1-1     By:  Dukes (Senate Sponsor - Shapleigh)               H.B. No. 2510
 1-2           (In the Senate - Received from the House April 23, 1999;
 1-3     April 26, 1999, read first time and referred to Committee on State
 1-4     Affairs; May 13, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 9, Nays 0; May 13, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 2510               By:  Shapleigh
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the administration and operation of the workers'
1-11     compensation program of this state.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Section 401.013(a), Labor Code, is amended to
1-14     read as follows:
1-15           (a)  In this subtitle, "intoxication" means the state of:
1-16                 (1)  having an alcohol concentration to qualify as
1-17     intoxicated under [defined by] Section 49.01(2), Penal Code[, of
1-18     0.10 or more]; or
1-19                 (2)  not having the normal use of mental or physical
1-20     faculties resulting from the voluntary introduction into the body
1-21     of:
1-22                       (A)  an alcoholic beverage, as defined by Section
1-23     1.04, Alcoholic Beverage Code;
1-24                       (B)  a controlled substance or controlled
1-25     substance analogue, as defined by Section 481.002, Health and
1-26     Safety Code;
1-27                       (C)  a dangerous drug, as defined by Section
1-28     483.001, Health and Safety Code;
1-29                       (D)  an abusable glue or aerosol paint, as
1-30     defined by Section 485.001, Health and Safety Code; or
1-31                       (E)  any similar substance, the use of which is
1-32     regulated under state law.
1-33           SECTION 2.  Section 401.023(b), Labor Code, is amended to
1-34     read as follows:
1-35           (b)  The commission shall compute and publish the interest
1-36     and discount rate quarterly, using the auction rate quoted on a
1-37     discount basis for the 52-week treasury bills issued by the United
1-38     States government, as published by the Federal Reserve Board on the
1-39     date nearest to the 15th day preceding the first day of the
1-40     calendar quarter for which the rate is to be effective, plus 3.5
1-41     percent.  For this purpose, calendar quarters begin January 1,
1-42     April 1, July 1, and October 1.
1-43           SECTION 3.  Sections 402.011(b) and (c), Labor Code, are
1-44     amended to read as follows:
1-45           (b)  A member is entitled to reimbursement for actual lost
1-46     wages or use of leave benefits, if any, for:
1-47                 (1)  attendance at commission meetings and hearings[,
1-48     not to exceed one day in each calendar quarter];
1-49                 (2)  preparation for a commission meeting, not to
1-50     exceed two days in each calendar quarter;
1-51                 (3)  attendance at a subcommittee meeting, not to
1-52     exceed one day each month;
1-53                 (4)  attendance by the chair or vice chair of the
1-54     commission at a legislative committee meeting if attendance is
1-55     requested by the committee chair; and
1-56                 (5)  attendance at a meeting by a member appointed to
1-57     the Research and Oversight Council on Workers' Compensation or the
1-58     Texas Certified Self-Insured Guaranty [Guarantee] Association.
1-59           (c)  Reimbursement under Subsection (b) may not exceed $100 a
1-60     day and $5,000 [$12,000] a year.
1-61           SECTION 4.  Section 402.062, Labor Code, is amended to read
1-62     as follows:
1-63           Sec. 402.062.  Acceptance of Gifts, Grants, and Donations.
1-64     (a)  The commission may accept gifts, grants, or donations as
 2-1     provided by rules adopted by the commission.
 2-2           (b)  Notwithstanding Chapter 575, Government Code, the
 2-3     commission may accept a grant paid from the Texas Workers'
 2-4     Compensation Insurance Fund established under Article 5.76-3,
 2-5     Insurance Code, to implement specific steps to control and lower
 2-6     medical costs in the workers' compensation system.  The commission
 2-7     must publish the name of the grantor and the purpose and conditions
 2-8     of the grant in the Texas Register and provide for a 20-day public
 2-9     comment period before the commission may accept the grant.  The
2-10     commission shall acknowledge acceptance of the grant at a public
2-11     meeting.  The minutes of the public meeting must include the name
2-12     of the grantor, a description of the grant, and a general statement
2-13     of the purposes for which the grant will be used.
2-14           SECTION 5.  Section 402.085(a), Labor Code, is amended to
2-15     read as follows:
2-16           (a)  The commission shall release information on a claim to:
2-17                 (1)  the Texas Department of Insurance for any
2-18     statutory or regulatory purpose;
2-19                 (2)  a legislative committee for legislative purposes;
2-20                 (3)  a state or federal elected official requested in
2-21     writing to provide assistance by a constituent who qualifies to
2-22     obtain injury information under Section 402.084(b), if the request
2-23     for assistance is provided to the commission;
2-24                 (4)  the Research and Oversight Council on Workers'
2-25     Compensation [research center] for research purposes; or
2-26                 (5)  the attorney general or another entity that
2-27     provides child support services under Part D, Title IV, Social
2-28     Security Act (42 U.S.C. Section 651 et seq.), [or Chapter 76, Human
2-29     Resources Code,] relating to:
2-30                       (A)  establishing, modifying, or enforcing a
2-31     child support or medical support obligation; or
2-32                       (B)  locating an absent parent.
2-33           SECTION 6.  Section 404.007(a), Labor Code, is amended to
2-34     read as follows:
2-35           (a)  The board shall:
2-36                 (1)  approve the operating budget of the council;
2-37                 (2)  adopt rules for the operations of the board and
2-38     the council;
2-39                 (3)  conduct professional studies and research on all
2-40     matters relevant to the cost, quality, and operational
2-41     effectiveness of the workers' compensation system;
2-42                 (4)  monitor the cost of income benefits under this
2-43     subtitle, with emphasis on the availability and cost of
2-44     supplemental income benefits;
2-45                 (5)  monitor the performance and operation of the Texas
2-46     Workers' Compensation Insurance Fund, with emphasis on the insurer
2-47     of last resort program;
2-48                 (6)  hold regular public hearings and receive testimony
2-49     and reports from:
2-50                       (A)  the commission;
2-51                       (B)  the Texas Workers' Compensation Insurance
2-52     Fund;
2-53                       (C)  [the Texas workers' compensation insurance
2-54     facility;]
2-55                       [(D)]  the Texas Department of Insurance;
2-56                       (D) [(E)]  the State Office of Risk Management
2-57     [office of the attorney general]; and
2-58                       (E) [(F)]  any other public or private entity
2-59     that is involved in the workers' compensation system;
2-60                 (7)  receive information about workers' compensation
2-61     rules and operations of an entity listed in Subdivision (6); and
2-62                 (8)  review specific recommendations for legislation
2-63     relating to the Texas Workers' Compensation Act formally proposed
2-64     by an entity listed in Subdivision (6).
2-65           SECTION 7.  Section 404.010, Labor Code, is amended by
2-66     amending Subsection (a) and adding Subsection (d) to read as
2-67     follows:
2-68           (a)  As required to fulfill the objectives of the council,
2-69     the council is entitled to access to the files and records of:
 3-1                 (1)  the commission;
 3-2                 (2)  the Texas Workforce [Employment] Commission;
 3-3                 (3)  the Texas Department of Insurance;
 3-4                 (4)  the Texas Department of Human Services;
 3-5                 (5)  [the Texas workers' compensation insurance
 3-6     facility;]
 3-7                 [(6)]  the Texas Workers' Compensation Insurance Fund;
 3-8     and
 3-9                 (6) [(7)]  other state agencies.
3-10           (d)  The identity of an individual or entity selected to
3-11     participate in a council survey or who participates in such a
3-12     survey is confidential and is not subject to public disclosure
3-13     under Chapter 552, Government Code.
3-14           SECTION 8.  Sections 408.004(e) and (f), Labor Code, are
3-15     amended to read as follows:
3-16           (e)  An employee who, without good cause as determined by the
3-17     commission, fails or refuses to appear at the time scheduled for an
3-18     examination under Subsection (a) or (b) commits a violation.  A
3-19     violation under this subsection is a Class D administrative
3-20     violation.  An employee is not entitled to temporary income
3-21     benefits, and an insurance carrier may suspend the payment of
3-22     temporary income benefits, during and for a period in which the
3-23     employee fails to submit to an examination under Subsection (a) or
3-24     (b) unless the commission determines that the employee had good
3-25     cause for the failure to submit to the examination.  The commission
3-26     may order temporary income benefits to be paid for the period that
3-27     the commission determines the employee had good cause.  The
3-28     commission by rule shall ensure that an employee receives
3-29     reasonable notice of an examination and of the insurance carrier's
3-30     basis for suspension of payment, and that the employee is provided
3-31     a reasonable opportunity to reschedule an examination missed by the
3-32     employee for good cause.  [If the report of a doctor selected by an
3-33     insurance carrier indicates that the employee can return to work
3-34     immediately, the commission shall schedule a benefit review
3-35     conference on the next available docket.  The insurance carrier may
3-36     not suspend medical or income benefit payments pending the benefit
3-37     review conference.]
3-38           (f)  If the report of a doctor selected by an insurance
3-39     carrier indicates that an employee can return to work immediately
3-40     or has reached maximum medical improvement, the insurance carrier
3-41     may suspend or reduce the payment of temporary income benefits on
3-42     the 14th day after the date on which the insurance carrier files a
3-43     notice of suspension with the commission as provided by this
3-44     subsection.  The commission shall hold an expedited benefit review
3-45     conference, by personal appearance or by telephone, not later than
3-46     the 10th day after the date on which the commission receives the
3-47     insurance carrier's notice of suspension.  The commission is not
3-48     required to automatically schedule a contested case hearing as
3-49     required by Section 410.025(b) if a benefit review conference is
3-50     scheduled under this subsection.  The commission may enter an
3-51     interlocutory order for the continuation of benefits, and the
3-52     insurance carrier is eligible for reimbursement for any
3-53     overpayments of benefits as provided by Chapter 410.  The
3-54     commission shall adopt rules as necessary to implement this
3-55     subsection under which:
3-56                 (1)  an insurance carrier is required to notify the
3-57     employee and the treating doctor of the suspension of benefits
3-58     under this subsection by certified mail or another verifiable
3-59     delivery method;
3-60                 (2)  the commission makes a reasonable attempt to
3-61     obtain the treating doctor's opinion before the commission makes a
3-62     determination regarding the entry of an interlocutory order; and
3-63                 (3)  the commission may allow abbreviated contested
3-64     case hearings by personal appearance or telephone to consider
3-65     issues relating to overpayment of benefits under this section [An
3-66     employee who, without good cause, fails or refuses to appear at the
3-67     time scheduled for an examination under Subsection (a) or (b)
3-68     commits a violation.  A violation under this subsection is a Class
3-69     D administrative violation].
 4-1           SECTION 9.  Section 408.025(d), Labor Code, is amended to
 4-2     read as follows:
 4-3           (d)  On the request of an injured employee, the employee's
 4-4     attorney, or the insurance carrier, a health care provider
 4-5     [facility] shall furnish records relating to treatment or
 4-6     hospitalization for which compensation is being sought.  The
 4-7     commission may regulate the charge for furnishing a report or
 4-8     record, but the charge may not be less than the fair and reasonable
 4-9     charge for furnishing the report or record.  A health care provider
4-10     [facility] may disclose to the insurance carrier of an affected
4-11     employer records relating to the diagnosis or treatment of the
4-12     injured employee without the authorization of the injured employee
4-13     to determine the amount of payment or the entitlement to payment.
4-14           SECTION 10.  Section 408.027(a), Labor Code, is amended to
4-15     read as follows:
4-16           (a)  An insurance carrier shall pay the fee allowed under
4-17     Section 413.011 [charged] for a service rendered by a health care
4-18     provider not later than the 45th day after the date the insurance
4-19     carrier receives the charge unless the amount of the payment or the
4-20     entitlement to payment is disputed.
4-21           SECTION 11.  Section 408.081, Labor Code, is amended to read
4-22     as follows:
4-23           Sec. 408.081.  Income Benefits.  (a)  An employee is entitled
4-24     to income benefits as provided in this chapter.
4-25           (b)  Except as otherwise provided by this section or this
4-26     subtitle, income benefits and interest on accrued but unpaid income
4-27     benefits shall be paid weekly as and when they accrue without order
4-28     from the commission.
4-29           (c)  The commission by rule shall establish requirements for
4-30     agreements under which income benefits may be paid monthly.  Income
4-31     benefits may be paid monthly only:
4-32                 (1)  on the request of the employee and the agreement
4-33     of the employee and the insurance carrier; and
4-34                 (2)  in compliance with the requirements adopted by the
4-35     commission.
4-36           (d)  An employee's entitlement to income benefits under this
4-37     chapter terminates on the death of the employee.  An interest in
4-38     future income benefits does not survive after the employee's death.
4-39           SECTION 12.  Section 408.124(b), Labor Code, is amended to
4-40     read as follows:
4-41           (b)  For [The commission shall use for] determining the
4-42     existence and degree of an employee's impairment, the commission
4-43     shall use "Guides to the Evaluation of Permanent Impairment," third
4-44     edition, second printing, dated February 1989, published by the
4-45     American Medical Association.
4-46           (c)  Notwithstanding Subsection (b), the commission by rule
4-47     may adopt the fourth edition of the "Guides to the Evaluation of
4-48     Permanent Impairment" published by the American Medical Association
4-49     for determining the existence and degree of an employee's
4-50     impairment.  If the commission adopts the Guides to the Evaluation
4-51     of Permanent Impairment, fourth edition, the commission shall use
4-52     the range of motion model for evaluating impairment resulting from
4-53     a back injury.
4-54           SECTION 13.  Section 408.150(b), Labor Code, is amended to
4-55     read as follows:
4-56           (b)  An employee who refuses services or refuses to cooperate
4-57     with services provided under this section loses entitlement to
4-58     supplemental [supplementary] income benefits.
4-59           SECTION 14.  Section 408.161, Labor Code, is amended by
4-60     adding Subsection (d) to read as follows:
4-61           (d)  An insurance carrier may pay lifetime income benefits
4-62     through an annuity if the annuity agreement meets the terms and
4-63     conditions for annuity agreements adopted by the commission by
4-64     rule.  The establishment of an annuity under this subsection does
4-65     not relieve the insurance carrier of the liability under this title
4-66     for ensuring that the lifetime income benefits are paid.
4-67           SECTION 15.  Section 408.181, Labor Code, is amended by
4-68     adding Subsections (c) and (d) to read as follows:
4-69           (c)  The commission by rule shall establish requirements for
 5-1     agreements under which death benefits may be paid monthly.  Death
 5-2     benefits may be paid monthly only:
 5-3                 (1)  on the request of the legal beneficiary and the
 5-4     agreement of the legal beneficiary and the insurance carrier; and
 5-5                 (2)  in compliance with the requirements adopted by the
 5-6     commission.
 5-7           (d)  An insurance carrier may pay death benefits through an
 5-8     annuity if the annuity agreement meets the terms and conditions for
 5-9     annuity agreements adopted by the commission by rule.  The
5-10     establishment of an annuity under this subsection does not relieve
5-11     the insurance carrier of the liability under this title for
5-12     ensuring that the death benefits are paid.
5-13           SECTION 16.  Section 408.186(a), Labor Code, is amended to
5-14     read as follows:
5-15           (a)  If the death of an employee results from a compensable
5-16     injury, the insurance carrier shall pay to the person who incurred
5-17     liability for the costs of burial the lesser of:
5-18                 (1)  the actual costs incurred for reasonable burial
5-19     expenses; or
5-20                 (2)  $6,000 [$2,500].
5-21           SECTION 17.  Section 413.005(b), Labor Code, is amended to
5-22     read as follows:
5-23           (b)  The medical advisory committee is composed of members
5-24     appointed by the commission as follows:
5-25                 (1)  a representative of a public health care facility;
5-26                 (2)  a representative of a private health care
5-27     facility;
5-28                 (3)  a doctor of medicine;
5-29                 (4)  a doctor of osteopathic medicine;
5-30                 (5)  a chiropractor;
5-31                 (6)  a dentist;
5-32                 (7)  a physical therapist;
5-33                 (8)  a pharmacist;
5-34                 (9)  a podiatrist;
5-35                 (10)  an occupational therapist;
5-36                 (11)  a medical equipment supplier;
5-37                 (12)  a registered nurse;
5-38                 (13)  a representative of employers;
5-39                 (14)  a representative of employees; [and]
5-40                 (15)  a representative of an insurance carrier; and
5-41                 (16)  two representatives of the general public.
5-42           SECTION 18.  Section 504.012(a), Labor Code, is amended to
5-43     read as follows:
5-44           (a)  A political subdivision may cover volunteer fire
5-45     fighters, police officers, emergency medical personnel, and other
5-46     volunteers that are specifically named.  A person covered under
5-47     this subsection is entitled to full medical benefits and the
5-48     minimum compensation payments under the law.  Notwithstanding any
5-49     other law, the governing body of the political subdivision may
5-50     elect to provide compensation payments to a person covered under
5-51     this subsection that are greater than the minimum benefits provided
5-52     under this title.
5-53           SECTION 19.  Article 5.61, Insurance Code, is amended to read
5-54     as follows:
5-55           Art. 5.61.  Adequate Reserves.  (a)  Each workers'
5-56     compensation insurer transacting business in this state shall
5-57     maintain reserves in an amount estimated in the aggregate to
5-58     provide for the payment of all losses and claims incurred, whether
5-59     reported or unreported, but not in an amount greater than
5-60     reasonably required for those purposes.  The reserves shall be
5-61     computed in accordance with any rules adopted [approved] by the
5-62     commissioner [Board] for the purpose of adequately protecting the
5-63     insureds, securing the solvency of the insurer, and preventing
5-64     unreasonably large reserves.
5-65           (b)  [Each workers' compensation insurer shall provide a
5-66     separate report to the Board showing its year-end loss, expense,
5-67     and unearned premium reserves for workers' compensation insurance
5-68     results in this state.  The report must be filed not later than
5-69     June 30 of each year and must show the reserve development over a
 6-1     period of years sufficiently long to allow the Board to determine
 6-2     whether the reserves are adequate, inadequate, or unreasonably
 6-3     large.  The report shall be audited by an independent certified
 6-4     public accountant in accordance with generally accepted auditing
 6-5     standards and the rules of the Board.  The reserve amounts reported
 6-6     may be taken from an audited financial report prepared by an
 6-7     independent auditor as prescribed by law.]
 6-8           [(c)]  If the reserves are determined to be inadequate, the
 6-9     commissioner [Board] shall notify the insurer and require the
6-10     insurer to establish and maintain reasonable additional reserves.
6-11     If the reserves are determined to be unreasonably large, the
6-12     commissioner [Board] shall notify the insurer and require the
6-13     insurer to reduce its reserves to a reasonable amount.
6-14           (c) [(d)]  Not later than the 60th day after the date of the
6-15     notification by the commissioner [Board] that its reserves have
6-16     been determined not to be in compliance with the requirements of
6-17     this article, the insurer shall restore compliance and file a
6-18     statement of restored compliance, together with such documentation
6-19     as the commissioner [Board] may require.
6-20           SECTION 20.  Section 13, Article 5.76-3, Insurance Code, is
6-21     amended by adding Subsection (l) to read as follows:
6-22           (l)  Notwithstanding any other law, the fund may issue grants
6-23     from available fund surplus to the Texas Workers' Compensation
6-24     Commission as provided by Section 402.062, Labor Code.  The amount
6-25     of the grant is not to exceed $2.2 million for the four-year period
6-26     of September 1, 1999 through September 1, 2003.  This subsection
6-27     expires September 1, 2003.
6-28           SECTION 21.  (a)  Except as provided by Subsection (b) of
6-29     this section, this Act takes effect September 1, 1999, and applies
6-30     only to an agreement regarding payment of workers' compensation
6-31     income benefits or death benefits that is entered into on or after
6-32     that date.
6-33           (b)  Section 401.023(b), Labor Code, as amended by this Act,
6-34     takes effect October 1, 1999.
6-35           (c)  Section 408.124(b), Labor Code, as amended by this Act,
6-36     applies only to determination of an impairment rating for workers'
6-37     compensation benefits under Subchapter G, Chapter 408, Labor Code,
6-38     on or after January 1, 2000.  The determination of an impairment
6-39     rating before that date is governed by the law in effect
6-40     immediately before the effective date of this Act, and the former
6-41     law is continued in effect for that purpose.
6-42           (d)  Section 408.186(a), Labor Code, as amended by this Act,
6-43     applies only to a claim for workers' compensation burial benefits
6-44     based on a compensable injury that occurs on or after the effective
6-45     date of this Act.  A claim based on a compensable injury that
6-46     occurs before that date is governed by the law in effect on the
6-47     date that the compensable injury occurred, and the former law is
6-48     continued in effect for that purpose.
6-49           SECTION 22.  The importance of this legislation and the
6-50     crowded condition of the calendars in both houses create an
6-51     emergency and an imperative public necessity that the
6-52     constitutional rule requiring bills to be read on three several
6-53     days in each house be suspended, and this rule is hereby suspended.
6-54                                  * * * * *