HBA-MPA C.S.H.B. 2514 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2514 By: Ritter Business & Industry 3/26/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the Texas Workers' Compensation Commission's (TWCC) extra-hazardous employer program is limited in application to public employers such as counties, cities, and school districts. This is the result of a 1996 decision by the Third Court of Appeals, which ruled that the program was duplicative of the federal Occupational Safety and Health Act (OSHA). Also, the Texas Workers' Compensation Act does not authorize TWCC to obtain reimbursement for the cost of inspecting an insurance carrier's accident prevention services program, and if the insurance carrier fails the inspection, the carrier is not responsible for the cost of a reinspection by TWCC. C.S.H.B. 2514 limits the application of the renamed hazardous employer program to reflect the OSHA preemption, and requires TWCC to reinspect the accident prevention services of insurance carriers who fail an initial inspection, and to collect reasonable costs from insurance carriers to cover reinspection. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Workers' Compensation Commission in SECTION 2.04 (Section 411.042, Labor Code) of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. IMMUNITY FOR LIABILITY FOR CERTAIN SAFETY CONSULTANTS SECTION 1.01. Amends Section 411.003(a), Labor Code, to provide that an insurance company or safety consultant has no liability for accident, injury, or occupational disease caused by a program, inspection, or other activity or service undertaken by the insurance company for accident prevention. ARTICLE 2. HAZARDOUS EMPLOYER PROGRAM SECTION 2.01. Amends the heading to Subchapter D, Chapter 411, Labor Code, as follows: SUBCHAPTER D. New Title: HAZARDOUS EMPLOYER PROGRAM SECTION 2.02. Amends Section 411.041, Labor Code, as follows: Sec. 411.041. New title: APPLICATION; IDENTIFICATION OF HAZARDOUS EMPLOYERS. (a) Provides that this subchapter: (1) does not apply to a federal entity or to a state agency, institution, or department described by Chapters 501 (Workers Compensation Insurance Coverage for Certain State EmployeesIncluding Employees Under the Direction or Control of the Board of Regents of Regents of Texas Tech University), 502 (Workers' Compensation Insurance Coverage for Employees of the Texas A&M University System), 503 (Workers' Compensation Insurance Coverage for Employees of the University of Texas System), or 505 (Workers Compensation Insurance Coverage for the Texas Department of Transportation); (2) Sections 411.043 (Safety Consultation; Report; Accident Prevention Plan), 411.044 (Accident Investigation), 411.045 (Compliance Certification), 411.046 (Administrative Violation), and 411.047 (Additional Safety Plan) apply only to a political subdivision that is subject to Chapter 504 (Workers' Compensation Insurance Coverage for Employees of Political Subdivisions), and employees not covered by Subdivision (1); and (3) Sections 411.0415 (Exemption for Certain Employers; Hearing), 411.042 (Notification to Extra-Hazardous Employer and Insurance Carrier), 411.048 (Costs Charged to Employer), 411.049 (Hearing), and 411.050 (Admissibility of Identification as Extra-Hazardous Employer) apply to all employers, other than those described in Subdivision (1). (b) Makes conforming and nonsubstantive changes. (c) Makes conforming and nonsubstantive changes. SECTION 2.03. Amends Sections 411.0415(a) and (c), Labor Code, to make conforming and nonsubstantive changes. SECTION 2.04. Amends Section 411.042, Labor Code, to require the Texas Workers' Compensation Commission (commission), by rule, to require a minimum interval of at least six months before a subsequent audit to identify an employer who was previously identified as a hazardous employer. Makes conforming and nonsubstantive changes. SECTION 2.05. Amends Section 411.048, Labor Code, to require the commission to charge a private employer for reimbursement of the reasonable cost of services provided by the division of workers' health and safety of the commission (division), including a reasonable allocation of administrative costs, in providing safety and health services at the employer's request. Provides that this subsection does not apply to services provided to an employer under Section 411.018 (Federal OSHA Compliance). Makes conforming and nonsubstantive changes. SECTION 2.06. Amends Section 411.050, Labor Code, to make conforming changes. ARTICLE 3. INSURER ACCIDENT PREVENTION SERVICES SECTION 3.01. Amends Section 411.064, Labor Code, by creating Subsection (a) from existing text, and by adding Subsections (b) and (c), as follows: (b) Requires the division, if after the biennial inspection required under this section it determines that an insurance company's accident prevention services are inadequate, to reinspect the services no earlier than 180 days or later than 270 days after they are determined inadequate. (c) Requires the insurance company to reimburse the commission for the cost of reinspection, including the reasonable administrative costs. ARTICLE 4. TRANSITION; EFFECTIVE DATE; EMERGENCY SECTION 4.01. Makes application of Section 411.003, as amended by this Act, prospective. SECTION 4.02. Makes application of Section 411.064, as amended by this Act, prospective. SECTION 4.03. Effective date: September 1, 1999. SECTION 4.03. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2514 differs from the original in ARTICLE 1 by adding a change to Section 411.003(a), Labor Code, to provide that an insurance company or safety consultant has no liability for accident, injury, or occupational disease caused by a program, inspection, or other activity or service undertaken by the insurance company for accident prevention. C.S.H.B. 2514 differs from the original in ARTICLE 2 by adding new Subdivision (a)(1) providing that this subchapter does not apply to a federal entity or to a state agency, institution, or department described by Chapters 501, 502, 503, or 505, Labor Code. The substitute also differs from the original in Subsection (a)(2) by deleting Section 411.048 (Costs Charged to Employer), which in the original bill applied only to political subdivisions under Chapter 504 (Workers' Compensation Insurance Coverage for Employees of Political Subdivisions), and by including Section 411.048 in Subsection (a)(3). Subsection (a)(3) as added by the substitute provides that Sections 411.0415, 411.042, 411.048, 411.049, and 411.050, Labor Code, apply to all employers, except those exempted by Subdivision (a)(1). C.S.H.B. 2514 differs from the original in ARTICLE 3 by changing the time period in Section 411.064(b) for the reinspection requirement for employers whose accident prevention services are found to be inadequate to not earlier than 180 days or later than 270 days after the determination is made. C.S.H.B. 2514 differs from the original in ARTICLE 4 by specifying that Section 411.003, Labor Code, as amended by this Act, applies prospectively to a cause of action. C.S.H.B. 2514 differs from the original by redesignating ARTICLES 1-3 as 2-4.