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.