Sen. Taylor presents SB 1506-1 to MLAC proposing small split assessment to fund BOLI; members seek tighter guardrails

Sen. Kathleen Taylor told the Workers' Compensation Management-Labor Advisory Committee on Jan. 29 that SB 1506-1 is the product of a bipartisan workgroup and would fund a portion of the Bureau of Labor and Industries’ operations through “one tenth of one percent split equally between workers and employers.” She said the amendment aims to give BOLI a steady funding stream while preserving the Workers' Benefit Fund (WBF) and invited MLAC to propose amendments to tighten guardrails.

Josh Nasbe of the Bureau of Labor and Industries explained the amendment would use the WBF’s existing collection mechanisms to create a separate BOLI expense fund and described statutory and administrative protections intended to prevent co-mingling: separate collection and adjustment procedures, explicit prohibitions on using WBF monies to meet BOLI expense fund obligations, and MLAC review authority over plans to raise the BOLI expenses fund. Nasbe said the amendment is intended to maintain the temporary positions funded in 2025 and to phase in any additional positions only as the fund can support them.

Committee member Sara Duckwall pressed for detail on the bill’s language about maintaining positions, asking specifically how the reinvestment positions would be sustained after 2029 and about the phrase “the greater of $19 million or 24 months of reserves.” Nasbe replied there are two tranches — (1) positions temporarily funded in 2025 that the bill would maintain, and (2) additional positions expected to be supported after the fund grows — and said authors are open to tighter language around targets and guardrails.

Director Sean O’Day of the Department of Consumer and Business Services said DCBS’s role is administrative: to know BOLI’s appropriation by June 30 of every odd-numbered year so DCBS can calculate rate components. He warned a worst-case scenario would be an unexpected economic downturn after rates are set, and said the bill as described would apportion revenue reductions proportionately between the BOLI expense fund and the WBF.

Co-Chair Scott Strickland urged the committee to focus on MLAC’s statutory charge — preserving WBF programs — and noted that, based on presentations and the Director’s assurances, the amendment “appears to not interfere with the existing programs moving forward,” while also questioning whether deciding the bill’s policy elements was within MLAC’s scope. Members including Sara Duckwall and Stacy Lewallen repeatedly requested clearer guardrails and caps to avoid creating a precedent that could allow future non-WBF spending to be funded through the WBF.

The committee took a brief caucus to consider next steps. Several members left during or after the caucus; the co-chairs and bill sponsors said they welcome amendments and will work with MLAC to address concerns. The committee deferred remaining agenda items to the next meeting.