1-1                                   AN ACT
 1-2     relating to the purchase of certain insurance coverage by state
 1-3     agencies and to workers' compensation insurance benefits provided
 1-4     by certain state agencies.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6                 ARTICLE 1.  PURCHASE OF INSURANCE COVERAGE
 1-7           SECTION 1.01. Subchapter B, Chapter 412, Labor Code, is
 1-8     amended by amending Section 412.011 and adding Section 412.0111 to
 1-9     read as follows:
1-10           Sec. 412.011.  POWERS AND DUTIES OF OFFICE.  (a)  The State
1-11     Office of Risk Management shall [is created to] administer
1-12     insurance services obtained by state agencies, including the
1-13     government employees workers' compensation insurance program and
1-14     the state risk management programs.
1-15           (b)  The office shall:
1-16                 (1)  operate as a full-service risk manager and
1-17     insurance manager for state agencies as provided by Subsection (c);
1-18                 (2)  maintain and review records of property, casualty,
1-19     or liability insurance coverages purchased by or for a state
1-20     agency;
1-21                 (3)  administer the program for the purchase of surety
1-22     bonds for state officers and employees as provided by Chapter 653,
1-23     Government Code;
1-24                 (4)  administer guidelines adopted by the board for a
 2-1     comprehensive risk management program applicable to all state
 2-2     agencies to reduce property and liability losses, including
 2-3     workers' compensation losses;
 2-4                 (5) [(2)]  review, verify, monitor, and approve risk
 2-5     management programs adopted by state agencies;
 2-6                 (6) [(3)]  assist a state agency that has not
 2-7     implemented an effective risk management program to implement a
 2-8     comprehensive program that meets the guidelines established by the
 2-9     board; and
2-10                 (7) [(4)]  administer the workers' compensation
2-11     insurance program for state employees established under Chapter
2-12     501.
2-13           (c)  The office shall:
2-14                 (1)  perform risk management for each state agency
2-15     subject to Chapter 412; and
2-16                 (2)  purchase insurance coverage for a state agency
2-17     subject to Chapter 501, except for an institution subject to
2-18     Section 501.022, under any line of insurance other than health or
2-19     life insurance, including liability insurance authorized under
2-20     Chapter 612, Government Code.
2-21           (d)  The board by rule shall develop an implementation
2-22     schedule for the purchase under this section of insurance for state
2-23     agencies by the office.  The board shall phase in, by line of
2-24     insurance, the requirement that a state agency purchase coverage
2-25     only through the office.
2-26           (e)  A state agency subject to Chapter 501, except for an
2-27     institution subject to Section 501.022, may not purchase property,
 3-1     casualty, or liability insurance coverage without the approval of
 3-2     the board.
 3-3           Sec. 412.0111.  AFFILIATION WITH OFFICE OF ATTORNEY GENERAL.
 3-4     The office is administratively attached to the office of the
 3-5     attorney general and the office of the attorney general shall
 3-6     provide the facilities for the office, but the office shall be
 3-7     independent of the office of the attorney general's direction.
 3-8           SECTION 1.02. Subchapter B, Chapter 412, Labor Code, is
 3-9     amended by amending Section 412.012 and adding Sections 412.0121,
3-10     412.0122, and 412.0123 to read as follows:
3-11           Sec. 412.012.  FUNDING. [(a)]  The office shall be
3-12     administered through money appropriated by the legislature and
3-13     through:
3-14                 (1)  interagency contracts for purchase of insurance
3-15     coverage and the operation of the risk management program; and
3-16                 (2)  the allocation program for the financing of state
3-17     workers' compensation benefits.
3-18           Sec. 412.0121.  INTERAGENCY CONTRACTS. (a)  [(b)  Interagency
3-19     Contracts.  (1)]  Each state agency shall enter into an interagency
3-20     contract with the office under Chapter 771, Government Code, to pay
3-21     the costs incurred by the office in administering this chapter for
3-22     the benefit of that state agency.
3-23           (b)  Costs payable under the contract include the cost of:
3-24                 (1) [(A)]  services of office employees;
3-25                 (2) [(B)]  materials; and
3-26                 (3) [(C)]  equipment, including computer hardware and
3-27     software.
 4-1           (c) [(2)]  The amount of the costs to be paid by a state
 4-2     agency under the interagency contract is based on:
 4-3                 (1) [(A)]  the number of employees of the agency
 4-4     compared with the total number of employees of all state agencies
 4-5     to which this chapter applies;
 4-6                 (2) [(B)]  the dollar value of the agency's property
 4-7     and asset and liability exposure compared to that of all state
 4-8     agencies to which this chapter applies; and
 4-9                 (3) [(C)]  the number and aggregate cost of claims and
4-10     losses incurred by the state agency compared to those incurred by
4-11     all state agencies to which this chapter applies.
4-12           (d)  The board may by rule establish the formula for
4-13     allocating the cost of this chapter in an interagency contract in a
4-14     manner that gives consideration to the factors in Subsection (c)
4-15     and any other factors it deems relevant, including an agency's risk
4-16     management expenditures, unique risks, and established programs.
4-17           Sec. 412.0122.  STATE SELF-INSURING FOR WORKERS'
4-18     COMPENSATION.  (a) [(c)]  The state is self-insuring with respect
4-19     to an employee's compensable injury.
4-20           (b)  The legislature shall appropriate the amount designated
4-21     by the appropriation structure for the payment of state workers'
4-22     compensation claims costs to the office.  This section does not
4-23     affect the reimbursement of claims costs by funds other than
4-24     general revenue funds, as provided by the General Appropriations
4-25     Act.
4-26           Sec. 412.0123.  DEPOSIT OF WORKERS' COMPENSATION SUBROGATION
4-27     RECOVERIES. (a) [(d)  State Workers' Compensation Account.  (1)]
 5-1     All money recovered by the director from a third party through
 5-2     subrogation shall be deposited into the state workers' compensation
 5-3     account in general revenue.
 5-4           (b) [(2)]  Funds deposited under this section may be used for
 5-5     the payment of workers' compensation [and other] benefits to state
 5-6     employees.
 5-7           SECTION 1.03. Section 412.021(a), Labor Code, is amended to
 5-8     read as follows:
 5-9           (a)  The office is governed by the risk management board.
5-10     Members of the board must have demonstrated experience in the
5-11     fields [field] of:
5-12                 (1)  insurance and insurance regulation;
5-13                 (2)  workers' compensation; and
5-14                 (3)  risk management administration.
5-15           SECTION 1.04. Section 412.022(b), Labor Code, is amended to
5-16     read as follows:
5-17           (b)  A training program established under this section must
5-18     provide information to the member regarding:
5-19                 (1)  the enabling legislation that created the board;
5-20                 (2)  the program operated by the board;
5-21                 (3)  the role and functions of the board;
5-22                 (4)  the rules of the board, with an emphasis on the
5-23     rules that relate to disciplinary and investigatory authority;
5-24                 (5)  the current budget for the board;
5-25                 (6)  the results of the most recent formal audit of the
5-26     board;
5-27                 (7)  the requirements of:
 6-1                       (A)  the open meetings law, Chapter 551,
 6-2     Government Code;
 6-3                       (B)  the public information [open records] law,
 6-4     Chapter 552, Government Code; and
 6-5                       (C)  the administrative procedure law, Chapter
 6-6     2001, Government Code;
 6-7                 (8)  the requirements of the conflict of interest laws
 6-8     and other laws relating to public officials; and
 6-9                 (9)  any applicable ethics policies adopted by the
6-10     board or the Texas Ethics Commission.
6-11           SECTION 1.05. Section 412.041, Labor Code, is amended to read
6-12     as follows:
6-13           Sec. 412.041.  DIRECTOR DUTIES[; RESPONSIBILITIES]. (a)  The
6-14     director serves as the state risk manager.
6-15           (b)  The director shall supervise the development and
6-16     administration of systems to:
6-17                 (1)  identify the property and liability losses,
6-18     including workers' compensation losses, of each state agency;
6-19                 (2)  identify the administrative costs of risk
6-20     management incurred by each state agency;
6-21                 (3)  identify and evaluate the exposure of each state
6-22     agency to claims for property and liability losses, including
6-23     workers' compensation; and
6-24                 (4)  reduce the property and liability losses,
6-25     including workers' compensation, incurred by each state agency.
6-26           (c)  In addition to other duties provided by this chapter, by
6-27     Chapter 501, and by the board, the director shall:
 7-1                 (1)  keep full and accurate minutes of the transactions
 7-2     and proceedings of the board;
 7-3                 (2)  be the custodian of the files and records of the
 7-4     board;
 7-5                 (3)  prepare and recommend to the board plans and
 7-6     procedures necessary to implement the purposes and objectives of
 7-7     this chapter and Chapter 501, including rules and proposals for
 7-8     administrative procedures consistent with this chapter and Chapter
 7-9     501;
7-10                 (4)  hire staff as necessary to accomplish the
7-11     objectives of the board and may delegate powers and duties to
7-12     members of that staff as necessary;
7-13                 (5)  be responsible for the investigation of complaints
7-14     and for the presentation of formal complaints;
7-15                 (6)  attend all meetings of the board as a nonvoting
7-16     participant; and
7-17                 (7)  handle the correspondence of the board and obtain,
7-18     assemble, or prepare the reports and information that the board may
7-19     direct or authorize.
7-20           (d)  If necessary to the administration of this chapter and
7-21     Chapter 501, the director, with the approval of the board, may
7-22     secure and provide for services that are necessary and may employ
7-23     and compensate within available appropriations professional
7-24     consultants, technical assistants, and employees on a full-time or
7-25     part-time basis.
7-26           (e)  The director also serves as the administrator of the
7-27     government employees workers' compensation insurance program.
 8-1           (f)  In administering and enforcing Chapter 501 as regards a
 8-2     compensable injury with a date of injury before September 1, 1995,
 8-3     the director shall act in the capacity of employer and insurer.  In
 8-4     administering and enforcing Chapter 501 as regards a compensable
 8-5     injury with a date of injury on or after September 1, 1995, the
 8-6     director shall act in the capacity of insurer.  [(effective for
 8-7     dates of injury before September 1, 1995.)]
 8-8           (g) [(1)]  The director shall act as an adversary before the
 8-9     commission and courts and present the legal defenses and positions
8-10     of the state as an employer and insurer, as appropriate.
8-11           (h) [(2)]  For the purposes of Subsection (f) [this
8-12     subsection] and Chapter 501, the director is entitled to the legal
8-13     counsel of the attorney general.
8-14           (i)  In administering Chapter 501 the [(3)  The] director is
8-15     subject to the rules, orders, and decisions of the commission in
8-16     the same manner as a private employer, insurer, or association.
8-17           (j) [(g)  In administering and enforcing Chapter 501, the
8-18     director shall act in the capacity of insurer.  (effective for
8-19     dates of injury on or after September 1, 1995.)]
8-20                 [(1)  The director shall act as an adversary before the
8-21     commission and courts and present the legal defenses and positions
8-22     of the state as an insurer.]
8-23                 [(2)  For purposes of this subsection and Chapter 501,
8-24     the director is entitled to legal counsel of the attorney general.] 
8-25                 [(3)  The director is subject to the rules, orders, and
8-26     decisions of the commission in the same manner as an insurer or
8-27     association.]
 9-1           [(h)]  The director shall:
 9-2                 (1)  prepare for adoption by the board procedural rules
 9-3     and prescribe forms necessary for the effective administration of
 9-4     this chapter and Chapter 501 [(effective for dates of injury before
 9-5     September 1, 1995)]; and
 9-6                 (2)  prepare for adoption by the board and enforce
 9-7     reasonable rules for the prevention of accidents and injuries[;]
 9-8                 [(3)  prepare for adoption by the board procedural
 9-9     rules and prescribe forms necessary for the effective
9-10     administration of this chapter and Chapter 501].  [(effective for
9-11     dates of injury on or after September 1, 1995.)]
9-12           (k) [(i)]  The director shall hold hearings on all proposed
9-13     rules and provide reasonable opportunity for the officers of state
9-14     agencies to testify at hearings on all proposed rules under this
9-15     chapter and Chapter 501.
9-16           (l) [(j)]  The director shall furnish copies of all rules to:
9-17                 (1)  the commission;
9-18                 (2)  the commissioner of the Texas Department of
9-19     Insurance; and
9-20                 (3)  [to] the administrative heads of all state
9-21     agencies affected by this chapter and Chapter 501.
9-22           SECTION 1.06. Sections 412.042(a) and (b), Labor Code, are
9-23     amended to read as follows:
9-24           (a)  The director shall report to the legislature at the
9-25     beginning of each regular session regarding the services provided
9-26     by the office to a state agency subject to Chapter 501.
9-27           [(b)]  The report required under this subsection [section]
 10-1    shall be dated January 1 of the year in which the regular session
 10-2    is held and must include:
 10-3                (1)  a summary of administrative expenses;
 10-4                (2)  a statement:
 10-5                      (A)  showing the amount of the money appropriated
 10-6    by the preceding legislature that remains unexpended on the date of
 10-7    the report; and
 10-8                      (B)  estimating the amount of that balance
 10-9    necessary to administer Chapter 501 for the remainder of that
10-10    fiscal year; and
10-11                (3) [(C)]  an estimate, based on experience factors, of
10-12    the amount of money that will be required to administer Chapter 501
10-13    and pay for the compensation and services provided under Chapter
10-14    501 during the next succeeding biennium.
10-15          (b)  In addition to the report required under Subsection (a),
10-16    the director shall report to the legislature not later than
10-17    February 1 of each odd-numbered year regarding insurance coverage
10-18    purchased for state agencies, premium dollars spent to obtain that
10-19    coverage, and losses incurred under that coverage.
10-20          (c)  On an annual basis, not later than September 30 of each
10-21    year, agencies exempt under Section 412.052 of this article shall
10-22    provide a written report to the Legislative Budget Board
10-23    identifying policies purchased under any line of insurance other
10-24    than life or health insurance.  The report should include a
10-25    description of the policy, name of the insurance company, annual
10-26    premium, coverage limits, deductibles, and losses incurred under
10-27    that coverage.
 11-1          SECTION 1.07.  Section 412.051, Labor Code, is amended to
 11-2    read as follows:
 11-3          Sec. 412.051.  DUTIES OF STATE AGENCIES; INSURANCE REPORTING
 11-4    REQUIREMENTS.  (a)  Each state agency [subject to this chapter]
 11-5    shall actively manage the risks of that agency by:
 11-6                (1)  developing, implementing, and maintaining programs
 11-7    designed to assist employees who sustain compensable injuries to
 11-8    return to work; and
 11-9                (2)  cooperating with the office and the Texas
11-10    Department of Insurance in the purchase of property, casualty, and
11-11    liability lines of insurance coverage.
11-12          (b)  In addition to the report required under Section
11-13    412.053, each state agency that intends to purchase property,
11-14    casualty, or liability insurance coverage in a manner other than
11-15    through the services provided by the office shall report the
11-16    intended purchase to the office in the manner prescribed by the
11-17    office. The state agency shall report the intended purchase not
11-18    later than the 30th day before the date on which the purchase of
11-19    the coverage is scheduled to occur.  The office may require a state
11-20    agency to submit copies of insurance forms, policies, and other
11-21    relevant information.
11-22          SECTION 1.08.  Section 412.053(b), Labor Code, is amended to
11-23    read as follows:
11-24          (b)  The information shall be reported not later than the
11-25    60th day before the last day [on or before 60 days after the close]
11-26    of each fiscal year.
11-27          SECTION 1.09. Subchapter E, Chapter 21, Insurance Code, is
 12-1    amended by adding Article 21.49-15A to read as follows:
 12-2          Art. 21.49-15A.  INSURER REPORT TO STATE OFFICE OF RISK
 12-3    MANAGEMENT
 12-4          Sec. 1.  DEFINITIONS. In this article:
 12-5                (1)  "Insurer" means an insurance company,
 12-6    inter-insurance exchange, mutual or reciprocal association, county
 12-7    mutual insurance company, Lloyd's plan, or other entity that is
 12-8    authorized by the Texas Department of Insurance to engage in the
 12-9    business of insurance in this state.
12-10                (2)  "Office" means the State Office of Risk
12-11    Management.
12-12                (3)  "State agency" has the meaning assigned by Section
12-13    412.001, Labor Code.
12-14          Sec. 2.  REPORTING REQUIREMENTS. (a)  Each insurer that
12-15    enters into an insurance policy or other contract or agreement with
12-16    a state agency for the purchase of property, casualty, or liability
12-17    insurance coverage by the state agency, including a policy,
12-18    contract, or agreement subject to competitive bidding requirements,
12-19    shall report the intended sale to the office in the manner
12-20    prescribed by that office.
12-21          (b)  The insurer shall report the intended sale not later
12-22    than the 30th day before the date the sale of the insurance
12-23    coverage is scheduled to occur.
12-24          (c)  The office may require an insurer to submit copies of
12-25    insurance forms, policies, and other relevant information.
12-26          (d)  The office shall adopt rules as necessary to implement
12-27    this article.  In adopting those rules, the office shall consult
 13-1    with the commissioner.
 13-2          (e)  Failure by an insurer to comply with the reporting
 13-3    requirements adopted under this article constitutes grounds for the
 13-4    imposition of sanctions against that insurer under Chapter 82.
 13-5          SECTION 1.10.  Section 653.002, Government Code, is amended
 13-6    to read as follows:
 13-7          Sec. 653.002.  LEGISLATIVE INTENT. The intent of the
 13-8    legislature in enacting this chapter is to limit the purchase of
 13-9    surety bonds by state agencies in order that the state, to the
13-10    greatest extent practicable, shall self-insure for such purposes.
13-11    This chapter does not affect the purchase by a state agency of any
13-12    form of insurance other than a surety bond [prescribe:]
13-13                [(1)  uniform standards for the bonding of officers and
13-14    employees of state agencies to provide protection against loss; and]
13-15                [(2)  a uniform bond to cover those officers and
13-16    employees].
13-17          SECTION 1.11.  Section 653.003, Government Code, is amended
13-18    to read as follows:
13-19          Sec. 653.003.  DEFINITIONS. In this chapter:
13-20                (1)  "Surety bond [Bond]" means any bond, including a
13-21    bond for a notary public under Section 406.010, that obligates [an
13-22    agreement obligating an insurance company, as] a surety[,] to pay
13-23    within certain limits a loss caused by a:
13-24                      (A)  dishonest act of an officer or employee of a
13-25    state agency; or
13-26                      (B)  failure of an officer or employee of a state
13-27    agency to faithfully perform a duty of the officer's or employee's
 14-1    office or position.
 14-2                (2)  "Office" means the State Office of Risk Management
 14-3    ["Faithful performance blanket position bond" means a bond that:]
 14-4                      [(A)  covers all positions in a state agency; and]
 14-5                      [(B)  is conditioned on the faithful performance
 14-6    of the officers' and employees' duties].
 14-7                (3)  ["Honesty blanket position bond" means a bond that
 14-8    covers all positions in a state agency for a specific amount for
 14-9    each position.]
14-10                [(4)  "Position schedule honesty bond" means a bond
14-11    that covers, for a specific amount for each position, the honesty
14-12    of an employee of a state agency who occupies and performs the
14-13    duties of a position listed in a schedule attached to the bond.]
14-14                [(5)  "Specific excess indemnity" means additional bond
14-15    coverage that exceeds the coverage specified in a faithful
14-16    performance blanket position bond, honesty blanket position bond,
14-17    or position schedule honesty bond.]
14-18                [(6)]  "State agency" means a state department,
14-19    commission, board, institution, court, or institution of higher
14-20    education.  The term also includes a soil conservation district of
14-21    the state but does not include any other political subdivision of
14-22    the state.
14-23          SECTION 1.12.  Section 653.004, Government Code, is amended
14-24    to read as follows:
14-25          Sec. 653.004.  AUTHORITY TO PURCHASE BONDS. (a)
14-26    Notwithstanding any other law that authorizes or requires a state
14-27    officer or employee to obtain a surety bond, [The head of] a state
 15-1    agency may purchase a surety bond for a state officer or employee
 15-2    only if [contract for]:
 15-3                (1)  required by the constitution of the state or by
 15-4    federal law or regulation [a position schedule honesty bond
 15-5    covering not more than 10 offices or positions of the state
 15-6    agency]; [or]
 15-7                (2)  required by court order; or
 15-8                (3)  approved by the office [a blanket position bond
 15-9    for more than two offices or positions of the state agency].
15-10          (b)  The office may approve the purchase of a surety bond if:
15-11                (1)  the office finds that the surety bond is warranted
15-12    by a substantial or unusual risk of loss; or
15-13                (2)  the office otherwise determines that the purchase
15-14    of a surety bond is necessary to protect the interests of the state
15-15    [head of a state agency may not contract for coverage of the same
15-16    office or position under more than one type of bond, other than for
15-17    specific excess indemnity authorized under Subsection (c)].
15-18          [(c)  The head of a state agency, other than the comptroller,
15-19    may contract for specific excess indemnity coverage in addition to
15-20    a blanket bond.  The comptroller may contract for:]
15-21                [(1)  specific excess indemnity coverage in addition to
15-22    an honesty blanket position bond or to a position schedule honesty
15-23    bond; and]
15-24                [(2)  a faithful performance blanket position bond.]
15-25          [(d)  A bond covers the office or position rather than the
15-26    officer or employee in the office or position.]
15-27          SECTION 1.13.  Section 653.005, Government Code, is amended
 16-1    to read as follows:
 16-2          Sec. 653.005.  SCOPE AND AMOUNT OF BOND COVERAGE. Unless the
 16-3    amount of bond coverage is established as provided by Subsections
 16-4    (a)(1) and (a)(2) of Section 653.004, the office [(a)  The head of
 16-5    a state agency] shall determine the necessary scope and amount of
 16-6    bond coverage for a state [the] agency [within the maximum bond
 16-7    coverage limit].
 16-8          [(b)  The maximum bond coverage on a state officer or
 16-9    employee, including specific excess indemnity coverage, may not
16-10    exceed $10,000 unless the state auditor recommends and approves
16-11    specific excess indemnity coverage of more than $10,000 as
16-12    necessary to protect the state.]
16-13          SECTION 1.14.  Chapter 653, Government Code, is amended by
16-14    adding Section 653.012 to read as follows:
16-15          Sec. 653.012.  QUALIFICATION FOR OFFICE OR EMPLOYMENT.
16-16    Notwithstanding any other law that requires a state officer or
16-17    employee to obtain a surety bond, a state officer or employee
16-18    otherwise qualified to hold office, employment, or to serve as a
16-19    notary public shall not be disqualified because a surety bond has
16-20    not been obtained for such officer or employee.
16-21          SECTION 1.15. A person serving as a member of the risk
16-22    management board on the effective date of this Act is entitled to
16-23    serve until the expiration of the term for which the member was
16-24    appointed.  On the expiration of that term, the governor shall
16-25    appoint a member who meets the qualifications established by
16-26    Section 412.021, Labor Code, as amended by this Act.
 17-1           ARTICLE 2.  EFFECT OF USE OF LEAVE ON INCOME BENEFITS
 17-2          SECTION 2.01. Subchapter C, Chapter 505, Labor Code, is
 17-3    amended by adding Section 505.060 to read as follows:
 17-4          Sec. 505.060.  EFFECT OF SICK LEAVE; ANNUAL LEAVE. (a)  An
 17-5    employee may elect to use accrued sick leave before receiving
 17-6    income benefits.  If an employee elects to use sick leave, the
 17-7    employee is not entitled to income benefits under this chapter
 17-8    until the employee has exhausted the employee's accrued sick leave.
 17-9          (b)  An employee may elect to use all or any number of weeks
17-10    of accrued annual leave after the employee's accrued sick leave is
17-11    exhausted.  If an employee elects to use annual leave, the employee
17-12    is not entitled to income benefits under this chapter until the
17-13    elected number of weeks of leave have been exhausted.
17-14                     ARTICLE 3.  TRANSITION; EFFECTIVE DATE
17-15          SECTION 3.01. (a)  Except as provided by Subsections (b),
17-16    (c), and (d) of this section, this Act takes effect September 1,
17-17    2002.
17-18          (b)  Not later than December 1, 2002, the risk management
17-19    board shall adopt rules to implement:
17-20                (1)  the changes in law made by the amendments made by
17-21    this Act to Chapter 412, Labor Code; and
17-22                (2)  Article 21.49-15A, Insurance Code, as added by
17-23    this Act.
17-24          (c)  An insurer is not required to comply with the reporting
17-25    requirements adopted under Article 21.49-15A, Insurance Code, as
17-26    added by this Act, until January 1, 2002.  Article 21.49-15A,
17-27    Insurance Code, as added by this Act, applies only to an insurance
 18-1    policy, contract, or agreement delivered, issued for delivery, or
 18-2    renewed on or after January 1, 2002.  A policy, contract, or
 18-3    agreement delivered, issued for delivery, or renewed before January
 18-4    1, 2002, is governed by the law as it existed immediately before
 18-5    the effective date of this Act, and that law is continued in effect
 18-6    for that purpose.
 18-7          (d)  Section 505.060, Labor Code, as added by this Act,
 18-8    applies only to a claim for workers' compensation benefits based on
 18-9    a compensable injury that occurs on or after the effective date of
18-10    this Act.  A claim based on a compensable injury that occurs before
18-11    that date is governed by the law in effect on the date the
18-12    compensable injury occurred, and the former law is continued in
18-13    effect for that purpose.
18-14          (e)  The changes made by this Act to Chapter 653, Government
18-15    Code, shall not apply to payments made under an agreement to
18-16    purchase a surety bond entered into by a state agency before the
18-17    effective date of this Act.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1203 was passed by the House on May
         11, 2001, by a non-record vote; that the House refused to concur in
         Senate amendments to H.B. No. 1203 on May 23, 2001, 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. 1203 on May 27, 2001, by a
         non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1203 was passed by the Senate, with
         amendments, on May 21, 2001, 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. 1203 on May 27, 2001,
         by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor