KRS 393.082: Special expendable trust fund for unclaimed sums under KRS

393.080(3) -- Administration and distribution of fund -- Claims procedures.

(1) Unclaimed sums delivered to the Kentucky State Treasurer pursuant to KRS

393.080(3) shall be placed in a special expendable trust fund established by

the Kentucky Workers' Compensation Funding Commission. The Kentucky

Workers' Compensation Funding Commission shall establish a separate trust

account with respect to each final determination or order providing for a refund

that the Attorney General determines to have a reasonable relationship to the

workers' compensation liability of a bankrupt employer.

(2) The commissioner of the Department of Workers' Claims shall be the

administrator of the resulting trust fund established pursuant to this section.

The commissioner or his or her designee shall be authorized to determine the

value of all workers' compensation claims against the bankrupt employer and

to prepare a comprehensive distribution plan. Eligible claimants may elect to

participate in a comprehensive distribution plan in exchange for the release of

all related claims against the Commonwealth and all of its cabinets,

departments, offices, bureaus, agencies, officers, agents, and employees, with

the exception of the special fund in the Education and Labor Cabinet. A

claimant shall agree as part of a release under this section not to file any future

motions to reopen the named workers' compensation claim or claims, and not

to file new claims with respect to the same injury or occupational disease.

(3) A comprehensive distribution plan for unclaimed utility refunds placed in a trust

account pursuant to this section shall consist of the full payment of workers'

compensation income benefits for eligible claimants until the fund is exhausted,

subject to the exceptions noted in KRS 393.080 and this section, and may

include lump-sum settlements in addition to biweekly payment plans. An initial

distribution shall be made to eligible claimants after the commissioner of the

Department of Workers' Claims, or the commissioner's designee, has made an

initial determination of the number of eligible claimants, the amount of income

benefits due, and the amount to be retained as a reserve for pending claims.

The initial distribution shall include payment of all past due income benefits,

without interest, for eligible claimants.

(4) Neither the special fund nor the uninsured employers' fund shall be considered

to be claimants for the purposes of this section. Medical and related benefits

shall not be considered in the valuation of the claims unless the amount

available in the trust fund clearly exceeds the estimated value of income

benefits for all claims. If a workers' compensation surety bond, letter of credit,

or other form of security for the payment of the workers' compensation liabilities

of a bankrupt employer has been collected by the commissioner of the

Department of Workers' Claims or the Workers' Compensation Board for

distribution to claimants in a manner to be determined by court order, it may be

assumed in the valuation of the claims in a comprehensive distribution plan

that the security will be distributed by the court on a pro rata basis and an

appropriate deduction may be taken.

(5) In preparing the valuation of claims for inclusion in a comprehensive

distribution plan, the commissioner or the commissioner's designee shall

deduct special fund payments. Settlement of a workers' compensation claim as

part of a comprehensive distribution plan under this section shall not accelerate

the date on which the special fund's liability becomes due.

(6) If the bankrupt employer ceased business operations at least three (3) years

prior to establishment of a trust account pursuant to this section, only claimants

who file workers' compensation claims within sixty (60) days of the

establishment of the trust account or before shall be eligible to receive

payments from the trust fund.

(7) All claimants shall cooperate with information requests from the Department of

Workers' Claims concerning prior payments of workers' compensation benefits.

The commissioner of the Department of Workers' Claims or his or her designee

may subpoena witnesses, including present or past managers and officers of

the bankrupt employer, and may conduct evidentiary hearings under oath

relating to the past and present workers' compensation liabilities of the

bankrupt employer or information relevant to unpaid workers' compensation

benefits. Administrative subpoenas issued under the authority of the

commissioner of the Department of Workers' Claims for this purpose may be

enforced in the Franklin Circuit Court.

(8) The Attorney General shall provide representation of the comprehensive

distribution plan as a named defendant in the event the establishment of the

trust fund is challenged.

(9) The provisions of KRS 393.080(3) or this section shall not be construed to

constitute an admission of the validity of any workers' compensation claims,

nor shall these provisions be interpreted in a manner that would transfer or

create liability on behalf of the commissioner of the Department of Workers'

Claims, any agency, or employee, beyond that expressly set forth in a

comprehensive distribution plan.

(10) The special fund shall issue trust fund checks in the amounts and to the

claimants or claimants' representatives as directed by the commissioner of the

Department of Workers' Claims.

(11) The personnel and other costs of administering a trust fund established

pursuant to this section shall be paid out of the investment income of the trust

fund.

(12) Attorney fees shall be subject to the limitations and maximum amounts for the

payment of attorney's fees established by KRS 342.320, as well as the

approval of the commissioner or his or her designee.

(13) If a workers' compensation claimant elects not to participate in a

comprehensive distribution plan proposed by the commissioner of the

Department of Workers' Claims or the commissioner's designee, that claimant

shall not be entitled to any portion of the utility refund for the payment of the

workers' compensation benefits. A claimant shall have sixty (60) days following

issuance of a comprehensive distribution plan in which to make an election to

participate or not.