Opinion ID: 3006936
Heading Depth: 3
Heading Rank: 2

Heading: Pennsylvania Workers’ Compensation Statutes

Text: In this instance, ―the laws of [the] other state,‖ Tenn. Code Ann. § 56-4-218(a), are three Pennsylvania workers‘ compensation statutes known as the Workmen‘s Compensation Administration Fund, 77 Pa. Stat. Ann. § 1000.2 (West 2002); the Subsequent Injury Fund, 77 Pa. Stat. Ann. § 517 (West 2002); and the Workmen‘s Compensation Supersedeas Fund, 77 Pa. Stat. Ann. § 999 (West 2002). The State contends that the Pennsylvania statutes impose a burden on Tennessee insurance companies doing business in Pennsylvania that is higher than the reciprocal burden imposed by Tennessee on Pennsylvania insurance companies doing business in our state. The Claimants, on the other hand, assert that the Pennsylvania statutes do not impose any burden, other than an administrative tax-collection burden, upon the insurance companies. Initially, to determine whether Pennsylvania imposes a burden on Tennessee insurance companies doing business in that state, we must look to the plain language of their statutes. Mansell v. Bridgestone Firestone N. Am. Tire, LLC, 417 S.W.3d 393, 400 (Tenn. 2013) (―When a statute is clear, we apply the plain meaning without complicating the task, and simply enforce the written language.‖). 5 Every state except Hawaii has adopted retaliatory tax statutes, which have resulted in approximately equal tax burdens on insurance companies across the country. First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 630 (Tex. 2008). This national system of retaliatory taxation has generally been supported by insurance companies and state governments alike, even though retaliatory tax statutes are facially discriminatory. See Carl R. Erdmann & Robert F. Montellione, Maximizing Tax Incentive Benefits in the Insurance Industry, 2000 J. Multistate Tax‘n & Incentives 1, 2. Over the years, retaliatory tax statutes have survived constitutional challenges on the narrow basis that their ―principal purpose . . . is to promote the interstate business of domestic insurers by deterring other [s]tates from enacting discriminatory or excessive taxes.‖ W. & S. Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 668 (1981). -6- The Workmen‘s Compensation Administration Fund has been ―maintained by no more than one (1) annual assessment payable in any calendar year on insurers and selfinsurers.‖ 77 Pa. Stat. Ann. § 1000.2(b) (emphasis added). Likewise, the Subsequent Injury Fund has been ―maintained at one hundred thousand dollars ($100,000) by assessing each insurer a proportion of the amount expended from the fund during the preceding year.‖ 77 Pa. Stat. Ann. § 517 (emphasis added). Finally, the Workmen‘s Compensation Supersedeas Fund also has been ―maintained by annual assessments on insurers and self-insurers.‖ 77 Pa. Stat. Ann. § 999(b) (emphasis added). The Claimants do not dispute that each of these statutes, by assessing an annual payment from an ―insurer‖ or ―self-insurer,‖ imposes a financial burden directly upon insurance companies doing business in Pennsylvania. We agree that the plain language of these statutes supports such an interpretation, which is bolstered by certain provisions that require the insurance companies to pay the Pennsylvania Department of Labor and Industry even if the amount of an assessment is disputed. 77 Pa. Stat. Ann. §§ 999(b), 1000.2(c). Moreover, particularly as to the Workmen‘s Compensation Administration Fund, the failure to pay the assessment may result in ―revocation or suspension of the [insurance] company‘s license to transact business in [Pennsylvania].‖ 77 Pa. Stat. Ann. § 1000.2(c). Notwithstanding the plain language of the three statutes at issue, however, the Claimants contend that a more recent statute, 71 Pa. Cons. Stat. Ann. § 578 (West 2012), effectuated a change in the law such that the assessments collected by the Pennsylvania Department of Labor and Industry are no longer imposed directly upon insurance companies operating in Pennsylvania. Section 578, which was passed by the Pennsylvania General Assembly in 1997, provides in its entirety as follows: Effective July 1, 1998, the assessments for the maintenance of the Subsequent Injury Fund, the Workmen‘s Compensation Supersedeas Fund and the Workmen‘s Compensation Administration Fund under sections 306.2, 443 and 446 of the act of June 2, 1915 (P.L. 736, No. 338),[ 77 Pa. Stat. Ann. §§ 517, 999, 1000.2,] known as the ―Workers‘ Compensation Act,‖ shall no longer be imposed on insurers but shall be imposed, collected and remitted through insurers in accordance with regulations promulgated by the Department of Labor and Industry. 71 Pa. Cons. Stat. Ann. § 578 (emphasis added) (footnote omitted). By the plain language of section 578, the workers‘ compensation assessments at issue are no longer to be paid by insurance companies doing business in Pennsylvania; instead, section 578 requires the assessments to be ―imposed, collected[,] and remitted through insurers in -7- accordance with regulations promulgated by the Department of Labor and Industry.‖ (Emphasis added.) It is evident that the plain language of section 578 contradicts the plain language of the Workmen‘s Compensation Administration Fund, the Subsequent Injury Fund, and the Supersedeas Fund. The Claimants contend, however, that those three statutes have been expressly repealed by virtue of the bill enacting section 578, which provides that the Pennsylvania Workers‘ Compensation Act has been repealed to the extent that ―it is inconsistent with section [578].‖ 1997 Pa. Laws 530, 548. We must agree. Moreover, even without considering the repeal provision, another canon of statutory construction aids our analysis—that is, ―[w]hen construing a more recent statute in conjunction with pre-existing legislation, ‗we presume that the legislature has knowledge of its prior enactments and is fully aware of any judicial constructions of those enactments.‘‖ Davis v. State, 313 S.W.3d 751, 762 (Tenn. 2010) (quoting Hicks v. State, 945 S.W.2d 706, 707 (Tenn. 1997)); see also Mishoe v. Erie Ins. Co., 824 A.2d 1153, 1168 (Pa. 2003) (―[The] General Assembly [is] presumed to know the existing law when enacting a statute.‖). Thus, when there is a conflict between statutes which were enacted at different times, ―the more specific and more recently enacted statutory provision‖ generally controls. Lovlace v. Copley, 418 S.W.3d 1, 20 (Tenn. 2013); see also Commonwealth v. Menezes, 871 A.2d 204, 210 (Pa. 2005) (holding that a more recently enacted, specific statute controlled over a prior, more general statute). As the more recently enacted statute, which makes specific references to the earlier workers‘ compensation statutes, section 578 evinces a legislative intent to change how the workers‘ compensation assessments are to be paid to the Pennsylvania Department of Labor and Industry. Although repeal by implication is not favored under either Tennessee or Pennsylvania law, this doctrine does apply when a more recent, more specific statute is irreconcilable with a former statute on the same subject. See Pa. Dep‘t of Educ. v. First Sch., 370 A.2d 702, 708 (Pa. 1977); Hayes v. Gibson Cnty., 288 S.W.3d 334, 337-38 (Tenn. 2009). The plain language of section 578, stating that the assessments ―shall no longer be imposed on insurers,‖ further supports our conclusion that the three workers‘ compensation statutes have been repealed insofar as they are inconsistent with section 578. (Emphasis added.) For all of these reasons, we conclude that we must focus our analysis on section 578.