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    Subdivision 1. Uninsured and self-insured employers; special compensation fund.
When any employee sustains an injury arising out of and in the course of employment while
in the employ of an employer, other than the state or its political subdivisions, not insured or
self-insured as provided for in this chapter, the employee or the employee's dependents shall
nevertheless receive benefits as provided for in this chapter from the special compensation fund.
As used in subdivision 1 or 2, "employer" includes any owners or officers of a corporation who
direct and control the activities of employees. In any petition for benefits under this chapter, the
naming of an employer corporation not insured or self-insured as provided for in this chapter, as
a defendant, shall constitute without more the naming of the owners or officers as defendants,
and service of notice of proceeding under this chapter on the corporation shall constitute service
upon the owners or officers. An action to recover benefits paid shall be instituted unless the
commissioner determines that no recovery is possible. There shall be no payment from the special
compensation fund if there is liability for the injury under the provisions of section 176.215, by
an insurer or self-insurer.
    Subd. 1a.[Repealed, 1988 c 674 s 22]
    Subd. 2. Special compensation fund; penalties. After a hearing on a petition for benefits
and prior to issuing an order against the special compensation fund to pay compensation benefits
to an employee, a compensation judge shall first make findings regarding the insurance status
of the employer and its liability. The special compensation fund shall not be found liable in the
absence of a finding of liability against the employer. Where the liable employer is found after the
hearing to be not insured or self-insured as provided for in this chapter, the compensation judge
shall assess and order the employer to pay all compensation benefits to which the employee is
entitled, the amount for actual and necessary disbursements expended by the special compensation
fund, and a penalty in the amount of 65 percent of all compensation benefits ordered to be paid.
The award issued against an employer after the hearing shall constitute a lien for government
services pursuant to section 514.67 on all property of the employer and shall be subject to the
provisions of the Revenue Recapture Act in chapter 270A. The special compensation fund may
enforce the terms of that award in the same manner as a district court judgment. The commissioner
of labor and industry, in accordance with the terms of the order awarding compensation, shall pay
compensation to the employee or the employee's dependent from the special compensation fund.
The commissioner of labor and industry shall certify to the commissioner of finance and to the
legislature annually the total amount of compensation paid from the special compensation fund
under subdivision 1. Compensation paid under this section shall remain a liability of the special
compensation fund and shall be financed by the percentage assessed under section 176.129.
    Subd. 3. Commissioner-directed payments. (a) Notwithstanding subdivision 2, the
commissioner may direct payment from the special compensation fund for compensation payable
pursuant to subdivision 1, including benefits payable under sections 176.102 and 176.135, prior to
issuance of an order of a compensation judge or the Workers' Compensation Court of Appeals
directing payment or awarding compensation. Where payment is issued pursuant to a petition for
a temporary order, the terms of any resulting order shall have the same status and be governed by
the same provisions as an award issued pursuant to subdivision 2.
(b) The commissioner may suspend or terminate an order under paragraph (a) for good cause
as determined by the commissioner.
    Subd. 4. Notice by commissioner; rights of parties. If the commissioner authorizes the
special fund to commence payment without the issuance of a temporary order, the commissioner
shall serve by certified mail notice upon the employer and other interested parties of the intention
to commence payment. This notice shall be served at least ten calendar days before commencing
payment and shall be mailed to the last known address of the parties. The notice shall include a
statement that failure of the employer to respond within ten calendar days of the date of service
will be deemed acceptance by the employer of the proposed action by the commissioner and will
be deemed a waiver of defenses the employer has to a subrogation or indemnity action by the
commissioner. At any time prior to final determination of liability, the employer may appear as a
party and present defenses the employer has, whether or not an appearance by the employer has
previously been made in the matter. The commissioner has a cause of action against the employer
to recover compensation paid by the special fund under this section.
History: 1967 c 330 s 1; 1969 c 372 s 1; 1969 c 399 s 49; 1973 c 388 s 50; 1973 c 750 s 1,2;
1974 c 355 s 22; 1977 c 403 s 6; 1981 c 356 s 328; 1983 c 290 s 115-118; 1983 c 301 s 147; 1984
c 432 art 2 s 27; 1986 c 444; 1987 c 332 s 48,49; 1988 c 674 s 19,20; 1992 c 510 art 3 s 20;
1992 c 513 art 3 s 39; 1995 c 231 art 2 s 73,74; 1998 c 294 s 1