Second Injury Fund and Rate Adjustment Fund

On January 15 and July 15, 1981, and on January 15 and July 15 of each

year thereafter the employer shall within 60 days pay a sum equal to 1/8

of 1% of all compensation payments made by him after July 1, 1980,

either under this Act or the Workers’ Occupational Diseases Act, whether

by lump sum settlement or weekly compensation payments, but not

including hospital, surgical or rehabilitation payments, made during the

first 6 months and during the second 6 months respectively of the fiscal

year next preceding the date of the payments, into a special fund which

shall be designated the “Second Injury Fund”, of which the State

Treasurer is ex-officio custodian, such special fund to be held and

disbursed for the purposes hereinafter stated in paragraphs (f) and (g) of

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Section 8, either upon the order of the Commission or of a competent

court. Said special fund shall be deposited the same as are State funds

and any interest accruing thereon shall be added thereto every 6 months.

It is subject to audit the same as State funds and accounts and is protected

by the General bond given by the State Treasurer. It is considered always

appropriated for the purposes of disbursements as provided in Section 8,

paragraph (f), of this Act, and shall be paid out and disbursed as therein

provided and shall not at any time be appropriated or diverted to any

other use or purpose.

On January 15, 1991, the employer shall further pay a sum equal to one

half of 1% of all compensation payments made by him from January 1,

1990 through June 30, 1990 either under this Act or under the Workers’

Occupational Diseases Act, whether by lump sum settlement or weekly

compensation payments, but not including hospital, surgical or

rehabilitation payments, into an additional Special Fund which shall be

designated as the “Rate Adjustment Fund”. On March 15, 1991, the

employer shall pay into the Rate Adjustment Fund a sum equal to one

half of 1% of all such compensation payments made from July 1, 1990

through December 31, 1990. Within 60 days after July 15, 1991, the

employer shall pay into the Rate Adjustment Fund a sum equal to one

half of 1% of all such compensation payments made from January 1,

1991 through June 30, 1991. Within 60 days after January 15 of 1992

and each subsequent year through 1996, the employer shall pay into the

Rate Adjustment Fund a sum equal to one half of 1% of all such

compensation payments made in the last 6 months of the preceding

calendar year. Within 60 days after July 15 of 1992 and each subsequent

year through 1995, the employer shall pay into the Rate Adjustment Fund

a sum equal to one half of 1% of all such compensation payments made

in the first 6 months of the same calendar year. Within 60 days after

January 15 of 1997 and each subsequent year through 2005, the employer

shall pay into the Rate Adjustment Fund a sum equal to three-fourths of

1% of all such compensation payments made in the last 6 months of the

preceding calendar year. Within 60 days after July 15 of 1996 and each

subsequent year through 2004, the employer shall pay into the Rate

Adjustment Fund a sum equal to three-fourths of 1% of all such

compensation payments made in the first 6 months of the same calendar

year. Within 60 days after July 15 of 2005, the employer shall pay into

the Rate Adjustment Fund a sum equal to 1% of such compensation

payments made in the first 6 months of the same calendar year. Within

60 days after January 15 of 2006 and each subsequent year, the employer

shall pay into the Rate Adjustment Fund a sum equal to 1.25% of such

compensation payments made in the last 6 months of the preceding

calendar year. Within 60 days after July 15 of 2006 and each subsequent

year, the employer shall pay into the Rate Adjustment Fund a sum equal

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to 1.25% of such compensation payments made in the first 6 months of

the same calendar year. The administrative costs of collecting

assessments from employers for the Rate Adjustment Fund shall be paid

from the Rate Adjustment Fund. The cost of an actuarial audit of the

Fund shall be paid from the Rate Adjustment Fund. The State Treasurer

is ex officio custodian of such Special Fund and the same shall be held

and disbursed for the purposes hereinafter stated in paragraphs (f) and (g)

of Section 8 upon the order of the Commission or of a competent court.

The Rate Adjustment Fund shall be deposited the same as are State funds

and any interest accruing thereon shall be added thereto every 6 months.

It shall be subject to audit the same as State funds and accounts and shall

be protected by the general bond given by the State Treasurer. It is

considered always appropriated for the purposes of disbursements as

provided in paragraphs (f) and (g) of Section 8 of this Act and shall be

paid out and disbursed as therein provided and shall not at any time be

appropriated or diverted to any other use or purpose. Within 5 days after

the effective date of this amendatory Act of 1990, the Comptroller and

the State Treasurer shall transfer $1,000,000 from the General Revenue

Fund to the Rate Adjustment Fund. By February 15, 1991, the

Comptroller and the State Treasurer shall transfer $1,000,000 from the

Rate Adjustment Fund to the General Revenue Fund. The Comptroller

and Treasurer are authorized to make transfers at the request of the

Chairman up to a total of $19,000,000 from the Second Injury Fund, the

General Revenue Fund, and the Workers’ Compensation Benefit Trust

Fund to the Rate Adjustment Fund to the extent that there is insufficient

money in the Rate Adjustment Fund to pay claims and obligations.

Amounts may be transferred from the General Revenue Fund only if the

funds in he Second Injury Fund or the Workers’ Compensation Benefit

Trust Fund are insufficient to pay claims and obligations of the Rate

Adjustment Fund. All amounts transferred from the Second Injury Fund,

the General Revenue Fund, and the Workers’ Compensation Benefit

Trust Fund shall be repaid from the Rate Adjustment Fund within 270

days of a transfer, together with interest at the rate earned by moneys on

deposit in the Fund or Funds from which the moneys were transferred.

Upon a finding by the Commission, after reasonable notice and hearing,

that any employer has willfully and knowingly failed to pay the proper

amounts into the Second Injury Fund or the Rate Adjustment Fund

required by this Section or if such payments are not made within the time

periods prescribed by this Section, the employer shall, in addition to such

payments, pay a penalty of 20% of the amount required to be paid or

$2,500, whichever is greater, for each year or part thereof of such failure

to pay. This penalty shall only apply to obligations of an employer to the

Second Injury Fund or the Rate Adjustment Fund accruing after the

effective date of this amendatory Act of 1989. All or part of such a

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penalty may be waived by the Commission for good cause shown.

Any obligations of an employer to the Second Injury Fund and Rate

Adjustment Fund accruing prior to the effective date of this amendatory

Act of 1989 shall be paid in full by such employer within 5 years of the

effective date of this amendatory Act of 1989, with at least one-fifth of

such obligation to be paid during each year following the effective date of

this amendatory Act of 1989. If the Commission finds, following

reasonable notice and hearing, that an employer has failed to make timely

payment of any obligation accruing under the preceding sentence, the

employer shall, in addition to all other payments required by this Section,

be liable for a penalty equal to 20% of the overdue obligation or $2,500,

whichever is greater, for each year or part thereof that obligation is

overdue. All or part of such a penalty may be waived by the Commission

for good cause shown.

The Chairman of the Illinois Workers’ Compensation Commission shall,

annually, furnish to the Director of the Department of Insurance a list of

the amounts paid into the Second Injury Fund and the Rate Adjustment

Fund by each insurance company on behalf of their insured employers.

The Director shall verify to the Chairman that the amounts paid by each

insurance company are accurate as best as the Director can determine

from the records available to the Director. The Chairman shall verify that

the amounts paid by each self-insurer are accurate as best as the

Chairman can determine from records available to the Chairman. The

Chairman may require each self-insurer to provide information

concerning the total compensation payments made upon which

contributions to the Second Injury Fund and the Rate Adjustment Fund

are predicated and any additional information establishing that such

payments have been made into these funds. Any deficiencies in

payments noted by the Director or Chairman shall be subject to the

penalty provisions of this Act.

The State Treasurer, or his duly authorized representative, shall be named

as a party to all proceedings in all cases involving claim for the loss of, or

the permanent and complete loss of the use of one eye, one foot, one leg,

one arm or one hand.

The State Treasurer or his duly authorized agent shall have the same

rights as any other party to the proceeding, including the right to petition

for review of any award. The reasonable expenses of litigation, such as

medical examinations, testimony, and transcript of evidence, incurred by

the State Treasurer or his duly authorized representative, shall be borne

by the Second Injury Fund.

If the award is not paid within 30 days after the date the award has

become final, the Commission shall proceed to take judgment thereon in

its own name as is provided for other awards by paragraph (g) of Section

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19 of this Act and take the necessary steps to collect the award.

Any person, corporation or organization who has paid or become liable

for the payment of burial expenses of the deceased employee may in his

or its own name institute proceedings before the Commission for the

collection thereof.

For the purpose of administration, receipts and disbursements, the Special

Fund provided for in paragraph (f) of this Section shall be administered

jointly with the Special Fund provided for in Section 7, paragraph (f) of

the Workers’ Occupational Diseases Act.