HBA-ATS C.S.H.B. 2507 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2507 By: George Business & Industry 4/6/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Section 408.001 of the Labor Code provides that workers' compensation benefits are the exclusive remedy of an employee covered by workers' compensation insurance against the employer or an agent or employee of the employer for work-related injuries sustained by the employee. Injured employees must look exclusively to the insurance carrier for compensation for injuries sustained on the job. They are prohibited from seeking common-law remedies from their employer and from their employer's agents and employees. Omitted from the statute are business entities such as parent corporations and subsidiary corporations of the employer who provides the workers' compensation coverage. Because of this omission, these entities may find themselves defendants in a common-law suit brought by employees of business units these entities either own or control or which control or own them. C.S.H.B. 2507 includes a parent corporation of an employer, a subsidiary corporation of an employer, or any other subsidiary of a parent corporation of an employer, that is a named insured on the employer's policy of workers' compensation, or an agent or employee of an employer, a parent corporation of an employer, a subsidiary corporation of an employer, or any other subsidiary of a parent corporation of an employer, among the parties to which the exclusive remedy of recovery of workers' compensation benefits by an injured or deceased employee applies. This bill also includes an agent or employee of an employer, a parent corporation of an employer, a subsidiary corporation of an employer, or any other subsidiary of a parent corporation of an employer, among the parties to which this exclusive remedy applies. As amended, the law prohibits an employee or a legal beneficiary from seeking common-law remedies from an employer, the parent corporation of the employer, a subsidiary corporation of the employer, or any other subsidiary of the parent corporation of the employer, as well as from the agents and employees of the employer, the parent corporation of the employer, a subsidiary corporation of the employer, or any other subsidiary of the parent corporation of the employer. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 408.001(a), Labor Code, to include a parent corporation of an employer, a subsidiary corporation of an employer, or any other subsidiary of a parent corporation of an employer, that is a named insured on the employer's policy of workers' compensation insurance or is covered by a certificate of authority to self-insure issued by the Texas Workers' Compensation Commission under Chapter 407 (Self-Insurance Regulation) among the parties (employer) to which the exclusive remedy of recovery of workers' compensation benefits by an injured or deceased employee applies. Includes an agent or employee of an employer, a parent corporation of an employer, a subsidiary corporation of an employer, or any other subsidiary of a parent corporation of an employer, among the parties to which this exclusive remedy applies. Makes a nonsubstantive change and conforming changes. SECTION 2.Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 3.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2705 modifies the original bill in SECTION 1 by amending Section 408.001(a) to include self-insurance coverage as evidenced by a certificate of authority issued by the Texas Workers' Compensation Commission among the types of insurance that, if held by a parent corporation of an employer, a subsidiary corporation of an employer, or any other subsidiary of a parent corporation of an employer, bring into play the exclusive remedy of recovery of workers' compensation benefits by an injured or deceased employee. The substitute also makes a nonsubstantive change to existing law and conforms the proposed modification of Section 408.001(a) to Legislative Council format.