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S.B. 159

             1     

ASSESSMENT OFFSET FOR DONATIONS

             2     
PROMOTING OCCUPATIONAL HEALTH AND

             3     
SAFETY

             4     
2005 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Sponsor: Ed Mayne

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill provides an offset for an assessment charged a workers' compensation insurer
             11      or self-insured employers.
             12      Highlighted Provisions:
             13          This bill:
             14          .    defines terms;
             15          .    provides for an offset against an assessment charged a self-insured employer for
             16      qualified donations to an occupational health and safety center;
             17          .    provides for an offset against a premium assessment charged a workers'
             18      compensation insurer for qualified donations to an occupational health and safety
             19      center;
             20          .    provides for allocation of the offset;
             21          .    imposes requirements on an occupational health and safety center;
             22          .    imposes a sunset date; and
             23          .    makes technical changes.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          This bill has retrospective operation to January 1, 2005.



             28      Utah Code Sections Affected:
             29      AMENDS:
             30          34A-2-202, as last amended by Chapter 71, Laws of Utah 2002
             31          59-9-102, as renumbered and amended by Chapter 2, Laws of Utah 1987
             32          63-55-234, as last amended by Chapter 172, Laws of Utah 1999
             33          63-55-259, as last amended by Chapter 1, Laws of Utah 2004, Third Special Session
             34      ENACTS:
             35          34A-2-202.5, Utah Code Annotated 1953
             36          59-9-102.5, Utah Code Annotated 1953
             37     
             38      Be it enacted by the Legislature of the state of Utah:
             39          Section 1. Section 34A-2-202 is amended to read:
             40           34A-2-202. Assessment on self-insured employers including counties, cities,
             41      towns, or school districts paying compensation direct.
             42          (1) (a) (i) A self-insured employer, including a county, city, town, or school district,
             43      who by authority of the division under Sections 34A-2-201 and 34A-2-201.5 is authorized to
             44      pay compensation direct shall pay annually, on or before March 31, an assessment in
             45      accordance with this section and rules made by the commission under this section.
             46          (ii) For purposes of this section, "self-insured employer" is as defined in Section
             47      34A-2-201.5 .
             48          (b) The assessment required by Subsection (1)(a) is:
             49          (i) to be collected by the State Tax Commission [and];
             50          (ii) paid by the State Tax Commission into the state treasury as provided in Subsection
             51      59-9-101 (2)[.]; and
             52          (iii) subject to the offset provided in Section 34A-2-202.5 .
             53          (c) The assessment under Subsection (1)(a) shall be based on a total calculated
             54      premium multiplied by the premium assessment rate established pursuant to Subsection
             55      59-9-101 (2).
             56          (d) The total calculated premium, for purposes of calculating the assessment under
             57      Subsection (1)(a), shall be calculated by:
             58          (i) multiplying the total of the standard premium for each class code calculated in


             59      Subsection (1)(e) by the self-insured employer's experience modification factor; and
             60          (ii) multiplying the total under Subsection (1)(d)(i) by a safety factor determined under
             61      Subsection (1)(g).
             62          (e) A standard premium shall be calculated by:
             63          (i) multiplying the prospective loss cost for the year being considered, as filed with the
             64      insurance department pursuant to Section 31A-19a-406 , for each applicable class code by 1.10
             65      to determine the manual rate for each class code; and
             66          (ii) multiplying the manual rate for each class code under Subsection (1)(e)(i) by each
             67      $100 of the self-insured employer's covered payroll for each class code.
             68          (f) (i) Each self-insured employer paying compensation direct shall annually obtain the
             69      experience modification factor required in Subsection (1)(d)(i) by using:
             70          (A) the rate service organization designated by the insurance commissioner in Section
             71      31A-19a-404 ; or
             72          (B) for a self-insured employer that is a public agency insurance mutual, an actuary
             73      approved by the commission.
             74          (ii) If a self-insured employer's experience modification factor under Subsection
             75      (1)(f)(i) is less than 0.50, the self-insured employer shall use an experience modification factor
             76      of 0.50 in determining the total calculated premium.
             77          (g) To provide incentive for improved safety, the safety factor required in Subsection
             78      (1)(d)(ii) shall be determined based on the self-insured employer's experience modification
             79      factor as follows:
             80                  EXPERIENCE
             81              MODIFICATION FACTOR            SAFETY FACTOR
             82          Less than or equal to 0.90                    0.56
             83          Greater than 0.90 but less than or equal to 1.00        0.78
             84          Greater than 1.00 but less than or equal to 1.10        1.00
             85          Greater than 1.10 but less than or equal to 1.20        1.22
             86          Greater than 1.20                        1.44
             87          (h) (i) A premium or premium assessment modification other than a premium or
             88      premium assessment modification under this section may not be allowed.
             89          (ii) If a self-insured employer paying compensation direct fails to obtain an experience


             90      modification factor as required in Subsection (1)(f)(i) within the reasonable time period
             91      established by rule by the State Tax Commission, the State Tax Commission shall use an
             92      experience modification factor of 2.00 and a safety factor of 2.00 to calculate the total
             93      calculated premium for purposes of determining the assessment.
             94          (iii) Prior to calculating the total calculated premium under Subsection (1)(h)(ii), the
             95      State Tax Commission shall provide the self-insured employer with written notice that failure
             96      to obtain an experience modification factor within a reasonable time period, as established by
             97      rule by the State Tax Commission:
             98          (A) shall result in the State Tax Commission using an experience modification factor
             99      of 2.00 and a safety factor of 2.00 in calculating the total calculated premium for purposes of
             100      determining the assessment; and
             101          (B) may result in the division revoking the self-insured employer's right to pay
             102      compensation direct.
             103          (i) The division may immediately revoke a self-insured employer's certificate issued
             104      under Sections 34A-2-201 and 34A-2-201.5 that permits the self-insured employer to pay
             105      compensation direct if the State Tax Commission assigns an experience modification factor
             106      and a safety factor under Subsection (1)(h) because the self-insured employer failed to obtain
             107      an experience modification factor.
             108          (2) Notwithstanding the annual payment requirement in Subsection (1)(a), a
             109      self-insured employer whose total assessment obligation under Subsection (1)(a) for the
             110      preceding year was $10,000 or more shall pay the assessment in quarterly installments in the
             111      same manner provided in Section 59-9-104 and subject to the same penalty provided in Section
             112      59-9-104 for not paying or underpaying an installment.
             113          (3) (a) The State Tax Commission shall have access to all the records of the division
             114      for the purpose of auditing and collecting any amounts described in this section.
             115          (b) Time periods for the State Tax Commission to allow a refund or make an
             116      assessment shall be determined in accordance with Section 59-9-106 .
             117          (4) (a) A review of appropriate use of job class assignment and calculation
             118      methodology may be conducted as directed by the division at any reasonable time as a
             119      condition of the self-insured employer's certification of paying compensation direct.
             120          (b) The State Tax Commission shall make any records necessary for the review


             121      available to the commission.
             122          (c) The commission shall make the results of any review available to the State Tax
             123      Commission.
             124          Section 2. Section 34A-2-202.5 is enacted to read:
             125          34A-2-202.5. Offset for occupational health and safety related donations.
             126          (1) As used in this section:
             127          (a) "Occupational health and safety center" means an entity:
             128          (i) affiliated with an institution within the state system of higher education as defined
             129      in Section 53B-1-102 ; and
             130          (ii) designated as an education and research center by the National Institute for
             131      Occupational Safety and Health.
             132          (b) "Qualified donation" means a donation that is:
             133          (i) cash;
             134          (ii) given directly to an occupational health and safety center; and
             135          (iii) given exclusively for the purpose of:
             136          (A) supporting graduate level education and training in fields of:
             137          (I) safety and ergonomics;
             138          (II) industrial hygiene;
             139          (III) occupational health nursing; and
             140          (IV) occupational medicine;
             141          (B) providing continuing education programs for employers designed to promote
             142      workplace safety; and
             143          (C) paying reasonable administrative, personnel, equipment, and overhead costs of the
             144      occupational health and safety center.
             145          (c) "Self-insured employer" is a self-insured employer as defined in Section
             146      34A-2-201.5 that is required to pay the assessment imposed under Section 34A-2-202 .
             147          (2) (a) A self-insured employer may offset against the assessment imposed under
             148      Section 34A-2-202 an amount equal to the lesser of:
             149          (i) the total of qualified donations made by the self-insured employer in the calendar
             150      year for which the assessment is calculated; and
             151          (ii) .10% of the self-insured employer's total calculated premium calculated under


             152      Subsection 34A-2-202 (1)(d) for the calendar year for which the assessment is calculated.
             153          (b) The offset provided under this Subsection (2) shall be allocated to the restricted
             154      account and funds described in Subsection 59-9-101 (2)(c) in proportion to the rates provided in
             155      Subsection 59-9-101 (2)(c).
             156          (3) An occupational health and safety center shall:
             157          (a) provide a self-insured employer a receipt for any qualified donation made by the
             158      self-insured employer to the occupational health and safety center;
             159          (b) expend monies received by a qualified donation:
             160          (i) for the purposes described in Subsection (1)(b)(iii); and
             161          (ii) in a manner that can be audited to ensure that the monies are expended for the
             162      purposes described in Subsection (1)(b)(iii); and
             163          (c) in conjunction with the report required by Section 59-9-102.5 , report to the
             164      Legislature through the Office of the Legislative Fiscal Analyst by no later than July 1 of each
             165      year:
             166          (i) the qualified donations received by the occupational health and safety center in the
             167      previous calendar year; and
             168          (ii) the expenditures during the previous calendar year of qualified donations received
             169      by the occupational health and safety center.
             170          Section 3. Section 59-9-102 is amended to read:
             171           59-9-102. Offsets.
             172          (1) If any authorized insurer doing business in this state during the tax year pays a
             173      property tax in this state, the insurer may deduct from the tax provided under this chapter that
             174      portion of the property tax paid for general state purposes.
             175          (2) Any domestic insurance company paying a fee for examination under Section
             176      31A-2-205 may deduct from the tax provided under this chapter the amount of the examination
             177      fee paid, subject to the limitations of Subsection 31A-2-203 (2)(d).
             178          (3) There is offset against the taxes imposed under Section 59-9-101 the amount of any
             179      assessments paid by an insurance company under the guaranty associations established under
             180      Title 31A, Chapter 28, in the manner provided by Sections 31A-28-113 and 31A-28-212 .
             181          (4) There is an offset provided in Section 59-9-102.5 against the premium assessment
             182      imposed under Subsection 59-9-101 (2) against an admitted insurer writing workers'


             183      compensation insurance in this state.
             184          [(4)] (5) The state has no liability to insurers for any amount by which offsets allowed
             185      under this section exceed the insurer's premium tax liability.
             186          Section 4. Section 59-9-102.5 is enacted to read:
             187          59-9-102.5. Offset for occupational health and safety related donations.
             188          (1) As used in this section:
             189          (a) "Occupational health and safety center" means an entity:
             190          (i) affiliated with an institution within the state system of higher education as defined
             191      in Section 53B-1-102 ; and
             192          (ii) designated as an education and research center by the National Institute for
             193      Occupational Safety and Health.
             194          (b) "Qualified donation" means a donation that is:
             195          (i) cash;
             196          (ii) given directly to an occupational health and safety center; and
             197          (iii) given exclusively for the purpose of:
             198          (A) supporting graduate level education and training in fields of:
             199          (I) safety and ergonomics;
             200          (II) industrial hygiene;
             201          (III) occupational health nursing; and
             202          (IV) occupational medicine;
             203          (B) providing continuing education programs for employers designed to promote
             204      workplace safety; and
             205          (C) paying reasonable administrative, personnel, equipment, and overhead costs of the
             206      occupational health and safety center.
             207          (c) "Workers' compensation insurer" means an admitted insurer writing workers'
             208      compensation insurance in this state that is required to pay the premium assessment imposed
             209      under Subsection 59-9-101 (2).
             210          (2) (a) A workers' compensation insurer may offset against the premium assessment
             211      imposed under Subsection 59-9-101 (2) an amount equal to the lesser of:
             212          (i) the total of qualified donations made by the workers' compensation insurer in the
             213      calender year for which the premium assessment is calculated; and


             214          (ii) .10% of the workers' compensation insurer's total workers' compensation premium
             215      income as defined in Subsection 59-9-101 (2)(b) in the calendar year for which the premium
             216      assessment is calculated.
             217          (b) The offset provided under this Subsection (2) shall be allocated to the restricted
             218      account and funds described in Subsection 59-9-101 (2)(c) in proportion to the rates provided in
             219      Subsection 59-9-101 (2)(c).
             220          (3) An occupational health and safety center shall:
             221          (a) provide a workers' compensation insurer a receipt for any qualified donation made
             222      by the workers' compensation insurer to the occupational health and safety center;
             223          (b) expend monies received by a qualified donation:
             224          (i) for the purposes described in Subsection (1)(b)(iii); and
             225          (ii) in a manner that can be audited to ensure that the monies are expended for the
             226      purposes described in Subsection (1)(b)(iii); and
             227          (c) in conjunction with the report required by Section 34A-2-202.5 , report to the
             228      Legislature through the Office of the Legislative Fiscal Analyst by no later than July 1 of each
             229      year:
             230          (i) the qualified donations received by the occupational health and safety center in the
             231      previous calendar year; and
             232          (ii) the expenditures during the previous calendar year of qualified donations received
             233      by the occupational health and safety center.
             234          Section 5. Section 63-55-234 is amended to read:
             235           63-55-234. Repeal dates, Title 34A.
             236          (1) Section 34A-2-202.5 is repealed December 31, 2010.
             237          (2) Title 34A, Chapter 8, Utah Injured Worker Reemployment Act, is repealed July 1,
             238      2009.
             239          Section 6. Section 63-55-259 is amended to read:
             240           63-55-259. Repeal dates, Title 59.
             241          (1) Title 59, Chapter 1, Part 12, Legislative Intent, is repealed July 1, 2005.
             242          (2) Section 59-9-102.5 is repealed December 31, 2010.
             243          [(2)] (3) Section 59-10-530.5 , Homeless Trust Account, is repealed July 1, 2007.
             244          Section 7. Retrospective operation.


             245          This bill has retrospective operation to January 1, 2005.




Legislative Review Note
    as of 1-27-05 12:22 PM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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