House Bill 4815e2

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                                         HB 4815, Second Engrossed



  1                      A bill to be entitled

  2         An act relating to workers' compensation;

  3         amending s. 440.09, F.S.; excluding coverage

  4         under the Defense Base Act; amending s.

  5         440.134, F.S.; providing individually

  6         self-insured employers the option to provide

  7         medical benefits either through managed care

  8         arrangements or without managed care

  9         arrangements; amending s. 440.135, F.S.;

10         modifying the requirements of the 24-hour

11         health insurance coverage pilot programs;

12         amending s. 440.38, F.S.; permitting local

13         government participation in 24-hour health

14         insurance coverage; amending s. 440.49, F.S.,

15         creating the Special Disability Trust Fund

16         Privatization Commission; providing purpose;

17         providing for members; providing duties;

18         providing for adoption of rules; creating the

19         Special Disability Trust Fund Financing

20         Corporation; providing purposes; providing for

21         a board of directors; providing powers and

22         duties of the corporation; authorizing the

23         Division of Workers' Compensation to enter into

24         service contracts for certain purposes;

25         authorizing the corporation to issue evidences

26         of indebtedness; authorizing the corporation to

27         validate bond obligations; exempting the

28         corporation from certain taxes and assessments;

29         providing application; providing for reversion

30         of the assets to the State upon dissolution of

31         the corporation; providing for the State Board


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                                         HB 4815, Second Engrossed



  1         of Administration to be a trustee of the

  2         corporation's securities; authorizing the

  3         commission to issue a request for proposal for

  4         administration of the claims of the fund;

  5         authorizing the transfer and assumption of the

  6         liabilities of the Special Disability Trust

  7         Fund to a qualified entity if it is determined

  8         by the commission that such an arrangement

  9         would be more cost effective than the current

10         administration by the division; authorizing the

11         Auditor General to examine and audit the

12         records of the corporation; providing an

13         appropriation; providing an effective date.

14

15  Be It Enacted by the Legislature of the State of Florida:

16

17         Section 1.  Subsection (2) of section 440.09, Florida

18  Statutes, is amended to read:

19         440.09  Coverage.--

20         (2)  Benefits are not payable in respect of the

21  disability or death of any employee covered by the Federal

22  Employer's Liability Act, the Longshoremen's and Harbor

23  Worker's Compensation Act, the Defense Base Act, or the Jones

24  Act.

25         Section 2.  Paragraph (b) of subsection (2) of section

26  440.134, Florida Statutes, is amended to read:

27         440.134  Workers' compensation managed care

28  arrangement.--

29         (2)

30         (b)  Effective January 1, 1997, the employer shall,

31  subject to the limitations specified elsewhere in this


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                                         HB 4815, Second Engrossed



  1  chapter, furnish to the employee solely through managed care

  2  arrangements such medically necessary remedial treatment,

  3  care, and attendance for such period as the nature of the

  4  injury or the process of recovery requires pursuant to s.

  5  440.13(2)(a) and (b).  An employer that has secured coverage

  6  under s. 440.38(1)(b) as an individual self-insurer or under

  7  s. 440.38(6) shall furnish such medically necessary remedial

  8  treatment, care, and attendance to the employee for such a

  9  period as the nature or process of recovery may require

10  pursuant to s. 440.13(2)(a) and (b) either through managed

11  care arrangements or without managed care arrangements. An

12  individual self-insured employer utilizing a workers'

13  compensation managed care arrangement otherwise in compliance

14  with this section may unilaterally elect to be exempt from

15  obtaining any approval from the agency or making any filing

16  with the agency required by this section. Nothing in this

17  subsection shall be construed to prevent an individual

18  self-insurer from implementing or continuing to use managed

19  care arrangements in accordance with this section.

20         Section 3.  Paragraph (f) of subsection (1) of section

21  440.135, Florida Statutes, is amended to read:

22         440.135  Pilot programs for medical and remedial care

23  in workers' compensation.--

24         (1)  It is the intent of the Legislature to determine

25  whether the costs of the workers' compensation system can be

26  effectively contained by monitoring more closely the medical,

27  hospital, and remedial care required by s. 440.13, while

28  providing injured workers with more prompt and effective care

29  and earlier restoration of earning capacity without diminution

30  of the quality of such care. It is the further intent of the

31  Legislature to determine whether the total cost to an employer


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                                         HB 4815, Second Engrossed



  1  that provides a policy or plan of health insurance and a

  2  separate policy or plan of workers' compensation and

  3  employer's liability insurance for its employees can be

  4  reduced by combining both coverages under a policy or plan

  5  that provides 24-hour health insurance coverage as set forth

  6  in this section. Therefore, the Legislature authorizes the

  7  establishment of one or more pilot programs to be administered

  8  by the Department of Insurance after consulting with the

  9  division. Each pilot program shall terminate 2 years after the

10  first date of operation of the program, unless extended by act

11  of the Legislature. In order to evaluate the feasibility of

12  implementing these pilot programs, the Department of Insurance

13  shall consult with the division regarding:

14         (f)  Initiating one or more pilot programs under which

15  participating employers would provide a 24-hour health

16  insurance coverage policy to their employees under a single

17  insurance plan policy or self-insured plan that may contain

18  more than one policy. The policy or plan must provide a level

19  of health insurance benefits which meets criteria established

20  by the Department of Insurance but which provides medical

21  benefits for at least occupational injuries and illnesses

22  comparable to those required by this chapter and which may use

23  deductibles and coinsurance provisions that require the

24  employee to pay a portion of the actual medical care received

25  by the employee, notwithstanding any other provisions of this

26  chapter. The policy or plan may also provide indemnity

27  benefits as specified in s. 440.38(1)(e). The employer shall

28  pay the entire workers' compensation portion of the premium

29  for the 24-hour health insurance policy or self-insured plan.

30  The employee may pay all or part of the nonworkers'

31  compensation portion of the premium and all or part of other


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                                         HB 4815, Second Engrossed



  1  than the portion of the premium which relates to dependent

  2  coverage.

  3         Section 4.  Paragraph (e) of subsection (1) of section

  4  440.38, Florida Statutes, is amended to read:

  5         440.38  Security for compensation; insurance carriers

  6  and self-insurers.--

  7         (1)  Every employer shall secure the payment of

  8  compensation under this chapter:

  9         (e)  In accordance with s. 440.135, an employer, other

10  than a local government unit, may elect coverage under the

11  Workers' Compensation Law and retain the benefit of the

12  exclusiveness of liability provided in s. 440.11 by obtaining

13  a 24-hour health insurance policy from an authorized property

14  and casualty insurance carrier or an authorized life and

15  health insurance carrier, or by participating in a fully or

16  partially self-insured 24-hour health plan that is established

17  or maintained by or for two or more employers, so long as the

18  law of this state is not preempted by the Employee Retirement

19  Income Security Act of 1974, Pub. L. No. 93-406, or any

20  amendment to that law, which policy or plan must provide, for

21  at least occupational injuries and illnesses, medical benefits

22  that are comparable to those required by this chapter. A local

23  government unit, as a single employer, in accordance with s.

24  440.135, may participate in the 24-hour health insurance

25  coverage plan referenced in this paragraph. Disputes and

26  remedies arising under policies issued under this section are

27  governed by the terms and conditions of the policies and under

28  the applicable provisions of the Florida Insurance Code and

29  rules adopted under the insurance code and other applicable

30  laws of this state. The 24-hour health insurance policy may

31  provide for health care by a health maintenance organization


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                                         HB 4815, Second Engrossed



  1  or a preferred provider organization. The premium for such

  2  24-hour health insurance policy shall be paid entirely by the

  3  employer. The 24-hour health insurance policy may use

  4  deductibles and coinsurance provisions that require the

  5  employee to pay a portion of the actual medical care received

  6  by the employee. If an employer obtains a 24-hour health

  7  insurance policy or self-insured plan to secure payment of

  8  compensation as to medical benefits, the employer must also

  9  obtain an insurance policy or policies that provide indemnity

10  benefits as follows:

11         1.  If indemnity benefits are provided only for

12  occupational-related disability, such benefits must be

13  comparable to those required by this chapter.

14         2.  If indemnity benefits are provided for both

15  occupational-related and nonoccupational-related disability,

16  such benefits must be comparable to those required by this

17  chapter, except that they must be based on 60 percent of the

18  average weekly wages.

19         3.  The employer shall provide for each of its

20  employees life insurance with a death benefit of $100,000.

21         4.  Policies providing coverage under this subsection

22  must use prescribed and acceptable underwriting standards,

23  forms, and policies approved by the Department of Insurance.

24  If any insurance policy that provides coverage under this

25  section is canceled, terminated, or nonrenewed for any reason,

26  the cancellation, termination, or nonrenewal is ineffective

27  until the self-insured employer or insurance carrier or

28  carriers notify the division and the Department of Insurance

29  of the cancellation, termination, or nonrenewal, and until the

30  division has actually received the notification. The division

31  must be notified of replacement coverage under a workers'


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                                         HB 4815, Second Engrossed



  1  compensation and employer's liability insurance policy or plan

  2  by the employer prior to the effective date of the

  3  cancellation, termination, or nonrenewal; or

  4         Section 5.  Section 440.49, Florida Statutes, is

  5  amended to read:

  6         440.49  Limitation of liability for subsequent injury

  7  through Special Disability Trust Fund.--

  8         (1)  LEGISLATIVE INTENT.--Whereas it is often difficult

  9  for workers with disabilities to achieve employment or to

10  become reemployed following an injury, and it is the desire of

11  the Legislature to facilitate the return of these workers to

12  the workplace, it is the purpose of this section to encourage

13  the employment, reemployment, and accommodation of the

14  physically disabled by reducing an employer's insurance

15  premium for reemploying an injured worker, to decrease

16  litigation between carriers on apportionment issues, and to

17  protect employers from excess liability for compensation and

18  medical expense when an injury to a physically disabled worker

19  merges with, aggravates, or accelerates her or his preexisting

20  permanent physical impairment to cause either a greater

21  disability or permanent impairment, or an increase in

22  expenditures for temporary compensation or medical benefits

23  than would have resulted from the injury alone. The division

24  or the administrator shall inform all employers of the

25  existence and function of the fund and shall interpret

26  eligibility requirements liberally. However, this subsection

27  shall not be construed to create or provide any benefits for

28  injured employees or their dependents not otherwise provided

29  by this chapter. The entitlement of an injured employee or her

30  or his dependents to compensation under this chapter shall be

31  determined without regard to this subsection, the provisions


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                                         HB 4815, Second Engrossed



  1  of which shall be considered only in determining whether an

  2  employer or carrier who has paid compensation under this

  3  chapter is entitled to reimbursement from the Special

  4  Disability Trust Fund.

  5         (2)  DEFINITIONS.--As used in this section, the term:

  6         (a)  "Permanent physical impairment" means and is

  7  limited to the conditions listed in paragraph (6)(a).

  8         (b)  "Preferred worker" means a worker who, because of

  9  a permanent impairment resulting from a compensable injury or

10  occupational disease, is unable to return to the worker's

11  regular employment.

12         (c)  "Merger" describes or means that:

13         1.  If the permanent physical impairment had not

14  existed, the subsequent accident or occupational disease would

15  not have occurred;

16         2.  The permanent disability or permanent impairment

17  resulting from the subsequent accident or occupational disease

18  is materially and substantially greater than that which would

19  have resulted had the permanent physical impairment not

20  existed, and the employer has been required to pay, and has

21  paid, permanent total disability or permanent impairment

22  benefits for that materially and substantially greater

23  disability;

24         3.  The preexisting permanent physical impairment is

25  aggravated or accelerated as a result of the subsequent injury

26  or occupational disease, or the preexisting impairment has

27  contributed, medically and circumstantially, to the need for

28  temporary compensation, medical, or attendant care and the

29  employer has been required to pay, and has paid, temporary

30  compensation, medical, or attendant care benefits for the

31  aggravated preexisting permanent impairment; or


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                                         HB 4815, Second Engrossed



  1         4.  Death would not have been accelerated if the

  2  permanent physical impairment had not existed.

  3         (d)  "Excess permanent compensation" means that

  4  compensation for permanent impairment, or permanent total

  5  disability or death benefits, for which the employer or

  6  carrier is otherwise entitled to reimbursement from the

  7  Special Disability Trust Fund.

  8         (e)  "Administrator" means the entity selected by the

  9  commission to review, allow, deny, compromise, controvert, and

10  litigate claims of the Special Disability Trust Fund.

11         (f)  "Corporation" means the Special Disability Trust

12  Fund Financing Corporation, as created under subsection (14).

13         (g)  "Commission" means the Special Disability Trust

14  Fund Privatization Commission, as created under subsection

15  (13).

16         (3)  DEDUCTIBLE.--Reimbursement may not be obtained for

17  the first $10,000 of benefits paid which otherwise qualify for

18  reimbursement under this section. This deductible does not

19  apply to claims by employers for reimbursement under

20  subparagraph (b)3.

21         (4)  PERMANENT IMPAIRMENT OR PERMANENT TOTAL

22  DISABILITY, TEMPORARY BENEFITS, MEDICAL BENEFITS, OR ATTENDANT

23  CARE AFTER OTHER PHYSICAL IMPAIRMENT.--

24         (a)  Permanent impairment.--If an employee who has a

25  preexisting permanent physical impairment incurs a subsequent

26  permanent impairment from injury or occupational disease

27  arising out of, and in the course of, her or his employment

28  which merges with the preexisting permanent physical

29  impairment to cause a permanent impairment, the employer

30  shall, in the first instance, pay all benefits provided by

31  this chapter; but, subject to the limitations specified in


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                                         HB 4815, Second Engrossed



  1  subsection (6), such employer shall be reimbursed from the

  2  Special Disability Trust Fund created by subsection (8) for 50

  3  percent of all impairment benefits which the employer has been

  4  required to provide pursuant to s. 440.15(3)(a) as a result of

  5  the subsequent accident or occupational disease.

  6         (b)  Permanent total disability.--If an employee who

  7  has a preexisting permanent physical impairment incurs a

  8  subsequent permanent impairment from injury or occupational

  9  disease arising out of, and in the course of, her or his

10  employment which merges with the preexisting permanent

11  physical impairment to cause permanent total disability, the

12  employer shall, in the first instance, pay all benefits

13  provided by this chapter; but, subject to the limitations

14  specified in subsection (6), such employer shall be reimbursed

15  from the Special Disability Trust Fund created by subsection

16  (8) for 50 percent of all compensation for permanent total

17  disability.

18         (c)  Temporary compensation and medical benefits;

19  aggravation or acceleration of preexisting condition or

20  circumstantial causation.--If an employee who has a

21  preexisting permanent physical impairment experiences an

22  aggravation or acceleration of the preexisting permanent

23  physical impairment as a result of an injury or occupational

24  disease arising out of and in the course of her or his

25  employment, or suffers an injury as a result of a merger as

26  defined in subparagraph (1)(b)2., the employer shall provide

27  all benefits provided by this chapter, but, subject to the

28  limitations specified in subsection (7), the employer shall be

29  reimbursed by the Special Disability Trust Fund created by

30  subsection (8) for 50 percent of its payments for temporary,

31  medical, and attendant care benefits.


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                                         HB 4815, Second Engrossed



  1         (5)  WHEN DEATH RESULTS.--If death results from the

  2  subsequent permanent impairment contemplated in paragraph (c)

  3  within 1 year after the subsequent injury, or within 5 years

  4  after the subsequent injury when disability has been

  5  continuous since the subsequent injury, and it is determined

  6  that the death resulted from a merger, the employer shall, in

  7  the first instance, pay the funeral expenses and the death

  8  benefits prescribed by this chapter; but, subject to the

  9  limitations specified in subsection (6), she or he shall be

10  reimbursed from the Special Disability Trust Fund created by

11  subsection (8) for the last 50 percent of all compensation

12  allowable and paid for such death and for 50 percent of the

13  amount paid as funeral expenses.

14         (6)  EMPLOYER KNOWLEDGE, EFFECT ON REIMBURSEMENT.--

15         (a)  Reimbursement is not allowed under this section

16  unless it is established that the employer knew of the

17  preexisting permanent physical impairment prior to the

18  occurrence of the subsequent injury or occupational disease,

19  and that the permanent physical impairment is one of the

20  following:

21         1.  Epilepsy.

22         2.  Diabetes.

23         3.  Cardiac disease.

24         4.  Amputation of foot, leg, arm, or hand.

25         5.  Total loss of sight of one or both eyes or a

26  partial loss of corrected vision of more than 75 percent

27  bilaterally.

28         6.  Residual disability from poliomyelitis.

29         7.  Cerebral palsy.

30         8.  Multiple sclerosis.

31         9.  Parkinson's disease.


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                                         HB 4815, Second Engrossed



  1         10.  Meniscectomy.

  2         11.  Patellectomy.

  3         12.  Ruptured cruciate ligament.

  4         13.  Hemophilia.

  5         14.  Chronic osteomyelitis.

  6         15.  Surgical or spontaneous fusion of a major

  7  weight-bearing joint.

  8         16.  Hyperinsulinism.

  9         17.  Muscular dystrophy.

10         18.  Thrombophlebitis.

11         19.  Herniated intervertebral disk.

12         20.  Surgical removal of an intervertebral disk or

13  spinal fusion.

14         21.  One or more back injuries or a disease process of

15  the back resulting in disability over a total of 120 or more

16  days, if substantiated by a doctor's opinion that there was a

17  preexisting impairment to the claimant's back.

18         22.  Total deafness.

19         23.  Mental retardation, provided the employee's

20  intelligence quotient is such that she or he falls within the

21  lowest 2 percentile of the general population. However, it

22  shall not be necessary for the employer to know the employee's

23  actual intelligence quotient or actual relative ranking in

24  relation to the intelligence quotient of the general

25  population.

26         24.  Any permanent physical condition which, prior to

27  the industrial accident or occupational disease, constitutes a

28  20-percent impairment of a member or of the body as a whole.

29         25.  Obesity, provided the employee is 30 percent or

30  more over the average weight designated for her or his height

31  and age in the Table of Average Weight of Americans by Height


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                                         HB 4815, Second Engrossed



  1  and Age prepared by the Society of Actuaries using data from

  2  the 1979 Build and Blood Pressure Study.

  3         26.  Any permanent physical impairment as defined in s.

  4  440.15(3) which is a result of a prior industrial accident

  5  with the same employer or the employer's parent company,

  6  subsidiary, sister company, or affiliate located within the

  7  geographical boundaries of this state.

  8         (b)  The Special Disability Trust Fund is not liable

  9  for any costs, interest, penalties, or attorneys' fees.

10         (c)  An employer's or carrier's right to apportionment

11  or deduction pursuant to ss. 440.02(1), 440.15(5)(b), and

12  440.151(1)(c) does not preclude reimbursement from such fund,

13  except when the merger comes within the definition of

14  subparagraph (2)(b)2. and such apportionment or deduction

15  relieves the employer or carrier from providing the materially

16  and substantially greater permanent disability benefits

17  otherwise contemplated in those paragraphs.

18         (7)  REIMBURSEMENT OF EMPLOYER.--

19         (a)  The right to reimbursement as provided in this

20  section is barred unless written notice of claim of the right

21  to such reimbursement is filed by the employer or carrier

22  entitled to such reimbursement with the division or

23  administrator at Tallahassee within 2 years after the date the

24  employee last reached maximum medical improvement, or within 2

25  years after the date of the first payment of compensation for

26  permanent total disability, wage loss, or death, whichever is

27  later. The notice of claim must contain such information as

28  the division by rule requires or as established by the

29  administrator; and the employer or carrier claiming

30  reimbursement shall furnish such evidence in support of the

31  claim as the division or administrator reasonably may require.


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                                         HB 4815, Second Engrossed



  1         (b)  For notice of claims on the Special Disability

  2  Trust Fund filed on or after July 1, 1978, the Special

  3  Disability Trust Fund shall, within 120 days after receipt of

  4  notice that a carrier has paid, been required to pay, or

  5  accepted liability for excess compensation, serve notice of

  6  the acceptance of the claim for reimbursement.

  7         (c)  A proof of claim must be filed on each notice of

  8  claim on file as of June 30, 1997, within 1 year after July 1,

  9  1997, or the right to reimbursement of the claim shall be

10  barred. A notice of claim on file on or before June 30, 1997,

11  may be withdrawn and refiled if, at the time refiled, the

12  notice of claim remains within the limitation period specified

13  in paragraph (a).  Such refiling shall not toll, extend, or

14  otherwise alter in any way the limitation period applicable to

15  the withdrawn and subsequently refiled notice of claim. Each

16  proof of claim filed shall be accompanied by a proof-of-claim

17  fee as provided in paragraph (9)(d). The Special Disability

18  Trust Fund shall, within 120 days after receipt of the proof

19  of claim, serve notice of the acceptance of the claim for

20  reimbursement. This paragraph shall apply to all claims

21  notwithstanding the provisions of subsection (12).

22         (d)  Each notice of claim filed or refiled on or after

23  July 1, 1997, must be accompanied by a notification fee as

24  provided in paragraph (9)(d).  A proof of claim must be filed

25  within 1 year after the date the notice of claim is filed or

26  refiled, accompanied by a proof-of-claim fee as provided in

27  paragraph (9)(d), or the claim shall be barred.  The

28  notification fee shall be waived if both the notice of claim

29  and proof of claim are submitted together as a single filing.

30  The Special Disability Trust Fund shall, within 180 days after

31  receipt of the proof of claim, serve notice of the acceptance


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                                         HB 4815, Second Engrossed



  1  of the claim for reimbursement.  This paragraph shall apply to

  2  all claims notwithstanding the provisions of subsection (12).

  3         (e)  For dates of accident on or after January 1, 1994,

  4  the Special Disability Trust Fund shall, within 120 days of

  5  receipt of notice that a carrier has been required to pay, and

  6  has paid over $10,000 in benefits, serve notice of the

  7  acceptance of the claim for reimbursement. Failure of the

  8  Special Disability Trust Fund to serve notice of acceptance

  9  shall give rise to the right to request a hearing on the claim

10  for reimbursement. If the Special Disability Trust Fund

11  through its representative denies or controverts the claim,

12  the right to such reimbursement shall be barred unless an

13  application for a hearing thereon is filed with the division

14  or administrator at Tallahassee within 60 days after notice to

15  the employer or carrier of such denial or controversion. When

16  such application for a hearing is timely filed, the claim

17  shall be heard and determined in accordance with the procedure

18  prescribed in s. 440.25, to the extent that such procedure is

19  applicable, and in accordance with the workers' compensation

20  rules of procedure. In such proceeding on a claim for

21  reimbursement, the Special Disability Trust Fund shall be made

22  the party respondent, and no findings of fact made with

23  respect to the claim of the injured employee or the dependents

24  for compensation, including any finding made or order entered

25  pursuant to s. 440.20(12), shall be res judicata. The Special

26  Disability Trust Fund may not be joined or made a party to any

27  controversy or dispute between an employee and the dependents

28  and the employer or between two or more employers or carriers

29  without the written consent of the fund.

30         (f)  When it has been determined that an employer or

31  carrier is entitled to reimbursement in any amount, the


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                                         HB 4815, Second Engrossed



  1  employer or carrier shall be reimbursed annually from the

  2  Special Disability Trust Fund for the compensation and medical

  3  benefits paid by the employer or carrier for which the

  4  employer or carrier is entitled to reimbursement, upon filing

  5  request therefor and submitting evidence of such payment in

  6  accordance with rules prescribed by the division, which rules

  7  may include parameters for annual audits. The Special

  8  Disability Trust Fund shall pay the approved reimbursement

  9  requests on a first-in, first-out basis reflecting the order

10  in which the reimbursement requests were received.

11         (8)  PREFERRED WORKER PROGRAM.--The division or

12  administrator shall issue identity cards to preferred workers

13  upon request by qualified employees and shall reimburse an

14  employer, from the Special Disability Trust Fund, for the cost

15  of workers' compensation premium related to the preferred

16  workers payroll for up to 3 years of continuous employment

17  upon satisfactory evidence of placement and issuance of

18  payroll and classification records and upon the employee's

19  certification of employment.

20         (9)  SPECIAL DISABILITY TRUST FUND.--

21         (a)  There is established in the State Treasury a

22  special fund to be known as the "Special Disability Trust

23  Fund," which shall be available only for the purposes stated

24  in this section; and the assets thereof may not at any time be

25  appropriated or diverted to any other use or purpose. The

26  Treasurer shall be the custodian of such fund, and all moneys

27  and securities in such fund shall be held in trust by such

28  Treasurer and shall not be the money or property of the state.

29  The Treasurer is authorized to disburse moneys from such fund

30  only when approved by the division or corporation and upon the

31  order of the Comptroller. The Treasurer shall deposit any


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                                         HB 4815, Second Engrossed



  1  moneys paid into such fund into such depository banks as the

  2  division or corporation may designate and is authorized to

  3  invest any portion of the fund which, in the opinion of the

  4  division, is not needed for current requirements, in the same

  5  manner and subject to all the provisions of the law with

  6  respect to the deposits of state funds by such Treasurer. All

  7  interest earned by such portion of the fund as may be invested

  8  by the Treasurer shall be collected by her or him and placed

  9  to the credit of such fund.

10         (b)1.  The Special Disability Trust Fund shall be

11  maintained by annual assessments upon the insurance companies

12  writing compensation insurance in the state, the commercial

13  self-insurers under ss. 624.462 and 624.4621, the assessable

14  mutuals under s. 628.601, and the self-insurers under this

15  chapter, which assessments shall become due and be paid

16  quarterly at the same time and in addition to the assessments

17  provided in s. 440.51. The division shall estimate annually in

18  advance the amount necessary for the administration of this

19  subsection and the maintenance of this fund and shall make

20  such assessment in the manner hereinafter provided.

21         2.  The annual assessment shall be calculated to

22  produce during the ensuing fiscal year an amount which, when

23  combined with that part of the balance in the fund on June 30

24  of the current fiscal year which is in excess of $100,000, is

25  equal to the average of:

26         a.  The sum of disbursements from the fund during the

27  immediate past 3 calendar years, and

28         b.  Two times the disbursements of the most recent

29  calendar year.

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                                         HB 4815, Second Engrossed



  1  Such amount shall be prorated among the insurance companies

  2  writing compensation insurance in the state and the

  3  self-insurers.

  4         3.  The net premiums written by the companies for

  5  workers' compensation in this state and the net premium

  6  written applicable to the self-insurers in this state are the

  7  basis for computing the amount to be assessed as a percentage

  8  of net premiums. Such payments shall be made by each insurance

  9  company and self-insurer to the division for the Special

10  Disability Trust Fund in accordance with such regulations as

11  the division prescribes.

12         4.  The Treasurer is authorized to receive and credit

13  to such Special Disability Trust Fund any sum or sums that may

14  at any time be contributed to the state by the United States

15  under any Act of Congress, or otherwise, to which the state

16  may be or become entitled by reason of any payments made out

17  of such fund.

18         (c)  Notwithstanding the Special Disability Trust Fund

19  assessment rate calculated pursuant to this section, the rate

20  assessed shall not exceed 4.52 percent.

21         (d)  The Special Disability Trust Fund shall be

22  supplemented by a $250 notification fee on each notice of

23  claim filed or refiled after July 1, 1997, and a $500 fee on

24  each proof of claim filed in accordance with subsection (7).

25  Revenues from the fee shall be deposited into the Special

26  Disability Trust Fund and are exempt from the deduction

27  required by s. 215.20. The fees provided in this paragraph

28  shall not be imposed upon any insurer which is in receivership

29  with the Department of Insurance.

30         (e)  The Department of Labor and Employment Security or

31  administrator shall report annually on the status of the


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                                         HB 4815, Second Engrossed



  1  Special Disability Trust Fund.  The report shall update the

  2  estimated undiscounted and discounted fund liability, as

  3  determined by an independent actuary the projected change in

  4  fund liability, change in the total number of notices of claim

  5  on file with the fund in addition to the number of newly filed

  6  notices of claim, change in the number of proofs of claim

  7  processed by the fund, and the fee revenues refunded and

  8  revenues applied to pay down the liability of the fund, the

  9  average time required to reimburse accepted claims, and the

10  average administrative costs per claim.  The department or

11  administrator shall submit its initial report to the Governor,

12  the President of the Senate, and the Speaker of the House of

13  Representatives by March 1, 1998, for the period ending

14  February 1, 1998, with additional reports submitted by

15  December 1 of each year, 1998, and December 1, 1999.

16         (10)  DIVISION ADMINISTRATION OF FUND; CLAIMS; ADVISORY

17  COMMITTEE; EXPENSES.--The division or administrator shall

18  administer the Special Disability Trust Fund with authority to

19  allow, deny, compromise, controvert, and litigate claims made

20  against it and to designate an attorney to represent it in

21  proceedings involving claims against the fund, including

22  negotiation and consummation of settlements, hearings before

23  judges of compensation claims, and judicial review. The

24  division or administrator or the attorney designated by it

25  shall be given notice of all hearings and proceedings

26  involving the rights or obligations of such fund and shall

27  have authority to make expenditures for such medical

28  examinations, expert witness fees, depositions, transcripts of

29  testimony, and the like as may be necessary to the proper

30  defense of any claim. The division shall appoint an advisory

31  committee composed of representatives of management,


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                                         HB 4815, Second Engrossed



  1  compensation insurance carriers, and self-insurers to aid it

  2  in formulating policies with respect to conservation of the

  3  fund, who shall serve without compensation for such terms as

  4  specified by it, but be reimbursed for travel expenses as

  5  provided in s. 112.061. All expenditures made in connection

  6  with conservation of the fund, including the salary of the

  7  attorney designated to represent it and necessary travel

  8  expenses, shall be allowed and paid from the Special

  9  Disability Trust Fund as provided in this section upon the

10  presentation of itemized vouchers therefor approved by the

11  division.

12         (11)  EFFECTIVE DATES.--This section does not apply to

13  any case in which the accident causing the subsequent injury

14  or death or the disablement or death from a subsequent

15  occupational disease occurred prior to July 1, 1955, or on or

16  after January 1, 1998.  In no event shall the Special

17  Disability Trust Fund be liable for, or reimburse employers or

18  carriers for, any case in which the accident causing the

19  subsequent injury or death or the disablement or death from a

20  subsequent occupational disease occurred on or after January

21  1, 1998.  The Special Disability Trust Fund shall continue to

22  reimburse employers or carriers for subsequent injuries

23  occurring prior to January 1, 1998, and the division shall

24  continue to assess for and the division or administrator shall

25  fund reimbursements as provided in subsection (9) for this

26  purpose.

27         (12)  REIMBURSEMENT FROM THE SPECIAL DISABILITY TRUST

28  FUND.--The applicable law for the purposes of determining

29  entitlement to reimbursement from the Special Disability Trust

30  Fund is the law in effect on the date the accident occurred.

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                                         HB 4815, Second Engrossed



  1         (13)(a)  The Special Disability Trust Fund

  2  Privatization Commission is created to evaluate and determine

  3  the feasibility of privatizing the Special Disability Trust

  4  Fund.  The commission shall determine the liabilities of the

  5  fund and the costs to presently administer the Special

  6  Disability Trust Fund.  The commission may develop and issue a

  7  request for proposal to transfer the liabilities of the

  8  Special Disability Trust Fund to a qualified entity.  The

  9  commission is authorized to select and contract with a

10  qualified entity, only if the commission determines that such

11  an arrangement would substantially reduce the costs and be

12  more effective than the current administration of the Special

13  Disability Trust Fund.  The commission may adopt rules

14  necessary for the performance of its assigned duties and

15  responsibilities.

16         (b)  Consistent with the closing of the fund provided

17  in subsection (11), the Special Disability Trust Fund

18  Privatization Commission is authorized to contract with an

19  administrator to review, allow, deny, compromise, controvert,

20  and litigate claims of the Special Disability Trust Fund under

21  this section.  The Commission, in consultation with the

22  division, is authorized to contract with a qualified entity to

23  assume the reimbursement obligations of the Special Disability

24  Trust Fund for claims which have previously have accepted for

25  reimbursement by the Special Disability Trust Fund and claims

26  which are determined to be reimbursable by the Special

27  Disability Trust Fund.  The qualified entity and the

28  administrator shall not be affiliates of the other, and shall

29  not establish or maintain a financial or contractual agreement

30  with each other for purposes of this section. On or before

31  July 1, 1999, the commission, in consultation with the


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                                         HB 4815, Second Engrossed



  1  division, may develop and issue a request for proposal for the

  2  transfer and assumption of liabilities, and administration of

  3  certain functions related to claims of the Special Disability

  4  Trust Fund. The administrator shall have experience in

  5  workers' compensation claims management of sufficient scope

  6  and size to undertake the duties and responsibilities of this

  7  section and shall demonstrate the ability to meet the criteria

  8  established by the commission, which shall include the ability

  9  to substantially reduce the overall costs of reviewing and

10  reimbursing claims, and to settle and extinguish the

11  liabilities of the Special Disability Trust Fund in a more

12  cost efficient and more timely manner than presently provided

13  by the division. In the event liabilities on the Special

14  Disabilities Trust Fund are transferred to and assumed by a

15  qualified entity, such entity shall provide the state with

16  financial assurance as to the satisfaction of any such

17  liabilities or claims and the state and the Special Disability

18  Trust Fund shall have no further liability with respect to

19  those liabilities and claims. The financial assurances may

20  include, but are not limited to, cash reserves, reinsurance,

21  guarantees, or letters of credit.

22         (c)  The commission shall be composed of three members,

23  one member selected by the Governor; one selected by the

24  Insurance Commissioner; and one selected by the Comptroller.

25         (d)  The commission is authorized to appoint and employ

26  such officers, agents, and employees as the commission deems

27  advisable to operate and manage the affairs of the commission,

28  which officers, agents, and employees may be employees of the

29  division or the State Board of Administration. The commission

30  shall contract with consultants deemed necessary to determine

31  the liabilities of the Special Disability Trust Fund, as of


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                                         HB 4815, Second Engrossed



  1  December 31, 1998, and the feasibility of privatizing the

  2  Special Disability Trust Fund.

  3         (14)  Florida Special Disability Trust Fund Financing

  4  Corporation.--

  5         (a)  The Legislature finds that:

  6         1.  The liabilities of the Special Disability Trust

  7  Fund are substantial and that the extinguishment of these

  8  liabilities in a cost effective and timely manner are of

  9  paramount importance to the state. In connection therewith, in

10  the event that the commission determines that it is more cost

11  effective and in the best interest of the Special Disabilities

12  Trust Fund and the state to finance the liabilities of the

13  Special Disabilities Trust Fund through the issuance of bonds,

14  notes or other evidence of indebtedness, it shall request the

15  assistance of the corporation to issue such bonds, notes or

16  other evidences of indebtedness.

17         2.  The Legislature finds that the creation of a public

18  benefits corporation and the issuance of bonds or other forms

19  of indebtedness under this section is consistent with the

20  underlying public purpose of reducing and ultimately

21  eliminating the liabilities of the Special Disability Trust

22  Fund. The purpose of the corporation and the subsequent bond

23  issuance is to fund and pay the liabilities of the Special

24  Disability Trust Fund, ensure the existence of a sufficient

25  funding source for reimbursements to employers and carriers,

26  and reduce the overall costs of the program provided by the

27  state by employers and carriers.

28         (b)  In the event the commission determines that it is

29  more cost effective and in the best interest of the Special

30  Disability Trust Fund, the state, insurers, and employers to

31  finance the liabilities of the Special Disability Trust Fund


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                                         HB 4815, Second Engrossed



  1  through the issuance of bonds, notes, or other evidences of

  2  indebtedness, there is created a public benefits corporation

  3  to be known as the Special Disability Trust Fund Financing

  4  Corporation.

  5         1.  The corporation shall operate under a three-member

  6  board of directors consisting of the Governor or a designee,

  7  the Treasurer or a designee, and the Comptroller or a

  8  designee.

  9         2.  The corporation has all of the powers of

10  corporations under chapter 607 and under chapter 617.

11         3.  The corporation may issue bonds, notes, or other

12  evidences of indebtedness and engage in such other financial

13  transactions as are necessary to provide sufficient funds to

14  achieve the purposes of this section.

15         4.  The corporation may invest in any of the

16  investments authorized under s. 215.47.

17         5.  There shall be no liability on the part of, and no

18  cause of action shall arise against, any board members or

19  employees of the corporation or the state for any actions

20  taken by them in the performance of their duties under this

21  paragraph.

22         6.  The corporation may appoint and employ such

23  officers, agents, and employees as the corporation deems

24  advisable to operate and manage the affairs of the

25  corporation, which officers, agents, and employees may be

26  employees of the division or the State Board of

27  Administration. The administrative costs and fees incurred by

28  the corporation, and employee salaries, shall be paid from

29  bond revenues.  The corporation and the division shall have

30  the power to contract with each other for expenses incurred in

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                                         HB 4815, Second Engrossed



  1  connection with the transfer, assumption, and settlement of

  2  liabilities of the Special Disability Trust Fund.

  3         7.  In addition to bonding, the corporation may also

  4  borrow from, or enter into other financing arrangements with,

  5  any market sources at interest rates not exceeding prevailing

  6  interest rates.

  7         (c)1.  The proceeds of revenue bonds issued by this

  8  corporation may be used to pay obligations of the Special

  9  Disability Trust Fund made pursuant to this section; to

10  finance or replace previously existing borrowings or financial

11  arrangements; to pay interest on bonds; to fund reserves for

12  the bonds; to pay expenses incident to the issuance or sale of

13  any bonds issued under this subsection, or for such other

14  purposes related to the financial obligations of the Special

15  Disability Trust Fund as the corporation may determine. The

16  corporation may pledge all or a portion of the revenues

17  collected under subsection (9) to secure such revenue bonds,

18  and may execute such agreements between the corporation and

19  the division, necessary or desirable in connection with the

20  issuance of any revenue bonds.

21         2.  The corporation may contract with the State Board

22  of Administration to serve as trustee with respect to debt

23  obligations issued by the corporation as provided by this

24  section and to hold, administer, and invest proceeds of such

25  debt obligations and other funds of the corporation. The State

26  Board of Administration may perform such services and may

27  contract with others to provide all or a part of such services

28  and to recover the costs and expenses of providing such

29  services.  The investment of proceeds of debt obligations or

30  other funds of the corporation and contracts of funds held in

31  trust by the State Board of Administration, whether directly


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                                         HB 4815, Second Engrossed



  1  or indirectly related to the investments or contracts, are

  2  exempt from the provisions of chapter 287.

  3         (d)1.  Revenue bonds may not be issued under this

  4  subsection until validated under chapter 75. In any suit,

  5  action, or proceeding involving the validity or enforceability

  6  of any bond issued under this subsection, or the security

  7  therefor, any such bond reciting in substance that it has been

  8  issued by the corporation in connection with any purpose of

  9  this section shall be conclusively deemed to have been carried

10  out in accordance with the mandates herein. In actions under

11  chapter 75 to validate any bonds issued by the corporation,

12  the notice required by s. 75.06 shall be published only in

13  Leon County and in two newspapers of general circulation in

14  the state, and the complaint and order of the court shall be

15  served only on the State Attorney of the Second Judicial

16  Circuit. The validation of at least the first obligations

17  incurred pursuant to this subsection shall be appealed to the

18  Supreme Court, to be handled on an expedited basis.

19         2.  The state hereby covenants with holders of bonds of

20  the corporation that the state will not repeal or abrogate the

21  power of the division to levy the assessments and to collect

22  the proceeds of the revenues pledged to the payment of such

23  bonds as long as any such bonds remain outstanding unless

24  adequate provision has been made for the payment of such bonds

25  pursuant to the documents authorizing the issuance of such

26  bonds.

27         3.  The corporation and its corporate existence shall

28  continue until terminated by law; however, no such law shall

29  take effect as long as the corporation has bonds outstanding

30  unless adequate provision has been made for the payment of

31  such bonds pursuant to the documents authorizing the issuance


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                                         HB 4815, Second Engrossed



  1  of such bonds. Upon termination of the existence of the

  2  corporation, all of its rights and properties in excess of its

  3  obligations shall pass to and be vested in the state.

  4         (e)1.  The funds, credit, property, or taxing power of

  5  the state or political subdivisions of the state shall not be

  6  pledged for the payment of such bonds. The bonds of the

  7  corporation are not a debt of the state or of any political

  8  subdivision, and neither the state nor any political

  9  subdivision is liable on such bonds. The corporation does not

10  have the power to pledge the credit, the revenues, or the

11  taxing power of the state or of any political subdivision. The

12  credit, revenues, or taxing power of the state or of any

13  political subdivision shall not be deemed to be pledged to the

14  payment of any bonds of the corporation. However, bonds issued

15  under this subsection are declared to be for an essential

16  public and governmental purpose.

17         2.  The property, revenues, and other assets of the

18  corporation; the transactions and operations of the

19  corporation and the income from such transactions and

20  operations; and all bonds issued under this paragraph and the

21  interest on such bonds, which is exempt from income taxes of

22  the United States, are exempt from taxation by the state and

23  any political subdivision, including, but not limited to, the

24  intangibles tax under chapter 199, the income tax under

25  chapter 220, and the premium tax under the Florida Insurance

26  Code. This exemption does not apply to any tax imposed by

27  chapter 220 on interest income or profits on debt obligations

28  owned by corporations other than the Special Disability Trust

29  Fund Financing Corporation. The corporation is not subject to

30  the reporting requirements mandated by the Florida Insurance

31  Code.


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                                         HB 4815, Second Engrossed



  1         (f)  All bonds of the corporation shall be and

  2  constitute legal investments without limitation for all public

  3  bodies of this state; for all banks, trust companies, savings

  4  banks, savings associations, savings and loan associations,

  5  and investment companies; for all administrators, executors,

  6  trustees, and other fiduciaries; for all insurance companies

  7  and associations and other persons carrying on an insurance

  8  business; and for all other persons who are now or may

  9  hereafter be authorized to invest in bonds or other

10  obligations of the state and shall be and constitute eligible

11  securities to be deposited as collateral for the security of

12  any state, county, municipal, or other public funds. This

13  paragraph shall be considered as additional and supplemental

14  authority and shall not be limited without specific reference

15  to this paragraph.

16         (g)  In the event the commission selects a qualified

17  entity to assume all or some of the liabilities of the Special

18  Disability Trust Fund, all or any portion of the monetary

19  assets and claims liabilities held in and accruing to the

20  Special Disability Trust Fund may, with the agreement of the

21  corporation or the administrator, be transferred to and fully

22  assumed by the corporation or the qualified entity. As

23  provided in an agreement with the corporation or the qualified

24  entity, subsequent assessments under subsection (9) shall be

25  collected by the division, deposited into the Special

26  Disability Trust Fund, and used exclusively for the debt

27  service of the bonds issued by the corporation, the payment of

28  outstanding liabilities of the Special Disability Trust Fund

29  not assumed by the corporation or the qualified entity, and

30  expenses of the corporation.

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                                         HB 4815, Second Engrossed



  1         (h)  The administrator is prohibited from reviewing,

  2  auditing, litigating, reimbursing, or settling any pending or

  3  future claim or liability of its affiliates or subsidiaries.

  4  The administrator is required to subcontract the

  5  responsibility of reviewing, auditing, litigating,

  6  reimbursing, or settling such a claim or liability.

  7         (i)  The Auditor General is authorized to examine and

  8  audit the records and accounts of the corporation.

  9         Section 6.  There is hereby appropriated $200,000 from

10  the Special Disability Trust Fund to the Special Disability

11  Trust Fund Privatization Commission to implement this act.

12         Section 7.  This act shall take effect upon becoming a

13  law.

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