GEC C.S.H.B. 3138 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
C.S.H.B. 3138
By: Brimer
4-1-97
Committee Report (Substituted)



BACKGROUND 

Currently, Workers' Compensation Insurance Coverage, codified in Chapter
406 of the Labor Code, does not provide the conditions under which certain
oil and gas workers or service providers are independent contractors. In
the oil and gas production business, it is common for an operator of an
oil and natural gas well to hire an individual to perform certain services
as well. The hired individual is usually an independent contractor who is
in business as a sole proprietor and does not have any employees. Under
Sections 406.121-126, Labor Code, the operator is generally required to
provide, at the operator's expense, workers' compensation insurance
coverage for the hired individual. The operator does not pay employment
taxes or withhold FICA or federal income taxes for that individual since
that individual is not the operator's employee. This bill would sets forth
the conditions under which such an individual is an independent contractor
in regard to the operator for purposes of workers' compensation insurance
coverage. 

PURPOSE

As proposed, HB 3138, sets forth the condition under which a person who
performs work or provides a service for an oil and gas well operator is an
independent contractor for purposes of workers' compensation insurance
coverage. 

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 Section 406.122, Labor Code, by adding Subsection (d),
to set forth the conditions under which a person who performs work or
provides a service for an oil or gas well operator is an independent
contractor for purposes of workers' compensation insurance coverage. 

SECTION 2. Effective Date

SECTION 3. Emergency Clause


COMPARISON OF ORIGINAL TO SUBSTITUTE

The committee substitute for H.B. 3138 leaves the current definition of
"independent contractor" and adds a new subsection (h) to 406.123.  The
new section states that an oil and gas well operator that hires a contract
pumper who is an independent contractor with no employees, is not required
to provide workers' compensation insurance for the pumper.  The bill does
not prohibit an oil and gas well operator and an independent contractor
from entering into an agreement for the provision of, and payment for,
workers' compensation coverage.