By Heflin H.B. No. 3548
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to coverage of certain independent contractors
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Amend Section 406.121. DEFINITIONS.
1-5 In this subchapter:
1-6 (1) "General contractor" means a person who undertakes
1-7 to procure the performance of work for a service, either separately
1-8 or through the use of subcontractors. The term includes a premises
1-9 owner contracting for work or services on its premises or in
1-10 connections with its business, a "principal contractor, " "original
1-11 contractor," "prime contractor," or other analogous term. The term
1-12 does not include a motor carrier that provides a transportation
1-13 service through the use of an owner operator.
1-14 SECTION 2. Amend Section 406.123. Election to Provide
1-15 Coverage; Administrative Violation.
1-16 (a) A general contractor and a subcontractor may enter into
1-17 a written agreement under which the general contractor provides
1-18 workers' compensation insurance coverage to the subcontractor and
1-19 the employees of the subcontractor.
1-20 (b) If a general contractor has workers' compensation
1-21 insurance to protect the general contractor's employees and if, in
2-1 the course of the general contractor's business, the general
2-2 contractor enters into a contract with a subcontractor who does not
2-3 have employees, the general contractor shall be treated as the
2-4 employer of the subcontractor for the purposes of this subtitle and
2-5 may enter into an agreement for the deduction of premiums paid in
2-6 accordance with Subsection (e).
2-7 (c) If a general contractor has workers' compensation
2-8 insurance to protect the general contractor's business, the general
2-9 contractor enters into a contract with a subcontractor who does
2-10 have employees and who has workers' compensation insurance to
2-11 protect the subcontractor's employees, the general contractor may
2-12 enter into an agreement for the subcontractor to provide the
2-13 workers' compensation coverage for the subcontractor's employees
2-14 while working for the general contractor, even if they are deemed
2-15 to be the general contractor's borrowed servants by reason of the
2-16 general contractor's right to control the details of the work of
2-17 the subcontractor's employees. In such event, the workers'
2-18 compensation insurance coverage obtained by the subcontractor shall
2-19 provide primary coverage and shall be obligated on behalf of the
2-20 general contractor and the subcontractor to comply with all the
2-21 provision of this Act.
2-22 (d) A motor carrier and an owner operator may enter into a
2-23 written agreement under which the motor carrier provides workers'
2-24 compensation insurance coverage to the owner operator and the
2-25 employees of the owner operator.
3-1 (e) If a general contractor or a motor carrier elects to
3-2 provide coverage under Subsection (a) or (d), then notwithstanding
3-3 Section 415.006, the actual premiums, based on payroll, that are
3-4 paid or incurred by the general contractor or motor carrier for the
3-5 coverage may be deducted from the contract price or other amount
3-6 owed to the subcontractor or owner operator by the general
3-7 contractor or motor carrier.
3-8 (f) If a general contractor enters into an agreement with a
3-9 subcontractor under Subsection (c), then notwithstanding Section
3-10 415.006, the actual premiums, based on payroll, that are paid or
3-11 incurred by the subcontractor for such coverage may be added to the
3-12 contract price or other amount owed to the subcontractor by the
3-13 general contractor.
3-14 (g) An agreement under this section makes the general
3-15 contractor the employer of the subcontractor and the
3-16 subcontractor's employees only for purposed of the workers'
3-17 compensation laws of this state. If the general contractor elects
3-18 to provide coverage under Subsections (a), (c), or (d), the general
3-19 contractor and the subcontractor are subject to Section 406.034 and
3-20 408.001.
3-21 (h) A general contractor shall file a copy of an agreement
3-22 entered into under this section with the general contractor's
3-23 workers' compensation insurance carriers not later than the 10th
3-24 day after the date on which the contract is executed.
3-25 (i) If a general contractor enters into an agreement with a
4-1 subcontractor under Subsection (c), then a copy of such agreement
4-2 shall be filed with the general contractor's and the
4-3 subcontractor's workers' compensation insurance carriers not later
4-4 than the 10th day after the date in which the contract is executed,
4-5 if the general contractor or subcontractor is a certified
4-6 self-insurer, the copy must be filed with the division of
4-7 self-insurance regulation.
4-8 (j) A general contractor who enters into an agreement with a
4-9 subcontractor under this section commits a violation if the
4-10 contractor fails to file a copy of the agreement as required by
4-11 Subsections (h) or (I). A violation under this subsection is a
4-12 Class B administrative violation.
4-13 (k) Notwithstanding Subsection (b), a person who performs
4-14 work or provides a service for an oil or gas well operator and who
4-15 is an independent contractor that has no employees shall be treated
4-16 in the same manner as an independent contractor with employees and
4-17 is not entitled to coverage under the general contractor's workers'
4-18 compensation insurance policy unless the independent contractor and
4-19 the general contractor enter into an agreement under this section.
4-20 SECTION 3. This act takes effect September 1, 1999.
4-21 SECTION 4. The importance of this legislation and the
4-22 crowded condition of the calendars in both houses create an
4-23 emergency and an imperative public necessity that the
4-24 constitutional rule requiring bills to be read on three several
4-25 days in each house be suspended, and this rule is hereby suspended.