§ 89. Rates for workers' compensation. 1. Employments and employees in the state fund shall be divided into such groups and classes as shall be equitable based upon differences of industry or hazard for the purpose of establishing premium rates for workers' compensation insurance, and for such purpose a system of merit rating may be employed which shall take account of the peculiar hazard of each individual risk. Such premiums in the state fund shall be fixed at the lowest possible rates consistent with the maintenance of a solvent fund and of reasonable reserves and surplus. 2. Premiums for construction classification employers shall be subject to a payroll limitation on each construction classification subject to the following transition program. For purposes of this section, "construction classification" shall mean employments classified under sections two hundred twenty, two hundred forty and two hundred forty-one of the labor law, provided such employments are classified under each of said sections, except that construction classification shall not include any employments engaged in the construction of one or two family residential housing.

(a) For policies with rating anniversary dates after September thirtieth, nineteen hundred ninety-nine and before October first, two thousand, an employer's payroll for premium computation purposes in the affected construction classifications shall be the actual weekly payroll per employee for the number of weeks employed subject to a maximum of nine hundred dollars per week per employee plus one-half of the difference between the employer's total payroll and the limited payroll.

(b) For policies with rating anniversary dates after September thirtieth, two thousand and before October first, two thousand one, an employer's payroll for premium computation purposes in the affected construction classifications shall be the actual weekly payroll per employee for the number of weeks employed subject to a maximum of nine hundred dollars per week per employee.

(c) For policies with rating anniversary dates after September thirtieth, two thousand one and before October first, two thousand two, an employer's payroll for premium computation purposes in the affected construction classifications shall be the actual weekly payroll per employee for the number of weeks employed subject to a maximum of eight hundred dollars per week per employee.

(d) For policies with rating anniversary dates after September thirtieth, two thousand two, an employer's payroll for premium computation purposes in the affected construction classifications shall be the actual weekly payroll per employee for the number of weeks employed subject to a maximum of the greater of seven hundred fifty dollars per week or the weekly payroll amount upon which the maximum weekly benefit is based, per employee. 3. The base rates applicable to construction classifications as defined in this subdivision shall be adjusted by the New York workers' compensation rating board beginning October first, nineteen hundred ninety-nine, to reflect the payroll limitations required by this subdivision as they separately affect such rates for work actually performed within each of the following geographic territories:

(a) Territory 1 comprising the counties of the Bronx, Kings, New York, Queens, and Richmond;

(b) Territory 2 comprising the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester; and

(c) Territory 3 comprising all other counties within the state.