Can the Mississippi Workers' Compensation Commission charge the State Self-Insured Workers' Compensation Trust an annual assessment after the 2016 Budget Transparency Act?

Plain-English summary

The Workers' Compensation Commission funds itself by an annual assessment prorated among workers' compensation insurance carriers and self-insureds in the state. After the 2016 Budget Transparency and Simplification Act, the State Self-Insured Workers' Compensation Trust (a member-funded trust covering state agencies) stopped paying its assessment, leaving the rest of the carriers/self-insureds to make up the gap. The Commission asked whether the assessment was a banned interagency charge, and whether the Trust's premium charge to Commission member agencies (including the Commission itself) was also banned.

Answer 1 (assessment from Commission to Trust): Banned. Section 27-104-203 prohibits state agencies from charging another state agency "a fee, assessment, rent, audit fee, personnel fee or other charge for services or resources received." Section 71-3-100 specifically incorporates this language, listing the Commission as defrayed by Legislative appropriation and explicitly applying the interagency-charge ban to "fees, assessments, rents, or other charges" received under Section 71-3-85 et seq. Therefore, the Section 71-3-99 assessment cannot be charged against the Trust.

Answer 2 (premium from Trust to Commission): Not banned. Section 27-104-31 specifically authorizes the Trust to require state agencies to make premium payments and contributions necessary for the comprehensive risk management program. The 2016 Upchurch opinion already concluded that Trust premiums were not the kind of interagency charge banned by Section 27-104-203. Specific statute beats general statute (per Townsend v. Estate of Gilbert), so the Trust's premium authority controls.

The practical result: the WCC loses the Trust's portion of the assessment, which gets redistributed across the remaining carriers/self-insureds, and the Commission keeps paying the Trust for state-agency workers' compensation coverage.

What this means for you

For state agencies that participate in the Trust

You're paying premium to the Trust under Section 27-104-31 and that's appropriate. You're not paying the WCC assessment as a separate line item; the WCC funds itself out of carrier and private self-insurer assessments plus its General Fund appropriation.

If your agency is also a workers' compensation insurance carrier or self-insurer outside the Trust framework (rare), the assessment analysis may differ. Most state agencies fall fully within the Trust.

For workers' compensation insurance carriers and private self-insureds

Your share of the WCC's annual assessment increased after 2016 because the Trust's portion was redistributed across the remaining payers. This opinion confirms that's the right outcome under the statute.

Plan annual budgets accordingly. The Trust's exclusion from the assessment base is permanent absent legislative change.

For the Workers' Compensation Commission

The opinion gives prospective guidance only; it does not validate or invalidate past actions. Going forward:

• Don't bill the Trust the Section 71-3-99 assessment
• Continue paying the Trust premium for the Commission's own workers' compensation coverage under Section 27-104-31
• Allocate the remaining assessment burden across non-Trust carriers and self-insureds

If the Commission needs additional funding to cover the gap, the avenue is appropriations from the Legislature, not interagency charges.

For the Department of Finance and Administration and the Trust

The Upchurch 2016 opinion remains good law. Trust premiums are exempt from the appropriation process and don't lapse to the General Fund. State agencies' premium contributions to the Trust are part of risk management, not interagency charges.

For state legislators

If the Legislature wants the Trust to participate in the WCC assessment, that would require either repealing Section 71-3-100's interagency-charge ban as applied to the Trust, or amending Section 71-3-99 to specifically include the Trust as an assessable entity. Currently, the framework exempts the Trust.

Common questions

Q: What is the Mississippi State Agencies Self-Insured Workers' Compensation Trust?
A: A trust authorized under Section 27-104-31 that provides workers' compensation coverage for state agencies. Member agencies pay premiums based on their incurred liabilities; the Trust pays workers' compensation claims for state agency employees.

Q: Why did the 2016 Budget Transparency Act ban interagency charges?
A: To increase budget transparency and stop one agency funding another through fees that hide the true cost of state services. Each agency's appropriation is supposed to cover its operations, with revenues flowing to the General Fund rather than between agencies.

Q: Is this just a paperwork shuffle?
A: Sort of. The WCC funds the same operations either way; the question is whether the Trust pays into the WCC pool or whether the Trust's share gets redistributed across non-state-agency payers. Post-2016, the Trust does not pay the assessment, and non-state payers absorb a slightly larger pro-rata share.

Q: What if a private employer is also self-insured for workers' compensation?
A: Private self-insurers continue to pay the WCC assessment under Section 71-3-99. The interagency ban only applies between state agencies.

Q: Why is the Trust premium analyzed differently from the WCC assessment?
A: The Trust premium is specifically authorized by Section 27-104-31, the Trust's enabling statute. The 2016 Upchurch opinion concluded that Section 27-104-203 doesn't apply to "any trust fund account maintained by the sixteen agencies, including the DFA." General prohibitions in Section 27-104-203 yield to specific authorizations elsewhere.

Q: Does this opinion validate past assessment payments by the Trust?
A: No. AG opinions under Section 7-5-25 are prospective. The opinion does not say whether past payments were lawful or whether refunds are owed. That's a separate question.

Q: What happens if a future Legislature wants to undo this?
A: It can. Amending either Section 27-104-203 (to exclude the WCC assessment from the ban) or Section 71-3-100 (to remove the incorporation language) would change the analysis.

Q: Does the same logic apply to other regulatory agencies that assess insurers (e.g., Insurance Department)?
A: Possibly, but each statute would need its own analysis. The structural rule (specific statute beats general; trust contributions are different from interagency fees) applies broadly, but the result depends on each agency's enabling statute.

Background and statutory framework

Mississippi's 2016 Budget Transparency and Simplification Act (Sections 27-104-201 et seq.) reorganized state agency funding. Key provisions:

• Section 27-104-203(1): "From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent, audit fee, personnel fee or other charge for services or resources received."
• Section 27-104-205(1): Lists state agencies whose expenses are defrayed by Legislative appropriation from the General Fund. Includes the Workers' Compensation Commission. "Beginning July 1, 2016, any fees, assessments or other revenues charged for the support of the above-named state agencies shall be deposited into the State General Fund."

The Workers' Compensation Commission's enabling statutes (Section 71-3-85 et seq.) include:

• Section 71-3-99: Annual assessment of $250 per carrier/self-insurer, plus pro-rata of remaining estimated expenses
• Section 71-3-100: All Commission funds paid to State Treasurer for the General Fund; specifically incorporates Section 27-104-203's interagency-charge ban for funds received under Section 71-3-85 et seq.

The Trust is governed by Section 27-104-31, which authorizes premium payments and contributions from state agencies "necessary to meet the obligations created by the comprehensive risk management program." Trust funds are exempt from appropriation and don't lapse to the General Fund.

The AG applied the rule of statutory construction from Townsend v. Estate of Gilbert: when general and specific statutes conflict, the specific controls. Trust premium authority (specific) beats interagency-charge ban (general). But for the WCC assessment, Section 71-3-100 specifically incorporates the ban, so there is no conflict — the ban applies.

Citations and references

Statutes:
- Miss. Code Ann. § 7-5-25, AG opinion authority (prospective only)
- Miss. Code Ann. § 27-104-31, Trust premium authority
- Miss. Code Ann. § 27-104-201 et seq., Budget Transparency and Simplification Act of 2016
- Miss. Code Ann. § 27-104-203, interagency-charge prohibition
- Miss. Code Ann. § 27-104-205, agencies funded by General Fund appropriation
- Miss. Code Ann. § 71-3-85 et seq., Workers' Compensation Commission
- Miss. Code Ann. § 71-3-99, annual assessment
- Miss. Code Ann. § 71-3-100, deposit of Commission funds; incorporation of interagency-charge ban

Cases cited:
- Townsend v. Estate of Gilbert, 616 So. 2d 333, 335 (Miss. 1993), specific statute controls over general

Prior AG opinions cited:
- MS AG Op., Upchurch (June 30, 2016), Trust premiums not banned by Section 27-104-203

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/03/M.Formby-January-14-2022-Mississippi-Workers-Compensation-Commission-Annual-Assessment.pdf

Original opinion text

January 14, 2022

Mark S. Formby
Chairman, Mississippi Workers' Compensation Commission
Post Office Box 5300
Jackson, Mississippi 39296-5300

Re: Mississippi Workers' Compensation Commission Annual Assessment

Dear Mr. Formby:

The Office of the Attorney General has received your request for an official opinion.

Background

Pursuant to Section 71-3-99(1), the Workers' Compensation Commission ("Commission") collects an annual assessment to fully fund the Commission's appropriated budget, which is prorated among all insurance carriers and self-insureds writing workers' compensation insurance in the State of Mississippi. The gross claims for compensation and medical services and supplies paid by the insurance carriers and self-insurers are the basis for computing the amount to be assessed. According to your request, subsequent to the enactment of the Mississippi Budget Transparency and Simplification Act of 2016, Miss. Code Ann. § 27-104-201, et. seq., the Mississippi State Agencies Self-Insured Workers' Compensation Trust ("Trust") ceased to pay its annual assessment. You state that the remaining insurance carriers and self-insureds must now fulfill the Trust's former portion of the assessment. You further state that the Trust continues to be funded through premiums paid by the member state agencies calculated by the liabilities incurred by each agency and that the Commission is a member of the Trust and, thus, pays such premium.

Questions Presented

(1) Would the annual assessment collected from the Trust by the Commission amount to a "charge for services or resources" or is it an assessment outside the legislative intent of Mississippi Code Annotated Section 27-104-203?
(2) Does the premium collected by the Trust from the Commission amount to a "charge for services or resources" provided by the Trust to the Commission, or is it an assessment outside the legislative intent of Section 27-104-203?

Brief Response

(1) The annual assessment collected by the Commission and authorized by Section 71-3-99 is of the type of interagency charge contemplated by the general prohibition against interagency charges in Section 27-104-203. Thus, the Commission does not have the authority to assess the Trust under Section 71-3-99.
(2) No. We have previously opined, and still do opine, that the premium collected by the Trust is not the type of interagency charge contemplated or prohibited by Section 27-104-203. Thus, the Commission must continue to pay the Trust the premium collected pursuant to Section 27-104-31(1)(e).

Applicable Law and Discussion

As an initial matter, we note that opinions of this office are issued on prospective questions of law pursuant to Section 7-5-25. Official opinions do not validate nor invalidate past actions. We offer the following for future guidance.

Section 27-104-203 provides a general prohibition against interagency charges stating, in relevant part, "From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent, audit fee, personnel fee or other charge for services or resources received." Miss. Code Ann. § 27-104-203(1). Furthermore, Section 27-104-205 lists the state agencies that have their expenses defrayed by Legislative appropriation from the State General Fund and includes the Commission as one of those agencies. Miss. Code Ann. § 27-104-205(1). This section further provides, in pertinent part, "Beginning July 1, 2016, any fees, assessments or other revenues charged for the support of the above-named state agencies shall be deposited into the State General Fund…" Id.

Section 71-3-85 et seq. governs the Workers' Compensation Commission. In addition to the more general statutes above, Section 71-3-100 states that all funds received by the Commission, as established by Section 71-3-85 et seq., are to be paid to the State Treasurer, who will deposit the funds into the State General Fund. Furthermore, this section specifically reaffirms the language of Section 27-104-205 by stating that from and after July 1, 2016, the expenses of the Commission are defrayed by Legislative appropriation from the General Fund and that all user charges and fees authorized by Section 71-3-85 et seq. must be deposited into the General Fund. Finally, Section 71-3-100 specifically incorporates the prohibition against interagency charges provided in Section 27-104-203 stating, "From and after July 1, 2016, the Workers' Compensation Commission shall not charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of Section 71-3-85 et seq." Miss. Code Ann. § 27-104-203.

Section 71-3-99 requires the Commission to estimate annually in advance the amounts necessary for its administration and then authorizes the Commission to assess each carrier and self-insurer Two Hundred Fifty Dollars ($250.00). Miss. Code Ann. § 71-3-99(1)(b). The proceeds of that assessment are to be deducted from the total estimate of expenses, and then the remaining expenses of the administration are to be prorated among the carriers writing compensation insurance in the state and self-insurers. Id. Section 71-3-99(4) specifically requires that such amounts collected be paid into the State General Fund.

In response to your first question, it is our opinion that the assessment authorized in Section 71-3-99 is the type of interagency charge contemplated and prohibited by Section 27-104-203 because Section 71-3-100 tracks the prohibitive language of Section 27-104-203 and applies that prohibition to those funds "received by authority of Section 71-3-85 et seq." The Legislature displayed its clear intent for the general prohibition of interagency charges to apply to the Commission when it amended Section 71-3-100 to both incorporate the prohibitive language of Section 27-104-203 and to provide that fees authorized and received by the Commission must go into the General Fund for its legislative appropriation. Therefore, the assessment authorized by Section 71-3-99 is the type of interagency charge no longer permitted according to Section 27-104-203 and may not be assessed by the Commission against another state agency pursuant to Section 71-3-100.

In response to your second question, Section 27-104-31 is the enabling statute for the Trust. That section also authorizes the Trust to require that state agencies make premium payments, contributions to self-insurance funds, or both, that are "necessary to meet the obligations created by the comprehensive risk management program." Miss. Code Ann. Section 27-104-31(1)(e). Subsection (1)(e) provides that the funds required by the statute shall be used to pay claims under the workers' compensation self-insurance fund. Id.

When previously asked about the implications of Section 27-104-203 on the Trust, we opined that the premiums collected by the Trust are not prohibited by Section 27-104-203. MS AG Op., Upchurch at *3 (June 30, 2016). Additionally, we said Section 27-104-203 "does not apply to any trust fund account maintained by the sixteen agencies, including the DFA; nor does it prohibit the sixteen agencies, including the DFA, from maintaining clearing accounts in approved depositories." Id. Our opinion remains the same. Notably, the entire Trust is funded by state agencies. The funds are exempt from the appropriation process and do not lapse into the State General Fund. Miss. Code Ann. Section 27-104-31(1)(e).

As a general rule of statutory construction, in the event of a conflict between a general statute and a specific statute on the same subject, the specific statute preempts the general statute. Townsend v. Estate of Gilbert, 616 So. 2d 333, 335 (Miss. 1993). Therefore, the specific authority of the Trust to collect premium payments or contributions under Section 27-104-31 preempts the general prohibition in Section 27-104-203. Thus, the Commission should continue to pay to the Trust the premium payments collected pursuant to Section 27-104-31(1)(e).

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Abby C. Overby
Abby C. Overby
Special Assistant Attorney General