H. B. 3182


(By Mr. Speaker, Mr. Kiss)


[Introduced February 21, 2003; referred to the

Committee on Finance.]




A BILL to amend and reenact section six, article two, chapter twenty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to powers and duties of the of the commissioner of the bureau of employment programs; requiring proposals from attorneys to be on both an hourly and a contingent fee basis; attorney invoices; limitation on attorney fees; evidence; notification to employer of audit commencement and results; time limits; limitation on commissioner where procedure not followed; and providing definition.

Be it enacted by the Legislature of West Virginia:
That section six, article two, chapter twenty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, to read as follows:
ARTICLE 2. THE COMMISSIONER OF THE BUREAU OF EMPLOYMENT PROGRAMS.

§21A-2-6. Powers and duties generally.
The commissioner is the executive and administrative head of the bureau and has the power and duty to:
(1) Exercise general supervision of and make rules for the government of the bureau;
(2) Prescribe uniform rules pertaining to investigations, departmental hearings, and promulgate rules;
(3) Supervise fiscal affairs and responsibilities of the bureau;
(4) Prescribe the qualifications of, appoint, remove, and fix the compensation of the officers and employees of the bureau, subject to the provisions of section ten, article four of this chapter, relating to the board of review;
(5) Organize and administer the bureau so as to comply with the requirements of this chapter and chapter twenty-three of this code and to satisfy any conditions established in applicable federal legislation;
(6) Make reports in such form and containing such information as the United States department of labor may from time to time require, and comply with such provisions as the United States department of labor may from time to time find necessary to assure the correctness and verification of such reports;
(7) Make available to any agency of the United States charged with the administration of public works or assistance through public employment, upon its request, the name, address, ordinary occupation and employment status of each recipient of unemployment compensation, and a statement of the recipient's rights to further compensation under this chapter;
(8) Keep an accurate and complete record of all bureau proceedings; record and file all bonds and contracts and assume responsibility for the custody and preservation of all papers and documents of the bureau;
(9) Sign and execute in the name of the state, by "The Bureau of Employment Programs", any contract or agreement with the federal government, its agencies, other states, their subdivisions, or private persons;
(10) Prescribe a salary scale to govern compensation of appointees and employees of the bureau;
(11) Make the original determination of right in claims for benefits;
(12) Make recommendations and an annual report to the governor concerning the condition, operation, and functioning of the bureau;
(13) Invoke any legal or special remedy for the enforcement of orders or the provisions of this chapter and chapter twenty-three of this code;
(14) Exercise any other power necessary to standardize administration, expedite bureau business, assure the establishment of fair rules and promote the efficiency of the service;
(15) Keep an accurate and complete record and prepare a monthly report of the number of persons employed and unemployed in the state, which report shall be made available upon request to members of the public and press;
(16) Provide at bureau expense a program of continuing professional, technical and specialized instruction for the personnel of the bureau;
(17) In addition to the authority granted to the commissioner by section eighteen of this article and notwithstanding anything to the contrary elsewhere in this code, utilize any attorney regularly employed by the bureau or the office of the attorney general to represent the commissioner, the bureau or any of its divisions in any matter. In addition, the commissioner, with the approval of the compensation programs performance council, is authorized to retain counsel for any purpose in the administration of this chapter or in the administration of chapter twenty-three of this code relating to the collection of any amounts due from employers to the bureau or any of its divisions. The compensation programs performance council shall solicit proposals from counsel who are interested in representing the commissioner, the bureau or any of its divisions under the terms of this subdivision. These proposals shall be solicited on an hourly basis and on a contingent fee basis. Thereafter, the compensation programs performance council shall select such attorneys as it determines necessary to pursue the collection objectives of this subdivision.
(A) Payment to any such retained counsel may either be by hourly or other fixed fee, or as determined by the court or administrative law judge as provided for below. A contingency fee payable from the amount recovered by judgment or settlement for the commissioner, the bureau or any of its divisions is only permitted, to the extent not prohibited by federal law, when the assets of a defendant or respondent are depleted so that a full recovery plus attorneys' fees is not possible. The performance counsel shall require that the attorneys selected provide an accurate invoice on an hourly basis and on a contingent fee basis, and where the hourly basis is less than one half of the invoice prepared on the contingent fee basis, the attorney is limited to the hourly fee amount only plus reasonable expenses.
(B) In the event that any collections action, other than a collections action against a claimant, initiated either by retained counsel or other counsel on behalf of the commissioner, the bureau or any of its divisions results in a judgment or settlement in favor of the commissioner, the bureau or any of its divisions, then the court or, if there was no judicial component to the action, the administrative law judge, shall determine the amount of attorneys' fees that shall be paid by the defendants or respondents to the retained or other counsel representing the commissioner, the bureau or any of its divisions. If the court is to determine the amount of attorneys' fees, it shall include in its determination the amount of fee that should be paid for the representation of the commissioner, the bureau or its divisions in pursuing the administrative component, if any, of the action. The amount so paid shall be fixed by the court or the administrative law judge in an amount no less than twenty percent of its recovery. Any additional amount of attorneys' fees shall be determined by use of the following factors:
(i) The counsel's normal hourly rate or, if the counsel is an employee of the bureau or is an employee of the office of the attorney general, such hourly rate as the court or the administrative law judge shall determine to be customary based upon the attorney's experience and skill level;
(ii) The number of hours actually expended on the action;
(iii) The complexity of the issues involved in the action;
(iv) The degree of risk involved in the case with regard to the probability of success or failure;
(v) The overhead costs incurred by counsel with regard to the use of paralegals and other office staff, experts, and investigators; and
(vi) The public purpose served or public objective achieved by the attorney in obtaining the judgment or settlement on behalf of the commissioner, the bureau or any of its divisions.
(C) Notwithstanding the provisions of paragraph (B) of this subdivision, if the commissioner, bureau or any of its divisions and the defendants or respondents to any administrative or judicial action settle the action, then the parties may negotiate a separate settlement of attorneys' fees to be paid by the defendants or respondents above and beyond the amount recovered by the commissioner, the bureau or any its divisions. In the event that such a settlement of attorneys' fees is made, it must be submitted to the court or administrative law judge for approval.
(D) Any attorney regularly employed by the bureau or by the office of the attorney general may not receive any remuneration for his or her services other than such attorney's regular salary. Any attorneys' fees awarded for such an employed attorney shall be payable to the commissioner;
(18) With the approval of the compensation programs performance council created pursuant to section one, article three of this chapter, to promulgate rules under which agencies of this state shall not grant, issue, or renew any contract, license, permit, certificate, or other authority to conduct a trade, profession, or business to or with any employing unit whose account is in default with the commissioner with regard to the administration of this chapter and with regard to the administration of chapter twenty-three of this code. The term "agency" includes any unit of state government such as officers, agencies, divisions, departments, boards, commissions, authorities, or public corporations. An employing unit is not in default if it has entered into repayment agreements with the appropriate divisions of the bureau and remains in compliance with its obligations under the repayment agreements.
The rules shall provide that, before granting, issuing, or renewing any contract, license, permit, certificate, or other authority to conduct a trade, profession, or business to or with any employing unit, the designated agencies shall review a list or lists, provided by the appropriate divisions of the bureau, of employers that are in default. If the employing unit's name is not on the list, the agency, unless it has actual knowledge that the employing unit is in default with a division of the bureau, may grant, issue, or renew the contract, license, permit, certificate, other authority to conduct a trade, profession, or business. The list may be provided to the agency in the form of a computerized database or databases that the agency can access. Any objections to such refusal to issue or renew shall be reviewed under the appropriate provisions of this chapter or of chapter twenty-three of this code, or both, whichever is applicable. The rules provided for by this subdivision shall be promulgated pursuant to the provisions of subdivisions (b) and (c), section seven, article three of this chapter as if they were rules being promulgated for the purposes of chapter twenty-three of this code. The prohibition against granting, issuing, or renewing any contract, license, permit, certificate, or other authority under this subdivision are not operative until the rules are promulgated and are in effect, except as provided in subdivision (6), section eight, article three, chapter twenty-two or otherwise by law.
The rules may be promulgated or implemented in phases so that specific agencies or specific types of contracts, licenses, permits, certificates, or other authority to conduct trades, professions, or businesses will be subject to the rules beginning on different dates. The presumptions of ownership or control contained in the division of environmental protection's surface mining reclamation regulations promulgated under the provisions of article three, chapter twenty-two of this code are not applicable or controlling in determining the identity of employing units who are in default for the purposes of this subdivision. The rules shall also provide a procedure allowing any agency or interested person, after being covered under the rules for at least one year, to petition the council to be exempt from the provisions of the rules. Rules subjecting all applicable agencies and contracts, licenses, permits, certificates, or other authority to conduct trades, professions, or businesses to the requirements of this subdivision shall be promulgated no later than the first day of January, two thousand; and
(19) Deposit to the credit of the appropriate special revenue account or fund, notwithstanding any other provision of this code and to the extent allowed by federal law, all amounts of delinquent payments or overpayments, interest and penalties thereon, and attorneys' fees and costs collected under the provisions of this chapter and chapter twenty-three of this code. The amounts collected shall not be treated by the auditor or treasurer as part of the general revenue of the state.
(20) Notwithstanding anything to the contrary, the office of judges shall consider pleadings and protest documents as evidence of the allegations therein contained.
(21) Notwithstanding anything in this code to the contrary, if the commissioner has performed an audit of any kind on an employer's accounts, including an internal audit, the commissioner shall inform an employer in writing of the results of the audit not later than thirty days following completion of the audit process. An audit is conclusively presumed unreasonable if an employer is not notified in writing of the audit within sixty days following commencement of the audit. The commissioner shall also notify an employer in writing at the commencement of any audit of that employer's account. Any time the commissioner believes an employer to be in default the commissioner has thirty days to notify the employer in writing of the alleged default. Failure to notify an employer in accordance with the terms of this subsection acts as an absolute bar to the imposition and collection of interest and penalties and to collection of attorney fees on the amount of the alleged default. For purposes of this section, the term "default" includes any alleged amount of underpayment of quarterly premium and the amount of underfunded premium deposit for any calendar quarter or quarters preceding the calendar quarter in which notice of the alleged default is issued.

NOTE: The purpose of this bill is to require proposals from attorneys to collect Workers' Compensation premiums to be on both an hourly and a contingent fee basis. The bill places a limitation on attorney fees and requires notification to employer of audit commencement and results. The bill also sets forth a limitation on commissioner where the procedure is not followed.


 Strike-throughs indicate language that would be stricken from the present law, and underlining indicates new language that would be added.