Legislature(2005 - 2006)HOUSE FINANCE 519

04/07/2006 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 488 OIL AND GAS PRODUCTION TAX TELECONFERENCED
<Bill Hearing Postponed>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 403 NEIGHBORHOOD ELECTRIC VEHICLES TELECONFERENCED
Moved CSHB 403(FIN) Out of Committee
+= HB 362 INCREASE BASE STUDENT ALLOCATION TELECONFERENCED
Heard & Held
= HB 51 EMPLOYER ASSN FOR WORKERS' COMP INS
Moved CSHB 51(FIN) Out of Committee
3:01:27 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 51                                                                                                             
                                                                                                                                
     An Act relating to permitting employers in the same                                                                        
     trade to form joint insurance arrangements for self-                                                                       
     insured workers' compensation coverage.                                                                                    
                                                                                                                                
Co-Chair Meyer  MOVED to ADOPT Amendment #1.   Representative                                                                   
Kelly OBJECTED.                                                                                                                 
                                                                                                                                
MIKE PALOWSKI,  STAFF, REPRESENTATIVE KEVIN  MEYER, explained                                                                   
that Amendment  #1 on  Page 2, Line  11, clarifies  the joint                                                                   
liability language.  The amendment  adds "and the solvency of                                                                   
the association  of self-insured  employers".  The  amendment                                                                   
clarifies the  member's obligations  and the solvency  of the                                                                   
association.                                                                                                                    
                                                                                                                                
Representative Kelly WITHDREW  his OBJECTION.  There being NO                                                                   
further OBJECTION, Amendment #1 was adopted.                                                                                    
                                                                                                                                
Co-Chair Meyer  MOVED to ADOPT Amendment #2.   Representative                                                                   
Kelly OBJECTED.                                                                                                                 
                                                                                                                                
Mr. Palowski  explained that Amendment  #2, Page 5,  Line 27,                                                                   
addresses concerns  with assessment.   The amendment  inserts                                                                   
"of not  less than  $300,000 in  the aggregate  and not  less                                                                   
than  $10,000", in  order  to qualify  for  a certificate  of                                                                   
self-insurance.   He  acknowledged  that it  would push  some                                                                   
smaller companies from being able  to join some associations.                                                                   
The sponsoring  groups testified in favor of  the legislation                                                                   
including that language.                                                                                                        
                                                                                                                                
3:06:15 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch pointed out  that addition  of that                                                                   
language would drive him out of  business.  He questioned the                                                                   
deletion  of   all  material  on   Page  5.     He  suggested                                                                   
alternative language to Line 28:   "Or an amount necessary to                                                                   
maintain  solvency  with  the association".    That  language                                                                   
could provide the Department the  discretion to determine the                                                                   
appropriateness of  the floor.  He noted that  he did support                                                                   
the first part of the amendment.                                                                                                
                                                                                                                                
Mr. Pawlowski agreed that the  change could work well for the                                                                   
language of the bill and was consistent with the intent.                                                                        
                                                                                                                                
Representative  Weyhrauch   MOVED  to  AMEND   Amendment  #2,                                                                   
deleting Lines  5 & 6  of the amendment  and then on  Page 5,                                                                   
Line 28,  add "or" before "in".    There being  NO OBJECTION,                                                                   
Amendment #2 was amended.                                                                                                       
                                                                                                                                
Representative Kelly WITHDREW  his OBJECTION to Amendment #2.                                                                   
There being  NO further OBJECTION,  amended Amendment  #2 was                                                                   
adopted.                                                                                                                        
                                                                                                                                
3:09:11 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer MOVED  to  ADOPT Amendment  #3.   Vice  Chair                                                                   
Stoltze OBJECTED.                                                                                                               
                                                                                                                                
Mr.  Pawlowski stated  that Amendment  #3  relates to  single                                                                   
self-insurance.   Page 2, Line 1, deletes $5  million dollars                                                                   
and inserts $10  million dollars; Page 6, Line  9, deletes $5                                                                   
million  dollars and  inserts  $10 million  dollars; Page  6,                                                                   
Line 11, deletes  $5 million dollars and inserts  $10 million                                                                   
dollars.   The changes  reflect the  testimony received  from                                                                   
the Department of Labor & Workforce Development.                                                                                
                                                                                                                                
Vice Chair Stoltze WITHDREW his OBJECTION.                                                                                      
                                                                                                                                
Representative  Kelly asked  the new  number.  Mr.  Pawlowski                                                                   
did not  know.  There being  NO further OBJECTION,  Amendment                                                                   
#3 was adopted.                                                                                                                 
                                                                                                                                
3:10:45 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer MOVED  to  ADOPT Amendment  #4.   Vice  Chair                                                                   
Stoltze OBJECTED.                                                                                                               
                                                                                                                                
Mr.  Pawlowski  explained the  change  to  Page 6,  Line  18,                                                                   
following "employers",  inserting "shall be  registered under                                                                   
AS 21.27.630-21.27.660  and".  The change was  recommended by                                                                   
Director  Linda   Hall,  Department  of  Labor   &  Workforce                                                                   
Development, allowing  the process of claims  be addressed by                                                                   
   rd                                                                                                                           
a 3 party administrator.                                                                                                        
                                                                                                                                
Vice Chair  Stoltze WITHDREW his  OBJECTION.  There  being NO                                                                   
further OBJECTION, Amendment #4 was adopted.                                                                                    
                                                                                                                                
3:11:46 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  MOVED to ADOPT Amendment #5.   Representative                                                                   
Kelly OBJECTED.                                                                                                                 
                                                                                                                                
PAUL LISANKIE,  DIRECTOR, DIVISION OF WORKERS'  COMPENSATION,                                                                   
DEPARTMENT OF  LABOR & WORKFORCE DEVELOPMENT,  explained that                                                                   
Amendment #5  reflects that the  association will be  kept in                                                                   
the frame work  of the Workers Compensation  Act for purposes                                                                   
of determining entitlement.                                                                                                     
                                                                                                                                
Mr. Lisankie  continued, Part  2 of  the Amendment,  Page 16,                                                                   
following  Line 7, the  association will  not have  a premium                                                                   
but rather an  assessment.  Currently, the  language requests                                                                   
consideration  of  insertion  of "each  association  of  self                                                                   
insured   employers"  base   all   contributions  on   either                                                                   
insurance premiums  or payments.    That language  guarantees                                                                   
that the  association, on behalf  of the members,  would make                                                                   
the  contributions  now.    The tail  end  of  the  amendment                                                                   
provides provisions  needed when an association  is started &                                                                   
then during the transition period.                                                                                              
                                                                                                                                
3:15:25 PM                                                                                                                    
                                                                                                                                
Representative  Kerttula  inquired  where  workers  would  be                                                                   
placed  under  the  second  portion of  Amendment  #5.    Mr.                                                                   
Pawlowski explained that the provisions  in Title 21, relates                                                                   
to the  accounting portion.   The places,  where it  would be                                                                   
applicable,  such  as  on  Page 7,  Line  30,  providing  the                                                                   
investment  of assets  and the  type  of investment  classes.                                                                   
There is a difference between  accounting and gap accounting,                                                                   
and  the  internal   procedures  the  insurance   company  is                                                                   
required  to go  through, and  is not  appropriate for  self-                                                                   
insurance.                                                                                                                      
                                                                                                                                
3:17:05 PM                                                                                                                    
                                                                                                                                
Mr. Lisankie  agreed,  stating that it  would guarantee  that                                                                   
they  fit into  the  Worker's  Compensation statute  but  not                                                                   
subject to all the Title 21 Insurance Act regulations.                                                                          
                                                                                                                                
Representative Kelly WITHDREW  his OBJECTION.  There being NO                                                                   
further OBJECTIONS, Amendment #5 was adopted.                                                                                   
                                                                                                                                
3:17:56 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch MOVED  to ADOPT Conceptual Amendment                                                                   
#6 to  Page 15, Line  26, describing  a tangible  net income.                                                                   
Co-Chair Meyer OBJECTED.                                                                                                        
                                                                                                                                
Representative  Weyhrauch addressed  net worth protection  by                                                                   
adding   after  "chapter",   language:  "including   defining                                                                   
tangible net worth".                                                                                                            
                                                                                                                                
Mr. Pawlowski  thought that  would be  okay.  Co-Chair  Meyer                                                                   
agreed.                                                                                                                         
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, conceptual Amendment #6 was adopted.                                                                         
                                                                                                                                
3:20:29 PM                                                                                                                    
                                                                                                                                
Representative Foster  MOVED to REPORT CS SS HB  51 (FIN) out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying  notes.   There being  NO OBJECTION,  it was  so                                                                   
ordered.                                                                                                                        
                                                                                                                                
CS HB  51 (FIN)  was reported  out of  Committee with  a "no"                                                                   
recommendation and with a new  zero note by the Department of                                                                   
Labor &  Workforce Development  and indeterminate note  #1 by                                                                   
the   Department   of   Commerce,    Community   &   Economic                                                                   
Development.                                                                                                                    

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