OWCA Director Kellar Issues Additional Notice on Dedicated Fund Issue

Office of Workers’ Compensation Administration (OWCA) Director Sheral Kellar issued an additional public notice via email regarding the potential shift of the OWCA statutory dedicated fund from a fund to fees and self-generated revenue. Read the notice, distributed yesterday, in full below. Read background information about the controversy here.

 

 

 

 

PUBLIC NOTICE

 

Recall a couple of weeks ago when I informed you that an ad hoc legislative finance committee made a motion to the Joint Legislative Committee on the Budget to classify the OWCA Administrative Fund as fees and self-generating revenue and eliminate it as a statutory dedicated fund.

Fast forward to April 23 when during a Senate Finance Committee meeting, the OWCA Administrative Fund was removed from the fees and self-generating revenue classification, over the objection of Senator Sharon Hewitt, and placed back into the statutory dedication classification,  Then  on  April 30, SB 400, which did not include the OWCA Administrative Fund as a fees and self-generating revenue account was read by title, passed by a vote of 20 yeas and 14 nays, ordered reengrossed and sent to the House.

On May 8th, SB 400 was heard in House Appropriations where Representative Rick Edmonds introduced House Committee Amendment No. 4060.  Of particular interest to the workers’ compensation community is Amendment #13.  It not only placed the OWCA Administrative Fund back into the fees and self-generating revenue classification [(L.R.S.-23:1291(E)] but it also classified the penalties for failure to secure workers’ compensation insurance; assessment and collection (L.S.A.-R.S. 23:1170), the criminal penalties for willfully failing to provide security for compensation (L.S.A.-R.S. 23:1172 and 1172.1), the criminal penalties for unlawful practices (L.S.A.-R.S. 23:1172.2) and the fines for failing to attend a cost-containment meeting (L.S.A.-R.S. 23:1178) as fees and self-generating revenue.

When Representative Jack McFarland inquired about the agreement made in Senate Finance to keep certain funds as statutorily dedicated and not to reclassify them as fees and self-generating revenue, Representative Edmonds responded that he made no such agreement.

As I stated in my earlier notice to you, the difference between the fund now funds being classified as fees and self-generating revenue rather than as statutory dedication is that these funds can be easily swept by the appropriations process at any time to fill a budget hole.  Senator Hewitt said as much during the House Appropriations Committee hearing.  Request for these funds should go through the normal budget process, she said.   “We should get to decide how these funds are used.”  We have too many statutory dedicated accounts, she said.

The next step is that SB 400 along with the amendment that classified OWCA fines, penalties and the OWCA Administrative Fund as fees and self-generating revenue will be heard on the House Floor.  If it passes along with the Amendment No. 13, you lose the right to say what your self-assessment will be used for.   If you want the OWCA Assessment and the OWCA fines and penalties to be used for the purposed intended, you should address your concerns to members of the House of Representatives in advance of the vote, either personally or during the House Floor debate.

 

 

 

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