Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately clarify the disability retirement law of the commonwealth, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 18 of chapter 15 of the General Laws, as appearing in section 2 of chapter 315 of the acts of 1996, is hereby amended by striking out the first and second sentences and inserting in place thereof the following two sentences:- The teachers' retirement board shall appoint and may remove an executive director and shall establish his salary. Subject to the approval of said board, the executive director shall employ other employees, prescribe their duties and fix their compensation; provided, however, that the salaries of said employees shall not exceed the sum annually approved therefore by said board.

SECTION 2. Paragraph (a) of subdivision (1) of section 8 of chapter 32 of the General Laws, as appearing in section 16 of chapter 306 of the acts of 1996, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- The commission shall require, after consultation with the local board, any member retired for disability under the provisions of sections six and seven to participate in an evaluation to determine whether the member is able to perform the essential duties of the position from which he retired or a similar job within the same department for which he is qualified without a medical or vocational rehabilitation program, or whether such member's return to his former or similar job within the same department would likely be expedited by participation in a medical or vocational rehabilitation program.

SECTION 3. Said paragraph (a) of said subdivision (1) of said section 8 of said chapter 32, as so appearing, is hereby further amended by striking out the third sentence and inserting in place thereof the following sentence:- Such evaluations shall include mental or physical medical examinations, vocational testing, meetings, and consultations with medical professionals, including the member's treating physician and vocational rehabilitation counselors, which are necessary to determine whether the disability for which the member was retired continues to render the member unable to perform the essential duties of his job; provided, however, that the commission may excuse a member from such examination if the commission determines based on written findings that such examination is unwarranted based on the catastrophic nature of the member's illness or injury.

SECTION 4. The last paragraph of said paragraph (a) of said subdivision (1) of said section 8 of said chapter 32, as so appearing, is hereby amended by striking out the last sentence and inserting in place thereof the following sentence:- Said member may appeal such termination to the contributory retirement appeals board.

SECTION 5. Said subdivision (1) of said section 8 of said chapter 32, as so appearing, is hereby further amended by striking out paragraph (b) and inserting in place thereof the following paragraph:-

(b) For the purpose of mental or physical examinations under this section, the commission may appoint either a single physician or a three member regional panel to examine the retired member.

SECTION 6. Paragraph (a) of subdivision (2) of said section 8 of said chapter 32, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- If, within two years of the date that a member is retired under section six or seven, a regional medical panel determines that the retired member is able to perform the essential duties of the position from which he retired or, if following the completion of a rehabilitation program required under subdivision (1), a regional medical panel so finds, the member shall be returned to such position and his disability retirement shall be revoked; provided, however, that if the retired member is able to perform the essential duties of a similar job within the same department for which he is qualified, as determined by the department of personnel administration, and such position is vacant, said member shall return to such position.

SECTION 6A. Paragraph (b) of subdivision (3) of section 20 of said chapter 32 is hereby amended by striking out the first two paragraphs, inserted by section 24 of chapter 306 of the acts of 1996, and inserting in place thereof the following paragraph:-

Each such county system shall be managed by a retirement board which shall have the general powers and duties set forth in subdivision (5). Said board shall consist of five members as follows: the county treasurer, but if there is no county treasurer the director of finance, who shall be a member ex officio and serve as chairman; a second member appointed by the county commissioners; two members hereinafter referred to as the elected members; and one member of the county retirement board advisory council who shall be elected by a majority of those present and voting at a public meeting of said council, properly posted, called specifically for such election pursuant to paragraph (g). The election of the elected member shall be conducted in accordance with the provisions of paragraph (h).

SECTION 7. Paragraph (b) of subdivision (4) of said section 20 of said chapter 32, as appearing in section 26 of said chapter 306, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:- Such board shall consist of five members and shall be chosen in the following manner, except as provided in paragraph (c), the city auditor or town accountant or other officer having similar powers and duties who shall be a member ex officio, a second member appointed by the board of selectmen in a town, the mayor in a city, the city manager in a city having a Plan D or Plan E form of government, a third and fourth member who shall be elected by the members in or retired from service of such system from among their number in such manner and for such term, not exceeding three years, as the mayor in a city or the board of selectmen in a town shall determine, and a fifth member who shall not be an employee, a retiree, or official of the governmental unit and shall be chosen by the other four for a term of three years.

SECTION 8. Paragraph (a) of subdivision (7) of section 22 of said chapter 32, as appearing in section 58 of said chapter 306, is hereby further amended by striking out the second sentence and inserting in place thereof the following sentence:- Said budgets shall include all salaries for personnel employed by the state board of retirement and the teachers' retirement board and said budgets shall be funded from the investment income of each system without further appropriation.

SECTION 9. Section 86 of chapter 152 of the General Laws, as appearing in the 1994 Official Edition, is hereby amended by striking out, in line 8, the words "commissioner of public employee retirement" and inserting in place thereof the following words:- public employee retirement administration commission.

SECTION 10. Chapter 338 of the acts of 1990 is hereby amended by striking out section 1, as appearing in section 54 of chapter 306 of the acts of 1996, and inserting in place thereof the following section:-

Section 1. (a) The public employee retirement administration commission is hereby authorized to create a pension fraud unit with the powers and duties specified in this section for the prevention and investigation of fraudulent disability pension claims and payments.

(b) The commission shall appoint employees of said pension fraud unit as necessary. The commission may expend for legal, investigative, clerical and any other such expenses in such sums as may be necessary. The commission shall encourage the public to report fraudulent pension disability pension claims and payments and shall maintain a toll free number to receive such reports.

(c) The commission shall designate such authorized personnel employed by said pension fraud unit to have access to the following information and records when the same are relevant to any pension fraud unit investigation: records kept by the registry of motor vehicles; records kept by the department of industrial accidents; records kept by the department of revenue; records kept by the department of transitional assistance; records kept by the department of employment and training; records kept by any retirement board of a city, town, county or other governmental unit; and the criminal offender record information which may be disseminated pursuant to clause (b) of section one hundred and seventy-two of chapter six of the General Laws; provided, however, that access to such information and records shall be solely for the use by such authorized personnel in the performance of their official duties and responsibilities within said pension fraud unit.

(d) Any person or entity paying disability benefits to any public employee, having reason to believe that a disability pension claim or payment may be fraudulent, or having knowledge that a fraudulent disability pension claim or payment is about to take place, or has taken place, shall promptly send to said pension fraud unit, on a form prescribed by the commission, the information requested by the form and such additional information relative to the transaction and the parties involved as the commission may require. Said pension fraud unit shall review each such report and undertake such further investigation as it deems necessary and proper to determine the validity of the transaction.

(e) The commission may request the attendance and testimony of witnesses and the production of books and records relevant to an investigation. If a person neglects or refuses to comply with any request to provide testimony or produce books and records relevant to the investigation, the commission may refer the matter to the attorney general, the appropriate district attorney, or the United States attorney.

(f) Whenever the commission is satisfied that a material fraud, deceit, or intentional misrepresentation has been committed in a disability pension claim or payment or in a purported disability pension claim or payment, or a violation of other laws of the commonwealth concerning pension disability fraud has occurred, the commission shall refer the matter to the attorney general, the appropriate district attorney or the United States attorney. The commission shall also report any suspected violations of law to the appropriate licensing agencies of the state and federal governments.

(g) Beginning August first, nineteen hundred and ninety-seven and every twelve months thereafter the commission shall file a report with the joint committee on public service of the general court and with the attorney general, which shall include appropriate information, unless otherwise prohibited by law, on the disposition of matters referred to said pension fraud unit. Beginning August first, nineteen hundred and ninety-seven and every twelve months thereafter, the attorney general shall file a report with the said joint public service committee and with the commission, which shall include appropriate information, unless prohibited by law, on the disposition of matters referred to the attorney general by said pension fraud unit.

(h) A person convicted for the violation of any law concerning pension fraud, following the investigation and referral for prosecution by said pension fraud unit, shall be ordered to make restitution to the pension fraud unit, or the state or other pension system, as appropriate, for any financial loss sustained as a result of such violation.

SECTION 11. Chapter 306 of the acts of 1996 is hereby amended by striking out section 55 and inserting in place thereof the following section:-

Section 55. The public employee retirement administration commission shall succeed to and perform the duties of the division of the public employee retirement administration. All duties, responsibilities, obligations, rule and regulation making authority, and all other activities formerly mandated to, granted to, or performed by the division of public employee retirement administration and all related books, papers, records, property, documents, equipment, and other property, both personal and real, which immediately prior to the effective date of this act are in the custody of the division of public employee retirement administration are hereby transferred to the public employee retirement administration commission and all related existing contracts, memoranda of understanding, and other obligations of the division of public employee retirement administration which are in force on the effective date of this act shall become the obligations of and shall thereafter be performed by said public employee retirement administration commission, and all orders, rules, regulations, other determinations, approvals, and permissions granted by the division of public employee retirement administration shall continue in effect as if established or granted by the public employee retirement administration commission unless or until amended, modified, suspended, or revoked. All monies heretofore appropriated for the division of public employee retirement administration, remaining unexpended on the effective date of this act, are hereby transferred to the public employee retirement administration commission and shall be available for expenditure by said commission for the purposes for which such funds were originally appropriated.

The employees of the division of public employee retirement administration shall be transferred to the public employee retirement administration commission, and any such employee so transferred may continue to be an employee without loss of accrued rights to holidays, sick leave, vacation and benefits, and shall thereafter perform his duties at the direction of the public employee retirement administration commission. Nothing in this act shall prevent the commission from appointing the commissioner of the public employee retirement administration as the executive director of the public employee retirement administration commission.

SECTION 12. Said chapter 306 is hereby further amended by striking out section 57 and inserting in place thereof the following section:-

Section 57. Notwithstanding the provisions of any general or special law to the contrary, the elected member of each retirement board shall continue to serve in office until the expiration of his term and until the qualification of his successor. The current appointed member of each retirement board shall serve in office until the qualification of his successor who is chosen by the other four members of said board or until sixty days after the effective date of this act, whichever occurs first. The public employee retirement administration commission shall determine the manner in which the new elected member of each board shall first be elected. Said new elected member shall be so elected within sixty days of the effective date of this act.

SECTION 13. Notwithstanding the provisions of any general or special law to the contrary, the Automobile Insurance Bureau of Massachusetts, or its successor licensed under the provisions of section eight of chapter one hundred and seventy-five A of the General Laws, and the Workers' Compensation Rating and Inspection Bureau of Massachusetts or its successor licensed under the provisions of section fifty-two C of chapter one hundred and fifty-two of the General Laws are hereby authorized to create an insurance fraud bureau with the powers and duties specified in this section for the prevention and investigation of fraudulent insurance transactions.

(a) Said insurance fraud bureau shall be governed by a board consisting of fifteen members, one of whom shall be the secretary of the executive office of public safety, one of whom shall be the director of labor and workforce development, one of whom shall be the registrar of motor vehicles, one of whom shall be the commissioner of insurance, and one of whom shall be the commissioner of the department of industrial accidents, and five of whom shall be members of the governing committee of the Automobile Insurers Bureau of Massachusetts, or its successor, and five of whom shall be members of the governing committee of the Workers' Compensation Rating and Inspection Bureau of Massachusetts or its successor.

(b) The governing board of said insurance fraud bureau shall employ an executive director and a general counsel. The executive director shall be responsible for the administrative operation of said insurance fraud bureau and shall perform such other tasks as said board may direct. The executive director shall ensure that appropriate resources of the insurance fraud bureau are dedicated to the investigation of fraudulent workers' compensation insurance transactions as well as other fraudulent insurance transactions. The general counsel shall be the chief legal officer of said insurance fraud bureau.

(c) The executive director shall appoint other employees of said insurance fraud bureau as necessary. The executive director may expend for legal, investigative, clerical and any other expenses in such sums as may be necessary. The executive director shall also disseminate the provisions of this act by publishing informational brochures and other materials which encourage the public to report workers' compensation fraud and shall maintain a toll free number to receive such reports. All costs of administration and operation of said insurance fraud bureau shall be borne equally by the Automobile Insurers Bureau of Massachusetts, or its successor, and by the Workers' Compensation Rating and Inspection Bureau of Massachusetts or its successor. The executive director shall determine the estimated costs for the operation of said insurance fraud bureau and, upon approval by said board, shall assess the Automobile Insurers Bureau of Massachusetts and the Workers' Compensation Rating and Inspection Bureau of Massachusetts for such estimated costs. The estimated costs shall be paid to the executive director and he shall subsequently make adjustments to future assessments for any variation between estimated and actual costs on a fair and reasonable basis.

(d) The executive director shall designate such authorized personnel employed by said insurance fraud bureau to have access to the following information and records when the same are relevant to any said insurance fraud bureau investigation: records kept by the registry of motor vehicles; records kept by the department of industrial accidents; records kept by the department of revenue; records kept by the department of transitional assistance; records kept by the Workers' Compensation Rating and Inspection Bureau; records kept by the department of employment and training; records kept by insurance companies; and criminal offender record information which may be disseminated pursuant to clause (b) of section one hundred and seventy-two of chapter six of the General Laws; provided, however, that access to such information and records shall be solely for the use by such authorized personnel in the performance of their official duties and responsibilities within said insurance fraud bureau.

(e) Any insurer licensed pursuant to the provisions of chapter one hundred and seventy-five of the General Laws, and any person engaged in the business of insurance in the commonwealth exempted from compliance with the licensing requirements of said chapter one hundred and seventy-five, or other similar entity, having reason to believe that an insurance transaction may be fraudulent, or having knowledge that a fraudulent insurance transaction is about to take place, or has taken place, shall within thirty days after determination that the transaction may be fraudulent, send to said insurance fraud bureau, on a form prescribed by the executive director, the information requested by the form and such additional information relative to the transaction and the parties involved as the executive director may require. Fraudulent insurance transactions shall include, but shall not be limited to, fraud and abuse of the system by attorneys, insurers, employers, medical providers, vocational rehabilitation providers, agents for attorneys or other service providers, claimants, or any other individuals or companies alleged to have engaged in unlawful acts under the provisions of section fourteen of chapter one hundred and fifty-two, sections one hundred and eleven A or one hundred and eleven B of chapter two hundred and sixty-six of the General Laws or other laws of the commonwealth concerning insurance fraud.

(f) Said insurance fraud bureau shall review each such report and undertake such further investigation as it deems necessary and proper to determine the validity of the transaction. Upon receipt of such report pursuant to subsection (e), or other information which provides reason to believe that any person has violated any law of the commonwealth concerning insurance fraud, said insurance fraud bureau may conduct an investigation within or without the commonwealth. A person having material which is located outside the commonwealth and is requested by the executive director may make it available to the executive director or his representative to be examined at the place where it is located. The executive director may designate representatives, including officials of the state in which the material is located, to inspect the material on his behalf, and may respond to similar requests from officials of other states.

(g) The executive director, or his designee, may request the attendance and testimony of witnesses and the production of books and records relevant to an investigation. If a person neglects or refuses to comply with any request to provide testimony or produce books and records relevant to the investigation, the executive director may refer the matter to the attorney general, the appropriate district attorney, or the United States attorney.

(h) Whenever the executive director is satisfied that a material fraud, deceit, or intentional misrepresentation has been committed in an insurance transaction or purported insurance transaction, or that a violation of subsection three of section fourteen of chapter one hundred and fifty-two of the General Laws or sections one hundred and eleven A and one hundred and eleven B of chapter two hundred and sixty-six of the General Laws or other laws of the commonwealth concerning insurance fraud has occurred, the executive director shall refer the matter to the attorney general, the appropriate district attorney or the United States attorney. The executive director shall also report any suspected violation of law to appropriate licensing agencies of the state and federal governments.

(i) In the absence of malice or bad faith, no insurer, member of said insurance fraud bureau, member of said governing board, or an employee or agent of said insurance fraud bureau or other person subject to the provisions of this section, or an employee or agent of such insurer or person, shall be subject to civil liability for damages by reason of any statement, report or investigation made pursuant to the provisions of this section.

(j) Beginning on August first, nineteen hundred and ninety-two and every six months thereafter said insurance fraud bureau shall file a report with the clerk of the house of representatives who shall forward the same to the joint legislative committee on insurance and to the joint legislative committee on commerce and labor and with the attorney general which shall include appropriate information, unless otherwise prohibited by law, on the disposition of matters referred to said insurance fraud bureau. Beginning August first, nineteen hundred and ninety-two and every six months thereafter the attorney general shall file a report with the clerk of the house of representatives who shall forward the same to the joint legislative committee on insurance and the joint legislative committee on commerce and labor and with said insurance fraud bureau which shall include appropriate information, unless prohibited by law, on the disposition of matters referred to the attorney general by said insurance fraud bureau. Said insurance fraud bureau shall periodically report to insurers regarding the status of matters reported to said insurance fraud bureau by insurers, the outcome of all investigations and prosecutions conducted by said insurance fraud bureau, and patterns and practices of fraudulent insurance transactions identified in the course of performing its duties. Said insurance fraud bureau shall perform such research functions and data collection efforts as directed by the governing board to assist in the prevention, detection and prosecution of fraudulent insurance transactions.

(k) A person convicted for the violation of any law concerning insurance fraud, following the investigation and referral for prosecution by said insurance fraud bureau, shall be ordered to make restitution to the insurer for any financial loss sustained as a result of such violation.

SECTION 14. The early intervention plans required by section five B of chapter thirty-two of the General Laws shall be established by retirement boards not later than March fifteenth, nineteen hundred and ninety-seven consistent with guidelines to be established by the public employee retirement administration commission no later than February first, nineteen hundred and ninety-seven. Said plans shall include projections of implementation costs to be borne by every such board and the commonwealth, if applicable. Said commission shall file said cost projections with the clerk of the house of representatives who shall forward the same to the house and senate committees on ways and means and the joint committee on public service of the general court not later than March nineteenth, nineteen hundred and ninety-seven. Said plans shall be implemented no later than July first, nineteen hundred and ninety-seven.

SECTION 15. Notwithstanding the provisions of any general or special law to the contrary, all monies heretofore appropriated for the state board of retirement, the teachers' retirement board and the retirement board of any other governmental unit remaining unexpended on November seventh, nineteen hundred and ninety-six are hereby transferred to said boards and shall be available for expenditure by said boards for the purposes for which such funds were originally appropriated.

The comptroller is hereby authorized and directed to establish on the Massachusetts management accounting and reporting system separate accounts for any of the appropriated monies available to the state board of retirement, the teachers' retirement board and the public employee retirement administration pursuant to the first paragraph. Any expenditure of said monies by said entities shall be recorded on said accounting and reporting system.

In fiscal year nineteen hundred and ninety-seven, the workers' compensation unit within the public employee retirement administration commission shall not be funded from the investment income account of the state employees' and state teachers' retirement systems and shall be funded from funds previously appropriated for the purposes of said unit.

SECTION 15A. Not later than January fifteenth, nineteen hundred and ninety-seven, the public employee retirement administration commission shall make recommendations to the general court for establishing a mechanism to assess retirement systems for the administrative expenses incurred by the commission, and any other recommendations concerning proposed changes to the disability retirement law as set forth in chapter three hundred and six of the acts of nineteen hundred and ninety-six.

SECTION 16. This act shall take effect as of November seventh, nineteen hundred and ninety-six.