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H. B. No. 576 As IntroducedAs Introduced
128th General Assembly | Regular Session | 2009-2010 |
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Cosponsors:
Representatives Uecker, Blair, Hite, Grossman, Jordan, Adams, R., Sears, Lehner
A BILL
To amend sections 1739.02, 4115.04, 4123.01, 4123.35,
and 4123.82 and to enact sections 122.09 and
4123.354 of the Revised Code to authorize the
state and local governments to jointly offer tax
and other incentives to businesses that establish
operations within designated areas.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1739.02, 4115.04, 4123.01, 4123.35,
and 4123.82 be amended and sections 122.09 and 4123.354 of the
Revised Code be enacted to read as follows:
Sec. 122.09. (A) As used in this section:
(1) "Subdivision" has the same meaning as in section 5705.01
of the Revised Code and refers to the subdivision's taxing
authority, as defined in that section, where the context requires.
(2) "Participating governmental authority" means a
subdivision that enters into a contract under this section, and
the state if the director of development is a party to such a
contract.
(3) "Tax and other incentives" includes full or partial
exemption from taxation of property in an area; exemptions,
deductions, or credits from or against the taxes imposed under
Chapter 322., 5725., 5729., 5733., 5739., 5741., 5747., or 5751.
of the Revised Code; exemptions, deductions, or credits from or
against municipal income taxes; assistance under Chapter 122.,
165., 166., or 184. of the Revised Code; and any other assistance
intended to promote or foster business development, increased
employment, and general economic welfare.
(4) "Multiple employer welfare arrangement," "fully insured
program," and "group self-insurance program" have the same
meanings as in section 1739.01 of the Revised Code.
(B)(1) For the purpose of facilitating economic development,
to create or preserve jobs and employment opportunities, and to
improve the economic welfare of the people in this state, the
director of development or one or more subdivisions may enter into
a contract to create an Ohio opportunity area. The area shall be
comprised exclusively of territory zoned for commercial or
agricultural use and shall be located within the boundaries of
this state and two or more participating governmental authorities.
The contract term may not exceed ten years, but it may be renewed
upon agreement of the participating governmental authorities. The
contract shall describe the area's boundaries, create a board of
directors, and delineate the board's authority and duties.
Authority granted to the board of directors may include the
following:
(a) Entering into agreements with businesses whereby a
business commits to create or preserve jobs in the area and the
board of directors provides tax and other incentives for the
business;
(b) Accepting service payments in lieu of taxes from
contracting businesses and using them for any purpose of the area;
(c) Granting or guaranteeing loans to finance infrastructure
improvements in the area and to acquire, construct, enlarge,
improve, or equip, and to sell, lease, exchange, or otherwise
dispose of property, structures, equipment, and facilities within
the area for industry, commerce, distribution, and research and
development purposes, pursuant to Sections 2p and 13 of Article
VIII, Ohio Constitution;
(d) Levying an income tax to be used solely for the purposes
of the area. A tax levied pursuant to division (B)(1)(d) of this
section may be levied only upon written petition signed by all
persons owning or leasing real property in the area for the
purpose of conducting a trade or business. The tax may be based
only on income earned by individuals for services performed within
the area and on the net profits of businesses located in the area.
The income tax is subject to the limitations of Chapter 718. of
the Revised Code. The board of directors may prescribe the form of
the petition. The board of directors shall publish or post public
notice within the area of any resolution adopted by the board
levying an income tax in the same manner required of municipal
corporations under sections 731.21 and 731.25 of the Revised Code.
(e) Waiving the prevailing wage requirements under Chapter
4115. of the Revised Code for public improvement projects in the
area for a fixed period of time, for the duration of the project,
or as otherwise determined by the board.
(2) If tax or other incentives are provided that reduce the
revenue from a tax imposed by a taxing authority that is not a
participating governmental authority, the taxing authority
imposing the tax shall be reimbursed for the entire amount of the
reduction unless it agrees otherwise.
(3)(a) A participating governmental authority may, by
resolution, issue on behalf of the board of directors
self-supporting securities to finance improvements in the area for
industry, commerce, distribution, and research and development
purposes, pursuant to Sections 2p and 13 of Article VIII, Ohio
Constitution. Securities shall be secured by a pledge of and a
lien upon the revenues derived from ownership or operation of the
improvements or amounts from taxes levied by the board of
directors or from service payments in lieu of taxes received by
the board of directors.
(b) A participating governmental authority may, by
resolution, issue on behalf of the board of directors bonds to
finance improvements in the area for industry, commerce,
distribution, and research and development purposes, pursuant to
Sections 2p and 13 of Article VIII, Ohio Constitution. The bonds
shall be secured by a pledge of and lien on taxes levied by the
board of directors or by service payments in lieu of taxes
received by the board of directors. The bonds shall not be general
obligations of the participating governmental authority, and shall
not constitute a debt, or a pledge of the faith and credit, but
shall be payable solely from the funds pledged for their payment
as authorized by this section.
(C) Businesses located in an Ohio opportunity area may form a
multiple employer welfare arrangement to provide health insurance
to the employees of the businesses and the employees' dependents
through a fully insured program or a group self-insurance program.
If the multiple employer welfare arrangement provides health
insurance through a group self-insurance program, the multiple
employer welfare arrangement shall be subject to Chapter 1739. of
the Revised Code.
(D) A board of directors created pursuant to this section is
a body corporate and politic that may sue and be sued, plead and
be impleaded, and has the powers and jurisdiction enumerated in
this section. The exercise by a board of the powers conferred upon
it shall be essential governmental functions of this state but no
authority is immune from liability by reason thereof. The
provisions of Chapter 2744. and section 121.22 of the Revised Code
apply to the board and the area. The board of directors is a
governmental agency for the purposes of Chapter 166. of the
Revised Code.
If the state is a participating governmental authority, the
director of development or a designee of the director shall be a
member of the board. Other members of the board shall be appointed
as provided in the contract from among the other participating
governmental authorities and the elected chief executive officers
thereof, if any, provided that there shall be at least two members
appointed from each of the participating governmental authorities.
Official actions of the board of directors require an
affirmative vote of two-thirds of the board's members. The board's
official actions bind the participating governmental authorities.
(E)(1) A contract entered into under division (B) of this
section is not binding unless it is approved by each participating
governmental authority. The director of development shall
determine whether the state will be a party to the contract. All
other participating governmental authorities shall approve the
contract by ordinance or resolution. After all participating
governmental authorities have approved the contract, a copy of the
contract shall be filed with the director of development unless
the state is a participating governmental authority. Upon creation
of the area, no exemption from taxation may be granted or
authorized for property in the area unless the exemption is first
approved by official action of the board of directors before
application is made to the tax commissioner.
(2) Before a subdivision approves a contract entered into
under this section, each shall hold a public hearing concerning
the contract and shall provide thirty days' public notice of the
time and place of the public hearing in a newspaper of general
circulation in the county or counties in which the area is to be
created, a summary of the terms of the contract, a statement that
the entire text of the contract and area maps and plans are on
file for public examination in the office of the fiscal officer of
each subdivision, and information pertaining to any tax or debt
changes that will or may occur as a result of the contract.
During the thirty-day period before the public hearing, a
copy of the text of the contract together with copies of area maps
and plans related to or part of the contract shall be on file, for
public examination, in the office of the fiscal officer of each
subdivision. The public hearing provided for in this division
shall allow for public comment and recommendations from the public
on the proposed contract. The participating governmental
authorities may include in the contract any of those
recommendations before approving the contract.
Sec. 1739.02. (A) A trade association, industry association,
or professional association that has been organized and maintained
in good faith for a continuous period of one year or more for
purposes other than obtaining insurance may establish, maintain,
or operate a group self-insurance program under a multiple
employer welfare arrangement that is chartered and created in this
state under sections 1739.01 to 1739.22 of the Revised Code.
(B) Except as provided in section 9.833 and sections 1739.01
to 1739.22 of the Revised Code, no multiple employer welfare
arrangement or other entity by which two or more employers jointly
participate in a common employee welfare benefit plan shall
operate a group self-insurance program in this state after four
months after the effective date of this section April 9, 1993.
(C) Sections 1739.01 to 1739.22 of the Revised Code do not
apply to any entity that establishes, maintains, or operates a
fully-insured fully insured program.
(D) No person shall establish, operate, or maintain a
multiple employer welfare arrangement providing benefits through a
group self-insurance program in this state unless the multiple
employer welfare arrangement has a valid certificate of authority
from the superintendent of insurance.
(E) This chapter shall not apply to a self-insuring
consortium created for purposes of workers' compensation as
described in section 4123.354 of the Revised Code.
Sec. 4115.04. (A)(1) Every public authority authorized to
contract for or construct with its own forces a public
improvement, before advertising for bids or undertaking such
construction with its own forces, shall have the director of
commerce determine the prevailing rates of wages of mechanics and
laborers in accordance with section 4115.05 of the Revised Code
for the class of work called for by the public improvement, in the
locality where the work is to be performed. Except as provided in
division (A)(2) of this section, that schedule of wages shall be
attached to and made part of the specifications for the work, and
shall be printed on the bidding blanks where the work is done by
contract. A copy of the bidding blank shall be filed with the
director before the contract is awarded. A minimum rate of wages
for common laborers, on work coming under the jurisdiction of the
department of transportation, shall be fixed in each county of the
state by the department of transportation, in accordance with
section 4115.05 of the Revised Code.
(2) In the case of contracts that are administered by the
department of natural resources, the director of natural resources
or the director's designee shall include language in the contracts
requiring wage rate determinations and updates to be obtained
directly from the department of commerce through electronic or
other means as appropriate. Contracts that include this
requirement are exempt from the requirements established in
division (A)(1) of this section that involve attaching the
schedule of wages to the specifications for the work, making the
schedule part of those specifications, and printing the schedule
on the bidding blanks where the work is done by contract.
(B) Sections 4115.03 to 4115.16 of the Revised Code do not
apply to:
(1) Public improvements in any case where the federal
government or any of its agencies furnishes by loan or grant all
or any part of the funds used in constructing such improvements,
provided that the federal government or any of its agencies
prescribes predetermined minimum wages to be paid to mechanics and
laborers employed in the construction of such improvements;
(2) A participant in a work activity, developmental activity,
or an alternative work activity under sections 5107.40 to 5107.69
of the Revised Code when a public authority directly uses the
labor of the participant to construct a public improvement if the
participant is not engaged in paid employment or subsidized
employment pursuant to the activity;
(3) Public improvements undertaken by, or under contract for,
the board of education of any school district or the governing
board of any educational service center;
(4) Public improvements undertaken by, or under contract for,
a county hospital operated pursuant to Chapter 339. of the Revised
Code or a municipal hospital operated pursuant to Chapter 749. of
the Revised Code if none of the funds used in constructing the
improvements are the proceeds of bonds or other obligations that
are secured by the full faith and credit of the state, a county, a
township, or a municipal corporation and none of the funds used in
constructing the improvements, including funds used to repay any
amounts borrowed to construct the improvements, are funds that
have been appropriated for that purpose by the state, a board of
county commissioners, a township, or a municipal corporation from
funds generated by the levy of a tax, provided that a county
hospital or municipal hospital may elect to apply sections 4115.03
to 4115.16 of the Revised Code to a public improvement undertaken
by, or under contract for, the hospital;
(5) Any project described in divisions (D)(1)(a) to (D)(1)(e)
of section 176.05 of the Revised Code;
(6) Any project for which a waiver has been granted by a
board of directors of an Ohio opportunity area pursuant to section
122.09 of the Revised Code.
Sec. 4123.01. As used in this chapter:
(a) Every person in the service of the state, or of any
county, municipal corporation, township, or school district
therein, including regular members of lawfully constituted police
and fire departments of municipal corporations and townships,
whether paid or volunteer, and wherever serving within the state
or on temporary assignment outside thereof, and executive officers
of boards of education, under any appointment or contract of hire,
express or implied, oral or written, including any elected
official of the state, or of any county, municipal corporation, or
township, or members of boards of education.
As used in division (A)(1)(a) of this section, the term
"employee" includes the following persons when responding to an
inherently dangerous situation that calls for an immediate
response on the part of the person, regardless of whether the
person is within the limits of the jurisdiction of the person's
regular employment or voluntary service when responding, on the
condition that the person responds to the situation as the person
otherwise would if the person were on duty in the person's
jurisdiction:
(i) Off-duty peace officers. As used in division (A)(1)(a)(i)
of this section, "peace officer" has the same meaning as in
section 2935.01 of the Revised Code.
(ii) Off-duty firefighters, whether paid or volunteer, of a
lawfully constituted fire department.
(iii) Off-duty first responders, emergency medical
technicians-basic, emergency medical technicians-intermediate, or
emergency medical technicians-paramedic, whether paid or
volunteer, of an ambulance service organization or emergency
medical service organization pursuant to Chapter 4765. of the
Revised Code.
(b) Every person in the service of any person, firm, or
private corporation, including any public service corporation,
that (i) employs one or more persons regularly in the same
business or in or about the same establishment under any contract
of hire, express or implied, oral or written, including aliens and
minors, household workers who earn one hundred sixty dollars or
more in cash in any calendar quarter from a single household and
casual workers who earn one hundred sixty dollars or more in cash
in any calendar quarter from a single employer, or (ii) is bound
by any such contract of hire or by any other written contract, to
pay into the state insurance fund the premiums provided by this
chapter.
(c) Every person who performs labor or provides services
pursuant to a construction contract, as defined in section 4123.79
of the Revised Code, if at least ten of the following criteria
apply:
(i) The person is required to comply with instructions from
the other contracting party regarding the manner or method of
performing services;
(ii) The person is required by the other contracting party to
have particular training;
(iii) The person's services are integrated into the regular
functioning of the other contracting party;
(iv) The person is required to perform the work personally;
(v) The person is hired, supervised, or paid by the other
contracting party;
(vi) A continuing relationship exists between the person and
the other contracting party that contemplates continuing or
recurring work even if the work is not full time;
(vii) The person's hours of work are established by the other
contracting party;
(viii) The person is required to devote full time to the
business of the other contracting party;
(ix) The person is required to perform the work on the
premises of the other contracting party;
(x) The person is required to follow the order of work set by
the other contracting party;
(xi) The person is required to make oral or written reports
of progress to the other contracting party;
(xii) The person is paid for services on a regular basis such
as hourly, weekly, or monthly;
(xiii) The person's expenses are paid for by the other
contracting party;
(xiv) The person's tools and materials are furnished by the
other contracting party;
(xv) The person is provided with the facilities used to
perform services;
(xvi) The person does not realize a profit or suffer a loss
as a result of the services provided;
(xvii) The person is not performing services for a number of
employers at the same time;
(xviii) The person does not make the same services available
to the general public;
(xix) The other contracting party has a right to discharge
the person;
(xx) The person has the right to end the relationship with
the other contracting party without incurring liability pursuant
to an employment contract or agreement.
Every person in the service of any independent contractor or
subcontractor who has failed to pay into the state insurance fund
the amount of premium determined and fixed by the administrator of
workers' compensation for the person's employment or occupation or
if a self-insuring employer has failed to pay compensation and
benefits directly to the employer's injured and to the dependents
of the employer's killed employees as required by section 4123.35
of the Revised Code, shall be considered as the employee of the
person who has entered into a contract, whether written or verbal,
with such independent contractor unless such employees or their
legal representatives or beneficiaries elect, after injury or
death, to regard such independent contractor as the employer.
(d) Every person to whom all of the following apply:
(i) The person is a resident of a state other than this state
and is covered by that other state's workers' compensation law;
(ii) The person performs labor or provides services for that
person's employer while temporarily within this state;
(iii) The laws of that other state do not include the
provisions described in division (H)(4) of section 4123.54 of the
Revised Code.
(2) "Employee" does not mean:
(a) A duly ordained, commissioned, or licensed minister or
assistant or associate minister of a church in the exercise of
ministry;
(b) Any officer of a family farm corporation;
(c) An individual incorporated as a corporation; or
(d) An individual who otherwise is an employee of an employer
but who signs the waiver and affidavit specified in section
4123.15 of the Revised Code on the condition that the
administrator has granted a waiver and exception to the
individual's employer under section 4123.15 of the Revised Code.
Any employer may elect to include as an "employee" within
this chapter, any person excluded from the definition of
"employee" pursuant to division (A)(2) of this section. If an
employer is a partnership, sole proprietorship, individual
incorporated as a corporation, or family farm corporation, such
employer may elect to include as an "employee" within this
chapter, any member of such partnership, the owner of the sole
proprietorship, the individual incorporated as a corporation, or
the officers of the family farm corporation. In the event of an
election, the employer shall serve upon the bureau of workers'
compensation written notice naming the persons to be covered,
include such employee's remuneration for premium purposes in all
future payroll reports, and no person excluded from the definition
of "employee" pursuant to division (A)(2) of this section,
proprietor, individual incorporated as a corporation, or partner
shall be deemed an employee within this division until the
employer has served such notice.
For informational purposes only, the bureau shall prescribe
such language as it considers appropriate, on such of its forms as
it considers appropriate, to advise employers of their right to
elect to include as an "employee" within this chapter a sole
proprietor, any member of a partnership, an individual
incorporated as a corporation, the officers of a family farm
corporation, or a person excluded from the definition of
"employee" under division (A)(2) of this section, that they should
check any health and disability insurance policy, or other form of
health and disability plan or contract, presently covering them,
or the purchase of which they may be considering, to determine
whether such policy, plan, or contract excludes benefits for
illness or injury that they might have elected to have covered by
workers' compensation.
(1) The state, including state hospitals, each county,
municipal corporation, township, school district, and hospital
owned by a political subdivision or subdivisions other than the
state;
(2) Every person, firm, professional employer organization as
defined in section 4125.01 of the Revised Code, and private
corporation, including any public service corporation, that (a)
has in service one or more employees or shared employees regularly
in the same business or in or about the same establishment under
any contract of hire, express or implied, oral or written, or (b)
is bound by any such contract of hire or by any other written
contract, to pay into the insurance fund the premiums provided by
this chapter.
All such employers are subject to this chapter. Any member of
a firm or association, who regularly performs manual labor in or
about a mine, factory, or other establishment, including a
household establishment, shall be considered an employee in
determining whether such person, firm, or private corporation, or
public service corporation, has in its service, one or more
employees and the employer shall report the income derived from
such labor to the bureau as part of the payroll of such employer,
and such member shall thereupon be entitled to all the benefits of
an employee.
(C) "Injury" includes any injury, whether caused by external
accidental means or accidental in character and result, received
in the course of, and arising out of, the injured employee's
employment. "Injury" does not include:
(1) Psychiatric conditions except where the claimant's
psychiatric conditions have arisen from an injury or occupational
disease sustained by that claimant or where the claimant's
psychiatric conditions have arisen from sexual conduct in which
the claimant was forced by threat of physical harm to engage or
participate;
(2) Injury or disability caused primarily by the natural
deterioration of tissue, an organ, or part of the body;
(3) Injury or disability incurred in voluntary participation
in an employer-sponsored recreation or fitness activity if the
employee signs a waiver of the employee's right to compensation or
benefits under this chapter prior to engaging in the recreation or
fitness activity;
(4) A condition that pre-existed an injury unless that
pre-existing condition is substantially aggravated by the injury.
Such a substantial aggravation must be documented by objective
diagnostic findings, objective clinical findings, or objective
test results. Subjective complaints may be evidence of such a
substantial aggravation. However, subjective complaints without
objective diagnostic findings, objective clinical findings, or
objective test results are insufficient to substantiate a
substantial aggravation.
(D) "Child" includes a posthumous child and a child legally
adopted prior to the injury.
(E) "Family farm corporation" means a corporation founded for
the purpose of farming agricultural land in which the majority of
the voting stock is held by and the majority of the stockholders
are persons or the spouse of persons related to each other within
the fourth degree of kinship, according to the rules of the civil
law, and at least one of the related persons is residing on or
actively operating the farm, and none of whose stockholders are a
corporation. A family farm corporation does not cease to qualify
under this division where, by reason of any devise, bequest, or
the operation of the laws of descent or distribution, the
ownership of shares of voting stock is transferred to another
person, as long as that person is within the degree of kinship
stipulated in this division.
(F) "Occupational disease" means a disease contracted in the
course of employment, which by its causes and the characteristics
of its manifestation or the condition of the employment results in
a hazard which distinguishes the employment in character from
employment generally, and the employment creates a risk of
contracting the disease in greater degree and in a different
manner from the public in general.
(G) "Self-insuring employer" means an employer who is granted
the privilege of paying compensation and benefits directly under
section 4123.35 of the Revised Code, including a board of county
commissioners for the sole purpose of constructing a sports
facility as defined in section 307.696 of the Revised Code,
provided that the electors of the county in which the sports
facility is to be built have approved construction of a sports
facility by ballot election no later than November 6, 1997, but
does not include a self-insuring consortium.
(H) "Public employer" means an employer as defined in
division (B)(1) of this section.
(I) "Sexual conduct" means vaginal intercourse between a male
and female; anal intercourse, fellatio, and cunnilingus between
persons regardless of gender; and, without privilege to do so, the
insertion, however slight, of any part of the body or any
instrument, apparatus, or other object into the vaginal or anal
cavity of another. Penetration, however slight, is sufficient to
complete vaginal or anal intercourse.
(J) "Other-states' insurer" means an insurance company that
is authorized to provide workers' compensation insurance coverage
in any of the states that permit employers to obtain insurance for
workers' compensation claims through insurance companies.
(K) "Other-states' coverage" means insurance coverage
purchased by an employer for workers' compensation claims that
arise in a state or states other than this state and that are
filed by the employees of the employer or those employee's
dependents, as applicable, in that other state or those other
states.
(L) "Self-insuring consortium" means a group of employers
that is granted the privilege of paying compensation and benefits
directly under section 4123.354 of the Revised Code.
Sec. 4123.35. (A) Except as provided in this section, every
employer mentioned in division (B)(2) of section 4123.01 of the
Revised Code, and every publicly owned utility shall pay
semiannually in the months of January and July into the state
insurance fund the amount of annual premium the administrator of
workers' compensation fixes for the employment or occupation of
the employer, the amount of which premium to be paid by each
employer to be determined by the classifications, rules, and rates
made and published by the administrator. The employer shall pay
semiannually a further sum of money into the state insurance fund
as may be ascertained to be due from the employer by applying the
rules of the administrator, and a receipt or certificate
certifying that payment has been made, along with a written notice
as is required in section 4123.54 of the Revised Code, shall be
mailed immediately to the employer by the bureau of workers'
compensation. The receipt or certificate is prima-facie evidence
of the payment of the premium, and the proper posting of the
notice constitutes the employer's compliance with the notice
requirement mandated in section 4123.54 of the Revised Code.
The bureau of workers' compensation shall verify with the
secretary of state the existence of all corporations and
organizations making application for workers' compensation
coverage and shall require every such application to include the
employer's federal identification number.
An employer as defined in division (B)(2) of section 4123.01
of the Revised Code who has contracted with a subcontractor is
liable for the unpaid premium due from any subcontractor with
respect to that part of the payroll of the subcontractor that is
for work performed pursuant to the contract with the employer.
Division (A) of this section providing for the payment of
premiums semiannually does not apply to any employer who was a
subscriber to the state insurance fund prior to January 1, 1914,
or who may first become a subscriber to the fund in any month
other than January or July. Instead, the semiannual premiums shall
be paid by those employers from time to time upon the expiration
of the respective periods for which payments into the fund have
been made by them.
The administrator shall adopt rules to permit employers to
make periodic payments of the semiannual premium due under this
division. The rules shall include provisions for the assessment of
interest charges, where appropriate, and for the assessment of
penalties when an employer fails to make timely premium payments.
An employer who timely pays the amounts due under this division is
entitled to all of the benefits and protections of this chapter.
Upon receipt of payment, the bureau immediately shall mail a
receipt or certificate to the employer certifying that payment has
been made, which receipt is prima-facie evidence of payment.
Workers' compensation coverage under this chapter continues
uninterrupted upon timely receipt of payment under this division.
Every public employer, except public employers that are
self-insuring employers under this section, shall comply with
sections 4123.38 to 4123.41, and 4123.48 of the Revised Code in
regard to the contribution of moneys to the public insurance fund.
(B) Employers who will abide by the rules of the
administrator and who may be of sufficient financial ability to
render certain the payment of compensation to injured employees or
the dependents of killed employees, and the furnishing of medical,
surgical, nursing, and hospital attention and services and
medicines, and funeral expenses, equal to or greater than is
provided for in sections 4123.52, 4123.55 to 4123.62, and 4123.64
to 4123.67 of the Revised Code, and who do not desire to insure
the payment thereof or indemnify themselves against loss sustained
by the direct payment thereof, upon a finding of such facts by the
administrator, may be granted the privilege to pay individually
compensation, and furnish medical, surgical, nursing, and hospital
services and attention and funeral expenses directly to injured
employees or the dependents of killed employees, thereby being
granted status as a self-insuring employer. The administrator may
charge employers who apply for the status as a self-insuring
employer a reasonable application fee to cover the bureau's costs
in connection with processing and making a determination with
respect to an application.
All employers granted status as self-insuring employers shall
demonstrate sufficient financial and administrative ability to
assure that all obligations under this section are promptly met.
The administrator shall deny the privilege where the employer is
unable to demonstrate the employer's ability to promptly meet all
the obligations imposed on the employer by this section.
(1) The administrator shall consider, but is not limited to,
the following factors, where applicable, in determining the
employer's ability to meet all of the obligations imposed on the
employer by this section:
(a) The employer employs a minimum of five hundred employees
in this state;
(b) The employer has operated in this state for a minimum of
two years, provided that an employer who has purchased, acquired,
or otherwise succeeded to the operation of a business, or any part
thereof, situated in this state that has operated for at least two
years in this state, also shall qualify;
(c) Where the employer previously contributed to the state
insurance fund or is a successor employer as defined by bureau
rules, the amount of the buyout, as defined by bureau rules;
(d) The sufficiency of the employer's assets located in this
state to insure the employer's solvency in paying compensation
directly;
(e) The financial records, documents, and data, certified by
a certified public accountant, necessary to provide the employer's
full financial disclosure. The records, documents, and data
include, but are not limited to, balance sheets and profit and
loss history for the current year and previous four years.
(f) The employer's organizational plan for the administration
of the workers' compensation law;
(g) The employer's proposed plan to inform employees of the
change from a state fund insurer to a self-insuring employer, the
procedures the employer will follow as a self-insuring employer,
and the employees' rights to compensation and benefits; and
(h) The employer has either an account in a financial
institution in this state, or if the employer maintains an account
with a financial institution outside this state, ensures that
workers' compensation checks are drawn from the same account as
payroll checks or the employer clearly indicates that payment will
be honored by a financial institution in this state.
The Except as otherwise provided in section 4123.354 of the
Revised Code, the administrator may waive the requirements of
divisions (B)(1)(a) and (b) of this section and the requirement of
division (B)(1)(e) of this section that the financial records,
documents, and data be certified by a certified public accountant.
The administrator shall adopt rules establishing the criteria that
an employer shall meet in order for the administrator to waive the
requirement of division (B)(1)(e) of this section. Such rules may
require additional security of that employer pursuant to division
(E) of section 4123.351 of the Revised Code.
The administrator shall not grant the status of self-insuring
employer to the state, except that the administrator may grant the
status of self-insuring employer to a state institution of higher
education, excluding its hospitals, that meets the requirements of
division (B)(2) of this section.
(2) When considering the application of a public employer,
except for a board of county commissioners described in division
(G) of section 4123.01 of the Revised Code, a board of a county
hospital, or a publicly owned utility, the administrator shall
verify that the public employer satisfies all of the following
requirements as the requirements apply to that public employer:
(a) For the two-year period preceding application under this
section, the public employer has maintained an unvoted debt
capacity equal to at least two times the amount of the current
annual premium established by the administrator under this chapter
for that public employer for the year immediately preceding the
year in which the public employer makes application under this
section.
(b) For each of the two fiscal years preceding application
under this section, the unreserved and undesignated year-end fund
balance in the public employer's general fund is equal to at least
five per cent of the public employer's general fund revenues for
the fiscal year computed in accordance with generally accepted
accounting principles.
(c) For the five-year period preceding application under this
section, the public employer, to the extent applicable, has
complied fully with the continuing disclosure requirements
established in rules adopted by the United States securities and
exchange commission under 17 C.F.R. 240.15c 2-12.
(d) For the five-year period preceding application under this
section, the public employer has not had its local government fund
distribution withheld on account of the public employer being
indebted or otherwise obligated to the state.
(e) For the five-year period preceding application under this
section, the public employer has not been under a fiscal watch or
fiscal emergency pursuant to section 118.023, 118.04, or 3316.03
of the Revised Code.
(f) For the public employer's fiscal year preceding
application under this section, the public employer has obtained
an annual financial audit as required under section 117.10 of the
Revised Code, which has been released by the auditor of state
within seven months after the end of the public employer's fiscal
year.
(g) On the date of application, the public employer holds a
debt rating of Aa3 or higher according to Moody's investors
service, inc., or a comparable rating by an independent rating
agency similar to Moody's investors service, inc.
(h) The public employer agrees to generate an annual
accumulating book reserve in its financial statements reflecting
an actuarially generated reserve adequate to pay projected claims
under this chapter for the applicable period of time, as
determined by the administrator.
(i) For a public employer that is a hospital, the public
employer shall submit audited financial statements showing the
hospital's overall liquidity characteristics, and the
administrator shall determine, on an individual basis, whether the
public employer satisfies liquidity standards equivalent to the
liquidity standards of other public employers.
(j) Any additional criteria that the administrator adopts by
rule pursuant to division (E) of this section.
The administrator shall not approve the application of a
public employer, except for a board of county commissioners
described in division (G) of section 4123.01 of the Revised Code,
a board of a county hospital, or publicly owned utility, who does
not satisfy all of the requirements listed in division (B)(2) of
this section.
(C) A board of county commissioners described in division (G)
of section 4123.01 of the Revised Code, as an employer, that will
abide by the rules of the administrator and that may be of
sufficient financial ability to render certain the payment of
compensation to injured employees or the dependents of killed
employees, and the furnishing of medical, surgical, nursing, and
hospital attention and services and medicines, and funeral
expenses, equal to or greater than is provided for in sections
4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised
Code, and that does not desire to insure the payment thereof or
indemnify itself against loss sustained by the direct payment
thereof, upon a finding of such facts by the administrator, may be
granted the privilege to pay individually compensation, and
furnish medical, surgical, nursing, and hospital services and
attention and funeral expenses directly to injured employees or
the dependents of killed employees, thereby being granted status
as a self-insuring employer. The administrator may charge a board
of county commissioners described in division (G) of section
4123.01 of the Revised Code that applies for the status as a
self-insuring employer a reasonable application fee to cover the
bureau's costs in connection with processing and making a
determination with respect to an application. All employers
granted such status shall demonstrate sufficient financial and
administrative ability to assure that all obligations under this
section are promptly met. The administrator shall deny the
privilege where the employer is unable to demonstrate the
employer's ability to promptly meet all the obligations imposed on
the employer by this section. The administrator shall consider,
but is not limited to, the following factors, where applicable, in
determining the employer's ability to meet all of the obligations
imposed on the board as an employer by this section:
(1) The board as an employer employs a minimum of five
hundred employees in this state;
(2) The board has operated in this state for a minimum of two
years;
(3) Where the board previously contributed to the state
insurance fund or is a successor employer as defined by bureau
rules, the amount of the buyout, as defined by bureau rules;
(4) The sufficiency of the board's assets located in this
state to insure the board's solvency in paying compensation
directly;
(5) The financial records, documents, and data, certified by
a certified public accountant, necessary to provide the board's
full financial disclosure. The records, documents, and data
include, but are not limited to, balance sheets and profit and
loss history for the current year and previous four years.
(6) The board's organizational plan for the administration of
the workers' compensation law;
(7) The board's proposed plan to inform employees of the
proposed self-insurance, the procedures the board will follow as a
self-insuring employer, and the employees' rights to compensation
and benefits;
(8) The board has either an account in a financial
institution in this state, or if the board maintains an account
with a financial institution outside this state, ensures that
workers' compensation checks are drawn from the same account as
payroll checks or the board clearly indicates that payment will be
honored by a financial institution in this state;
(9) The board shall provide the administrator a surety bond
in an amount equal to one hundred twenty-five per cent of the
projected losses as determined by the administrator.
(D) The administrator shall require a surety bond from all
self-insuring employers, issued pursuant to section 4123.351 of
the Revised Code, that is sufficient to compel, or secure to
injured employees, or to the dependents of employees killed, the
payment of compensation and expenses, which shall in no event be
less than that paid or furnished out of the state insurance fund
in similar cases to injured employees or to dependents of killed
employees whose employers contribute to the fund, except when an
employee of the employer, who has suffered the loss of a hand,
arm, foot, leg, or eye prior to the injury for which compensation
is to be paid, and thereafter suffers the loss of any other of the
members as the result of any injury sustained in the course of and
arising out of the employee's employment, the compensation to be
paid by the self-insuring employer is limited to the disability
suffered in the subsequent injury, additional compensation, if
any, to be paid by the bureau out of the surplus created by
section 4123.34 of the Revised Code.
(E) In addition to the requirements of this section, the
administrator shall make and publish rules governing the manner of
making application and the nature and extent of the proof required
to justify a finding of fact by the administrator as to granting
the status of a self-insuring employer, which rules shall be
general in their application, one of which rules shall provide
that all self-insuring employers shall pay into the state
insurance fund such amounts as are required to be credited to the
surplus fund in division (B) of section 4123.34 of the Revised
Code. The administrator may adopt rules establishing requirements
in addition to the requirements described in division (B)(2) of
this section that a public employer shall meet in order to qualify
for self-insuring status.
Employers shall secure directly from the bureau central
offices application forms upon which the bureau shall stamp a
designating number. Prior to submission of an application, an
employer shall make available to the bureau, and the bureau shall
review, the information described in division (B)(1) of this
section, and public employers shall make available, and the bureau
shall review, the information necessary to verify whether the
public employer meets the requirements listed in division (B)(2)
of this section. An employer shall file the completed application
forms with an application fee, which shall cover the costs of
processing the application, as established by the administrator,
by rule, with the bureau at least ninety days prior to the
effective date of the employer's new status as a self-insuring
employer. The application form is not deemed complete until all
the required information is attached thereto. The bureau shall
only accept applications that contain the required information.
(F) The bureau shall review completed applications within a
reasonable time. If the bureau determines to grant an employer the
status as a self-insuring employer, the bureau shall issue a
statement, containing its findings of fact, that is prepared by
the bureau and signed by the administrator. If the bureau
determines not to grant the status as a self-insuring employer,
the bureau shall notify the employer of the determination and
require the employer to continue to pay its full premium into the
state insurance fund. The administrator also shall adopt rules
establishing a minimum level of performance as a criterion for
granting and maintaining the status as a self-insuring employer
and fixing time limits beyond which failure of the self-insuring
employer to provide for the necessary medical examinations and
evaluations may not delay a decision on a claim.
(G) The administrator shall adopt rules setting forth
procedures for auditing the program of self-insuring employers.
The bureau shall conduct the audit upon a random basis or whenever
the bureau has grounds for believing that a self-insuring employer
is not in full compliance with bureau rules or this chapter.
The administrator shall monitor the programs conducted by
self-insuring employers, to ensure compliance with bureau
requirements and for that purpose, shall develop and issue to
self-insuring employers standardized forms for use by the
self-insuring employer in all aspects of the self-insuring
employers' direct compensation program and for reporting of
information to the bureau.
The bureau shall receive and transmit to the self-insuring
employer all complaints concerning any self-insuring employer. In
the case of a complaint against a self-insuring employer, the
administrator shall handle the complaint through the
self-insurance division of the bureau. The bureau shall maintain a
file by employer of all complaints received that relate to the
employer. The bureau shall evaluate each complaint and take
appropriate action.
The administrator shall adopt as a rule a prohibition against
any self-insuring employer from harassing, dismissing, or
otherwise disciplining any employee making a complaint, which rule
shall provide for a financial penalty to be levied by the
administrator payable by the offending self-insuring employer.
(H) For the purpose of making determinations as to whether to
grant status as a self-insuring employer, the administrator may
subscribe to and pay for a credit reporting service that offers
financial and other business information about individual
employers. The costs in connection with the bureau's subscription
or individual reports from the service about an applicant may be
included in the application fee charged employers under this
section.
(I) The administrator, notwithstanding other provisions of
this chapter, may permit a self-insuring employer to resume
payment of premiums to the state insurance fund with appropriate
credit modifications to the employer's basic premium rate as such
rate is determined pursuant to section 4123.29 of the Revised
Code.
(J) On the first day of July of each year, the administrator
shall calculate separately each self-insuring employer's
assessments for the safety and hygiene fund, administrative costs
pursuant to section 4123.342 of the Revised Code, and for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that is not used for handicapped
reimbursement, on the basis of the paid compensation attributable
to the individual self-insuring employer according to the
following calculation:
(1) The total assessment against all self-insuring employers
as a class for each fund and for the administrative costs for the
year that the assessment is being made, as determined by the
administrator, divided by the total amount of paid compensation
for the previous calendar year attributable to all amenable
self-insuring employers;
(2) Multiply the quotient in division (J)(1) of this section
by the total amount of paid compensation for the previous calendar
year that is attributable to the individual self-insuring employer
for whom the assessment is being determined. Each self-insuring
employer shall pay the assessment that results from this
calculation, unless the assessment resulting from this calculation
falls below a minimum assessment, which minimum assessment the
administrator shall determine on the first day of July of each
year with the advice and consent of the bureau of workers'
compensation board of directors, in which event, the self-insuring
employer shall pay the minimum assessment.
In determining the total amount due for the total assessment
against all self-insuring employers as a class for each fund and
the administrative assessment, the administrator shall reduce
proportionately the total for each fund and assessment by the
amount of money in the self-insurance assessment fund as of the
date of the computation of the assessment.
The administrator shall calculate the assessment for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that is used for handicapped reimbursement in
the same manner as set forth in divisions (J)(1) and (2) of this
section except that the administrator shall calculate the total
assessment for this portion of the surplus fund only on the basis
of those self-insuring employers that retain participation in the
handicapped reimbursement program and the individual self-insuring
employer's proportion of paid compensation shall be calculated
only for those self-insuring employers who retain participation in
the handicapped reimbursement program. The administrator, as the
administrator determines appropriate, may determine the total
assessment for the handicapped portion of the surplus fund in
accordance with sound actuarial principles.
The administrator shall calculate the assessment for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that under division (D) of section 4121.66 of
the Revised Code is used for rehabilitation costs in the same
manner as set forth in divisions (J)(1) and (2) of this section,
except that the administrator shall calculate the total assessment
for this portion of the surplus fund only on the basis of those
self-insuring employers who have not made the election to make
payments directly under division (D) of section 4121.66 of the
Revised Code and an individual self-insuring employer's proportion
of paid compensation only for those self-insuring employers who
have not made that election.
The administrator shall calculate the assessment for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that is used for reimbursement to a
self-insuring employer under division (H) of section 4123.512 of
the Revised Code in the same manner as set forth in divisions
(J)(1) and (2) of this section except that the administrator shall
calculate the total assessment for this portion of the surplus
fund only on the basis of those self-insuring employers that
retain participation in reimbursement to the self-insuring
employer under division (H) of section 4123.512 of the Revised
Code and the individual self-insuring employer's proportion of
paid compensation shall be calculated only for those self-insuring
employers who retain participation in reimbursement to the
self-insuring employer under division (H) of section 4123.512 of
the Revised Code.
An employer who no longer is a self-insuring employer in this
state or who no longer is operating in this state, shall continue
to pay assessments for administrative costs and for the portion of
the surplus fund under division (B) of section 4123.34 of the
Revised Code that is not used for handicapped reimbursement, based
upon paid compensation attributable to claims that occurred while
the employer was a self-insuring employer within this state.
(K) The administrator shall deposit any moneys received from
a self-insuring employer for the self-insuring employer's
assessment to pay the costs solely attributable to the workers'
compensation council into the administrative assessment account
described in division (B) of section 4123.342 of the Revised Code
for the administrative cost assessment collected by the
administrator for the council. There is hereby created in the
state treasury the self-insurance assessment fund. All investment
earnings of the fund shall be deposited in the fund. The
administrator shall use the money in the self-insurance assessment
fund only for administrative costs as specified in section
4123.341 of the Revised Code.
(L) Every self-insuring employer shall certify, in affidavit
form subject to the penalty for perjury, to the bureau the amount
of the self-insuring employer's paid compensation for the previous
calendar year. In reporting paid compensation paid for the
previous year, a self-insuring employer shall exclude from the
total amount of paid compensation any reimbursement the
self-insuring employer receives in the previous calendar year from
the surplus fund pursuant to section 4123.512 of the Revised Code
for any paid compensation. The self-insuring employer also shall
exclude from the paid compensation reported any amount recovered
under section 4123.931 of the Revised Code and any amount that is
determined not to have been payable to or on behalf of a claimant
in any final administrative or judicial proceeding. The
self-insuring employer shall exclude such amounts from the paid
compensation reported in the reporting period subsequent to the
date the determination is made. The administrator shall adopt
rules, in accordance with Chapter 119. of the Revised Code, that
provide for all of the following:
(1) Establishing the date by which self-insuring employers
must submit such information and the amount of the assessments
provided for in division (J) of this section for employers who
have been granted self-insuring status within the last calendar
year;
(2) If an employer fails to pay the assessment when due, the
administrator may add a late fee penalty of not more than five
hundred dollars to the assessment plus an additional penalty
amount as follows:
(a) For an assessment from sixty-one to ninety days past due,
the prime interest rate, multiplied by the assessment due;
(b) For an assessment from ninety-one to one hundred twenty
days past due, the prime interest rate plus two per cent,
multiplied by the assessment due;
(c) For an assessment from one hundred twenty-one to one
hundred fifty days past due, the prime interest rate plus four per
cent, multiplied by the assessment due;
(d) For an assessment from one hundred fifty-one to one
hundred eighty days past due, the prime interest rate plus six per
cent, multiplied by the assessment due;
(e) For an assessment from one hundred eighty-one to two
hundred ten days past due, the prime interest rate plus eight per
cent, multiplied by the assessment due;
(f) For each additional thirty-day period or portion thereof
that an assessment remains past due after it has remained past due
for more than two hundred ten days, the prime interest rate plus
eight per cent, multiplied by the assessment due.
(3) An employer may appeal a late fee penalty and penalty
assessment to the administrator.
For purposes of division (L)(2) of this section, "prime
interest rate" means the average bank prime rate, and the
administrator shall determine the prime interest rate in the same
manner as a county auditor determines the average bank prime rate
under section 929.02 of the Revised Code.
The administrator shall include any assessment and penalties
that remain unpaid for previous assessment periods in the
calculation and collection of any assessments due under this
division or division (J) of this section.
(M) As used in this section, "paid compensation" means all
amounts paid by a self-insuring employer for living maintenance
benefits, all amounts for compensation paid pursuant to sections
4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60, and
4123.64 of the Revised Code, all amounts paid as wages in lieu of
such compensation, all amounts paid in lieu of such compensation
under a nonoccupational accident and sickness program fully funded
by the self-insuring employer, and all amounts paid by a
self-insuring employer for a violation of a specific safety
standard pursuant to Section 35 of Article II, Ohio Constitution
and section 4121.47 of the Revised Code.
(N) Should any section of this chapter or Chapter 4121. of
the Revised Code providing for self-insuring employers'
assessments based upon compensation paid be declared
unconstitutional by a final decision of any court, then that
section of the Revised Code declared unconstitutional shall revert
back to the section in existence prior to November 3, 1989,
providing for assessments based upon payroll.
(O) The administrator may grant a self-insuring employer the
privilege to self-insure a construction project entered into by
the self-insuring employer that is scheduled for completion within
six years after the date the project begins, and the total cost of
which is estimated to exceed one hundred million dollars or, for
employers described in division (R) of this section, if the
construction project is estimated to exceed twenty-five million
dollars. The administrator may waive such cost and time criteria
and grant a self-insuring employer the privilege to self-insure a
construction project regardless of the time needed to complete the
construction project and provided that the cost of the
construction project is estimated to exceed fifty million dollars.
A self-insuring employer who desires to self-insure a construction
project shall submit to the administrator an application listing
the dates the construction project is scheduled to begin and end,
the estimated cost of the construction project, the contractors
and subcontractors whose employees are to be self-insured by the
self-insuring employer, the provisions of a safety program that is
specifically designed for the construction project, and a
statement as to whether a collective bargaining agreement
governing the rights, duties, and obligations of each of the
parties to the agreement with respect to the construction project
exists between the self-insuring employer and a labor
organization.
A self-insuring employer may apply to self-insure the
employees of either of the following:
(1) All contractors and subcontractors who perform labor or
work or provide materials for the construction project;
(2) All contractors and, at the administrator's discretion, a
substantial number of all the subcontractors who perform labor or
work or provide materials for the construction project.
Upon approval of the application, the administrator shall
mail a certificate granting the privilege to self-insure the
construction project to the self-insuring employer. The
certificate shall contain the name of the self-insuring employer
and the name, address, and telephone number of the self-insuring
employer's representatives who are responsible for administering
workers' compensation claims for the construction project. The
self-insuring employer shall post the certificate in a conspicuous
place at the site of the construction project.
The administrator shall maintain a record of the contractors
and subcontractors whose employees are covered under the
certificate issued to the self-insured employer. A self-insuring
employer immediately shall notify the administrator when any
contractor or subcontractor is added or eliminated from inclusion
under the certificate.
Upon approval of the application, the self-insuring employer
is responsible for the administration and payment of all claims
under this chapter and Chapter 4121. of the Revised Code for the
employees of the contractor and subcontractors covered under the
certificate who receive injuries or are killed in the course of
and arising out of employment on the construction project, or who
contract an occupational disease in the course of employment on
the construction project. For purposes of this chapter and Chapter
4121. of the Revised Code, a claim that is administered and paid
in accordance with this division is considered a claim against the
self-insuring employer listed in the certificate. A contractor or
subcontractor included under the certificate shall report to the
self-insuring employer listed in the certificate, all claims that
arise under this chapter and Chapter 4121. of the Revised Code in
connection with the construction project for which the certificate
is issued.
A self-insuring employer who complies with this division is
entitled to the protections provided under this chapter and
Chapter 4121. of the Revised Code with respect to the employees of
the contractors and subcontractors covered under a certificate
issued under this division for death or injuries that arise out
of, or death, injuries, or occupational diseases that arise in the
course of, those employees' employment on that construction
project, as if the employees were employees of the self-insuring
employer, provided that the self-insuring employer also complies
with this section. No employee of the contractors and
subcontractors covered under a certificate issued under this
division shall be considered the employee of the self-insuring
employer listed in that certificate for any purposes other than
this chapter and Chapter 4121. of the Revised Code. Nothing in
this division gives a self-insuring employer authority to control
the means, manner, or method of employment of the employees of the
contractors and subcontractors covered under a certificate issued
under this division.
The contractors and subcontractors included under a
certificate issued under this division are entitled to the
protections provided under this chapter and Chapter 4121. of the
Revised Code with respect to the contractor's or subcontractor's
employees who are employed on the construction project which is
the subject of the certificate, for death or injuries that arise
out of, or death, injuries, or occupational diseases that arise in
the course of, those employees' employment on that construction
project.
The contractors and subcontractors included under a
certificate issued under this division shall identify in their
payroll records the employees who are considered the employees of
the self-insuring employer listed in that certificate for purposes
of this chapter and Chapter 4121. of the Revised Code, and the
amount that those employees earned for employment on the
construction project that is the subject of that certificate.
Notwithstanding any provision to the contrary under this chapter
and Chapter 4121. of the Revised Code, the administrator shall
exclude the payroll that is reported for employees who are
considered the employees of the self-insuring employer listed in
that certificate, and that the employees earned for employment on
the construction project that is the subject of that certificate,
when determining those contractors' or subcontractors' premiums or
assessments required under this chapter and Chapter 4121. of the
Revised Code. A self-insuring employer issued a certificate under
this division shall include in the amount of paid compensation it
reports pursuant to division (L) of this section, the amount of
paid compensation the self-insuring employer paid pursuant to this
division for the previous calendar year.
Nothing in this division shall be construed as altering the
rights of employees under this chapter and Chapter 4121. of the
Revised Code as those rights existed prior to September 17, 1996.
Nothing in this division shall be construed as altering the rights
devolved under sections 2305.31 and 4123.82 of the Revised Code as
those rights existed prior to September 17, 1996.
As used in this division, "privilege to self-insure a
construction project" means privilege to pay individually
compensation, and to furnish medical, surgical, nursing, and
hospital services and attention and funeral expenses directly to
injured employees or the dependents of killed employees.
(P) A self-insuring employer whose application is granted
under division (O) of this section shall designate a safety
professional to be responsible for the administration and
enforcement of the safety program that is specifically designed
for the construction project that is the subject of the
application.
A self-insuring employer whose application is granted under
division (O) of this section shall employ an ombudsperson for the
construction project that is the subject of the application. The
ombudsperson shall have experience in workers' compensation or the
construction industry, or both. The ombudsperson shall perform all
of the following duties:
(1) Communicate with and provide information to employees who
are injured in the course of, or whose injury arises out of
employment on the construction project, or who contract an
occupational disease in the course of employment on the
construction project;
(2) Investigate the status of a claim upon the request of an
employee to do so;
(3) Provide information to claimants, third party
administrators, employers, and other persons to assist those
persons in protecting their rights under this chapter and Chapter
4121. of the Revised Code.
A self-insuring employer whose application is granted under
division (O) of this section shall post the name of the safety
professional and the ombudsperson and instructions for contacting
the safety professional and the ombudsperson in a conspicuous
place at the site of the construction project.
(Q) The administrator may consider all of the following when
deciding whether to grant a self-insuring employer the privilege
to self-insure a construction project as provided under division
(O) of this section:
(1) Whether the self-insuring employer has an organizational
plan for the administration of the workers' compensation law;
(2) Whether the safety program that is specifically designed
for the construction project provides for the safety of employees
employed on the construction project, is applicable to all
contractors and subcontractors who perform labor or work or
provide materials for the construction project, and has as a
component, a safety training program that complies with standards
adopted pursuant to the "Occupational Safety and Health Act of
1970," 84 Stat. 1590, 29 U.S.C.A. 651, and provides for continuing
management and employee involvement;
(3) Whether granting the privilege to self-insure the
construction project will reduce the costs of the construction
project;
(4) Whether the self-insuring employer has employed an
ombudsperson as required under division (P) of this section;
(5) Whether the self-insuring employer has sufficient surety
to secure the payment of claims for which the self-insuring
employer would be responsible pursuant to the granting of the
privilege to self-insure a construction project under division (O)
of this section.
(R) As used in divisions (O), (P), and (Q), "self-insuring
employer" includes the following employers, whether or not they
have been granted the status of being a self-insuring employer
under division (B) of this section:
(1) A state institution of higher education;
(3) A county school financing district;
(4) An educational service center;
(5) A community school established under Chapter 3314. of the
Revised Code;
(6) A municipal power agency as defined in section 3734.058
of the Revised Code.
(S) A group of employers mentioned in division (B)(2) of
section 4123.01 of the Revised Code may be granted the privilege
to pay compensation and benefits directly as provided in section
4123.354 of the Revised Code.
(T) As used in this section:
(1) "Unvoted debt capacity" means the amount of money that a
public employer may borrow without voter approval of a tax levy;
(2) "State institution of higher education" means the state
universities listed in section 3345.011 of the Revised Code,
community colleges created pursuant to Chapter 3354. of the
Revised Code, university branches created pursuant to Chapter
3355. of the Revised Code, technical colleges created pursuant to
Chapter 3357. of the Revised Code, and state community colleges
created pursuant to Chapter 3358. of the Revised Code.
Sec. 4123.354. (A) A group of employers mentioned in division
(B)(2) of section 4123.01 of the Revised Code that are located
within an Ohio opportunity area created under section 122.09 of
the Revised Code; that will abide by the rules of the
administrator of workers' compensation; that may be of sufficient
financial ability to render certain the payment of compensation to
claimants, and the furnishing of medical, surgical, nursing, and
hospital attention and services and medicines, and funeral
expenses, equal to or greater than is provided for in sections
4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised
Code; and that do not desire to insure the payment thereof or
indemnify themselves against loss sustained by the direct payment
thereof, upon a finding of such facts by the administrator, may be
granted the privilege to pay individually compensation, and
furnish medical, surgical, nursing, and hospital attention and
services and funeral expenses directly to claimants, thereby being
granted status as a self-insuring consortium.
(B) To qualify as a self-insuring consortium, the consortium
shall satisfy, as a group, the requirements listed in division
(B)(1) of section 4123.35 of the Revised Code that an individual
employer must satisfy to become a self-insuring employer. For
purposes of satisfying the requirement listed in division
(B)(1)(a) of that section, the administrator shall count only
those employees who work within an Ohio opportunity area and whose
employer wishes to participate in a self-insuring consortium. The
administrator shall not waive the requirement listed in division
(B)(1)(a) of that section with respect to a group of employers
wishing to become a self-insuring consortium.
(C)(1) A group of employers mentioned in division (B)(2) of
section 4123.01 of the Revised Code and located within an Ohio
opportunity area that desires to become a self-insuring consortium
as described in division (A) of this section shall submit an
application to the administrator alleging that the consortium
fulfills the requirements described in division (B)(1) of section
4123.35 of the Revised Code. Upon receipt of the application from
a group, the administrator shall determine whether the group, as a
whole, fulfills the requirements described in division (B)(1) of
section 4123.35 of the Revised Code. The administrator shall
review completed applications within a reasonable amount of time.
If the administrator determines to grant a group the status of a
self-insuring consortium, the administrator shall issue a
statement containing findings of fact that is prepared and signed
by the administrator. The administrator shall not grant the
privilege of self-insurance to a group where the group, as a
whole, is unable to demonstrate that the group satisfies the
requirements described in division (B)(1) of section 4123.35 of
the Revised Code and the employers comprising the group shall
continue to pay their full premiums into the state insurance fund.
(2) The administrator may charge groups that apply for the
status of a self-insuring consortium a reasonable application fee
to cover the administrator's costs in connection with processing
and making a determination with respect to an application.
(D) Each member of a self-insuring consortium is jointly and
severally liable for the payment of compensation and benefits
under this chapter and Chapters 4121., 4127., and 4131. of the
Revised Code. If an individual member of the consortium fails to
pay compensation and benefits for a claim that is compensable
under this chapter or Chapter 4121., 4127., or 4131. of the
Revised Code, the remaining members of the consortium are liable
for that payment. If the number of employees covered by the
consortium is below five hundred employees at any time, the
consortium shall lose the consortium's status as a self-insuring
consortium and the individual employers shall resume the payment
of premiums into the state insurance fund.
(E) An employer that participates in a self-insuring
consortium shall obtain an insurance policy that indemnifies the
employer against all of the employer's loss in excess of fifty
thousand dollars, as such policy is described in division (B)(1)
of section 4123.82 of the Revised Code.
(F) The administrator shall require a self-insuring
consortium to pay a contribution, calculated under section
4123.351 of the Revised Code, to the self-insuring employers'
guaranty fund established pursuant to section 4123.351 of the
Revised Code. The consortium shall adopt procedures to allocate
the cost of that contribution among the members of the consortium.
(G) For the purpose of making determinations as to whether to
grant status as a self-insuring consortium, the administrator may
subscribe to and pay for a credit reporting service that offers
financial and other business information about individual
employers. The costs in connection with the administrator's
subscription or individual reports from the service about a member
of an applicant group may be included in the application fee
charged groups under this section.
(H) The administrator may permit an employer member of a
self-insuring consortium to resume payment of premiums to the
state insurance fund with appropriate credit modifications to the
employer's basic premium rate as such rate is determined pursuant
to section 4123.29 of the Revised Code.
(I) A self-insuring consortium under this section shall pay
assessments for the safety and hygiene fund, administrative costs,
and surplus fund in the same manner as a self-insuring employer as
provided under divisions (J) and (K) of section 4123.35 of the
Revised Code. The consortium shall adopt procedures to allocate
the cost of those assessments among the members of the consortium.
(J) A self-insuring consortium shall certify the paid
compensation for all the members of the consortium for the
previous calendar year in the same manner as a self-insuring
employer as provided in division (L) of section 4123.35 of the
Revised Code.
(K) The administrator shall adopt rules to do all of the
following:
(1) Determine the liability of an employer that requests to
transfer from the state insurance fund coverage to a self-insuring
consortium;
(2) Set forth procedures for auditing the program of a
self-insuring consortium, similar to the requirements for
self-insuring employers provided in division (G) of section
4123.35 of the Revised Code;
(3) Provide for the implementation of this section.
(L) Sections 4121.121, 4121.31, 4121.44, 4121.444, 4123.15,
4123.25, 4123.342, 4123.343, 4123.351, 4123.411, 4123.46, 4123.50,
4123.51, 4123.511, 4123.512, 4123.54, 4123.56, 4123.63, 4123.65,
4123.70, 4123.74, 4123.75, 4123.79, 4123.84, 4123.85, 4123.93, and
4123.931 of the Revised Code apply to a self-insuring consortium
or employers that are members of a self-insuring consortium in the
same manner those sections apply to self-insuring employers.
Sec. 4123.82. (A) All contracts and agreements are void
which undertake to indemnify or insure an employer against loss or
liability for the payment of compensation to workers or their
dependents for death, injury, or occupational disease occasioned
in the course of the workers' employment, or which provide that
the insurer shall pay the compensation, or which indemnify the
employer against damages when the injury, disease, or death arises
from the failure to comply with any lawful requirement for the
protection of the lives, health, and safety of employees, or when
the same is occasioned by the willful act of the employer or any
of the employer's officers or agents, or by which it is agreed
that the insurer shall pay any such damages. No license or
authority to enter into any such agreements or issue any such
policies of insurance shall be granted or issued by any public
authority in this state. Any corporation organized or admitted
under the laws of this state to transact liability insurance as
defined in section 3929.01 of the Revised Code may by amendment of
its articles of incorporation or by original articles of
incorporation, provide therein for the authority and purpose to
make insurance in states, territories, districts, and counties,
other than the state of Ohio, and in the state of Ohio in respect
of contracts permitted by division (B) of this section,
indemnifying employers against loss or liability for payment of
compensation to workers and employees and their dependents for
death, injury, or occupational disease occasioned in the course of
the employment and to insure and indemnify employers against loss,
expense, and liability by risk of bodily injury or death by
accident, disability, sickness, or disease suffered by workers and
employees for which the employer may be liable or has assumed
liability.
(B) Notwithstanding division (A) of this section:
(1) No contract because of that division is void which
undertakes to indemnify a self-insuring employer or an employer
that is a member of a self-insuring consortium against all or part
of such employer's loss in excess of at least fifty thousand
dollars from any one disaster or event arising out of the
employer's liability under this chapter, but no insurance
corporation shall, directly or indirectly, represent an employer
in the settlement, adjudication, determination, allowance, or
payment of claims. The superintendent of insurance shall enforce
this prohibition by such disciplinary orders directed against the
offending insurance corporation as the superintendent of insurance
deems appropriate in the circumstances and the administrator of
workers' compensation shall enforce this prohibition by such
disciplinary orders directed against the offending employer as the
administrator deems appropriate in the circumstances, which orders
may include revocation of the insurance corporation's right to
enter into indemnity contracts and revocation of the employer's
status as a self-insuring employer or ability to participate in a
self-insuring consortium.
(2) The administrator may enter into a contract of indemnity
with any such employer upon such terms, payment of such premium,
and for such amount and form of indemnity as the administrator
determines and the bureau of workers' compensation board of
directors may procure reinsurance of the liability of the public
and private funds under this chapter, or any part of the liability
in respect of either or both of the funds, upon such terms and
premiums or other payments from the fund or funds as the
administrator deems prudent in the maintenance of a solvent fund
or funds from year to year. When making the finding of fact which
the administrator is required by section 4123.35 of the Revised
Code to make with respect to the financial ability of an employer,
no contract of indemnity, or the ability of the employer to
procure such a contract, shall be considered as increasing the
financial ability of the employer.
(C) Nothing in this section shall be construed to prohibit
the administrator or an other-states' insurer from providing to
employers in this state other-states' coverage in accordance with
section 4123.292 of the Revised Code.
(D) Notwithstanding any other section of the Revised Code,
but subject to division (A) of this section, the superintendent of
insurance shall have the sole authority to regulate any insurance
products, except for the bureau of workers' compensation and those
products offered by the bureau, that indemnify or insure employers
against workers' compensation losses in this state or that are
sold to employers in this state.
Section 2. That existing sections 1739.02, 4115.04, 4123.01,
4123.35, and 4123.82 of the Revised Code are hereby repealed.
Section 3. Section 4115.04 of the Revised Code is presented
in this act as a composite of the section as amended by both Sub.
H.B. 443 and Am. Sub. H.B. 699 of the 126th General Assembly. The
General Assembly, applying the principle stated in division (B) of
section 1.52 of the Revised Code that amendments are to be
harmonized if reasonably capable of simultaneous operation, finds
that the composite is the resulting version of the section in
effect prior to the effective date of the section as presented in
this act.
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