SB 878 - The act affirmatively states that occupational diseases are exclusively covered under workers' compensation laws. This act states that co-employees shall be released from all liability for workplace injuries or death for which compensation is recoverable under the workers' compensation statutes. However, the employee shall not escape liability when the employee engages in an affirmative negligent act that purposefully and dangerously caused or increased the risk of injury. When an employer acts knowingly and is reasonably certain that injury to or death of an employee will result, subsequent injury or death shall fall outside of the exclusive remedy provisions of the workers' compensation statutes and the employer shall not retain subrogation rights. No new claims shall be filed against the Second Injury Fund after July 1, 2012. Only awards granted prior to July 1, 2012, awards or settlements in cases filed before July 1, 2012 and medical bills incurred and filed by employees of uninsured employers before July 1, 2012 shall be paid by the fund. The Attorney General shall transmit the projected cost of all legal expenses to the director of the division of workers' compensation. The director shall then withhold sufficient funds to meet the expenses not to exceed 1/4 of the annual appropriation for that purpose. Under the act, an annual actuarial study shall be made taking into consideration any existing balance carried forward in the fund from a previous year. The act establishes priority for paying liability of the fund in the following order: 1. Expenses related to the legal defense of the fund. 2. Permanent total disability awards in the order settled or finally adjudicated. 3. Permanent partial disability awards in the order settled or finally adjudicated. 4. Medical expenses incurred prior to July 1, 2012. The act institutes a funding mechanism to bolster the Second Injury Fund when usual collections are inadequate. If funds fall short, the Director of the Division of Workers' Compensation shall determine the shortfall which shall be collected with a supplemental surcharge not to exceed 1 1/2%. If funds continue to fall short, the Second Injury Fund Commission shall determine the shortfall which shall be collected with a supplemental surcharge not to exceed 1 1/2%. The provisions containing the authorization of additional surcharges expire on December 31, 2019. The Attorney General shall reduce staff in proportion to the number of Second Injury Fund cases that remain. The act creates the Second Injury Fund Commission composed of the Governor, Attorney General, President Pro Tem of the Senate, and the Speaker of the House of Representatives to approve additional surcharges and authorize certain settlements. A provision requiring the workers' compensation statutes to be strictly construed is repealed. This act contains an emergency clause. This act is similar to SB 430 (2011), SB 8 (2011), 668 (2007), SB 417 (2011), and SB 430 (2011), SB 572 (2012), SB 827 (2012), SB 828 (2012), SB 829 (2012), and SB 807 (2012). CHRIS HOGERTY