BILL ANALYSIS

County Affairs Committee

By: Chisum
03-06-95
March 31, 1995

BACKGROUND

Under current law, nothing prevents a political subdivision from
providing employee benefits to persons living in the employee's
household, even if the persons in the household are not related in
any way to the subdivision employee.  A roommate or merely an
acquaintance of a city employee can be included on a local
government employee's health insurance.

Without the prohibition provided in H.B. 86 an employee may be
allowed to extend their coverage to a person who has a pre-existing
illness, or fraudulently sell insurance benefits to a third party
who allegedly lives in the employees house.  This policy leads to
losses to insurance companies and therefore higher insurance rates
as well as the drainage of local tax revenues.

PURPOSE

To prevent local governments from providing employee benefits to
anyone except the employee or their legal relatives.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle C, Title 5, Local Government Code by
adding Chapter 176.

     Sec. 176.001 of the new chapter defines "collateral benefits"
as accident, health, disability,   and dental insurance benefits,
and political subdivision as the definition in current      statutes.

     Sec. 176.002 prohibits a political subdivision from extending
collateral benefits to another     person designated by the
employee unless the person is related to the employee within     the third degree by consanguinity or affinity or unless the
employee is the guardian of the    person.

     Sec. 176.003 does not preclude death benefits from being
assigned to any person by an  employee.

Section 2. Grandfather clause.

Section 3. Effective date, September 1, 1995.

Section 4. Emergency clause.


SUMMARY OF COMMITTEE ACTION

HB 87 was considered by the County Affairs Committee in a public
hearing on 3/8/95. HB 87 was left pending. HB 87 was laid out as
pending business in a public hearing on 3/29/95. HB 87 was reported
favorably with the recommendation that it do pass and be printed
and be sent to the Committee on Local and Consent Calendars, by a
record vote of 8 ayes, 0 nays, 0 pnv, 1 absent.