The Florida Senate

440.49  Limitation of liability for subsequent injury through Special Disability Trust Fund.--

(1)  LEGISLATIVE INTENT.--Whereas it is often difficult for workers with disabilities to achieve employment or to become reemployed following an injury, and it is the desire of the Legislature to facilitate the return of these workers to the workplace, it is the purpose of this section to encourage the employment, reemployment, and accommodation of the physically disabled by reducing an employer's insurance premium for reemploying an injured worker, to decrease litigation between carriers on apportionment issues, and to protect employers from excess liability for compensation and medical expense when an injury to a physically disabled worker merges with, aggravates, or accelerates her or his preexisting permanent physical impairment to cause either a greater disability or permanent impairment, or an increase in expenditures for temporary compensation or medical benefits than would have resulted from the injury alone. The division or the administrator shall inform all employers of the existence and function of the fund and shall interpret eligibility requirements liberally. However, this subsection shall not be construed to create or provide any benefits for injured employees or their dependents not otherwise provided by this chapter. The entitlement of an injured employee or her or his dependents to compensation under this chapter shall be determined without regard to this subsection, the provisions of which shall be considered only in determining whether an employer or carrier who has paid compensation under this chapter is entitled to reimbursement from the Special Disability Trust Fund.

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

(a)  "Permanent physical impairment" means and is limited to the conditions listed in paragraph (6)(a).

(b)  "Preferred worker" means a worker who, because of a permanent impairment resulting from a compensable injury or occupational disease, is unable to return to the worker's regular employment.

(c)  "Merger" describes or means that:

1.  If the permanent physical impairment had not existed, the subsequent accident or occupational disease would not have occurred;

2.  The permanent disability or permanent impairment resulting from the subsequent accident or occupational disease is materially and substantially greater than that which would have resulted had the permanent physical impairment not existed, and the employer has been required to pay, and has paid, permanent total disability or permanent impairment benefits for that materially and substantially greater disability;

3.  The preexisting permanent physical impairment is aggravated or accelerated as a result of the subsequent injury or occupational disease, or the preexisting impairment has contributed, medically and circumstantially, to the need for temporary compensation, medical, or attendant care and the employer has been required to pay, and has paid, temporary compensation, medical, or attendant care benefits for the aggravated preexisting permanent impairment; or

4.  Death would not have been accelerated if the permanent physical impairment had not existed.

(d)  "Excess permanent compensation" means that compensation for permanent impairment, or permanent total disability or death benefits, for which the employer or carrier is otherwise entitled to reimbursement from the Special Disability Trust Fund.

(e)  "Administrator" means the entity selected by the commission to review, allow, deny, compromise, controvert, and litigate claims of the Special Disability Trust Fund.

(f)  "Corporation" means the Special Disability Trust Fund Financing Corporation, as created under subsection (14).

(g)  "Commission" means the Special Disability Trust Fund Privatization Commission, as created under subsection (13).

In addition to the definitions contained in this subsection, the division may by rule prescribe definitions that are necessary for the effective administration of this section.

(3)  DEDUCTIBLE.--Reimbursement may not be obtained for the first $10,000 of benefits paid which otherwise qualify for reimbursement under this section. This deductible does not apply to claims by employers for reimbursement under ¹subparagraph (b)3.

(4)  PERMANENT IMPAIRMENT OR PERMANENT TOTAL DISABILITY, TEMPORARY BENEFITS, MEDICAL BENEFITS, OR ATTENDANT CARE AFTER OTHER PHYSICAL IMPAIRMENT.--

(a)  Permanent impairment.--If an employee who has a preexisting permanent physical impairment incurs a subsequent permanent impairment from injury or occupational disease arising out of, and in the course of, her or his employment which merges with the preexisting permanent physical impairment to cause a permanent impairment, the employer shall, in the first instance, pay all benefits provided by this chapter; but, subject to the limitations specified in subsection (6), such employer shall be reimbursed from the Special Disability Trust Fund created by subsection (9) for 50 percent of all impairment benefits which the employer has been required to provide pursuant to s. 440.15(3)(a) as a result of the subsequent accident or occupational disease.

(b)  Permanent total disability.--If an employee who has a preexisting permanent physical impairment incurs a subsequent permanent impairment from injury or occupational disease arising out of, and in the course of, her or his employment which merges with the preexisting permanent physical impairment to cause permanent total disability, the employer shall, in the first instance, pay all benefits provided by this chapter; but, subject to the limitations specified in subsection (6), such employer shall be reimbursed from the Special Disability Trust Fund created by subsection (9) for 50 percent of all compensation for permanent total disability.

(c)  Temporary compensation and medical benefits; aggravation or acceleration of preexisting condition or circumstantial causation.--If an employee who has a preexisting permanent physical impairment experiences an aggravation or acceleration of the preexisting permanent physical impairment as a result of an injury or occupational disease arising out of and in the course of her or his employment, or suffers an injury as a result of a merger as defined in paragraph (2)(c), the employer shall provide all benefits provided by this chapter, but, subject to the limitations specified in subsection (7), the employer shall be reimbursed by the Special Disability Trust Fund created by subsection (9) for 50 percent of its payments for temporary, medical, and attendant care benefits.

(5)  WHEN DEATH RESULTS.--If death results from the subsequent permanent impairment contemplated in subsection (4) within 1 year after the subsequent injury, or within 5 years after the subsequent injury when disability has been continuous since the subsequent injury, and it is determined that the death resulted from a merger, the employer shall, in the first instance, pay the funeral expenses and the death benefits prescribed by this chapter; but, subject to the limitations specified in subsection (6), she or he shall be reimbursed from the Special Disability Trust Fund created by subsection (9) for the last 50 percent of all compensation allowable and paid for such death and for 50 percent of the amount paid as funeral expenses.

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

(a)  Reimbursement is not allowed under this section unless it is established that the employer knew of the preexisting permanent physical impairment prior to the occurrence of the subsequent injury or occupational disease, and that the permanent physical impairment is one of the following:

1.  Epilepsy.

2.  Diabetes.

3.  Cardiac disease.

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

5.  Total loss of sight of one or both eyes or a partial loss of corrected vision of more than 75 percent bilaterally.

6.  Residual disability from poliomyelitis.

7.  Cerebral palsy.

8.  Multiple sclerosis.

9.  Parkinson's disease.

10.  Meniscectomy.

11.  Patellectomy.

12.  Ruptured cruciate ligament.

13.  Hemophilia.

14.  Chronic osteomyelitis.

15.  Surgical or spontaneous fusion of a major weight-bearing joint.

16.  Hyperinsulinism.

17.  Muscular dystrophy.

18.  Thrombophlebitis.

19.  Herniated intervertebral disk.

20.  Surgical removal of an intervertebral disk or spinal fusion.

21.  One or more back injuries or a disease process of the back resulting in disability over a total of 120 or more days, if substantiated by a doctor's opinion that there was a preexisting impairment to the claimant's back.

22.  Total deafness.

23.  Mental retardation, provided the employee's intelligence quotient is such that she or he falls within the lowest 2 percentile of the general population. However, it shall not be necessary for the employer to know the employee's actual intelligence quotient or actual relative ranking in relation to the intelligence quotient of the general population.

24.  Any permanent physical condition which, prior to the industrial accident or occupational disease, constitutes a 20-percent impairment of a member or of the body as a whole.

25.  Obesity, provided the employee is 30 percent or more over the average weight designated for her or his height and age in the Table of Average Weight of Americans by Height and Age prepared by the Society of Actuaries using data from the 1979 Build and Blood Pressure Study.

26.  Any permanent physical impairment as defined in s. 440.15(3) which is a result of a prior industrial accident with the same employer or the employer's parent company, subsidiary, sister company, or affiliate located within the geographical boundaries of this state.

(b)  The Special Disability Trust Fund is not liable for any costs, interest, penalties, or attorneys' fees.

(c)  An employer's or carrier's right to apportionment or deduction pursuant to ss. 440.02(1), 440.15(5)(b), and 440.151(1)(c) does not preclude reimbursement from such fund, except when the merger comes within the definition of paragraph (2)(c) and such apportionment or deduction relieves the employer or carrier from providing the materially and substantially greater permanent disability benefits otherwise contemplated in those paragraphs.

(7)  REIMBURSEMENT OF EMPLOYER.--

(a)  The right to reimbursement as provided in this section is barred unless written notice of claim of the right to such reimbursement is filed by the employer or carrier entitled to such reimbursement with the division or administrator at Tallahassee within 2 years after the date the employee last reached maximum medical improvement, or within 2 years after the date of the first payment of compensation for permanent total disability, wage loss, or death, whichever is later. The notice of claim must contain such information as the division by rule requires or as established by the administrator; and the employer or carrier claiming reimbursement shall furnish such evidence in support of the claim as the division or administrator reasonably may require.

(b)  For notice of claims on the Special Disability Trust Fund filed on or after July 1, 1978, the Special Disability Trust Fund shall, within 120 days after receipt of notice that a carrier has paid, been required to pay, or accepted liability for excess compensation, serve notice of the acceptance of the claim for reimbursement.

(c)  A proof of claim must be filed on each notice of claim on file as of June 30, 1997, within 1 year after July 1, 1997, or the right to reimbursement of the claim shall be barred. A notice of claim on file on or before June 30, 1997, may be withdrawn and refiled if, at the time refiled, the notice of claim remains within the limitation period specified in paragraph (a). Such refiling shall not toll, extend, or otherwise alter in any way the limitation period applicable to the withdrawn and subsequently refiled notice of claim. Each proof of claim filed shall be accompanied by a proof-of-claim fee as provided in paragraph (9)(d). The Special Disability Trust Fund shall, within 120 days after receipt of the proof of claim, serve notice of the acceptance of the claim for reimbursement. This paragraph shall apply to all claims notwithstanding the provisions of subsection (12).

(d)  Each notice of claim filed or refiled on or after July 1, 1997, must be accompanied by a notification fee as provided in paragraph (9)(d). A proof of claim must be filed within 1 year after the date the notice of claim is filed or refiled, accompanied by a proof-of-claim fee as provided in paragraph (9)(d), or the claim shall be barred. The notification fee shall be waived if both the notice of claim and proof of claim are submitted together as a single filing. The Special Disability Trust Fund shall, within 180 days after receipt of the proof of claim, serve notice of the acceptance of the claim for reimbursement. This paragraph shall apply to all claims notwithstanding the provisions of subsection (12).

(e)  For dates of accident on or after January 1, 1994, the Special Disability Trust Fund shall, within 120 days of receipt of notice that a carrier has been required to pay, and has paid over $10,000 in benefits, serve notice of the acceptance of the claim for reimbursement. Failure of the Special Disability Trust Fund to serve notice of acceptance shall give rise to the right to request a hearing on the claim for reimbursement. If the Special Disability Trust Fund through its representative denies or controverts the claim, the right to such reimbursement shall be barred unless an application for a hearing thereon is filed with the division or administrator at Tallahassee within 60 days after notice to the employer or carrier of such denial or controversion. When such application for a hearing is timely filed, the claim shall be heard and determined in accordance with the procedure prescribed in s. 440.25, to the extent that such procedure is applicable, and in accordance with the workers' compensation rules of procedure. In such proceeding on a claim for reimbursement, the Special Disability Trust Fund shall be made the party respondent, and no findings of fact made with respect to the claim of the injured employee or the dependents for compensation, including any finding made or order entered pursuant to s. 440.20(11), shall be res judicata. The Special Disability Trust Fund may not be joined or made a party to any controversy or dispute between an employee and the dependents and the employer or between two or more employers or carriers without the written consent of the fund.

(f)  When it has been determined that an employer or carrier is entitled to reimbursement in any amount, the employer or carrier shall be reimbursed annually from the Special Disability Trust Fund for the compensation and medical benefits paid by the employer or carrier for which the employer or carrier is entitled to reimbursement, upon filing request therefor and submitting evidence of such payment in accordance with rules prescribed by the division, which rules may include parameters for annual audits. The Special Disability Trust Fund shall pay the approved reimbursement requests on a first-in, first-out basis reflecting the order in which the reimbursement requests were received.

(g)  The division may by rule require specific forms and procedures for the administration and processing of claims made through the Special Disability Trust Fund.

(8)  PREFERRED WORKER PROGRAM.--The division or administrator shall issue identity cards to preferred workers upon request by qualified employees and shall reimburse an employer, from the Special Disability Trust Fund, for the cost of workers' compensation premium related to the preferred workers payroll for up to 3 years of continuous employment upon satisfactory evidence of placement and issuance of payroll and classification records and upon the employee's certification of employment. The division may by rule prescribe definitions, forms, and procedures for the administration of the preferred worker program. The division may by rule prescribe the schedule for submission of forms for participation in the program.

(9)  SPECIAL DISABILITY TRUST FUND.--

(a)  There is established in the State Treasury a special fund to be known as the "Special Disability Trust Fund," which shall be available only for the purposes stated in this section; and the assets thereof may not at any time be appropriated or diverted to any other use or purpose. The Treasurer shall be the custodian of such fund, and all moneys and securities in such fund shall be held in trust by such Treasurer and shall not be the money or property of the state. The Treasurer is authorized to disburse moneys from such fund only when approved by the division or corporation and upon the order of the Comptroller. The Treasurer shall deposit any moneys paid into such fund into such depository banks as the division or corporation may designate and is authorized to invest any portion of the fund which, in the opinion of the division, is not needed for current requirements, in the same manner and subject to all the provisions of the law with respect to the deposits of state funds by such Treasurer. All interest earned by such portion of the fund as may be invested by the Treasurer shall be collected by her or him and placed to the credit of such fund.

(b)1.  The Special Disability Trust Fund shall be maintained by annual assessments upon the insurance companies writing compensation insurance in the state, the commercial self-insurers under ss. 624.462 and 624.4621, the assessable mutuals under ²s. 628.601, and the self-insurers under this chapter, which assessments shall become due and be paid quarterly at the same time and in addition to the assessments provided in s. 440.51. The division shall estimate annually in advance the amount necessary for the administration of this subsection and the maintenance of this fund and shall make such assessment in the manner hereinafter provided.

2.  The annual assessment shall be calculated to produce during the ensuing fiscal year an amount which, when combined with that part of the balance in the fund on June 30 of the current fiscal year which is in excess of $100,000, is equal to the average of:

a.  The sum of disbursements from the fund during the immediate past 3 calendar years, and

b.  Two times the disbursements of the most recent calendar year.

Such amount shall be prorated among the insurance companies writing compensation insurance in the state and the self-insurers. Provided however, for those carriers that have excluded ceded reinsurance premiums from their assessments on or before January 1, 2000, no assessments on ceded reinsurance premiums shall be paid by those carriers until such time as the division advises each of those carriers of the impact that the inclusion of ceded reinsurance premiums has on their assessment. The division may not recover any past underpayments of assessments levied against any carrier that on or before January 1, 2000, excluded ceded reinsurance premiums from their assessment prior to the point that the division advises of the appropriate assessment that should have been paid.

3.  The net premiums written by the companies for workers' compensation in this state and the net premium written applicable to the self-insurers in this state are the basis for computing the amount to be assessed as a percentage of net premiums. Such payments shall be made by each carrier and self-insurer to the division for the Special Disability Trust Fund in accordance with such regulations as the division prescribes.

4.  The Treasurer is authorized to receive and credit to such Special Disability Trust Fund any sum or sums that may at any time be contributed to the state by the United States under any Act of Congress, or otherwise, to which the state may be or become entitled by reason of any payments made out of such fund.

(c)  Notwithstanding the Special Disability Trust Fund assessment rate calculated pursuant to this section, the rate assessed shall not exceed 4.52 percent.

(d)  The Special Disability Trust Fund shall be supplemented by a $250 notification fee on each notice of claim filed or refiled after July 1, 1997, and a $500 fee on each proof of claim filed in accordance with subsection (7). Revenues from the fee shall be deposited into the Special Disability Trust Fund and are exempt from the deduction required by s. 215.20. The fees provided in this paragraph shall not be imposed upon any insurer which is in receivership with the Department of Insurance.

(e)  The Department of Labor and Employment Security or administrator shall report annually on the status of the Special Disability Trust Fund. The report shall update the estimated undiscounted and discounted fund liability, as determined by an independent actuary, change in the total number of notices of claim on file with the fund in addition to the number of newly filed notices of claim, change in the number of proofs of claim processed by the fund, the fee revenues refunded and revenues applied to pay down the liability of the fund, the average time required to reimburse accepted claims, and the average administrative costs per claim. The department or administrator shall submit its report to the Governor, the President of the Senate, and the Speaker of the House of Representatives by December 1 of each year.

(10)  DIVISION ADMINISTRATION OF FUND; CLAIMS; ADVISORY COMMITTEE; EXPENSES.--The division or administrator shall administer the Special Disability Trust Fund with authority to allow, deny, compromise, controvert, and litigate claims made against it and to designate an attorney to represent it in proceedings involving claims against the fund, including negotiation and consummation of settlements, hearings before judges of compensation claims, and judicial review. The division or administrator or the attorney designated by it shall be given notice of all hearings and proceedings involving the rights or obligations of such fund and shall have authority to make expenditures for such medical examinations, expert witness fees, depositions, transcripts of testimony, and the like as may be necessary to the proper defense of any claim. The division shall appoint an advisory committee composed of representatives of management, compensation insurance carriers, and self-insurers to aid it in formulating policies with respect to conservation of the fund, who shall serve without compensation for such terms as specified by it, but be reimbursed for travel expenses as provided in s. 112.061. All expenditures made in connection with conservation of the fund, including the salary of the attorney designated to represent it and necessary travel expenses, shall be allowed and paid from the Special Disability Trust Fund as provided in this section upon the presentation of itemized vouchers therefor approved by the division.

(11)  EFFECTIVE DATES.--This section does not apply to any case in which the accident causing the subsequent injury or death or the disablement or death from a subsequent occupational disease occurred prior to July 1, 1955, or on or after January 1, 1998. In no event shall the Special Disability Trust Fund be liable for, or reimburse employers or carriers for, any case in which the accident causing the subsequent injury or death or the disablement or death from a subsequent occupational disease occurred on or after January 1, 1998. The Special Disability Trust Fund shall continue to reimburse employers or carriers for subsequent injuries occurring prior to January 1, 1998, and the division shall continue to assess for and the division or administrator shall fund reimbursements as provided in subsection (9) for this purpose.

(12)  REIMBURSEMENT FROM THE SPECIAL DISABILITY TRUST FUND.--The applicable law for the purposes of determining entitlement to reimbursement from the Special Disability Trust Fund is the law in effect on the date the accident occurred.

(13)  SPECIAL DISABILITY TRUST FUND PRIVATIZATION COMMISSION.--

(a)  The Special Disability Trust Fund Privatization Commission is created to evaluate and determine the feasibility of privatizing the Special Disability Trust Fund. The commission shall determine the liabilities of the fund and the costs to presently administer the Special Disability Trust Fund. The commission may develop and issue a request for proposal to transfer the liabilities of the Special Disability Trust Fund to a qualified entity. The commission is authorized to select and contract with a qualified entity, only if the commission determines that such an arrangement would substantially reduce the costs and be more effective than the current administration of the Special Disability Trust Fund. The commission may adopt rules necessary for the performance of its assigned duties and responsibilities.

(b)  Consistent with the closing of the fund provided in subsection (11), the Special Disability Trust Fund Privatization Commission is authorized to contract with an administrator to review, allow, deny, compromise, controvert, and litigate claims of the Special Disability Trust Fund under this section. The commission, in consultation with the division, is authorized to contract with a qualified entity to assume the reimbursement obligations of the Special Disability Trust Fund for claims which have previously been accepted for reimbursement by the Special Disability Trust Fund and claims which are determined to be reimbursable by the Special Disability Trust Fund. The qualified entity and the administrator shall not be affiliates of the other, and shall not establish or maintain a financial or contractual agreement with each other for purposes of this section. On or before July 1, 1999, the commission, in consultation with the division, may develop and issue a request for proposal for the transfer and assumption of liabilities, and administration of certain functions related to claims of the Special Disability Trust Fund. The administrator shall have experience in workers' compensation claims management of sufficient scope and size to undertake the duties and responsibilities of this section and shall demonstrate the ability to meet the criteria established by the commission, which shall include the ability to substantially reduce the overall costs of reviewing and reimbursing claims, and to settle and extinguish the liabilities of the Special Disability Trust Fund in a more cost-efficient and more timely manner than presently provided by the division. In the event liabilities on the Special Disabilities Trust Fund are transferred to and assumed by a qualified entity, such entity shall provide the state with financial assurance as to the satisfaction of any such liabilities or claims and the state and the Special Disability Trust Fund shall have no further liability with respect to those liabilities and claims. The financial assurances may include, but are not limited to, cash reserves, reinsurance, guarantees, or letters of credit.

(c)  The commission shall be composed of three members: one member selected by the Governor; one selected by the Insurance Commissioner; and one selected by the Comptroller.

(d)  The commission is authorized to appoint and employ such officers, agents, and employees as the commission deems advisable to operate and manage the affairs of the commission, which officers, agents, and employees may be employees of the division or the State Board of Administration. The commission shall contract with consultants deemed necessary to determine the liabilities of the Special Disability Trust Fund, as of December 31, 1998, and the feasibility of privatizing the Special Disability Trust Fund.

(14)  FLORIDA SPECIAL DISABILITY TRUST FUND FINANCING CORPORATION.--

(a)  The Legislature finds that:

1.  The liabilities of the Special Disability Trust Fund are substantial and that the extinguishment of these liabilities in a cost-effective and timely manner are of paramount importance to the state. In connection therewith, in the event that the commission determines that it is more cost-effective and in the best interest of the Special Disabilities Trust Fund and the state to finance the liabilities of the Special Disabilities Trust Fund through the issuance of bonds, notes or other evidence of indebtedness, it shall request the assistance of the corporation to issue such bonds, notes, or other evidences of indebtedness.

2.  The Legislature finds that the creation of a public benefits corporation and the issuance of bonds or other forms of indebtedness under this section is consistent with the underlying public purpose of reducing and ultimately eliminating the liabilities of the Special Disability Trust Fund. The purpose of the corporation and the subsequent bond issuance is to fund and pay the liabilities of the Special Disability Trust Fund, ensure the existence of a sufficient funding source for reimbursements to employers and carriers, and reduce the overall costs of the program provided by the state by employers and carriers.

(b)  In the event the commission determines that it is more cost-effective and in the best interest of the Special Disability Trust Fund, the state, insurers, and employers to finance the liabilities of the Special Disability Trust Fund through the issuance of bonds, notes, or other evidences of indebtedness, there is created a public benefits corporation to be known as the Special Disability Trust Fund Financing Corporation.

1.  The corporation shall operate under a three-member board of directors consisting of the Governor or a designee, the Treasurer or a designee, and the Comptroller or a designee.

2.  The corporation has all of the powers of corporations under chapters 607 and 617.

3.  The corporation may issue bonds, notes, or other evidences of indebtedness and engage in such other financial transactions as are necessary to provide sufficient funds to achieve the purposes of this section.

4.  The corporation may invest in any of the investments authorized under s. 215.47.

5.  There shall be no liability on the part of, and no cause of action shall arise against, any board members or employees of the corporation or the state for any actions taken by them in the performance of their duties under this paragraph.

6.  The corporation may appoint and employ such officers, agents, and employees as the corporation deems advisable to operate and manage the affairs of the corporation, which officers, agents, and employees may be employees of the division or the State Board of Administration. The administrative costs and fees incurred by the corporation, and employee salaries, shall be paid from bond revenues. The corporation and the division shall have the power to contract with each other for expenses incurred in connection with the transfer, assumption, and settlement of liabilities of the Special Disability Trust Fund.

7.  In addition to bonding, the corporation may also borrow from, or enter into other financing arrangements with, any market sources at interest rates not exceeding prevailing interest rates.

(c)1.  The proceeds of revenue bonds issued by this corporation may be used to pay obligations of the Special Disability Trust Fund made pursuant to this section; to finance or replace previously existing borrowings or financial arrangements; to pay interest on bonds; to fund reserves for the bonds; to pay expenses incident to the issuance or sale of any bonds issued under this subsection, or for such other purposes related to the financial obligations of the Special Disability Trust Fund as the corporation may determine. The corporation may pledge all or a portion of the revenues collected under subsection (9) to secure such revenue bonds, and may execute such agreements between the corporation and the division, necessary or desirable in connection with the issuance of any revenue bonds.

2.  The corporation may contract with the State Board of Administration to serve as trustee with respect to debt obligations issued by the corporation as provided by this section and to hold, administer, and invest proceeds of such debt obligations and other funds of the corporation. The State Board of Administration may perform such services and may contract with others to provide all or a part of such services and to recover the costs and expenses of providing such services. The investment of proceeds of debt obligations or other funds of the corporation and contracts of funds held in trust by the State Board of Administration, whether directly or indirectly related to the investments or contracts, are exempt from the provisions of chapter 287.

(d)1.  Revenue bonds may not be issued under this subsection until validated under chapter 75. In any suit, action, or proceeding involving the validity or enforceability of any bond issued under this subsection, or the security therefor, any such bond reciting in substance that it has been issued by the corporation in connection with any purpose of this section shall be conclusively deemed to have been carried out in accordance with the mandates herein. In actions under chapter 75 to validate any bonds issued by the corporation, the notice required by s. 75.06 shall be published only in Leon County and in two newspapers of general circulation in the state, and the complaint and order of the court shall be served only on the State Attorney of the Second Judicial Circuit. The validation of at least the first obligations incurred pursuant to this subsection shall be appealed to the Supreme Court, to be handled on an expedited basis.

2.  The state hereby covenants with holders of bonds of the corporation that the state will not repeal or abrogate the power of the division to levy the assessments and to collect the proceeds of the revenues pledged to the payment of such bonds as long as any such bonds remain outstanding unless adequate provision has been made for the payment of such bonds pursuant to the documents authorizing the issuance of such bonds.

3.  The corporation and its corporate existence shall continue until terminated by law; however, no such law shall take effect as long as the corporation has bonds outstanding unless adequate provision has been made for the payment of such bonds pursuant to the documents authorizing the issuance of such bonds. Upon termination of the existence of the corporation, all of its rights and properties in excess of its obligations shall pass to and be vested in the state.

(e)1.  The funds, credit, property, or taxing power of the state or political subdivisions of the state shall not be pledged for the payment of such bonds. The bonds of the corporation are not a debt of the state or of any political subdivision, and neither the state nor any political subdivision is liable on such bonds. The corporation does not have the power to pledge the credit, the revenues, or the taxing power of the state or of any political subdivision. The credit, revenues, or taxing power of the state or of any political subdivision shall not be deemed to be pledged to the payment of any bonds of the corporation. However, bonds issued under this subsection are declared to be for an essential public and governmental purpose.

2.  The property, revenues, and other assets of the corporation; the transactions and operations of the corporation and the income from such transactions and operations; and all bonds issued under this paragraph and the interest on such bonds, which is exempt from income taxes of the United States, are exempt from taxation by the state and any political subdivision, including, but not limited to, the intangibles tax under chapter 199, the income tax under chapter 220, and the premium tax under the Florida Insurance Code. This exemption does not apply to any tax imposed by chapter 220 on interest income or profits on debt obligations owned by corporations other than the Special Disability Trust Fund Financing Corporation. The corporation is not subject to the reporting requirements mandated by the Florida Insurance Code.

(f)  All bonds of the corporation shall be and constitute legal investments without limitation for all public bodies of this state; for all banks, trust companies, savings banks, savings associations, savings and loan associations, and investment companies; for all administrators, executors, trustees, and other fiduciaries; for all insurance companies and associations and other persons carrying on an insurance business; and for all other persons who are now or may hereafter be authorized to invest in bonds or other obligations of the state and shall be and constitute eligible securities to be deposited as collateral for the security of any state, county, municipal, or other public funds. This paragraph shall be considered as additional and supplemental authority and shall not be limited without specific reference to this paragraph.

(g)  In the event the commission selects a qualified entity to assume all or some of the liabilities of the Special Disability Trust Fund, all or any portion of the monetary assets and claims liabilities held in and accruing to the Special Disability Trust Fund may, with the agreement of the corporation or the administrator, be transferred to and fully assumed by the corporation or the qualified entity. As provided in an agreement with the corporation or the qualified entity, subsequent assessments under subsection (9) shall be collected by the division, deposited into the Special Disability Trust Fund, and used exclusively for the debt service of the bonds issued by the corporation, the payment of outstanding liabilities of the Special Disability Trust Fund not assumed by the corporation or the qualified entity, and expenses of the corporation.

(h)  The administrator is prohibited from reviewing, auditing, litigating, reimbursing, or settling any pending or future claim or liability of its affiliates or subsidiaries. The administrator is required to subcontract the responsibility of reviewing, auditing, litigating, reimbursing, or settling such a claim or liability.

(i)  The Auditor General is authorized to examine and audit the records and accounts of the corporation.

History.--s. 49, ch. 17481, 1935; CGL 1936 Supp. 5966(47); s. 13, ch. 28241, 1953; s. 12, ch. 29778, 1955; s. 1, ch. 59-101; s. 2, ch. 63-235; s. 19, ch. 63-400; s. 2, ch. 67-554; ss. 17, 35, ch. 69-106; s. 21, ch. 74-197; s. 24, ch. 75-209; ss. 151, 152, ch. 77-104; ss. 15, 23, ch. 78-300; ss. 37, 124, ch. 79-40; s. 21, ch. 79-312; s. 11, ch. 81-119; s. 17, ch. 83-305; s. 10, ch. 85-61; s. 9, ch. 87-330; ss. 24, 43, ch. 89-289; ss. 40, 56, ch. 90-201; ss. 38, 52, ch. 91-1; s. 43, ch. 93-415; s. 4, ch. 95-285; s. 21, ch. 95-327; s. 12, ch. 96-423; s. 1054, ch. 97-103; s. 1, ch. 97-262; s. 9, ch. 98-125; s. 84, ch. 98-199; s. 2, ch. 2000-150; s. 98, ch. 2000-153.

¹Note.--Subsection (3) is not divided into subunits.

²Note.--Transferred to s. 628.905 by s. 3, ch. 87-127. Section 628.905 is concerned with captive insurers; assessable mutual insurers are covered by part II of ch. 628.