S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7748

                            I N  S E N A T E

                              June 17, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the workers' compensation law, in  relation  to  assess-
  ments  on  workers'  compensation  policies and removing the mandatory
  aggregate trust fund deposit requirements for non-scheduled  permanent
  partial disability cases

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 151 of the workers' compensation law, as  added  by
chapter  74 of the laws of 1945, subdivision 1 as amended by chapter 694
of the laws of 1958, subdivision 2 as separately amended by chapters 125
and 316 of the laws of 1991, paragraph (a) of subdivision 2  as  amended
by  chapter  309 of the laws of 1996, paragraphs (b) and (c) of subdivi-
sion 2 as amended by section 7 of part G of chapter 57 of  the  laws  of
2011,  the  second undesignated paragraph of paragraph (b) and paragraph
(c) of subdivision 2 as further amended by section  104  of  part  A  of
chapter  62  of the laws of 2011, subdivision 3 as separately amended by
chapters 125 and 285 of the laws of 1991, subdivision 4  as  amended  by
chapter  944  of the laws of 1972, and subdivision 5 as added by chapter
540 of the laws of 1984, is amended to read as follows:
  S 151. Administration expenses. 1. The chairman, as soon as  practica-
ble  after September first in each year, shall submit to the director of
the budget for his approval an estimated budget of expenditures for  the
succeeding  fiscal  year.  There  may  not  be expended by the board for
purposes of administration more than the amounts specified in such budg-
et for each item of expenditure, except as authorized by the director of
the budget. If there be officers or employees of the board whose  duties
relate partly to the general work of the board and partly to the work of
the  department  of  labor,  and in case there is other expense which is
incurred jointly on behalf of the general work  of  the  board  and  the
department  of labor, an equitable apportionment of the expense shall be
made and the part thereof which is applicable  to  the  board  shall  be
chargeable  thereto. The board shall include in its annual report to the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16304-02-2
              

S. 7748                             2

governor a statement showing the expense of administering the  workmen's
compensation law for the preceding fiscal year.
  2.  (a) The chair and department of audit and control annually as soon
as practicable after April first shall ascertain  the  total  amount  of
expenses, including in addition to the direct costs of personal service,
the  cost  of maintenance and operation, the cost of retirement contrib-
utions made and workers' compensation premiums paid by the state for  or
on  account  of  personnel, rentals for space occupied in state owned or
state leased buildings, such additional sum as may be certified  to  the
chair  and  the  department of audit and control as a reasonable compen-
sation for services rendered by  the  department  of  law  and  expenses
incurred  by  such department, for transfer into the training and educa-
tion program on occupational safety and health fund created pursuant  to
chapter  eight hundred eighty-six of the laws of nineteen hundred eight-
y-five and section ninety-seven-c of the state finance law, for the  New
York  state  occupational  health clinics network, for the department of
labor occupational safety and health program and for transfer  into  the
uninsured  employers'  fund pursuant to subdivision two of section twen-
ty-six-a of this chapter,  and  all  other  direct  or  indirect  costs,
incurred  by  the  board  during the preceding fiscal year in connection
with the administration of this chapter, except those expenses for which
[an assessment] A SURCHARGE is authorized pursuant to  subdivision  five
of section fifty and sections two hundred twenty-eight and three hundred
twenty-five of this chapter.
  (b)  [An  itemized  statement  of the expenses so ascertained shall be
open to public inspection in the office of the  board  for  thirty  days
after notice to the state insurance fund, all insurance carriers and all
self-insurers  affected  thereby, before the board shall make an assess-
ment for such expenses. The  chair  shall  assess  upon  and  collect  a
proportion  of such expenses as hereinafter provided from each insurance
carrier, the state insurance fund and each self-insurer. The  assessment
for  such expenses shall be allocated to (i) self-insurers and the state
insurance fund based upon the proportion  that  the  total  compensation
payments  made by all self-insurers and the state insurance fund in such
year bore to the total compensation payments made by all  self-insurers,
the  state insurance fund, and all insurance carriers and (ii) insurance
carriers based upon the proportion that the total compensation  payments
made  by  all  insurance carriers in such year bore to the total compen-
sation payments by all self-insurers, the state insurance fund  and  all
insurance  carriers.  The  portion  of  the assessment for such expenses
allocated to self-insurers and the state insurance fund  that  shall  be
collected from each self-insurer and the state insurance fund shall be a
sum  equal  to the proportion of the amount which the total compensation
payments of each such self-insurer or the state insurance fund  in  such
year  bore  to the total compensation payments made by all self-insurers
and the state insurance fund. The portion of  the  assessment  for  such
expenses  allocated  to  insurance carriers that shall be collected from
each such insurance carrier shall be a sum equal to that  proportion  of
the  amount  which  the  total  standard  premium by each such insurance
carrier bore to the total standard premium  reported  by  all  insurance
carriers  for  the calendar year which ended with the state fiscal year.
The amounts so secured shall be used for the payment of the expenses  of
administering  this  chapter.] THE CHAIR OF THE BOARD, WITH THE APPROVAL
OF THE SUPERINTENDENT OF FINANCIAL SERVICES, MAY  ADOPT  REGULATIONS  TO
ESTABLISH  AN  EMPLOYER  SURCHARGE THAT SHALL GENERATE REVENUE NEEDED TO
SATISFY SUCH ASCERTAINED EXPENSES. SUCH SURCHARGE, AT A  RATE  PUBLISHED

S. 7748                             3

ANNUALLY BY THE BOARD, SHALL CONSTITUTE A PROPORTIONATE AMOUNT OF ASCER-
TAINED  EXPENSES BETWEEN SELF-INSURERS, THE STATE INSURANCE FUND AND ALL
INSURED EMPLOYERS, BASED ON THE TOTAL  COMPENSATION  PAYMENTS  FROM  THE
PRECEDING  CALENDAR  YEAR. SELF-INSURERS, THE STATE  INSURANCE FUND, AND
ALL INSURANCE CARRIERS, SHALL COLLECT  FROM  ALL  EMPLOYERS,  AN  AMOUNT
EQUAL  TO  THE  ASSESSED  AMOUNT  THROUGH  A SURCHARGE BASED ON STANDARD
PREMIUM. SUCH SURCHARGE SHALL NOT CONSTITUTE AN ELEMENT OF LOSS FOR  THE
PURPOSE  OF ESTABLISHING RATES FOR WORKERS' COMPENSATION INSURANCE  BUT,
FOR THE PURPOSE OF  COLLECTION,  SHALL  BE  TREATED  AS  SEPARATE  COSTS
IMPOSED UPON INSURED EMPLOYERS. SELF-INSURERS, THE STATE INSURANCE FUND,
AND  ALL  INSURANCE CARRIERS SHALL BE DEEMED TO BE COLLECTION AGENTS FOR
PURPOSES OF COLLECTING SUCH SURCHARGE.
  For purposes of this paragraph,  "standard  premium"  shall  mean  the
premium  as  defined  for the purposes of this [assessment] SURCHARGE by
the superintendent of financial services, in consultation with the chair
of the board and the workers' compensation rating board. The amounts  so
secured  shall  be used for the payment of the expenses of administering
this chapter.
  For the purposes of this paragraph, the term "insurance carrier" shall
include only stock  corporations,  mutual  corporations  and  reciprocal
insurers  authorized  to  transact the business of workers' compensation
insurance in this state and the term "self-insurer"  shall  include  any
employer  or  group  of employers permitted to pay compensation directly
under the provisions of subdivision three, three-a or  four  of  section
fifty  of this chapter. For the purposes of this section, a "self-insur-
er" shall be: (i) an employer authorized to self-insure  under  subdivi-
sion three of section fifty of this chapter, or active groups authorized
pursuant  to  subdivision  three-a  of  section fifty of this chapter, a
group of employers authorized to  self-insure  under  paragraph  ten  of
subdivision  three-a  of section fifty of this chapter; or (ii) a public
employer as set forth in paragraph a  of  subdivision  four  of  section
fifty of this chapter authorized to self-insure under subdivision three,
three-a or four of section fifty or article five of this chapter, wheth-
er individually or as a group.
  (c)  [Assessments  for  the  special  disability  fund,  the  fund for
reopened cases and for the operations of the board shall not  constitute
elements  of  loss but shall for collection purposes be treated as sepa-
rate costs by carriers. All  insurance  carriers,  including  the  state
insurance  fund, shall collect such assessments from their policyholders
through a surcharge based on premium in accordance with rules set  forth
by  the  New York workers' compensation rating board, as approved by the
superintendent of financial services. Such surcharge shall be considered
as part of premium for purposes prescribed by  law  including,  but  not
limited  to,  computing  premium tax, reporting to the superintendent of
financial services pursuant to section ninety-nine of this  chapter  and
section  three  hundred seven of the insurance law,] THE SURCHARGE SHALL
BE EXCLUDED FROM THE DEFINITION OF "PREMIUM" FOR ALL PURPOSES, INCLUDING
PREMIUM TAXES; PROVIDED, HOWEVER, IT MAY  BE  USED  IN  determining  the
limitation of expenditures for the administration of the state insurance
fund  pursuant to section eighty-eight of this chapter and the cancella-
tion by an insurance carrier, including the state insurance fund,  of  a
policy for non-payment of premium.
  3.  Notwithstanding the provisions of subdivision two of this section,
the chair [shall require that  partial  payments  for  expenses  of  the
fiscal  year  beginning  April first, nineteen hundred eighty-three, and
for each fiscal year thereafter, shall be made on  March  tenth  of  the

S. 7748                             4

preceding  fiscal  year and on June tenth, September tenth, and December
tenth of each year]  OF  THE  BOARD  SHALL  PRESCRIBE  REQUIREMENTS  FOR
PAYMENT  OF  SURCHARGE  AMOUNTS COLLECTED, or on such other dates as the
director of the budget may prescribe, by each insurance carrier, includ-
ing  the  state insurance fund. [Provided, however, that the payment due
March tenth, nineteen hundred eighty-three for the fiscal year beginning
April first, nineteen hundred eighty-three shall not be required  to  be
paid until June tenth, nineteen hundred eighty-three.] Each such payment
shall  be  a sum equal to [twenty-five per centum of the annual expenses
assessed upon each carrier, including the state insurance fund, as esti-
mated by the chair.   The balance of assessments  for  the  fiscal  year
beginning April first, nineteen hundred seventy-two and each fiscal year
thereafter, shall be paid upon determination of the actual amount due in
accordance  with  the provisions of subdivision two of this section. Any
overpayment of annual assessments] SURCHARGE  AMOUNTS  COLLECTED  DURING
THE  PRIOR  PERIOD.  ANY  EXCESS  SURCHARGE  AMOUNTS  resulting from the
requirements of this subdivision shall be refunded or at the  option  of
the  chair  shall  be  applied  as  a credit against the [assessment of]
AGGREGATE SURCHARGE AMOUNT TO BE COLLECTED  FOR  the  succeeding  fiscal
year.  The  requirements  of  this  subdivision shall not apply to those
carriers whose estimated annual [assessment] SURCHARGE COLLECTED for the
fiscal year is less than one hundred dollars  and  such  carriers  shall
make  a single payment of the estimated annual [assessment] SURCHARGE on
[or before September tenth of the fiscal year] A DATE DETERMINED BY  THE
CHAIR.
  4.  [Commencing  with  the fiscal year beginning April first, nineteen
hundred seventy-three, the] THE provisions  of  [subdivision  three  of]
this  section shall be applicable to any county, city, town, village, or
other political subdivision failing to secure compensation  pursuant  to
subdivisions one and two of section fifty OF THIS CHAPTER, IN ACCORDANCE
WITH  REGULATIONS  PROMULGATED  BY  THE  CHAIR  OF  THE  BOARD, WITH THE
APPROVAL OF THE SUPERINTENDENT OF FINANCIAL SERVICES.
  5. The provisions of this section shall  not  apply  with  respect  to
policies  containing coverage pursuant to [subdivision four-a of section
one hundred sixty-seven] PARAGRAPH ONE  OF  SUBSECTION  (J)  OF  SECTION
THREE  THOUSAND  FOUR  HUNDRED  TWENTY  of the insurance law relating to
every policy providing comprehensive personal liability insurance  on  a
one, two, three or four family owner-occupied dwelling.
  S  2. Subdivision 3 of section 50 of the workers' compensation law, as
amended by section 3 of part G of chapter 57 of the laws  of  2011,  the
closing paragraph as further amended by section 104 of part A of chapter
62 of the laws of 2011, is amended to read as follows:
  3.  By  furnishing  satisfactory  proof  to the chair of his financial
ability to pay such compensation for himself, or  to  pay  such  compen-
sation  on behalf of a group of employers in accordance with subdivision
ten of this section, in which case the chair shall require  the  deposit
with the chair of such securities as the chair may deem necessary of the
kind  prescribed  in  subdivisions  one,  two, three, four and five, and
subparagraph (a) of paragraph three of subdivision seven of section  two
hundred  thirty-five  of the banking law, or the deposit of cash, or the
filing of irrevocable letters of credit issued by  a  qualified  banking
institution  as  defined by rules promulgated by the chair or the filing
of a bond of a surety company authorized to transact  business  in  this
state,  in  an  amount to be determined by the chair, or the posting and
filing as aforesaid of a combination of such  securities,  cash,  irrev-
ocable  letters  of credit and surety bond in an amount to be determined

S. 7748                             5

by the chair, to secure his liability to pay the  compensation  provided
in this chapter. Any such surety bond must be approved as to form by the
chair.  If  an employer or group of employers posts and files a combina-
tion  of securities, cash, irrevocable letters of credit and surety bond
as aforesaid, and if it becomes necessary to use the  same  to  pay  the
compensation  provided  in  this chapter, the chair shall first use such
securities or cash or irrevocable letters of credit and, when  the  full
amount  thereof  has been exhausted, he shall then require the surety to
pay forthwith to the chair all or any part of the penal sum of the  bond
for that purpose. The chair may also require an agreement on the part of
the  employer  or  group  of  employers to pay any awards commuted under
section twenty-seven of this chapter, into the special fund of the state
fund, as a condition of his being allowed to remain  uninsured  pursuant
to this section. The chair shall have the authority to deny the applica-
tion  of  an employer or group of employers to pay such compensation for
himself or to revoke his consent furnished, under this  section  at  any
time,  for good cause shown. The employer or group of employers qualify-
ing under this subdivision shall be known as a self-insurer.
  If for any reason the status of an  employer  or  group  of  employers
under this subdivision is terminated, the securities or the surety bond,
or  the  securities,  cash,  or irrevocable letters of credit and surety
bond, on deposit referred to herein shall remain in the custody  of  the
chair for such time as the chair may deem proper and warranted under the
circumstances.  In lieu thereof, and at the discretion of the chair, the
employer, his or her heirs or assigns or others carrying on or liquidat-
ing such business, may execute an assumption  of  workers'  compensation
liability  insurance  policy securing such further and future contingent
liability as may arise from prior injuries to workers and be incurred by
reason of any change in condition of such workers warranting  the  board
making  subsequent  awards  for payment of additional compensation. Such
policy shall be in a form approved by the  superintendent  of  financial
services  and issued by the state fund or any insurance company licensed
to issue this class of insurance in this state. In the event  that  such
policy is issued by an insurance company other than the state fund, then
said  policy  shall be deemed of the kind specified in paragraph fifteen
of subsection (a) of section one thousand one hundred  thirteen  of  the
insurance  law and covered by the workers' compensation security fund as
created and governed by article six-A of this chapter. It shall only  be
issued  for a single complete premium payment in advance by the employer
or group of employers and in an amount deemed acceptable  by  the  chair
and the superintendent of financial services.  In lieu of the applicable
premium  charge  ordinarily  required  to  be imposed by a carrier, said
[premium] POLICY shall include [a] THE EMPLOYER surcharge in  an  amount
to be determined by the chair to: (i) satisfy all [assessment] SURCHARGE
liability  due  and owing to the board and/or the chair under this chap-
ter; and (ii) satisfy all future [assessment] SURCHARGE liability  under
this section, and which surcharge shall be adjusted from time to time to
reflect  any changes to the [assessment] SURCHARGE of group self-insured
employers, including any changes enacted by the chapter of the  laws  of
two  thousand eleven amending sections fifteen and one hundred fifty-one
of this chapter. Said surcharge shall be payable to the board simultane-
ous to the execution of the assumption of workers' compensation  liabil-
ity  insurance  policy.  However, the payment of said surcharge does not
relieve the carrier from any other liability, including  liability  owed
to the superintendent of financial services pursuant to article six-A of
this  chapter.  When issued such policy shall be non-cancellable without

S. 7748                             6

recourse for any cause during the continuance of the  liability  secured
and so covered.
  S  3.  Paragraph  7  of  subdivision 3-a of section 50 of the workers'
compensation law, as amended by section 4 of part R of chapter 56 of the
laws of 2010, subparagraph (a) as amended by section  4  of  part  G  of
chapter 57 of the laws of 2011, and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  (7)  (a)  If  for any reason, the status of a group self-insurer under
this subdivision is terminated, including by operation  of  law  on  and
after  January first, two thousand twelve, the securities or cash or the
surety bond on deposit referred to herein shall remain in the custody of
the chair for such time as the chair may deem proper and  warranted.  In
lieu  thereof, and at the discretion of the chair, the group self-insur-
er, its heirs or assigns or others carrying on or liquidating such group
self-insurer, including the chair on the  group  self-insurer's  behalf,
may  execute  an assumption of workers' compensation liability insurance
policy securing such further and  future  contingent  liability  as  may
arise  from  prior  injuries to workers and be incurred by reason of any
change in the condition of such  workers  warranting  the  board  making
subsequent  awards  for  payment of additional compensation. Such policy
shall be in a form approved by the superintendent of financial  services
and  issued by the state fund or any insurance company licensed to issue
this class of insurance in this state. In the event that such policy  is
issued  by  an  insurance  company  other than the state fund, then said
policy shall be deemed of the kind specified  in  paragraph  fifteen  of
subsection  (a)  of  section  one  thousand  one hundred thirteen of the
insurance law and covered by the workers' compensation security fund  as
created  and governed by article six-A of this chapter. It shall only be
issued for a single complete premium payment in  advance  by  the  group
self-insurer  and  in  an  amount deemed acceptable by the chair and the
superintendent of financial services.  In lieu of the applicable premium
charge ordinarily required to be imposed by a  carrier,  said  [premium]
POLICY  shall  include  [a]  THE  EMPLOYER  surcharge in an amount to be
determined by the chair to: (i)  satisfy  all  [assessment]    SURCHARGE
liability  due  and owing to the board and/or the chair under this chap-
ter; and (ii) satisfy all future [assessment] SURCHARGE liability  under
this section, and which surcharge shall be adjusted from time to time to
reflect  any  changes to the assessment of group self-insured employers,
including any changes enacted by the chapter of the laws of two thousand
eleven amending sections fifteen and one hundred fifty-one of this chap-
ter. Said surcharge shall be payable to the board  simultaneous  to  the
execution of the assumption of workers' compensation liability insurance
policy.  However,  the  payment  of  said surcharge does not relieve the
carrier from any other liability, including liability owed to the super-
intendent of financial services pursuant to article six-A of this  chap-
ter.  When  issued  such policy shall be noncancellable without recourse
for any cause during the continuance of the  liability  secured  and  so
covered.
  (b)  The  chair shall levy an assessment on the members of a defaulted
group self-insurer within one hundred twenty days of such default or  of
the  effective  date  of  the  chapter of the laws of two thousand eight
which amended this subdivision, whichever  is  later,  and  against  the
members  of  any other terminated group self-insurer when necessary, for
such an amount as he or she determines to be necessary to discharge  all
liabilities  of the group self-insurer, including the reasonable cost of
liquidation such as claims administration costs, actuarial and  account-

S. 7748                             7

ing  services,  and  the  value  of future SURCHARGES AND assessments on
members of such group self-insurer.  The  chair  may  impose  subsequent
deficit  assessments,  or  return funds to members, to adjust the moneys
collected  to  reflect  the  time of participation, and percent of group
self-insurer liabilities for such time. Notwithstanding any such  action
by the chair, each member of the group self-insurer shall remain jointly
and  severally  responsible for all liabilities provided by this chapter
including but not limited to outstanding and  estimated  future  liabil-
ities  and  [assessments] SURCHARGES.  Further, separate and apart from,
and in addition to a member's joint and several liability  and  notwith-
standing any payments made by any other members of the group self-insur-
er pursuant to this subparagraph, in the event that a member neglects or
fails to pay an assessment OR SURCHARGE levied pursuant to this subpara-
graph,  the  member shall be deemed in default in the payment of compen-
sation. Such defaulting member is subject to the enforcement  provisions
of  section  twenty-six  of  this chapter for the payment of all compen-
sation relative to awards due and owing on claims filed by the employees
of such member that have neither been paid by the member  or  the  group
self-insurer.  Nothing  in  this  paragraph shall prevent the chair from
offering payment plans or settling claims against members of  any  group
self-insurer as necessary to facilitate collection.
  (c) Upon the assumption of the assets and liabilities of a group self-
insurer  by  the  chair or his or her designee pursuant to regulation of
the chair, all records, documents and files of whatever nature, pertain-
ing to the group self-insurer, be they in the possession  of  the  group
self-insurer  or  a  third  party, and all remaining assets of the group
self-insurer, shall become the property of the chair. All custodians  of
such  records  and/or funds shall turn over to the chair or his designee
all such original records upon demand.
  S 4.  Clause 2 of subparagraph (a) of paragraph 10 of subdivision  3-a
of section 50 of the workers' compensation law, as added by section 4 of
part G of chapter 57 of the laws of 2011, is amended to read as follows:
  (2)  The  members of the group, through the administrator, (a) jointly
deposit sufficient securities in accordance with  subdivision  three  of
this  section  as to secure the liability of the members of the group to
pay for all existing claims obligations, provided such deposit shall  be
made  by November first, two thousand eleven, (b) jointly deposit suffi-
cient securities in accordance with subdivision three of this section as
to secure all anticipated present and future claims of  the  members  of
the  group,  by  November  first, two thousand fourteen, provided annual
deposits are made in accordance with a schedule set by the chair  on  or
before  November first of each year, and provided that the deposit shall
be deemed an asset of the group for the purpose of determining its fund-
ing status, and (c) by November first, two thousand eleven and thereaft-
er, shall maintain funds sufficient for all  other  liabilities  besides
claims,  including  reserves for all [assessment] SURCHARGE liabilities,
in a trust governed in accordance with Part 126 of title 11 of  the  New
York code of rules and regulations, of which the board shall be the sole
beneficiary,  and  the  terms  of  the trust agreement, and the trustee,
shall be approved by the chair  in  his  or  her  sole  discretion,  and
provided  that any group self-insurer that does not hold such funds in a
trust that meets the terms of this paragraph shall post  them  with  the
board;
  S  5.  Paragraphs  11  and  12 of subdivision 3-a of section 50 of the
workers' compensation law, as added by section 4 of part G of chapter 57
of the laws of 2011, are amended to read as follows:

S. 7748                             8

  (11) Former group self-insurer. Any group self-insurer that has ceased
to self-insure, or has ceased to self-insure any new  liabilities  after
January  first,  two thousand twelve in accordance with paragraph two of
this subdivision, shall remain subject to all  the  provisions  of  this
subdivision   and  the  regulations  issued  pursuant  thereto  and  any
SURCHARGES OR assessments provided for by this section until  such  time
as the group self-insurer no longer possesses any liabilities.
  (12)  Any  non-municipal  group of employers authorized to self-insure
under paragraph ten of this section on or after January first, two thou-
sand twelve shall be deemed a "private self-insurer" for purposes of the
assessments AND SURCHARGES set forth in sections fifteen and one hundred
fifty-one of this chapter.
  S 6. Paragraph (h) of subdivision 8 of  section  15  of  the  workers'
compensation  law, as amended by chapter 6 of the laws of 2007, subpara-
graph 4 as amended by section 1 of part QQ of chapter 56 of the laws  of
2009, the opening paragraph, clause (A) and clause (B) of subparagraph 4
as  amended  by  section  1 of part G of chapter 57 of the laws of 2011,
clause (B) of subparagraph 4 as further amended by section 104 of part A
of chapter 62 of the laws of 2011, is amended to read as follows:
  (h) Special disability fund. (1) The fund  heretofore  maintained  and
provided  for  by  and  pursuant  to  former  subdivision  eight of this
section, is hereby continued and shall retain the liabilities heretofore
charged or chargeable thereto under the provisions of such former subdi-
vision eight of this section as it existed immediately prior to the time
this subdivision, as hereby added, takes  effect,  and  the  liabilities
chargeable thereto under the provisions of former subdivision eight-a of
this section as added by chapter seven hundred forty-nine of the laws of
nineteen  hundred forty-four and repealed at the same time this subdivi-
sion, as heretofore added,  takes  effect,  and  payments  therefrom  on
account  of such liabilities shall continue to be made as provided here-
in. The said fund shall be known as  the  special  disability  fund  and
shall be available only for the purposes stated in this subdivision, and
the  assets thereof shall not at any time be appropriated or diverted to
any other use or purpose.
  (2) (A) No carrier or employer, or the state insurance fund, may  file
a claim for reimbursement from the special disability fund, for an inju-
ry or illness with a date of accident or date of disablement on or after
July  first,  two  thousand  seven. No carrier or employer, or the state
insurance fund, may file a claim  for  reimbursement  from  the  special
disability  fund  after  July  first,  two  thousand ten, and no written
submissions or evidence in support of such  a  claim  may  be  submitted
after that date.
  (B)  All  requests  for reimbursement from the special disability fund
with a date of injury or date of disablement prior to  July  first,  two
thousand  seven  as  to  which the board has determined that the special
disability fund is liable must be submitted to  the  special  disability
fund  by  the  later of (i) one year after the expense has been paid, or
(ii) one year from the effective date of this paragraph.
  (C) All claims for reimbursement from the special disability fund must
be accompanied by a filing fee of  two  hundred  fifty  dollars,  to  be
deposited  in  the special disability fund. Upon any final ruling that a
claim is eligible for reimbursement from the fund, the fund will  return
two hundred dollars of this fee to the claimant.
  (3)  The  chair of the board shall, as soon as practicable after April
first, nineteen hundred forty-five, assess upon and  collect  from  each
insurance  carrier,  including  the state insurance fund and any county,

S. 7748                             9

city, town, village or other political  subdivision  failing  to  secure
compensation pursuant to subdivision one or two of section fifty of this
chapter, a sum equal to one per centum of the total compensation paid by
such  carrier  in  the year ending March thirty-first next preceding the
date of such assessment.
  (4) As soon as practicable  after  May  first  in  the  year  nineteen
hundred  fifty-eight,  and  annually  thereafter  as soon as practicable
after January first in each succeeding year,  the  chair  of  the  board
shall  [assess upon and collect from] ESTABLISH AN EMPLOYER SURCHARGE TO
BE COLLECTED BY all self-insurers, the state  insurance  fund,  and  all
insurance  carriers  (A)  a sum equal to one hundred fifty per centum of
the total disbursements made from the special disability fund during the
preceding calendar year (not including any disbursements made on account
of anticipated liabilities or waiver agreements funded by bond  proceeds
and related earnings), less the amount of the net assets in such fund as
of  December thirty-first of said preceding calendar year, and (B) a sum
sufficient to cover  debt  service,  and  associated  costs  (the  "debt
service  [assessment] SURCHARGE") to be paid during the calendar year by
the dormitory authority, as calculated in accordance  with  subparagraph
five of this paragraph. Such [assessments] SURCHARGES shall be allocated
to (i) self-insurers and the state insurance fund based upon the propor-
tion  that the total compensation payments made by all self-insurers and
the state insurance fund bore to the total compensation payments made by
all self-insurers, the state insurance fund, and all insurance carriers,
and (ii) insurance carriers based upon the  proportion  that  the  total
compensation  payments  made by all insurance carriers bore to the total
compensation payments by all self-insurers, the state insurance fund and
all insurance carriers during the fiscal year which  ended  within  said
preceding calendar year.  [Insurance carriers and self-insurers shall be
liable  for  all  such  assessments regardless of the date on which they
came into existence, or whether they have made any claim for  reimburse-
ment from the special disability fund. The portion of such sum allocated
to  self-insurers  and  the state insurance fund that shall be collected
from each self-insurer and the state insurance fund shall be a sum equal
to the proportion of the amount which the total compensation payments of
each such self-insurer or the state insurance fund  bore  to  the  total
compensation  payments made by all self-insurers and the state insurance
fund during the fiscal year which ended within said  preceding  calendar
year.]  The  portion  of  such sum allocated to [insurance carriers that
shall be] INSURED EMPLOYERS  AND  collected  [from]  BY  each  insurance
carrier  shall be a sum equal to that proportion of the amount which the
total standard premium by each such insurance carrier bore to the  total
standard  premium reported by all insurance carriers during the calendar
year which ended within said preceding fiscal year.  The  payments  from
the  debt  service [assessment] SURCHARGE, unless otherwise set forth in
the special disability fund  financing  agreement,  are  hereby  pledged
therefor  and  shall  be  deemed the first monies received on account of
[assessments] SURCHARGES in each year. For the purposes  of  this  para-
graph,  "standard  premium"  shall  mean  the premium as defined for the
purposes of this [assessment] SURCHARGE by the superintendent of  finan-
cial services, in consultation with the chair of the board and the work-
ers' compensation rating board. An employer who has ceased to be a self-
insurer  shall  continue  to  be liable for any [assessments] SURCHARGES
into said fund on account of any compensation payments made  by  him  or
her  on  his  or  her  account during such fiscal year, and the security
fund, created under the provisions of section one hundred seven of  this

S. 7748                            10

chapter, shall, in the event of the insolvency of any insurance company,
be  liable  for  any [assessments] SURCHARGES that would have been [made
against] CHARGED TO such company except for its insolvency. No  [assess-
ment]  SURCHARGE shall be payable from the aggregate trust fund, created
under the provisions of section twenty-seven of this article,  but  such
fund  shall  continue  to  be  liable for all compensation that shall be
payable under any award or order of the board,  the  commuted  value  of
which  has been paid into such fund.  Such [assessments] SURCHARGES when
collected shall be deposited  with  the  commissioner  of  taxation  and
finance  for  the benefit of such fund. [Unless otherwise provided, such
assessments, shall not constitute an element of loss for the purpose  of
establishing  rates for compensation insurance but shall for the purpose
of collection be treated as separate costs by carriers.]  All  insurance
carriers  and the state insurance fund, shall collect [such assessments,
from their policyholders through a surcharge] SURCHARGES based on premi-
ums in accordance with rules set forth by the superintendent  of  finan-
cial  services  in  consultation with the New York workers' compensation
rating board and the chair of the board. Such  surcharge  shall  NOT  be
considered as part of premium for purposes [prescribed by law including,
but  not  limited to,] OF computing premium tax, HOWEVER, SUCH SURCHARGE
MAY BE USED for reporting PURPOSES to the  superintendent  of  financial
services  pursuant  to  section  ninety-nine of this chapter and section
three hundred seven of the insurance law, determining the limitation  of
expenditures for the administration of the state insurance fund pursuant
to  section  eighty-eight  of  this  chapter  and the cancellation by an
insurance carrier, including the state insurance fund, of a  policy  for
non-payment of premium. The provisions of this paragraph shall not apply
with  respect to policies containing coverage pursuant to subsection (j)
of section three thousand four  hundred  twenty  of  the  insurance  law
relating  to  every  policy  providing  comprehensive personal liability
insurance on a one, two, three or four family  owner-occupied  dwelling.
[The  state  insurance  fund shall notify its insureds that such assess-
ments, shall be, for the purpose  of  recoupment,  treated  as  separate
costs,  for  the  purpose  of premiums billed on or after October first,
nineteen hundred ninety-four.] For  the  purposes  of  this  section,  a
"self-insurer" shall be: (i) an employer authorized to self-insure under
subdivision  three  of  section  fifty  of  this  chapter, active groups
authorized pursuant to subdivision three-a  of  section  fifty  of  this
chapter  or  a  group of employers authorized to self-insure under para-
graph ten of subdivision three-a of section fifty of  this  chapter;  or
(ii)  a public employer authorized as set forth in paragraph a of subdi-
vision four of section fifty of this chapter to self-insure under subdi-
vision three, three-a or four of such section or article  five  of  this
chapter, whether individually or as a group.
  For  the purposes of this paragraph, except as otherwise provided: the
term "insurance carrier" shall include only stock  corporations,  mutual
corporations and reciprocal insurers authorized to transact the business
of  workers' compensation insurance in this state; the term "self-insur-
er" shall include any employer or group of employers  permitted  to  pay
compensation directly under the provisions of subdivision three, three-a
or four of section fifty of this chapter.
  The  board  is hereby authorized to issue credits or refunds as neces-
sary, in the case of overpayments made to the fund. An insurance carrier
that knowingly underreports premiums for the purposes  of  this  section
shall be guilty of a class E felony.

S. 7748                            11

  (5)  (A)  The  chair  and the commissioner of taxation and finance are
authorized and directed to enter into a  financing  agreement  with  the
dormitory authority, to be known as the "special disability fund financ-
ing agreement." Such agreement shall set forth the process for calculat-
ing the annual debt service of the bonds issued by the dormitory author-
ity  and  any  other  associated  costs.  For  purposes of this section,
"associated costs" may include a coverage factor, reserve fund  require-
ments,  all  costs  of any nature incurred by the dormitory authority in
connection with the  special  disability  fund  financing  agreement  or
pursuant thereto, the operating costs of the waiver agreement management
office,  the  costs  of  any  independent  audits  undertaken under this
section, and any other costs for the implementation of this subparagraph
and the issuance of bonds by the dormitory authority, including interest
rate exchange payments, rebate payments, liquidity fees, credit provider
fees, fiduciary fees, remarketing, dealer,  auction  agent  and  related
fees  and  other similar bond-related expenses, unless otherwise funded.
By January first of each year, the dormitory authority shall provide  to
the  chair  the  calculation  of  the  amount expected to be paid by the
dormitory authority in debt service and associated costs for purposes of
calculating the debt service [assessment]  SURCHARGE  as  set  forth  in
subparagraph  four of this paragraph.  All monies received on account of
any [assessment] SURCHARGE under subparagraph four of this paragraph and
this subparagraph shall be applied in accordance with this  subparagraph
and in accordance with the financing agreement until the financial obli-
gations  of  the dormitory authority in respect to its contract with its
bondholders are met and all associated costs payable  to  the  dormitory
authority  have  been  paid,  notwithstanding any other provision of law
respecting secured transactions. This provision may be included  by  the
dormitory  authority in any contract of the dormitory authority with its
bondholders.
  The special disability fund financing agreement may restrict disburse-
ments, investments, or rebates, and may prescribe a system  of  accounts
applicable  to  the  special  disability  fund,  including custody of an
account with a trust indenture trustee that may  be  prescribed  by  the
dormitory  authority  as  part of its contract with the bondholders. For
purposes of this paragraph, the term "bonds" shall include notes  issued
in  anticipation of the issuance of bonds, or notes issued pursuant to a
commercial paper program.
  (B) The chair may conduct periodic audits of any self-insurer,  insur-
ance  carrier and the state insurance fund concerning any information or
payment required under this paragraph, including any  information  rele-
vant  to the payment or calculation of any [assessments] SURCHARGES. The
self-insurer, insurance carrier  and  the  state  insurance  fund  shall
provide  all necessary documents and information in relation to an audit
in a manner prescribed by the chair. Upon the determination of the chair
that a self-insurer, insurance carrier or the state insurance  fund  has
underpaid  [an  assessment]  A  SURCHARGE  as a result of its inaccurate
reporting, the self-insurer, insurance carrier or  the  state  insurance
fund upon notice from the chair, shall pay the full amount of the under-
paid [assessment] SURCHARGE, along with interest at the rate of nine per
cent  per  annum on the unpaid [assessment] SURCHARGE due not later than
thirty days after such notice.
  (6) The commissioner of taxation and finance is hereby  authorized  to
receive  and credit to such special disability fund any sum or sums that
may at any time be contributed to the state  by  the  United  States  of

S. 7748                            12

America  under any act of congress, or otherwise, to which the state may
be or become entitled by reason of any payments made out of such fund.
  (7) The commissioner of taxation and finance shall be the custodian of
said  fund  and, unless otherwise provided for in the special disability
fund financing agreement, shall invest any  surplus  or  reserve  moneys
thereof  in  securities  which  constitute legal investments for savings
banks under the laws of this state and in interest bearing  certificates
of deposit of a bank or trust company located and authorized to do busi-
ness  in  this state or of a national bank located in this state secured
by a pledge of direct obligations of the United States or of  the  state
of  New  York  in  an amount equal to the amount of such certificates of
deposit, and may sell any of the securities or certificates  of  deposit
in  which  such  fund  is  invested if necessary for the proper adminis-
tration or in the best interest of such fund.  Disbursements  from  such
fund  as  provided by this subdivision shall be made by the commissioner
of taxation and finance upon vouchers signed by the chair of  the  board
unless  the financing agreement provides for some other means of author-
izing such disbursements that is no less protective of the fund.
  The commissioner of taxation and finance, as custodian of  such  fund,
annually  as  soon  as practicable after January first, shall furnish to
the chair of the workers' compensation board a statement  of  the  fund,
setting forth the balance of moneys in the said fund as of the beginning
of  the  calendar  year, the income of the fund, the summary of payments
out of the fund on account of reimbursements and other  charges  ordered
to  be  paid  by  the board, and all other charges against the fund, and
setting forth the balance of the fund remaining to its credit on  Decem-
ber  thirty-first.  Such statement shall be open to public inspection in
the office of the secretary of the board. The chair, not less than nine-
ty days after the issuance of the dormitory  authority's  annual  audit,
shall  furnish  to the temporary president of the senate and the speaker
of the assembly the following reports on the special disability fund:  a
revenue  and  operating  expense  statement;  a financing plan; a report
concerning the assets and liabilities; the number of  waiver  agreements
entered  into  by  the waiver agreement management office; the number of
claimants remaining in the fund; the estimated current unfunded  liabil-
ity  of the fund with respect to such claims; and a debt issuance report
including but not limited to (i) pledged [assessment] SURCHARGE  revenue
and  securitization coverage, (ii) debt service maturities, (iii) inter-
est rate exchange or similar agreements, and (iv) financing and issuance
costs.
  The commissioner of taxation and  finance  may  establish  within  the
special  disability  fund  such  accounts  and sub-accounts as he or she
deems useful for the operation of the fund, or as necessary to segregate
moneys within the fund, subject  to  the  provisions  of  the  financing
agreement. The waiver agreement management office, as defined in section
thirty-two  of  this  article,  shall make application to the chair on a
quarterly basis for any administrative costs incurred by the office.
  S 7. Subdivision 3 of section 25-a of the workers'  compensation  law,
as amended by chapter 6 of the laws of 2007, the second and third undes-
ignated  paragraphs as further amended by section 104 of part A of chap-
ter 62 of the laws of 2011, is amended to read as follows:
  3. Any awards so made shall be payable out of the special fund hereto-
fore created for such purpose, which fund is hereby continued and  shall
be  known  as the fund for reopened cases. The employer, or, if insured,
his insurance carrier shall pay into such  fund,  or,  in  the  case  of
awards  made on or after July first, nineteen hundred sixty-nine, either

S. 7748                            13

into such fund or the uninsured employers' fund  under  section  twenty-
six-a  of  this  article  in accordance with the provisions thereof, for
every case of injury causing death for which there are no persons  enti-
tled  to compensation the sum of three hundred dollars where such injury
occurred prior to July first, nineteen hundred forty and the sum of  one
thousand dollars where such injury shall occur on or after said date and
prior  to  April  first,  nineteen  hundred  forty-five,  and the sum of
fifteen hundred dollars where such injury shall occur on or after  April
first,  nineteen  hundred forty-five and prior to September first, nine-
teen hundred seventy-eight and the sum of three thousand  dollars  where
such  injury  shall  occur on or after September first, nineteen hundred
seventy-eight, and in each case of death resulting from injury sustained
on or after July first, nineteen hundred forty and  prior  to  September
first,  nineteen hundred seventy-eight, where there are persons entitled
to compensation but the total amount of such compensation is  less  than
two thousand dollars exclusive of funeral benefits, the employer, or, if
insured,  his  insurance  carrier,  shall pay into such fund, or, in the
case of awards made on or after July first, nineteen hundred  sixty-nine
and  prior  to  September  first, nineteen hundred seventy-eight, either
into such fund or the uninsured employers' fund  under  section  twenty-
six-a  of  this  article  in accordance with the provisions thereof, the
difference between the sum of two thousand dollars and the compensation,
exclusive of funeral benefits, and in each case of death resulting  from
injury  sustained on or after September first, nineteen hundred seventy-
eight, the employer, or if insured, his insurance carrier shall pay into
such fund or the uninsured employers' fund under section twenty-six-a of
this article in accordance with the provisions thereof,  the  difference
between the sum of five thousand dollars and the compensation, exclusive
of  funeral  benefits  actually  paid  to  or  for the dependents of the
deceased employee together with any expense charge required  by  section
twenty-seven  of this article; provided, however, that where death shall
occur subsequent to the periods  limited  by  subdivision  one  of  this
section  no  payment  into  such  special  fund  nor to the special fund
provided by subdivision nine of section fifteen  nor  to  the  uninsured
employers'  fund  provided by section twenty-six-a of this article shall
be required. In addition to the [assessments made against all]  EMPLOYER
SURCHARGE  COLLECTED  BY insurance carriers for the expenses of adminis-
tering this chapter provided for under the  provisions  of  section  one
hundred  fifty-one of this chapter, and the payments above provided, the
employer, or, if insured, his insurance carrier, shall pay  the  sum  of
five  dollars  into  said  fund  for each case in which an award is made
pursuant to the provisions of paragraphs a to s inclusive of subdivision
three of section fifteen of this [chapter] ARTICLE by reason  of  injury
sustained between July first, nineteen hundred forty and June thirtieth,
nineteen  hundred  forty-two,  both  dates inclusive, and the sum of ten
dollars for each such case by reason of injury  sustained  between  July
first,  nineteen  hundred forty-two and June thirtieth, nineteen hundred
fifty, both dates inclusive, which payment shall be in addition  to  any
payment  of  compensation  to  the  injured employee as provided in this
chapter.
  There shall be maintained in the special fund at all times  assets  at
least  equal  in  value  to  the  sum of (1) the value of awards charged
against such fund, (2) the value of all claims that have  been  reopened
by  the  board as a charge against such fund but as to which awards have
not yet been made, (3) effective January first, nineteen hundred  seven-
ty-one,   the  total  supplemental  benefits  paid  from  such  fund  as

S. 7748                            14

reimbursement pursuant to subdivision nine of this  section  during  the
calendar  year immediately preceding, and (4) a reserve equal to ten per
cent of the sum of items (1) and (2) of this paragraph. For the  purpose
of  accumulating funds for the payment of supplemental benefits pursuant
to subdivision nine of this section, the chairman shall  impose  against
all  carriers  an  assessment  in  the sum of five million dollars to be
collected in the respective proportions established in the  fiscal  year
commencing   April   first,  nineteen  hundred  sixty-eight,  under  the
provisions of section one hundred fifty-one of  this  chapter  for  each
carrier.  Annually,  as  soon as practicable after January first in each
year, the chairman shall ascertain the condition of the fund and whenev-
er the assets shall fall below the prescribed minimum as herein provided
the chairman shall [assess  and  collect  from]  ESTABLISH  AN  EMPLOYER
SURCHARGE  TO BE COLLECTED BY all insurance carriers, [in the respective
proportions] established in the prior [fiscal] CALENDAR year  under  the
provisions  of  section  one  hundred fifty-one of this chapter for each
carrier, an amount sufficient to restore  the  fund  to  the  prescribed
minimum.  The  chairman  before  [making  an  assessment] ESTABLISHING A
SURCHARGE as provided in this section shall give thirty days' notice  to
the  representative of the fund, designated pursuant to subdivision five
of this section, that an itemized statement of the condition of the fund
is open for his inspection. The superintendent of financial services may
examine into the condition of the fund at any time on his own initiative
or on request of the chairman or representative of the fund.
  Such [assessment] SURCHARGE and the payments made into said fund shall
not constitute an element of loss for the purpose of establishing  rates
for  workers'  compensation  insurance  as provided in the insurance law
[but shall for the purpose of recoupment be treated as separate costs by
carriers]. Carriers shall [assess such costs on] COLLECT SUCH  SURCHARGE
FROM  [their  policyholders]  INSURED EMPLOYERS in accordance with rules
set forth by  the  New  York  workers'  compensation  rating  board,  as
approved by the superintendent of financial services.
  The  provisions  of  this  subdivision shall not apply with respect to
policies containing coverage pursuant  to  section  thirty-four  hundred
twenty  of  the insurance law relating to every policy providing compre-
hensive personal liability insurance on a one, two, three or four family
owner-occupied dwelling.
  S 8. Paragraph (f) of subdivision 9 of section 25-a  of  the  workers'
compensation  law,  as  added  by  chapter  830  of the laws of 1968, is
amended to read as follows:
  (f) The special disability fund created  under  subdivision  eight  of
section  fifteen and the reopened cases fund created under section twen-
ty-five-a and the aggregate trust fund created under section twenty-sev-
en of this chapter shall be deemed to be insurance carriers for purposes
of  this  subdivision,  other  than  the  payment  of  the  [assessment]
SURCHARGE under the provisions of subdivision three of this section.
  S 9. Subparagraph (a) of paragraph 10 of subdivision 3-a of section 50
of  the workers' compensation law is amended by adding a new clause 8 to
read as follows:
  (8) (A) NOTWITHSTANDING ANYTHING IN THIS SECTION, PRESENT  AND  FUTURE
LIABILITIES  MAY  BE  SECURED  IN A TRUST FUND PURSUANT TO DEPARTMENT OF
FINANCIAL SERVICES REGULATION 114 TRUST ACCOUNT;
  (B) NOTWITHSTANDING THE PROVISIONS OF THIS SECTION,  A  TRUST  MEETING
THE  FOLLOWING  CRITERIA  IS SUBJECT TO POSTING A SECURITY NOT TO EXCEED
TEN PERCENT OF TOTAL RESERVES:
  (I) ASSETS OVER ONE HUNDRED MILLION DOLLARS;

S. 7748                            15

  (II) NON-PROFIT  ADMINISTRATOR  SUBJECT  TO  A  COLLECTIVE  BARGAINING
AGREEMENT; AND
  (III)  ADMINISTRATOR IS ALSO THE ADMINISTRATOR OF MORE THAN FIVE ERISA
TRUST FUNDS.
  (C) TOTAL LIABILITIES SHALL NOT INCLUDE ASSESSMENT LIABILITY;
  (D) THE MEMBERS OF ANY SUCH GROUP SHALL ENTER INTO AN AGREEMENT  AMONG
THEMSELVES  AND WITH THE GROUP'S ADMINISTRATOR WHICH SHALL, AT A MINIMUM
INDICATE THAT EACH OF THE MEMBERS OF THE GROUP IS PROTECTED AS TO ANY OF
THE MEMBERS LIABILITIES OF THE GROUP BY A FORM OF SECURITY ACCEPTABLE TO
THE BOARD INCLUDING BUT NOT  LIMITED  TO  STOP  LOSS  INSURANCE,  BONDS,
SECURED  IN  A  TRUST  FUND PURSUANT TO DEPARTMENT OF FINANCIAL SERVICES
REGULATION 114 TRUST ACCOUNT, OR OTHER FORMS OF SECURITY;
  S 10. This act shall take effect immediately.