74(R) HB 1089 Senate Committee Report

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.

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.

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.

(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.

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.