By: Springer S.B. No. 1973
A BILL TO BE ENTITLED
AN ACT
relating to the operation of and coverage by a nonprofit
agricultural organization.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 8, Insurance Code, is amended by adding
Subtitle N to read as follows:
SUBTITLE N. NONPROFIT AGRICULTURAL ORGANIZATION COVERAGE
CHAPTER 1699. NONPROFIT AGRICULTURAL ORGANIZATION COVERAGE
Sec. 1699.001. DEFINITION OF NONPROFIT AGRICULTURAL
ORGANIZATION. As used in this chapter, "nonprofit agricultural
organization" means an organization:
(1) that is tax-exempt under Internal Revenue Code
under Section 501(c) (5)
(2) that is domiciled in Texas;
(3) that was in existence before 1940;
(4) the members of which include residents of at least
98% of the counties in Texas;
(5) that collects annual dues from its members; and
(6) that was created to promote and develop the most
profitable and desirable system of agriculture and the most
wholesome and satisfactory conditions of rural life in accordance
with its Articles of Incorporation and Bylaws.
Sec. 1699.002 NONPROFIT AGRICULTURAL ORGANIZATION
COVERAGE. As used in this chapter, "nonprofit agricultural
organization coverage" means health benefit coverage provided
under this chapter that is: (1) sponsored by: (a) a nonprofit
agricultural organization; or (b) an affiliate of a nonprofit
agricultural organization (2) offered only to: (a) members of the
nonprofit agricultural organization; and (b) families of the
members of the nonprofit agricultural organization; (3) deemed by
the nonprofit agricultural organization to be important in
assisting its members to live long and productive lives (4) not
considered insurance under this title or any other provision of
Texas law; and (5) not subject to the regulatory authority of the
department of insurance under this title or any other provision of
Texas law.
1699.003 ACKNOWLDEGEMENT.
(a) An individual applying for nonprofit agricultural
organization coverage under this chapter shall be notified by the
nonprofit agricultural organization and must acknowledge that the
nonprofit agricultural organization coverage:(1) is not considered
insurance; and (2) is not subject to the administrative rules of the
Texas Department of Insurance.
(b) The acknowledgement required by subsection (a) must be
in writing and signed by the individual. The nonprofit agricultural
organization shall: (1) keep a copy of the written acknowledgement
for the duration of the contract under which the individual is
provided coverage under this chapter; and (2) provide a copy of the
acknowledgment to the individual at the individual's request.
Sec. 1681.004. EXEMPTION. Notwithstanding any other
provision of this code, a nonprofit agricultural organization that
acts in accordance with this chapter is not considered to be
engaging in the business of insurance.
SECTION 2. This Act takes effect January 1, 2022.