03/25/2019 03:15 PM House LABOR & COMMERCE

        HB  30-WORKERS' COMP: DEATH; PERM PARTIAL IMPAIR                                                                    
                                                                                                                                
3:18:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  announced that the  first order of  business would                                                               
be HOUSE  BILL NO. 30, "An  Act relating to the  exclusiveness of                                                               
liability of  an employer in the  case of death; relating  to the                                                               
payment  of  workers'  compensation   benefits  in  the  case  of                                                               
permanent  partial impairment;  relating  to  notice of  workers'                                                               
compensation death benefits; relating  to the payment of workers'                                                               
compensation death  benefits payable  to a  child of  an employee                                                               
where there  is no surviving  spouse; relating to the  payment of                                                               
workers' compensation  death benefits  for an employee  without a                                                               
surviving spouse or child; and providing for an effective date."                                                                
                                                                                                                                
3:18:44 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 3:18 p.m.                                                                                 
                                                                                                                                
3:18:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  moved to adopt  the CS for HB  30, Version                                                               
31-LS0280\U, Marx, 1/24/19, as the  working document. There being                                                               
no objection Version U was before the committee.                                                                                
                                                                                                                                
3:19:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDY  JOSEPHSON,  Alaska  State  Legislature,  as                                                               
prime  sponsor  of  HB  30,  paraphrased  parts  of  the  sponsor                                                               
statement [included in  the committee packet], which  read in its                                                               
entirety as follows [original punctuation provided]:                                                                            
                                                                                                                                
     In  2011,  a  26-year-old  electrical  worker,  Abigail                                                                    
     Caudle,   lost   her   life  to   employer-   workplace                                                                    
     negligence.  Hers  was   a  wrongful  death  warranting                                                                    
     compensation.  Under  current  Alaska statute,  when  a                                                                    
     worker without  children, a spouse, or  dependents dies                                                                    
     due  to  a  work-related   injury,  their  family  only                                                                    
     receives  reimbursement for  the cost  of the  funeral,                                                                    
     and under worker   compensation  law, are unable to sue                                                                    
     for wrongful death.                                                                                                        
                                                                                                                                
     House Bill 30  (HB 30) rectifies this  issue and others                                                                    
     in  the  state's  current system  and  brings  Alaska's                                                                    
     compensation  levels for  injury, illness  or death  of                                                                    
     workers into the present.                                                                                                  
                                                                                                                                
     HB  30 specifies  that when  an  employee dies  without                                                                    
     having  a  spouse or  minor  children,  parents of  the                                                                    
     deceased can elect to either  take legal action against                                                                    
     the employer  or receive  a death  benefit compensation                                                                    
     of $120,000.  If there are  no surviving  parents, this                                                                    
     benefit  is  payable to  the  estate  of the  deceased.                                                                    
     Unmarried,  childless workers  are  the  only class  of                                                                    
     worker  that  does  not  receive  some  form  of  death                                                                    
     benefit  compensation.  HB  30 allows  parents  of  the                                                                    
     deceased appropriate  compensation and  helps alleviate                                                                    
     the burden of any debt of  the deceased. It is time for                                                                    
     Alaska   to  join   the   13   other  states   offering                                                                    
     compensation  to families  of  workers who  die from  a                                                                    
     work-related  injury or  illness but  have no  eligible                                                                    
     dependents.                                                                                                                
                                                                                                                                
     HB  30 addresses  the problem  of inadequate  financial                                                                    
     support for  older children  after their  single parent                                                                    
     dies on  the job.  Currently, financial support  is cut                                                                    
     off  when  children  turn 18.  The  bill  provides  for                                                                    
     support  payments  to extend  for  five  years after  a                                                                    
     child reaches legal adulthood.                                                                                             
                                                                                                                                
     HB  30 encourages  equitable  compensation for  workers                                                                    
     suffering  from  permanent  injuries  or  illnesses  by                                                                    
     adjusting the  base Permanent Partial  Impairment (PPI)                                                                    
     values  for  inflation  and   provides  for  an  annual                                                                    
     adjustment  based  on   the  Anchorage  Consumer  Price                                                                    
     Index. The  Permanent Partial Impairment index  has not                                                                    
     been adjusted in 18 years.                                                                                                 
                                                                                                                                
     HB  30  conservatively  increases  the  aggregate  wage                                                                    
     benefits    for    financially    dependent    parents,                                                                    
     grandchildren,  brothers and  sisters  of the  deceased                                                                    
     from a  limit of $20,000  to a limit of  $150,000. This                                                                    
     amount  hasn't   been  adjusted  for  inflation   in  a                                                                    
     staggering 53 years.                                                                                                       
                                                                                                                                
     The  current values  for these  benefits are  egregious                                                                    
     and  warrant serious  change. I  invite you  to discuss                                                                    
     this  issue with  me further  and urge  you to  support                                                                    
     this legislation.                                                                                                          
                                                                                                                                
CO-CHAIR  WOOL  sought  clarification   on  the  benefit  if  the                                                               
deceased had a spouse or child.                                                                                                 
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   answered  that  scenario   becomes  a                                                               
variable  depending on  how  old  the child  is  and whether  the                                                               
spouse remarries.   If the spouse remarries the  benefit could be                                                               
as  short as  two  years.   He further  stated  that the  maximum                                                               
benefit that a  family [with dependents] could receive  is in the                                                               
range of 850,000 dollars spread out over many years.                                                                            
                                                                                                                                
CO-CHAIR WOOL asked where that payment would come from.                                                                         
                                                                                                                                
REPRESENTATIVE    JOSEPHSON   answered    workers'   compensation                                                               
insurance.                                                                                                                      
                                                                                                                                
3:26:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS recalled that in  the past, fines have been                                                               
somewhat  inconsistent in  terms of  determining the  value of  a                                                               
human life  when it comes  to workplace death.   He said  that he                                                               
remembers  them being  very low  for  many years  until the  most                                                               
recent deaths, which  were the result of  negligence, and finally                                                               
resulted in a meaningful penalty.  He asked if this was true.                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  replied that  he  would  follow up  on                                                               
that.   He returned to  the second  part of the  bill, explaining                                                               
that  it increases  the beneficiaries'  compensation from  20,000                                                               
dollars, which  was implemented  in 1966,  to 150,000  dollars on                                                               
account of inflation.  The third  feature of the bill updates the                                                               
Permanent Partial  Impairment (PPI)  ratings.  He  explained when                                                               
someone  loses their  hand an  economic value  is placed  on that                                                               
limb, noting that the value of  a human hand hasn't changed in 19                                                               
years.                                                                                                                          
                                                                                                                                
3:30:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX offered her understanding  that there would be no                                                               
difference in  benefits between  an individual  who loses  a limb                                                               
that their  job depends  on and  an individual  who loses  a limb                                                               
that  their job  doesn't depend  on; for  example, a  surgeon who                                                               
loses a  hand and  a economist who  loses a hand.   She  asked if                                                               
this was correct.                                                                                                               
                                                                                                                                
3:31:13 PM                                                                                                                    
                                                                                                                                
ELISE  SORUM-BIRK, Staff,  Representative Andy  Josephson, Alaska                                                               
State Legislature,  on behalf of Representative  Josephson, prime                                                               
sponsor   of  HB   30,   acknowledged   that  Co-Chair   LeDoux's                                                               
understanding was  correct.  She stated  that PPI in Alaska  is a                                                               
specific  percentage multiplied  by  177,000.   She referred  the                                                               
committee  to a  chart provided  in  the committee  packet.   The                                                               
chart  displayed  the  PPI benefit  comparisons  and  percentages                                                               
based on  body part.  For  example, the amputation of  a dominant                                                               
arm is considered  a 60 percent impairment.  She  said it doesn't                                                               
consider  whether  the  individual  needed their  arm  for  their                                                               
profession, just  that the individual  lost their  [dominant] arm                                                               
at all.                                                                                                                         
                                                                                                                                
3:31:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE     JOSEPHSON    confirmed     Ms.    Sorum-Birk's                                                               
understanding.  He  explained that the PPI  needs some adjustment                                                               
as  well.   He  asked  the committee  to  consider an  additional                                                               
feature of the bill, directing them  to page 2, lines 8-10 of the                                                               
CS.  Essentially,  it allows the family of the  deceased to elect                                                               
between workers' compensation  or taking legal action.   He noted                                                               
there are several other states  that have similar laws, including                                                               
Arizona and  Minnesota.  He  said it  can be a  complicated issue                                                               
and  suggested  that  the committee  focus  on  certain  critical                                                               
aspects  during  future  hearings,  such  as  attorney  fees  for                                                               
personal injury action.                                                                                                         
                                                                                                                                
REPRESENTATIVE  JOSEPHSON directed  attention  to the  PowerPoint                                                               
presentation [included in the committee  packet] entitled, "HB 30                                                               
The Abigail Caudle Act."   He informed the committee that Abigail                                                               
Caudle was  a young electrical  worker who  lost her life  in the                                                               
workplace with  no compensation  (slide 2).   One of  the current                                                               
bill's major goals is to  extend death benefits to single workers                                                               
with no  dependents and provide parents/estates  of these workers                                                               
a financial or legal remedy (slide 3).                                                                                          
                                                                                                                                
3:38:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX directed  attention to page 2, lines  7-14 of the                                                               
CS and asked  if an injury such as total  paralysis would warrant                                                               
legal action against the employer.                                                                                              
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  replied  legal action  could  only  be                                                               
taken when someone dies.                                                                                                        
                                                                                                                                
3:39:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS stated  it's time  the legislature  sent a                                                               
strong  message  that  employers  should  take  every  effort  to                                                               
prevent  employees' death  on  the job  given  there hasn't  been                                                               
adequate punishment in the past.                                                                                                
                                                                                                                                
CO-CHAIR  WOOL   questioned  whether   workplace  death   was  an                                                               
infrequent occurrence.                                                                                                          
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered very infrequent.                                                                              
                                                                                                                                
3:39:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX directed attention to  page 2, lines 13-14 of the                                                               
CS.  She  questioned whether the word  "wilful" means intentional                                                               
or reckless.   She offered her understanding  that "wilful" would                                                               
imply more than simple negligence and asked if that was correct.                                                                
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered absolutely.   He said that word                                                               
was chosen because the state of Arizona also uses it in statute.                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON,  responding  to a  follow-up  question                                                               
from Co-Chair  LeDoux, stated that  "wilful" indicates  more than                                                               
recklessness.   He  added this  language raises  some concern  in                                                               
that it could be a point of "tremendous litigation."                                                                            
                                                                                                                                
3:41:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS offered  his belief  that "wilful"  was an                                                               
appropriate word choice                                                                                                         
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  directed  attention  to  slide  3  and                                                               
related  that increasing  the PPI  rates for  inflation is  a top                                                               
priority in HB  30.  Adjusting the rate of  death benefit paid to                                                               
non-child dependents, which was last  updated in 1966, is another                                                               
major  goal.   He noted  the current  bill also  allows dependent                                                               
children  to   continue  to  receive  benefits   for  five  years                                                               
following legal adulthood.                                                                                                      
                                                                                                                                
3:42:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL questioned whether 5 years was chosen arbitrarily.                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   said  that   it  was,  in   a  sense,                                                               
arbitrary.    The  Affordable  Care  Act (ACA)  was  a  point  of                                                               
reference, as  it treats "college-age  people" as  being eligible                                                               
for their parents' healthcare.                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOSEPHSON returned  to the  presentation.   Under                                                               
current law single workers without  dependents are the only class                                                               
of worker who  receives no death benefit - parents  cannot sue or                                                               
collect  workers'   compensation;  however,   HB  30   amends  AS                                                               
23.30.055  [Exclusiveness of  liability] to  allow the  parent or                                                               
estate  of the  deceased  a choice  between  taking legal  action                                                               
against the  employer or receiving compensation  through workers'                                                               
compensation.    HB  30  also  adds a  new  subsection  under  AS                                                               
23.30.215(a)  to  provide  a death  benefit  for  single  workers                                                               
without  dependents  of 120,000  dollars  payable  to parents  or                                                               
estate  (slide  4).    PPI  rates  have  not  been  adjusted  for                                                               
inflation  since 2000.    HB  30 adjusts  the  amount of  177,000                                                               
dollars  to 255,854  dollars to  account for  inflation and  ties                                                               
this  figure to  the Anchorage  Consumer Price  Index (slide  5).                                                               
Under AS  23.30.215(a)(4) the death  benefit paid to  a dependent                                                               
father, mother,  grandchild, brother  or sister  is a  maximum of                                                               
only 20,000 dollars -  an amount set in 1966.   HB 30 amends this                                                               
statute to adjust  for inflation and sets the  new maximum amount                                                               
at 150,000  dollars (slide 6).   Representative Josephson further                                                               
noted that the  current bill made it through the  House last year                                                               
and then died in the Senate Finance committee.                                                                                  
                                                                                                                                
3:48:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  asked how the benefit  would be calculated                                                               
if Abigail Caudle had been married without children.                                                                            
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  replied  it  would  be  based  on  her                                                               
spendable  weekly earnings,  adding that  her husband  would have                                                               
enjoyed some sort of maintenance for a period of time.                                                                          
                                                                                                                                
3:48:51 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK, in  response  to  Representative Hannan,  stated                                                               
that  the  compensation  would  be 90  percent  of  the  workers'                                                               
spendable, after-tax weekly wages.   She added that the statutory                                                               
limit is 12 years.                                                                                                              
                                                                                                                                
REPRESENTATIVE  HANNAN  asked  if   there  are  any  states  that                                                               
compensate a workers' death regardless of marital status.                                                                       
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered yes.                                                                                          
                                                                                                                                
REPRESENTATIVE  HANNAN sought  to  understand  the rationale  for                                                               
differentiating  between  married   and  unmarried  couples  when                                                               
determining compensation.                                                                                                       
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said Representative Hannan's  point was                                                               
noted;  however, that  particular  issue doesn't  pertain to  the                                                               
current bill.   He added that  an individual must be  married and                                                               
not just cohabiting [to receive benefits] under HB 30.                                                                          
                                                                                                                                
REPRESENTATIVE HANNAN pointed  out that there are  many groups in                                                               
Alaska that allow  benefits despite marital status  and asked why                                                               
the  current  bill   uses  it  as  the   determining  factor  for                                                               
compensation.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON noted  that  marriage is  not the  only                                                               
determinant as dependents are also takes into consideration.                                                                    
                                                                                                                                
3:52:37 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL  mentioned  that  the current  bill  isn't  to  be                                                               
construed  as a  penalty; alternatively,  it is  compensation for                                                               
someone's  loss of  wage-earning  ability.   It  also takes  into                                                               
consideration what that effect might be on their dependents.                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON established a  scenario in which both an                                                               
employee and a customer die after  the elevator breaks in a large                                                               
department store.  He explained  under current Alaska law, if the                                                               
employee was  single and had  no children,  he or she  would only                                                               
receive  a  10,000-dollar   funeral  reimbursement,  whereas  the                                                               
customer's  estate  could  receive   millions  of  dollars.    He                                                               
expressed  concern with  the difference  in compensation  between                                                               
the two.                                                                                                                        
                                                                                                                                
3:54:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that HB 30 was held over.