1-1     By:  West (Senate Sponsor - Bivins)                   H.B. No. 1254
 1-2           (In the Senate - Received from the House April 26, 2001;
 1-3     April 27, 2001, read first time and referred to Committee on
 1-4     Intergovernmental Relations; May 9, 2001, reported favorably by the
 1-5     following vote:  Yeas 6, Nays 0; May 9, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the extension of uniform group benefits for political
 1-9     subdivisions to certain affiliated service contractors.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 172.002, Local Government Code, is
1-12     amended to read as follows:
1-13           Sec. 172.002.  PURPOSE. The purpose of this chapter is to:
1-14                 (1)  provide uniformity in benefits including accident,
1-15     health, dental, and long-term disability coverage to employees of
1-16     political subdivisions;
1-17                 (2)  enable the political subdivisions to attract and
1-18     retain competent and able employees by providing them with accident
1-19     and health benefits coverages at least equal to those commonly
1-20     provided in private industry;
1-21                 (3)  foster, promote, and encourage employment by and
1-22     service to political subdivisions as a career profession for
1-23     persons of high standards of competence and ability;
1-24                 (4)  recognize and protect the political subdivisions'
1-25     investment in each permanent employee by promoting and preserving
1-26     economic security and good health among those employees;
1-27                 (5)  foster and develop high standards of
1-28     employer-employee relationships between each political subdivision
1-29     and its employees;
1-30                 (6)  recognize the service to political subdivisions by
1-31     elected officials and employees of affiliated service contractors
1-32     by extending to them the same accident and health benefits
1-33     coverages as are provided for political subdivision employees;  and
1-34                 (7)  recognize the long and faithful service and
1-35     dedication of employees of political subdivisions and to encourage
1-36     them to remain in service of their respective political
1-37     subdivisions until eligible for retirement by providing health
1-38     benefits to those employees.
1-39           SECTION 2.  Section 172.003, Local Government Code, is
1-40     amended to read as follows:
1-41           Sec. 172.003.  DEFINITIONS. In this chapter:
1-42                 (1)  "Affiliated service contractor" means an
1-43     organization qualified for exemption under Section 501(c), Internal
1-44     Revenue Code (26 U.S.C. Section 501(c)), as amended, that provides
1-45     governmental or quasi-governmental services on behalf of a
1-46     political subdivision and derives more than 50 percent of its gross
1-47     revenues from grants or funding from the political subdivision.
1-48                 (2)  "Employee" means a person who works at least 20
1-49     hours a week for a political subdivision.
1-50                 (3) [(2)]  "Political subdivision" means a county,
1-51     municipality, special district, school district, junior college
1-52     district, housing authority, or other political subdivision of the
1-53     state.
1-54           SECTION 3.  Sections 172.004(a) and (c), Local Government
1-55     Code, are amended to read as follows:
1-56           (a)  A political subdivision or a group of political
1-57     subdivisions pursuant to The Interlocal Cooperation Act (Chapter
1-58     791, Government Code) [(Article 4413(32c), Vernon's Texas Civil
1-59     Statutes)] directly or through a risk pool may provide health and
1-60     accident coverage for political subdivision officials, employees,
1-61     and retirees or any class of officials, employees, or retirees, and
1-62     employees of affiliated service contractors.
1-63           (c)  A political subdivision also may include under the
1-64     coverage dependents of the officers, employees, and retirees and of
 2-1     employees of affiliated service contractors.
 2-2           SECTION 4.  Sections 172.005(a) and (b), Local Government
 2-3     Code, are amended to read as follows:
 2-4           (a)  A political subdivision may establish a risk pool or may
 2-5     enter into an interlocal agreement under The Interlocal Cooperation
 2-6     Act (Chapter 791, Government Code) [(Article 4413(32c), Vernon's
 2-7     Texas Civil Statutes)] with other political subdivisions to
 2-8     establish a risk pool to provide health and accident coverage for
 2-9     officials, employees, retirees, employees of affiliated service
2-10     contractors, and their dependents.
2-11           (b)  Contributions paid by a political subdivision's
2-12     officials, employees, and retirees and employees of affiliated
2-13     service contractors for coverage shall be deposited to the credit
2-14     of the risk pool's fund and used as provided by rules of the risk
2-15     pool.
2-16           SECTION 5.  Section 172.013(b), Local Government Code, is
2-17     amended to read as follows:
2-18           (b)  A political subdivision also may pay all or part of the
2-19     contributions for coverage for officers, employees, retirees, and
2-20     dependents, but may not pay any part of the contributions for
2-21     coverage for employees of affiliated service contractors or their
2-22     dependents.
2-23           SECTION 6.  Chapter 172, Local Government Code, is amended by
2-24     adding Section 172.016 to read as follows:
2-25           Sec. 172.016.  STATUS OF AFFILIATED SERVICE CONTRACTORS.
2-26     Inclusion of the employees of affiliated service contractors in the
2-27     uniform group benefits program authorized by this chapter does not,
2-28     for any purpose:
2-29                 (1)  make an affiliated service contractor a political
2-30     subdivision or a division of a political subdivision; or
2-31                 (2)  make an employee of an affiliated service
2-32     contractor an employee of a political subdivision or a division of
2-33     a political subdivision.
2-34           SECTION 7.  This Act takes effect September 1, 2001.
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