. * 

The Attorney General of Texas 

June 23, 1978 

JOHN L. HILL 

Attorney General 

Honorable Cue D. Boykin, Chairman 

Texas Industrial Accident Board 

Lyndon Baines Johnson Building 

Austin, Texas 78’711 

Opinion No. H- 1193 

Re: Payments to the Second 

Injury Fund after it exceeds 

$250,000. 

Dear Mr. Boykin: 

You inquire about the liability of insurance carriers for payment to the 

Second Injury Fund after it equals $250,000 in excess of existing liabilities. 

The fund was established to help provide compensation to employees when the 

combined effects of a first and second injury produce a greater incapacity 

than the second injury alone would have caused. Texas Employers’ Ins. Ass’n 

v. Haunschild, 527 S.W.2d 270 (Tex. Civ. App. - Amarillo 1975, writ ref’d 

n.r.e.); Attorney General Opinion H-902 (1976); see Houston General Ins. Co. 

v. Teague, 531 S.W.2d 457 (Tex. Civ. App. - Wazl975, writ ref’d n.r.e.). Its 

purpose is to encourage the employment of persons handicapped by a previous 

injury by limiting the insurer’s liability to the disabili,ty caused by the second 

injury only. Second Injury Fund v. Keaton, 337 S.W.2d 841 (Tex. Civ. App. - 

1960) rev’d on other grounds 345 S.W.2d 711 (Tex. 1961). 

The fund is created in accordance with section 12c-2 of article 8306, 

V.T.C.S: 

(a) In every case of the death of an employee under 

this Act where there is no person entitled to compensation surviving said employee, the association shall 

@ to the Industrial Accident Board the full death 

benefits . . . for the benefit of said Fund. . . . 

(Emphasis added). ~When it reaches $250,000 in excess of existing liabilities, 

payments into the fund cease until it is reduced below $125,000, as follows: 

(b) When the total amount of all such payments into 

the Fund, together with the accumulated interest 

thereon, equals or exceeds Two Hundred Fifty 

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Honorable Cue D. Boykin - Page 2 (H-1193) 

Thousand Dollars ($250,000.00) in excess of existing liabilities, no further payments shall be required to be paid to 

said Fund; but whenever thereafter the amount of such Fund 

shall be reduced below One Hundred Twenty-Five Thousand 

Dollars ($125,000.00) by reason of payments from such Fund, 

the payments to such Fund shall be resumed forthwith, and 

shall continue until such Fund again amounts to Two 

Hundred Fifty Thousand Dollars ($250,000.00) including 

accumulated interest thereon. 

V.T.C.S. art. 8306, S 12c-2. 

You inform us that a payment into the fund on March 1, 1978, caused it to 

exceed $250,000 in excess of existing liabilities. You inquire about the liability of 

insurance carriers during the interval before the fund is reduced below $125,000; 

whether they have no liability for claims arising during this period, or whether they 

remain liable for such claims, payments merely being deferred until the fund is 

reduced below $125,000. You also ask whether the fund may now receive payment 

of death benefits for deaths which occurred before March 1,1978. 

Article 8306, section 12c-2 states that “the association shall pay” certain 

death benefits to the board. It thus creates a statutory liability to make payments 

to the fund under certain circumstances. See Industrial Accident Board v. Texas 

Employers’ Insurance Association, 345 S.Wm 718 (Tex. 1961). Section 12c-2fbj 

states that when the fund exceeds a certain sum, “no further payments shall be 

required to be paid to said Fund.” We interpret this language to mean that no 

statutory liability will come into existence after the fund exceeds the stated 

amount. Thus, carriers will have no liability to the fund for deaths occurring after 

March 1, 1978, and prior to a future date when the “Fund shall be reduced below . . . 

$125,000. . . .I’ 

Our interpretation of section 12c-2 is based in part on our observation that it 

speaks solely in terms of the carrier’s obligation to pay without referring to the 

board’s action to collect the money. We believe that the statutory references to 

‘pay” and “payment” denote the carrier’s legal duty to make payments, and not its 

actual tendering of money to the fund. When the statute ends the required 

payments, it thus prevents statutory liability from arising, rather than merely 

inhibiting the flow of money into the fund. 

The courts have required that the board claim death benefits from the carrier 

and prove that no one entitled to compensation survived the employee. Industrial 

Accident Board v. Texas Employers’ Insurance Association, w; Industrial 

Accident Board v. Miears, 227 S.W.2d 571 (Tex. Civ. App. - Galveston), aff’d in 

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Honorable Cue D. Boykin - Page 3 ( H- 119 3 1 

part, rev’d in part, 232 S.W.2d 671 (Tex. 1950). The carrier usually does not tender 

payment until some time after the death. Nevertheless, the existence of survivors, 

and consequently the carrier’s statutory liability, is determined by the facts as of 

the time of the employee’s death. V.T.C.S. art. 8306, S 8a. We believe that section 

12c-2 makes the carrier’s statutory liability depend on the size of the fund at the 

time of the employee’s death. Therefore the board may collect death benefits 

attributable to deaths prior to March 1, 1978. 

It has been suggested that the fund’s value at various other dates should 

control the carrier’s liability to it. These dates include the date of the board’s 

award, the date of final adjudication, and the date that payment is tendered. We 

do not believe any of these dates reflect a correct interpretation of the language of 

section 12c-2. Moreover, the selection of one of these dates would introduce 

unnecessary complications into the administration of the fund. When a proceeding 

to claim death benefits begins, the date of death is the only certain date. The 

other three events are uncertain future events, and their timing is subject to 

control by the board or the carrier. The factfinders would have to look to the 

death date on the survivorship question and to an uncertain future date with 

respect to the fund’s~value. We recognize that our conclusion that the death date 

controls liability may result in further payment being made into the fund after it 

has reached the $250,000 mark. We do not believe that section 12c-2 prohibits the 

tender of payment after this event, but only the creation of new obligations to pay. 

See Pennsylvania Mfrs. Assn. Ins. Co. v. Sheppard, 373 A.2d 760 (Pa. Commw. Ct.) 

Griers must pay full assessment, even though Workmen’s Compensation Security 

Fund will as a result exceed statutory amount). 

SUMMARY 

Workmen’s Compensation carriers have no liability to the 

Second Injury Fund for death benefits attributable to deaths 

occurring after the fund exceeds $250,000 in excess of 

existing liabilities and before it is reduced below $125,000. 

The fund may continue to receive payment of death benefits 

derived from deaths occurring before the fund exceeded the 

statutory amount. 

Very truly yours, 

ttorney General of Texas 

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Honorable Cue D. Boykin - Page 4 (H-1193) 

APPROVED: 

Opinion Committee” 

jsn 

p. 4801