CSHB 378(RLS): "An Act relating to the establishment of, assessment of, collection of, and accounting for service fees for state administration of workers' compensation and workers' safety programs; establishing civil penalties and sanctions for late payment or nonpayment of the service fee; and providing for an effective date."
00CS FOR HOUSE BILL NO. 378(RLS) 01 "An Act relating to the establishment of, assessment of, collection of, and 02 accounting for service fees for state administration of workers' compensation and 03 workers' safety programs; establishing civil penalties and sanctions for late 04 payment or nonpayment of the service fee; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 21.09.150(a) is amended to read: 07 (a) The director may suspend or revoke an insurer's certificate of authority if, 08 after a hearing, the director finds that the insurer has violated a lawful order of the 09 director or a provision of this title other than those for which suspension or revocation 10 is mandatory or has not paid any annual service fees assessed under AS 23.05.067 . 11 * Sec. 2. AS 21.09.270(b) is amended to read: 12 (b) This section does not apply to 13 (1) personal income taxes, or to ad valorem taxes on real or personal 14 property or to special purpose obligations or assessments imposed by another state in
01 connection with particular kinds of insurance other than property insurance , [;] except 02 that deductions from premium taxes or other taxes otherwise payable allowed on 03 accounts of real estate or personal property taxes paid shall be taken into consideration 04 by the director in determining the propriety and extent of retaliatory action under this 05 section; [OR] 06 (2) a health care insurer who issues health care insurance to the state, 07 a municipality, a city or borough school district, a regional educational attendance area, 08 the University of Alaska, or a community college operated by the University of 09 Alaska; in this paragraph, "health care insurer" has the meaning given in 10 AS 21.54.500 ; or 11 (3) the annual service fees assessed under AS 23.05.067 . 12 * Sec. 3. AS 23.05 is amended by adding a new section to read: 13 Sec. 23.05.067. Service fees for administration of workers' safety and 14 compensation programs. (a) Each insurer providing workers' compensation 15 insurance and each employer who is self-insured or uninsured for purposes of 16 AS 23.30 in this state shall pay an annual service fee to the department for the 17 administrative expenses of the state for workers' safety programs under AS 18.60 and 18 the workers' compensation program under AS 23.30 as follows: 19 (1) for each employer, 20 (A) except as provided in (b) of this section, the service fee 21 shall be paid each year to the department at the time that the annual report is 22 required to be filed under AS 23.30.155(m) or (n); and 23 (B) the service fee is 2.9 percent of all payments reported to the 24 Alaska Workers' Compensation Board under AS 23.30.155(m) or (n), except 25 second injury fund payments; and 26 (2) for each insurer, 27 (A) the service fee is payable on the same payment schedule 28 that applies to the tax on premium income for workers' compensation insurance 29 under AS 21.09.210(b); 30 (B) notwithstanding (e) of this section, the director of the 31 division of insurance shall deposit into the unrestricted general fund .88 percent
01 of the total direct premium income reported under AS 21.09.210 during the 02 year ending on the preceding December 31 and paid for workers' compensation 03 insurance, subject to all the deductions specified in AS 21.09.210(b); and 04 (C) the director of the division of insurance shall deposit 1.82 05 percent of the total direct premium income reported under AS 21.09.210 during 06 the year ending on the preceding December 31 and paid for workers' 07 compensation insurance, subject to all the deductions specified in 08 AS 21.09.210(b), under (e) of this section. 09 (b) An employer who is required to pay an annual service fee under (a) of this 10 section may elect to pay in yearly increments over a five-year period the portion of the 11 service fee due under (a) of this section as a result of a settlement of over $50,000 12 approved under AS 23.30.012. An election under this subsection must be made in the 13 first year that a service fee would be due as a result of the settlement. The employer 14 shall notify the department of an election under this subsection. If an election is made, 15 payment of each yearly increment that is due shall be made at the time the annual 16 report is required to be filed under AS 23.30.155(m) or (n). 17 (c) Payment of the annual service fee under this section shall be made in the 18 manner and by the method specified by the department. 19 (d) If an employer who is required to pay an annual service fee under this 20 section does not pay the required amount of the service fee by the time specified in 21 this section, the employer shall pay a civil penalty of $100 for the first day the 22 payment is late and $10 a day for each additional day the payment is late. The civil 23 penalty under this subsection is in addition to any civil penalties imposed for late 24 filings of reports under AS 23.30.155(m). 25 (e) Annual service fees and civil penalties collected under this section shall be 26 deposited in the workers' safety and compensation administration account in the state 27 treasury. Under AS 37.05.146(b), the service fees and civil penalties shall be 28 accounted for separately, and appropriations from the account are not made from the 29 unrestricted general fund. The legislature may appropriate money from the account 30 for expenditures by the department for necessary costs incurred by the department in 31 the administration of the workers' safety programs contained in AS 18.60 and of the
01 Alaska Workers' Compensation Act contained in AS 23.30. Nothing in this subsection 02 creates a dedicated fund or dedicates the money in the account for a specific purpose. 03 Money deposited in the account does not lapse at the end of a fiscal year unless 04 otherwise provided by an appropriation. 05 (f) The department may adopt regulations to implement and interpret this 06 section. 07 (g) Notwithstanding AS 21.76.020(a), a joint insurance arrangement established 08 under AS 21.76 is subject to the provisions of this section and regulations adopted 09 under this section and, if self-insured, is subject to the annual service fee on behalf of 10 its members. 11 (h) The department shall grant a credit against the service fee imposed under 12 (a)(1) of this section to an employer if (1) the employer applies to the department for 13 the credit on a form prescribed by the department; (2) the employer provides proof that 14 the employer has paid a premium tax imposed under AS 21.09.210 on an insurance 15 policy; and (3) workers' compensation claims have been paid under the insurance 16 policy described in (2) of this subsection and the claims are subject to the service fee 17 imposed under (a) of this section. The credit allowed under this subsection is equal 18 to the amount of the premium tax paid by the employer under the insurance policy, 19 may not exceed the service fee imposed under (a) of this section, and only applies to 20 premium taxes paid by the employer on or after January 1, 2000. 21 (i) In this section, "insurer" has the meaning given in AS 21.90.900. 22 * Sec. 4. AS 23.30.015(e) is amended to read: 23 (e) An amount recovered by the employer under an assignment, whether by 24 action or compromise, shall be distributed as follows: 25 (1) the employer shall retain an amount equal to 26 (A) the expenses incurred by the employer with [IN] respect to 27 the action or compromise, including a reasonable attorney fee determined by 28 the board; 29 (B) the cost of all benefits actually furnished by the employer 30 under this chapter; 31 (C) all amounts paid as compensation and second-injury fund
01 payments , and, if the employer is self-insured or uninsured, all service fees 02 paid under AS 23.05.067 ; 03 (D) the present value of all amounts payable later as 04 compensation , [(PRESENT VALUE TO BE] computed from a schedule 05 prepared by the board ; [),] and the present value of the cost of all benefits to 06 be furnished later under AS 23.30.095 [(] as estimated by the board ; [),] the 07 amounts so computed and estimated to be retained by the employer as a trust 08 fund to pay compensation and the cost of benefits as they become due and to 09 pay any finally remaining excess sum to the person entitled to compensation 10 or to the representative; and 11 (2) the employer shall pay any excess to the person entitled to 12 compensation or to the representative of that person. 13 * Sec. 5. AS 23.30.090 is amended to read: 14 Sec. 23.30.090. Self-insurance certificates. If an employer has complied with 15 the provisions of this chapter relating to self-insurance and has paid annual service 16 fees assessed under AS 23.05.067 , the board shall issue the employer a certificate that 17 [WHICH] shall remain in force for a period fixed by the board. The board may, upon 18 at least 10 days' notice and a hearing, revoke a self-insurance certificate upon 19 satisfactory proof that an employer is no longer entitled to it. After revocation , the 20 board may grant a new certificate to an employer, upon the employer's petition and 21 satisfactory proof of the employer's financial ability as provided in this chapter. An 22 employer authorized as a self-insurer shall provide claims facilities through its own 23 staffed adjusting facilities located within the state, or independent, licensed, resident 24 adjusters with power to effect settlement within the state. 25 * Sec. 6. AS 37.05.146(b)(4) is amended by adding a new subparagraph to read: 26 (X) workers' safety and compensation administration account 27 (AS 23.05.067); 28 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section 29 to read: 30 TRANSITION: PHASE-IN OF FEES FOR EMPLOYERS. (a) Notwithstanding the 31 amount of the annual service fee set by AS 23.05.067(a), enacted by sec. 3 of this Act, the
01 annual service fee for employers equals the following percentages of all payments reported 02 to the Alaska Workers' Compensation Board under AS 23.30.155(m) and (n), except second 03 injury payments: 04 (1) for payment due in 2001, 3.6 percent; 05 (2) for payment due in 2002, 3.4 percent; 06 (3) for payment due in 2003, 3.2 percent. 07 (b) Notwithstanding the amount of the annual service fee set by AS 23.05.067(a)(1) 08 and (b), enacted by sec. 3 of this Act, the state, a political subdivision of the state, a joint 09 insurance arrangement authorized under AS 21.76, and other employers who are self-insured 10 under AS 23.30.090 shall instead pay an annual service fee of the following amounts in the 11 following years: 12 (1) for payment due in 2001, 25 percent of the amount calculated for the 13 service fee under AS 23.05.067; 14 (2) for payment due in 2002, 50 percent of the amount calculated for the 15 service fee under AS 23.05.067; 16 (3) for payment due in 2003, 75 percent of the amount calculated for the 17 service fee under AS 23.05.067; and 18 (4) for payment due in 2004 and subsequent years, 100 percent of the amount 19 calculated for the service fee under AS 23.05.067. 20 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section 21 to read: 22 TRANSITION: SERVICE FEE FOR INSURERS. Notwithstanding the allocation of 23 the annual service fee imposed under AS 23.05.067(a)(2), enacted by sec. 3 of this Act, the 24 director of the division of insurance shall allocate the annual service fee during the years 25 2000, 2001, and 2002 as follows: 26 (1) for untaxed premium income in 2000, 2.31 percent shall be deposited into 27 the workers' safety and compensation administration account in the state treasury, and .39 28 percent shall be deposited into the unrestricted general fund; 29 (2) for premium income in 2001, 2.17 percent shall be deposited into the 30 workers' safety and compensation administration account in the state treasury, and .53 percent 31 shall be deposited into the unrestricted general fund; and
01 (3) for premium income in 2002, 2.03 percent shall be deposited into the 02 workers' safety and compensation administration account in the state treasury, and .67 percent 03 shall be deposited into the unrestricted general fund. 04 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 TRANSITION: REGULATIONS. The director of the division of insurance in the 07 Department of Community and Economic Development, and the Department of Labor and 08 Workforce Development, may proceed to adopt regulations necessary to implement or interpret 09 this Act. Regulations to implement or interpret a provision of this Act take effect under 10 AS 44.62 (Administrative Procedure Act), but not before the effective date of secs. 1 - 6 of 11 this Act. 12 * Sec. 10. Section 9 of this Act takes effect immediately under AS 01.10.070(c). 13 * Sec. 11. Except as provided in sec. 10 of this Act, this Act takes effect January 1, 2001.