SF 895

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to workers' compensation; regulating 
  1.3             benefits; regulating insurance; eliminating 
  1.4             supplementary benefits; eliminating certain lump sum 
  1.5             payments; requiring safety programs; regulating 
  1.6             coverage for independent contractors; providing 
  1.7             penalties; appropriating money; amending Minnesota 
  1.8             Statutes 1994, sections 79.085; 176.041, subdivision 
  1.9             1; 176.081, subdivision 1; 176.101, subdivisions 1, 
  1.10            3b, 3m, 3o, 3q, 4, and 5; 176.185, subdivision 1; 
  1.11            176.194, subdivisions 1 and 4; 176.221, subdivision 1; 
  1.12            176.225, subdivision 1; 176.232; 176.261; 176.645, 
  1.13            subdivisions 1 and 2; 176.66, subdivision 11; and 
  1.14            268.08, subdivision 3; proposing coding for new law in 
  1.15            Minnesota Statutes, chapters 79; 176; and 182; 
  1.16            repealing Minnesota Statutes 1994, sections 79.01, 
  1.17            subdivisions 7 and 8; 79.074, subdivision 2; 79.50; 
  1.18            79.51; 79.52; 79.53; 79.54; 79.55; 79.56; 79.57; 
  1.19            79.58; 79.59; 79.60; 79.61; 79.62; and 176.132, 
  1.20            subdivisions 2 and 3. 
  1.21  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.22                             ARTICLE 1 
  1.23                        INSURANCE REGULATION
  1.24     Section 1.  [79.64] [DEFINITIONS.] 
  1.25     Subdivision 1.  [SCOPE.] For the purpose of sections 79.64 
  1.26  to 79.78, the terms defined in this section have the meanings 
  1.27  given them. 
  1.28     Subd. 2.  [ASSOCIATION OR RATING 
  1.29  ASSOCIATION.] "Association" or "rating association" means the 
  1.30  Workers' Compensation Insurers Rating Association of Minnesota. 
  1.31     Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
  1.32  commissioner of commerce. 
  1.33     Subd. 4.  [RATE SERVICE ORGANIZATION.] "Rate service 
  2.1   organization" means any person, other than an employee of an 
  2.2   insurer, who assists insurers in ratemaking or filing by: 
  2.3      (1) collecting, compiling, and furnishing loss or expense 
  2.4   statistics; 
  2.5      (2) recommending, making, or filing rates or supplementary 
  2.6   rate information; or 
  2.7      (3) advising about rate questions, except as an attorney 
  2.8   giving legal advice. 
  2.9      Sec. 2.  [79.65] [SCOPE OF APPLICATION.] 
  2.10     Sections 79.64 to 79.78 apply to all workers' compensation 
  2.11  insurance written on risks or operations in this state, 
  2.12  employer's liability insurance when written in connection with 
  2.13  workers' compensation insurance, or insurance covering any part 
  2.14  of the liability of an employer exempted from insuring the 
  2.15  employer's liability for compensation under section 176.181. 
  2.16     Sec. 3.  [79.66] [RATING ASSOCIATION.] 
  2.17     The rating association is continued and every insurer, 
  2.18  including the assigned risk plan, writing any insurance 
  2.19  specified under section 79.65 is a member of it. 
  2.20     Sec. 4.  [79.67] [GENERAL PROVISIONS CONCERNING THE 
  2.21  ASSOCIATION.] 
  2.22     The association has the following purposes: 
  2.23     (1) to establish, maintain, and administer rules, 
  2.24  regulations, classifications, rates, and rating plans to govern 
  2.25  the transaction of insurance included in section 79.65; 
  2.26     (2) to cooperate with other rate service organizations and 
  2.27  with insurers in the development of rules, rates, and rating 
  2.28  plans and insurance policies and forms; 
  2.29     (3) to secure and analyze statistical and other data 
  2.30  required to accomplish these purposes; 
  2.31     (4) to inspect and classify risks; 
  2.32     (5) to file with the commissioner on behalf of its members 
  2.33  every manual of classifications, rules, and rates, every rating 
  2.34  plan, and every modification of any of them proposed for use in 
  2.35  this state; 
  2.36     (6) to assist the commissioner and insurers in the 
  3.1   promotion of safety in industry; and 
  3.2      (7) to assist in any matter necessary for the 
  3.3   accomplishment of these purposes. 
  3.4      Sec. 5.  [79.68] [RATE STANDARDS.] 
  3.5      Subdivision 1.  [GENERAL.] Rates determined under sections 
  3.6   79.64 to 79.78 shall not be excessive, inadequate, or unfairly 
  3.7   discriminatory. 
  3.8      Subd. 2.  [EXCESSIVENESS.] Rates determined under sections 
  3.9   79.64 to 79.78 are not excessive merely because a reasonable 
  3.10  margin is allowed for a profit. 
  3.11     Subd. 3.  [UNFAIR DISCRIMINATION.] Premiums are unfairly 
  3.12  discriminatory if differentials for insureds fail to reasonably 
  3.13  reflect the differences in expected losses and expenses to the 
  3.14  insurer attributable to the insureds. 
  3.15     Sec. 6.  [79.69] [RATING METHODS.] 
  3.16     Subdivision 1.  [CRITERIA.] In determining whether rates 
  3.17  comply with the standards under section 79.68, the criteria in 
  3.18  this section shall be applied. 
  3.19     Subd. 2.  [BASIC FACTORS IN RATES.] Due consideration must 
  3.20  be given to past and prospective loss and expense experience 
  3.21  within and outside this state; to catastrophe hazards and 
  3.22  contingencies; to a reasonable margin for profit, to dividends, 
  3.23  savings, or unabsorbed premium deposits allowed or returned by 
  3.24  insurers to their policyholders, members, or subscribers; and to 
  3.25  all other relevant factors. 
  3.26     Subd. 3.  [CLASSIFICATION.] Risks may be classified in any 
  3.27  reasonable way for the establishment of rates.  Classification 
  3.28  rates may be modified to produce rates for individual risks in 
  3.29  accordance with rating plans which established standards for 
  3.30  measuring variations in hazards or expense provisions, or both.  
  3.31  The standards may measure any differences among risks that can 
  3.32  be demonstrated to have a probable effect upon losses or 
  3.33  expenses. 
  3.34     Subd. 4.  [PHYSICAL IMPAIRMENT.] Rates or rating plans may 
  3.35  not take into account the physical impairment of employees.  Any 
  3.36  employer who applies or promotes any oppressive plan of physical 
  4.1   examination and rejection of employees or applicants for 
  4.2   employment shall forfeit the right to experience rating.  If the 
  4.3   commissioner determines that grounds exist for forfeiture, the 
  4.4   commissioner shall suspend any experience rating credit for the 
  4.5   employer.  Restoration of an employer to the advantages of 
  4.6   experience rating may be allowed upon cessation of the 
  4.7   oppressive plan. 
  4.8      Sec. 7.  [79.70] [APPROVAL OF RATES AND RATING PLANS.] 
  4.9      The association must file with the commissioner on behalf 
  4.10  of its members every manual of classifications, rules, and 
  4.11  rates, every rating plan, and every modification of any of them 
  4.12  proposed for use in this state.  Every filing shall state a 
  4.13  proposed effective date.  The association shall also file the 
  4.14  information upon which it supports the filings.  All filings 
  4.15  must comply with law and shall not be effective nor used until 
  4.16  approved by the commissioner.  A filing that has been on file 
  4.17  for 30 days is deemed to meet the requirements of sections 79.68 
  4.18  and 79.69, unless the commissioner earlier disapproves in a 
  4.19  written order. 
  4.20     Sec. 8.  [79.71] [FILINGS OPEN TO INSPECTION.] 
  4.21     Rate filings are open for public inspection. 
  4.22     Sec. 9.  [79.72] [DISAPPROVAL OF RATES.] 
  4.23     Subdivision 1.  [ORDER IN EVENT OF VIOLATION.] If the 
  4.24  commissioner finds after a hearing that a filing already in 
  4.25  effect under section 79.70 fails to meet the requirements of 
  4.26  law, the commissioner shall order that its use be discontinued 
  4.27  for any policy issued or renewed after a date specified in the 
  4.28  order. 
  4.29     Subd. 2.  [TIMING OF ORDER.] The commissioner shall issue 
  4.30  an order under section 79.70 within 30 days after the filing and 
  4.31  issue an order under subdivision 1 within 30 days after the 
  4.32  close of the hearing.  In either case, the commissioner may 
  4.33  extend the period for a reasonable time by written order prior 
  4.34  to the expiration of the time limit. 
  4.35     Subd. 3.  [INTERIM RATES.] Whenever an insurer has no 
  4.36  legally effective rates as a result of an order by the 
  5.1   commissioner under subdivision 1 or section 79.70, the 
  5.2   commissioner shall on request specify interim rates for the 
  5.3   insurer and may order that a specified portion of the premiums 
  5.4   be placed in an escrow account approved by the commissioner.  
  5.5   When new rates become legally effective, the commissioner shall 
  5.6   order the escrowed funds or any overcharge in the interim rates 
  5.7   to be distributed appropriately, except that refunds that are 
  5.8   trifling shall not be required. 
  5.9      Subd. 4.  [HEARING.] If negotiations between the 
  5.10  association and the commissioner fail to result in the approval 
  5.11  of all or part of a filing under section 79.70, the association 
  5.12  may at any time after the disapproval, request a contested case 
  5.13  hearing to address issues in dispute.  The burden is on the 
  5.14  association to demonstrate that a proposed filing meets the 
  5.15  requirements of sections 79.68 and 79.69. 
  5.16     Sec. 10.  [79.73] [USE OF RATES.] 
  5.17     Subdivision 1.  [APPROVAL REQUIRED.] An insurer writing any 
  5.18  insurance specified under section 79.65 may not use a rate, 
  5.19  rating plan, or classification nor an expense loading unless 
  5.20  approved by the commissioner. 
  5.21     Subd. 2.  [UNFAIR DISCRIMINATION.] No insurer writing any 
  5.22  insurance specified under section 79.65 may make or charge any 
  5.23  rate which discriminates unfairly between risks or classes, nor 
  5.24  discriminates unfairly between risks in the application of 
  5.25  rating plans, nor discriminates by granting to any employer 
  5.26  insurance against other hazards except in accordance with its 
  5.27  rates and rating plans filed and which are in effect for the 
  5.28  insurer. 
  5.29     Sec. 11.  [79.74] [OPERATION AND CONTROL OF ASSOCIATION.] 
  5.30     Subdivision 1.  [ASSOCIATION ADMINISTRATION.] The 
  5.31  association shall make bylaws for its government which, with 
  5.32  amendments thereto, shall be filed with and approved by the 
  5.33  commissioner before they are effective. 
  5.34     One-half of the members of the managing committee and of 
  5.35  the rating committee shall be chosen by stock insurers and 
  5.36  one-half by mutual insurers.  Both classes of insurers shall be 
  6.1   represented on all other committees.  Each committee member 
  6.2   shall have one vote, with the commissioner deciding the matter 
  6.3   in the event of a tie. 
  6.4      The services of the association must be supplied to members 
  6.5   without discrimination.  Each member of the association shall 
  6.6   pay an equitable share of the cost of operating the association 
  6.7   including assessments by the commissioner against the 
  6.8   association. 
  6.9      Subd. 2.  [INFORMATION TO BE SUPPLIED.] Upon demand, the 
  6.10  association must furnish to any employer upon whose risk a 
  6.11  survey has been made under section 79.75 and to any insurer full 
  6.12  information about the survey. 
  6.13     The association must, within a reasonable time after 
  6.14  receiving a written request and upon payment of a reasonable 
  6.15  charge, furnish information as to any rate to the insured 
  6.16  affected by it or to an authorized representative. 
  6.17     Subd. 3.  [REVIEW BY ASSOCIATION.] The following persons or 
  6.18  their authorized representatives shall be heard by the 
  6.19  association upon written request: 
  6.20     (1) any insurer or employer on any matter affecting the 
  6.21  risk in connection with a survey under section 79.75, 
  6.22  subdivision 2; 
  6.23     (2) any person or employer aggrieved by the application of 
  6.24  the association's rating system to the person; and 
  6.25     (3) any member alleging discrimination as to services or 
  6.26  charges of the association. 
  6.27     The association shall provide within this state a specified 
  6.28  procedure for review of the matters under this subdivision. 
  6.29     The commissioner may disapprove the review procedure if the 
  6.30  commissioner finds that it does not provide adequate notice and 
  6.31  fair hearing to the person asking for review. 
  6.32     The person asking for review may appeal to the commissioner 
  6.33  under subdivision 4 from a decision of the association or from 
  6.34  its failure to provide a review and decision within 30 days 
  6.35  after a written request. 
  6.36     Subd. 4.  [APPEALS FROM THE ASSOCIATION.] The following 
  7.1   persons or their authorized representatives may petition the 
  7.2   commissioner in writing for review of an association action or 
  7.3   decision: 
  7.4      (1) a member aggrieved by an apportionment of costs made by 
  7.5   the association under subdivision 1, or by the association's 
  7.6   failure to make an apportionment; 
  7.7      (2) a member aggrieved by discrimination in the supplying 
  7.8   of services by the association; 
  7.9      (3) a member aggrieved by the association's rejection of 
  7.10  proposed changes in or additions to its filings that would 
  7.11  affect the member; 
  7.12     (4) an insurer or employer aggrieved by findings made in a 
  7.13  survey under subdivision 2; and 
  7.14     (5) an insurer or employer aggrieved by the application of 
  7.15  the association's rating system to that person or agency. 
  7.16     Subd. 5.  [PROCEDURE FOR APPEAL.] An appeal is initiated by 
  7.17  a written petition to the commissioner, which must be filed 
  7.18  within 30 days after the adverse decision of the association on 
  7.19  review or, if the association has not announced a decision 
  7.20  within the specified 30 days, within 60 days after the written 
  7.21  request for review.  If the association announces a decision 
  7.22  after the specified 30 days but before filing of the petition, 
  7.23  the petitioner has 30 days after announcement of the decision to 
  7.24  petition the commissioner. 
  7.25     The commissioner shall give not less than ten days' notice 
  7.26  of hearing to the appellant and the association and, in cases 
  7.27  under subdivision 4, clause (1), to all other members of the 
  7.28  association. 
  7.29     Procedure in the hearing shall be as provided for other 
  7.30  hearings before the commissioner or as provided by rule. 
  7.31     The commissioner shall mail a copy of the commissioner's 
  7.32  decision to the appellant and the association. 
  7.33     Subd. 6.  [RELIEF AUTHORIZED.] The commissioner's decision 
  7.34  shall be by order, with findings or fact and conclusions of law, 
  7.35  which order may: 
  7.36     (1) approve the action or decision of the association; 
  8.1      (2) direct the association within a reasonable time the 
  8.2   commissioner designates to give further consideration to the 
  8.3   matter and to reach a conclusion consistent with the 
  8.4   commissioner's order; or 
  8.5      (3) direct the association within a reasonable time the 
  8.6   commissioner designates to take specified action consistent with 
  8.7   the commissioner's findings. 
  8.8      Sec. 12.  [79.75] [DEVELOPMENT OF RATES BY ASSOCIATION.] 
  8.9      Subdivision 1.  [ACQUISITION OF INFORMATION.] (a) Every 
  8.10  insurer writing any insurance specified under section 79.65 
  8.11  shall report its insurance in this state to the association at 
  8.12  least annually, on forms and under rules prescribed by the 
  8.13  association.  The association must file, pursuant to rules 
  8.14  adopted by the commissioner, a record of its reports with the 
  8.15  department.  No such information may be made public by the 
  8.16  association or any of its employees except as required by law 
  8.17  and in accordance with its rules. 
  8.18     (b) Payroll audits by insurers shall show information 
  8.19  classified under the statistical plan and shall be correct as to 
  8.20  amount in each classification.  The commissioner or the 
  8.21  association may check any payroll audit and upon written 
  8.22  complaint alleging facts that if true would create serious doubt 
  8.23  about the accuracy of the payroll audit must check it. 
  8.24     Subd. 2.  [CLASSIFICATIONS AND PLANS.] The commissioner 
  8.25  shall promulgate a statistical plan, which shall give due 
  8.26  consideration to the rating system on file with the commissioner 
  8.27  and seek to make the plan as uniform among the several states as 
  8.28  is practicable.  The statistical plan may be modified from time 
  8.29  to time.  It shall be used thereafter by each insurer in the 
  8.30  recording and reporting under subdivision 1 of its Minnesota 
  8.31  loss and countrywide expense experience.  The rules and 
  8.32  statistical plan may also provide for the recording and 
  8.33  reporting of expense experience items which are specially 
  8.34  applicable to this state.  The association shall assign each 
  8.35  compensation risk to its proper class, and its classification 
  8.36  shall be used by all insurers writing any insurance specified 
  9.1   under section 79.65.  On behalf of all members, the association 
  9.2   shall inspect and make a written survey of compensation risks to 
  9.3   determine their proper classifications and shall maintain a 
  9.4   record of its classification of risks, and the written surveys 
  9.5   of all risks inspected by it, showing such facts as are material 
  9.6   in the writing of insurance thereon. 
  9.7      Subd. 3.  [AIDS IN RATEMAKING.] The commissioner and every 
  9.8   insurer and rate service organization may exchange information 
  9.9   and experience data with insurance supervisory officials, 
  9.10  insurers, and rate service organizations in other states and may 
  9.11  consult with them with respect to ratemaking and the application 
  9.12  of rates.  The commissioner may designate one or more rate 
  9.13  service organizations to assist the commissioner in gathering 
  9.14  experience and making compilations thereof, and the compilations 
  9.15  shall be made available to insurers and rating organizations. 
  9.16     Sec. 13.  [79.76] [OTHER RATE SERVICE ORGANIZATIONS.] 
  9.17     Any group, association, or other organization which assists 
  9.18  the association in ratemaking by the collection and furnishing 
  9.19  of loss and expense statistics or by the submission of 
  9.20  recommendations is a rate service organization and shall be 
  9.21  governed by sections 79.74 and 79.75. 
  9.22     Sec. 14.  [79.77] [COSTS OF REGULATION.] 
  9.23     The costs for carrying out the commissioner's duties under 
  9.24  sections 79.64 to 79.78, including the costs of any hearings and 
  9.25  hearing officers, shall be paid by the special compensation fund 
  9.26  and assessed to the association quarterly.  The assessment must 
  9.27  be paid to the commissioner within 30 days and deposited into 
  9.28  the special compensation fund. 
  9.29     Sec. 15.  [79.78] [RULES.] 
  9.30     The commissioner may adopt rules necessary to implement and 
  9.31  administer sections 79.64 to 79.77. 
  9.32     Sec. 16.  Minnesota Statutes 1994, section 176.185, 
  9.33  subdivision 1, is amended to read: 
  9.34     Subdivision 1.  [NOTICE OF COVERAGE, TERMINATION, 
  9.35  CANCELLATION.] (a) Within ten days after the issuance of a 
  9.36  policy of insurance covering the liability to pay compensation 
 10.1   under this chapter written by an insurer licensed to insure such 
 10.2   liability in this state, the insurer shall file notice of 
 10.3   coverage with the commissioner under rules and on forms 
 10.4   prescribed by the commissioner.  No policy shall be canceled by 
 10.5   the insurer within the policy period nor terminated upon its 
 10.6   expiration date until a notice in writing is delivered or mailed 
 10.7   to the insured and filed with the commissioner, fixing the date 
 10.8   on which it is proposed to cancel it, or declaring that the 
 10.9   insurer does not intend to renew the policy upon the expiration 
 10.10  date.  A cancellation or termination is not effective until 30 
 10.11  days after written notice has been filed with the commissioner 
 10.12  in a manner prescribed by the commissioner unless prior to the 
 10.13  expiration of the 30-day period the employer obtains other 
 10.14  insurance coverage or an order exempting the employer from 
 10.15  carrying insurance as provided in section 176.181.  Upon receipt 
 10.16  of the notice, the commissioner shall notify the insured that 
 10.17  the insured must obtain coverage from some other licensed 
 10.18  carrier and that, if unable to do so, the insured shall request 
 10.19  the commissioner of commerce to require the issuance of a policy 
 10.20  as provided in section 79.251, subdivision 4.  Upon a 
 10.21  cancellation or termination of a policy by the insurer, the 
 10.22  employer is entitled to be assigned a policy in accordance with 
 10.23  sections 79.251 and 79.252.  
 10.24     (b) Notice of cancellation or termination by the insured 
 10.25  shall be served upon the insurer by written statement mailed or 
 10.26  delivered to the insurer.  Upon receipt of the notice, the 
 10.27  insurer shall notify the commissioner of the cancellation or 
 10.28  termination and the commissioner shall ask the employer for the 
 10.29  reasons for the cancellation or termination and notify the 
 10.30  employer of the duty under this chapter to insure the employer's 
 10.31  employees.  
 10.32     (c) In addition to the requirements under paragraphs (a) 
 10.33  and (b), with respect to any trucker employer in classification 
 10.34  7219, 7230, 7231, or 7360 pursuant to the classification plan 
 10.35  required to be filed under section 79.61 chapter 79, if the 
 10.36  insurer or its agent has delivered or mailed a written 
 11.1   certificate of insurance certifying that a policy in the name of 
 11.2   a trucker employer under this paragraph is in force, then the 
 11.3   insurer or its agent shall also deliver or mail written notice 
 11.4   of any midterm cancellation to the trucker employer recipient of 
 11.5   the certificate of insurance at the address listed on the 
 11.6   certificate.  If an insurer or its agent fails to mail or 
 11.7   deliver notice of any midterm cancellation of the trucker 
 11.8   employer's policy to the trucker employer recipient of the 
 11.9   certificate of insurance, then the special compensation fund 
 11.10  shall indemnify and hold harmless the recipient from any award 
 11.11  of benefits or other damages under this chapter resulting from 
 11.12  the failure to give notice. 
 11.13     Sec. 17.  [PRIOR RATES; PRESUMPTION.] 
 11.14     Rates, schedules of rates, and rating plans that have been 
 11.15  filed with the commissioner of commerce before April 1, 1995, 
 11.16  are conclusively presumed to satisfy the requirements of this 
 11.17  article until the initial schedule of rates has been approved by 
 11.18  order of the commissioner or until disapproved by the 
 11.19  commissioner. 
 11.20     Sec. 18.  [APPROPRIATION.] 
 11.21     $....... is appropriated from the special compensation fund 
 11.22  for the biennium ending June 30, 1997, to the department of 
 11.23  commerce for the purpose of this article.  
 11.24     Sec. 19.  [REPEALER.] 
 11.25     Minnesota Statutes 1994, sections 79.01, subdivisions 7 and 
 11.26  8; 79.074, subdivision 2; 79.50; 79.51; 79.52; 79.53; 79.54; 
 11.27  79.55; 79.56; 79.57; 79.58; 79.59; 79.60; 79.61; and 79.62, are 
 11.28  repealed. 
 11.29     Sec. 20.  [EFFECTIVE DATE.] 
 11.30     This article is effective the day following final enactment.
 11.31                             ARTICLE 2
 11.32                BENEFITS, SAFETY, AND MISCELLANEOUS
 11.33     Section 1.  Minnesota Statutes 1994, section 79.085, is 
 11.34  amended to read: 
 11.35     79.085 [SAFETY PROGRAMS.] 
 11.36     All insurers writing workers' compensation insurance in 
 12.1   this state shall provide safety and occupational health loss 
 12.2   control consultation services at no fee to each of their 
 12.3   policyholders requesting the services in writing.  Insurers must 
 12.4   annually notify their policyholders of their right under this 
 12.5   section to free safety and occupational health loss consultation 
 12.6   services.  The services must include the conduct of workplace 
 12.7   surveys to identify health and safety problems, review of 
 12.8   employer injury records with appropriate personnel, and 
 12.9   development of plans to improve employer occupational health and 
 12.10  safety loss records.  Insurers shall notify each policyholder of 
 12.11  the availability of those services and the telephone number and 
 12.12  address where such services can be requested.  The notification 
 12.13  may be delivered with the policy of workers' compensation 
 12.14  insurance. 
 12.15     Sec. 2.  Minnesota Statutes 1994, section 176.041, 
 12.16  subdivision 1, is amended to read: 
 12.17     Subdivision 1.  [EMPLOYMENTS EXCLUDED.] This chapter does 
 12.18  not apply to any of the following:  
 12.19     (a) a person employed by a common carrier by railroad 
 12.20  engaged in interstate or foreign commerce and who is covered by 
 12.21  the Federal Employers' Liability Act, United States Code, title 
 12.22  45, sections 51 to 60, or other comparable federal law; 
 12.23     (b) a person employed by a family farm as defined by 
 12.24  section 176.011, subdivision 11a; 
 12.25     (c) the spouse, parent, and child, regardless of age, of a 
 12.26  farmer-employer working for the farmer-employer; 
 12.27     (d) a sole proprietor, or the spouse, parent, and child, 
 12.28  regardless of age, of a sole proprietor; 
 12.29     (e) a partner engaged in a farm operation or a partner 
 12.30  engaged in a business and the spouse, parent, and child, 
 12.31  regardless of age, of a partner in the farm operation or 
 12.32  business; 
 12.33     (f) an executive officer of a family farm corporation; 
 12.34     (g) an executive officer of a closely held corporation 
 12.35  having less than 22,880 hours of payroll in the preceding 
 12.36  calendar year, if that executive officer owns at least 25 
 13.1   percent of the stock of the corporation; 
 13.2      (h) a spouse, parent, or child, regardless of age, of an 
 13.3   executive officer of a family farm corporation as defined in 
 13.4   section 500.24, subdivision 2, and employed by that family farm 
 13.5   corporation; 
 13.6      (i) a spouse, parent, or child, regardless of age, of an 
 13.7   executive officer of a closely held corporation who is referred 
 13.8   to in paragraph (g); 
 13.9      (j) another farmer or a member of the other farmer's family 
 13.10  exchanging work with the farmer-employer or family farm 
 13.11  corporation operator in the same community; 
 13.12     (k) a person whose employment at the time of the injury is 
 13.13  casual and not in the usual course of the trade, business, 
 13.14  profession, or occupation of the employer; 
 13.15     (l) persons who are independent contractors as defined by 
 13.16  rules adopted by the commissioner pursuant to section 176.83 
 13.17  except that this exclusion does not apply to an employee of an 
 13.18  independent contractor nor to an independent contractor defined 
 13.19  as an employee under section 176.042; 
 13.20     (m) an officer or a member of a veterans' organization 
 13.21  whose employment relationship arises solely by virtue of 
 13.22  attending meetings or conventions of the veterans' organization, 
 13.23  unless the veterans' organization elects by resolution to 
 13.24  provide coverage under this chapter for the officer or member; 
 13.25     (n) a person employed as a household worker in, for, or 
 13.26  about a private home or household who earns less than $1,000 in 
 13.27  cash in a three-month period from a single private home or 
 13.28  household provided that a household worker who has earned $1,000 
 13.29  or more from the household worker's present employer in a 
 13.30  three-month period within the previous year is covered by this 
 13.31  chapter regardless of whether or not the household worker has 
 13.32  earned $1,000 in the present quarter; 
 13.33     (o) persons employed by a closely held corporation who are 
 13.34  related by blood or marriage, within the third degree of kindred 
 13.35  according to the rules of civil law, to an officer of the 
 13.36  corporation, who is referred to in paragraph (g), if the 
 14.1   corporation files a written election with the commissioner to 
 14.2   exclude such individuals.  A written election is not required 
 14.3   for a person who is otherwise excluded from this chapter by this 
 14.4   section; 
 14.5      (p) a nonprofit association which does not pay more than 
 14.6   $1,000 in salary or wages in a year; 
 14.7      (q) persons covered under the Domestic Volunteer Service 
 14.8   Act of 1973, as amended, United States Code, title 42, sections 
 14.9   5011, et seq.; 
 14.10     (r) a manager of a limited liability company having ten or 
 14.11  fewer members and having less than 22,880 hours of payroll in 
 14.12  the preceding calendar year, if that manager owns at least a 25 
 14.13  percent membership interest in the limited liability company; 
 14.14     (s) a spouse, parent, or child, regardless of age, of a 
 14.15  manager of a limited liability company described in paragraph 
 14.16  (r); 
 14.17     (t) persons employed by a limited liability company having 
 14.18  ten or fewer members and having less than 22,880 hours of 
 14.19  payroll in the preceding calendar year who are related by blood 
 14.20  or marriage, within the third degree of kindred according to the 
 14.21  rules of civil law, to a manager of a limited liability company 
 14.22  described in paragraph (r), if the company files a written 
 14.23  election with the commissioner to exclude these persons.  A 
 14.24  written election is not required for a person who is otherwise 
 14.25  excluded from this chapter by this section; or 
 14.26     (u) members of limited liability companies who satisfy the 
 14.27  requirements of paragraph (l). 
 14.28     Sec. 3.  [176.042] [INDEPENDENT CONTRACTORS; BUILDING 
 14.29  CONSTRUCTION OR IMPROVEMENTS.] 
 14.30     Subdivision 1.  [GENERAL RULE; ARE EMPLOYEES.] Except as 
 14.31  provided in subdivision 2, an independent contractor is an 
 14.32  employee for the purposes of this chapter if: 
 14.33     (1) the independent contractor performs construction trade 
 14.34  or craft services at a commercial or residential building 
 14.35  construction or improvement project in the private or public 
 14.36  sector; and 
 15.1      (2) those services are performed in the course of the trade 
 15.2   or business of the person or business entity with whom the 
 15.3   independent contractor has contracted. 
 15.4      Subd. 2.  [EXCEPTION.] An independent contractor is not an 
 15.5   employee pursuant to subdivision 1 if the independent contractor 
 15.6   meets all of the following conditions: 
 15.7      (1) maintains a separate business with the independent 
 15.8   contractor's own office, equipment, materials, and other 
 15.9   facilities; 
 15.10     (2) holds or has applied for a federal employer 
 15.11  identification number; 
 15.12     (3) operates under contracts to perform specific services 
 15.13  or work for specific amounts of money and under which the 
 15.14  independent contractor controls the means of performing the 
 15.15  services or work; 
 15.16     (4) incurs the main expenses related to the service or work 
 15.17  that the independent contractor performs under contract; 
 15.18     (5) is responsible for the satisfactory completion of work 
 15.19  or services that the independent contractor contracts to perform 
 15.20  and is liable for a failure to complete the work or service; 
 15.21     (6) receives compensation for work or service performed 
 15.22  under a contract on a commission or per job or competitive bid 
 15.23  basis and not on any other basis; 
 15.24     (7) may realize a profit or suffer a loss under contracts 
 15.25  to perform work or service; 
 15.26     (8) has continuing or recurring business liabilities or 
 15.27  obligations; and 
 15.28     (9) the success or failure of the independent contractor's 
 15.29  business depends on the relationship of business receipts to 
 15.30  expenditures. 
 15.31     Sec. 4.  Minnesota Statutes 1994, section 176.081, 
 15.32  subdivision 1, is amended to read: 
 15.33     Subdivision 1.  [APPROVAL.] (a) A fee for legal services of 
 15.34  25 percent of the first $4,000 of compensation awarded to the 
 15.35  employee and 20 percent of the next $60,000 of compensation 
 15.36  awarded to the employee is permissible and does not require 
 16.1   approval by the commissioner, compensation judge, or any other 
 16.2   party except as provided in paragraph (d).  All fees must be 
 16.3   calculated according to the formula under this subdivision, or 
 16.4   earned in hourly fees for representation at discontinuance 
 16.5   conferences under section 176.239, or earned in hourly fees for 
 16.6   representation on rehabilitation or medical issues under section 
 16.7   176.102, 176.135, or 176.136.  Attorney fees for recovery of 
 16.8   medical or rehabilitation benefits or services shall be assessed 
 16.9   against the employer or insurer if these fees exceed the 
 16.10  contingent fee under this section in connection with benefits 
 16.11  currently in dispute.  The amount of the fee that the employer 
 16.12  or insurer is liable for is the amount determined under 
 16.13  subdivision 5, minus the contingent fee. 
 16.14     (b) All fees for legal services related to the same injury 
 16.15  are cumulative and may not exceed $13,000, except as provided by 
 16.16  subdivision 2.  If multiple injuries are the subject of a 
 16.17  dispute, the commissioner, compensation judge, or court of 
 16.18  appeals shall specify the attorney fee attributable to each 
 16.19  injury. 
 16.20     (c) If the employer or the insurer or the defendant is 
 16.21  given written notice of claims for legal services or 
 16.22  disbursements, the claim shall be a lien against the amount paid 
 16.23  or payable as compensation.  In no case shall fees be calculated 
 16.24  on the basis of any undisputed portion of compensation awards.  
 16.25  Allowable fees under this chapter shall be based solely upon 
 16.26  genuinely disputed claims or portions of claims, including 
 16.27  disputes related to the payment of rehabilitation benefits or to 
 16.28  other aspects of a rehabilitation plan.  The existence of a 
 16.29  dispute is dependent upon a disagreement after the employer or 
 16.30  insurer has had adequate time and information to take a position 
 16.31  on liability.  Neither the holding of a hearing nor the filing 
 16.32  of an application for a hearing alone may determine the 
 16.33  existence of a dispute.  A fee may not be charged for services 
 16.34  performed before the employee has consulted with the department 
 16.35  and the department certifies that there is a dispute and that it 
 16.36  has tried to resolve the dispute.  Fees for administrative 
 17.1   conferences under section 176.239 shall be determined on an 
 17.2   hourly basis, according to the criteria in subdivision 5.  
 17.3      (d) An attorney who is claiming legal fees for representing 
 17.4   an employee in a workers' compensation matter shall file a 
 17.5   statement of attorney fees with the commissioner, compensation 
 17.6   judge before whom the matter was heard, or workers' compensation 
 17.7   court of appeals on cases before the court.  A copy of the 
 17.8   signed retainer agreement shall also be filed.  The employee and 
 17.9   insurer shall receive a copy of the statement.  The statement 
 17.10  shall be on a form prescribed by the commissioner, shall report 
 17.11  the number of hours spent on the case, and shall clearly and 
 17.12  conspicuously state that the employee or insurer has ten 
 17.13  calendar days to object to the attorney fees requested.  If no 
 17.14  objection is timely made by the employee or insurer, the amount 
 17.15  requested shall be conclusively presumed reasonable providing 
 17.16  the amount does not exceed the limitation in subdivision 1, and 
 17.17  the other requirements of this section are satisfied.  The 
 17.18  commissioner, compensation judge, or court of appeals shall 
 17.19  issue an order granting the fees and the amount requested shall 
 17.20  be awarded to the party requesting the fee.  
 17.21     If a timely objection is filed, or the fee is determined on 
 17.22  an hourly basis, the commissioner, compensation judge, or court 
 17.23  of appeals shall review the matter and make a determination 
 17.24  based on the criteria in subdivision 5. 
 17.25     If no timely objection is made by an employer or insurer, 
 17.26  reimbursement under subdivision 7 shall be made if the statement 
 17.27  of fees requested this reimbursement. 
 17.28     (e) Employers and insurers may not pay attorney fees or 
 17.29  wages for legal services of more than $13,000 per case unless 
 17.30  the additional fees or wages are approved under subdivision 2.  
 17.31     (f) Each insurer and self-insured employer shall file 
 17.32  annual statements with the commissioner detailing the total 
 17.33  amount of legal fees and other legal costs incurred by the 
 17.34  insurer or employer during the year.  The statement shall 
 17.35  include the amount paid for outside and in-house counsel, 
 17.36  deposition and other witness fees, and all other costs relating 
 18.1   to litigation. 
 18.2      Sec. 5.  Minnesota Statutes 1994, section 176.101, 
 18.3   subdivision 1, is amended to read: 
 18.4      Subdivision 1.  [TEMPORARY TOTAL DISABILITY.] (a) For 
 18.5   injury producing temporary total disability, the compensation is 
 18.6   66-2/3 percent of the weekly wage at the time of injury. 
 18.7      (b) During the year commencing on October 1, 1992 1995, and 
 18.8   each year thereafter, the maximum weekly compensation payable is 
 18.9   105 percent of the statewide average weekly wage for the period 
 18.10  ending December 31 of the preceding year. 
 18.11     (c) The minimum weekly compensation payable is 20 percent 
 18.12  of the statewide average weekly wage for the period ending 
 18.13  December 31 of the preceding year or the injured employee's 
 18.14  actual weekly wage, whichever is less.  
 18.15     (d) Subject to subdivisions 3a to 3u this compensation 
 18.16  shall be paid during the period of disability, payment to be 
 18.17  made at the intervals when the wage was payable, as nearly as 
 18.18  may be. 
 18.19     Sec. 6.  Minnesota Statutes 1994, section 176.101, 
 18.20  subdivision 3b, is amended to read: 
 18.21     Subd. 3b.  [IMPAIRMENT COMPENSATION.] An employee who 
 18.22  suffers a permanent partial disability due to a personal injury 
 18.23  and receives impairment compensation under this section shall 
 18.24  receive compensation in an amount as provided by this 
 18.25  subdivision.  For permanent partial disability up to the percent 
 18.26  of the whole body shown in the following schedule the amount 
 18.27  shall be equal to the proportion that the loss of function of 
 18.28  the disabled part bears to the whole body multiplied by the 
 18.29  amount aligned with that percent in the following schedule:  
 18.30         Percent of disability             Amount
 18.31                  0-25                    $ 75,000 $ 82,500
 18.32                 26-30                      80,000   88,000
 18.33                 31-35                      85,000   93,500
 18.34                 36-40                      90,000   99,000
 18.35                 41-45                      95,000  104,500
 18.36                 46-50                     100,000  110,000
 19.1                  51-55                     120,000  132,000
 19.2                  56-60                     140,000  154,000
 19.3                  61-65                     160,000  176,000
 19.4                  66-70                     180,000  198,000
 19.5                  71-75                     200,000  220,000
 19.6                  76-80                     240,000  264,000
 19.7                  81-85                     280,000  308,000
 19.8                  86-90                     320,000  352,000
 19.9                  91-95                     360,000  396,000
 19.10                 96-100                    400,000  440,000
 19.11     For all cases under this subdivision the percentage loss of 
 19.12  function of a part of the body is determined according to the 
 19.13  rules adopted by the commissioner pursuant to section 176.105, 
 19.14  subdivision 4.  This subdivision applies to an injury which 
 19.15  occurs on or after January 1, 1984.  
 19.16     Sec. 7.  Minnesota Statutes 1994, section 176.101, 
 19.17  subdivision 3m, is amended to read: 
 19.18     Subd. 3m.  [RETURN TO WORK AFTER REFUSAL OF JOB OFFER.] If 
 19.19  the employee has refused the job offer under subdivision 3e and 
 19.20  is receiving periodic impairment compensation and returns to 
 19.21  work at another job, the employee shall receive the remaining 
 19.22  impairment compensation due, in a lump sum, 30 days after return 
 19.23  to work if the employment has not been substantially interrupted 
 19.24  by the injury for any part of the 30 days and the employee is 
 19.25  still employed at that job at the end of the period at the same 
 19.26  rate that temporary total compensation was last paid. 
 19.27     Sec. 8.  Minnesota Statutes 1994, section 176.101, 
 19.28  subdivision 3o, is amended to read: 
 19.29     Subd. 3o.  [INABILITY TO RETURN TO WORK.] (a) An employee 
 19.30  who is permanently totally disabled pursuant to subdivision 5 
 19.31  shall receive impairment compensation as determined pursuant to 
 19.32  subdivision 3b.  This compensation is payable in addition to 
 19.33  permanent total compensation pursuant to subdivision 4 and is 
 19.34  payable concurrently.  In this case the impairment compensation 
 19.35  shall be paid in the same intervals and amount as the permanent 
 19.36  total compensation was initially paid, and the impairment 
 20.1   compensation shall cease when the amount due under subdivision 
 20.2   3b is reached.  If this employee returns to work at any job 
 20.3   during the period the impairment compensation is being paid, the 
 20.4   remaining impairment compensation due shall be paid in a lump 
 20.5   sum 30 days after the employee has returned to work and no 
 20.6   further temporary total compensation shall be paid.  
 20.7      (b) If an employee is receiving periodic economic recovery 
 20.8   compensation and is determined to be permanently totally 
 20.9   disabled no offset shall be taken against future permanent total 
 20.10  compensation for the compensation paid and no permanent total 
 20.11  weekly compensation is payable for any period during which 
 20.12  economic recovery compensation has already been paid.  No 
 20.13  further economic recovery compensation is payable even if the 
 20.14  amount due the employee pursuant to subdivision 3a has not yet 
 20.15  been reached.  
 20.16     (c) An employee who has received periodic economic recovery 
 20.17  compensation and who meets the criteria under clause (b) shall 
 20.18  receive impairment compensation pursuant to clause (a) even if 
 20.19  the employee has previously received economic recovery 
 20.20  compensation for that disability.  
 20.21     (d) Rehabilitation consultation pursuant to section 176.102 
 20.22  shall be provided to an employee who is permanently totally 
 20.23  disabled.  
 20.24     Sec. 9.  Minnesota Statutes 1994, section 176.101, 
 20.25  subdivision 3q, is amended to read: 
 20.26     Subd. 3q.  [METHOD OF PAYMENT OF ECONOMIC RECOVERY 
 20.27  COMPENSATION.] (a) Economic recovery compensation is payable at 
 20.28  the same intervals and in the same amount as temporary total 
 20.29  compensation was initially paid.  If the employee returns to 
 20.30  work and the economic recovery compensation is still being paid, 
 20.31  the remaining economic recovery compensation due shall be paid 
 20.32  in a lump sum 30 days after the employee has returned to work if 
 20.33  the employment has not been substantially interrupted by the 
 20.34  injury for any part of the 30 days and the employee is still 
 20.35  employed at that job at the end of the period.  
 20.36     (b) Periodic economic recovery compensation paid to the 
 21.1   employee shall not be adjusted pursuant to section 176.645.  
 21.2      Sec. 10.  Minnesota Statutes 1994, section 176.101, 
 21.3   subdivision 4, is amended to read: 
 21.4      Subd. 4.  [PERMANENT TOTAL DISABILITY.] For permanent total 
 21.5   disability, as defined in subdivision 5, the compensation shall 
 21.6   be 66-2/3 percent of the daily wage at the time of the injury, 
 21.7   subject to a maximum weekly compensation equal to the maximum 
 21.8   weekly compensation for a temporary total disability and a 
 21.9   minimum weekly compensation equal to the minimum weekly 
 21.10  compensation for a temporary total disability 65 percent of the 
 21.11  statewide average weekly wage.  This compensation shall be paid 
 21.12  during the permanent total disability of the injured employee 
 21.13  but after a total of $25,000 of weekly compensation has been 
 21.14  paid, the amount of the weekly compensation benefits being paid 
 21.15  by the employer shall be reduced by the amount of any disability 
 21.16  benefits being paid by any government disability benefit program 
 21.17  if the disability benefits are occasioned by the same injury or 
 21.18  injuries which give rise to payments under this subdivision.  
 21.19  This reduction shall also apply to any old age and survivor 
 21.20  insurance benefits.  Payments shall be made at the intervals 
 21.21  when the wage was payable, as nearly as may be.  In case an 
 21.22  employee who is permanently and totally disabled becomes an 
 21.23  inmate of a public institution, no compensation shall be payable 
 21.24  during the period of confinement in the institution, unless 
 21.25  there is wholly dependent on the employee for support some 
 21.26  person named in section 176.111, subdivision 1, 2, or 3, in 
 21.27  which case the compensation provided for in section 176.111, 
 21.28  during the period of confinement, shall be paid for the benefit 
 21.29  of the dependent person during dependency.  The dependency of 
 21.30  this person shall be determined as though the employee were 
 21.31  deceased. 
 21.32     Sec. 11.  Minnesota Statutes 1994, section 176.101, 
 21.33  subdivision 5, is amended to read: 
 21.34     Subd. 5.  [DEFINITION.] (a) For purposes of subdivision 4, 
 21.35  permanent total disability means only:  
 21.36     (1) the total and permanent loss of the sight of both eyes, 
 22.1   the loss of both arms at the shoulder, the loss of both legs so 
 22.2   close to the hips that no effective artificial members can be 
 22.3   used, complete and permanent paralysis, total and permanent loss 
 22.4   of mental faculties; or 
 22.5      (2) any other injury which totally and permanently 
 22.6   incapacitates the employee from working at an occupation which 
 22.7   brings the employee an income.  
 22.8      (b) For purposes of paragraph (a), clause (2), "totally and 
 22.9   permanently incapacitated" means that the employee's physical 
 22.10  disability, in combination with the employee's age, education, 
 22.11  training, and experience, causes the employee to be unable to 
 22.12  secure anything more than sporadic employment resulting in an 
 22.13  insubstantial income.  The employee's willingness to make a 
 22.14  reasonable change in residence to secure suitable employment 
 22.15  must be considered when evaluating an employee's ability to 
 22.16  secure more than sporadic employment resulting in an 
 22.17  insubstantial income. 
 22.18     Sec. 12.  Minnesota Statutes 1994, section 176.194, 
 22.19  subdivision 1, is amended to read: 
 22.20     Subdivision 1.  [APPLICATION.] This section applies to 
 22.21  insurers, self-insurers, group self-insurers, political 
 22.22  subdivisions of the state, and the administrator of state 
 22.23  employees' claims. 
 22.24     This section also applies to adjusters and third-party 
 22.25  administrators who act on behalf of an insurer, self-insurer, 
 22.26  group self-insurer, the assigned risk plan, the Minnesota 
 22.27  insurance guaranty association, a political subdivision, or any 
 22.28  other entity. 
 22.29     This section shall be enforceable only by the commissioner 
 22.30  of labor and industry or a compensation judge.  Evidence of 
 22.31  violations under this section shall not be admissible in any 
 22.32  civil action. 
 22.33     Sec. 13.  Minnesota Statutes 1994, section 176.194, 
 22.34  subdivision 4, is amended to read: 
 22.35     Subd. 4.  [PENALTIES.] The penalties for violations of 
 22.36  subdivision 3, clauses (1) through (6), are as follows: 
 23.1       1st through 5th violation
 23.2       of each paragraph                   written warning 
 23.3       2nd through 5th violation
 23.4       of each paragraph with respect
 23.5       to a particular claimant            $2,500 per violation
 23.6       6th through 10th violation          $2,500 per violation 
 23.7       of each paragraph                   in excess of five 
 23.8       11th through 30th violation         $5,000 per violation 
 23.9       of each paragraph                   in excess of ten 
 23.10  For violations of subdivision 3, clauses (7) and (8), the 
 23.11  penalties are: 
 23.12      1st through 5th violation
 23.13      of each paragraph                   $2,500 per violation 
 23.14      6th through 30th violation          $5,000 per violation 
 23.15      of each paragraph                   in excess of five 
 23.16     The penalties under this section may be imposed in addition 
 23.17  to other penalties under this chapter that might apply for the 
 23.18  same violation.  The penalties under this section are assessed 
 23.19  by the commissioner and are payable to the assigned risk safety 
 23.20  account.  A party may object to the penalty and request a formal 
 23.21  hearing under section 176.85.  If an entity has more than 30 
 23.22  violations within any 12-month period, in addition to the 
 23.23  monetary penalties provided, the commissioner may refer the 
 23.24  matter to the commissioner of commerce with recommendation for 
 23.25  suspension or revocation of the entity's (a) license to write 
 23.26  workers' compensation insurance; (b) license to administer 
 23.27  claims on behalf of a self-insured, the assigned risk plan, or 
 23.28  the Minnesota insurance guaranty association; (c) authority to 
 23.29  self-insure; or (d) license to adjust claims.  The commissioner 
 23.30  of commerce shall follow the procedures specified in section 
 23.31  176.195. 
 23.32     Sec. 14.  Minnesota Statutes 1994, section 176.221, 
 23.33  subdivision 1, is amended to read: 
 23.34     Subdivision 1.  [COMMENCEMENT OF PAYMENT.] Within 14 days 
 23.35  of notice to or knowledge by the employer of an injury 
 23.36  compensable under this chapter the payment of temporary total 
 24.1   compensation shall commence.  Within 14 days of notice to or 
 24.2   knowledge by an employer of a new period of temporary total 
 24.3   disability which is caused by an old injury compensable under 
 24.4   this chapter, the payment of temporary total compensation shall 
 24.5   commence; provided that the employer or insurer may file for an 
 24.6   extension with the commissioner within this 14-day period, in 
 24.7   which case the compensation need not commence within the 14-day 
 24.8   period but shall commence no later than 30 days from the date of 
 24.9   the notice to or knowledge by the employer of the new period of 
 24.10  disability.  Commencement of payment by an employer or insurer 
 24.11  does not waive any rights to any defense the employer has on any 
 24.12  claim or incident either with respect to the compensability of 
 24.13  the claim under this chapter or the amount of the compensation 
 24.14  due.  Where there are multiple employers, the first employer 
 24.15  shall pay, unless it is shown that the injury has arisen out of 
 24.16  employment with the second or subsequent employer.  Liability 
 24.17  for compensation under this chapter may be denied by the 
 24.18  employer or insurer by giving the employee written notice of the 
 24.19  denial of liability.  If liability is denied for an injury which 
 24.20  is required to be reported to the commissioner under section 
 24.21  176.231, subdivision 1, the denial of liability must be filed 
 24.22  with the commissioner within 14 days after notice to or 
 24.23  knowledge by the employer of an injury which is alleged to be 
 24.24  compensable under this chapter.  If the employer or insurer has 
 24.25  commenced payment of compensation under this subdivision but 
 24.26  determines within 30 90 days of notice to or knowledge by the 
 24.27  employer of the injury that the disability is not a result of a 
 24.28  personal injury, payment of compensation may be terminated upon 
 24.29  the filing of a notice of denial of liability within 30 90 days 
 24.30  of notice or knowledge.  After the 30-day 90-day period, payment 
 24.31  may be terminated only by the filing of a notice as provided 
 24.32  under section 176.239.  Upon the termination, payments made may 
 24.33  be recovered by the employer if the commissioner or compensation 
 24.34  judge finds that the employee's claim of work related disability 
 24.35  was not made in good faith.  A notice of denial of liability 
 24.36  must state in detail the facts forming the basis for the denial 
 25.1   and specific reasons explaining why the claimed injury or 
 25.2   occupational disease was determined not to be within the scope 
 25.3   and course of employment and shall include the name and 
 25.4   telephone number of the person making this determination.  
 25.5      Sec. 15.  [176.223] [PROMPT PAYMENT REPORT.] 
 25.6      The department shall publish an annual report providing 
 25.7   data on the promptness of all insurers and self-insurers in 
 25.8   making first payments on a claim for injury.  The report shall 
 25.9   identify all insurers and self-insurers and state the percentage 
 25.10  of first payments made within 14 days from the last date worked 
 25.11  for each of the insurers and self-insurers.  The report shall 
 25.12  also list the total number of claims and the number of claims 
 25.13  paid within the 14-day standard.  Each report shall contain the 
 25.14  required information for each of the last four years the report 
 25.15  has been compiled so that a total of five years is included.  
 25.16  The department shall make the report available to employers and 
 25.17  shall provide a copy to each insurer and self-insurer listed in 
 25.18  the report for the current year. 
 25.19     Sec. 16.  Minnesota Statutes 1994, section 176.225, 
 25.20  subdivision 1, is amended to read: 
 25.21     Subdivision 1.  [GROUNDS.] Upon reasonable notice and 
 25.22  hearing or opportunity to be heard, the commissioner, a 
 25.23  compensation judge, or upon appeal, the court of appeals or the 
 25.24  supreme court may shall award compensation, in addition to the 
 25.25  total amount of compensation award, of up to 25 percent of that 
 25.26  total amount where an employer or insurer has: 
 25.27     (a) instituted a proceeding or interposed a defense which 
 25.28  does not present a real controversy but which is frivolous or 
 25.29  for the purpose of delay; or, 
 25.30     (b) unreasonably or vexatiously delayed payment; or, 
 25.31     (c) neglected or refused to pay compensation; or, 
 25.32     (d) intentionally underpaid compensation; or 
 25.33     (e) frivolously denied a claim; or 
 25.34     (f) unreasonably or vexatiously discontinued compensation 
 25.35  in violation of sections 176.238 and 176.239. 
 25.36     For the purpose of this section, "frivolously" means 
 26.1   without a good faith investigation of the facts or on a basis 
 26.2   that is clearly contrary to fact or law. 
 26.3      Sec. 17.  Minnesota Statutes 1994, section 176.232, is 
 26.4   amended to read: 
 26.5      176.232 [SAFETY COMMITTEES.] 
 26.6      Every public or private employer of more than 25 employees 
 26.7   shall establish and administer a joint labor-management safety 
 26.8   committee.  
 26.9      Every public or private employer of 25 or fewer employees 
 26.10  shall establish and administer a safety committee if: 
 26.11     (1) the employer has a lost workday cases incidence rate in 
 26.12  the top ten percent of all rates for employers in the same 
 26.13  industry; or 
 26.14     (2) the workers' compensation premium classification 
 26.15  assigned to the greatest portion of the payroll for the employer 
 26.16  has a pure premium rate as reported by the workers' compensation 
 26.17  rating association in the top 25 percent of premium rates for 
 26.18  all classes. 
 26.19     Employee safety committee members must be selected by 
 26.20  employees.  An employer that fails to establish or administer a 
 26.21  safety committee as required by this section may be cited by the 
 26.22  commissioner.  A citation is punishable as a serious violation 
 26.23  under section 182.666. 
 26.24     The commissioner may adopt rules regarding the training of 
 26.25  safety committee members and the operation of safety committees. 
 26.26     Sec. 18.  Minnesota Statutes 1994, section 176.261, is 
 26.27  amended to read: 
 26.28     176.261 [EMPLOYEE OF COMMISSIONER OF THE DEPARTMENT OF 
 26.29  LABOR AND INDUSTRY MAY ACT FOR AND ADVISE A PARTY TO A 
 26.30  PROCEEDING.] 
 26.31     When requested by an employer or an employee or an 
 26.32  employee's dependent, the commissioner of the department of 
 26.33  labor and industry may designate one or more of the division 
 26.34  employees to advise that party of rights under this chapter, and 
 26.35  as far as possible to assist in adjusting differences between 
 26.36  the parties.  The person so designated may appear in person in 
 27.1   any proceedings under this chapter as the representative or 
 27.2   adviser of the party.  In such case, the party need not be 
 27.3   represented by an attorney at law.  
 27.4      Prior to advising an employee or employer to seek 
 27.5   assistance outside of the department, the department must refer 
 27.6   employers and employees seeking advice or requesting assistance 
 27.7   in resolving a dispute to an attorney or rehabilitation and 
 27.8   medical specialist employed by the department, whichever is 
 27.9   appropriate. 
 27.10     The department must make efforts to settle problems of 
 27.11  employees and employers by contacting third parties, including 
 27.12  attorneys, insurers, and health care providers, on behalf of 
 27.13  employers and employees and using the department's persuasion to 
 27.14  settle issues quickly and cooperatively.  The obligation to make 
 27.15  efforts to settle problems exists whether or not a formal claim 
 27.16  has been filed with the department. 
 27.17     Sec. 19.  Minnesota Statutes 1994, section 176.645, 
 27.18  subdivision 1, is amended to read: 
 27.19     Subdivision 1.  [AMOUNT.] For injuries occurring after 
 27.20  October 1, 1975 for which benefits are payable under section 
 27.21  176.101, subdivisions 1, 2, and 4, and section 176.111, 
 27.22  subdivision 5, the total benefits due the employee or any 
 27.23  dependents shall be adjusted in accordance with this section.  
 27.24  On October 1, 1981, and thereafter on the anniversary of the 
 27.25  date of the employee's injury the total benefits due shall be 
 27.26  adjusted by multiplying the total benefits due prior to each 
 27.27  adjustment by a fraction, the denominator of which is the 
 27.28  statewide average weekly wage for December 31, of the year two 
 27.29  years previous to the adjustment and the numerator of which is 
 27.30  the statewide average weekly wage for December 31, of the year 
 27.31  previous to the adjustment.  For injuries occurring after 
 27.32  October 1, 1975, all adjustments provided for in this section 
 27.33  shall be included in computing any benefit due under this 
 27.34  section.  Any limitations of amounts due for daily or weekly 
 27.35  compensation under this chapter shall not apply to adjustments 
 27.36  made under this section.  No adjustment increase made on or 
 28.1   after October 1, 1977, but prior to October 1, 1992, under this 
 28.2   section shall exceed six percent a year; in those instances 
 28.3   where the adjustment under the formula of this section would 
 28.4   exceed this maximum, the increase shall be deemed to be six 
 28.5   percent.  For injuries occurring on or after October 1, 1992, no 
 28.6   adjustment increase made on or after October 1, 1992, under this 
 28.7   section shall exceed four percent a year; in those instances 
 28.8   where the adjustment under the formula of this section would 
 28.9   exceed this maximum, the increase shall be deemed to be four 
 28.10  percent. 
 28.11     Sec. 20.  Minnesota Statutes 1994, section 176.645, 
 28.12  subdivision 2, is amended to read: 
 28.13     Subd. 2.  [TIME OF FIRST ADJUSTMENT.] For injuries 
 28.14  occurring on or after October 1, 1981, the initial adjustment 
 28.15  made pursuant to subdivision 1 is deferred until the first 
 28.16  anniversary of the date of the injury.  For injuries occurring 
 28.17  on or after October 1, 1992, the initial adjustment under 
 28.18  subdivision 1 is deferred until the second anniversary of the 
 28.19  date of the injury.  For injuries occurring on or after October 
 28.20  1, 1995, the initial adjustment under subdivision 1 is deferred 
 28.21  until the fourth anniversary of the date of injury. 
 28.22     Sec. 21.  Minnesota Statutes 1994, section 176.66, 
 28.23  subdivision 11, is amended to read: 
 28.24     Subd. 11.  [AMOUNT OF COMPENSATION.] The compensation for 
 28.25  an occupational disease is 66-2/3 percent of the employee's 
 28.26  weekly wage on the date of injury subject to a maximum 
 28.27  compensation equal to the maximum compensation in effect on the 
 28.28  date of last exposure.  The employee shall be eligible for 
 28.29  supplementary benefits notwithstanding the provisions of section 
 28.30  176.132, after four years have elapsed since the date of last 
 28.31  significant exposure to the hazard of the occupational disease 
 28.32  if that employee's weekly compensation rate is less than the 
 28.33  current supplementary benefit rate.  
 28.34     Sec. 22.  [176.861] [DISCLOSURE OF INFORMATION.] 
 28.35     Subdivision 1.  [INSURANCE INFORMATION.] The commissioner 
 28.36  may, in writing, require an insurance company to release to the 
 29.1   commissioner any or all relevant information or evidence the 
 29.2   commissioner deems important which the company may have in its 
 29.3   possession relating to a workers' compensation claim including 
 29.4   material relating to the investigation of the claim, statements 
 29.5   of any person, and any other evidence relevant to the 
 29.6   investigation. 
 29.7      Subd. 2.  [INFORMATION RELEASED TO AUTHORIZED PERSONS.] If 
 29.8   an insurance company has reason to believe that a claim may be 
 29.9   suspicious, fraudulent, or illegal, the company shall, in 
 29.10  writing, notify the commissioner and provide the commissioner 
 29.11  with all relevant material related to the company's inquiry into 
 29.12  the claim. 
 29.13     Subd. 3.  [GOOD FAITH IMMUNITY.] An insurance company or 
 29.14  its agent acting in its behalf who releases information, whether 
 29.15  oral or written, acting in good faith, pursuant to subdivisions 
 29.16  1 and 2, is immune from any liability, civil or criminal, that 
 29.17  might otherwise be incurred or imposed. 
 29.18     Subd. 4.  [SELF-INSURER; ASSIGNED RISK PLAN.] For the 
 29.19  purposes of this section, "insurance company" includes a 
 29.20  self-insurer and the assigned risk plan and their agents. 
 29.21     Sec. 23.  [182.6531] [INJURY AND ILLNESS PREVENTION 
 29.22  PROGRAM.] 
 29.23     The commissioner shall establish model injury and illness 
 29.24  prevention training programs to prevent repetitive motion 
 29.25  injuries, including, but not limited to, back injuries.  The 
 29.26  commissioner shall make recommendations for the minimum 
 29.27  qualifications of training program instructors.  The model 
 29.28  programs must be made available to employers, employer 
 29.29  associations, workers' compensation insurers, and employee 
 29.30  organizations on request. 
 29.31     Sec. 24.  Minnesota Statutes 1994, section 268.08, 
 29.32  subdivision 3, is amended to read: 
 29.33     Subd. 3.  [NOT ELIGIBLE.] An individual shall not be 
 29.34  eligible to receive benefits for any week with respect to which 
 29.35  the individual is receiving, has received, or has filed a claim 
 29.36  for remuneration in an amount equal to or in excess of the 
 30.1   individual's weekly benefit amount in the form of: 
 30.2      (1) termination, severance, or dismissal payment or wages 
 30.3   in lieu of notice whether legally required or not; provided that 
 30.4   if a termination, severance, or dismissal payment is made in a 
 30.5   lump sum, such lump sum payment shall be allocated over a period 
 30.6   equal to the lump sum divided by the employee's regular pay 
 30.7   while employed by such employer; provided such payment shall be 
 30.8   applied for a period immediately following the last day of 
 30.9   employment but not to exceed 28 calendar days provided that 50 
 30.10  percent of the total of any such payments in excess of eight 
 30.11  weeks shall be similarly allocated to the period immediately 
 30.12  following the 28 days; or 
 30.13     (2) vacation allowance paid directly by the employer for a 
 30.14  period of requested vacation, including vacation periods 
 30.15  assigned by the employer under the provisions of a collective 
 30.16  bargaining agreement, or uniform vacation shutdown; or 
 30.17     (3) compensation for loss of wages under the workers' 
 30.18  compensation law of this state or any other state or under a 
 30.19  similar law of the United States, or under other insurance or 
 30.20  fund established and paid for by the employer except that this 
 30.21  does not apply to an individual who is receiving temporary 
 30.22  partial compensation pursuant to section 176.101, subdivision 
 30.23  3k; or 
 30.24     (4) 50 percent of the pension payments from any fund, 
 30.25  annuity or insurance maintained or contributed to by a base 
 30.26  period employer including the armed forces of the United States 
 30.27  if the employee contributed to the fund, annuity or insurance 
 30.28  and all of the pension payments if the employee did not 
 30.29  contribute to the fund, annuity or insurance; or 
 30.30     (5) (4) 50 percent of a primary insurance benefit under 
 30.31  title II of the Social Security Act, as amended, or similar old 
 30.32  age benefits under any act of Congress or this state or any 
 30.33  other state. 
 30.34     An individual shall not be eligible to receive benefits for 
 30.35  any week with respect to which the individual is receiving or 
 30.36  has received remuneration in an amount equal to or in excess of 
 31.1   the individual's weekly benefit amount in the form of 
 31.2   compensation for loss of wages under the workers' compensation 
 31.3   law of this state or any other state or under a similar law of 
 31.4   the United States, or under other insurance or fund established 
 31.5   and paid for by the employer, except that this does not apply to 
 31.6   an individual who is receiving temporary partial compensation 
 31.7   pursuant to section 176.101, subdivision 3k. 
 31.8      Provided, that if such remuneration is less than the 
 31.9   benefits which would otherwise be due under sections 268.03 to 
 31.10  268.231, the individual shall be entitled to receive for such 
 31.11  week, if otherwise eligible, benefits reduced by the amount of 
 31.12  such remuneration; provided, further, that if the appropriate 
 31.13  agency of such other state or the federal government finally 
 31.14  determines that the individual is not entitled to such benefits, 
 31.15  this provision shall not apply.  If the computation of reduced 
 31.16  benefits, required by this subdivision, is not a whole dollar 
 31.17  amount, it shall be rounded down to the next lower dollar amount.
 31.18     Sec. 25.  [APPROPRIATION.] 
 31.19     $....... is appropriated from the special compensation fund 
 31.20  to the department of labor and industry for the biennium ending 
 31.21  June 30, 1997, for the purposes of this article. 
 31.22     Sec. 26.  [REPEALER.] 
 31.23     Minnesota Statutes 1994, section 176.132, subdivisions 2 
 31.24  and 3, are repealed. 
 31.25     Sec. 27.  [EFFECTIVE DATE.] 
 31.26     Sections 5, 6, 7, 8, 9, 10, 11, 19, 20, 21, and 26 apply to 
 31.27  personal injuries suffered on and after October 1, 1995.