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.