HBA-TBM H.B. 3055 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 3055
By: Dukes
County Affairs
7/19/2001
Enrolled



BACKGROUND AND PURPOSE 

Most contractors provide workers' compensation insurance for their crews as
a normal business expense and calculate their project bids accordingly.  In
a county construction project, this increased bid price is passed along to
the county and paid for by the county taxpayers.  To save money, some
counties would prefer to provide workers' compensation insurance themselves
through an owner-controlled insurance program (OCIP).  This can actually
lower the cost to the county because it may be less expensive for the
county to provide insurance for construction workers than it is for a
contractor.  OCIPs also benefit contractors with small businesses who may
not be able to afford workers' compensation insurance. However, a county
may have difficulty finding funding for an OCIP.  Under a regular
construction contract, a contractor pays for the insurance and passes the
cost along in the price of the contractor's bid.  The county pays for the
construction, including insurance, through bonds or certificates of
obligation issued to fund the project.  Prior to the 77th Legislature,
OCIPs could not be funded by bonds or certificates, so the county had to
raise the money from the county's general fund.  House Bill 3055 authorizes
a county to issue bonds or certificates of obligation to pay for an OCIP in
conjunction with a county construction project.  
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 3055 amends the Government Code to authorize a county to use the
proceeds of bonds or certificates of obligation issued to pay for a county
construction project to pay for an owner-controlled insurance program under
which the county establishes and administers a consolidated insurance
program for the project if the county's order authorizing the issuance of
the bonds or other certificates of obligation authorizes the establishment
of such a program.   

EFFECTIVE DATE

September 1, 2001.