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 pro-
vided 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 repre-
sentatives 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 fol-
lowing 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 Work-
men'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 enum-
erated 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 in-
surance having this effect, the Workmen's Compen-
sation 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 dis-
tinction 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 Navi-
gation District No. 1 Terminal Drainage Project,
214 F.SUDD. 868. Althouah this case was decided
in 1963, 'as we have here&before noted the Legis-
lature 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 navi-
gation 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 sub-
divisions as having purchased 'voluntary' cover-
age if they did not fall within one of the
categories of employers made specifically eli-
gible to purchase Workmen's Compensation coverage
by statute. Likewise, we have continued to re-
gard private employers as purchasers of 'volun-
tary' 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' compen-
sation insurance as opposed to 'statutory' compen-
sation insurance."
In City.of Tyler v. Texas Employers Insurance Association,
288 S.W. 409 (Comm.App. 19261, the Court stated that the Legis-
lature was without constitutional power to authorize cities and
towns to provide workmen's compensation insurance for their em-
ployees, and this principle of law.was applicable to other politi-
cal 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 pro-
hibition 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 pur-
chased 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 in-
surance, as those terms are used in State Insurance Board administra-
tive 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'scompensa-
tion 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" compensa-
tion insurance as oppose~d to "statutory" compensa-
tion insurance as the term "voluntary" and the
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. 1
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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Untitled Texas Attorney General Opinion
Combined Opinion