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                                 SENATE AMENDED
        PRIOR PRINTER'S NOS. 4162, 4191, 4364,        PRINTER'S NO. 4760
        4637

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2738 Session of 2006


        INTRODUCED BY ALLEN, COHEN, PERZEL, EACHUS, PHILLIPS,
           S. H. SMITH, BAKER, BALDWIN, BASTIAN, BENNINGHOFF, BIRMELIN,
           BOYD, BUNT, BUXTON, CAPPELLI, CAUSER, CRAHALLA, DENLINGER,
           FLEAGLE, GEORGE, GILLESPIE, GOOD, GOODMAN, HARRIS, HENNESSEY,
           HERSHEY, HESS, HICKERNELL, HUTCHINSON, KAUFFMAN, KOTIK,
           LEACH, MACKERETH, MARKOSEK, McCALL, McILHATTAN, METCALFE,
           R. MILLER, MUSTIO, NICKOL, PICKETT, PYLE, REED, REICHLEY,
           SABATINA, SATHER, SCAVELLO, SCHRODER, STEIL, STERN,
           R. STEVENSON, TANGRETTI, E. Z. TAYLOR, TIGUE, TRUE, WALKO,
           WANSACZ, WILT, ADOLPH, GERBER, DALLY, JOSEPHS, KENNEY,
           SIPTROTH, GEIST, BEYER, GRELL, CLYMER AND GINGRICH,
           JUNE 7, 2006

        SENATOR WENGER, APPROPRIATIONS, IN SENATE, RE-REPORTED AS
           AMENDED, OCTOBER 16, 2006

                                     AN ACT

     1  Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
     2     reenacted and amended, "An act defining the liability of an
     3     employer to pay damages for injuries received by an employe
     4     in the course of employment; establishing an elective
     5     schedule of compensation; providing procedure for the
     6     determination of liability and compensation thereunder; and
     7     prescribing penalties," further providing for schedule of
     8     compensation, for definitions relating to procedure and for
     9     enforcement of standards and processing of claims; providing
    10     for the Workers' Compensation Appeal Board; further providing
    11     for assignment of claims to referees, for rehearings, AND for  <--
    12     counsel fees and for the Office of Adjudication; providing     <--
    13     for an Uninsured Employers Guaranty Fund; and making a
    14     related repeal.

    15     The General Assembly of the Commonwealth of Pennsylvania
    16  hereby enacts as follows:
    17     Section 1.  Section 306(h) of the act of June 2, 1915


     1  (P.L.736, No.338), known as the Workers' Compensation Act,
     2  reenacted and amended June 21, 1939 (P.L.520, No.281) and added
     3  December 5, 1974 (P.L.782, No.263), is amended to read:
     4     Section 306.  The following schedule of compensation is
     5  hereby established:
     6     * * *
     7     (h)  Any person receiving compensation under sections 306(a),
     8  [306(b), 306(c)(23), or section] 306(c)(23) or 307, as a result
     9  of an [accident] injury which occurred prior to [the effective
    10  date of the amendatory act of January 17, 1968 (P.L.6, No.4)
    11  shall have the compensation rate adjusted to the level they
    12  would have received had the injury occurred on the effective
    13  date of the amendatory act of January 17, 1968 (P.L.6, No.4) and
    14  had the injured employe been earning wages equal to ninety
    15  dollars ($90) per week.] August 31, 1993, shall, beginning July   <--
    16  1, 2006 JANUARY 1, 2007, receive a minimum amount of one hundred  <--
    17  dollars ($100) per week. The additional compensation shall be
    18  paid by the self-insured employer or insurance carrier making
    19  payment and shall be reimbursed in advance by the Commonwealth
    20  on a quarterly basis as provided in rules and regulations of the
    21  department. The payment of additional compensation shall be made
    22  by the carrier or self-insured employer only during those fiscal
    23  years for which appropriations are made to cover reimbursement.
    24     Section 2.  Section 401 of the act, amended February 8, 1972
    25  (P.L.25, No.12), July 2, 1993 (P.L.190, No.44) and June 24, 1996
    26  (P.L.350, No.57), is amended to read:
    27     Section 401.  The term "referee," when used in this act,
    28  shall mean a Workers' Compensation Judge of the Department of
    29  Labor and Industry, appointed by and subject to the general
    30  supervision of the Secretary of Labor and Industry for the
    20060H2738B4760                  - 2 -     

     1  purpose of conducting departmental hearings under this act. The
     2  secretary may establish different classes of these judges. Any
     3  reference in any statute to a workmen's compensation referee
     4  shall be deemed to be a reference to a workers' compensation
     5  judge.
     6     The term "board," when used in this article, shall mean the
     7  Workers' Compensation Appeal Board, a departmental
     8  administrative board as provided in sections 202, 207, 503 and
     9  2208 of the act of April 9, 1929 (P.L.177), known as "The
    10  Administrative Code of 1929," exercising its powers and
    11  performing its duties as an appellate board independently of the
    12  Secretary of Labor and Industry and any other official of the
    13  department.
    14     The term "fund," when used in this article, shall mean the
    15  State Workmen's Insurance Fund of this Commonwealth, the State-
    16  operated insurance carrier from which workmen's compensation
    17  insurance policies may be purchased by employers to cover all
    18  risks of liability under this act including those declined by
    19  private carriers.
    20     The terms "insurer" and "carrier," when used in this article,
    21  shall mean the State Workmen's Insurance Fund or other insurance
    22  carrier which has insured the employer's liability under this
    23  act, or the employer in cases of self-insurance.
    24     The term "employer," when used in this article, shall mean
    25  the employer as defined in article one of this act, or his duly
    26  authorized agent, or his insurer if such insurer has assumed the
    27  employer's liability or the fund if the employer be insured
    28  therein.
    29     The term "resolution hearing," when used in this article,
    30  shall mean a procedure established by the Office of Adjudication
    20060H2738B4760                  - 3 -     

     1  with the sole purpose of providing a venue to present a
     2  compromise and release to a WORKERS' COMPENSATION judge in an     <--
     3  expedited fashion.
     4     The term "mediation," when used in this article, shall mean a
     5  conference conducted by a workers' compensation judge, but not
     6  necessarily the judge assigned to the actual case involving the
     7  parties, and shall require the attendance in person OR BY         <--
     8  TELECONFERENCE of all parties including the claimant and
     9  employer, and their respective counsel. The representative from   <--
    10  the employer must have requisite authority to bring about
    11  settlement of the case or must have the ability to obtain said
    12  authority during the course of the mediation., IF ANY. ALL        <--
    13  PARTIES SHALL HAVE REQUISITE AUTHORITY TO ACCEPT, MODIFY OR
    14  REJECT SETTLEMENT PROPOSALS OFFERED AT A MEDIATION, EITHER AT
    15  THE MEDIATION OR WITHIN A REASONABLE TIME PERIOD AFTER THE
    16  MEDIATION AS ESTABLISHED BY THE WORKERS' COMPENSATION JUDGE.
    17     Section 3.  Section 401.1 of the act, added February 8, 1972
    18  (P.L.25, No.12), is amended to read:
    19     Section 401.1.  The department shall, in fulfillment of its
    20  responsibilities under this act, enforce the time standards and
    21  other performance standards herein provided for the prompt
    22  processing of injury cases and payment of compensation when due
    23  by employers and insurers both upon petition by a party or on
    24  its own motion. In any case in which compensation has not been
    25  timely paid, or in which notice of denial of compensation has
    26  been given, the department shall hear and determine all claim
    27  petitions for compensation filed by employes or their
    28  dependents. The department shall also hear and determine all
    29  petitions by employers or insurers to suspend, terminate, reduce
    30  or otherwise modify compensation payments, awards, or agreements
    20060H2738B4760                  - 4 -     

     1  and petitions by employes or their dependents to increase,
     2  modify or reinstate compensation payments, awards, or
     3  agreements. Hearings shall be scheduled forthwith upon receipt
     4  of the claim petition or other petition, as the case may be, and
     5  determinations thereon shall be made promptly and in conformity
     6  with time standards herein or hereunder established. Such
     7  hearings shall be conducted by a [referee] workers' compensation
     8  judge or other hearing officer designated by the secretary.
     9     Each workers' compensation judge assigned to conduct hearings
    10  shall set forth a mandatory trial schedule at the first hearing.
    11  This trial schedule shall include specific deadlines for the
    12  presentation of evidence by the parties and dates for future
    13  hearings. Judges shall strictly enforce their schedules, and no
    14  party will be excused from honoring the schedule absent good
    15  cause shown. Every trial schedule shall include a specific date
    16  and time for a mediation conference. Mediations shall take place
    17  no later than thirty (30) days prior to the date set for filing
    18  proposed findings of fact and conclusions of law or legal briefs
    19  or memoranda, unless, upon good cause shown, the workers'
    20  compensation judge determines mediation would be futile. Within
    21  one hundred twenty (120) days of the effective date of this
    22  paragraph, the Office of Adjudication shall create a resolution
    23  hearing procedure to hear compromise and release agreements in
    24  an expedited manner. The hearing shall be held within fourteen
    25  (14) business days of notice of a commutation or compromise and
    26  release.
    27     The workers' compensation judge conducting a resolution
    28  hearing will not be required to have received formal assignment
    29  by the Workers' Compensation Bureau of the compromise and
    30  release petition prior to conducting the resolution hearing. At
    20060H2738B4760                  - 5 -     

     1  the time of hearing, the parties shall submit proof of filing a
     2  petition to the workers' compensation judge hearing the
     3  compromise and release matter. A workers' compensation judge
     4  shall render a decision within five (5) business days of the
     5  hearing.
     6     Delays in hearings will be granted according to rules
     7  established by the department, and any party who unreasonably
     8  delays a hearing will be subject to a penalty as provided in
     9  section 435. Subject to the provisions of the act of July 31,
    10  1968 (P.L.769, No.240), known as the "Commonwealth Documents
    11  Law," the department shall adopt such rules and regulations as
    12  it finds necessary or desirable for the enforcement of this act.
    13     Section 4.  The act is amended by adding a section to read:
    14     Section 401.2.  (a)  The Workers' Compensation Appeal Board
    15  shall consist of at least three, and not more than fifteen,
    16  appointed members MEMBERS APPOINTED BY THE GOVERNOR, of whom the  <--
    17  Governor shall designate one as chairman.; the Governor may, on   <--
    18  the recommendation of the Secretary of Labor and Industry,
    19  increase the number of appointed members on the board. An en
    20  banc board shall consist of all the appointed members on the
    21  board, a majority of which shall constitute a quorum, and no
    22  action of the board shall be valid unless it shall have the
    23  concurrence of such number of members and that number
    24  constitutes a majority of the votes cast. Where there are more
    25  than three appointed members, the board may sit in panels of
    26  three, all three members shall constitute a quorum and no action
    27  taken by a panel shall be valid unless it shall have the
    28  concurrence of a majority of the panel members. When a majority
    29  of any such panel has reached a decision, the chair of the panel
    30  shall assign the writing of an opinion and order to a panel
    20060H2738B4760                  - 6 -     

     1  member. The panel member shall prepare a draft opinion and award
     2  and transmit it to the secretary of the board for circulation
     3  and review to all members of the Workers' Compensation Appeal
     4  Board. Each member of the Workers' Compensation Appeal Board
     5  shall be entitled to a period of thirty (30) days from the date
     6  a draft opinion on behalf of a majority of a panel is placed in
     7  circulation by the secretary of the board in which to concur in,
     8  comment on, object to or dissent from the proposed draft opinion
     9  and award. Concurrences, comments, objections and dissents shall
    10  be transmitted to the chairman of the board, the secretary of
    11  the board and the board member responsible for writing the draft
    12  opinion. A board member who does not submit a written response
    13  to a proposed draft opinion and order circulated shall be deemed
    14  to concur in the opinion and order as drafted and initially
    15  placed in circulation in conformity with the procedure set forth
    16  in subsection (a). If at the conclusion of the thirty-day (30-
    17  day) period a majority of the members of the board have failed
    18  to concur in the draft opinion and order as circulated, the
    19  Chairman of the Workers' Compensation Appeal Board, in
    20  consultation with the chair of the panel that heard the case in
    21  question shall reassign the opinion to a board member for the
    22  purpose of redrafting and circulating a draft opinion and order
    23  in conformity with the procedures articulated in this subsection
    24  (a). A vacancy on the board shall not impair the right of a
    25  quorum to exercise all the rights and perform all the duties of
    26  the board. The Secretary of Labor and Industry, with the
    27  approval of the Governor, shall appoint a secretary to the
    28  Workers' Compensation Appeal Board, who shall receive such
    29  salary as the Secretary of Labor and Industry, with the approval
    30  of the Governor, shall determine.
    20060H2738B4760                  - 7 -     

     1     (b)  Members of the board shall be required to annually
     2  attend and participate in a minimum of eight (8) hours of
     3  workers' compensation related education approved by the
     4  Pennsylvania Supreme Court Continuing Legal Education Board or a
     5  similar reputable agency approved by the department.
     6     (c)  A member of the Workers' Compensation Appeal Board shall
     7  conform to the following code of ethics:
     8     (1)  Avoid impropriety and the appearance of impropriety in
     9  all activities.
    10     (2)  Perform duties impartially and diligently.
    11     (3)  Avoid ex parte communications in any contested, on-the-
    12  record matter pending before the department.
    13     (4)  Abstain from expressing publicly, except in
    14  administrative disposition or adjudication, personal views on
    15  the merits of an adjudication pending before the department and
    16  require similar abstention on the part of department personnel
    17  subject to the member's direction and control.
    18     (5)  Require staff and personnel subject to the member's
    19  direction and control to observe the standards of fidelity and
    20  diligence that apply to a member.
    21     (6)  Refer to the Secretary of Labor and Industry
    22  disciplinary measures against department personnel subject to
    23  the member's direction and control for unethical conduct.
    24     (7)  Disqualify himself from proceedings in which
    25  impartiality may be reasonably questioned.
    26     (8)  Keep informed about the personal and fiduciary interests
    27  of himself and his immediate family.
    28     (9)  Regulate outside activities to minimize the risk of
    29  conflict with official duties. A member may speak, write or
    30  lecture, and reimbursed expenses, honoraria, royalties or other
    20060H2738B4760                  - 8 -     

     1  money received in connection therewith shall be disclosed
     2  annually. A disclosure statement shall be filed with the
     3  Secretary of Labor and Industry and the State Ethics Commission
     4  and shall be open to inspection by the public during the normal
     5  business hours of the department and the commission during the
     6  tenure of the member.
     7     (10)  Refrain from direct or indirect solicitation of funds
     8  for political, educational, religious, charitable, fraternal or
     9  civic purposes: Provided, however, That a member may be an
    10  officer, a director or a trustee of such organizations.
    11     (11)  Refrain from financial or business dealings which would
    12  tend to reflect adversely on impartiality. A member may hold and
    13  manage investments which are not incompatible with the duties of
    14  office.
    15     (12)  Uphold the integrity and independence of the workers'
    16  compensation system.
    17     (d)  Individuals who are currently serving as members of the   <--
    18  Workers' Compensation Appeal Board shall continue to serve,
    19  subject to the provisions of subsection (c).
    20     (e) (D)  The secretary shall ensure that there are at least    <--
    21  two opinion writers assigned to each member of the board.
    22  Opinion writers employed by or on behalf of the board whose
    23  duties involve, in whole or in part, the writing or drafting of
    24  proposed opinions, decisions or orders for the board or any
    25  member of the board shall be required to annually attend and
    26  participate in a minimum of eight (8) hours of continuing legal
    27  education in the field of workers' compensation practice and
    28  procedure in courses approved by the Pennsylvania Supreme Court
    29  Continuing Legal Education Board.
    30     Section 5.  Section 414 of the act, amended February 8, 1972
    20060H2738B4760                  - 9 -     

     1  (P.L.25, No.12), is amended to read:
     2     Section 414.  Whenever a claim petition or other petition is
     3  presented to the department, the department shall, by general
     4  rules or special order, assign it to a [referee] workers'
     5  compensation judge for hearing. When assigning petitions,
     6  including those for resolution hearings, the department shall
     7  not assign to a particular workers' compensation judge more than
     8  seventy-five per centum of the petitions from a particular
     9  county.
    10     The department shall serve upon each adverse party a copy of
    11  the petition, together with a notice that such petition will be
    12  heard by the [referee] WORKERS' COMPENSATION JUDGE to whom it     <--
    13  has been assigned (giving his name and address) as the case may
    14  be, and, shall mail the original petition to such [referee]       <--
    15  WORKERS' COMPENSATION JUDGE, together with copies of the notices  <--
    16  served upon the adverse parties.
    17     Section 6.  Section 426 of the act, amended February 8, 1972   <--
    18  (P.L.25, No.12) and repealed in part April 28, 1978 (P.L.202,
    19  No.53), is amended to read:
    20     Section 426.  The board, upon petition of any party and upon
    21  cause shown, may grant a rehearing of any petition upon which
    22  the board has made an award or disallowance of compensation or
    23  other order or ruling, or upon which the board has sustained or
    24  reversed any action of a referee; but such rehearing shall not
    25  be granted more than eighteen months after the board has made
    26  such award, disallowance, or other order or ruling, or has
    27  sustained or reversed any action of the referee: Provided,
    28  however, That nothing contained in this section shall limit or
    29  restrict the right of the board, or a referee to review, modify,
    30  set aside, reinstate, suspend, or terminate, an original or
    20060H2738B4760                 - 10 -     

     1  supplemental agreement, or an award in accordance with the
     2  provisions of section four hundred thirteen of this article. A
     3  rehearing shall be conducted by the board en banc.
     4     Section 7 6.  Section 442 of the act, amended June 24, 1996    <--
     5  (P.L.350, No.57), is amended to read:
     6     Section 442.  All counsel fees, agreed upon by claimant and
     7  his attorneys, for services performed in matters before any
     8  workers' compensation judge or the board, whether or not allowed
     9  as part of a judgment, shall be approved by the workers'
    10  compensation judge or board as the case may be, providing the
    11  counsel fees do not exceed twenty per centum of the amount
    12  awarded. [The official conducting any hearing, upon cause shown,
    13  may allow a reasonable attorney fee exceeding twenty per centum
    14  of the amount awarded at the discretion of the hearing
    15  official.]
    16     In cases where the efforts of claimant's counsel produce a
    17  result favorable to the claimant but where no immediate award of
    18  compensation is made such as in cases of termination or
    19  suspension the hearing official shall allow or award reasonable
    20  counsel fees, as agreed upon by claimant and his attorneys,
    21  without regard to any per centum. In the case of compromise and
    22  release settlement agreements, where there is no underlying       <--
    23  litigation, no counsel fees shall exceed twenty per centum of
    24  the workers' compensation settlement amount.
    25     Section 8.  Section 1401 of the act, added June 24, 1996       <--
    26  (P.L.350, No.57), is amended to read:
    27     Section 1401.  (a)  There is created within the department an
    28  office to be known as the Office of Adjudication.
    29     (b)  The secretary shall appoint as many qualified and
    30  competent workers' compensation judges as necessary to conduct
    20060H2738B4760                 - 11 -     

     1  matters under this act.
     2     (c)  The secretary shall set normal working hours for
     3  workers' compensation judges. During those hours, workers'
     4  compensation judges shall devote full time to their official
     5  duties and shall perform no work inconsistent with their duties
     6  as workers' compensation judges. Workers' compensation judges
     7  shall not engage in any unapproved activities during normal
     8  working hours.
     9     (d)  Workers' compensation judges shall be afforded
    10  employment security as provided by the act of August 5, 1941
    11  (P.L.752, No.286), known as the "Civil Service Act."
    12     (e)  Compensation for workers' compensation judges shall be
    13  established by the Executive Board. Compensation for workers'
    14  compensation judges shall be established by the executive board
    15  at a pay range not less than the pay range for administrative
    16  law judges appointed under section 212 of the act of April 12,
    17  1951 (P.L.90, No.21), known as the "Liquor Code," and 66 Pa.C.S.
    18  § 304 (relating to administrative law judges).
    19     (f)  The secretary shall develop and require all workers'
    20  compensation judges to complete a course of training and
    21  instruction in the duties of their respective offices and pass
    22  an examination prior to assuming office. The course of training
    23  and instruction shall not exceed four weeks in duration and
    24  shall consist of a minimum of forty hours of class instruction
    25  in medicine and law.
    26     (g)  The secretary shall develop a continuing professional
    27  development plan for workers' compensation judges which shall
    28  require the annual completion of twenty hours of approved
    29  continuing professional development courses.
    30     (h)  The secretary may adopt additional rules to establish
    20060H2738B4760                 - 12 -     

     1  standards and procedures for the evaluation, training, promotion
     2  and discipline of workers' compensation judges.
     3     Section 9 7.  The act is amended by adding an article to       <--
     4  read:
     5                            ARTICLE XVI
     6                 UNINSURED EMPLOYERS GUARANTY FUND
     7  Section 1601.  Definitions.
     8     The following words and phrases when used in this article
     9  shall have the meanings given to them in this section unless the
    10  context clearly indicates otherwise:
    11     "Compensation."  Benefits paid pursuant to sections 306 and
    12  307.
    13     "Employer."  Any employer as defined in section 103. The term
    14  does not include a person that qualifies as a self-insured
    15  employer under section 305.
    16     "Fund."  The Uninsured Employers Guaranty Fund established in
    17  section 1602. The fund shall not be considered an insurer and
    18  shall not be subject to penalties, unreasonable contest fees or
    19  any reporting and liability requirements under section 440.
    20     "Policyholder."  A holder of a workers' compensation policy
    21  issued by the State Workers' Insurance Fund, or an insurer that
    22  is a domestic, foreign or alien mutual association or stock
    23  company writing workers' compensation insurance on risks which
    24  would be covered by this act.
    25     "Secretary."  The Secretary of Labor and Industry of the
    26  Commonwealth.
    27  Section 1602.  Fund.
    28     (a)  Establishment.--
    29         (1)  There is established a special fund to be known as
    30     the Uninsured Employers Guaranty Fund.
    20060H2738B4760                 - 13 -     

     1         (2)  The fund shall be maintained as a separate fund in
     2     the State Treasury subject to the procedures and provisions
     3     set forth in this article.
     4     (b)  Source.--The sources of the fund are:
     5         (1)  Assessments provided for under section 1607.
     6         (2)  Reimbursements or restitution.
     7         (3)  Interest on money in the fund.
     8     (c)  Use.--The administrator shall establish and maintain the
     9  fund for the exclusive purpose of paying to any claimant or his
    10  dependents workers' compensation benefits due and payable under
    11  this act and the Occupational Disease Act and any costs
    12  specifically associated therewith where the employer liable for
    13  the payments failed to carry workers' compensation insurance      <--
    14  coverage INSURE OR SELF-INSURE ITS WORKERS' COMPENSATION          <--
    15  LIABILITY UNDER SECTION 305 at the time the injuries took place.
    16     (d)  Administration.--The secretary shall be the
    17  administrator of the fund and shall have the power to collect
    18  money for and disburse money from the fund.
    19     (e)  Status.--The fund shall have all of the same rights,
    20  duties, responsibilities and obligations as an insurer.
    21  Section 1603.  Claims.
    22     (a)  Scope.--This section shall apply to claims for an injury
    23  or a death which occurs on or after the effective date of this
    24  article.
    25     (b)  Time.--An injured worker shall notify the fund within 45
    26  days after the worker knew that the employer was uninsured. or    <--
    27  received confirmation of noninsurance from the rating bureau or
    28  any other agency charged with providing notice of a claim
    29  against the fund. The department shall have adequate time to
    30  monitor the claim and shall determine the obligations of the
    20060H2738B4760                 - 14 -     

     1  employer. No compensation shall be paid from this fund until
     2  notice is given and the department determines that the employer
     3  failed to voluntarily accept and pay the claim or subsequently
     4  defaulted on payments of compensation. No compensation shall be
     5  due until notice is given.
     6     (c)  Process.--After notice, the fund shall process the claim
     7  in accordance with the provisions of this act.
     8     (d)  Petitions.--No claim petition may be filed against the
     9  fund until at least 21 days after notice of the claim is made to
    10  the fund.
    11  Section 1604.  Claim petition.
    12     If a claim for compensation is filed under this article and
    13  the claim is not voluntarily accepted as compensable, the
    14  employee may file a claim petition naming both the employer and
    15  the fund as defendants. A responsive pleading filed by the fund   <--
    16  to the claim petition shall serve as an answer on behalf of the
    17  uninsured employer. Failure of the uninsured employer to answer
    18  a claim petition shall not serve as an admission or otherwise
    19  bind the fund under section 416.
    20  Section 1605.  Department.
    21     (a)  Insurance inquiry.--Within ten days of notice of a
    22  claim, the fund shall demand from the employer proof of
    23  applicable insurance coverage. Within 14 days from the date of
    24  the fund's request, the employer must provide proof of
    25  insurance. If the employer does not provide proof, there shall
    26  be rebuttable presumption of uninsurance. and the fund shall      <--
    27  serve as the uninsured employer's insurer for purposes of the
    28  claim in question.
    29     (b)  Reimbursement.--The department shall, on behalf of the
    30  fund, exhaust all remedies at law against the uninsured employer
    20060H2738B4760                 - 15 -     

     1  in order to collect the amount of a voluntary payment or award,
     2  including voluntary payment or award itself and reimbursement of
     3  costs, interest, penalties, fees under section 440 and costs of
     4  the fund's attorney, which have been paid by the fund. The fund
     5  shall also be reimbursed for costs or attorney fees which are
     6  incurred in seeking reimbursement under this subsection. The
     7  department is authorized to investigate violations of section
     8  305 for prosecution of the uninsured employer pursuant to
     9  section 305(b) and shall pursue such prosecutions through
    10  coordination with the appropriate prosecuting authority. Any
    11  restitution obtained shall be paid to the fund.
    12     (c)  Bankruptcy.--The department has the right to appear and
    13  represent the fund as a creditor in a bankruptcy proceeding
    14  involving the uninsured employer.
    15     (d)  Liens.--If payments of any nature have been made by the
    16  fund on behalf of an uninsured employer, the fund shall file a
    17  certified proof of payment with the prothonotary of a court of
    18  common pleas and the prothonotary shall enter the entire balance
    19  as a judgment against the employer. The judgment shall be a
    20  statutory lien against property of the employer IN THE MANNER     <--
    21  SET FORTH IN SECTION 308.1 OF THE ACT OF DECEMBER 5, 1936 (2ND
    22  SP.SESS., 1937 P.L.2897, NO.1), KNOWN AS THE UNEMPLOYMENT
    23  COMPENSATION LAW, and execution may issue on it. The fund has
    24  the right to update the amount of the lien as payments are made.
    25  Section 1606.  Other remedies.
    26     Nothing contained in this article shall serve to abrogate the
    27  provisions of section 305(d) allowing the claimant or dependents
    28  to bring a direct suit for damages at law as provided by Article
    29  II. The fund shall be entitled to assert rights to subrogation
    30  under section 319 for recovery made from the employer or any
    20060H2738B4760                 - 16 -     

     1  other third party.
     2  Section 1607.  Assessments.
     3     For the purpose of establishing and maintaining the fund, on   <--
     4  the effective date of this section, and on or before January 31
     5  of each year thereafter, the department shall calculate the
     6  amount necessary to maintain the fund and shall assess insurers
     7  and self-insured employers as, in the discretion of the
     8  department, is necessary to provide an amount sufficient to pay
     9  outstanding and anticipated claims in a timely manner and meet
    10  the costs of the department to administer the fund. Assessments
    11  to maintain the fund shall be imposed, collected and remitted in
    12  the same manner as administration fund assessments under section
    13  446, and the regulations promulgated thereunder. THE SUM OF       <--
    14  $1,000,000 IS HEREBY TRANSFERRED FROM THE ADMINISTRATION FUND
    15  ESTABLISHED UNDER SECTION 446 TO THE FUND FOR OPERATION OF THE
    16  FUND FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS
    17  SECTION THROUGH JUNE 30, 2007. THE DEPARTMENT SHALL CALCULATE
    18  THE AMOUNT NECESSARY TO MAINTAIN THE FUND AND SHALL ASSESS
    19  INSURERS AND SELF-INSURED EMPLOYERS AS IS NECESSARY TO PROVIDE
    20  AN AMOUNT SUFFICIENT TO PAY OUTSTANDING AND ANTICIPATED CLAIMS
    21  IN THE FOLLOWING YEAR IN A TIMELY MANNER AND TO MEET THE COSTS
    22  OF THE DEPARTMENT TO ADMINISTER THE FUND. THE FUND SHALL BE
    23  MAINTAINED IN THE SAME MANNER AS THE WORKERS' COMPENSATION
    24  ADMINISTRATIVE FUND UNDER SECTION 446 AND THE REGULATIONS
    25  THEREUNDER. IN NO EVENT SHALL ANY ANNUAL ASSESSMENT EXCEED 0.1%
    26  OF THE TOTAL COMPENSATION PAID BY ALL INSURERS OR SELF-INSURED
    27  EMPLOYERS DURING THE PREVIOUS CALENDAR YEAR.
    28  Section 1608.  Regulations.
    29     The department may promulgate regulations for the
    30  administration and enforcement of this article.
    20060H2738B4760                 - 17 -     

     1     Section 10 8.  Repeals are as follows:                         <--
     2         (1)  The General Assembly declares that the repeal under
     3     paragraph 2 is necessary to effectuate the addition of
     4     section 401.2 of the act.
     5         (2)  Section 441 of the act of April 9, 1929 (P.L.177,
     6     No.175), known as The Administrative Code of 1929, is
     7     repealed.
     8     Section 11 9.  This act shall take effect as follows:          <--
     9         (1)  The amendment of section 401.1 of the act shall take
    10     effect immediately.
    11         (2)  This section shall take effect immediately.
    12         (3)  The remainder of this act shall take effect in 60
    13     days.












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