Legal Department History

The statutory precursor of the Subsequent Injury Fund, the Second Injury Fund, was created by Chapter 637 of the Acts of 1945.

By Chapter 809 of the Acts of 1963, Section 66 of Article 101 was repealed and re-enacted with amendments.  One of the amendments to Section 66 abolished the Second Injury Fund and created in its place the Subsequent Injury Fund.

In analyzing the Subsequent Injury Fund, the Court of Appeals in Subsequent Injury Fund v. Pack, 250 Md. 206, 308, 342 A.2d, 506, 508 said that its purpose was to persuade the employer to employ the handicapped individual by limiting the liability which the employer may otherwise have incurred.  The Subsequent Injury Fund, funded by assessments imposed upon employers and insurers, by statute, would contribute the balance of the total award, so that the sum of the two payments would equal the compensation provided by statute for the combined effects of both the previous disability and the subsequent injury.

The Fund had no legal standing as a party until the Legislature passed Acts of 1969, Chapter 394:

In the event of any award against the Subsequent Injury Fund, there shall be a right of appeal by the Subsequent Injury Fund, as provided in Section 56 (a) of Article 101.

Acts of 1982, Chapter 142, added subsections 7 and 8 to Article 101, Section 66.  The provisions, among others, were as follows:

(7)  Staff; budget; appropriations.

(a)  The Fund shall have the staff and employees which are authorized in the annual State budget.
(b)  The Fund annually shall submit its budget to the Governor for inclusion in the next State budget   submitted to the General Assembly.

(8)  Subsequent Injury Fund Board.

(a)  There is a Subsequent Injury Fund Board.
(b)  The Board is composed of 3 members, one member each shall represent labor, management and the public.
(c)  The Board shall supervise the operation, and administration of the Subsequent Injury Fund.
(f)  The Board shall submit an annual report to the Governor on or before October 1.  The report shall include a statement in detail of the expenses and balances of the Fund.

This legislation provided the first significant step toward resolving the administrative problems of the Subsequent Injury Fund.  The Workers' Compensation Fund Board was abolished and the Subsequent Injury Fund Board created.  The Subsequent Injury Fund became recognized for the first time by the Legislature as a separate agency and thus independent of the Workers' Compensation Commission.

Acts of 1982, Chapter 142, did not clarify the Funding for the operating costs of the Subsequent Injury Fund.  To eliminate the question of whether general or special funding applied, Acts of 1983, Chapter 326, was passed and subsection (7) (c) was added to Section to Section 66 of Article 101 as follows:

Appropriation of funding for the budget of the Subsequent Injury Fund shall be made from the Fund created under subsection (2) of Section 66....

Thus, the source of funding for the Subsequent Injury Fund (the 5% assessment on all permanency awards, settlements and death claims paid by employers participating in the Workers' Compensation process) was for the first time allocated to the operational costs of the Subsequent Injury Fund as well as to the formerly exclusive application of paying benefits pursuant to awards of the Workers' Compensation Commission.  Other significant changes in the 1983 statute clarified responsibility for the handling of all Subsequent Injury Fund monies and placed that responsibility in the hands of the Subsequent Injury Fund Board and its Director rather than with the Workers' Compensation Commission.