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69th Legislature 2025 HB 516
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AN ACT TRANSFERRING THE WORKERS' COMPENSATION JUDGE FROM THE DEPARTMENT OF
LABOR AND INDUSTRY TO THE JUDICIAL BRANCH; PROVIDING FOR SUPERVISION AND
ADMINISTRATION BY THE SUPREME COURT; CREATING A WORKERS' COMPENSATION COURT FUND
AND PROVIDING FOR AN ANNUAL TRANSFER OF FUNDS TO THE FUND; PROVIDING FOR A
TRANSITION; PROVIDING FOR A ONE-TIME ELECTION FOR THE CURRENT WORKERS'
COMPENSATION JUDGE TO ELECT TO REMAIN IN THE JUDGE'S CURRENT RETIREMENT SYSTEM;
AMENDING SECTIONS 2-15-1707, 19-5-301, AND 39-71-201, MCA; AND PROVIDING AN EFFECTIVE
DATE.”
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 2-15-1707, MCA, is amended to read:
"2-15-1707.
-- qualifications -- salary. (1) There is the office of workers' compensation judge. The office is allocated to the
department of labor and industry for administrative purposes only as prescribed in 2-15-121 There is a workers'
compensation court. The workers' compensation court is presided over by a workers' compensation judge.
(2) The governor shall appoint the workers' compensation judge for a term of 6 years in the same
manner provided by Title 3, chapter 1, part 9, for the appointment of supreme court justices or district court
judges. A vacancy must be filled in the same manner as the original appointment.
(3) To be eligible for workers' compensation judge, a person must:
(a) have the qualifications necessary for district court judges found in Article VII, section 9, of the
Montana constitution;
(b) devote full time to the duties of workers' compensation judge and not engage in the private
practice of law. - 2025
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(4) The workers' compensation judge is entitled to the same salary and other emoluments as that
of a district judge but must be accorded retirement benefits under the public employees' retirement system
expense allowances as provided in 3-5-211."
Section 2. (1) The Montana supreme court
shall supervise the activities of the workers' compensation court, the workers' compensation judge, and
associated personnel in implementing [section 3] and this section.
(2) The supreme court shall pay the expenses of the workers' compensation judge and the salaries
and expenses of the workers' compensation judge's staff from appropriations made for that purpose.
(3) Salaries and expenses must be paid out of the workers' compensation court fund provided in
[section 3].
(4) As used in this section, "salaries and expenses" include but are not limited to the salaries and
expenses of personnel, the cost of office equipment and office space, and other necessary expenses that may
be incurred in the administration of [section 3] and this section.
Section 3. (1) There is a workers'
compensation court fund special revenue account within the state special revenue fund established in 17-2-
102. The money in the account must be used solely for the purpose of administering the workers' compensation
court as provided in [section 2].
(2) By July 15 of each fiscal year, the department of labor and industry shall transfer $500,000 an
amount equal to the amount appropriated for the workers' compensation court in the general appropriations act
as approved by the legislature from the workers' compensation administration fund established in 39-71-201 to
the workers' compensation court fund.
Section 4. Section 19-5-301, MCA, is amended to read:
"19-5-301. (1) Except
for a judge or justice who elected in writing to remain under the public employees' retirement system on or
before October 1, 1985, or a workers' compensation judge who elected in writing to remain under the public - 2025
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employees' retirement system on or before October 1, 2025, a judge of a district court, a justice of the supreme
court, and the chief water judge or associate water judge provided for in 3-7-221, and the workers'
compensation judge provided for in 2-15-1707 must be members of the Montana judges' retirement system.
(2) A judge pro tempore is not eligible for active membership in the retirement system.
(3) A member with at least 5 years of membership service who terminates service and does not
take a refund of the member's accumulated contributions is an inactive vested member and retains the right to
purchase service credit and to receive a retirement benefit under the provisions of this chapter.
(4) A member with less than 5 years of membership service who terminates service and leaves the
member's accumulated contributions in the pension trust fund is an inactive nonvested member and is not
eligible for any benefits from the retirement system. An inactive nonvested member is eligible only for a refund
of the member's accumulated contributions."
Section 5. Section 39-71-201, MCA, is amended to read:
"39-71-201.
administration fund is established out of which are to be paid upon lawful appropriation all costs of
administering the Workers' Compensation Act, with the exception of the certification of independent contractors
provided for in Title 39, chapter 71, part 4, the subsequent injury fund provided for in 39-71-907, and the
uninsured employers' fund provided for in 39-71-503. The department may use the workers' compensation
administration fund to reimburse premiums for high-quality work-based learning programs, as provided in 39-
71-319. The department shall collect and deposit in the state treasury to the credit of the workers'
compensation administration fund:
(a) all fees and penalties provided in 39-71-107, 39-71-205, 39-71-223, 39-71-304, 39-71-307, 39-
71-315, 39-71-316, 39-71-401(6), 39-71-2204, 39-71-2205, and 39-71-2337; and
(b) all fees paid by an assessment on paid losses, plus administrative fines and interest provided
by this section.
(2) For the purposes of this section, paid losses include the following benefits paid during the
preceding calendar year for injuries covered by the Workers' Compensation Act without regard to the
application of any deductible whether the employer or the insurer pays the losses: - 2025
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(a) total compensation benefits paid; and
(b) except for medical benefits in excess of $200,000 for each occurrence that are exempt from
assessment, total medical benefits paid for medical treatment rendered to an injured worker, including hospital
treatment and prescription drugs.
(3) Each plan No. 1 employer, plan No. 2 insurer subject to the provisions of this section, and plan
No. 3, the state fund, shall file annually on March 1 in the form and containing the information required by the
department a report of paid losses pursuant to subsection (2).
(4) Each employer enrolled under compensation plan No. 1, compensation plan No. 2, or
compensation plan No. 3, the state fund, shall pay its proportionate share determined by the paid losses in the
preceding calendar year of all costs of administering and regulating the Workers' Compensation Act, with the
exception of the certification of independent contractors provided for in Title 39, chapter 71, part 4, the
subsequent injury fund provided for in 39-71-907, and the uninsured employers' fund provided for in 39-71-503.
In addition, compensation plan No. 3, the state fund, shall pay a proportionate share of these costs based upon
paid losses for claims arising before July 1, 1990.
(5) (a) Each employer enrolled under compensation plan No. 1 shall pay an assessment to fund
administrative and regulatory costs. The assessment may be up to 4% of the paid losses paid in the preceding
calendar year by or on behalf of the plan No. 1 employer. Any entity, other than the department, that assumes
the obligations of an employer enrolled under compensation plan No. 1 is considered to be the employer for the
purposes of this section.
(b) An employer formerly enrolled under compensation plan No. 1 shall pay an assessment to fund
administrative and regulatory costs. The assessment may be up to 4% of the paid losses paid in the preceding
calendar year by or on behalf of the employer for claims arising out of the time when the employer was enrolled
under compensation plan No. 1.
(c) By April 30 of each year, the department shall notify employers described in subsections (5)(a)
and (5)(b) of the percentage of the assessment that comprises the compensation plan No. 1 proportionate
share of administrative and regulatory costs. The assessment provided for by this subsection (5) must be paid
by the employer in:
(i) one installment due on July 1; or - 2025
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(ii) two equal installments due on July 1 and December 31 of each year.
(d) If an employer fails to timely pay to the department the assessment under this section, the
department may impose on the employer an administrative fine of $500 plus interest on the delinquent amount
at the annual interest rate of 12%. Administrative fines and interest must be deposited in the workers'
compensation administration fund and may be used to pay the reimbursement of premiums required under 39-
71-319.
(6) (a) Compensation plan No. 3, the state fund, shall pay an assessment to fund administrative
and regulatory costs attributable to claims arising before July 1, 1990. The assessment may be up to 4% of the
paid losses paid in the preceding calendar year for claims arising before July 1, 1990. As required by 39-71-
2352, the state fund may not pass along to insured employers the cost of the assessment for administrative and
regulatory costs that is attributable to claims arising before July 1, 1990.
(b) The assessment must be paid in:
(i) one installment due on July 1; or
(ii) two equal installments due on July 1 and December 31 of each year.
(c) If the state fund fails to timely pay to the department the assessment under this section, the
department may impose on the state fund an administrative fine of $500 plus interest on the delinquent amount
at the annual interest rate of 12%. Administrative fines and interest must be deposited in the workers'
compensation administration fund.
(7) (a) Each employer insured under compensation plan No. 2 or plan No. 3, the state fund, shall
pay a premium surcharge to fund administrative and regulatory costs. The premium surcharge must be
collected by each plan No. 2 insurer and by plan No. 3, the state fund, from each employer that it insures. The
premium surcharge must be stated as a separate cost on an insured employer's policy or on a separate
document submitted to the insured employer and must be identified as "workers' compensation regulatory
assessment surcharge". The premium surcharge must be excluded from the definition of premiums for all
purposes, including computation of insurance producers' commissions or premium taxes. However, an insurer
may cancel a workers' compensation policy for nonpayment of the premium surcharge. When collected,
assessments may not constitute an element of loss for the purpose of establishing rates for workers'
compensation insurance but, for the purpose of collection, must be treated as a separate cost imposed upon - 2025
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insured employers.
(b) The amount to be funded by the premium surcharge may be up to 4% of the paid losses paid in
the preceding calendar year by or on behalf of all plan No. 2 insurers and may be up to 4% of paid losses for
claims arising on or after July 1, 1990, for plan No. 3, the state fund, plus or minus any adjustments as provided
by subsection (7)(f). The amount to be funded must be divided by the total premium paid by all employers
enrolled under compensation plan No. 2 or plan No. 3 during the preceding calendar year. A single premium
surcharge rate, applicable to all employers enrolled in compensation plan No. 2 or plan No. 3, must be
calculated annually by the department by not later than April 30. The resulting rate, expressed as a percentage,
is levied against the premium paid by each employer enrolled under compensation plan No. 2 or plan No. 3 in
the next fiscal year.
(c) On or before April 30 of each year, the department, in consultation with the advisory
organization designated pursuant to 33-16-1023, shall notify plan No. 2 insurers and plan No. 3, the state fund,
of the premium surcharge percentage to be effective for policies written or renewed annually on and after July 1
of that year.
(d) The premium surcharge must be paid whenever the employer pays a premium to the insurer.
Each insurer shall collect the premium surcharge levied against every employer that it insures. Each insurer
shall pay to the department all money collected as a premium surcharge within 20 days of the end of the
calendar quarter in which the money was collected. If an insurer fails to timely pay to the department the
premium surcharge collected under this section, the department may impose on the insurer an administrative
fine of $500 plus interest on the delinquent amount at the annual interest rate of 12%. Administrative fines and
interest must be deposited in the workers' compensation administration fund and may be used to pay the
reimbursement of premiums required under 39-71-319.
(e) If an employer fails to remit to an insurer the total amount due for the premium and premium
surcharge, the amount received by the insurer must be applied to the premium surcharge first and the
remaining amount applied to the premium due.
(f) The amount actually collected as a premium surcharge in a given year must be compared to
the assessment on the paid losses paid in the preceding year. Any excess amount collected must be deducted
from the amount to be collected as a premium surcharge in the following year. The amount collected that is less - 2025
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than the assessed amount must be added to the amount to be collected as a premium surcharge in the
following year.
(8) By July 1, an insurer under compensation plan No. 2 that paid benefits in the preceding
calendar year but that will not collect any premium for coverage in the following fiscal year shall pay an
assessment of up to 4% of paid losses paid in the preceding calendar year. The department shall determine
and notify the insurer by April 30 of each year of the amount that is due by July 1.
(9) An employer that makes a first-time application for permission to enroll under compensation
plan No. 1 shall pay an assessment of $500 within 15 days of being granted permission by the department to
enroll under compensation plan No. 1.
(10) The department shall deposit all funds received pursuant to this section in the state treasury, as
provided in this section.
(11) The administration fund must be debited with expenses incurred by the department in the
general administration of the provisions of this chapter, including the salaries of its members, officers, and
employees and the travel expenses of the members, officers, and employees, as provided for in 2-18-501
through 2-18-503, incurred while on the business of the department either within or without the state.
Reimbursement of premiums required under 39-71-319 by the workers' compensation administration fund also
is a debit on the fund.
(12) Disbursements from the administration fund must be made after being approved by the
department upon claim for disbursement.
(13) The department shall transfer funds to the workers' compensation court fund as provided by
[section 3].
(13)(14)The department may assess and collect the workers' compensation regulatory assessment
surcharge from uninsured employers, as defined in 39-71-501, that fail to properly comply with the coverage
requirements of the Workers' Compensation Act. Any amounts collected by the department pursuant to this
subsection must be deposited in the workers' compensation administration fund."
Section 6.
proceedings -- rights of duties under existing transactions -- references. (1) (a) The workers' - 2025
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compensation judge and each employee of the office of workers' compensation judge affected by the transfer of
the office from the executive branch to the judicial branch are entitled to all rights that the judge or employee
possessed as a judge or employee before [the effective date of this act], including:
(i) rights to tenure in office and of pay;
(ii) rights to vacation pay, sick pay, and leave;
(iii) rights under any retirement or personnel plan or labor union contract;
(iv) rights to compensatory time earned; and
(v) any other rights under any law or administrative policy.
(b) This section is not intended to create any new rights for the workers' compensation judge or
any employee but to continue only those rights in effect before [the effective date of this act].
(2) The supreme court succeeds to the rights to all real and personal property of that agency
relating to the functions or parts of the office of workers' compensation judge. The property includes real
property, records, office equipment, supplies, contracts, books, papers, documents, maps, appropriations,
accounts within and outside of the state treasury, funds, vehicles, and all other similar property. However, the
supreme court may not use or divert money in a fund or account for a purpose other than provided by law. The
governor shall resolve any conflict as to the proper disposition of the property, and the governor's decision is
final.
(3) The supreme court succeeds to the rules and orders of the office of workers' compensation
judge relating to the functions or parts of functions transferred in [this act]. The rules and orders of the office of
workers' compensation judge in effect before [the effective date of this act] remain in effect until amended,
repealed, superseded, or nullified by proper authority or by law.
(4) The transfer of the office of workers' compensation judge to the judicial branch does not affect
the validity of any judicial or administrative proceeding pending or that may have been commenced before [the
effective date of this act].
(5) The rights, privileges, and duties of the holders of bonds and other obligations issued and of
the parties to contracts, leases, indentures, and other transactions entered into by the office of workers'
compensation judge before [the effective date of this act], by the state or by any agency, officer, or employee of
the state or any agency, and covenants and agreements remain in effect, and none of those rights, privileges, - 2025
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duties, covenants, or agreements are impaired or diminished by reason of the transfer of the functions of the
office of workers' compensation judge. The supreme court is substituted for the department of labor and
industry and succeeds to its rights and duties under the provisions of those bonds, contracts, leases,
indentures, and other transactions related to the office of workers' compensation judge.
(6) Unless inconsistent with the provisions of [this act], references to the office of workers'
compensation judge in any contract or other document must apply to the supreme court.
Section 7. A workers' compensation
judge who is an active member of the public employees' retirement system on [the effective date of this act]
may elect to remain under that system by notifying the public employees' retirement board in writing of the
election on or before October 1, 2025.
Section 8. (1) Section 2-15-1707 is intended to be renumbered
and codified as a new chapter in Title 3.
(2) The code commissioner is instructed to renumber sections currently in Title 39, chapter 71, part
29, into the same new chapter in Title 3 as [sections 2 and 3] and 2-15-1707.
(3) The code commissioner is instructed to change all internal references within and to the
renumbered subsections in the Montana Code Annotated, including within sections enacted or amended by the
2025 legislature, to reflect the new section numbers assigned pursuant to this section.
(4) Any section enacted by the 2025 legislature that is to be codified in Title 39, chapter 71, part
29, must be codified as an integral part of the new chapter, and the provisions of the new chapter apply to the
enacted sections.
Section 9. [Sections 2 and 3] are intended to be codified as a new chapter
in Title 3, and the provisions of Title 3 apply to [sections 2 and 3].
Section 10.
were incurred, or proceedings that were begun before [the effective date of this act]. - 2025
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ENROLLED BILLSection 11. [This act] is effective July 1, 2025.
- END - I hereby certify that the within bill,
HB 516, originated in the House.
___________________________________________
Chief Clerk of the House
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025. HOUSE BILL NO. 516
INTRODUCED BY K. WALSH, M. THIEL, M. CUFFE, L. JONES, W. MCKAMEY, D. HARVEY, S.
FITZPATRICK, A. OLSEN, G. PARRY
AN ACT TRANSFERRING THE WORKERS' COMPENSATION JUDGE FROM THE DEPARTMENT OF LABOR
AND INDUSTRY TO THE JUDICIAL BRANCH; PROVIDING FOR SUPERVISION AND ADMINISTRATION BY
THE SUPREME COURT; CREATING A WORKERS' COMPENSATION COURT FUND AND PROVIDING FOR
AN ANNUAL TRANSFER OF FUNDS TO THE FUND; PROVIDING FOR A TRANSITION; PROVIDING FOR A
ONE-TIME ELECTION FOR THE CURRENT WORKERS' COMPENSATION JUDGE TO ELECT TO REMAIN
IN THE JUDGE'S CURRENT RETIREMENT SYSTEM; AMENDING SECTIONS 2-15-1707, 19-5-301, AND 39-
71-201, MCA; AND PROVIDING AN EFFECTIVE DATE.”