CHAPTER 412. STATE OFFICE OF RISK MANAGEMENT - Texas Statutes

LABOR CODE

TITLE 5. WORKERS' COMPENSATION

SUBTITLE A. TEXAS WORKERS' COMPENSATION ACT

CHAPTER 412. STATE OFFICE OF RISK MANAGEMENT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 412.001. DEFINITIONS. In this chapter:

(1) "Board" means the risk management board.

(2) "Director" means the executive director of the office.

(3) "Office" means the State Office of Risk Management.

(4) "State agency" means a board, commission, department,

office, or other agency in the executive, judicial, or

legislative branch of state government that has five or more

employees, was created by the constitution or a statute of this

state, and has authority not limited to a specific geographical

portion of the state.

Amended by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

SUBCHAPTER B. OFFICE

Sec. 412.011. POWERS AND DUTIES OF OFFICE. (a) The State

Office of Risk Management shall administer insurance services

obtained by state agencies, including the government employees

workers' compensation insurance program and the state risk

management programs.

(b) The office shall:

(1) operate as a full-service risk manager and insurance manager

for state agencies as provided by Subsection (c);

(2) maintain and review records of property, casualty, or

liability insurance coverages purchased by or for a state agency;

(3) administer the program for the purchase of surety bonds for

state officers and employees as provided by Chapter 653,

Government Code;

(4) administer guidelines adopted by the board for a

comprehensive risk management program applicable to all state

agencies to reduce property and liability losses, including

workers' compensation losses;

(5) review, verify, monitor, and approve risk management

programs adopted by state agencies;

(6) assist a state agency that has not implemented an effective

risk management program to implement a comprehensive program that

meets the guidelines established by the board;

(7) administer the workers' compensation insurance program for

state employees established under Chapter 501; and

(8) provide risk management services for employees of community

supervision and corrections departments established under Chapter

76, Government Code, as if the employees were employees of a

state agency.

(c) The office shall:

(1) perform risk management for each state agency subject to

Chapter 412; and

(2) purchase insurance coverage for a state agency subject to

Chapter 501, except for an institution subject to Section

501.022, under any line of insurance other than health or life

insurance, including liability insurance authorized under Chapter

612, Government Code.

(d) The board by rule shall develop an implementation schedule

for the purchase under this section of insurance for state

agencies by the office. The board shall phase in, by line of

insurance, the requirement that a state agency purchase coverage

only through the office.

(e) A state agency subject to Chapter 501, except for an

institution subject to Section 501.022, may not purchase

property, casualty, or liability insurance coverage without the

approval of the board.

(f) The office shall work with each state agency to develop an

agency-level business continuity plan under Section 412.054.

(g) The office shall make available to each agency subject to

Section 412.054 guidelines and models for each element listed in

Section 412.054. The office shall assist the agency as necessary

to ensure that:

(1) agency staff understands each element of the business

continuity plan developed under Section 412.054; and

(2) each agency practices implementation of the plan.

(h) The office and the Texas Building and Procurement Commission

shall adopt a memorandum of understanding that:

(1) includes the type, amount, and frequency of safety-related

information that may be shared between the office and the

commission; and

(2) designates points of contact within the office and the

commission to coordinate the sharing of information.

(i) The office shall:

(1) maintain a system to promptly and efficiently act on

complaints filed with the office;

(2) maintain information about parties to the complaint, the

subject matter of the complaint, a summary of the results of the

review or investigation of the complaint, and disposition of the

complaint;

(3) make information available describing the office's

procedures for complaint investigation and resolution; and

(4) periodically notify the complaint parties of the status of

the complaint until final disposition.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.01, eff.

Sept. 1, 2002; Acts 2003, 78th Leg., ch. 527, Sec. 1, eff. Sept.

1, 2003.

Amended by:

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

407, Sec. 1, eff. September 1, 2007.

Sec. 412.0111. AFFILIATION WITH OFFICE OF ATTORNEY GENERAL. The

office is administratively attached to the office of the attorney

general and the office of the attorney general shall provide the

facilities for the office, but the office shall be independent of

the office of the attorney general's direction.

Added by Acts 2001, 77th Leg., ch. 1017, Sec. 1.02, eff. Sept. 1,

2002. Redesignated from Labor Code Sec. 412.011(c).

Text of section as amended by Acts 2001, 77th Leg., ch. 559, Sec.

1 and Acts 2001, 77th Leg., ch. 1456, Sec. 14.01

Sec. 412.012. FUNDING. The office shall be administered through

money appropriated by the legislature and through the allocation

program for the financing of state workers' compensation benefits

and risk management costs.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 559, Sec. 1, eff. Sept.

1, 2001; Acts 2001, 77th Leg., ch. 1456, Sec. 14.01, eff. June

17, 2001.

Text of section as amended by Acts 2001, 77th Leg., ch. 1017,

Sec. 1.02

Sec. 412.012. FUNDING. The office shall be administered through

money appropriated by the legislature and through:

(1) interagency contracts for purchase of insurance coverage and

the operation of the risk management program; and

(2) the allocation program for the financing of state workers'

compensation benefits.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1017, Sec. 1.02, eff.

Sept. 1, 2002.

Text of section as renumbered from Labor Code Sec. 412.012(b) and

amended by Acts 2001, 77th Leg., ch. 559, Sec. 1 and Acts 2001,

77th Leg., ch. 1456, Sec. 14.01

Sec. 412.0121. INTERAGENCY CONTRACTS. (a) Each state agency

shall enter into an interagency contract with the office under

Chapter 771, Government Code, to pay the costs incurred by the

office in administering this chapter for the benefit of that

state agency.

(b) Costs payable under the contract include the cost of:

(1) services of office employees;

(2) materials; and

(3) equipment, including computer hardware and software.

(c) The costs of risk management services provided by a state

agency under the interagency contract shall be allocated in the

same proportion and determined in the same manner as the costs of

workers' compensation.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999. Renumbered from Labor Code Sec. 412.012(b) by Acts

2001, 77th Leg., ch. 559, Sec. 1, eff. Sept. 1, 2001; Acts 2001,

77th Leg., ch. 1456, Sec. 14.01, eff. June 17, 2001.

Text of section as renumbered from Labor Code Sec. 412.012(b) and

amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.02

Sec. 412.0121. INTERAGENCY CONTRACTS. (a) Each state agency

shall enter into an interagency contract with the office under

Chapter 771, Government Code, to pay the costs incurred by the

office in administering this chapter for the benefit of that

state agency.

(b) Costs payable under the contract include the cost of:

(1) services of office employees;

(2) materials; and

(3) equipment, including computer hardware and software.

(c) The amount of the costs to be paid by a state agency under

the interagency contract is based on:

(1) the number of employees of the agency compared with the

total number of employees of all state agencies to which this

chapter applies;

(2) the dollar value of the agency's property and asset and

liability exposure compared to that of all state agencies to

which this chapter applies; and

(3) the number and aggregate cost of claims and losses incurred

by the state agency compared to those incurred by all state

agencies to which this chapter applies.

(d) The board may by rule establish the formula for allocating

the cost of this chapter in an interagency contract in a manner

that gives consideration to the factors in Subsection (c) and any

other factors it deems relevant, including an agency's risk

management expenditures, unique risks, and established programs.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999. Renumbered from Labor Code Sec. 412.012(b) and

amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.02, eff. Sept.

1, 2002.

Text of section as renumbered from Labor Code Sec. 412.012(c) and

amended by Acts 2001, 77th Leg., ch. 559, Sec. 1, and Acts 2001,

77th Leg., ch. 1456, Sec. 14.01

Sec. 412.0122. STATE SELF-INSURING FOR WORKERS' COMPENSATION.

The state is self-insuring with respect to an employee's

compensable injury.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999. Renumbered from Labor Code Sec. 412.012(c) and

amended by Acts 2001, 77th Leg., ch. 559, Sec. 1, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1456, Sec. 14.01, eff. June 17,

2001.

Text of section as renumbered from Labor Code Sec. 412.012(c) and

amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.02

Sec. 412.0122. STATE SELF-INSURING FOR WORKERS' COMPENSATION.

(a) The state is self-insuring with respect to an employee's

compensable injury.

(b) The legislature shall appropriate the amount designated by

the appropriation structure for the payment of state workers'

compensation claims costs to the office. This section does not

affect the reimbursement of claims costs by funds other than

general revenue funds, as provided by the General Appropriations

Act.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999. Renumbered from Labor Code Sec. 412.012(c) and

amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.02, eff. Sept.

1, 2002.

Text of section as added by Acts 2001, 77th Leg., ch. 559, Sec.

1, and Acts 2001, 77th Leg., ch. 1456, Sec. 14.01

Sec. 412.0123. ALLOCATION OF WORKERS' COMPENSATION AND RISK

MANAGEMENT COSTS; RISK REWARD PROGRAM.

Text of subsec. (a) as added by Acts 2001, 77th Leg., ch. 559,

Sec. 1

(a) The office shall establish an allocation program for the

payment of workers' compensation claims and risk management

services that are incurred by a state agency subject to Chapter

501.

Text of subsec. (a) as added by Acts 2001, 77th Leg., ch. 1456,

Sec. 14.01

(a) The office shall establish a risk reward the payment of

workers' compensation claims and risk management services that

are incurred by a state agency subject to Chapter 501.

(b) The office shall 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

factors that the office determines to be relevant. The agency may

provide modifiers to the formula to promote the effective

implementation of risk management programs by state agencies.

(c) The board has final authority to determine the assessments

to be paid by the covered agencies.

Added by 2001, 77th Leg., ch. 559, Sec. 1, eff. Sept. 1, 2001;

Acts 2001, 77th Leg., ch. 1456, Sec. 14.01, eff. June 17, 2001.

Text of section as renumbered from Labor Code Sec. 412.012(d) by

Acts 2001, 77th Leg., ch. 1017, Sec. 1.02

Sec. 412.0123. DEPOSIT OF WORKERS' COMPENSATION SUBROGATION

RECOVERIES. (a) All money recovered by the director from a

third party through subrogation shall be deposited into the state

workers' compensation account in general revenue.

(b) Funds deposited under this section may be used for the

payment of workers' compensation benefits to state employees.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999. Renumbered from Labor Code Sec. 412.012(d) and

amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.02, eff. Sept.

1, 2002.

Sec. 412.0124. DEPOSIT OF WORKERS' COMPENSATION SUBROGATION

RECOVERIES. All money recovered by the director from a third

party through subrogation shall be deposited into the state

workers' compensation account in general revenue.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 4, eff.

Sept. 1, 1999. Renumbered from Labor Code Sec. 412.012(d) and

amended by Acts 2001, 77th Leg., ch. 1456, Sec. 14.01, eff. June

17, 2001; Acts 2001, 77th Leg., ch. 559, Sec. 1, eff. Sept. 1,

2001.

Sec. 412.0125. RETURN-TO-WORK COORDINATION SERVICES; CASE

MANAGEMENT. (a) The office shall provide each state agency with

return-to-work coordination services as necessary to facilitate

an injured employee's return to employment. The office shall

notify each state agency of the availability of return-to-work

coordination services.

(b) As part of return-to-work coordination services under this

section, the office shall:

(1) establish a time frame for case management of an injured

employee that ensures services are provided to the injured

employee as soon as practicable to improve the employee's chance

of returning to work as quickly as possible;

(2) provide guidance to each state agency to identify

appropriate services for an injured employee;

(3) adopt rules that set standards and provide guidance to a

state agency interacting with an injured employee; and

(4) implement any other services provided under Section 413.021

that will facilitate the reintegration of an injured employee.

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

407, Sec. 2, eff. September 1, 2007.

Sec. 412.0126. ANALYSIS. (a) The board shall adopt rules as

necessary to collect data on lost time and return-to-work

outcomes of each state agency to allow full evaluations of

successes and of barriers to achieving timely return to work

after an injury.

(b) The office shall:

(1) collect and analyze data from each state agency regarding

lost time, including sick leave and annual leave used by an

injured employee;

(2) identify state agencies that need additional training or

case management services related to return-to-work services;

(3) modify as necessary the office's assessment computation to

encourage state agencies to effectively reduce workers'

compensation costs;

(4) incorporate as necessary return-to-work goals developed by

the division of workers' compensation under Section 413.025;

(5) work with the workers' compensation research and evaluation

group to develop analytical tools to assist the office with its

duties under this section;

(6) require state agencies to report information in a

standardized format;

(7) monitor the information reported by each state agency; and

(8) evaluate the information provided under this section to

determine outcomes over time for each state agency.

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

407, Sec. 2, eff. September 1, 2007.

Sec. 412.0127. PAYMENT BY ELECTRONIC FUNDS TRANSFER. (a)

Notwithstanding Section 403.016, Government Code, and except as

provided by Subsection (b), the office shall pay an employee

entitled to an indemnity benefit payment using the same payment

method as the method by which the employee receives the

employee's wages.

(b) The office shall adopt rules to facilitate the use of

electronic funds transfer as the preferred method of payment

under this section.

(c) The office may issue an indemnity benefit payment by check

on request or if electronic funds transfer is not feasible.

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

407, Sec. 2, eff. September 1, 2007.

Sec. 412.0128. CONFIDENTIALITY OF INJURY INFORMATION.

Information in or derived from a workers' compensation claim file

regarding an employee is confidential and may not be disclosed by

the office except as provided by this subchapter or other law.

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

407, Sec. 2, eff. September 1, 2007.

SUBCHAPTER C. BOARD

Sec. 412.021. RISK MANAGEMENT BOARD. (a) The office is

governed by the risk management board. Members of the board must

have demonstrated experience in the fields of:

(1) insurance and insurance regulation;

(2) workers' compensation; and

(3) risk management administration.

(a-1) A person may not be a member of the board if the person or

the person's spouse:

(1) is employed by or participates in the management of a

business entity or other organization regulated by or receiving

money from the office;

(2) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

regulated by or receiving money from the office; or

(3) uses or receives a substantial amount of tangible goods,

services, or money from the office other than compensation or

reimbursement authorized by law for risk management board

membership, attendance, or expenses.

(b) The board is composed of five members appointed by the

governor.

(c) Members of the board hold office for staggered terms of six

years with one or two members' terms expiring February 1 of each

odd-numbered year. A member appointed to fill a vacancy shall

hold office for the remainder of that term.

(d) The governor shall designate one member of the board as

presiding officer. The presiding officer shall serve in that

capacity at the pleasure of the governor.

(e) The board is subject to Chapters 552 and 2001, Government

Code.

(f) The risk management board and the office are subject to

Chapter 325, Government Code (Texas Sunset Act). Unless

continued in existence as provided by that chapter, the board is

abolished and this section expires September 1, 2019.

(g) Appointments to the board shall be made without regard to

the race, color, disability, sex, religion, age, or national

origin of the appointee.

(h) The board shall develop and implement policies that clearly

separate the policymaking responsibilities of the board and the

management responsibilities of the director and the staff of the

risk management office.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.03, eff.

Sept. 1, 2002; Acts 2001, 77th Leg., ch. 1481, Sec. 3.02, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1170, Sec. 40.01, eff.

Sept. 1, 2003.

Amended by:

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

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

Sec. 412.022. TRAINING PROGRAM FOR BOARD MEMBERS. (a) A person

who is appointed to and qualifies for office as a member of the

board may not vote, deliberate, or be counted as a member in

attendance at a meeting of the board until the person completes a

training program that complies with this section.

(b) A training program established under this section must

provide information to the member regarding:

(1) the enabling legislation that created the office and the

office's programs, functions, rules, and budget;

(2) the results of the most recent formal audit of the office;

(3) the requirements of laws relating to open meetings, public

information, administrative procedure, and conflicts of interest;

and

(4) any applicable ethics policies adopted by the office or the

Texas Ethics Commission.

(c) A person appointed to the board is entitled to

reimbursement, as provided by the General Appropriations Act, for

the travel expenses incurred in attending the training program

regardless of whether the attendance at the program occurs before

or after the person qualifies for office.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.04, eff.

Sept. 1, 2002.

Amended by:

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

407, Sec. 4, eff. September 1, 2007.

Sec. 412.023. EFFECT OF LOBBYING ACTIVITY. (a) In this

section, "Texas trade association" means a cooperative and

voluntarily joined statewide association of business or

professional competitors in this state designed to assist its

members and its industry or profession in dealing with mutual

business or professional problems and in promoting their common

interest.

(b) A person may not be a member of the board and may not be an

employee of the office employed in a "bona fide executive,

administrative, or professional capacity," as that phrase is used

for purposes of establishing an exemption to the overtime

provisions of the federal Fair Labor Standards Act of 1938 (29

U.S.C. Section 201 et seq.) if:

(1) the person is an officer, employee, or paid consultant of a

Texas trade association in the field of insurance or health care;

or

(2) the person's spouse is an officer, manager, or paid

consultant of a Texas trade association in the field of insurance

or health care.

(c) A person may not serve as a member of the board or act as

the general counsel to the board if the person is required to

register as a lobbyist under Chapter 305, Government Code,

because of the person's activities for compensation on behalf of

a profession related to the operation of the office.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

Amended by:

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

407, Sec. 5, eff. September 1, 2007.

Sec. 412.024. GROUNDS FOR REMOVAL FROM BOARD. (a) It is a

ground for removal from the board if a member:

(1) does not have at the time of taking office the

qualifications required by Section 412.021;

(2) does not maintain during service on the board the

qualifications required by Section 412.021;

(3) is ineligible for membership under Section 412.021 or

412.023;

(4) cannot because of illness or incapacity discharge the

member's duties for a substantial part of the member's term; or

(5) is absent from more than half of the regularly scheduled

board meetings that the member is eligible to attend during a

calendar year without an excuse approved by a majority vote of

the board.

(a-1) The validity of an action of the board is not affected by

the fact that it is taken when a ground for removal of a board

member exists.

(b) If the director knows that a potential ground for removal

exists, the director shall notify the presiding officer of the

board of the potential ground. The presiding officer shall then

notify the governor and the attorney general that a potential

ground for removal exists. If the potential ground for removal

involves the presiding officer, the director shall notify the

next highest officer of the board, who shall notify the governor

and the attorney general that a potential ground for removal

exists.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

Amended by:

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

407, Sec. 6, eff. September 1, 2007.

Sec. 412.027. USE OF TECHNOLOGY. The board shall implement a

policy requiring the office to use appropriate technological

solutions to improve the office's ability to perform its

functions. The policy must ensure that the public is able to

interact with the office on the Internet.

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

407, Sec. 7, eff. September 1, 2007.

SUBCHAPTER D. GENERAL POWERS AND DUTIES OF BOARD

Sec. 412.031. RULEMAKING AUTHORITY. The board shall adopt rules

as necessary to implement this chapter and Chapter 501, including

rules relating to reporting requirements for a state agency.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

Sec. 412.032. BOARD'S REPORT TO LEGISLATURE. (a) Based on the

recommendations of the director, the board shall report to each

legislature relating to:

(1) methods to reduce the exposure of state agencies to the

risks of property and liability losses, including workers'

compensation losses;

(2) the operation, financing, and management of those risks;

(3) the handling of claims brought against the state;

(4) return-to-work outcomes under Section 412.0126 for each

state agency; and

(5) the business continuity plan developed by state agencies

under Section 412.054.

(b) The report must include:

(1) the frequency, severity, and aggregate amount of open and

closed claims in the preceding biennium by category of risk,

including final judgments;

(2) the identification of each state agency that has not

complied with the risk management guidelines and reporting

requirements of this chapter;

(3) recommendations for the coordination and administration of a

comprehensive risk management program to serve all state

agencies, including recommendations for any necessary statutory

changes;

(4) a report of outcomes by state agency of lost time due to

employee injury and return-to-work programs based on the

information collected and analyzed by the office in Section

412.0126; and

(5) an evaluation of business continuity plans developed by

state agencies under Section 412.054 for completeness and

viability.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

Amended by:

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

407, Sec. 8, eff. September 1, 2007.

Sec. 412.033. HIRING DIRECTOR. The board shall hire a qualified

person to serve as director of the office. The director serves at

the pleasure of the board.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

Sec. 412.034. PUBLIC HEARING. The board shall develop and

implement policies that provide the public with a reasonable

opportunity to appear before the board and to speak on any issue

under the jurisdiction of the office.

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

407, Sec. 9, eff. September 1, 2007.

Sec. 412.035. DISPUTE RESOLUTION. (a) The board shall develop

and implement a policy to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008,

Government Code, for the adoption of office rules; and

(2) appropriate alternative dispute resolution procedures under

Chapter 2009, Government Code, to assist in the resolution of

internal and external disputes under the office's jurisdiction.

(b) The office's procedures relating to alternative dispute

resolution must conform, to the extent possible, to any model

guidelines issued by the State Office of Administrative Hearings

for the use of alternative dispute resolution by state agencies.

(c) The board shall designate a trained person to:

(1) coordinate the implementation of the policy adopted under

Subsection (a);

(2) serve as a resource for any training needed to implement the

procedures for negotiated rulemaking or alternative dispute

resolution; and

(3) collect data concerning the effectiveness of those

procedures, as implemented by the office.

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

407, Sec. 10, eff. September 1, 2007.

SUBCHAPTER E. DIRECTOR

Sec. 412.041. DIRECTOR DUTIES. (a) The director serves as the

state risk manager.

(b) The director shall supervise the development and

administration of systems to:

(1) identify the property and liability losses, including

workers' compensation losses, of each state agency;

(2) identify the administrative costs of risk management

incurred by each state agency;

(3) identify and evaluate the exposure of each state agency to

claims for property and liability losses, including workers'

compensation; and

(4) reduce the property and liability losses, including workers'

compensation, incurred by each state agency.

(c) In addition to other duties provided by this chapter, by

Chapter 501, and by the board, the director shall:

(1) keep full and accurate minutes of the transactions and

proceedings of the board;

(2) be the custodian of the files and records of the board;

(3) prepare and recommend to the board plans and procedures

necessary to implement the purposes and objectives of this

chapter and Chapter 501, including rules and proposals for

administrative procedures consistent with this chapter and

Chapter 501;

(4) hire staff as necessary to accomplish the objectives of the

board and may delegate powers and duties to members of that staff

as necessary;

(5) be responsible for the investigation of complaints and for

the presentation of formal complaints;

(6) attend all meetings of the board as a nonvoting participant;

and

(7) handle the correspondence of the board and obtain, assemble,

or prepare the reports and information that the board may direct

or authorize.

(d) If necessary to the administration of this chapter and

Chapter 501, the director, with the approval of the board, may

secure and provide for services that are necessary and may employ

and compensate within available appropriations professional

consultants, technical assistants, and employees on a full-time

or part-time basis.

(e) The director also serves as the administrator of the

government employees workers' compensation insurance program.

(f) In administering and enforcing Chapter 501 as regards a

compensable injury with a date of injury before September 1,

1995, the director shall act in the capacity of employer and

insurer. In administering and enforcing Chapter 501 as regards a

compensable injury with a date of injury on or after September 1,

1995, the director shall act in the capacity of insurer.

(g) The director shall act as an adversary before the division

and courts and present the legal defenses and positions of the

state as an employer and insurer, as appropriate.

(h) For the purposes of Subsection (f) and Chapter 501, the

director is entitled to the legal counsel of the attorney

general.

(i) In administering Chapter 501, the director is subject to the

rules, orders, and decisions of the commissioner in the same

manner as a private employer, insurer, or association.

(j) The director shall:

(1) prepare for adoption by the board procedural rules and

prescribe forms necessary for the effective administration of

this chapter and Chapter 501; and

(2) prepare for adoption by the board and enforce reasonable

rules for the prevention of accidents and injuries.

(k) The director shall hold hearings on all proposed rules and

provide reasonable opportunity for the officers of state agencies

to testify at hearings on all proposed rules under this chapter

and Chapter 501.

(l) The director shall furnish copies of all rules to:

(1) the commissioner of insurance;

(2) the commissioner; and

(3) the administrative heads of all state agencies affected by

this chapter and Chapter 501.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.05, eff.

Sept. 1, 2002.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.225, eff. September 1, 2005.

Sec. 412.042. REPORTS TO THE LEGISLATURE. (a) The director

shall report to the legislature at the beginning of each regular

session regarding the services provided by the office to a state

agency subject to Chapter 501.

The report required under this subsection shall be dated January

1 of the year in which the regular session is held and must

include:

(1) a summary of administrative expenses;

(2) a statement:

(A) showing the amount of the money appropriated by the

preceding legislature that remains unexpended on the date of the

report; and

(B) estimating the amount of that balance necessary to

administer Chapter 501 for the remainder of that fiscal year; and

(3) an estimate, based on experience factors, of the amount of

money that will be required to administer Chapter 501 and pay for

the compensation and services provided under Chapter 501 during

the next succeeding biennium.

(b) In addition to the report required under Subsection (a), the

director shall report to the legislature not later than February

1 of each odd-numbered year regarding insurance coverage

purchased for state agencies, premium dollars spent to obtain

that coverage, and losses incurred under that coverage.

(c) On an annual basis, not later than September 30 of each

year, agencies exempt under Section 412.052 of this article shall

provide a written report to the Legislative Budget Board

identifying policies purchased under any line of insurance other

than life or health insurance. The report should include a

description of the policy, name of the insurance company, annual

premium, coverage limits, deductibles, and losses incurred under

that coverage.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 953, Sec. 1, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1017, Sec. 1.06, eff.

Sept. 1, 2002.

SUBCHAPTER F. STATE AGENCIES

Sec. 412.051. DUTIES OF STATE AGENCIES; INSURANCE REPORTING

REQUIREMENTS. (a) Each state agency shall actively manage the

risks of that agency by:

(1) developing, implementing, and maintaining programs designed

to assist employees who sustain compensable injuries to return to

work; and

(2) cooperating with the office and the Texas Department of

Insurance in the purchase of property, casualty, and liability

lines of insurance coverage.

(b) In addition to the report required under Section 412.053,

each state agency that intends to purchase property, casualty, or

liability insurance coverage in a manner other than through the

services provided by the office shall report the intended

purchase to the office in the manner prescribed by the office.

The state agency shall report the intended purchase not later

than the 30th day before the date on which the purchase of the

coverage is scheduled to occur. The office may require a state

agency to submit copies of insurance forms, policies, and other

relevant information.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.07, eff.

Sept. 1, 2002.

Sec. 412.052. EXEMPTION OF CERTAIN STATE AGENCIES. This chapter

does not apply to a state agency that had medical malpractice

insurance coverage, workers' compensation insurance coverage, or

other self-insurance coverage with associated risk management

programs before January 1, 1989.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997.

Sec. 412.053. ANNUAL REPORT BY STATE AGENCY. (a) Each state

agency shall report to the director for each fiscal year:

(1) the location, timing, frequency, severity, and aggregate

amounts of losses by category of risk, including open and closed

claims and final judgments;

(2) loss information obtained by the state agency in the course

of its administration of the workers' compensation program;

(3) detailed information on existing and potential exposure to

loss, including property location and values, descriptions of

agency operations, and estimates of maximum probable and maximum

possible losses by category of risk;

(4) estimates by category of risk of losses incurred but not

reported;

(5) information the director determines necessary to prepare a

Texas Workers' Compensation Unit Statistical Report; and

(6) additional information that the director determines to be

necessary.

(b) The information shall be reported not later than the 60th

day before the last day of each fiscal year.

Added by Acts 1997, 75th Leg., ch. 1098, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1017, Sec. 1.08, eff.

Sept. 1, 2002.

Sec. 412.054. BUSINESS CONTINUITY PLAN. (a) Each state agency

shall work with the office to develop an agency-level business

continuity plan that outlines procedures to keep the agency

operational in case of disruptions to production, finance,

administration, or other essential operations. The plan must

include detailed information regarding resumption of essential

services after a catastrophe, including:

(1) coordination with public authorities;

(2) management of media;

(3) customer service delivery;

(4) assessing immediate financial and operational needs; and

(5) other services as determined by the office.

(b) A business continuity plan is considered to meet the

requirements of this section if the agency forwards the plan to

the office for review and the agency is:

(1) involved in the delivery of emergency services as a member

of the governor's Emergency Management Council; or

(2) part of the State Data Center program.

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

407, Sec. 11, eff. September 1, 2007.