1-1                                   AN ACT
 1-2     relating to the administration and operation of the workers'
 1-3     compensation program of this state.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 401.013(a), Labor Code, is amended to
 1-6     read as follows:
 1-7           (a)  In this subtitle, "intoxication" means the state of:
 1-8                 (1)  having an alcohol concentration to qualify as
 1-9     intoxicated under [defined by] Section 49.01(2), Penal Code[, of
1-10     0.10 or more]; or
1-11                 (2)  not having the normal use of mental or physical
1-12     faculties resulting from the voluntary introduction into the body
1-13     of:
1-14                       (A)  an alcoholic beverage, as defined by Section
1-15     1.04, Alcoholic Beverage Code;
1-16                       (B)  a controlled substance or controlled
1-17     substance analogue, as defined by Section 481.002, Health and
1-18     Safety Code;
1-19                       (C)  a dangerous drug, as defined by Section
1-20     483.001, Health and Safety Code;
1-21                       (D)  an abusable glue or aerosol paint, as
1-22     defined by  Section 485.001, Health and Safety Code; or
1-23                       (E)  any similar substance, the use of which is
1-24     regulated under state law.
 2-1           SECTION 2.  Section 401.023(b), Labor Code, is amended to
 2-2     read as follows:
 2-3           (b)  The commission shall compute and publish the interest
 2-4     and discount rate quarterly, using the auction rate quoted on a
 2-5     discount basis for the 52-week treasury bills issued by the United
 2-6     States government, as published by the Federal Reserve Board on the
 2-7     date nearest to the 15th day preceding the first day of the
 2-8     calendar quarter for which the rate is to be effective, plus 3.5
 2-9     percent. For this purpose, calendar quarters begin January 1, April
2-10     1, July 1, and October 1.
2-11           SECTION 3.  Sections 402.011(b) and (c), Labor Code, are
2-12     amended to read as follows:
2-13           (b)  A member is entitled to reimbursement for actual lost
2-14     wages or use of leave benefits, if any, for:
2-15                 (1)  attendance at commission meetings and hearings[,
2-16     not to exceed one day in each calendar quarter];
2-17                 (2)  preparation for a commission meeting, not to
2-18     exceed two days in each calendar quarter;
2-19                 (3)  attendance at a subcommittee meeting, not to
2-20     exceed one day each month;
2-21                 (4)  attendance by the chair or vice chair of the
2-22     commission at a legislative committee meeting if attendance is
2-23     requested by the committee chair; and
2-24                 (5)  attendance at a meeting by a member appointed to
2-25     the Research and Oversight Council on Workers' Compensation or the
2-26     Texas Certified Self-Insured Guaranty [Guarantee] Association.
2-27           (c)  Reimbursement under Subsection (b) may not exceed $100 a
 3-1     day and $5,000 [$12,000] a year.
 3-2           SECTION 4.  Section 402.062, Labor Code, is amended to read
 3-3     as follows:
 3-4           Sec. 402.062.  ACCEPTANCE OF GIFTS, GRANTS, AND DONATIONS.
 3-5     (a)  The commission may accept gifts, grants, or donations as
 3-6     provided by rules adopted by the commission.
 3-7           (b)  Notwithstanding Chapter 575, Government Code, the
 3-8     commission may accept a grant paid from the Texas Workers'
 3-9     Compensation Insurance Fund established under Article 5.76-3,
3-10     Insurance Code, to implement specific steps to control and lower
3-11     medical costs in the workers' compensation system and to ensure the
3-12     delivery of quality medical care.  The commission must publish the
3-13     name of the grantor and the purpose and conditions of the grant in
3-14     the Texas Register and provide for a 20-day public comment period
3-15     before the commission may accept the grant.  The commission shall
3-16     acknowledge acceptance of the grant at a public meeting.  The
3-17     minutes of the public meeting must include the name of the grantor,
3-18     a description of the grant, and a general statement of the purposes
3-19     for which the grant will be used.
3-20           SECTION 5.  Section 402.085(a), Labor Code, is amended to
3-21     read as follows:
3-22           (a)  The commission shall release information on a claim to:
3-23                 (1)  the Texas Department of Insurance for any
3-24     statutory or regulatory purpose;
3-25                 (2)  a legislative committee for legislative purposes;
3-26                 (3)  a state or federal elected official requested in
3-27     writing to provide assistance by a constituent who qualifies to
 4-1     obtain injury information under Section 402.084(b), if the request
 4-2     for assistance is provided to the commission;
 4-3                 (4)  the Research and Oversight Council on Workers'
 4-4     Compensation [research center] for research purposes; or
 4-5                 (5)  the attorney general or another entity that
 4-6     provides child support services under Part D, Title IV, Social
 4-7     Security Act (42 U.S.C. Section 651 et seq.), [or Chapter 76, Human
 4-8     Resources Code,] relating to:
 4-9                       (A)  establishing, modifying, or enforcing a
4-10     child support or medical support obligation; or
4-11                       (B)  locating an absent parent.
4-12           SECTION 6.  Section 404.007(a), Labor Code, is amended to
4-13     read as follows:
4-14           (a)  The board shall:
4-15                 (1)  approve the operating budget of the council;
4-16                 (2)  adopt rules for the operations of the board and
4-17     the council;
4-18                 (3)  conduct professional studies and research on all
4-19     matters relevant to the cost, quality, and operational
4-20     effectiveness of the workers' compensation system;
4-21                 (4)  monitor the cost of income benefits under this
4-22     subtitle, with emphasis on the availability and cost of
4-23     supplemental income benefits;
4-24                 (5)  monitor the performance and operation of the Texas
4-25     Workers' Compensation Insurance Fund, with emphasis on the insurer
4-26     of last resort program;
4-27                 (6)  hold regular public hearings and receive testimony
 5-1     and reports from:
 5-2                       (A)  the commission;
 5-3                       (B)  the Texas Workers' Compensation Insurance
 5-4     Fund;
 5-5                       (C)  [the Texas workers' compensation insurance
 5-6     facility;]
 5-7                       [(D)]  the Texas Department of Insurance;
 5-8                       (D) [(E)]  the State Office of Risk Management
 5-9     [office of the attorney general]; and
5-10                       (E) [(F)]  any other public or private entity
5-11     that is involved in the workers' compensation system;
5-12                 (7)  receive information about workers' compensation
5-13     rules and operations of an entity listed in Subdivision (6); and
5-14                 (8)  review specific recommendations for legislation
5-15     relating to the Texas Workers' Compensation Act formally proposed
5-16     by an entity listed in Subdivision (6).
5-17           SECTION 7.  Section 404.010, Labor Code, is amended by
5-18     amending Subsection (a)  and adding Subsection (d) to read as
5-19     follows:
5-20           (a)  As required to fulfill the objectives of the council,
5-21     the council is entitled to access to the files and records of:
5-22                 (1)  the commission;
5-23                 (2)  the Texas Workforce [Employment] Commission;
5-24                 (3)  the Texas Department of Insurance;
5-25                 (4)  the Texas Department of Human Services;
5-26                 (5)  [the Texas workers' compensation insurance
5-27     facility;]
 6-1                 [(6)]  the Texas Workers' Compensation Insurance Fund;
 6-2     and
 6-3                 (6) [(7)]  other state agencies.
 6-4           (d)  The identity of an individual or entity selected to
 6-5     participate in a council survey or who participates in such a
 6-6     survey is confidential and is not subject to public disclosure
 6-7     under Chapter 552, Government Code.
 6-8           SECTION 8.  Sections 408.004(e) and (f), Labor Code, are
 6-9     amended to read as follows:
6-10           (e)  An employee who, without good cause as determined by the
6-11     commission, fails or refuses to appear at the time scheduled for an
6-12     examination under Subsection (a)  or (b) commits a violation.  A
6-13     violation under this subsection is a Class D administrative
6-14     violation.  An employee is not entitled to temporary income
6-15     benefits, and an insurance carrier may suspend the payment of
6-16     temporary income benefits, during and for a period in which the
6-17     employee fails to submit to an examination under Subsection (a)  or
6-18     (b) unless the commission determines that the employee had good
6-19     cause for the failure to submit to the examination.  The commission
6-20     may order temporary income benefits to be paid for the period that
6-21     the commission determines the employee had good cause.  The
6-22     commission by rule shall ensure that an employee receives
6-23     reasonable notice of an examination and of the insurance carrier's
6-24     basis for suspension of payment, and that the employee is provided
6-25     a reasonable opportunity to reschedule an examination missed by the
6-26     employee for good cause.  [If the report of a doctor selected by an
6-27     insurance carrier indicates that the employee can return to work
 7-1     immediately, the commission shall schedule a benefit review
 7-2     conference on the next available docket.  The insurance carrier may
 7-3     not suspend medical or income benefit payments pending the benefit
 7-4     review conference.]
 7-5           (f)  If the report of a doctor selected by an insurance
 7-6     carrier indicates that an employee can return to work immediately
 7-7     or has reached maximum medical improvement, the insurance carrier
 7-8     may suspend or reduce the payment of temporary income benefits on
 7-9     the 14th day after the date on which the insurance carrier files a
7-10     notice of suspension with the commission as provided by this
7-11     subsection.  The commission shall hold an expedited benefit review
7-12     conference, by personal appearance or by telephone, not later than
7-13     the 10th day after the date on which the commission receives the
7-14     insurance carrier's notice of suspension.   If a benefit review
7-15     conference is not held by the 14th day after the date on which the
7-16     commission receives the insurance carrier's notice of suspension,
7-17     an interlocutory order, effective from the date of the report
7-18     certifying maximum medical improvement, is automatically entered
7-19     for the continuation of temporary income benefits until a benefit
7-20     review conference is held, and the insurance carrier is eligible
7-21     for reimbursement for any overpayment of benefits as provided by
7-22     Chapter 410.  The commission is not required to automatically
7-23     schedule a contested case hearing as required by Section 410.025(b)
7-24     if a benefit review conference is scheduled under this subsection.
7-25     If a benefit review conference is held not later than the 14th day,
7-26     the commission may enter an interlocutory order for the
7-27     continuation of benefits, and the insurance carrier is eligible for
 8-1     reimbursement for any overpayments of benefits as provided by
 8-2     Chapter 410.  The commission shall adopt rules as necessary to
 8-3     implement this subsection under which:
 8-4                 (1)  an insurance carrier is required to notify the
 8-5     employee and the treating doctor of the suspension of benefits
 8-6     under this subsection by certified mail or another verifiable
 8-7     delivery method;
 8-8                 (2)  the commission makes a reasonable attempt to
 8-9     obtain the treating doctor's opinion before the commission makes a
8-10     determination regarding the entry of an interlocutory order; and
8-11                 (3)  the commission may allow abbreviated contested
8-12     case hearings by personal appearance or telephone to consider
8-13     issues relating to overpayment of benefits under this section [An
8-14     employee who, without good cause, fails or refuses to appear at the
8-15     time scheduled for an examination under Subsection (a)  or (b)
8-16     commits a violation.  A violation under this subsection is a Class
8-17     D administrative violation].
8-18           SECTION 9.  Section 408.025(d), Labor Code, is amended to
8-19     read as follows:
8-20           (d)  On the request of an injured employee, the employee's
8-21     attorney, or the insurance carrier, a health care provider
8-22     [facility] shall furnish records relating to treatment or
8-23     hospitalization for which compensation is being sought.  The
8-24     commission may regulate the charge for furnishing a report or
8-25     record, but the charge may not be less than the fair and reasonable
8-26     charge for furnishing the report or record.  A health care provider
8-27     [facility] may disclose to the insurance carrier of an affected
 9-1     employer records relating to the diagnosis or treatment of the
 9-2     injured employee without the authorization of the injured employee
 9-3     to determine the amount of payment or the entitlement to payment.
 9-4           SECTION 10.  Section 408.027(a), Labor Code, is amended to
 9-5     read as follows:
 9-6           (a)  An insurance carrier shall pay the fee allowed under
 9-7     Section 413.011 [charged] for a service rendered by a health care
 9-8     provider  not later than the 45th day after the date the insurance
 9-9     carrier receives the charge unless the amount of the payment or the
9-10     entitlement to payment is disputed.
9-11           SECTION 11.  Section 408.081, Labor Code, is amended to read
9-12     as  follows:
9-13           Sec. 408.081.  INCOME BENEFITS.  (a)  An employee is entitled
9-14     to income benefits as provided in this chapter.
9-15           (b)  Except as otherwise provided by this section or this
9-16     subtitle, income benefits shall be paid weekly as  and when they
9-17     accrue without order from the commission. Interest on accrued but
9-18     unpaid benefits shall be paid, without order of the commission, at
9-19     the time the accrued benefits are paid.
9-20           (c)  The commission by rule shall establish requirements for
9-21     agreements under which income benefits may be paid monthly.  Income
9-22     benefits may be  paid monthly only:
9-23                 (1)  on the request of the employee and the agreement
9-24     of the employee and the insurance carrier; and
9-25                 (2)  in compliance with the requirements adopted by the
9-26     commission.
9-27           (d)  An employee's entitlement to income benefits under this
 10-1    chapter terminates on the death of the employee.  An interest in
 10-2    future income benefits does not survive after the employee's death.
 10-3          SECTION 12.  Section 408.124, Labor Code, is amended by
 10-4    amending Subsection (b) and by adding Subsection (c) to read as
 10-5    follows:
 10-6          (b)  For [The commission shall use for] determining the
 10-7    existence and degree of an employee's impairment, the commission
 10-8    shall use "Guides to the Evaluation of Permanent Impairment," third
 10-9    edition, second printing, dated February 1989, published by the
10-10    American Medical Association.
10-11          (c)  Notwithstanding Subsection (b), the commission by rule
10-12    may adopt the fourth edition of the "Guides to the Evaluation of
10-13    Permanent Impairment," published by the American Medical
10-14    Association, for determining the existence and degree of an
10-15    employee's impairment.
10-16          SECTION 13.  Section 408.150(b), Labor Code, is amended to
10-17    read as follows:
10-18          (b)  An employee who refuses services or refuses to cooperate
10-19    with services provided under this section loses entitlement to
10-20    supplemental [supplementary] income benefits.
10-21          SECTION 14.  Section 408.161, Labor Code, is amended by
10-22    adding Subsection (d) to read as follows:
10-23          (d)  An insurance carrier may pay lifetime income benefits
10-24    through an annuity if the annuity agreement meets the terms and
10-25    conditions for annuity agreements adopted by the commission by
10-26    rule.  The establishment of an annuity under this subsection does
10-27    not relieve the insurance carrier of the liability under this title
 11-1    for ensuring that the lifetime income benefits are paid.
 11-2          SECTION 15.  Section 408.181, Labor Code, is amended by
 11-3    adding Subsections (c) and (d) to read as follows:
 11-4          (c)  The commission by rule shall establish requirements for
 11-5    agreements under which death benefits may be paid monthly.  Death
 11-6    benefits may be paid monthly only:
 11-7                (1)  on the request of the legal beneficiary and the
 11-8    agreement of the legal beneficiary and the insurance carrier; and
 11-9                (2)  in compliance with the requirements adopted by the
11-10    commission.
11-11          (d)  An insurance carrier may pay death benefits through an
11-12    annuity if the annuity agreement meets the terms and conditions for
11-13    annuity agreements adopted by the commission by rule.  The
11-14    establishment of an annuity under this subsection does not relieve
11-15    the insurance carrier of the liability under this title for
11-16    ensuring that the death benefits are paid.
11-17          SECTION 16.  Section 408.186(a), Labor Code, is amended to
11-18    read as follows:
11-19          (a)  If the death of an employee results from a compensable
11-20    injury, the insurance carrier shall pay to the person who incurred
11-21    liability for the costs of burial the lesser of:
11-22                (1)  the actual costs incurred for reasonable burial
11-23    expenses; or
11-24                (2)  $6,000 [$2,500].
11-25          SECTION 17.  Section 413.005(b), Labor Code, is amended to
11-26    read as follows:
11-27          (b)  The medical advisory committee is composed of members
 12-1    appointed by the commission as follows:
 12-2                (1)  a representative of a public health care facility;
 12-3                (2)  a representative of a private health care
 12-4    facility;
 12-5                (3)  a doctor of medicine;
 12-6                (4)  a doctor of osteopathic medicine;
 12-7                (5)  a chiropractor;
 12-8                (6)  a dentist;
 12-9                (7)  a physical therapist;
12-10                (8)  a pharmacist;
12-11                (9)  a podiatrist;
12-12                (10)  an occupational therapist;
12-13                (11)  a medical equipment supplier;
12-14                (12)  a registered nurse;
12-15                (13)  a representative of employers;
12-16                (14)  a representative of employees;  [and]
12-17                (15)  a representative of an insurance carrier; and
12-18                (16)  two representatives of the general public.
12-19          SECTION 18.  Section 504.012(a), Labor Code, is amended to
12-20    read as follows:
12-21          (a)  A political subdivision may cover volunteer fire
12-22    fighters, police officers, emergency medical personnel, and other
12-23    volunteers that are specifically named.  A person covered under
12-24    this subsection is entitled to full medical benefits and the
12-25    minimum compensation payments under the law.  Notwithstanding any
12-26    other law, the governing body of the political subdivision may
12-27    elect to provide compensation payments to a person covered under
 13-1    this subsection that are greater than the minimum benefits provided
 13-2    under this title.
 13-3          SECTION 19.  Article 5.61, Insurance Code, is amended to read
 13-4    as follows:
 13-5          Art. 5.61.  ADEQUATE RESERVES.  (a)  Each workers'
 13-6    compensation insurer transacting business in this state shall
 13-7    maintain reserves in an amount estimated in the aggregate to
 13-8    provide for the payment of all losses and claims incurred, whether
 13-9    reported or unreported, but not in an amount greater than
13-10    reasonably required for those purposes.  The reserves shall be
13-11    computed in accordance with any rules adopted [approved] by the
13-12    commissioner [Board] for the purpose of adequately protecting the
13-13    insureds, securing the solvency of the insurer, and preventing
13-14    unreasonably large reserves.
13-15          (b)  [Each workers' compensation insurer shall provide a
13-16    separate report to the Board showing its year-end loss, expense,
13-17    and unearned premium reserves for workers' compensation insurance
13-18    results in this state.  The report must be filed not later than
13-19    June 30 of each year and must show the reserve development over a
13-20    period of years sufficiently long to allow the Board to determine
13-21    whether the reserves are adequate, inadequate, or unreasonably
13-22    large.  The report shall be audited by an independent certified
13-23    public accountant in accordance with generally accepted auditing
13-24    standards and the rules of the Board.  The reserve amounts reported
13-25    may be taken from an audited financial report prepared by an
13-26    independent auditor as prescribed by law.]
13-27          [(c)]  If the reserves are determined to be inadequate, the
 14-1    commissioner [Board] shall notify the insurer and require the
 14-2    insurer to establish and maintain reasonable additional reserves.
 14-3    If the reserves are determined to be unreasonably large, the
 14-4    commissioner [Board] shall notify the insurer and require the
 14-5    insurer to reduce its reserves to a reasonable amount.
 14-6          (c) [(d)]  Not later than the 60th day after the date of the
 14-7    notification by the commissioner [Board] that its reserves have
 14-8    been determined not to be in compliance with the requirements of
 14-9    this article, the insurer shall restore compliance and file a
14-10    statement of restored compliance, together with such documentation
14-11    as the commissioner [Board] may require.
14-12          SECTION 20.  Section 13, Article 5.76-3, Insurance Code, is
14-13    amended by adding Subsection (l) to read as follows:
14-14          (l)  Notwithstanding any other law, the fund may issue grants
14-15    to the Texas Workers' Compensation Commission as provided by
14-16    Section 402.062, Labor Code.  The amount of the grant is not to
14-17    exceed $2.2 million for the four-year period of September 1, 1999,
14-18    through September 1, 2003.  This subsection expires September 1,
14-19    2003.
14-20          SECTION 21.  (a)  Except as otherwise provided by this
14-21    section, this Act takes effect September 1, 1999.
14-22          (b)  Section 401.013(a), Labor Code, as amended by this Act,
14-23    applies only to a claim for workers' compensation benefits based on
14-24    a compensable injury that occurs on or after the effective date of
14-25    this Act. A claim based on a compensable injury that occurs before
14-26    that date is governed by the law in effect on the date that the
14-27    compensable injury occurred, and the former law is continued in
 15-1    effect for that purpose.
 15-2          (c)  Section 401.023(b), Labor Code, as amended by this Act,
 15-3    takes effect October 1, 1999.
 15-4          (d)  Section 408.004, Labor Code, as amended by this Act,
 15-5    takes effect January 1, 2000, and applies only to required medical
 15-6    examinations scheduled to occur on or after that date.
 15-7          (e)  Sections 408.081, 408.161, and 408.181, Labor Code, as
 15-8    amended by this Act, take effect September 1, 1999, and apply only
 15-9    to an agreement regarding payment of workers' compensation income
15-10    benefits or death benefits that is entered into on or after that
15-11    date.
15-12          (f)  Section 408.186(a), Labor Code, as amended by this Act,
15-13    applies only to a claim for workers' compensation burial benefits
15-14    based on a compensable injury that occurs on or after the effective
15-15    date of this Act.  A claim based on a compensable injury that
15-16    occurs before that date is governed by the law in effect on the
15-17    date that the compensable injury occurred, and the former law is
15-18    continued in effect for that purpose.
15-19          SECTION 22.  The importance of this legislation and the
15-20    crowded condition of the calendars in both houses create an
15-21    emergency and an imperative public necessity that the
15-22    constitutional rule requiring bills to be read on three several
15-23    days in each house be suspended, and this rule is hereby suspended.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 2510 was passed by the House on April
         22, 1999, by a non-record vote; that the House refused to concur in
         Senate amendments to H.B. No. 2510 on May 26, 1999, and requested
         the appointment of a conference committee to consider the
         differences between the two houses; and that the House adopted the
         conference committee report on H.B. No. 2510 on May 30, 1999, by a
         non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 2510 was passed by the Senate, with
         amendments, on May 24, 1999, by a viva-voce vote; at the request of
         the House, the Senate appointed a conference committee to consider
         the differences between the two houses; and that the Senate adopted
         the conference committee report on H.B. No. 2510 on May 30, 1999,
         by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  _____________________
                            Date
                    _____________________
                          Governor