SRC-BWC H.B. 3055 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 3055
77R2297 MI-DBy: Dukes (Barrientos)
Intergovernmental Relations
5/5/2001
Engrossed


DIGEST AND PURPOSE 

Most contractors provide workers' compensation insurance for their crews as
a normal business expense and calculate their project bids accordingly.  In
a county construction project, this increased bid price is passed along to
the county and paid for by the county taxpayers.  To save money, some
counties would prefer to provide workers' compensation insurance themselves
through an ownercontrolled insurance program (OCIP).  This can actually
lower the cost to the county because it may be less expensive for the
county to provide insurance for construction workers than it is for a
contractor. OCIPs also benefit contractors with small businesses who may
not be able to afford workers' compensation insurance.  However, a county
may have difficulty finding funding for an OCIP.  Under a regular
construction contract, a contractor pays for the insurance and passes the
cost along in the price of the contractor's bid.  The county pays for the
construction, including insurance, through bonds or certificates of
obligation issued to fund the project.  Under current law, OCIPs cannot be
funded by bonds or certificates, so the county must raise the money from
the county's general fund.  H.B. 3055 authorizes a county to issue bonds or
certificates of obligation to pay for an OCIP in conjunction with a county
construction project.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 9D, Government Code, by adding Chapter 1303, as
follows: 

CHAPTER 1303.  OTHER USE OF COUNTY BOND PROCEEDS

Sec. 1303.001.  USE OF BOND PROCEEDS FOR OWNER-CONTROLLED INSURANCE
PROGRAM.  Authorizes a county to use the proceeds of bonds or certificates
of obligation issued to pay for a county construction project to pay for an
owner-controlled insurance program under which the county establishes and
administers a consolidated insurance program for the project if the
county's order authorizing the issuance of the bonds or other certificates
of obligation authorizes the establishment of the program. 

SECTION 2.  Effective date: September 1, 2001.