2003-03-06                     Senate Journal                      Page 0408
SB 120                                                                                            
SENATE BILL NO. 120 BY THE SENATE RULES COMMITTEE                                                   
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
                                                                                                    
                                                                                                    

2003-03-06                     Senate Journal                      Page 0409
          "An Act relating to the state's sovereign immunity for                                    
          certain actions regarding injury, illness, or death of                                    
          state-employed seamen and to workers' compensation                                        
          coverage for those seamen; and providing for an                                           
          effective date."                                                                          
                                                                                                    
was read the first time and referred to the Labor and Commerce and                                  
Finance Committees.                                                                                 
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Administration                                              
                                                                                                    
Governor's transmittal letter dated March 5:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill that would provide a uniform                                 
equitable remedy for work injuries of all state employees under a                                   
single compensation system.                                                                         
                                                                                                    
AMHS crew and a small number of other ship based personnel are the                                  
only state employees presently authorized to file a direct civil                                    
(negligence) action against their employer for on -the-job injury or                                
illness. Historically, this unique legal privilege was provided to                                  
maritime employees as a consideration to compensate for the perils of                               
long ocean voyages away from home as well as to protect them from                                   
the risk of abandonment at a foreign port should they become ill or                                 
injured mid-voyage.                                                                                 
                                                                                                    
State maritime employees typically work scheduled voyages of a week                                 
or two in duration and are compensated with employer-provided                                       
retirement and comprehensive health plan benefits (including                                        
occupational disability.)                                                                           
                                                                                                    
For over 8 years, during the 1980's, AMHS union labor agreements                                    
stipulated and the state paid Alaska Workers' Compensation Act                                      
benefits in lieu of traditional Jones Act and other maritime remedies.                              
Many employees preferred the AWCA as a more complete and                                            
immediate no-fault payment (non-taxable wage indemnification rather                                 

2003-03-06                     Senate Journal                      Page 0410
than a modest daily maintenance stipend) - avoiding controversy,                                    
delays, and the extra costs inherent in protracted civil litigation. A                              
single employee's constitutional challenge resulted in the Supreme                                  
Court decision (Brown v. State & Div. Of Marine Highway Systems                                     
(8/30/91) which precludes this practice under current law (unless new                               
legislation is enacted.)                                                                            
                                                                                                    
Legal arguments over liability and the subjective nature of non-                                    
economic damages provided under maritime law generate greater                                       
claims adjudication costs and significantly greater compensation                                    
awards to injured employees. The cost to the state for the claims of                                
these employees is nearly 75% higher than the cost related to claims of                             
other state employees covered by workers' compensation. Litigation                                  
expenses and defense costs presently incurred defending the Alaska                                  
Marine Highway System (AMHS) and other agency maritime                                              
employee claims will be significantly reduced by this legislation.                                  
                                                                                                    
The proposed legislation would limit the remedy for work injuries                                   
incurred by the state-employed seaman to those benefits provided all                                
other employees under the Alaska Workers' Compensation Act.                                         
                                                                                                    
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
Sincerely,                                                                                          
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor