From 1994 to 2011-2012 session
Arizona’s 2012 legislative session picked up where the first half 2011 session left off—aspiring to be the most pro-small-business Legislature in Arizona’s history. The 2012 session’s accomplishments ended up being so consistently good and significant in scope that the Fiftieth Arizona Legislature can rightly make the claim to be the most pro-small-business in state history. NFIB’s work during the session cutting regulatory red tape, stemming lawsuit abuse, properly managing employment benefits, and streamlining and easing the tax burden are ranked in reverse order below.
#10. Senate Bill 1441: Residential Construction Fall Protection Regulation, sponsored by Sen. Andy Biggs, restores to Arizona’s control the regulation of fall protection at residential construction sites, standards that have proven to be very successful in promoting the safety of our construction workers while avoiding arbitrary and costly regulation. The legislation reversed a late-2011 decision by the Industrial Commission of Arizona to adopt federally promoted, one-size-fits-all fall protection standards on the construction industry in Arizona that would have imposed unnecessary and significant new costs and burdens.
#9. Senate Bill 1193: Small Business Impact Data for Proposed Rules, sponsored by Sen. Gail Griffin, expands numerous regulatory rights involving appeals and licensing applications and requires that government agencies use empirical, replicable and testable data when preparing their economic, small business and consumer impact statements for proposed rules and regulations.
#8. Senate Bill 1410: Trespasser Responsibility Act, sponsored by Sen. Ron Gould, solves a potential problem created by the recently published Third Restatement of Torts, the most influential legal treatise on the current state of common law which largely governs civil lawsuits. While the Restatement is not a binding source of law, it is widely used and accepted by the legal community and is occasionally cited by judges in their decisions. At issue was the Third Restatement’s expansion of property owners’ exposure to liability when a trespasser is injured on their property. The Third Restatement places the liability on the land owner for protection of trespassers unless they are “flagrant” trespassers, a concept undefined by either existing common law in any state, let alone Arizona, or in the Third Restatement itself. NFIB drafted this legislation to block activist judges’ ability to wreak havoc upon small-business owners by imposing this flawed legal reasoning.
#7. House Bill 2519: Unemployment Insurance Omnibus, sponsored by Rep. Karen Fann, makes a series of reforms tightening up Arizona’s unemployment insurance system, including requiring individuals to engage in a sustained effort to obtain work during at least four days of the week and make at least three work search contacts per week. The law also declares that a worker is considered to have refused an offer of suitable work if an offer is withdrawn after they either refuse to submit to a drug test or tests positive for drugs.
#6. House Bill 2571: State Personnel Reform, sponsored by Rep. Justin Olson:
- consolidates multiple state government personnel systems
- transitions the state to an at-will workforce
- improves the management of the state workforce
- restructures the grievance and appeal system
- and, updates human resources practices.
Currently, about 80 percent of Arizona state workers are ‘covered’ employees and the remaining 20 percent being ‘uncovered’ or at-will employees. Once fully implemented over the next few years, those numbers will be flipped with 80 percent of the state workforce becoming at-will employees just like most of the taxpayers who work in the private sector. The efficiency and accountability gains will hold down the cost of state government.
#5. House Bill 2368: Workers' Compensation Omnibus, sponsored by Rep. Karen Fann, makes many necessary reforms including a more stable indexing formula for benefits and greater subrogation rights. But the most important provision regards the use of evidence-based medicine in workers’ compensation claims. While indemnity costs in the Arizona workers’ compensation system have risen in recent years, medical benefits still constitute 71 percent of our total benefit costs compared to 59 percent nationwide. Far from placing Arizona in the position of trailblazer in this area, roughly half of the states in the U.S. have adopted evidence-based medicine treatment guidelines for workers’ compensation cases. Experience in these other states suggests that adopting evidence-base medicine will not only result in better quality care for injured workers but less time off work.
#4. House Bill 2466: Local Sales Tax Portal, sponsored by Rep. Rick Gray, offers small businesses a one-stop web portal to remit transaction privilege (sales) tax receipts to state and multiple local municipalities. Scheduled to be in place before 2015, this easy-to-use web portal will streamline the confusing process of remitting sale tax receipts separately to multiple jurisdictions and will lower the cost of compliance for businesses collecting the sales tax.
#3. House Bill 2150: Unemployment Insurance Appeals Reform, sponsored by Rep. Tom Forese, provides clarity to and fair treatment for employees and employers in Department of Economic Security (DES) unemployment compensation proceedings. The NFIB-written law:
- provides a definition of an employee to clarify the factors that should be considered in determining whether someone is an employee or an independent contractor
- requires DES to state the reasons for its decisions to ensure that the determinations are consistent with the law so all parties will be able to consider them in deciding whether to pursue an appeal
- and most importantly, provides 30- and 60-day time periods to appeal DES decisions instead of the clearly unreasonable 15-day time periods that are replaced.
#2. House Bill 2815: Tax Reform, sponsored by Rep. J.D. Mesnard, builds on the foundations of last year’s Competitiveness Package of business tax relief by making further reforms designed to spur economic prosperity. The chief benefits for small businesses include an 85 percent boost in the personal property tax exemption for equipment and machinery and a state income tax deduction equal to the federal 10 percent bonus depreciation for assets purchased this year. Also, the net operating loss (NOL) carry forward for corporations is extended from five years to 20 years to match the NOL treatment already enjoyed by S corporations, LLCs and partnerships who file as individuals. The legislation also creates a phased-in 25 percent reduction in the income tax on long-term capital gains on assets purchased after 2012 and reworks the thresholds and eligibility criteria for receiving a new jobs tax credit.
#1. Senate Concurrent Resolution 1012: Small Business Job Creation Act (Proposition 116), sponsored by Sen. Andy Biggs, refers to the November ballot a pro-growth adjustment to the constitutional exemption for new equipment and machinery investments—the crucial component of a job-producing recovery. Written and championed by NFIB, passage of Proposition 116 will unleash more than 60,000 small business job creators by effectively removing them from the personal property tax rolls. Proposition 116 enjoyed unanimous bipartisan support among legislators and is structured to protect K-12 school budgets and avoids placing additional stress on homeowners.
Victories from the 2011 half of the 50th Arizona Legislature
Won property tax reductions for all businesses
Lowered, over time, the commercial and industrial property tax assessment ratio to 18 percent by 2016 from its current 20 percent. (House Bill 2001)
Helped slash corporate income tax rate
Decreased in phases the corporate income tax rate to 4.9 percent by 2017 from its current 6.968 percent. (House Bill 2001)
Obtained faster depreciation of business personal property
Advocated for passage a 5-percent bump in the accelerated depreciation schedule for business personal property. (House Bill 2001)
Killed property tax shift to existing small businesses
Defeated a misguided effort to abandon broad-based property tax reductions for small business for a policy of picking winners over losers in the tax code. (Senate Bill 1041)
Fought for health savings account incentives
Created income tax credits for small businesses for the premium paid on a high-deductable health plan and for contributions to employees’ health savings accounts. (House Bill 2556)
Banned city ‘bounty hunter’ auditors
Reversed the emerging trend of cities hiring ‘bounty hunter’ auditors on contingent fee contracts to audit and harass businesses collecting sales tax receipts. (Senate Bill 1165)
Won protection for small businesses against union intimidation tactics
Restricted unlawful picketing, trespassing, and defamation by labor unions against a business. (Senate Bill 1363)
Ended union preference in federal contracting
Prohibited state entities, counties, cities and towns from accepting federal money for a construction project if accepting it requires them to give a preference to union labor. (House Bill 2644)
Secured a city and county regulatory Bill of Rights
Extended the state’s Regulatory Bill of Rights to cities and counties to ensure fair and open regulation by local governments. (Senate Bill 1598)
Won relief against lawsuit abuse during appeals
Helped pass a law providing relief for businesses in civil lawsuits by limiting the amount of the bond that must be posted against a judgment during the appeals process. (Senate Bill 1212)
Obtained state tax audit reform and relief
Enhanced the criteria for declaring an ‘affected class’ for the purposes of determining whether an extensive misunderstanding or misapplication of Arizona tax laws has occurred—thereby allowing for the abatement of past tax liability, interest and penalties. (House Bill 2202)
Protected taxpayers form harm when state dithers
Secured waiver of any interest or penalties for an unpaid tax liability due to the state failing to conform to revised definitions in the Internal Revenue Code in time for the taxpayer to accurately file their annual tax return. (House Bill 2332)
Won government-employee pension reform
Supported changes to Arizona government-employee pension benefit and contribution structures aimed at bolstering solvency and minimizing unfunded liabilities. (Senate Bill 1609)
Secured ballot initiative to end taxpayer money for politicians
Referred to the 2012 General Election ballot a proposition baring taxpayer funds from being used to finance state and legislative candidates’ political campaigns. (Senate Concurrent Resolution 1025)
2010 NFIB/Arizona Legislative Victories
Stopped raid on workers’ compensation premiums to balance the state’s budget
NFIB was a victorious plaintiff in a case decided in June 2010 that ruled the state could not divert millions of dollars paid by small businesses in the form of workers' compensation premiums to help balance the state budget. “To allow the state to reach into these assets in an attempt to balance the budget violates both Arizona’s constitution and the Constitution of the United States. This is a back-door attempt at a special tax on employers and insurers,” said Karen Harned, executive director of the NFIB Small Business Legal Center in court documents. The ruling returned $4.7 million to the swept workers’ compensation fund and protects future premiums from such money-gabs.
Protected unemployment taxpayers from federal mandates and rate hikes
NFIB led the effort to have Arizona reject federal inducements to increase the cost of unemployment insurance benefits in exchange for strings-laden stimulus dollars. NFIB also worked with state government officials and lawmakers (Senate Bill 1041) to limit the impact of historic levels of unemployment on small business unemployment insurance taxpayers. There were no additional assessments on Arizona employers in 2010.
Frustrated union ‘card check’ and protected workers’ secret ballot voting rights
NFIB took the lead in ensuring Arizona voters will have the opportunity to protect workers’ secret ballot voting rights in union organizing elections. After a similar measure was thrown off the ballot one week before the deadline closing the ballot to new propositions, lawmakers came back into special legislative session at NFIB’s urging to send a new referendum banning ‘card check’ to the November ballot in the form of Prop. 113. The voters passed the constitutional amendment with 61 percent in favor and 39 percent opposed.
Saved accounting credit for collecting the sales tax for state government
NFIB successfully defeated legislation (House Bill 2013) hard-wired into the 2010-2011 state budget deal that would have permanently repealed the already inadequate accounting expenses credit that businesses may take for collecting billions of dollars annually for the state in sales tax. The credit, one-percent of the tax collected (capped at $10,000) and worth $20 million annually, is already well below the true cost of this irreplaceable service that small business performs for state government.
Toughened expert witness qualifications in Arizona courtrooms
NFIB helped pass legislation (Senate Bill 1189) that raises the standard used in civil and criminal trials relating to the admissibility of expert testimony. This new more rigorous standard will better ensure that juries consider sound science and truly authoritative testimony in court proceedings.
Created one-stop-shops for state, county and local government regulations
NFIB helped pass regulatory reform legislation (HB 2260) long sought by small business including the requirement that a regulation’s benefits outweigh its probable costs; the adoption of the least burdensome and costly option; expansion of the requirements for the Economic, Small Business and Consumer Impact Statement; creates an online, appropriately-linked and searchable computer database or one-stop-shop for codes, ordinances and business license requirements.
Greater accountability of local governments through transparency
NFIB championed the new law (House Bill 2282) that requires local governments to establish and maintain an official website that contains a comprehensive reporting of all revenues and expenditures over $5,000.
Won greater consumer choice for individual health plans
NFIB helped pass House Bill 2324, which now gives individuals access to mandate-lite, health-insurance policies. Starting this year, insurance carriers may offer individuals health insurance policies without all of the state-required mandates. The new law provides individuals consumer choice and possible premium savings. HB 2324 was filed into law.
Secured quicker access to mandate-lite health insurance policies for small businesses
NFIB pushed House Bill 2323 to successful passage. The measure reduces the required waiting period for small businesses wanting to purchase a mandate-lite, health insurance policy. Signed into law by the Governor, the waiting time – often referred to as the ‘go bare’ period – from when a small business must have been without health insurance in order to purchase mandate-lite plans has been reduced from six months to 90 days.
Helped keep emergency room professionals from leaving Arizona
NFIB supported Senate Bill 1018 that would raise the burden of proof in medical malpractice civil actions against healthcare providers and hospitals to clear-and-convincing evidence in connection with certain emergency medical services. Signed by the Governor, this new law should help retain emergency room professionals so that small business owners and their employees can get the necessary treatment when visiting a hospital’s emergency room.
Successfully fought for reduced paperwork on drug-and-alcohol testing programs
NFIB helped win passage of Senate Bill 1266 that relates to a measure passed in 2009 that restored an insurance carrier’s ability to offer up to a 5 percent premium discounts on workers' compensation policies for businesses with qualified drug-and-alcohol testing programs in the workplace. Signed by the Governor, this new law eliminates the unnecessary requirement that a certification be filed with the Industrial Commission of Arizona (ICA) by a business seeking this premium discount with their workers’ compensation carrier.
Continued success with workers' compensation reforms
NFIB supported a measure that prohibits a claim from being reopened if the initial claim was denied or the determination was allowed to become final. Also, it requires claims for temporary partial disability benefits to be filed within two years of either the date the claimed entitlement accrued or the date an award for benefits encompassing the entitlement period became final.
Ensuring small businesses can operate without unnecessary regulations
NFIB supported this new law that prohibits the state from regulating any non-health profession not currently regulated unless certain criteria concerning regulation are met. The criteria includes a clear proof that an unregulated practice may harm the public health, welfare or safety; and a clear determination that the public benefit of regulation exceeds the costs imposed on the regulated profession and its customers. This new law does not impact current regulated professions and occupations.
Retroactivity removed from the employer sanctions law of 2007
NFIB supported a provision that clarified to whom the employer sanctions law applies. Now, the employer sanctions law applies to employees hired on or after Jan. 1, 2008. LAWA will no longer apply to individuals who started employment at a business prior to the 2007 law's effective date of Jan. 1, 2008.
Additional tax relief for small business
NFIB actively supported the fiscal year 2008 budget, which included two tax relief measures for business. One provision accelerates the depreciation schedule on business equipment that is purchased in 2008. The second provision accelerates the phase down of the assessment ratio for class 1 properties (commercial/business) from eight years to four years by allowing a decrease of 1 percent per year and eliminating the 0.5 percent adjustments. The 2007 assessment ratio is 24 percent and will reach 20 percent for tax year 2011.
Expanding consumer choice for small-business health plans
NFIB was successful in advocating for more small businesses to take advantage of "mandate-lite" health-insurance policies. This year, the allows insurance carriers to offer small-business owners health insurance without all of the state-required mandates to groups with of up to 50 employees. A year earlier, the cap was established at up to 25 employees. The new law provides for consumer choice for more small businesses and possible premium savings.
Reducing paperwork when applying for health insurance
NFIB supported a law that establishes a working committee to develop and implement a uniform health-insurance application form by Jan. 1, 2009. The intent is to simplify the process and eliminate mounds of paperwork by requiring health-insurance carriers to use the same initial application form, allowing small businesses to apply for insurance with multiple carriers at one time and compare costs with the quotes obtained.
Workers' compensation premium discounts for workplace drug-and-alcohol testing
NFIB pursued a law that restores insurance carriers' abilities to offer up to five percent in premium discounts on workers' compensation policies for businesses with drug and alcohol testing programs in the workplace. The new law comes on the heels of the 2005 Grammatico decision, where the Arizona Supreme Court ruled that denying workers' compensation benefits to employees under the influence of drugs and alcohol was unconstitutional. The ruling led to an immediate withdrawal of the 5 percent premium discount for employers who had certified drug and alcohol policies filed with the Industrial Commission of Arizona.
Leveling the playing field for all businesses
NFIB advocated for a law that prohibits municipalities located entirely in Maricopa and Pinal counties from providing retail tax incentives to induce large retail businesses to locate in their municipality. The purpose of the new law is to discourage the tax incentive bidding wars between cities at the expense of taxpayers and small-business owners.
Income and property tax relief for small business
NFIB helped pass the largest tax cut package in Arizona history. The most significant components of the tax package included a 10 percent reduction in the individual income tax rates over two years; and suspending the county education tax on property, temporarily eliminating the 43 cent levy for each $100 of assessed value.
Passed small-group health insurance plans, providing consumer choice and lower premiums for small business
NFIB successfully passed "mandate lite" legislation that would allow insurance carriers to offer small-business owners health insurance without all of the state-required mandates. The new law provides for more consumer choice and possible premium savings.
Bridged health insurance gap for small businesses and individuals
During the 2006 legislative session, NFIB was able to take another step in health-care reform. The new law creates a temporary program for uninsured individuals and small businesses to receive up-front money to help buy down annual health-insurance premiums.
Protecting private property rights
During the 2006 election season, NFIB/Arizona actively supported coalition efforts on Proposition 207, an effort to protect small business owners' private property rights. The new law will ensure that government's power of eminent domain is used only for necessary public uses, and not to take our small-business properties to give to other businesses or developers. It will also give property owners an opportunity to obtain just compensation when arbitrary changes in land-use regulations hurt the value of their properties.
Creating additional property tax relief for small business
Also during the political season, NFIB/Arizona backed Proposition 101, eliminating more than $173 million of surplus taxing capacity by requiring cities, counties and community colleges to calculate their constitutional property tax limits based on the actual tax collections in 2005. It will remove the possibility of large annual tax increases, levied without voter approval, that currently threaten Arizona property taxpayers.
Pushed property tax relief for business
For the better part of a decade, NFIB has fought for real property tax relief for small businesses. Since 1980, Class 1 (commercial property) has shouldered the property tax burden by paying a 25 percent assessment ratio, which is 2 and ½ times more than homeowners (10 percent). During the 2005 legislative session, NFIB was able get passed a phased-in relief by decreasing the assessment ration from 25 percent to 20 percent over 10 years.
Supported medical malpractice procedural reforms
During the 2005 legislative session, NFIB was able to help pass medical malpractice reforms that facilitate an open dialogue between doctors and patients; and tightens the expert witness testimony by requiring experts who either currently practice or teach in the same medical specialty as the doctor on trial. These reforms should help lower medical malpractice insurance costs and keep doctors in Arizona treating small business owners and their employees.
Ensured the states can't raid Arizona workers' compensation fund
In April, 2004, Arizona Superior Court Judge Albrecht ruled in favor of NFIB and other plaintiffs that the state can't transfer funds from the State Workers' Compensation Fund to balance the budget and are to be used for losses incurred by policyholders. If NFIB had lost this case, the state would have had carte blanche to raid policyholder money to spend on programs unrelated to workers' compensation. Ultimately, policyholders could have had an increase in premiums.
Defeated the sales tax on services
For four consecutive years, NFIB blocked legislative proposals for a sales tax on services. This type of tax would crush small business. It would add a tax on everything from oil changes, accounting services, to haircuts. We will continue to work against this type of legislation.
Prevented additional health benefit mandates
In 2004, NFIB/Arizona helped defeat a requirement that all small business and individually purchased health insurance products include coverage for mental health benefits at the same level as physical care. This mandate would have increased insurance costs on small businesses.
NFIB/Arizona successfully lobbied for further small business regulatory reform. Highlights include requiring state agencies to prepare and make public their regulatory agendas and establishing better notice of new rules to small-business owners.
Sick leave bill defeated
NFIB/Arizona successfully fought a bill requiring employers who provide employee sick leave to expand it to include cases where the employee's family is ill. The bill would have increased costs for small businesses and opened the door for litigation.
Health benefit mandates defeated
With NFIB/Arizona members opposed to health benefit mandates, the organization was able to hold off efforts to mandate contraceptive coverage, mental health parity, and prescription drugs like Viagra.
Business record shredding mandate defeated
NFIB/Arizona defeated legislation that would have required small businesses to destroy customer records, as outlined in the bill, if a business was planning to dispose of the records.
Several unemployment insurance bills defeated
NFIB/Arizona successfully opposed raids on the unemployment insurance trust fund to pay for family medical leave; indexing of benefits to the average weekly wage; eliminating the one-week waiting period to collect unemployment if an individual is required to attend mandatory training that is uncompensated by the employer.
Proposition 202, the Citizens Growth Management Initiative, defeated
During the 2000 November elections, NFIB Arizona worked with a coalition of business groups, trade associations, elected officials, and concerned citizens to defeat Proposition 202, the Citizens' Growth Management Initiative (CGMI), sponsored by the Sierra Club. With the diligent efforts of NFIB and the coalition, the initiative failed with 70 percent of the voters opposing it.
NFIB opposed Prop 202 because it has nothing to do with managing growth. In fact, Prop 202 was the most far-reaching no-growth proposal ever seen in Arizona and it would have taken away the freedom of local governments and its citizens -- like you -- to decide what is best for their communities.
What was even scarier is the fact that Prop 202 would have created a lawsuit quagmire. Any person or interest group in the U.S. could sue and stop any Arizonan from using their land if they believed that a land use decision violated Prop 202.
No Further Action policies help small business
Superfund settlements: passed legislation to allow small businesses with potentially bankrupting environmental liability to get an expedited settlement under the state's Superfund program known as WQARF (sounds like warf). This law will keep small businesses from going bankrupt while waiting for the Dept. of Environmental Quality to act.
In 2000, NFIB/Arizona made a few more adjustments to WQARF, by creating No Further Action policies. Now, small-business owners can seek a No Further Action with the Arizona Department of Environmental Quality if hazardous substances to groundwater are below Arizona aquifer water quality standards. It also allows for a granting of No Further Action for groundwater based on an ADEQ approved site risk assessment. The law also puts a timeline on for No Further Actions to be determined and allows applicants for a NFA the right to appeal the ADEQ's denial to the Office of Administrative Hearings.
NFIB assisted in amending current law to include tax disputes brought on by the Department of Revenue and other local taxing authorities to pay the prevailing party up to $30,000 in attorney's fees.
Qualified Business Settlements to help small business
NFIB helped pass legislation to allow small businesses with potentially bankrupting environmental liability to get an expedited settlement under the state's Superfund program known as WQARF. This bill will keep small businesses from going bankrupt while waiting for the Department of Environmental Quality to act.
Vehicle license tax reductions
NFIB supported reducing the vehicle license tax by $40 million. This means that the vehicle license tax has been reduced by $136 million over the past two years.
Health benefit mandates defeated
NFIB defeated health-care mandates that would have increased small-business health insurance premiums by at least 25 percent.
NFIB defeated legislation that would have raised unemployment insurance tax rates, especially for small employers with good experience ratings.
NFIB supported legislation to reduce unemployment insurance tax rates by .10 percent for employers with a positive reserve ratio and by .05 percent for employers with a negative reserve ratio.
NFIB helped pass legislation to reduce the vehicle license tax by $80 million in 1998-1999 and additional $96 million for subsequent years.
NFIB helped pass legislation to reduce business personal property taxes by expanding the $50,000 exemption to apply to each location of the business and by accelerating the depreciation schedule for business personal property. These reductions amounted to a $5.4 million reduction in 1998 and a $10.7 million reduction for 1999-2000.
NFIB led the charge to repeal the requirement for all privately held corporations to file a financial statement with the Corporation Commission. Under the old law, the statements were then made available to the public. Now, privately held corporations can keep their financial information confidential.
With the income tax cited as the one of the top two taxes small-business owners would like to see reduced or eliminated, NFIB supported $110 million dollars in income tax reductions.
NFIB helped pass legislation to allow a business owner to rely on the IRS determination of independent contractor status and require DES to abide by the determination. The law guarantees judicial review in all DES tax liability cases.
NFIB assisted in the passage of legislation to further clarify the definition of an independent contractor for purposes of workers' compensation insurance. The legislation also creates an eight-pronged test for determining whether or not a contractor is independent.
NFIB helped pass legislation to deny workers' compensation benefits when substantial cause of injury was alcohol or illegal drug use.
NFIB advocated successfully for legislation that takes money from fines and penalties assessed by state agencies out of agency operating budgets and place it in the general fund. This action removes the monetary incentive for an agency to assess a fine or penalty.
NFIB lobbied successfully for business personal property tax cuts. BPP taxes were cut by $32 million for 1996.
NFIB helped pass regulatory reform that includes a separate appeals board completely independent of state agencies to hear appeals of agency decisions. A provision included allowing compensation for a prevailing party for hearing costs and attorney's fees.
NFIB supported the elimination of the 2 percent premium tax on small group health insurance policies.
With NFIB support, Gov. Fife Symington and the Arizona Legislature cut personal and business taxes for the third year in a row. At that time, Arizona was the only state in the nation to cut taxes in three consecutive years.
NFIB won meaningful health-care reform by passing Medical Savings Accounts as a way to encourage consumerism in the purchase of health care.
NFIB worked to pass a bill that clarifies independent contractor rulings and states that sole proprietors are not required to carry workers' compensation insurance on themselves.