BILL ANALYSIS H.B. 1089 By: Brimer (Armbrister) State Affairs 04-25-95 Senate Committee Report (Amended) BACKGROUND The Texas Workers' Compensation Commission (TWCC) was created in 1989 by the 71st Legislature. TWCC is responsible for ensuring timely, fair, and appropriate benefits for injured and ill workers; providing an effective forum for parties to resolve claim disputes without going to court; helping Texas employers provide safer workplaces; developing programs to contain or reduce medical and legal costs; regulating self-insurance for private employers; helping state agencies establish effective risk management programs; and enforcing compliance with state workers' compensation laws and agency rules. PURPOSE As engrossed, H.B. 1089 extends the existence of the Texas Workers' Compensation Commission; provides penalties. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Texas Workers' Compensation Commission in SECTIONS 1.17, 1.26, 1.30, and 1.37 (Sections 402.073(a), 408.122(b), 409.042(c), 411.062(a), Labor Code) of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. TEXAS WORKERS' COMPENSATION COMMISSION SECTION 1.01. Amends Section 401.002, Labor Code, to delete the provision that subjects the Texas Workers' Compensation Research Center to Chapter 325, Government Code. Continues the Texas Workers' Compensation Commission (commission) through September 1, 2007. SECTION 1.02. Amends Section 402.001(c), Labor Code, to provide that a person is not eligible for appointment as a member of the commission if the person provides services subject to regulation by the commission or charges fees that are subject to regulation by the commission. SECTION 1.03. Amends Chapter 402A, Labor Code, by adding Section 402.0015, as follows: Sec. 402.0015. TRAINING PROGRAM FOR COMMISSION MEMBERS. (a) Authorizes a member of the commission to assume the member's duties upon completion of the training program established under this section. (b) Sets forth the information the training program must provide each member. SECTION 1.04. Amends Section 402.003, Labor Code, to prohibit a person from serving as a member of the commission or acting as general counsel to the commission if the person is required to register as a lobbyist. Deletes existing section. SECTION 1.05. Amends Sections 402.005(a) and (c), Labor Code, as follows: (a) Sets forth grounds for removal from the commission. (c) Requires the executive director of the commission to notify the chairman of the commission of the potential ground. Requires the chairman to notify the governor and the attorney general of the potential ground for removal. Requires the executive director to notify the next highest officer of the commission who then must notify the governor and the attorney general. SECTION 1.06. Amends Section 402.008(a), Labor Code, to require the governor to designate a member of the commission as the chairman of the commission, rather than the commission electing one of its members, to serve a two-year term. Requires the governor to alternate the chairmanship between the members who are employers and the members who are wage earners. SECTION 1.07. Amends Chapter 402A, Labor Code, by adding Section 402.012, as follows: Sec. 402.012. CONFLICT OF INTEREST. (a) Prohibits certain persons from participating as a member of the commission or from being employed by the commission. (b) Requires a person who accepts appointment to the commission to resign the position or terminate the contract with the trade association if applicable. (c) Defines "Texas trade association." SECTION 1.08. Amends Section 402.023, Labor Code, as follows: Sec. 402.023. COMPLAINT INFORMATION. (a) Requires the executive director to keep an information file about each written complaint filed with the commission that is unrelated to a specific workers' compensation claim. Sets forth the required contents of the information file. (b) Requires the executive director to provide information about the commission's policies and procedures relating to complaint investigation and resolution to a person filing a complaint and the person about whom the complaint is made. Requires the commission to notify those persons about the status of the complaint unless the notice would jeopardize an undercover investigation. SECTION 1.09. Amends Section 402.024, Labor Code, as follows: (b) Requires the commission to comply with federal and state laws related to program and facility accessibility. (c) Requires the executive director to prepare and maintain a written plan that describes how a person who does not speak English may be provided reasonable access to the commission's programs and services. Deletes existing Subsection (c). SECTION 1.10. Amends Section 402.041, Labor Code, by adding Subsection (d), to require the commission to develop and implement policies that clearly separate the policymaking responsibilities of the commission and the management responsibilities of the executive director and the staff of the commission. SECTION 1.11. Amends Section 402.044, Labor Code, as follows: (a) Requires the executive director to develop an intra-agency career ladder program that addresses opportunities for mobility and advancement for employees within the commission. Requires the program to require intra-agency posting of all positions concurrently with any public posting. (b) Requires the executive director to develop a system of annual performance evaluations that are based on documented employee performance. SECTION 1.12. Amends Section 402.045, Labor Code, as follows: (a) Requires the executive director to prepare and maintain a written policy statement to ensure implementation of a program of equal employment opportunity under which all personnel transactions are made without regard to certain personal characteristics. Sets forth the required contents of the policy statement. (b) Establishes the required criteria for a policy statement. (c) Makes a conforming change. SECTION 1.13. Amends Chapter 402D, Labor Code, by adding Section 402.0665, as follows: Sec. 402.0665. LEGISLATIVE OVERSIGHT. Authorizes the legislature to adopt requirements relating to legislative oversight of the commission and the workers' compensation system of this state. Requires the commission to comply with any requirements adopted by the legislature under this section. SECTION 1.14. Amends Section 402.068, Labor Code, as follows: Sec. 402.068. New heading: DELEGATION OF RIGHTS AND DUTIES. Prohibits the commission from delegating rights and duties imposed on it by this subchapter, except as expressly provided. SECTION 1.15. Amends Section 402.069, Labor Code, to require the executive director to provide certain information to the members of the commission and commission employees. SECTION 1.16. Amends Section 402.070, Labor Code, to make nonsubstantive changes. SECTION 1.17. Amends Section Chapter 402D, Labor Code, by adding Section 402.073, as follows: Sec. 402.073. COOPERATION WITH STATE OFFICE OF ADMINISTRATIVE HEARINGS. (a) Requires the commission and the chief administrative law judge of the State Office of Administrative Hearings (office), by rule, to adopt a memorandum of understanding governing administrative procedure law hearings. (b) Requires the administrative law judge to enter the final decision in a case in which a hearing is conducted by the office after the completion of the hearing. (c) Requires the administrative law judge to propose a decision to the commission for final consideration and decision by the commission. SECTION 1.18. Amends Section 402.091(d), Labor Code, to provide that an offense under this section may not be prosecuted in a court in Travis County unless the information is unlawfully received in Travis County. SECTION 1.19. Amends Chapter 406E, Labor Code, by adding Section 406.097, as follows: Sec. 406.097. EXECUTIVE EMPLOYEES OF CERTAIN BUSINESS ENTITIES. (a) Provides that a sole proprietor, partner, or corporate executive officer of a business entity (officer) that elects to provide workers' compensation insurance coverage is entitled to benefits under that coverage as an employee unless the officer is specifically excluded from coverage though an endorsement to the insurance policy or certificate of authority to self-insure. (b) Provides that the dual capacity doctrine does not apply to a corporate executive officer with an equity ownership in the covered business entity of at least 25 percent and will not invalidate the exclusion of such a corporate executive officer from coverage under Subsection (a). (c) Authorizes a sole proprietor or partner of a covered business entity or a corporate officer with an equity ownership in a covered business entity of at least 25 percent to be excluded from coverage under this section. SECTION 1.20. Amends Sections 407.046(b) and (c), Labor Code, to make conforming changes. SECTION 1.21. Amends Section 407.103(b), Labor Code, to require the director to multiply the amount of certified self-insurer's liabilities for workers' compensation claims incurred in the previous year, including claims incurred but not reported, plus the amount of expense incurred by the certified self-insurer in the previous year for administration of self-insurance, including legal costs, by 1.02. Deletes existing Subsection (b). SECTION 1.22. Amends Section 407.122, Labor Code, by amending Subsections (b) and (c) and by adding Subsection (d), as follows: (b) Establishes the composition of the board of directors (board) of the Texas Certified Self-Insurer Guaranty Association. (c) Provides that the executive director of the commission and the director of the division of self-insurance regulation serve as nonvoting members of the board. (d) Provides that a board member or member of the staff of the board is not liable in a civil action for an act performed in good faith in the execution of that person's powers or duties. SECTION 1.23. Amends Section 407.126, Labor Code, as follows: Sec. 407.126. New heading: TRUST FUND; FEE; SCHEDULE. (a) Requires each member of the association to be assessed a fee to create, over a period of 10, rather than five years, a Texas certified self-insurer guaranty trust fund of at least $1 million for the emergency payment of the compensation liabilities of an impaired employer. (b) Requires the board to adopt a year-by-year schedule of assessments to meet the 10-year funding goal of the trust fund. (c)-(d) Redesignated from existing Subsections (b) and (c). SECTION 1.24. Amends Section 408.023(b), Labor Code, to include a violation of Chapter 413, Labor Code, as criteria for removing a doctor from the approved list. SECTION 1.25. Amends Section 408.083, Labor Code, as follows: (a) Makes a conforming change. (b) Provides that if an employee incurs an occupational diseases, the employee's eligibility for temporary income benefits, impairment income benefits, and supplement income benefits, and supplemental income benefits terminates on the expiration of 401 weeks after the date on which benefits began to accrue. SECTION 1.26. Amends Section 408.122, Labor Code, as follows: Sec. 408.122. New heading: ELIGIBILITY FOR IMPAIRMENT INCOME BENEFITS; DESIGNATED DOCTOR. (a) No change. (b) Requires a doctor to meet specific qualifications, including training in the determination of impairment ratings in order to be eligible to serve as a designated doctor. Requires the executive director to develop qualification standards and administrative policies to implement this subsection, and authorizes the commission to adopt rules as necessary. Requires a designated doctor to be in the same discipline and licensed by the same board of examiners as the employee's doctor of choice, to the extent possible. SECTION 1.27. Amends Section 408.125, Labor Code, by adding Subsection (f), to authorize an injured employee or member of the commission staff to communicate with the designated doctor about the case regarding the injured employee's medical condition or history before the examination of the injured employee by the designated doctor. Authorizes communication with the designated doctor regarding the injured employee's medical condition or history to be made only through appropriate commission staff members. Authorizes the doctor to initiate communication with any doctor who has previously treated or examined the injured employee for the work-related injury. SECTION 1.28. Amends Section 409.005, Labor Code, as follows: Sec. 409.005. New heading: REPORT OF INJURY; ADMINISTRATIVE VIOLATION. (a) Requires an employer to report to the employer's insurance carrier (carrier) under certain conditions. (b) Requires the report to be made within a specified time. (c) Requires the employer to deliver a written copy of the report to the injured employee at the time that the report is made to the carrier. (d) Requires the carrier to file the report of the injury on behalf of the policyholder. Requires the carrier to electronically file the report with the commission within a specified time. (e) Authorizes the executive director to waive the electronic filing requirement under Subsection (d) and allow a carrier to mail or deliver the report to the commission within a specified time. (f) Prohibits a report from being considered an admission by or evidence against an employer or a carrier in a proceeding before the commission or a court in which the facts set out in the report are contradicted by the employer or insurance carrier. (g) Requires the report to contain a summary written in plain language of the employee's statutory rights and responsibilities. (h)-(j) Makes conforming changes. Redesignated from existing Subsections (d)-(f). SECTION 1.29. Amends Chapter 409A, Labor Code, by adding Section 409.013, as follows: Sec. 409.013. PLAIN LANGUAGE INFORMATION; NOTIFICATION OF INJURED WORKER. (a) Requires the commission to develop information for public dissemination about the benefit process and the compensation procedures. Sets forth the required conditions of the information. (b) Requires the commission to contact the affected employee by mail or by telephone and to provide the information to that employee, together with any other information that may be prepared by the commission for public dissemination that relates to the employee's situation. SECTION 1.30. Amends Chapter 409C, Labor Code, as follows: Sec. 409.041. New heading: OMBUDSMAN PROGRAM. Makes a nonsubstantive change. Sec. 409.042. DESIGNATION AS OMBUDSMAN; ELIGIBILITY AND TRAINING REQUIREMENTS; CONTINUING EDUCATION REQUIREMENTS. (a) Redesignated from existing Subsection (c). (b) Establishes the eligibility requirements for designation as an ombudsman. (c) Requires the commission, by rule, to adopt training guidelines and continuing education requirements for ombudsmen. Sets forth the required guidelines regarding training. Sec. 409.043. EMPLOYER NOTIFICATION; ADMINISTRATIVE VIOLATION. (a) Redesignated from existing 409.041(d). (b) Provides that an employer who fails to comply with this section commits a Class C administrative violation. Sec. 409.044. Redesignated from Section 409.042. SECTION 1.31. Amends Section 411.032, Labor Code, as follows: Sec. 411.032. New heading: EMPLOYER INJURY AND OCCUPATIONAL DISEASE REPORT; ADMINISTRATIVE VIOLATION. (c) Provides that an employer commits a Class D administrative violation if the employer fails to report to the commission unless good cause exists, as determined by the commission, for the failure. SECTION 1.32. Amends Section 411.034, Labor Code, as follows: Sec. 411.034. New heading: CONFIDENTIALITY REQUIREMENT; OFFENSE; PENALTY. (b) Provides that a person commits an offense if the person knowingly, intentionally, or recklessly publishes, discloses, or distributes information that is confidential to a person not authorized to receive the information. (c) Provides that a person commits an offense if the person knowingly, intentionally, or recklessly receives information that is confidential that the person is not authorized to receive. (d) Provides that an offense under this section is a Class A misdemeanor. (e) Provides that an offense under this section may be prosecuted in a court in the county where the information was unlawfully received, published, disclosed, or distributed. (f) Provides that a district court in Travis County has jurisdiction to enjoin the use, publication, disclosure, or distribution of confidential information. SECTION 1.33. Amends Section 411.041(b), Labor Code, to provide that Section 411.0415 is an exception to this section. SECTION 1.34. Amends Chapter 411D, Labor Code, by adding Section 411.0415, as follows: Sec. 411.0415. EXEMPTION FOR CERTAIN EMPLOYERS; HEARING. (a) Authorizes the executive director to exclude from identification as an extra-hazardous employer an employer who presents evidence satisfactory to the commission that the injury frequencies of the employer substantially exceed those that may reasonably be expected in that employer's business or industry only because of the occurrence of a specified fatality. (b) Requires the commission, by rule, to analyze and list fatalities that may not be related to the work environment. (c) Authorizes the commission to request a hearing if the commission determines that the case history of the employee's fatality indicates that the employer or the work environment was a proximate cause of the fatality. Authorizes the commission to require the employer to participate in the program if the fatality causes the employer to be designated as an extra-hazardous employer. SECTION 1.35. Amends Section 411.045(a), Labor Code, to require the division of workers' health and safety of the commission (division) to conduct a follow-up inspection of the employer's premises not earlier than six months or later than nine months, rather than exactly six months after the formulation of an accident prevention plan. SECTION 1.36. Amends Section 411.049(b), Labor Code, to make conforming changes. SECTION 1.37. Amends Section 411.062, Labor Code, as follows: (a) Requires the commission, by rule, to establish qualifications for field safety representatives. Requires the rules to include education experience requirements for those representatives. (b) Requires each field safety representative to meet the qualifications established by the commission. Deletes Subdivisions (1)-(6). SECTION 1.38. Amends Chapter 412, Labor Code, by adding Section 412.0025, as follows: Sec. 412.0025. DUTIES OF STATE AGENCIES. Requires each state agency to actively manage the risks of that agency by developing, implementing, and maintaining health and safety programs and programs designed to assist employees who sustain compensable injuries to return to work. SECTION 1.39. Amends Section 412.003(a), Labor Code, to require the division to include reviewing, verifying, monitoring, and approving risk management programs adopted by state agencies among the duties of the division. SECTION 1.40. Amends Section 412.007(b), Labor Code, to make a conforming change. SECTION 1.41. Amends Section 413.002, Labor Code, by adding Subsection (c) to require the division to evaluate the compliance of those providers who serve as designated doctors with this subtitle and with rules adopted by the commission relating to medical policies, fee guidelines, and impairment ratings. SECTION 1.42. Amends Section 413.031(d), Labor Code, to make conforming changes. SECTION 1.43. Amends Chapter 413D, Labor Code, by adding Section 413.044, as follows: Sec. 413.044. SANCTIONS OF DESIGNATED DOCTOR. Authorizes the commission to impose sanctions against a person who serves as a designated doctor after an evaluation is determined by the division to be out of compliance with this subtitle or with rules adopted by the commission relating to medical policies, fee guidelines, and impairment ratings. SECTION 1.44. Amends Chapter 415A, Labor Code, by amending Section 415.002 and 415.003 and by adding Section 415.0035, as follows: Sec. 415.002. (a) Deletes Subdivisions (2), (3), (4)-(23) as Subdivisions (2)-(23), and (19). (b) Makes a conforming change. Sec. 415.003. Deletes Subdivisions (3) and (5). Sec. 415.0035. ADDITIONAL VIOLATIONS BY INSURANCE CARRIER OR HEALTH CARE PROVIDER. (a) Sets forth the conditions for commission of an offense by an insurance carrier or its representative. (b) Sets forth conditions for commission of an administrative violation by a health care provider. (c) Provides that a violation under Subsection (a) is Class C administrative violation. (d) Provides that a violation under Subsection (b) is Class D administrative violation. SECTION 1.45. Amends Section 415.034(a), Labor Code, to make conforming and nonsubstantive changes. SECTION 1.46. Amends Title 5A, Labor Code, by adding Chapter 418, as follows: CHAPTER 418. CRIMINAL PENALTIES Sec. 418.001. PENALTY FOR FRAUDULENTLY OBTAINING OR DENYING BENEFITS. (a) Sets forth the actions which constitute commission of an offense regarding denial of payment of benefits. (b) Provides that an offense under Subsection (a) is a Class A misdemeanor if the value of the benefits is less than $1,500, and a state jail felony if the value of the benefits is $1,500 or more. Sec. 418.002. PENALTY FOR FRAUDULENTLY OBTAINING WORKERS' COMPENSATION INSURANCE COVERAGE. (a) Sets forth the actions which constitute commission of an offense regarding intent to obtain workers' compensation insurance coverage or to avoid payment of premiums due for that coverage. (b) Provides that an offense under Subsection (a) is a Class A misdemeanor if the value of the benefits is less than $1,500, and a state jail felony if the value of the benefits is $1,500 or more. (c) Authorizes the court to order a person to pay restitution to an insurance company, the Texas workers' compensation insurance facility, or the Texas Workers' Compensation Insurance Fund if the person commits an offense under this section. SECTION 1.47. (a) Makes application of Sections 402.001, 402.005, and 402.012, Labor Code, as amended or added by this Act, prospective. (b) Requires the training program required under Section 402.0015, Labor Code, to be established not later than January 1, 1996. SECTION 1.48. Requires the commission to adopt rules necessary to implement to changes in law made by this Act to Title 5, Labor Code, not later than March 1, 1996. SECTION 1.49. Provides that Section 406.097, Labor Code, applies to an insurance policy or certificate of authority to self-insure prospective to January 1, 1996. SECTION 1.50. Makes application of Section 408.083, Labor Code, of this Act prospective. SECTION 1.51. Makes application of Section 409.005, Labor Code, of this Act prospective. SECTION 1.52. Makes application of Chapter 409C, Labor Code, of this Act prospective. SECTION 1.53. Makes application of Section 402.092, Labor Code, of this Act prospective. SECTION 1.54. Makes application of Section 411.062, Labor Code, of this Act prospective. SECTION 1.55. Requires a state agency to develop programs, as required, not later than January 1, 1996. SECTION 1.56. Provides that a change in law under this Act transferring jurisdiction of a hearing to the State Office of Administrative Hearings takes effect January 1, 1996. SECTION 1.57. Makes application of this Act prospective. ARTICLE 2. WORKERS' COMPENSATION INSURANCE COVERAGE FOR CERTAIN GOVERNMENTAL EMPLOYEES SECTION 2.01. Amends Sections 501.002(b) and (c), Labor Code, as follows: (b) Requires an individual state agency to be considered the employer. Makes a conforming change. (c) Defines "insurer" and "employer" by adding "state agency" as a meaning. SECTION 2.02. Amends Section 501.022, Labor Code, as follows: Sec. 501.022. TEXAS TECH UNIVERSITY EMPLOYEES. (a) Provides that an eligible employee of Texas Tech University, Texas Tech Health Sciences Center, rather than the Research Farm and School of Medicine at Lubbock, or another agency is entitled to participate in the workers' compensation program for state employees provided under this chapter. (b) Provides that Texas Tech University is a state agency and shall act in the capacity of employer. (c) Provides that Texas Tech University Health Sciences Center is a state agency and shall act in the capacity of employer. SECTION 2.03. Amends Section 501.042, Labor Code, to make conforming changes. SECTION 2.04. Amends Section 501.043(a), Labor Code, to delete the director's duty to adopt and enforce reasonable rules for the prevention of accidents and injuries. SECTION 2.05. Makes application of Chapter 501, Labor Code, of this Act prospective. ARTICLE 3. CONFORMING AMENDMENTS SECTION 3.01. Amends Section 2003.001(3), Government Code, to define "state agency." SECTION 3.02. Amends Section 2003.021, Government Code, by adding Subsection (c), to require the office to conduct hearings. Sets forth the required actions and considerations of the office regarding the hearings. ARTICLE 4. MISCELLANEOUS PROVISIONS SECTION 4.01. Makes application of Sections 407.046, 411.049(b), 413.031(d), and 415.034, Labor Code, of this Act prospective to January 1, 1996. SECTION 4.02. Effective date: September 1, 1995. SECTION 4.03. Emergency clause.