KRS 342.1223: Kentucky Workers' Compensation Funding Commission -- Commission's

relationship with Office of Financial Management within the Finance and

Administration Cabinet.

(1) The Kentucky Workers' Compensation Funding Commission is created as an

agency of the Commonwealth for the public purpose of controlling, investing, and

managing the funds collected pursuant to KRS 342.122.

(2) The commission shall:

(a) Hold, administer, invest, and reinvest the funds collected pursuant to KRS

342.122 and its other funds separate and apart from all "state funds" or "public

funds," as defined in KRS Chapter 446;

(b) Act as a fiduciary, as defined in KRS Chapter 386, in exercising its power

over the funds collected pursuant to KRS 342.122, and may invest associatio n

funds through one (1) or more banks, trust companies, or other financial

institutions with offices in Kentucky in good standing with the Department of

Financial Institutions, in investments described in KRS Chapter 386, except

that the funding commission may, at its discretion, invest in equity securities;

(c) Report to the General Assembly at each even -numbered-year regular session

the actuarial soundness and adequacy of the funding mechanism for the

special fund and other programs supported by the mecha nism, including

detailed information on the investment of funds and yields thereon;

(d) Recommend to the General Assembly, not later than October 31 of the year

prior to each even-numbered-year regular legislative session, changes deemed

necessary in the level of the assessments imposed in this chapter;

(e) In conjunction with the commissioner, submit to the General Assembly, not

later than October 31 of the year prior to each even -numbered-year regular

legislative session, a proposed budget for the bienniu m beginning July 1

following the even-numbered-year regular session of the General Assembly;

(f) In conjunction with the commissioner, provide to the Interim Joint Committee

on Appropriations and Revenue an annual budget and detailed quarterly

financial reports;

(g) Conduct periodic audits, independently or in cooperation with the Department

of Workers' Claims or the Department of Revenue, of all entities subject to

the assessments imposed in this chapter; and

(h) Report monthly to the Committees on Appropr iations and Revenue and on

Economic Development and Workforce Investment its monthly expenditures

of restricted agency funds and the nature of the expenditures.

(3) The commission shall have all of the powers necessary or convenient to carry out

and effectuate the purposes for which it was established, including, but not limited

to, the power:

(a) To sue and be sued, complain, or defend, in its name;

(b) To elect, app oint, or hire officers, agents, and employees, and define their

duties and fix their compensation within the limits of its budget approved by

the General Assembly. Notwithstanding any provision of KRS Chapter 18A

to the contrary, officers and employees of the funding commission may be

exempted from the classified service;

(c) To contract for investment counseling, legal, actuarial, auditing, and other

professional services in accordance with the provisions relating to personal

service contracts contained in KRS Chapter 45A;

(d) To appoint, hire, and contract with banks, trust companies, and other entities

to serve as depositories and custodians of its investment receipts and other

funds;

(e) To take any and all other actions consistent with the purposes of t he

commission and the provisions of this chapter; and

(f) To make and promulgate administrative regulations.

(4) The Kentucky Workers' Compensation Funding Commission may utilize the

investment expertise and advice of the Office of Financial Management wit hin the

Finance and Administration Cabinet. The Kentucky Workers' Compensation

Funding Commission may procure one (1) or more consulting firms and enter into a

personal service contract with such consulting firms to provide investment

advisory, investment counseling, or investment management services. The Office of

Financial Management shall participate in the selection of any firms for investment

services provided, however, the Kentucky Workers' Compensation Funding

Commission shall have the right to make the final decision on the selection of any

firms. Notwithstanding any provisions of this section to the contrary, all contracts

for investment advisory, investment counseling, or investment management

services or for the management of assets shall be subje ct to KRS Chapter 45A. The

fees charged by financial institutions for managing the investments of the funds of

the funding commission shall be paid from the investment earnings of the funds.

(5) The commission shall be attached to the Education and Labor C abinet for

administrative purposes only.