HBA-NRS H.B. 2976 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2976
By: Dukes
Business & Industry
7/19/2001
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 77th Legislature, state agencies were required to enter into
interagency contracts with the State Office of Risk Management (SORM) for
the administration of the risk management program and to partially fund
SORM. There was some concern over the growth  of workers' compensation
payments incurred by certain state agencies and it was felt that it would
be beneficial to make state agencies more responsible for accident
prevention and loss control programs. House Bill 2976 requires SORM to
establish a formula for allocating the state's workers' compensation costs
to state agencies in order for state agencies to implement risk management
programs. 

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 2976 amends the Labor Code by replacing interagency contracts
for the risk management program as a funding source of the State Office of
Risk Management (SORM) with risk management costs. The bill requires the
costs of risk management services provided by a state agency under an
interagency contract to be allocated in the same proportion and determined
in the same manner as the costs of workers' compensation. The bill removes
the provision that requires the amount of the costs to be paid by a state
agency under an interagency contract to be based on certain determinants.
The bill removes the provision requiring the legislature to appropriate the
amount designated by the appropriation structure for the payment of state
workers' compensation claims costs to the SORM.  

The bill requires SORM to establish an allocation program for the payment
of workers' compensation claims and risk management services that are
incurred by a state agency. The bill requires SORM to establish a formula
for allocating the state's workers' compensation costs among covered
agencies based on the claims experience of each agency, the current and
projected size of each agency's workforce, each agency's payroll, the
related costs incurred in administering claims, and other relevant factors.
The bill authorizes an agency to provide modifiers to the formula to
promote the effective implementation of risk management programs by state
agencies. The bill provides that the risk management board has final
authority to determine the assessments to be paid by the covered agencies.  

The bill removes the provision that authorizes funds recovered by the
executive director of SORM from a third party through subrogation that are
deposited into the state's workers' compensation account to be used for the
payment of compensation and other benefits to state employees. 

EFFECTIVE DATE

September 1, 2001.