It is enacted by the General Assembly as follows:

SECTION 1. Sections 27-7.2-1 and 27-7.2-9.1 of the General Laws in Chapter 27-7.2 entitled "Workers' Compensation Insurance Fund" are hereby amended to read as follows:

{ADD 27-7.2-1. Definitions. -- ADD} When used in this chapter, the following words shall have the following meanings:

(1) "Manager" means the manager of the state compensation insurance fund.

(2) "Fund" means the state compensation insurance fund.

(3) "Board" means the board of directors of the state compensation insurance fund.

(4) "Personal injury" or "injury" has the meaning given to it in chapter 28-29 of the general laws.

(5) "Residual risk" means an employer who in good faith attempts to procure or retain workers' compensation insurance but is unable to do so {ADD at competitive rates ADD} through ordinary methods in the voluntary market with a qualified insurer and who is not self-insured. The term also includes any legal entities that may be combined for experience rating purposes.

(6) "Voluntary risk" means an employer for which the fund voluntarily elects to provide workers' compensation or incidental coverage under this chapter.

(7) "Transition period" means the period from [May 18, 1992] through December 31, 1994.

{ADD 27-7.2-9.1. Residual risk program. -- ADD} (a) Provision of residual risk coverage.

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(d) Residual risk rate regulation.

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{DEL (vi) Notwithstanding any other provisions of law, as a further condition to becoming insured under the residual risk program of the fund, any residual risk which has been self-insured against workers' compensation liabilities arising under title 28 at any time after the effective date of this act shall pay to the fund an additional one-time and nonrefundable premium surcharge equal to thirty three percent (33%) of the premium which would otherwise be applicable for the first policy year under the residual program, as determined by the fund. DEL}

SECTION 2. Title 28, Chapter 29 of the General Laws entitled "Workers' Compensation -- General Provisions" is hereby amended by adding the following sections:

{ADD 28-29-2. Definitions. -- ADD} In chapters 29-38, inclusive, of this title, unless the context otherwise requires:

(1) "Employer" shall include any person, co-partnership, corporation or voluntary association, and the legal representative of a deceased employer; it shall include the state, and the City of Providence. It shall include also each city, town, and regional school district therein that shall vote or accept the provisions of chapters 29-38, inclusive, of this title in the manner herein provided.

(2) "Employee" means any person who has entered into the employment of or works under contract of service or apprenticeship with any employer, except that in the case of a city or town other than the City of Providence it shall only mean those class or classes of employees as may be designated by a city, town, or regional school district in manner herein provided to receive compensation under chapters 29-38 inclusive, of this title. It shall not include any partner or sole proprietor, or a person whose employment is of a casual nature and who is employed otherwise than for the purpose of the employer's trade or business, {ADD or a person whose services are voluntary or who performs charitable acts, ADD} nor shall it include the members of the regularly organized fire and police departments of any town or city; and whenever a contractor has contracted with the state, a city, town, or regional school district any person employed by that contractor in work under contract shall not be deemed an employee of the state, city, town or regional school district as the case may be. {ADD In the case of a person whose services are voluntary or who performs charitable acts, any benefit received, in the form of monetary remuneration or otherwise, shall be reportable to the appropriate taxation authority but shall not be deemed to be wages earned under contract of hire for purposes of qualifying for benefits under chapters 29-38, inclusive, of this title. ADD} Any reference to an employee who had been injured shall, where the employee is dead, include a reference to his or her dependents as hereinafter defined, or to his or her legal representatives, or, where he or she is a minor or incompetent, to his or her conservator or guardian. A "seasonal occupation" means those occupations in which work is performed on a seasonal basis of not more than sixteen (16) weeks.

(3) "General or special employer":

(A) A general employer shall {ADD include, but shall not be limited to temporary help companies and employee leasing companies and shall ADD} mean a person who for consideration and as the regular course of its business supplies an employee with or without vehicle to another person.

(B) A special employer shall mean a person who contracts for services with a general employer for the use of an employee, a vehicle or both.

(C) Whenever there be a general employer and special employer wherein the general employer supplies to the special employer and employee and the general employer pays or is obligated to pay the wages or salaries of such supplied employee, then and in that event notwithstanding the fact that direction and control shall be in the special employer and not the general employer, the general employer if it be subject to the provisions of the workers' compensation act or has accepted the same, shall be deemed to be the employer as set forth in subdivision (1) of this section {ADD and both the general and special employer shall be the employer for purposes of Section 28-29-17 and 18 ADD} .

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SECTION 3. Sections 28-29-6 and 28-29-26 of the General Laws in Chapter 28-29 entitled "Workers' Compensation -- General Provisions" are hereby amended to read as follows:

{ADD 28-29-6. Employers subject to law. -- ADD} The following shall constitute employers subject to the provisions of chapters 29 -- 38, inclusive, of this title:

Every person, firm, and private corporation, including any public service corporation, including the state, that employs four (4) or more workers or operatives (which for purposes of determining jurisdiction under this act shall include partners and sole proprietors) regularly in the same business or in or about the same establishment under any contract of hire, express or implied, and a city or town in this state that shall vote to accept the provisions of those chapters in the manner provided shall constitute an employer.

{ADD 28-29-26. Supervision of enforcement. -- ADD} (a) Department of Labor -- The director as provided for in chapters 29-38, inclusive, of this title, and chapter 16 of title 42, shall have supervision over the enforcement of the provisions of those chapters, and the director shall have the power and authority to adopt and enforce all reasonable rules, regulations and orders necessary and suitable to the administration of the department's responsibilities as described in those chapters.

(b) Workers' Compensation Court -- * * *

(iv) The enactment of this section shall not affect the rights of the parties established by any existing memorandum of agreement, suspension agreement and receipt, preliminary determination of the department of workers' compensation, order or decree, or any existing right to the payment of compensation acquired pursuant to {ADD 28-29-6, or ADD} 28-35-9.

SECTION 4. Title 28 of the General Laws entitled "Labor and Labor Relations" is hereby amended by adding thereto the following chapter:

{ADD 28-31.1-1. Fund established. -- ADD} {ADD (a) There is hereby established in the department of administration of the state of Rhode Island a special account to be known as the State Employees' Compensation Fund, an account within the general fund. Such account, hereinafter referred to as the "state employees' compensation fund", shall consist of payments made to it as hereinafter provided, or penalties paid pursuant to this chapter, and of all other moneys paid into and received by the fund, of property and securities acquired by and through the use of moneys belonging to the fund, and of interest earned upon the moneys belonging to the fund. All moneys in the fund shall be mingled and undivided. The fund shall be administered by the director of administration or said director's designee. ADD}

{ADD (b) The purpose for which this fund shall be used is as follows: the settlement of claims pursuant to section 4 of chapter 31 of title 28. ADD}

{ADD 28-31.1-2. Parties to appeals involving fund. -- ADD} {ADD (a) In any appeal taken under chapters 29-38, inclusive, of this title which involves the state employees' compensation fund the director shall be a necessary party. ADD}

{ADD (b) In every case where payments are ordered made from the state employees' compensation fund, the director shall receive a notice of the same and he or she shall have the right to claim an appeal from the order, if, in his or her opinion, the director believes that the decision is not proper or that the fund is in danger of unwarranted depletion. ADD}

{ADD 28-31.1-3. Payments into fund by agencies. -- ADD} {ADD For the purposes of administering section 28-31-4 and 28-31.1-1(b) each state agency shall annually make payments to the state employee's compensation fund as determined by department of administration. ADD}

SECTION 5. Sections 28-33-4, 28-33-17.3, 28-33-41 of the General Laws in Chapter 28-33 entitled "Workers' Compensation -- Benefits" are hereby amended to read as follows:

{ADD 28-33-4. Commencement of compensation. -- ADD} No indemnity compensation shall be paid under chapters 29 -- 38, inclusive, of this title, for any injury which does not incapacitate the employee for a period of at least three (3) days from earning full wages, but, if such incapacity extends beyond the period of three (3) days, compensation shall begin on the fourth day from the date of injury, the first two hundred fifty dollars ($250) of indemnity compensation following the three (3) day period mentioned herein, and the first two hundred fifty dollars ($250) of medical expense, for any compensable injury, shall {ADD , at the discretion of the carrier, ADD} be a {DEL mandatory DEL} deductible {ADD charged ADD} to any employer insured in the residual market, which deductible the insurance carrier shall promptly charge back to the employer. Non-payment by the employer may be grounds for cancellation of the employer's workers' compensation insurance policy.

{ADD 28-33-17.3. Fraud and abuse. -- ADD} (a) The workers' compensation court is authorized and directed to impose sanctions and penalties necessary to maintain the integrity of and to maintain the high standards of professional conduct in the workers' compensation system.

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(E) Wilfully misrepresent or fail to disclose any material fact in order to obtain workers' compensation insurance at less than the proper rate for the insurance including, but not limited to intentionally misleading or failing to disclose information to an insurer regarding the appropriate rate classification of an employee; or

{ADD (F) Wilfully fail to provide a lower rate adjustment favorable to an employer as required by an approved experience rating plan or regulations promulgated by the insurance commissioner; or ADD} {DEL (F) DEL} {ADD (G) ADD} Wilfully fail to report or provide false or misleading information regarding ownership changes as required by an approved experience rating plan or regulations promulgated by the insurance commissioner.

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{ADD 28-33-41. Rehabilitation of injured persons -- * * * -- ADD} * * *

(i) Treatment by spiritual means. -- {ADD (1) ADD} Nothing in this chapter shall be construed to require an employee who in good faith relies on or is treated by prayer or spiritual means by a duly accredited practitioner of a well recognized church to undergo any medical or surgical treatment, and weekly compensation benefits may not be suspended or terminated on the grounds that such employee refuses to accept recommended medical or surgical benefits. Such employee shall submit to all physical examinations as required by Title 28, chapters 29-38, inclusive.

{ADD (2) However a private employer, insurer, self-insurer or group self-insurer, may make payment or reimburse an employee for any costs associated with treatment by prayer or spiritual means. ADD}

(B) Vocational restorative services -- vocational services needed to return the disabled employee to his or her pre-injury employment or, if that is not possible, to a state of employability in suitable alternative employment. Such services may include, but are not limited to, the following: psychological and vocational evaluations, counseling and training.

(C) Reemployment services -- services used to return the occupationally disabled employee to suitable, remunerative employment as adjudged by his or her functional and vocational ability at that time.

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(c) Compensation payments shall not be diminished or terminated while the employee is participating in a rehabilitation program approved by the director {ADD , or while a proposal for approval of a rehabilitation plan has been filed with the department of labor prior to the date of which an employer's petition to reduce or terminate benefits has been filed, while such plan is pending approval by the director ADD} . Provided, however, That compensation payments shall be suspended while an injured employee wilfully refuses to participate in a rehabilitation program approved by the director. When the employee has completed an approved rehabilitation program, the rehabilitation provider shall recommend, in the instance of vocational rehabilitation, an earnings capacity, or in the instance of physical rehabilitation provided or prescribed by a physician, a degree of functional impairment, and the employee shall be referred to the court for an earnings capacity adjustment to benefits, unless the employee has returned to gainful employment.

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SECTION 6. Title 28, Chapter 36 of the General Laws entitled "Workers' Compensation -- Insurance" are hereby amended to read as follows:

{ADD 28-36-10. Liability of noncomplying employers. -- ADD} Any employer subject to chapters 29 -- 38, inclusive, of this title who shall fail to comply with this chapter, and any employer who has elected to become subject to the provisions of chapters 29 -- 38, inclusive, of this title in accordance with {ADD 28-29-6, and ADD} 28-29-8, who shall fail to comply with this chapter within ten (10) days after that election, shall be liable for compensation to any injured employee or his dependents according to the provisions of chapters 29 -- 38, inclusive, of this title, or for damages in the same manner as if the employer had not elected to become subject to, or was not subject to, the provisions of those chapters, at the option of the employee or his dependents; provided, that the option is exercised and notice thereof in writing given to the employer within ninety (90) days after the injury to the employee, otherwise the employer shall be liable only for the compensation payable under those chapters by employers subject to or who have elected to become subject to the provisions of those chapters.

{ADD 28-36-13. Information furnished by insurers or self-insurers on request of director. -- ADD} Any employer insurance company or self-insurer insuring employers against liability for personal injuries to employees shall fill out all blanks and answer all questions submitted to it by the director, relating to classifications, premium rates, amount of compensation paid and such other information which the director may deem important either for the proper administration of chapters 29 -- 38, inclusive, of this title or for statistical purposes. Any employer insurance company or self-insurer who refuses to notify the director as required in this section shall be subject to prosecution for a misdemeanor and upon conviction thereof may be punished by a fine of not more than two hundred fifty dollars ($250.00) for each offense. All criminal actions for any violation of this section shall be prosecuted by the attorney general. The attorney general shall prosecute such actions to enforce the payment of penalties and fines at the request of the director.

{ADD (b) Any insurance company that willfully refuses to lower rates based on the employer's good faith report of information required by this section shall be subject to prosecution for a misdemeanor and upon conviction thereof may be punished by a fine of not more than two hundred fifty dollars ($250.00) for each offense. All criminal actions for any violation of this section shall be prosecuted by the attorney general at the request of the director. In addition to the foregoing, the director shall have discretion to assess an administrative penalty and/or to bring a civil action in any court of competent jurisdiction for collection of such penalties and sanctions. ADD}

{ADD 28-36-15. Penalty for failure to secure compensation -- Personal liability of corporate officers. -- ADD} {ADD (a) ADD} Any employer required to secure the payment of compensation under the provisions of chapters 29 -- 38, inclusive, of this title who fails to secure that compensation shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine of not {ADD less than one hundred dollars ($100) and not ADD} more than {DEL one DEL} {ADD five hundred ADD} {DEL thousand DEL} dollars {DEL ($1,000) DEL} {ADD ($500) for each day of non-compliance with the requirements of this title. The director may in his/her discretion assess an administrative penalty and/or to bring a civil action in any court of competent jurisdiction, or to refer the matter to the attorney general for prosecution of criminal charges. Each day shall constitute a separate and distinct offense for calculation of the fine. Provided, however, that in no case shall such fine exceed an amount determined to be three (3) time the payment of premium as determined by the payroll audit for the time period in which such employer was required to secure said payment of compensation, ADD} or by imprisonment for not more than one (1) year, or by both fine and imprisonment; and in any case where that employer is a corporation, the president, vice president, secretary, and treasurer thereof shall be also severally liable to the fine or imprisonment as herein provided for the failure of that corporation to secure the payment of compensation; and the president, vice president, secretary, and treasurer shall be severally personally liable, jointly with such corporation, for any compensation or other benefit which may accrue under the those chapters in respect to any injury which may occur to any employee of that corporation while it shall so fail to secure the payment of compensation as required by those chapters. All criminal actions for any violation of this section shall be prosecuted by the attorney general.

The attorney general shall prosecute such actions to enforce the payment of penalties and fines at the request of the director.

The workers' compensation court shall have jurisdiction over all civil actions filed pursuant to this section.

{ADD (b) As soon as practicable after a complaint under this section is filed, the director shall examine the complaint to determine whether cause exists for further inquiry. Should the director find cause, the director shall thereupon give the parties to the complaint not less than ten (10) days' notice by mail of the time and place of hearing. After the hearing, parties to the complaint shall be given notice by mail by the director of his or her determination of the controversy, including the amount of the payment the director recommends as a bond or penalty. Any party shall have the right to appeal from any determination or order made under the provisions of this chapter. Any appeal authorized under this chapter shall be made to the workers' compensation court in the first instance, and from the workers' compensation court to the supreme court in accordance with the provision of 28-35-30. The director, in his discretion, may bring a civil action in any court of competent jurisdiction to collect all payments and penalties ordered. All civil actions for any violations of this chapter or of any of the rules or regulations promulgated by the director, or for the collection of payments in accordance with 28-37-13 or penalties hereunder shall be prosecuted by any qualified member of the Rhode Island bar whom the director may designate, in the name of the director, and the director shall be exempt from giving surety for costs in any such proceedings. ADD}

{ADD (c) Collection and transmission of payments. -- The director shall collect all payments under this chapter under such rules and regulations as may be set forth by the director. All fines collected pursuant to this section shall be deposited to a restricted receipt account to be administered by the director of the department of labor in his sole discretion to carry out the provisions of title 28, chapter 29--38, inclusive. ADD}

{ADD 28-36-16. Fraudulent conveyances by uninsured employer. -- ADD} Any uninsured employer, who knowingly transfers, sells, encumbers, assigns, or in any manner disposes of, conceals, secretes or destroys any property belonging to that employer, after one of his employees has been injured, within the purview of chapters 29 -- 38, inclusive of this title, and with intent to avoid the payment of compensation under those chapters to that employee or his dependents, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not {ADD less than one hundred dollars ($100) and not ADD} more than {DEL one DEL} {ADD five hundred ADD} {DEL thousand DEL} dollars {DEL ($1,000) DEL} {ADD $500) for each day of willful non-compliance with the requirements of this title. Each day shall constitute a separate and distinct offense for calculation of the fine. Provided, however, that in no case shall such fine exceed an amount determined to be three (3) times the premium required as determined by the payroll audit required, for the time period in which such employer was required to secure said payment of compensation, ADD} or by imprisonment for not more than one (1) year, or by both fine and imprisonment, and in any case where that employer is a corporation, the president, secretary, and treasurer thereof shall be also severally liable to the penalty of imprisonment as well as jointly and severally liable with the corporation for the fine. {ADD The director has discretion to assess an administrative penalty and/or to bring a civil action in any court of competent jurisdiction, or to refer the matter to the attorney general for prosecution of criminal charges. ADD}

{ADD (b) As soon as practicable after a complaint under this section is filed, the director shall examine the complaint to determine whether cause exists for further inquiry. Should the director find cause, the director shall thereupon give the parties to the complaint not less than ten (10) days' notice by mail of the time and place of hearing. After the hearing, parties to the complaint shall be given notice by mail by the director of his or her determination of the controversy, including the amount of the payment the director recommends as a bond or penalty. Any party shall have the right to appeal from any determination or order made under the provisions of this chapter. Any appeal authorized under this chapter shall be made to the workers' compensation commission in the first instance, and from the workers' compensation commission to the supreme court in accordance with the provisions of 28-35-30. The director, in his discretion, may bring a civil action in any court of competent jurisdiction. All civil actions for any violations of this chapter or of any of the rules or regulation promulgated by the director, or for the collection of payments in accordance with 28-37-13 or penalties hereunder shall be prosecuted by any qualified member of the Rhode Island bar whom the director may designate, in the name of the director, and the director shall be exempt from giving surety for costs in any such proceedings. ADD}

{ADD (c) Collection and transmission of payments. -- The director shall collect all payments under this chapter under such rules and regulations as may be set forth by the director. All fines collected pursuant to this section shall be deposited to a restricted receipt account to be administered by the director of the department of labor in his sole discretion to carry out the provisions of title 28, chapters 29--38, inclusive. ADD}

SECTION 7. Title 12, Chapter 6 of the General laws entitled "Warrants for arrest" is hereby amended by adding the follwing sections:

{ADD 12-6-5. Recognizance not required on official complaints. -- ADD} Whenever any agent of the Children's Friend and Service shall make complaint against any person for any of the offenses mentioned in sections 11-9-1 to 11-9-8, inclusive; or whenever any agent of the Rhode Island Society for the Prevention of Cruelty to Animals shall make any complaint against any person for any of the offenses mentioned in chapter 1 of title 4; or whenever the director of public welfare of any town shall make complaint against any person for the violation of any of the provisions contained in chapter 8 of title 15; or whenever the director or an agent of the department of labor, specifically designated for such purpose shall make a complaint against any person for any of the offenses mentioned in chapters 3, 12 {DEL and DEL} {ADD , ADD} 14 {ADD , and chapters 29 -- 38, inclusive ADD} of title 28; or whenever the director or an agent of the department of human services, duly appointed for that purpose; or the director of any state institution appointed by the director of social and rehabilitative services; or the superintendent of the Rhode Island training school for youth;or the warden of the adult correctional institutions shall make complaint against any person under any law governing the state department of social and rehabilitative services, such director, agent or officer shall not be required to enter into recognizance for costs.

SECTION 8. Sections 28-37-1, 28-37-13 and 28-37-11 of the General Laws in Chapter 28-37 entitled "Workers' compensation -- Administrative fund" are hereby amended to read as follows:

{ADD 28-37-1. Fund established -- Sources -- Administration. -- ADD} (a) There is hereby established in the department of labor of the state of Rhode Island a special account to be known as the workers' compensation administrative account, an account within the general fund. Such account, hereinafter referred to as the "workers' compensation administrative account", shall consist of payments made to it, as hereinafter provided, or penalties paid pursuant to this chapter, and of all other moneys paid into and received by the fund, or property and securities acquired by and through the use of moneys belonging to the fund, and of interest earned upon the moneys belonging to the fund. All moneys in the fund shall be mingled and undivided. The fund shall be administered by the director of labor or his or her designee.

(b) The purposes for which this fund shall be used are as follows:

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{ADD (8) To provide funds for the payment or reimbursement of actual incremental costs of COLA increases mandated by section 28-33-17 respecting injuries occurring prior to September 1, 1990, in such amounts as the director, in his sole discretion, deems appropriate. Such amounts may be paid out of the Fund by order of the Director and shall be made by order drawn on the general treasury to be charged against the Fund. ADD}

{ADD 28-37-13. Payments into fund by insurers and employers. -- ADD} (a) For the privilege of writing or renewing workers' compensation insurance or employer's liability insurance in this state, every mutual association or stock company so authorized, to be hereinafter referred to as "insurers," and for the privilege of being authorized to make payments of workers' compensation directly to its employees every employer so authorized, to be hereinafter referred to as " certified employers," shall annually make the following payments to the workers' compensation administrative fund:

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{ADD (f) Any employer, insurer, self-insurer, or group self-insurer who has not paid assessments or who is not current with payment of assessments into this fund shall not be permitted to place a claim against the fund. Reimbursements to any employer, insurer, self-insurer, or group self-insurer who is not current with payment of assessments into this fund shall be suspended forthwith as of the first date of arrearage. ADD}

{ADD (g) To be eligible to use any of the services funded by the Workers' Compensation Administrative Fund an employer, insurer, self-insurer, or group self-insurer shall pay a fee of one thousand dollars ($1,000) per claim, per month into the fund until the arrearage is paid in full in addition to any other interests or penalties. ADD}

{ADD 28-37-11. Parties to appeals involving fund. -- ADD} (a) In any appeal taken under chapters 29-38, inclusive, of this title which involves the workers' compensation administrative fund the director shall be a necessary party.

(b) In every case where payments are ordered made from the workers' compensation administrative fund, the director shall receive a notice of the same and he or she shall have the right to claim an appeal from the order, if, in his or her opinion, the director believes that the decision is not proper or that the fund is in danger of unwarranted depletion.

{ADD (c) In every case, where reimbursement from the workers' compensation administrative fund is ordered pursuant to the provisions of sections 1.1 of chapter 33, repealed, or 20(f) of chapter 35 of this title, in which the employee's incapacity has been determined to have been misrepresented pursuant to the provisions of sections 17.1, 17.2, 17.3, or 18.1 of chapter 33 of this title, the director may, in his discretion, bring suit or charges against the appropriate party in any court having jurisdiction over the matter. ADD}

SECTION 9. Title 28, Chapter 47 of the General Laws entitled "Workers' compensation -- Group self-insurance" is hereby amended to read as follows:

{ADD 28-47-12. Premium taxes and assessments. -- ADD} Each group self-insurer, except any group self-insurer composed of the state, municipal governments, governmental authorities of the state or municipalities, or quasi-municipal subdivisions of the state or municipalities, shall pay premium taxes, as close as practicable, on the same basis as insurers as provided in chapter 17 of title 44. Each group self-insurer shall pay assessments for the {DEL second injury fund, as provided in section 28-37-17 and for the Donley Center, as provided, in section 28-38-5, DEL} {ADD Workers' Compensation Administrative Fund pursuant to chapter 37 of Title 28 ADD} on the same basis as is practicable, as an insurer.

SECTION 10. Title 42, Chapter 11 of the General Laws entitled "Department of Administration" is hereby amended to read as follows:

{ADD 42-11-15. Fraud prevention unit -- Appointment -- Duties -- Qualifications -- Annual report. -- ADD} (a) The director of administration shall establish within the state employees' workers' compensation unit of the department of administration, a workers' compensation fraud prevention unit whose members shall be in the unclassified service and whose responsibility it shall be to formulate an integrated state plan to reduce and prevent fraud arising out of claims made pursuant to the workers' compensation laws of this state.

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(c) The unit shall be funded by the workers' compensation administrative fund established in section 28-37-1 of the Rhode Island general laws, and such other funds or balances as the director may deem appropriate. {ADD Expenditures for any increase in service level shall be by agreement of the director, department of labor and the director, department of administration. ADD}

{ADD 42-11-16. Investigative powers of the fraud prevention unit. -- ADD} {ADD The unit is authorized to investigate allegations of workers' compensation fraud and abuse. In furtherance of any investigation, the unit shall have the power to: (a) Administrative subpoena. -- The unit may request, through an administrative subpoena, the attendance and testimony of witnesses and the production of books, records, and other evidence relevant to an investigation. The subpoena shall specify the time, date, and place where the witness is to respond. Within twenty (20) days after the service of the subpoena or at anytime before the return date specified therein, whichever period is shorter, the person served may file in a state superior court and serve upon the unit and the attorney general a civil petition for an order of the court modifying or setting aside the subpoena. The petition shall specify each ground upon which the petitioner is seeking relief. If a person neglects or refuses to comply with any request to provide testimony or produce books, records, and other evidence relevant to an investigation, the attorney general may petition the superior court for an order compelling such person to answer the request. Books, records, and other evidence obtained through an administrative subpoena that are not used in a court proceeding shall be destroyed as soon as practicable. ADD}

{ADD (b) Service of process. -- Unit investigators shall have the authority to serve criminal and civil process. ADD}

{ADD 42-11-17. Disclosure of information to the fraud prevention unit. -- ADD} {ADD Any insurer, or agent authorized by the insurer to act on its behalf, having reason to believe that an insurance transaction may be fraudulent, shall send to the fraud prevention unit a report of the transaction and any additional information requested by the unit. The unit shall review the reports submitted and undertake further investigation in appropriate cases, as determined by the unit. ADD}

{ADD 42-11-18. Fraud prevention unit -- evidence/confidentiality. -- ADD} {ADD The unit's documents, reports, or evidence relative to a workers' compensation investigation shall be privileged and not open to public inspection. Such documents, reports, and evidence shall not be subject to a subpoena duces tecum unless the unit consents, or a court determines the unit would not be jeopardized by compliance with the subpoena. ADD}

{ADD 42-11-19. Immunity. -- ADD} {ADD In the absence of fraud, malice or bad faith, no insurer or agent authorized by the insurer to act on its behalf, employee of the unit, or person providing information to the unit, shall be subject to civil liability for damages as a result of any statement, report, or investigation made pursuant to chapter 42-11. Nothing herein shall interfere with any common law or statutory privilege or immunity. ADD}

{ADD 42-11-20. Severability. -- ADD} {ADD If any clause, sentence, paragraph, section or part or this chapter or the application thereof to any person or circumstances, shall, for any reason, be adjudged by any court of competent jurisdiction to be invalid, such judgement shall not affect, impair or invalidate the remainder of this chapter and the application thereof to other persons or circumstances, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgement shall have been rendered and to the person or circumstances involved. ADD}

SECTION 11. This act shall take effect upon passage.