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S1388.......................................by COMMERCE AND HUMAN RESOURCES
WORKER'S COMPENSATION - Amends existing law to provide clarifying language
when any employer, including an unincorporated association, qualifying
under Section 601(c)(3) of the Internal Revenue Code of 1985, as amended,
shall be presumed to be exempt from the worker's compensation law; and
requiring the Industrial Commission to file a report with the 2001
Legislature regarding the effectiveness of this act.
02/09 Senate intro - 1st rdg - to printing
02/10 Rpt prt - to Com/HuRes
S1388
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE SENATE
SENATE BILL NO. 1388
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO WORKER'S COMPENSATION; AMENDING SECTION 72-212, IDAHO CODE, TO
3 PROVIDE CLARIFYING LANGUAGE WHEN ANY EMPLOYER INCLUDING AN UNINCORPORATED
4 ASSOCIATION QUALIFYING UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE
5 CODE OF 1986, AS AMENDED, SHALL BE PRESUMED TO BE EXEMPT FROM THE WORKER'S
6 COMPENSATION LAW; DECLARING AN EMERGENCY, PROVIDING RETROACTIVE APPLICA-
7 TION AND REQUIRING THE INDUSTRIAL COMMISSION TO FILE A REPORT WITH THE
8 2001 LEGISLATURE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 72-212, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 72-212. EXEMPTIONS FROM COVERAGE. None of the provisions of this law
13 shall apply to the following employments unless coverage thereof is elected as
14 provided in section 72-213, Idaho Code.
15 (1) Household domestic service.
16 (2) Casual employment.
17 (3) Employment of outworkers.
18 (4) Employment of members of an employer's family dwelling in his house-
19 hold.
20 (5) Employment of members of an employer's family not dwelling in his
21 household if the employer is the owner of a sole proprietorship, provided the
22 family member has filed with the commission a written declaration of his elec-
23 tion for exemption from coverage. For the purposes of this subsection, "member
24 of an employer's family" means a natural person or the spouse of a natural
25 person who is related to the employer by blood, adoption or marriage within
26 the first degree of consanguinity or a grandchild or the spouse of a grand-
27 child.
28 (6) Employment which is not carried on by the employer for the sake of
29 pecuniary gain. For the purposes of this subsection, any employer, including
30 an unincorporated association, qualifying under section 501(c)(3) of the
31 Internal Revenue Code of 1986, as amended, shall be presumed to be exempt
32 under this subsection, which presumption may be overcome only by clear and
33 convincing evidence. In determining whether an employer carries on employment
34 for the sake of pecuniary gain, receipt of donations by an employer which is
35 an organization, including an unincorporated association, qualifying under
36 section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall not
37 be considered as carrying on employment for the sake of pecuniary gain under
38 any circumstances. Activities of an employer, including an unincorporated
39 association, qualifying under section 501(c)(3) of the Internal Revenue Code,
40 of 1986, as amended, which constitute an unrelated trade or business as
41 defined in section 513 of the Internal Revenue Code of 1986, as amended, shall
42 be considered employment for the sake of pecuniary gain only with respect to
43 those employees engaged in the unrelated trade or business.
2
1 (7) Employment as the owner of a sole proprietorship; employment of a
2 working member of a partnership or a limited liability company; employment of
3 an officer of a corporation who at all times during the period involved owns
4 not less than ten percent (10%) of all of the issued and outstanding voting
5 stock of the corporation and, if the corporation has directors, is also a
6 director thereof.
7 (8) Employment for which a rule of liability for injury, occupational
8 disease, or death is provided by the laws of the United States.
9 (9) Pilots of agricultural spraying or dusting planes. Employment as a
10 pilot of an aircraft, used to apply fertilizers and pesticides to agricultural
11 crops, when actually operating an aircraft, shall be exempt from the provi-
12 sions of the worker's compensation law, if: the employer files with, and has
13 written approval by, the industrial commission, prior to employing a pilot for
14 the purpose of engaging in the application of pesticides to agricultural crops
15 by aircraft, proof of coverage of an insurance policy that will provide to the
16 employed pilot of such aircraft while actually operating an aircraft, benefits
17 in an amount of not less than: twenty-five thousand dollars ($25,000) acciden-
18 tal death and dismemberment, ten thousand dollars ($10,000) medical expense
19 payments, and five hundred dollars ($500) per month disability income for a
20 minimum of forty-eight (48) months.
21 (10) Associate real estate brokers and real estate salesmen. Service per-
22 formed by an individual for a real estate broker as an associate real estate
23 broker or as a real estate salesman, if all such service performed by such
24 individual for such person is performed for remuneration solely by way of com-
25 mission.
26 (11) Volunteer ski patrollers.
27 (12) Officials of athletic contests involving secondary schools, as
28 defined in section 33-119, Idaho Code.
29 SECTION 2. An emergency existing therefor, which emergency is hereby
30 declared to exist, this act shall be in full force and effect on and after its
31 passage and approval, and retroactively to January 1, 1997. Additionally, the
32 Industrial Commission shall submit a report to the 2001 Regular Session of the
33 Legislature as to the effectiveness of this act.
STATEMENT OF PURPOSE
RS09758
As a result of the 1997 Idaho Supreme Court ruling in
Burrows vs Caldwell Night Rodeo, Inc. regarding the
requirement for Workmans Compensation Insurance (WCI)
to be carried by non profit organizations where
"remuneration for services" is involved, the Idaho
Industrial Commission has interpreted that ruling
broadly to include free will donations and contributions.
Accordingly, it has extended its definition to all
non-profit organizations including small churches.
Further they have sought to impose heavy penalties on
these small churches for not carrying WCI on their
part-time Ministers and have threatened closure of the
churches if they don't pay-up.
The current statute allows exemption from WCI coverage
when employment is not carried on by the employer for
the sake of pecuniary gain. This legislation accomplishes
the following:
Clarifies the meaning of "pecuniary gain" for 501(c)3
organizations.
Provides that donations are not fees for services.
Allows examination whether an 501(c)(3)organization has
unrelated business activities subject to WCI.
Non profit organizations who do not have 501(c)(3) status
are not covered by this legislation.
This legislation provides protection for qualifying non-profit
organizations from government over-reaching.
It does not limit any 501(c)(3) organization from electing to
carry WCI.
FISCAL NOTE
This legislation has no fiscal impact to the general fund.
However, if encacted it should reduce court actions and other
such costs.
CONTACT: Robert L. Aldridge
1209 North Eighth Street
Boise, ID
(208) 336-9880
home: (208) 888-4668
Fax (208) 336-9882
Senator Hal Bunderson
332-1000
Representative Robert E. Schaefer
332-1224
STATEMENT OF PURPOSE/FISCAL NOTE S 1388