2010 REAL ESTATE TRANSACTIONS ARE UP COMPARED WITH 2009
September 14, 2010 – UB Daily
Retail real estate transactions in five major Utah counties in 2010 are up by 17.9 percent compared with the same period in 2009, according to figures compiled by Mountain West Retail/Investment Commercial Real Estate. Mountain West Managing Principal Chad Moore said his has office compiled retail transactions in Cache, Davis, Salt Lake, Utah and Weber counties through the third quarter of 2010.
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Retail real estate transactions in five major Utah counties in 2010 are up by 17.9 percent compared with the same period in 2009, according to figures compiled by Mountain West Retail/Investment Commercial Real Estate. Mountain West Managing Principal Chad Moore said his has office compiled retail transactions in Cache, Davis, Salt Lake, Utah and Weber counties through the third quarter of 2010.
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AUGUST RETAIL SALES STRONGEST IN 5 MONTHS
September 14, 2010 – Today in Manufacturing.net
Spending rose in August by the largest amount in five months, adding to evidence that a late spring economic swoon was temporary and not another recession ... continue
Spending rose in August by the largest amount in five months, adding to evidence that a late spring economic swoon was temporary and not another recession ... continue
BUSINESS INVENTORIES POST BIGGEST GAIN IN 2 YEARS
September 14, 2010 – LateWire from Manufacturing.net
Inventories jumped in July by the largest amount in two years while sales rebounded after two months of declines, Commerce Department said ... continue
Inventories jumped in July by the largest amount in two years while sales rebounded after two months of declines, Commerce Department said ... continue
LABOR COMMISSION REPORTS ON MERRILL DECISION AND ERF
September 13, 2010 – Utah Labor Commission
The following follow up report was submitted by the Utah Labor Commission to the Utah Legislature and copied to the Workers Compensation Advisory Council. UMA is represented on the Workers Compensation Advisory Council by President Tom Bingham. It addresses the impacts of this legal decision on the Employers Reinsurance Fund (ERF).
Utah Labor Commission
SHERRIE HAYASHI
Commissioner
Senator John L. Valentine, Senate Chair
Representative James A. Dunnigan, House Chair
Business and Labor Interim Committee
Utah State Legislature
Re: Labor Commission report on implementation and effect of the Utah Supreme Court’s Merrill decisions
Dear Senator Valentine and Representative Dunnigan:
Pursuant to House Bill 188 (2010 general session) and your letter of May 25, 2010, the Utah Labor Commission respectfully submits the following report on the implementation of the Utah Supreme Court’s Merrill decisions and the effect of those decisions on Utah Workers’ Compensation system.
Background. In 1988 the Utah Legislature enacted § 34A-2-413 (5) of the Utah Workers’ Compensation Act. Section § 413 (5) provided that, after an injured worker received 312 weeks of permanent total disability compensation, any subsequent permanent total disability compensation would be reduced by an amount equal to 50% of the worker’s social security retirement benefit.
On April 24, 2009, the Utah Supreme Court issued its first decision in Merrill v. Labor Commission, et al., 223 P.3d 1089 (Utah 2009), striking down the social security offset provision in § 413 (5) as violating “Utah’s uniform operation of laws provision by unconstitutionally singling out and reducing workers’ compensation benefits of injured individuals over the age of sixty-five who qualify for social security retirement benefits.”
On December 4, 2009, the Court issued its second decision in Merrill, 223 P.3d 1099 (Utah 2009). Where the first Merrill decision prohibited the future application of § 413 (5)’s social security offset, the second Merrill decision addressed past application of the statute—specifically, whether social security offsets previously taken under authority of § 413 (5) should be repaid. The Court concluded that these prior offsets must be repaid, except in cases where the injured worker: 1) had agreed to a compromise settlement of a disputed claim; 2) accepted a lump-sum payment in satisfaction of continuing compensation; or 3) was deceased.
After the Court issued its two Merrill decisions, the 2010 Utah Legislature enacted House Bill 188, repealing the social security offset provision in § 413 (5) that the Court had found unconstitutional. Also included in H.B. 188 was the requirement that the Labor Commission report to the Business and Labor Interim Committee on the following issues:
1. Status of cases for which the Employers’ Reinsurance Fund (“ERF”) pays permanent total disability compensation;
2. The Commission’s process to facilitate implementation of the Merrill decisions;
3. The effect of the Merrill decisions on the ERF, workers’ compensation premium assessments and insurance premiums;
4. The status and nature of disputes arising in the implementation of the Merrill decisions; and
5. The need, if any, for further legislative action.
Each of these issues is addressed below.
Status of ERF cases. For injured workers permanently and totally disabled from injuries suffered prior to July 1, 1994, the employer and its insurance carrier are liable for initial payments of permanent total disability compensation. Then, after the employer/insurance carrier have satisfied their liability, the ERF assumes liability for payment of continuing compensation. Prior to the Court’s decision in Merrill I, the ERF relied on the social security offset authorized by § 413 (5) and reduced on-going compensation payments accordingly. When the Court declared § 413 (5) unconstitutional the ERF immediately stopped applying the offset. Then, when the Court issued its decision in Merrill II requiring repayment of some past offsets, the ERF audited all its cases to determine which were subject to repayment.
Of 323 cases possibly subject to the Merrill decisions, the ERF concluded that repayments were appropriate in 299 cases, totaling $11,261,192.02 in compensation and interest. The ERF has not yet completed review in 5 cases in which the injured workers died between the time the first and second Merrill decisions were issued. An additional $223,293.10 may be paid in these cases.
Commission implementation of Merrill decisions. It is probable that the ERF is liable for the majority of permanent total disability cases affected by the Merrill decisions. As discussed in the preceding section of this report, the ERF took prompt action after Merrill I to terminate the unconstitutional social security offset. Likewise, the ERF took prompt action to identify the permanently and totally disabled workers who were entitled to repayment under Merrill II. The ERF’s repayment process is almost finished. The Commission believes that Utah’s workers’ compensation insurance carriers have taken similar action and that implementation of the Merrill decisions is nearly complete.
Effect of Merrill decisions on ERF, workers’ compensation premium assessments and insurance premiums.
· Effect on ERF. ERF liability for repayment of past social security offsets as required by Merrill II will total slightly less than $11.5 million. Almost all of this sum has already been paid out to the individual disabled workers. The Commission’s independent actuaries estimate that the ERF’s liability for future benefits is increased by $27.5 million as a result of Merrill I. Thus, the two Merrill decisions have increased the ERF’s total liabilities by approximately $39 million.[1]
· Workers’ compensation premium assessments. The ERF is funded from assessments against workers’ compensation premiums, an equivalent assessment paid by self-insured employers, and investment income. Because the ERF operated on a “pay-as-you-go” basis during its first several decades, it failed to build reserves equal to its liabilities. To address the ERF’s unfunded liabilities, the 1994 Utah legislature enacted H.B. 310, which, among other provisions, amended § 59-9-101 (2) (d) (ii) to require the Commission to set premium assessment rates sufficient to fully fund the ERF no later than June 30, 2025.
The following follow up report was submitted by the Utah Labor Commission to the Utah Legislature and copied to the Workers Compensation Advisory Council. UMA is represented on the Workers Compensation Advisory Council by President Tom Bingham. It addresses the impacts of this legal decision on the Employers Reinsurance Fund (ERF).
Utah Labor Commission
SHERRIE HAYASHI
Commissioner
Senator John L. Valentine, Senate Chair
Representative James A. Dunnigan, House Chair
Business and Labor Interim Committee
Utah State Legislature
Re: Labor Commission report on implementation and effect of the Utah Supreme Court’s Merrill decisions
Dear Senator Valentine and Representative Dunnigan:
Pursuant to House Bill 188 (2010 general session) and your letter of May 25, 2010, the Utah Labor Commission respectfully submits the following report on the implementation of the Utah Supreme Court’s Merrill decisions and the effect of those decisions on Utah Workers’ Compensation system.
Background. In 1988 the Utah Legislature enacted § 34A-2-413 (5) of the Utah Workers’ Compensation Act. Section § 413 (5) provided that, after an injured worker received 312 weeks of permanent total disability compensation, any subsequent permanent total disability compensation would be reduced by an amount equal to 50% of the worker’s social security retirement benefit.
On April 24, 2009, the Utah Supreme Court issued its first decision in Merrill v. Labor Commission, et al., 223 P.3d 1089 (Utah 2009), striking down the social security offset provision in § 413 (5) as violating “Utah’s uniform operation of laws provision by unconstitutionally singling out and reducing workers’ compensation benefits of injured individuals over the age of sixty-five who qualify for social security retirement benefits.”
On December 4, 2009, the Court issued its second decision in Merrill, 223 P.3d 1099 (Utah 2009). Where the first Merrill decision prohibited the future application of § 413 (5)’s social security offset, the second Merrill decision addressed past application of the statute—specifically, whether social security offsets previously taken under authority of § 413 (5) should be repaid. The Court concluded that these prior offsets must be repaid, except in cases where the injured worker: 1) had agreed to a compromise settlement of a disputed claim; 2) accepted a lump-sum payment in satisfaction of continuing compensation; or 3) was deceased.
After the Court issued its two Merrill decisions, the 2010 Utah Legislature enacted House Bill 188, repealing the social security offset provision in § 413 (5) that the Court had found unconstitutional. Also included in H.B. 188 was the requirement that the Labor Commission report to the Business and Labor Interim Committee on the following issues:
1. Status of cases for which the Employers’ Reinsurance Fund (“ERF”) pays permanent total disability compensation;
2. The Commission’s process to facilitate implementation of the Merrill decisions;
3. The effect of the Merrill decisions on the ERF, workers’ compensation premium assessments and insurance premiums;
4. The status and nature of disputes arising in the implementation of the Merrill decisions; and
5. The need, if any, for further legislative action.
Each of these issues is addressed below.
Status of ERF cases. For injured workers permanently and totally disabled from injuries suffered prior to July 1, 1994, the employer and its insurance carrier are liable for initial payments of permanent total disability compensation. Then, after the employer/insurance carrier have satisfied their liability, the ERF assumes liability for payment of continuing compensation. Prior to the Court’s decision in Merrill I, the ERF relied on the social security offset authorized by § 413 (5) and reduced on-going compensation payments accordingly. When the Court declared § 413 (5) unconstitutional the ERF immediately stopped applying the offset. Then, when the Court issued its decision in Merrill II requiring repayment of some past offsets, the ERF audited all its cases to determine which were subject to repayment.
Of 323 cases possibly subject to the Merrill decisions, the ERF concluded that repayments were appropriate in 299 cases, totaling $11,261,192.02 in compensation and interest. The ERF has not yet completed review in 5 cases in which the injured workers died between the time the first and second Merrill decisions were issued. An additional $223,293.10 may be paid in these cases.
Commission implementation of Merrill decisions. It is probable that the ERF is liable for the majority of permanent total disability cases affected by the Merrill decisions. As discussed in the preceding section of this report, the ERF took prompt action after Merrill I to terminate the unconstitutional social security offset. Likewise, the ERF took prompt action to identify the permanently and totally disabled workers who were entitled to repayment under Merrill II. The ERF’s repayment process is almost finished. The Commission believes that Utah’s workers’ compensation insurance carriers have taken similar action and that implementation of the Merrill decisions is nearly complete.
Effect of Merrill decisions on ERF, workers’ compensation premium assessments and insurance premiums.
· Effect on ERF. ERF liability for repayment of past social security offsets as required by Merrill II will total slightly less than $11.5 million. Almost all of this sum has already been paid out to the individual disabled workers. The Commission’s independent actuaries estimate that the ERF’s liability for future benefits is increased by $27.5 million as a result of Merrill I. Thus, the two Merrill decisions have increased the ERF’s total liabilities by approximately $39 million.[1]
· Workers’ compensation premium assessments. The ERF is funded from assessments against workers’ compensation premiums, an equivalent assessment paid by self-insured employers, and investment income. Because the ERF operated on a “pay-as-you-go” basis during its first several decades, it failed to build reserves equal to its liabilities. To address the ERF’s unfunded liabilities, the 1994 Utah legislature enacted H.B. 310, which, among other provisions, amended § 59-9-101 (2) (d) (ii) to require the Commission to set premium assessment rates sufficient to fully fund the ERF no later than June 30, 2025.
With the support of workers’ compensation stakeholders, the ERF has nearly reached the legislatively-mandated goal of full funding well in advance of the June 2025 deadline. The most-recent complete actuarial study, which includes the additional prospective liability established by Merrill I ($27.5 million) but does not include the additional retroactive liability established by Merrill II ($11.5 million), estimates the present value of ERF liabilities at $241.5 million, against Fund assets of $191 million. The study projects that the ERF will reach full funding by 2013. However, in light of the $11.5 million in additional ERF liability resulting from Merrill II, and a concurrent reduction in Tax Commission remittances of premium assessments to the ERF, it may be necessary to either: 1) extend the duration of the premium assessment; 2) increase the premium assessment rate; or 3) some combination of the two. While such actions would require legislative authorization,[2] it is unlikely that any action will be necessary during the 2011 session. The Commission anticipates receiving a full actuarial report during the next few weeks which will provide additional insight and recommendations on this issue.
Insurance premiums. The National Council on Compensation Insurance (“NCCI”) estimates that Merrill’s elimination of the social security offset will increase Utah’s workers’ compensation costs by approximately 1% ($6 million) annually.
Status and nature of disputes arising from Merrill decisions. To date, no substantial disputes have arisen from the interpretation or application of the Merrill decisions.
Recommendations regarding need for further legislative action. As already noted, the Commission believes that legislative action may be necessary to modify § 59-9-101 (2)’s limits on premium assessments in order to fully fund the ERF. The Commission does not believe any other legislation is necessary to implement the Merrill decisions.
Summary. The significant points regarding the implementation and effect of the Merrill decisions can be summarized as follows:
· In the 17 months since Merrill I invalidated § 413 (5)’s social security retirement offset, the Utah Legislature has removed that provision from the Utah Workers’ Compensation Act. Utah’s workers’ compensation system has complied with these judicial and legislative actions and no longer uses social security retirement benefits to reduce permanent total disability compensation.
· In the 9 months since Merrill II required repayment of prior offsets in some cases, the ERF has identified and paid almost all claims entitled to repayment. The Commission believes that other insurance carriers and self-insured employers have taken similar steps.
· Existing reserves in the workers’ compensation system have been sufficient to repay prior offsets.
· Elimination of future social security retirement offsets are estimated to increase future workers’ compensation costs by a minimal 1%.
· With specific reference to the ERF, it has repaid past offsets of $11.5 million out of reserves and will pay additional future benefits of $27.5 million. These unanticipated costs from the Merrill decisions, added to shortfalls in ERF income, may necessitate legislative authorization for marginal increases in the rate or duration of premium assessments in order to fully fund the ERF.
· No substantial disputes have arisen out of the Merrill decisions.
· The Commission does not believe any legislative action is immediately necessary. However, it may become necessary next year to modify existing limits on premium assessments in order to fully fund the ERF.
Thank you for the opportunity to report on this important development in Utah’s workers’ compensation system. The Labor Commission will be pleased to provide any additional information or explanation required by the Committee.
Sincerely,
Sherrie Hayashi
Utah Labor Commissioner
Cc. Members, Utah Workers’ Compensation Advisory Council
[1] To place the ERF’s increased liabililty in context, in 2008—prior to the Court’s Merrill decisions--the Commission’s actuaries estimated the ERF’s total liabilities at slightly more than $209 million.
[2] Section 59-9-101 (2) imposes gradually-declining caps on the premium assessments that can be imposed to fund the ERF, and completely terminates such assessments after 2012. The income that can be generated by the existing limitations in § 59-9-101 (2) may be insufficient to fully fund the ERF.
Recommendations regarding need for further legislative action. As already noted, the Commission believes that legislative action may be necessary to modify § 59-9-101 (2)’s limits on premium assessments in order to fully fund the ERF. The Commission does not believe any other legislation is necessary to implement the Merrill decisions.
Summary. The significant points regarding the implementation and effect of the Merrill decisions can be summarized as follows:
· In the 17 months since Merrill I invalidated § 413 (5)’s social security retirement offset, the Utah Legislature has removed that provision from the Utah Workers’ Compensation Act. Utah’s workers’ compensation system has complied with these judicial and legislative actions and no longer uses social security retirement benefits to reduce permanent total disability compensation.
· In the 9 months since Merrill II required repayment of prior offsets in some cases, the ERF has identified and paid almost all claims entitled to repayment. The Commission believes that other insurance carriers and self-insured employers have taken similar steps.
· Existing reserves in the workers’ compensation system have been sufficient to repay prior offsets.
· Elimination of future social security retirement offsets are estimated to increase future workers’ compensation costs by a minimal 1%.
· With specific reference to the ERF, it has repaid past offsets of $11.5 million out of reserves and will pay additional future benefits of $27.5 million. These unanticipated costs from the Merrill decisions, added to shortfalls in ERF income, may necessitate legislative authorization for marginal increases in the rate or duration of premium assessments in order to fully fund the ERF.
· No substantial disputes have arisen out of the Merrill decisions.
· The Commission does not believe any legislative action is immediately necessary. However, it may become necessary next year to modify existing limits on premium assessments in order to fully fund the ERF.
Thank you for the opportunity to report on this important development in Utah’s workers’ compensation system. The Labor Commission will be pleased to provide any additional information or explanation required by the Committee.
Sincerely,
Sherrie Hayashi
Utah Labor Commissioner
Cc. Members, Utah Workers’ Compensation Advisory Council
[1] To place the ERF’s increased liabililty in context, in 2008—prior to the Court’s Merrill decisions--the Commission’s actuaries estimated the ERF’s total liabilities at slightly more than $209 million.
[2] Section 59-9-101 (2) imposes gradually-declining caps on the premium assessments that can be imposed to fund the ERF, and completely terminates such assessments after 2012. The income that can be generated by the existing limitations in § 59-9-101 (2) may be insufficient to fully fund the ERF.
OIL INDUSTRY SAYS INSPECTION FEES COULD COST JOBS
September 14, 2010 – LateWire from Manufacturing.net
U.S. oil and gas industry says an Obama administration plan to double fees charged for inspections of offshore operations could cost jobs ... continue
U.S. oil and gas industry says an Obama administration plan to double fees charged for inspections of offshore operations could cost jobs ... continue
UTAH SITE SELECTION QUARTERLY NEWSLETTER: UTAH IS DOING WELL
September 14, 2010 – EDCUtah
The numbers are beginning to show signs of improvement and recovery. Yes, the effects of the national recession still linger. But from 9,410 feet, the highest point in Salt Lake City, the sky is clear and the view is dramatic. In fact, from up here you really can see the economic recovery taking shape below.
{read more}
The numbers are beginning to show signs of improvement and recovery. Yes, the effects of the national recession still linger. But from 9,410 feet, the highest point in Salt Lake City, the sky is clear and the view is dramatic. In fact, from up here you really can see the economic recovery taking shape below.
{read more}
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