HBA-MPM H.B. 1980 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1980 By: Farabee Business & Industry 3/29/2001 Introduced BACKGROUND AND PURPOSE Under current law, governmental entities including cities and counties that contract with building or construction contractors must only hire those who carry workers' compensation insurance. Many small contractors capable of submitting competitive bids are precluded from the selection process because they lack workers' compensation insurance. This might prohibit a governmental entity from getting the best services and lead to larger expenditures. House Bill 1980 authorizes governmental entities to hire contractors without workers' compensation insurance for contracting projects that cost less than $9,000 per year. 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. ANALYSIS House Bill 1980 amends the Labor Code to require a governmental entity that enters into a building or construction contract for which the total dollar amount in a fiscal year exceeds $9,000 to require the contractor to certify in writing that the contractor provides workers' compensation insurance coverage for each employee of the contractor employed on the public project. The bill also makes this provision applicable to each subcontractor on the public project and requires the subcontractor to provide a certificate relating to coverage of its employees to the general contractor, who is then required to provide the certificate to the governmental entity. EFFECTIVE DATE September 1, 2001.