Bill Text: OH HB576 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: To authorize the state and local governments to jointly offer tax and other incentives to businesses that establish operations within designated areas.

Spectrum: Partisan Bill (Republican 9-0)

Status: (Introduced - Dead) 2010-09-01 - To Ways & Means [HB576 Detail]

Download: Ohio-2009-HB576-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 576

Representative Morgan 

Cosponsors: Representatives Uecker, Blair, Hite, Grossman, Jordan, Adams, R., Sears, Lehner 

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A BILL

To amend sections 1739.02, 4115.04, 4123.01, 4123.35,

1

and 4123.82 and to enact sections 122.09 and

2

4123.354 of the Revised Code to authorize the

3

state and local governments to jointly offer tax

4

and other incentives to businesses that establish

5

operations within designated areas.

6

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1739.02, 4115.04, 4123.01, 4123.35,	7
and 4123.82 be amended and sections 122.09 and 4123.354 of the	8
Revised Code be enacted to read as follows:	9

Sec. 122.09. (A) As used in this section:

10

(1) "Subdivision" has the same meaning as in section 5705.01	11
of the Revised Code and refers to the subdivision's taxing	12
authority, as defined in that section, where the context requires.	13

(2) "Participating governmental authority" means a	14
subdivision that enters into a contract under this section, and	15
the state if the director of development is a party to such a	16
contract.	17

(3) "Tax and other incentives" includes full or partial	18
exemption from taxation of property in an area; exemptions,	19
deductions, or credits from or against the taxes imposed under	20
Chapter 322., 5725., 5729., 5733., 5739., 5741., 5747., or 5751.	21
of the Revised Code; exemptions, deductions, or credits from or	22
against municipal income taxes; assistance under Chapter 122.,	23
165., 166., or 184. of the Revised Code; and any other assistance	24
intended to promote or foster business development, increased	25
employment, and general economic welfare.	26

(4) "Multiple employer welfare arrangement," "fully insured	27
program," and "group self-insurance program" have the same	28
meanings as in section 1739.01 of the Revised Code.	29

(B)(1) For the purpose of facilitating economic development,	30
to create or preserve jobs and employment opportunities, and to	31
improve the economic welfare of the people in this state, the	32
director of development or one or more subdivisions may enter into	33
a contract to create an Ohio opportunity area. The area shall be	34
comprised exclusively of territory zoned for commercial or	35
agricultural use and shall be located within the boundaries of	36
this state and two or more participating governmental authorities.	37
The contract term may not exceed ten years, but it may be renewed	38
upon agreement of the participating governmental authorities. The	39
contract shall describe the area's boundaries, create a board of	40
directors, and delineate the board's authority and duties.	41

Authority granted to the board of directors may include the	42
following:	43

(a) Entering into agreements with businesses whereby a	44
business commits to create or preserve jobs in the area and the	45
board of directors provides tax and other incentives for the	46
business;	47

(b) Accepting service payments in lieu of taxes from	48
contracting businesses and using them for any purpose of the area;	49

(c) Granting or guaranteeing loans to finance infrastructure	50
improvements in the area and to acquire, construct, enlarge,	51
improve, or equip, and to sell, lease, exchange, or otherwise	52
dispose of property, structures, equipment, and facilities within	53
the area for industry, commerce, distribution, and research and	54
development purposes, pursuant to Sections 2p and 13 of Article	55
VIII, Ohio Constitution;	56

(d) Levying an income tax to be used solely for the purposes	57
of the area. A tax levied pursuant to division (B)(1)(d) of this	58
section may be levied only upon written petition signed by all	59
persons owning or leasing real property in the area for the	60
purpose of conducting a trade or business. The tax may be based	61
only on income earned by individuals for services performed within	62
the area and on the net profits of businesses located in the area.	63
The income tax is subject to the limitations of Chapter 718. of	64
the Revised Code. The board of directors may prescribe the form of	65
the petition. The board of directors shall publish or post public	66
notice within the area of any resolution adopted by the board	67
levying an income tax in the same manner required of municipal	68
corporations under sections 731.21 and 731.25 of the Revised Code.	69

(e) Waiving the prevailing wage requirements under Chapter	70
4115. of the Revised Code for public improvement projects in the	71
area for a fixed period of time, for the duration of the project,	72
or as otherwise determined by the board.	73

(2) If tax or other incentives are provided that reduce the	74
revenue from a tax imposed by a taxing authority that is not a	75
participating governmental authority, the taxing authority	76
imposing the tax shall be reimbursed for the entire amount of the	77
reduction unless it agrees otherwise.	78

(3)(a) A participating governmental authority may, by	79
resolution, issue on behalf of the board of directors	80
self-supporting securities to finance improvements in the area for	81
industry, commerce, distribution, and research and development	82
purposes, pursuant to Sections 2p and 13 of Article VIII, Ohio	83
Constitution. Securities shall be secured by a pledge of and a	84
lien upon the revenues derived from ownership or operation of the	85
improvements or amounts from taxes levied by the board of	86
directors or from service payments in lieu of taxes received by	87
the board of directors.	88

(b) A participating governmental authority may, by	89
resolution, issue on behalf of the board of directors bonds to	90
finance improvements in the area for industry, commerce,	91
distribution, and research and development purposes, pursuant to	92
Sections 2p and 13 of Article VIII, Ohio Constitution. The bonds	93
shall be secured by a pledge of and lien on taxes levied by the	94
board of directors or by service payments in lieu of taxes	95
received by the board of directors. The bonds shall not be general	96
obligations of the participating governmental authority, and shall	97
not constitute a debt, or a pledge of the faith and credit, but	98
shall be payable solely from the funds pledged for their payment	99
as authorized by this section.	100

(C) Businesses located in an Ohio opportunity area may form a	101
multiple employer welfare arrangement to provide health insurance	102
to the employees of the businesses and the employees' dependents	103
through a fully insured program or a group self-insurance program.	104
If the multiple employer welfare arrangement provides health	105
insurance through a group self-insurance program, the multiple	106
employer welfare arrangement shall be subject to Chapter 1739. of	107
the Revised Code.	108

(D) A board of directors created pursuant to this section is	109
a body corporate and politic that may sue and be sued, plead and	110
be impleaded, and has the powers and jurisdiction enumerated in	111
this section. The exercise by a board of the powers conferred upon	112
it shall be essential governmental functions of this state but no	113
authority is immune from liability by reason thereof. The	114
provisions of Chapter 2744. and section 121.22 of the Revised Code	115
apply to the board and the area. The board of directors is a	116
governmental agency for the purposes of Chapter 166. of the	117
Revised Code.	118

If the state is a participating governmental authority, the	119
director of development or a designee of the director shall be a	120
member of the board. Other members of the board shall be appointed	121
as provided in the contract from among the other participating	122
governmental authorities and the elected chief executive officers	123
thereof, if any, provided that there shall be at least two members	124
appointed from each of the participating governmental authorities.	125

Official actions of the board of directors require an	126
affirmative vote of two-thirds of the board's members. The board's	127
official actions bind the participating governmental authorities.	128

(E)(1) A contract entered into under division (B) of this	129
section is not binding unless it is approved by each participating	130
governmental authority. The director of development shall	131
determine whether the state will be a party to the contract. All	132
other participating governmental authorities shall approve the	133
contract by ordinance or resolution. After all participating	134
governmental authorities have approved the contract, a copy of the	135
contract shall be filed with the director of development unless	136
the state is a participating governmental authority. Upon creation	137
of the area, no exemption from taxation may be granted or	138
authorized for property in the area unless the exemption is first	139
approved by official action of the board of directors before	140
application is made to the tax commissioner.	141

(2) Before a subdivision approves a contract entered into	142
under this section, each shall hold a public hearing concerning	143
the contract and shall provide thirty days' public notice of the	144
time and place of the public hearing in a newspaper of general	145
circulation in the county or counties in which the area is to be	146
created, a summary of the terms of the contract, a statement that	147
the entire text of the contract and area maps and plans are on	148
file for public examination in the office of the fiscal officer of	149
each subdivision, and information pertaining to any tax or debt	150
changes that will or may occur as a result of the contract.	151

During the thirty-day period before the public hearing, a	152
copy of the text of the contract together with copies of area maps	153
and plans related to or part of the contract shall be on file, for	154
public examination, in the office of the fiscal officer of each	155
subdivision. The public hearing provided for in this division	156
shall allow for public comment and recommendations from the public	157
on the proposed contract. The participating governmental	158
authorities may include in the contract any of those	159
recommendations before approving the contract.	160

Sec. 1739.02.  (A) A trade association, industry association,	161
or professional association that has been organized and maintained	162
in good faith for a continuous period of one year or more for	163
purposes other than obtaining insurance may establish, maintain,	164
or operate a group self-insurance program under a multiple	165
employer welfare arrangement that is chartered and created in this	166
state under sections 1739.01 to 1739.22 of the Revised Code.	167

(B) Except as provided in section 9.833 and sections 1739.01	168
to 1739.22 of the Revised Code, no multiple employer welfare	169
arrangement or other entity by which two or more employers jointly	170
participate in a common employee welfare benefit plan shall	171
operate a group self-insurance program in this state after four	172
months after the effective date of this sectionApril 9, 1993.	173

(C) Sections 1739.01 to 1739.22 of the Revised Code do not	174
apply to any entity that establishes, maintains, or operates a	175
fully-insuredfully insured program.	176

(D) No person shall establish, operate, or maintain a	177
multiple employer welfare arrangement providing benefits through a	178
group self-insurance program in this state unless the multiple	179
employer welfare arrangement has a valid certificate of authority	180
from the superintendent of insurance.	181

(E) This chapter shall not apply to a self-insuring	182
consortium created for purposes of workers' compensation as	183
described in section 4123.354 of the Revised Code.	184

Sec. 4115.04.  (A)(1) Every public authority authorized to	185
contract for or construct with its own forces a public	186
improvement, before advertising for bids or undertaking such	187
construction with its own forces, shall have the director of	188
commerce determine the prevailing rates of wages of mechanics and	189
laborers in accordance with section 4115.05 of the Revised Code	190
for the class of work called for by the public improvement, in the	191
locality where the work is to be performed. Except as provided in	192
division (A)(2) of this section, that schedule of wages shall be	193
attached to and made part of the specifications for the work, and	194
shall be printed on the bidding blanks where the work is done by	195
contract. A copy of the bidding blank shall be filed with the	196
director before the contract is awarded. A minimum rate of wages	197
for common laborers, on work coming under the jurisdiction of the	198
department of transportation, shall be fixed in each county of the	199
state by the department of transportation, in accordance with	200
section 4115.05 of the Revised Code.	201

(2) In the case of contracts that are administered by the	202
department of natural resources, the director of natural resources	203
or the director's designee shall include language in the contracts	204
requiring wage rate determinations and updates to be obtained	205
directly from the department of commerce through electronic or	206
other means as appropriate. Contracts that include this	207
requirement are exempt from the requirements established in	208
division (A)(1) of this section that involve attaching the	209
schedule of wages to the specifications for the work, making the	210
schedule part of those specifications, and printing the schedule	211
on the bidding blanks where the work is done by contract.	212

(B) Sections 4115.03 to 4115.16 of the Revised Code do not	213
apply to:	214

(1) Public improvements in any case where the federal	215
government or any of its agencies furnishes by loan or grant all	216
or any part of the funds used in constructing such improvements,	217
provided that the federal government or any of its agencies	218
prescribes predetermined minimum wages to be paid to mechanics and	219
laborers employed in the construction of such improvements;	220

(2) A participant in a work activity, developmental activity,	221
or an alternative work activity under sections 5107.40 to 5107.69	222
of the Revised Code when a public authority directly uses the	223
labor of the participant to construct a public improvement if the	224
participant is not engaged in paid employment or subsidized	225
employment pursuant to the activity;	226

(3) Public improvements undertaken by, or under contract for,	227
the board of education of any school district or the governing	228
board of any educational service center;	229

(4) Public improvements undertaken by, or under contract for,	230
a county hospital operated pursuant to Chapter 339. of the Revised	231
Code or a municipal hospital operated pursuant to Chapter 749. of	232
the Revised Code if none of the funds used in constructing the	233
improvements are the proceeds of bonds or other obligations that	234
are secured by the full faith and credit of the state, a county, a	235
township, or a municipal corporation and none of the funds used in	236
constructing the improvements, including funds used to repay any	237
amounts borrowed to construct the improvements, are funds that	238
have been appropriated for that purpose by the state, a board of	239
county commissioners, a township, or a municipal corporation from	240
funds generated by the levy of a tax, provided that a county	241
hospital or municipal hospital may elect to apply sections 4115.03	242
to 4115.16 of the Revised Code to a public improvement undertaken	243
by, or under contract for, the hospital;	244

(5) Any project described in divisions (D)(1)(a) to (D)(1)(e)	245
of section 176.05 of the Revised Code;	246

(6) Any project for which a waiver has been granted by a	247
board of directors of an Ohio opportunity area pursuant to section	248
122.09 of the Revised Code.	249

Sec. 4123.01.  As used in this chapter:

250

(A)(1) "Employee" means:

251

(a) Every person in the service of the state, or of any	252
county, municipal corporation, township, or school district	253
therein, including regular members of lawfully constituted police	254
and fire departments of municipal corporations and townships,	255
whether paid or volunteer, and wherever serving within the state	256
or on temporary assignment outside thereof, and executive officers	257
of boards of education, under any appointment or contract of hire,	258
express or implied, oral or written, including any elected	259
official of the state, or of any county, municipal corporation, or	260
township, or members of boards of education.	261

As used in division (A)(1)(a) of this section, the term	262
"employee" includes the following persons when responding to an	263
inherently dangerous situation that calls for an immediate	264
response on the part of the person, regardless of whether the	265
person is within the limits of the jurisdiction of the person's	266
regular employment or voluntary service when responding, on the	267
condition that the person responds to the situation as the person	268
otherwise would if the person were on duty in the person's	269
jurisdiction:	270

(i) Off-duty peace officers. As used in division (A)(1)(a)(i)	271
of this section, "peace officer" has the same meaning as in	272
section 2935.01 of the Revised Code.	273

(ii) Off-duty firefighters, whether paid or volunteer, of a	274
lawfully constituted fire department.	275

(iii) Off-duty first responders, emergency medical	276
technicians-basic, emergency medical technicians-intermediate, or	277
emergency medical technicians-paramedic, whether paid or	278
volunteer, of an ambulance service organization or emergency	279
medical service organization pursuant to Chapter 4765. of the	280
Revised Code.	281

(b) Every person in the service of any person, firm, or	282
private corporation, including any public service corporation,	283
that (i) employs one or more persons regularly in the same	284
business or in or about the same establishment under any contract	285
of hire, express or implied, oral or written, including aliens and	286
minors, household workers who earn one hundred sixty dollars or	287
more in cash in any calendar quarter from a single household and	288
casual workers who earn one hundred sixty dollars or more in cash	289
in any calendar quarter from a single employer, or (ii) is bound	290
by any such contract of hire or by any other written contract, to	291
pay into the state insurance fund the premiums provided by this	292
chapter.	293

(c) Every person who performs labor or provides services	294
pursuant to a construction contract, as defined in section 4123.79	295
of the Revised Code, if at least ten of the following criteria	296
apply:	297

(i) The person is required to comply with instructions from	298
the other contracting party regarding the manner or method of	299
performing services;	300

(ii) The person is required by the other contracting party to	301
have particular training;	302

(iii) The person's services are integrated into the regular	303
functioning of the other contracting party;	304

(iv) The person is required to perform the work personally;

305

(v) The person is hired, supervised, or paid by the other	306
contracting party;	307

(vi) A continuing relationship exists between the person and	308
the other contracting party that contemplates continuing or	309
recurring work even if the work is not full time;	310

(vii) The person's hours of work are established by the other	311
contracting party;	312

(viii) The person is required to devote full time to the	313
business of the other contracting party;	314

(ix) The person is required to perform the work on the	315
premises of the other contracting party;	316

(x) The person is required to follow the order of work set by	317
the other contracting party;	318

(xi) The person is required to make oral or written reports	319
of progress to the other contracting party;	320

(xii) The person is paid for services on a regular basis such	321
as hourly, weekly, or monthly;	322

(xiii) The person's expenses are paid for by the other	323
contracting party;	324

(xiv) The person's tools and materials are furnished by the	325
other contracting party;	326

(xv) The person is provided with the facilities used to	327
perform services;	328

(xvi) The person does not realize a profit or suffer a loss	329
as a result of the services provided;	330

(xvii) The person is not performing services for a number of	331
employers at the same time;	332

(xviii) The person does not make the same services available	333
to the general public;	334

(xix) The other contracting party has a right to discharge	335
the person;	336

(xx) The person has the right to end the relationship with	337
the other contracting party without incurring liability pursuant	338
to an employment contract or agreement.	339

Every person in the service of any independent contractor or	340
subcontractor who has failed to pay into the state insurance fund	341
the amount of premium determined and fixed by the administrator of	342
workers' compensation for the person's employment or occupation or	343
if a self-insuring employer has failed to pay compensation and	344
benefits directly to the employer's injured and to the dependents	345
of the employer's killed employees as required by section 4123.35	346
of the Revised Code, shall be considered as the employee of the	347
person who has entered into a contract, whether written or verbal,	348
with such independent contractor unless such employees or their	349
legal representatives or beneficiaries elect, after injury or	350
death, to regard such independent contractor as the employer.	351

(d) Every person to whom all of the following apply:

352

(i) The person is a resident of a state other than this state	353
and is covered by that other state's workers' compensation law;	354

(ii) The person performs labor or provides services for that	355
person's employer while temporarily within this state;	356

(iii) The laws of that other state do not include the	357
provisions described in division (H)(4) of section 4123.54 of the	358
Revised Code.	359

(2) "Employee" does not mean:

360

(a) A duly ordained, commissioned, or licensed minister or	361
assistant or associate minister of a church in the exercise of	362
ministry;	363

(b) Any officer of a family farm corporation;

364

(c) An individual incorporated as a corporation; or

365

(d) An individual who otherwise is an employee of an employer	366
but who signs the waiver and affidavit specified in section	367
4123.15 of the Revised Code on the condition that the	368
administrator has granted a waiver and exception to the	369
individual's employer under section 4123.15 of the Revised Code.	370

Any employer may elect to include as an "employee" within	371
this chapter, any person excluded from the definition of	372
"employee" pursuant to division (A)(2) of this section. If an	373
employer is a partnership, sole proprietorship, individual	374
incorporated as a corporation, or family farm corporation, such	375
employer may elect to include as an "employee" within this	376
chapter, any member of such partnership, the owner of the sole	377
proprietorship, the individual incorporated as a corporation, or	378
the officers of the family farm corporation. In the event of an	379
election, the employer shall serve upon the bureau of workers'	380
compensation written notice naming the persons to be covered,	381
include such employee's remuneration for premium purposes in all	382
future payroll reports, and no person excluded from the definition	383
of "employee" pursuant to division (A)(2) of this section,	384
proprietor, individual incorporated as a corporation, or partner	385
shall be deemed an employee within this division until the	386
employer has served such notice.	387

For informational purposes only, the bureau shall prescribe	388
such language as it considers appropriate, on such of its forms as	389
it considers appropriate, to advise employers of their right to	390
elect to include as an "employee" within this chapter a sole	391
proprietor, any member of a partnership, an individual	392
incorporated as a corporation, the officers of a family farm	393
corporation, or a person excluded from the definition of	394
"employee" under division (A)(2) of this section, that they should	395
check any health and disability insurance policy, or other form of	396
health and disability plan or contract, presently covering them,	397
or the purchase of which they may be considering, to determine	398
whether such policy, plan, or contract excludes benefits for	399
illness or injury that they might have elected to have covered by	400
workers' compensation.	401

(B) "Employer" means:

402

(1) The state, including state hospitals, each county,	403
municipal corporation, township, school district, and hospital	404
owned by a political subdivision or subdivisions other than the	405
state;	406

(2) Every person, firm, professional employer organization as	407
defined in section 4125.01 of the Revised Code, and private	408
corporation, including any public service corporation, that (a)	409
has in service one or more employees or shared employees regularly	410
in the same business or in or about the same establishment under	411
any contract of hire, express or implied, oral or written, or (b)	412
is bound by any such contract of hire or by any other written	413
contract, to pay into the insurance fund the premiums provided by	414
this chapter.	415

All such employers are subject to this chapter. Any member of	416
a firm or association, who regularly performs manual labor in or	417
about a mine, factory, or other establishment, including a	418
household establishment, shall be considered an employee in	419
determining whether such person, firm, or private corporation, or	420
public service corporation, has in its service, one or more	421
employees and the employer shall report the income derived from	422
such labor to the bureau as part of the payroll of such employer,	423
and such member shall thereupon be entitled to all the benefits of	424
an employee.	425

(C) "Injury" includes any injury, whether caused by external	426
accidental means or accidental in character and result, received	427
in the course of, and arising out of, the injured employee's	428
employment. "Injury" does not include:	429

(1) Psychiatric conditions except where the claimant's	430
psychiatric conditions have arisen from an injury or occupational	431
disease sustained by that claimant or where the claimant's	432
psychiatric conditions have arisen from sexual conduct in which	433
the claimant was forced by threat of physical harm to engage or	434
participate;	435

(2) Injury or disability caused primarily by the natural	436
deterioration of tissue, an organ, or part of the body;	437

(3) Injury or disability incurred in voluntary participation	438
in an employer-sponsored recreation or fitness activity if the	439
employee signs a waiver of the employee's right to compensation or	440
benefits under this chapter prior to engaging in the recreation or	441
fitness activity;	442

(4) A condition that pre-existed an injury unless that	443
pre-existing condition is substantially aggravated by the injury.	444
Such a substantial aggravation must be documented by objective	445
diagnostic findings, objective clinical findings, or objective	446
test results. Subjective complaints may be evidence of such a	447
substantial aggravation. However, subjective complaints without	448
objective diagnostic findings, objective clinical findings, or	449
objective test results are insufficient to substantiate a	450
substantial aggravation.	451

(D) "Child" includes a posthumous child and a child legally	452
adopted prior to the injury.	453

(E) "Family farm corporation" means a corporation founded for	454
the purpose of farming agricultural land in which the majority of	455
the voting stock is held by and the majority of the stockholders	456
are persons or the spouse of persons related to each other within	457
the fourth degree of kinship, according to the rules of the civil	458
law, and at least one of the related persons is residing on or	459
actively operating the farm, and none of whose stockholders are a	460
corporation. A family farm corporation does not cease to qualify	461
under this division where, by reason of any devise, bequest, or	462
the operation of the laws of descent or distribution, the	463
ownership of shares of voting stock is transferred to another	464
person, as long as that person is within the degree of kinship	465
stipulated in this division.	466

(F) "Occupational disease" means a disease contracted in the	467
course of employment, which by its causes and the characteristics	468
of its manifestation or the condition of the employment results in	469
a hazard which distinguishes the employment in character from	470
employment generally, and the employment creates a risk of	471
contracting the disease in greater degree and in a different	472
manner from the public in general.	473

(G) "Self-insuring employer" means an employer who is granted	474
the privilege of paying compensation and benefits directly under	475
section 4123.35 of the Revised Code, including a board of county	476
commissioners for the sole purpose of constructing a sports	477
facility as defined in section 307.696 of the Revised Code,	478
provided that the electors of the county in which the sports	479
facility is to be built have approved construction of a sports	480
facility by ballot election no later than November 6, 1997, but	481
does not include a self-insuring consortium.	482

(H) "Public employer" means an employer as defined in	483
division (B)(1) of this section.	484

(I) "Sexual conduct" means vaginal intercourse between a male	485
and female; anal intercourse, fellatio, and cunnilingus between	486
persons regardless of gender; and, without privilege to do so, the	487
insertion, however slight, of any part of the body or any	488
instrument, apparatus, or other object into the vaginal or anal	489
cavity of another. Penetration, however slight, is sufficient to	490
complete vaginal or anal intercourse.	491

(J) "Other-states' insurer" means an insurance company that	492
is authorized to provide workers' compensation insurance coverage	493
in any of the states that permit employers to obtain insurance for	494
workers' compensation claims through insurance companies.	495

(K) "Other-states' coverage" means insurance coverage	496
purchased by an employer for workers' compensation claims that	497
arise in a state or states other than this state and that are	498
filed by the employees of the employer or those employee's	499
dependents, as applicable, in that other state or those other	500
states.	501

(L) "Self-insuring consortium" means a group of employers	502
that is granted the privilege of paying compensation and benefits	503
directly under section 4123.354 of the Revised Code.	504

Sec. 4123.35.  (A) Except as provided in this section, every	505
employer mentioned in division (B)(2) of section 4123.01 of the	506
Revised Code, and every publicly owned utility shall pay	507
semiannually in the months of January and July into the state	508
insurance fund the amount of annual premium the administrator of	509
workers' compensation fixes for the employment or occupation of	510
the employer, the amount of which premium to be paid by each	511
employer to be determined by the classifications, rules, and rates	512
made and published by the administrator. The employer shall pay	513
semiannually a further sum of money into the state insurance fund	514
as may be ascertained to be due from the employer by applying the	515
rules of the administrator, and a receipt or certificate	516
certifying that payment has been made, along with a written notice	517
as is required in section 4123.54 of the Revised Code, shall be	518
mailed immediately to the employer by the bureau of workers'	519
compensation. The receipt or certificate is prima-facie evidence	520
of the payment of the premium, and the proper posting of the	521
notice constitutes the employer's compliance with the notice	522
requirement mandated in section 4123.54 of the Revised Code.	523

The bureau of workers' compensation shall verify with the	524
secretary of state the existence of all corporations and	525
organizations making application for workers' compensation	526
coverage and shall require every such application to include the	527
employer's federal identification number.	528

An employer as defined in division (B)(2) of section 4123.01	529
of the Revised Code who has contracted with a subcontractor is	530
liable for the unpaid premium due from any subcontractor with	531
respect to that part of the payroll of the subcontractor that is	532
for work performed pursuant to the contract with the employer.	533

Division (A) of this section providing for the payment of	534
premiums semiannually does not apply to any employer who was a	535
subscriber to the state insurance fund prior to January 1, 1914,	536
or who may first become a subscriber to the fund in any month	537
other than January or July. Instead, the semiannual premiums shall	538
be paid by those employers from time to time upon the expiration	539
of the respective periods for which payments into the fund have	540
been made by them.	541

The administrator shall adopt rules to permit employers to	542
make periodic payments of the semiannual premium due under this	543
division. The rules shall include provisions for the assessment of	544
interest charges, where appropriate, and for the assessment of	545
penalties when an employer fails to make timely premium payments.	546
An employer who timely pays the amounts due under this division is	547
entitled to all of the benefits and protections of this chapter.	548
Upon receipt of payment, the bureau immediately shall mail a	549
receipt or certificate to the employer certifying that payment has	550
been made, which receipt is prima-facie evidence of payment.	551
Workers' compensation coverage under this chapter continues	552
uninterrupted upon timely receipt of payment under this division.	553

Every public employer, except public employers that are	554
self-insuring employers under this section, shall comply with	555
sections 4123.38 to 4123.41, and 4123.48 of the Revised Code in	556
regard to the contribution of moneys to the public insurance fund.	557

(B) Employers who will abide by the rules of the	558
administrator and who may be of sufficient financial ability to	559
render certain the payment of compensation to injured employees or	560
the dependents of killed employees, and the furnishing of medical,	561
surgical, nursing, and hospital attention and services and	562
medicines, and funeral expenses, equal to or greater than is	563
provided for in sections 4123.52, 4123.55 to 4123.62, and 4123.64	564
to 4123.67 of the Revised Code, and who do not desire to insure	565
the payment thereof or indemnify themselves against loss sustained	566
by the direct payment thereof, upon a finding of such facts by the	567
administrator, may be granted the privilege to pay individually	568
compensation, and furnish medical, surgical, nursing, and hospital	569
services and attention and funeral expenses directly to injured	570
employees or the dependents of killed employees, thereby being	571
granted status as a self-insuring employer. The administrator may	572
charge employers who apply for the status as a self-insuring	573
employer a reasonable application fee to cover the bureau's costs	574
in connection with processing and making a determination with	575
respect to an application.	576

All employers granted status as self-insuring employers shall	577
demonstrate sufficient financial and administrative ability to	578
assure that all obligations under this section are promptly met.	579
The administrator shall deny the privilege where the employer is	580
unable to demonstrate the employer's ability to promptly meet all	581
the obligations imposed on the employer by this section.	582

(1) The administrator shall consider, but is not limited to,	583
the following factors, where applicable, in determining the	584
employer's ability to meet all of the obligations imposed on the	585
employer by this section:	586

(a) The employer employs a minimum of five hundred employees	587
in this state;	588

(b) The employer has operated in this state for a minimum of	589
two years, provided that an employer who has purchased, acquired,	590
or otherwise succeeded to the operation of a business, or any part	591
thereof, situated in this state that has operated for at least two	592
years in this state, also shall qualify;	593

(c) Where the employer previously contributed to the state	594
insurance fund or is a successor employer as defined by bureau	595
rules, the amount of the buyout, as defined by bureau rules;	596

(d) The sufficiency of the employer's assets located in this	597
state to insure the employer's solvency in paying compensation	598
directly;	599

(e) The financial records, documents, and data, certified by	600
a certified public accountant, necessary to provide the employer's	601
full financial disclosure. The records, documents, and data	602
include, but are not limited to, balance sheets and profit and	603
loss history for the current year and previous four years.	604

(f) The employer's organizational plan for the administration	605
of the workers' compensation law;	606

(g) The employer's proposed plan to inform employees of the	607
change from a state fund insurer to a self-insuring employer, the	608
procedures the employer will follow as a self-insuring employer,	609
and the employees' rights to compensation and benefits; and	610

(h) The employer has either an account in a financial	611
institution in this state, or if the employer maintains an account	612
with a financial institution outside this state, ensures that	613
workers' compensation checks are drawn from the same account as	614
payroll checks or the employer clearly indicates that payment will	615
be honored by a financial institution in this state.	616

TheExcept as otherwise provided in section 4123.354 of the	617
Revised Code, the administrator may waive the requirements of	618
divisions (B)(1)(a) and (b) of this section and the requirement of	619
division (B)(1)(e) of this section that the financial records,	620
documents, and data be certified by a certified public accountant.	621
The administrator shall adopt rules establishing the criteria that	622
an employer shall meet in order for the administrator to waive the	623
requirement of division (B)(1)(e) of this section. Such rules may	624
require additional security of that employer pursuant to division	625
(E) of section 4123.351 of the Revised Code.	626

The administrator shall not grant the status of self-insuring	627
employer to the state, except that the administrator may grant the	628
status of self-insuring employer to a state institution of higher	629
education, excluding its hospitals, that meets the requirements of	630
division (B)(2) of this section.	631

(2) When considering the application of a public employer,	632
except for a board of county commissioners described in division	633
(G) of section 4123.01 of the Revised Code, a board of a county	634
hospital, or a publicly owned utility, the administrator shall	635
verify that the public employer satisfies all of the following	636
requirements as the requirements apply to that public employer:	637

(a) For the two-year period preceding application under this	638
section, the public employer has maintained an unvoted debt	639
capacity equal to at least two times the amount of the current	640
annual premium established by the administrator under this chapter	641
for that public employer for the year immediately preceding the	642
year in which the public employer makes application under this	643
section.	644

(b) For each of the two fiscal years preceding application	645
under this section, the unreserved and undesignated year-end fund	646
balance in the public employer's general fund is equal to at least	647
five per cent of the public employer's general fund revenues for	648
the fiscal year computed in accordance with generally accepted	649
accounting principles.	650

(c) For the five-year period preceding application under this	651
section, the public employer, to the extent applicable, has	652
complied fully with the continuing disclosure requirements	653
established in rules adopted by the United States securities and	654
exchange commission under 17 C.F.R. 240.15c 2-12.	655

(d) For the five-year period preceding application under this	656
section, the public employer has not had its local government fund	657
distribution withheld on account of the public employer being	658
indebted or otherwise obligated to the state.	659

(e) For the five-year period preceding application under this	660
section, the public employer has not been under a fiscal watch or	661
fiscal emergency pursuant to section 118.023, 118.04, or 3316.03	662
of the Revised Code.	663

(f) For the public employer's fiscal year preceding	664
application under this section, the public employer has obtained	665
an annual financial audit as required under section 117.10 of the	666
Revised Code, which has been released by the auditor of state	667
within seven months after the end of the public employer's fiscal	668
year.	669

(g) On the date of application, the public employer holds a	670
debt rating of Aa3 or higher according to Moody's investors	671
service, inc., or a comparable rating by an independent rating	672
agency similar to Moody's investors service, inc.	673

(h) The public employer agrees to generate an annual	674
accumulating book reserve in its financial statements reflecting	675
an actuarially generated reserve adequate to pay projected claims	676
under this chapter for the applicable period of time, as	677
determined by the administrator.	678

(i) For a public employer that is a hospital, the public	679
employer shall submit audited financial statements showing the	680
hospital's overall liquidity characteristics, and the	681
administrator shall determine, on an individual basis, whether the	682
public employer satisfies liquidity standards equivalent to the	683
liquidity standards of other public employers.	684

(j) Any additional criteria that the administrator adopts by	685
rule pursuant to division (E) of this section.	686

The administrator shall not approve the application of a	687
public employer, except for a board of county commissioners	688
described in division (G) of section 4123.01 of the Revised Code,	689
a board of a county hospital, or publicly owned utility, who does	690
not satisfy all of the requirements listed in division (B)(2) of	691
this section.	692

(C) A board of county commissioners described in division (G)	693
of section 4123.01 of the Revised Code, as an employer, that will	694
abide by the rules of the administrator and that may be of	695
sufficient financial ability to render certain the payment of	696
compensation to injured employees or the dependents of killed	697
employees, and the furnishing of medical, surgical, nursing, and	698
hospital attention and services and medicines, and funeral	699
expenses, equal to or greater than is provided for in sections	700
4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised	701
Code, and that does not desire to insure the payment thereof or	702
indemnify itself against loss sustained by the direct payment	703
thereof, upon a finding of such facts by the administrator, may be	704
granted the privilege to pay individually compensation, and	705
furnish medical, surgical, nursing, and hospital services and	706
attention and funeral expenses directly to injured employees or	707
the dependents of killed employees, thereby being granted status	708
as a self-insuring employer. The administrator may charge a board	709
of county commissioners described in division (G) of section	710
4123.01 of the Revised Code that applies for the status as a	711
self-insuring employer a reasonable application fee to cover the	712
bureau's costs in connection with processing and making a	713
determination with respect to an application. All employers	714
granted such status shall demonstrate sufficient financial and	715
administrative ability to assure that all obligations under this	716
section are promptly met. The administrator shall deny the	717
privilege where the employer is unable to demonstrate the	718
employer's ability to promptly meet all the obligations imposed on	719
the employer by this section. The administrator shall consider,	720
but is not limited to, the following factors, where applicable, in	721
determining the employer's ability to meet all of the obligations	722
imposed on the board as an employer by this section:	723

(1) The board as an employer employs a minimum of five	724
hundred employees in this state;	725

(2) The board has operated in this state for a minimum of two	726
years;	727

(3) Where the board previously contributed to the state	728
insurance fund or is a successor employer as defined by bureau	729
rules, the amount of the buyout, as defined by bureau rules;	730

(4) The sufficiency of the board's assets located in this	731
state to insure the board's solvency in paying compensation	732
directly;	733

(5) The financial records, documents, and data, certified by	734
a certified public accountant, necessary to provide the board's	735
full financial disclosure. The records, documents, and data	736
include, but are not limited to, balance sheets and profit and	737
loss history for the current year and previous four years.	738

(6) The board's organizational plan for the administration of	739
the workers' compensation law;	740

(7) The board's proposed plan to inform employees of the	741
proposed self-insurance, the procedures the board will follow as a	742
self-insuring employer, and the employees' rights to compensation	743
and benefits;	744

(8) The board has either an account in a financial	745
institution in this state, or if the board maintains an account	746
with a financial institution outside this state, ensures that	747
workers' compensation checks are drawn from the same account as	748
payroll checks or the board clearly indicates that payment will be	749
honored by a financial institution in this state;	750

(9) The board shall provide the administrator a surety bond	751
in an amount equal to one hundred twenty-five per cent of the	752
projected losses as determined by the administrator.	753

(D) The administrator shall require a surety bond from all	754
self-insuring employers, issued pursuant to section 4123.351 of	755
the Revised Code, that is sufficient to compel, or secure to	756
injured employees, or to the dependents of employees killed, the	757
payment of compensation and expenses, which shall in no event be	758
less than that paid or furnished out of the state insurance fund	759
in similar cases to injured employees or to dependents of killed	760
employees whose employers contribute to the fund, except when an	761
employee of the employer, who has suffered the loss of a hand,	762
arm, foot, leg, or eye prior to the injury for which compensation	763
is to be paid, and thereafter suffers the loss of any other of the	764
members as the result of any injury sustained in the course of and	765
arising out of the employee's employment, the compensation to be	766
paid by the self-insuring employer is limited to the disability	767
suffered in the subsequent injury, additional compensation, if	768
any, to be paid by the bureau out of the surplus created by	769
section 4123.34 of the Revised Code.	770

(E) In addition to the requirements of this section, the	771
administrator shall make and publish rules governing the manner of	772
making application and the nature and extent of the proof required	773
to justify a finding of fact by the administrator as to granting	774
the status of a self-insuring employer, which rules shall be	775
general in their application, one of which rules shall provide	776
that all self-insuring employers shall pay into the state	777
insurance fund such amounts as are required to be credited to the	778
surplus fund in division (B) of section 4123.34 of the Revised	779
Code. The administrator may adopt rules establishing requirements	780
in addition to the requirements described in division (B)(2) of	781
this section that a public employer shall meet in order to qualify	782
for self-insuring status.	783

Employers shall secure directly from the bureau central	784
offices application forms upon which the bureau shall stamp a	785
designating number. Prior to submission of an application, an	786
employer shall make available to the bureau, and the bureau shall	787
review, the information described in division (B)(1) of this	788
section, and public employers shall make available, and the bureau	789
shall review, the information necessary to verify whether the	790
public employer meets the requirements listed in division (B)(2)	791
of this section. An employer shall file the completed application	792
forms with an application fee, which shall cover the costs of	793
processing the application, as established by the administrator,	794
by rule, with the bureau at least ninety days prior to the	795
effective date of the employer's new status as a self-insuring	796
employer. The application form is not deemed complete until all	797
the required information is attached thereto. The bureau shall	798
only accept applications that contain the required information.	799

(F) The bureau shall review completed applications within a	800
reasonable time. If the bureau determines to grant an employer the	801
status as a self-insuring employer, the bureau shall issue a	802
statement, containing its findings of fact, that is prepared by	803
the bureau and signed by the administrator. If the bureau	804
determines not to grant the status as a self-insuring employer,	805
the bureau shall notify the employer of the determination and	806
require the employer to continue to pay its full premium into the	807
state insurance fund. The administrator also shall adopt rules	808
establishing a minimum level of performance as a criterion for	809
granting and maintaining the status as a self-insuring employer	810
and fixing time limits beyond which failure of the self-insuring	811
employer to provide for the necessary medical examinations and	812
evaluations may not delay a decision on a claim.	813

(G) The administrator shall adopt rules setting forth	814
procedures for auditing the program of self-insuring employers.	815
The bureau shall conduct the audit upon a random basis or whenever	816
the bureau has grounds for believing that a self-insuring employer	817
is not in full compliance with bureau rules or this chapter.	818

The administrator shall monitor the programs conducted by	819
self-insuring employers, to ensure compliance with bureau	820
requirements and for that purpose, shall develop and issue to	821
self-insuring employers standardized forms for use by the	822
self-insuring employer in all aspects of the self-insuring	823
employers' direct compensation program and for reporting of	824
information to the bureau.	825

The bureau shall receive and transmit to the self-insuring	826
employer all complaints concerning any self-insuring employer. In	827
the case of a complaint against a self-insuring employer, the	828
administrator shall handle the complaint through the	829
self-insurance division of the bureau. The bureau shall maintain a	830
file by employer of all complaints received that relate to the	831
employer. The bureau shall evaluate each complaint and take	832
appropriate action.	833

The administrator shall adopt as a rule a prohibition against	834
any self-insuring employer from harassing, dismissing, or	835
otherwise disciplining any employee making a complaint, which rule	836
shall provide for a financial penalty to be levied by the	837
administrator payable by the offending self-insuring employer.	838

(H) For the purpose of making determinations as to whether to	839
grant status as a self-insuring employer, the administrator may	840
subscribe to and pay for a credit reporting service that offers	841
financial and other business information about individual	842
employers. The costs in connection with the bureau's subscription	843
or individual reports from the service about an applicant may be	844
included in the application fee charged employers under this	845
section.	846

(I) The administrator, notwithstanding other provisions of	847
this chapter, may permit a self-insuring employer to resume	848
payment of premiums to the state insurance fund with appropriate	849
credit modifications to the employer's basic premium rate as such	850
rate is determined pursuant to section 4123.29 of the Revised	851
Code.	852

(J) On the first day of July of each year, the administrator	853
shall calculate separately each self-insuring employer's	854
assessments for the safety and hygiene fund, administrative costs	855
pursuant to section 4123.342 of the Revised Code, and for the	856
portion of the surplus fund under division (B) of section 4123.34	857
of the Revised Code that is not used for handicapped	858
reimbursement, on the basis of the paid compensation attributable	859
to the individual self-insuring employer according to the	860
following calculation:	861

(1) The total assessment against all self-insuring employers	862
as a class for each fund and for the administrative costs for the	863
year that the assessment is being made, as determined by the	864
administrator, divided by the total amount of paid compensation	865
for the previous calendar year attributable to all amenable	866
self-insuring employers;	867

(2) Multiply the quotient in division (J)(1) of this section	868
by the total amount of paid compensation for the previous calendar	869
year that is attributable to the individual self-insuring employer	870
for whom the assessment is being determined. Each self-insuring	871
employer shall pay the assessment that results from this	872
calculation, unless the assessment resulting from this calculation	873
falls below a minimum assessment, which minimum assessment the	874
administrator shall determine on the first day of July of each	875
year with the advice and consent of the bureau of workers'	876
compensation board of directors, in which event, the self-insuring	877
employer shall pay the minimum assessment.	878

In determining the total amount due for the total assessment	879
against all self-insuring employers as a class for each fund and	880
the administrative assessment, the administrator shall reduce	881
proportionately the total for each fund and assessment by the	882
amount of money in the self-insurance assessment fund as of the	883
date of the computation of the assessment.	884

The administrator shall calculate the assessment for the	885
portion of the surplus fund under division (B) of section 4123.34	886
of the Revised Code that is used for handicapped reimbursement in	887
the same manner as set forth in divisions (J)(1) and (2) of this	888
section except that the administrator shall calculate the total	889
assessment for this portion of the surplus fund only on the basis	890
of those self-insuring employers that retain participation in the	891
handicapped reimbursement program and the individual self-insuring	892
employer's proportion of paid compensation shall be calculated	893
only for those self-insuring employers who retain participation in	894
the handicapped reimbursement program. The administrator, as the	895
administrator determines appropriate, may determine the total	896
assessment for the handicapped portion of the surplus fund in	897
accordance with sound actuarial principles.	898

The administrator shall calculate the assessment for the	899
portion of the surplus fund under division (B) of section 4123.34	900
of the Revised Code that under division (D) of section 4121.66 of	901
the Revised Code is used for rehabilitation costs in the same	902
manner as set forth in divisions (J)(1) and (2) of this section,	903
except that the administrator shall calculate the total assessment	904
for this portion of the surplus fund only on the basis of those	905
self-insuring employers who have not made the election to make	906
payments directly under division (D) of section 4121.66 of the	907
Revised Code and an individual self-insuring employer's proportion	908
of paid compensation only for those self-insuring employers who	909
have not made that election.	910

The administrator shall calculate the assessment for the	911
portion of the surplus fund under division (B) of section 4123.34	912
of the Revised Code that is used for reimbursement to a	913
self-insuring employer under division (H) of section 4123.512 of	914
the Revised Code in the same manner as set forth in divisions	915
(J)(1) and (2) of this section except that the administrator shall	916
calculate the total assessment for this portion of the surplus	917
fund only on the basis of those self-insuring employers that	918
retain participation in reimbursement to the self-insuring	919
employer under division (H) of section 4123.512 of the Revised	920
Code and the individual self-insuring employer's proportion of	921
paid compensation shall be calculated only for those self-insuring	922
employers who retain participation in reimbursement to the	923
self-insuring employer under division (H) of section 4123.512 of	924
the Revised Code.	925

An employer who no longer is a self-insuring employer in this	926
state or who no longer is operating in this state, shall continue	927
to pay assessments for administrative costs and for the portion of	928
the surplus fund under division (B) of section 4123.34 of the	929
Revised Code that is not used for handicapped reimbursement, based	930
upon paid compensation attributable to claims that occurred while	931
the employer was a self-insuring employer within this state.	932

(K) The administrator shall deposit any moneys received from	933
a self-insuring employer for the self-insuring employer's	934
assessment to pay the costs solely attributable to the workers'	935
compensation council into the administrative assessment account	936
described in division (B) of section 4123.342 of the Revised Code	937
for the administrative cost assessment collected by the	938
administrator for the council. There is hereby created in the	939
state treasury the self-insurance assessment fund. All investment	940
earnings of the fund shall be deposited in the fund. The	941
administrator shall use the money in the self-insurance assessment	942
fund only for administrative costs as specified in section	943
4123.341 of the Revised Code.	944

(L) Every self-insuring employer shall certify, in affidavit	945
form subject to the penalty for perjury, to the bureau the amount	946
of the self-insuring employer's paid compensation for the previous	947
calendar year. In reporting paid compensation paid for the	948
previous year, a self-insuring employer shall exclude from the	949
total amount of paid compensation any reimbursement the	950
self-insuring employer receives in the previous calendar year from	951
the surplus fund pursuant to section 4123.512 of the Revised Code	952
for any paid compensation. The self-insuring employer also shall	953
exclude from the paid compensation reported any amount recovered	954
under section 4123.931 of the Revised Code and any amount that is	955
determined not to have been payable to or on behalf of a claimant	956
in any final administrative or judicial proceeding. The	957
self-insuring employer shall exclude such amounts from the paid	958
compensation reported in the reporting period subsequent to the	959
date the determination is made. The administrator shall adopt	960
rules, in accordance with Chapter 119. of the Revised Code, that	961
provide for all of the following:	962

(1) Establishing the date by which self-insuring employers	963
must submit such information and the amount of the assessments	964
provided for in division (J) of this section for employers who	965
have been granted self-insuring status within the last calendar	966
year;	967

(2) If an employer fails to pay the assessment when due, the	968
administrator may add a late fee penalty of not more than five	969
hundred dollars to the assessment plus an additional penalty	970
amount as follows:	971

(a) For an assessment from sixty-one to ninety days past due,	972
the prime interest rate, multiplied by the assessment due;	973

(b) For an assessment from ninety-one to one hundred twenty	974
days past due, the prime interest rate plus two per cent,	975
multiplied by the assessment due;	976

(c) For an assessment from one hundred twenty-one to one	977
hundred fifty days past due, the prime interest rate plus four per	978
cent, multiplied by the assessment due;	979

(d) For an assessment from one hundred fifty-one to one	980
hundred eighty days past due, the prime interest rate plus six per	981
cent, multiplied by the assessment due;	982

(e) For an assessment from one hundred eighty-one to two	983
hundred ten days past due, the prime interest rate plus eight per	984
cent, multiplied by the assessment due;	985

(f) For each additional thirty-day period or portion thereof	986
that an assessment remains past due after it has remained past due	987
for more than two hundred ten days, the prime interest rate plus	988
eight per cent, multiplied by the assessment due.	989

(3) An employer may appeal a late fee penalty and penalty	990
assessment to the administrator.	991

For purposes of division (L)(2) of this section, "prime	992
interest rate" means the average bank prime rate, and the	993
administrator shall determine the prime interest rate in the same	994
manner as a county auditor determines the average bank prime rate	995
under section 929.02 of the Revised Code.	996

The administrator shall include any assessment and penalties	997
that remain unpaid for previous assessment periods in the	998
calculation and collection of any assessments due under this	999
division or division (J) of this section.	1000

(M) As used in this section, "paid compensation" means all	1001
amounts paid by a self-insuring employer for living maintenance	1002
benefits, all amounts for compensation paid pursuant to sections	1003
4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60, and	1004
4123.64 of the Revised Code, all amounts paid as wages in lieu of	1005
such compensation, all amounts paid in lieu of such compensation	1006
under a nonoccupational accident and sickness program fully funded	1007
by the self-insuring employer, and all amounts paid by a	1008
self-insuring employer for a violation of a specific safety	1009
standard pursuant to Section 35 of Article II, Ohio Constitution	1010
and section 4121.47 of the Revised Code.	1011

(N) Should any section of this chapter or Chapter 4121. of	1012
the Revised Code providing for self-insuring employers'	1013
assessments based upon compensation paid be declared	1014
unconstitutional by a final decision of any court, then that	1015
section of the Revised Code declared unconstitutional shall revert	1016
back to the section in existence prior to November 3, 1989,	1017
providing for assessments based upon payroll.	1018

(O) The administrator may grant a self-insuring employer the	1019
privilege to self-insure a construction project entered into by	1020
the self-insuring employer that is scheduled for completion within	1021
six years after the date the project begins, and the total cost of	1022
which is estimated to exceed one hundred million dollars or, for	1023
employers described in division (R) of this section, if the	1024
construction project is estimated to exceed twenty-five million	1025
dollars. The administrator may waive such cost and time criteria	1026
and grant a self-insuring employer the privilege to self-insure a	1027
construction project regardless of the time needed to complete the	1028
construction project and provided that the cost of the	1029
construction project is estimated to exceed fifty million dollars.	1030
A self-insuring employer who desires to self-insure a construction	1031
project shall submit to the administrator an application listing	1032
the dates the construction project is scheduled to begin and end,	1033
the estimated cost of the construction project, the contractors	1034
and subcontractors whose employees are to be self-insured by the	1035
self-insuring employer, the provisions of a safety program that is	1036
specifically designed for the construction project, and a	1037
statement as to whether a collective bargaining agreement	1038
governing the rights, duties, and obligations of each of the	1039
parties to the agreement with respect to the construction project	1040
exists between the self-insuring employer and a labor	1041
organization.	1042

A self-insuring employer may apply to self-insure the	1043
employees of either of the following:	1044

(1) All contractors and subcontractors who perform labor or	1045
work or provide materials for the construction project;	1046

(2) All contractors and, at the administrator's discretion, a	1047
substantial number of all the subcontractors who perform labor or	1048
work or provide materials for the construction project.	1049

Upon approval of the application, the administrator shall	1050
mail a certificate granting the privilege to self-insure the	1051
construction project to the self-insuring employer. The	1052
certificate shall contain the name of the self-insuring employer	1053
and the name, address, and telephone number of the self-insuring	1054
employer's representatives who are responsible for administering	1055
workers' compensation claims for the construction project. The	1056
self-insuring employer shall post the certificate in a conspicuous	1057
place at the site of the construction project.	1058

The administrator shall maintain a record of the contractors	1059
and subcontractors whose employees are covered under the	1060
certificate issued to the self-insured employer. A self-insuring	1061
employer immediately shall notify the administrator when any	1062
contractor or subcontractor is added or eliminated from inclusion	1063
under the certificate.	1064

Upon approval of the application, the self-insuring employer	1065
is responsible for the administration and payment of all claims	1066
under this chapter and Chapter 4121. of the Revised Code for the	1067
employees of the contractor and subcontractors covered under the	1068
certificate who receive injuries or are killed in the course of	1069
and arising out of employment on the construction project, or who	1070
contract an occupational disease in the course of employment on	1071
the construction project. For purposes of this chapter and Chapter	1072
4121. of the Revised Code, a claim that is administered and paid	1073
in accordance with this division is considered a claim against the	1074
self-insuring employer listed in the certificate. A contractor or	1075
subcontractor included under the certificate shall report to the	1076
self-insuring employer listed in the certificate, all claims that	1077
arise under this chapter and Chapter 4121. of the Revised Code in	1078
connection with the construction project for which the certificate	1079
is issued.	1080

A self-insuring employer who complies with this division is	1081
entitled to the protections provided under this chapter and	1082
Chapter 4121. of the Revised Code with respect to the employees of	1083
the contractors and subcontractors covered under a certificate	1084
issued under this division for death or injuries that arise out	1085
of, or death, injuries, or occupational diseases that arise in the	1086
course of, those employees' employment on that construction	1087
project, as if the employees were employees of the self-insuring	1088
employer, provided that the self-insuring employer also complies	1089
with this section. No employee of the contractors and	1090
subcontractors covered under a certificate issued under this	1091
division shall be considered the employee of the self-insuring	1092
employer listed in that certificate for any purposes other than	1093
this chapter and Chapter 4121. of the Revised Code. Nothing in	1094
this division gives a self-insuring employer authority to control	1095
the means, manner, or method of employment of the employees of the	1096
contractors and subcontractors covered under a certificate issued	1097
under this division.	1098

The contractors and subcontractors included under a	1099
certificate issued under this division are entitled to the	1100
protections provided under this chapter and Chapter 4121. of the	1101
Revised Code with respect to the contractor's or subcontractor's	1102
employees who are employed on the construction project which is	1103
the subject of the certificate, for death or injuries that arise	1104
out of, or death, injuries, or occupational diseases that arise in	1105
the course of, those employees' employment on that construction	1106
project.	1107

The contractors and subcontractors included under a	1108
certificate issued under this division shall identify in their	1109
payroll records the employees who are considered the employees of	1110
the self-insuring employer listed in that certificate for purposes	1111
of this chapter and Chapter 4121. of the Revised Code, and the	1112
amount that those employees earned for employment on the	1113
construction project that is the subject of that certificate.	1114
Notwithstanding any provision to the contrary under this chapter	1115
and Chapter 4121. of the Revised Code, the administrator shall	1116
exclude the payroll that is reported for employees who are	1117
considered the employees of the self-insuring employer listed in	1118
that certificate, and that the employees earned for employment on	1119
the construction project that is the subject of that certificate,	1120
when determining those contractors' or subcontractors' premiums or	1121
assessments required under this chapter and Chapter 4121. of the	1122
Revised Code. A self-insuring employer issued a certificate under	1123
this division shall include in the amount of paid compensation it	1124
reports pursuant to division (L) of this section, the amount of	1125
paid compensation the self-insuring employer paid pursuant to this	1126
division for the previous calendar year.	1127

Nothing in this division shall be construed as altering the	1128
rights of employees under this chapter and Chapter 4121. of the	1129
Revised Code as those rights existed prior to September 17, 1996.	1130
Nothing in this division shall be construed as altering the rights	1131
devolved under sections 2305.31 and 4123.82 of the Revised Code as	1132
those rights existed prior to September 17, 1996.	1133

As used in this division, "privilege to self-insure a	1134
construction project" means privilege to pay individually	1135
compensation, and to furnish medical, surgical, nursing, and	1136
hospital services and attention and funeral expenses directly to	1137
injured employees or the dependents of killed employees.	1138

(P) A self-insuring employer whose application is granted	1139
under division (O) of this section shall designate a safety	1140
professional to be responsible for the administration and	1141
enforcement of the safety program that is specifically designed	1142
for the construction project that is the subject of the	1143
application.	1144

A self-insuring employer whose application is granted under	1145
division (O) of this section shall employ an ombudsperson for the	1146
construction project that is the subject of the application. The	1147
ombudsperson shall have experience in workers' compensation or the	1148
construction industry, or both. The ombudsperson shall perform all	1149
of the following duties:	1150

(1) Communicate with and provide information to employees who	1151
are injured in the course of, or whose injury arises out of	1152
employment on the construction project, or who contract an	1153
occupational disease in the course of employment on the	1154
construction project;	1155

(2) Investigate the status of a claim upon the request of an	1156
employee to do so;	1157

(3) Provide information to claimants, third party	1158
administrators, employers, and other persons to assist those	1159
persons in protecting their rights under this chapter and Chapter	1160
4121. of the Revised Code.	1161

A self-insuring employer whose application is granted under	1162
division (O) of this section shall post the name of the safety	1163
professional and the ombudsperson and instructions for contacting	1164
the safety professional and the ombudsperson in a conspicuous	1165
place at the site of the construction project.	1166

(Q) The administrator may consider all of the following when	1167
deciding whether to grant a self-insuring employer the privilege	1168
to self-insure a construction project as provided under division	1169
(O) of this section:	1170

(1) Whether the self-insuring employer has an organizational	1171
plan for the administration of the workers' compensation law;	1172

(2) Whether the safety program that is specifically designed	1173
for the construction project provides for the safety of employees	1174
employed on the construction project, is applicable to all	1175
contractors and subcontractors who perform labor or work or	1176
provide materials for the construction project, and has as a	1177
component, a safety training program that complies with standards	1178
adopted pursuant to the "Occupational Safety and Health Act of	1179
1970," 84 Stat. 1590, 29 U.S.C.A. 651, and provides for continuing	1180
management and employee involvement;	1181

(3) Whether granting the privilege to self-insure the	1182
construction project will reduce the costs of the construction	1183
project;	1184

(4) Whether the self-insuring employer has employed an	1185
ombudsperson as required under division (P) of this section;	1186

(5) Whether the self-insuring employer has sufficient surety	1187
to secure the payment of claims for which the self-insuring	1188
employer would be responsible pursuant to the granting of the	1189
privilege to self-insure a construction project under division (O)	1190
of this section.	1191

(R) As used in divisions (O), (P), and (Q), "self-insuring	1192
employer" includes the following employers, whether or not they	1193
have been granted the status of being a self-insuring employer	1194
under division (B) of this section:	1195

(1) A state institution of higher education;

1196

(2) A school district;

1197

(3) A county school financing district;

1198

(4) An educational service center;

1199

(5) A community school established under Chapter 3314. of the	1200
Revised Code;	1201

(6) A municipal power agency as defined in section 3734.058	1202
of the Revised Code.	1203

(S) A group of employers mentioned in division (B)(2) of	1204
section 4123.01 of the Revised Code may be granted the privilege	1205
to pay compensation and benefits directly as provided in section	1206
4123.354 of the Revised Code.	1207

(T) As used in this section:

1208

(1) "Unvoted debt capacity" means the amount of money that a	1209
public employer may borrow without voter approval of a tax levy;	1210

(2) "State institution of higher education" means the state	1211
universities listed in section 3345.011 of the Revised Code,	1212
community colleges created pursuant to Chapter 3354. of the	1213
Revised Code, university branches created pursuant to Chapter	1214
3355. of the Revised Code, technical colleges created pursuant to	1215
Chapter 3357. of the Revised Code, and state community colleges	1216
created pursuant to Chapter 3358. of the Revised Code.	1217

Sec. 4123.354. (A) A group of employers mentioned in division	1218
(B)(2) of section 4123.01 of the Revised Code that are located	1219
within an Ohio opportunity area created under section 122.09 of	1220
the Revised Code; that will abide by the rules of the	1221
administrator of workers' compensation; that may be of sufficient	1222
financial ability to render certain the payment of compensation to	1223
claimants, and the furnishing of medical, surgical, nursing, and	1224
hospital attention and services and medicines, and funeral	1225
expenses, equal to or greater than is provided for in sections	1226
4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised	1227
Code; and that do not desire to insure the payment thereof or	1228
indemnify themselves against loss sustained by the direct payment	1229
thereof, upon a finding of such facts by the administrator, may be	1230
granted the privilege to pay individually compensation, and	1231
furnish medical, surgical, nursing, and hospital attention and	1232
services and funeral expenses directly to claimants, thereby being	1233
granted status as a self-insuring consortium.	1234

(B) To qualify as a self-insuring consortium, the consortium	1235
shall satisfy, as a group, the requirements listed in division	1236
(B)(1) of section 4123.35 of the Revised Code that an individual	1237
employer must satisfy to become a self-insuring employer. For	1238
purposes of satisfying the requirement listed in division	1239
(B)(1)(a) of that section, the administrator shall count only	1240
those employees who work within an Ohio opportunity area and whose	1241
employer wishes to participate in a self-insuring consortium. The	1242
administrator shall not waive the requirement listed in division	1243
(B)(1)(a) of that section with respect to a group of employers	1244
wishing to become a self-insuring consortium.	1245

(C)(1) A group of employers mentioned in division (B)(2) of	1246
section 4123.01 of the Revised Code and located within an Ohio	1247
opportunity area that desires to become a self-insuring consortium	1248
as described in division (A) of this section shall submit an	1249
application to the administrator alleging that the consortium	1250
fulfills the requirements described in division (B)(1) of section	1251
4123.35 of the Revised Code. Upon receipt of the application from	1252
a group, the administrator shall determine whether the group, as a	1253
whole, fulfills the requirements described in division (B)(1) of	1254
section 4123.35 of the Revised Code. The administrator shall	1255
review completed applications within a reasonable amount of time.	1256
If the administrator determines to grant a group the status of a	1257
self-insuring consortium, the administrator shall issue a	1258
statement containing findings of fact that is prepared and signed	1259
by the administrator. The administrator shall not grant the	1260
privilege of self-insurance to a group where the group, as a	1261
whole, is unable to demonstrate that the group satisfies the	1262
requirements described in division (B)(1) of section 4123.35 of	1263
the Revised Code and the employers comprising the group shall	1264
continue to pay their full premiums into the state insurance fund.	1265

(2) The administrator may charge groups that apply for the	1266
status of a self-insuring consortium a reasonable application fee	1267
to cover the administrator's costs in connection with processing	1268
and making a determination with respect to an application.	1269

(D) Each member of a self-insuring consortium is jointly and	1270
severally liable for the payment of compensation and benefits	1271
under this chapter and Chapters 4121., 4127., and 4131. of the	1272
Revised Code. If an individual member of the consortium fails to	1273
pay compensation and benefits for a claim that is compensable	1274
under this chapter or Chapter 4121., 4127., or 4131. of the	1275
Revised Code, the remaining members of the consortium are liable	1276
for that payment. If the number of employees covered by the	1277
consortium is below five hundred employees at any time, the	1278
consortium shall lose the consortium's status as a self-insuring	1279
consortium and the individual employers shall resume the payment	1280
of premiums into the state insurance fund.	1281

(E) An employer that participates in a self-insuring	1282
consortium shall obtain an insurance policy that indemnifies the	1283
employer against all of the employer's loss in excess of fifty	1284
thousand dollars, as such policy is described in division (B)(1)	1285
of section 4123.82 of the Revised Code.	1286

(F) The administrator shall require a self-insuring	1287
consortium to pay a contribution, calculated under section	1288
4123.351 of the Revised Code, to the self-insuring employers'	1289
guaranty fund established pursuant to section 4123.351 of the	1290
Revised Code. The consortium shall adopt procedures to allocate	1291
the cost of that contribution among the members of the consortium.	1292

(G) For the purpose of making determinations as to whether to	1293
grant status as a self-insuring consortium, the administrator may	1294
subscribe to and pay for a credit reporting service that offers	1295
financial and other business information about individual	1296
employers. The costs in connection with the administrator's	1297
subscription or individual reports from the service about a member	1298
of an applicant group may be included in the application fee	1299
charged groups under this section.	1300

(H) The administrator may permit an employer member of a	1301
self-insuring consortium to resume payment of premiums to the	1302
state insurance fund with appropriate credit modifications to the	1303
employer's basic premium rate as such rate is determined pursuant	1304
to section 4123.29 of the Revised Code.	1305

(I) A self-insuring consortium under this section shall pay	1306
assessments for the safety and hygiene fund, administrative costs,	1307
and surplus fund in the same manner as a self-insuring employer as	1308
provided under divisions (J) and (K) of section 4123.35 of the	1309
Revised Code. The consortium shall adopt procedures to allocate	1310
the cost of those assessments among the members of the consortium.	1311

(J) A self-insuring consortium shall certify the paid	1312
compensation for all the members of the consortium for the	1313
previous calendar year in the same manner as a self-insuring	1314
employer as provided in division (L) of section 4123.35 of the	1315
Revised Code.	1316

(K) The administrator shall adopt rules to do all of the	1317
following:	1318

(1) Determine the liability of an employer that requests to	1319
transfer from the state insurance fund coverage to a self-insuring	1320
consortium;	1321

(2) Set forth procedures for auditing the program of a	1322
self-insuring consortium, similar to the requirements for	1323
self-insuring employers provided in division (G) of section	1324
4123.35 of the Revised Code;	1325

(3) Provide for the implementation of this section.

1326

(L) Sections 4121.121, 4121.31, 4121.44, 4121.444, 4123.15,	1327
4123.25, 4123.342, 4123.343, 4123.351, 4123.411, 4123.46, 4123.50,	1328
4123.51, 4123.511, 4123.512, 4123.54, 4123.56, 4123.63, 4123.65,	1329
4123.70, 4123.74, 4123.75, 4123.79, 4123.84, 4123.85, 4123.93, and	1330
4123.931 of the Revised Code apply to a self-insuring consortium	1331
or employers that are members of a self-insuring consortium in the	1332
same manner those sections apply to self-insuring employers.	1333

Sec. 4123.82.  (A) All contracts and agreements are void	1334
which undertake to indemnify or insure an employer against loss or	1335
liability for the payment of compensation to workers or their	1336
dependents for death, injury, or occupational disease occasioned	1337
in the course of the workers' employment, or which provide that	1338
the insurer shall pay the compensation, or which indemnify the	1339
employer against damages when the injury, disease, or death arises	1340
from the failure to comply with any lawful requirement for the	1341
protection of the lives, health, and safety of employees, or when	1342
the same is occasioned by the willful act of the employer or any	1343
of the employer's officers or agents, or by which it is agreed	1344
that the insurer shall pay any such damages. No license or	1345
authority to enter into any such agreements or issue any such	1346
policies of insurance shall be granted or issued by any public	1347
authority in this state. Any corporation organized or admitted	1348
under the laws of this state to transact liability insurance as	1349
defined in section 3929.01 of the Revised Code may by amendment of	1350
its articles of incorporation or by original articles of	1351
incorporation, provide therein for the authority and purpose to	1352
make insurance in states, territories, districts, and counties,	1353
other than the state of Ohio, and in the state of Ohio in respect	1354
of contracts permitted by division (B) of this section,	1355
indemnifying employers against loss or liability for payment of	1356
compensation to workers and employees and their dependents for	1357
death, injury, or occupational disease occasioned in the course of	1358
the employment and to insure and indemnify employers against loss,	1359
expense, and liability by risk of bodily injury or death by	1360
accident, disability, sickness, or disease suffered by workers and	1361
employees for which the employer may be liable or has assumed	1362
liability.	1363

(B) Notwithstanding division (A) of this section:

1364

(1) No contract because of that division is void which	1365
undertakes to indemnify a self-insuring employer or an employer	1366
that is a member of a self-insuring consortium against all or part	1367
of such employer's loss in excess of at least fifty thousand	1368
dollars from any one disaster or event arising out of the	1369
employer's liability under this chapter, but no insurance	1370
corporation shall, directly or indirectly, represent an employer	1371
in the settlement, adjudication, determination, allowance, or	1372
payment of claims. The superintendent of insurance shall enforce	1373
this prohibition by such disciplinary orders directed against the	1374
offending insurance corporation as the superintendent of insurance	1375
deems appropriate in the circumstances and the administrator of	1376
workers' compensation shall enforce this prohibition by such	1377
disciplinary orders directed against the offending employer as the	1378
administrator deems appropriate in the circumstances, which orders	1379
may include revocation of the insurance corporation's right to	1380
enter into indemnity contracts and revocation of the employer's	1381
status as a self-insuring employer or ability to participate in a	1382
self-insuring consortium.	1383

(2) The administrator may enter into a contract of indemnity	1384
with any such employer upon such terms, payment of such premium,	1385
and for such amount and form of indemnity as the administrator	1386
determines and the bureau of workers' compensation board of	1387
directors may procure reinsurance of the liability of the public	1388
and private funds under this chapter, or any part of the liability	1389
in respect of either or both of the funds, upon such terms and	1390
premiums or other payments from the fund or funds as the	1391
administrator deems prudent in the maintenance of a solvent fund	1392
or funds from year to year. When making the finding of fact which	1393
the administrator is required by section 4123.35 of the Revised	1394
Code to make with respect to the financial ability of an employer,	1395
no contract of indemnity, or the ability of the employer to	1396
procure such a contract, shall be considered as increasing the	1397
financial ability of the employer.	1398

(C) Nothing in this section shall be construed to prohibit	1399
the administrator or an other-states' insurer from providing to	1400
employers in this state other-states' coverage in accordance with	1401
section 4123.292 of the Revised Code.	1402

(D) Notwithstanding any other section of the Revised Code,	1403
but subject to division (A) of this section, the superintendent of	1404
insurance shall have the sole authority to regulate any insurance	1405
products, except for the bureau of workers' compensation and those	1406
products offered by the bureau, that indemnify or insure employers	1407
against workers' compensation losses in this state or that are	1408
sold to employers in this state.	1409

Section 2. That existing sections 1739.02, 4115.04, 4123.01,	1410
4123.35, and 4123.82 of the Revised Code are hereby repealed.	1411

Section 3.  Section 4115.04 of the Revised Code is presented	1412
in this act as a composite of the section as amended by both Sub.	1413
H.B. 443 and Am. Sub. H.B. 699 of the 126th General Assembly. The	1414
General Assembly, applying the principle stated in division (B) of	1415
section 1.52 of the Revised Code that amendments are to be	1416
harmonized if reasonably capable of simultaneous operation, finds	1417
that the composite is the resulting version of the section in	1418
effect prior to the effective date of the section as presented in	1419
this act.	1420