By Junell                                       H.B. No. 1020

      75R4397 DLF-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the liability of third parties for an injury to an

 1-3     employee.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Sections 33.011(5) and (6), Civil Practice and

 1-6     Remedies Code, are amended to read as follows:

 1-7                 (5)  "Settling person" means a person who at the time

 1-8     of submission has paid or promised to pay money or anything of

 1-9     monetary value to a claimant at any time in consideration of

1-10     potential liability pursuant to the provisions of Section 33.001

1-11     with respect to the personal injury, property damage, death, or

1-12     other harm for which recovery of damages is sought.  The term

1-13     includes a person protected from liability to the claimant by

1-14     Section 408.001, Labor Code.

1-15                 (6)(A)  "Responsible third party" means any person to

1-16     whom all of the following apply:

1-17                             (i)  the court in which the action was

1-18     filed could exercise jurisdiction over the person;

1-19                             (ii)  the person could have been, but was

1-20     not, sued by the claimant; and

1-21                             (iii)  the person is or may be liable to

1-22     the claimant [plaintiff] for all or a part of the damages claimed

1-23     against the named defendant or defendants.

1-24                       (B)  The term "responsible third party" does not

 2-1     include:

 2-2                             (i)  a person protected from liability to

 2-3     the claimant by Section 408.001, Labor Code [the claimant's

 2-4     employer, if the employer maintained workers' compensation

 2-5     insurance coverage, as defined by Section 401.011(44), Labor Code,

 2-6     at the time of the act, event, or occurrence made the basis of the

 2-7     claimant's suit]; or

 2-8                             (ii)  a person or entity that is a debtor

 2-9     in bankruptcy proceedings or a person or entity against whom this

2-10     claimant's claim has been discharged in bankruptcy, except to the

2-11     extent that liability insurance or other source of third party

2-12     funding may be available to pay claims asserted against the debtor.

2-13           SECTION 2.  Section 33.012(d), Civil Practice and Remedies

2-14     Code, is amended to read as follows:

2-15           (d)  Subsection (b) does  [This section shall] not apply to

2-16     benefits paid to a claimant under [by or on behalf of an employer

2-17     to an employee pursuant to] workers' compensation insurance

2-18     coverage, as defined by [in] Section 401.011[(44)], Labor Code,

2-19     that is in effect at the time of the act, event, or occurrence made

2-20     the basis of claimant's suit.  If a settling person is protected

2-21     from liability to the claimant by Section 408.001, Labor Code, the

2-22     court shall further reduce the amount of damages to be recovered by

2-23     the claimant with respect to the cause of action by a percentage

2-24     equal to that settling person's percentage of responsibility.

2-25           SECTION 3.  Section 417.001(b), Labor Code, is amended to

2-26     read as follows:

2-27           (b)  If a benefit is claimed by an injured employee or a

 3-1     legal beneficiary of the employee, the insurance carrier is

 3-2     subrogated to the rights of the injured employee and may enforce

 3-3     the liability of the third party in the name of the injured

 3-4     employee or the legal beneficiary.  The insurance carrier's

 3-5     subrogation interest is limited to the amount of the total benefits

 3-6     paid or assumed by the carrier to the employee or the legal

 3-7     beneficiary, less the amount by which the court reduces the

 3-8     judgment under Section 33.012(d), Civil Practice and Remedies Code.

 3-9     If the recovery is for an amount greater than the amount of the

3-10     insurance carrier's subrogation interest [that paid or assumed by

3-11     the insurance carrier to the employee or the legal beneficiary],

3-12     the insurance carrier shall:

3-13                 (1)  reimburse itself and pay the costs from the amount

3-14     recovered; and

3-15                 (2)  pay the remainder of the amount recovered to the

3-16     injured employee or the legal beneficiary.

3-17           SECTION 4.  Section 417.002(a), Labor Code, is amended to

3-18     read as follows:

3-19           (a)  The net amount recovered by a claimant in a third-party

3-20     action shall be used to reimburse the insurance carrier for

3-21     benefits, including medical benefits, that have been paid for the

3-22     compensable injury, up to the carrier's subrogation interest as

3-23     determined under Section 417.001(b).

3-24           SECTION 5.  This Act takes effect September 1, 1997, and

3-25     applies only to an action commenced on or after that date.  An

3-26     action commenced before the effective date of this Act is governed

3-27     by the law in effect immediately before that date, and that law is

 4-1     continued in effect for that purpose.

 4-2           SECTION 6.  The importance of this legislation and the

 4-3     crowded condition of the calendars in both houses create an

 4-4     emergency and an imperative public necessity that the

 4-5     constitutional rule requiring bills to be read on three several

 4-6     days in each house be suspended, and this rule is hereby suspended.