HBA-NRS H.B. 3214 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3214 By: George Business & Industry 3/26/2001 Introduced BACKGROUND AND PURPOSE Current law authorizes independent and hiring contractors to enter into workers' compensation coverage agreements. Such agreements must be filed with the Texas Workers' Compensation Commission (TWCC) and with the hiring contractor's workers' compensation insurance carrier, which creates duplicate and redundant reporting. Consequently, tens of thousands of agreements are filed with TWCC annually, for which TWCC receives few inquiries. Therefore, copies of such agreements as needed by other interested parties could still be retrieved from the appropriate workers' compensation insurance carrier if filing the agreements with TWCC was no longer required. House Bill 3214 requires independent and hiring contractors to file workers' compensation coverage agreements only with certain workers' compensation insurance carriers. 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 1 (Section 406.144, Labor Code) and SECTION 2 (Section 406.145, Labor Code) of this bill. ANALYSIS House Bill 3214 amends the Labor Code to authorize the Texas Workers' Compensation Commission (TWCC) by rule to establish the procedures and requirements for a written agreement that an independent contractor and a hiring contractor may enter into under which the independent contractor agrees that the hiring contractor may withhold the cost of workers' compensation insurance coverage from the contract price and that the hiring contractor is the employer of the independent contractor and the independent contractor's employees for the purpose of providing workers' compensation insurance. The bill requires the hiring contractor to file a copy of an agreement with the hiring contractor's workers' compensation insurance carrier not later than the 10th day after the date on which the agreement is signed by both contractors. If the hiring contractor is a certified self-insurer, the bill requires the copy to be filed with TWCC's division of self-insurance regulation. The bill requires the hiring contractor's workers' compensation insurance carrier to maintain a system for accepting and maintaining the agreements. The bill provides that a hiring contractor who enters into an agreement with an independent contractor commits a Class B administrative violation if the hiring contractor fails to file a copy of the agreement. The bill deletes the provision that required a written agreement to be filled with TWCC. The bill authorizes TWCC by rule to establish the procedure and requirements for a joint agreement in which a hiring contractor and an independent contractor declare that the subcontractor is an independent contractor and that the subcontractor is not the employee of the hiring contractor and therefore is not entitled to workers' compensation insurance coverage through the hiring contractor. The bill requires the hiring contractor to file a copy of the joint agreement with the hiring contractor's workers' compensation insurance carrier not later than the 10th day after the date on which the agreement is signed by both contractors. If the hiring contractor is a certified self-insurer, the copy must be filed with TWCC's division of self-insurance regulation. The bill requires the hiring contractor's workers' compensation insurance carrier, rather than TWCC, to maintain a system for accepting and maintaining the joint agreements. The bill provides that a hiring contractor who enters into a joint agreement with an independent contractor commits a Class B administrative violation if the hiring contractor fails to file a copy of the joint agreement. The bill deletes provisions relating to filing an agreement or joint agreement with TWCC. EFFECTIVE DATE September 1, 2001.