Legislature(2005 - 2006)HOUSE FINANCE 519
04/21/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB187 | |
| HB13 | |
| HB231 | |
| HB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 13 | TELECONFERENCED | |
| += | HB 187 | TELECONFERENCED | |
| + | HB 31 | TELECONFERENCED | |
| + | HB 231 | TELECONFERENCED | |
| + | HB 101 | TELECONFERENCED | |
| + | HB 53 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 21, 2005
1:43 p.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:43:11 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
None
ALSO PRESENT
Pete Ecklund, Staff, Co-Chair Meyer; Laura Achee, Alaska
Permanent Fund Corporation; Devon Mitchell, Executive
Director, Alaska Municipal Bond Bank Authority, Department
of Revenue; Michael Barnhill, Assistant Attorney General,
Department of Law; Cody Rice, Staff, Representative Carl
Gatto; Carl Rose, Alaska Association of School Boards;
Representative Mark Neuman; Eddy Jeans, Director, Education
Support Services, Department of Education and Early
Development; Representative Peggy Wilson; Janet Clarke,
Assistant Commissioner, Division of Finance and Management
Services, Department of Health and Social Services; Jon
Bittner, Staff, Representative Tom Anderson; Dominic Lozano,
Alaska Firefighters Association; Eric Tuott, Alaska
Firefighters Association; Kevin Smith, Executive Director,
Alaska Municipal League Joint Insurance Association
PRESENT VIA TELECONFERENCE
George Vakalis, Assistant Superintendent, Anchorage School
District; Marleen Norton, Human Services, Municipality of
Anchorage; Rob Allen, Southeast Conference, Sitka
SUMMARY
HB 187 "An Act establishing the Alaska capital income
account within the Alaska permanent fund; relating
to deposits into the account; relating to certain
transfers regarding the Amerada Hess settlement to
offset the effects of inflation on the Alaska
permanent fund; and providing for an effective
date."
HB 187 was heard and HELD in Committee for further
consideration.
HB 13 "An Act relating to reimbursement of municipal
bonds for school construction; and providing for
an effective date."
HB 13 was heard and HELD in Committee for further
consideration.
HB 231 "An Act relating to the definition of
'municipality' for purposes of human services
community matching grants."
HB 231 was heard and HELD in Committee for further
consideration.
HB 31 "An Act relating to the presumption of coverage
for a workers' compensation claim for disability
as a result of certain diseases for certain
occupations."
CSSSHB 31 (FIN) was REPORTED out of Committee with
a "no recommendation" recommendation and with
three fiscal impact notes: zero note #1 CED,
indeterminate note #2 ADM, and a new indeterminate
note by LWF.
1:44:45 PM
HOUSE BILL NO. 187
"An Act establishing the Alaska capital income account
within the Alaska permanent fund; relating to deposits
into the account; relating to certain transfers
regarding the Amerada Hess settlement to offset the
effects of inflation on the Alaska permanent fund; and
providing for an effective date."
Co-Chair Chenault MOVED to ADOPT the new CS for HB 187
labeled 24-GH1070\F, Cook, 4/12/05.
Representative Hawker OBJECTED.
PETE ECKLUND, STAFF, CO-CHAIR MEYER, explained that the new
CS changes the bill by taking the Amerada Hess earnings and
creating a new fund in the general fund called the Alaska
Capital Income Fund. The Amerada Hess bonding proposal is
not moving forward; the intention of this bill is to
transfer those funds to help with this year's capital
budget. He referred to a retroactivity clause on page 2.
1:49:23 PM
Co-Chair Meyer asked for an explanation of the difference
between this version and the original version of the bill.
Mr. Ecklund replied that in the original bill, the account
resided within the earnings reserve of the Permanent Fund.
That fund was renamed and the money was moved to the general
fund. A retroactivity clause was also added. Co-Chair
Meyer inquired if the amount was $60 million. Mr. Ecklund
replied that it was.
1:50:26 PM
Representative Hawker addressed his objection. He opined
that there is a critical deficiency in both bills, however
the approach in the CS compounds the problem. Both bills
would take 100 percent of the earnings every year, leaving
nothing in the permanent fund to protect its value over
time. There is a need to inflation proof it. The new CS
takes the money and moves it into the general fund. He
opined that the Governor's bill did a better job of allowing
discretion by leaving it in the permanent fund. It is
available for spending and the value is kept. The Governor's
approach needs a statutory percent of market value (POMV) to
guarantee the continue growth and availability at a future
date. He argued for a POMV and taking up the Governor's
bill with an amendment.
1:54:54 PM
Mr. Ecklund termed it a policy call and described the
outcome for both methods.
Representative Hawker observed that the earnings this year
of $30 million, with a POMV, would equal $21.9 million, an
$8 million difference, which is the inflation-proofing
component.
Co-Chair Meyer noted there were concerns going that route.
He did not disagree, but opined it would not hurt the value
of the principal of the fund because it is a one-time use of
the fund. He stated a preference to see Representative
Hawker's idea in a separate bill. He pointed out that this
money would be used for a one-time capital expenditure.
1:57:53 PM
Mr. Ecklund noted that with the proposed CS the legislature
could appropriate money back into the fund.
1:58:23 PM
Representative Weyhrauch questioned Representative Hawker
about his proposed conceptual amendment.
Representative Hawker said his amendment refers to the old
bill, version A.
Co-Chair Meyer asked Representative Hawker if he would
remove his objection. Representative Hawker replied that
his amendment is too complex to address today.
Representative Hawker WITHDREW his OBJECTION to adopt the
new CS. There being NO OBJECTION, it was so ordered.
2:00:53 PM
Representative Croft asked if the diversion of $30 million
is just for two years. Mr. Ecklund replied that there is no
sunset date. Representative Croft asked about the interest
rate. Mr. Ecklund thought it was a 7 percent return.
Representative Croft agreed it was between 7 and 7.5
percent. He asked why the amount stays at $30 million.
LAURA ACHEE, ALASKA PERMANENT FUND CORPORATION, explained
the rates of return and the projected returns. The number
remains the same because it is not inflation-proofed.
Mr. Ecklund clarified that the appropriation to the new fund
does not happen automatically. It still takes an
appropriation to take those earnings from Amerada Hess to
the new Alaska Capital Income Fund. Representative Croft
summarized that it sets up the mechanism, but does not
prohibit nor guarantee future action.
2:04:29 PM
Representative Hawker related that the language of the bill
states, "shall be deposited in the Alaska Capital Interest
Fund." Co-Chair Meyer observed that it would not prohibit
the legislature from adding a POMV concept.
Representative Croft referred to page 2, line 25, and asked
if the deposit is diverted for all time. Mr. Ecklund
responded that under current law that transfer does not
happen without an appropriation. If the CS passes, to
capture the FY 05 earnings, last year's operating budget
would have to be amended. Representative Croft asked about
inflation proofing in Section 2. Mr. Ecklund explained that
the Amerada Hess "dead money fund" would not grow any
further. Representative Croft opined that inflation
proofing is more important.
2:08:21 PM
Representative Joule asked for clarification about the
Amerada Hess Settlement and HB 11, as it applies to interest
earning. Mr. Ecklund replied that the Amerada Hess fund
does not grow, other than the appropriation of the interest
earned back into the fund. Co-Chair Meyer replied that HB
11 does not apply to the interest earned.
2:10:55 PM
Representative Hawker MOVED to ADOPT Conceptual Amendment 1,
which was drafted to incorporate the A version of HB 187:
Page 1, line 1, following "establishing the"
Delete "Alaska capital income"
Insert "Amerada Hess earnings reserve"
Page 2, line 14, following "deposited into the"
Delete "Alaska capital income"
Insert "Amerada Hess earnings reserve"
Page 2, line 18, following "(e) The"
Delete "Alaska capital income"
Insert "Amerada Hess earnings reserve"
Page 2, line 19, following "Money in the"
Delete "Alaska capital income"
Insert "Amerada Hess earnings reserve"
Page 2, line following line 23
Insert
"(f) Appropriations from the Amerada Hess earnings
reserve account for a fiscal year may not exceed:
a. five percent of the average of the combined market
value of the Amerada Hess earnings reserve account and
the value of the principal of the fund attributed to
the settlement of State v. Amerada Hess, et al., 1 JU-
77-847 Civ. (Superior Court, First Judicial District)
on June 30 for the first five of the six fiscal years
immediately preceding that fiscal year.
b. the balance in the Amerada Hess earnings reserve
account."
Co-Chair Meyer OBJECTED for discussion purposes.
2:12:31 PM
Representative Hawker explained that the amendment calls the
Alaska Capital Income Account "the Amerada Hess earnings
reserve account", and any money in that account may be
appropriated for any valid public purpose, including
covering annual debt service. He explained the methodology
of the POMV language in the amendment. He spoke about the
guidance of the trustees of the permanent fund. He noted
that his amendment would reduce the amount available from
$30 to $22 million. He emphasized the importance of
protecting the value of the permanent fund. The amendment
would create a sustainable fund at the cost of not funding
all of the projects and would allow for not overspending the
fund. He stated his willingness to fund fewer projects in
order to maintain the integrity of the permanent fund.
2:18:31 PM
Co-Chair Meyer asked Representative Hawker if he agrees that
a one-time draw would not affect the long-term viability of
the fund. Representative Hawker replied that the fund would
survive; however, the issue is that the legislature violates
the public trust by attacking the fund.
Representative Kelly inquired if the POMV approach would
permit the money in the future to be used as a payment
stream for bonding. Representative Hawker replied that it
would. It is an $8 million-a-year cost.
2:21:10 PM
Representative Croft restated the effect of the amendment in
bonding terms.
Representative Kelly agreed with the inflation proofing of
any fund. He noted that the concept of preserving the
corpus is attractive.
Representative Hawker suggested that this proposal might be
enacted for a longer period of time. He pointed out the
value of the fund in 20 years if it is not inflation
proofed.
2:23:26 PM
Representative Meyer suggested a sunset date or a separate
bill to set up a POMV system. He stated his intent to stick
with the bill.
2:24:19 PM
At ease.
2:34:22 PM
Co-Chair Meyer noted that during the bread, a conversation
took place dealing with a possible compromise on the bill.
Representative Hawker WITHDREW Conceptual Amendment 1.
Mr. Ecklund referred to page 2 and discussed inflation
proofing by removing subparagraph (3) of Section 2.
Representative Croft agreed that by removing that section,
Representative Hawker's idea that every year Amerada Hess
could earn money and then 5 percent could be spent, is
addressed. The net effect is that 3 percent is left in the
reserve, which is inflation proofed. The question is where
to inflation proof. He discussed the pros and cons of
removing Section 2.
2:39:15 PM
Representative Hawker addressed Representative Croft's
concern and said what is currently inflation proofed is the
principal of the fund, not the whole value of the fund. He
noted that is taken care of in Section 3, "income earned on
the Amerada Hess settlement shall be treated in the same
manner as other income." He suggested that removing lines
14-17 would solve the problem. Mr. Ecklund concurred that
if lines 14-17 were removed, the whole principal of the fund
would be inflation proofed.
Representative Hawker welcomed further expert testimony on
the subject.
Representative Kelly suggested that legislative legal take a
look at it.
2:45:04 PM
Ms. Achee restated Representative Hawker's question: if
lines 14-17 on page 2 were removed, would the Amerada Hess
principal again be inflation proofed as it currently is and
would the $30 million amount increase. Representative
Hawker explained that the amount taken out for another
purpose must go down. He suggested a review by legislative
legal.
2:46:42 PM
DEVON MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, spoke of modeling
with inflation proofing. With a realized earnings rate
assumption of 7.04 percent and an inflation rate of 2.6
percent, the inflation proofing for 2005-06 would be about
$11 million each year. He agreed that the largest benefit
would be in the future.
Representative Hawker asked if $22 million rather than $16
million is the correct amount. Mr. Mitchell said yes.
Representative Hawker argued that this is why the POMV
method makes sense. Mr. Mitchell responded that it would
inflation proof the entire fund balance.
2:49:20 PM
MICHAEL BARNHILL, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, noted that all the options previously mentioned are
legal.
HB 187 was HELD in Committee for further consideration.
2:50:14 PM
HOUSE BILL NO. 13
"An Act relating to reimbursement of municipal bonds
for school construction; and providing for an effective
date."
CODY RICE, STAFF, REPRESENTATIVE CARL GATTO, explained that
the purpose of HB 13 is to reauthorize school bond debt
reimbursement. In the Health and Social Services (HESS)
Committee it was amended to be contingent upon a minimum of
a $100 million direct appropriation to qualifying areas
primarily in rural Alaska. This program is an exact model
of the previous program, with the exception of the direct
appropriation. It allows for legislative authorization to
reimburse local districts for up to 70 percent of
construction costs for qualifying schools, and 60 percent
for schools that don't meet the standards.
Representative Joule asked how long it would go and if there
is a cap. Mr. Rice replied that there is no cap and it
would be in effect until July 1, 2006. It is up to each
locality to determine the amount of the bonding at the
ballot.
Vice-Chair Stoltze speculated that if no local bonds were
passed, a $100 million direct grant would remain. Mr. Rice
said that is correct, however, bond debt reimbursement is
contingent upon legislative approval. Vice-Chair Stoltze
asked about a HESS amendment regarding student population of
1,000. Mr. Rice said he does not know. He explained that
the intent of that amendment was stated to replicate the
conditions of the previous bond package. He pointed out
that another difference in the HESS amendment is the length
of the window.
2:57:14 PM
Mr. Rice noted that Representative Gatto did not support
direct appropriations.
2:58:12 PM
CARL ROSE, ALASKA ASSOCIATION OF ALASKA SCHOOL BOARDS,
stated support for the bill. He addressed a concern that
the reimbursement program be extended. He referred to the
needs of the Alaska School Board, which resulted in two
resolutions, one to extend the bonded indebtedness program
and the other to insure that the capital improvement
priority list is followed. He opined that $100 million is
about $42 million shy of the current major maintenance list.
He related that there is no way of knowing about the amount
of money that will be passed in local bonds. He termed it
an equity question and said not all needs are going to be
met.
3:00:42 PM
GEORGE VAKALIS, ASSISTANT SUPERINTENDENT, ANCHORAGE SCHOOL
DISTRICT, (via teleconference) spoke of the many needs of
Alaskan school districts. One of the biggest incentives to
meet some of these needs is the debt reimbursement program.
He spoke in support of HB 13.
Co-Chair Chenault asked what the amount of the total needs
is. Mr. Vakalis responded that Mr. Jeans has the list.
3:03:11 PM
EDDY JEANS, DIRECTOR, EDUCATION SUPPORT SERVICES, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, reported that there is
about $73 million on Anchorage's needs list, but that does
not address all their needs. Co-Chair Chenault asked for a
dollar amount regarding MatSu Valley's needs. Mr. Jeans
replied $8.9 million for Settlers Bay, $172,000 for the
Colony track, and $2.4 million for Wasilla High renovations,
and one more, which he did not have the numbers for.
3:05:00 PM
Representative Kelly asked for Fairbanks numbers. Mr. Jeans
replied that those were not submitted to the department.
Co-Chair Meyer asked how many schools qualify under the
70/30 program. Mr. Jeans replied that most of the projects
on the new construction list are in rural Alaska.
Representative Kelly spoke of a concern about his area's
numbers. Mr. Jeans explained how the numbers are obtained
for the department's list.
3:06:56 PM
Co-Chair Chenault asked if new schools in the MatSu Valley
could fall under this program. Mr. Jeans said any
municipality could submit a request for review, but the
question is whether they would qualify for 70 percent based
on need, or 60 percent based on want.
3:07:57 PM
REPRESENTATIVE MARK NEWMAN, spoke about the MatSu Valley's
needs and increasing enrollment. The school board has just
proposed $6 million in bonds for an elementary school, a
high school, and for the expansion of Wasilla High School.
3:11:16 PM
Co-Chair Chenault suggested that it is a worthwhile bill but
a few more issues need to be looked at first before it is
passed from committee.
HB 13 was HELD in Committee for further consideration.
3:12:41 PM
HOUSE BILL NO. 231
"An Act relating to the definition of 'municipality'
for purposes of human services community matching
grants."
REPRESENTATIVE PEGGY WILSON explained that HB 231 addresses
human services community matching grants, which total about
$1.2 million annually. Qualified communities have to
provide a 35 percent match to receive a grant, and only
three communities are now qualified. This bill would make
it possible for other communities to form consortiums to
pool money to receive these grants. Any group of
communities totaling 35,000 could apply. She referred to a
Talking Points handout (copy on file.) It is not the intent
of the bill to take away from the original three
communities. The deadline for applying for these grants is
October. She described the process, which would not go into
effect until 2007. The Southeast Conference would assist in
the development of consortiums.
3:17:43 PM
Co-Chair Meyer asked for clarification of the intent of the
bill. Representative Wilson repeated that it is not the
intent to take away services from anyone else.
Representative Croft asked about geographic area
definitions. Representative Wilson replied that the
geographic areas were purposely not defined. Representative
Croft asked whether diverse areas could apply.
Representative Wilson said that is fine. Representative
Croft asked if the bill might delay harming communities
receiving current services.
Co-Chair Meyer clarified that the intent is to increase the
amount appropriated in the future.
3:20:49 PM
Representative Hawker related that there is no intent to
take funding away, presuming the same level of funding is
maintained. He suggested that more funding would be needed
in the future. Representative Wilson said that decision
would be made in a HESS subcommittee. Representative Hawker
disagreed with the zero fiscal note. Representative Wilson
referred Representative Hawker to the second page
explanation of the fiscal note.
Co-Chair Meyer suggested another option. Representative
Wilson said some of it has already been done.
3:22:40 PM
Representative Joule asked about population requirements.
Ms. Wilson implied that the numbers could be changed.
3:24:25 PM
MARLEEN NORTON, HUMAN SERVICES, MUNICIPALITY OF ANCHORAGE,
ANCHORAGE, (via teleconference) spoke to the user's matching
grants. She requested that sufficient funding be provided
for services.
3:27:18 PM
ROB ALLEN, SOUTHEAST CONFERENCE, SITKA, (via teleconference)
spoke in support of the legislation. It adds an additional
category to the definition of areas that would be eligible
to receive state grant funds for human services. He pointed
out that the population of Southeast Alaska is declining and
fewer contributions are flowing to nonprofits from
businesses and communities. He urged passage and support of
the bill.
3:30:14 PM
JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE
AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, addressed the fiscal note. There is nothing
mandating holding harmless of the grantees. Representative
Hawker agreed.
Ms. Clarke provided the history of the program. The
original program was established in the 1980's and the block
grants went to only Anchorage and Fairbanks. In the early
1990's, with the downturn in state revenues, then-
Representative Boyer put the program in statute and it was
developed. At that point, no other community qualified
except Anchorage and Fairbanks.
Ms. Clarke referred to the fiscal note related to the CRA
version of the legislation (#2), which would impact in FY
07. She noted the two scenarios provided by the note. Ms.
Clarke referenced page 3. The department made the program a
statewide program, which would cover the entire population
of the State. Page 4 of the fiscal note provides the
opposite view, which would need an additional appropriation.
3:35:57 PM
Representative Hawker asked about the grant history. He
pointed out that the program had been targeted. It was
codified in 1992. He noted that two years ago, the grants
had been zeroed out. He asked how that reconciled with
expansion of the program.
3:37:34 PM
Ms. Clarke related that governors and commissioners can
change their minds and they do support the bill at this
point.
Representative Hawker inquired about diminishing the amount
going to the communities. Ms. Clarke replied that the
department is neutral on that subject. The original intent
of the social services block grant has changed with the
advent of Mat-Su. When the programs were at their budget
height, there were many designated grants. Today, there are
no designated grants.
Representative Hawker asked for clarification of "none"
going to the state. Ms. Clarke replied that there are none
in the operating budget. Representative Hawker noted that
$1.5 billion dollars is in the Department of Health and
Social Services budget this year. He requested a statewide
breakdown. Ms. Clarke replied that there is a breakout of
the community grants in the amount of $150 million dollars
in the grant book analysis.
Representative Hawker asked if scenario 1 or 2 is the intent
of the bill. Representative Wilson replied the intent is
not to make anything worse for other areas at the benefit of
her district. Representative Hawker observed that is
scenario 2. He asked, with limited financial resources,
where the dollars would come from.
Representative Wilson commented that services have been cut
to parts of the state and to municipalities due to the
elimination of revenue sharing. This type of economy puts
more stress on families and communities, and human services
needs definitely need to be met throughout the state.
3:42:18 PM
Representative Hawker asked which area to the money should
be taken from. Representative Wilson replied from the
personal care attendant area, which needs sideboards.
Representative Hawker agreed. So much is driven by
abandoned revenue sharing. He stated appreciation for
Representative Wilson's perspective.
Vice-Chair Stoltze recalled that many cuts have been made to
communities statewide. Representative Wilson responded that
in Southeast Alaska, services such as Catholic Community
Services had to be cut, which left a large void.
Representative Hawker made a suggestion about the fiscal
note; have a two-scenario fiscal note with a clear intent.
Ms. Clarke said that could be done. Representative Hawker
noted this year's 5 percent increase for PERS and TRS. Ms.
Clarke deferred to the wishes of the finance committee.
3:46:54 PM
Representative Weyhrauch MOVED to ADOPT Amendment 1, on page
1, line 8, to delete 35,000 and insert 50,000. Vice-Chair
Stoltze OBJECTED for discussion purposes.
Representative Wilson stated her support for the original
bill.
Vice-Chair Stoltze WITHDREW his objection to adopt Amendment
1. There being NO OBJECTION, it was so ordered.
3:48:20 PM
Ms. Clarke clarified that several regions of the state would
not qualify at 50,000 population. It would cost $400,000 to
hold the current participants harmless.
Representative Wilson explained how the consortium would
work.
3:49:54 PM
Vice-Chair Stoltze set the bill aside. HB 231 was HELD in
Committee for further consideration.
3:50:29 PM
HOUSE BILL NO. 31
"An Act relating to the presumption of coverage for a
workers' compensation claim for disability as a result
of certain diseases for certain occupations."
JON BITTNER, STAFF, REPRESENTATIVE TOM ANDERSON, read the
sponsor statement (copy on file.) He shared examples of the
dangers of being a firefighter and the increased likelihood
of contracting cancer. HB 31 provides presumption of
coverage for first responders and firefighter, shifting the
burden of proof from them to their employers. He referred
to a study in the committee members' packets, which showed
no significant fiscal impact in other states. He urged
support of the bill.
Vice-Chair Stoltze asked who this legislation covers. Mr.
Bittner replied that the intent of the sponsor is to cover
as many first responders as possible, but all firefighters.
There is a new presumption on page 2, line 27-8, which
states coverage for police officers and emergency rescue
personnel.
3:53:54 PM
Representative Hawker MOVED to ADOPT the new CS for HB 31,
labeled 24-LS0225\I. There being NO OBJECTION, it was so
ordered.
Mr. Bittner related two changes in the new CS. On page 2,
line 3, "cardiovascular events" replaces "heart disease".
On page 2, line 26, the firefighter has to prove exposure to
a know carcinogen.
3:56:14 PM
Representative Hawker stated full support for the intent of
the bill. He wondered about voluntary self-destructive
behavior. He referred to line 10, regarding a list of
evidence of such behavior and asked if that list is too
limited. Mr. Bittner noted that the list is specific to the
exclusions. Representative Weyhrauch pointed out that it
reads as a presumption of coverage and the burden of proof
is on the insurance company or municipality.
3:59:51 PM
Representative Hawker asked if the intent is to limit
coverage for these specific examples. Mr. Bittner related
that these are the specific issues mentioned when drafting
the bill. Representative Weyhrauch suggested the wording,
"the evidence may include but not be limited to".
Representative Hawker concurred with Representative
Weyhrauch, but noted that the list is very broad. Mr.
Bittner said one of the fears was to make it too broad.
Representative Weyhrauch gave an example of smoke inhaled on
another fire department job.
4:03:38 PM
Co-Chair Chenault agreed that the list is too wide and would
exclude many valid claims. Representative Kelly voiced
concern about the cost of workers' compensation. He pointed
out that most first responders are covered by OSHA.
4:06:12 PM
Representative Hawker concluded that he is comfortable with
the language.
4:06:46 PM
DOMINIC LOZANO, ALASKA FIREFIGHTERS ASSOCIATION, related
that HB 31 provides a much-needed safety net. He shared
statistics about the dangerous profession of firefighting.
Thirty-eight other states have this coverage. He gave
examples of claims filed involving cancer. He mentioned
studies regarding the higher incidence of cancer in
firefighters. He shared studies from various states. He
predicted that Alaska would have 1,000 claims a year. He
spoke in support of HB 31.
4:13:32 PM
ERIC TUOTT, ALASKA FIREFIGHTERS ASSOCIATION, testified in
support of HB 31. He addressed concerns brought up earlier.
He noted that the bill is modeled after Washington state's
law. He referred to the clause about tobacco products and
addressed a concern about numbers and screening for cancer.
He pointed out that coverage under Section C is only for
first responders, and the numbers would be limited. He
explained the criteria for qualifying for a claim.
4:18:27 PM
Mr. Tuott addressed a concern by Representative Kelly and
OSHA controls. He pointed out that public safety employees
do not have OSHA coverage. He referenced the contagious
disease portion of the bill. Holding an EMT license does
not qualify someone for this coverage.
4:20:48 PM
Mr. Tuott addressed why this legislation is needed. He
referred to page 1, line 9, where it states that the
presumption of coverage may be rebutted by preponderance of
the evidence. The language is restricted to first
responders and applies to claims that are already awarded.
He urged passage of the bill.
4:23:10 PM
KEVIN SMITH, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE
JOINT INSURANCE ASSOCIATION, related concerns about rate
increases. He explained who is represented by workers
compensation and addressed complications of the program. He
pointed out that compensation for these diseases already
exists. He suggested that lifestyle is a factor in these
diseases. He said that a medical exam is costly and does
not preclude developing cancer later on. He came up with
the number 9,050 as the total number of firefighters that
would qualify for the coverage.
4:30:01 PM
Representative Croft asked who should have the burden of
proof. For example, he suggested it would be difficult to
know which contact led to AIDS. He opined that it is fair
to cover AIDS and the burden of proof should not be on the
first responder.
Mr. Smith responded that ideally it would be nice to provide
this coverage. He opined it is easier now to prove, but the
liability is unfunded. Representative Croft suggested that
first responders should be covered. Mr. Smith talked about
the expense of the worker's compensation system.
4:34:24 PM
Representative Kelly asked if the incidence is so low, how
would there be a 10-20 percent increase. Mr. Smith
explained that NCCI uses national figures. He spoke about
the expense of an individual claim.
4:36:18 PM
Representative Hawker moved to report CSSSHB 31 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal impact notes. There being NO OBJECTION,
it was so ordered.
CSSSHB 31 (FIN) was REPORTED out of Committee with a "no
recommendation" recommendation and with three fiscal impact
notes: zero note #1 CED, indeterminate note #2 ADM, and a
new indeterminate note by LWF.
ADJOURNMENT
The meeting was adjourned at 4:36 PM
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