Legislature(2017 - 2018)GRUENBERG 120
03/08/2018 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s):|| Fishermen's Fund Advisory and Appeals Council (ffaac)|| Commercial Fisheries Entry Commission (cfec) | |
| HB354 | |
| HB379 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 354 | TELECONFERENCED | |
| *+ | HB 379 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 379-COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS
11:09:24 AM
CHAIR STUTES announced that the final order of business would be
HOUSE BILL NO. 379, "An Act relating to claims against
protection and indemnity insurance policies of vessel owners."
11:10:49 AM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, introduced
HB 379, reading from his sponsor's statement, which read as
follows [original punctuation provided]:
In 2010, the Legislature amended the Fishermen's Fund
statute to allow a vessel owner to receive 50% of the
owner's Protection & Indemnity insurance deductible
from the fund in cases where an injured crewmember
made a claim against the Fund and against the P&I
policy. The intent of this amendment was to encourage
vessel owners to obtain P&I insurance to fully cover
crewmember's medical expenses in the event of an
injury, and to reduce the financial burden on the
State. HB 379 will allow an owner to fully recover the
P&I deductible from the Fund up to an amount of
$5,000. This would provide further financial incentive
for vessel owners to obtain P&I insurance to fully
cover crewmembers in the event of an injury or illness
at sea.
REPRESENTATIVE ORTIZ said this bill was brought forward at the
behest of fishermen and the fishing industry. This would
provide a means to pursue insurance and protection in the
dangerous fisheries that often exist, he said.
11:12:47 AM
REPRESENTATIVE NEUMAN asked for further clarification on the
Fishermen's Fund. He expressed an interest in learning how
claims are approved, the fund balance, the type of fund and
whether the fund earns any interest.
11:13:38 AM
LIZ HARPOLD, Staff, Representative Dan Ortiz, Alaska State
Legislature, responded that the Fishermen's Fund predates Alaska
statehood. It was established in 1951 to provide the treatment
and care of Alaska licensed commercial fishermen who have been
injured while fishing onshore or offshore in Alaska. She said
the benefits from the fund are financed from revenue received
from each resident and non-resident commercial fisherman's
license and permit fees - 39 percent but not to exceed $50 for
each license holder per year. The commissioner of Department of
Labor & Workforce Development (DLWD) oversees the administration
of the program, with assistance from the Fishermen's Fund
Advisory and Appeals Council (FFAAC). She reminded members that
Mr. Saldi, a member of the FFAAC, had testified earlier during
confirmation hearings.
11:14:27 AM
MS. HARPOLD stated that the FFAAC was comprised of the
commissioner, or designee, who serves as chairman and five
members appointed by the governor. She directed attention to AS
23.35, which outlines benefits and process for a fisherman to
file a claim. She deferred to the division to answer technical
questions about the fund.
11:15:16 AM
MARIE MARX, Director, Division of Workers' Compensation (DWC),
Department of Labor & Workforce Development (DLWD), recalled
that Representative Neuman had previously asked what benefits
were available to fishermen under the Fishermen's Fund.
REPRESENTATIVE NEUMAN clarified he was interested in the
structure of the Fishermen's Fund, for example, if it was an
enterprise fund.
MS. MARX responded that the Fishermen's Fund is a dedicated,
completely self-sustaining fund. The amount of money collected
provides enough funding to run the program and pay for the
benefits available through the fund.
REPRESENTATIVE NEUMAN asked for further clarification on the
level the division attempts to maintain the fund, noting that
medical costs continue to rise. He further asked for how the
division maintains the costs at 39 percent tax.
11:16:41 AM
MS. MARX said that the amount of increase shown in the fiscal
note is $18,900. which is not a huge increase compared to the
amount of benefits paid since this reimburses vessel owners up
to $5,000. She explained that most claims are paid to
fishermen, which would not be changed by this bill. This bill
would allow a vessel owner to be reimbursed more of the
deductible, but still with a limit of $5,000.
11:17:30 AM
CHAIR STUTES related her understanding that the bill would
provide the vessel owners with an incentive to carry the
protection and indemnity (P&I) insurance since they will receive
the deductible back.
MS. MARX agreed.
11:17:53 AM
CHAIR STUTES, in response to a question by Representative
Neuman, clarified the goal of the bill. She explained that if a
vessel owner does not have P&I insurance, an injured crewmember
would submit a claim to the Fishermen's Fund. This bill would
encourage vessel owners to carry P&I insurance since it would
reimburse the entire deductible of $5,000 when a crewmember
becomes injured. Currently, the vessel owner would be
reimbursed $2,500 of the deductible; however, under the bill,
the vessel owner would receive the entire $5,000 deductible.
This provides an incentive to vessel owners to carry the P&I
insurance.
11:18:41 AM
REPRESENTATIVE NEUMAN said his question related to the fund
balance. He asked for further clarification on whether there
would be an increase in tax to offset the additional amount of
money that would be reimbursed to vessel owners to cover their
deductible.
11:19:07 AM
MS. MARX responded that there was enough revenue to cover the
increased liability. She explained that the revenue was
approximately $1.4 million each year
REPRESENTATIVE NEUMAN asked whether the tax should be reduced
since the Fishermen's Fund might be collecting excess funds.
11:20:07 AM
ROBERT KEHOE, Executive Director, Purse Seine Vessel Owners
Association (PSVOA), stated that PSVOA fully supports HB 379.
He said the bill would expand on the legislature's effort in
2010 to provide a financial incentive to vessel owners to obtain
insurance to fully cover their crewmembers in the event of an
injury.
MR. KEHOE stated that as small, independent business owners, the
cost of liability insurance is a major fixed cost. This bill
would ease the financial burden on vessel owners in paying for
the cost of insurance. It would further promote the goal of
ensuring all the medical needs of injured crewmembers are
satisfied. He said PSVOA respectfully requests that the
committee supports HB 379 and move it forward.
11:21:40 AM
CHAIR STUTES opened public testimony on HB 379.
11:22:09 AM
MARK VINSEL, Executive Administrator, United Fishermen of Alaska
(UFA), stated that the UFA reviewed HB 379 at its board meeting
last week and the board voted to support passage of HB 379. All
fishermen are supportive of the Fishermen's Fund, which was
essentially the equivalent of workers' compensation, he said.
He emphasized that most important was the solvency of the fund.
He said in 2009 and 2010, the UFA supported increasing the
maximum claim limit [audio skip]. Ultimately the legislature
changed it to $10,000 and at the time, this concept had been
discussed but it was important to see over time how the fund
would hold up and to ensure that it was solvent. The people in
support of this have been patient, and according to those who
manage the fund, it is appropriate to do so now. The UFA offers
its support for HB 379. He urged the committee members to
support the bill.
11:23:57 AM
CLAY BESENEK stated he was testifying on behalf of himself,
although he also serves on the Fishermen's Fund Advisory and
Appeals Council (FFAAC), having been appointed by former
Governor Sarah Palin. He explained that managing the
Fishermen's Fund was a function that each council member takes
seriously. He concurred with Mr. Vinsel's testimony. He stated
that he previously served on the [council] when the
[compensation amount] was increased to $10,000 since medical
costs have not decreased. He acknowledged that some fishermen
have not always used the fund as a means of last resort. He
emphasized that the [council] has been striving for
responsibility from fishermen since the Fishermen's Fund was a
fund of last resort. He offered his belief that HB 379 would
fix a loophole. He offered his full support for HB 379;
however, he could not speak for the [council] since the bill had
not yet been discussed; however, he anticipated the full support
of the council. In response to an earlier comment by
Representative Neuman, he said the fund was formed prior to
statehood so if the FFAAC needed something from the state he
would be willing to ask for it.
11:26:32 AM
CHAIR STUTES closed public testimony on HB 379.
11:26:40 AM
REPRESENTATIVE NEUMAN indicated his support for commercial
fishermen and the issues and dangers they face, noting medical
costs were rising. He expressed concern that $1.4 million was
sitting in a fund instead of being in fishermen's pockets. He
further expressed an interest in reviewing the tax rates on
commercial fishermen. He commented that their biggest complaint
has been the amount of government that they must deal with,
noting the cost of licenses and permits was very high. He said
the legislature could take an opportunity to be more equitable
with the fund to assist fisherman. He reiterated that he would
prefer that the fishermen would have the funds rather than to
have the money sit in the Fishermen's Fund.
CHAIR STUTES offered her belief that the bill would assist the
fishermen in reducing their [medical] costs overall and help
promote carrying insurance on behalf of fishermen. She stated
her support for HB 379. She asked Representative Eastman if he
had any comments but did not receive a response.
11:28:36 AM
The committee took a brief at-ease.
11:28:55 AM
CHAIR STUTES commented that HB 379 has a fiscal note with an
estimated impact of $18,900 annually on the fund; however, from
the testimony received, the fund will remain solvent. This bill
would encourage more people to carry insurance and may represent
a cost savings to the fund in the long term due to reduced
claims against the fund.
11:29:43 AM
REPRESENTATIVE TARR moved to report HB 379 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 379 was reported from the House
Special Committee on Fisheries.