1.1                          A bill for an act 
  1.2             relating to workers' compensation; providing for 
  1.3             periodic payments of the assessments for the workers' 
  1.4             compensation special compensation fund; amending 
  1.5             Minnesota Statutes 2002, section 176.129, subdivision 
  1.6             2a. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 176.129, 
  1.9   subdivision 2a, is amended to read: 
  1.10     Subd. 2a.  [PAYMENTS TO FUND.] (a) On or before April 1 of 
  1.11  each year, all self-insured employers shall report paid 
  1.12  indemnity losses and insurers shall report paid indemnity losses 
  1.13  and standard workers' compensation premium in the form and 
  1.14  manner prescribed by the commissioner.  On June 1 of each year, 
  1.15  the commissioner shall determine the total amount needed to pay 
  1.16  all estimated liabilities, including administrative expenses, of 
  1.17  the special compensation fund for the following fiscal year.  
  1.18  The commissioner shall assess this amount against self-insured 
  1.19  employers and insurers.  The total amount of the assessment must 
  1.20  be allocated between self-insured employers and insured 
  1.21  employers based on paid indemnity losses for the preceding 
  1.22  calendar year.  The method of assessing self-insured employers 
  1.23  must be based on paid indemnity losses.  The method of assessing 
  1.24  insured employers is based on premium, collectible through a 
  1.25  policyholder surcharge.  On or before June 30 of each year, the 
  1.26  commissioner shall provide notification to each self-insured 
  2.1   employer and insurer of amounts due.  At least one-half of the 
  2.2   payment shall be made to the commissioner for deposit into the 
  2.3   special compensation fund on or before August 1 of the same 
  2.4   calendar year.  The remaining balance is due on February 1 of 
  2.5   the following calendar year. 
  2.6      (b) The portion of the total amount that is collected from 
  2.7   self-insured employers is equal to that proportion of the paid 
  2.8   indemnity losses for the preceding calendar year, which the paid 
  2.9   indemnity losses of all self-insured employers bore to the total 
  2.10  paid indemnity losses made by all self-insured employers and 
  2.11  insured employers during the preceding calendar year.  The 
  2.12  portion of the total amount that is collected from insured 
  2.13  employers is equal to that proportion of the total paid 
  2.14  indemnity losses on behalf of all insured employers bore to the 
  2.15  total paid indemnity losses on behalf of all self-insured 
  2.16  employers and insured employers during the preceding calendar 
  2.17  year.  The portion of the total assessment allocated to insured 
  2.18  employers that is collected from each insured employer must be 
  2.19  based on standard workers' compensation premium written in the 
  2.20  state during the preceding calendar year.  An employer who has 
  2.21  ceased to be self-insured shall continue to be liable for 
  2.22  assessments based on paid indemnity losses made by the employer 
  2.23  in the preceding calendar year. 
  2.24     (c) Insurers shall collect the assessments from their 
  2.25  insured employers through a surcharge based on premium, as 
  2.26  provided in paragraph (a).  The surcharge shall be made at least 
  2.27  quarterly, based on the total amount expected to be due for the 
  2.28  calendar year.  Assessments when collected do not constitute an 
  2.29  element of loss for the purpose of establishing rates for 
  2.30  workers' compensation insurance but for the purpose of 
  2.31  collection are treated as separate costs imposed on insured 
  2.32  employers.  The premium surcharge is included in the definition 
  2.33  of gross premium as defined in section 297I.01.  An insurer may 
  2.34  cancel a policy for nonpayment of the premium surcharge.  The 
  2.35  premium surcharge is excluded from the definition of premium 
  2.36  except as otherwise provided in this paragraph.