion of the open meeting,] the
826	826	commissioner shall approve or[,] disapprove[, or modify] the filing
827	827	in writing not later than October [November] 15 of the year in which
828	828	the filing was made. If the filing is not approved or[,]
829	829	disapproved[, or modified] on or before that date, the filing is
830	830	considered approved.
831	831	(d) Except as provided by Subsection (a-1), if [(g) If] the
832	832	commissioner disapproves a filing, the commissioner shall state in
833	833	writing the reasons for the disapproval and the criteria the
834	834	association is required to meet to obtain approval.
835	835	SECTION 34. Section 2210.353, Insurance Code, is amended to
836	836	read as follows:
837	837	Sec. 2210.353. MANUAL RATE FILINGS: AMENDED ANNUAL FILING.
838	838	(a) Not later than the 30th day after the date the association
839	839	receives the commissioner's written disapproval under Section
840	840	2210.352(c) [2210.352(f)], the association may file with the
841	841	commissioner an amended annual filing that conforms to all criteria
842	842	stated in that written disapproval.
843	843	(b) Not later than the 30th day after the date an amended
844	844	filing made under Subsection (a) is received, the commissioner
845	845	shall approve [the amended filing with or without modifications] or
846	846	disapprove the amended filing. If the filing is not [modified or]
847	847	disapproved on or before the 30th day after the date of receipt, the
848	848	filing is considered approved [without modification]. If the
849	849	commissioner disapproves a filing, the commissioner shall state in
850	850	writing the reasons for the disapproval and the criteria the
851	851	association is required to meet to obtain approval.
852	852	(c) Before approving or disapproving an amended annual
853	853	filing under this section, the commissioner shall, in the manner
854	854	provided by Section 2210.352(b), provide all interested persons a
855	855	reasonable opportunity to:
856	856	(1) review the amended annual filing;
857	857	(2) obtain copies of the amended annual filing on
858	858	payment of any legally required copying cost; and
859	859	(3) submit to the commissioner written comments or
860	860	information related to the amended annual filing.
861	861	[(d) The commissioner may, in the manner provided by
862	862	Sections 2210.352(c) and (d), hold a hearing regarding an amended
863	863	filing not later than the 20th day after the date the department
864	864	receives the amended filing.
865	865	[(e) Not later than the 10th day after the date the hearing
866	866	is concluded, the commissioner shall approve or disapprove the
867	867	amended filing.
868	868	[(f) The requirements imposed under Subsection (a) and
869	869	under Sections 2210.352(e), (f), and (g) apply to a hearing
870	870	conducted under this section and the commissioner's decision
871	871	resulting from that hearing.]
872	872	SECTION 35. Subsections (a), (c), and (d), Section
873	873	2210.354, Insurance Code, are amended to read as follows:
874	874	(a) In conjunction with the review of a filing under Section
875	875	2210.352, other than a filing made under Subsection (a-1) of that
876	876	section [or 2210.353]:
877	877	(1) the commissioner may request the association to
878	878	provide additional supporting information relating to the filing;
879	879	and
880	880	(2) any interested person may file a written request
881	881	with the commissioner, during a period specified by the
882	882	commissioner by rule, for additional supporting information
883	883	relating to the filing.
884	884	(c) The commissioner shall submit to the association all
885	885	requests for additional supporting information made under this
886	886	section for the commissioner's use and the use of any interested
887	887	person not later than the 21st day after the date of receipt of the
888	888	filing.
889	889	(d) Unless a different period is requested by the
890	890	association and approved by the commissioner, the association shall
891	891	provide the information to the commissioner not later than the
892	892	fifth day after the date the written request for additional
893	893	supporting information is delivered to the association. [The
894	894	department shall notify an interested person who has requested
895	895	additional information of the availability of the information not
896	896	later than one business day after the date the commissioner
897	897	receives the information from the association.]
898	898	SECTION 36. Section 2210.355, Insurance Code, is amended by
899	899	adding Subsections (h) and (i) to read as follows:
900	900	(h) In adopting rates under this chapter, recognized
901	901	catastrophe models may be considered.
902	902	(i) The association may establish rating territories and
903	903	may vary rates among the territories as provided by this
904	904	subsection. A rating territory that subdivides a county may be used
905	905	only if the rate for any subdivision in the county is not more than:
906	906	(A) five percent higher than the rate used by the
907	907	association in 2009 in any other subdivision in the county;
908	908	(B) six percent higher than the rate used by the
909	909	association in 2010 in any other subdivision in the county;
910	910	(C) seven percent higher than the rate used by the
911	911	association in 2011 in any other subdivision in the county; and
912	912	(D) eight percent higher than the rate used by the
913	913	association in 2012 in any other subdivision in the county.
914	914	SECTION 37. Subsection (b), Section 2210.361, Insurance
915	915	Code, is amended to read as follows:
916	916	(b) After notice and hearing, the commissioner may accept[,
917	917	modify,] or reject a recommendation made by the association under
918	918	this section. [Chapter 40 does not apply to an action taken under
919	919	this section.]
920	920	SECTION 38. Subsections (a), (c), and (d), Section
921	921	2210.452, Insurance Code, are amended to read as follows:
922	922	(a) The commissioner shall adopt rules under which the
923	923	association makes [members relinquish their net equity on an annual
924	924	basis as provided by those rules by making] payments to the
925	925	catastrophe reserve trust fund. The trust fund may be used only to
926	926	fund[:
927	927	[(1)] the obligations of the trust fund under
928	928	Subchapter B-1 [Section 2210.058(a); and
929	929	[(2) the mitigation and preparedness plan established
930	930	under Section 2210.454 to reduce the potential for payments by
931	931	association members that give rise to tax credits in the event of
932	932	loss].
933	933	(c) At the end of each calendar year or policy year, the
934	934	association shall use [pay] the net gain from operations [equity]
935	935	of the association [a member], including all premium and other
936	936	revenue of the association in excess of incurred losses and
937	937	operating expenses, to make payments to the trust fund, to procure
938	938	[or a] reinsurance, or to make payments to the trust fund and to
939	939	procure reinsurance [program approved by the commissioner].
940	940	(d) The commissioner by rule shall establish the procedure
941	941	relating to the disbursement of money from the trust fund to
942	942	policyholders in the event of an occurrence or series of
943	943	occurrences within a catastrophe area that results in a
944	944	disbursement under Subchapter B-1 [Section 2210.058(a)].
945	945	SECTION 39. Section 2210.453, Insurance Code, is amended to
946	946	read as follows:
947	947	Sec. 2210.453. REINSURANCE [PROGRAM]. (a) The
948	948	association may [shall]:
949	949	(1) make payments into the trust fund; and [or]
950	950	(2) purchase [establish a] reinsurance [program
951	951	approved by the department].
952	952	(b) The [With the approval of the department, the]
953	953	association may purchase [establish a] reinsurance [program] that
954	954	operates in addition to or in concert with the trust fund, public
955	955	securities, financial instruments, and assessments authorized by
956	956	this chapter.
957	957	SECTION 40. Subsection (b), Section 2210.454, Insurance
958	958	Code, is amended to read as follows:
959	959	(b) Each state fiscal year, the department may fund the
960	960	mitigation and preparedness plan using available funds [the
961	961	investment income of the trust fund in an amount not less than $1
962	962	million and not more than 10 percent of the investment income of the
963	963	prior fiscal year. From that amount and as part of that plan, the
964	964	department may use in each fiscal year $1 million for the windstorm
965	965	inspection program established under Section 2210.251].
966	966	SECTION 41. Chapter 2210, Insurance Code, is amended by
967	967	adding Subchapters M and N to read as follows:
968	968	SUBCHAPTER M. PUBLIC SECURITIES PROGRAM
969	969	Sec. 2210.601. PURPOSE. The legislature finds that
970	970	authorizing the issuance of public securities to provide a method
971	971	to raise funds to provide windstorm and hail insurance through the
972	972	association in certain designated portions of the state is for the
973	973	benefit of the public and in furtherance of a public purpose.
974	974	Sec. 2210.602. DEFINITIONS. In this subchapter:
975	975	(1) "Board" means the board of directors of the Texas
976	976	Public Finance Authority.
977	977	(2) "Class 1 public securities" means public
978	978	securities authorized to be issued on or after an occurrence or
979	979	series of occurrences by Section 2210.072, including a commercial
980	980	paper program authorized before the occurrence of a catastrophic
981	981	event so long as no tranche of commercial paper is issued under the
982	982	program until after the catastrophic event.
983	983	(3) "Class 2 public securities" means public
984	984	securities authorized to be issued on or after the occurrence of a
985	985	catastrophic event by Section 2210.073.
986	986	(4) "Class 3 public securities" means public
987	987	securities authorized to be issued on or after the occurrence of a
988	988	catastrophic event by Section 2210.074.
989	989	(5) "Credit agreement" has the meaning assigned by
990	990	Chapter 1371, Government Code.
991	991	(6) "Insurer" means each property and casualty insurer
992	992	authorized to engage in the business of property and casualty
993	993	insurance in this state and an affiliate of such an insurer, as
994	994	described by Section 823.003, including an affiliate that is not
995	995	authorized to engage in the business of property and casualty
996	996	insurance in this state. The term specifically includes a county
997	997	mutual insurance company, a Lloyd's plan, and a reciprocal or
998	998	interinsurance exchange.
999	999	(7) "Public security" means a debt instrument or other
1000	1000	public security issued by the Texas Public Finance Authority.
1001	1001	(8) "Public security administrative expenses" means
1002	1002	expenses incurred to administer public securities issued under this
1003	1003	subchapter, including fees for credit enhancement, paying agents,
1004	1004	trustees, and attorneys, and for other professional services.
1005	1005	(9) "Public security obligations" means the principal
1006	1006	of a public security and any premium and interest on a public
1007	1007	security issued under this subchapter, together with any amount
1008	1008	owed under a related credit agreement.
1009	1009	(10) "Public security obligation revenue fund" means
1010	1010	the dedicated trust fund established by the association and held by
1011	1011	the Texas Safekeeping Trust Company outside the state treasury
1012	1012	under this subchapter.
1013	1013	(11) "Public security resolution" means the
1014	1014	resolution or order authorizing public securities to be issued
1015	1015	under this subchapter.
1016	1016	Sec. 2210.603. APPLICABILITY OF OTHER LAWS. (a) The board
1017	1017	shall issue the public securities as described by Section 2210.604
1018	1018	in accordance with and subject to the requirements of Chapter 1232,
1019	1019	Government Code, other than Section 1232.108 of that chapter, and
1020	1020	in accordance with and subject to other provisions of Title 9,
1021	1021	Government Code, that apply to issuance of a public security by a
1022	1022	state agency. In the event of a conflict, this subchapter controls.
1023	1023	(b) A purpose for which public securities are issued under
1024	1024	this chapter constitutes an eligible project for purposes of
1025	1025	Chapter 1371, Government Code.
1026	1026	Sec. 2210.604. ISSUANCE OF PUBLIC SECURITIES AUTHORIZED.
1027	1027	(a) At the request of the association and with the approval of the
1028	1028	commissioner, the Texas Public Finance Authority shall issue Class
1029	1029	1, Class 2, or Class 3 public securities. The association and the
1030	1030	commissioner must approve each tranche of commercial paper issued
1031	1031	under a commercial paper program established under this chapter.
1032	1032	(b) The association shall specify in the association's
1033	1033	request to the board the maximum principal amount of the public
1034	1034	securities and the maximum term of the public securities.
1035	1035	(c) The principal amount determined by the association
1036	1036	under Subsection (b) may be increased to include an amount
1037	1037	sufficient to:
1038	1038	(1) pay the costs related to issuance of the public
1039	1039	securities;
1040	1040	(2) provide a public security reserve fund; and
1041	1041	(3) capitalize interest for the period determined
1042	1042	necessary by the association, not to exceed two years.
1043	1043	Sec. 2210.605. TERMS OF ISSUANCE. (a) The board shall
1044	1044	determine the method of sale, type and form of public security,
1045	1045	maximum interest rates, and other terms of the public securities
1046	1046	that, in the board's judgment, best achieve the goals of the
1047	1047	association and effect the borrowing at the lowest practicable
1048	1048	cost. The board may enter into a credit agreement in connection
1049	1049	with the public securities.
1050	1050	(b) Public securities must be issued by the board on behalf
1051	1051	of the association.
1052	1052	(c) Public securities issued under this chapter are
1053	1053	eligible obligations under Section 404.027, Government Code.
1054	1054	Sec. 2210.606. ADDITIONAL COVENANTS. The board may make
1055	1055	additional covenants with respect to the public securities and the
1056	1056	designated income and receipts of the association pledged to their
1057	1057	payment, and provide for the flow of funds and the establishment,
1058	1058	maintenance, and investment of funds and accounts with respect to
1059	1059	the public securities, and the administration of those funds and
1060	1060	accounts, as provided in the proceedings authorizing the public
1061	1061	securities.
1062	1062	Sec. 2210.607. PUBLIC SECURITY PROCEEDS. The proceeds of
1063	1063	public securities issued by the board under this subchapter may be
1064	1064	deposited with the Texas Treasury Safekeeping Trust Company.
1065	1065	Sec. 2210.608. USE OF PUBLIC SECURITY PROCEEDS. (a) Public
1066	1066	security proceeds, including investment income, shall be held in
1067	1067	trust for the exclusive use and benefit of the association. The
1068	1068	association may use the proceeds to:
1069	1069	(1) pay incurred claims and operating expenses of the
1070	1070	association;
1071	1071	(2) purchase reinsurance for the association;
1072	1072	(3) pay the costs of issuing the public securities,
1073	1073	and public security administrative expenses, if any;
1074	1074	(4) provide a public security reserve; and
1075	1075	(5) pay capitalized interest and principal on the
1076	1076	public securities for the period determined necessary by the
1077	1077	association.
1078	1078	(b) Any excess public security proceeds remaining after the
1079	1079	purposes for which the public securities were issued are satisfied
1080	1080	may be used to purchase or redeem outstanding public securities. If
1081	1081	there are no outstanding public security obligations or public
1082	1082	security administrative expenses, the excess proceeds shall be
1083	1083	transferred to the catastrophe reserve trust fund.
1084	1084	Sec. 2210.609. REPAYMENT OF ASSOCIATION'S PUBLIC SECURITY
1085	1085	OBLIGATIONS. (a) The board and the association shall enter into
1086	1086	an agreement under which the association shall provide for the
1087	1087	payment of all public security obligations from available funds
1088	1088	collected by the association and deposited into the public security
1089	1089	obligation revenue fund. If the association determines that it is
1090	1090	unable to pay the public security obligations and public security
1091	1091	administrative expenses, if any, with available funds, the
1092	1092	association shall pay those obligations and expenses in accordance
1093	1093	with Sections 2210.612, 2210.613, and 2210.6135 as applicable.
1094	1094	Class 1, Class 2, or Class 3 public securities may be issued on a
1095	1095	parity or subordinate lien basis with other Class 1, Class 2, or
1096	1096	Class 3 public securities, respectively.
1097	1097	(b) The board shall notify the association of the amount of
1098	1098	the public security obligations and the estimated amount of public
1099	1099	security administrative expenses, if any, each year in a period
1100	1100	sufficient, as determined by the association, to permit the
1101	1101	association to determine the availability of funds and assess a
1102	1102	premium surcharge if necessary.
1103	1103	(c) The association shall deposit all revenue collected
1104	1104	under Sections 2210.612, 2210.613, and 2210.6135 in the public
1105	1105	security obligation revenue fund. Money deposited in the fund may
1106	1106	be invested as permitted by general law. Money in the fund required
1107	1107	to be used to pay public security obligations and public security
1108	1108	administrative expenses, if any, shall be transferred to the
1109	1109	appropriate funds in the manner and at the time specified in the
1110	1110	proceedings authorizing the public securities to ensure timely
1111	1111	payment of obligations and expenses. This may include the board
1112	1112	establishing funds and accounts with the comptroller that the board
1113	1113	determines are necessary to administer and repay the public
1114	1114	security obligations. If the association has not transferred
1115	1115	amounts sufficient to pay the public security obligations to the
1116	1116	board's designated interest and sinking fund in a timely manner,
1117	1117	the board may direct the Texas Treasury Safekeeping Trust Company
1118	1118	to transfer from the public security obligation revenue fund to the
1119	1119	appropriate account the amount necessary to pay the public security
1120	1120	obligation.
1121	1121	(d) The association shall provide for the payment of the
1122	1122	public security obligations and the public security administrative
1123	1123	expenses by irrevocably pledging revenues received from premiums,
1124	1124	premium surcharges, and amounts on deposit in the public security
1125	1125	obligation revenue fund, together with any public security reserve
1126	1126	fund, as provided in the proceedings authorizing the public
1127	1127	securities and related credit agreements.
1128	1128	(e) An amount owed by the board under a credit agreement
1129	1129	shall be payable from and secured by a pledge of revenues received
1130	1130	by the association or amounts from the obligation trust fund to the
1131	1131	extent provided in the proceedings authorizing the credit
1132	1132	agreement.
1133	1133	Sec. 2210.610. PUBLIC SECURITY PAYMENTS. (a) Revenues
1134	1134	received from the premium surcharges under Section 2210.613 may be
1135	1135	applied only as provided by this subchapter.
1136	1136	(b) The association may pay public security obligations
1137	1137	with other legally available funds.
1138	1138	(c) Public security obligations are payable only from
1139	1139	sources provided for payment in this subchapter.
1140	1140	Sec. 2210.611. EXCESS REVENUE COLLECTIONS AND INVESTMENT
1141	1141	EARNINGS. Revenue collected in any year from a premium surcharge
1142	1142	under Section 2210.613 that exceeds the amount of the public
1143	1143	security obligations and public security administrative expenses
1144	1144	payable in that year and interest earned on the public security
1145	1145	obligation fund may, in the discretion of the association, be:
1146	1146	(1) used to pay public security obligations payable in
1147	1147	the subsequent year, offsetting the amount of the premium surcharge
1148	1148	that would otherwise be required to be levied for the year under
1149	1149	this subchapter;
1150	1150	(2) used to redeem or purchase outstanding public
1151	1151	securities; or
1152	1152	(3) deposited in the catastrophe reserve trust fund.
1153	1153	Sec. 2210.612. PAYMENT OF CLASS 1 PUBLIC SECURITIES. (a)
1154	1154	The association shall pay Class 1 public securities issued under
1155	1155	Section 2210.072 from its premium and other revenue.
1156	1156	(b) The association may enter financing arrangements as
1157	1157	described by Section 2210.072(d) as necessary to obtain public
1158	1158	securities issued under that section. Nothing in this subsection
1159	1159	shall prevent the authorization and creation of one or more
1160	1160	programs for the issuance of commercial paper before the date of an
1161	1161	occurrence that results in insured losses under Section 2210.072(a)
1162	1162	so long as no tranche of commercial paper is issued under a
1163	1163	commercial paper program until after such an occurrence.
1164	1164	Sec. 2210.613. PAYMENT OF CLASS 2 PUBLIC SECURITIES. (a)
1165	1165	The association shall pay Class 2 public securities issued under
1166	1166	Section 2210.073 as provided by this section. Thirty percent of the
1167	1167	cost of the public securities shall be paid through member
1168	1168	assessments as provided by this section. The association shall
1169	1169	notify each member of the association of the amount of the member's
1170	1170	assessment under this section. The proportion of the losses
1171	1171	allocable to each insurer under this section shall be determined in
1172	1172	the manner used to determine each insurer's participation in the
1173	1173	association for the year under Section 2210.052. A member of the
1174	1174	association may not recoup an assessment paid under this subsection
1175	1175	through a premium surcharge or tax credit.
1176	1176	(b) Seventy percent of the cost of the public securities
1177	1177	shall be paid by a nonrefundable premium surcharge collected under
1178	1178	this section in an amount set by the commissioner. On approval by
1179	1179	the commissioner, each insurer, the association, and the Texas FAIR
1180	1180	Plan Association shall assess a premium surcharge to its
1181	1181	policyholders as provided by this section. The premium surcharge
1182	1182	must be set in an amount sufficient to pay all debt service not
1183	1183	already covered by available funds and all related expenses on the
1184	1184	public securities.
1185	1185	(c) The premium surcharge under Subsection (b) shall be
1186	1186	assessed on all policyholders who reside or have operations in, or
1187	1187	whose insured property is located in a catastrophe area for each
1188	1188	Texas windstorm and hail insurance policy and each property and
1189	1189	casualty insurance policy issued for property located in the
1190	1190	catastrophe area. A premium surcharge under Subsection (b) applies
1191	1191	to all policies that provide coverage on any premises, locations,
1192	1192	operations, or property located in the area described by this
1193	1193	subsection for all property and casualty lines of insurance, other
1194	1194	than federal flood insurance, workers' compensation insurance,
1195	1195	accident and health insurance, and medical malpractice insurance.
1196	1196	(d) A premium surcharge under Subsection (b) is a separate
1197	1197	nonrefundable charge in addition to the premiums collected and is
1198	1198	not subject to premium tax or commissions. Failure by a
1199	1199	policyholder to pay the surcharge constitutes failure to pay
1200	1200	premium for purposes of policy cancellation.
1201	1201	Sec. 2210.6135. PAYMENT OF CLASS 3 PUBLIC SECURITIES. (a)
1202	1202	The association shall pay Class 3 public securities issued under
1203	1203	Section 2210.074 as provided by this section through member
1204	1204	assessments. The association shall assess the members of the
1205	1205	association an amount not to exceed $500 million per year for the
1206	1206	payment of the losses. The association shall notify each member of
1207	1207	the association of the amount of the member's assessment under this
1208	1208	section.
1209	1209	(b) The proportion of the losses allocable to each insurer
1210	1210	under this section shall be determined in the manner used to
1211	1211	determine each insurer's participation in the association for the
1212	1212	year under Section 2210.052.
1213	1213	(c) A member of the association may not recoup an assessment
1214	1214	paid under this section through a premium surcharge or tax credit.
1215	1215	Sec. 2210.614. REFINANCING PUBLIC SECURITIES. The
1216	1216	association may request the board to refinance any public
1217	1217	securities issued in accordance with Subchapter B-1, whether Class
1218	1218	1, Class 2, or Class 3 public securities, with public securities
1219	1219	payable from the same sources as the original public securities.
1220	1220	Sec. 2210.615. SOURCE OF PAYMENT; STATE DEBT NOT CREATED.
1221	1221	(a) A public security or credit agreement is payable solely from
1222	1222	revenue as provided by this subchapter.
1223	1223	(b) A public security issued under this subchapter, and any
1224	1224	related credit agreement, is not a debt of this state or any state
1225	1225	agency or political subdivision of this state, and does not
1226	1226	constitute a pledge of the faith and credit of this state or any
1227	1227	state agency or political subdivision of this state.
1228	1228	(c) Each public security, and any related credit agreement,
1229	1229	issued under this subchapter must state on the security's face
1230	1230	that:
1231	1231	(1) neither the state nor a state agency, political
1232	1232	corporation, or political subdivision of the state is obligated to
1233	1233	pay the principal of or interest on the public security except as
1234	1234	provided by this subchapter; and
1235	1235	(2) neither the faith and credit nor the taxing power
1236	1236	of the state or any state agency, political corporation, or
1237	1237	political subdivision of the state is pledged to the payment of the
1238	1238	principal of or interest on the public security.
1239	1239	Sec. 2210.616. STATE NOT TO IMPAIR PUBLIC SECURITY
1240	1240	OBLIGATIONS. If public securities under this subchapter are
1241	1241	outstanding, the state may not:
1242	1242	(1) take action to limit or restrict the rights of the
1243	1243	association to fulfill its responsibility to pay public security
1244	1244	obligations; or
1245	1245	(2) in any way impair the rights and remedies of the
1246	1246	public security owners until the public securities are fully
1247	1247	discharged.
1248	1248	Sec. 2210.617. ENFORCEMENT BY MANDAMUS. A writ of mandamus
1249	1249	and any other legal and equitable remedies are available to a party
1250	1250	at interest to require the association or another party to fulfill
1251	1251	an agreement and to perform functions and duties under:
1252	1252	(1) this subchapter;
1253	1253	(2) the Texas Constitution; or
1254	1254	(3) a relevant public security resolution.
1255	1255	Sec. 2210.618. EXEMPTION FROM TAXATION. A public security
1256	1256	issued under this subchapter, any transaction relating to the
1257	1257	public security, and profits made from the sale of the public
1258	1258	security are exempt from taxation by this state or by a municipality
1259	1259	or other political subdivision of this state.
1260	1260	Sec. 2210.619. NO PERSONAL LIABILITY. The members of the
1261	1261	association, members of the association board of directors,
1262	1262	association employees, the board, the employees of the Texas Public
1263	1263	Finance Authority, the commissioner, and department employees are
1264	1264	not personally liable as a result of exercising the rights and
1265	1265	responsibilities granted under this subchapter.
1266	1266	Sec. 2210.620. AUTHORIZED INVESTMENTS. Public securities
1267	1267	issued under this subchapter are authorized investments under:
1268	1268	(1) Subchapter B, Chapter 424;
1269	1269	(2) Subchapter C, Chapter 425; and
1270	1270	(3) Sections 425.203-425.213.
1271	1271	SUBCHAPTER N. LEGISLATIVE OVERSIGHT BOARD
1272	1272	Sec. 2210.651. DEFINITION. In this subchapter, "board"
1273	1273	means the windstorm insurance legislative oversight board.
1274	1274	Sec. 2210.652. COMPOSITION OF BOARD. The windstorm
1275	1275	insurance legislative oversight board is composed of eight members
1276	1276	as follows:
1277	1277	(1) four members of the senate appointed by the
1278	1278	lieutenant governor, including the chairperson of the Senate
1279	1279	Business and Commerce Committee, who shall serve as co-chairperson
1280	1280	of the board; and
1281	1281	(2) four members of the house of representatives
1282	1282	appointed by the speaker of the house of representatives.
1283	1283	Sec. 2210.653. POWERS AND DUTIES OF BOARD. (a) The board
1284	1284	shall:
1285	1285	(1) receive information about rules proposed by the
1286	1286	department relating to windstorm insurance and may submit comments
1287	1287	to the commissioner on the proposed rules;
1288	1288	(2) monitor windstorm insurance in this state,
1289	1289	including:
1290	1290	(A) the adequacy of rates;
1291	1291	(B) the operation of the association; and
1292	1292	(C) the availability of coverage; and
1293	1293	(3) review recommendations for legislation proposed
1294	1294	by the department or the association.
1295	1295	(b) The board may request reports and other information from
1296	1296	the department and the association as necessary to implement this
1297	1297	subchapter.
1298	1298	Sec. 2210.654. REPORT. (a) Not later than November 15 of
1299	1299	each even-numbered year, the board shall report on the board's
1300	1300	activities under Section 2210.653 to:
1301	1301	(1) the governor;
1302	1302	(2) the lieutenant governor; and
1303	1303	(3) the speaker of the house of representatives.
1304	1304	(b) The report must include:
1305	1305	(1) an analysis of any problems identified; and
1306	1306	(2) recommendations for any legislative action
1307	1307	necessary to address those problems and to foster stability,
1308	1308	availability, and competition within the windstorm insurance
1309	1309	industry.
1310	1310	SECTION 42. Section 941.003, Insurance Code, is amended by
1311	1311	adding Subsection (e) to read as follows:
1312	1312	(e) A Lloyd's plan is subject to Chapter 2210, as provided
1313	1313	by that chapter.
1314	1314	SECTION 43. Section 942.003, Insurance Code, is amended by
1315	1315	adding Subsection (f) to read as follows:
1316	1316	(f) An exchange is subject to Chapter 2210, as provided by
1317	1317	that chapter.
1318	1318	SECTION 44. The following laws are repealed:
1319	1319	(1) Subdivisions (5) and (12), Section 2210.003,
1320	1320	Insurance Code;
1321	1321	(2) Sections 2210.058 and 2210.059, Insurance Code;
1322	1322	(3) Sections 2210.205 and 2210.206, Insurance Code;
1323	1323	(4) Sections 2210.356, 2210.360, and 2210.363,
1324	1324	Insurance Code; and
1325	1325	(6) Subchapter G, Chapter 2210, Insurance Code.
1326	1326	SECTION 45. (a) The board of directors of the Texas
1327	1327	Windstorm Insurance Association established under Section
1328	1328	2210.102, Insurance Code, as that section existed before amendment
1329	1329	by this Act, is abolished effective December 31, 2009.
1330	1330	(b) The commissioner of insurance shall appoint the members
1331	1331	of the board of directors of the Texas Windstorm Insurance
1332	1332	Association under Section 2210.102, Insurance Code, as amended by
1333	1333	this Act, not later than December 31, 2009.
1334	1334	(c) The term of a person who is serving as a member of the
1335	1335	board of directors of the Texas Windstorm Insurance Association
1336	1336	immediately before the abolition of that board under Subsection (a)
1337	1337	of this section expires on December 31, 2009. Such a person is
1338	1338	eligible for appointment by the commissioner of insurance to the
1339	1339	new board of directors of the Texas Windstorm Insurance Association
1340	1340	under Section 2210.102, Insurance Code, as amended by this Act.
1341	1341	SECTION 46. (a) The commissioner of insurance shall adopt
1342	1342	rules as required by Chapter 2210, Insurance Code, as amended by
1343	1343	this Act, as soon as possible after the effective date of this Act,
1344	1344	but not later than the 30th day after the effective date of this
1345	1345	Act.
1346	1346	(b) The Texas Windstorm Insurance Association, through the
1347	1347	board of directors of that association, shall propose to the
1348	1348	commissioner of insurance amendments to the association's plan of
1349	1349	operation as required by Chapter 2210, Insurance Code, as amended
1350	1350	by this Act, not later than March 1, 2010.
1351	1351	SECTION 47. Sections 2210.202 and 2210.203, Insurance Code,
1352	1352	as amended by this Act, apply to an application for insurance
1353	1353	coverage submitted to the Texas Windstorm Insurance Association on
1354	1354	or after the effective date of this Act.
1355	1355	SECTION 48. Section 2210.251, Insurance Code, as amended by
1356	1356	this Act, applies to an inspection conducted on or after September
1357	1357	1, 2009. Except as otherwise specifically provided by that
1358	1358	section, a structure that has been inspected and is the subject of a
1359	1359	certificate of compliance issued by the Texas Department of
1360	1360	Insurance under Subsection (g), Section 2210.251, Insurance Code,
1361	1361	as that section existed immediately before September 1, 2009, is
1362	1362	not required to obtain a new inspection certificate to remain
1363	1363	eligible for insurance coverage through the Texas Windstorm
1364	1364	Insurance Association unless the structure is altered, remodeled,
1365	1365	enlarged, or repaired on or after September 1, 2009.
1366	1366	SECTION 49. The changes in law made by this Act in amending
1367	1367	Section 2210.251, Insurance Code, take effect September 1, 2009.
1368	1368	SECTION 50. Not later than January 1, 2010, the relevant
1369	1369	state agencies shall adopt the contracts required by Section
1370	1370	418.126, Government Code, as added by this Act.
1371	1371	SECTION 51. (a) Except as provided by Subsection (b) of
1372	1372	this section or otherwise provided by this Act, this Act takes
1373	1373	effect immediately if it receives a vote of two-thirds of all the
1374	1374	members elected to each house, as provided by Section 39, Article
1375	1375	III, Texas Constitution. If this Act does not receive the vote
1376	1376	necessary for immediate effect, this Act takes effect September 1,
1377	1377	2009.
1378	1378	(b) Sections 1 through 4 and 50 of this Act take effect
1379	1379	September 1, 2009.
1380	1380	______________________________ ______________________________
1381	1381	President of the Senate Speaker of the House
1382	1382	I certify that H.B. No. 4409 was passed by the House on May 6,
1383	1383	2009, by the following vote: Yeas 147, Nays 0, 1 present, not
1384	1384	voting; that the House refused to concur in Senate amendments to
1385	1385	H.B. No. 4409 on May 29, 2009, and requested the appointment of a
1386	1386	conference committee to consider the differences between the two
1387	1387	houses; that the House adopted the conference committee report on
1388	1388	H.B. No. 4409 on May 31, 2009, by the following vote: Yeas 147,
1389	1389	Nays 0, 1 present, not voting; and that the House adopted H.C.R. No.
1390	1390	287 authorizing certain corrections in H.B. No. 4409 on June 1,
1391	1391	2009, by the following vote: Yeas 147, Nays 0, 1 present, not
1392	1392	voting.
1393	1393	______________________________
1394	1394	Chief Clerk of the House
1395	1395	I certify that H.B. No. 4409 was passed by the Senate, with
1396	1396	amendments, on May 27, 2009, by the following vote: Yeas 31, Nays
1397	1397	0; at the request of the House, the Senate appointed a conference
1398	1398	committee to consider the differences between the two houses; that
1399	1399	the Senate adopted the conference committee report on H.B. No. 4409
1400	1400	on June 1, 2009, by the following vote: Yeas 31, Nays 0; and that
1401	1401	the Senate adopted H.C.R. No. 287 authorizing certain corrections
1402	1402	in H.B. No. 4409 on June 1, 2009, by the following vote: Yeas 31,
1403	1403	Nays 0.
1404	1404	______________________________
1405	1405	Secretary of the Senate
1406	1406	APPROVED: __________________
1407	1407	Date
1408	1408	__________________
1409	1409	Governor