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SF 1159

3rd Engrossment - 87th Legislature (2011 - 2012) Posted on 03/06/2012 02:55pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 3rd Engrossment

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A bill for an act
relating to workers' compensation; adopting recommendations of the Workers'
Compensation Advisory Council; increasing amount available for remodeling
or alteration projects; requiring rulemaking; appropriating money; amending
Minnesota Statutes 2010, sections 14.48, subdivisions 2, 3; 14.49; 14.50;
176.106, subdivisions 1, 3, 5, 6, 7, 8, 9; 176.137, subdivisions 2, 4, 5; 176.238,
subdivision 6; 176.305, subdivisions 1, 1a; 176.307; 176.341, subdivision 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 14.48, subdivision 2, is amended to read:


Subd. 2.

Chief administrative law judge.

The office shall be under the direction
of a chief administrative law judge who shall be learned in the law and appointed by the
governor, with the advice and consent of the senate, for a term ending on June 30 of the
sixth calendar year after appointment. Senate confirmation of the chief administrative law
judge shall be as provided by section 15.066. The chief administrative law judge may hear
cases and shall appoint additional administrative law judges and compensation judges to
serve in the office as necessary to fulfill the duties deleted text beginprescribed in chapters 14 and 176deleted text endnew text begin of
the Office of Administrative Hearings
new text end. The chief administrative law judge may delegate
to a subordinate employee the exercise of a specified statutory power or duty as deemed
advisable, subject to the control of the chief administrative law judge. Every delegation
must be by written order filed with the secretary of state. The chief administrative law
judge is subject to the provisions of the Minnesota Constitution, article VI, section 6, the
jurisdiction of the Board on Judicial Standards, and the provisions of the Code of Judicial
Conduct.

Sec. 2.

Minnesota Statutes 2010, section 14.48, subdivision 3, is amended to read:


Subd. 3.

Administrative law judges and compensation judges.

(a) All
administrative law judges and compensation judges shall be in the classified service
except that the chief administrative law judge shall be in the unclassified service, but
may be removed only for cause.

(b) All administrative law judges and workers' compensation judges must be learned
in the law and must be free of any political or economic association that would impair
their ability to function in a fair and impartial manner. Administrative law judges shall
have demonstrated knowledge of administrative procedures and workers' compensation
judges shall have demonstrated knowledge of workers' compensation laws.

(c) deleted text beginThe appointment of individuals as workers' compensation judges or as
administrative law judges does not preclude the chief administrative law judge from
establishing a system of training to enable them to acquire demonstrable knowledge and
to become qualified to conduct hearings in the area other than the area of their original
appointment.
deleted text endnew text begin Only compensation judges shall conduct administrative conferences,
hearings, or other workers' compensation proceedings within the jurisdiction of the Office
of Administrative Hearings under chapter 176, unless the proceeding is required to be
conducted under chapter 14.
new text end Conducting hearings in the deleted text beginotherdeleted text endnew text begin administrative lawnew text end area
does not affect deleted text beginan administrative law judge's ordeleted text endnew text begin anew text end workers' compensation judge's job
class established pursuant to section 43A.07 or seniority within that job class. The chief
administrative law judge shall annually notify the Department of Management and Budget
of the amount of credit payable to the workers' compensation special fund for time spent
by workers' compensation judges on noncompensation proceedings.

(d) Administrative law judges and compensation judges are subject to the provisions
of the Code of Judicial Conduct. Administrative law and compensation judges may,
however, serve as a member of a governmental board when so directed by the legislature.
The chief administrative law judge shall provide training to administrative law and
compensation judges about the requirements of the code and shall apply the provisions
of the code to their actions. Only administrative law judges serving as temporary judges
under a written contract are considered to be part-time judges for purposes of the code.
Reports required to be filed by the code must be filed with the chief administrative law
judge. The chief administrative law judge shall apply the provisions of the Code of Judicial
Conduct, to the extent applicable, to the other administrative law and compensation judges
in a manner consistent with interpretations made by the Board on Judicial Standards.
The chief administrative law judge shall follow the procedural requirements of the
commissioner's plan for state employees if any adverse personnel action is taken based in
whole or in part as a violation of the Code of Judicial Conduct.

(e) In addition to other duties provided by law, workers' compensation and
administrative law judges may mediate, arbitrate, or take other appropriate action on
matters referred to the Office of Administrative Hearings by any member of the federal or
state judicial branch or by the Workers' Compensation Court of Appeals.

Sec. 3.

Minnesota Statutes 2010, section 14.49, is amended to read:


14.49 TEMPORARY ADMINISTRATIVE LAW JUDGES.

When regularly appointed administrative law judges deleted text beginor compensation judgesdeleted text end are not
available, the chief administrative law judge may contract with qualified individuals to
serve as administrative law judges deleted text beginor compensation judgesdeleted text end. Such temporary administrative
law judges deleted text beginor compensation judgesdeleted text end shall not be employees of the state.new text begin Compensation
judges must be employees of the state, except that when all available regularly appointed
compensation judges are disqualified from a specific case under the Code of Judicial
Conduct, the chief administrative law judge may contract with a workers' compensation
attorney or former workers' compensation judge to serve as a compensation judge for
that case.
new text end

Sec. 4.

Minnesota Statutes 2010, section 14.50, is amended to read:


14.50 HEARINGS BEFORE ADMINISTRATIVE LAW JUDGE.

All hearings of state agencies required to be conducted under this chapter shall be
conducted by an administrative law judge assigned by the chief administrative law judge
or by a workers' compensation judge assigned by the chief administrative law judge as
provided in section 14.48. All hearings required to be conducted under chapter 176 shall
be conducted by a compensation judge assigned by the chief administrative law judge deleted text beginor
by an administrative law judge assigned by the chief administrative law judge as provided
in section 14.48
deleted text end. In assigning administrative law judges or compensation judges to
conduct deleted text beginsuchdeleted text end hearingsnew text begin under this chapternew text end, the chief administrative law judge shall attempt
to utilize personnel having expertise in the subject to be dealt with in the hearing. It shall
be the duty of the judge to: (1) advise an agency as to the location at which and time during
which a hearing should be held so as to allow for participation by all affected interests; (2)
conduct only hearings for which proper notice has been given; (3) see to it that all hearings
are conducted in a fair and impartial manner. Except in the case of workers' compensation
hearings involving claims for compensation it shall also be the duty of the judge to make a
report on each proposed agency action in which the administrative law judge functioned in
an official capacity, stating findings of fact and conclusions and recommendations, taking
notice of the degree to which the agency has (i) documented its statutory authority to take
the proposed action, (ii) fulfilled all relevant procedural requirements of law or rule, and
(iii) in rulemaking proceedings, demonstrated the need for and reasonableness of its
proposed action with an affirmative presentation of facts.

Sec. 5.

Minnesota Statutes 2010, section 176.106, subdivision 1, is amended to read:


Subdivision 1.

Scope.

All determinations by the commissioner or deleted text beginthe
commissioner's designee
deleted text endnew text begin compensation judgenew text end pursuant to section 176.102, 176.103,
176.135, or 176.136 shall be in accordance with the procedures contained in this section.
For medical disputes under sections 176.135 and 176.136, the commissioner deleted text beginor the
commissioner's designee
deleted text end shall have jurisdiction to hold an administrative conference
and issue decisions and orders under this section if the amount in dispute at the time the
medical request is filed is $7,500 or less.

Sec. 6.

Minnesota Statutes 2010, section 176.106, subdivision 3, is amended to read:


Subd. 3.

Conference.

The matter shall be scheduled for an administrative
conference within 60 days after receipt of the request for a conference. Notice of the
conference shall be served on all parties no later than 14 days prior to the conference,
unless the commissionernew text begin or compensation judgenew text end determines that a conference shall not be
held. The commissionernew text begin or compensation judgenew text end may order an administrative conference
before the commissioner's designee whether or not a request for conference is filed.

The commissionernew text begin or compensation judgenew text end may refuse to hold an administrative
conference and refer the matter for a settlement or pretrial conference or may certify the
matter to the Office of Administrative Hearings for a full hearing before a compensation
judge.

Sec. 7.

Minnesota Statutes 2010, section 176.106, subdivision 5, is amended to read:


Subd. 5.

Decision.

new text beginUnless the matter is referred for other proceedings under
subdivision 3,
new text enda written decision shall be issued by the deleted text begincommissioner's designeedeleted text endnew text begin
commissioner or compensation judge
new text end determining all issues considered at the conference
or if a conference was not held, based on the written submissions. Disputed issues of fact
shall be determined by a preponderance of the evidence. The decision must be issued
within 30 days after the close of the conference or if no conference was held, within 60
days after receipt of the request for conference. The decision must include a statement
indicating the right to request a de novo hearing before a compensation judge and how to
initiate the request.

Sec. 8.

Minnesota Statutes 2010, section 176.106, subdivision 6, is amended to read:


Subd. 6.

Penalty.

At a conference, if the insurer does not provide a specific reason
for nonpayment of the items in dispute, the deleted text begincommissioner's designeedeleted text endnew text begin commissioner or
compensation judge
new text end may assess a penalty of $300 payable to the commissioner for deposit
in the assigned risk safety account, unless it is determined that the reason for the lack of
specificity was the failure of the insurer, upon timely request, to receive information
necessary to remedy the lack of specificity. This penalty is in addition to any penalty
that may be applicable for nonpayment.

Sec. 9.

Minnesota Statutes 2010, section 176.106, subdivision 7, is amended to read:


Subd. 7.

Request for hearing.

new text begin(a) new text endAny party aggrieved by the decision of the
deleted text begin commissioner's designeedeleted text endnew text begin commissioner or compensation judgenew text end may request a formal
hearing by filing the request with the commissioner and serving the request on all parties
no later than 30 days after the decision. Requests shall be referred to the Office of
Administrative Hearings for a de novo hearing before a compensation judge. new text beginWhen a
compensation judge issued the administrative decision under subdivision 5, the formal
de novo hearing must be held before a compensation judge other than the compensation
judge who presided over the administrative conference.
new text end

new text begin (b) new text endExcept where the only issues to be determined pursuant to this section involve
liability for past treatment or services that will not affect entitlement to ongoing or future
proposed treatment or services under section 176.102 or 176.135, the commissioner shall
refer a timely request to the Office of Administrative Hearings within five working days
after filing of the request and the hearing at the Office of Administrative Hearings must be
held on the first date that all parties are available but not later than 60 days after the Office
of Administrative Hearings receives the matter. Following the hearing, the compensation
judge must issue the decision within 30 days. The decision of the compensation judge is
appealable pursuant to section 176.421.

Sec. 10.

Minnesota Statutes 2010, section 176.106, subdivision 8, is amended to read:


Subd. 8.

Denial of primary liability.

The commissioner does not have authority to
make determinations relating to medical or rehabilitation benefits when there is a genuine
dispute over whether the injury initially arose out of and in the course of employmentdeleted text begin,
except as provided by section 176.305
deleted text end.

Sec. 11.

Minnesota Statutes 2010, section 176.106, subdivision 9, is amended to read:


Subd. 9.

Subsequent causation issues.

If initial liability for an injury has been
admitted or established and an issue subsequently arises regarding causation between
the employee's condition and the work injury, the commissionernew text begin or compensation judgenew text end
may make the subsequent causation determination subject to de novo hearing by a
compensation judge deleted text beginwith a right to review by the court of appeals,deleted text end as provided in deleted text beginthis
chapter
deleted text endnew text begin subdivision 7new text end.

Sec. 12.

Minnesota Statutes 2010, section 176.137, subdivision 2, is amended to read:


Subd. 2.

Cost.

The pecuniary liability of an employer for remodeling or alteration
required by this section is limited to prevailing costs in the community for remodeling or
alteration of that type.new text begin The costs of obtaining the architectural certification and supervision
required by this section are included in the $75,000 limit in subdivision 5.
new text end

Sec. 13.

Minnesota Statutes 2010, section 176.137, subdivision 4, is amended to read:


Subd. 4.

Certification.

new text begin(a) Except as provided in paragraph (b), new text endno award may be
made except upon the certification of a licensed architect to the division or Workers'
Compensation Court of Appeals that the proposed alteration or remodeling of an existing
residence or the building or purchase of a new or different residence is reasonably required
for the purposes specified in subdivision 1. The Council on Disability shall advise the
division or Workers' Compensation Court of Appeals as provided in section 256.482,
subdivision 5, clause (7)
. The alteration or remodeling of an existing residence, or the
building or purchase of a new home must be done under the supervision of a licensed
architect relative to the specific needs to accommodate the disability.

new text begin (b) Remodeling or alteration projects do not require an architect's certification and
supervision if the project is:
new text end

new text begin (1) approved by the Council on Disability;
new text end

new text begin (2) performed by a residential building contractor or residential remodeler licensed
under section 326B.805, subdivision 1; and
new text end

new text begin (3) approved by a certified building official or certified accessibility specialist under
section 326B.133, subdivision 3a, paragraphs (b) and (d), who states in writing that the
proposed remodeling or alterations are reasonably required to enable the employee to move
freely into and throughout the residence and to otherwise accommodate the disability.
new text end

Sec. 14.

Minnesota Statutes 2010, section 176.137, subdivision 5, is amended to read:


Subd. 5.

Limitation.

An employee is limited to deleted text begin$60,000deleted text endnew text begin $75,000new text end under this section
for each personal injury.

Sec. 15.

Minnesota Statutes 2010, section 176.238, subdivision 6, is amended to read:


Subd. 6.

Expedited hearing before compensation judge.

(a) A hearing before a
compensation judge shall be held within 60 calendar days after the office receives the file
from the commissioner if:

(1) an objection to discontinuance has been filed under subdivision 4 within 60
calendar days after the notice of discontinuance was filed and where no administrative
conference has been held;

(2) an objection to discontinuance has been filed under subdivision 4 within 60
calendar days after deleted text beginthe commissioner'sdeleted text endnew text begin an interim administrativenew text end decision under this
section has been issued;

(3) a petition to discontinue has been filed by the insurer in lieu of filing a notice of
discontinuance; or

(4) a petition to discontinue has been filed within 60 calendar days after the
deleted text begin commissioner'sdeleted text endnew text begin interim administrativenew text end decision under this section has been issued.

(b) If the petition or objection is filed later than the deadlines listed above, the
expedited procedures in this section apply only where the employee is unemployed at the
time of filing the objection and shows, to the satisfaction of the chief administrative judge,
by sworn affidavit, that the failure to file the objection within the deadlines was due to some
infirmity or incapacity of the employee or to circumstances beyond the employee's control.
The hearing shall be limited to the issues raised by the notice or petition unless all parties
agree to expanding the issues. If the issues are expanded, the time limits for hearing and
issuance of a decision by the compensation judge under this subdivision shall not apply.

(c) Once a hearing date has been set, a continuance of the hearing date will be
granted only under the following circumstances:

(1) the employer has agreed, in writing, to a continuation of the payment of benefits
pending the outcome of the hearing; or

(2) the employee has agreed, in a document signed by the employee, that benefits
may be discontinued pending the outcome of the hearing.

(d) Absent a clear showing of surprise at the hearing or the unexpected unavailability
of a crucial witness, all evidence must be introduced at the hearing. If it is necessary
to accept additional evidence or testimony after the scheduled hearing date, it must be
submitted no later than 14 days following the hearing, unless the compensation judge, for
good cause, determines otherwise.

(e) new text beginWhen a compensation judge issued the interim administrative decision, the de
novo hearing under paragraph (a), clauses (2) and (4), must be held before a compensation
judge other than the compensation judge who presided over the administrative conference.
new text endThe compensation judge shall issue a decision pursuant to this subdivision within 30 days
following the close of the hearing record.

Sec. 16.

Minnesota Statutes 2010, section 176.305, subdivision 1, is amended to read:


Subdivision 1.

Hearings on petitions.

The petitioner shall serve a copy of the
petition on each adverse party personally or by first class mail. A clear copy suitable
for imaging shall be filed with the commissioner together with an appropriate affidavit
of service. deleted text beginWhen any petition has been filed with the Workers' Compensation Division,deleted text end
The commissioner shall, within ten days, refer deleted text beginthe matter presented by the petition for a
settlement conference under this section, for an administrative conference under section
176.106, or for hearing
deleted text endnew text begin all petitions involving issues over which the commissioner lacks
jurisdiction
new text end to the office.

Sec. 17.

Minnesota Statutes 2010, section 176.305, subdivision 1a, is amended to read:


Subd. 1a.

Settlement and pretrial conferences; summary decision.

The
deleted text begin commissionerdeleted text endnew text begin chief administrative law judge shall promptly assign the petition to a
compensation judge under section 176.307, and
new text end shall schedule a settlement conferencedeleted text begin, if
appropriate, within 60 days after receiving the petition
deleted text endnew text begin before a compensation judge, to be
held no later than 180 days after a claim petition was filed, or 45 days after a petition to
discontinue, objection to discontinuance, or request for formal hearing was filed
new text end.

All parties must appear at the new text beginsettlement new text endconference, either personally or by
representative, must be prepared to discuss settlement of all issues, and must be prepared
to discuss or present the information required by the joint rules of the division and the
office. If a representative appears on behalf of a party, the representative must have
authority to fully settle the matter.new text begin The parties shall serve and file a pretrial statement no
fewer than five days before the settlement conference.
new text end

If settlement is not reached, the deleted text beginpresiding officerdeleted text endnew text begin chief administrative law judge shall
schedule a hearing to be held within 90 days from the scheduled settlement conference.
However, the hearing must be held earlier than 90 days from the scheduled settlement
conference if this chapter requires an expedited hearing to be held at an earlier date. The
hearing must be held before a compensation judge other than the compensation judge
who conducted the settlement conference. The compensation judge assigned to hold the
hearing may choose to conduct a pretrial conference to clarify the issues and evidence that
will be presented at the hearing.
new text end

new text begin Cancellations and continuations of proceedings are disfavored but may be granted
upon the showing of good cause under section 176.341, subdivision 4.
new text end

new text begin The compensation judge conducting the settlement conferencenew text end may require the
parties to present copies of all documentary evidence not previously filed and a summary
of the evidence they will present at a formal hearing. If appropriate, a written summary
decision shall be issued within ten days after the conference stating the issues and a
determination of each issue. If a party fails to appear at the conference, all issues may
be determined contrary to the absent party's interest, provided the party in attendance
presents a prima facie case.

The summary decision is final unless a written request for a formal hearing is served
on all parties and filed with the commissioner within 30 days after the date of service
and filing of the summary decision. Within ten days after receipt of the request, the
commissioner shall certify the matter to the office for a de novo hearing. In proceedings
under section 176.2615, the summary decision is final and not subject to appeal or de
novo proceedings.

Sec. 18.

Minnesota Statutes 2010, section 176.307, is amended to read:


176.307 COMPENSATION JUDGES; BLOCK SYSTEM.

The chief administrative law judge deleted text beginmustdeleted text endnew text begin maynew text end assign workers' compensation cases to
compensation judges using a block system type of assignment that, among other things,
ensures that a case will remain with the same judge from commencement to conclusion
deleted text begin unlessdeleted text endnew text begin, except thatnew text end the judge deleted text beginisdeleted text endnew text begin must benew text end removed from the case deleted text beginby exercise ofdeleted text endnew text begin when:
new text end

new text begin (1)new text end a new text beginparty exercises a new text endlegal right deleted text beginof a party or by incapacitydeleted text endnew text begin to do so;
new text end

new text begin (2) the judge is incapacitated or is otherwise unable to hold a hearing; or
new text end

new text begin (3) assignment of a different judge is required by section 176.106, subdivision
7; 176.238, subdivision 6; 176.305, subdivision 1a; or the Minnesota Code of Judicial
Conduct
new text end.

The block system deleted text beginmust be the principaldeleted text endnew text begin shall be the preferrednew text end means of assigning
cases, but it may be supplemented by other systems of case assignment to ensure that
cases are timely decided.

Sec. 19.

Minnesota Statutes 2010, section 176.341, subdivision 4, is amended to read:


Subd. 4.

Continuances.

Only the chief administrative law judge or designee, on a
showing of good cause, may grant a continuance of a hearing at the office. Except in cases
of emergency or other good cause shown, any request for a continuance must be signed by
both the party and the attorney seeking the continuance.

A continuance of a hearing will be granted only upon a showing of good cause.
Good cause is established when the underlying eventuality is unforeseen, is not due to
lack of preparation, is relevant, is brought to the chief administrative law judge's attention
in a timely manner and does not prejudice the adversary.

Continuances will not be granted for the reason that an attorney for one of the parties
has scheduled a vacation for the date set for the hearing unless the attorney has, prior to
the setting of the hearing date, notified the office of the unavailable dates.

Continuances which are requested during the course of a hearing are subject to the
same standards but may be granted or denied by the compensation judge assigned to the
hearing. Continuances of prehearing or settlement conferences deleted text beginat the department ordeleted text end at the
office are subject to the same standards but may be granted or denied by a compensation
judge, the calendar judge, or other presiding officer assigned to the prehearing or
settlement conference.new text begin Cancellation of settlement conferences shall be granted if all
parties agree to cancellation.
new text end

Sec. 20. new text beginMEDICAL FEE REVIEW; WHOLESALE ACQUISITION COST
STANDARD.
new text end

new text begin The commissioner of labor and industry may replace the "average wholesale price"
standard in Minnesota Rules, part 5221.4070, with the "wholesale acquisition cost"
standard. The wholesale acquisition cost must be increased by the percentage necessary
to establish maximum fees that are the same as the maximum fees currently provided
under that part. The commissioner shall use the procedures in Minnesota Statutes, section
14.386, paragraph (a), to amend Minnesota Rules, part 5221.4070, for this purpose, except
that the amendments are not subject to expiration under section 14.386, paragraph (b).
This section does not limit the commissioner's existing authority under this chapter to
further amend the rules using the regular rule adoption procedures in chapter 14, and
shall not be considered a new grant of rulemaking authority for purposes of Minnesota
Statutes, section 14.125.
new text end

Sec. 21. new text beginAPPROPRIATION.
new text end

new text begin $600,000 is appropriated to the commissioner of labor and industry from the special
compensation fund for the purposes of implementing a case management system and
electronic filing system at the Office of Administrative Hearings. This is a onetime
appropriation. Funds appropriated in this section are available only to the extent requested
by the chief administrative law judge of the Office of Administrative Hearings. The
review panel convened by the Office of Administrative Hearings to review any proposals
for a case management system and electronic filing system, shall include one labor
representative and one business representative serving pursuant to Minnesota Statutes,
section 175.007, subdivision 1, paragraph (b) or (c).
new text end

Sec. 22. new text beginREVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall change the phrase "commissioner's decision" to "interim
administrative decision" wherever it appears in Minnesota Statutes, sections 176.238
and 176.239.
new text end

Sec. 23. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 11 and 15 to 21 are effective August 1, 2011.
new text end

new text begin (b) Sections 12 to 14 are effective the day following final enactment.
new text end