Legislature(2017 - 2018)HOUSE FINANCE 519
02/05/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB79 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 79 | TELECONFERENCED | |
| += | HB 91 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 5, 2018
1:32 p.m.
1:32:54 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:32 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
Representative Steve Thompson
ALSO PRESENT
Representative Sam Kito, Sponsor; Crystal Koeneman, Staff,
Representative Sam Kito; Alexei Painter, Analyst,
Legislative Finance Division; Greg Cashen, Deputy
Commissioner, Department of Labor and Workforce
Development; Marie Marx, Director, Workers' Compensation,
Department of Labor and Workforce Development.
PRESENT VIA TELECONFERENCE
Heather Hebdon, Alaska Public Offices Commission,
Anchorage; Charles McKee, Self, Anchorage.
SUMMARY
HB 79 OMNIBUS WORKERS' COMPENSATION
HB 79 was HEARD and HELD in committee for further
consideration.
HB 91 APOC REGISTRATION FEES; LOBBYIST TAX
CSHB 91(FIN) was REPORTED out of committee with a
"do pass" recommendation and with one new fiscal
impact note from the Department of
Administration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 91
"An Act relating to fees for certain persons filing
disclosure statements or other reports with the Alaska
Public Offices Commission; relating to a tax on
legislative lobbyists; and providing for an effective
date."
1:33:59 PM
REPRESENTATIVE SAM KITO, SPONSOR, shared that the intent of
the legislation was to help provide the resources needed by
the Alaska Public Offices Commission (APOC) to do the work
of protecting the public interest by being able to have
receipts to support their operations. He said that the bill
reflected and estimated level of receipt collection of
approximately $250 thousand; the receipts collected in past
years had been as much as $113 thousand. He said that the
commission could only charge fees as identified in statute;
current fees for registration for each lobbyist client was
$250, which generated $113 thousand per year. He relayed
that the commission had struggled to maintain staff to
provide necessary audits. Auditing each campaign and each
lobbyist was time consuming and sometimes resulted in
accumulating penalties, which were then forgiven because
the accumulation occurred under circumstances beyond the
auditees control. The additional receipt authority would
help to support operations and would aid in righting the
state's fiscal situation.
1:37:10 PM
Vice-Chair Gara understood the additional revenue the bill
would raise, and he supported the bill. He believed the
bill would enable the commission to hire staff to operate
APOC efficiently. He surmised that implementation of the
bill would raise the cost of running the commission to $245
thousand per year.
Representative Kito replied that at present there was
receipt authority available to the commission of up to
$145,000. He stated that providing the receipt authority
would not give the commission excess authority and the
commission would still need to present to the legislature
before adding additional staff. Currently, the commission
did not have the authority to be able to generate
additional revenue.
1:39:27 PM
Co-Chair Foster noted that Representative Guttenberg and
Representative Pruitt had joined the meeting.
Vice-Chair Gara understood the bill would increase the
receipt authority of designated general funds (DGF). He
asked about the $220 thousand under Personnel Services on
the fiscal note.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, answered
that the fiscal note indicated that funding was necessary
on the personal services line to decrease the vacancy in
APOC; by reducing the vacancy they would be able to better
provide service to the public.
Representative Wilson asked whether the money funds would
be DGF.
1:41:26 PM
Representative Kito answered that the funds would be DGF
and made available to the level of the APOC. He added that
the if fund exceeded the costs of facilitating the program,
they could return to the legislature for an audit of the
program.
Representative Wilson asked about the agency's current
receipt authority. She asked whether the bill would
increase the amount of receipt authority.
Representative Kito responded increasing the receipt
authority would allow APOC to decrease the amount of
general fund that they were expending.
Representative Wilson wanted to make sure that the money
from an increase in the fees would be used as the
legislation intended. She referred to Page 1 of the bill
and asked about "non-group" entities and how much they
would pay in registration fees.
Representative Kito answered that all entities would pay
the same registration fees.
Ms. Koeneman elaborated that any non-group entity with an
annual operating budget of $250, or less, would be exempt.
They would be able to fundraise to take in additional
monies but if their annual operating expense was under
$250, they would be exempt.
Representative Wilson understood that the language did not
pertain to volunteer groups, without operating expenses.
Ms. Koeneman replied in the affirmative; the language
included personal services and office space.
Representative Kawasaki spoke to people that may not have
the ability to pay if the fee was increased. He wondered
whether the fees could be waived.
1:45:27 PM
Representative Kito answered that there was a currently a
process whereby a candidate could file an exempt campaign
where they were not subject to any of the fees that applies
to candidates. He understood that the election filing fee
would still need to be paid but they would be exempt from
paying the registration fee to APOC.
Representative Kawasaki asked for clarification on the
answer from APOC.
HEATHER HEBDON, ALASKA PUBLIC OFFICES COMMISSION, ANCHORAGE
(via teleconference), asked for Representative Kawasaki to
repeat the question.
Representative Kawasaki complied.
Ms. Hebdon replied that there was a provision in statute
that allowed for an exempt campaign; campaigns that had
limited financial activity of less than $5,000 during the
duration of the campaign could file an exemption statement
and not have to report. She said that the exemption was not
available on a statewide level and only applied to a
municipal or judicial retention candidate.
Representative Kawasaki asked whether anyone had ever come
to APOC wanting to file but had been unable to pay the
filing fee.
Ms. Hebdon answered that it was a new fee, which meant that
there was not history of such a circumstance.
1:48:05 PM
Representative Ortiz asked whether there had been a further
reduction in appropriated APOC funds since FY16.
Ms. Hebdon replied that the agency had received a cut in
program authority the previous session, from $242.6 million
to $143.3 million. She said that the fees had been
unrealized as there had not been fees in statute to allow
receipt authority up to the full $242.6 million.
Representative Ortiz surmised that the agency had remained
flat funded since FY16, and receipt authority had been
reduced for receipts that had never been collected anyway.
Ms. Hebdon answered in the affirmative.
Representative Ortiz asked how long the current $250
lobbying registration fee been in place.
Ms. Hebdon did not know the origination date, but the fee
had been increased to $250 in 2003.
1:50:25 PM
Representative Guttenberg offered a hypothetical of someone
exceeding the $250 in operating expenses, but in in-kind
donations, he wondered where this would fit in under the
bill.
Ms. Hebdon did not believe the hypothetical was the proper
definition of non-group entity. She said a non-group entity
was defined as a person, other than an individual, whose
primary purpose was to influence an election. Those people
had to meet certain criteria and could not participate in
business activities, they did not have shareholders and
were independent from the influence of business
corporations. She said that to her knowledge only one non-
group entity had ever registered with APOC, but that
Citizens United had rendered the definition obsolete and
groups no longer had to go through the steps to achieve
non-group status, instead they registered as an entity and
could make unlimited independent expenditures.
1:52:46 PM
Vice-Chair Gara did not believe in holding a bill for a
technical question that could be fixed on the floor. He
pointed to an exemption on Page 2, line 3 for municipal
office holders. He surmised that APOC did not have a fee
for Tribal office holders.
Ms. Hebdon answered that the office did not regulate Tribal
elections.
Vice-Chair Gara surmised that village office holders would
not be charged a fee.
Ms. Hebdon answered in the affirmative.
Vice-Chair Gara spoke to the fee for a lobbying contract.
He understood that the fee was for each contract and not
per lobbyist.
Ms. Hebdon replied in the affirmative; the fee was per
client.
Representative Wilson surmised that a group of volunteers
that raised $3,500 for a local election would be charged
the same fee as a larger organization that raised tens of
thousands of dollars.
Ms. Hebdon answered in the affirmative.
Representative explained that the fee was not a tax. He
said registering to participate in the process would cost
the same for small or large entities. He said that the fee
was nominal at $100 and would not apply to those who
qualifies for an exemption.
Representative Wilson thought that the tier for lobbyists
was questionable. She asked whether it would take longer
for APOC to track a donation of $100,000, rather than
$4,000.
1:57:25 PM
Ms. Hebdon answered that the amount did not necessarily
change the number of reports submitted, but it changed the
amount of audit hours tracking the transactional history.
Representative Wilson asked why the amount had been
selected for the lobbyist tiers.
Representative Wilson answered that the lobbying side began
at $250 per client. He believed that the $100 was nominal,
but $250 was not for an organization raising only $1000 was
not. The ranges of client volume reviewed by APOC fit more
effectively to have a tiered structure for lobbyists that
allowed a nominal fee to be identified for clients spending
less money to lobby the legislature.
1:59:07 PM
Co-Chair Seaton asked whether independent expenditure
groups were not covered in the bill because of Citizens
United.
Ms. Hebdon believed they would be covered under the term
"group."
Co-Chair Seaton asked whether the term "non-group entity"
did not apply because every non-group entity would be under
the definition of a "group." definition of a group.
Ms. Hebdon answered that, technically, it would be defined
as a person, which included a group.
Co-Chair Seaton expressed curiosity about fees not being
collected because a credit or debit card could not be used.
Ms. Hebdon answered that the issue had been fixed;
lobbyists could now use a credit card. The issue had been
that the agency had lacked a programmer to process
electronic payments.
Co-Chair Seaton asked for verification that that electronic
payment process included candidate payments.
Ms. Hebdon answered that currently the only people that
paid fees to APOC were lobbyists.
Co-Chair Seaton understood that if the bill passed, anyone
paying fees to APOC could do so with a credit card.
2:03:13 PM
Ms. Hebdon answered in the affirmative.
Representative Kawasaki asked how the fees would be
assessed on individuals that were paid monthly, salary and
hourly.
Ms. Hebdon deferred to the sponsor. Currently everyone paid
the same fee regardless of how they were compensated. He
said that APOC would entertain regualtion in order to
clarify any nuances.
Representative Pruitt asked for the definition of
"representational lobbyist."
2:06:27 PM
Ms. Hebdon replied that representational lobbyists filed
registration but did not submit reports and received no
compensation or fees other than reimbursement for travel
and personal living expenses.
Vice-Chair Gara asked whether a lobbyist on a contract
could avoid the fee.
Ms. Hebdon answered that they would pay a fee regardless of
salary.
Representative Kito understood there was a conceptual and
other amendment. He did not object to either.
2:08:53 PM
Representative Kawasaki MOVED to ADOPT Amendment 1:
Page 3, lines 2-5:
Delete all material and insert:
"(1) $150 for a contract with a value of
less than $10,000;
(2) $350 for a contract with a value of at
least $10,000 but less than $25,000;
(3) $650 for a contract with a value of at
least $25,000 but less than $45,000; and
(4) $850 for a contract with a value of
$45,000 or more."
Representative Wilson OBJECTED for discussion.
Representative Kawasaki explained that the amendment would
keep the original concept of a progressive system being in
place for contracts.
Representative Wilson wondered how the sponsor felt about
the figures in the amendment.
Representative Kito replied that he had not worked on the
numbers in the amendment, but he did not disagree with the
concept. He agreed that there were lobbying clients that
did not spend as much in Juneau and believed that it was
appropriate to be sure that they were not making excessive
payments to come to Juneau.
Representative Wilson WITHDREW her OBJECTION.
There being NO OBJECTION, Amendment 1 was ADOPTED.
Co-Chair Foster MOVED to ADOPT Conceptual Amendment 2 to
alter the bill's effective date from January 1, 2018 to
January 1, 2019.
There being NO OBJECTION, it was so ordered.
2:13:06 PM
Representative Pruitt offered Conceptual Amendment 3. He
explained the requirement that APOC have an office in every
senate district was not currently enforced and was also
unnecessary. He moved that the statutory language requiring
an APOC office in every senate district be removed from
regulations.
Co-Chair Seaton OBJECTED for discussion.
2:14:17 PM
AT EASE
2:14:51 PM
RECONVENED
Representative Pruitt WITHDREW the conceptual amendment.
Vice-Chair Gara reviewed the fiscal note from the
Department of Administration, OMB Component Number 70. The
note reflected operating expenditures of $226.6 through
FY24.
Representative Wilson pointed to Page 2 of the fiscal note
related to the vacancy rate. She understood that although
the agency did not have the authority to use the funds for
personal services, the fiscal note implied that maybe it
could; she expressed confusion about the vacancy as
addressed in the fiscal note.
2:17:18 PM
Ms. Hebdon relayed that the agency would be looking at
adding at least one more position.
Representative Wilson wondered how a change in the vacancy
rate would affect the legislation.
Representative Kito answered that the department was
authorized a certain number of positions not funded to the
full level of positions. He said that if the vacancy rate
were reduced it would create an opportunity for one of the
positions to be filled utilizing the receipts that were
collected.
Representative Wilson felt that vacancy rates were usually
addressed in appropriation bills. She expressed confusion
about the 2 positions reflected in the note.
2:19:16 PM
Representative Kito answered that adding 2 positions would
increase the PCN count, but they would still not have the
funding to fill the position. If the filled positions were
existing PCNs, the vacancy rate would remain the same. He
related that the challenge was that a certain number of
PCNs had been authorized but there was not funding to fund
the PCNs.
Representative Wilson wanted assurances that the bill was
not acting as an appropriation bill.
2:20:42 PM
Co-Chair Seaton explained that if the bill passed there
would be $220,500 appropriated for personal services within
APOC. He asserted that the bill did not circumvent the
appropriation process.
Representative Wilson understood.
2:22:45 PM
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
shared that the fiscal note in itself was not an
appropriation, but typically fiscal notes were incorporated
into the operating budget during conference committee. He
stated that the additional funding included in the fiscal
note would be added into the budget were the bill to pass.
Representative Wilson understood. She maintained concern
that the vacancy rate was being discussed under the bill
rather than in the operating budget process.
Mr. Painter answered that the budgeted vacancy rate would
not necessarily change. However, currently there was
funding for 5 of the 7 positions. The bill would give the
funding for the remaining 2 positions.
2:24:55 PM
Vice-Chair Gara understood that there were vacancy factors,
and then there were vacancies of positions that could be
funded. He did not recognize the discussion of vacancy
factor in the fiscal note that Representative Wilson had
suggested.
Co-Chair Seaton MOVED to REPORT CSHB 91(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
Representative Wilson OBJECTED. She expressed concern with
the tier levels for lobbyists. She WITHDREW her OBJECTION.
CSHB 91(FIN) was REPORTED out of committee with a "do pass"
recommendation and with
2:27:30 PM
AT EASE
2:31:28 PM
RECONVENED
HOUSE BILL NO. 79
"An Act relating to workers' compensation; repealing
the second injury fund upon satisfaction of claims;
relating to service fees and civil penalties for the
workers' safety programs and the workers' compensation
program; relating to the liability of specified
officers and members of specified business entities
for payment of workers' compensation benefits and
civil penalties; relating to civil penalties for
underinsuring or failing to insure or provide security
for workers' compensation liability; relating to
preauthorization and timely payment for medical
treatment and services provided to injured employees;
relating to incorporation of reference materials in
workers' compensation regulations; relating to
proceedings before the Workers' Compensation Board;
providing for methods of payment for workers'
compensation benefits; relating to the workers'
compensation benefits guaranty fund authority to claim
a lien; excluding independent contractors from
workers' compensation coverage; establishing the
circumstances under which certain nonemployee
executive corporate officers and members of limited
liability companies may obtain workers' compensation
coverage; relating to the duties of injured employees
to report income or work; relating to
misclassification of employees and deceptive leasing;
defining 'employee'; relating to the Workers'
Compensation Board's approval of attorney fees in a
settlement agreement; and providing for an effective
date."
2:31:40 PM
Co-Chair Foster invited testifiers to the table.
GREG CASHEN, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, introduced the PowerPoint
presentation, "Workers' Compensation: HB 79" dated February
5, 2018 (copy on file). He spoke to Slide 3:
HB 79: Workers' Compensation Efficiencies Bill
? Speed up dispute resolution
? Improve the delivery of medical care to injured
workers
? Strengthen provisions to prevent workers'
compensation fraud by employers and employees
? Reduce administrative costs
? Ensure adequate funding for the administration of
the workers' compensation and workers' safety programs
Mr. Cashen shared that the legislature had consistently
endeavored to create a workers' compensation system that
delivered benefits quickly, efficiently, fairly, and
predictably to injured workers at a reasonable cost to
employers, as mandated by statute. He said that the system
had not been significantly reformed in over 10 years; the
improvements in the bill addressed rising costs, recent
legal development, and new approached to improve the
systems efficiency and fairness. He said that the bill
focused mainly on efficiencies and modernization of the
currently system, while recognizing that benefit issues
like reemployment also needed attention. He related that
reemployment benefits were being addressed in separate
legislation. He described the various ways the department
had worked with stakeholders to craft a comprehensive bill.
2:34:28 PM
MARIE MARX, DIRECTOR, WORKERS' COMPENSATION, DEPARTMENT OF
LABOR AND WORKFORCE DEVELOPMENT, turned to Slide 2. She
highlighted the pillars of the Alaska Workers' Compensation
System as listed on the slide:
• Quick
• Efficient
• Fair
• Predictable
• Reasonable Cost
Ms. Marx asserted that balancing these pillars guided the
divisions administration. She explained that that the
division ensured compliance with the state workers'
compensation act, conducted workers' compensation hearings,
operated an appeals program, processed Fishermen's Fund
claims, and administered vocational rehabilitation benefits
and training program for injured workers.
2:35:37 PM
Ms. Marx explained that HB 79 addressed all the statutory
pillars, focusing especially on fairness, quickness, and
efficiency in the workers' compensation process.
2:36:24 PM
Ms. Marx addressed Slide 4 [Secretary Note: The numbered
items under "Current Law" correlate with the numbered items
under "HB 79" for the duration of this transcription]:
Speeds Up Dispute Resolution:
Secs. 8-10, 19-21, 39
Current law
1. A party requests hearing on claim
2. Non-attorneys may represent parties
3. Board must approve attorney fees in settlement
agreement
4. Division petitions Board to assess a civil
penalty against uninsured employer
HB 79
1. Board will schedule a hearing shortly after claim
is filed (Secs. 19, 21)
2. Any person authorized by regulation of the Board
(Sec. 20)
3. Board does not need to approve if fees are sole
issue that needs Board approval (Sec. 39)
4. Division assesses civil penalty against uninsured
or underinsured employer; party may appeal
assessment to Board (Secs. 8-10)
Ms. Marx explained that the board conducted hearings as
part of a panel but separately had regulatory authority.
2:37:45 PM
Ms. Marx spoke to Slide 5:
Improve the Delivery of Medical Care:
Secs. 14, 23, 25-26
Current law
1. No language addressing if and when a provider's
written request for medical care must be
preauthorized
2. No penalty for untimely preauthorization or
denial
3. Medical bills paid within 30 days
HB 79
1. Requires an employer to preauthorize or deny
medical treatment within 60 days of a medical
provider's written request (Sec. 14)
2. Penalty for untimely preauthorization or denial
(Secs. 23, 25-26)
3. NO CHANGE
2:38:24 PM
Ms. Marx moved to Slide 6;
Why the Division is Tackling Misclassification
? Worker safety
? Risk of uninsured losses
? Law-abiding employers bear greater financial burden
Ms. Marx stated that a great disservice was done to both
workers and law-abiding businesses when the issue was
ignored. She said that when workers were misclassified,
workers died or were severely injured, and uninsured losses
could put companies out of business. She relayed that the
bill defined "independent contractor' and did not keep true
independent contractors from existing and flourishing. The
bill did not change the definition but clarified what was
already in place, which would help workers clearly
understand what it meant to be an independent contractor.
2:39:31 PM
Ms. Marx advanced to Slide 7:
Strengthen Fraud Provisions:
Secs. 7, 9, 11, 25-26, 29, 32-35, 37
Current Law
1. No definition of misclassification
2. No affirmative duty to report work or wage-loss
benefits
3. No owner liability for benefits for some business
entities and no civil penalty liability
4. No definition of independent contractor and
multi-factor balancing test for employee status
5. Injured worker may file lien for benefits but
Benefits Guaranty Fund may not
HB 79
1. Defines misclassification and when it amounts to
2. fraud (Sec. 33)
3. Affirmative duty to report (Secs. 33)
4. More business entity owner liability for benefits
and civil penalties (Secs. 7, 34-35)
5. Defines independent contractor and clarifies
statutory definition of employee (Sec. 29, 37)
6. Benefits Guaranty Fund may file lien for
compensation and civil penalties (Secs. 25-26)
Representative Wilson asked whether the same definition for
"independent contractor" was used as found in statute.
Ms. Marx answered that there was currently no definition,
which had been a problem. The bill would add a definition,
which had been reached through a collaborative process
involving many stakeholders.
Representative Wilson asked for verification that a
definition for "independent contractor" was located nowhere
in statute.
Ms. Marx could not speak to other departments. She
clarified that under the Alaska Workers' Compensation there
was no definition of "independent contractor." She said
that the goal of defining something for workers'
compensation was different than defining something for the
Internal Revenue Service (IRS).
Representative Wilson thought there had been several
definitions of "independent contractor" in statute. She
wanted to be as consistent as possible between departments.
2:42:46 PM
Ms. Marx answered that the bill was clear that the
definition only applied to the Alaska Workers' Compensation
Act.
Representative Pruitt wanted to know why the definition
differed between the IRS and the Worker's Compensation Act.
Ms. Marx answered that the goal of the act was to protect
injured workers and employers from huge uninsured losses,
which differed greatly from the goals of the IRS. She said
that every state in the nation worked this way. She stated
that there was simply not a "one size fits all" definitions
because of the narrow application of the term.
Representative Pruitt understood that there could be
varying definitions of "independent contractor" based on
who needed to pay taxes in a certain way, and still another
definition based on how they should be covered under the
Workers' Compensation Act. He felt that there could be a
uniform definition across state systems.
Ms. Marx used the definition of "resident" as a parallel.
There were many different definitions of "resident" that
were used under different circumstances. She submitted that
the definition of "independent contractor" for workers'
compensation purposes should be very narrow, considering
that the issue was protecting injured workers and employers
from huge uninsured losses that would put them out of
business.
2:47:22 PM
Ms. Marx addressed Slide 8:
Strengthen Fraud Provisions CONT.:
Secs. 7, 9, 11, 25-26, 28, 31-35, 37
Current Law
1. No penalty assessed for an employer who has
engaged in fraudulent misclassification
2. Maximum penalty of $1,000 for each uninsured
employee workday
3. Board suspends penalties in full or in part and
no guidelines for suspension
4. No interest paid on payment plans
HB 79
1. Division may assess a penalty (Secs. 9, 32)
2. Maximum civil penalty of three times the premium
an employer should have paid (Sec. 9)
3. Penalties may not be suspended in full or in part
(Sec. 11)
4. Interest on payment plans (Sec. 11)
2:50:11 PM
Co-Chair Seaton asked whether the penalties on Slide 8,
pertained solely to civil penalties.
Ms. Marx answered in the affirmative. She elaborated that
she was talking about an employee's failure to maintain
workers' compensation insurance as required by law. She
furthered that those penalties went into the injured worker
fund. The fund needed the ability to file liens because
often by the time it came to collect penalties that were
due the assets were depleted.
Co-Chair Seaton understood that if an employee did not have
workers' compensation insurance then administrative costs
would need to be recovered.
Ms. Marx answered in the affirmative. Whenever there was an
uninsured injury the employer was required to pay the
benefits whether there was insurance or not. If employers
did not pay, those amounts were paid by the injured worker
fund, which in turn sought reimbursement of the costs from
the employer.
Ms. Marx turned to Slide 9:
Reduce Administrative Costs:
Secs. 2-6, 13, 15, 19, 21, 24, 27, 30-31, 38, 40
Current Law
1. An employer pays benefits by check
2. Division may not require electronic filing
3. Division approval needed for corporate executive
officer workers' compensation coverage opt out
HB 79
1. Does not prescribe a specific method of payment
(Sec. 38)
2. Division may prescribe filing format (Secs. 3-6,
19, 21, 24)
3. Division approval not required; not an employee
if at least 10% ownership interest (Sec. 30)
2:54:57 PM
Ms. Marx moved to Slide 10:
Reduce Administrative Costs CONT.:
Secs. 2-6, 13, 15, 19, 21, 24, 27, 30-31, 38, 40
Current Law
1. Some medical publications not listed
2. No deadline for reporting initial coverage; 10
day deadline for termination of coverage and no
penalty if late
3. Division administers contribution to and
reimbursement from Second Injury Fund
HB 79
1. Adds publications to list (Sec. 15)
2. 30 day deadline to report initial coverage and
termination of coverage, and penalty if late
(Sec. 13)
3. Phases out Second Injury Fund (Secs. 2, 27, 31,
38, 40)
Ms. Marx turned to Slide 11:
Ensure Adequate Funding:
Sec. 1
Current Law
1. Workers' compensation insurers pay a fee of 2.7%
of net workers' compensation premium written
2. 1.82% to WSCAA and .88% to Alaska Comprehensive
Health Insurance Fund (ACHI)
HB 79
1. NO CHANGE
2. 2.5% to WSCAA and .2% to ACHI
2:57:12 PM
Co-Chair Foster hoped that electronic filing issues related
to limited internet in rural Alaska had been considered.
Ms. Marx answered that reports of injury were filed by
either insurance companies, r third party administrators,
or self-insured employers. She shared that injured workers
never filed directly with the division. She furthered that
if an injured worker was not given a response form the
employer, a paper form was available from the division in
order to file directly. She related that the bill would
allow the division to clarify for insurance companies and
self-employed insurers to standardize the business process.
Representative Wilson pointed to Section 1, page 9 of the
bill. She asked whether there were instances there an
attorney for an employee could be paid for by the state.
Ms. Marx answered that there was a statutory provision in
the Workers' Compensation Act that allowed for a guardian
to be appointed for the purpose of resolving the workers'
compensation claim.
Representative Wilson thought that it could be important to
allow for non-attorneys to represent an injured worker. She
thought that people who could not afford an attorney could
be at a disadvantage.
3:00:24 PM
Ms. Marx replied that the balance was between allowing
those who had filed claims to work their way through the
system and working to keep system operations efficient. She
added that most tribunals had process guidelines related to
who could efficiently represent parties before them. She
suggested that there could be an amendment to provide a
list of allowable representation included non-attorneys.
She said that in her experience non-attorneys made the
process less efficient.
Representative Wilson thought that the injured worker
should be prioritized over efficiency.
Ms. Marx responded that there were systems in place to
assist injured workers. She said that the division had
staff whose job was to provide assistance to unrepresented
parties. She related that the division had a duty under the
law to inform injured workers about their right to
benefits, and how to pursue their right to compensation
under the law. She reiterated her suggesting of crafting a
list of allowable representatives.
3:04:16 PM
Co-Chair Foster noted Paloma Harbour, Director, Division of
Administrative Services, Department of Labor and Workforce
Development was available for questions as well.
Representative Kawasaki referenced Slide 11. He noted that
the handouts were different than the presentation. Ms. Marx
agreed and noted she had made a correction on the record.
Representative Guttenberg asked whether it had been
disruptive for claimants to be represented by a non-
attorney.
Ms. Marx asked for clarification.
Representative Guttenberg wondered whether non-attorney
representation had been productive for claimants.
3:06:55 PM
Ms. Marx replied that, in her experience, non-attorney
representatives did not understand procedures and available
benefits, which made it difficult to bring cases to
resolution in a timely fashion, if at all. She asserted
that the bill would provide for a more efficient process.
3:08:37 PM
Representative Pruitt referenced letters from several
parties who initially had concern but were now supportive.
He wondered if the letters were still valid.
Ms. Marx understood that the stakeholder groups that wrote
the letters maintained their support of the legislation.
3:10:00 PM
Co-Chair Foster OPENED public testimony.
CHARLES MCKEE, SELF, ANCHORAGE (via teleconference), shared
that he was currently navigating the system. He relayed his
case number. He offered a series of personal comments on
the issue of workers' compensation.
Co-Chair Foster CLOSED public testimony. He asked members
to submit any amendments to his office by Monday, January
12, 2018.
HB 79 was HEARD and HELD in committee for further
consideration.
3:16:15 PM
AT EASE
3:17:05 PM
RECONVENED
Co-Chair Foster relayed that amendments on HB 79 were due
on Tuesday, February 6 at 5pm and the bill would be heard
again on Thursday.
ADJOURNMENT
3:17:55 PM
The meeting was adjourned at 3:17 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 91 Amendment #1.pdf |
HFIN 2/5/2018 1:30:00 PM |
HB 91 |
| HB 79 DOL 02.05.18.pdf |
HFIN 2/5/2018 1:30:00 PM |
HB 79 |
| HB 79 Legal Opinion.pdf |
HFIN 2/5/2018 1:30:00 PM |
HB 79 |