By Rhodes, Brimer                                     H.B. No. 3522

         Substitute the following for H.B. No. 3522:

         By Rhodes                                         C.S.H.B. No. 3522

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the administration and enforcement of the workers'

 1-3     compensation law; providing penalties.

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

 1-5           SECTION 1.  Section 401.011(30), Labor Code, is amended to

 1-6     read as follows:

 1-7                 (30)  "Maximum medical improvement" means the earlier

 1-8     of:

 1-9                       (A)  the earliest date after which, based on

1-10     reasonable medical probability, further material recovery from or

1-11     lasting improvement to an injury can no longer reasonably be

1-12     anticipated; [or]

1-13                       (B)  the expiration of 104 weeks from the date on

1-14     which income benefits begin to accrue; or as provided by Section

1-15     408.104.

1-16                       [(C)  that date that a condition is medically

1-17     stabilized if the injured employee has had surgery not later than

1-18     six weeks after the date computed under Paragraph (b), subject to

1-19     the commission's discretion.]

1-20           SECTION 2.  Section 402.011, Labor Code, is amended by

1-21     amending Subsection (b) and adding Subsections (c) and (d) to read

1-22     as follows:

1-23           (b)  A member is entitled to reimbursement for actual lost

1-24     wages, if any, for:

 2-1                 (1)  [due to] attendance at commission meetings, not to

 2-2     exceed one day in each calendar quarter;

 2-3                 (2)  preparation for a commission meeting, not to

 2-4     extend two days in each calendar quarter;

 2-5                 (3)  attendance at a subcommittee meeting, not to

 2-6     exceed one day each month;

 2-7                 (4)  attendance by the chair or vice chair of the

 2-8     commission at a legislative committee meeting if attendance is

 2-9     requested by the committee chair; and

2-10                 (5)  attendance at a meeting by a member appointed to

2-11     the Research and Oversight Council on Workers' Compensation or the

2-12     Texas Certified Self-Insured Guarantee Association.

2-13           (c)  Reimbursement under Subsection (b) [this subsection] may

2-14     not exceed $100 a day and $12,000 a year.

2-15           (d)  A member of the commission is entitled to reimbursement

2-16     for actual and necessary expenses for attendance at not more than

2-17     (]L10  ) 5 seminars in a calendar year if:

2-18                 (1)  the member is invited as a representative of the

2-19     commission to participate in a program offered at the seminar; and

2-20                 (2)  the member's participation is approved by the

2-21     chair of the commission.

2-22           SECTION 3.  Sections 403.002(a) and (b) Labor Code, are

2-23     amended to read as follows:

2-24           (a)  Each insurance carrier, other than a governmental

2-25     entity, shall pay an annual maintenance tax to pay the costs of

2-26     administering this subtitle[.] and to support the prosecution of

2-27     workers' compensation insurance fraud in this state.

 3-1           (b)  The assessment may not exceed an amount equal to two

 3-2     percent of the correctly reported gross workers' compensation

 3-3     insurance premiums.  Out of this amount, and in addition to the

 3-4     amounts assessed to pay the costs of administration, an amount not

 3-5     to exceed one-tenth of one percent of correctly reported gross

 3-6     premiums shall be assessed annually to support the prosecution of

 3-7     workers' compensation insurance fraud.

 3-8           SECTION 4.  Section 403.003(a), Texas Labor Code, is amended

 3-9     to read as follows:

3-10           (a) (3)  a surplus or deficit produced by the tax in the

3-11     preceding year; [and]

3-12           (a) (4)  revenue recovered from other sources, including

3-13     reappropriated receipts, grants, payments, fees, gifts, and

3-14     penalties recovered under this subtitle; and

3-15           (a) (5)  expenditures projected as necessary to support the

3-16     prosecution of workers' compensation insurance fraud.

3-17           SECTION 5.  Chapter 408 is amended by adding a new Section

3-18     408.104 to read as follows: [Section 408.123, Labor Code, is

3-19     amended by adding Subsection (d) to read as follows:]

3-20           [(d)  The commission shall adopt rules that prescribe the

3-21     method of determining maximum medical improvement under Section

3-22     401.011(30)(C) and the criteria for determining whether a specific

3-23     injured employee is subject to that provision.]

3-24           Sec. 408.104.  MAXIMUM MEDICAL IMPROVEMENT AFTER SPINAL

3-25     SURGERY.  (a)  Upon application by either the employee or the

3-26     insurance carrier, the commission may by order extend the 104-week

3-27     period described in Section 401.011(B) if the employee has had

 4-1     spinal surgery, or has been approved for spinal surgery pursuant to

 4-2     the provisions of Section 408.026 and commission rules, within 12

 4-3     weeks prior to the expiration of the 104-week period.  If an order

 4-4     is issued under this section, the order shall extend the statutory

 4-5     period for maximum medical improvement to a date certain, based on

 4-6     medical evidence presented to the commission.

 4-7           (b)  Either the employee or the insurance carrier may dispute

 4-8     an application for extension.  Such disputes shall be subject to

 4-9     the provisions contained in Chapter 410.

4-10           (c)  The commission shall adopt rules to implement this

4-11     section, including rules which establish procedures for requesting

4-12     and disputing an extension.

4-13           SECTION 6.  Section 407.103(a), Labor Code, is amended to

4-14     read as follows:

4-15           (a)  Each certified self-insurer shall pay a self insurer

4-16     maintenance tax for the administration of the commission and to

4-17     support the prosecution of workers' compensation insurance fraud in

4-18     this state.  Not more than two-percent of the total tax base of all

4-19     certified self insurers, as computed under Subsection (b), may be

4-20     assessed for a maintenance tax under this section.  Out of this

4-21     amount, and in addition to the amounts assessed to pay the costs of

4-22     administration, an amount not to exceed one-tenth of one percent of

4-23     the total tax base of all certified self-insurers shall be assessed

4-24     annually to support the prosecution of workers' compensation

4-25     insurance fraud.

4-26           SECTION 7. [8]   Section 409.042(b), Labor Code, is amended

4-27     to read as follows:

 5-1           (b)  To be eligible for designation as an ombudsman, a person

 5-2     must:

 5-3                 (1)  demonstrate satisfactory knowledge of the

 5-4     requirements of:

 5-5                       (A)  this subtitle and the provisions of Subtitle

 5-6     C that relate to claims management;

 5-7                       (B)  other laws relating to workers'

 5-8     compensation; and

 5-9                       (C)  rules adopted under this subtitle and the

5-10     laws described under Subdivision (1)(B);

5-11                 (2)  have demonstrated experience in handling and

5-12     resolving problems for the general public;

5-13                 (3)  possesses strong interpersonal skills; and

5-14                 (4)  have at least [three years] one year of

5-15     demonstrated experience in the field of workers' compensation.

5-16           SECTION 8 [9].  Section 415.024, Labor Code, is added to read

5-17     as follows:

5-18           Sec. 415.024.  A breach of a settlement agreement that

5-19     establishes a compliance plan is an administrative violation

5-20     punishable by an administrative penalty not to exceed $50,000.  In

5-21     determining the amount of the penalty, the commission shall

5-22     consider the total volume of claims handled by the insurance

5-23     carrier.

5-24           SECTION 9 [10].  (a)  This Act takes effect September 1,

5-25     1997.

5-26           (b)  The change in law made by this Act to Section 415.024,

5-27     Labor Code, applies only to a violation that occurs on or after the

 6-1     effective date of this Act.  A violation that occurs before the

 6-2     effective date of this Act is governed by the law in effect on the

 6-3     date the violation occurred, and the former law is continued for

 6-4     that purpose.

 6-5           (c)  The change in law made by this Act to Sections

 6-6     401.011(30) and 408.104, Labor Code, applies only to dates of

 6-7     injury on or after the effective date of this Act.  For dates of

 6-8     injury prior to the effective date of this Act, the former law is

 6-9     continued in effect.

6-10           SECTION 10 [11].  The importance of this legislation and the

6-11     crowded condition of the calendars in both houses create an

6-12     emergency and an imperative public necessity that the

6-13     constitutional rule requiring bills to be read on three several

6-14     days in each house is suspended, and this rule is hereby suspended.