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Nixon bill signing spree includes approval of Second Injury Fund fix

In Backroom

4:01 pm on Wed, 07.10.13

With the clock ticking on his time to sign or veto bills, Gov. Jay Nixon signed legislation revamping the Second Injury Fund and adding occupational disease to the workers compensation system.

Jay Nixon
Jay Nixon

The bill – SB 1 -- makes major changes to how the Second Injury Fund works and is funded. The fund was set up in the 1940s to protect businesses that hire people who have pre-existing injuries.

Among other things, SB 1 authorizes a temporary surcharge on businesses not to exceed 3 percent of their workers compensation premiums. It also limits the type of injuries that would be covered under the Second Injury Fund.

In addition, the bill shifts some toxic-exposure occupational diseases out of the Second Injury Fund into the state’s regular workers compensation system. The change also sets a maximum benefit of $500,000 for certain toxic exposures, such as lung diseases caused by exposure to asbestos.

The Second Injury Fund's revenue comes from a surcharge on employers based on their workers compensation insurance premium. In 2005, under then-Gov. Matt Blunt, the Republican-controlled General Assembly imposed a 3 percent cap on the size of the surcharge. Some Democrats contended that contributed to the fund's insolvency.

In many respects, the bill is aimed at curbing a flood of lawsuits filed by injured Missouri workers who haven’t been able to collect Second Injury Fund benefits because of a lack of money to pay for them.

In a statement, Nixon thanked the two sponsors of the bill – Sen. Scott Rupp, R-Wentzville, and Rep. Todd Richardson, R-Poplar Bluff – for pushing the bill past the finish line. Lawmakers have been grappling with making changes to the Second Injury Fund -- and trying to add occupational disease to the workers compensation system -- for years.

“I appreciate the bipartisan efforts of lawmakers and stakeholders to craft a fair solution to a difficult, complex and long running-problem,” Nixon said in a statement. “Shoring up the Second Injury Fund will provide long-overdue certainty to businesses and security to injured workers.”

Chris Koster
Chris Koster

Attorney General Chris Koster – whose office administers the Second Injury Fund – praised Nixon for signing the bill.

In a release, Koster said, “The insolvency of the Fund means that the state has been unable to pay more than 1,380 Missourians the awards to which they are entitled, totaling over $32 million. This law allows the state to begin the process of providing relief to these injured workers.”

The press release from Koster’s office noted that since provisions do not take effect until Jan. 1, 2014, “the Second Injury Fund will not see increased revenue from the additional surcharge until the following April -- the end of the first quarter of next year.” This, his office said, “will require the state to continue to manage withheld awards for some period of time.”

But the president and CEO of Associated Industries of Missouri took a more cautious view of the legislation. While he said that the bill would “fix a broken down system and help sustain the Second Injury Fund into the future,” AIM President Ray McCarty wasn't as enthused about the changes to the state's workers compensation system.

"While we are glad that there is now language in law that clarifies occupational diseases are covered by the Missouri Workers' Compensation Law, we are concerned about the new enhanced remedies," McCarty said in a statment. "We feel these new guaranteed payments for special diseases set a bad precedent for future carve-outs in workers' compensation cases."

Deadline: July 14

Nixon’s decision on SB 1 capped a busy day of bill signings. The governor has until July 14 to sign or veto legislation.

Nixon was in Cape Girardeau and Springfield today to sign a number of bills related to veterans. That includes:

  • SB 116: This bill, according to Nixon’s office, requires the secretary of state “to develop an electronic system to facilitate registration and voting by military and overseas voters, and extends the time in which ballots from such voters can be counted.”
  • SB 117: This legislation allows veterans who are leaving the military to qualify for lower tuition rates at Missouri public universities and colleges by providing them with resident student status.
  • HB 702: This bill tries to make it easier for the state treasurer to identify owners of military medals that are unclaimed property.

Nixon also signed legislation designating a number of memorial highways and bridges. One provision of the bill names the Missouri portion of the new Mississippi River Bridge in St. Louis as the “Stan Musial Memorial Bridge.”

Federal legislation naming the entire bridge the “Stan Musial Veterans Memorial Bridge” is awaiting President Barack Obama’s signature. 

Vetoes gas surchage bill

But the governor's day did feature at least one veto of a bill -- SB 240 -- that would have increased the amount a gas corporation may recover through infrastructure system replacement surcharges – or ISRS -- from 10 percent of the gas corporation's base revenue level to 13 percent.

The bill also, among other things, extends the amount of time a gas company can have an ISRS from three to five years.

“While an increase in the existing ISRS would no doubt benefit utilities, this benefit would come at a cost to consumers – a cost the [Public Service Commission] could police less frequently due to the additional two years [the bill] would allow between general rate cases,” Nixon said in his veto message.

Joan Bray
Joan Bray

Nixon's vetoed received a big thumbs up from the Consumers Council of Missouri, which had called on the governor to veto the measure.

"By vetoing SB 240, Governor Nixon prevented gas utilities from adding more costly surcharges to consumers' bills," said Joan Bray, the chairwoman of the Consumer Council of Missouri, in a statement. "He also maintained the current balance in the rate process that gives consumers a fighting chance against the gas companies, which enjoy monopoly status and very healthy profits."

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