Legislature(1999 - 2000)
04/17/2000 06:21 PM Senate FIN
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* first hearing in first committee of referral
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COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 378(RLS)
"An Act relating to the establishment of, assessment
of, collection of, and accounting for service fees for
state administration of workers' compensation and
workers' safety programs; establishing civil penalties
and sanctions for late payment or nonpayment of the
service fee; and providing for an effective date."
This was the second hearing for this bill in the Senate
Finance Committee.
AT EASE 6:25 PM / 6:33 PM
Amendment #1: This amendment deletes "or interpret" from
page 7, line 8 and line again on line 9. The amended
language reads as follows.
TRANSITION: REGULATIONS. The director of the
division of insurance in the Department of Community
and Economic Development, and the Department of Labor
and Workforce Development, may proceed to adopt
regulations necessary to implement this Act.
Regulations to implement a provision of this Act take
effect under AS 44.62 (Administrative procedure Act),
but not before the effective date of secs. 1 - 6 of
this Act.
Senator Leman moved for adoption.
Without objection the amendment was ADOPTED.
Amendment #2: This amendment reads as follows.
CSHB 378 (RLS) Workers Compensation Safety Fee
Suggested Language Changes by
Department of Community & Economic Development
Change 1: Sec. 3. Sec. 23.05.067 (a) (2) (page 2, lines
26 through page 3, line 8) is replaced by the
following:
(2) For each insurer, the director
of the division of insurance shall deposit
under (e) of this section from funds received
from the insurer under AS 21.09.210, the
service fee of 1.82 percent of the direct
premium income for workers compensation
insurance received by the insurer during the
year ending on the preceding December 31,
subject to all the deductions specified in AS
21.09.210(b).
Current language requires the Division of Insurance to
deposits a portion of premium tax collected as opposed
to premium reported. Otherwise, deposits may be
required greater than the amounts collected.
Change 2: Delete Section 2 and renumber Sections 3-11.
Unlike previous versions, the rules CS does not,
contain the "in lieu of all taxes..." sentence found on
page 2, lines 25-28 of the previous (CSHB 378 (L&C))
version. The provision amending AS 21.09.270 should be
removed. This change maintains the long-standing
statutory status quo regarding retaliatory fees. This
will keep Alaska's retaliatory calculation in line with
other states and will promote a level playing field
between companies from this state and other states.
Senator Leman moved for adoption and explained these were
two technical changes suggested by the Division of
Insurance. He referred to an April 14, 2000 letter on the
subject by Bob Lohr the division's director. [Copy on
file.]
The amendment was ADOPTED without objection.
REMOND HENDERSON, Director, Division of Administrative
Services, Department of Labor and Workforce Development
listed the four updated fiscal notes that accompany the
committee substitute.
Mr. Henderson addressed the changes to the Occupational
Health and Safety component fiscal note to reflect that in
the second year of the program, it would still be reliant
on some general funds. This, he explained is because the
committee substitute increased the phase-in time of the
program to three years. He noted that $1 million, of which
$315,000 is from the Occupational Safety and Health
Administration (OSHA) and the balance from the Workers
Compensation component, would replace general funds in the
second year.
PAUL GROSSI, Director, Division of Worker's Compensation,
Department of Labor and Workforce Development noted the
amendment that lengthened the phase-in time by one year was
done by the House Rules Committee so there would not be a
"double charge" for those entities paying a tax then a
service fee.
Co-Chair Torgerson noted the current version of this fiscal
note is $300,000 less than previous versions and asked if
the program is losing money because of the phase-in change.
Mr. Grossi replied that the program would not lose money,
however funds would not be available for deposit into the
program's account until the following year. This was
because of the collection period, he said.
Mr. Grossi confirmed that the increased phase-in period of
the program is the reason for the changes in the Workers
Compensation component fiscal note dated April 17, 2000.
Mr. Henderson explained that the changes to the Department
of Labor and Workforce Development, Office of Commissioner
component April 17, 2000 fiscal note reflect the reduction
of revenues received in the first year from $3.5 million to
$2.5 million.
BRAD THOMPSON, Director, Division of Risk Management,
Department of Administration, explained the increased Risk
Management component fiscal note. He stated that the State
Of Alaska, as an authorized self-insured employer, would
pay according to the fee assessment stipulated in the bill.
He pointed out that the fiscal note reflects the increased
costs estimated for all state agencies.
The Division of Risk Management, Mr. Thompson noted
allocates these costs based on experience and exposure of
claims based on a historical five-year average. He
continued that the accompanying Office of Management and
Budget information shows the inter-agency funding source of
the increased amounts.
Senator Green mentioned the potential impact of this
legislation on local governments. She said she was
uncomfortable tying worker's compensation to OSHA for
budgeting purposes saying that any revenue shortfalls would
require reductions to worker's compensation due to OSHA
minimum funding requirements.
No motion to move the bill was offered by any member of the
Committee.
Co-Chair Torgerson ordered the bill HELD in Committee.
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