HBA-NRS H.B. 2976 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2976 By: Dukes Business & Industry 3/29/2001 Introduced BACKGROUND AND PURPOSE Current law requires state agencies 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 is some concern over the growth of workers' compensation payments incurred by certain state agencies and 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.