Legislature(2003 - 2004)

04/27/2004 03:50 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 27, 2004                                                                                         
                           3:50 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Tom Anderson, Chair                                                                                              
Representative Carl Gatto, Vice Chair                                                                                           
Representative Nancy Dahlstrom                                                                                                  
Representative Bob Lynn                                                                                                         
Representative Norman Rokeberg                                                                                                  
Representative Harry Crawford                                                                                                   
Representative David Guttenberg                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 555                                                                                                              
"An Act relating to occupational licensing fees and receipts."                                                                  
                                                                                                                                
     - MOVED HB 555 OUT OF COMMITTEE                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 194(FIN)                                                                                                 
"An Act  authorizing delivery of  up to two bottles  of distilled                                                               
spirits  and 40  ounces of  beer to  a cruise  ship passenger  or                                                               
hotel guest."                                                                                                                   
                                                                                                                                
     - MOVED HCS CSSB 194(L&C) OUT OF COMMITTEE                                                                                 
                                                                                                                                
HOUSE BILL NO. 94                                                                                                               
"An Act  exempting flight  crew members  of certain  air carriers                                                               
from overtime pay requirements."                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
CS FOR SENATE BILL NO. 323(JUD) am                                                                                              
"An Act relating to a  subcontractor's, contractor's, and project                                                               
owner's liability for workers'  compensation, to sole proprietors                                                               
and  partnerships without  employees,  and  managers or  managing                                                               
members of limited liability companies,  and to the exclusiveness                                                               
of liability for workers' compensation."                                                                                        
                                                                                                                                
     - MOVED CSSB 323(JUD)am OUT OF COMMITTEE                                                                                   
                                                                                                                                
HOUSE BILL NO. 346                                                                                                              
"An Act relating to health insurance coverage for gastric bypass                                                                
surgery; and providing for an effective date."                                                                                  
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 555                                                                                                                  
SHORT TITLE: OCCUPATIONAL LICENSING FEES AND RECEIPTS                                                                           
SPONSOR(S): RULES                                                                                                               
                                                                                                                                
04/19/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/19/04       (H)       L&C, FIN                                                                                               
04/26/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
04/26/04       (H)       -- Meeting Canceled --                                                                                 
04/27/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/27/04       (H)       L&C AT 3:30 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: SB 194                                                                                                                  
SHORT TITLE: LIQUOR DELIVERED TO HOTELS/CRUISE SHIPS                                                                            
SPONSOR(S): SENATOR(S) STEVENS G                                                                                                
                                                                                                                                
04/23/03       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/23/03       (S)       L&C, FIN                                                                                               
05/13/03       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
05/13/03       (S)       <Bill Hearing Rescheduled to 5/15/03>                                                                  
05/15/03       (S)       L&C AT 7:45 AM BUTROVICH 205                                                                           
05/15/03       (S)       Moved Out of Committee                                                                                 
05/15/03       (S)       MINUTE(L&C)                                                                                            
05/16/03       (S)       L&C RPT 3DP                                                                                            
05/16/03       (S)       DP: BUNDE, SEEKINS, STEVENS G                                                                          
02/27/04       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/27/04       (S)       Heard & Held                                                                                           
02/27/04       (S)       MINUTE(FIN)                                                                                            
03/01/04       (S)       FIN RPT CS  2DP 4NR         NEW TITLE                                                                  
03/01/04       (S)       NR: GREEN, DYSON, HOFFMAN, OLSON;                                                                      
03/01/04       (S)       DP: STEVENS B, BUNDE                                                                                   
03/01/04       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/01/04       (S)       Moved  CSSB 194(FIN) Out of Committee                                                                  
03/01/04       (S)       MINUTE(FIN)                                                                                            
04/20/04       (S)       TRANSMITTED TO (H)                                                                                     
04/20/04       (S)       VERSION: CSSB 194(FIN)                                                                                 
04/21/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/21/04       (H)       L&C                                                                                                    
04/26/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
04/26/04       (H)       -- Meeting Canceled --                                                                                 
04/27/04       (H)       L&C AT 3:30 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB  94                                                                                                                  
SHORT TITLE: OVERTIME PAY FOR AIRLINE EMPLOYEES                                                                                 
SPONSOR(S): TRANSPORTATION BY REQUEST                                                                                           
                                                                                                                                
02/12/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/12/03       (H)       L&C                                                                                                    
03/03/03       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
03/03/03       (H)       Heard & Held                                                                                           
03/03/03       (H)       MINUTE(L&C)                                                                                            
04/27/04       (H)       L&C AT 3:30 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: SB 323                                                                                                                  
SHORT TITLE: WORKERS COMPENSATION AND CONTRACTORS                                                                               
SPONSOR(S): SENATOR(S) SEEKINS                                                                                                  
                                                                                                                                
02/13/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/04       (S)       L&C, JUD                                                                                               
03/04/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/04/04       (S)       Heard & Held                                                                                           
03/04/04       (S)       MINUTE(L&C)                                                                                            
03/09/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/09/04       (S)       Moved SB 323 Out of Committee                                                                          
03/09/04       (S)       MINUTE(L&C)                                                                                            
03/10/04       (S)       L&C RPT 2DP 2NR 1AM                                                                                    
03/10/04       (S)       DP: BUNDE, SEEKINS; NR: DAVIS,                                                                         
03/10/04       (S)       STEVENS G; AM: FRENCH                                                                                  
03/17/04       (S)       JUD AT 8:00 AM BUTROVICH 205                                                                           
03/17/04       (S)       Heard & Held                                                                                           
03/17/04       (S)       MINUTE(JUD)                                                                                            
04/02/04       (S)       JUD AT 8:00 AM BUTROVICH 205                                                                           
04/02/04       (S)       Heard & Held                                                                                           
04/02/04       (S)       MINUTE(JUD)                                                                                            
04/07/04       (S)       JUD AT 8:00 AM BUTROVICH 205                                                                           
04/07/04       (S)       Heard & Held                                                                                           
04/07/04       (S)       MINUTE(JUD)                                                                                            
04/14/04       (S)       JUD AT 5:30 PM BUTROVICH 205                                                                           
04/14/04       (S)       Heard & Held                                                                                           
04/14/04       (S)       MINUTE(JUD)                                                                                            
04/16/04       (S)       JUD RPT CS 2DP 1DNP 1NR       NEW TITLE                                                                
04/16/04       (S)       DP: SEEKINS, OGAN;                                                                                     
04/16/04       (S)       DNP: FRENCH; NR: THERRIAULT                                                                            
04/16/04       (S)       JUD AT 8:00 AM BUTROVICH 205                                                                           
04/16/04       (S)       Moved CSSB 323(JUD) Out of Committee                                                                   
04/16/04       (S)       MINUTE(JUD)                                                                                            
04/21/04       (S)       TRANSMITTED TO (H)                                                                                     
04/21/04       (S)       VERSION: CSSB 323(JUD) AM                                                                              
04/22/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/22/04       (H)       L&C                                                                                                    
04/27/04       (H)       L&C AT 3:30 PM CAPITOL 17                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RICK URION, Director                                                                                                            
Division of Occupational Licensing                                                                                              
Department of Community & Economic Development (DCED)                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Explained HB 555.                                                                                          
                                                                                                                                
DOUG LETCH, Staff                                                                                                               
to Senator Gary Stevens                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB 194 on behalf of the sponsor,                                                                 
Senator Gary Stevens.                                                                                                           
                                                                                                                                
SENATOR RALPH SEEKINS                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of SB 323.                                                                            
                                                                                                                                
JOHN BITNEY, Lobbyist                                                                                                           
Alaska State Homebuilders Association                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of SB 323 as a step in                                                                
the right direction.                                                                                                            
                                                                                                                                
JACK MILLER, Attorney                                                                                                           
State Chamber of Commerce                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During discussion of SB 323, answered                                                                      
questions.                                                                                                                      
                                                                                                                                
STEVE CONSTANTINO, Attorney at Law                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SB 323.                                                                         
                                                                                                                                
PAUL DILLON, Attorney at Law                                                                                                    
Dillon & Findley, PC                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Expressed concerns with SB 323.                                                                            
                                                                                                                                
PAMELA LaBOLLE, President                                                                                                       
Alaska State Chamber of Commerce                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 323.                                                                            
                                                                                                                                
JACK MILLER, Attorney at Law (of counsel)                                                                                       
Eide, Miller & Pate, PC                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on SB 323.                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-48, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR TOM ANDERSON  called the House Labor  and Commerce Standing                                                             
Committee  meeting  to  order  at   3:50  p.m.    Representatives                                                               
Anderson, Dahlstrom,  Lynn, Rokeberg,  and Crawford  were present                                                               
at  the call  to  order.   Representatives  Gatto and  Guttenberg                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
HB 555-OCCUPATIONAL LICENSING FEES AND RECEIPTS                                                                               
                                                                                                                                
CHAIR ANDERSON announced  that the first order  of business would                                                               
be  HOUSE  BILL  NO.  555,   "An  Act  relating  to  occupational                                                               
licensing fees and receipts."                                                                                                   
                                                                                                                                
Number 0085                                                                                                                     
                                                                                                                                
RICK  URION,   Director,  Division  of   Occupational  Licensing,                                                               
Department of  Community & Economic Development  (DCED), reminded                                                               
the committee  that the division  charges fees based on  the cost                                                               
to regulate the profession.   One of the largest costs associated                                                               
with the licensing programs are  disciplinary actions.  Until two                                                               
years  ago the  fines  collected from  disciplinary actions  were                                                               
placed in  the funds used to  offset the costs of  the particular                                                               
profession.  This legislation merely  allows the division to take                                                               
the  fines  collected from  various  disciplinary  actions to  be                                                               
credited  to that  profession  in  order to  offset  the cost  of                                                               
collection.   Mr.  Urion  noted that  the  [collection of  fines]                                                               
averages about $67,000 a year.                                                                                                  
                                                                                                                                
Number 0233                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG recalled that  AS 08.01.065 requires that                                                               
all   professions   be   self-supporting,  and   therefore   this                                                               
legislation  merely  allows  the  fines  to  be  credited  toward                                                               
licensure.   Representative Rokeberg also recalled  that a recent                                                               
Real Estate Commission case went  to major hearings, and inquired                                                               
as to the cost of such.                                                                                                         
                                                                                                                                
MR.  URION said  that  he didn't  know the  exact  cost, but  the                                                               
particular   case  with   the  Real   Estate  Commission   was  a                                                               
considerable sum.   He related  that the fine itself  was $25,000                                                               
and agreed  with Representative  Rokeberg that  the cost  [of the                                                               
disciplinary  process]  could  be  over  $100,000.    In  further                                                               
response  to Representative  Rokeberg, Mr.  Urion confirmed  that                                                               
currently the  fine would have to  be placed in the  general fund                                                               
rather  than go  toward  the licensure  fees,  and therefore  the                                                               
licensees would have  to pick up the cost  of that [disciplinary]                                                               
hearing.                                                                                                                        
                                                                                                                                
Number 0369                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  asked  if  there are  any  boards  or                                                               
commissions in which  the state has a vested  interest in having,                                                               
but can't pay for themselves.  He  also asked if there has been a                                                               
fine  levied  against  a  board or  commission,  which  was  cost                                                               
prohibitive  and couldn't  be passed  on  to the  members of  the                                                               
profession.                                                                                                                     
                                                                                                                                
MR. URION said that the  division's purpose is public protection.                                                               
He  confirmed that  there have  been some  expensive disciplinary                                                               
actions, which have caused licensure fees to double.                                                                            
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  reiterated   his  question  regarding                                                               
whether  expensive   disciplinary  actions  have  been   so  cost                                                               
prohibitive  that the  members of  a  profession couldn't  afford                                                               
[the licensure fees] and left the profession.                                                                                   
                                                                                                                                
MR. URION explained  that the division doesn't  increase the fees                                                               
to a  point at  which folks  decide to  leave the  profession, an                                                               
incremental  approach  over a  period  of  years  is taken.    He                                                               
mentioned the possibility of a  proposal next session to create a                                                               
pool to address those large [fee increases].                                                                                    
                                                                                                                                
CHAIR ANDERSON closed public testimony.                                                                                         
                                                                                                                                
Number 0535                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAHLSTROM moved to report  HB 555 out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no objection, it was so ordered.                                                                            
                                                                                                                                
SB 194-LIQUOR DELIVERED TO HOTELS/CRUISE SHIPS                                                                                
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be CS FOR SENATE BILL  NO. 194(FIN), "An Act authorizing delivery                                                               
of up to  two bottles of distilled spirits and  40 ounces of beer                                                               
to a cruise ship passenger or hotel guest."                                                                                     
                                                                                                                                
Number 0574                                                                                                                     
                                                                                                                                
DOUG  LETCH,   Staff  to  Senator  Gary   Stevens,  Alaska  State                                                               
Legislature,  explained  that  SB  194  adds  statutory  language                                                               
allowing the delivery  to hotel guests or  cruise ship passengers                                                               
of up  to two bottles of  distilled spirits or 40  ounces of beer                                                               
with floral arrangements.  Adding  the distilled spirits and beer                                                               
language  to  the current  statute  will  capture all  consumable                                                               
alcohol products currently for sale.   He noted that for purposes                                                               
of the  Alcoholic Beverage Control  Board (ABC)  regulations beer                                                               
would also  include any malt  beverages.  Mr. Letch  related that                                                               
this  legislation builds  on  HB 69  of  the Twenty-First  Alaska                                                               
State Legislature, which was amended  to allow the delivery of up                                                               
to two bottles  of wine and champagne with  a floral arrangement.                                                               
This  legislation,  SB 194,  would  open  opportunities for  some                                                               
additional  business, particularly  in areas  where cruise  ships                                                               
come.  In response to  Representative Rokeberg, Mr. Letch related                                                               
that  the  40 ounce  amount  was  recommended  by the  ABC  Board                                                               
because it represents  two 20 ounce bottles.  The  ABC Board said                                                               
that  it  would  entertain  the  ability to  set  the  amount  by                                                               
regulations, but  the sponsor  felt that  a gift-sized  bottle of                                                               
beer would be appropriate.                                                                                                      
                                                                                                                                
REPRESENTATIVE DAHLSTROM inquired as  to why this legislation was                                                               
introduced.                                                                                                                     
                                                                                                                                
MR. LETCH reiterated that this  legislation further expands HB 69                                                               
of  the   Twenty-First  Alaska   State  Legislature,   which  was                                                               
introduced because a floral business  in Seward wanted to deliver                                                               
gift baskets with  champagne and wine.  The  same business wanted                                                               
to expand the  aforementioned in order to include  other forms of                                                               
alcohol.   In  further response  to Representative  Dahlstrom, he                                                               
specified that this  would be effective throughout  the state and                                                               
the business would have to obtain  a permit from the ABC Board to                                                               
deliver such gift baskets.                                                                                                      
                                                                                                                                
Number 0957                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD  drew  attention to  the  language  "two                                                               
bottles", which could  refer to one ounce bottles  to half gallon                                                               
bottles.   Therefore,  he asked  whether the  language should  be                                                               
tightened.                                                                                                                      
                                                                                                                                
MR. LETCH offered to research  that because the regulations would                                                               
seem to fall under the ABC Board in terms of volume of alcohol.                                                                 
                                                                                                                                
REPRESENTATIVE  CRAWFORD expressed  concern that  a business,  on                                                               
the  pretense  of  supplying flower  arrangements,  could  supply                                                               
alcohol to  young individuals.   He said  that he didn't  want to                                                               
open the door to abuses.                                                                                                        
                                                                                                                                
MR. LETCH  confirmed that this  legislation is  merely addressing                                                               
delivery  to  hotel and  cruise  ship  guests.   He  opined  that                                                               
Representative  Meyer's  legislation  would  probably  discourage                                                               
much of the concerns of Representative Crawford.                                                                                
                                                                                                                                
REPRESENTATIVE ROKEBERG reiterated his  concern with the 40 ounce                                                               
specification, and  indicated his  size preference of  72 ounces.                                                               
He  questioned  whether the  Alaska  Brewing  Company used  these                                                               
sizes.                                                                                                                          
                                                                                                                                
MR. LETCH  said that he  would entertain any sizes  the committee                                                               
would desire.                                                                                                                   
                                                                                                                                
Number 1241                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO asked  if  this legislation  refers to  one                                                               
delivery per passenger, port, day, et cetera.                                                                                   
                                                                                                                                
MR. LETCH opined that it's  a relatively low volume business with                                                               
one visit per customer.  However,  he offered to review this with                                                               
the ABC Board.                                                                                                                  
                                                                                                                                
REPRESENTATIVE GATTO  related his understanding that  the federal                                                               
government used to allow infants  into the country with a certain                                                               
amount of alcohol.                                                                                                              
                                                                                                                                
Number 1302                                                                                                                     
                                                                                                                                
REPRESENTATIVE   ROKEBERG   moved   that  the   committee   adopt                                                               
Conceptual Amendment 1, as follows:                                                                                             
                                                                                                                                
     Page 1, line 1;                                                                                                            
          Delete "40"                                                                                                         
          Insert "72"                                                                                                           
                                                                                                                                
     Page 1, line 1;                                                                                                            
          Delete "and"                                                                                                        
          Insert "or"                                                                                                           
                                                                                                                                
     Page 1, line 6                                                                                                             
          Delete "and"                                                                                                      
          Insert "or"                                                                                                           
                                                                                                                                
     Page 1, line 7;                                                                                                            
          Delete "40"                                                                                                       
          Insert "72"                                                                                                           
                                                                                                                                
REPRESENTATIVE GATTO moved that  the committee adopt an amendment                                                               
to Conceptual  Amendment 1, such  that the language  "bottles" be                                                               
changed to "liters".   He opined, "Typically  speaking people who                                                               
are buying a special brew or  something, are not buying it by the                                                               
gallon, they're generally  going for a special bottle  of wine or                                                               
something like that."                                                                                                           
                                                                                                                                
REPRESENTATIVE ROKEBERG  commented that  although there  seems to                                                               
be a shift with regard to  the availability of fifths, or liters,                                                               
the predominant measurement of sale in the U.S. is the fifth.                                                                   
                                                                                                                                
REPRESENTATIVE  GATTO   withdrew  his  amendment   to  Conceptual                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
[Conceptual Amendment 1 was treated as adopted.]                                                                                
                                                                                                                                
MR.  LETCH, in  response to  Representative Dahlstrom,  confirmed                                                               
that the House Labor and  Commerce Standing Committee is the only                                                               
committee of referral for SB 194, which has a zero fiscal note.                                                                 
                                                                                                                                
Number 1498                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG  moved  to   report  CSSB  194(FIN),  as                                                               
amended,  out of  committee with  individual recommendations  and                                                               
the accompanying  zero fiscal  note.   There being  no objection,                                                               
HCS CSSB 194(L&C) was reported  from the House Labor and Commerce                                                               
Standing Committee.                                                                                                             
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
HB  94-OVERTIME PAY FOR AIRLINE EMPLOYEES                                                                                     
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be HOUSE  BILL NO. 94, "An  Act exempting flight crew  members of                                                               
certain air carriers from overtime pay requirements."                                                                           
                                                                                                                                
Number 1548                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAHLSTROM moved to adopt  CSHB 94, Version D dated                                                               
4/23/04,  as the  working document.   There  being no  objection,                                                               
Version D was before the committee.                                                                                             
                                                                                                                                
CHAIR ANDERSON highlighted that HB 94  is the companion to SB 54,                                                               
which exempted flight  crews from the [Alaska] Wage  and Hour Act                                                               
per the  request of  flight crews.   Last year  SB 54  passed the                                                               
legislature with a  unanimous vote.  He explained  that Version D                                                               
of HB  94 removes the language  that was already passed  in SB 54                                                               
and inserts language to establish the  effective date of SB 54 as                                                               
January 1,  2000.   The aforementioned  will preserve  many small                                                               
airlines in  rural Alaska from  costly legal  action.  This  is a                                                               
major  policy  call and  Version  D  would merely  establish  the                                                               
effective date  of the  policy.  Chair  Anderson noted  that this                                                               
legislation was  brought forward upon  the request of  some rural                                                               
airlines.                                                                                                                       
                                                                                                                                
Number 1633                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD related his  understanding that the rural                                                               
airlines wanted this  policy to be retroactive  because there was                                                               
a class action  lawsuit that was won by an  employee.  Therefore,                                                               
passage   of  [Version   D]  would   make  the   result  of   the                                                               
aforementioned lawsuit moot.                                                                                                    
                                                                                                                                
CHAIR  ANDERSON  said  he  couldn't   answer  the  question,  and                                                               
therefore he  said he  would have  one of  the requestors  of the                                                               
legislation  speak  to Representative  Crawford's  understanding.                                                               
He announced  that CSHB 94 would  be held over.   Chair Anderson,                                                               
in response to Representative Dahlstrom,  explained that in SB 54                                                               
in the Twenty-First Alaska State  Legislature, the effective date                                                               
wasn't included.                                                                                                                
                                                                                                                                
REPRESENTATIVE CRAWFORD  said he  believes that in  SB 54  in the                                                               
Twenty-First  Alaska State  Legislature  there  was an  immediate                                                               
effective date and  the decision was not to  make the legislation                                                               
retroactive.                                                                                                                    
                                                                                                                                
[HB 94 was held over.]                                                                                                          
                                                                                                                                
SB 323-WORKERS COMPENSATION AND CONTRACTORS                                                                                   
                                                                                                                                
[Contains discussion of HB 311.]                                                                                                
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be CS  FOR SENATE  BILL NO.  323(JUD) am, "An  Act relating  to a                                                               
subcontractor's, contractor's, and  project owner's liability for                                                               
workers'  compensation,  to  sole  proprietors  and  partnerships                                                               
without employees,  and managers  or managing members  of limited                                                               
liability companies,  and to the  exclusiveness of  liability for                                                               
workers' compensation."                                                                                                         
                                                                                                                                
Number 1768                                                                                                                     
                                                                                                                                
SENATOR  RALPH SEEKINS,  Alaska State  Legislature, spoke  as the                                                               
sponsor of  SB 323.   He paraphrased  from the  following written                                                               
sponsor statement [original punctuation provided]:                                                                              
                                                                                                                                
     Senate Bill  323 revises the Workers'  Compensation Act                                                                    
     as  it  applies   to  subcontractors,  contractors  and                                                                    
     project owners.   The  two principal  modifications are                                                                    
     as follows:                                                                                                                
                                                                                                                                
          1. Responsibility for payment of compensation is                                                                      
          extended up the chain of contracts to include                                                                         
          project owners; and,                                                                                                  
                                                                                                                                
          2. Injured parties in receipt of benefits under                                                                       
          the Workers' Compensation Act would be barred                                                                         
       from "double dipping" via a tort liability claim.                                                                        
                                                                                                                                
     Under   AS  23.30.045(a),   an  injured   employee  has                                                                    
     recourse  for   workers'  compensation   benefits  only                                                                    
     against his  immediate employer and if  the employer is                                                                    
     a  subcontractor, against  the contractor  who retained                                                                    
     the  subcontractor.   The  proposed legislation  allows                                                                    
     recourse  for  the  payment  of  compensation  benefits                                                                    
     against  project owners,  as  well  as contractors  and                                                                    
     subcontractors.                                                                                                            
                                                                                                                                
     This extension  of the rights  of injured  employees is                                                                    
     sensible  inasmuch   as  the   project  owner   is  the                                                                    
     beneficial user  of the work  performed by  the injured                                                                    
     employee.   It  should be  noted that  a project  owner                                                                    
     does  not  include  individuals who  have  engaged  the                                                                    
     services  of   contractors  to  build  or   renovate  a                                                                    
     residential home.                                                                                                          
                                                                                                                                
     Additionally,  the  proposed  legislation  extends  the                                                                    
     exclusivity  protection set  forth in  AS 23.30.055  to                                                                    
     all  parties in  the  contracting chain  relating to  a                                                                    
     project.   This  includes the  employer of  the injured                                                                    
     employee, and those parties, which  are upstream in the                                                                    
     chain  of contracts  from the  employer of  the injured                                                                    
     employee.                                                                                                                  
                                                                                                                                
     It  is  important to  note  that  sole proprietors  and                                                                    
     members of  a partnership or Limited  Liability Company                                                                    
     will  not fall  within the  scope of  the Act  provided                                                                    
     upstream   contractors  are   held  harmless,   through                                                                    
     written   agreement,  from   payment  of   compensation                                                                    
     benefits and  claims of tort liability.   However, this                                                                    
     only applies where these entities have no employees.                                                                       
                                                                                                                                
     Senate Bill  323 encourages parties participating  in a                                                                    
     project   to  identify   and   enforce  strict   safety                                                                    
     standards for the benefit of  all employees rather than                                                                    
     deflecting responsibility through  the use of indemnity                                                                    
     agreements  as is  common practice  currently.   At the                                                                    
     same time,  it ensures  that injured  employees receive                                                                    
     all  benefits  available   under  the  Alaska  Workers'                                                                    
     Compensation Act.                                                                                                          
                                                                                                                                
SENATOR SEEKINS related  an example in which  a subcontractor has                                                               
an  injured employee.   In  this example  there was  an indemnity                                                               
agreement in  order for the  subcontractor to hire  the employee.                                                               
Furthermore,  there  was  an indemnity  agreement  [between]  the                                                               
project owner and  the contractor.  Therefore,  the sole recourse                                                               
for an  injured employee is  workers' compensation  insurance and                                                               
the [employee's] attorney  would sue the project  owner.  Senator                                                               
Seekins explained, "The  indemnification agreement basically said                                                               
... now  the guy who's the  sole remedy acted in  their favor ...                                                               
with the subcontractor now had to  defend against a suit that was                                                               
taken against  the project owner and  if there was a  judgment to                                                               
pay it.  So,  they never did have any guarantee  of a sole remedy                                                               
because of  the common  practice of  indemnification agreements."                                                               
Therefore, this legislation specifies  that if project owners are                                                               
liable  in  case  the contractor  or  subcontractor  didn't  have                                                               
workers'  compensation  insurance  on   the  employee,  then  the                                                               
exclusive remedy extends all the way up the chain.                                                                              
                                                                                                                                
Number 1975                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG turned  attention to  the definition  of                                                               
"project  owner" on  page  2, lines  9-11,  which he  interpreted                                                               
could  refer to  a small  group of  investors.   He asked  if the                                                               
sponsor  is suggesting  that  this group  of  people should  have                                                               
workers' compensation if there are no employees.                                                                                
                                                                                                                                
SENATOR SEEKINS stated  that if the project  owner hasn't ensured                                                               
that his  or her contractor has  workers' compensation insurance,                                                               
then the project owner still  bears the responsibility of payment                                                               
if the  contractor doesn't have workers'  compensation insurance.                                                               
He clarified, "I'm  not saying that they have to  buy the policy,                                                               
but they have  to secure the payment to the  injured employee if,                                                               
for some  reason, that contractor  or subcontractor did  not have                                                               
that policy.  This is in exchange  for their not being able to be                                                               
sued  under  the double  dipping  scenario  that I  talked  about                                                               
earlier."    In  further  response  to  Representative  Rokeberg,                                                               
Senator Seekins  provided an  example.  He  posed a  situation in                                                               
which British Petroleum (BP) hires  a drilling company to drill a                                                               
well and the drilling company  has a subcontractor that works for                                                               
it.  In order to obtain  the contract with BP, an indemnification                                                               
agreement holding  [BP] harmless for any  claims downstream would                                                               
have to be signed.  In this  situation if one of the employees of                                                               
the  subcontractor is  hurt, the  employee's exclusive  remedy is                                                               
workers'  compensation.   If for  some  reason the  subcontractor                                                               
doesn't have  the coverage  and the  contractor hasn't  made sure                                                               
that the  subcontractor provided  the coverage,  the contractor's                                                               
workers' compensation coverage would  provide the coverage or the                                                               
contractor  would have  to secure  the payment  for it.   If  the                                                               
contractor  doesn't have  workers'  compensation insurance,  then                                                               
the project owner bears the responsibility.                                                                                     
                                                                                                                                
SENATOR SEEKINS posed the following:                                                                                            
                                                                                                                                
     If,  for  an example,  now  ...  my employee  is  hurt.                                                                    
     That's the  exclusive remedy against me  and he decides                                                                    
     that's  not good  enough  for me  ...  he sues  British                                                                    
     Petroleum for  providing an unsafe  workplace.   In the                                                                    
     defense against that you ...  are required to indemnify                                                                    
     them  in  that  defense   and  you've  required  me  to                                                                    
     indemnify  that expense.    So, the  very  person --  I                                                                    
     being the one  who has an exclusive  remedy now carries                                                                    
     the  expense  of  the  defense.     And  if  there's  a                                                                    
     judgment,  has  to  pay the  judgment  because  of  the                                                                    
     indemnification agreements  that exist.   So,  ... [the                                                                    
     legislation] says if BP makes  sure that you and I have                                                                    
     workers'  compensation insurance  and  that covers  the                                                                    
     employee, they  can't be sued  farther up because  if I                                                                    
     didn't have  it, you  didn't have  it, they  [BP] would                                                                    
     have to  provide it.   So, there's  a trade off  up and                                                                    
     down the line.                                                                                                             
                                                                                                                                
SENATOR  SEEKINS  related  that  as  a  result  of  the  [current                                                               
situation] in  which the responsibility moves  up stream, project                                                               
owners  don't want  to  know  about the  safety  procedures of  a                                                               
project  because  knowledge  of  it   means  a  higher  level  of                                                               
responsibility.  Therefore, this  legislation will help provide a                                                               
safer work environment throughout the chain, he opined.                                                                         
                                                                                                                                
Number 2170                                                                                                                     
                                                                                                                                
CHAIR ANDERSON  turned attention to  an e-mail from  Paul Dillon,                                                               
which relates the following [original punctuation provided]:                                                                    
                                                                                                                                
     3) The killer aspect of 323  is that it trades away the                                                                    
     employees  right to  sue responsible  third parties  in                                                                    
     exchange  for nothing,  absolutely nothing  because the                                                                    
     injured employee is already  protected the workers comp                                                                    
     (by state law,  See 1 above) ... what  this bill really                                                                    
     is a  wolf in sheep's  clothing, because it  extends to                                                                    
     all contractors  and the project owner  the exclusivity                                                                    
     of workers  comp to  them.   Meaning that  the employee                                                                    
     cannot sue them even though they are at fault!                                                                             
                                                                                                                                
CHAIR  ANDERSON  surmised  that Senator  Seekins  sponsored  this                                                               
legislation in order to provide  clear and concise responsibility                                                               
for workers' compensation.                                                                                                      
                                                                                                                                
SENATOR  SEEKINS   said  that  Mr.  Dillon's   interpretation  is                                                               
inaccurate.   He  further said  that there  are attorneys  around                                                               
that  don't  like  this legislation  because  it  eliminates  the                                                               
opportunity for  double dipping.   "In my opinion, when  there is                                                               
an exclusive remedy that makes  employer-employee whole ... under                                                               
state law, ... that person  isn't trading anything away when they                                                               
say now I can go back  against somebody else for more money after                                                               
I  have  already been  taken  care  of  under the  provisions  of                                                               
workers' comp," he  opined.  This legislation  merely removes the                                                               
ability to accept  an exclusive remedy and  then force additional                                                               
settlement on someone else.                                                                                                     
                                                                                                                                
Number 2257                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  opined that this legislation  "turns the                                                               
system  on its  ear."   He related  his understanding  that if  a                                                               
third party is  responsible for negligence and  there's a further                                                               
suit,   beyond  workers'   compensation,  there   is  a   payback                                                               
provision.  Therefore, workers' compensation  has to be paid back                                                               
for any other judgment that's awarded.                                                                                          
                                                                                                                                
SENATOR SEEKINS said that he wasn't aware of any such provision.                                                                
                                                                                                                                
REPRESENTATIVE  CRAWFORD said  he  believes the  law includes  [a                                                               
payback provision].                                                                                                             
                                                                                                                                
SENATOR  SEEKINS acknowledged  that there  are subrogation  laws.                                                               
However, he wasn't  aware of a workers'  compensation insurer who                                                               
has   pursued  a   claim  against   someone   up  stream,   under                                                               
subrogation.   Senator Seekins said  that he wasn't aware  that a                                                               
contractor would  have to  pay back the  injuries sustained  by a                                                               
subcontractor unless  it could  be shown [that  it was  an injury                                                               
outside  of workers'  compensation].    This legislation  doesn't                                                               
exempt  any  injuries other  than  those  covered under  workers'                                                               
compensation.  The legislation  doesn't address product liability                                                               
or extreme negligence.                                                                                                          
                                                                                                                                
Number 2367                                                                                                                     
                                                                                                                                
CHAIR ANDERSON highlighted the  legislation he and Representative                                                               
Crawford   had  sponsored,   HB   311,  which   ensured  that   a                                                               
subcontractor  secures payment  for the  compensation payable  to                                                               
the subcontractor's  employees.  Therefore, if  the subcontractor                                                               
fails to  secure payment for  the compensation payable to  his or                                                               
her employees,  the general  contractor would  be liable  for the                                                               
payment.  Chair  Anderson said that he didn't believe  HB 311 and                                                               
SB 323  necessarily cross because  he believes that SB  323 takes                                                               
[HB  311]  one  step  further by  extending  protection  for  the                                                               
workers ... [tape changes mid-sentence].                                                                                        
                                                                                                                                
TAPE 04-48, SIDE B                                                                                                            
                                                                                                                                
CHAIR  ANDERSON  related  his understanding  that  SB  323  would                                                               
extend exclusivity of liability protection  to all the parties in                                                               
the   chain.      Those  injured   parties   receiving   workers'                                                               
compensation benefits would be precluded  from double dipping via                                                               
the  tort claim  liability.   Chair Anderson  reiterated that  he                                                               
didn't believe HB 311 and SB 323  cross, in fact, he said that he                                                               
tended to agree  with Senator Seekins "that it has  to be broader                                                               
and it has to make sure the double dipping effect isn't there."                                                                 
                                                                                                                                
Number 2346                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD related his  personal experience in which                                                               
his company was  hired as a subcontractor to build  a barn at the                                                               
Palmer State  Fair.  The  general contractor also hired  a number                                                               
of employees  whom they  made obtain  a contractor's  license and                                                               
thus became sole  proprietor's of a small company.   The [general                                                               
contractor]  coerced the  aforementioned employees  into becoming                                                               
subcontractors so that [the general  contractor] wouldn't have to                                                               
have   workers'  compensation   insurance.     Therefore,   these                                                               
employees were "much  cheaper" than other companies  were able to                                                               
do.    Had  SB  323  been in  effect,  he  predicted  that  these                                                               
individuals  would've   been  coerced   into  signing   a  waiver                                                               
eliminating   any  liability   [on  the   part  of   the  general                                                               
contractor].  This  legislation is leaving a large  loophole.  He                                                               
said that  with HB 311  he had hoped  to level the  playing field                                                               
and   close  the   loophole  so   that  all   subcontractors  are                                                               
responsible for having workers' compensation.                                                                                   
                                                                                                                                
SENATOR SEEKINS emphasized that those  who commit fraud should be                                                               
handled per the  statutes.  He said that  [with this legislation]                                                               
he's  not  talking  about  an ironworker,  but  rather  a  window                                                               
washer, in which he or she  is the only employee, who chooses not                                                               
to  cover   himself  or   herself  with   workers'  compensation.                                                               
However,  by  law  if  the  aforementioned  window  washer  hires                                                               
another  window washer,  workers' compensation  must be  carried.                                                               
Currently,  by  law  a  contractor   must  ensure  that  workers'                                                               
compensation is  provided for  the subcontractor's  employees and                                                               
this  legislation is  extended  to the  project  owner.   Senator                                                               
Seekins noted that he has 120  employees of which 119 are covered                                                               
by workers' compensation, the one  not covered is himself who has                                                               
the exclusive remedy  against himself.  With regard  to fraud, he                                                               
noted  that his  workers' compensation  insurance company  audits                                                               
him  annually.    There  are  some checks  and  balances  in  the                                                               
industry to avoid [fraud].                                                                                                      
                                                                                                                                
Number 2104                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  explained that  the type of  coercion to                                                               
which he was  referring is one in which employees  are being told                                                               
by an [employer] that he or  she can't afford to hire them unless                                                               
the individual  obtains a business  license.   The aforementioned                                                               
happens quite  often.  He agreed  that once someone is  hurt, the                                                               
workers' compensation claim requires  the [general contractor] to                                                               
go back and  pay the premiums for that individual  who was really                                                               
an  employee,  although referred  to  as  a subcontractor.    The                                                               
loophole needs to be closed, and SB 323 is the place to do it.                                                                  
                                                                                                                                
SENATOR SEEKINS clarified that the intent  of SB 323 is to ensure                                                               
that those on the job  are covered by workers' compensation while                                                               
continuing the  current law allowing  sole proprietors  to exempt                                                               
themselves and any waiving of that would be done in writing.                                                                    
                                                                                                                                
REPRESENTATIVE CRAWFORD  commented that  as long as  the loophole                                                               
allowing   the  sole   proprietors  to   waive  having   workers'                                                               
compensation insurance exists, it will be  used to get a job done                                                               
cheaper.   It's  wrong  to  take [sole  proprietors]  out of  the                                                               
liability chain, he said.                                                                                                       
                                                                                                                                
REPRESENTATIVE ROKEBERG  referred to  Section 4,  which clarifies                                                               
the  responsibility of  limited liability  companies (LLCs),  and                                                               
asked  if this  legislation  places  LLCs on  the  same level  of                                                               
enforcement as  a sole  proprietor, member  of a  partnership, or                                                               
members of  a partnership.  Therefore,  would an LLC not  have to                                                               
have  workers'   compensation  if   the  LLC  doesn't   have  any                                                               
employees, he asked.                                                                                                            
                                                                                                                                
SENATOR SEEKINS replied  yes, if one is actually a  member of the                                                               
LLC.                                                                                                                            
                                                                                                                                
Number 1931                                                                                                                     
                                                                                                                                
JOHN  BITNEY, Lobbyist,  Alaska  State Homebuilders  Association,                                                               
reminded the  committee that the  association was in favor  of HB
311,  which   addressed  sole  proprietors   such  that   a  sole                                                               
proprietor  could be  retroactively  charged a  premium for  risk                                                               
incurred  during  the  period   in  which  workers'  compensation                                                               
insurance  wasn't carried.   The  preferred solution  is to  have                                                               
sole   proprietors   carry   workers'   compensation   insurance.                                                               
However, there seem to be some  drafting problems with the way in                                                               
which  HB 311  approached it.   Mr.  Bitney related,  "We are  in                                                               
support of  ... SB 323  as a step in  the right direction  ... it                                                               
doesn't go as far  as we would like it to go  ...."  The question                                                               
is how the carriers will view  this legislation and the extent to                                                               
which  the carriers  believe  this will  alleviate  some risk  on                                                               
their part when a claim is filed.                                                                                               
                                                                                                                                
REPRESENTATIVE  CRAWFORD  inquired as  to  how  the Alaska  State                                                               
Homebuilders Association  views the ability to  waive one's right                                                               
to workers' compensation.                                                                                                       
                                                                                                                                
MR. BITNEY  clarified that  this is  a matter  of how  the courts                                                               
will view this when the claim is  filed.  Until the courts make a                                                               
ruling, he wasn't sure whether  the carriers would feel that this                                                               
legislation alleviates any risk.                                                                                                
                                                                                                                                
REPRESENTATIVE  ROKEBERG   related  his  understanding   that  an                                                               
individual hiring  a homebuilder  can't be held  responsible [for                                                               
workers' compensation].                                                                                                         
                                                                                                                                
MR.  BITNEY related  his understanding  that a  project owner  is                                                               
shielded  from  a  general  liability   claim  after  a  workers'                                                               
compensation claim  has been filed.   However, he  didn't believe                                                               
the   legislation  shields   a   project   owner  from   workers'                                                               
compensation  issues  any more  than  current  law.   Mr.  Bitney                                                               
agreed  with  Representative  Rokeberg  that when  one  builds  a                                                               
house, the  project owner  is the contractor  not the  people who                                                               
hire the contractor.                                                                                                            
                                                                                                                                
Number 1731                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG  asked whether  that's always  the case                                                               
because often  in residential development,  there wouldn't  be an                                                               
owner  until the  home  is built.   Many  homes  are built  under                                                               
contract of a homeowner, and  therefore he questioned whether the                                                               
homeowner would be liable for later claims.                                                                                     
                                                                                                                                
MR. BITNEY  said that he  didn't know how this  legislation would                                                               
address a project owner on a residential project.                                                                               
                                                                                                                                
SENATOR  SEEKINS directed  attention  to the  definitions of  the                                                               
legislation, which don't include  "homeowner".  Currently, no law                                                               
holds a homeowner responsible for workers' compensation.                                                                        
                                                                                                                                
JACK MILLER, Attorney,  State Chamber of Commerce,  stated that a                                                               
residential  homeowner,   not  as   a  business,  who   hires  an                                                               
individual  to do  renovations  in  his or  her  home retains  no                                                               
liability under the current law or this proposed legislation.                                                                   
                                                                                                                                
Number 1596                                                                                                                     
                                                                                                                                
STEVE  CONSTANTINO, Attorney  at Law,  noted that  he has  been a                                                               
hearing  officer  for  the Alaska  Workers'  Compensation  Board,                                                               
although  he   currently  practices  workers'   compensation  law                                                               
representing  injured   workers.     Mr.  Constantino   spoke  in                                                               
opposition  to  SB  323  which  is  based  on  the  rationale  of                                                               
protecting  employers   from  double  dipping   employees,  which                                                               
doesn't occur.   In an  example in which  a worker is  injured by                                                               
the  negligence  or  fault  of  a third  party,  in  addition  to                                                               
workers'  compensation  benefits, that  employee  or  his or  her                                                               
insurer  have  the right  to  file  suit against  the  wrongdoer.                                                               
However,  should  the  injured  worker or  his  or  her  workers'                                                               
compensation insurer file suit against  the wrongdoer, there is a                                                               
lien by the workers' compensation  insurer for the full amount of                                                               
all benefits  paid to the  injured worker.   In other  words, the                                                               
workers' compensation insurer  is repaid all the  benefits by the                                                               
wrongdoer  before the  injured worker  receives any  damages from                                                               
the  wrongdoer, the  project  owner or  general  contractor.   He                                                               
specified  that  the aforementioned  is  found  in AS  23.30.015,                                                               
which has  been part of  the workers' compensation  statute since                                                               
1955.   He  reiterated that  there is  no possibility  for double                                                               
dipping.    This legislation  provides  a  special exemption  for                                                               
project owners  and prime  contractors in  order to  protect them                                                               
against their own negligence.   By extending the exclusive remedy                                                               
provision, the  project owners and  prime contractors  would only                                                               
be  liable  for the  minimal  damages  allowed under  the  Alaska                                                               
Workers' Compensation  Act.  Therefore, the  injured worker would                                                               
receive  nothing  for  pain  and  suffering  or  future  loss  of                                                               
benefits.                                                                                                                       
                                                                                                                                
MR.  CONSTANTINO said  the  notion that  SB  323 would  encourage                                                               
safety  on the  part of  project owners  or prime  contractors is                                                               
fallacious.   Under  the Workers'  Compensation Act  there is  no                                                               
deterrent for  an employer  who violates  safety standards  or is                                                               
negligent.   Drawing  from his  time practicing  in the  workers'                                                               
compensation  area,  he  opined  that  workers'  compensation  is                                                               
protection against liability and  paying damages, while safety is                                                               
encouraged  due  to  the  imposition of  damages  and  the  risks                                                               
entailed.  Mr.  Constantino highlighted that in  the Alaska State                                                               
Chamber  of Commerce's  support for  SB 322,  the Moloso  case, a                                                             
1982 Alaska  Supreme Court  case, is  cited.   In that  case, the                                                               
state  wanted  a  highway  constructed  that  required  dangerous                                                               
excavation.  The state retained many  experts to advise it how to                                                               
do this construction  safely and responsibly.   After the project                                                               
was bid,  the prime contractor   presented a change  order saying                                                               
that the prime  contractor had its own experts who  said that the                                                               
project could be  done quicker and cheaper if  the project wasn't                                                               
as elaborate or  safe.  The state agreed to  the change order and                                                               
took  one half  of  the savings  predicted.   Mr.  Moloso, a  CAT                                                               
driver, was the first one on  the site and the slope subsided, as                                                               
the state's experts  predicted, and Mr. Moloso was  killed.  Were                                                               
this proposed  legislation in effect  back in 1982,  Mr. Moloso's                                                               
widow and children  wouldn't be allowed to sue  the contractor or                                                               
the  project  owner  and  would   only  be  limited  to  workers'                                                               
compensation.    Therefore,  the  widow  would  have  received  a                                                               
maximum of  12 years of  compensation benefits for  her husband's                                                               
wrongful death.   Mr. Constantino opined  that the aforementioned                                                               
isn't fair  nor a good public  policy.  Those who,  through their                                                               
own negligence,  injure others should  be held responsible  for a                                                               
reasonable amount of  damages, not the limited  amount of damages                                                               
provided under workers'  compensation, which is the  product of a                                                               
political compromise between employers and employees.                                                                           
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  pointed  out  that  this  legislation                                                               
allows  the subcontractor  to waive  workers'  compensation by  a                                                               
written  agreement.   If the  aforementioned is  the case  and an                                                               
accident occurs, would there be any recourse, he asked.                                                                         
                                                                                                                                
MR.  CONSTANTINO said  that  it isn't  his  understanding of  the                                                               
legislation.  He related that  it's against public policy and the                                                               
law to  waive workers' compensation.   Every employer,  save sole                                                               
proprietors,  general partnerships,  and  some  LLCs, of  workers                                                               
must  have workers'  compensation and  it can't  be waived.   Mr.                                                               
Constantino  recalled that  the  sponsor discussed  the need  for                                                               
this legislation  in terms of indemnification  agreements between                                                               
contractors,     subcontractors,      and     project     owners.                                                               
Indemnification agreements shift  the risks as they  exist in the                                                               
law.  Mr. Constantino said, "I  think it is inappropriate for our                                                               
legislature to  be distorting public  policy and the  general law                                                               
to accommodate  the private agreements  between the  parties that                                                               
the law has indicated should  be responsible for the consequences                                                               
of their own actions."                                                                                                          
                                                                                                                                
Number 1213                                                                                                                     
                                                                                                                                
PAUL   DILLON,   Attorney  at   Law,   Dillon   &  Findley,   PC,                                                               
characterized  Mr.  Constantino's   testimony  as  correct  legal                                                               
analysis.   He  highlighted AS  23.30.015 and  AS 09.17.080.   He                                                               
said that  Senator Seekins'  statement that  SB 323  could affect                                                               
the livelihood  of attorneys is inappropriate.   This legislation                                                               
waives  a fundamental  right  of those  who work  in  any of  the                                                               
building trades, construction,  or work on the North  Slope.  Mr.                                                               
Dillon  stated  that there  are  indications  that the  insurance                                                               
industry through the  Alaska Chamber of Commerce  is driving this                                                               
legislation.  This legislation, he  opined, is an effort to cloak                                                               
business   with   the    exclusivity   provisions   of   workers'                                                               
compensation  and doesn't  protect employees.   The  existing law                                                               
protects  employees  to  the extent  that  workers'  compensation                                                               
protection is  required.  He  posed an  example in which  his son                                                               
worked in a  subcontractor arrangement on the North  Slope and BP                                                               
is the owner.  As the result  of the negligence of an employee of                                                               
BP,  his  son  is  injured,   the  workers'  compensation  remedy                                                               
wouldn't  be satisfactory.   With  regard to  the double  dipping                                                               
claim, Mr. Dillon  emphasized that the law is clear  and has been                                                               
interpreted on  numerous occasions  by the Alaska  Supreme Court.                                                               
Furthermore, it's settled law.                                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG surmised that  Mr. Dillon was saying that                                                               
it isn't within  the legislature's purview to look  at the public                                                               
policy  of  whether  workers' compensation  exclusivity  remedies                                                               
should be  a barrier to  any tort causes  of action for  the same                                                               
injury event.   However, he indicated that  the aforementioned is                                                               
the fundamental  reason for workers'  compensation benefits:   to                                                               
limit   those  liabilities   and  ensure   that  the   worker  is                                                               
compensated and cared for due to a specific accident.                                                                           
                                                                                                                                
MR. DILLON  clarified that workers' compensation  is an exclusive                                                               
remedy  between the  employer  and the  employee  and it  doesn't                                                               
impact  the remedies  of  the  employee with  regard  to a  third                                                               
party.   For  example, assuming  a situation  in which  there was                                                               
negligence on the  part of a BP employee who  injured an employee                                                               
of  a subcontractor  of BP,  workers' compensation  wouldn't come                                                               
into play  with the rights  and remedies [of  the subcontractor's                                                               
employee] in suing BP.                                                                                                          
                                                                                                                                
REPRESENTATIVE  ROKEBERG questioned  whether the  indemnification                                                               
and  subrogation  provisions  of  contracts  typically  make  the                                                               
claims  fall back  on the  level of  the contracting  chain under                                                               
which [the employee] is.                                                                                                        
                                                                                                                                
MR. DILLON reiterated that there  would be no double dipping with                                                               
regard  to  the  injured  employee.   The  workers'  compensation                                                               
carrier  is paid  in  full.   Furthermore,  the apportionment  of                                                               
damages  is divided  on  the  basis of  fault.    If the  parties                                                               
privately contract to exchange or  indemnify each other, that's a                                                               
matter  of contracting.   In  further response  to Representative                                                               
Rokeberg, he  agreed that the  aforementioned is  common practice                                                               
in most of the construction fields.                                                                                             
                                                                                                                                
Number 0796                                                                                                                     
                                                                                                                                
PAMELA  LaBOLLE, President,  Alaska  State  Chamber of  Commerce,                                                               
announced the  Alaska State Chamber  of Commerce's support  of SB
323, the  issue of which  was brought to the  chamber's attention                                                               
by its members.  Members are  concerned that the very idea of the                                                               
workers' compensation system is that  an employee has the ability                                                               
to have  his or her injuries  covered and can [also  seek remedy]                                                               
with  those connected  with the  project who  weren't responsible                                                               
for the injury or the project's safety.                                                                                         
                                                                                                                                
JACK MILLER, Attorney  at Law (of counsel), Eide,  Miller & Pate,                                                               
PC, representing the Alaska State  Chamber of Commerce, turned to                                                               
the comment that this legislation  addresses a public policy that                                                               
the  legislature shouldn't  address  and said  such sentiment  is                                                               
patently  wrong.   The current  public policy  specifies that  an                                                               
injured employee's  exclusive remedy against his  or her employer                                                               
is workers' compensation benefits.   This legislation extends the                                                               
aforementioned  public  policy  to  enhance  the  guarantee  that                                                               
injured   workers  have   of  collecting   workers'  compensation                                                               
benefits  all the  way  up  the line  to  the  project owner  and                                                               
extends the  exclusivity protection  against tort  claims through                                                               
the  project  owner.   Therefore,  the  guarantee  of  recovering                                                               
workers'  compensation  benefits  now   goes  beyond  the  direct                                                               
employer,  the contactor,  and  all  the way  up  to the  project                                                               
owners.   [This legislation] enhances the  guarantee that injured                                                               
workers will recover workers' compensation  benefits.  The entire                                                               
workers' compensation (indisc.)  the acknowledgement are entitled                                                               
to  reasonable compensation  for  their injuries  and the  entire                                                               
workers'  compensation benefits  system is  geared toward  making                                                               
the individual whole based on  the injury.  Furthermore, workers'                                                               
compensation treats  work-related injuries as  compensable, which                                                               
goes  all  the  way  up  the  contracting  chain  under  SB  323,                                                               
regardless of anyone's negligence or  fault in causing the injury                                                               
along with the enhanced financial guarantee.                                                                                    
                                                                                                                                
MR. MILLER  turned to the Moloso  case.  He said  that because of                                                             
the Moloso  case and  other similar cases,  the only  defense for                                                             
project owners and  contractors in the state to a  tort claim for                                                               
a work-related injury is that  the contractor or subcontractor is                                                               
an   independent  contractor.     However,   to  establish   that                                                               
independent contractor  defense, a  project owner  and contractor                                                               
can't retain control  of any part of the work,  which is based on                                                               
the  last  20 years  of  Alaska  Supreme  Court decisions.    The                                                               
aforementioned   potential  tort   liability   has  resulted   in                                                               
companies  refusing to  become involved  in efforts  to integrate                                                               
safety programs.   Therefore, Mr.  Miller opined that  passage of                                                               
SB 323  would allow project  owners and contractors  to integrate                                                               
and coordinate  their safety programs.   Mr. Miller  concluded by                                                               
specifying that  SB 323  is the  most important  legislation that                                                               
the  legislature could  pass in  an effort  to enhance  safety in                                                               
Alaska's  workplace and  greatly reduce  the number  work-related                                                               
injuries.   Furthermore, SB 323  will enhance the  guarantee that                                                               
workers  injured on  the job  will be  able to  recover the  full                                                               
benefits of the Workers' Compensation Act.                                                                                      
                                                                                                                                
Number 0314                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  inquired as  to Mr.  Miller's view  of a                                                               
subcontractor's ability,  under SB 323, to  claim he or she  is a                                                               
sole proprietor and  opt out of workers'  compensation by signing                                                               
a waiver that he or she has no  right to recover from any part of                                                               
the chain.   He questioned why  such a loophole would  be left in                                                               
the system.                                                                                                                     
                                                                                                                                
MR. MILLER characterized  this as a policy decision.   He related                                                               
that  under  current  law  a  disreputable  company  that  forced                                                               
individuals  to  obtain  contracting  licenses  and  work  for  a                                                               
company  without  workers'   compensation  benefits  can't  avoid                                                               
existing employment  laws.  If  an individual is hired  and given                                                               
the tools to do his or her work  and directed in his or her work,                                                               
that  individual is  an employee  not a  contractor.   In such  a                                                               
situation  the  company  can't   ignore  its  obligations  as  an                                                               
employer.    Therefore,  existing laws  protect  individuals  and                                                               
provide a remedy against disreputable or dishonest employers.                                                                   
                                                                                                                                
MR.  MILLER  highlighted   that  there  are  a   number  of  sole                                                               
proprietors  that work  in the  home building  association.   For                                                               
example,  one individual  does a  specific job,  such as  build a                                                               
deck or  lay tile.   If  those members  of ABC  - Alaska  have to                                                               
obtain workers'  compensation for  themselves, they  won't remain                                                               
competitive  and  won't  be  able  to  continue  to  work.    The                                                               
aforementioned  is why  sole proprietors  offered  the option  to                                                               
sign a waiver.   Mr. Miller opined that the  current law protects                                                               
both  the  sole proprietor  that  has  to  go  out and  obtain  a                                                               
contracting license as well as [tape ends midspeech].                                                                           
                                                                                                                                
TAPE 04-49, SIDE A                                                                                                            
                                                                                                                                
MR.  MILLER opined  that this  legislation  also recognizes  that                                                               
honest  sole  proprietors without  employees  should  be able  to                                                               
continue working and be competitive in Alaska industry.                                                                         
                                                                                                                                
Number 0046                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  inquired as to  the type of  coercion in                                                               
which two  virtually identical contractors  bid on the  same job.                                                               
One contractor bids $15,000 for  the job and another bids $20,000                                                               
for the  job.  One  of the contractors has  workers' compensation                                                               
and the other  doesn't.  The aforementioned,  not having workers'                                                               
compensation [and  its associated  costs], is  a way  to undercut                                                               
the market.   "As long  as you ...  leave this loophole  in there                                                               
for  people to  ... not  have workers'  comp, then  it keeps  the                                                               
playing field unlevel," he remarked.                                                                                            
                                                                                                                                
MR.  MILLER said  that he  isn't aware  that such  coercion is  a                                                               
major  issue,  and  this  is after  discussing  the  matter  with                                                               
hundreds of businesses  throughout the state.   Under the current                                                               
law, company  owners, including  sole proprietors,  partners, and                                                               
owner/shareholders  of  corporations,  are  considered  employers                                                               
under the  Alaska Workers' Compensation  Act unless they  opt out                                                               
of coverage  under the Act.   Therefore, he didn't see  a need to                                                               
overhaul  that  entire  system  because he  didn't  see  a  major                                                               
problem.   Again,  if  there  is coercion,  fraud,  or an  actual                                                               
employment relationship, the current  law provides good remedies.                                                               
This legislation doesn't impact the aforementioned in any way.                                                                  
                                                                                                                                
MR. CRAWFORD interjected that  the Associated General Contractors                                                               
(AGC)  views  this  [coercion, fraud,  or  an  actual  employment                                                               
relationship] as  a huge problem.   For the last four  years, the                                                               
AGC  has  been   trying  to  pass  legislation   to  require  all                                                               
subcontractors to have workers' compensation insurance.                                                                         
                                                                                                                                
MR. MILLER,  in response  to Chair  Anderson, related  his belief                                                               
that SB  323 was  introduced early  in the  session.   In further                                                               
response, he  said he wasn't  aware of any  letter from AGC.   He                                                               
noted that the Alaska State  Chamber of Commerce, ABC-Alaska, and                                                               
the   Alaska  Miners   Association   have   all  supported   this                                                               
legislation.                                                                                                                    
                                                                                                                                
Number 0285                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  returned to  the definition  of "project                                                               
owner"  found in  Section  3.   He  expressed  concern "with  the                                                               
entrepreneurialism  in   the  ...  various  different   types  of                                                               
business organizations  that real estate developers  and builders                                                               
that hire  contractors to build  commercial real estate  would be                                                               
included in  this."  Unless the  aforementioned organizations are                                                               
a corporation and an active  development company, they don't have                                                               
any   employees.       Representative   Rokeberg    related   his                                                               
understanding that under SB 323  that a group of people organized                                                               
as an LLC or partnership would  have to have a policy of workers'                                                               
compensation  when  there were  no  employees.    He asked  if  a                                                               
workers'  compensation  policy  is available  for  those  without                                                               
employees.  Furthermore,  he asked if the intention  is for those                                                               
[LLCs and partnerships] to have workers' compensation insurance.                                                                
                                                                                                                                
MR.  MILLER  replied no,  this  legislation  doesn't require  the                                                               
procurement of  a workers'  compensation policy  when a  group of                                                               
people, say an investment group,  organize without any employees.                                                               
However, when  a building  contractor is  hired a  certificate of                                                               
insurance would need  to be obtained in order to  ensure that the                                                               
contractor  has a  workers' compensation  policy  and can  secure                                                               
payments to  injured workers.   If the  contractor didn't  have a                                                               
workers'  compensation  policy,  the  contractor  still  has  the                                                               
independent  obligation  to   secure  the  workers'  compensation                                                               
benefit  payments  to  its  injured  workers.    If  all  of  the                                                               
aforementioned fails, the project  owner would have liability for                                                               
the  workers' compensation  payments and  simultaneously couldn't                                                               
be the  subject of  a tort remedy,  which is  currently available                                                               
under the law.                                                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG  surmised then that the  investment group                                                               
dealing  with the  general contractor  would  have an  agreement.                                                               
Therefore, if the general contractor  failed or went bankrupt and                                                               
become judgment proof, would a  workers' compensation claim still                                                               
look to the project owner  or would this legislation change that,                                                               
he asked.                                                                                                                       
                                                                                                                                
MR.  MILLER specified  that under  the existing  law the  project                                                               
owner   wouldn't  have   liability   for  workers'   compensation                                                               
payments,  but  would  have tort  liability.    This  legislation                                                               
limits the individual's  recovery against the project  owner.  In                                                               
the event  of bankruptcy and  no workers' compensation  policy by                                                               
the contractor,  the remedy  against the  project owner  would be                                                               
for workers'  compensation benefits.   There couldn't be  a claim                                                               
in tort against the investors or the project owner.                                                                             
                                                                                                                                
Number 0603                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG surmised  that under  this legislation                                                               
an injured worker's only recourse  under any scenario is workers'                                                               
compensation.   No longer is  there any liability  for negligence                                                               
or anything else, he further surmised.                                                                                          
                                                                                                                                
MR.  MILLER replied  yes, "so  long as  he receives  his workers'                                                               
compensation benefits,"                                                                                                         
                                                                                                                                
REPRESENTATIVE GUTTENBERG inquired  as to what would  happen in a                                                               
situation in which a subcontractor is negligent on a project.                                                                   
                                                                                                                                
MR. MILLER  clarified that SB  323 only relates to  parties under                                                               
the  legislation that  have liability  for workers'  compensation                                                               
benefits  payments  to an  injured  worker.   Therefore,  if  the                                                               
injured  worker works  for a  subcontractor, that  employee would                                                               
have  a financial  guarantee of  workers'  compensation from  his                                                               
employer  [the subcontractor],  the  contractor  that hired  [the                                                               
subcontractor], and the project  owner that hired the contractor.                                                               
If   there's   another   subcontractor,   contractor,   defective                                                               
equipment, or  third party  who crosses a  road barrier  for road                                                               
construction,  all  those  parties  would be  free  of  potential                                                               
liability  for workers'  compensation benefits.   However,  those                                                               
groups  wouldn't have  protection against  a tort  claim.   "This                                                               
bill  tracks liability  for  workers'  compensation benefits  and                                                               
protection  against tort  claims.   And again  the purpose  is to                                                               
allow companies involved  in a project to  integrate their safety                                                               
program," he said.                                                                                                              
                                                                                                                                
REPRESENTATIVE GUTTENBERG inquired as to  any scenario by which a                                                               
worker would have the right for compensation under any tort.                                                                    
                                                                                                                                
MR. MILLER said  that the Alaska Supreme Court has  made it clear                                                               
that  a reckless  or intentional  act resulting  in injury  isn't                                                               
currently protected  under the exclusivity doctrine.   The Alaska                                                               
Supreme Court  has said  that in situations  in which  it's clear                                                               
there is an  intent to injure someone,  the Workers' Compensation                                                               
Act doesn't apply and that  injured individual could even sue his                                                               
or her direct employer.                                                                                                         
                                                                                                                                
Number 0805                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG noted his  30 years in construction and                                                               
the discussion  regarding a level playing  field.  Representative                                                               
Guttenberg said he  was amazed that a small  contractor with five                                                               
or so employees bidding on  a contract that required only sending                                                               
one person for the job would  be considered a level playing field                                                               
under a bidding  process in which one [bidder] was  able to avoid                                                               
liability.  "It amazes me  that small contractors wouldn't have a                                                               
problem with this.  And yet  we hear from the Chamber that nobody                                                               
has said anything," he commented.                                                                                               
                                                                                                                                
CHAIR ANDERSON  opined that there's  going to be  disagreement in                                                               
terms of the  coverage, the definition of  the responsible party,                                                               
and the parameter upon which an injured party can seek redress.                                                                 
                                                                                                                                
MS.  LaBOLLE  added that  SB  323  extends coverage  and  workers                                                               
safety beyond its  current level by moving  the responsibility up                                                               
the chain.  Furthermore, tort  is still available when the courts                                                               
deem [an action]  to be negligible to the point  of a tort claim.                                                               
She opined that SB 323 is an improvement over the current law.                                                                  
                                                                                                                                
Number 0973                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  related  her belief  that  the  Alaska                                                               
State Chamber of Commerce represents  some 700 [businesses in the                                                               
state].    Of  that  700,  she   inquired  as  to  how  many  are                                                               
professional businesses versus worker [organizations].                                                                          
                                                                                                                                
MS. LaBOLLE  answered that the  Alaska State Chamber  of Commerce                                                               
represents businesses  who employ approximately  70,000 Alaskans,                                                               
and therefore are  all employers or sole proprietors.   She noted                                                               
that there has been no word from  the AGC that it has any problem                                                               
with SB 323.                                                                                                                    
                                                                                                                                
CHAIR  ANDERSON interjected  that  he hasn't  heard any  vehement                                                               
opposition to SB 323 from labor organizations.                                                                                  
                                                                                                                                
MS. LaBOLLE agreed.   She noted that after Mr.  Miller spoke with                                                               
the homebuilders  and AGC  regarding the  difficulty with  HB 311                                                               
the sole  proprietor aspect  of HB 311  was incorporated  into SB
323.                                                                                                                            
                                                                                                                                
REPRESENTATIVE DAHLSTROM  asked if when the  Alaska State Chamber                                                               
of Commerce does  surveys, it does so for management  only or the                                                               
entire work force.                                                                                                              
                                                                                                                                
MS.  LaBOLLE answered  that it's  the management  side of  issues                                                               
that the Alaska State Chamber  of Commerce supports.  Ms. LaBolle                                                               
noted that  SB 323  has had many  hearings, and  throughout there                                                               
has been no word from the labor community.                                                                                      
                                                                                                                                
CHAIR ANDERSON  related his belief  that the lack of  any comment                                                               
from  the labor  community  seems  to illustrate  a  lack of  any                                                               
vehement opposition to this legislation.                                                                                        
                                                                                                                                
REPRESENTATIVE  CRAWFORD  said  that  he  knew  that  some  labor                                                               
representatives wanted to be present  today, but couldn't because                                                               
of other  legislation being presented  that they had  to address.                                                               
Furthermore,  there   are  others  who  didn't   know  that  this                                                               
legislation was up for consideration today.                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG stated  a  point of  order pointing  out                                                               
that SB 323 followed the rules of notice for hearings.                                                                          
                                                                                                                                
REPRESENTATIVE  CRAWFORD agreed  that  the  legislation had  been                                                               
properly noticed.   However, he was told earlier that  SB 323 was                                                               
going to be  heard Wednesday, which resulted  in him misinforming                                                               
[labor representatives].                                                                                                        
                                                                                                                                
CHAIR ANDERSON  reiterated that at  this point he isn't  aware of                                                               
any opposition  from the labor  community, which can  be involved                                                               
throughout the remaining process.                                                                                               
                                                                                                                                
REPRESENTATIVE  GUTTENBERG highlighted  Representative Crawford's                                                               
opposition to this legislation.                                                                                                 
                                                                                                                                
CHAIR ANDERSON closed public testimony.                                                                                         
                                                                                                                                
Number 1321                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD moved that  the committee adopt Amendment                                                               
1, which read [original punctuation provided]:                                                                                  
                                                                                                                                
     Page 1, Line 6-Page 3, Line 15;                                                                                            
     Delete all language and replace with:                                                                                      
                                                                                                                                
     *Section 1. AS 23.30.045(a) is amended to read:                                                                          
               (a) An employer is liable for and shall                                                                          
     secure   [THE]   payment    [TO   EMPLOYEES]   of   the                                                                    
     compensation payable  to employees under  AS 23.30.041,                                                                
     23.20.050,  23.30.095,   23.30.145,  and   23.30.180  -                                                                    
     23.30.215.   If  the employer  is a  subcontractor, the                                                                
     subcontractor shall secure  payment of the compensation                                                                
     payable  to  the  subcontractor's  employees,  and  the                                                                
     coverage   must  include   securing   payment  of   the                                                                
     compensation  payable to  the  subcontractor.   If  the                                                                
     employer  is  a  contractor, the  [THE]  contractor  is                                                                
     responsible   for   securing   compliance   with   this                                                                
     subsection  by  the   contractor's  own  subcontractors                                                                
     [LIABLE  FOR  AND  SHALL  SECURE  THE  PAYMENT  OF  THE                                                                    
     COMPENSATION TO  EMPLOYEES OF THE  SUBCONTRACTOR UNLESS                                                                    
     THE SUBCONTRACTOR SECURES THE PAYMENT].                                                                                    
                                                                                                                                
CHAIR ANDERSON objected.                                                                                                        
                                                                                                                                
REPRESENTATIVE CRAWFORD opined that  SB 323 changes the liability                                                               
to the project  owner, which he didn't believe should  be part of                                                               
the  liability chain  with workers'  compensation.   The  project                                                               
owner shouldn't be the one who  has to ensure that each and every                                                               
subcontractor  has the  proper  workers' compensation  insurance.                                                               
The aforementioned  should fall  under the responsibility  of the                                                               
general  contractor.   Furthermore, the  law should  specify that                                                               
everyone  working   as  a  subcontractor  should   have  workers'                                                               
compensation.   Representative Crawford specified  that Amendment                                                               
1 doesn't change  that a sole proprietor can opt  out of workers'                                                               
compensation insurance.                                                                                                         
                                                                                                                                
CHAIR  ANDERSON related  his  belief that  the  sponsor would  be                                                               
adverse to Amendment  1 because it seems to  change the direction                                                               
of the legislation.                                                                                                             
                                                                                                                                
REPRESENTATIVE ROKEBERG spoke  in opposition to Amendment  1.  He                                                               
surmised  that  Representative  Crawford wants  a  subcontractor,                                                               
even  if  a  sole  proprietor, to  be  responsible  for  workers'                                                               
compensation.   Representative  Rokeberg related  that he  wasn't                                                               
sure Representative  Crawford would be entirely  satisfied unless                                                               
every  sole proprietor,  partnership, and  LLC without  employees                                                               
had  to have  workers' compensation  insurance.   He opined  that                                                               
Amendment 1 would ultimately do the aforementioned.                                                                             
                                                                                                                                
Number 1549                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD acknowledged  that some  folks did  want                                                               
every sole  proprietor to be  covered, but that's not  the intent                                                               
with [Amendment  1].  Amendment  1 speaks to  [requiring workers'                                                               
compensation  insurance] when  a subcontractor  is working  for a                                                               
general  contractor,  so  that  the  liability  isn't  misplaced.                                                               
However,  a  sole  proprietor isn't  required  to  have  workers'                                                               
compensation insurance  unless working  as a subcontractor  for a                                                               
general contractor.                                                                                                             
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  inquired  as  to the  meaning  of  the                                                               
following  portion  of Amendment  1:    "the subcontractor  shall                                                           
secure   payment    of   the   compensation   payable    to   the                                                           
subcontractor's employees,".                                                                                                
                                                                                                                                
REPRESENTATIVE CRAWFORD  explained that  the language  means that                                                               
the  subcontractor   will  pay  the  premiums   to  the  workers'                                                               
compensation carrier.                                                                                                           
                                                                                                                                
REPRESENTATIVE DAHLSTROM inquired as to  how it would work with a                                                               
subcontractor  who doesn't  have year  round business  to keep  a                                                               
full crew.                                                                                                                      
                                                                                                                                
REPRESENTATIVE    CRAWFORD   clarified    that   with    workers'                                                               
compensation  insurance,  premiums are  paid  based  only on  the                                                               
hours worked.                                                                                                                   
                                                                                                                                
REPRESENTATIVE DAHLSTROM  asked if [the subcontractor]  would pay                                                               
the premiums after the hours are  worked or would the payments be                                                               
made on the assumption of the hours that would be worked.                                                                       
                                                                                                                                
REPRESENTATIVE CRAWFORD said that he couldn't answer that.                                                                      
                                                                                                                                
A  roll  call  vote  was taken.    Representatives  Crawford  and                                                               
Guttenberg  voted  in  favor of  Amendment  1.    Representatives                                                               
Gatto, Dahlstrom, Lynn, Rokeberg,  and Anderson voted against it.                                                               
Therefore, Amendment 1 failed by a vote of 2-5.                                                                                 
                                                                                                                                
Number 1799                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAHLSTROM  moved to report CSSB  323(JUD)am out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
REPRESENTATIVE   CRAWFORD  objected.     He   opined  that   this                                                               
legislation  is  far worse  than  having  no legislation  at  all                                                               
because it  leaves workers less  than protected than  the current                                                               
situation.  "I think that this is a travesty," he said.                                                                         
                                                                                                                                
REPRESENTATIVE GUTTENBERG  spoke against the  legislation because                                                               
some of the assumptions made about  it don't hold up to any test,                                                               
such as the assumption that  the legislation would provide better                                                               
integration  of  safety   programs.    Representative  Guttenberg                                                               
opined  that under  this legislation  workers will  receive fewer                                                               
rights and actually be denied rights, which is concerning.                                                                      
                                                                                                                                
CHAIR ANDERSON said  that it can be argued  that this legislation                                                               
is an  expansion of worker protection.   He noted his  support of                                                               
the tort aspect  that prevents double dipping.   Therefore, Chair                                                               
Anderson noted his support the legislation.                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  supported the legislation and  found the                                                               
arguments that  it doesn't provide greater  protection of workers                                                               
noncompelling.    Representative  Rokeberg highlighted  that  the                                                               
testimony  provided   that  private  investment   groups  without                                                               
employees aren't intended to be covered by this legislation.                                                                    
                                                                                                                                
Number 2008                                                                                                                     
                                                                                                                                
A roll  call vote was  taken.  Representatives  Gatto, Dahlstrom,                                                               
Lynn, Rokeberg,  and Anderson  voted in  favor of  reporting CSSB
323(JUD)am  from  committee.     Representatives  Guttenberg  and                                                               
Crawford  voted  against  it.   Therefore,  CSSB  323(JUD)am  was                                                               
reported out of  the House Labor and  Commerce Standing Committee                                                               
by a vote of 5-2.                                                                                                               
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The  House  Labor and  Commerce  Standing  Committee meeting  was                                                               
recessed at 6:04 p.m. to the call of the chair.                                                                                 
                                                                                                                                
                                                                                                                                

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