By Brimer, Counts, Junell H.B. No. 1090
74R4393 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the continuation and functions of the Texas Workers'
1-3 Compensation Insurance Fund.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1(4), Article 5.76-3, Insurance Code, is
1-6 amended to read as follows:
1-7 (4) "Workers' compensation insurance" means the
1-8 insurance for any risk under:
1-9 (A) Subtitle A, Title 5, Labor Code (the Texas
1-10 Workers' Compensation Act); <(Article 8308-1.01 et seq., Vernon's
1-11 Texas Civil Statutes),>
1-12 (B) the Longshore and Harbor Workers'
1-13 Compensation Act (33 U.S.C. Section 901);<,>
1-14 (C) the Federal Mine Safety and Health Act of
1-15 1977 (33 U.S.C. Section 801 et seq.);<,> or
1-16 (D) Chapter 504, Labor Code <Article 8309h,
1-17 Revised Statutes>.
1-18 SECTION 2. Section 2, Article 5.76-3, Insurance Code, is
1-19 amended by amending Subsections (b) and (d) and adding Subsection
1-20 (f) to read as follows:
1-21 (b) Except as otherwise provided by this subsection, the
1-22 fund is subject to the open meetings law, Chapter 551, Government
1-23 Code and the open records law, Chapter 552, Government Code
1-24 <Chapter 271, Acts of the 60th Legislature, Regular Session, 1967
2-1 (Article 6252-17, Vernon's Texas Civil Statutes), and the open
2-2 records law, Chapter 424, Acts of the 63rd Legislature, Regular
2-3 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes)>.
2-4 The board may hold closed meetings to consider and refuse to
2-5 release information relating to claims, rates, the fund's
2-6 underwriting guidelines, and other information that would give
2-7 advantage to competitors or bidders.
2-8 (d) The fund is subject to Chapter 325, Government Code
2-9 (Texas Sunset Act). Unless continued in effect as provided by that
2-10 chapter, the fund is abolished September 1, 2007 <1995>.
2-11 (f) The fund shall prepare annually a complete and detailed
2-12 written report accounting for all funds received and disbursed by
2-13 the fund during the preceding fiscal year. The annual report must
2-14 meet the reporting requirements applicable to financial reporting
2-15 provided by the General Appropriations Act.
2-16 SECTION 3. Section 3, Article 5.76-3, Insurance Code, is
2-17 amended to read as follows:
2-18 Sec. 3. BOARD OF DIRECTORS. (a) The fund is governed by a
2-19 board of directors composed of nine members, all of whom shall be
2-20 citizens of this state. The members shall be appointed by the
2-21 governor with the advice and consent of the senate, and vacancies
2-22 shall be filled in the same manner. The members of the board of
2-23 directors serve staggered six-year terms, with the terms of three
2-24 members expiring February 1 of each odd-numbered year.
2-25 (b) Except as provided by Subsection (c) of this section, to
2-26 be eligible for appointment as a member of the board a person must
2-27 be a policyholder of the fund or an officer or employee of a
3-1 policyholder and must maintain that status during the period of
3-2 service on the board. Failure to maintain that status disqualifies
3-3 the board member and creates a vacancy on the board.
3-4 (c) The initial appointees to the board must be employers in
3-5 this state.
3-6 (d) In making appointments to the board, the governor shall
3-7 attempt to reflect the social, geographic, and economic diversity
3-8 of the state. To ensure balanced representation, the governor may
3-9 consider the geographic location of a prospective appointee's
3-10 domicile and the prospective appointee's experience in business and
3-11 insurance matters and shall consider those factors in appointing
3-12 members to fill vacancies on the board. Appointments to the board
3-13 shall be made without regard to the race, color, disability, sex,
3-14 religion, age, or national origin of the appointees.
3-15 (e) A person may not serve as a member of the board if the
3-16 person, an individual related to the person within the second
3-17 degree by consanguinity or affinity, or an individual residing in
3-18 the same household with the person:
3-19 (1) is required to be registered or licensed under
3-20 this code;
3-21 (2) is employed by or acts as a consultant to a person
3-22 required to be registered or licensed under this code;
3-23 (3) owns, controls, has a financial interest in, or
3-24 participates in the management of an organization required to be
3-25 registered or licensed under this code;
3-26 (4) receives a substantial tangible benefit from the
3-27 fund or the Texas Department of Insurance; or
4-1 (5) is an officer, employee, or consultant of an
4-2 association in the field of insurance<; or>
4-3 <(6) is required to register as a lobbyist under
4-4 Chapter 305, Government Code>.
4-5 (f) It is a ground for removal from the board if a member:
4-6 (1) does not have at the time of appointment the
4-7 qualifications required by Subsection (b) of this section;
4-8 (2) does not maintain during service on the board the
4-9 qualifications required by Subsection (b) of this section;
4-10 (3) cannot because of illness or disability discharge
4-11 the member's duties for a substantial part of the term for which
4-12 the member is appointed; or
4-13 (4) is absent from more than half of the regularly
4-14 scheduled board meetings that the member is eligible to attend
4-15 during a calendar year.
4-16 (g) The validity of an action of the board is not affected
4-17 by the fact that it is taken when a ground for removal of a board
4-18 member exists.
4-19 (h) If the president has knowledge that a potential ground
4-20 for removal exists, the president shall notify the chairman of the
4-21 board of the potential ground. The chairman shall then notify the
4-22 governor and the attorney general that a potential ground for
4-23 removal exists. If the potential ground for removal involves the
4-24 chairman, the president shall notify the next highest officer of
4-25 the board, who shall notify the governor and the attorney general
4-26 that a potential ground for removal exists.
4-27 (i) Subsection (e) of this section does not prohibit a
5-1 person who is only a consumer of insurance or insurance products
5-2 from serving as a member of the board.
5-3 (j) <(g)> A person who is ineligible to serve on the board
5-4 under Subsection (e) of this section may not serve as a member of
5-5 the board for one year after the date on which the condition that
5-6 makes the person ineligible ends.
5-7 (k) <(h)> Each member shall receive actual and necessary
5-8 travel expenses and expenses incurred in the performance of the
5-9 member's duties as a member.
5-10 (l) <(i)> The governor shall designate a member of the board
5-11 as the chairman of the board to serve in that capacity at the
5-12 pleasure of the governor. The members of the board shall elect
5-13 annually from their number a <chairman, a> vice-chairman<,> and a
5-14 secretary.
5-15 (m) <(j)> The board shall hold meetings at least once each
5-16 month and at other times at the call of the chairman and at times
5-17 established by board rule. Special meetings may be called by any
5-18 two members of the board on two days notice.
5-19 (n) <(k)> A majority of the board members constitutes a
5-20 quorum.
5-21 (o) <(l)> The board shall maintain the principal office of
5-22 the fund in Austin, Texas.
5-23 (p) <(m)> For cost control purposes and as is determined to
5-24 be cost-effective, as many functions as possible shall be performed
5-25 by the fund.
5-26 (q) A person may not serve as a member of the board or act
5-27 as the general counsel to the board or the fund if the person is
6-1 required to register as a lobbyist under Chapter 305, Government
6-2 Code, because of the person's activities for compensation on behalf
6-3 of any person or entity other than the fund.
6-4 (r) The board shall develop and implement policies that
6-5 clearly separate the policymaking responsibilities of the board and
6-6 the management responsibilities of the president and the staff of
6-7 the fund.
6-8 SECTION 4. Article 5.76-3, Insurance Code, is amended by
6-9 adding Section 3A to read as follows:
6-10 Sec. 3A. TRAINING PROGRAM FOR BOARD MEMBERS. (a) Before a
6-11 member of the board may assume the member's duties, the member must
6-12 complete the training program established under this section.
6-13 (b) A training program established under this section shall
6-14 provide information to the member regarding:
6-15 (1) the enabling legislation that created the fund and
6-16 the board;
6-17 (2) the programs operated by the fund;
6-18 (3) the role and functions of the fund;
6-19 (4) the current budget for the fund;
6-20 (5) the results of the most recent independent audit
6-21 of the fund;
6-22 (6) the requirements of:
6-23 (A) the open meetings law, Chapter 551,
6-24 Government Code; and
6-25 (B) the open records law, Chapter 552,
6-26 Government Code;
6-27 (7) the requirements of the conflict of interest laws
7-1 and other laws relating to members of the board; and
7-2 (8) any applicable ethics policies adopted by the fund
7-3 or the Texas Ethics Commission.
7-4 SECTION 5. Section 4, Article 5.76-3, Insurance Code, is
7-5 amended by adding Subsections (c), (d), and (e) to read as follows:
7-6 (c) The board shall appoint an internal auditor in
7-7 compliance with Chapter 2102, Government Code. The internal
7-8 auditor serves at the pleasure of the board.
7-9 (d) If the fund obtains legal services through the use of
7-10 outside counsel, the attorney general shall annually review the use
7-11 of outside counsel by the fund to ensure that:
7-12 (1) the use of outside counsel does not result in a
7-13 conflict of interest; and
7-14 (2) the persons used as outside counsel comply with
7-15 state and federal policies regarding the treatment of persons who
7-16 are members of minority groups.
7-17 (e) The board shall provide requested information to
7-18 appropriate legislative committees in the manner requested by those
7-19 committees.
7-20 SECTION 6. Section 6, Article 5.76-3, Insurance Code, is
7-21 amended by adding Subsections (f)-(l) to read as follows:
7-22 (f) The president shall develop a career ladder program that
7-23 addresses opportunities for mobility and advancement for employees
7-24 within the fund. The program shall require internal posting of all
7-25 positions concurrently with any public posting.
7-26 (g) The president shall develop a system of annual
7-27 performance evaluations that are based on documented employee
8-1 performance. All merit pay for fund employees must be based on the
8-2 system established under this subsection.
8-3 (h) The president shall prepare and maintain a written
8-4 policy statement to assure implementation of a program of equal
8-5 employment opportunity under which all personnel transactions are
8-6 made without regard to race, color, disability, sex, religion, age,
8-7 or national origin. The policy statement must include:
8-8 (1) personnel policies, including policies relating to
8-9 recruitment, evaluation, selection, appointment, training, and
8-10 promotion of personnel that are in compliance with the requirements
8-11 of Chapter 21, Labor Code;
8-12 (2) a comprehensive analysis of the fund workforce
8-13 that meets federal and state guidelines;
8-14 (3) procedures by which a determination can be made
8-15 about the extent of underuse in the fund workforce of all persons
8-16 for whom federal or state guidelines encourage a more equitable
8-17 balance; and
8-18 (4) reasonable methods to appropriately address those
8-19 areas of underuse.
8-20 (i) A policy statement prepared under Subsection (h) of this
8-21 section must:
8-22 (1) cover an annual period;
8-23 (2) be updated annually;
8-24 (3) be reviewed annually by the Commission on Human
8-25 Rights for compliance with Subsection (h)(1); and
8-26 (4) be filed with the governor's office.
8-27 (j) The governor's office shall deliver a biennial report to
9-1 the legislature based on the information received under Subsection
9-2 (i) of this section. The report may be made separately or as a
9-3 part of other biennial reports made to the legislature.
9-4 (k) The president shall provide to members of the board and
9-5 to fund employees, as often as necessary, information regarding
9-6 their qualification for office or employment under this article and
9-7 their responsibilities under applicable laws relating to standards
9-8 of conduct for board members or employees.
9-9 (l) In hiring employees for the fund under this article, the
9-10 president shall ensure that the fund complies with the minority
9-11 hiring practices guidelines adopted for state agencies and
9-12 institutions by the General Appropriations Act.
9-13 SECTION 7. Section 10(l), Article 5.76-3, Insurance Code, is
9-14 amended to read as follows:
9-15 (l) The compliance and practices division of the commission
9-16 shall enforce compliance with this section through the
9-17 administrative violation proceedings under Chapter 415, Labor Code
9-18 <Article 10, Texas Workers' Compensation Act (Article 8308-10.01 et
9-19 seq., Vernon's Texas Civil Statutes)>.
9-20 SECTION 8. Section 16, Article 5.76-3, Insurance Code, is
9-21 amended to read as follows:
9-22 Sec. 16. CANCELLATION AND NONRENEWAL. The fund may cancel
9-23 or refuse to renew coverage on a policyholder as provided by
9-24 Section 406.008, Labor Code <in Section 3.28, Texas Workers'
9-25 Compensation Act (Article 8308-3.28, Vernon's Texas Civil
9-26 Statutes)>.
9-27 SECTION 9. Section 17(a), Article 5.76-3, Insurance Code, is
10-1 amended to read as follows:
10-2 (a) Not later than March 1 of each subsequent year <the 30th
10-3 day after the date on which the fund's fiscal year ends>, the board
10-4 shall publish a report analyzing the fund's activities and fiscal
10-5 condition during the preceding fiscal year and shall file the
10-6 report with the Texas Department of Insurance. The board shall
10-7 have an independent audit made of the annual <each such> report.
10-8 SECTION 10. Article 5.76-3, Insurance Code, is amended by
10-9 adding Section 17A to read as follows:
10-10 Sec. 17A. ADDITIONAL AUDIT REQUIREMENTS; INTERNAL AUDIT
10-11 REPORT. (a) The state auditor shall periodically identify issues
10-12 related to the operational efficiency, effectiveness, and statutory
10-13 compliance of the fund. The fund shall include all issues
10-14 identified by the state auditor in the fund's annual independent
10-15 and internal audit plans.
10-16 (b) Each person who conducts an independent audit or
10-17 internal audit of the fund shall send a copy of the audit report
10-18 prepared by the person to the office of the state auditor. The
10-19 state auditor shall summarize the audit reports presented under
10-20 this subsection in an annual memorandum to the Legislative Audit
10-21 Committee.
10-22 (c) The internal auditor appointed under Section 4 of this
10-23 article shall submit the internal audit report directly to the
10-24 board and shall provide a summary of the report to the governor,
10-25 lieutenant governor, and speaker of the house of representatives.
10-26 The internal auditor's summary report must include an analysis of
10-27 the use by the fund of historically underutilized businesses. For
11-1 purposes of this subsection, "historically underutilized business"
11-2 has the meaning assigned by Section 1.02, State Purchasing and
11-3 General Services Commission Act (Article 601b, Vernon's Texas Civil
11-4 Statutes).
11-5 SECTION 11. Article 5.76-3, Insurance Code, is amended by
11-6 adding Sections 19A and 19B to read as follows:
11-7 Sec. 19A. PUBLIC INFORMATION; ACCESSIBILITY. (a) The fund
11-8 shall prepare information of public interest describing the
11-9 functions of the fund and the procedures by which complaints are
11-10 filed with and resolved by the fund. The fund shall make the
11-11 information available to the public and appropriate state agencies.
11-12 (b) The board shall establish methods by which consumers and
11-13 service recipients are notified of the name, mailing address, and
11-14 telephone number of the fund for the purpose of directing
11-15 complaints to the fund. The board may provide for that
11-16 notification:
11-17 (1) by a supplement or endorsement to a written
11-18 policy;
11-19 (2) on a sign prominently displayed in the place of
11-20 business of each regional office of the fund; or
11-21 (3) in a bill for services provided by the fund.
11-22 (c) The fund shall comply with federal and state laws
11-23 related to program and facility accessibility. The president shall
11-24 also prepare and maintain a written plan that describes how a
11-25 person who does not speak English can be provided reasonable access
11-26 to the fund's programs and services.
11-27 (d) The board shall develop and implement policies that
12-1 provide the public with a reasonable opportunity to appear before
12-2 the board and to speak on any issue under the jurisdiction of the
12-3 fund.
12-4 Sec. 19B. COMPLAINT RESOLUTION. (a) The fund shall keep
12-5 information about each written complaint submitted to the fund.
12-6 The information shall include:
12-7 (1) the date the complaint is received;
12-8 (2) the name of the complainant;
12-9 (3) the subject matter of the complaint;
12-10 (4) a record of all persons contacted in relation to
12-11 the complaint;
12-12 (5) a summary of the results of the review or
12-13 investigation of the complaint; and
12-14 (6) for complaints for which the fund took no action,
12-15 an explanation of the reason the complaint was closed without
12-16 action.
12-17 (b) For each written complaint that the fund has authority
12-18 to resolve, the fund shall provide to the person filing the
12-19 complaint and the persons or entities complained about the fund's
12-20 policies and procedures pertaining to complaint investigation and
12-21 resolution. The fund, at least quarterly and until final
12-22 disposition of the complaint, shall notify the person filing the
12-23 complaint and the persons or entities complained about of the
12-24 status of the complaint unless the notice would jeopardize an
12-25 undercover investigation.
12-26 SECTION 12. Section 21(a), Article 5.76-3, Insurance Code,
12-27 is amended to read as follows:
13-1 (a) The fund is an insurance company for purposes of
13-2 Subtitle A, Title 5, Labor Code (the Texas Workers' Compensation
13-3 Act) <(Article 8308-1.01 et seq., Vernon's Texas Civil Statutes)>.
13-4 SECTION 13. Article 5.76-4, Insurance Code, is amended by
13-5 adding Subsections (g) and (h) to read as follows:
13-6 (g) When acting as insurer of last resort, the fund may
13-7 require an applicant for workers' compensation insurance coverage
13-8 who is identified as a risk for purposes of Subsection (b) of this
13-9 article to insure all business entities that are commonly owned or
13-10 commonly controlled by the applicant. The board may adopt policies
13-11 to implement this subsection.
13-12 (h) The fund shall report the statistical and other
13-13 information developed under Subsection (c) of this article on
13-14 request to the Texas Workers' Compensation Research Center and the
13-15 legislative oversight committee on workers' compensation, or to any
13-16 successor entity for research and oversight of the workers'
13-17 compensation system of this state.
13-18 SECTION 14. (a) The training program adopted under Section
13-19 3A, Article 5.76-3, Insurance Code, as added by this Act, for
13-20 members of the board of directors of the Texas Workers'
13-21 Compensation Insurance Fund applies only to a person who is
13-22 appointed to that board on or after September 1, 1995.
13-23 (b) The president of the fund shall adopt personnel policies
13-24 under Section 6, Article 5.76-3, Insurance Code, as amended by this
13-25 Act, not later than January 1, 1996.
13-26 (c) The board of directors of the Texas Workers'
13-27 Compensation Insurance Fund shall adopt a public information system
14-1 under Section 19A, Article 5.76-3, Insurance Code, and a complaint
14-2 resolution system under Section 19B, Article 5.76-3, Insurance
14-3 Code, as added by this Act, not later than January 1, 1996.
14-4 SECTION 15. This Act takes effect September 1, 1995.
14-5 SECTION 16. The importance of this legislation and the
14-6 crowded condition of the calendars in both houses create an
14-7 emergency and an imperative public necessity that the
14-8 constitutional rule requiring bills to be read on three several
14-9 days in each house be suspended, and this rule is hereby suspended.