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# 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., apart of thebasic Workmen's Compensation Law, defines 'employer'
as any person, firm, partnership,,association of persons or corporations, or their legal representatives thatmake contracts of hire. Art. 8306, Sec. 2, excepts from the applicability of theWorkmen'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 theprivate business sector only, but the following categories ofpublic 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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8309e-1; and (7)employees of certain drainage districts (1967),Art. 8309c-1.

"Because of the above statutes, theWorkmen's Compensation Section of the State Board of Insurance has regarded public employees asbeing eligible for Workmen's Compensation coverage only, if they come within one of the categories enumerated inthe next preceding paragraph. Also, in theprivate business sector, employees of those employers coming within the exceptions enumerated inArt. 8306were regarded as ineligible for this coverage. "Although it is recognized that the Workmen's Compensation Law isnot compulsory as to any employer, yet eligibility coupled with failure to obtain this coverage would result in the loss of certain common lawdefenses.. To describe insurance having this effect, theWorkmen's Compensation Section commonly uses the term 'statutory.' The term 'voluntary' or 'V.C.' is commonly used by theWorkmen's Compensation Section to describe coverage bought by employers who do not come under the Act. Administratively, we must make adistinction between 'statutory' and 'voluntary,' since the coverage and premiums are not uniform
as between the two; and it is for this reason thatwe request the advice of your office as to whether the coverage of certain employers is to be regarded as 'statutory' or 'voluntary' aswe have previously defined those terms.

"We are aware of the Court's holding in the
case ofVirgil A. Dillard vs. Nueces County Navigation District No. 1Terminal Drainage Project, 214 F.SUDD. 868. Althouah this casewas decided in 1963,'aswe have here&before noted the Legislature subsequently enacted specific lawswhich 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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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 fallwithin 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 aspurchasers of 'voluntary' coverage, if such employers fellwithin
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 tomake any employer eligible topurchase Workmen's Compensation coverage with one exception only. The exception is any employee or classification of employees forwhom a rule of liability or a method of compensation has been established or may be established by the Congress.of the United States.
"Allpremises considered, we respectfully request your instructions as towhich, if any, employers, either in the private business sector or in thepublic employment sector, may still be regarded ashaving 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 onby the Court. The following constitutional amendments authorize the Legislature topass laws forworkmen'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 (1948and 1961); Article III, Section 61, for city, town and village employees (1952).

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In Dillard v. Nueces County Navigation District No. 1 Terminal Drainage Project, 214 F.Supp. 868, a claim by Dillard forworkmen's compensation benefits was adiudicated. A "voluntarv" (asthe 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,

. . .anavigation district may become a subscriber forworkmen'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 ofworkmen'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 thepurchase 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 ,Dillardcase'may be regarded ashaving 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 toprovide workmen's compensation benefits muatbe designated as a "VoluntarQ" purchaser in accordance with your administrative definitions.

SUMMARY Navigation districts, water districts and river authorities which provide workmen'scompensation benefits aswell asprivate employers who do notwaive common lawdefenses for failure to provide workmen's compensation benefits, should be regarded as having purchased "voluntary" compensation insurance as oppose~dto "statutory" compensation insurance as the term "voluntary" and the

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term "statutory"isused.intheStateInsurance Boardadministrativepractice.

PreparedbyJohnReeves AssistantAttorneyGeneral

APPROVED: OPINIONCOMMITTEE

KeensTaylor,Chairman AlfredWalker,Co-Chairman. RogerTyler WayneRodgers HoughtonBrownlee JayFloyd

MEADEF.GRIFFIN StaffLegalAssistant

NOLAWHITE FirstAssistant



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