GEC S.B. 445 75(R)BILL ANALYSIS


BUSINESS & INDUSTRY
S.B. 445
By: Haywood (Brimer)
4-23-97
Committee Report (Unamended)



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 well workers or service providers are independent contractors.
In the oil and gas production business, it is common for an operator of an
oil or natural gas well to hire an individual to perform certain services
on the well.  The hired individual is usually an independent contractor
who is in business as a sole proprietor and does not have any employees.
Under recent interpretations of the Labor Code, the operator is being
required to provide 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 clarify that an oil or gas well
worker or service provider who is an independent contractor with no
employees shall be treated the same as independent contractors with
employees, and is not entitled to coverage under the operator's workers'
compensation policy, unless agreed to by both parties. 
 
PURPOSE

As proposed, C.S.S.B. 445 clarifies that an oil or gas well worker or
service provider who is an independent contractor with no employees shall
be treated the same as  independent contractors with employees, and is not
entitled to coverage under the operator's workers' compensation policy,
unless agreed to by both parties. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 406.123, Labor Code, by adding Subsection (h),
to require that a person who performs work or provides a service for an
oil or gas well operator, and who is an independent contractor that has no
employees, be treated in the same manner as an independent contractor with
employees and is not entitled to coverage under the general contractor's
workers' compensation insurance policy unless the independent contractor
and the general contractor enter into an agreement under this section,
notwithstanding Subsection (b).     

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.