BILL ANALYSIS H.B. 1091 By: Brimer 2-21-95 Committee Report (Amended) BACKGROUND The 71st Legislature created the Texas Workers' Compensation Research Center (research center) in 1989 to provide objective information on the workers' compensation insurance system in Texas to policymakers. The research center serves as an advisory body to the Texas Workers' Compensation Commission (TWCC) and is charged with developing factual, fair and unbiased research, findings, and conclusions in key areas of the workers' compensation system. To conduct research, the research center may access the files and records of TWCC, the Texas Employment Commission (TEC), the Texas Department of Insurance (TDI), the Texas Department of Human Services (TDHS) and other state agencies. To support these functions, the research center had a budget of $709,503 and 8 employees for fiscal year 1994. The Legislative Oversight Committee on Workers' Compensation (LOC) was created in 1991, as part of the Workers' Compensation Act. The purpose of the LOC is to report to the Governor, Lt. Governor, and Speaker of the House on any problems in the workers' compensation system with recommendations for commission and legislative action; provide an evaluation of the research conducted by the research center with recommendations for any additional necessary research; and monitor the effectiveness of the workers' compensation system to provide adequate, equitable, and timely benefits to injured workers at a reasonable cost to employers. To carry out its functions, the LOC was budgeted $196,037 and 5 employees for fiscal year 1994. PURPOSE The purpose of this bill is to create the Research and Oversight Council on Workers' Compensation, and merge the functions and responsibilities of the Texas Workers' Compensation Research Center and the Legislative Oversight Committee on Workers' Compensation in this new entity. The Texas Workers' Compensation Research Center and its board, and the LOC would be abolished. The Research and Oversight Council on Workers' Compensation would be responsible for doing research on and monitoring the effectiveness of the workers' compensation system. The bill also includes the recommendations of the Sunset Advisory Commission regarding the research center. Modifications proposed by this bill: restructure the board of directors to include three members of the Senate, three members of the House of Representatives, one TWCC commissioner who represents employees, one TWCC commissioner who represents employers, and the commissioner of insurance or a designee; require the council to identify, collect, maintain and analyze key information needed to assess the operational effectiveness of the state's workers' compensation system and provide information to the Governor and the Legislature on a quarterly basis; require the council to collect information from the Texas Workers' Compensation Insurance Fund and determine its impact on the workers' compensation system; authorize the council to seek and use federal funds; and provide for other changes. 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 Chapter 404, Labor Code. Changes the name of the chapter from the TEXAS WORKERS' COMPENSATION RESEARCH CENTER to the RESEARCH AND OVERSIGHT COUNCIL ON WORKERS' COMPENSATION. Sec. 404.001. Defines the "Board" as the board of directors of the council, "council" as the Research and Oversight Council on Workers' Compensation, and "Executive Director" as the executive director of the council. Sec. 404.0015. Subjects the Research and Oversight Council to Chapter 325, Government Code (Sunset Act) and sets the council's Sunset date as September 1, 2007, which provides for the usual 12-year review. Sec. 404.002. (a) Establishes the council as an advisory body to the commission, and requires the council to be operated in a manner that ensures research is factual, fair, and unbiased. (b) Requires the council to conduct professional studies and research formerly done by the research center. Adds studying the Workers' Compensation Insurance Fund and its impact on the workers' compensation system to the council's duties. (c) Transfers the research center's duty to conduct studies related to drugs in the workplace to the council. (d) Requires the council to identify, collect, maintain, and analyze key information to assess the operational effectiveness of the workers' compensation system, and to provide this information to the Legislature on a quarterly basis. (e) Authorizes the council, with the approval of the board, to apply for and spend federal funds. Sec. 404.003. (a) Amends language to substitute "council" for "research center." Specifies that the council is funded by the maintenance tax. (e) Requires amounts received from the maintenance tax to be deposited in a special account for the operation of the council and requires the council to reimburse the general revenue fund in accordance with Article 4.19, Insurance Code. Changes the word "fund" to "account." (f) Exempts the account established in subsection (e) from fund consolidation requirements of the Government Code. Sec. 404.004. (a) Changes the composition of the board. Requires the board to be composed of three senators, appointed by the lieutenant governor; three members of the house of representatives, appointed by the speaker of the house of representatives; a member of the Texas Workers' Compensation Commission representing labor, appointed by the commissioners; a member of the Texas Workers' Compensation Commission representing employers, appointed by the commissioners; and the commissioner of insurance or a person designated by the commissioner. Deletes language related to the composition of the research center board. (b) Deletes language related to appointment of public members. (c) Reletters subsection. (d) Adds standard language developed by the Sunset Commission. Prohibits employees compensated at or above Group 17 in the appropriations act from being an officer or employee of a related Texas trade association. (e) Adds standard language developed by the Sunset Commission. Defines a Texas trade association. (f) Adds standard language developed by the Sunset Commission. Requires the board of directors to clearly separate its policymaking responsibilities from the management responsibilities of the executive director and staff of the council. Deletes language related to the use of the term "disability." Sec. 404.0041. Adds standard language developed by the Sunset Commission. Prohibits registered lobbyists from serving as the general counsel of the board or the council. Sec. 404.005. (a) Provides that a person appointed to the board serves at the will of the appointing state officer or agency. Deletes language defining the terms of the members. (b) Requires the appointing officer or agency to appoint a qualified replacement if a vacancy occurs on the board. Reletters subsection. (c) Specifies that the Commissioner of Insurance serves as an ex officio member of the board as long as he or she is Commissioner. Provides the Commissioner or designee with the authority to vote on any matter before the board. Sec. 404.0055. (a) - (c) Adds standard language developed by the Sunset Commission. Defines the grounds for removing a board member and requires notification of the council's presiding officer, the governor and the attorney general if knowledge that a potential ground for removal exists. Affirms that an action of the board is valid even if it is taken when a ground for removal exists for one of the members. (d) Clarifies that the use of the term "disability" in Sec. 401.011(16) does not apply to the use of the term "disability" in subsection (a). Sec. 404.006. (a) Requires the council to have a chairman and vice-chairman as presiding officers, and that they serve in this capacity for two-year terms. Requires the lieutenant governor and speaker of the house of representatives to alternate in the selection of the chairman and vice-chairman, with the speaker of the house of representatives designating the first chairman and the lieutenant governor selecting the first vice-chairman. (b) Specifies that the period of service for the chairman and vice-chairman expire on February 1 of each even-numbered year. Authorizes the chairman and vice-chairman to vote on all matters before the board. (c) Provides for the board to meet as necessary at the call of the chairman. Reletters subsections. Sec. 404.007. (a) Specifies the general powers and duties of the board and requires the board to approve the operating budget of the council; adopt rules for the operation of the board and the council; conduct professional studies and research on all matters relevant to the cost, quality, and operational effectiveness of the workers' compensation system; monitor the cost of income benefits, with emphasis on the availability and cost of supplemental income benefits; monitor the performance and operation of the Texas Workers' Compensation Insurance Fund, with emphasis on the insurer of last resort program; meet regularly with any public or private sector entity involved in the workers' compensation system; receive information about rules adopted or proposed by any entity in the workers' compensation system; and review specific recommendations for legislation proposed by any entity in the workers' compensation system. (b) Requires the board to report to the governor, lieutenant governor and speaker of the house no later than December 31 of each even-numbered year. Requires the report to include: activities of the council; identification of any problem identified in the workers' compensation system, with recommendations for regulatory and legislative action based on research and testimony; and the status of the effectiveness of the workers' compensation system to provide adequate, equitable and timely benefits for injured workers at a reasonable cost to employers, with recommendations for any additional research. Deletes language requiring the board to ensure the quality of research products and the economy in the use of funds for projects contracted with and conducted by educational institutions or other public or private research institutions and workers' compensation experts. (d) Allows the board to delegate powers to the executive director as it considers appropriate including general guidance on the identification of information needs and the conduct of research. Provides the board with the authority to contract with other persons, including institutions of higher education, for economics and quality studies; appoint expert advisory committees to provide technical assistance in conducting research; and request reports or other information from appropriate agencies. Sec. 404.008. (a) Requires the board to employ an executive director to administer the council who serves at the pleasure of the board. (b) Requires the executive director to hire staff as necessary to accomplish the objectives of the council. Authorizes the executive director to delegate powers and duties to the staff as necessary. (c) Changes "research center" to "council." (d) Adds standard language developed by the Sunset Commission. Requires the executive director to prepare an annual financial report that meets the reporting requirements in the General Appropriations Act. (e) Adds standard language developed by the Sunset Commission. Requires the executive director to develop an intra-agency career ladder program that addresses mobility and advancement opportunities for employees within the council and requires intra-agency posting of job openings concurrently with any public posting. (f) Adds standard language developed by the Sunset Commission. Requires the executive director to develop a system of annual performance evaluations based on documented employee performance and upon which merit salary increases must be based. (g) - (i) Adds standard language developed by the Sunset Commission. Requires the executive director or a designee to develop an equal employment policy that is annually updated, reviewed by the Texas Commission on Human Rights, and filed with the Governor's Office. (j) Adds standard language developed by the Sunset Commission. Requires the board to inform its members and employees of the qualifications for office or employment and each person's responsibilities under the law. Sec. 404.0091. (a) Adds standard language developed by the Sunset Commission. Requires the council to prepare and distribute information to the public concerning the council's functions and complaint procedures. (b) Adds standard language developed by the Sunset Commission. Requires the board to give the public reasonable opportunity to appear before it regarding issues under the jurisdiction of the council. (c) Adds standard language developed by the Sunset Commission. Requires the council to comply with state and federal program and facility accessibility laws and to develop a plan that describes how non-English speaking persons can be provided reasonable access to the council's programs. Sec. 404.0092. (a) Adds standard language developed by the Sunset Commission. Requires the council to collect and maintain information about all written complaints filed with the council. (b) Adds standard language developed by the Sunset Commission. Requires the council to maintain files on written complaints that the council has the authority to resolve and to notify the parties regarding the status of the complaint quarterly until disposition. Sec. 404.010. (a) Adds authority for the council to access the files and records of the Texas workers' compensation insurance facility, Texas Workers' Compensation Insurance Fund, and other agencies related to workers' compensation. (b) - (c) Changes "research center" to "council." SECTION 2. Abolishes the Legislative Oversight Committee on Workers' Compensation by repealing Chapter 405, Labor Code. SECTION 3. (a) Abolishes the Texas Workers' Compensation Research Center and the board of directors and transfers all state records and other property, employees, and unexpended and unobligated appropriations of the Texas Workers' Compensation Research Center or the board of directors to the Research and Oversight Council on Workers' Compensation. Clarifies that any reference in law to the research center or its board of directors means the Research and Oversight Council on Workers' Compensation or its board of directors. (b) Recreates and redesignates the special fund created under Section 404.003, Labor Code as a special account to be used for the purposes cited in Section 404.003, Labor Code. SECTION 4. Requires the board of directors and the executive director of the Research and Oversight Council on Workers' Compensation to adopt policies as required by the Act no later than January 1, 1996. SECTION 5. Provides for the initial chairman of the board of directors of the Research and Oversight Council on Workers' Compensation to serve as chair until February 1, 1998. SECTION 6. Specifies the effective date of the Act as September 1, 1995. SECTION 7. Emergency clause. Explanation of Amendments COMMITTEE AMENDMENT #1 amends new Section 404.0055, Labor Code. This amendment is a technical correction and modifies standard Sunset language related to who should be notified if grounds for removal of a board member exist. Deletes "governor and the attorney general" and substitutes "lieutenant governor, the speaker of the house of representatives, and the attorney general." Because the lieutenant governor and speaker of the house appoint members of the board, they, and not the governor, should be notified if grounds for removal exist. The governor does not appoint any members of the board. COMMITTEE AMENDMENT #2 amends Section 404.007, Labor Code. This amendment is a technical correction and deletes "quality and economics studies" and substitutes "economical studies of high quality". This amendment authorizes the board to contract for studies that are economical, rather than economic studies. COMMITTEE AMENDMENT #3 amends Section 404.007, Labor Code. This amendment is a technical correction and deletes "meet regularly with" and substitutes "hold regular public hearings and receive testimony and reports from". This amendment would clarify the purpose of the meetings that the board may hold with the Texas Workers' Compensation Commission, the Texas Workers' Compensation Insurance Fund, the Texas workers' compensation insurance facility, the Texas Department of Insurance, the office of the attorney general, and any other public or private entity that is involved in the workers' compensation system. SUMMARY OF COMMITTEE ACTION House Bill 1091 was considered in a public hearing on February 21, 1995. Testifying on the bill were David Holland, representing Sunset Advisory Commission, and Ken Levine, representing Sunset Advisory Commission. Testifying for the bill were George B. Allen, representing Texas Apartment Association, Pam Beachley, representing Business Insurance Consumers Association, Roy Evans, representing himself, Joe Hanson, representing Texas Association of Business and Chambers of Commerce, Ted Roberts, representing Texas Association of Business and Chambers of Commerce, and Ms. Dillon Snowden, representing Texas Association of Rehabilitation Professionals in Private Sector. Testifying against the bill were Joseph Hamilton, representing himself, and Sam D. Seale, representing Texas Association of Counties. The Business and Industry Committee considered three (3) amendments to the bill. Three of those amendments were adopted without objection. A motion to report H.B. 1091, as amended, to the full house with the recommendation that it do pass and be printed carried with a record vote of 8 ayes, 0 nays, 0 present-not-voting, and 1 absent. The vote by which H.B. 1091, as amended, was reported favorably was reconsidered without objection. A motion to report H.B. 1091, as amended, to the full House with the recommendation that it do pass and be printed carried with a record vote of 9 ayes, 0 nays, 0 present-not-voting, and 0 absent.