HOUSE BILL REPORT

HB 1713

BYRepresentatives R. King and Patrick

Revising provisions for industrial insurance dividends and premium refunds.

House Committe on Commerce & Labor

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (11)

      Signed by Representatives Vekich, Chair; Cole, Vice Chair; Patrick, Ranking Republican Member; Jones, R. King, Leonard, O'Brien, Prentice, Smith, Walker and Wolfe.

House Staff:Chris Cordes (786-7117)

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR FEBRUARY 28, 1989

BACKGROUND:

Under the industrial insurance law, state agencies may participate in retrospective rating programs that pay premium refunds if the agency reduces its claim experience during the retrospective plan period.  State law does not allow agencies to retain these premiums between fiscal periods.

SUMMARY:

SUBSTITUTE BILL:  An industrial insurance premium refund account is created in which will be deposited the industrial insurance refunds earned by state agencies through the retrospective rating program.  Funds from the account may be appropriated to the participating agencies for programs within the agencies, with preference being given to programs that promote employee safety and early, appropriate return-to-work for injured employees.  No agency may receive an appropriation greater than the amount earned by the agency as a premium refund.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The provisions of the original bill are deleted that would have permitted agencies to carry premium refunds between fiscal periods.  An industrial insurance premium refund account is created in which will be deposited the industrial insurance refunds earned by state agencies through the retrospective rating program.  Funds from the account may be appropriated to the participating agencies for programs within the agencies, with preference being given to programs that promote employee safety and early, appropriate return-to-work for injured employees.  No agency may receive an appropriation greater than the amount earned by the agency as a premium refund.

Fiscal Note:      Requested March 1, 1989.

Effective Date:The bill contains an emergency clause and takes effect July 1, 1989.

House Committee ‑ Testified For:    Representative Richard King, Prime Sponsor; Gary Moore, Washington Federation of State Employees; Don Scoville, Department of Labor and Industries.

House Committee - Testified Against:      Ralph Wilhelmi, Office of Financial Management.

House Committee - Testimony For:    Returning retrospective refunds to agencies that have good safety programs is an incentive to continue those safety efforts.

House Committee - Testimony For:    Allowing agencies to carry premium refunds between fiscal periods is in opposition to present state policy and also may raise a constitutional issue.  An alternative method of creating incentives for agencies should be developed.