CHAPTER 403. DIVISION FINANCING - Texas Statutes

LABOR CODE

TITLE 5. WORKERS' COMPENSATION

SUBTITLE A. TEXAS WORKERS' COMPENSATION ACT

CHAPTER 403. DIVISION FINANCING

Sec. 403.001. FUNDS. (a) Except as provided by Sections

403.006 and 403.007 or as otherwise provided by law, money

collected under this subtitle, including administrative penalties

and advance deposits for purchase of services, shall be deposited

in the general revenue fund of the state treasury to the credit

of the Texas Department of Insurance operating account.

(b) The money may be spent as authorized by legislative

appropriation on warrants issued by the comptroller under

requisitions made by the commissioner of insurance.

(c) Money deposited in the general revenue fund under this

section may be used to satisfy the requirements of Section

201.052, Insurance Code.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.44(a), eff. Sept.

1, 1995.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.010, eff. September 1, 2005.

Sec. 403.002. MAINTENANCE TAXES. (a) Each insurance carrier,

other than a governmental entity, shall pay an annual maintenance

tax to pay the costs of administering this subtitle and to

support the prosecution of workers' compensation insurance fraud

in this state.

(b) The assessment may not exceed an amount equal to two percent

of the correctly reported gross workers' compensation insurance

premiums, including the modified annual premium of a policyholder

that purchases an optional deductible plan under Article 5.55C,

Insurance Code. The rate of assessment shall be applied to the

modified annual premium before application of a deductible

premium credit.

(c) A workers' compensation insurance company is taxed at the

rate established under Section 403.003. The tax shall be

collected in the manner provided for collection of other taxes on

gross premiums from a workers' compensation insurance company as

provided in Chapter 255, Insurance Code.

(d) Each certified self-insurer shall pay a fee and maintenance

taxes as provided by Subchapter F, Chapter 407.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1443, Sec. 3, eff. Sept. 1,

1997; Acts 2003, 78th Leg., ch. 1274, Sec. 21, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.134, eff. September 1, 2005.

Sec. 403.003. RATE OF ASSESSMENT. (a) The commissioner of

insurance shall set and certify to the comptroller the rate of

maintenance tax assessment taking into account:

(1) any expenditure projected as necessary for the division and

the office of injured employee counsel to:

(A) administer this subtitle during the fiscal year for which

the rate of assessment is set; and

(B) reimburse the general revenue fund as provided by Section

201.052, Insurance Code;

(2) projected employee benefits paid from general revenues;

(3) a surplus or deficit produced by the tax in the preceding

year;

(4) revenue recovered from other sources, including

reappropriated receipts, grants, payments, fees, gifts, and

penalties recovered under this subtitle; and

(5) expenditures projected as necessary to support the

prosecution of workers' compensation insurance fraud.

(b) In setting the rate of assessment, the commissioner of

insurance may not consider revenue or expenditures related to:

(1) the State Office of Risk Management;

(2) the workers' compensation research functions of the

department under Chapter 405; or

(3) any other revenue or expenditure excluded from consideration

by law.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.45(a), eff. Sept.

1, 1995; Acts 1997, 75th Leg., ch. 1098, Sec. 8, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1443, Sec. 4, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.011, eff. September 1, 2005.

Sec. 403.004. COLLECTION OF TAX AFTER WITHDRAWAL FROM BUSINESS.

The commissioner or the commissioner of insurance immediately

shall proceed to collect taxes due under this chapter from an

insurance carrier that withdraws from business in this state,

using legal process as necessary.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.012, eff. September 1, 2005.

Sec. 403.005. TAX RATE. The commissioner of insurance shall

annually adjust the rate of assessment of the maintenance tax

imposed under Section 403.003 so that the tax imposed that year,

together with any unexpended funds produced by the tax, produces

the amount the commissioner of insurance determines is necessary

to pay the expenses of administering this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.013, eff. September 1, 2005.

Sec. 403.006. SUBSEQUENT INJURY FUND. (a) The subsequent

injury fund is a dedicated account in the general revenue fund.

Money in the account may be appropriated only for the purposes of

this section or as provided by other law. Section 403.095,

Government Code, does not apply to the subsequent injury fund.

(b) The subsequent injury fund is liable for:

(1) the payment of compensation as provided by Section 408.162;

(2) reimbursement of insurance carrier claims of overpayment of

benefits made under an interlocutory order or decision of the

commissioner as provided by this subtitle, consistent with the

priorities established by rule by the commissioner;

(3) reimbursement of insurance carrier claims as provided by

Sections 408.042 and 413.0141, consistent with the priorities

established by rule by the commissioner; and

(4) the reimbursement of an insurance carrier as provided by

Section 408.0041(f-1).

(c) The commissioner shall appoint an administrator for the

subsequent injury fund.

(d) Based on an actuarial assessment of the funding available

under Section 403.007(e), the commissioner may make partial

payment of insurance carrier claims under Subsection (b)(3).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 10.01, eff. June

17, 2001; Acts 2003, 78th Leg., ch. 211, Sec. 2.01, eff. June 16,

2003; Acts 2003, 78th Leg., ch. 1296, Sec. 5(a), eff. June 20,

2003.

Reenacted and amended by Acts 2005, 79th Leg., Ch.

265, Sec. 3.014, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1150, Sec. 3, eff. September 1, 2007.

Sec. 403.007. FUNDING OF SUBSEQUENT INJURY FUND. (a) If a

compensable death occurs and no legal beneficiary survives or a

claim for death benefits is not timely made, the insurance

carrier shall pay to the division for deposit to the credit of

the subsequent injury fund an amount equal to 364 weeks of the

death benefits otherwise payable.

(b) The insurance carrier may elect or the commissioner may

order that death benefits payable to the fund be commuted on

written approval of the commissioner. The commutation may be

discounted for present payment at the rate established in Section

401.023, compounded annually.

(c) If a claim for death benefits is not filed with the division

by a legal beneficiary on or before the first anniversary of the

date of the death of the employee, it is presumed, for purposes

of this section only, that no legal beneficiary survived the

deceased employee. The presumption does not apply against a

minor beneficiary or an incompetent beneficiary for whom a

guardian has not been appointed.

(d) If the insurance carrier makes payment to the subsequent

injury fund and it is later determined by a final award of the

commissioner or the final judgment of a court of competent

jurisdiction that a legal beneficiary is entitled to the death

benefits, the commissioner shall order the fund to reimburse the

insurance carrier for the amount overpaid to the fund.

(e) If the commissioner determines that the funding under

Subsection (a) is not adequate to meet the expected obligations

of the subsequent injury fund established under Section 403.006,

the fund shall be supplemented by the collection of a maintenance

tax paid by insurance carriers, other than a governmental entity,

as provided by Sections 403.002 and 403.003. The rate of

assessment must be adequate to provide 120 percent of the

projected unfunded liabilities of the fund for the next biennium

as certified by an independent actuary or financial advisor.

(f) The commissioner's actuary or financial advisor shall report

biannually to the department on the financial condition and

projected assets and liabilities of the subsequent injury fund.

The commissioner shall make the reports available to members of

the legislature and the public. The division may purchase

annuities to provide for payments due to claimants under this

subtitle if the commissioner determines that the purchase of

annuities is financially prudent for the administration of the

fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 10.02, eff. June

17, 2001.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.015, eff. September 1, 2005.