130th Ohio General Assembly
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Am. Sub. H. B. No. 15  As Re-reported by the House Finance and Appropriations Committee
As Re-reported by the House Finance and Appropriations Committee

128th General Assembly
Regular Session
2009-2010
Am. Sub. H. B. No. 15


Representative Sykes 

Cosponsor: Representative Dodd 



A BILL
To amend sections 121.52, 4121.12, 4121.125, 4121.62, 4121.70, and 4123.34 of the Revised Code to create the Deputy Inspector General for the Bureau of Workers' Compensation and Industrial Commission Fund; to make other changes to the Workers' Compensation Law; to make appropriations for the Bureau of Workers' Compensation and for the Workers' Compensation Council for the biennium beginning July 1, 2009, and ending June 30, 2011; and to provide authorization and conditions for the operation of the Bureau's and the Council's programs.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 101. That sections 121.52, 4121.12, 4121.125, 4121.62, 4121.70, and 4123.34 of the Revised Code be amended to read as follows:
Sec. 121.52.  There is hereby created in the office of the inspector general the office of deputy inspector general for the bureau of workers' compensation and industrial commission. The inspector general shall appoint the deputy inspector general, and the deputy inspector general shall serve at the pleasure of the inspector general. A person employed as the deputy inspector general shall have the same qualifications as those specified in section 121.49 of the Revised Code for the inspector general. The inspector general shall provide professional and clerical assistance to the deputy inspector general.
The deputy inspector general for the bureau of workers' compensation and the industrial commission shall investigate wrongful acts or omissions that have been committed by or are being committed by officers or employees of the bureau of workers' compensation and the industrial commission. The deputy inspector general has the same powers and duties regarding matters concerning the bureau and the commission as those specified in sections 121.42, 121.43, and 121.45 of the Revised Code for the inspector general. Complaints may be filed with the deputy inspector general in the same manner as prescribed for complaints filed with the inspector general under section 121.46 of the Revised Code. All investigations conducted and reports issued by the deputy inspector general are subject to section 121.44 of the Revised Code.
There is hereby created in the state treasury the deputy inspector general for the bureau of workers' compensation and industrial commission fund, which shall consist of moneys deposited into it that the inspector general receives from the administrator of workers' compensation and receives from the industrial commission in accordance with this section. The inspector general shall use the fund to pay the costs incurred by the deputy inspector general in performing the duties of the deputy inspector general as required under this section.
Beginning the fiscal year quarter that begins October 1, 2009, and at the beginning of each quarter of each fiscal year thereafter, the inspector general shall submit a billing to the administrator and to the chairperson of the industrial commission that reflects the costs incurred by the deputy inspector general during the fiscal year quarter immediately preceding the quarter that the inspector general submits the billing. The billing submitted to the administrator and the chairperson shall reflect each agency's respective share of the costs incurred by the deputy inspector general for work performed regarding the respective agency. At the beginning of the fiscal year quarter that starts October 1, 2009, and at the beginning of each quarter of each fiscal year thereafter, upon the receipt of the billings the administrator and the chairperson shall process intrastate transfer vouchers to pay for those billings.
The members of the industrial commission, bureau of workers' compensation board of directors, workers' compensation audit committee, workers' compensation actuarial committee, and workers' compensation investment committee, and the administrator of workers' compensation, and employees of the industrial commission and the bureau shall cooperate with and provide assistance to the deputy inspector general in the performance of any investigation conducted by the deputy inspector general. In particular, those persons shall make their premises, equipment, personnel, books, records, and papers readily available to the deputy inspector general. In the course of an investigation, the deputy inspector general may question any person employed by the industrial commission or the administrator and any person transacting business with the industrial commission, the board, the audit committee, the actuarial committee, the investment committee, the administrator, or the bureau and may inspect and copy any books, records, or papers in the possession of those persons or entities, taking care to preserve the confidentiality of information contained in responses to questions or the books, records, or papers that are made confidential by law.
In performing any investigation, the deputy inspector general shall avoid interfering with the ongoing operations of the entities being investigated, except insofar as is reasonably necessary to successfully complete the investigation.
At the conclusion of an investigation conducted by the deputy inspector general for the bureau of workers' compensation and industrial commission, the deputy inspector general shall deliver to the board, the administrator, the industrial commission, and the governor any case for which remedial action is necessary. The deputy inspector general shall maintain a public record of the activities of the office of the deputy inspector general to the extent permitted under this section, ensuring that the rights of the parties involved in each case are protected. The inspector general shall include in the annual report required under section 121.48 of the Revised Code a summary of the activities of the deputy inspector general during the previous year.
No person shall disclose any information that is designated as confidential in accordance with section 121.44 of the Revised Code or any confidential information that is acquired in the course of an investigation conducted under this section 121.53 of the Revised Code to any person who is not legally entitled to disclosure of that information.
Sec. 4121.12.  (A) There is hereby created the bureau of workers' compensation board of directors consisting of eleven members to be appointed by the governor with the advice and consent of the senate. One member shall be an individual who, on account of the individual's previous vocation, employment, or affiliations, can be classed as a representative of employees; two members shall be individuals who, on account of their previous vocation, employment, or affiliations, can be classed as representatives of employee organizations and at least one of these two individuals shall be a member of the executive committee of the largest statewide labor federation; three members shall be individuals who, on account of their previous vocation, employment, or affiliations, can be classed as representatives of employers, one of whom represents self-insuring employers, one of whom is a state fund employer who employs one hundred or more employees, and one of whom is a state fund employer who employs less than one hundred employees; two members shall be individuals who, on account of their vocation, employment, or affiliations, can be classed as investment and securities experts who have direct experience in the management, analysis, supervision, or investment of assets and are residents of this state; one member who shall be a certified public accountant; one member who shall be an actuary who is a member in good standing with the American academy of actuaries or who is an associate or fellow with the society of actuaries; and one member shall represent the public and also be an individual who, on account of the individual's previous vocation, employment, or affiliations, cannot be classed as either predominantly representative of employees or of employers. The governor shall select the chairperson of the board who shall serve as chairperson at the pleasure of the governor.
None of the members of the board, within one year immediately preceding the member's appointment, shall have been employed by the bureau of workers' compensation or by any person, partnership, or corporation that has provided to the bureau services of a financial or investment nature, including the management, analysis, supervision, or investment of assets.
(B) Of the initial appointments made to the board, the governor shall appoint the member who represents employees, one member who represents employers, and the member who represents the public to a term ending one year after the effective date of this amendment June 11, 2007; one member who represents employers, one member who represents employee organizations, one member who is an investment and securities expert, and the member who is a certified public accountant to a term ending two years after the effective date of this amendment June 11, 2007; and one member who represents employers, one member who represents employee organizations, one member who is an investment and securities expert, and the member who is an actuary to a term ending three years after the effective date of this amendment June 11, 2007. Thereafter, terms of office shall be for three years, with each term ending on the same day of the same month as did the term that it succeeds. Each member shall hold office from the date of the member's appointment until the end of the term for which the member was appointed.
Members may be reappointed. Any member appointed to fill a vacancy occurring prior to the expiration date of the term for which the member's predecessor was appointed shall hold office as a member for the remainder of that term. A member shall continue in office subsequent to the expiration date of the member's term until a successor takes office or until a period of sixty days has elapsed, whichever occurs first.
(C) In making appointments to the board, the governor shall select the members from the list of names submitted by the workers' compensation board of directors nominating committee pursuant to this division. The nominating committee shall submit to the governor a list containing four separate names for each of the members on the board. Within fourteen days after the submission of the list, the governor shall appoint individuals from the list.
Within sixty At least thirty days after prior to a vacancy occurring as a result of the expiration of a term and within thirty days after other vacancies occurring on the board, the nominating committee shall submit an initial list containing four names for each vacancy. Within fourteen days after the submission of the initial list, the governor either shall appoint individuals from that list or request the nominating committee to submit another list of four names for each member the governor has not appointed from the initial list, which list the nominating committee shall submit to the governor within fourteen days after the governor's request. The governor then shall appoint, within seven days after the submission of the second list, one of the individuals from either list to fill the vacancy for which the governor has not made an appointment from the initial list. If the governor appoints an individual to fill a vacancy occurring as a result of the expiration of a term, the individual appointed shall begin serving as a member of the board when the term for which the individual's predecessor was appointed expires or immediately upon appointment by the governor, whichever occurs later. With respect to the filling of vacancies, the nominating committee shall provide the governor with a list of four individuals who are, in the judgment of the nominating committee, the most fully qualified to accede to membership on the board.
In order for the name of an individual to be submitted to the governor under this division, the nominating committee shall approve the individual by an affirmative vote of a majority of its members.
(D) All members of the board shall receive their reasonable and necessary expenses pursuant to section 126.31 of the Revised Code while engaged in the performance of their duties as members and also shall receive an annual salary not to exceed sixty thousand dollars in total, payable on the following basis:
(1) Except as provided in division (D)(2) of this section, a member shall receive two thousand five hundred dollars during a month in which the member attends one or more meetings of the board and shall receive no payment during a month in which the member attends no meeting of the board.
(2) A member may receive no more than thirty thousand dollars per year to compensate the member for attending meetings of the board, regardless of the number of meetings held by the board during a year or the number of meetings in excess of twelve within a year that the member attends.
(3) Except as provided in division (D)(4) of this section, if a member serves on the workers' compensation audit committee, workers' compensation actuarial committee, or the workers' compensation investment committee, the member shall receive two thousand five hundred dollars during a month in which the member attends one or more meetings of the committee on which the member serves and shall receive no payment during any month in which the member attends no meeting of that committee.
(4) A member may receive no more than thirty thousand dollars per year to compensate the member for attending meetings of any of the committees specified in division (D)(3) of this section, regardless of the number of meetings held by a committee during a year or the number of committees on which a member serves.
The chairperson of the board shall set the meeting dates of the board as necessary to perform the duties of the board under this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised Code. The board shall meet at least twelve times a year. The administrator of workers' compensation shall provide professional and clerical assistance to the board, as the board considers appropriate.
(E) Before entering upon the duties of office, each appointed member of the board shall take an oath of office as required by sections 3.22 and 3.23 of the Revised Code and file in the office of the secretary of state the bond required under section 4121.127 of the Revised Code.
(F) The board shall:
(1) Establish the overall administrative policy for the bureau for the purposes of this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised Code;
(2) Review progress of the bureau in meeting its cost and quality objectives and in complying with this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised Code;
(3) Submit an annual report to the president of the senate, the speaker of the house of representatives, the governor, and the workers' compensation council and include all of the following in that report:
(a) An evaluation of the cost and quality objectives of the bureau;
(b) A statement of the net assets available for the provision of compensation and benefits under this chapter and Chapters 4123., 4127., and 4131. of the Revised Code as of the last day of the fiscal year;
(c) A statement of any changes that occurred in the net assets available, including employer premiums and net investment income, for the provision of compensation and benefits and payment of administrative expenses, between the first and last day of the fiscal year immediately preceding the date of the report;
(d) The following information for each of the six consecutive fiscal years occurring previous to the report:
(i) A schedule of the net assets available for compensation and benefits;
(ii) The annual cost of the payment of compensation and benefits;
(iii) Annual administrative expenses incurred;
(iv) Annual employer premiums allocated for the provision of compensation and benefits.
(e) A description of any significant changes that occurred during the six years for which the board provided the information required under division (F)(3)(d) of this section that affect the ability of the board to compare that information from year to year.
(4) Review all independent financial audits of the bureau. The administrator shall provide access to records of the bureau to facilitate the review required under this division.
(5) Study issues as requested by the administrator or the governor;
(6) Contract with all of the following:
(a) An independent actuarial firm to assist the board in making recommendations to the administrator regarding premium rates;
(b) An outside investment counsel to assist the workers' compensation investment committee in fulfilling its duties;
(c) An independent fiduciary counsel to assist the board in the performance of its duties.
(7) Approve the investment policy developed by the workers' compensation investment committee pursuant to section 4121.129 of the Revised Code if the policy satisfies the requirements specified in section 4123.442 of the Revised Code.
(8) Review and publish the investment policy no less than annually and make copies available to interested parties.
(9) Prohibit, on a prospective basis, any specific investment it finds to be contrary to the investment policy approved by the board.
(10) Vote to open each investment class and allow the administrator to invest in an investment class only if the board, by a majority vote, opens that class;
(11) After opening a class but prior to the administrator investing in that class, adopt rules establishing due diligence standards for employees of the bureau to follow when investing in that class and establish policies and procedures to review and monitor the performance and value of each investment class;
(12) Submit a report annually on the performance and value of each investment class to the governor, the president and minority leader of the senate, and the speaker and minority leader of the house of representatives, and the workers' compensation council.
(13) Advise and consent on all of the following:
(a) Administrative rules the administrator submits to it pursuant to division (B)(5) of section 4121.121 of the Revised Code for the classification of occupations or industries, for premium rates and contributions, for the amount to be credited to the surplus fund, for rules and systems of rating, rate revisions, and merit rating;
(b) The duties and authority conferred upon the administrator pursuant to section 4121.37 of the Revised Code;
(c) Rules the administrator adopts for the health partnership program and the qualified health plan system, as provided in sections 4121.44, 4121.441, and 4121.442 of the Revised Code;
(d) Rules the administrator submits to it pursuant to Chapter 4167. of the Revised Code regarding the public employment risk reduction program and the protection of public health care workers from exposure incidents.
As used in this division, "public health care worker" and "exposure incident" have the same meanings as in section 4167.25 of the Revised Code.
(14) Perform all duties required under this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised Code;
(15) Meet with the governor on an annual basis to discuss the administrator's performance of the duties specified in this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised Code;
(16) Develop and participate in a bureau of workers' compensation board of directors education program that consists of all of the following:
(a) An orientation component for newly appointed members;
(b) A continuing education component for board members who have served for at least one year;
(c) A curriculum that includes education about each of the following topics:
(i) Board member duties and responsibilities;
(ii) Compensation and benefits paid pursuant to this chapter and Chapters 4123., 4127., and 4131. of the Revised Code;
(iii) Ethics;
(iv) Governance processes and procedures;
(v) Actuarial soundness;
(vi) Investments;
(vii) Any other subject matter the board believes is reasonably related to the duties of a board member.
(17) Submit the program developed pursuant to division (F)(16) of this section to the workers' compensation council for approval;
(18) Hold all sessions, classes, and other events for the program developed pursuant to division (F)(16) of this section in this state.
(G) The board may do both of the following:
(1) Vote to close any investment class;
(2) Create any committees in addition to the workers' compensation audit committee, the workers' compensation actuarial committee, and the workers' compensation investment committee that the board determines are necessary to assist the board in performing its duties.
(H) The office of a member of the board who is convicted of or pleads guilty to a felony, a theft offense as defined in section 2913.01 of the Revised Code, or a violation of section 102.02, 102.03, 102.04, 2921.02, 2921.11, 2921.13, 2921.31, 2921.41, 2921.42, 2921.43, or 2921.44 of the Revised Code shall be deemed vacant. The vacancy shall be filled in the same manner as the original appointment. A person who has pleaded guilty to or been convicted of an offense of that nature is ineligible to be a member of the board. A member who receives a bill of indictment for any of the offenses specified in this section shall be automatically suspended from the board pending resolution of the criminal matter.
(I) For the purposes of division (G)(1) of section 121.22 of the Revised Code, the meeting between the governor and the board to review the administrator's performance as required under division (F)(15) of this section shall be considered a meeting regarding the employment of the administrator.
Sec. 4121.125.  (A) The bureau of workers' compensation board of directors, based upon recommendations of the workers' compensation actuarial committee, may contract with one or more outside actuarial firms and other professional persons, as the board determines necessary, to assist the board in measuring the performance of Ohio's workers' compensation system and in comparing Ohio's workers' compensation system to other state and private workers' compensation systems. The board, actuarial firm or firms, and professional persons shall make such measurements and comparisons using accepted insurance industry standards, including, but not limited to, standards promulgated by the National Council on Compensation Insurance.
(B) The board may contract with one or more outside firms to conduct management and financial audits of the workers' compensation system, including audits of the reserve fund belonging to the state insurance fund, and to establish objective quality management principles and methods by which to review the performance of the workers' compensation system.
(C) The board shall do all of the following:
(1) Contract to have prepared annually by or under the supervision of an actuary a report that meets the requirements specified under division (E) of this section and that consists of an actuarial valuation of the assets, liabilities, and funding requirements of the state insurance fund and all other funds specified in this chapter and Chapters 4123., 4127., and 4131. of the Revised Code;
(2) Require that the actuary or person supervised by an actuary referred to in division (C)(1) of this section complete the valuation in accordance with the actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries;
(3) Submit the report referred to in division (C)(1) of this section to the workers' compensation council and the standing committees of the house of representatives and the senate with primary responsibility for workers' compensation legislation not later than on or before the first day of September November following the year for which the valuation was made;
(4) Have an actuary or a person who provides actuarial services under the supervision of an actuary, at such time as the board determines, and at least once during the five-year period that commences on the effective date of this amendment September 10, 2007, and once within each five-year period thereafter, conduct an actuarial investigation of the experience of employers, the mortality, service, and injury rate of employees, and the payment of temporary total disability, permanent partial disability, and permanent total disability under sections 4123.56 to 4123.58 of the Revised Code to update the actuarial assumptions used in the report required by division (C)(1) of this section;
(5) Submit the report required under division (F) of this section to the council and the standing committees of the house of representatives and the senate with primary responsibility for workers' compensation legislation not later than the first day of November following the fifth year of the period that the report covers;
(6) Have prepared by or under the supervision of an actuary an actuarial analysis of any introduced legislation expected to have a measurable financial impact on the workers' compensation system;
(7) Submit the report required under division (G) of this section to the legislative service commission, the standing committees of the house of representatives and the senate with primary responsibility for workers' compensation legislation, and the council not later than sixty days after the date of introduction of the legislation.
(D) The administrator of workers' compensation and the industrial commission shall compile information and provide access to records of the bureau and the industrial commission to the board to the extent necessary for fulfillment of both of the following requirements:
(1) Conduct of the measurements and comparisons described in division (A) of this section;
(2) Conduct of the management and financial audits and establishment of the principles and methods described in division (B) of this section.
(E) The firm or person with whom the board contracts pursuant to division (C)(1) of this section shall prepare a report of the valuation and submit the report to the board. The firm or person shall include all of the following information in the report that is required under division (C)(1) of this section:
(1) A summary of the compensation and benefit provisions evaluated;
(2) A summary of the census data and financial information used in the valuation;
(3) A description of the actuarial assumptions, actuarial cost method, and asset valuation method used in the valuation;
(4) A summary of findings that includes a statement of the actuarial accrued compensation and benefit liabilities and unfunded actuarial accrued compensation and benefit liabilities;
(5) A schedule showing the effect of any changes in the compensation and benefit provisions, actuarial assumptions, or cost methods since the previous annual actuarial valuation report was submitted to the board.
(F) The actuary or person whom the board designates to conduct an actuarial investigation under division (C)(4) of this section shall prepare a report of the actuarial investigation and shall submit the report to the board. The actuary or person shall prepare the report and make any recommended changes in actuarial assumptions in accordance with the actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries. The actuary or person shall include all of the following information in the report:
(1) A summary of relevant decrement and economic assumption experience;
(2) Recommended changes in actuarial assumptions to be used in subsequent actuarial valuations required by division (C)(1) of this section;
(3) A measurement of the financial effect of the recommended changes in actuarial assumptions.
(G) The actuary or person whom the board designates to conduct the actuarial analysis under division (C)(6) of this section shall prepare a report of the actuarial analysis and shall submit that report to the board. The actuary or person shall complete the analysis in accordance with the actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries. The actuary or person shall include all of the following information in the report:
(1) A summary of the statutory changes being evaluated;
(2) A description of or reference to the actuarial assumptions and actuarial cost method used in the report;
(3) A description of the participant group or groups included in the report;
(4) A statement of the financial impact of the legislation, including the resulting increase, if any, in employer premiums, in actuarial accrued liabilities, and, if an increase in actuarial accrued liabilities is predicted, the per cent of premium increase that would be required to amortize the increase in those liabilities as a level per cent of employer premiums over a period not to exceed thirty years.
(5) A statement of whether the employer premiums paid to the bureau of workers' compensation after the proposed change is enacted are expected to be sufficient to satisfy the funding objectives established by the board.
(H) The board may, at any time, request an actuary to make any studies or actuarial valuations to determine the adequacy of the premium rates established by the administrator in accordance with sections 4123.29 and 4123.34 of the Revised Code, and may adjust those rates as recommended by the actuary.
(I) The board shall have an independent auditor, at least once every ten years, conduct a fiduciary performance audit of the investment program of the bureau of workers' compensation. That audit shall include an audit of the investment policies approved by the board and investment procedures of the bureau. The board shall submit a copy of that audit to the auditor of state.
(J) The administrator, with the advice and consent of the board, shall employ an internal auditor who shall report findings directly to the board, workers' compensation audit committee, and administrator, except that the internal auditor shall not report findings directly to the administrator when those findings involve malfeasance, misfeasance, or nonfeasance on the part of the administrator. The board and the workers' compensation audit committee may request and review internal audits conducted by the internal auditor.
(K) The administrator shall pay the expenses incurred by the board to effectively fulfill its duties and exercise its powers under this section as the administrator pays other operating expenses of the bureau.
Sec. 4121.62.  (A) The authority granted to the administrator of workers' compensation pursuant to sections 4121.61 to 4121.69 of the Revised Code includes the authority to do all of the following:
(1) Contract with any public or private person for the rendition of rehabilitation services;
(2) Take actions and utilize money in the state insurance fund as necessary to obtain federal funds and assistance in the maximum amounts and most advantageous proportions and terms possible;
(3) Conduct rehabilitation educational programs for employers and employees;
(4) Establish within the bureau of workers' compensation a rehabilitation division under the supervision of a director of rehabilitation appointed by and responsible to the administrator.
(B) The director of the division established is in the unclassified civil service of the state. The appointing authority may designate up to three positions at each facility under the jurisdiction of the division, and up to six positions in the division which are part of the director's immediate staff as being in the unclassified service of the state as long as the administrator determines that the positions are primarily and distinctively administrative, managerial, or professional. All other full-time employees of the division are in the classified civil service.
(C) The administrator shall establish fees for use of services offered by the division of rehabilitation, including, without limitation, the expense of providing rehabilitation services, counseling, and training. The administrator shall adopt rules, in accordance with Chapter 119. of the Revised Code, which establish the specific services the division offers and the amount of the fee for those services, which amount shall be based upon the actual cost of the division providing the services to the employer and employee.
(D) Nothing in sections 4121.61 to 4121.69 of the Revised Code shall be interpreted to grant authority to the administrator to require a claimant to utilize a public provider of rehabilitation services, counseling, or training.
Sec. 4121.70.  (A) There is hereby created the labor-management government advisory council consisting of twelve members appointed as follows:
(1) The governor, with the advice and consent of the senate, shall appoint three members who, by training and vocation, are representative of labor and three members who, by training and vocation, are representative of employers.
(2) Ex officio, the chairpersons of the standing committees of the house of representatives and the senate to which legislation concerned with workers' compensation is customarily referred. A chairperson may designate the vice-chairperson of the committee to serve instead.
(3) One person who by training and vocation represents labor and one person who by training and vocation represents employers of differing political parties appointed by the speaker of the house of representatives.
(4) One person who by training and vocation represents labor and one person who by training and vocation represents employers of differing political parties appointed by the president of the senate.
(B) Members appointed by the governor shall serve for a term of six years with each term ending on the same day of the year in which the member was first appointed, except that each member shall serve for a period of sixty additional days at the end of the member's term or until the member's successor is appointed and qualifies, whichever date occurs first. Of the members first appointed to the council by the governor, one member each representing labor and management shall serve an initial term of two years, one member each representing labor and management shall serve a term of four years, and the remaining two members shall serve full six-year terms. The members initially appointed by the speaker of the house of representatives and the president of the senate shall serve a term of six years. Thereafter, members shall be appointed to and serve full six-year terms. Members are eligible for reappointment to any number of additional terms.
Legislative members shall serve a term that coincides with the two-year legislative session in which they are first appointed with each term ending on the thirty-first day of December of the even-numbered year. Legislative members are eligible for reappointment.
Vacancies on the council shall be filled in the same manner as the original appointment. All members of the council shall serve without additional compensation but shall be reimbursed by the bureau of workers' compensation for actual and necessary expenses.
The council shall advise the bureau of workers' compensation board of directors and the administrator of workers' compensation on the quality and effectiveness of rehabilitation services and make recommendations pertaining to the bureau's rehabilitation program, including the operation of that program.
The labor-management government advisory council shall recommend to the administrator three candidates for the position of director of rehabilitation. The candidates shall be chosen for their ability and background in the field of rehabilitation. The administrator shall select a director from the list of candidates.
Sec. 4123.34.  It shall be the duty of the bureau of workers' compensation board of directors and the administrator of workers' compensation to safeguard and maintain the solvency of the state insurance fund and all other funds specified in this chapter and Chapters 4121., 4127., and 4131. of the Revised Code. The administrator, in the exercise of the powers and discretion conferred upon the administrator in section 4123.29 of the Revised Code, shall fix and maintain, with the advice and consent of the board, for each class of occupation or industry, the lowest possible rates of premium consistent with the maintenance of a solvent state insurance fund and the creation and maintenance of a reasonable surplus, after the payment of legitimate claims for injury, occupational disease, and death that the administrator authorizes to be paid from the state insurance fund for the benefit of injured, diseased, and the dependents of killed employees. In establishing rates, the administrator shall take into account the necessity of ensuring sufficient money is set aside in the premium payment security fund to cover any defaults in premium obligations. The administrator shall observe all of the following requirements in fixing the rates of premium for the risks of occupations or industries:
(A) The administrator shall keep an accurate account of the money paid in premiums by each of the several classes of occupations or industries, and the losses on account of injuries, occupational disease, and death of employees thereof, and also keep an account of the money received from each individual employer and the amount of losses incurred against the state insurance fund on account of injuries, occupational disease, and death of the employees of the employer.
(B) Ten per cent A portion of the money paid into the state insurance fund shall be set aside for the creation of a surplus until the surplus amounts to the sum of one hundred thousand dollars, after which time, whenever necessary in the judgment of the administrator to guarantee a solvent fund account within the state insurance fund, a sum not exceeding five per cent of all the money paid into the state insurance fund shall be credited to the surplus fund. Any references in this chapter or in Chapter 4121., 4125., 4127., or 4131. of the Revised Code to the surplus fund, the surplus created in this division, the statutory surplus fund, or the statutory surplus of the state insurance fund are hereby deemed to be references to the surplus fund account. The administrator may transfer the portion of the state insurance fund to the surplus fund account as the administrator determines is necessary to satisfy the needs of the surplus fund account and to guarantee the solvency of the state insurance fund and the surplus fund account. In addition to all statutory authority under this chapter and Chapter 4121. of the Revised Code, the administrator has discretionary and contingency authority to make charges to the surplus fund account. The administrator shall account for all charges, whether statutory, discretionary, or contingency, that the administrator may make to the surplus fund account. A revision of basic rates shall be made annually on the first day of July.
Notwithstanding any provision of the law to the contrary, one hundred eighty days after the effective date on which self-insuring employers first may elect under division (D) of section 4121.66 of the Revised Code to directly pay for rehabilitation expenses, the administrator shall calculate the deficit, if any, in the portion of the surplus fund account that is used for reimbursement to self-insuring employers for all expenses other than handicapped reimbursement under section 4123.343 of the Revised Code. The administrator, from time to time, may determine whether the surplus fund account has such a deficit and may assess all self-insuring employers who participated in the portion of the surplus fund account during the accrual of the deficit and who during that time period have not made the election under division (D) of section 4121.66 of the Revised Code the amount the administrator determines necessary to reduce the deficit.
Revisions of basic rates shall be in accordance with the oldest four of the last five calendar years of the combined accident and occupational disease experience of the administrator in the administration of this chapter, as shown by the accounts kept as provided in this section, excluding the experience of employers that are no longer active if the administrator determines that the inclusion of those employers would have a significant negative impact on the remainder of the employers in a particular manual classification; and the administrator shall adopt rules, with the advice and consent of the board, governing rate revisions, the object of which shall be to make an equitable distribution of losses among the several classes of occupation or industry, which rules shall be general in their application.
(C) The administrator may apply that form of rating system that the administrator finds is best calculated to merit rate or individually rate the risk more equitably, predicated upon the basis of its individual industrial accident and occupational disease experience, and may encourage and stimulate accident prevention. The administrator shall develop fixed and equitable rules controlling the rating system, which rules shall conserve to each risk the basic principles of workers' compensation insurance.
(D) The administrator, from the money paid into the state insurance fund, shall set aside into an account of the state insurance fund titled a premium payment security fund sufficient money to pay for any premiums due from an employer and uncollected that are in excess of the employer's premium security deposit.
The fund shall be in the custody of the treasurer of state. All investment earnings of the fund shall be deposited in the fund. Disbursements from the fund shall be made by the bureau of workers' compensation upon order of the administrator to the state insurance fund. The use of the moneys held by the premium payment security fund is restricted to reimbursement to the state insurance fund of premiums due and uncollected in excess of an employer's premium security deposit. The moneys constituting the premium payment security fund shall be maintained without regard to or reliance upon any other fund. This section does not prevent the deposit or investment of the premium payment security fund with any other fund created by this chapter, but the premium payment security fund is separate and distinct for every other purpose and a strict accounting thereof shall be maintained.
(E) The administrator may grant discounts on premium rates for employers who meet either of the following requirements:
(1) Have not incurred a compensable injury for one year or more and who maintain an employee safety committee or similar organization or make periodic safety inspections of the workplace.
(2) Successfully complete a loss prevention program prescribed by the superintendent of the division of safety and hygiene and conducted by the division or by any other person approved by the superintendent.
(F)(1) In determining the premium rates for the construction industry the administrator shall calculate the employers' premiums based upon the actual remuneration construction industry employees receive from construction industry employers, provided that the amount of remuneration the administrator uses in calculating the premiums shall not exceed an average weekly wage equal to one hundred fifty per cent of the statewide average weekly wage as defined in division (C) of section 4123.62 of the Revised Code.
(2) Division (F)(1) of this section shall not be construed as affecting the manner in which benefits to a claimant are awarded under this chapter.
(3) As used in division (F) of this section, "construction industry" includes any activity performed in connection with the erection, alteration, repair, replacement, renovation, installation, or demolition of any building, structure, highway, or bridge.
Section 102. That existing sections 121.52, 4121.12, 4121.125, 4121.62, 4121.70, and 4123.34 of the Revised Code are hereby repealed.
Section 201.  All items in Sections 201 and 203 of this act are hereby appropriated out of any moneys in the state treasury to the credit of the designated fund. For all appropriations made in this act, those in the first column are for fiscal year 2010, and those in the second column are for fiscal year 2011.
FND AI AI TITLE Appropriations

BWC BUREAU OF WORKERS' COMPENSATION
Workers' Compensation Fund Group
7023 855401 William Green Lease Payments to OBA $ 19,871,795 $ 19,049,395
7023 855407 Claims, Risk and Medical Management $ 138,129,873 $ 142,659,528
7023 855408 Fraud Prevention $ 12,546,239 $ 13,101,761
7023 855409 Administrative Services $ 124,355,772 $ 119,767,995
7023 855410 Attorney General Payments $ 4,621,850 $ 4,621,850
8220 855606 Coal Workers' Fund $ 91,894 $ 91,894
8230 855608 Marine Industry $ 53,952 $ 53,952
8250 855605 Disabled Workers Relief Fund $ 492,500 $ 492,500
8260 855609 Safety and Hygiene Operating $ 20,734,750 $ 20,734,750
8260 855610 Gear Program $ 4,000,000 $ 4,000,000
8290 855604 Long Term Care Loan Program $ 2,000,000 $ 2,000,000
TOTAL WCF Workers' Compensation
Fund Group $ 326,898,625 $ 326,573,625

Federal Special Revenue Fund Group
3490 855601 OSHA Enforcement $ 1,604,140 $ 1,604,140
TOTAL FED Federal Special Revenue Fund Group $ 1,604,140 $ 1,604,140
TOTAL ALL BUDGET FUND GROUPS $ 328,502,765 $ 328,177,765

WILLIAM GREEN LEASE PAYMENTS
The foregoing appropriation item 855401, William Green Lease Payments to OBA, shall be used for lease payments to the Ohio Building Authority, and these appropriations shall be used to meet all payments at the times they are required to be made during the period from July 1, 2009, to June 30, 2011, by the Bureau of Workers' Compensation to the Ohio Building Authority pursuant to leases and agreements made under Chapter 152. of the Revised Code and Section 6 of Am. Sub. H.B. 743 of the 118th General Assembly. Of the amounts received in Fund 7023, appropriation item 855401, William Green Lease Payments to OBA, up to $38,921,190 shall be restricted for lease rental payments to the Ohio Building Authority. If it is determined that additional appropriations are necessary for such purpose, such amounts are hereby appropriated.
Notwithstanding any provision of law to the contrary, all tenants of the William Green Building not funded by the Workers' Compensation Fund (Fund 7023) shall pay their fair share of the costs of lease payments to the Workers' Compensation Fund (Fund 7023) by intrastate transfer voucher.
WORKERS' COMPENSATION FRAUD UNIT
The Workers' Compensation Section Fund (Fund 1950) that is used by the Attorney General shall receive payments from the Bureau of Workers' Compensation at the beginning of each quarter of each fiscal year to fund expenses of the Workers' Compensation Fraud Unit of the Attorney General's Office. Of the foregoing appropriation item 855410, Attorney General Payments, $828,200 in fiscal year 2010 and $828,200 in fiscal year 2011 shall be used to provide these payments.
SAFETY AND HYGIENE
Notwithstanding section 4121.37 of the Revised Code, the Administrator of Workers' Compensation shall transfer moneys from the State Insurance Fund so that appropriation item 855609, Safety and Hygiene Operating, is provided $20,734,750 in fiscal year 2010 and $20,734,750 in fiscal year 2011.
OSHA ON-SITE CONSULTATION PROGRAM
The Bureau of Workers' Compensation may designate a portion of appropriation item 855609, Safety and Hygiene Operating, to be used to match federal funding for the federal Occupational Safety and Health Administration's (OSHA) on-site consultation program.
VOCATIONAL REHABILITATION
The Bureau of Workers' Compensation and the Rehabilitation Services Commission shall enter into an interagency agreement for the provision of vocational rehabilitation services and staff to mutually eligible clients. The bureau shall provide $605,407 in fiscal year 2010 and $605,407 in fiscal year 2011 from the State Insurance Fund to fund vocational rehabilitation services and staff in accordance with the interagency agreement.
FUND BALANCE
Any unencumbered cash balance in excess of $45,000,000 in the Workers' Compensation Fund (Fund 7023) on the thirtieth day of June of each fiscal year shall be used to reduce the administrative cost rate charged to employers to cover appropriations for Bureau of Workers' Compensation operations.
Section 203. WCC WORKERS' COMPENSATION COUNCIL
5FV0 321600 Remuneration Expenses $ 471,200 $ 471,200
TOTAL 5FV0 Workers' Compensation Council Remuneration Fund $ 471,200 $ 471,200
TOTAL ALL BUDGET FUND GROUPS $ 471,200 $ 471,200

WORKERS' COMPENSATION COUNCIL
The foregoing appropriation item 321600, Remuneration Expenses, shall be used to pay the payroll and fringe benefit costs for employees of the Workers' Compensation Council.
Between July 1, 2009, and December 31, 2009, the Administrator of Workers' Compensation shall direct the Treasurer of State to transfer $325,000 in cash from the Workers' Compensation Fund (Fund 7023) to the Workers' Compensation Council Fund, created in division (C) of section 4121.79 of the Revised Code, in three installments. These transfers shall be made according to a schedule agreed to by the Director of the Workers' Compensation Council and the Administrator of Workers' Compensation.
Section 211. RECOVERING THE COST OF DEPUTY INSPECTOR GENERAL INVESTIGATIONS FROM BWC AND OIC
On July 1, 2009, or as soon as possible thereafter, the Director of Budget and Management shall transfer $106,000 in cash from the Workers' Compensation Fund (Fund 7023) to the Deputy Inspector General for the Bureau of Workers' Compensation and Industrial Commission Fund (Fund 5FT0). The amounts transferred are appropriated.
Beginning October 1, 2009, the Inspector General shall recover the costs of investigations prescribed by section 121.52 of the Revised Code through intrastate transfer voucher billings to the Bureau of Workers' Compensation and to the Industrial Commission.
Notwithstanding division (D) of section 4121.03, division (B)(10) of section 4121.121, and section 101.532 of the Revised Code, of the appropriation item 855409, Administrative Services, in the Bureau of Workers' Compensation and appropriation item 845321, Operating Expenses, in the Industrial Commission, not more than $425,000 in total in each fiscal year shall be used to reimburse the Inspector General for the cost of investigations incurred under section 121.52 of the Revised Code. Should additional amounts be necessary, the Administrator of Workers' Compensation and the Chairperson of the Industrial Commission may seek Controlling Board approval to increase the amounts designated and the appropriations necessary to reimburse the Inspector General for the cost of investigations.
Section 221. Law contained in the Main Operating Appropriations Act of the 128th General Assembly that applies generally to the appropriations made in that act also applies generally to the appropriations made in this act.
Section 301. The provisions of law contained in this act, and their applications, are severable. If any provision of law contained in this act, or if any application of any provision of law contained in this act, is held invalid, the invalidity does not affect other provisions of law contained in this act and their applications that can be given effect without the invalid provision or application.
Section 311.  Except as otherwise provided in this act, the amendment, enactment, or repeal by this act of a section of law is exempt from the referendum because it is or relates to an appropriation for current expenses within the meaning of Ohio Constitution, Article II, Section 1d and section 1.471 of the Revised Code and therefore takes effect immediately when this act becomes law.
Section 313. The amendment, enactment, or repeal by this act of the sections of law listed below is subject to the referendum under Ohio Constitution, Article II, Section 1c and therefore takes effect on the ninety-first day after this act is filed with the Secretary of State.
The amendment by this act of sections 4121.12, 4121.125, 4121.62, 4121.70, and 4123.34 of the Revised Code.
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