Legislature(1997 - 1998)
01/22/1997 03:12 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 22, 1997
3:12 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative John Cowdery, Vice Chairman
Representative Bill Hudson
Representative Jerry Sanders
Representative Joe Ryan
MEMBERS ABSENT
Representative Eric Croft
Representative Gene Kubina
OTHER HOUSE MEMBERS PRESENT
Representative Tom Brice
COMMITTEE CALENDAR
OVERVIEW: DEPARTMENT OF LABOR
*HOUSE BILL NO. 41
"An Act relating to impairment rating guides used in evaluation of
certain workers' compensation claims."
- MOVED HB 41(L&C) OUT OF COMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HB 41
SHORT TITLE: IMPAIRMENT RATING GUIDES FOR WORKERS COMP
SPONSOR(S): REPRESENTATIVE(S) ROKEBERG
JRN-DATE JRN-PG ACTION
01/13/97 38 (H) PREFILE RELEASED 1/3/97
01/13/97 38 (H) READ THE FIRST TIME - REFERRAL(S)
01/13/97 38 (H) LABOR & COMMERCE
01/22/97 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
TOM CASHEN, Commissioner
Department of Labor
P.O. Box 21149
Juneau, Alaska 99802
Telephone: (907) 465-2784
POSITION STATEMENT: Overview on the Department of Labor
REBECCA NANCE, Director
Division of Employment Security
Department of Labor
P.O. Box 25509
Juneau, Alaska 99802
Telephone: (907) 465-4537
POSITION STATEMENT: Explained Unemployment Insurance Program
ED FLANAGAN, Deputy Commissioner
Office of the Commissioner
Department of Labor
P.O. Box 21149
Juneau, Alaska 99802
Telephone: (907) 465-2784
POSITION STATEMENT: Answered questions on the Department of Labor
ARBE WILLIAMS, Director
Division of Administrative Services
Department of Labor
P.O. Box 21149
Juneau, Alaska 99802
Telephone: (907) 465-2720
POSITION STATEMENT: Centralizing services in the Department of
Labor
PAUL GROSSI, Director
Division of Workers' Compensation
Department of Labor
P.O. Box 25512
Juneau, Alaska 99802
Telephone: (907) 465-2790
POSITION STATEMENT: Testified on HB 41
CRYSTAL SMITH, Legal Administrator
Office of the Attorney General
Department of Law
P.O. Box 110300
Juneau, Alaska 99811
Telephone: (907) 465-3600
POSITION STATEMENT: Testified on HB 41
DEBORAH BEHR, Assistant Attorney General
Legislation and Regulations Section
Civil Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811
Telephone: (907) 465-3600
POSITION STATEMENT: Testified on HB 41
MIKE FORD, Attorney
Legislative Legal and Research Services
Legislative Affairs Agency
130 Seward Street, Suite 409
Juneau, Alaska 99081
Telephone: (907) 465-2450
POSITION STATEMENT: Testified on HB 41
ACTION NARRATIVE
TAPE 97-1, SIDE A
Number 001
The House Labor and Commerce Standing Committee was called to order
by Chairman Rokeberg at 3:12 p.m. Members present at the call to
order were Representatives Rokeberg, Cowdery, Hudson, Ryan and
Sanders. He also noted Representative Brice was in attendance.
CHAIRMAN NORMAN ROKEBERG welcomed everybody to the meeting and
indicated a quorum was present. He introduced Committee
Secretary/Supervisor of House Records Cathy Wood, Chief of
Staff/Committee Aid, Shirley Armstrong, and Staff Member Janet
Seitz.
CHAIRMAN ROKEBERG stated that there were two items on the agenda
for the Department of Labor; the back issues of Alaska's Economic
Trends and Title 23. He announced there would also be a public
hearing on HB 41.
Number 193
CHAIRMAN ROKEBERG announced a brief at ease at 3:15 p.m., to wait
for the arrival of Tom Cashen, Commissioner of the Department of
Labor, (DOL).
CHAIRMAN ROKEBERG called the meeting back to order at 3:19 p.m. He
asked Commissioner Cashen what was on the DOL's agenda this year.
Number 280
COMMISSIONER TOM CASHEN, Commissioner, Department of Labor,
referred to a pie chart giving the DOL five-tenths of 1 percent of
the state budget. He stated that the DOL has taken $276,000 in
general fund budget cuts and a $1.2 million cut in the federal side
of the budget. The DOL has had to delete 18 full-time positions
and laid off nine people. The Governor has given the DOL a
$100,000 cut for 1997. The DOL will continue to operate as before,
with less funds. In the case of heavier cuts, in the million
dollar range, the DOL will have to start to cut programs.
Commissioner Cashen stated that the DOL is trying to implement
efficiencies in each department due to the budget cuts and
increased work load. He asked if the committee had any questions
regarding the DOL.
Number 526
CHAIRMAN ROKEBERG asked if the DOL was doing anything to streamline
or consolidate the organization. For example, Colorado is
consolidating all of its employment security operations into a
single location.
Number 578
REBECCA NANCE, Director, Division Employment Security, Department
of Labor, stated she has been working on the inefficiencies in the
Unemployment Insurance Program. Colorado has one unemployment
insurance call center which handles all of the unemployment
insurance claims by phone or mail and will be handling claims
strictly telephonically. The DOL will always offer the option of
mail claims due to the rural nature of the state of Alaska. Ms.
Nance indicated the DOL has three toll-free call centers. The call
center has cut overtime by 95 percent; last year the cost of
overtime was $5,000 verses the previous year of $90,000. In
addition, the service is more convenient for the claimants by
eliminating office visits.
Number 696
CHAIRMAN ROKEBERG asked if the federal government has increased the
minimum wage law, indicating that Alaska has an automatic step
above the federal minimum wage.
Number 719
COMMISSIONER CASHEN answered that in October of 1996, the federal
minimum wage increased 50 cents to $4.75. In October of 1997, the
federal minimum wage will increase 40 cents to $5.15. Alaska law
states that the State's minimum wage will be 50 cents higher than
the federal minimum wage. The State's minimum wage is $5.25 and
will increase to $5.65 in October 1997. Commissioner Cashen stated
that he would like to see Alaska's state minimum wage $1.00 higher
that the federal minimum wage.
Number 831
REPRESENTATIVE JOHN COWDERY referred to the Labor Relations
Agency's classified employees who are partially exempt because they
became political appointees.
ED FLANAGAN, Deputy Commissioner, Office of the Commissioner,
Department of Labor, indicated Representative Cowdery might be
referring to the Labor Negotiator positions in the Department of
Administration, (DOA). The DOL's Labor Relations Agency is for
employees who administer the labor relations functions but do not
negotiate contracts. It is the state equivalent of the National
Labors Relations Bureau (NLRB) which is not classified as a union
position because it oversees union processes.
REPRESENTATIVE COWDERY asked if it was classified as a union
position in the past.
MR. FLANAGAN replied it was not.
Number 955
REPRESENTATIVE BILL HUDSON inquired if the federal government,
possibly in connection with the block grants is proposing anything
that might diminish or increase the budget, especially since the
largest share of the DOL's money, $60 million, is federal monies.
Number 979
COMMISSIONER CASHEN replied that it is one of the reasons the DOL
has started the Unemployment Insurance (UI) reorganization. He
spoke with Senator Stevens, who advised that the DOL is fine for
now but plans should be made in the future because of anticipated
reductions.
Number 1017
REPRESENTATIVE JOE RYAN indicated that the various departments have
their own data processing sections and inquired if there were any
plans for a central data processing system that all departments
could access.
Number 1040
ARBE WILLIAMS, Director, Division of Administrative Services,
Department of Labor, stated that a couple of years ago the DOL was
installing a new application to run the UI called DB2. Texas
Instruments had the original contract with the DOL, which has since
doubled running into the four million dollar range. The division,
as a result, has been discussing how they would be able to control
its costs internally with a good data processing operation. Ms.
Williams noted that this operation would have to support services
and not supplant services due to cost.
MS. WILLIAMS indicated that four years ago the DOL consolidated its
main frame applications with the DOA. For past three years the
division's costs of data processing were capped due to the
division's development mode, in effect the division was paying $1.2
million when the usage was $4.2 million. The DOL could not afford
to increase its usage at this cost rate. A systems programmer was
able to cut usage to $1.6 million by centralizing services in data
processing. Ms. Williams stated, "But if you get those services
too far out beyond the programs, then they become efficient
services that are not necessarily providing good support to the
programs." She does not feel centralizing the DOL's data
processing operation with the DOA would be effective.
Number 1280
REPRESENTATIVE HUDSON asked how the DOA absorbs the DOL's loss.
Number 1288
MS. WILLIAMS replied that the DOL's cap was to end July 1, 1997.
The DOA accommodated their overhead to the $1.6 million. She
stated that the DOL does not plan to go over the $1.6 million
because that would result in program cuts.
REPRESENTATIVE HUDSON stated that the legislature needs to review
what's going to happen in 1997.
Number 1306
MS. WILLIAMS replied the DOA understands that the DOL is not going
to pay them more that $1.6 million because the DOL's usage will not
surpass that. She believes the DOA has accommodated the $1.6
million internally into its 1998 plans. She also stated that there
is one-half to one million dollars leeway in the anticipated usage
of resources.
REPRESENTATIVE HUDSON asked if the changes that positively affect
the DOL will negatively affect the state through the DOA and
thought this needed to be examined. He asked if the DOL had their
own mainframe.
MS. WILLIAMS replied that the DOL does not have their own
mainframe, they are with the DOA. She indicated the steps the DOL
has taken to come within the Department's budgeted allocation will
not adversely affect the DOA.
REPRESENTATIVE HUDSON asked if the DOL will continue to use the
DOA's mainframe capacity.
MS. WILLIAMS replied yes for now. She indicated that because the
technology is changing they did not want too far ahead. The DOL
and the DOA are meeting every three months, to assess what the
usage and program needs are. They are constantly looking at
options as to whether they will change to a mainframe environment
or a distributed network environment or something in between the
two.
Number 1414
REPRESENTATIVE HUDSON asked if the DOL finalized its 1998 budget.
MS. WILLIAMS replied they had finalized it and expect that through
1998 they will not be moving off the mainframe since the DOL has
been so successful in coming within the budget.
Number 1432
REPRESENTATIVE HUDSON asked for the location of the 50 cent
increase.
Number 1447
MR. FLANAGAN stated it was located in AS 23.10.
CHAIRMAN ROKEBERG asked Commissioner Cashen to introduce his staff.
Number 1465
COMMISSIONER CASHEN introduced his staff at the Department of
Labor: Paul Grossi, Director of Worker's Compensation; Al Dwyer,
Director of Labor Standards and Safety; Dwight Perkins, Special
Assistant; Steve Schlaffman, Deputy Director of Employment
Security; Dan Knouse, Budget Director of Employment Security; and
Mike Helms, Budget Analyst.
HB 41 - IMPAIRMENT RATING GUIDES FOR WORKERS COMP
Number 1568
CHAIRMAN ROKEBERG announced House Bill 41 was next on the agenda,
"An Act relating to impairment rating AMA Guides used in evaluation
of certain workers' compensation claims." Chairman Rokeberg
indicated he was the sponsor of the bill and stated, "This
seemingly is a very simple bill. It was introduced two years ago
in the first session of the Nineteenth Legislature by
Representative Bettye Davis and I signed on immediately as a
cosponsor of the bill. The -- and one reason I was aware of that
the people and the underwriters in the workers' comp insurance
business were desirous of having legislation to make immediate
adoption of the American Medical Association Impairment Guide. And
the bill it did -- it took two years to wind its way through the
legislature and during which time, and if I - perhaps Mr. Grossi
later can explain the exact time frame -- and one of the most
urgent portions of the former bill was the adoption of the guide,
but it did go through the regulatory process that took almost two
years to get it adopted. So the urgency of the bill is not with us
now because the latest edition has been adopted by regulation, but
the purpose and intention of the bill is to make - which is part of
the older bill - is to make this an automatic procedure in the
future, thereby, also saving the state the expense of going through
the Administrative Procedures Act and adopting the whole enchilada
in terms of regulation."
Number 1921
CHAIRMAN ROKEBERG stated, "One issue that came up was the original
bill had a 60-day window and after testimony in the HESS (Health,
Education and Social Services) Committee last year, we did adopt
the 90-day time frame. So at the last hour, it was brought to our
attention that there may be some corrective things done to it.
Before I go any further, we'll ask for some testimony from the
folks that have signed in and I would ask the Mr. Paul Grossi lead
off the testimony."
PAUL GROSSI, Director, Division of Workers' Compensation,
Department of Labor, explained permanent partial impairment and
how it fits into HB 41. He gave the example of a injured worker,
deemed disabled/medically unstable, and receiving temporary total
disability benefits. The employee will receive those benefits
until he or she becomes medically stable, at which time the
employee has a permanent physical impairment. The employee is then
rated and either released to go back to work receiving a lump sum
based on the permanent partial impairment rating or they may have
to go back to training. The DOL is required by Section 1, AS
23.30.190 as it currently exists to use the AMA Guides. The
problem the DOL encounters is the AMA Guides are published as
changes occur in the science. The way HB 41 exists now requires
the DOL to pass a regulation before they can use the next edition.
The intent of this amendment is to allow the DOL to use the newly
published AMA Guides without promulgation of a regulation. The
Department of Law has informed the DOL that there are problems with
the way the amendment is written. Mr. Grossi stated that the DOL,
and the Workers' Compensation Board, support the amendment to HB 41
because promulgation of a regulation can prevent the most current
science from being implemented in the rating of the impairments,
negatively affecting both the employee and the involved insurance
companies. Mr. Grossi added this amendment would eliminate the
expense of having to issue a regulation every time the new AMA
Guide is issued.
Number 1921
CHAIRMAN ROKEBERG asked what was the time frame for adoption the
regulation.
MR. GROSSI stated a year and a half.
CHAIRMAN ROKEBERG indicated the latest AMA Guide was published
January of 1995 and the regulation was adopted in April of 1996.
The time delay of the regulatory process caused many physicians and
other users of the AMA Guides to not have access to the AMA Guides.
MR. GROSSI stated that when the AMA issues a new edition they stop
publishing the previous edition. There was a period of time
because of the delay in regulation when users did not have access
to the AMA Guides.
Number 1993
REPRESENTATIVE COWDERY asked if there had been any objections to HB
41.
MR. GROSSI replied that there was testimony by Alaska Public
Interest Group (AKPIRG) but it was not against the automatic
adoption, it was over the use of the permanent partial impairment
as a system.
Number 2046
REPRESENTATIVE TOM BRICE asked if there were any changes to the AMA
Guide by the State in regards to permanent partial impairment.
MR. GROSSI replied that there are no additional changes, besides
the change to use the most recent edition of the AMA Guide.
REPRESENTATIVE BRICE asked if within the contents of the most
recent edition has there ever been a need to issue changes.
MR. GROSSI replied no and added that it is the opinion of everyone
he has talked to doctors, insurance agencies, workers' compensation
attorneys and the Workers' Compensation Board that the sooner the
use of the most recent AMA Guide can be implemented the better off
everyone will be. The DOL supports the legislation that will bring
about that change.
Number 2107
REPRESENTATIVE HUDSON asked if the Department of Law had a problem
with the regulation.
MR. GROSSI answered the Department of Law has a technical problem
with determining the exact date the publication would be in effect.
Number 2176
CHAIRMAN ROKEBERG indicated it was the intention of the chair to
move HB 41 today and asked Crystal Smith, Legal Administrator, to
talk about the Department of Law's technical problem with the
amendment.
CRYSTAL SMITH, Legal Administrator, Office of the Attorney General,
Department of Law, stated the Department did not notice the problem
when HB 41 was reviewed last session. She feels there needs to be
a process to establish the date that the new AMA Guides would be
adopted. House Bill 41 currently states that they need to be in
effect within 90 days. This gives the interpretation that the DOL
still needs to go through the regulation process to establish the
effective date. The Department of Law is suggesting a process of
setting a date, that would eliminate the regulatory process. Such
as, issuing a specific time for a board meeting after the new AMA
Guides were published to determine when they would adopt the new
rating standards.
Number 2272
DEBRA BEHR, Assistant Attorney General, Legislation and Regulation
Section, Civil Division, Department of Law, stated HB 41 does not
accomplish the full goal of the committee to have the AMA Guides
come in effect without having to go through the regulation process.
House Bill 41 currently states that the board is to begin using the
new AMA Guides within a 90-day period, which could be any day
within those 90 days. Ms. Behr believes the public has a right to
know what the date is and should be involved in the process of when
to start applying the new AMA Guide. She stated the AMA Guide
effects the public's rights and responsibilities, for example an
employee may receive a better outcome under the old or new AMA
Guide. The amendment would require the board to hold a meeting
declaring the new AMA Guide's effective date. The Department would
issue a press release to notify the public and also include the
date in the Department's bulletin to notify the employees involved
in the Workers' Compensation System that the new AMA Guide is in
effect. The last sentence of the amendment states that there does
not have to have a regulation to issue and effective date. Ms.
Behr anticipated the board could issue the date at a regularly
scheduled meeting, a telephonic meeting, or hold a special meeting.
She addressed the option of issuing a firm date, for example 90
days from X, except that the AMA does not have a firm date from
which to count those 90 days. This can cause debate on when those
90 days start. The amendment the Department of Law is suggesting
will accomplish the goal with minimum cost.
Number 2378
REPRESENTATIVE BRICE stated that he thought the AMA would have a
specific publishing date.
MS. BEHR responded that most publications give a month and a year
but not a specific date with the month.
REPRESENTATIVE BRICE asked if the publishing company would a have
a more specific date.
MS. BEHR said then there is ambiguity as to whether published means
published in the state of Alaska, or when the printer received the
document, creating further problems. The most direct way would be
to allow the board to meet, taking in the concerns of the public
and setting a date that takes in the concerns of the State of
Alaska.
Number 2441
CHAIRMAN ROKEBERG stated that there was some concern that the board
could set a date that was after the 90-day period. He questioned
if the language in AS 23.10.190 (b) was strong enough to prevent
that situation.
Number 2454
MS. BEHR felt that in the circumstance of litigation, a court would
have to conclude that the board would have to set the date within
90 days. However, she does not have an objection if the committee
would like to do a technical amendment to include the 90 days in
both places of the amendment.
TAPE 97-1, SIDE B
Number 001
CHAIRMAN ROKEBERG suggested language stating the new AMA Guide is
to be adopted precisely 90 days after publication. He asked Mike
Ford, Attorney for Legislative Legal Affairs and drafter of HB 41,
to give his opinion on the statutory draftsmanship of the amendment
to this issue.
MIKE FORD, Attorney, Legislative and Research Services, Legislative
Affairs Agency, believes there are two options: either craft a
mechanism in statute to fix a set day as to when the new edition
would take effect or allow the board to set a day by giving the
board parameters. He stated the problem with fixing a date is, as
the legal department discussed, identifying the date of
publication. However, the option of giving the board parameters
would still require a guideline to set those parameters.
CHAIRMAN ROKEBERG believed AS 23.30.190 (d) set the parameters for
the board. He asked Mr. Ford if he had any suggestions that would
further clarify (d) but leaving the language alone in AS 23.30.190
(b). Chairman Rokeberg felt that the language in AS 23.30.190 (b)
gives the board the flexibility to meet within the 90 days and
presumably the board would meet and set the date inside those 90
days.
Number 100
MR. FORD felt in order to be absolutely certain, the 90-day
requirement should be crafted on to AS 23.30.190 (d) making it
clear that the board has to act within a certain period. However,
in doing this, the problem still exists in how that period would be
measured. He feels the board needs a more precise parameter of
when to act.
CHAIRMAN ROKEBERG asked Mr. Ford to suggest parameters for the
setting of a date.
MR. FORD asked if there was a month of publication.
Number 157
MR. GROSSI passed around the AMA Guide which contained a month but
not an exact date of publication.
REPRESENTATIVE BRICE asked if the DOL acknowledges a specific date
when they receive the AMA Guide, as most official agencies stamp
the date of receipt on all in-coming mail.
MR. GROSSI stated that the DOL receives advance notice from the AMA
of the new edition for ordering purposes.
REPRESENTATIVE RYAN stated that publishers may vary in their
particular time of publication and they do not usually do not
usually distribute the publications. A distribution company will
list a date that the publication will be available for distribution
or sale. Representative Ryan felt the distribution date could be
used as a benchmark.
Number 240
REPRESENTATIVE JERRY SANDERS asked if the 90 days could be started
from the last day of the month of publication.
MR. FORD suggested that the board could set the day that the new
AMA Guide becomes effective, and require the board to act within a
certain period. If the month is ascertainable it could read "not
later than 90 days after the last day of the month of publication."
That would allow the board to take public testimony in case they
had a conflict with a particular day. Mr. Ford stated he could
prepare the wording.
CHAIRMAN ROKEBERG stated he would like to adopt it as a conceptual
amendment and then provide for a committee substitute.
Number 295
REPRESENTATIVE HUDSON made a motion adopt the amendment.
CHAIRMAN ROKEBERG upon hearing no objection, it was so ordered. He
stated it would be called Amendment 1.
MR. FORD suggested that Section 1, AS 23.30.190, be dropped and the
amended version of Section 2, AS 23.30.190, including Amendment 1,
be used as the only section of HB 41. Mr. Ford stated that without
doing this, HB 41 would require all determinations to be made under
the most recent published edition, creating a period the most
recently published edition would not be in effect because the board
still has to act. The replacement HB 41 with the amended language
from the Department of Law, with Amendment 1 would accomplish the
committee's goal.
Number 363
CHAIRMEN ROKEBERG asked Mr. Ford to draft an amendment to the
amendment with the 90-day language in front of the committee in
order to move HB 41.
MR. FORD stated on page 1, lines 4 through 13 be deleted and insert
the amendment, to now be Section 1, AS 23.30.190 with the new (d),
after edition in the first sentence, "the meeting required under
the subsection shall be held not later than 90 days after the last
day of the month of publication.
Number 455
MS. SMITH stated that it was not that the board meeting had to be
within 90 days, but the effective date was to be within 90 days.
The board meeting could actually be held prior to the last day of
the month of publication.
MR. GROSSI stated that it depended on when the DOL received notice
from the AMA, it may be that a meeting could be held prior to the
effective date.
MR. FORD stated that there are two time frames: when the board
meets and the period within which the board has to select an
effective date.
MS. SMITH suggested to tighten up the 90-day language for the time
frame of the board meeting.
Number 510
CHAIRMAN ROKEBERG stated it to be the intention of the Chair that
both the meeting and the selection of the date occur within 90
days. He said, "With the indulgence of the committee and with the
great faith in our legal counsel's ability to wordsmith it and if
the Department of Law and the DOL agree to this conceptual
amendment (shaking heads yes) with these additions we move the
amendment to the amendment."
Number 572
REPRESENTATIVE COWDERY made a motion to adopt the amendment to
Amendment 1.
CHAIRMAN ROKEBERG there being no objection, it was so ordered.
REPRESENTATIVE HUDSON stated the committee has HB 41, as amended,
before them with some conceptual words missing as authorized by Mr.
Ford and the Department of Law. He made a motion to move HB 41, as
amended, out of committee with individual recommendations.
Number 593
CHAIRMAN ROKEBERG there being no objection, CSHB 41(L&C) moved out
of the House Labor and Commerce Committee.
ADJOURNMENT
Number 642
CHAIRMEN ROKEBERG adjourned the House Labor and Commerce Committee
meeting at 4:20 p.m.
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