SENATORS Nein, Wachtmann, Jacobson, Goodman, White, Austria, Spada, Armbruster, Ryan

To amend sections 4123.35, 4123.93, and 4123.931 of

1

the Revised Code to modify the subrogation

2

provisions of the Workers' Compensation Law.

3

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4123.35, 4123.93, and 4123.931 of	4
the Revised Code be amended to read as follows:	5

Sec. 4123.35.  (A) Except as provided in this section,	6
every employer mentioned in division (B)(2) of section 4123.01 of	7
the Revised Code, and every publicly owned utility shall pay	8
semiannually in the months of January and July into the state	9
insurance fund the amount of annual premium the administrator of	10
workers' compensation fixes for the employment or occupation of	11
the employer, the amount of which premium to be paid by each	12
employer to be determined by the classifications, rules, and rates	13
made and published by the administrator. The employer shall pay	14
semiannually a further sum of money into the state insurance fund	15
as may be ascertained to be due from the employer by applying the	16
rules of the administrator, and a receipt or certificate	17
certifying that payment has been made shall be mailed immediately	18
to the employer by the bureau of workers' compensation. The	19
receipt or certificate is prima-facie evidence of the payment of	20
the premium.	21

The bureau of workers' compensation shall verify with the	22
secretary of state the existence of all corporations and	23
organizations making application for workers' compensation	24
coverage and shall require every such application to include the	25
employer's federal identification number.	26

An employer as defined in division (B)(2) of section 4123.01	27
of the Revised Code who has contracted with a subcontractor is	28
liable for the unpaid premium due from any subcontractor with	29
respect to that part of the payroll of the subcontractor that is	30
for work performed pursuant to the contract with the employer.	31

Division (A) of this section providing for the payment of	32
premiums semiannually does not apply to any employer who was a	33
subscriber to the state insurance fund prior to January 1, 1914,	34
or who may first become a subscriber to the fund in any month	35
other than January or July. Instead, the semiannual premiums	36
shall be paid by those employers from time to time upon the	37
expiration of the respective periods for which payments into the	38
fund have been made by them.	39

The administrator shall adopt rules to permit employers to	40
make periodic payments of the semiannual premium due under this	41
division. The rules shall include provisions for the assessment	42
of interest charges, where appropriate, and for the assessment of	43
penalties when an employer fails to make timely premium payments.	44
An employer who timely pays the amounts due under this division is	45
entitled to all of the benefits and protections of this chapter.	46
Upon receipt of payment, the bureau immediately shall mail a	47
receipt or certificate to the employer certifying that payment has	48
been made, which receipt is prima-facie evidence of payment.	49
Workers' compensation coverage under this chapter continues	50
uninterrupted upon timely receipt of payment under this division.	51

Every public employer, except public employers that are	52
self-insuring employers under this section, shall comply with	53
sections 4123.38 to 4123.41, and 4123.48 of the Revised Code in	54
regard to the contribution of moneys to the public insurance fund.	55

(B) Employers who will abide by the rules of the	56
administrator and who may be of sufficient financial ability to	57
render certain the payment of compensation to injured employees or	58
the dependents of killed employees, and the furnishing of medical,	59
surgical, nursing, and hospital attention and services and	60
medicines, and funeral expenses, equal to or greater than is	61
provided for in sections 4123.52, 4123.55 to 4123.62, and 4123.64	62
to 4123.67 of the Revised Code, and who do not desire to insure	63
the payment thereof or indemnify themselves against loss sustained	64
by the direct payment thereof, upon a finding of such facts by the	65
administrator, may be granted the privilege to pay individually	66
compensation, and furnish medical, surgical, nursing, and hospital	67
services and attention and funeral expenses directly to injured	68
employees or the dependents of killed employees, thereby being	69
granted status as a self-insuring employer. The administrator may	70
charge employers who apply for the status as a self-insuring	71
employer a reasonable application fee to cover the bureau's costs	72
in connection with processing and making a determination with	73
respect to an application.	74

All employers granted such status shall demonstrate	75
sufficient financial and administrative ability to assure that all	76
obligations under this section are promptly met. The	77
administrator shall deny the privilege where the employer is	78
unable to demonstrate the employer's ability to promptly meet all	79
the obligations imposed on the employer by this section.	80

(1) The administrator shall consider, but is not limited to,	81
the following factors, where applicable, in determining the	82
employer's ability to meet all of the obligations imposed on the	83
employer by this section:	84

(a) The employer employs a minimum of five hundred employees	85
in this state;	86

(b) The employer has operated in this state for a minimum of	87
two years, provided that an employer who has purchased, acquired,	88
or otherwise succeeded to the operation of a business, or any part	89
thereof, situated in this state that has operated for at least two	90
years in this state, also shall qualify;	91

(c) Where the employer previously contributed to the state	92
insurance fund or is a successor employer as defined by bureau	93
rules, the amount of the buyout, as defined by bureau rules;	94

(d) The sufficiency of the employer's assets located in this	95
state to insure the employer's solvency in paying compensation	96
directly;	97

(e) The financial records, documents, and data, certified by	98
a certified public accountant, necessary to provide the employer's	99
full financial disclosure. The records, documents, and data	100
include, but are not limited to, balance sheets and profit and	101
loss history for the current year and previous four years.	102

(f) The employer's organizational plan for the	103
administration of the workers' compensation law;	104

(g) The employer's proposed plan to inform employees of the	105
change from a state fund insurer to a self-insuring employer, the	106
procedures the employer will follow as a self-insuring employer,	107
and the employees' rights to compensation and benefits; and	108

(h) The employer has either an account in a financial	109
institution in this state, or if the employer maintains an account	110
with a financial institution outside this state, ensures that	111
workers' compensation checks are drawn from the same account as	112
payroll checks or the employer clearly indicates that payment will	113
be honored by a financial institution in this state.	114

The administrator may waive the requirements of divisions	115
(B)(1)(a) and (b) of this section and the requirement of division	116
(B)(1)(e) of this section that the financial records, documents,	117
and data be certified by a certified public accountant. The	118
administrator shall adopt rules establishing the criteria that an	119
employer shall meet in order for the administrator to waive the	120
requirement of division (B)(1)(e) of this section. Such rules may	121
require additional security of that employer pursuant to division	122
(E) of section 4123.351 of the Revised Code.	123

The administrator shall not grant the status of self-insuring	124
employer to the state, except that the administrator may grant the	125
status of self-insuring employer to a state institution of higher	126
education, excluding its hospitals, that meets the requirements of	127
division (B)(2) of this section.	128

(2) When considering the application of a public employer,	129
except for a board of county commissioners described in division	130
(G) of section 4123.01 of the Revised Code, a board of a county	131
hospital, or a publicly owned utility, the administrator shall	132
verify that the public employer satisfies all of the following	133
requirements as the requirements apply to that public employer:	134

(a) For the two-year period preceding application under this	135
section, the public employer has maintained an unvoted debt	136
capacity equal to at least two times the amount of the current	137
annual premium established by the administrator under this chapter	138
for that public employer for the year immediately preceding the	139
year in which the public employer makes application under this	140
section.	141

(b) For each of the two fiscal years preceding application	142
under this section, the unreserved and undesignated year-end fund	143
balance in the public employer's general fund is equal to at least	144
five per cent of the public employer's general fund revenues for	145
the fiscal year computed in accordance with generally accepted	146
accounting principles.	147

(c) For the five-year period preceding application under	148
this section, the public employer, to the extent applicable, has	149
complied fully with the continuing disclosure requirements	150
established in rules adopted by the United States securities and	151
exchange commission under 17 C.F.R. 240.15c 2-12.	152

(d) For the five-year period preceding application under	153
this section, the public employer has not had its local government	154
fund distribution withheld on account of the public employer being	155
indebted or otherwise obligated to the state.	156

(e) For the five-year period preceding application under	157
this section, the public employer has not been under a fiscal	158
watch or fiscal emergency pursuant to section 118.023, 118.04, or	159
3316.03 of the Revised Code.	160

(f) For the public employer's fiscal year preceding	161
application under this section, the public employer has obtained	162
an annual financial audit as required under section 117.10 of the	163
Revised Code, which has been released by the auditor of state	164
within seven months after the end of the public employer's fiscal	165
year.	166

(g) On the date of application, the public employer holds a	167
debt rating of Aa3 or higher according to Moody's investors	168
service, inc., or a comparable rating by an independent rating	169
agency similar to Moody's investors service, inc.	170

(h) The public employer agrees to generate an annual	171
accumulating book reserve in its financial statements reflecting	172
an actuarially generated reserve adequate to pay projected claims	173
under this chapter for the applicable period of time, as	174
determined by the administrator.	175

(i) For a public employer that is a hospital, the public	176
employer shall submit audited financial statements showing the	177
hospital's overall liquidity characteristics, and the	178
administrator shall determine, on an individual basis, whether the	179
public employer satisfies liquidity standards equivalent to the	180
liquidity standards of other public employers.	181

(j) Any additional criteria that the administrator adopts by	182
rule pursuant to division (E) of this section.	183

The administrator shall not approve the application of a	184
public employer, except for a board of county commissioners	185
described in division (G) of section 4123.01 of the Revised Code,	186
a board of a county hospital, or publicly owned utility, who does	187
not satisfy all of the requirements listed in division (B)(2) of	188
this section.	189

(C) A board of county commissioners described in division	190
(G) of section 4123.01 of the Revised Code, as an employer, that	191
will abide by the rules of the administrator and that may be of	192
sufficient financial ability to render certain the payment of	193
compensation to injured employees or the dependents of killed	194
employees, and the furnishing of medical, surgical, nursing, and	195
hospital attention and services and medicines, and funeral	196
expenses, equal to or greater than is provided for in sections	197
4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised	198
Code, and that does not desire to insure the payment thereof or	199
indemnify itself against loss sustained by the direct payment	200
thereof, upon a finding of such facts by the administrator, may be	201
granted the privilege to pay individually compensation, and	202
furnish medical, surgical, nursing, and hospital services and	203
attention and funeral expenses directly to injured employees or	204
the dependents of killed employees, thereby being granted status	205
as a self-insuring employer. The administrator may charge a board	206
of county commissioners described in division (G) of section	207
4123.01 of the Revised Code that applies for the status as a	208
self-insuring employer a reasonable application fee to cover the	209
bureau's costs in connection with processing and making a	210
determination with respect to an application. All employers	211
granted such status shall demonstrate sufficient financial and	212
administrative ability to assure that all obligations under this	213
section are promptly met. The administrator shall deny the	214
privilege where the employer is unable to demonstrate the	215
employer's ability to promptly meet all the obligations imposed on	216
the employer by this section. The administrator shall consider,	217
but is not limited to, the following factors, where applicable, in	218
determining the employer's ability to meet all of the obligations	219
imposed on the board as an employer by this section:	220

(1) The board as an employer employs a minimum of five	221
hundred employees in this state;	222

(2) The board has operated in this state for a minimum of	223
two years;	224

(3) Where the board previously contributed to the state	225
insurance fund or is a successor employer as defined by bureau	226
rules, the amount of the buyout, as defined by bureau rules;	227

(4) The sufficiency of the board's assets located in this	228
state to insure the board's solvency in paying compensation	229
directly;	230

(5) The financial records, documents, and data, certified by	231
a certified public accountant, necessary to provide the board's	232
full financial disclosure. The records, documents, and data	233
include, but are not limited to, balance sheets and profit and	234
loss history for the current year and previous four years.	235

(6) The board's organizational plan for the administration	236
of the workers' compensation law;	237

(7) The board's proposed plan to inform employees of the	238
proposed self-insurance, the procedures the board will follow as a	239
self-insuring employer, and the employees' rights to compensation	240
and benefits;	241

(8) The board has either an account in a financial	242
institution in this state, or if the board maintains an account	243
with a financial institution outside this state, ensures that	244
workers' compensation checks are drawn from the same account as	245
payroll checks or the board clearly indicates that payment will be	246
honored by a financial institution in this state;	247

(9) The board shall provide the administrator a surety bond	248
in an amount equal to one hundred twenty-five per cent of the	249
projected losses as determined by the administrator.	250

(D) The administrator shall require a surety bond from all	251
self-insuring employers, issued pursuant to section 4123.351 of	252
the Revised Code, that is sufficient to compel, or secure to	253
injured employees, or to the dependents of employees killed, the	254
payment of compensation and expenses, which shall in no event be	255
less than that paid or furnished out of the state insurance fund	256
in similar cases to injured employees or to dependents of killed	257
employees whose employers contribute to the fund, except when an	258
employee of the employer, who has suffered the loss of a hand,	259
arm, foot, leg, or eye prior to the injury for which compensation	260
is to be paid, and thereafter suffers the loss of any other of the	261
members as the result of any injury sustained in the course of and	262
arising out of the employee's employment, the compensation to be	263
paid by the self-insuring employer is limited to the disability	264
suffered in the subsequent injury, additional compensation, if	265
any, to be paid by the bureau out of the surplus created by	266
section 4123.34 of the Revised Code.	267

(E) In addition to the requirements of this section, the	268
administrator shall make and publish rules governing the manner of	269
making application and the nature and extent of the proof required	270
to justify a finding of fact by the administrator as to granting	271
the status of a self-insuring employer, which rules shall be	272
general in their application, one of which rules shall provide	273
that all self-insuring employers shall pay into the state	274
insurance fund such amounts as are required to be credited to the	275
surplus fund in division (B) of section 4123.34 of the Revised	276
Code. The administrator may adopt rules establishing requirements	277
in addition to the requirements described in division (B)(2) of	278
this section that a public employer shall meet in order to qualify	279
for self-insuring status.	280

Employers shall secure directly from the bureau central	281
offices application forms upon which the bureau shall stamp a	282
designating number. Prior to submission of an application, an	283
employer shall make available to the bureau, and the bureau shall	284
review, the information described in division (B)(1) of this	285
section, and public employers shall make available, and the bureau	286
shall review, the information necessary to verify whether the	287
public employer meets the requirements listed in division (B)(2)	288
of this section. An employer shall file the completed application	289
forms with an application fee, which shall cover the costs of	290
processing the application, as established by the administrator,	291
by rule, with the bureau at least ninety days prior to the	292
effective date of the employer's new status as a self-insuring	293
employer. The application form is not deemed complete until all	294
the required information is attached thereto. The bureau shall	295
only accept applications that contain the required information.	296

(F) The bureau shall review completed applications within a	297
reasonable time. If the bureau determines to grant an employer	298
the status as a self-insuring employer, the bureau shall issue a	299
statement, containing its findings of fact, that is prepared by	300
the bureau and signed by the administrator. If the bureau	301
determines not to grant the status as a self-insuring employer,	302
the bureau shall notify the employer of the determination and	303
require the employer to continue to pay its full premium into the	304
state insurance fund. The administrator also shall adopt rules	305
establishing a minimum level of performance as a criterion for	306
granting and maintaining the status as a self-insuring employer	307
and fixing time limits beyond which failure of the self-insuring	308
employer to provide for the necessary medical examinations and	309
evaluations may not delay a decision on a claim.	310

(G) The administrator shall adopt rules setting forth	311
procedures for auditing the program of self-insuring employers.	312
The bureau shall conduct the audit upon a random basis or whenever	313
the bureau has grounds for believing that a self-insuring employer	314
is not in full compliance with bureau rules or this chapter.	315

The administrator shall monitor the programs conducted by	316
self-insuring employers, to ensure compliance with bureau	317
requirements and for that purpose, shall develop and issue to	318
self-insuring employers standardized forms for use by the	319
self-insuring employer in all aspects of the self-insuring	320
employers' direct compensation program and for reporting of	321
information to the bureau.	322

The bureau shall receive and transmit to the self-insuring	323
employer all complaints concerning any self-insuring employer. In	324
the case of a complaint against a self-insuring employer, the	325
administrator shall handle the complaint through the	326
self-insurance division of the bureau. The bureau shall maintain	327
a file by employer of all complaints received that relate to the	328
employer. The bureau shall evaluate each complaint and take	329
appropriate action.	330

The administrator shall adopt as a rule a prohibition against	331
any self-insuring employer from harassing, dismissing, or	332
otherwise disciplining any employee making a complaint, which rule	333
shall provide for a financial penalty to be levied by the	334
administrator payable by the offending self-insuring employer.	335

(H) For the purpose of making determinations as to whether	336
to grant status as a self-insuring employer, the administrator may	337
subscribe to and pay for a credit reporting service that offers	338
financial and other business information about individual	339
employers. The costs in connection with the bureau's subscription	340
or individual reports from the service about an applicant may be	341
included in the application fee charged employers under this	342
section.	343

(I) The administrator, notwithstanding other provisions of	344
this chapter, may permit a self-insuring employer to resume	345
payment of premiums to the state insurance fund with appropriate	346
credit modifications to the employer's basic premium rate as such	347
rate is determined pursuant to section 4123.29 of the Revised	348
Code.	349

(J) On the first day of July of each year, the administrator	350
shall calculate separately each self-insuring employer's	351
assessments for the safety and hygiene fund, administrative costs	352
pursuant to section 4123.342 of the Revised Code, and for the	353
portion of the surplus fund under division (B) of section 4123.34	354
of the Revised Code that is not used for handicapped	355
reimbursement, on the basis of the paid compensation attributable	356
to the individual self-insuring employer according to the	357
following calculation:	358

(1) The total assessment against all self-insuring employers	359
as a class for each fund and for the administrative costs for the	360
year that the assessment is being made, as determined by the	361
administrator, divided by the total amount of paid compensation	362
for the previous calendar year attributable to all amenable	363
self-insuring employers;	364

(2) Multiply the quotient in division (J)(1) of this section	365
by the total amount of paid compensation for the previous calendar	366
year that is attributable to the individual self-insuring employer	367
for whom the assessment is being determined. Each self-insuring	368
employer shall pay the assessment that results from this	369
calculation, unless the assessment resulting from this calculation	370
falls below a minimum assessment, which minimum assessment the	371
administrator shall determine on the first day of July of each	372
year with the advice and consent of the workers' compensation	373
oversight commission, in which event, the self-insuring employer	374
shall pay the minimum assessment.	375

In determining the total amount due for the total assessment	376
against all self-insuring employers as a class for each fund and	377
the administrative assessment, the administrator shall reduce	378
proportionately the total for each fund and assessment by the	379
amount of money in the self-insurance assessment fund as of the	380
date of the computation of the assessment.	381

The administrator shall calculate the assessment for the	382
portion of the surplus fund under division (B) of section 4123.34	383
of the Revised Code that is used for handicapped reimbursement in	384
the same manner as set forth in divisions (J)(1) and (2) of this	385
section except that the administrator shall calculate the total	386
assessment for this portion of the surplus fund only on the basis	387
of those self-insuring employers that retain participation in the	388
handicapped reimbursement program and the individual self-insuring	389
employer's proportion of paid compensation shall be calculated	390
only for those self-insuring employers who retain participation in	391
the handicapped reimbursement program. The administrator, as the	392
administrator determines appropriate, may determine the total	393
assessment for the handicapped portion of the surplus fund in	394
accordance with sound actuarial principles.	395

The administrator shall calculate the assessment for the	396
portion of the surplus fund under division (B) of section 4123.34	397
of the Revised Code that under division (D) of section 4121.66 of	398
the Revised Code is used for rehabilitation costs in the same	399
manner as set forth in divisions (J)(1) and (2) of this section,	400
except that the administrator shall calculate the total assessment	401
for this portion of the surplus fund only on the basis of those	402
self-insuring employers who have not made the election to make	403
payments directly under division (D) of section 4121.66 of the	404
Revised Code and an individual self-insuring employer's proportion	405
of paid compensation only for those self-insuring employers who	406
have not made that election.	407

An employer who no longer is a self-insuring employer in this	408
state or who no longer is operating in this state, shall continue	409
to pay assessments for administrative costs and for the portion of	410
the surplus fund under division (B) of section 4123.34 of the	411
Revised Code that is not used for handicapped reimbursement, based	412
upon paid compensation attributable to claims that occurred while	413
the employer was a self-insuring employer within this state.	414

(K) There is hereby created in the state treasury the	415
self-insurance assessment fund. All investment earnings of the	416
fund shall be deposited in the fund. The administrator shall use	417
the money in the self-insurance assessment fund only for	418
administrative costs as specified in section 4123.341 of the	419
Revised Code.	420

(L) Every self-insuring employer shall certify, in affidavit	421
form subject to the penalty for perjury, to the bureau the amount	422
of the self-insuring employer's paid compensation for the previous	423
calendar year. In reporting paid compensation paid for the	424
previous year, a self-insuring employer shall exclude from the	425
total amount of paid compensation any reimbursement the	426
self-insuring employer receives in the previous calendar year from	427
the surplus fund pursuant to section 4123.512 of the Revised Code	428
for any paid compensation. The self-insuring employer also shall	429
exclude from the paid compensation reported any amount recovered	430
under section 4123.934123.931 of the Revised Code and any amount	431
that is determined not to have been payable to or on behalf of a	432
claimant in any final administrative or judicial proceeding. The	433
self-insuring employer shall exclude such amounts from the paid	434
compensation reported in the reporting period subsequent to the	435
date the determination is made. The administrator shall adopt	436
rules, in accordance with Chapter 119. of the Revised Code,	437
establishing the date by which self-insuring employers must submit	438
such information and the amount of the assessments provided for in	439
division (J) of this section for employers who have been granted	440
self-insuring status within the last calendar year.	441

The administrator shall include any assessment that remains	442
unpaid for previous assessment periods in the calculation and	443
collection of any assessments due under this division or division	444
(J) of this section.	445

(M) As used in this section, "paid compensation" means all	446
amounts paid by a self-insuring employer for living maintenance	447
benefits, all amounts for compensation paid pursuant to sections	448
4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60, and	449
4123.64 of the Revised Code, all amounts paid as wages in lieu of	450
such compensation, all amounts paid in lieu of such compensation	451
under a nonoccupational accident and sickness program fully funded	452
by the self-insuring employer, and all amounts paid by a	453
self-insuring employer for a violation of a specific safety	454
standard pursuant to Section 35 of Article II, Ohio Constitution	455
and section 4121.47 of the Revised Code.	456

(N) Should any section of this chapter or Chapter 4121. of	457
the Revised Code providing for self-insuring employers'	458
assessments based upon compensation paid be declared	459
unconstitutional by a final decision of any court, then that	460
section of the Revised Code declared unconstitutional shall revert	461
back to the section in existence prior to November 3, 1989,	462
providing for assessments based upon payroll.	463

(O) The administrator may grant a self-insuring employer the	464
privilege to self-insure a construction project entered into by	465
the self-insuring employer that is scheduled for completion within	466
six years after the date the project begins, and the total cost of	467
which is estimated to exceed one hundred million dollars. The	468
administrator may waive such cost and time criteria and grant a	469
self-insuring employer the privilege to self-insure a construction	470
project regardless of the time needed to complete the construction	471
project and provided that the cost of the construction project is	472
estimated to exceed fifty million dollars. A self-insuring	473
employer who desires to self-insure a construction project shall	474
submit to the administrator an application listing the dates the	475
construction project is scheduled to begin and end, the estimated	476
cost of the construction project, the contractors and	477
subcontractors whose employees are to be self-insured by the	478
self-insuring employer, the provisions of a safety program that is	479
specifically designed for the construction project, and a	480
statement as to whether a collective bargaining agreement	481
governing the rights, duties, and obligations of each of the	482
parties to the agreement with respect to the construction project	483
exists between the self-insuring employer and a labor	484
organization.	485

A self-insuring employer may apply to self-insure the	486
employees of either of the following:	487

(1) All contractors and subcontractors who perform labor or	488
work or provide materials for the construction project;	489

(2) All contractors and, at the administrator's discretion,	490
a substantial number of all the subcontractors who perform labor	491
or work or provide materials for the construction project.	492

Upon approval of the application, the administrator shall	493
mail a certificate granting the privilege to self-insure the	494
construction project to the self-insuring employer. The	495
certificate shall contain the name of the self-insuring employer	496
and the name, address, and telephone number of the self-insuring	497
employer's representatives who are responsible for administering	498
workers' compensation claims for the construction project. The	499
self-insuring employer shall post the certificate in a conspicuous	500
place at the site of the construction project.	501

The administrator shall maintain a record of the contractors	502
and subcontractors whose employees are covered under the	503
certificate issued to the self-insured employer. A self-insuring	504
employer immediately shall notify the administrator when any	505
contractor or subcontractor is added or eliminated from inclusion	506
under the certificate.	507

Upon approval of the application, the self-insuring employer	508
is responsible for the administration and payment of all claims	509
under this chapter and Chapter 4121. of the Revised Code for the	510
employees of the contractor and subcontractors covered under the	511
certificate who receive injuries or are killed in the course of	512
and arising out of employment on the construction project, or who	513
contract an occupational disease in the course of employment on	514
the construction project. For purposes of this chapter and	515
Chapter 4121. of the Revised Code, a claim that is administered	516
and paid in accordance with this division is considered a claim	517
against the self-insuring employer listed in the certificate. A	518
contractor or subcontractor included under the certificate shall	519
report to the self-insuring employer listed in the certificate,	520
all claims that arise under this chapter and Chapter 4121. of the	521
Revised Code in connection with the construction project for which	522
the certificate is issued.	523

A self-insuring employer who complies with this division is	524
entitled to the protections provided under this chapter and	525
Chapter 4121. of the Revised Code with respect to the employees of	526
the contractors and subcontractors covered under a certificate	527
issued under this division for death or injuries that arise out	528
of, or death, injuries, or occupational diseases that arise in the	529
course of, those employees' employment on that construction	530
project, as if the employees were employees of the self-insuring	531
employer, provided that the self-insuring employer also complies	532
with this section. No employee of the contractors and	533
subcontractors covered under a certificate issued under this	534
division shall be considered the employee of the self-insuring	535
employer listed in that certificate for any purposes other than	536
this chapter and Chapter 4121. of the Revised Code. Nothing in	537
this division gives a self-insuring employer authority to control	538
the means, manner, or method of employment of the employees of the	539
contractors and subcontractors covered under a certificate issued	540
under this division.	541

The contractors and subcontractors included under a	542
certificate issued under this division are entitled to the	543
protections provided under this chapter and Chapter 4121. of the	544
Revised Code with respect to the contractor's or subcontractor's	545
employees who are employed on the construction project which is	546
the subject of the certificate, for death or injuries that arise	547
out of, or death, injuries, or occupational diseases that arise in	548
the course of, those employees' employment on that construction	549
project.	550

The contractors and subcontractors included under a	551
certificate issued under this division shall identify in their	552
payroll records the employees who are considered the employees of	553
the self-insuring employer listed in that certificate for purposes	554
of this chapter and Chapter 4121. of the Revised Code, and the	555
amount that those employees earned for employment on the	556
construction project that is the subject of that certificate.	557
Notwithstanding any provision to the contrary under this chapter	558
and Chapter 4121. of the Revised Code, the administrator shall	559
exclude the payroll that is reported for employees who are	560
considered the employees of the self-insuring employer listed in	561
that certificate, and that the employees earned for employment on	562
the construction project that is the subject of that certificate,	563
when determining those contractors' or subcontractors' premiums or	564
assessments required under this chapter and Chapter 4121. of the	565
Revised Code. A self-insuring employer issued a certificate under	566
this division shall include in the amount of paid compensation it	567
reports pursuant to division (L) of this section, the amount of	568
paid compensation the self-insuring employer paid pursuant to this	569
division for the previous calendar year.	570

Nothing in this division shall be construed as altering the	571
rights of employees under this chapter and Chapter 4121. of the	572
Revised Code as those rights existed prior to September 17, 1996.	573
Nothing in this division shall be construed as altering the rights	574
devolved under sections 2305.31 and 4123.82 of the Revised Code as	575
those rights existed prior to September 17, 1996.	576

As used in this division, "privilege to self-insure a	577
construction project" means privilege to pay individually	578
compensation, and to furnish medical, surgical, nursing, and	579
hospital services and attention and funeral expenses directly to	580
injured employees or the dependents of killed employees.	581

(P) A self-insuring employer whose application is granted	582
under division (O) of this section shall designate a safety	583
professional to be responsible for the administration and	584
enforcement of the safety program that is specifically designed	585
for the construction project that is the subject of the	586
application.	587

A self-insuring employer whose application is granted under	588
division (O) of this section shall employ an ombudsperson for the	589
construction project that is the subject of the application. The	590
ombudsperson shall have experience in workers' compensation or the	591
construction industry, or both. The ombudsperson shall perform	592
all of the following duties:	593

(1) Communicate with and provide information to employees	594
who are injured in the course of, or whose injury arises out of	595
employment on the construction project, or who contract an	596
occupational disease in the course of employment on the	597
construction project;	598

(2) Investigate the status of a claim upon the request of an	599
employee to do so;	600

(3) Provide information to claimants, third party	601
administrators, employers, and other persons to assist those	602
persons in protecting their rights under this chapter and Chapter	603
4121. of the Revised Code.	604

A self-insuring employer whose application is granted under	605
division (O) of this section shall post the name of the safety	606
professional and the ombudsperson and instructions for contacting	607
the safety professional and the ombudsperson in a conspicuous	608
place at the site of the construction project.	609

(Q) The administrator may consider all of the following when	610
deciding whether to grant a self-insuring employer the privilege	611
to self-insure a construction project as provided under division	612
(O) of this section:	613

(1) Whether the self-insuring employer has an organizational	614
plan for the administration of the workers' compensation law;	615

(2) Whether the safety program that is specifically designed	616
for the construction project provides for the safety of employees	617
employed on the construction project, is applicable to all	618
contractors and subcontractors who perform labor or work or	619
provide materials for the construction project, and has a	620
component, a safety training program that complies with standards	621
adopted pursuant to the "Occupational Safety and Health Act of	622
1970," 84 Stat. 1590, 29 U.S.C.A. 651, and provides for continuing	623
management and employee involvement;	624

(3) Whether granting the privilege to self-insure the	625
construction project will reduce the costs of the construction	626
project;	627

(4) Whether the self-insuring employer has employed an	628
ombudsperson as required under division (P) of this section;	629

(5) Whether the self-insuring employer has sufficient surety	630
to secure the payment of claims for which the self-insuring	631
employer would be responsible pursuant to the granting of the	632
privilege to self-insure a construction project under division (O)	633
of this section.	634

(R) As used in this section:

635

(1) "Unvoted debt capacity" means the amount of money that a	636
public employer may borrow without voter approval of a tax levy;	637

(2) "State institution of higher education" means the state	638
universities listed in section 3345.011 of the Revised Code,	639
community colleges created pursuant to Chapter 3354. of the	640
Revised Code, university branches created pursuant to Chapter	641
3355. of the Revised Code, technical colleges created pursuant to	642
Chapter 3357. of the Revised Code, and state community colleges	643
created pursuant to Chapter 3358. of the Revised Code.	644

Sec. 4123.93.  As used in sections 4123.93 and 4123.931 of	645
the Revised Code:	646

(A) "Claimant" means a person who is eligible to receive	647
compensation or, medical benefits, or death benefits under this	648
chapter or Chapter 4121., 4127., or 4131. of the Revised Code,	649
including any dependent or person whose eligibility is the result	650
of an injury to or occupational disease of another person.	651

(B) "Statutory subrogee" means the administrator of the	652
bureau of workers' compensation, a self-insuring employer, or an	653
employer that contracts for the direct payment of medical services	654
pursuant to division (L) of section 4121.44 of the Revised Code.	655

(C) "Subrogated amounts" include, but are not limited to, the	656
following:	657

(1) Amounts recoverable from any third party,	658
notwithstanding any limitations by the third party concerning its	659
responsibility to make payments in cases involving workers'	660
compensation under Chapter 4121., 4123., 4127., or 4131. of the	661
Revised Code;	662

(2) Amounts recoverable from a claimant's insurer in	663
connection with underinsured or uninsured motorist coverage,	664
notwithstanding any limitation contained in Chapter 3937. of the	665
Revised Code;	666

(3) Amounts that a claimant would be entitled to recover	667
from a political subdivision, notwithstanding any limitations	668
contained in Chapter 2744. of the Revised Code.	669

(D) "Third party" means an individual, private insurer,	670
public or private entity, or public or private program that is or	671
may be liable to make payments to a person without regard to any	672
statutory duty contained in this chapter or Chapter 4121., 4127.,	673
or 4131. of the Revised Code.	674

(D) "Subrogation interest" includes past, present, and	675
estimated future payments of compensation, medical benefits,	676
rehabilitation costs, or death benefits, and any other costs or	677
expenses paid by the statutory subrogee pursuant to this chapter	678
or Chapter 4121., 4127., or 4131. of the Revised Code.	679

(E) "Net amount recovered" means the amount of any award,	680
settlement, compromise, or recovery by a claimant against a third	681
party, minus the attorney's fees, costs, or other expenses	682
incurred by the claimant in securing the award, settlement,	683
compromise, or recovery.	684

(F) "Uncompensated damages" means the claimant's	685
demonstrated or proven damages minus the statutory subrogee's	686
subrogation interest.	687

Sec. 4123.931.  (A) The payment of compensation or benefits	688
pursuant to this chapter or Chapter 4121., 4127., or 4131., of the	689
Revised Code creates a right of subrogationrecovery in favor of a	690
statutory subrogee against a third party. A statutory subrogee's	691
subrogation interest includes past payments of compensation and	692
medical benefits and estimated future values of compensation and	693
medical benefits arising out of an injury to or disability or	694
disease of a claimant, and the statutory subrogee is subrogated to	695
the rights of a claimant against that third party. The net amount	696
recovered is subject to a statutory subrogee's right of recovery.	697

(B) If a claimant, statutory subrogee, and third party settle	698
or attempt to settle a claimant's claim against a third party, the	699
net amount recovered shall be divided and paid to the claimant and	700
the statutory subrogee on a basis that is proportional to the	701
claimant's uncompensated damages and the statutory subrogee's	702
subrogation interest unless it is divided and paid on a more fair	703
and reasonable basis that is agreed to by the claimant and	704
statutory subrogee. If while attempting to settle, the claimant	705
and statutory subrogee cannot agree to the allocation of the net	706
amount recovered, the claimant and statutory subrogee may file a	707
request with the administrator of workers' compensation for a	708
conference to be conducted by a designee appointed by the	709
administrator, or the claimant and statutory subrogee may agree to	710
utilize any other binding or non-binding alternative dispute	711
resolution process.	712

The claimant and statutory subrogee shall pay equal shares	713
of the fees and expenses of utilizing an alternative dispute	714
resolution process, unless they agree to pay those fees and	715
expenses in another manner. The administrator shall not assess	716
any fees to a claimant or statutory subrogee for a conference	717
conducted by the administrator's designee.	718

(C) If a claimant and statutory subrogee request that a	719
conference be conducted by the administrator's designee pursuant	720
to division (B) of this section, both of the following apply:	721

(1) The administrator's designee shall schedule a conference	722
on or before sixty days after the date that the claimant and	723
statutory subrogee filed a request for the conference.	724

(2) The determination made by the administrator's designee	725
is not subject to Chapter 119. of the Revised Code.	726

(D) When a claimant's action against a third party proceeds	727
to trial and damages are awarded, both of the following apply:	728

(1) The net amount recovered shall be divided and paid to	729
the claimant and the statutory subrogee on a basis that is	730
proportional to the claimant's uncompensated damages and the	731
statutory subrogee's subrogation interest.	732

(2) The court in a nonjury action shall make findings of	733
fact, and the jury in a jury action shall return a general verdict	734
accompanied by answers to interrogatories that specify the	735
following:	736

(a) The total amount of the compensatory damages;

737

(b) The portion of the compensatory damages specified	738
pursuant to division (D)(2)(a) of this section that represents	739
economic loss;	740

(c) The portion of the compensatory damages specified	741
pursuant to division (D)(2)(a) of this section that represents	742
noneconomic loss.	743

(E)(1) After a claimant and statutory subrogee know the net	744
amount recovered, and after the means for dividing it has been	745
determined under division (B) or (D) of this section, a claimant	746
may establish an interest-bearing trust account for the full	747
amount of the subrogation interest that represents estimated	748
future payments of compensation, medical benefits, rehabilitation	749
costs, or death benefits, reduced to present value, from which the	750
claimant shall make reimbursement payments to the statutory	751
subrogee for the future payments of compensation, medical	752
benefits, rehabilitation costs, or death benefits. If the	753
workers' compensation claim associated with the subrogation	754
interest is settled, or if the claimant dies, or if any other	755
circumstance occurs that would preclude any future payments of	756
compensation, medical benefits, rehabilitation costs, and death	757
benefits by the statutory subrogee, any amount remaining in the	758
trust account after final reimbursement is paid to the statutory	759
subrogee for all payments made by the statutory subrogee before	760
the ending of future payments shall be paid to the claimant or the	761
claimant's estate.	762

(2) A claimant may use interest that accrues on the trust	763
account to pay the expenses of establishing and maintaining the	764
trust account, and all remaining interest shall be credited to the	765
trust account.	766

(3) If a claimant establishes a trust account, the	767
statutory subrogee shall provide payment notices to the claimant	768
on or before the thirtieth day of June and the thirty-first day of	769
December every year listing the total amount that the statutory	770
subrogee has paid for compensation, medical benefits,	771
rehabilitation costs, or death benefits during the half of the	772
year preceding the notice. The claimant shall make reimbursement	773
payments to the statutory subrogee from the trust account on or	774
before the thirty-first day of July every year for a notice	775
provided by the thirtieth day of June, and on or before the	776
thirty-first day of January every year for a notice provided by	777
the thirty-first day of December. The claimant's reimbursement	778
payment shall be in an amount that equals the total amount listed	779
on the notice the claimant receives from the statutory subrogee.	780

(F) If a claimant does not establish a trust account as	781
described in division (E)(1) of this section, the claimant shall	782
pay to the statutory subrogee, on or before thirty days after	783
receipt of funds from the third party, the full amount of the	784
subrogation interest that represents estimated future payments of	785
compensation, medical benefits, rehabilitation costs, or death	786
benefits.	787

(G) A claimant shall notify a statutory subrogee and the	788
attorney general of the identity of all third parties against whom	789
the claimant has or may have a right of recovery, except that when	790
the statutory subrogee is a self-insuring employer, the claimant	791
need not notify the attorney general. No settlement, compromise,	792
judgment, award, or other recovery in any action or claim by a	793
claimant shall be final unless the claimant provides the statutory	794
subrogee and, when required, the attorney general, with prior	795
notice and a reasonable opportunity to assert its subrogation	796
rights. If a statutory subrogee isand, when required, the	797
attorney general are not given that notice, or if a settlement or	798
compromise excludes any amount paid by the statutory subrogee, the	799
third party and the claimant shall be jointly and severally liable	800
to pay the statutory subrogee the full amount of the subrogation	801
interest.	802

(C)(H) The right of subrogation under this chapter is	803
automatic, regardless of whether a statutory subrogee is joined as	804
a party in an action by a claimant against a third party. A	805
statutory subrogee may assert its subrogation rights through	806
correspondence with the claimant and the third party or their	807
legal representatives. A statutory subrogee may institute and	808
pursue legal proceedings against a third party either by itself or	809
in conjunction with a claimant. If a statutory subrogee institutes	810
legal proceedings against a third party, the statutory subrogee	811
shall provide notice of that fact to the claimant. If the	812
statutory subrogee joins the claimant as a necessary party, or if	813
the claimant elects to participate in the proceedings as a party,	814
the claimant may present the claimant's case first if the matter	815
proceeds to trial. If a claimant disputes the validity or amount	816
of an asserted subrogation interest, the claimant shall join the	817
statutory subrogee as a necessary party to the action against the	818
third party.	819

(D) The entire amount of any settlement or compromise of an	820
action or claim is subject to the subrogation right of a statutory	821
subrogee, regardless of the manner in which the settlement or	822
compromise is characterized. Any settlement or compromise that	823
excludes the amount of compensation or medical benefits shall not	824
preclude a statutory subrogee from enforcing its rights under this	825
section. The entire amount of any award or judgment is presumed	826
to represent compensation and medical benefits and future	827
estimated values of compensation and medical benefits that are	828
subject to a statutory subrogee's subrogation rights unless the	829
claimant obtains a special verdict or jury interrogatories	830
indicating that the award or judgment represents different types	831
of damages.	832

(E) Subrogation does not apply to the portion of any	833
judgment, award, settlement, or compromise of a claim to the	834
extent of a claimant's attorney's fees, costs, or other expenses	835
incurred by a claimant in securing the judgment, award,	836
settlement, or compromise, or the extent of medical, surgical, and	837
hospital expenses paid by a claimant from the claimant's own	838
resources for which reimbursement is not sought. No additional	839
attorney's fees, costs, or other expenses in securing any recovery	840
may be assessed against any subrogated claims of a statutory	841
subrogee(I) The statutory subrogation right of recovery applies	842
to, but is not limited to, all of the following:	843

(1) Amounts recoverable from a claimant's insurer in	844
connection with underinsured or uninsured motorist coverage,	845
notwithstanding any limitation contained in Chapter 3937. of the	846
Revised Code;	847

(2) Amounts that a claimant would be entitled to recover	848
from a political subdivision, notwithstanding any limitations	849
contained in Chapter 2744. of the Revised Code;	850

(3) Amounts recoverable from an intentional tort action.

851

(J) If a claimant's claim against a third party is for	852
wrongful death or the claim involves any minor beneficiaries,	853
amounts allocated under this section are subject to the approval	854
of probate court.	855

Section 2.  That existing sections 4123.35, 4123.93, and	856
4123.931 of the Revised Code are hereby repealed.	857