AN ACT relating to the Department of Workers' Claims and declaring an emergency.

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AN ACT relating to the Department of Workers' Claims and declaring an 1
emergency. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
SECTION 1. A NEW SECTION OF KRS CHAPTER 342 IS CREATED TO 4
READ AS FOLLOWS: 5
(1) There is hereby created the Department of Workers' Claims administratively 6
attached to the Office of the Governor, which shall be headed by a commissioner 7
appointed by the Governor and confirmed by the Senate in accordance with 8
Section 6 of this Act. 9
(2) The department shall be divided for administrative purposes into the: 10
(a) Office of the Commissioner; 11
(b) Office of General Counsel: 12
(c) Office of Administrative Law Judges; 13
(d) Division of Claims Processing; 14
(e) Division of Security and Compliance; 15
(f) Division of Workers' Compensation Funds; and 16
(g) Division of Specialist and Medical Services. 17
(3) The Office of Administrative Law Judges shall be headed by a chief 18
administrative law judge appointed in accordance with Section 7 of this Act. 19
(4) Each division in the department shall be headed by a director appointed by the 20
commissioner with the approval of the Governor in accordance with KRS 12.050. 21
(5) The Workers' Compensation Board shall be attached to the Depa rtment of 22
Workers' Claims for administrative purposes only. 23
Section 2. KRS 342.0011 is amended to read as follows: 24
As used in this chapter, unless the context otherwise requires: 25
(1) "Injury" means any work -related traum atic event or series of traumatic events, 26
including cumulative trauma, arising out of and in the course of employment which 27
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is the proximate cause producing a harmful change in the human organism 1
evidenced by objective medical findings. "Injury" does not include the effects of the 2
natural aging process, and does not include any communicable disease unless the 3
risk of contracting the disease is increased by the nature of the employment. 4
"Injury" when used generally, unless the context indicates otherwise, sh all include 5
an occupational disease and damage to a prosthetic appliance, but shall not include 6
a psychological, psychiatric, or stress-related change in the human organism, unless 7
it is a direct result of a physical injury; 8
(2) "Occupational disease" mean s a disease arising out of and in the course of the 9
employment; 10
(3) An occupational disease as defined in this chapter shall be deemed to arise out of 11
the employment if there is apparent to the rational mind, upon consideration of all 12
the circumstances, a causal connection between the conditions under which the 13
work is performed and the occupational disease, and which can be seen to have 14
followed as a natural incident to the work as a result of the exposure occasioned by 15
the nature of the employment and whi ch can be fairly traced to the employment as 16
the proximate cause. The occupational disease shall be incidental to the character of 17
the business and not independent of the relationship of employer and employee. An 18
occupational disease need not have been for eseen or expected but, after its 19
contraction, it must appear to be related to a risk connected with the employment 20
and to have flowed from that source as a rational consequence; 21
(4) "Injurious exposure" shall mean that exposure to occupational hazard which would, 22
independently of any other cause whatsoever, produce or cause the disease for 23
which the claim is made; 24
(5) "Death" means death resulting from an injury or occupational disease; 25
(6) "Carrier" means any insurer, or legal representative thereof, authorized to insure the 26
liability of employers under this chapter and includes a self-insurer; 27
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(7) "Self-insurer" is an employer who has been authorized under the provisions of this 1
chapter to carry his own liability on his employees covered by this chapter; 2
(8) "Department" means the Department of Workers' Claims administratively attached 3
to the office of the Governor[in the Education and Labor Cabinet]; 4
(9) "Commissioner" means the commissioner of the Department of Workers' Claims [ 5
under the direction and sup ervision of the secretary of the Education and Labor 6
Cabinet]; 7
(10) "Board" means the Workers' Compensation Board; 8
(11) (a) "Temporary total disability" means the condition of an employee who has not 9
reached maximum medical improvement from an injury and has not reached a 10
level of improvement that would permit a return to employment; 11
(b) "Permanent partial disability" means the condition of an employee who, due 12
to an injury, has a permanent disability rating but retains the ability to work; 13
and 14
(c) "Permanent total disability" means the condition of an employee who, due to 15
an injury, has a permanent disability rating and has a complete and permanent 16
inability to perform any type of work as a result of an injury, except that total 17
disability shall be irrebuttably presumed to exist for an injury that results in: 18
1. Total and permanent loss of sight in both eyes; 19
2. Loss of both feet at or above the ankle; 20
3. Loss of both hands at or above the wrist; 21
4. Loss of one (1) foot at or above the ankle and the loss of one (1) hand at 22
or above the wrist; 23
5. Permanent and complete paralysis of both arms, both legs, or one (1) 24
arm and one (1) leg; 25
6. Incurable insanity or imbecility; or 26
7. Total loss of hearing; 27
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(12) "Income benefits" means payments made under the provisions of this chapter to the 1
disabled worker or his dependents in case of death, excluding medical and related 2
benefits; 3
(13) "Medical and related benefits" means payments made for medical, hospital, burial, 4
and other services as provided in this chapter, other than income benefits; 5
(14) "Compensation" means all payments made under the provisions of this chapter 6
representing the sum of income benefits and medical and related benefits; 7
(15) "Medical services" means medical, surgical, dental, hospital, nursing, and medical 8
rehabilitation services, medicines, and fittings for artificial or prosthetic devices; 9
(16) "Person" means any individual, partnership, limited partnership, limited liability 10
company, firm, association, trust, joint venture, corporation, or legal representative 11
thereof; 12
(17) "Wages" means, in addition to money payments for services rendered, the 13
reasonable value of board, rent, housing, lodging, fuel, or similar advantages 14
received from the employer, and gratuities received in the course of employment 15
from persons other than the employer as evidenced by the employee's federal and 16
state tax returns; 17
(18) "Agriculture" means the operation of farm premises, including the planting, 18
cultivation, producing, growing, harvesting, and preparation for market of 19
agricultural or horticultural commodities thereon, the raising of livestock for food 20
products and for racing purposes, and poultry thereon, and any work performed as 21
an incident to or in conj unction with the farm operations, including the sale of 22
produce at on-site markets and the processing of produce for sale at on-site markets. 23
It shall not include the commercial processing, packing, drying, storing, or canning 24
of such commodities for market, or making cheese or butter or other dairy products 25
for market; 26
(19) "Beneficiary" means any person who is entitled to income benefits or medical and 27
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related benefits under this chapter; 1
(20) "United States," when used in a geographic sense, means the se veral states, the 2
District of Columbia, the Commonwealth of Puerto Rico, the Canal Zone, and the 3
territories of the United States; 4
(21) "Alien" means a person who is not a citizen, a national, or a resident of the United 5
States or Canada. Any person not a citizen or national of the United States who 6
relinquishes or is about to relinquish his residence in the United States shall be 7
regarded as an alien; 8
(22) "Insurance carrier" means every insurance carrier or insurance company authorized 9
to do business in t he Commonwealth writing workers' compensation insurance 10
coverage and includes the Kentucky Employers Mutual Insurance Authority and 11
every self-insured group operating under the provisions of this chapter; 12
(23) (a) "Severance or processing of coal" means al l activities performed in the 13
Commonwealth at underground, auger, and surface mining sites; all activities 14
performed at tipple or processing plants that clean, break, size, or treat coal; 15
and all activities performed at coal loading facilities for trucks, railroads, and 16
barges. Severance or processing of coal shall not include acts performed by a 17
final consumer if the acts are performed at the site of final consumption. 18
(b) "Engaged in severance or processing of coal" shall include all individuals, 19
partnerships, limited partnerships, limited liability companies, corporations, 20
joint ventures, associations, or any other business entity in the Commonwealth 21
which has employees on its payroll who perform any of the acts stated in 22
paragraph (a) of this subsection, regardless of whether the acts are performed 23
as owner of the coal or on a contract or fee basis for the actual owner of the 24
coal. A business entity engaged in the severance or processing of coal, 25
including but not limited to administrative or selling func tions, shall be 26
considered wholly engaged in the severance or processing of coal for the 27
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purpose of this chapter. However, a business entity which is engaged in a 1
separate business activity not related to coal, for which a separate premium 2
charge is not ma de, shall be deemed to be engaged in the severance or 3
processing of coal only to the extent that the number of employees engaged in 4
the severance or processing of coal bears to the total number of employees. 5
Any employee who is involved in the business of severing or processing of 6
coal and business activities not related to coal shall be prorated based on the 7
time involved in severance or processing of coal bears to his total time; 8
(24) "Premium" for every self-insured group means any and all assessments levied on its 9
members by such group or contributed to it by the members thereof. For special 10
fund assessment purposes, "premium" also includes any and all membership dues, 11
fees, or other payments by members of the group to associations or other entities 12
used for underwriting, claims handling, loss control, premium audit, actuarial, or 13
other services associated with the maintenance or operation of the self -insurance 14
group; 15
(25) (a) "Premiums received" for policies effective on or after January 1, 1994, for 16
insurance companies means direct written premiums as reported in the annual 17
statement to the Department of Insurance by insurance companies, except that 18
"premiums received" includes premiums charged off or deferred, and, on 19
insurance policies or other evidenc e of coverage with provisions for 20
deductibles, the calculated cost for coverage, including experience 21
modification and premium surcharge or discount, prior to any reduction for 22
deductibles. The rates, factors, and methods used to calculate the cost for 23
coverage under this paragraph for insurance policies or other evidence of 24
coverage with provisions for deductibles shall be the same rates, factors, and 25
methods normally used by the insurance company in Kentucky to calculate 26
the cost for coverage for insuranc e policies or other evidence of coverage 27
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without provisions for deductibles, except that, for insurance policies or other 1
evidence of coverage with provisions for deductibles effective on or after 2
January 1, 1995, the calculated cost for coverage shall not include any 3
schedule rating modification, debits, or credits. For policies with provisions 4
for deductibles with effective dates on or after January 1, 1995, assessments 5
shall be imposed on premiums received as calculated by the deductible 6
program adjustment. The cost for coverage calculated under this paragraph by 7
insurance companies that issue only deductible insurance policies in Kentucky 8
shall be actuarially adequate to cover the entire liability of the employer for 9
compensation under this chapter, incl uding all expenses and allowances 10
normally used to calculate the cost for coverage. For policies with provisions 11
for deductibles with effective dates of May 6, 1993, through December 31, 12
1993, for which the insurance company did not report premiums and rem it 13
special fund assessments based on the calculated cost for coverage prior to the 14
reduction for deductibles, "premiums received" includes the initial premium 15
plus any reimbursements invoiced for losses, expenses, and fees charged 16
under the deductibles. Th e special fund assessment rates in effect for 17
reimbursements invoiced for losses, expenses, or fees charged under the 18
deductibles shall be those percentages in effect on the effective date of the 19
insurance policy. For policies covering covered employees ha ving a co -20
employment relationship with a professional employer organization and a 21
client as defined in KRS Chapter 336, "premiums received" means premiums 22
calculated using the experience modification factor of each client as defined 23
in KRS Chapter 336 for each covered employee for that portion of the payroll 24
pertaining to the covered employee. 25
(b) "Direct written premium" for insurance companies means the gross premium 26
written less return premiums and premiums on policies not taken but 27
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including policy and membership fees. 1
(c) "Premium," for policies effective on or after January 1, 1994, for insurance 2
companies means all consideration, whether designated as premium or 3
otherwise, for workers' compensation insurance paid to an insurance company 4
or its represe ntative, including, on insurance policies with provisions for 5
deductibles, the calculated cost for coverage, including experience 6
modification and premium surcharge or discount, prior to any reduction for 7
deductibles. The rates, factors, and methods used t o calculate the cost for 8
coverage under this paragraph for insurance policies or other evidence of 9
coverage with provisions for deductibles shall be the same rates, factors, and 10
methods normally used by the insurance company in Kentucky to calculate 11
the co st for coverage for insurance policies or other evidence of coverage 12
without provisions for deductibles, except that, for insurance policies or other 13
evidence of coverage with provisions for deductibles effective on or after 14
January 1, 1995, the calculated cost for coverage shall not include any 15
schedule rating modifications, debits, or credits. For policies with provisions 16
for deductibles with effective dates on or after January 1, 1995, assessments 17
shall be imposed as calculated by the deductible program adjustment. The cost 18
for coverage calculated under this paragraph by insurance companies that 19
issue only deductible insurance policies in Kentucky shall be actuarially 20
adequate to cover the entire liability of the employer for compensation under 21
this chapter, including all expenses and allowances normally used to calculate 22
the cost for coverage. For policies with provisions for deductibles with 23
effective dates of May 6, 1993, through December 31, 1993, for which the 24
insurance company did not report premiums and remit special fund 25
assessments based on the calculated cost for coverage prior to the reduction 26
for deductibles, "premium" includes the initial consideration plus any 27
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reimbursements invoiced for losses, expenses, or fees charged under the 1
deductibles. 2
(d) "Return premiums" for insurance companies means amounts returned to 3
insureds due to endorsements, retrospective adjustments, cancellations, 4
dividends, or errors. 5
(e) "Deductible program adjustment" means calculating premium and premiums 6
received on a gross basis without regard to the following: 7
1. Schedule rating modifications, debits, or credits; 8
2. Deductible credits; or 9
3. Modifications to the cost of coverage from inception through and 10
including any audit that are based on negotiated retrospective rating 11
arrangements, including but not limited to large risk alternative rating 12
options; 13
(26) "Insurance policy" for an insuranc e company or self -insured group means the term 14
of insurance coverage commencing from the date coverage is extended, whether a 15
new policy or a renewal, through its expiration, not to exceed the anniversary date 16
of the renewal for the following year; 17
(27) "Self-insurance year" for a self -insured group means the annual period of 18
certification of the group created pursuant to KRS 342.350(4) and 304.50-010; 19
(28) "Premium" for each employer carrying his own risk pursuant to KRS 342.340(1) 20
shall be the projected v alue of the employer's workers' compensation claims for the 21
next calendar year as calculated by the commissioner using generally -accepted 22
actuarial methods as follows: 23
(a) The base period shall be the earliest three (3) calendar years of the five (5) 24
calendar years immediately preceding the calendar year for which the 25
calculation is made. The commissioner shall identify each claim of the 26
employer which has an injury date or date of last injurious exposure to the 27
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cause of an occupational disease during each one (1) of the three (3) calendar 1
years to be used as the base, and shall assign a value to each claim. The value 2
shall be the total of the indemnity benefits paid to date and projected to be 3
paid, adjusted to current benefit levels, plus the medical benef its paid to date 4
and projected to be paid for the life of the claim, plus the cost of medical and 5
vocational rehabilitation paid to date and projected to be paid. Adjustment to 6
current benefit levels shall be done by multiplying the weekly indemnity 7
benefit for each claim by the number obtained by dividing the statewide 8
average weekly wage which will be in effect for the year for which the 9
premium is being calculated by the statewide average weekly wage in effect 10
during the year in which the injury or date of the last exposure occurred. The 11
total value of the claims using the adjusted weekly benefit shall then be 12
calculated by the commissioner. Values for claims in which awards have been 13
made or settlements reached because of findings of permanent partial or 14
permanent total disability shall be calculated using the mortality and interest 15
discount assumptions used in the latest available statistical plan of the 16
advisory rating organization defined in Subtitle 13 of KRS Chapter 304. The 17
sum of all calculated val ues shall be computed for all claims in the base 18
period; 19
(b) The commissioner shall obtain the annual payroll for each of the three (3) 20
years in the base period for each employer carrying his own risk from records 21
of the department and from the records of the Department of Workforce 22
Development, Education and Labor Cabinet. The commissioner shall multiply 23
each of the three (3) years of payroll by the number obtained by dividing the 24
statewide average weekly wage which will be in effect for the year in which 25
the premium is being calculated by the statewide average weekly wage in 26
effect in each of the years of the base period; 27
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(c) The commissioner shall divide the total of the adjusted claim values for the 1
three (3) year base period by the total adjusted payrol l for the same three (3) 2
year period. The value so calculated shall be multiplied by 1.25 and shall then 3
be multiplied by the employer's most recent annualized payroll, calculated 4
using records of the department and the Department of Workforce 5
Development data which shall be made available for this purpose on a 6
quarterly basis as reported, to obtain the premium for the next calendar year 7
for assessment purposes under KRS 342.122; 8
(d) For November 1, 1987, through December 31, 1988, premium for each 9
employer carrying its own risk shall be an amount calculated by the board 10
pursuant to the provisions contained in this subsection and such premium 11
shall be provided to each employer carrying its own risk and to the funding 12
commission on or before January 1, 1988. Thereafter, the calculations set 13
forth in this subsection shall be performed annually, at the time each employer 14
applies or renews its application for certification to carry its own risk for the 15
next twelve (12) month period and submits payroll and other d ata in support 16
of the application. The employer and the funding commission shall be notified 17
at the time of the certification or recertification of the premium calculated by 18
the commissioner, which shall form the employer's basis for assessments 19
pursuant t o KRS 342.122 for the calendar year beginning on January 1 20
following the date of certification or recertification; 21
(e) If an employer having fewer than five (5) years of doing business in this state 22
applies to carry its own risk and is so certified, its pr emium for the purposes 23
of KRS 342.122 shall be based on the lesser number of years of experience as 24
may be available including the two (2) most recent years if necessary to create 25
a three (3) year base period. If the employer has less than two (2) years of 26
operation in this state available for the premium calculation, then its premium 27
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shall be the greater of the value obtained by the calculation called for in this 1
subsection or the amount of security required by the commissioner pursuant to 2
KRS 342.340(1); 3
(f) If an employer is certified to carry its own risk after having previously insured 4
the risk, its premium shall be calculated using values obtained from claims 5
incurred while insured for as many of the years of the base period as may be 6
necessary to create a full three (3) year base. After the employer is certified to 7
carry its own risk and has paid all amounts due for assessments upon 8
premiums paid while insured, the employer shall be assessed only upon the 9
premium calculated under this subsection; 10
(g) "Premium" for each employer defined in KRS 342.630(2) shall be calculated 11
as set forth in this subsection; and 12
(h) Notwithstanding any other provision of this subsection, the premium of any 13
employer authorized to carry its own risk for purposes of assessmen ts due 14
under this chapter shall be no less than thirty cents ($0.30) per one hundred 15
dollars ($100) of the employer's most recent annualized payroll for employees 16
covered by this chapter; 17
(29) "SIC code" as used in this chapter means the Standard Industria l Classification 18
Code contained in the latest edition of the Standard Industrial Classification Manual 19
published by the Federal Office of Management and Budget; 20
(30) "Investment interest" means any pecuniary or beneficial interest in a provider of 21
medical services or treatment under this chapter, other than a provider in which that 22
pecuniary or investment interest is obtained on terms equally available to the public 23
through trading on a registered national securities exchange, such as the New York 24
Stock Exchange or the American Stock Exchange, or on the National Association 25
of Securities Dealers Automated Quotation System; 26
(31) "Managed health care system" means a health care system that employs gatekeeper 27
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providers, performs utilization review, and does medical bill audits; 1
(32) "Physician" means physicians and surgeons, audiologists holding a doctorate in 2
audiology, psychologists, optometrists, dentists, podiatrists, and osteopathic and 3
chiropractic practitioners acting within the scope of the license or ot her credentials 4
required by his or her specialty of practice in the United States jurisdiction in which 5
he or she is authorized to practice; 6
(33) "Objective medical findings" means information gained through direct observation 7
and testing of the patient applying objective or standardized methods; 8
(34) "Work" means providing services to another in return for remuneration on a regular 9
and sustained basis in a competitive economy; 10
(35) "Permanent impairment rating" means percentage of whole body impairment 11
caused by the injury or occupational disease as determined by the "Guides to the 12
Evaluation of Permanent Impairment"; 13
(36) "Permanent disability rating" means the permanent impairment rating selected by 14
an administrative law judge times the factor set forth i n the table that appears at 15
KRS 342.730(1)(b); and 16
(37) "Guides to the Evaluation of Permanent Impairment" means, except as provided in 17
KRS 342.262: 18
(a) The fifth edition published by the American Medical Association; and 19
(b) For psychological impairments, Chapter 12 of the second edition published by 20
the American Medical Association. 21
Section 3. KRS 342.120 is amended to read as follows: 22
(1) There is created the Division of Workers' Compensation Funds in the Department 23
of Workers' Claims that[which] shall be responsible for the administration of the 24
special fund and the coal workers' pneumoconiosis fund and the maintenance of 25
records regarding the payment of claims by these funds. The Division of Workers' 26
Compensation Fund s shall have no responsibility for the coal workers' 27
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pneumoconiosis fund once the assets and liabilities have been transferred to the 1
Kentucky Employers' Mutual Insurance Authority, which will administer the fund 2
pursuant to KRS 342.1243. The Division of W orkers' Compensation Funds shall be 3
headed by a director appointed by the commissioner[secretary of the Education and 4
Labor Cabinet], with the prior written approval of the Governor pursuant to KRS 5
12.050. The director shall be responsible for overseeing t he administration of the 6
funds and the maintenance of records regarding the payment of claims by the funds. 7
(2) The special fund shall have no liability upon any claim in which the injury 8
occurred, or for cumulative trauma, the disability became manifest, or, for 9
occupational disease, if the date of injury or last exposure occurred, after December 10
12, 1996. 11
(3) Where the employer has settled its liability for income benefits and thereafter a 12
determination has been made of the special fund's liability, the special fund portion 13
of the benefit rate shall be paid over the maximum period provided for by statute 14
for that disability, with the period of payment beginning on the date settlement was 15
approved by an administrative law judge. This provision is remedial and shall apply 16
to all pending and future claims. 17
Section 4. KRS 342.122 is amended to read as follows: 18
(1) (a) For calendar year 1997 and for each calendar year thereafter, for the purpose 19
of funding and prefunding the liabilities of the special fund, financing the 20
administration and operation of the Kentucky Workers' Compensation 21
Funding Commission, and financing the expenditures for all programs in the 22
Department of Workers' Claims, Occupational Safety and Health Review 23
Commission, Workers' Compensation Nominating Committee, Department of 24
Workplace Standards, except expenditures for the Division of Wages and 25
Hours contained in the Department of Workplace Standards and the 26
proportional support for general administration and support based on an 27
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approved indirect cost allocation plan within the Department of Workers' 1
Claims and the E ducation and Labor Cabinet, as reflected in the enacted 2
budget of the Commonwealth and enacted by the General Assembly, the 3
funding commission shall impose a special fund assessment rate of nine 4
percent (9%) upon the amount of workers' compensation premium s received 5
on and after January 1, 1997, through December 31, 1997, by every insurance 6
carrier writing workers' compensation insurance in the Commonwealth, by 7
every self -insured group operating under the provisions of KRS 342.350(4) 8
and Chapter 304, and ag ainst the premium, as defined in KRS 342.0011, of 9
every employer carrying his or her own risk. 10
(b) 1. The funding commission shall, for calendar year 1998 and thereafter, 11
establish for the special fund an assessment rate to be assessed against 12
all premium received during that calendar year which shall produce 13
enough revenue to amortize on a level basis the unfunded liability of the 14
special fund as of June 30 preceding January 1 of each year, for the 15
period remaining until December 31, 2029 . The special fund 16
assessment imposed by the funding commission shall continue to be 17
assessed to finance the administration and operation of the Kentucky 18
Workers' Compensation Funding Commission under subsection (1)(a) 19
of this section, and financing the expenditures for all programs in the 20
Department of Workers' Claims, Occupational Safety and Health 21
Review Commission, Department of Workplace Standards, excluding 22
expenditures for the Division of Wages and Hours contained in the 23
Department of Workplace Standards and the propo rtional support for 24
general administration and support based on an approved indirect cost 25
allocation plan within the Department of Workers' Claims and the 26
Education and Labor Cabinet. 27
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2. For the purpose of establishing the assessment rate after the liabil ities 1
of the special fund have been funded or prefunded, the Workers' 2
Compensation Funding Commission, the Department of Workers' 3
Claims, the Occupational Safety and Health Review Commission, the 4
Department of Workplace Standards, excluding the Division of Wages 5
and Hours contained within the Department of Workplace Standards, 6
and the Education and Labor Cabinet, shall each submit a budget to 7
the commissioner for approval. The commissioner shall submit a 8
combined budget request for use of the special fund a ssessment, 9
subject to the approval of the Workers' Compensation Funding 10
Commission, to the chairs of the House Standing Committee on 11
Appropriations and Revenue and the Senate Standing Committee on 12
Appropriations and Revenue. The combined budgets of the 13
Occupational Safety and Health Review Commission, Department of 14
Workplace Standards, and the proportional support for the general 15
administration and approved indirect cost allocation to the Education 16
and Labor Cabinet, shall not exceed fifty percent (50%) of the total 17
combined budget submitted by the commissioner. 18
3. The interest rate to be used in this calculation shall reflect the funding 19
commission's investment experience to date and the current investment 20
policies of the commission. This assessment shall b e imposed upon the 21
amount of workers' compensation premiums received by every 22
insurance carrier writing workers' compensation insurance in the 23
Commonwealth, by every self -insured group operating under the 24
provisions of KRS 342.350(4) and Chapter 304, and a gainst the 25
premium, as defined in KRS 342.0011, of every employer carrying its 26
own risk. On or before October 1 of each year, the commission shall 27
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notify each insurance carrier writing workers' compensation insurance in 1
the Commonwealth, every group of sel f-insured employers, and each 2
employer carrying its own risk, of the rates which shall become effective 3
on January 1 of each year, unless modified by the General Assembly. 4
(c) All assessments imposed by this section shall be paid to the Kentucky 5
Workers' C ompensation Funding Commission and shall be credited to the 6
benefit reserve fund within the Kentucky Workers' Compensation Funding 7
Commission. 8
(d) The assessments imposed in this chapter shall be in lieu of all other 9
assessments or taxes on workers' compensation premiums. 10
(2) (a) These assessments shall be paid quarterly not later than the thirtieth day of the 11
month following the end of the quarter in which the premium is received. 12
Receipt shall be considered timely through actual physical receipt or by 13
postmark of the United States Postal Service. Employers carrying their own 14
risk and employers defined in KRS 342.630(2) shall pay the annual 15
assessments in four (4) equal quarterly installments. 16
(b) Beginning on January 1, 2020, all assessments shall be elect ronically remitted 17
to the funding commission quarterly not later than the thirtieth day of the 18
month following the end of the quarter in which the premium is received. 19
Receipt shall be considered timely when filed and remitted using the 20
appropriate electronic pay system as prescribed by the funding commission. 21
Employers carrying their own risk and employers defined in KRS 342.630(2) 22
shall pay the annual assessments in four (4) equal quarterly installments. 23
(3) The assessments imposed by this section may be collected by the insurance carrier 24
from the insured. However, the insurance carrier shall not collect from the employer 25
any amount exceeding the assessments imposed pursuant to this section. If the 26
insurance carrier collects the assessment from an insured, the assessment shall be 27
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collected at the same time and in the same proportion as the premium is collected. 1
The assessment for an insurance policy or other evidence of coverage providing a 2
deductible may be collected in accordance with this chapter on a pr emium amount 3
that equates to the premium that would have applied without the deductible. Each 4
statement from an insurance carrier presented to an insured reflecting premium and 5
assessment amounts shall clearly identify and distinguish the amount to be paid for 6
premium and the amount to be paid for assessments. No insurance carrier shall 7
collect from an insured an amount in excess of the assessment percentages imposed 8
by this chapter. The assessment for an insurance policy or other evidence of 9
coverage providing a deductible may be collected in accordance with this chapter 10
on a premium amount that equates to the premium that would have applied without 11
the deductible. The percentages imposed by this chapter for an insurance policy 12
issued by an insurance compan y shall be those percentages in effect on the annual 13
effective date of the policy, regardless of the date that the premium is actually 14
received by the insurance company. 15
(4) A self-insured group may elect to report its premiums and to have its assessments 16
computed in the same manner as insurance companies. This election may not be 17
rescinded for at least ten (10) years, nor may this election be made a second time 18
for at least another ten (10) years, except that the board of directors of the funding 19
commission may, at its discretion, waive the ten (10) year ban on a case -by-case 20
basis after formal petition has been made to the funding commission by a self -21
insured group. 22
(5) The funding commission, as part of the collection and auditing of the special fund 23
assessments required by this section, shall annually require each insurance carrier 24
and each self -insured group to provide a list of employers which it has insured or 25
which are members and the amount collected from each employer. Additionally, the 26
funding commission shall require each entity paying a special fund assessment to 27
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report the SIC code for each employer and the amount of premium collected from 1
each SIC code. An insurance carrier or self -insured group may require its insureds 2
or members to furnish the SIC code for each of their employees. However, the 3
failure of any employer to furnish said codes shall not relieve the insurance carrier 4
or self -insured group from the obligation to furnish same to the funding 5
commission. The Department of Workforce Devel opment, Education and Labor 6
Cabinet, is hereby directed to make available the SIC codes assigned in its records 7
to specific employers to aid in the reporting and recording of the special fund 8
assessment data. 9
(6) Each self -insured employer, self -insured gr oup, or insurance carrier shall provide 10
any information and submit any reports the Department of Revenue or the funding 11
commission may require to effectuate the provisions of this section. In addition, the 12
funding commission may enter reciprocal agreements with other governmental 13
agencies for the exchange of information necessary to effectuate the provisions of 14
this section. 15
(7) The special fund shall be required to maintain a central claim registry of all claims 16
to which it is named a party, giving each su ch claim a unique claim number and 17
thereafter recording the status of each claim on a current basis. The registry shall be 18
established by January 26, 1988, for all claims on which payments were made since 19
July 1, 1986, or which were pending adjudication si nce July 1, 1986, by audit of all 20
claim files in the possession of the special fund. 21
(8) The fund heretofore designated as the subsequent claim fund is abolished, and there 22
is substituted therefor the special fund as set out by this section, and all moneys and 23
properties owned by the subsequent claim fund are transferred to the special fund. 24
(9) Notwithstanding any other provisions of this section or this chapter to the contrary, 25
the total amount of funds collected pursuant to the assessment rates adopted b y the 26
funding commission shall not be limited to the provisions of this section. 27
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(10) All assessment rates imposed for periods prior to January 1, 1997, under KRS 1
342.122 shall forever remain applicable to premiums received on policies with 2
effective dates prior to January 1, 1997, by every insurance carrier writing workers' 3
compensation insurance in the Commonwealth, by every self -insured group 4
operating under the provision of KRS 342.350(4) and Chapter 304, and against the 5
premium, as defined in KRS 342.0011, of every employer carrying its own risk. 6
Section 5. KRS 342.215 is amended to read as follows: 7
(1) The Workers' Compensation Board is hereby created and established. The board 8
shall rule on appeals of decisions rend ered by administrative law judges under this 9
chapter. The board shall rule on an appeal of a decision of an administrative law 10
judge no later than sixty (60) days following the date on which the last appeal brief 11
was filed. 12
(2) The Workers' Compensation Board shall consist of three (3) members appointed by 13
the Governor. Each member shall hold no other public office and shall devote his or 14
her full time to the duties of his or her office. Each member shall be exempt from 15
the classified service, and his or her support staff may be exempt from the classified 16
service. 17
(3) Of the members of the board appointed under this section, any member appointed to 18
fill an unexpired term shall immediately assume the office subject to the 19
confirmation by the Senate in accordance with KRS 11.160 for the remainder of the 20
term. Any member not currently pending reappointment by the Senate with a term 21
expiring on or before: 22
(a) December 1, 2025, shall continue serving a term that shall expire on June 1, 23
2026; 24
(b) December 1, 2026, shall continue serving a term that shall expire on June 1, 25
2027; or 26
(c) December 1, 2027, shall continue serving a term that shall expire on June 1, 27
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2028. 1
Thereafter, each term of a board member shall run for four (4) years from the date 2
of expiration of the term for which the member's predecessor was appointed, except 3
that a person appointed to fill a vacancy prior to the expiration of a term shall be 4
appointed for the remainder of the term. The Governor shall not appoint a member 5
of the board to fill the unexpired term of another board member, nor shall the 6
Governor reappoint a member of the board who has been removed from his or her 7
position prior to the expiration of his or her term. The members of the board shall 8
have the qualificatio ns required of appeals court judges, except for residence in a 9
district, and shall receive the same salary and shall be subject to the same standards 10
of conduct. The Governor shall designate a member of the board to serve as 11
chairman. Any vacancy in the ch airmanship shall be filled by the Governor. The 12
Governor may at any time remove any member for cause after furnishing the 13
member with a written copy of the charges against him or her and giving the 14
member a public hearing if he or she requests it. 15
(4) A decision concurred in by any two (2) of the three (3) members shall constitute a 16
decision of the board. 17
(5) Members of the Workers' Compensation Board and the administrative law judges 18
shall be members of the Kentucky Employees Retirement System. 19
(6) The Workers' Compensation Board shall be attached to the Department of Workers' 20
Claims[ in the Education and Labor Cabinet]. 21
Section 6. KRS 342.228 is amended to read as follows: 22
(1) The Department of Workers' Claims shall be r esponsible for administering claims 23
and ensuring compliance with the insurance, self -insurance, and rehabilitation 24
provisions in this chapter. The department shall be administered by a commissioner 25
appointed by the Governor. The commissioner appointed by t he Governor shall be 26
subject to the consent of the Senate in accordance with KRS 11.160. 27
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(2) The commissioner shall have demonstrated knowledge and experience in the areas 1
of public administration, administrative law, and workers' compensation by 2
having a minimum of eight (8) years of legal practice experience in the area of 3
workers' compensation[area of workers' compensation, public administration, and 4
administrative law]. 5
Section 7. KRS 342.230 is amended to read as follows: 6
(1) The commissioner shall establish and fill any positions, including medical 7
services and advice, necessary to carry on the department's work subject to the 8
limits of appropriations for the department and ex cept as otherwise required by 9
law. All employees of the department shall be classified employees under KRS 10
Chapter 18A, except for the commissioner, the administrative law judges, and 11
board members. The commissioner shall have immediate supervision of the 12
employees of the department, perform duties assigned to him or her, and have 13
complete authority to carry out all the administrative functions relating to the 14
department. 15
(2) The commissioner with the assistance of the board shall train and instruct the 16
administrative law judges on an ongoing basis; assign cases; and monitor the 17
caseloads of the administrative law judges and the Workers' Compensation Board to 18
ensure timely disposition of cases; keep and be the custodian of the records of the 19
board and the ad ministrative law judges; annually report the activities of the board 20
and the administrative law judges to the Governor; and devote his or her full time to 21
the duties of his or her office. The commissioner shall be paid a salary not less than 22
the salary of a member of the board. 23
(3)[(2)] The Governor shall appoint, with the consent of the Senate in accordance with 24
KRS 11.160 for a term of four (4) years, not more than nineteen (19) administrative 25
law judges, each of whom shall be an attorney and shall have f ive (5) years' 26
experience in the Commonwealth in the practice of workers' compensation law or a 27
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related field, and extensive knowledge of workers' compensation law, and shall be 1
paid the same salary as a Circuit Judge. Each newly appointed administrative l aw 2
judge shall not assume his or her office until June 1 following confirmation by the 3
Senate. Administrative law judges who are reappointed shall continue to serve in 4
their capacity until the reappointment is confirmed by the Senate or the Senate 5
adjourns without confirming the appointment. Each administrative law judge shall 6
be exempt from the classified service, and his or her support staff may be exempt 7
from the classified service. Each administrative law judge may be employed for 8
additional terms with the consent of the Senate in accordance with KRS 11.160. 9
The Governor, at least thirty (30) days prior to the expiration of a term of an 10
administrative law judge, shall provide the name of the individual whom he or she 11
intends to appoint to the position to the chairman of the Senate Standing Committee 12
on Economic Development, Tourism, and Labor. These administrative law judges 13
shall conduct hearings, and otherwise supervise the presentation of evidence and 14
perform any other duties assigned to them by statut e and shall render final 15
decisions, orders, or awards. Administrative law judges may, in receiving evidence, 16
make rulings affecting the competency, relevancy, and materiality of the evidence 17
about to be presented and upon motions presented during the takin g of evidence as 18
will expedite the preparation of the case. 19
(4)[(3)] To ensure that the administrative law judges perform their responsibilities 20
competently and issue decisions consistent with this chapter, the commissioner 21
shall, at least twice annually, conduct training and education seminars in workers' 22
compensation law; administrative law; and methods and procedures for writing 23
well-reasoned, clear, correct, and concise opinions, orders, or awards. 24
(5)[(4)] The Governor may at any time remove the commis sioner or any member of 25
the board. The commissioner may remove any administrative law judge. A member 26
of the board or an administrative law judge may be removed for good cause, 27
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including violation of the code of judicial ethics or the code of ethics applic able to 1
the executive branch of the Commonwealth. In addition, an administrative law 2
judge or a member of the board may be removed for the persistent or repeated 3
failure to perform satisfactorily the specific duties assigned in this chapter, 4
including the requirement of timely disposition of cases, review of attorney's fees, 5
and failure to attend training and continuing education programs required by this 6
section. 7
(6)[(5)] Any vacancy in the term of an administrative law judge, which occurs prior to 8
the exp iration of the term, shall be filled if necessary by appointment of the 9
Governor in accordance with subsection (3)[(2)] of this section within sixty (60) 10
days from the date the vacancy occurs, with the consent of the Senate in accordance 11
with KRS 11.160, f or the remainder of the term. An administrative law judge 12
appointed to fill an unexpired term shall immediately assume the office subject to 13
the confirmation by the Senate in accordance with KRS 11.160 for the remainder of 14
the term. 15
(7)[(6)] Any administra tive law judge not currently pending confirmation by the 16
Senate with a term expiring on or before: 17
(a) December 1, 2025, shall continue serving a term that shall expire on June 1, 18
2026; 19
(b) December 1, 2026, shall continue serving a term that shall expire on June 1, 20
2027; 21
(c) December 1, 2027, shall continue serving a term that shall expire on June 1, 22
2028; or 23
(d) December 1, 2028, shall continue serving a term that shall expire on June 1, 24
2029. 25
(8)[(7)] One (1) of the administrative law judges appointed pu rsuant to this section 26
shall be appointed as a chief administrative law judge, to have the same 27
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qualifications, powers, duties, and requirements as those of other administrative law 1
judges. The chief administrative law judge shall not be assigned regular d ockets but 2
shall instead assist the commissioner by doing all scheduling of the administrative 3
law judges, handling dockets assigned to the administrative law judges in case of an 4
emergency, providing supervision of the administrative law judges, and provi ding 5
educational opportunities for the administrative law judges. The chief 6
administrative law judge shall be paid at the same rate as the administrative law 7
judges plus an additional three thousand dollars ($3,000) per year. At any time the 8
commissioner may replace the chief administrative law judge with one (1) of the 9
other administrative law judges at which time the former chief administrative law 10
judge shall resume the duties assigned to the other administrative law judges 11
pursuant to this chapter. On J anuary 1, 1998, the commissioner shall employ a 12
person in this position for a four (4) year term. 13
Section 8. KRS 342.342 is amended to read as follows: 14
(1) Notwithstanding the provisions of KRS 342.340, KRS 342.350, or a ny 15
administrative regulations promulgated pursuant to those provisions, the 16
commissioner shall annually review the adequacy of the financial or other security 17
requirements contained in administrative regulations, promulgated pursuant to the 18
individual self-insurance provisions in this chapter. The commissioner shall report 19
the results of the review to the Economic Development and Workforce Investment 20
Committee of the General Assembly and any recommendations for proposed 21
changes to insure the financial sound ness of the individual self -insurers authorized 22
pursuant to this chapter. In addition, the commissioner shall report not less often 23
than annually a summary report on the financial soundness of the individual self -24
insurers. 25
(2) The Economic Development and Workforce Investment Committee of the General 26
Assembly shall annually review the administrative regulations promulgated 27
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pursuant to the individual provisions under this chapter. 1
(3) On July 1, 1994, the Division of Security and Compliance of the Department of 2
Workers' Claims[ in the Education and Labor Cabinet] shall be expanded by five 3
(5) employees. These additional employees shall be employed for the purpose of 4
conducting financial audits, examinations, and reviews and other activities 5
necessary to ensur e and monitor the financial soundness of the individual self -6
insured employers authorized pursuant to KRS 342.340. 7
Section 9. KRS 12.020 is amended to read as follows: 8
Departments, program cabinets and their departments, and the respective major 9
administrative bodies that they include are enumerated in this section. It is not intended 10
that this enumeration of administrative bodies be all -inclusive. Every authority, board, 11
bureau, interstate compact, commission, committee, conference, council, office, or any 12
other form of organization shall be included in or attached to the department or program 13
cabinet in which they are included or to which they are attached by statute or statutorily 14
authorized executive order; except in t he case of the Personnel Board and where the 15
attached department or administrative body is headed by a constitutionally elected 16
officer, the attachment shall be solely for the purpose of dissemination of information and 17
coordination of activities and shall not include any authority over the functions, 18
personnel, funds, equipment, facilities, or records of the department or administrative 19
body. 20
I. Cabinet for General Government - Departments headed by elected officers: 21
(1) The Governor. 22
(2) Lieutenant Governor. 23
(3) Department of State. 24
(a) Secretary of State. 25
(b) Board of Elections. 26
(c) Registry of Election Finance. 27
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(4) Department of Law. 1
(a) Attorney General. 2
(5) Department of the Treasury. 3
(a) Treasurer. 4
(6) Department of Agriculture. 5
(a) Commissioner of Agriculture. 6
(b) Agricultural Development Board. 7
(c) Kentucky Agricultural Finance Corporation. 8
(7) Auditor of Public Accounts. 9
(a) Commonwealth Office of the Ombudsman. 10
II. Program cabinets headed by appointed officers: 11
(1) Justice and Public Safety Cabinet: 12
(a) Department of Kentucky State Police. 13
1. Office of Administrative Services. 14
a. Division of Operational Support. 15
b. Division of Management Services. 16
2. Office of Operations. 17
a. Division of West Troops. 18
b. Division of East Troops. 19
c. Division of Special Enforcement. 20
d. Division of Commercial Vehicle Enforcement. 21
3. Office of Technical Services. 22
a. Division of Forensic Sciences. 23
b. Division of Electronic Services. 24
c. Division of Records Management. 25
(b) Department of Criminal Justice Training. 26
(c) Department of Corrections. 27
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(d) Department of Juvenile Justice. 1
(e) Office of the Secretary. 2
(f) Office of Drug Control Policy. 3
(g) Office of Legal Services. 4
(h) Office of the Kentucky State Medical Examiner. 5
(i) Parole Board. 6
(j) Kentucky State Corrections Commission. 7
(k) Office of Legislative and Intergovernmental Services. 8
(l) Office of Human Resource Management. 9
1. Division of Human Resource Administration. 10
2. Division of Employee Management. 11
(m) Department of Public Advocacy. 12
(n) Office of Communications. 13
1. Information Technology Services Division. 14
(o) Office of Financial Management Services. 15
1. Division of Financial Management. 16
(p) Grants Management Division. 17
(2) Energy and Environment Cabinet: 18
(a) Office of the Secretary. 19
1. Office of Legislative and Intergovernmental Affairs. 20
2. Office of Legal Services. 21
a. Legal Division I. 22
b. Legal Division II. 23
3. Office of Administrative Hearings. 24
4. Office of Communication. 25
5. Mine Safety Review Commission. 26
6. Office of Kentucky Nature Preserves. 27
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7. Kentucky Public Service Commission. 1
(b) Department for Environmental Protection. 2
1. Office of the Commissioner. 3
2. Division for Air Quality. 4
3. Division of Water. 5
4. Division of Environmental Program Support. 6
5. Division of Waste Management. 7
6. Division of Enforcement. 8
7. Division of Compliance Assistance. 9
(c) Department for Natural Resources. 10
1. Office of the Commissioner. 11
2. Division of Mine Permits. 12
3. Division of Mine Reclamation and Enforcement. 13
4. Division of Abandoned Mine Lands. 14
5. Division of Oil and Gas. 15
6. Division of Mine Safety. 16
7. Division of Forestry. 17
8. Division of Conservation. 18
9. Office of the Reclamation Guaranty Fund. 19
(d) Office of Energy Policy. 20
1. Division of Energy Assistance. 21
(e) Office of Administrative Services. 22
1. Division of Human Resources Management. 23
2. Division of Financial Management. 24
3. Division of Information Services. 25
(3) Public Protection Cabinet. 26
(a) Office of the Secretary. 27
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1. Office of Communications and Public Outreach. 1
2. Office of Legal Services. 2
a. Insurance Legal Division. 3
b. Alcoholic Beverage Control Legal Division. 4
c. Housing, Buildings and Construction Legal Division. 5
d. Financial Institutions Legal Division. 6
e. Professional Licensing Legal Division. 7
3. Office of Administrative Hearings. 8
4. Office of Administrative Services. 9
a. Division of Human Resources. 10
b. Division of Fiscal Responsibility. 11
(b) Office of Claims and Appeals. 12
1. Board of Tax Appeals. 13
2. Board of Claims. 14
3. Crime Victims Compensation Board. 15
(c) Kentucky Boxing and Wrestling Commission. 16
(d) Department of Alcoholic Beverage Control. 17
1. Division of Distilled Spirits. 18
2. Division of Malt Beverages. 19
3. Division of Enforcement. 20
4. Division of Tobacco, Nicotine, and Vapor Product Licensing. 21
(e) Department of Financial Institutions. 22
1. Division of Depository Institutions. 23
2. Division of Non-Depository Institutions. 24
3. Division of Securities. 25
(f) Department of Housing, Buildings and Construction. 26
1. Division of Fire Prevention. 27
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2. Division of Plumbing. 1
3. Division of Heating, Ventilation, and Air Conditioning. 2
4. Division of Building Code Enforcement. 3
(g) Department of Insurance. 4
1. Division of Health and Life Insurance and Managed Care. 5
2. Division of Property and Casualty Insurance. 6
3. Division of Administrative Services. 7
4. Division of Financial Standards and Examination. 8
5. Division of Licensing. 9
6. Division of Insurance Fraud Investigation. 10
7. Division of Consumer Protection. 11
(h) Department of Professional Licensing. 12
1. Real Estate Authority. 13
2. Division of Real Property Boards. 14
(4) Transportation Cabinet: 15
(a) Department of Highways. 16
1. Office of Project Development. 17
2. Office of Project Delivery and Preservation. 18
3. Office of Highway Safety. 19
4. Highway District Offices One through Twelve. 20
(b) Department of Vehicle Regulation. 21
(c) Department of Aviation. 22
(d) Department of Rural and Municipal Aid. 23
1. Office of Local Programs. 24
2. Office of Rural and Secondary Roads. 25
(e) Office of the Secretary. 26
1. Office of Public Affairs. 27
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2. Office for Civil Rights and Small Business Development. 1
3. Office of Budget and Fiscal Management. 2
4. Office of Inspector General. 3
5. Secretary's Office of Safety. 4
(f) Office of Support Services. 5
(g) Office of Transportation Delivery. 6
(h) Office of Audits. 7
(i) Office of Human Resource Management. 8
(j) Office of Information Technology. 9
(k) Office of Legal Services. 10
(5) Cabinet for Economic Development: 11
(a) Office of the Secretary. 12
1. Office of Legal Services. 13
2. Department for Business and Community Development. 14
a. Development and Retention Division – West Kentucky. 15
b. Development, Retention, and Administrative Division – 16
Central and East Kentucky. 17
c. Community and Workforce Development Division. 18
3. Department for Financial Services. 19
a. Kentucky Economic Development Finance Authority. 20
b. Finance and Personnel Division. 21
c. IT and Resource Management Division. 22
d. Compliance Division. 23
e. Program Administration Division. 24
f. Bluegrass State Skills Corporation. 25
g. The GRANT Commission. 26
4. Office of Strategy and Public Affairs. 27
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a. Marketing and Communications Division. 1
b. Research and Strategy Division. 2
5. Office of Entrepreneurship and Innovation. 3
a. Commission on Small Business Innovation and Advocacy. 4
6. Kentucky Film Office. 5
a. Kentucky Film Leadership Council. 6
(6) Cabinet for Health and Family Services: 7
(a) Office of the Secretary. 8
1. Office of Public Affairs. 9
2. Office of Legal Services. 10
3. Office of Inspector General. 11
4. Office of Human Resource Management. 12
5. Office of Finance and Budget. 13
6. Office of Legislative and Regulatory Affairs. 14
7. Office of Administrative Services. 15
8. Office of Application Technology Services. 16
9. Office of Data Analytics. 17
10. Office of Medical Cannabis. 18
a. Division of Enforcement and Compliance. 19
b. Division of Licensure and Access. 20
(b) Department for Public Health. 21
(c) Department for Medicaid Services. 22
(d) Department for Behavioral Health, Developmental and Intellectual 23
Disabilities. 24
(e) Department for Aging and Independent Living. 25
(f) Department for Community Based Services. 26
(g) Department for Family Resource Centers and Volunteer Services. 27
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(7) Finance and Administration Cabinet: 1
(a) Office of the Secretary. 2
(b) Office of the Inspector General. 3
(c) Office of Legislative and Intergovernmental Affairs. 4
(d) Office of General Counsel. 5
(e) Office of the Controller. 6
(f) Office of Administrative Services. 7
(g) Office of Policy and Audit. 8
(h) Department for Facilities and Support Services. 9
(i) Department of Revenue. 10
(j) Commonwealth Office of Technology. 11
(k) State Property and Buildings Commission. 12
(l) Office of Equal Employment Opportunity and Contract Compliance. 13
(m) Kentucky Employees Retirement Systems. 14
(n) Commonwealth Credit Union. 15
(o) State Investment Commission. 16
(p) Kentucky Housing Corporation. 17
(q) Kentucky Local Correctional Facilities Construction Authority. 18
(r) Kentucky Turnpike Authority. 19
(s) Historic Properties Advisory Commission. 20
(t) Kentucky Higher Education Assistance Authority. 21
(u) Kentucky River Authority. 22
(v) Kentucky Teachers' Retirement System Board of Trustees. 23
(w) Executive Branch Ethics Commission. 24
(x) Office of Fleet Management. 25
(8) Tourism, Arts and Heritage Cabinet: 26
(a) Kentucky Department of Tourism. 27
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1. Division of Tourism Services. 1
2. Division of Marketing and Administration. 2
3. Division of Communications and Promotions. 3
(b) Kentucky Department of Parks. 4
1. Division of Information Technology. 5
2. Division of Human Resources. 6
3. Division of Financial Operations. 7
4. Division of Purchasing. 8
5. Division of Facilities. 9
6. Division of Park Operations. 10
7. Division of Sales, Marketing, and Customer Service. 11
8. Division of Engagement. 12
9. Division of Food Services. 13
10. Division of Rangers. 14
(c) Department of Fish and Wildlife Resources. 15
1. Division of Law Enforcement. 16
2. Division of Administrative Services. 17
3. Division of Engineering, Infrastructure, and Technology. 18
4. Division of Fisheries. 19
5. Division of Information and Education. 20
6. Division of Wildlife. 21
7. Division of Marketing. 22
(d) Kentucky Horse Park. 23
1. Division of Support Services. 24
2. Division of Buildings and Grounds. 25
3. Division of Operational Services. 26
(e) Kentucky State Fair Board. 27
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1. Office of Administrative and Information Technology Services. 1
2. Office of Human Resources and Access Control. 2
3. Division of Expositions. 3
4. Division of Kentucky Exposition Center Operations. 4
5. Division of Kentucky International Convention Center. 5
6. Division of Public Relations and Media. 6
7. Division of Venue Services. 7
8. Division of Personnel Management and Staff Development. 8
9. Division of Sales. 9
10. Division of Security and Traffic Control. 10
11. Division of Information Technology. 11
12. Division of the Louisville Arena. 12
13. Division of Fiscal and Contract Management. 13
14. Division of Access Control. 14
(f) Office of the Secretary. 15
1. Office of Finance. 16
2. Office of Government Relations and Administration. 17
(g) Office of Legal Affairs. 18
(h) Office of Human Resources. 19
(i) Office of Public Affairs and Constituent Services. 20
(j) Office of Arts and Cultural Heritage. 21
(k) Kentucky African-American Heritage Commission. 22
(l) Kentucky Foundation for the Arts. 23
(m) Kentucky Humanities Council. 24
(n) Kentucky Heritage Council. 25
(o) Kentucky Arts Council. 26
(p) Kentucky Historical Society. 27
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1. Division of Museums. 1
2. Division of Oral History and Educational Outreach. 2
3. Division of Research and Publications. 3
4. Division of Administration. 4
(q) Kentucky Center for the Arts. 5
1. Division of Governor's School for the Arts. 6
(r) Kentucky Artisans Center at Berea. 7
(s) Northern Kentucky Convention Center. 8
(t) Eastern Kentucky Exposition Center. 9
(9) Personnel Cabinet: 10
(a) Office of the Secretary. 11
(b) Department of Human Resources Administration. 12
(c) Office of Employee Relations. 13
(d) Kentucky Public Employees Deferred Compensation Authority. 14
(e) Office of Administrative Services. 15
(f) Office of Legal Services. 16
(g) Governmental Services Center. 17
(h) Department of Employee Insurance. 18
(i) Office of Diversity, Equality, and Training. 19
(j) Office of Public Affairs. 20
(10) Education and Labor Cabinet: 21
(a) Office of the Secretary. 22
1. Office of Legal Services. 23
a. Workplace Standards Legal Division. 24
b.[ Workers' Claims Legal Division. 25
c.] Workforce Development Legal Division. 26
2. Office of Administrative Services. 27
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a. Division of Human Resources Management. 1
b. Division of Fiscal Management. 2
c. Division of Operations and Support Services. 3
3. Office of Technology Services. 4
a. Division of Information Technology Services. 5
4. Office of Policy and Audit. 6
5. Office of Legislative Services. 7
6. Office of Communications. 8
7. Office of the Kentucky Center for Statistics. 9
8. Board of the Kentucky Center for Statistics. 10
9. Early Childhood Advisory Council. 11
10. Governors' Scholars Program. 12
11. Governor's School for Entrepreneurs Program. 13
12. Foundation for Adult Education. 14
(b) Department of Education. 15
1. Kentucky Board of Education. 16
2. Kentucky Technical Education Personnel Board. 17
3. Education Professional Standards Board. 18
(c) Board of Directors for the Center for School Safety. 19
(d) Department for Libraries and Archives. 20
(e) Kentucky Environmental Education Council. 21
(f) Kentucky Educational Television. 22
(g) Kentucky Commission on the Deaf and Hard of Hearing. 23
(h) Department of Workforce Development. 24
1. Career Development Office. 25
2. Office of Vocational Rehabilitation. 26
a. Division of Kentucky Business Enterprise. 27
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b. Division of the Carl D. Perkins Vocational Training Center. 1
c. Division of Blind Services. 2
d. Division of Field Services. 3
e. Statewide Council for Vocational Rehabilitation. 4
f. Employment First Council. 5
g. Division of Program Policy and Support. 6
3. Office of Industry and Apprenticeship Services. 7
a. Division of Apprenticeship. 8
b. Division of Workforce Talent. 9
4. Kentucky Apprenticeship Council. 10
5. Division of Technical Assistance. 11
6. Office of Adult Education. 12
7. Office of the Kentucky Workforce Innovation Board. 13
(i) Department of Workplace Standards. 14
1. Division of Occupational Safety and Health Compliance. 15
2. Division of Occupational Safety and Health Education and 16
Training. 17
3. Division of Wages and Hours. 18
(j) Office of Unemployment Insurance. 19
(k) Kentucky Unemployment Insurance Commission. 20
(l)[ Department of Workers' Claims. 21
1. Division of Workers' Compensation Funds. 22
2. Office of Administrative Law Judges. 23
3. Division of Claims Processing. 24
4. Division of Security and Compliance. 25
5. Division of Specialist and Medical Services. 26
6. Workers' Compensation Board. 27
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(m)] Workers' Compensation Funding Commission. 1
(m)[(n)] Kentucky Occupational Safety and Health Standards Board. 2
(n)[(o)] State Labor Relations Board. 3
(o)[(p)] Employers' Mutual Insurance Authority. 4
(p)[(q)] Kentucky Occupational Safety and Health Review Commission. 5
(q)[(r)] Workers' Compensation Nominating Committee. 6
(r)[(s)] Office of Educational Programs. 7
(s)[(t)] Kentucky Workforce Innovation Board. 8
(t)[(u)] Kentucky Commission on Proprietary Education. 9
(u)[(v)] Kentucky Work Ready Skills Advisory Committee. 10
(v)[(w)] Kentucky Geographic Education Board. 11
(w)[(x)] Department for Disability Determination Services. 12
1. Division of Operations. 13
2. Division of Support Services. 14
3. Division of Specialized Cases. 15
4. Division of Case Processing. 16
III. Other departments headed by appointed officers: 17
(1) Council on Postsecondary Education. 18
(2) Department of Military Affairs. 19
(3) Department for Local Government. 20
(4) Kentucky Commission on Human Rights. 21
(5) Kentucky Commission on Women. 22
(6) Department of Veterans' Affairs. 23
(7) Kentucky Commission on Military Affairs. 24
(8) Office of Minority Empowerment. 25
(9) Governor's Council on Wellness and Physical Activity. 26
(10) Kentucky Communications Network Authority. 27
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(11) Department of Workers' Claims. 1
(a) Office of the Commissioner. 2
(b) Office of General Counsel. 3
(c) Office of Administrative Law Judges. 4
(d) Division of Claims Processing. 5
(e) Division of Security and Compliance. 6
(f) Division of Workers' Compensation Funds. 7
(g) Division of Specialist and Medical Services. 8
Section 10. KRS 12.023 is amended to read as follows: 9
The following organizational units and administrative bodies sh all be attached to the 10
Office of the Governor: 11
(1) Council on Postsecondary Education; 12
(2) Department of Military Affairs; 13
(3) Department for Local Government; 14
(4) Kentucky Commission on Human Rights; 15
(5) Kentucky Commission on Women; 16
(6) Kentucky Commission on Military Affairs; 17
(7) Office of Minority Empowerment; 18
(a) The Martin Luther King Commission; 19
(8) Office of Homeland Security;[ and] 20
(9) Kentucky Communications Network Authority; and 21
(10) Department of Workers' Claims; 22
(a) Office of the Commissioner. 23
(b) Office of General Counsel. 24
(c) Office of Administrative Law Judges. 25
(d) Division of Claims Processing. 26
(e) Division of Security and Compliance. 27
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(f) Division of Workers' Compensation Funds. 1
(g) Division of Specialist and Medical Services. 2
Section 11. KRS 13A.3441 is amended to read as follows: 3
(1) The General Assembly finds that a proposed amendment of 803 KAR 25:190, 4
relating to utilization review and medical bill a udits, filed with the Commission on 5
February 18, 2021, by the [Labor Cabinet, ] Department of Workers' Claims, was 6
found deficient on or after March 30, 2021, and before January 4, 2022, but 7
determined to become effective notwithstanding the finding of defi ciency pursuant 8
to KRS 13A.330, as evidenced by records of the Legislative Research Commission. 9
(2) Contrary provisions of any section of the Kentucky Revised Statutes 10
notwithstanding: 11
(a) If the proposed amendment of 803 KAR 25:190 referenced in subsecti on (1) 12
of this section has not been adopted on or before April 14, 2022, the proposed 13
amendment shall expire as of April 14, 2022; or 14
(b) If the proposed amendment of 803 KAR 25:190 referenced in subsection (1) 15
of this section has been adopted on or before April 14, 2022, 803 KAR 25:190 16
shall be null, void, and unenforceable as of April 14, 2022. 17
(3) Contrary provisions of any section of the Kentucky Revised Statutes 18
notwithstanding, the administrative body shall be prohibited from promulgating an 19
administrative regulation that is identical to, or substantially the same as, the 20
proposed amendment of 803 KAR 25:190 referenced in subsection (1) of this 21
section for a period beginning on January 4, 2022, and concluding on June 1, 2023. 22
(4) The proposed amendmen t referenced in subsection (1) of this section shall be 23
available to the public, in the office of the Legislative Research Commission's 24
regulations compiler. 25
Section 12. KRS 13B.020 is amended to read as follows: 26
(1) The provisions of this chapter shall apply to all administrative hearings conducted 27
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by an agency, with the exception of those specifically exempted under this section. 1
The provisions of this chapter shall supersede any other provisions of the Kentucky 2
Revised Statutes and administrative regulations, unless exempted under this section, 3
to the extent these other provisions are duplicative or in conflict. This chapter 4
creates only procedural rights and shall not be construed to confer upon any person 5
a right to hearing not expressly provided by law. 6
(2) The provisions of this chapter shall not apply to: 7
(a) Investigations, hearings to determine probable cause, or any other type of 8
information gathering or fact finding activities; 9
(b) Public hearings required in KR S Chapter 13A for the promulgation of 10
administrative regulations; 11
(c) Any other public hearing conducted by an administrative agency which is 12
nonadjudicatory in nature and the primary purpose of which is to seek public 13
input on public policy making; 14
(d) Military adjudicatory proceedings conducted in accordance with KRS Chapter 15
35; 16
(e) Administrative hearings conducted by the legislative and judicial branches of 17
state government; 18
(f) Administrative hearings conducted by any city, county, urban -county, charter 19
county, or special district contained in KRS Chapters 65 to 109, or any other 20
unit of local government operating strictly in a local jurisdictional capacity; 21
(g) Informal hearings which are part of a multilevel hearing process that affords 22
an administrative hearing at some point in the hearing process if the 23
procedures for informal hearings are approved and promulgated in accordance 24
with subsections (4) and (5) of this section; 25
(h) Limited exemptions granted for specific hearing provisions and denoted by 26
reference in the text of the applicable statutes or administrative regulations; 27
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(i) Administrative hearings exempted pursuant to subsection (3) of this section; 1
(j) Administrative hearings exempted, in whole or in part, pursuant to 2
subsections (4) and (5) of this section; and 3
(k) Any administrative hearing which was commenced but not completed prior to 4
July 15, 1996. 5
(3) The following administrative hearings are exempt from application of this chapter 6
in compliance with 1994 Ky. Acts ch. 382, sec. 19: 7
(a) Finance and Administration Cabinet 8
1. Higher Education Assistance Authority 9
a. Wage garnishment hearings conducted under authority of 20 10
U.S.C. sec. 1095a and 34 C.F.R. sec. 682.410 11
b. Offset hearings conducted under authority of 31 U.S.C. sec. 12
3720A and sec. 3716, and 34 C.F.R. sec. 30.33 13
2. Department of Revenue 14
a. Any licensing and bond revocation hearings conducted under the 15
authority of KRS 138.210 to 138.448 and 234.310 to 234.440 16
b. Any license revocation hearings under KRS 131.630 and 138.130 17
to 138.205 18
(b) Cabinet for Health and Family Services 19
1. Office of the Inspector General 20
a. Certificate-of-need hearings and licensure conducted under 21
authority of KRS Chapter 216B 22
b. Licensure revocation hearings conducted under authority of KRS 23
Chapter 216B 24
2. Department for Community Based Services 25
a. Supervised placement revoca tion hearings conducted under 26
authority of KRS Chapter 630 27
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3. Department for Medicaid Services 1
a. Administrative appeal hearings following an external independent 2
third-party review of a Medicaid managed care organization's final 3
decision that denies, in whole or in part, a health care service to an 4
enrollee or a claim for reimbursement to the provider for a health 5
care service rendered by the provider to an enrollee of the 6
Medicaid managed care organization, conducted under authority of 7
KRS 205.646 8
(c) Justice and Public Safety Cabinet 9
1. Department of Kentucky State Police 10
a. Kentucky State Police Trial Board disciplinary hearings conducted 11
under authority of KRS Chapter 16 12
2. Department of Corrections 13
a. Parole Board hearings conducted under authority of KRS Chapter 14
439 15
b. Prison adjustment committee hearings conducted under a uthority 16
of KRS Chapter 197 17
c. Prison grievance committee hearings conducted under authority of 18
KRS Chapters 196 and 197 19
3. Department of Juvenile Justice 20
a. Supervised placement revocation hearings conducted under KRS 21
Chapter 635 22
(d) Energy and Environment Cabinet 23
1. Department for Natural Resources 24
a. Surface mining hearings conducted under authority of KRS 25
Chapter 350 26
b. Oil and gas hearings conducted under the authority of KRS 27
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Chapter 353, except for those conducted by the Kentucky Oil and 1
Gas Conservat ion Commission pursuant to KRS 353.500 to 2
353.720 3
c. Explosives and blasting hearings conducted under the authority of 4
KRS 351.315 to 351.375 5
2. Department for Environmental Protection 6
a. Wild River hearings conducted under authority of KRS Chapter 7
146 8
b. Water resources hearings conducted under authority of KRS 9
Chapter 151 10
c. Water plant operator and water well driller hearings conducted 11
under authority of KRS Chapter 223 12
d. Environmental protection hearings conducted under authority of 13
KRS Chapter 224 14
e. Petroleum Storage Tank Environmental Assurance Fund hearings 15
under authority of KRS Chapter 224 16
3. Public Service Commission 17
a. Utility hearings conducted under authority of KRS Chapters 74, 18
278, and 279 19
(e) Education and Labor Cabinet 20
1. [Department of Workers' Claims 21
a. Workers' compensation hearings conducted under authority of 22
KRS Chapter 342 23
2. ]Kentucky Occupational Safety and Health Review Commission 24
a. Occupational safety and health hearings conducted under authority 25
of KRS Chapter 338 26
2.[3.] Unemployment insurance hearings conducted under authority of KRS 27
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Chapter 341 1
3.[4.] Disability determination hearings conducted under authority of 20 2
C.F.R. pt. 404 3
(f) Public Protection Cabinet 4
1. Board of Claims 5
a. Liability hearings conducted under authority of KRS 49.020(5) 6
and 49.040 to 49.180 7
(g) State universities and colleges 8
1. Student suspension and expulsion hearings conducted under authority of 9
KRS Chapter 164 10
2. University presidents and faculty removal he arings conducted under 11
authority of KRS Chapter 164 12
3. Campus residency hearings conducted under authority of KRS Chapter 13
164 14
4. Family Education Rights to Privacy Act hearings conducted under 15
authority of 20 U.S.C. sec. 1232 and 34 C.F.R. sec. 99 16
5. Federal Health Care Quality Improvement Act of 1986 hearings 17
conducted under authority of 42 U.S.C. sec. 11101 to 11115 and KRS 18
Chapter 311 19
(h) Department of Workers' Claims 20
1. Workers' compensation hearings conducted under authority of KRS 21
Chapter 342. 22
(4) Any administrative hearing, or portion thereof, may be certified as exempt by the 23
Attorney General based on the following criteria: 24
(a) The provisions of this chapter conflict with any provision of federal law or 25
regulation with which the agency must comply, or with any federal law or 26
regulation with which the agency must comply to permit the agency or 27
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persons within the Commonwealth to receive federal tax benefits or federal 1
funds or other benefits; 2
(b) Conformity with the requirement of this chapter from whi ch exemption is 3
sought would be so unreasonable or so impractical as to deny due process 4
because of undue delay in the conduct of administrative hearings; or 5
(c) The hearing procedures represent informal proceedings which are the 6
preliminary stages or the review stages of a multilevel hearing process, if the 7
provisions of this chapter or the provisions of a substantially equivalent 8
hearing procedure exempted under subsection (3) of this section are applied at 9
some level within the multilevel process. 10
(5) The Attorney General shall not exempt an agency from any requirement of this 11
chapter until the agency establishes alternative procedures by administrative 12
regulation which, insofar as practical, shall be consistent with the intent and 13
purpose of this chapter . When regulations for alternative procedures are submitted 14
to the Administrative Regulation Review Subcommittee, they shall be accompanied 15
by the request for exemption and the approval of exemption from the Attorney 16
General. The decision of the Attorney G eneral, whether affirmative or negative, 17
shall be subject to judicial review in the Franklin Circuit Court within thirty (30) 18
days of the date of issuance. The court shall not overturn a decision of the Attorney 19
General unless the decision was arbitrary or capricious or contrary to law. 20
(6) Except to the extent precluded by another provision of law, a person may waive any 21
procedural right conferred upon that person by this chapter. 22
(7) The provisions of KRS 13B.030(2)(b) shall not apply to administrative he arings 23
held under KRS 11A.100 or 18A.095. 24
Section 13. KRS 151B.015 is amended to read as follows: 25
(1) The Education and Labor Cabinet is hereby created, which shall constitute a cabinet 26
of the state government within the meaning of KRS Chapter 12. The cabinet shall 27
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consist of a secretary and those administrative bodies and employees as provided by 1
law. 2
(2) Subject to KRS Chapter 12, the cabinet shall be composed of the major 3
organizational units listed below, units listed in KRS 12.020, and other 4
departments, divisions, and sections as are from time to time deemed necessary for 5
the proper and efficient operation of the cabinet: 6
(a) Office of the Secretary, which shall include the Office of Legal Services, the 7
Office of Adm inistrative Services, the Office of Technology Services, the 8
Office of Policy and Audit, the Office of Legislative Services, the Office of 9
Communications, and the Office of Kentucky Center for Statistics, as follows: 10
1. The Office of Legal Services shall: 11
a. Be headed by an executive director appointed by the secretary with 12
the approval of the Governor in accordance with KRS 12.050 and 13
12.210; and 14
b. Include the Workplace Standards Legal Division and[,] Workforce 15
Development Legal Division [, and Workers' Claims Legal 16
Division], each of which shall be headed by a general counsel 17
appointed by the secretary with the approval of the Governor in 18
accordance with KRS 12.050 and 12.210; and 19
2. The following agencies and entities are attached to the Office of the 20
Secretary for administrative purposes only: 21
a. Early Childhood Advisory Council; 22
b. Governor's School for Entrepreneurs Program; 23
c. Governor's Scholar Program; 24
d. Board of the Kentucky Center for Statistics; and 25
e. Foundation for Adult Education; 26
(b) [Department of Workers' Claims, which shall be headed by a commissioner 27
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appointed by the Governor and confirmed by the Senate in accordance with 1
KRS 342.228. The department shall be divided f or administrative purposes 2
into the Office of Administrative Law Judges, the Division of Claims 3
Processing, the Division of Security and Compliance, the Division of 4
Workers' Compensation Funds, and the Division of Specialist and Medical 5
Services. The Office of Administrative Law Judges shall be headed by a chief 6
administrative law judge appointed in accordance with KRS 342.230. Each 7
division in the department shall be headed by a director appointed by the 8
secretary with the approval of the Governor in accor dance with KRS 12.050. 9
The Workers' Compensation Board shall be attached to the Department of 10
Workers' Claims for administrative purposes only; 11
(c) ]Department of Workplace Standards, which shall be headed by a 12
commissioner appointed by the Governor in accordance with KRS 12.040 and 13
shall be divided for administrative purposes into the Division of Occupational 14
Safety and Health Compliance, the Division of Occupational Safety and 15
Health Education and Training, and the Division of Wages and Hours. Each 16
of the se divisions shall be headed by a director appointed by the secretary 17
with the approval of the Governor in accordance with KRS 12.050; 18
(c)[(d)] Office of Unemployment Insurance, which shall be headed by an 19
executive director appointed by the Governor in ac cordance with KRS 20
12.040; 21
(d)[(e)] Kentucky Unemployment Insurance Commission; 22
(e)[(f)] Department for Libraries and Archives; 23
(f)[(g)] Office of Educational Programs; 24
(g)[(h)] Kentucky Workforce Innovation Board; 25
(h)[(i)] Department for Disability Determi nation Services, which shall include 26
the: 27
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1. Division of Operations; 1
2. Division of Support Services; 2
3. Division of Specialized Cases; and 3
4. Division of Case Processing; and 4
(i)[(j)] Department of Workforce Development, which shall be headed by a 5
commissioner appointed by the Governor in accordance with KRS 12.040 6
who shall report to the secretary. Each office or division in the department 7
shall be headed by an executive director or division director appointed by the 8
secretary with the approval of the Gov ernor in accordance with KRS 12.050. 9
The department shall be composed of the following offices: 10
1. Career Development Office; 11
2. Office of Vocational Rehabilitation, which shall include the Division of 12
Program Policy and Support. The division director shal l report to the 13
executive director for the Office of Vocational Rehabilitation; 14
3. Office of Industry and Apprenticeship Services, which shall include the 15
Division of Apprenticeship and the Division of Workforce Talent. The 16
division directors shall report to the executive director of the Office of 17
Industry and Apprenticeship Services; 18
4. Office of Adult Education; 19
5. Kentucky Apprenticeship Council, which shall be attached to the 20
department for administrative purposes only; 21
6. Division of Technical Assistance; and 22
7. Office of the Kentucky Workforce Innovation Board. 23
(3) The following agencies are attached to the cabinet for administrative purposes only: 24
(a) Kentucky Occupational Safety and Health Review Commission; 25
(b) State Labor Relations Board; 26
(c) Workers' Compensation Funding Commission; 27
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(d) Kentucky Occupational Safety and Health Standards Board; 1
(e) Kentucky Environmental Education Council; 2
(f) Kentucky Geographic Education Board; 3
(g) Board of Directors for the Center for School Safety; 4
(h) Kentucky Commission on Proprietary Education; 5
(i) Employers' Mutual Insurance Authority; 6
(j) Workers' Compensation Nominating Committee; 7
(k) Kentucky Commission on the Deaf and Hard of Hearing; 8
(l) Kentucky Educational Television; 9
(m) Kentucky Work Ready Skills Advisory Committee; and 10
(n) Foundation for Adult Education. 11
Section 14. KRS 218A.278 is amended to read as follows: 12
(1) As used in[For the purposes of] this section: 13
(a) "Analyze" means to apply scientific and mathematical measures to determine 14
meaningful patterns and associations in data. "Analyze" includes descriptive 15
analysis to examine historical data, predictive analysis to examine future 16
probabilities and trends, and prescriptive analysis to examine how future 17
decisions may impact the population and trends; and 18
(b) "Pilot program" means a program in a county or set of counties, or a subset or 19
subsets of the population, as designated by the Cabinet for Health and Family 20
Services and the Office of Drug Control Policy for analyzing the effectiveness 21
of substance abuse treatment services in Kentucky. 22
(2) The general purpose of this section is to assist in the development of a pilot 23
program to analyze the outcomes and effectiveness of substance abuse treatment 24
programs in order to ensure that the Commonwealth is: 25
(a) Addressing appropriate risk and protective factors for substance abuse in a 26
defined population; 27
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(b) Using approaches that have been shown to be effective; 1
(c) Intervening early at important stages and transitions; 2
(d) Intervening in appropriate settings and domains; and 3
(e) Managing programs effectively. 4
(3) Sources of data for the pilot program shall include, at a m inimum, claims under the 5
Kentucky Department for Medicaid Services, the electronic monitoring system for 6
controlled substances established under KRS 218A.202, and the Department of 7
Workers' Claims[ within the Education and Labor Cabinet]. 8
(4) As funds are available, the Cabinet for Health and Family Services and the Office 9
of Drug Control Policy shall initiate a pilot program to determine, collect, and 10
analyze performance measurement data for substance abuse treatment services to 11
determine practices that re duce frequency of relapse, provide better outcomes for 12
patients, hold patients accountable, and control health costs related to substance 13
abuse. 14
(5) By December 31, 2016, the Cabinet for Health and Family Services and the Office 15
of Drug Control Policy shal l issue a joint report to the Legislative Research 16
Commission and the Office of the Governor that: 17
(a) Details the findings of the pilot program; 18
(b) Includes recommendations based on the pilot program's results for optimizing 19
substance abuse treatment services; and 20
(c) Includes recommendations for the continued application of analytics to further 21
augment Kentucky's approach to fighting substance abuse in the future. 22
Section 15. KRS 304.13-167 is amended to read as follows: 23
(1) Every workers' compensation insurer shall adhere to a uniform classification system 24
and uniform experience rating system filed with the commiss ioner by an advisory 25
organization designated by the commissioner. 26
(2) Every workers' compensation insurer shall report its experience in accordance with 27
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the statistical plans and other reporting requirements in use by an advisory 1
organization designated by the commissioner. 2
(3) A workers' compensation insurer may develop subclassifications of the uniform 3
classification system upon which rates may be made. These subclassifications and 4
their filing shall be subject to the provisions of this chapter applicable to filings 5
generally. 6
(4) A workers' compensation insurer may develop rating plans which identify loss 7
experience as a factor to be used. These rating plans and their filing shall be subject 8
to the provisions of this chapter applicable to filings generally. 9
(5) The commissioner shall disapprove subclassifications, rating plans, or other 10
variations from manual rules filed by a workers' compensation insurer if the insurer 11
fails to demonstrate that the data thereby produced can be reported consistent with 12
the uniform classification system and experience rating system and in such a 13
fashion so as to allow for the application of experience rating filed by the advisory 14
organization. 15
(6) The commissioner shall approve rating plans for workers' compensation insuranc e 16
that give specific identifiable consideration in the setting of rates to employers who 17
implement a drug -free workplace program pursuant to administrative regulations 18
adopted by the Department of Workers' Claims [ in the Education and Labor 19
Cabinet]. The plans shall take effect January 1, 2008, shall be actuarially sound, and 20
shall state the savings anticipated to result from such drug -free workplace 21
programs. The credit shall be at least five percent (5%) unless the commissioner 22
determines that five percen t (5%) is actuarially unsound. The commissioner is also 23
authorized to develop a schedule of premium credits for workers' compensation 24
insurance for employers who have safety programs that contain certain criteria for 25
safety programs. The commissioner shall consult with the commissioner of the 26
Department of Workers' Claims [ in the Education and Labor Cabinet] in setting 27
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such criteria. A drug -free workplace credit under this subsection shall not be 1
available to employers who receive a credit under KRS 304.13-412 or KRS Chapter 2
351. 3
Section 16. KRS 304.20-090 is amended to read as follows: 4
Any insurer providing workers' compensation insurance coverage for a Kentucky 5
location shall provide proof of coverage to the commissioner of the Department of 6
Workers' Claims [ in the Education and Labor Cabinet] in accordance with the 7
requirements of the chapter. 8
Section 17. KRS 342.1223 is amended to read as follows: 9
(1) The Kentucky Workers' Compensatio n Funding Commission is created as an 10
agency of the Commonwealth for the public purpose of controlling, investing, and 11
managing the funds collected pursuant to KRS 342.122. 12
(2) The commission shall: 13
(a) Hold, administer, invest, and reinvest the funds coll ected pursuant to KRS 14
342.122 and its other funds separate and apart from all "state funds" or "public 15
funds," as defined in KRS Chapter 446; 16
(b) Act as a fiduciary, as defined in KRS Chapter 386, in exercising its power 17
over the funds collected pursuant to KRS 342.122, and may invest association 18
funds through one (1) or more banks, trust companies, or other financial 19
institutions with offices in Kentucky in good standing with the Department of 20
Financial Institutions, in investments described in KRS Chapter 386, except 21
that the funding commission may, at its discretion, invest in equity securities; 22
(c) Report to the General Assembly at each even -numbered-year regular session 23
the actuarial soundness and adequacy of the funding mechanism for the 24
special fund a nd other programs supported by the mechanism, including 25
detailed information on the investment of funds and yields thereon; 26
(d) Recommend to the General Assembly, not later than October 31 of the year 27
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prior to each even-numbered-year regular legislative session, changes deemed 1
necessary in the level of the assessments imposed in this chapter; 2
(e) In conjunction with the commissioner[Education and Labor Cabinet] , submit 3
to the General Assembly, not later than October 31 of the year prior to each 4
even-numbered-year regular legislative session, a proposed budget for the 5
biennium beginning July 1 following the even -numbered-year regular session 6
of the General Assembly; 7
(f) In conjunction with the commissioner[Education and Labor Cabinet], provide 8
to the Interim Joint Committee on Appropriations and Revenue an annual 9
budget and detailed quarterly financial reports; 10
(g) Conduct periodic audits, independently or in cooperation with the Department 11
of Workers' Clai ms[Education and Labor Cabinet] or the Department of 12
Revenue, of all entities subject to the assessments imposed in this chapter; and 13
(h) Report monthly to the Committees on Appropriations and Revenue and on 14
Economic Development and Workforce Investment it s monthly expenditures 15
of restricted agency funds and the nature of the expenditures. 16
(3) The commission shall have all of the powers necessary or convenient to carry out 17
and effectuate the purposes for which it was established, including, but not limited 18
to, the power: 19
(a) To sue and be sued, complain, or defend, in its name; 20
(b) To elect, appoint, or hire officers, agents, and employees, and define their 21
duties and fix their compensation within the limits of its budget approved by 22
the General Assembly. No twithstanding any provision of KRS Chapter 18A 23
to the contrary, officers and employees of the funding commission may be 24
exempted from the classified service; 25
(c) To contract for investment counseling, legal, actuarial, auditing, and other 26
professional serv ices in accordance with the provisions relating to personal 27
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service contracts contained in KRS Chapter 45A; 1
(d) To appoint, hire, and contract with banks, trust companies, and other entities 2
to serve as depositories and custodians of its investment receipt s and other 3
funds; 4
(e) To tak e any and all other actions consistent with the purposes of the 5
commission and the provisions of this chapter; and 6
(f) To make and promulgate administrative regulations. 7
(4) The Kentucky Workers' Compensation Funding Commission may utilize the 8
investment expertise and advice of the Office of Financial Management within the 9
Finance and Administration Cabinet. The Kentucky Workers' Compensation 10
Funding Commission may procure one (1) or more consulting firms and enter into a 11
personal service contract with such consulting firms to provide investment 12
advisory, investment counseling, or investment management services. The Office of 13
Financial Management shall participate in the selection of any firms for investment 14
services provided, however, the Kentucky Workers' Compensation Funding 15
Commission shall have the right to make the final decision on the selection of any 16
firms. Notwithstanding any provisions of this section to the contrary, all contracts 17
for investment advisory, investment counseling, or investment manag ement 18
services or for the management of assets shall be subject to KRS Chapter 45A. The 19
fees charged by financial institutions for managing the investments of the funds of 20
the funding commission shall be paid from the investment earnings of the funds. 21
(5) The commission shall be attached to the Education and Labor Cabinet for 22
administrative purposes only. 23
Section 18. The Workers' Claims Legal Division within the Office of Legal 24
Services of the Education and Labor Cabinet shall be transferred to the Department of 25
Workers' Claims as the Office of General Counsel. 26
Section 19. Upon the effective date of this Act, all records, files, documents, 27
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equipment, staff, supporting budgets, and any an d all unexpended funds associated with 1
the activities of the Department of Workers' Claims when it was attached to the 2
Education and Labor Cabinet shall be transferred to the Department of Workers' Claims 3
administratively attached to the Office of the Gove rnor. All administrative regulations, 4
decisions, and actions promulgated, made, or taken by the Department of Workers' 5
Claims prior to the effective date of this Act that have not been repealed or rescinded 6
shall continue in effect on or after the effectiv e date of this Act, unless and until they are 7
amended, repealed, or rescinded by the department after the effective date of this Act. 8
Section 20. Whereas it is critical to the proper management and administration 9
of the reorganized Department of Workers' Claims that consolidation take place as soon 10
as possible, an emergency is declared to exist, and this Act takes effect upon its passage 11
and approval by the Governor or upon its otherwise becoming a law. 12