Senate Bill No. 290

Introduced By _______________________________________________________________________________

A Bill for an Act entitled: "An Act generally revising the workers' compensation administration fund; eliminating assessment funding to the department of commerce; clarifying those fees that are deposited to the administration fund; revising the method of assessment and the assessment base; revising the payment and collection requirements; amending section

39-71-201, MCA; and providing effective dates, retroactive applicability dates, and a termination date."

Be it enacted by the Legislature of the State of Montana:

Section 1. Section 39-71-201, MCA, is amended to read:

"39-71-201. Administration fund. (1) A workers' compensation administration fund is established out of which all costs of administering the Workers' Compensation and Occupational Disease Acts and the ~~various~~ statutory occupational safety acts the department ~~and the boiler inspections the department of commerce~~ must administer, with the exception of the subsequent injury fund, as provided for in 39-71-907, and the uninsured employers' fund, are to be paid upon lawful appropriation. The ~~following money collected by the~~ department ~~must be deposited~~ shall collect and deposit in the state treasury to the credit of the workers' compensation administrative fund ~~and must be used for the administrative expenses of the department and for the administrative expenses of the department of commerce for the purposes of 50-74-101~~:

(a) all fees and penalties provided in 39-71-205 ~~and~~, 39-71-223, 39-71-304, 39-71-307, 39-71-308, 39-71-315, 39-71-316, 39-71-401(6), 39-71-2204, 39-71-2205, and 39-71-2337; and

(b) ~~all fees paid for inspection of boilers as required by law;~~

~~(c)~~ all ~~fees~~ taxes paid ~~from~~ by an assessment on each plan No. 1 employer, plan No. 2 insurer, and plan No. 3, the state fund. The assessments must be levied against the preceding calendar year's gross annual payroll of the plan No. 1 employers and the gross annual direct premiums collected in Montana on the policies of the plan No. 2 insurers, insuring employers covered under the chapter, during the preceding calendar year . However, an assessment of the plan No. 1 employer or plan No. 2 insurer may not be less than ~~$200~~ $500. If at any time during the fiscal year a plan No. 1 employer is granted permission to self-insure or a plan No. 2 insurer is authorized to insure employers under this chapter, that plan No. 1 employer or plan No. 2 insurer is subject to assessment. The assessments must be sufficient to fund the direct costs identified to the three plans and an equitable portion of the indirect costs based on the ratio of the preceding fiscal year's indirect costs distributed to the plans, using proper accounting and cost allocation procedures. Plan No. 3 must be assessed an amount sufficient to fund the direct costs and an equitable portion of the indirect costs of regulating plan No. 3. Other sources of revenue, including unexpended funds from the preceding fiscal year, must be used to reduce the costs before levying the assessments.

(2) The administration fund must be debited with expenses incurred by the department in the general administration of the provisions of this chapter, including the salaries of its members, officers, and employees and the travel expenses of the members, officers, and employees, as provided for in 2-18-501 through 2-18-503, as amended, incurred while on the business of the department either within or without the state.

(3) Disbursements from the administration money must be made after being approved by the department upon a claim ~~therefor~~."

Section 2. Section 39-71-201, MCA, is amended to read:

(a) all fees and penalties provided in 39-71-205 ~~and~~, 39-71-223, 39-71-304, 39-71-307, 39-71-308, 39-71-315, 39-71-316, 39-71-401(6), 39-71-2204, 39-71-2205, and 39-71-2337; and

~~(b) all fees paid for inspection of boilers as required by law;~~

~~(c)~~(b) all ~~fees~~ taxes paid ~~from~~ by an assessment on each plan No. 1 employer, plan No. 2 insurer, and plan No. 3, the state fund. The assessments must be levied against the preceding calendar year's gross annual payroll of the plan No. 1 employers and the gross annual direct premiums collected in Montana on the policies of the plan No. 2 insurers, insuring employers covered under the chapter, during the preceding calendar year. However, an must be 2.15% of the following benefits paid during the preceding calendar year for injuries covered by the Workers' Compensation Act and the Occupational Disease Act without regard to the application of any deductible whether the employer or the insurer pays the losses:

(i) total compensation benefits paid; and

(ii) except for medical benefits in excess of $200,000 per occurrence that are exempt from assessment, total medical benefits paid for medical treatment rendered to an injured worker, including hospital treatment and prescription drugs.

(2) Each plan No. 1 employer, plan No. 2 insurer subject to the provisions of this section, and plan No. 3, the state fund, shall file annually on March 31 in the form and containing the information required by the department a report of paid losses pursuant to subsection (1)(b).

(3) An assessment of the plan No. 1 employer or plan No. 2 insurer may not be less than ~~$200~~ $500. If at any time during the fiscal year a plan No. 1 employer is granted permission to self-insure or a plan No. 2 insurer is authorized to insure employers under this chapter, that plan No. 1 employer or plan No. 2 insurer is subject to an initial assessment equal to the minimum assessment against plan No. 1 employers and plan No. 2 insurers.

(4) Payment of the assessment required by this section must be submitted by the employer under plan No. 1, plan No. 2, or plan No. 3 in:

(a) one installment made on or before June 30; or

(b) two equal installments made on or before June 30 and December 31 of each year. If an employer or insurer fails to pay the assessment required under this section, the department may impose a fine of $100 plus interest on the delinquent amount at the annual interest rate of 12%. The assessments must be sufficient to fund the direct costs identified to the three plans and an equitable portion of the indirect costs based on the ratio of the preceding fiscal year's indirect costs distributed to the plans, using proper accounting and cost allocation procedures. Plan No. 3 must be assessed an amount sufficient to fund the direct costs and an equitable portion of the indirect costs of regulating plan No. 3. Other sources of revenue, including unexpended funds from the preceding fiscal year, must be used to reduce the costs before levying the assessments.

~~(2)~~(5) The administration fund must be debited with expenses incurred by the department in the general administration of the provisions of this chapter, including the salaries of its members, officers, and employees and the travel expenses of the members, officers, and employees, as provided for in 2-18-501 through 2-18-503, as amended, incurred while on the business of the department either within or without the state.

~~(3)~~(6) Disbursements from the administration money must be made after being approved by the department upon claim ~~therefor~~ for disbursement."

NEW SECTION. Section 3. Effective dates -- retroactive applicability. (1) [Sections 1 and 4 and this section] are effective on passage and approval and [section 1] applies retroactively, within the meaning of 1-2-109, to taxes collected on or after June 30, 1997.

(2) [Section 2] is effective July 1, 1999, and applies retroactively, within the meaning of 1-2-109, to taxes collected on or after June 30, 1998.

NEW SECTION. Section 4. Termination. [Section 1] terminates June 30, 1998.

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