August 29, 1966

Honorable Gene Russell Opinion No. C-744 CountyAttorney Eurnet County Re: Construction of Article &met, Texas 83Qgc,Vernon's Civil Statutes, relative to countiesbecoming selfInsuring or purchasing workmen's compensation Dear Mr. Russell: insurance. :

Your letter requesting an opinion of this office reads, in part, as follows:

"The Constitution of the State of Texas (Article III, Sec. 60) authorized the Leglslature to pass a law permitting the counties of Texas to become self-insuring or to purchase workmen's compensation Insurance. Article 8309c (at Sectlon3), In fact gives the counties such authority. "The Act provides (at Section 16) that the countymay set aside.

. .anamount not to exceed 5% of the annual employee payroll for thepayment of costs etc.authorizedby the Act. Section 3 provides that the Act shall not be mandatory but that If the provisions of the Actare adopted, thz it shall be mandatory that the counts either selfinsuring or that it purcha~se workmen's compensation insurance.

. . . "(1) Does the Act re.ferto lself-insuring' as the statusof the county, if it adopts the provisiohs of the Act (butwithout taking out insurancewith a private carrier), or to,the stertus

of a county which does'not choose to comeunder the Act at all, or to both? "(2) Does it in any way purport to enlarge the liabilityof a county which does not elect to come under the provisions of the Act? -3587-Hon. Gene Russell,page 2 (c-744)

“(3) And, finally, if a county does electto comeunder the Act, does the authorization for It to set aside 2 to 5% of the annual employee payroll in any respect imply that its statutory llabllity Is limitedby the amount which It does set aslde If it sets aside less than the 5% referred to (or is this last simply a~flnanclngprovision implying no correlationwith liability)." (Enumerationof questionsadded for clarification.) Section 60 of Article III of the Constitutionof Texas provides that the Legislaturehas power to pass laws necessary toprovideWorkmen's Compensation Insurance for all county employees. Article 8309~ ofVernon's Civil StatutesprovidesWorkmen's Compensationfor all county employees and adopts liabilityprovjslons of the general Workmen's Compensationstatutes IncludingArticle 8306 and 8307.
In answer to vour first auestion,. it is our opinion that the term "self-insuring"as.applled to counties refers to the status of a countywhich has adopted theAct (Article83ogc) and chooses to carry Its own risk of liabilityas opposed to purchaslng.coverageof this risk under the Act from a private carrier.

In answer to your second question,.it Ishour opinion that the Legislaturedid not intend that counties which elected to become self-insurersor subscribersunder Workmen's CompensationAct shouldbe deprived of their common law defensesnor have their risk of livability enlargedby theirchoice of nonparticipation. In answer to your second question,~ it is noted that Section 6 of Article 83ogc, although adopting certain provisions of Article~8306, Vernon's Civil Statutes, "insofaras applicable," did not adopt.Section 4 of.that Article. Section Aprovides for the rights of employeeswhose employers are not subscribers to that Act. Section 4 further provides that such an employeemay bring suit against and recover damages from an employer to whom that Act applies. Said Section 4 further states, "and theprovisions of Section 1 of this law shallbe applied in all such actions." Section 1 provides for the abolition of the common law defensesof contributorynegligenceand assumed risk. It is our opinion that by not adopting Section 4 of Article 8306, the Legislaturedid not Intend that countieswho

-3588-Hon. Gene Russell,page 3 (c-744)

elected not to become a self-insurer or subscriberunder the Act shouldbe decrlved of their common law defenses. ppwell v. City of Sweetwater, 341 S.W.2d 66: (Tex.Civ.

. 961, error ref.)
In answer to your third question, It Is our opinion that the authorization for a county to set aslde up to 5s of the annual employee payroll is a financing provision and has nothing to do with liability. If adoption of the Act is voted by a county, then the statutory provisions shal~l

be applicable to that county, and the county Is chargedwith the administration of the Act. 61 Tex.Jur.2d 546, 320. All liabilityprovisions. either set forth specificallyby the Act or adopted by the Act from the general Workmen's Compensationprovisions are applicable to the county and it is chargedwith admlnistrationof those liabilityprovisions.

The term "self-insuring"as applied to counties refers to a county which has adopted Article 83ogc and chooses to carry Its own risk of liabilityunder the Act rather than purchase coverage of that risk from a private Insurance company. ~Counties

which do not adopt the Act are not deprived of common-flaw defenses, and their liability Is not affected. ~Theauthorizationby the Act for a county to set aside up to 5% of the annual employee payroll Is a financingprovision and has nothing to do with .llablllty. Yours.very truly,
WAGGORER CARR Attorney General of Texas 

# g r-2..,~

Z<,, : Gordon Houser AssistantAttorney General GH:sck -3589-. .

Hon. Gene Russell, page 4 (C-744)

APPROVED: OPINION COMMITTEE

**W.** V. Geppert, Chairman
W. 0. Shultz Wade Anderson Malcolm Quick Paul Phy
APPROVED FOR THE ATTORNEY GENERAL BY: T. B. Wright

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