House Committee on Business & Industry – Interim Report

The House Committee on Business & Industry has published its report to the 82^nd Legislature. Below is a summary of the recommendations.

Interim Charge 1—Examine Title 11 of the Texas Property Code to determine if the various independent statutes are sufficient to protect the interest of homeowners and homeowners associations. Consider whether Title 11 should be consolidated with other laws.

Recommendations:

1. HOAs need to be regulated by a state-wide general application to address the creation, obligation, governance of HOAs and rights of homeowners.
2. Current provisions in law regarding HOAs should be consolidated and conform to the best practices of HOAs and protections for both homeowners and HOAs, as determined by the Legislature.

(a). If the extent of laws currently governing HOAs are insufficient after consolidation with other laws, a new chapter of the Texas Property Code should be enacted to ensure HOAs are properly governed within the state.

1. The consolidated laws, or the new chapter created by the Legislature, should include the use of an Informal Resolution Process to ensure non-legal and inexpensive resolutions are thoroughly utilized when resolving a conflict between an HOA and a homeowner.
2. The consolidated laws, or a new chapter created by the Legislature, should include a specified Priority of Payment when a homeowner is making a good faith attempt to pay assessment fees and should prohibit HOAs from applying monthly assessment monies from homeowners toward other debts that homeowner may owe.
3. The consolidated laws, or a new chapter created by the Legislature, should include language to ensure that if an HOA is allowed to foreclose on a home, based on late payment of assessment dues, the monetary amount should be required to reach a high threshold amount determined by the Legislature, and all smaller debts, including assessments, should be settled through an informal, reasonable payment plan negotiated by the homeowner and the association. 
4. The consolidated laws, or a new chapter created by the Legislature, should prohibit nonjudicial foreclosures, and if the practice of foreclosure by HOAs is allowed to continue in the state, it should be allowed only through the judicial foreclosure system.

Interim Charge 2—Study and report on third-party liability issues involving workers’ compensation, including the frequency and success rates of third-party litigation, the relationship, if any, between third-party litigation and jobsite safety, the adequacy of compensation and reimbursement to workers, and the economic costs of third-party litigation and equitable and contractual subrogation in construction activities. (Joint Interim Charge with the House Committee on Judiciary and Civil Jurisprudence)

Recommendations:

1. Legislation should be passed to change the definition of “general contractor” in the Texas
2. Labor Code to ensure certain third-party premises owners cannot be a general contractor and therefore ineligible to purchase Workers’ Compensation Insurance and qualify for the exclusive remedy defense.
3. Allow an injured employee the ability to pursue litigation toward an employer covered by workers’ compensation, if that employer was shown to be grossly negligent in the cause of any injury to the employee, not just death.
4. Adjust the stringent requirements of the type and extent of injury that an employee must incur to qualify for lifetime benefits to allow for an enhanced number of severely injured workers to qualify who are covered solely by workers’ compensation.
5. Require all premises owners to provide information to subcontractors working on a site, before work begins, of the Occupational Safety and Health Administration (OSHA) safety requirements and standards.  Also provide the contact information and procedures for a worker to file a complaint to have OSHA inspect the work premises.
6. Formulate a tiered system of premiums required to pay to workers’ compensation insurance carriers. Base the payment tiers on the workplace safety record of businesses under workers’ compensation.
7. Collect data from hospitals and other health care providers to document the number of uncompensated medical care patients hurt at work and no longer receiving monetary or medical benefits from workers’ compensation, to identify the direct costs associated with externalizing the responsibilities of negligent premises owners to the public.

Interim Charge 3—Review the Unemployment Compensation Fund and its impact on business taxpayers to determine whether changes may be made to stabilize the fund in times of economic contraction without imposing and undue economic burden on businesses. Determine whether modernizations should be implemented to make the fund more efficient and effective. (Joint Interim Charge with the House Committee on Technology, Economic Development, and Workforce)

Recommendations:

1. In order to access $185 million in federal stimulus money the Legislature should adopt the “alternate base period” as the method to determine unemployment eligibility in the next Legislative Session.
2. Eliminate the “sham employer loophole” by requiring that a person demonstrate employment of at least twenty (20) to thirty (30) hours in a single week with an employer who pays into the unemployment insurance system.
3. Eliminate the “severance loophole” by classifying employees who received severance pay and for how long, and delay the payment of unemployment benefits until they exhaust their severance package.
4. The Legislature should raise the statutory ceiling of the Texas Unemployment Fund to reduce the pain of a recession by forcing large tax increases on struggling businesses.
5. Tie the statutory ceiling of the Trust Fund to average actual wages to mitigate future recessionary taxes by having more funds within the trust.
6. Texas Workforce Commission should increase vigilance and expand the penalties toward employers who cheat the unemployment insurance system by improperly classifying employees as independent contractors to avoid paying into the unemployment insurance fund.

Interim Charge 4—Examine ways to increase the creation of jobs in the Texas manufacturing industry.

Recommendations:

1. Identify what training and education will be necessary in future manufacturing and create programs to ensure workers stay competitive in a global, evolving industry.
2. Proactively identify manufacturers in the state and collaborate with them to identify what skills are needed to ensure the next generation of Texas employees receives specialized training to fill those specific positions.
3. Develop programs in collaboration with high schools, community colleges and TWC summer programs to provide hands-on educational training for students that do not plan to attend four-year institutions of higher learning.
4. Continue to proactively identify future manufacturing skills that rely on science and math and create programs to develop a strong understanding of core concepts to provide Texas high school graduates the skills necessary to work and continue to be educated in an ever-advancing industry.
5. Through a resolution, the Legislature should establish a “manufacturers’ day at the capitol” during the 82nd Legislative Session to maintain communication and collaboration between lawmakers, educational institutions, TWC program developers, and manufacturers to continue to proactively coordinate what skills will be necessary in the near future in the manufacturing sector.
6. Establish a safety-net fund program for large manufacturers in the state that may need temporary financial assistance to maint
   ain its large manufacturing workforce.
7. Identify manufacturers currently investing in clean energy products and create an incentive program to ensure continued growth and investment in clean energy products throughout Texas.
8. Texas should give preferred consideration to Texas manufacturers and American manufacturers when making purchase decisions on behalf of the state.

Interim Charge 5—Monitor the agencies and programs under the committee’s jurisdiction.

Recommendations:

1. Make changes to the audit based review process to target high utilizing providers specifically.
2. Evaluate the MQRP process to identify why very few audit based and complaint-based reviews make it to SOAH for enforcement.
3. The Commissioner should not have the authority to shut down any enforcement process without approval by the Commissioner of Insurance.
4. The Legislature should adopt the Sunset Commission recommendations (See appendix B) regarding the MQRP.
5. The Legislature should monitor the implementation of Sunset Commission decisions to ensure that any new internal policies effectively target overutilization within the system and actively discipline providers abusing the system.
6. An 82nd Legislative Interim Charge to the committee should be to review the MQRP functions and processes, and identify whether it should remain within the Workers’ Compensation Division, or be moved to the Texas Board of Medical Examiners.

A complete copy of the report can be found by visiting:

http://www.house.state.tx.us/_media/pdf/committees/reports/82interim/House-Committee-on-Business-and-Industry-Interim-Report-2010.pdf