By George H.B. No. 3214
77R5892 JMM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to agreements between certain contractors with regard to
1-3 workers' compensation insurance coverage; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 406.144, Labor Code, is amended to read as
1-6 follows:
1-7 Sec. 406.144. ELECTION TO PROVIDE COVERAGE; AGREEMENT;
1-8 ADMINISTRATIVE VIOLATION. (a) Except as provided by this section,
1-9 a hiring contractor is not responsible for providing workers'
1-10 compensation insurance coverage for an independent contractor or
1-11 the independent contractor's employee, helper, or subcontractor.
1-12 An independent contractor and a hiring contractor may enter into a
1-13 written agreement under which the independent contractor agrees
1-14 that the hiring contractor may withhold the cost of workers'
1-15 compensation insurance coverage from the contract price and that,
1-16 for the purpose of providing workers' compensation insurance
1-17 coverage, the hiring contractor is the employer of the independent
1-18 contractor and the independent contractor's employees.
1-19 (b) A hiring contractor and independent contractor may enter
1-20 into an agreement under Subsection (a) even if the independent
1-21 contractor does not have an employee.
1-22 (c) The commission by rule may establish the procedures and
1-23 requirements for an agreement under this section [An agreement
1-24 under this section shall be filed with the commission either by
2-1 personal delivery or by registered or certified mail and is
2-2 considered filed on receipt by the commission].
2-3 (d) The hiring contractor shall file [send] a copy of an
2-4 agreement under this section with [to] the hiring contractor's
2-5 workers' compensation insurance carrier not later than the 10th day
2-6 after the date on which the agreement is signed by both contractors
2-7 who enter into the agreement. If the hiring contractor is a
2-8 certified self-insurer, the copy shall be filed with the
2-9 commission's division of self-insurance regulation. The hiring
2-10 contractor's workers' compensation insurance carrier shall maintain
2-11 a system for accepting and maintaining the agreements [on filing of
2-12 the agreement with the commission].
2-13 (e) An agreement under this section makes the hiring
2-14 contractor the employer of the independent contractor and the
2-15 independent contractor's employees only for the purposes of the
2-16 workers' compensation laws of this state.
2-17 (f) The deduction of the cost of the workers' compensation
2-18 insurance coverage from the independent contractor's contract price
2-19 is permitted notwithstanding Section 415.006.
2-20 (g) A hiring contractor who enters into an agreement with an
2-21 independent contractor under this section commits a violation if
2-22 the contractor fails to file a copy of the agreement as required by
2-23 Subsection (d). A violation under this subsection is a Class B
2-24 administrative violation.
2-25 SECTION 2. Section 406.145, Labor Code, is amended to read as
2-26 follows:
2-27 Sec. 406.145. JOINT AGREEMENT; ADMINISTRATIVE VIOLATION. (a)
3-1 A hiring contractor and an independent subcontractor may make a
3-2 joint agreement declaring that the subcontractor is an independent
3-3 contractor as defined in Section 406.141(2) and that the
3-4 subcontractor is not the employee of the hiring contractor. If the
3-5 joint agreement is signed by both the hiring contractor and the
3-6 subcontractor [and filed with the commission], the subcontractor,
3-7 as a matter of law, is an independent contractor and not an
3-8 employee, and is not entitled to workers' compensation insurance
3-9 coverage through the hiring contractor unless an agreement is
3-10 entered into under Section 406.144 to provide workers' compensation
3-11 insurance coverage. [The commission shall prescribe forms for the
3-12 joint agreement.]
3-13 (b) The commission by rule may establish the procedure and
3-14 requirements for a joint agreement under this section [A joint
3-15 agreement shall be delivered to the commission by personal delivery
3-16 or registered or certified mail and is considered filed on receipt
3-17 by the commission].
3-18 (c) The hiring contractor shall file [send] a copy of a
3-19 joint agreement signed under this section with [to] the hiring
3-20 contractor's workers' compensation insurance carrier not later than
3-21 the 10th day after the date on which the agreement is signed by
3-22 both contractors who enter into the agreement [on filing of the
3-23 joint agreement with the commission]. If the hiring contractor is
3-24 a certified self-insurer, the copy must be filed with the
3-25 commission's division of self-insurance regulation.
3-26 (d) The hiring contractor's workers' compensation insurance
3-27 carrier [commission] shall maintain a system for accepting and
4-1 maintaining the joint agreements.
4-2 (e) A joint agreement signed under this section applies to
4-3 each hiring agreement between the hiring contractor and the
4-4 independent contractor until the first anniversary of its filing
4-5 date, unless a subsequent hiring agreement expressly states that
4-6 the joint agreement does not apply.
4-7 (f) If a subsequent hiring agreement is made to which the
4-8 joint agreement does not apply, the hiring contractor and
4-9 independent contractor shall notify the [commission and the] hiring
4-10 contractor's workers' compensation insurance carrier [in writing].
4-11 (g) If a hiring contractor and an independent contractor
4-12 have filed a joint agreement under this section, an insurance
4-13 company may not require the payment of an insurance premium by a
4-14 hiring contractor for coverage of an independent contractor or an
4-15 independent contractor's employee, helper, or subcontractor other
4-16 than under an agreement entered into in compliance with Section
4-17 406.144.
4-18 (h) A hiring contractor who enters into a joint agreement
4-19 with an independent contractor under this section commits a
4-20 violation if the contractor fails to file a copy of the agreement
4-21 as required by Subsection (c). A violation under this subsection
4-22 is a Class B administrative violation.
4-23 SECTION 3. This Act takes effect September 1, 2001, and
4-24 applies to an agreement entered into under Section 406.144 or
4-25 406.145, Labor Code, as those sections are amended by this Act, on
4-26 or after the effective date of this Act. An agreement entered into
4-27 before the effective date of this Act is governed by the law in
5-1 effect on the date the agreement was entered into, and the former
5-2 law is continued in effect for that purpose.