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Connecticut Public Acts 1996

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Substitute House Bill No. 5799

PUBLIC ACT NO. 96-242

AN ACT CONCERNING THE ADMINISTRATION OF THE SECOND INJURY FUND AND THE ISSUANCE OF REVENUE BONDS OF THE STATE PAYABLE SOLELY FROM ASSESSMENTS ON EMPLOYERS TO FINANCE THE SETTLEMENT OF SECOND INJURY CLAIMS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 31-349 of the general statutes, as amended by section 3 of public act 95-277, is amended by adding subsection (f) as follows:

(NEW) (f) No claim, where the custodian of the Second Injury Fund was served with a valid notice of intent to transfer under this section, shall be eligible for transfer to the Second Injury Fund unless all requirements for transfer, including payment of the one hundred and four weeks of benefits by the employer or its insurer, have been completed prior to July 1, 1999. All claims, pursuant to this section, not eligible for transfer to the fund on or before July 1, 1999, will remain the responsibility of the employer or its insurer.

Sec. 2. (NEW) All transfers of claims to the Second Injury Fund with a date of injury prior to July 1, 1995, shall be effected no later than July 1, 1999. All claims not transferred to the Second Injury Fund, on or before July 1, 1999, shall remain the responsibility of the employer or its insurer.

Sec. 3. (NEW) The custodian of the Second Injury Fund may implement cost-saving methodologies within the existing prescription drug program but shall not mandate the use of a mail order pharmacy by the claimant.

Sec. 4. It is found and declared that the closing of the Second Injury Fund pursuant to public act 95-277, and the efforts of the administrators and employees of the Second Injury Fund under the State Treasurer, as the custodian of the Second Injury Fund, to manage the Second Injury Fund in 1995, and to date have produced a dramatic reduction in Second Injury Fund liability thereby reducing the anticipated assessments to employers; that the cost of the settlement and payment of claims on a pay-as-you-go assessment method would require a significant increase in the aggregate employer assessments in fiscal years 1996, 1997 and 1998 to levels that are unacceptably high unless a certain portion of the lump sum settlements are amortized over a longer period of time; that revenue obligations issued by the state secured by special assessment premium surcharges annually levied, imposed and collected on and from self-insured and insured employers of the state pursuant to section 14 of public act 95-277, as amended by section 5 of this act and section 31-354 of the general statutes, as amended by section 6 of this act, for the governmental purpose of raising revenues to fund the lump sum settlement and certain other structured settlements of the Second Injury Fund and amortized over a period not exceeding twenty years would allow the state to settle and otherwise manage claims while reducing employer assessments to the lowest practical level thereby supporting the policy of the state to improve the business climate in the state and still honor its obligations to employees who have second injury claims; that bond financing to amortize over time the initial cost of the substantial increased number of settlements should have the effect of encouraging a more rapid return of injured workers to meaningful employment thereby promoting the vitality of our economy; and that therefore the provisions of this act are for the public benefit and good and the authorization provided in section 8 of this act of the issuance of special obligations of the state to finance lump sum and certain structured settlements of Second Injury Fund claims are declared to be for a public purpose and the exercise of an essential governmental function.

Sec. 5. Section 14 of public act 95-277 is repealed and the following is substituted in lieu thereof:

On or before January 1, 1996, the STATE Treasurer, in consultation with the Insurance Commissioner, shall adopt regulations regarding the method of assessing all employers for the liabilities of the Second Injury Fund. The liabilities shall be allocated between self-insured employers and insured employers based on paid losses for the preceding calendar year. The method of assessing self-insured employers shall be based on paid losses. The method of assessment for insured employers shall be a surcharge based on premium. In adopting regulations under this section, the STATE Treasurer shall consider their effect upon (1) the cost of doing business in this state, (2) the overall cost of the workers' compensation system, (3) the effect of the regulations on insurers, insureds and self-insured employers and (4) the financial condition and liabilities of the fund. For purposes of this section, "insured employers" include members of workers' compensation pools administered by interlocal risk management agencies AND ON AND AFTER JANUARY 1, 1996, "SELF-INSURED EMPLOYERS" SHALL INCLUDE AN EMPLOYER MUTUAL ASSOCIATION ORGANIZED PRIOR TO THE EFFECTIVE DATE OF THIS ACT, WITH A MEMBERSHIP COMPOSED EXCLUSIVELY OF HEALTH CARE PROVIDERS AND WHOSE PREMIUM BASE IS DERIVED ENTIRELY FROM HEALTH CARE ORGANIZATIONS.

Sec. 6. Section 31-354 of the general statutes, as amended by sections 15 and 16 of public act 95-277, is repealed and the following is substituted in lieu thereof:

(a) There shall be a fund to be known as the Second Injury Fund. Each employer, other than the state, shall, within thirty days after notice given by the STATE Treasurer, pay to the State Treasurer for the use of the state a sum in payment of his liability under this chapter WHICH SHALL BE THE SPECIAL ASSESSMENT PREMIUM SURCHARGE AND SHALL BE ASSESSED IN ACCORDANCE WITH SECTION 14 OF PUBLIC ACT 95-277, AS AMENDED BY SECTION 5 OF THIS ACT AND THIS ACT. Such sum shall be AN AMOUNT SUFFICIENT TO (1) PAY THE DEBT SERVICE ON STATE REVENUE BOND OBLIGATIONS AUTHORIZED TO BE ISSUED UNDER AND FOR THE PURPOSES SET FORTH IN SECTION 7 OF THIS ACT INCLUDING RESERVE AND COVENANT COVERAGE REQUIREMENTS, (2) PROVIDE FOR COSTS AND EXPENSES OF OPERATING THE SECOND INJURY FUND, AND (3) PAY SECOND INJURY FUND STIPULATIONS ON CLAIMS SETTLED BY THE CUSTODIAN OR OTHER BENEFITS PAYABLE OUT OF THE SECOND INJURY FUND AND NOT FUNDED THROUGH STATE REVENUE BOND OBLIGATIONS AND SHALL BE determined in accordance with the regulations adopted pursuant to the provisions of section 14 of [this act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ny employer who fails to pay in accordance with such regulations shall pay interest to the STATE Treasurer on the sum at the rate of fifteen per cent per annum from the date the sum should have been paid until the date of payment. The STATE Treasurer shall notify each employer of the penalty provision with the notice of assessment. Effective July 1, 1993, whenever the assessment is levied, the STATE Treasurer shall pay to the fund, on behalf of the state, a sum not to exceed the total amount of money expended by the fund on behalf of state employees during the period following the last assessment. The sums received shall be [kept separate] ACCOUNTED FOR SEPARATELY and apart from all other state moneys and the faith and credit of the state of Connecticut is pledged for their safekeeping. The STATE Treasurer shall be the custodian of the fund and all disbursements from the fund shall be made by him or his deputies. The moneys of the fund shall be invested by him in accordance with applicable law AND SECTION 8 OF THIS ACT. Interest, income and dividends from the investments shall be credited to the fund. Each employer, each private insurance carrier acting on behalf of any employer and each interlocal risk management agency acting on behalf of any employer shall annually, on or before April first, report to the STATE Treasurer, in the form prescribed by the STATE Treasurer, the amount of money expended by or on behalf of the employer in payments for the preceding calendar year. Each private insurance carrier and each interlocal risk management agency shall submit annually ON OR BEFORE APRIL FIRST to the STATE Treasurer, in the form prescribed by the STATE Treasurer, a report of the total standard earned premium collected in the preceding calendar year AND A REPORT OF THE PROJECTED TOTAL STANDARD EARNED PREMIUM FOR THE CURRENT CALENDAR YEAR. The fund shall be used to provide the benefits set forth in section 31-306 for adjustments in the compensation rate and payment of certain death benefits, in section 31-307b for adjustments where there are relapses after a return to work, in section 31-307c for totally disabled persons injured prior to October 1, 1953, in section 31-349 AS AMENDED for disabled or handicapped employees and in section 31-355 for the payment of benefits due injured employees whose employers or insurance carriers have failed to pay the compensation, and medical expenses required by this chapter, or any other compensation payable from the fund as may be required by any provision contained in this chapter or any other statute and to reimburse employers or insurance carriers for payments made under subsection (b) of section 31-307a. The assessment required by this section is a condition of doing business in this state and failure to pay the assessment, when due, shall result in the denial of the privilege of doing business in this state or to self-insure under section 31-284 AS AMENDED. Any administrative or other costs or expenses incurred by the STATE Treasurer in connection with carrying out the provisions of this part, including the hiring of necessary employees, shall be paid from the fund. The STATE Treasurer may adopt regulations, in accordance with the provisions of chapter 54, prescribing the practices, policies and procedures to be followed in the administration of the Second Injury Fund.

(b) THE STATE TREASURER SHALL ESTABLISH WITHIN THE SECOND INJURY FUND THREE ACCOUNTS TO BE KNOWN AS THE OPERATING ACCOUNT, THE SETTLEMENT ACCOUNT AND THE FINANCE ACCOUNT WHICH ACCOUNTS SHALL BE HELD SEPARATE AND APART FROM EACH OTHER. THE OPERATING ACCOUNT SHALL COVER THE COSTS AND EXPENSES TO THE STATE OF OPERATING THE SECOND INJURY FUND. THE SETTLEMENT ACCOUNT SHALL COVER ACTUAL DISBURSEMENT OF THE SETTLED CLAIMS WHETHER BY ONE-TIME FULL PAYMENTS OR BY PAYMENTS OVER A PERIOD OF TIME. THE FINANCE ACCOUNT SHALL CONTAIN SUCH FUNDS AND BE OPERATED IN THE MANNER PROVIDED IN SECTION 7 OF THIS ACT.

Sec. 7. (NEW) (a) There is established within the Second Injury Fund an account to be known as the finance account. The account shall be administered by the State Treasurer as a trust fund, in and accounted for as an account within the Second Injury Fund. The State Treasurer may enter into contracts that may be useful to the organization, establishment, operation and administration of the account. The finance account shall be funded, first, with state revenue bond proceeds and interest income or income earned on investment of moneys for disbursement purposes and, second, from the special assessment premium surcharges for payment of debt service and reserve requirements. All costs of organizing, establishing and operating the account, including the costs of personnel and contractual services and establishing billing and collection procedures, shall be a charge upon and paid by the State Treasurer from the account unless the State Treasurer otherwise determines to pay such costs from the operating account.

(b) There is established within the finance account (1) a single cost of issuance and finance administration subaccount, (2) a bond proceeds subaccount, and (3) a debt service and reserve subaccount, which subaccounts shall be held separate and apart from each other. Additional subaccounts may be established by the State Treasurer as he deems necessary.

(c) There shall be deposited in the bond proceeds subaccount proceeds of revenue bonds issued in accordance with section 8 of this act for application, in accordance with the bond authorization documentation for one or more of the following purposes: (1) To pay in full the settlement of certain claims, including any interest due thereon; (2) to provide cash advances for payment of other claims pending receipt of anticipated current year assessments therefor; and (3) to provide for cost of issuance, capitalized interest, if necessary, reinsurance premiums, if any, and other cash flow requirements.

(d) There shall be deposited in the debt service and reserve subaccount, in accordance with the proceeding authorizing the bonds, the proceeds of the issuance of revenue bonds which are expected to be applied as capitalized interest to the extent required prior to receipt of special assessment premium surcharges and to provide for a reserve which shall not exceed the maximum debt service in any year.

(e) There shall be deposited in the cost of issuance and finance administration subaccount: (1) The proceeds of revenue bonds expected to be deposited into the said subaccount; and (2) any additional money received from employers in payment of special assessment premium surcharges established in accordance with section 31-354 of the general statutes, as amended by section 6 of this act, to offset the costs and expenses of administering and operating the finance account.

(f) Investment earnings credited to the assets of the finance account and to any subaccount within the account shall become part of the assets of the Second Injury Fund and applied in accordance with the bond authorization documents. Any balance remaining in the account at the end of any fiscal year shall be carried forward in the account and subaccount for the next fiscal year.

(g) Upon the issuance of revenue bonds and to the extent there are sufficient proceeds or other amounts in the finance account available therefor, the State Treasurer may withdraw from the finance account, in accordance with the bond authorization documents amounts determined to be necessary for the purposes of sections 9 of this act. The State Treasurer shall, from time to time and at least annually, determine the amount of interest, amortization, reserve and associated costs required for the finance account under this section and such amounts shall be assessed as a special assessment premium surcharge as provided in section 31-354 of the general statutes, as amended by section 6 of this act.

(h) Unless the context requires a different meaning, the term "bonds" or "revenue bonds" under this section and section 8 of this act includes notes issued in anticipation of the issuance of revenue bonds, or notes issued pursuant to a commercial paper program.

Sec. 8. (a) The State Bond Commission may authorize the issuance of revenue bonds of the state in one or more series and in principal amounts not to exceed seven hundred fifty million dollars at any one time, of which the first issue shall not exceed four hundred million dollars, to finance the purposes and expenses of the finance account established under section 7 of this act and such additional amount of bonds required to fund any debt service and reserve account in accordance with the proceedings authorizing the bonds and the costs of issuance, capitalized interest, if any, and the initial costs and expenses of the finance administration subaccount, provided, in computing the total amount of bonds which may at any one time be outstanding, the principal amount of any refunding bonds issued to refund bonds shall be excluded.

(b) Bonds issued pursuant to subsection (a) of this section shall be special obligation bonds of the state and shall not be payable from nor charged upon any funds or accounts other than the finance account and revenues pledged to the payment thereof, nor shall the state or any political subdivision thereof be subject to any liability thereon other than from such sources. The issuance of revenue bonds under the provisions of this section shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. The bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the state or of any political subdivision thereof, except the finance account and revenues pledged or otherwise encumbered under the provisions and for the purpose of said sections. The substance of this limitation shall be plainly stated on the face of each bond. Revenue bonds issued pursuant to this section shall not be subject to any statutory limitation on the indebtedness of the state and the bonds under section 3-21 of the general statutes or any other provision of the general statutes, when issued, shall not be included in computing the aggregate indebtedness of the state in respect to, and to the extent of, any such limitation. As part of the contract of the state with the owners of the revenue bonds, all amounts necessary for the punctual payment of the debt service requirements with respect to the revenue bonds shall be deemed appropriated, but only from the sources pledged pursuant to this section.

(c) The revenue bonds referred to in subsection (a) of this section may be executed and delivered at the time or times, shall be dated, shall bear interest at the rate or rates, shall mature at the time or times not exceeding twenty years from their date, have the rank or priority, be payable in the medium of payment, be issued in coupon or in registered form, or both, carry the registration and transfer privileges and be made redeemable before maturity at the price or prices and under the terms and conditions, all as may be provided by the State Bond Commission. With the exception of subsections (i) and (p), all provisions of section 3-20 of the general statutes, as amended, and the exercise of any right or power granted thereby which are not inconsistent with the provisions of this section are hereby adopted and may be invoked in respect to all revenue bonds authorized by the State Bond Commission pursuant to this section. For the purposes of subsection (o) of said section 3-20 of the general statutes, as amended, "bond act" includes this section. None of the revenue bonds shall be authorized, except upon a finding by the State Bond Commission that there has been filed with it a request for authorization, which is signed by or on behalf of the State Treasurer and states the terms and conditions as said commission, in its discretion, may require.

(d) The principal of and interest on any bonds issued pursuant to this section shall be secured by a pledge of the finance account and any revenues, receipts, funds or moneys payable to said account, including any amounts of payment received from special assessment premium surcharges established pursuant to section 31-354 of the general statutes, as amended by section 6 of this act, all as set forth in the proceedings authorizing the bonds pursuant to said section. Any pledge made by the state pursuant to said section is a pledge within the meaning and for all purposes of title 42a of the general statutes and shall be valid and binding from the time when the pledge is made. Any revenues or other receipts, funds or moneys so pledged and thereafter received by the state shall be subject immediately to the lien of the pledge without any physical delivery thereof or further act. The lien of any pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the state, irrespective of whether the parties have notice of the claims. Neither this section, the resolution nor any other instrument by which a pledge is created need be recorded.

(e) Revenue bonds issued pursuant to this section are hereby made securities in which public officers and public bodies of the state and its political subdivisions, all insurance companies, credit unions, savings and loan associations, investment companies, banking associations, trust companies, executors, administrators, trustees and other fiduciaries and pensions, profit-sharing and retirement funds may properly and legally invest funds, including capital in their control or belonging to them. The bonds are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized by law.

(f) The proceedings under which bonds are authorized to be issued may contain any or all of the following: (1) Provisions respecting custody of the proceeds from the sale of the bonds; (2) provisions for the investment and reinvestment of bond proceeds and after the disposition of any excess bond proceeds or investment earnings thereon; (3) provisions for the execution of reimbursement agreements or similar agreements in connection with credit facilities, including, but not necessarily limited to, letters of credit or policies of bond insurance, remarketing agreements and agreements for the purpose of moderating interest rate fluctuations; (4) provisions regarding the establishment and maintenance of reserves and sinking funds in the amounts and on the terms approved by the State Bond Commission; (5) covenants for the establishment of pledged revenue coverage requirements for the bonds; (6) provisions for the issuance of additional bonds on a parity with bonds theretofore issued, including establishment of coverage requirements with respect thereto as provided in this section; (7) provisions regarding the rights and remedies available in case of a default to bondowners, noteowners or any trustee under any contract, loan agreement, document, instrument or trust indenture, including the right to appoint a trustee to represent their interests upon occurrence of an event of default, as defined in said proceedings, provided if any revenue bonds are secured by a trust indenture, the respective owners of the bonds shall have no authority, except as set forth in the trust indenture, to appoint a separate trustee to represent them; (8) provisions for the payment of rebate amounts; and (9) provisions of covenants of like or different character from subdivisions (1) to (8), inclusive, of this subsection which are consistent with this section and section 3-21a of the general statutes, as amended, and which the State Bond Commission determines in such proceedings are necessary, convenient or desirable in order to better secure the revenue bonds, or will tend to make the revenue bonds more marketable, and which are in the best interests of the state. Any provision which may be included in proceedings authorizing the issuance of bonds under this section may be included in an indenture of trust duly approved in accordance with said section, which secures the revenue bonds issued in anticipation thereof, and in such case the provision of the indenture shall be deemed to be a part of the proceedings as though they were expressly included therein.

(g) Whether or not any revenue bonds issued pursuant to this section are of the form and character to qualify as negotiable instruments under the terms of title 42a of the general statutes, the bonds are hereby made negotiable instruments within the meaning of and for all purposes of said title 42a, subject only to the provisions of the bonds.

(h) The revenue bonds issued by the state pursuant to this section, their transfer and the income therefrom, including revenue derived from the sale thereof, shall at all times be free from taxation by the state or any political subdivision thereof, except for estate and gift taxes, but the interest on such bonds shall be included in the computation of any excise or franchise tax. The State Treasurer is authorized to include this provision as a covenant of the state in any agreement with the owner of any bonds and in any credit facility or reimbursement agreement with respect to the bonds.

(i) The state covenants with the purchasers and all subsequent owners and transferees of bonds issued by the state pursuant to this section, in consideration of the acceptance of the payment of the bonds, until the bonds, together with the interest thereon, with interest on any unpaid instalment of interest and all costs and expenses in connection with any action or proceeding on behalf of the owners, are fully met and discharged or unless expressly permitted or otherwise authorized by the terms of each contract and agreement made or entered into by or on behalf of the state with or for the benefit of such owners, (1) that in the event such revenue bonds are sold as federally tax-exempt bonds, the state shall not take any action or fail to take action that would result in the loss of such federal tax exemption on said bonds, (2) that the state will cause the custodian to impose, charge, raise, levy, collect and apply the pledged assessments and other revenues, receipts, funds or moneys pledged for the payment of debt service requirements in each year in which bonds are outstanding, and (3) further, that the state (A) will not limit or alter the duties imposed on the custodian, the State Treasurer and other officers of the state by the proceedings authorizing the issuance of bonds with respect to application of pledged assessments or other revenues, receipts, funds or moneys pledged for the payment of debt service requirements, (B) will not issue any bonds, notes or other evidences of indebtedness, other than the bonds, having any rights arising out of said sections or secured by any pledge of or other lien or charge on the pledged revenues or other receipts, funds or moneys pledged for the payment of debt service requirements, (C) will not create or cause to be created any lien or charge on the pledged amounts, other than a lien or pledge created thereon pursuant to said sections, provided nothing in this subsection shall prevent the state from issuing evidences of indebtedness (i) which are secured by a pledge or lien which is, and shall on the face thereof, be expressly subordinate and junior in all respects to every lien and pledge created by or pursuant to said sections, or (ii) which are secured by a pledge of or lien on moneys or funds derived on or after the date every pledge or lien thereon created by or pursuant to said sections shall be discharged and satisfied, (D) will carry out and perform, or cause to be carried out and performed, each and every promise, covenant, agreement or contract made or entered into by the state or on its behalf with the owners of any bonds, (E) will not in any way impair the rights, exemptions or remedies of the owners, and (F) will not limit, modify, rescind, repeal or otherwise alter the rights or obligations of the appropriate officers of the state to impose, maintain, charge or collect the assessments and other revenues or receipts constituting the pledged revenues as may be necessary to produce sufficient revenues to fulfill the terms of the proceedings authorizing the issuance of the bonds, including pledged revenue coverage requirements, and provided nothing herein shall preclude the state from exercising its power, through a change in law, to limit, modify, rescind, repeal or otherwise alter the character of the pledged assessments or revenues or to substitute like or different sources of assessments, taxes, fees, charges or other receipts as pledged revenues if and when adequate provision shall be made by law for the protection of the holders of outstanding bonds pursuant to the proceedings under which the bonds are issued, including changing or altering the method of establishing the special assessment premium surcharges as provided in section 31-354 of the general statutes, as amended by section 6 of this act. The State Bond Commission is authorized to include this covenant of the state, as a contract of the state, in any agreement with the owner of any bonds and in any credit facility or reimbursement agreement with respect to the bonds.

(j) Pending the use and application of any bond proceeds, the proceeds may be invested by, or at the direction of, the State Treasurer in obligations listed in section 3-20 of the general statutes, as amended.

(k) Any revenue bonds issued under the provisions of this section and at any time outstanding may, at any time and from time to time, be refunded by the state by the issuance of its revenue refunding bonds in whatever amounts the State Bond Commission may deem necessary, but not to exceed an amount sufficient to refund the principal of the revenue bonds to be so refunded, to pay any unpaid interest thereon and any premiums and commissions necessary to be paid in connection therewith and to pay costs and expenses which the State Treasurer may deem necessary or advantageous in connection with the authorization, sale and issuance of refunding bonds. Any such refunding may be effected whether the revenue bonds to be refunded shall have matured or shall thereafter mature. All revenue refunding bonds issued hereunder shall be payable solely from the finance account and revenues or other receipts, funds or moneys out of which the revenue bonds to be refunded thereby are payable and shall be subject to and may be secured in accordance with the provisions of this section.

(l) The State Treasurer shall have power, out of any funds available therefor, to purchase revenue bonds issued pursuant to this section. The State Treasurer may hold, pledge, cancel or resell the bonds, subject to and in accordance with agreements with bondholders.

Sec. 9. To the extent that amounts are available in the finance account after providing for the annual debt service on the revenue bonds issued pursuant to section 8 of this act and on the request of the State Treasurer, he may apply the proceeds to the settlement account to settle claims or the operating account to pay costs and expenses of the Second Injury Fund to the extent and in accordance with the proceedings authorizing such revenue bonds.

Sec. 10. This act shall take effect from its passage.

Approved June 6, 1996. Effective June 6, 1996.

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