Tn A-TITOECNEY GENERAL 

OF TEXAS 

January 8, 1970 

Honorable Clay Cotten Opinion No. M-550 

Commissioner of Insurance 

1110 San Jacinto Street Re: Eligibility of certain 

Austin, Texas employers for statutory 

workmen's compensation 

Dear Mr. Cotten: insurance. 

you have requested the opinion of this office with 

regard to the above question. In this connection you have provided the following information: 

"Art. 8309, V.A.T.S., a part of the basic 

Workmen's Compensation Law, defines 'employer' 

as any person, firm, partnership,, association of 

persons or corporations, or their legal representatives that make contracts of hire. Art. 

8306, Sec. 2, excepts from the applicability of 

the Workmen's Compensation Law (1) domestic 

servants, (2) farm laborers, (3) ranch laborers, 

(4) employees of any firm, person or corporation 

having in his employ less than three employees, 

and (5) employees.of any person, firm or 

corporation operating any steam;, electric, 

street or interurban railway as a common carrier. 

"Apparently the original law, by definition 

or otherwise, was intended to have applicability 

in the private business sector only, but the following categories of public employees became 

eligible for Workmen's Compensation coverage at 

the times and under the statutes hereinafter 

enumerated: (1) employees of Texas A. & M. College 

(19311, Art. 830933, V.A.T.S.; (2) employees of 

The University of Texas (19311, Art. 8309d, 

V.A.T.S.; (3) employees of Texas Technological 

College (1931), Art. 8309f; (4) employees of 

counties (1949), Art. 8309c; (5) employees of 

munioipalities (1953), Art. 8309e; (6) employees 

of independent school districts (19651, Art. 

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Hon. Clay Cotten, page 2 (M-550) 

8309e-1; and (7) employees of certain drainage 

districts (1967), Art. 8309c-1. 

"Because of the above statutes, the Workmen's Compensation Section of the State Board of 

Insurance has regarded public employees as being 

eligible for Workmen's Compensation coverage only, 

if they come within one of the categories enumerated inthe next preceding paragraph. Also, in 

the private business sector, employees of those 

employers coming within the exceptions enumerated 

in Art. 8306 were regarded as ineligible for this 

coverage. 

"Although it is recognized that the Workmen's 

Compensation Law is not compulsory as to any 

employer, yet eligibility coupled with failure 

to obtain this coverage would result in the loss 

of certain common law defenses.. To describe insurance having this effect, the Workmen's Compensation Section commonly uses the term 'statutory.' 

The term 'voluntary' or 'V.C.' is commonly used by 

the Workmen's Compensation Section to describe 

coverage bought by employers who do not come under 

the Act. Administratively, we must make a distinction between 'statutory' and 'voluntary,' 

since the coverage and premiums are not uniform 

as between the two; and it is for this reason 

that we request the advice of your office as to 

whether the coverage of certain employers is to 

be regarded as 'statutory' or 'voluntary' as we 

have previously defined those terms. 

"We are aware of the Court's holding in the 

case of Virgil A. Dillard vs. Nueces County Navigation District No. 1 Terminal Drainage Project, 

214 F.SUDD. 868. Althouah this case was decided 

in 1963, 'as we have here&before noted the Legislature subsequently enacted specific laws which 

would make the employees of independent school 

districts and the employees of certain drainage 

districts eligible for coverage. If, under the 

decision of the Federal Court, such districts were 

already eligible, we are unable to understand the 

necessity for this legislation. There is still 

no specific statute making the employees of navigation districts eligible fpr this coverage. In 

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Hon. Clay Cotten, page 3 (M-5509 

any event, for our administrative purposes, we 

have continued to regard navigation districts, 

port authorities, housing authorities, river 

authorities, and in fact all other political subdivisions as having purchased 'voluntary' coverage if they did not fall within one of the 

categories of employers made specifically eligible to purchase Workmen's Compensation coverage 

by statute. Likewise, we have continued to regard private employers as purchasers of 'voluntary' coverage, if such employers fell within 

one of the exceptions of Art. 8306, V.A.T.S. 

"In 1967, the 60th Legislature enacted 

House Bill 680, which was published as Sec. 18 

of Art. 8308, V.A.T.S. This law seems to make 

any employer eligible to purchase Workmen's 

Compensation coverage with one exception only. 

The exception is any employee or classification 

of employees for whom a rule of liability or a 

method of compensation has been established or 

may be established by the Congress.of the United 

States. 

"All premises considered, we respectfully 

request your instructions as to which, if any, 

employers, either in the private business sector 

or in the public employment sector, may still be 

regarded as having purchased 'voluntary' compensation insurance as opposed to 'statutory' compensation insurance." 

In City.of Tyler v. Texas Employers Insurance Association, 

288 S.W. 409 (Comm.App. 19261, the Court stated that the Legislature was without constitutional power to authorize cities and 

towns to provide workmen's compensation insurance for their employees, and this principle of law.was applicable to other political subdivisions of the State. Subsequent to the City of Tyler 

case, various constitutional amendments to the Constitution of 

Texas have been adopted, removing from-the Constitution the prohibition relied on by the Court. The following constitutional 

amendments authorize the Legislature to pass laws for workmen's 

compensation coverage for certain designated employees, to-wit: 

Article III, Section 59, for State employees (1936); Article III, 

Section 60, for county and other political subdivision employees 

(1948 and 1961); Article III, Section 61, for city, town and 

village employees (1952). 

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Hon. Clay Cotten, page 4 (M-550) 

In Dillard v. Nueces County Navigation District No. 1 

Terminal Drainage Project, 214 F.Supp. 868, a claim by Dillard 

for workmen's compensation benefits was adiudicated. A "voluntarv" 

(as the term is used in State Insurance Board administrative 

practice) workmen's compensation insurance policy had been purchased by the navigation district. After reviewing all of the 

Texas case law available the Court concluded that: 

I, . . . a navigation district may become a 

subscriber for workmen's compensation insurance 

for its employees , provided it does so in an old 

_ line legal reserve company." 

Our research reveals that pursuant to such decision, the 

Texas Industrial Accident Board took jurisdiction of the claim in 

the above case and has consistently thereafter to this date taken 

jurisdiction of workmen's compensation claims of employees of 

such political subdivisions,and its administrative practice and 

construction of the law supports that of the Texas Insurance 

Commission to the effect that the purchase of such insurance is - 

"voluntary" coverage as opposed to "statutory" compensation insurance, as those terms are used in State Insurance Board administrative practice. This office is in agreement with that construction, 

which will be given great weight by our courts. Humble Oil and 

Refining Co. v. Calvert, 414 S.w.Zd 172 (Tex.Sup. 1967). 

You are accordingly advised that navigation districts, 

water districts and river authorities which provide workmen"s 

compensation benefits under the principle of law announced in 

the ,Dillard case'may be regarded as having purchased "voluntary" 

compensation insurance as opposed to "statutory" compensation 

insurance, as the term "voluntary" and the term "statutory" is 

used in the State Insurance Board administrative practice. In 

the private sector, any employer who does not waive common law 

defenses for failure to provide workmen's compensation benefits 

muat be designated as a "VoluntarQ" purchaser in accordance with 

your administrative definitions. 

SUMMARY 

Navigation districts, water districts and 

river authorities which provide workmen'scompensation benefits as well as private employers who 

do not waive common law defenses for failure to 

provide workmen's compensation benefits, should be 

regarded as having purchased "voluntary" compensation insurance as oppose~d to "statutory" compensation insurance as the term "voluntary" and the 

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Hon. Clay Cotten, page 5 (M-550) 

term "statutory" is used.in the State Insurance 

Board administrative practice. 

Prepared by John Reeves 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Keens Taylor, Chairman 

Alfred Walker, Co-Chairman. 

Roger Tyler 

Wayne Rodgers 

Houghton Brownlee 

Jay Floyd 

MEADE F. GRIFFIN 

Staff Legal Assistant 

NOLA WHITE 

First Assistant 

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