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[Introduced][Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 191 Enrolled

             1     

WORKERS' COMPENSATION COVERAGE WAIVERS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Karen Mayne

             5     
House Sponsor: Todd E. Kiser

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Workers' Compensation Act to address the issuance of workers'
             10      compensation coverage waivers.
             11      Highlighted Provisions:
             12          This bill:
             13          .    repeals the authorization for insurers to issue workers' compensation waivers;
             14          .    enacts the Workers' Compensation Coverage Waivers Act, including:
             15              .    defining terms;
             16              .    providing for the issuance of waivers;
             17              .    requiring information to be submitted to obtain a waiver; and
             18              .    providing for enforcement; and
             19          .    makes technical and conforming amendments.
             20      Money Appropriated in this Bill:
             21          This bill appropriates:
             22          .    to Labor Commission as a combination of one-time or ongoing money from two
             23      different fiscal years:
             24              .    from General Fund Restricted - Industrial Accident Restricted Account,
             25      $100,000.
             26      Other Special Clauses:
             27          This bill provides an effective date.
             28      Utah Code Sections Affected:
             29      AMENDS:


             30          34A-2-103, as last amended by Laws of Utah 2008, Chapters 250, 263, and 318
             31          34A-2-104, as last amended by Laws of Utah 2010, Chapter 379
             32          34A-2-110, as last amended by Laws of Utah 2008, Chapter 263
             33          34A-2-705, as enacted by Laws of Utah 2009, Chapter 85
             34      ENACTS:
             35          34A-2-1001, Utah Code Annotated 1953
             36          34A-2-1002, Utah Code Annotated 1953
             37          34A-2-1003, Utah Code Annotated 1953
             38          34A-2-1004, Utah Code Annotated 1953
             39          34A-2-1005, Utah Code Annotated 1953
             40      REPEALS:
             41          31A-22-1011, as enacted by Laws of Utah 2008, Chapter 263
             42     
             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 34A-2-103 is amended to read:
             45           34A-2-103. Employers enumerated and defined -- Regularly employed --
             46      Statutory employers.
             47          (1) (a) The state, and each county, city, town, and school district in the state are
             48      considered employers under this chapter and Chapter 3, Utah Occupational Disease Act.
             49          (b) For the purposes of the exclusive remedy in this chapter and Chapter 3, Utah
             50      Occupational Disease Act prescribed in Sections 34A-2-105 and 34A-3-102 , the state is
             51      considered to be a single employer and includes any office, department, agency, authority,
             52      commission, board, institution, hospital, college, university, or other instrumentality of the
             53      state.
             54          (2) (a) Except as provided in Subsection (4), each person, including each public utility
             55      and each independent contractor, who regularly employs one or more workers or operatives in
             56      the same business, or in or about the same establishment, under any contract of hire, express or
             57      implied, oral or written, is considered an employer under this chapter and Chapter 3, Utah


             58      Occupational Disease Act.
             59          (b) As used in this Subsection (2):
             60          (i) "Independent contractor" means any person engaged in the performance of any work
             61      for another who, while so engaged, is:
             62          (A) independent of the employer in all that pertains to the execution of the work;
             63          (B) not subject to the routine rule or control of the employer;
             64          (C) engaged only in the performance of a definite job or piece of work; and
             65          (D) subordinate to the employer only in effecting a result in accordance with the
             66      employer's design.
             67          (ii) "Regularly" includes all employments in the usual course of the trade, business,
             68      profession, or occupation of the employer, whether continuous throughout the year or for only a
             69      portion of the year.
             70          (3) (a) The client under a professional employer organization agreement regulated
             71      under Title 31A, Chapter 40, Professional Employer Organization Licensing Act:
             72          (i) is considered the employer of a covered employee; and
             73          (ii) subject to Section 31A-40-209 , shall secure workers' compensation benefits for a
             74      covered employee by complying with Subsection 34A-2-201 (1) or (2) and commission rules.
             75          (b) The division shall promptly inform the Insurance Department if the division has
             76      reason to believe that a professional employer organization is not in compliance with
             77      Subsection 34A-2-201 (1) or (2) and commission rules.
             78          (4) A domestic employer who does not employ one employee or more than one
             79      employee at least 40 hours per week is not considered an employer under this chapter and
             80      Chapter 3, Utah Occupational Disease Act.
             81          (5) (a) As used in this Subsection (5):
             82          (i) (A) "agricultural employer" means a person who employs agricultural labor as
             83      defined in Subsections 35A-4-206 (1) and (2) and does not include employment as provided in
             84      Subsection 35A-4-206 (3); and
             85          (B) notwithstanding Subsection (5)(a)(i)(A), only for purposes of determining who is a


             86      member of the employer's immediate family under Subsection (5)(a)(ii), if the agricultural
             87      employer is a corporation, partnership, or other business entity, "agricultural employer" means
             88      an officer, director, or partner of the business entity;
             89          (ii) "employer's immediate family" means:
             90          (A) an agricultural employer's:
             91          (I) spouse;
             92          (II) grandparent;
             93          (III) parent;
             94          (IV) sibling;
             95          (V) child;
             96          (VI) grandchild;
             97          (VII) nephew; or
             98          (VIII) niece;
             99          (B) a spouse of any person provided in Subsection (5)(a)(ii)(A)(II) through (VIII); or
             100          (C) an individual who is similar to those listed in Subsections (5)(a)(ii)(A) or (B) as
             101      defined by rules of the commission; and
             102          (iii) "nonimmediate family" means a person who is not a member of the employer's
             103      immediate family.
             104          (b) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
             105      agricultural employer is not considered an employer of a member of the employer's immediate
             106      family.
             107          (c) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
             108      agricultural employer is not considered an employer of a nonimmediate family employee if:
             109          (i) for the previous calendar year the agricultural employer's total annual payroll for all
             110      nonimmediate family employees was less than $8,000; or
             111          (ii) (A) for the previous calendar year the agricultural employer's total annual payroll
             112      for all nonimmediate family employees was equal to or greater than $8,000 but less than
             113      $50,000; and


             114          (B) the agricultural employer maintains insurance that covers job-related injuries of the
             115      employer's nonimmediate family employees in at least the following amounts:
             116          (I) $300,000 liability insurance, as defined in Section 31A-1-301 ; and
             117          (II) $5,000 for health care benefits similar to benefits under health care insurance as
             118      defined in Section 31A-1-301 .
             119          (d) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
             120      agricultural employer is considered an employer of a nonimmediate family employee if:
             121          (i) for the previous calendar year the agricultural employer's total annual payroll for all
             122      nonimmediate family employees is equal to or greater than $50,000; or
             123          (ii) (A) for the previous year the agricultural employer's total payroll for nonimmediate
             124      family employees was equal to or exceeds $8,000 but is less than $50,000; and
             125          (B) the agricultural employer fails to maintain the insurance required under Subsection
             126      (5)(c)(ii)(B).
             127          (6) An employer of agricultural laborers or domestic servants who is not considered an
             128      employer under this chapter and Chapter 3, Utah Occupational Disease Act, may come under
             129      this chapter and Chapter 3, Utah Occupational Disease Act, by complying with:
             130          (a) this chapter and Chapter 3, Utah Occupational Disease Act; and
             131          (b) the rules of the commission.
             132          (7) (a) (i) As used in this Subsection (7)(a), "employer" includes any of the following
             133      persons that procures work to be done by a contractor notwithstanding whether or not the
             134      person directly employs a person:
             135          (A) a sole proprietorship;
             136          (B) a corporation;
             137          (C) a partnership;
             138          (D) a limited liability company; or
             139          (E) a person similar to one described in Subsections (7)(a)(i)(A) through (D).
             140          (ii) If an employer procures any work to be done wholly or in part for the employer by
             141      a contractor over whose work the employer retains supervision or control, and this work is a


             142      part or process in the trade or business of the employer, the contractor, all persons employed by
             143      the contractor, all subcontractors under the contractor, and all persons employed by any of
             144      these subcontractors, are considered employees of the original employer for the purposes of
             145      this chapter and Chapter 3, Utah Occupational Disease Act.
             146          (b) Any person who is engaged in constructing, improving, repairing, or remodelling a
             147      residence that the person owns or is in the process of acquiring as the person's personal
             148      residence may not be considered an employee or employer solely by operation of Subsection
             149      (7)(a).
             150          (c) A partner in a partnership or an owner of a sole proprietorship is not considered an
             151      employee under Subsection (7)(a) if the employer who procures work to be done by the
             152      partnership or sole proprietorship obtains and relies on either:
             153          (i) a valid certification of the partnership's or sole proprietorship's compliance with
             154      Section 34A-2-201 indicating that the partnership or sole proprietorship secured the payment of
             155      workers' compensation benefits pursuant to Section 34A-2-201 ; or
             156          (ii) if a partnership or sole proprietorship with no employees other than a partner of the
             157      partnership or owner of the sole proprietorship, a workers' compensation coverage waiver
             158      issued by an insurer pursuant to [Section 31A-22-1011 ] Part 10, Workers' Compensation
             159      Coverage Waivers Act, stating that:
             160          (A) the partnership or sole proprietorship is customarily engaged in an independently
             161      established trade, occupation, profession, or business; and
             162          (B) the partner or owner personally waives the partner's or owner's entitlement to the
             163      benefits of this chapter and Chapter 3, Utah Occupational Disease Act, in the operation of the
             164      partnership or sole proprietorship.
             165          (d) A director or officer of a corporation is not considered an employee under
             166      Subsection (7)(a) if the director or officer is excluded from coverage under Subsection
             167      34A-2-104 (4).
             168          (e) A contractor or subcontractor is not an employee of the employer under Subsection
             169      (7)(a), if the employer who procures work to be done by the contractor or subcontractor obtains


             170      and relies on either:
             171          (i) a valid certification of the contractor's or subcontractor's compliance with Section
             172      34A-2-201 ; or
             173          (ii) if a partnership, corporation, or sole proprietorship with no employees other than a
             174      partner of the partnership, officer of the corporation, or owner of the sole proprietorship, a
             175      workers' compensation coverage waiver issued by an insurer pursuant to [Section
             176      31A-22-1011 ] Part 10, Workers' Compensation Coverage Waivers Act, stating that:
             177          (A) the partnership, corporation, or sole proprietorship is customarily engaged in an
             178      independently established trade, occupation, profession, or business; and
             179          (B) the partner, corporate officer, or owner personally waives the partner's, corporate
             180      officer's, or owner's entitlement to the benefits of this chapter and Chapter 3, Utah
             181      Occupational Disease Act, in the operation of the partnership's, corporation's, or sole
             182      proprietorship's enterprise under a contract of hire for services.
             183          (f) (i) For purposes of this Subsection (7)(f), "eligible employer" means a person who:
             184          (A) is an employer; and
             185          (B) procures work to be done wholly or in part for the employer by a contractor,
             186      including:
             187          (I) all persons employed by the contractor;
             188          (II) all subcontractors under the contractor; and
             189          (III) all persons employed by any of these subcontractors.
             190          (ii) Notwithstanding the other provisions in this Subsection (7), if the conditions of
             191      Subsection (7)(f)(iii) are met, an eligible employer is considered an employer for purposes of
             192      Section 34A-2-105 of the contractor, subcontractor, and all persons employed by the contractor
             193      or subcontractor described in Subsection (7)(f)(i)(B).
             194          (iii) Subsection (7)(f)(ii) applies if the eligible employer:
             195          (A) under Subsection (7)(a) is liable for and pays workers' compensation benefits as an
             196      original employer under Subsection (7)(a) because the contractor or subcontractor fails to
             197      comply with Section 34A-2-201 ;


             198          (B) (I) secures the payment of workers' compensation benefits for the contractor or
             199      subcontractor pursuant to Section 34A-2-201 ;
             200          (II) procures work to be done that is part or process of the trade or business of the
             201      eligible employer; and
             202          (III) does the following with regard to a written workplace accident and injury
             203      reduction program that meets the requirements of Subsection 34A-2-111 (3)(d):
             204          (Aa) adopts the workplace accident and injury reduction program;
             205          (Bb) posts the workplace accident and injury reduction program at the work site at
             206      which the eligible employer procures work; and
             207          (Cc) enforces the workplace accident and injury reduction program according to the
             208      terms of the workplace accident and injury reduction program; or
             209          (C) (I) obtains and relies on:
             210          (Aa) a valid certification described in Subsection (7)(c)(i) or (7)(e)(i);
             211          (Bb) a workers' compensation coverage waiver described in Subsection (7)(c)(ii) or
             212      (7)(e)(ii); or
             213          (Cc) proof that a director or officer is excluded from coverage under Subsection
             214      34A-2-104 (4);
             215          (II) is liable under Subsection (7)(a) for the payment of workers' compensation benefits
             216      if the contractor or subcontractor fails to comply with Section 34A-2-201 ;
             217          (III) procures work to be done that is part or process in the trade or business of the
             218      eligible employer; and
             219          (IV) does the following with regard to a written workplace accident and injury
             220      reduction program that meets the requirements of Subsection 34A-2-111 (3)(d):
             221          (Aa) adopts the workplace accident and injury reduction program;
             222          (Bb) posts the workplace accident and injury reduction program at the work site at
             223      which the eligible employer procures work; and
             224          (Cc) enforces the workplace accident and injury reduction program according to the
             225      terms of the workplace accident and injury reduction program.


             226          Section 2. Section 34A-2-104 is amended to read:
             227           34A-2-104. "Employee," "worker," and "operative" defined -- Specific
             228      circumstances -- Exemptions.
             229          (1) As used in this chapter and Chapter 3, Utah Occupational Disease Act, "employee,"
             230      "worker," and "operative" mean:
             231          (a) (i) an elective or appointive officer and any other person:
             232          (A) in the service of:
             233          (I) the state;
             234          (II) a county, city, or town within the state; or
             235          (III) a school district within the state;
             236          (B) serving the state, or any county, city, town, or school district under:
             237          (I) an election;
             238          (II) appointment; or
             239          (III) any contract of hire, express or implied, written or oral; and
             240          (ii) including:
             241          (A) an officer or employee of the state institutions of learning; and
             242          (B) a member of the National Guard while on state active duty; and
             243          (b) a person in the service of any employer, as defined in Section 34A-2-103 , who
             244      employs one or more workers or operatives regularly in the same business, or in or about the
             245      same establishment:
             246          (i) under any contract of hire:
             247          (A) express or implied; and
             248          (B) oral or written;
             249          (ii) including aliens and minors, whether legally or illegally working for hire; and
             250          (iii) not including any person whose employment:
             251          (A) is casual; and
             252          (B) not in the usual course of the trade, business, or occupation of the employee's
             253      employer.


             254          (2) (a) Unless a lessee provides coverage as an employer under this chapter and
             255      Chapter 3, any lessee in mines or of mining property and each employee and sublessee of the
             256      lessee shall be:
             257          (i) covered for compensation by the lessor under this chapter and Chapter 3;
             258          (ii) subject to this chapter and Chapter 3; and
             259          (iii) entitled to the benefits of this chapter and Chapter 3, to the same extent as if the
             260      lessee, employee, or sublessee were employees of the lessor drawing the wages paid employees
             261      for substantially similar work.
             262          (b) The lessor may deduct from the proceeds of ores mined by the lessees an amount
             263      equal to the insurance premium for that type of work.
             264          (3) (a) A partnership or sole proprietorship may elect to include any partner of the
             265      partnership or owner of the sole proprietorship as an employee of the partnership or sole
             266      proprietorship under this chapter and Chapter 3.
             267          (b) If a partnership or sole proprietorship makes an election under Subsection (3)(a),
             268      the partnership or sole proprietorship shall serve written notice upon its insurance carrier
             269      naming the persons to be covered.
             270          (c) A partner of a partnership or owner of a sole proprietorship may not be considered
             271      an employee of the partner's partnership or the owner's sole proprietorship under this chapter or
             272      Chapter 3 until the notice described in Subsection (3)(b) is given.
             273          (d) For premium rate making, the insurance carrier shall assume the salary or wage of
             274      the partner or sole proprietor electing coverage under Subsection (3)(a) to be 100% of the
             275      state's average weekly wage.
             276          (4) (a) A corporation may elect not to include any director or officer of the corporation
             277      as an employee under this chapter and Chapter 3.
             278          (b) If a corporation makes an election under Subsection (4)(a), the corporation shall
             279      serve written notice upon its insurance carrier naming the persons to be excluded from
             280      coverage.
             281          (c) A director or officer of a corporation is considered an employee under this chapter


             282      and Chapter 3 until the notice described in Subsection (4)(b) is given.
             283          (5) As used in this chapter and Chapter 3, "employee," "worker," and "operative" do
             284      not include:
             285          (a) a sales agent or associate broker, as defined in Section 61-2f-102 , who performs
             286      services in that capacity for a principal broker if:
             287          (i) substantially all of the sales agent's or associate broker's income for services is from
             288      real estate commissions; and
             289          (ii) the sales agent's or associate broker's services are performed under a written
             290      contract that provides that:
             291          (A) the real estate agent is an independent contractor; and
             292          (B) the sales agent or associate broker is not to be treated as an employee for federal
             293      income tax purposes;
             294          (b) an offender performing labor under Section 64-13-16 or 64-13-19 , except as
             295      required by federal statute or regulation;
             296          (c) an individual who for an insurance producer, as defined in Section 31A-1-301 ,
             297      solicits, negotiates, places or procures insurance if:
             298          (i) substantially all of the individual's income from those services is from insurance
             299      commissions; and
             300          (ii) the services of the individual are performed under a written contract that states that
             301      the individual:
             302          (A) is an independent contractor;
             303          (B) is not to be treated as an employee for federal income tax purposes; and
             304          (C) can derive income from more than one insurance company;
             305          (d) notwithstanding Subsection 34A-2-103 (4), an individual who provides domestic
             306      work for a person if:
             307          (i) the person for whom the domestic work is being provided receives or is eligible to
             308      receive the domestic work under a state or federal program designed to pay the costs of
             309      domestic work to prevent the person from being placed in:


             310          (A) an institution; or
             311          (B) a more restrictive placement than where that person resides at the time the person
             312      receives the domestic work;
             313          (ii) the individual is paid by a person designated by the Secretary of the Treasury in
             314      accordance with Section 3504, Internal Revenue Code, as a fiduciary, agent, or other person
             315      that has the control, receipt, custody, or disposal of, or pays the wages of the individual; and
             316          (iii) the domestic work is performed under a written contract that notifies the
             317      individual that the individual is not an employee under this chapter or Chapter 3; or
             318          (e) subject to Subsections (6) and (7), an individual who:
             319          (i) (A) owns a motor vehicle; or
             320          (B) leases a motor vehicle to a motor carrier;
             321          (ii) personally operates the motor vehicle described in Subsection (5)(e)(i);
             322          (iii) operates the motor vehicle described in Subsection (5)(e)(i) under a written
             323      agreement with the motor carrier that states that the individual operates the motor vehicle as an
             324      independent contractor; and
             325          (iv) provides to the motor carrier at the time the written agreement described in
             326      Subsection (5)(e)(iii) is executed or as soon after the execution as provided by an insurer:
             327          (A) a copy of a workers' compensation coverage waiver issued pursuant to [Section
             328      31A-22-1011 ] Part 10, Workers' Compensation Coverage Waivers Act, by an insurer to the
             329      individual; and
             330          (B) proof that the individual is covered by occupational accident related insurance.
             331          (6) An individual described in Subsection (5)(d) or (e) may become an employee under
             332      this chapter and Chapter 3 if the employer of the individual complies with:
             333          (a) this chapter and Chapter 3; and
             334          (b) commission rules.
             335          (7) For purposes of Subsection (5)(e):
             336          (a) "Motor carrier" means a person engaged in the business of transporting freight,
             337      merchandise, or other property by a commercial vehicle on a highway within this state.


             338          (b) "Motor vehicle" means a self-propelled vehicle intended primarily for use and
             339      operation on the highways, including a trailer or semitrailer designed for use with another
             340      motorized vehicle.
             341          (c) "Occupational accident related insurance" means insurance that provides the
             342      following coverage for an injury sustained in the course of working under a written agreement
             343      described in Subsection (5)(e)(iii):
             344          (i) disability benefits;
             345          (ii) death benefits;
             346          (iii) medical expense benefits, which include:
             347          (A) hospital coverage;
             348          (B) surgical coverage;
             349          (C) prescription drug coverage; and
             350          (D) dental coverage.
             351          Section 3. Section 34A-2-110 is amended to read:
             352           34A-2-110. Workers' compensation insurance fraud -- Elements -- Penalties --
             353      Notice.
             354          (1) As used in this section:
             355          (a) "Corporation" has the same meaning as in Section 76-2-201 .
             356          (b) "Intentionally" has the same meaning as in Section 76-2-103 .
             357          (c) "Knowingly" has the same meaning as in Section 76-2-103 .
             358          (d) "Person" has the same meaning as in Section 76-1-601 .
             359          (e) "Recklessly" has the same meaning as in Section 76-2-103 .
             360          (f) "Thing of value" means one or more of the following obtained under this chapter or
             361      Chapter 3, Utah Occupational Disease Act:
             362          (i) workers' compensation insurance coverage;
             363          (ii) disability compensation;
             364          (iii) a medical benefit;
             365          (iv) a good;


             366          (v) a professional service;
             367          (vi) a fee for a professional service; or
             368          (vii) anything of value.
             369          (2) (a) A person is guilty of workers' compensation insurance fraud if that person
             370      intentionally, knowingly, or recklessly:
             371          (i) devises a scheme or artifice to do the following by means of a false or fraudulent
             372      pretense, representation, promise, or material omission:
             373          (A) obtain a thing of value under this chapter or Chapter 3;
             374          (B) avoid paying the premium that an insurer charges, for an employee on the basis of
             375      the underwriting criteria applicable to that employee, to obtain a thing of value under this
             376      chapter or Chapter 3; or
             377          (C) deprive an employee of a thing of value under this chapter or Chapter 3; and
             378          (ii) communicates or causes a communication with another in furtherance of the
             379      scheme or artifice.
             380          (b) A violation of this Subsection (2) includes a scheme or artifice to:
             381          (i) make or cause to be made a false written or oral statement with the intent to obtain
             382      insurance coverage as mandated by this chapter or Chapter 3 at a rate that does not reflect the
             383      risk, industry, employer, or class code actually covered by the insurance coverage;
             384          (ii) form a business, reorganize a business, or change ownership in a business with the
             385      intent to obtain insurance coverage as mandated by this chapter or Chapter 3 at a rate that does
             386      not reflect the risk, industry, employer, or class code actually covered by the insurance
             387      coverage;
             388          (iii) misclassify an employee as one of the following so as to avoid the obligation to
             389      obtain insurance coverage as mandated by this chapter or Chapter 3:
             390          (A) an independent contractor;
             391          (B) a sole proprietor;
             392          (C) an owner;
             393          (D) a partner;


             394          (E) an officer; or
             395          (F) a member in a limited liability company;
             396          (iv) use a workers' compensation coverage waiver issued under [Section 31A-22-1011 ]
             397      Part 10, Workers' Compensation Coverage Waivers Act, to deprive an employee of workers'
             398      compensation coverage under this chapter or Chapter 3; or
             399          (v) collect or make a claim for temporary disability compensation as provided in
             400      Section 34A-2-410 while working for gain.
             401          (3) (a) Workers' compensation insurance fraud under Subsection (2) is punishable in
             402      the manner prescribed in Subsection (3)(c).
             403          (b) A corporation or association is guilty of the offense of workers' compensation
             404      insurance fraud under the same conditions as those set forth in Section 76-2-204 .
             405          (c) (i) In accordance with Subsection (3)(c)(ii), the determination of the degree of an
             406      offense under Subsection (2) shall be measured by the following on the basis of which creates
             407      the greatest penalty:
             408          (A) the total value of all property, money, or other things obtained or sought to be
             409      obtained by the scheme or artifice described in Subsection (2); or
             410          (B) the number of individuals not covered under this chapter or Chapter 3 because of
             411      the scheme or artifice described in Subsection (2).
             412          (ii) A person is guilty of:
             413          (A) a class A misdemeanor:
             414          (I) if the value of the property, money, or other thing of value described in Subsection
             415      (3)(c)(i)(A) is less than $1,000; or
             416          (II) for each individual described in Subsection (3)(c)(i)(B), if the number of
             417      individuals described in Subsection (3)(c)(i)(B) is less than five;
             418          (B) a third degree felony:
             419          (I) if the value of the property, money, or other thing of value described in Subsection
             420      (3)(c)(i)(A) is equal to or greater than $1,000, but is less than $5,000; or
             421          (II) for each individual described in Subsection (3)(c)(i)(B), if the number of


             422      individuals described in Subsection (3)(c)(i)(B) is equal to or greater than five, but is less than
             423      50; and
             424          (C) a second degree felony:
             425          (I) if the value of the property, money, or other thing of value described in Subsection
             426      (3)(c)(i)(A) is equal to or greater than $5,000; or
             427          (II) for each individual described in Subsection (3)(c)(i)(B), if the number of
             428      individuals described in Subsection (3)(c)(i)(B) is equal to or greater than 50.
             429          (4) The following are not a necessary element of an offense described in Subsection
             430      (2):
             431          (a) reliance on the part of a person;
             432          (b) the intent on the part of the perpetrator of an offense described in Subsection (2) to
             433      permanently deprive a person of property, money, or anything of value; or
             434          (c) an insurer or self-insured employer giving written notice in accordance with
             435      Subsection (5) that workers' compensation insurance fraud is a crime.
             436          (5) (a) An insurer or self-insured employer who, in connection with this chapter or
             437      Chapter 3, Utah Occupational Disease Act, prints, reproduces, or furnishes a form described in
             438      Subsection (5)(b) shall cause to be printed or displayed in comparative prominence with other
             439      content on the form the statement: "Any person who knowingly presents false or fraudulent
             440      underwriting information, files or causes to be filed a false or fraudulent claim for disability
             441      compensation or medical benefits, or submits a false or fraudulent report or billing for health
             442      care fees or other professional services is guilty of a crime and may be subject to fines and
             443      confinement in state prison."
             444          (b) Subsection (5)(a) applies to a form upon which a person:
             445          (i) applies for insurance coverage;
             446          (ii) applies for a workers' compensation coverage waiver issued under [Section
             447      31A-22-1011 ] Part 10, Workers' Compensation Coverage Waivers Act;
             448          (iii) reports payroll;
             449          (iv) makes a claim by reason of accident, injury, death, disease, or other claimed loss;


             450      or
             451          (v) makes a report or gives notice to an insurer or self-insured employer.
             452          (c) An insurer or self-insured employer who issues a check, warrant, or other financial
             453      instrument in payment of compensation issued under this chapter or Chapter 3[,] shall cause to
             454      be printed or displayed in comparative prominence above the area for endorsement a statement
             455      substantially similar to the following: "Workers' compensation insurance fraud is a crime
             456      punishable by Utah law."
             457          (d) This Subsection (5) applies only to the legal obligations of an insurer or a
             458      self-insured employer.
             459          (e) A person who violates Subsection (2) is guilty of workers' compensation insurance
             460      fraud, and the failure of an insurer or a self-insured employer to fully comply with this
             461      Subsection (5) is not:
             462          (i) a defense to violating Subsection (2); or
             463          (ii) grounds for suppressing evidence.
             464          (6) In the absence of malice, a person, employer, insurer, or governmental entity that
             465      reports a suspected fraudulent act relating to a workers' compensation insurance policy or claim
             466      is not subject to civil liability for libel, slander, or another relevant cause of action.
             467          (7) In an action involving workers' compensation, this section supersedes Title 31A,
             468      Chapter 31, Insurance Fraud Act.
             469          Section 4. Section 34A-2-705 is amended to read:
             470           34A-2-705. Industrial Accident Restricted Account.
             471          (1) As used in this section:
             472          (a) "Account" means the Industrial Accident Restricted Account created by this
             473      section.
             474          (b) "Advisory council" means the state workers' compensation advisory council created
             475      under Section 34A-2-107 .
             476          (2) There is created in the General Fund a restricted account known as the "Industrial
             477      Accident Restricted Account."


             478          (3) (a) The account is funded from:
             479          (i) .5% of the premium income remitted to the state treasurer and credited to the
             480      account pursuant to Subsection 59-9-101 (2)(c)(iv)[.]; and
             481          (ii) amounts deposited under Section 34A-2-1003 .
             482          (b) If the balance in the account exceeds $500,000 at the close of a fiscal year, the
             483      excess shall be transferred to the Uninsured Employers' Fund created under Section 34A-2-704 .
             484          (4) (a) From money appropriated by the Legislature from the account to the
             485      commission and subject to the requirements of this section, the commission may fund:
             486          (i) the activities of the Division of Industrial Accidents described in Section
             487      34A-1-202 ; [and]
             488          (ii) the activities of the Division of Adjudication described in Section 34A-1-202 [.];
             489      and
             490          (iii) the activities of the commission described in Section 34A-2-1005 .
             491          (b) The money deposited in the account may not be used for a purpose other than a
             492      purpose described in this Subsection (4), including an administrative cost or another activity of
             493      the commission unrelated to the account.
             494          (5) (a) Each year before the public hearing required by Subsection 59-9-101 (2)(d)(i),
             495      the commission shall report to the advisory council regarding:
             496          (i) the commission's budget request to the governor for the next fiscal year related to:
             497          (A) the Division of Industrial Accidents; and
             498          (B) the Division of Adjudication;
             499          (ii) the expenditures of the commission for the fiscal year in which the commission is
             500      reporting related to:
             501          (A) the Division of Industrial Accidents; and
             502          (B) the Division of Adjudication; [and]
             503          (iii) revenues generated from the premium assessment under Section 59-9-101 on an
             504      admitted insurer writing workers' compensation insurance in this state and on a self-insured
             505      employer under Section 34A-2-202 [.]; and


             506          (iv) money deposited under Section 34A-2-1003 .
             507          (b) The commission shall annually report to the governor and the Legislature
             508      regarding:
             509          (i) the use of the money appropriated to the commission under this section; [and]
             510          (ii) revenues generated from the premium assessment under Section 59-9-101 on an
             511      admitted insurer writing workers' compensation insurance in this state and on a self-insured
             512      employer under Section 34A-2-202 [.]; and
             513          (iii) money deposited under Section 34A-2-1003 .
             514          Section 5. Section 34A-2-1001 is enacted to read:
             515     
Part 10. Workers' Compensation Coverage Waivers Act

             516          34A-2-1001. Title.
             517          This part is known as the "Workers' Compensation Coverage Waivers Act."
             518          Section 6. Section 34A-2-1002 is enacted to read:
             519          34A-2-1002. Definitions.
             520          As used in this part:
             521          (1) "Business entity" means:
             522          (a) a sole proprietorship;
             523          (b) a corporation;
             524          (c) a partnership;
             525          (d) a limited liability company; or
             526          (e) an entity similar to one described in Subsections (1)(a) through (d).
             527          (2) "Waiver" means a workers' compensation coverage waiver issued under this part.
             528          Section 7. Section 34A-2-1003 is enacted to read:
             529          34A-2-1003. Issuance of a waiver.
             530          (1) The commission shall issue a workers' compensation coverage waiver to a business
             531      entity that:
             532          (a) elects not to include an owner, partner, or corporate officer or director as an
             533      employee under a workers' compensation policy in accordance with Section 34A-2-103 and


             534      Subsection 34A-2-104 (4);
             535          (b) employs no other employee on the day on which the commission issues the waiver
             536      to the business entity;
             537          (c) provides to the commission the information required by Section 34A-2-1004 ; and
             538          (d) pays a fee established by the commission in accordance with Section 63J-1-504 ,
             539      except that the fee may not exceed $50.
             540          (2) (a) A waiver issued under this section expires one year from the day on which it is
             541      issued unless renewed by the holder of the waiver.
             542          (b) To renew a waiver issued under this part, the holder of the waiver shall:
             543          (i) employ no other employee on the day on which the commission renews the waiver;
             544          (ii) provide to the commission the information required by Section 34A-2-1004 ; and
             545          (iii) pay a fee established by the commission in accordance with Section 63J-1-504 ,
             546      except that the fee may not exceed $50.
             547          (3) As of the day on which a business entity described in Subsection (1) employs an
             548      employee other than an owner, partner, or corporate officer or director described in Subsection
             549      (1)(a):
             550          (a) the business entity's waiver is invalid; and
             551          (b) the business entity is required to provide workers' compensation coverage for that
             552      employee in accordance with Section 34A-2-201 .
             553          (4) The commission shall deposit a fee collected under this section in the Industrial
             554      Accident Restricted Account created in Section 34A-2-705 .
             555          (5) Unless invalidated under Section 34A-2-1005 , notwithstanding the other provisions
             556      of this section, a waiver issued by an insurer that is valid on June 30, 2011, remains valid until
             557      its expiration date.
             558          Section 8. Section 34A-2-1004 is enacted to read:
             559          34A-2-1004. Information required to obtain a waiver.
             560          To obtain or renew a waiver, a business entity shall submit to the commission:
             561          (1) a copy of two or more of the following:


             562          (a) the business entity's federal or state income tax return that shows business income
             563      for the complete taxable year that immediately precedes the day on which the business entity
             564      submits the information;
             565          (b) a valid business license;
             566          (c) a license to engage in an occupation or profession, including a license under Title
             567      58, Occupations and Professions; or
             568          (d) documentation of an active liability insurance policy that covers the business
             569      entity's activities; or
             570          (2) a copy of one item listed in Subsection (1) and a copy of two or more of the
             571      following:
             572          (a) proof of a bank account for the business entity;
             573          (b) proof that for the business entity there is:
             574          (i) a telephone number; and
             575          (ii) a physical location; or
             576          (c) an advertisement of services in a newspaper of general circulation or telephone
             577      directory showing the business entity's:
             578          (i) name; and
             579          (ii) contact information.
             580          Section 9. Section 34A-2-1005 is enacted to read:
             581          34A-2-1005. Enforcement.
             582          (1) The commission may investigate a business entity to determine whether the
             583      business entity validly elects to not cover an owner, partner, or corporate officer or director as
             584      an employee under a workers' compensation policy in accordance with Section 34A-2-103 .
             585          (2) If the commission determines that a business entity's election as provided in this
             586      section is invalid, the commission may:
             587          (a) prohibit a business entity from using a waiver obtained under this part; and
             588          (b) take any action provided for under this chapter or Chapter 3, Utah Occupational
             589      Disease Act, for failure to obtain workers' compensation coverage for an employee.


             590          Section 10. Repealer.
             591          This bill repeals:
             592          Section 31A-22-1011, Workers' compensation coverage waivers.
             593          Section 11. Appropriation.
             594          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the
             595      following sums of money are appropriated from resources not otherwise appropriated out of the
             596      funds or accounts indicated for the fiscal year beginning July 1, 2010, and ending June 30,
             597      2011. These are additions to amounts previously appropriated for fiscal year 2011.
             598      To Labor Commission
             599      From General Fund Restricted - Industrial Accident Restricted Account
$10,000
             600      Schedule of Programs:
             601      Workers' Compensation Coverage Waivers Act
$10,000
             602          Section 12. Appropriation.
             603          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the
             604      following sums of money are appropriated from resources not otherwise appropriated out of the
             605      funds or accounts indicated for the fiscal year beginning July 1, 2011, and ending June 30,
             606      2012. These are additions to amounts previously appropriated for fiscal year 2012.
             607      To Labor Commission
             608      From General Fund Restricted - Industrial Accident Restricted Account    
$75,000
             609      From General Fund Restricted - Industrial Accident Restricted Account, One-time
$15,000
             610      Schedule of Programs:
             611      Workers' Compensation Coverage Waivers Act    
$90,000
             612          Section 13. Effective date.
             613          The appropriation in Section 11 for fiscal year 2011 takes effect on May 10, 2011, and
             614      the remainder of the bill takes effect on July 1, 2011.


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