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