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S.B. 170

This document includes Senate Committee Amendments incorporated into the bill on Fri, Feb 21, 2003 at 2:32 PM by rday. -->              1     

AMENDMENTS TO WORKERS' COMPENSATION

             2     
2003 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Curtis S. Bramble

             5      This act modifies the Insurance Code by repealing the enabling provisions of the
             6      Workers' Compensation Fund. This act authorizes the insurance commissioner to
             7      designate and enter into a contract with a residual market carrier. This act creates the
             8      Utah Residual Market Oversight Council and specifies the council's membership,
             9      appointment process, term of office, chair, compensation, and duties. This act requires
             10      certain reporting by the residual market carrier and the Utah Residual Market Oversight
             11      Council. This act provides for the withdrawal of independent corporations from the state
             12      retirement systems and provides for withdrawal procedures. This act provides a
             13      repealer. This act makes technical corrections. This act provides an immediate effective
             14      date.
             15      This act affects sections of Utah Code Annotated 1953 as follows:
             16      AMENDS:
             17          11-8-3, as last amended by Chapter 222, Laws of Utah 2000
             18          31A-1-105, as last amended by Chapter 222, Laws of Utah 2000
             19          31A-19a-401, as last amended by Chapter 222, Laws of Utah 2000
             20          31A-21-101, as last amended by Chapter 222, Laws of Utah 2000
             21          31A-22-309, as last amended by Chapter 59, Laws of Utah 2001
             22          31A-26-103, as last amended by Chapter 222, Laws of Utah 2000
             23          31A-33-109, as renumbered and amended by Chapter 240, Laws of Utah 1996
             24          34A-2-102, as last amended by Chapter 222, Laws of Utah 2000
             25          34A-2-107, as last amended by Chapter 114, Laws of Utah 2001
             26          34A-2-201, as last amended by Chapter 222, Laws of Utah 2000
             27          34A-2-203, as last amended by Chapter 222, Laws of Utah 2000




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             28
         34A-2-211, as last amended by Chapter 222, Laws of Utah 2000
             29          34A-2-406, as last amended by Chapter 222, Laws of Utah 2000
             30          51-7-2, as last amended by Chapter 159, Laws of Utah 2002
             31          51-7-4, as last amended by Chapters 159 and 250, Laws of Utah 2002
             32          59-9-101, as last amended by Chapter 71, Laws of Utah 2002
             33          59-9-101.3, as last amended by Chapter 71, Laws of Utah 2002
             34          63-5b-102, as last amended by Chapters 14 and 159, Laws of Utah 2002
             35          63-38a-102, as last amended by Chapter 159, Laws of Utah 2002
             36          63-55b-131, as last amended by Chapter 3, Laws of Utah 2001
             37          63-95-102, as last amended by Chapters 159 and 250, Laws of Utah 2002
             38          63-95-203, as last amended by Chapter 159, Laws of Utah 2002
             39          63E-1-102, as last amended by Chapters 159 and 250, Laws of Utah 2002
             40          63E-1-203, as last amended by Chapter 159, Laws of Utah 2002
             41          67-4-2, as last amended by Chapter 222, Laws of Utah 2000
             42      ENACTS:
             43          31A-33a-101, Utah Code Annotated 1953
             44          31A-33a-102, Utah Code Annotated 1953
             45          31A-33a-103, Utah Code Annotated 1953
             46          31A-33a-104, Utah Code Annotated 1953
             47          31A-33a-105, Utah Code Annotated 1953
             48          31A-33a-106, Utah Code Annotated 1953
             49          31A-33a-107, Utah Code Annotated 1953
             50          49-11-621, Utah Code Annotated 1953
             51      REPEALS:
             52          31A-22-1001, as last amended by Chapter 222, Laws of Utah 2000
             53          31A-33-101, as last amended by Chapter 222, Laws of Utah 2000
             54          31A-33-102, as last amended by Chapter 222, Laws of Utah 2000
             55          31A-33-103, as last amended by Chapter 222, Laws of Utah 2000
             56          31A-33-103.5, as last amended by Chapters 33 and 116, Laws of Utah 2001
             57          31A-33-104, as last amended by Chapter 33, Laws of Utah 2001
             58          31A-33-105, as last amended by Chapter 107, Laws of Utah 1998




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             59
         31A-33-106, as last amended by Chapters 176 and 186, Laws of Utah 2002
             60          31A-33-107, as last amended by Chapter 130, Laws of Utah 1999
             61          31A-33-108, as last amended by Chapter 375, Laws of Utah 1997
             62          31A-33-110, as last amended by Chapter 204, Laws of Utah 1997
             63          31A-33-111, as last amended by Chapter 130, Laws of Utah 1999
             64          31A-33-112, as renumbered and amended by Chapter 240, Laws of Utah 1996
             65          31A-33-113, as last amended by Chapter 116, Laws of Utah 2001
             66          31A-33-114, as renumbered and amended by Chapter 240, Laws of Utah 1996
             67          31A-33-115, as renumbered and amended by Chapter 240, Laws of Utah 1996
             68          31A-33-116, as renumbered and amended by Chapter 240, Laws of Utah 1996
             69          31A-33-117, as last amended by Chapter 375, Laws of Utah 1997
             70      Be it enacted by the Legislature of the state of Utah:
             71          Section 1. Section 11-8-3 is amended to read:
             72           11-8-3. Department of Environmental Quality to negotiate loans for sewage
             73      facilities.
             74          (1) The Department of Environmental Quality may negotiate loans from the Retirement
             75      Systems Fund, State Land Principal Fund, [Workers' Compensation Fund,] or any state trust
             76      and agency fund which has sums available for loaning, as these funds are defined in Title 51,
             77      Chapter 5, Funds Consolidation Act, not to exceed $1,000,000 in any fiscal year for the
             78      purposes of providing the funding for the loans provided for in Section 11-8-2 .
             79          (2) The terms of any borrowing and repayment shall be negotiated between the
             80      borrower and the lender consistent with the legal duties of the lender.
             81          Section 2. Section 31A-1-105 is amended to read:
             82           31A-1-105. Presumption of jurisdiction.
             83          (1) Any insurer[, including the Workers' Compensation Fund created under Chapter
             84      33,] that provides coverage of a resident of this state, property located in this state, or a
             85      business activity conducted in this state, or that engages in any activity described in
             86      Subsections 31A-15-102 (2)(a) through (h), is:
             87          (a) doing an insurance business in this state; and
             88          (b) subject to the jurisdiction of the insurance commissioner and the courts of this state
             89      under Sections 31A-2-309 and 31A-2-310 to the extent of that coverage or activity.



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             90
         (2) Any person doing or purporting to do an insurance business in this state as defined
             91      in Section 31A-1-301 is subject to the jurisdiction of the insurance commissioner and this title,
             92      unless the insurer can establish that the exemptions of Section 31A-1-103 apply.
             93          (3) This section does not limit the jurisdiction of the courts of this state under other
             94      applicable law.
             95          Section 3. Section 31A-19a-401 is amended to read:
             96           31A-19a-401. Scope of part.
             97          (1) This part applies to workers' compensation insurance and employers' liability
             98      insurance written in connection with it.
             99          (2) All insurers writing workers' compensation coverage[, including the Workers'
             100      Compensation Fund created under Chapter 33,] are subject to this part.
             101          Section 4. Section 31A-21-101 is amended to read:
             102           31A-21-101. Scope of Title 31A, Chapters 21 and 22.
             103          (1) Except as provided in Subsections (2) through (6), this chapter and Chapter 22
             104      apply to all insurance policies, applications, and certificates:
             105          (a) delivered or issued for delivery in this state;
             106          (b) on property ordinarily located in this state;
             107          (c) on persons residing in this state when the policy is issued; and
             108          (d) on business operations in this state.
             109          (2) This chapter and Chapter 22 do not apply to:
             110          (a) the exemptions provided in Section 31A-1-103 ;
             111          (b) insurance policies procured under Sections 31A-15-103 and 31A-15-104 ;
             112          (c) an insurance policy on business operations in this state if the contract is negotiated
             113      primarily outside this state and if the operations in this state are incidental or subordinate to
             114      operations outside this state, except that insurance required by a Utah statute must conform to
             115      the statutory requirements; or
             116          (d) other exemptions provided in this title.
             117          (3) Sections 31A-21-102 , 31A-21-103 , 31A-21-104 , Subsections 31A-21-107 (1) and
             118      (3), and Sections 31A-21-306 , 31A-21-308 , 31A-21-312 , and 31A-21-314 apply to ocean
             119      marine and inland marine insurance. Section 31A-21-201 applies to inland marine insurance
             120      that is written according to manual rules or rating plans.



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             121
         (4) Group or blanket policies are subject to this chapter and Chapter 22, except:
             122          (a) group or blanket policies outside the scope of this title under Subsection
             123      31A-1-103 (3)(h); and
             124          (b) other exemptions provided under Subsection (5).
             125          (5) The commissioner may by rule exempt any class of insurance contract or class of
             126      insurer from any or all of the provisions of this chapter and Chapter 22 if the interests of the
             127      Utah insureds, creditors, or the public would not be harmed by the exemption.
             128          (6) Workers' compensation insurance[, including that written by the Workers'
             129      Compensation Fund created under Chapter 33,] is subject to this chapter and Chapter 22.
             130          (7) Unless clearly inapplicable, any provision of this chapter or Chapter 22 applicable
             131      to either a policy or a contract is applicable to both.
             132          Section 5. Section 31A-22-309 is amended to read:
             133           31A-22-309. Limitations, exclusions, and conditions to personal injury
             134      protection.
             135          (1) (a) A person who has or is required to have direct benefit coverage under a policy
             136      which includes personal injury protection may not maintain a cause of action for general
             137      damages arising out of personal injuries alleged to have been caused by an automobile
             138      accident, except where the person has sustained one or more of the following:
             139          (i) death;
             140          (ii) dismemberment;
             141          (iii) permanent disability or permanent impairment based upon objective findings;
             142          (iv) permanent disfigurement; or
             143          (v) medical expenses to a person in excess of $3,000.
             144          (b) Subsection (1)(a) does not apply to a person making an uninsured motorist claim.
             145          (2) (a) Any insurer issuing personal injury protection coverage under this part may only
             146      exclude from this coverage benefits:
             147          (i) for any injury sustained by the insured while occupying another motor vehicle
             148      owned by or furnished for the regular use of the insured or a resident family member of the
             149      insured and not insured under the policy;
             150          (ii) for any injury sustained by any person while operating the insured motor vehicle
             151      without the express or implied consent of the insured or while not in lawful possession of the



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             152
     insured motor vehicle;
             153          (iii) to any injured person, if the person's conduct contributed to his injury:
             154          (A) by intentionally causing injury to himself; or
             155          (B) while committing a felony;
             156          (iv) for any injury sustained by any person arising out of the use of any motor vehicle
             157      while located for use as a residence or premises;
             158          (v) for any injury due to war, whether or not declared, civil war, insurrection, rebellion
             159      or revolution, or to any act or condition incident to any of the foregoing; or
             160          (vi) for any injury resulting from the radioactive, toxic, explosive, or other hazardous
             161      properties of nuclear materials.
             162          (b) The provisions of this subsection do not limit the exclusions which may be
             163      contained in other types of coverage.
             164          (3) The benefits payable to any injured person under Section 31A-22-307 are reduced
             165      by:
             166          (a) any benefits which that person receives or is entitled to receive as a result of an
             167      accident covered in this code under any workers' compensation or similar statutory plan; and
             168          (b) any amounts which that person receives or is entitled to receive from the United
             169      States or any of its agencies because that person is on active duty in the military service.
             170          (4) When a person injured is also an insured party under any other policy, including
             171      those policies complying with this part, primary coverage is given by the policy insuring the
             172      motor vehicle in use during the accident.
             173          (5) (a) Payment of the benefits provided for in Section 31A-22-307 shall be made on a
             174      monthly basis as expenses are incurred.
             175          (b) Benefits for any period are overdue if they are not paid within 30 days after the
             176      insurer receives reasonable proof of the fact and amount of expenses incurred during the
             177      period. If reasonable proof is not supplied as to the entire claim, the amount supported by
             178      reasonable proof is overdue if not paid within 30 days after that proof is received by the
             179      insurer. Any part or all of the remainder of the claim that is later supported by reasonable proof
             180      is also overdue if not paid within 30 days after the proof is received by the insurer.
             181          (c) If the insurer fails to pay the expenses when due, these expenses shall bear interest
             182      at the rate of 1-1/2% per month after the due date.



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             183
         (d) The person entitled to the benefits may bring an action in contract to recover the
             184      expenses plus the applicable interest. If the insurer is required by the action to pay any overdue
             185      benefits and interest, the insurer is also required to pay a reasonable attorney's fee to the
             186      claimant.
             187          (6) Every policy providing personal injury protection coverage is subject to the
             188      following:
             189          (a) that where the insured under the policy is or would be held legally liable for the
             190      personal injuries sustained by any person to whom benefits required under personal injury
             191      protection have been paid by another insurer, [including the Workers' Compensation Fund
             192      created under Chapter 33,] the insurer of the person who would be held legally liable shall
             193      reimburse the other insurer for the payment, but not in excess of the amount of damages
             194      recoverable; and
             195          (b) that the issue of liability for that reimbursement and its amount shall be decided by
             196      mandatory, binding arbitration between the insurers.
             197          Section 6. Section 31A-26-103 is amended to read:
             198           31A-26-103. Workers' compensation claims.
             199          In addition to being subject to this and other chapters of this title, insurers writing
             200      workers' compensation insurance in this state[, including the Workers' Compensation Fund
             201      created under Chapter 33,] are subject to the Labor Commission with respect to claims for and
             202      payment of compensation and benefits.
             203          Section 7. Section 31A-33-109 is amended to read:
             204           31A-33-109. Liability limited.
             205          (1) No officer or employee of the Workers' Compensation Fund is liable in a private
             206      capacity for any act performed or obligation entered into when done in good faith, without
             207      intent to defraud, and in an official capacity in connection with the administration,
             208      management, or conduct of the Workers' Compensation Fund or affairs relating to it.
             209          (2) Subject to the director's fiduciary responsibility as established by Section
             210      31A-33-106 , no director of the Workers' Compensation Fund is liable in a private capacity for
             211      any act performed or obligation entered into when done in good faith, without intent to defraud,
             212      and in an official capacity in connection with the administration, management, or conduct of
             213      the Workers' Compensation Fund or affairs relating to it.



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             214
         (3) The provisions of this section shall apply to acts made pursuant to Title 63E,
             215      Chapter 1, Part 4, Privatization of Independent Entities, and other statutes, including decisions,
             216      agreements, or payments which address the value of any interests the state holds in the
             217      Workers' Compensation Fund and the state's compensation for those interests as part of
             218      privatization.
             219          Section 8. Section 31A-33a-101 is enacted to read:
             220     
CHAPTER 33a. UTAH WORKERS' COMPENSATION RESIDUAL MARKET ACT

             221          31A-33a-101. Title.
             222          This chapter is known as the "Utah Workers' Compensation Residual Market Act."
             223          Section 9. Section 31A-33a-102 is enacted to read:
             224          31A-33a-102. Definitions.
             225          As used in this chapter:
             226          (1) "Council" means the Utah Residual Market Oversight Council created in Section
             227      31A-33a-104 .
             228          (2) "Member" means a member of the Utah Residual Market Oversight Council created
             229      in Section 31A-33a-104 .
             230          (3) "Residual market carrier" means the Utah residual market carrier that is designated
             231      in accordance with Section 31A-33a-103 .
             232          Section 10. Section 31A-33a-103 is enacted to read:
             233          31A-33a-103. Residual market carrier -- Designation -- Obligation to write
             234      workers' compensation insurance -- Limitations.
             235          (1) The commissioner shall designate and enter into a contract with a residual market
             236      carrier.
             237          (2) The residual market carrier shall:
             238          (a) be a licensed, Utah domiciled mutual insurance company;
             239          (b) be subject to the jurisdiction of the commissioner and the courts of this state in
             240      accordance with Section 31A-1-105 ;
             241          (c) provide workers' compensation insurance at actuarially sound premium rates that
             242      are in accordance with Title 31A, Chapter 19a, Part 4, Workers' Compensation Rates; and
             243          (d) meet the qualifications of 26 U.S.C. Section 501(c)(27)(B).
             244          (3) (a) The residual market carrier shall write all workers' compensation insurance for



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             245
     which application is made to the residual market carrier.
             246          (b) The requirement under Subsection (3)(a) does not apply to any other insurer.
             247          (4) S [ While designated the residual market carrier, and for five years after the contract
             248      terminates in accordance with Section 31A-33a-107 , the
] THE s
residual market carrier may not
             249      pursue:
             250          (a) dissolution under Title 16, Chapter 6a, Part 14, Dissolution, or Section 31A-5-504 ;
             251      or
             252          (b) conversion of a domestic mutual into a stock corporation under Section 31A-5-506 .
             252a      S (5) WHILE DESIGNATED THE RESIDUAL MARKET CARRIER, AND FOR FIVE YEARS AFTER THE
             252b      CONTRACT TERMINATES IN ACCORDANCE WITH SECTION 31A-331-107, THE RESIDUAL MARKET
             252c      CARRIER MAY NOT OFFER HEALTH CARE INSURANCE AS DEFINED IN SECTION 31A-1-301(55).
             252d          (6) THE RESIDUAL MARKET CARRIER SHALL OPERATE ITS BUSINESS IN A MANNER
             252e      CONSISTENT WITH MAINTAINING ITS FEDERAL INCOME TAX EXEMPTION UNDER 26 U.S.C.
             252f      SECTION 501(c)(27)(B) AND SHALL WORK TO CURE ANY DEFECTS IN MAINTAINING ITS
             252g      EXEMPTION.
             252h          (7) MEMBERS OF THE BOARD OF DIRECTORS OF THE RESIDUAL MARKET CARRIER SHALL:
             252i          (a) SERVE NO MORE THAN THREE FOUR-YEAR TERMS ON THE BOARD OF THE RESIDUAL
             252j      MARKET CARRIER; AND
             252k          (b) BE INVESTMENT TRUSTEES AND FIDUCIARIES OF THE RESIDUAL MARKET CARRIER'S
             252l      POLICYHOLDERS.
             252m          (8) COMPENSATION FOR THE OFFICERS, DIRECTORS, AND EMPLOYEES OF THE RESIDUAL
             252n      MARKET CARRIER IS SUBJECT TO THE PROVISIONS OF SECTION 31A-5-416. s
             253          Section 11. Section 31A-33a-104 is enacted to read:
             254          31A-33a-104. Utah Residual Market Oversight Council -- Membership -- Chair --
             255      Term of office -- Compensation.
             256          (1) There is created the Utah Residual Market Oversight Council.
             257          (2) The council shall consist of the following five members:
             258          (a) the commissioner; and
             259          (b) four members appointed by the governor, with the consent of the Senate.
             260          (3) A person may not be a council member if that person:
             261          (a) has a direct and substantial interest as a stockholder of an insurer that competes
             262      with the residual market carrier;
             263          (b) is an employee, officer, director, or attorney of an insurer that competes with the
             264      residual market carrier; or
             265          (c) is an employee, officer, director, or attorney of the residual market carrier.
             266          (4) The commissioner shall be the chair of the council.


            
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267
         (5) (a) Except as required by Subsection (5)(b), the term of office of the members
             268      appointed by the governor shall be four years, beginning July 1 of the year of appointment.
             269          (b) Notwithstanding the requirements of Subsection (5)(a), the governor shall, at the
             270      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             271      members are staggered so that approximately half of the council is appointed every two years.
             272          (6) Each member shall hold office until the member's successor is appointed and
             273      qualified.
             274          (7) When a vacancy occurs in the membership of the council for any reason, the
             275      replacement shall be appointed for the unexpired term.



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             276
         (8) (a) Members may not receive compensation or benefits for their services, but may
             277      receive per diem and expenses incurred in the performance of the member's official duties at
             278      the rates established by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             279          (b) Members may decline to receive per diem and expenses for their service.
             280          Section 12. Section 31A-33a-105 is enacted to read:
             281          31A-33a-105. Utah Residual Market Oversight Council -- Duties -- Reports.
             282          (1) Prior to July 1 of each year, the residual market carrier shall provide to the Utah
             283      Residual Market Oversight Council:
             284          (a) the residual market carrier's audited annual financial statement for the calendar year
             285      most recently ended;
             286          (b) copies of reports issued by the department in connection with any examination of
             287      the residual market carrier;
             288          (c) actuarial certification of the residual market carrier's loss reserves; and
             289          (d) other data or information the council may reasonably require to determine if the
             290      residual market carrier is fulfilling its purpose in accordance with this chapter.
             291          (2) The council shall:
             292          (a) review the items under Subsection (1);
             293          (b) review the activities of the residual market carrier for the calendar year most
             294      recently ended;
             295          (c) determine if the residual market carrier is fulfilling its purpose in accordance with
             296      this chapter; and
             297          (d) submit a report to the department and the Legislature prior to October 15 of each
             298      year that details the council's findings in accordance with this section, including any
             299      recommendations.
             300          Section 13. Section 31A-33a-106 is enacted to read:
             301          31A-33a-106. Status of the residual market carrier in relationship to the state.
             302          The requirement that the governor, with the consent of the Senate, appoint the members
             303      of the Utah Residual Market Oversight Council under Section 31A-33a-104 does not:
             304          (1) remove from the board of directors or policyholders of the residual market carrier,
             305      nor give to the state, the managerial, financial, operational, or voting control of the residual
             306      market carrier;



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         (2) cause the state to be liable for any obligation, expense, liability, or debt of the
             308      residual market carrier; or
             309          (3) alter the legal status of the residual market carrier as a mutual insurance company:
             310          (a) regulated under this title; and
             311          (b) domiciled in this state.
             312          Section 14. Section 31A-33a-107 is enacted to read:
             313          31A-33a-107. Termination of the residual market carrier.
             314          (1) The commissioner may S WITH UNANIMOUS CONSENT OF THE UTAH RESIDUAL
             314a      MARKET OVERSIGHT COUNCIL s terminate the contract entered into with the residual market
             315      carrier, for any reason, by giving the residual market carrier between 180 and 365 days written
             316      notice of the termination.
             317          (2) Upon termination of the contract, the commissioner may require the company that
             318      was the residual market carrier to continue under the requirement of Subsection
             319      31A-33a-103 (3)(a) for up to one year from the date the written notice of termination is given in
             320      accordance with Subsection (1).
             321          Section 15. Section 34A-2-102 is amended to read:
             322           34A-2-102. Definition of terms.
             323          As used in this chapter:
             324          (1) "Average weekly wages" means the average weekly wages as determined under
             325      Section 34A-2-409 .
             326          (2) "Award" means a final order of the commission as to the amount of compensation
             327      due:
             328          (a) any injured employee; or
             329          (b) the dependents of any deceased employee.
             330          (3) "Compensation" means the payments and benefits provided for in this chapter or
             331      Chapter 3, Utah Occupational Disease Act.
             332          (4) "Decision" means the ruling of an administrative law judge or, in accordance with
             333      Section 34A-2-801 , the commissioner or Appeals Board and may include:
             334          (a) an award or denial of medical, disability, death, or other related benefits under this
             335      chapter or Chapter 3, Utah Occupational Disease Act; or
             336          (b) another adjudicative ruling in accordance with this chapter or Chapter 3, Utah
             337      Occupational Disease Act.




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             338
         (5) "Director" means the director of the division, unless the context requires otherwise.
             339          (6) "Disability" means an administrative determination that may result in an
             340      entitlement to compensation as a consequence of becoming medically impaired as to function.
             341      Disability can be total or partial, temporary or permanent, industrial or nonindustrial.
             342          (7) "Division" means the Division of Industrial Accidents.
             343          (8) "Impairment" is a purely medical condition reflecting any anatomical or functional
             344      abnormality or loss. Impairment may be either temporary or permanent, industrial or
             345      nonindustrial.
             346          (9) "Order" means an action of the commission that determines the legal rights, duties,
             347      privileges, immunities, or other interests of one or more specific persons, but not a class of
             348      persons.
             349          (10) (a) "Personal injury by accident arising out of and in the course of employment"
             350      includes any injury caused by the willful act of a third person directed against an employee
             351      because of the employee's employment.
             352          (b) "Personal injury by accident arising out of and in the course of employment" does
             353      not include a disease, except as the disease results from the injury.
             354          (11) "Safe" and "safety," as applied to any employment or place of employment, means
             355      the freedom from danger to the life or health of employees reasonably permitted by the nature
             356      of the employment.
             357          [(12) "Workers' Compensation Fund" means the nonprofit, quasi-public corporation
             358      created in Title 31A, Chapter 33, Workers' Compensation Fund.]
             359          Section 16. Section 34A-2-107 is amended to read:
             360           34A-2-107. Appointment of workers' compensation advisory council --
             361      Composition -- Terms of members -- Duties -- Compensation.
             362          (1) The commissioner shall appoint a workers' compensation advisory council
             363      composed of:
             364          (a) the following voting members:
             365          (i) five employer representatives; and
             366          (ii) five employee representatives; and
             367          (b) the following nonvoting members:
             368          (i) a representative of the [Workers' Compensation Fund] residual market carrier



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             369
     designated under Section 31A-33a-103 ;
             370          (ii) a representative of a private insurance carrier;
             371          (iii) a representative of health care providers;
             372          (iv) the Utah insurance commissioner or the insurance commissioner's designee; and
             373          (v) the commissioner or the commissioner's designee.
             374          (2) Employers and employees shall consider nominating members of groups who
             375      historically may have been excluded from the council, such as women, minorities, and
             376      individuals with disabilities.
             377          (3) (a) Except as required by Subsection (3)(b), as terms of current council members
             378      expire, the commissioner shall appoint each new member or reappointed member to a two-year
             379      term beginning July 1 and ending June 30.
             380          (b) Notwithstanding the requirements of Subsection (3)(a), the commissioner shall, at
             381      the time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             382      council members are staggered so that approximately half of the council is appointed every two
             383      years.
             384          (4) (a) When a vacancy occurs in the membership for any reason, the replacement shall
             385      be appointed for the unexpired term.
             386          (b) The commissioner shall terminate the term of any council member who ceases to be
             387      representative as designated by the member's original appointment.
             388          (5) The council shall confer at least quarterly for the purpose of advising the
             389      commission, the division, and the Legislature on:
             390          (a) the Utah workers' compensation and occupational disease laws;
             391          (b) the administration of the laws described in Subsection (5)(a); and
             392          (c) rules related to the laws described in Subsection (5)(a).
             393          (6) Regarding workers' compensation, rehabilitation, and reemployment of employees
             394      who are disabled because of an industrial injury or occupational disease the council shall:
             395          (a) offer advice on issues requested by:
             396          (i) the commission;
             397          (ii) the division; and
             398          (iii) the Legislature; and
             399          (b) make recommendations to:



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             400
         (i) the commission; and
             401          (ii) the division.
             402          (7) The commissioner or the commissioner's designee shall serve as the chair of the
             403      council and call the necessary meetings.
             404          (8) The commission shall provide staff support to the council.
             405          (9) (a) (i) Members who are not government employees may not receive compensation
             406      or benefits for their services, but may receive per diem and expenses incurred in the
             407      performance of the member's official duties at the rates established by the Division of Finance
             408      under Sections 63A-3-106 and 63A-3-107 .
             409          (ii) Members may decline to receive per diem and expenses for their service.
             410          (b) (i) State government officer and employee members who do not receive salary, per
             411      diem, or expenses from their agency for their service may receive per diem and expenses
             412      incurred in the performance of their official duties from the council at the rates established by
             413      the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             414          (ii) State government officer and employee members may decline to receive per diem
             415      and expenses for their service.
             416          Section 17. Section 34A-2-201 is amended to read:
             417           34A-2-201. Employers to secure workers' compensation benefits for employees --
             418      Methods.
             419          An employer shall secure the payment of workers' compensation benefits for its
             420      employees by:
             421          [(1) insuring, and keeping insured, the payment of this compensation with the Workers'
             422      Compensation Fund;]
             423          [(2)] (1) insuring, and keeping insured, the payment of this compensation with any
             424      stock corporation or mutual association authorized to transact the business of workers'
             425      compensation insurance in this state, including the residual market carrier designated under
             426      Section 31A-33a-103 ; or
             427          [(3)] (2) obtaining approval from the division in accordance with Section 34A-2-201.5
             428      to pay direct compensation as a self-insured employer in the amount, in the manner, and when
             429      due as provided for in this chapter or Chapter 3, Utah Occupational Disease Act.
             430          Section 18. Section 34A-2-203 is amended to read:



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             431
          34A-2-203. Payment of premiums by state department, commission, board, or
             432      other agency.
             433          Each department, commission, board, or other agency of the state shall pay the
             434      insurance premium on its employees direct to the [Workers' Compensation Fund] residual
             435      market carrier designated under Section 31A-33a-103 .
             436          Section 19. Section 34A-2-211 is amended to read:
             437           34A-2-211. Notice of noncompliance to employer -- Enforcement power of
             438      division -- Penalty.
             439          (1) (a) In addition to the remedies specified in Section 34A-2-210 , if the division has
             440      reason to believe that an employer is conducting business without securing the payment of
             441      benefits in one of the three ways provided in Section 34A-2-201 , the division may give that
             442      employer written notice of the noncompliance by certified mail to the last-known address of the
             443      employer.
             444          (b) If the employer does not remedy the default within 15 days after delivery of the
             445      notice, the division may issue an order requiring the employer to appear before the division and
             446      show cause why the employer should not be ordered to comply with Section 34A-2-201 .
             447          (c) If it is found that the employer has failed to provide for the payment of benefits in
             448      one of the three ways provided in Section 34A-2-201 , the division may require any employer to
             449      comply with Section 34A-2-201 .
             450          (2) (a) Notwithstanding Subsection (1), the division may impose a penalty against the
             451      employer under this Subsection (2):
             452          (i) subject to the notice and other requirements of Title 63, Chapter 46b,
             453      Administrative Procedures Act; and
             454          (ii) if the division believes that an employer of one or more employees is conducting
             455      business without securing the payment of benefits in one of the three ways provided in Section
             456      34A-2-201 .
             457          (b) The penalty imposed under Subsection (2)(a) shall be the greater of:
             458          (i) $1,000; or
             459          (ii) three times the amount of the premium the employer would have paid for workers'
             460      compensation insurance based on the rate filing of the [Workers' Compensation Fund] residual
             461      market carrier designated under Section 31A-33a-103 , during the period of noncompliance.



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             462
         (c) For purposes of Subsection (2)(b)(ii), the premium is calculated by applying rates
             463      and rate multipliers to the payroll basis under Subsection (2)(d), using the highest rated
             464      employee class code applicable to the employer's operations.
             465          (d) The payroll basis for the purpose of calculating the premium penalty shall be 150%
             466      of the state's average weekly wage multiplied by the highest number of workers employed by
             467      the employer during the period of the employer's noncompliance multiplied by the number of
             468      weeks of the employer's noncompliance up to a maximum of 156 weeks.
             469          (3) The penalty imposed under Subsection (2) shall be deposited in the Uninsured
             470      Employers' Fund created by Section 34A-2-704 and used for the purposes of that fund.
             471          (4) (a) An employer who disputes the determination, imposition, or amount of a
             472      penalty imposed under Subsection (2) shall request a hearing before an administrative law
             473      judge within 30 days of the date of issuance of the administrative action imposing the penalty
             474      or the administrative action becomes a final order of the commission.
             475          (b) The employer's request for a hearing under Subsection (4)(a) shall specify the facts
             476      and grounds that are the basis of the employer's objection to the determination, imposition, or
             477      amount of the penalty.
             478          (c) An administrative law judge's decision under this Subsection (4) may be reviewed
             479      pursuant to Part 8, Adjudication.
             480          (5) (a) After a penalty has been issued and becomes a final order of the commission the
             481      division on behalf of the commission may file an abstract for any uncollected penalty in the
             482      district court.
             483          (b) The abstract filed under Subsection (5)(a) shall state:
             484          (i) the amount of the uncollected penalty;
             485          (ii) reasonable attorneys' fees;
             486          (iii) costs of collection; and
             487          (iv) court costs.
             488          (c) The filed abstract shall have the effect of a judgment of that court.
             489          (6) Any administrative action issued by the division under this section shall:
             490          (a) be in writing;
             491          (b) be sent by certified mail to the last-known address of the employer;
             492          (c) state the findings and administrative action of the division; and



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             493
         (d) specify its effective date, which may be immediate or may be at a later date.
             494          (7) The final order of the commission under this section, upon application by the
             495      division on behalf of the commission made on or after the effective date of the order to a court
             496      of general jurisdiction in any county in this state, may be enforced by an order to comply
             497      entered ex parte and without notice by the court.
             498          Section 20. Section 34A-2-406 is amended to read:
             499           34A-2-406. Exemptions from chapter for employees temporarily in state --
             500      Conditions -- Evidence of insurance.
             501          (1) Any employee who has been hired in another state and the employee's employer are
             502      exempt from this chapter and Chapter 3, Utah Occupational Disease Act, while the employee is
             503      temporarily within this state doing work for the employee's employer if:
             504          (a) the employer has furnished workers' compensation insurance coverage under the
             505      workers' compensation or similar laws of the other state;
             506          (b) the coverage covers the employee's employment while in this state; and
             507          (c) (i) the extraterritorial provisions of this chapter and Chapter 3 are recognized in the
             508      other state and employers and employees who are covered in this state are likewise exempted
             509      from the application of the workers' compensation or similar laws of the other state; or
             510          (ii) the [Workers' Compensation Fund] residual market carrier designated under
             511      Section 31A-33a-103 :
             512          (A) is an admitted insurance carrier in the other state; or
             513          (B) has agreements with a carrier and is able to furnish workers' compensation
             514      insurance or similar coverage to Utah employers and their subsidiaries or affiliates doing
             515      business in the other state.
             516          (2) The benefits under the workers' compensation or similar laws of the other state are
             517      the exclusive remedy against an employer for any injury, whether resulting in death or not,
             518      received by an employee while working for the employer in this state.
             519          (3) A certificate from an authorized officer of the industrial commission or similar
             520      department of the other state certifying that the employer is insured in the other state and has
             521      provided extraterritorial coverage insuring the employer's employees while working in this
             522      state is prima facie evidence that the employer carries compensation insurance.
             523          Section 21. Section 49-11-621 is enacted to read:



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Senate Committee Amendments 2-21-2003 rd/dsl
             524
         49-11-621. Withdrawal of independent corporations.
             525          (1) Notwithstanding any other provision of this title, an independent corporation, as
             526      defined in Section 63E-1-102 , which participates in a system or plan prior to S [ January ] JULY s 1,
             526a      2003,
             527      may withdraw from participation with that system or plan as follows:
             528          (a) the independent corporation shall comply with the provisions of Title 63E, Chapter
             529      2, Independent Corporations Act;
             530          (b) upon complying with the requirements of Title 63E, Chapter 2, Independent
             531      Corporations Act, the independent corporation and the board shall agree upon a date on which
             532      the independent entity shall make an election under Subsection (2);
             533          (c) an employee hired after the date set under Subsection (1)(b) may not participate in a
             534      system or plan; and
             535          (d) the withdrawing independent corporation shall pay to the office any actuarial or
             536      administrative cost, determined by the office, to have arisen out of the withdrawal.
             537          (2) The independent corporation shall elect to:
             538          (a) continue its participation for all current employees covered by a system or plan on
             539      the date set under Subsection (1)(b); or
             540          (b) withdraw from participation in all systems or plans for all employees as of the date
             541      set under Subsection (1)(b).
             542          (3) If an independent corporation elects to continue participation under Subsection
             543      (2)(a), the independent corporation and its employees shall continue to be subject to the laws
             544      and the rules governing the system or plan in which the employee participates, including the
             545      accrual of service credit and payment of contributions.
             546          (4) The independent corporation may create an alternative retirement program for its
             547      employees not covered by a system or plan in accordance with its election under Subsection
             548      (2).
             549          Section 22. Section 51-7-2 is amended to read:
             550           51-7-2. Exemptions from chapter.
             551          The following funds are exempt from this chapter:
             552          (1) funds invested in accordance with the participating employees' designation or
             553      direction pursuant to a public employees' deferred compensation plan established and operated
             554      in compliance with Section 457 of the Internal Revenue Code of 1954, as amended;




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             555
         [(2) funds of the Workers' Compensation Fund;]
             556          [(3)] (2) funds of the Utah State Retirement Board;
             557          [(4)] (3) funds of the Utah Technology Finance Corporation; and
             558          [(5)] (4) funds of the Utah Housing Corporation.
             559          Section 23. Section 51-7-4 is amended to read:
             560           51-7-4. Transfer of functions, powers, and duties relating to public funds to state
             561      treasurer -- Exceptions -- Deposit of income from investment of state money.
             562          (1) Unless otherwise required by the Utah Constitution or applicable federal law, the
             563      functions, powers, and duties vested by law in each and every state officer, board, commission,
             564      institution, department, division, agency, and other similar instrumentalities relating to the
             565      deposit, investment, or reinvestment of public funds, and the purchase, sale, or exchange of any
             566      investments or securities of or for any funds or accounts under the control and management of
             567      these instrumentalities, are transferred to and shall be exercised by the state treasurer, except:
             568          (a) funds assigned to the Utah State Retirement Board for investment under Section
             569      49-11-302 ;
             570          (b) funds of member institutions of the state system of higher education:
             571          (i) acquired by gift, devise, or bequest, or by federal or private contract or grant;
             572          (ii) derived from student fees or from income from operations of auxiliary enterprises,
             573      which fees and income are pledged or otherwise dedicated to the payment of interest and
             574      principal of bonds issued by such institutions; and
             575          (iii) any other funds which are not included in the institution's work program as
             576      approved by the State Board of Regents;
             577          (c) funds of the Utah Technology Finance Corporation;
             578          (d) inmate funds as provided in Section 64-13-23 or in Title 64, Chapter 9b, Work
             579      Programs for Prisoners;
             580          (e) trust funds established by judicial order; and
             581          [(f) funds of the Workers' Compensation Fund; and]
             582          [(g)] (f) funds of the Utah Housing Corporation.
             583          (2) All public funds held or administered by the state or any of its boards,
             584      commissions, institutions, departments, divisions, agencies, or similar instrumentalities and not
             585      transferred to the state treasurer as provided by this section shall be:



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             586
         (a) deposited and invested by the custodian in accordance with this chapter, unless
             587      otherwise required by statute or by applicable federal law; and
             588          (b) reported to the state treasurer in a form prescribed by the state treasurer.
             589          (3) Unless otherwise provided by the constitution or laws of this state or by contractual
             590      obligation, the income derived from the investment of state money by the state treasurer shall
             591      be deposited in and become part of the General Fund.
             592          Section 24. Section 59-9-101 is amended to read:
             593           59-9-101. Tax basis -- Rates -- Exemptions.
             594          (1) (a) Except for annuity considerations, insurance premiums paid by institutions
             595      within the state system of higher education as specified in Section 53B-1-102 , and ocean
             596      marine insurance, every admitted insurer shall pay to the commission on or before March 31 in
             597      each year, a tax of 2-1/4% of the total premiums received by it during the preceding calendar
             598      year from insurance covering property or risks located in this state.
             599          (b) This Subsection (1) does not apply to:
             600          (i) workers' compensation insurance, assessed under Subsection (2); and
             601          (ii) title insurance premiums taxed under Subsection (3).
             602          (c) The taxable premium under this Subsection (1) shall be reduced by:
             603          (i) all premiums returned or credited to policyholders on direct business subject to tax
             604      in this state;
             605          (ii) all premiums received for reinsurance of property or risks located in this state; and
             606          (iii) the dividends, including premium reduction benefits maturing within the year, paid
             607      or credited to policyholders in this state or applied in abatement or reduction of premiums due
             608      during the preceding calendar year.
             609          (2) (a) Every admitted insurer writing workers' compensation insurance in this state,
             610      [including the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers'
             611      Compensation Fund,] shall pay to the tax commission, on or before March 31 in each year, a
             612      premium assessment of between 1% and 8% of the total workers' compensation premium
             613      income received by the insurer from workers' compensation insurance in this state during the
             614      preceding calendar year.
             615          (b) Total workers' compensation premium income means the net written premium as
             616      calculated before any premium reduction for any insured employer's deductible, retention, or



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             617
     reimbursement amounts and also those amounts equivalent to premiums as provided in Section
             618      34A-2-202 .
             619          (c) The percentage of premium assessment applicable for a calendar year shall be
             620      determined by the Labor Commission under Subsection (2)(d). The total premium income
             621      shall be reduced in the same manner as provided in Subsections (1)(c)(i) and (1)(c)(ii), but not
             622      as provided in Subsection (1)(c)(iii). The tax commission shall promptly remit from the
             623      premium assessment collected under this Subsection (2):
             624          (i) an amount of up to 7.25% of the premium income to the state treasurer for credit to
             625      the Employers' Reinsurance Fund created under Subsection 34A-2-702 (1);
             626          (ii) an amount equal to 0.25% of the premium income to the state treasurer for credit to
             627      the restricted account in the General Fund, created by Section 34A-2-701 ; and
             628          (iii) an amount of up to 0.50% and any remaining assessed percentage of the premium
             629      income to the state treasurer for credit to the Uninsured Employers' Fund created under Section
             630      34A-2-704 .
             631          (d) (i) The Labor Commission shall determine the amount of the premium assessment
             632      for each year on or before each October 15 of the preceding year. The Labor Commission shall
             633      make this determination following a public hearing. The determination shall be based upon the
             634      recommendations of a qualified actuary.
             635          (ii) The actuary shall recommend a premium assessment rate sufficient to provide
             636      payments of benefits and expenses from the Employers' Reinsurance Fund and to project a
             637      funded condition with assets greater than liabilities by no later than June 30, 2025.
             638          (iii) The actuary shall recommend a premium assessment rate sufficient to provide
             639      payments of benefits and expenses from the Uninsured Employers' Fund and to maintain it at a
             640      funded condition with assets equal to or greater than liabilities.
             641          (iv) At the end of each fiscal year the minimum approximate assets in the Employers'
             642      Reinsurance Fund shall be $5,000,000 which amount shall be adjusted each year beginning in
             643      1990 by multiplying by the ratio that the total workers' compensation premium income for the
             644      preceding calendar year bears to the total workers' compensation premium income for the
             645      calendar year 1988.
             646          (v) The requirements of Subsection (2)(d)(iv) cease when the future annual
             647      disbursements from the Employers' Reinsurance Fund are projected to be less than the



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             648
     calculations of the corresponding future minimum required assets. The Labor Commission
             649      shall, after a public hearing, determine if the future annual disbursements are less than the
             650      corresponding future minimum required assets from projections provided by the actuary.
             651          (vi) At the end of each fiscal year the minimum approximate assets in the Uninsured
             652      Employers' Fund shall be $2,000,000, which amount shall be adjusted each year beginning in
             653      1990 by multiplying by the ratio that the total workers' compensation premium income for the
             654      preceding calendar year bears to the total workers' compensation premium income for the
             655      calendar year 1988.
             656          (e) A premium assessment that is to be transferred into the General Fund may be
             657      collected on premiums received from Utah public agencies.
             658          (3) Every admitted insurer writing title insurance in this state shall pay to the
             659      commission, on or before March 31 in each year, a tax of .45% of the total premium received
             660      by either the insurer or by its agents during the preceding calendar year from title insurance
             661      concerning property located in this state. In calculating this tax, "premium" includes the
             662      charges made to an insured under or to an applicant for a policy or contract of title insurance
             663      for:
             664          (a) the assumption by the title insurer of the risks assumed by the issuance of the policy
             665      or contract of title insurance; and
             666          (b) abstracting title, title searching, examining title, or determining the insurability of
             667      title, and every other activity, exclusive of escrow, settlement, or closing charges, whether
             668      denominated premium or otherwise, made by a title insurer, an agent of a title insurer, a title
             669      insurance agent, or any of them.
             670          (4) Beginning July 1, 1986, former county mutuals and former mutual benefit
             671      associations shall pay the premium tax or assessment due under this chapter. All premiums
             672      received after July 1, 1986, shall be considered in determining the tax or assessment.
             673          (5) The following insurers are not subject to the premium tax on health care insurance
             674      that would otherwise be applicable under Subsection (1):
             675          (a) insurers licensed under Title 31A, Chapter 5, Domestic Stock and Mutual Insurance
             676      Corporations;
             677          (b) insurers licensed under Title 31A, Chapter 7, Nonprofit Health Service Insurance
             678      Corporations;



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             679
         (c) insurers licensed under Title 31A, Chapter 8, Health Maintenance Organizations
             680      and Limited Health Plans;
             681          (d) insurers licensed under Title 31A, Chapter 9, Insurance Fraternals;
             682          (e) insurers licensed under Title 31A, Chapter 11, Motor Clubs;
             683          (f) insurers licensed under Title 31A, Chapter 13, Employee Welfare Funds and Plans;
             684      and
             685          (g) insurers licensed under Title 31A, Chapter 14, Foreign Insurers.
             686          (6) An insurer issuing multiple policies to an insured may not artificially allocate the
             687      premiums among the policies for purposes of reducing the aggregate premium tax or
             688      assessment applicable to the policies.
             689          (7) The retaliatory provisions of Title 31A, Chapter 3, Department Funding, Fees, and
             690      Taxes, apply to the tax or assessment imposed under this chapter.
             691          Section 25. Section 59-9-101.3 is amended to read:
             692           59-9-101.3. Employers' Reinsurance Fund special assessment.
             693          (1) For purposes of this section:
             694          (a) "Calendar year" means a time period beginning January 1 and ending December 31
             695      during which an assessment is imposed.
             696          (b) "Public agency insurance mutual" is as defined in Section 31A-1-103 .
             697          (c) "Total workers' compensation premium income" has the same meaning as under
             698      Subsection 59-9-101 (2).
             699          (d) "Self-insured employer" is as defined in Section 34A-2-201.5 .
             700          (2) (a) For calendar years beginning on January 1, 2002, through December 31, 2004,
             701      the following shall pay to the commission, on or before March 31 of each year, an assessment
             702      imposed by the Labor Commission under Subsection (3):
             703          (i) an admitted insurer writing workers' compensation insurance in this state[, including
             704      the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers'
             705      Compensation Fund];
             706          (ii) a public agency insurance mutual that is authorized under Sections 34A-2-201 and
             707      34A-2-201.5 to pay workers' compensation direct; and
             708          (iii) an employer authorized under Sections 34A-2-201 and 34A-2-201.5 to pay
             709      workers' compensation direct.



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             710
         (b) The assessment imposed under Subsection (3) shall be in addition to:
             711          (i) the premium assessment imposed under Subsection 59-9-101 (2); and
             712          (ii) the assessment imposed under Section 34A-2-202 .
             713          (3) (a) If the conditions described in Subsection (3)(b) are met, the Labor Commission
             714      may impose an assessment in accordance with Subsections (3)(c) and (d) of up to 2% of:
             715          (i) the total workers' compensation premium income received by the insurer from
             716      workers' compensation insurance in this state during the preceding calendar year; or
             717          (ii) if authorized under Sections 34A-2-201 and 34A-2-201.5 to pay workers'
             718      compensation direct, the amount calculated under Section 34A-2-202 for a self-insured
             719      employer that is equivalent to the total workers' compensation premium income.
             720          (b) The Labor Commission may impose the assessment described in Subsection (3)(a)
             721      if:
             722          (i) the Labor Commission determines that:
             723          (A) all admitted insurers writing workers' compensation insurance in this state shall
             724      pay the maximum 7.25% of the premium income under Subsection 59-9-101 (2)(c)(i); and
             725          (B) all self-insured employers shall pay the maximum 7.25% assessment under Section
             726      34A-2-202 ; and
             727          (ii) the maximum 7.25% of the premium income is insufficient to:
             728          (A) provide payment of benefits and expenses from the Employers' Reinsurance Fund
             729      to project a funded condition of the Employers' Reinsurance Fund with assets greater than
             730      liabilities by no later than June 30, 2025; or
             731          (B) maintain the minimum approximate assets required in Subsection
             732      59-9-101 (2)(d)(iv).
             733          (c) On or before each October 15 of the preceding year and following a public hearing,
             734      the Labor Commission shall determine:
             735          (i) whether an assessment will be imposed under this section for a calendar year; and
             736          (ii) if the assessment will be imposed, the percentage of the assessment applicable for
             737      the calendar year.
             738          (d) The Labor Commission shall:
             739          (i) base its determination on the recommendations of the qualified actuary required in
             740      Subsection 59-9-101 (2)(d)(i); and



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             741
         (ii) take into consideration the recommended premium assessment rate recommended
             742      by the actuary under Subsection 59-9-101 (2)(d)(ii).
             743          (4) An employer shall aggregate all assessments imposed under this section and
             744      Section 34A-2-202 or 59-9-101 to determine whether the total assessment obligation shall be
             745      paid in quarterly installments in accordance with Sections 34A-2-202 and 59-9-104 .
             746          (5) The commission shall promptly remit the assessment collected under Subsection
             747      (2) to the state treasurer for credit to the Employers' Reinsurance Fund created under Section
             748      34A-2-702 .
             749          Section 26. Section 63-5b-102 is amended to read:
             750           63-5b-102. Definitions.
             751          (1) (a) "Absent" means:
             752          (i) not physically present or not able to be communicated with for 48 hours; or
             753          (ii) for local government officers, as defined by local ordinances.
             754          (b) "Absent" does not include a person who can be communicated with via telephone,
             755      radio, or telecommunications.
             756          (2) "Attack" means a nuclear, conventional, biological, or chemical warfare action
             757      against the United States of America or this state.
             758          (3) "Department" means the Department of Administrative Services, the Department of
             759      Agriculture and Food, the Alcoholic Beverage Control Commission, the Department of
             760      Commerce, the Department of Community and Economic Development, the Department of
             761      Corrections, the Department of Environmental Quality, the Department of Financial
             762      Institutions, the Department of Health, the Department of Human Resource Management, the
             763      Department of Workforce Services, the Labor Commission, the National Guard, the
             764      Department of Insurance, the Department of Natural Resources, the Department of Public
             765      Safety, the Public Service Commission, the Department of Human Services, the State Tax
             766      Commission, the Department of Transportation, any other major administrative subdivisions of
             767      state government, the State Board of Education, the State Board of Regents, the Utah Housing
             768      Corporation, the Utah Technology Finance Corporation, [the Workers' Compensation Fund,]
             769      the State Retirement Board, and each institution of higher education within the system of
             770      higher education.
             771          (4) "Disaster" means a situation causing, or threatening to cause, widespread damage,



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             772
     social disruption, or injury or loss of life or property resulting from attack, internal disturbance,
             773      natural phenomenon, or technological hazard.
             774          (5) "Division" means the Division of Emergency Services and Homeland Security
             775      established in Title 53, Chapter 2, Emergency [Services and Homeland Security Act]
             776      Management.
             777          (6) "Emergency interim successor" means a person designated by this chapter to
             778      exercise the powers and discharge the duties of an office when the person legally exercising the
             779      powers and duties of the office is unavailable.
             780          (7) "Executive director" means the person with ultimate responsibility for managing
             781      and overseeing the operations of each department, however denominated.
             782          (8) "Internal disturbance" means a riot, prison break, disruptive terrorism, or strike.
             783          (9) "Natural phenomenon" means any earthquake, tornado, storm, flood, landslide,
             784      avalanche, forest or range fire, drought, epidemic, or other catastrophic event.
             785          (10) (a) "Office" includes all state and local offices, the powers and duties of which are
             786      defined by constitution, statutes, charters, optional plans, ordinances, articles, or by-laws.
             787          (b) "Office" does not include the office of governor or the legislative or judicial offices.
             788          (11) "Place of governance" means the physical location where the powers of an office
             789      are being exercised.
             790          (12) "Political subdivision" includes counties, cities, towns, townships, districts,
             791      authorities, and other public corporations and entities whether organized and existing under
             792      charter or general law.
             793          (13) "Political subdivision officer" means a person holding an office in a political
             794      subdivision.
             795          (14) "State officer" means the attorney general, the state treasurer, the state auditor, and
             796      the executive director of each department.
             797          (15) "Technological hazard" means any hazardous materials accident, mine accident,
             798      train derailment, air crash, radiation incident, pollution, structural fire, or explosion.
             799          (16) "Unavailable" means:
             800          (a) absent from the place of governance during a disaster that seriously disrupts normal
             801      governmental operations, whether or not that absence or inability would give rise to a vacancy
             802      under existing constitutional or statutory provisions; or



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             803
         (b) as otherwise defined by local ordinance.
             804          Section 27. Section 63-38a-102 is amended to read:
             805           63-38a-102. Definitions.
             806          As used in this chapter:
             807          (1) (a) "Agency" means each department, commission, board, council, agency,
             808      institution, officer, corporation, fund, division, office, committee, authority, laboratory, library,
             809      unit, bureau, panel, or other administrative unit of the state.
             810          (b) "Agency" does not include the legislative branch, the board of regents, the Utah
             811      Higher Education Assistance Authority, the board of trustees of each higher education
             812      institution, each higher education institution and its associated branches, centers, divisions,
             813      institutes, foundations, hospitals, colleges, schools, or departments, a public education entity,
             814      or an independent agency.
             815          (2) (a) "Dedicated credits revenues" means revenues from collections by an agency that
             816      are deposited directly into an account for expenditure on a separate line item and program.
             817          (b) "Dedicated credits" does not mean:
             818          (i) federal revenues and the related pass through or the related state match paid by one
             819      agency to another;
             820          (ii) revenues that are not deposited in governmental funds;
             821          (iii) revenues from any contracts; and
             822          (iv) revenues received by the Attorney General's Office from billings for professional
             823      services.
             824          (3) "Fees" means revenue collected by an agency for performing a service or providing
             825      a function that the agency deposits or accounts for as dedicated credits or fixed collections.
             826          (4) (a) "Fixed collections revenues" means revenue from collections:
             827          (i) fixed by law or by the appropriation act at a specific amount; and
             828          (ii) required by law to be deposited into a separate line item and program.
             829          (b) "Fixed collections" does not mean:
             830          (i) federal revenues and the related pass through or the related state match paid by one
             831      agency to another;
             832          (ii) revenues that are not deposited in governmental funds;
             833          (iii) revenues from any contracts; and



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             834
         (iv) revenues received by the Attorney General's Office from billings for professional
             835      services.
             836          (5) (a) "Governmental fund" means funds used to account for the acquisition, use, and
             837      balances of expendable financial resources and related liabilities using a measurement focus
             838      that emphasizes the flow of financial resources.
             839          (b) "Governmental fund" does not include internal service funds, enterprise funds,
             840      capital projects funds, debt service funds, or trust and agency funds as established in Section
             841      51-5-4 .
             842          (6) "Independent agency" means the Utah State Retirement Office, the Utah Housing
             843      Corporation, and the Utah Technology Finance Corporation[, and the Workers' Compensation
             844      Fund].
             845          (7) "Program" means the function or service provided by an agency for which the
             846      agency collects fees.
             847          (8) "Revenue types" means the categories established by the Division of Finance under
             848      the authority of this chapter that classify revenue according to the purpose for which it is
             849      collected.
             850          Section 28. Section 63-55b-131 is amended to read:
             851           63-55b-131. Repeal dates, Title 31A.
             852          (1) Section 31A-22-626 is repealed July 1, 2004.
             853          (2) Section 31A-23-315 is repealed July 1, 2006.
             854          (3) Section 31A-33-109 is repealed July 1, 2011.
             855          Section 29. Section 63-95-102 is amended to read:
             856           63-95-102. Definitions.
             857          For purposes of this chapter:
             858          (1) "Asset" means property of all kind, real and personal, tangible and intangible, and
             859      includes:
             860          (a) cash, except reasonable compensation or salary for services rendered;
             861          (b) stock or other investments;
             862          (c) goodwill;
             863          (d) real property;
             864          (e) an ownership interest;



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             865
         (f) a license;
             866          (g) a cause of action; and
             867          (h) any similar property.
             868          (2) "Authorizing statutes" means the statutes creating an entity as a quasi-governmental
             869      entity.
             870          (3) "Business interest" means:
             871          (a) holding the position of trustee, director, officer, or other similar position with a
             872      business entity; or
             873          (b) the ownership, either legally or equitably, of at least 10% of the outstanding shares
             874      of a corporation or 10% interest in any other business entity, being held by:
             875          (i) an individual;
             876          (ii) the individual's spouse;
             877          (iii) a minor child of the individual; or
             878          (iv) any combination of Subsections (3)(b)(i) through (iii).
             879          (4) "Committee" means the Legislative Quasi-Governmental Entities Committee
             880      created in Section 63-95-201 .
             881          (5) "Government requestor" means:
             882          (a) the governor;
             883          (b) an executive branch officer other than the governor;
             884          (c) an executive branch agency;
             885          (d) a legislator, including a legislative sponsor of legislation creating a
             886      quasi-governmental entity; or
             887          (e) a legislative committee.
             888          (6) "Interested party" means a person that held or holds the position of trustee, director,
             889      officer, or other similar position with a quasi-governmental entity within:
             890          (a) five years prior to the date of an action described in Subsection (8); or
             891          (b) during the privatization of a quasi-governmental entity.
             892          (7) "Lobbyist" is a person that provided or provides services as a lobbyist, as defined in
             893      Section 36-11-102 , within:
             894          (a) five years prior to the date of an action described in Subsection (8); or
             895          (b) during the privatization of a quasi-governmental entity.



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             896
         (8) (a) "Privatized" means an action described in Subsection (8)(b) taken under
             897      circumstances in which the operations of the quasi-governmental entity are continued by a
             898      successor entity that:
             899          (i) is privately owned;
             900          (ii) is unaffiliated to the state; and
             901          (iii) receives any asset of the quasi-governmental entity.
             902          (b) An action referred to in Subsection (8)(a) includes:
             903          (i) the repeal of the authorizing statute of a quasi-governmental entity and the revision
             904      to state laws to terminate the relationship between the state and the quasi-governmental entity;
             905          (ii) the dissolution of the quasi-governmental entity;
             906          (iii) the merger or consolidation of the quasi-governmental entity with another entity;
             907      or
             908          (iv) the sale of all or substantially all of the assets of the quasi-governmental entity.
             909          (9) (a) "Quasi-governmental entity" means an entity that:
             910          (i) is created by the state or is given by the state the right to exist and conduct its affairs
             911      as a quasi-governmental entity:
             912          (A) to serve a public purpose; and
             913          (B) to meet a need that cannot be met through a private business; and
             914          (ii) is designated by the state as:
             915          (A) an independent state agency;
             916          (B) an independent public corporation;
             917          (C) a quasi-public corporation; or
             918          (D) a term similar to that described in Subsections (9)(a)(ii)(A) through (C).
             919          (b) "Quasi-governmental entity" includes the:
             920          (i) Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
             921          (ii) Utah Technology Finance Corporation created in Title 9, Chapter 13, Utah
             922      Technology and Small Business Finance Act;
             923          (iii) Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber
             924      Valley Historic Railroad Authority;
             925          (iv) Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
             926      Center Authority;



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             927
         (v) Utah Housing Corporation created in Title 9, Chapter 4, Part 9, Utah Housing
             928      Corporation Act;
             929          (vi) Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
             930      Corporation Act;
             931          [(vii) Workers' Compensation Fund created in Title 31A, Chapter 33, Workers'
             932      Compensation Fund;]
             933          [(viii)] (vii) Utah State Retirement Office created in Title 49, Chapter 11, Utah State
             934      Retirement Systems Administration;
             935          [(ix)] (viii) School and Institutional Trust Lands Administration created in Title 53C,
             936      Chapter 1, Part 2, School and Institutional Trust Lands Administration; and
             937          [(x)] (ix) Utah Communications Agency Network created in Title 63C, Chapter 7, Utah
             938      Communications Agency Network Act.
             939          (c) Notwithstanding Subsection (9)(a), "quasi-governmental entity" does not include:
             940          (i) the Public Service Commission of Utah created in Section 54-1-1 ;
             941          (ii) an institution within the state system of higher education;
             942          (iii) a city, county, or town;
             943          (iv) a local school district;
             944          (v) a special district created under the authority of Title 17A, Special Districts; or
             945          (vi) a local district created under the authority of Title 17B, Limited Purpose Local
             946      Government Entities.
             947          Section 30. Section 63-95-203 is amended to read:
             948           63-95-203. Exemption from committee activities.
             949          Notwithstanding the other provisions of this Part 2 and Subsection 63-95-102 (9), the
             950      [following quasi-governmental entities are] Utah Housing Corporation created in Title 9,
             951      Chapter 4, Part 9, Utah Housing Corporation Act, is exempt from the study by the committee
             952      under Section 63-95-202 [:].
             953          [(1) the Utah Housing Corporation created in Title 9, Chapter 4, Part 9, Utah Housing
             954      Corporation Act; and]
             955          [(2) the Workers' Compensation Fund created in Title 31A, Chapter 33, Workers'
             956      Compensation Fund.]
             957          Section 31. Section 63E-1-102 is amended to read:



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             958
          63E-1-102. Definitions.
             959          As used in this title:
             960          (1) "Authorizing statute" means the statute creating an entity as an independent entity.
             961          (2) "Committee" means the Legislative Independent Entities Committee created in
             962      Section 63E-1-201 .
             963          (3) "Independent corporation" means a corporation incorporated in accordance with
             964      Chapter 2, Independent Corporations Act.
             965          (4) (a) "Independent entity" means an entity having a public purpose relating to the
             966      state or its citizens that is individually created by the state or is given by the state the right to
             967      exist and conduct its affairs as an:
             968          (i) independent state agency; or
             969          (ii) independent corporation.
             970          (b) "Independent entity" includes the:
             971          (i) Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
             972          (ii) Utah Technology Finance Corporation created in Title 9, Chapter 13, Utah
             973      Technology and Small Business Finance Act;
             974          (iii) Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber
             975      Valley Historic Railroad Authority;
             976          (iv) Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
             977      Center Authority;
             978          (v) Utah Housing Corporation created in Title 9, Chapter 4, Part 9, Utah Housing
             979      Corporation Act;
             980          (vi) Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
             981      Corporation Act;
             982          [(vii) Workers' Compensation Fund created in Title 31A, Chapter 33, Workers'
             983      Compensation Fund;]
             984          [(viii)] (vii) Utah State Retirement Office created in Title 49, Chapter 11, Utah State
             985      Retirement Systems Administration;
             986          [(ix)] (viii) School and Institutional Trust Lands Administration created in Title 53C,
             987      Chapter 1, Part 2, School and Institutional Trust Lands Administration; and
             988          [(x)] (ix) Utah Communications Agency Network created in Title 63C, Chapter 7, Utah



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             989
     Communications Agency Network Act.
             990          (c) Notwithstanding this Subsection (4), "independent entity" does not include:
             991          (i) the Public Service Commission of Utah created in Section 54-1-1 ;
             992          (ii) an institution within the state system of higher education;
             993          (iii) a city, county, or town;
             994          (iv) a local school district;
             995          (v) a special district created under the authority of Title 17A, Special Districts; or
             996          (vi) a local district created under the authority of Title 17B, Limited Purpose Local
             997      Government Entities.
             998          (5) "Independent state agency" means an entity that is created by the state, but is
             999      independent of the governor's direct supervisory control.
             1000          (6) "Monies held in trust" means monies maintained for the benefit of:
             1001          (a) one or more private individuals, including public employees;
             1002          (b) one or more public or private entities; or
             1003          (c) the owners of a quasi-public corporation.
             1004          (7) "Public corporation" means an artificial person, public in ownership, individually
             1005      created by the state as a body politic and corporate for the administration of a public purpose
             1006      relating to the state or its citizens.
             1007          (8) "Quasi-public corporation" means an artificial person, private in ownership,
             1008      individually created as a corporation by the state which has accepted from the state the grant of
             1009      a franchise or contract involving the performance of a public purpose relating to the state or its
             1010      citizens.
             1011          Section 32. Section 63E-1-203 is amended to read:
             1012           63E-1-203. Exemption from committee activities.
             1013          Notwithstanding the other provisions of this Part 2 and Subsection 63E-1-102 (4), the
             1014      [following independent entities are] Utah Housing Corporation created in Title 9, Chapter 4,
             1015      Part 9, Utah Housing Corporation Act, is exempt from the study by the committee under
             1016      Section 63E-1-202 [:].
             1017          [(1) the Utah Housing Corporation created in Title 9, Chapter 4, Part 9, Utah Housing
             1018      Corporation Act; and]
             1019          [(2) the Workers' Compensation Fund created in Title 31A, Chapter 33, Workers'



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             1020
     Compensation Fund.]
             1021          Section 33. Section 67-4-2 is amended to read:
             1022           67-4-2. Definitions.
             1023          As used in this chapter:
             1024          (1) "Federal funds" means cash received from the United States government or from
             1025      other individuals or entities for or on behalf of the United States and deposited with the state
             1026      treasurer or any agency of the state.
             1027          (2) "General Fund" means monies received into the treasury and not specially
             1028      appropriated to any other fund.
             1029          (3) "Maintain custody" means to direct the safekeeping and investment of state funds.
             1030          (4) (a) "State entity" means each department, commission, board, council, agency,
             1031      institution, officer, corporation, fund, division, office, committee, authority, laboratory, library,
             1032      unit, bureau, panel, or other administrative unit of the state.
             1033          (b) "State entity" includes independent state agencies and public corporations.
             1034          (5) (a) "State funds" means funds that are owned, held, or administered by a state
             1035      entity, regardless of the source of the funds.
             1036          (b) "State funds" includes funds of independent state agencies or public corporations,
             1037      regardless of the source of funds.
             1038          (c) "State funds" does not include funds held by the Utah State Retirement Board [or
             1039      the Workers' Compensation Fund].
             1040          (6) "Warrant" means an order in a specific amount drawn upon the treasurer by the
             1041      Division of Finance or another state agency.
             1042          Section 34. Repealer.
             1043          This act repeals:
             1044          Section 31A-22-1001, Obligation to write workers' compensation insurance.
             1045          Section 31A-33-101, Definitions.
             1046          Section 31A-33-102, Establishment of the Workers' Compensation Fund and the
             1047      Injury Fund.
             1048          Section 31A-33-103, Legal nature of Workers' Compensation Fund.
             1049          Section 31A-33-103.5, Powers of Fund -- Limitations.
             1050          Section 31A-33-104, Workers' Compensation Fund exempted.



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             1051
         Section 31A-33-105, Price of insurance -- Liability of state.
             1052          Section 31A-33-106, Board of directors -- Status of the fund in relationship to the
             1053      state.
             1054          Section 31A-33-107, Duties of board -- Creation of subsidiaries -- Entering into
             1055      joint enterprises.
             1056          Section 31A-33-108, Powers and duties of chief executive officer.
             1057          Section 31A-33-110, Audits and examinations required.
             1058          Section 31A-33-111, Adoption of rates.
             1059          Section 31A-33-112, Withdrawal of policyholders.
             1060          Section 31A-33-113, Cancellation of policies.
             1061          Section 31A-33-114, Premium assessment.
             1062          Section 31A-33-115, Interest and costs of collecting delinquent premium.
             1063          Section 31A-33-116, Dividends.
             1064          Section 31A-33-117, Availability of employers' reports.
             1065          Section 35. Effective date.
             1066          If approved by two-thirds of all the members elected to each house, this act takes effect
             1067      upon approval by the governor, or the day following the constitutional time limit of Utah
             1068      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             1069      the date of veto override.





Legislative Review Note
    as of 2-14-03 1:53 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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