02/11/2004 03:20 PM House L&C
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ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 11, 2004
3:20 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Harry Crawford
MEMBERS ABSENT
Representative Norman Rokeberg
Representative David Guttenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 403
"An Act relating to the Alaska Insurance Guaranty Association;
relating to joint insurance arrangements and assessments to the
association; relating to the powers of the Alaska Industrial
Development and Export Authority concerning the association; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 386
"An Act exempting contracts of the Alaska Natural Gas
Development Authority from the State Procurement Code; and
providing for an effective date."
- MOVED HB 386 OUT OF COMMITTEE
HOUSE BILL NO. 213
"An Act relating to a provisional driver's license and to
issuance of a driver's license; and providing for an effective
date."
- MOVED CSHB 213(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 80
"An Act prohibiting sales of certain soft drinks in public
schools."
- HEARD AND HELD
HOUSE BILL NO. 450
"An Act providing for a special deposit for workers'
compensation insurers; relating to the board of governors of the
Alaska Insurance Guaranty Association; relating to covered
workers' compensation claims paid by the Alaska Insurance
Guaranty Association; stating the intent of the legislature, and
setting out limitations, concerning the interpretation,
construction, and implementation of workers' compensation laws;
relating to restructuring the Alaska workers' compensation
system; eliminating the Alaska Workers' Compensation Board;
establishing a proposed Division of Workers' Compensation within
the Department of Labor and Workforce Development and assigning
certain Alaska Workers' Compensation Board functions to the
division and the Department of Labor and Workforce Development;
establishing a Workers' Compensation Appeals Commission;
assigning certain functions of the Alaska Workers' Compensation
Board to the Workers' Compensation Appeals Commission; relating
to agreements that discharge workers' compensation liability;
providing for hearing officers in workers' compensation
proceedings; relating to workers' compensation awards; relating
to an employer's failure to insure and keep insured or provide
security; providing for appeals from compensation orders;
relating to workers' compensation proceedings; providing for
supreme court jurisdiction of appeals from the Workers'
Compensation Appeals Commission; providing for a maximum amount
for the cost-of- living adjustment for workers' compensation
benefits; providing for administrative penalties for employers
uninsured or without adequate security for workers'
compensation; relating to assigned risk pools and insurers; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 403
SHORT TITLE: ALASKA INSURANCE GUARANTY ASSOCIATION
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
01/28/04 (H) READ THE FIRST TIME - REFERRALS
01/28/04 (H) L&C, JUD, FIN
02/09/04 (H) L&C AT 3:15 PM CAPITOL 17
02/09/04 (H) Heard & Held
02/09/04 (H) MINUTE(L&C)
02/11/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 386
SHORT TITLE: NATURAL GAS DEVELOPMENT AUTH. CONTRACT
SPONSOR(S): REPRESENTATIVE(S) CROFT
01/20/04 (H) READ THE FIRST TIME - REFERRALS
01/20/04 (H) L&C, O&G, RES
02/11/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 213
SHORT TITLE: PROVISIONAL DRIVER'S LICENSE
SPONSOR(S): REPRESENTATIVE(S) WEYHRAUCH
03/26/03 (H) READ THE FIRST TIME - REFERRALS
03/26/03 (H) TRA, L&C
04/01/03 (H) TRA AT 1:30 PM CAPITOL 17
04/01/03 (H) Heard & Held
04/01/03 (H) MINUTE(TRA)
04/03/03 (H) TRA AT 1:30 PM CAPITOL 17
04/03/03 (H) Heard & Held
04/03/03 (H) MINUTE(TRA)
04/15/03 (H) TRA AT 1:30 PM CAPITOL 17
04/15/03 (H) Heard & Held/Subcommittee assigned
04/15/03 (H) MINUTE(TRA)
01/22/04 (H) TRA AT 1:30 PM CAPITOL 17
01/22/04 (H) -- Meeting Postponed to 1/27/04 --
01/27/04 (H) TRA AT 1:30 PM CAPITOL 17
01/27/04 (H) Heard & Held
01/27/04 (H) MINUTE(TRA)
02/03/04 (H) TRA AT 1:30 PM CAPITOL 17
02/03/04 (H) Moved CSHB 213(TRA) Out of Committee
02/03/04 (H) MINUTE(TRA)
02/09/04 (H) TRA RPT CS(TRA) 6NR 1AM
02/09/04 (H) NR: KAPSNER, KOOKESH, MASEK, OGG,
02/09/04 (H) STEPOVICH, HOLM; AM: KOHRING
02/09/04 (H) FIN REFERRAL ADDED AFTER L&C
02/11/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 80
SHORT TITLE: PROHIBIT SOFT DRINKS IN SCHOOL
SPONSOR(S): REPRESENTATIVE(S) KAPSNER
02/05/03 (H) READ THE FIRST TIME - REFERRALS
02/05/03 (H) L&C, HES
02/11/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 450
SHORT TITLE: INSURANCE & WORKERS' COMPENSATION SYSTEM
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
02/09/04 (H) READ THE FIRST TIME - REFERRALS
02/09/04 (H) L&C, FIN
02/11/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
SARAH McNAIR-GROVE, Property Casualty Actuary
Division of Insurance
Department of Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Testified on HB 403.
MARK GNADT, Staff
to Representative Eric Croft
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 386 on behalf of
Representative Croft, sponsor.
HAROLD HEINZE, Chief Executive Officer
Alaska Natural Gas Development Authority (ANGDA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 386.
LEONARD HERZOG, Assistant Attorney General
Oil, Gas & Mining Section
Civil Division (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 386.
LINDA SYLVESTER, Staff
to Representative Bruce Weyhrauch
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As staff to Representative Weyhrauch,
sponsor of HB 213, explained the bill.
KEVIN E. QUINLAN, Chief
Safety Advocacy Division
National Transportation Safety Board
Washington, D.C.
POSITION STATEMENT: Testified in support of HB 213 and shared
information about graduated driver's licensing from a nationwide
perspective.
CINDY CASHEN, Executive Director
MADD [Mothers Against Drunk Driving] Juneau Chapter
Juneau, Alaska
POSITION STATEMENT: Testified as a representative for statewide
MADD chapters in support of HB 213.
MARTHA MOORE, Coordinator
Alaska Trauma Registry
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 213.
DUANE BANNOCK, Director
Division of Motor Vehicles
Department of Administration
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 213.
REPRESENTATIVE MARY KAPSNER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 80.
STEVE CLEARY, Executive Director
Alaska Public Interest Research Group (AkPIRG)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 80.
MARIE LAVIGNE, Executive Director
Alaska Public Health Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 80.
JULIAN NAYLOR, M.D., Alaskan Diabetes Consultant
Alaska Native Medical Center
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 80.
JENNIFER APP, Alaska Advocacy Director
American Heart Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 80.
SHELLEY McLAUGHLIN-TRUE, Dental Hygienist
Haines, Alaska
POSITION STATEMENT: Testified in support of HB 80.
PAUL LISANKIE, Director
Division of Workers' Compensation
Department of Labor and Workforce Development
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 450.
ACTION NARRATIVE
TAPE 04-11, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:20 p.m. Representatives
Anderson, Gatto, Lynn, and Crawford were present at the call to
order. Representative Dahlstrom arrived as the meeting was in
progress.
HB 403-ALASKA INSURANCE GUARANTY ASSOCIATION
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 403, "An Act relating to the Alaska Insurance
Guaranty Association; relating to joint insurance arrangements
and assessments to the association; relating to the powers of
the Alaska Industrial Development and Export Authority
concerning the association; and providing for an effective
date."
Number 0135
REPRESENTATIVE CARL GATTO moved to adopt the proposed committee
substitute (CS), Version D, labeled 23-GH2105\D, Bullock,
2/11/04, as a work draft.
CHAIR ANDERSON objected for discussion purposes.
Number 0154
SARAH McNAIR-GROVE, Property Casualty Actuary, Division of
Insurance, Department of Community and Economic Development,
said she hadn't actually reviewed Version D, but thought she
knew its intent.
CHAIR ANDERSON asked what sections had been removed because of
the recommendations from the Association of Alaska School Boards
and the joint insurance associations (JIAs). He recalled that
the self-insured groups had requested that certain sections of
HB 403 be deleted.
MS. McNAIR-GROVE said she believed Sections 1, 3, 5, 6, and 8
had been deleted. If Version D passes, then 2 JIAs and 24 or 25
self-insured employers wouldn't be subject to the guaranty
association assessment.
REPRESENTATIVE CRAWFORD related his understanding that if the
self-insured employers and JIAs weren't included in the bill,
there wouldn't be enough money collected to solve the problem.
He asked, "What's changed?"
MS. McNAIR-GROVE answered that the division was willing to take
those sections out, since those groups wouldn't be covered by
the guaranty association. She said the funds [from that portion
of the assessment] weren't significant, and this action wouldn't
significantly impact the bill.
Number 0385
CHAIR ANDERSON announced that he would hold HB 403 for further
discussion, with [the pending motion to adopt] Version D and the
objection maintained.
HB 386-NATURAL GAS DEVELOPMENT AUTH. CONTRACT
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 386, "An Act exempting contracts of the Alaska
Natural Gas Development Authority from the State Procurement
Code; and providing for an effective date."
Number 0460
MARK GNADT, Staff to Representative Eric Croft, Alaska State
Legislature, introduced HB 386 on behalf of Representative
Croft, sponsor. He stated:
We feel this is a necessary bill because of the
dynamics of the Alaska natural gas or the natural gas
industry worldwide. There already have been a few
contracts that have come and gone, where the Alaska
Natural Gas Development Authority has been trying to
meet the demands of a rapidly moving industry. And
the requirements to the procurement code inhibit them
in certain ways that we feel are unnecessary.
MR. GNADT said certain state organizations or entities are
exempt from the procurement code already. Some, including the
Alaska Railroad Corporation (ARRC), the Alaska Aerospace
Development Corporation, and a few others, [are exempt] for
similar purposes of being able to move within contract
negotiations without some of the obstacles that the state's
procurement code puts forward. Those obstacles are great for
other things in the state, and necessary, but not necessarily
for organizations dealing in "the natural gas industry and other
things," he added.
Number 0550
REPRESENTATIVE GATTO asked Mr. Gnadt to clarify what the state
procurement code means to him.
MR. GNADT replied, "To me, it's a set of regulations ... that
guide state entities in their forming of contracts with outside
sources, and things along that line." He pointed out that the
state's procurement code isn't his area of expertise.
Number 0607
HAROLD HEINZE, Chief Executive Officer, Alaska Natural Gas
Development Authority (ANGDA), reminded members that ANGDA is a
product of the initiative process, during which little pieces of
language and subtleties of law get may get left out. He said
he'd make the "me too" argument, that every other public
corporation of the State of Alaska, and most of its other
agencies, "have been opted out" of the procurement code as part
of their creation.
MR. HEINZE responded to Representative Gatto's question, noting
that the state procurement code basically provides for a
centralized contracting authority within the administration.
This code is broadly applied to everybody in the state. He
explained that the legislature and the courts are "opted out"
and they have their own set of procurement procedures. He said
there is a group and an individual in the Department of
Administration responsible for all the procurement of the state.
He described the process as a series of procedures, timelines,
and requirements which basically assure that no undue political
influence will result in the awarding of contracts to certain
people. The goal of this process is to keep the playing field
fair and level.
MR. HEINZE explained that while the code accomplishes fairness,
it also sets up situations that aren't necessarily useful to
major contractors or major entities that have their own boards
or other leadership, separate from the executive branch of
government. He said ANGDA, as a public corporation, looks to
models such as the Alaska Housing Finance Corporation (AHFC) and
ARRC as organizations that have evolved and faced major
decisions similar to ones he anticipates for ANGDA.
MR. HEINZE contrasted contracts under $100,000, which have
flexibility within the current system, with contracts involving
hundreds of millions or billions of dollars, such as those for
the purchase or sale of gas. These major contracts don't fare
as well in the current system because of issues with time and
other considerations.
Number 0833
MR. HEINZE proposed that the ANGDA board adopt its own
procurement code so it maintains control over any contracts
awarded in the future. He said he felt ANGDA would do a better
job in terms of "Alaska hire" and use of Alaskan contractors if
it could control the process. He informed the committee that a
large number of agencies aren't covered by the code; over 43
different types of contracts, some major, are delineated in the
law itself.
Number 0873
CHAIR ANDERSON requested clarification on models in state
government that are exempt from the procurement code.
MR. HEINZE referred to a handout listing the following agencies:
ARRC, Alaska Aerospace Development Corporation, AHFC, Alaska
State Pension Investment Board, Alaska Marine Highway System and
new vessels, Alaska Seafood Marketing Institute (ASMI), and
University of Alaska. These entities all have their own
specific, individualized procurement approaches that are
tailored to meet their needs, he explained, rather than falling
under the more general procurement code.
Number 0957
REPRESENTATIVE GATTO asked if there was a common thread in the
procurement codes of those organizations that Mr. Heinz could
use to formulate a code.
MR. HEINZE replied that all have boards that are responsible
for, and have authority over, what the organization does. He
proposed using AHFC's procurement code as a model for ANGDA. He
said AHFC's code is of interest, since it deals with large-
dollar contracts and has a small staff.
REPRESENTATIVE GATTO asked if Mr. Heinze would be involved in
the development of a procurement code for ANGDA.
MR. HEINZE explained that he'd be involved and could draw upon
his specific project management experience from 27 years in the
oil industry. He explained that it's necessary to have a
procurement process that is flexible, effective, and heavily
weighted toward ensuring that the state and the authority
receive full value for the contract in terms of performance, as
well as for the amount of dollars spent.
Number 1110
REPRESENTATIVE GATTO inquired, "The bill, as written, simply
exempts you from the state procurement code without authorizing
entrance into, or creating of, any additional codes; was that
the intent?"
MR. HEINZE explained that the enabling statute of [ANGDA]
invests in the board of directors with broad authorities to
conduct business; by being exempt, the board becomes responsible
to ensure that a procurement procedure is followed. He assured
the committee that until the board can adopt a new procurement
code, "I would just continue to operate under the [present]
procurement code, and move as quickly as we could, to the Alaska
Housing Finance Corporation model."
Number 1180
LEONARD HERZOG, Assistant Attorney General; Oil, Gas & Mining
Section; Civil Division (Anchorage); Department of Law, said Mr.
Heinze had done a good job of explaining the bill, as he
understands it. Mr. Herzog said he attends all [ANGDA's]
meetings and remarked, "We would proceed under the procurement
code until such time as the authority adopted, and published to
the public, its own procurement code."
REPRESENTATIVE GATTO reiterated his concern, saying, "About
letting somebody not have any codes that they have to run by,
according to the bill, ... what an opportunity that would be.
But, indeed, if that's the goal and intent, I can live with
that."
Number 1269
REPRESENTATIVE CRAWFORD moved to report HB 386 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 386 was reported from the
House Labor and Commerce Standing Committee.
HB 213-PROVISIONAL DRIVER'S LICENSE
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 213, "An Act relating to a provisional
driver's license and to issuance of a driver's license; and
providing for an effective date."
Number 1325
REPRESENTATIVE GATTO moved to adopt the proposed committee
substitute (CS), Version 23-LSO786\X, Luckhaupt, 1/29/04, as a
work draft. There being no objection, Version X was before the
committee.
[Note: Version X was the same version adopted and reported from
the House Transportation Standing Committee as CSHB 213(TRA).]
Number 1339
LINDA SYLVESTER, Staff to Representative Bruce Weyhrauch,
introduced HB 213 on behalf of Representative Weyhrauch,
sponsor, and talked about CSHB 213(TRA) [and the corresponding
Version X]:
This bill deals with the process by which young
drivers get their Alaska driver's license. Currently,
the system is two-tiered. There's a permit that is
required. You are eligible to get a permit when you
are 14 years old. Alaska law requires that you hold
the permit for six months before testing for your
driver's license at age 16. ... If you are under 18,
regardless of when you got your permit, you have to
hold your permit for six months before you can test
for your license. ...
We're adding another tier. We look at it as
protections. They are very simple protections, and
what they do is basically ... restrict a young person
from driving around in their car in the middle of the
night with their friends. ... This period of time is
only for six months. ...
The idea is that a young driver who is learning to
drive is highly susceptible to distractions, which are
very dangerous ... and fatal. In the state of Alaska,
if you are a young person and you're going to die,
you're going to die from one or two things. It
toggles from year to year. You're either going to die
from a car accident or you're going to die from
suicide. We can't do much about suicide, but this
bill will likely save lives.
Number 1410
MS. SYLVESTER reported that other states that have adopted
graduated driver's licensing systems [GDLs] with full-on
protections have seen dramatic reductions in accident rates and
deaths. The standard is 20 percent, she said. She continued:
So we're looking at protecting the kids who are
driving, and we're also looking to protect other
Alaskans who are driving around on the roads who are
being hit and injured and suffering property loss,
loss of life, loss of time from work. ... It's a good
idea.
MS. SYLVESTER noted that the bill spent a lot of time in the
House Transportation Standing Committee. She said:
We started off with the mother of all GDL bills. We
had it at a year, and we thought that was very
draconian. We've dropped it down to six months.
We've put exemptions; we want to make sure this is
tailored to Alaska. ... If you're in your GDL period,
your provisional-license period, you can drive around
with your siblings. So this way, if you live out in
the rural area, if you're out in the [Matanuska-
Susitna area] and your parents rely on the ... young
driver to take the kids to school, that's allowed.
We've also got an exemption ... for working. If a kid
is working, needs to be driving in the middle of the
night ... to work in a fish camp, you can get a work
permit ... to work in the scope of your business, or
driving to and from work. ...
If you're in your provisional period and you're a
careless driver and you're speeding and you've got a
ticket and you've been convicted of your ticket, then
that's going to put you back, and you're not going to
advance. So that's a neat idea for the police. It's
the carrot that will keep the drivers safe ... on the
road.
Number 1500
REPRESENTATIVE GATTO asked if the bill limits the number of
siblings a young driver could have in the car.
MS. SYLVESTER read from the bill, page 2, lines 20-22
[Section 3, paragraph (1)], which says for the first six months
after receiving a provisional driver's license [the person may
not] operate a motor vehicle that is carrying any passengers
except a parent, legal guardian, sibling, or person at least 21
years of age. In further reply, she said statistics show that
buddies provide fatal distractions for these kids. "So they get
six months of handling all of the nuances of driving, and then
they've got some... experience under their belt ... and can deal
with what the buddies are doing," she added.
Number 1606
REPRESENTATIVE CRAWFORD asked what "proof satisfactory" meant in
the context of HB 213.
MS. SYLVESTER replied:
What you're referring to is a certification before you
get your provisional license; ... a parent, guardian,
or employer is certifying that while the kid had a
permit, they've got lots of time driving. And we're
saying 40 hours. So when you ... bring your kid to
[the Division of Motor Vehicles] you're signing the
statement that you're accepting legal liability for
your child driving. And on that statement you're just
saying that ... they've got [the 40 hours of driving
experience]. We wanted to leave it open-ended for the
Division of Motor Vehicles. It's a form; there's no
... enforcement of it. It ... is a very open-ended
item that serves to heighten people's awareness of
what ... standard ... is necessary.
REPRESENTATIVE CRAWFORD restated, "So, what you're actually
asking for is that I've driven that much time with my kids."
MS. SYLVESTER responded, "Don't forget the nighttime ... driving
and driving in inclement weather. A lot of people don't think
those things through, so it's an educational tool." She added
that it's simple and innocuous, but highly effective,
statistically speaking.
Number 1690
KEVIN E. QUINLAN, Chief, Safety Advocacy Division, National
Transportation Safety Board (NTSB), Washington, D.C., spoke in
support of HB 213, noting that members had two documents:
written testimony he'd highlight and a list of safety
recommendations entitled "NTSB: Most Wanted Transportation
Safety Improvements 2004." He said NTSB is an independent
federal accident-investigation agency. Although it investigates
airplane accidents and so forth, it also does highway
investigations. Emphasizing that NTSB isn't a regulating
agency, he explained:
We don't tell you or the states what to do. ...
Rather, we ask you to do the right thing, based on our
investigations, and it's really up to you to adapt the
recommendations to fit your state. That said, the
safety board is known for its scientific rigor and
objectivity.
MR. QUINLAN said 90 percent of transportation fatalities every
year happen on the highway, and 40 percent of teen deaths occur
in traffic crashes - it's the leading cause of death for
teenagers. In Alaska, teens constitute 7 percent of the driving
population, but are 17 percent of the drivers in fatal crashes;
26 percent of the fatalities in Alaska involve teen drivers. In
terms of teen passengers, two-thirds of teen vehicle-related
deaths occur in vehicles driven by other teens. He continued:
One of the things that's not in the testimony is that
the nation as a whole - and probably Alaska, but I
haven't checked your statistics on this - is
experiencing an increase in the number of young
drivers. It's called the "baby boomlet," and that
increase is 25 percent. That means ... you have more
in that age group, so you have more drivers, more
crashes, more fatalities. That's the way it would
normally work.
Teen drivers also do about 20 percent of their driving
at night, but 50 percent of the fatalities are at
night. So there's another issue. What we've seen is
that the system's broken. The system doesn't teach
our young people to drive. It teaches them how to
pass a test, and the fix for that is to give them more
experience in a supervised, safe setting. GDL is the
answer; it's not new, and it works in the other
states.
Number 1850
MR. QUINLAN continued:
You've heard some discussion of what a three-phase
system is. Now, Alaska has the learner's permit with
the six-month mandatory holding period. Supervised
training is very important. Most states select 50
hours. And crash- and violation-free driving is very
important. So you can identify the high-risk drivers
early and remediate.
The new phase is an intermediate phase. Six months is
the minimum because most of the effect is achieved in
the first six months, but it does continue up to a
year. We recommend a year, but six months is fine.
In that phase, there are three restrictions that the
safety board recommends.
One is a nighttime driving restriction, and the reason
is that the cues are different at night.
Unfortunately, the people that have the best reflexes,
that is, teenagers, have the worst driving record and
the worst crash record. I know Alaska conditions are
different: you could have nighttime driving at 4 ...
p.m. That's fine. The real message is, we need to
give them lots of nighttime driving experience and
lots of driving experience that's supervised.
We also recommended a passenger restriction of zero or
one, to last at least six months, again, preferably a
year. The reason we picked one [passenger] is for
security: ... in some areas you need to consider
security issues unless they're supervised. And then
they can have as many people as they want. You need
an adult supervising driver.
The last one is a cell-phone restriction. This is
just for the provisional phase. Now, some states have
banned handheld cell phones. We've investigated
crashes involving teen drivers where, clearly, the
distraction was the cell phone. ... I have to tell
you, I was unconvinced when I looked at the first
investigations on this, but then I came to realize,
with the data that we had, that the distraction for a
teenager in the learning phase and the intermediate
phase is very analogous to that of having multiple
teen passengers, again, crash- and violation-free
driving.
Number 1941
MR. QUINLAN continued:
We have 39 states with a three-phase system; 36
states, including Alaska, have some elements, and I
mentioned that one of a graduated licensing system; 37
have nighttime restrictions; and the newer one that
almost didn't exist three years ago, 26 states now
have passenger restrictions. ...
You have in the testimony a summary sheet of
effectiveness in other states. And I'd like to point
out a couple to you really quickly: Michigan, 25
percent overall reduction in crash rates; that's
normalized data, so that's good, hard data, and it's
done by a highly-esteemed, scientific institution.
The same thing in North Carolina, but look at the
57 percent reduction in fatal crashes.
There is one thing that's not in there, on California.
There's a recent report from California on the
reduction in teen alcohol-related fatal crashes from
GDL, a totally unexpected consequence of ... enacting
GDL. It's done by the [Automobile] Club of Southern
California.
MR. QUINLAN also pointed out that in Pennsylvania there was a 58
percent reduction in fatalities. Turning to the "most wanted"
list, he noted that GDLs are right up there with measures to
keep aircraft from exploding in mid-air and running into each
other on the ground. "We take this very seriously," he
remarked. "It will actually save more lives."
Number 2042
MR. QUINLAN continued:
Let me just wrap up by saying ... I like to read state
constitutions, and most states in the United States
have the word "safety" in Article I. Alaska doesn't,
but it does say that you have the right to life, and
in Article VII it talks about public health and public
welfare. ... That's what we are really talking about
here.
We strongly support HB 213. We know this measure
works; it's one of the most effective actions that you
can take to prevent teen deaths and the deaths of
others in teen crashes. And the best part is, it's
not just this year, it's every year. ... It passes all
of the tests, and the one that's most important to me
is that it passes the commonsense test because teen
drivers just need experience driving. We cannot do
what Germany does and require 270 hours of driver
education. That's not going to happen. But we can
give them lots of driving experience. And I think,
finally, it's just the right thing to do.
REPRESENTATIVE GATTO asked if "teens" refers to anyone younger
than 20 years of age.
MR. QUINLAN said that's how the data is "cut." The states make
the age what they want: 14 in some, 15 or 16 in others, for
example, or [18] in New York.
REPRESENTATIVE GATTO remarked, "If we're talking about
statistics that affect everybody from 'a minute under 20' all
the way down, there has to be some portion of this that has no
effect. ... It only applies to six months of 'teenagehood,'
while the rest of it is wild."
MR. QUINLAN replied:
Let's hypothetically say it's 16. You have to hold
the learner's permit for six months. You have to hold
the other permit for at least six - we recommend a
year. It's actually best to carry it through to 18,
as New York does, because then you get them over the
hump of the inexperience, the - I hesitate to say it -
... testosterone.
Number 2188
REPRESENTATIVE GATTO told of his experience with his two
daughters and the two wrecked cars they produced in their first
six months of driving.
MR. QUINLAN referred to a television news program that showed
teen drivers in a car with camera surveillance in the car. The
three girls "still blew a stop sign" because there were teen
passengers in the car. He explained that the first six months
of driving is a critical time, an intermediate phase when it's
important to restrict teen passengers.
Number 2230
REPRESENTATIVE LYNN noted that Alaskan weather can be severe,
and said cell phones are a safety feature for drivers. He also
commented that if a car breaks down and the temperature is 20
degrees below zero, or if a drunk driver is observed, a person
needs to be able to call authorities.
MR. QUINLAN replied:
Every state that has that [cell-phone restriction] has
an emergency exemption, 911 or whatever. And it only
makes sense. If you're in an emergency, are you going
to be holding both hands on the wheel and checking ...
the whiteout as it comes to you? Or are you going to
be on the phone, or are you going to stop and call?
You're probably going to stop and call, and that's the
safest. ... Of course you'd want to have a cell phone
in the car, and of course you would want the ... teen
driver to be able to call somebody to help them.
Number 2340
CINDY CASHEN, Executive Director, MADD [Mothers Against Drunk
Driving], Juneau Chapter, testified in support of HB 213 on
behalf of four of the MADD Alaska chapters: Anchorage,
Fairbanks, Juneau, and Mat-Su. She said this is the MADD Alaska
chapters' number-one priority.
TAPE 04-11, SIDE B
Number 2350
MS. CASHEN said:
We feel that early driving experiences must be
required in a lower-risk environment through extended
restriction of no alcohol use, primary belt
enforcement, limitations on nighttime driving and
teenage passengers. Appropriate restrictions should
be lifted in stages, based on clean driving records.
According to the Alaska Highway Safety Office, in the
year 2000 in Alaska there were over 3,800 crashes
involving 16- to 20-year-old Alaskan teenagers. The
next year, 2001, it went up ... by over 400. In the
year 2000, every two and one-half hours there was a
teenager in Alaska being involved in a crash. In 1995
to the year 2000, that five-year period, there were 64
Mat-Su teen drivers in motor vehicle crashes on the
highway who were injured seriously enough to be
hospitalized.
Number 2299
MS. CASHEN continued:
I looked up three places, through the Alaska Highway
Safety Office, three Alaskan towns, villages, cities,
to ... give you a representation how it's not just in
urban areas. It's all over Alaska. In Kodiak 34
percent of their crashes involve teen drivers; in
Anchorage it's 28 percent; in Barrow it's 26 percent.
The evening crashes, that would be between midnight
and 5 a.m.: in Kodiak, it's 22 percent of evening
crashes involve teenage drivers; in Anchorage and in
Barrow, they're both 25 percent - pretty substantial
numbers, and these numbers can be brought down if we
have the GDL program. The studies prove it.
REPRESENTATIVE CRAWFORD commented that he had personal
experience with his children and hoped this bill would help them
"make it through these harrowing years."
Number 2257
MARTHA MOORE, Coordinator, Alaska Trauma Registry, Department of
Health and Social Services, testified that the department
supports HB 213. She explained:
My job is to ... maintain and work with an injury
surveillance system. And I ... look at injury
statistics in Alaska, as well as do research on them.
It's common knowledge that teens are at greatest risk
for traffic crashes and have the highest motor vehicle
fatality rates.
Several years ago, the Associated Press published an
article with a report from a 20-year study by the
Insurance Institute for Highway Safety. And the
report said ... two important and impressive facts.
One is that even though the death rates ... for
crashes were declining, [for] those 16 years old,
their death rates had doubled in the 20 years ... from
1975 to 1996. And the second thing it said was that
the death rate of the 17- to 19-year-olds was twice
that of older drivers, but the death rate for 16-year-
olds was half again as much. So, it was actually
three times that of the older drivers.
The reasons the 16-year-olds are at such high risk
are, first and foremost, youth, just sheer immaturity;
... secondly, inexperience; third, risk-taking
behavior, which is common among young people and is
certainly exacerbated by peer pressure; and then
lastly, distractions while driving, which would
certainly increase when other teens are in the car.
Number 2175
MS. MOORE continued:
The good news is that since 1996, 39 states have
adopted graduated licensing programs. This has
drastically lowered the death rates and the crash
rates for 16-year-olds.
The legislation before you does three important
things. And it helps youth to gain the experience
[they need], driving under the supervision of an
adult. It puts off full licensure for six months,
which from the statistics evidently is ... a critical
time - that sixteenth year, even six months into the
sixteenth year - for them to attain the maturity they
need to be a better driver. It removes ... the
highest risk factors for ... six months of
unsupervised driving by restricting the nighttime
driving and having teen passengers in the car.
I have done research on teen driving in Alaska, and
I've published a paper ["Comparison of Young and Adult
Driver Crashes in Alaska Using Linked Traffic Crash
and Hospital Data"] in the Alaska Medicine Journal.
I'd be happy to leave that with you. Essentially, in
summary, ... what happens with Alaskan teens is not
unlike the rest of the country. ... The economic
burden on the state is lopsided for teens as well.
Number 2086
DUANE BANNOCK, Director, Division of Motor Vehicles, Department
of Administration, said the division is supportive of the bill.
CHAIR ANDERSON, upon determining no one else wished to testify,
closed public testimony.
Number 2061
REPRESENTATIVE LYNN moved to report CSHB 213, Version 23-
LS0786\X, Luckhaupt, 1/29/04, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 213(L&C) was reported from the House Labor
and Commerce Standing Committee.
HB 80-PROHIBIT SOFT DRINKS IN SCHOOL
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 80, "An Act prohibiting sales of certain soft
drinks in public schools."
Number 1990
REPRESENTATIVE MARY KAPSNER, Alaska State Legislature, sponsor
of HB 80, explained that she prefers to characterize this bill
as requiring schools to substitute sodas and carbonated
beverages with more healthful drinks. Noting that she'd come up
with the idea herself, she expressed concern for the rising
epidemic of obesity across the nation, particularly pediatric or
childhood obesity. Emphasizing the desire to refocus the system
so it is a health care system and not a "disease care" system,
she remarked, "I feel that school should be a place of learning
and habit formation. And especially while kids are in school,
we should be promoting healthy habits and healthy nutrition."
REPRESENTATIVE KAPSNER reported that she'd attended a conference
in Portland this past summer. She mentioned a call to action by
the surgeon general on overweight and obesity, saying two-thirds
of women are overweight or obese in the nation. She said:
That overweight and obesity is not just a concern of
those struggling to lose a few pounds or a lot of
pounds; it is really ... the next burgeoning, major
public health concern. For adults, obesity has
doubled in the last 20 years. And for adolescents,
it's tripled in the last 20 years. Again, this is
across all ethnic groups and ages.
REPRESENTATIVE KAPSNER said it was pointed out that for obese
kids, their quality of life is equivalent to the quality of life
kids face who are fighting cancer and under chemotherapy.
Furthermore, in the last year $117 billion was spent by the
federal government for obesity-related diseases, including
indirect costs such as loss of wages and future earnings lost.
Representative Kapsner asked, "When you compare that to the $87
billion that people were outraged that we are spending on the
war in Iraq, and the outcry that that brought forth, where is
the corresponding outcry for the cost of obesity and overweight-
related diseases?"
Number 1840
REPRESENTATIVE KAPSNER acknowledged that soda isn't the only
factor in obesity. She told members:
My hope is that this will just be one segment of a
host of bills that we can put forward that would
address health issues. ... A lot of people are
concerned, not only about soda in vending machines,
but also unhealthy snack food in vending machines and
also school districts having a rotating menu of fast-
food carriers coming in throughout the week. That's
one of the examples that Juneau-Douglas High School
has: every day of the week they have a different
fast-food industry preparing their meal.
I understand that this is primarily a family and
parent and community responsibility, but I think that
it's important that we get the discussion going, and
this was a good starting point for me.
REPRESENTATIVE KAPSNER addressed concern about eliminating
revenue from vending machines. Noting that Oakland, California,
has mandated that schools substitute more healthful foods in
vending machines, she remarked, "They have actually made more
money for their school's discretionary funding." She pointed
out that soda industries also [bottle] water and juices.
Number 1733
REPRESENTATIVE GATTO asked:
If a family doesn't want to take on the job, aren't
they just transferring it to the school? Number two,
we have drugs in schools, alcohol in schools, we have
guns on school property, and we have bullying in
schools, and all kinds of rules. It seems like we are
overwhelmed with things that we have to do in schools
to protect the kids.
This seems like just one more way for government to
have a control in schools that I would just as soon be
up to the principal and the parents in that school,
rather than people that are sitting in Juneau. Am I
wrong?
Number 1686
REPRESENTATIVE KAPSNER agreed those are valid points.
Highlighting $177 billion, however, she remarked, "As public
policymakers we're not engaged in the prevention aspect as much
as I think we could be. I am a ... federal taxpayer, and I
shudder at the thought that we are losing $117 billion every
year, and it's going to get worse." She cited an example of
going to a fourth- and fifth-grade classroom where the children
were very large. Speaking of the teacher of that classroom, she
remarked:
She said that the kids are getting bigger and bigger
every year. She said that she promotes healthy
choices. She talks a blue streak about making healthy
choices, but ... a lot of times it's the parents who
are not hearing that. I think that, in the vein of
prevention, we should have the discussion.
REPRESENTATIVE GATTO noted that HB 80 prohibits the sale of soft
drinks, but not the consumption; thus students can bring soft
drinks to school.
REPRESENTATIVE KAPSNER said:
I wasn't interested in making soda pop contraband.
Like you say, we have guns and drugs and alcohol and a
lot of other things that are contraband. I just felt
that for schools to be generating a lot of revenue,
and in some cases ... -- the other thing that I wanted
to prevent, ... in some states, school districts are
so hard up for money that they are engaging in
contracts with fast-food industries, and ... at one
point in Colorado, teachers were issued a mandate from
their administrator saying, "You cannot let kids bring
in sodas from home, and you have to let them drink
sodas in class, because we have to make our quota, we
have to meet our ... contractual obligations to sell
'x' amount of whatever." So this was a preventative
step in that regard, too. ... I didn't want Alaska to
get to that point.
Number 1571
REPRESENTATIVE CRAWFORD, cosponsor, expressed strong support for
the bill. He shared personal experiences from his foster
parenting of dealing with dental issues because of the sugar
content of sodas.
REPRESENTATIVE KAPSNER talked about the cost to Alaska for
dental problems of school-aged children caused by soda pop.
REPRESENTATIVE LYNN, cosponsor, said he thinks mixed messages
are being sent to school children when health classes teach good
nutrition but schools don't support this teaching because they
have vending machines. He said when children come to school,
the school is acting "in loco parentis" and needs to support
health. He added that he doesn't think sports programs should
be funded by bringing in unhealthful food and drinks to the
schools.
Number 1381
STEVE CLEARY, Executive Director, Alaska Public Interest
Research Group (AkPIRG), testified:
I was following this bill last year, when, I believe,
it didn't get a committee hearing. So when I saw it
come back up again this year, I was excited to see
that there are bipartisan cosponsors and an effort to
get it going in the House. I'm really excited about
it.
I did see a couple of good additions in there, talking
about food items that derive more than 35 percent of
their calories from fat - so addressing some of the
concerns about having other things than soda that are
unhealthy as well, ... encompassed in this bill.
I think what Representative Lynn was just getting to
was exactly the point that I was going to make. ...
You learn in class how to eat healthy, how to consume
healthy products, and then ... kids are bombarded with
advertisements with soda machines, some of whom are,
pretty soon, going to start talking to us, playing
music and enticing them to be unhealthy. We need to
give them as much of a leg up as we can in the early
parts of their lives when they are forming their
habits. So, I'm excited to see this bill moving, and
I urge your support for it.
Number 1282
MARIE LAVIGNE, Executive Director, Alaska Public Health
Association, said she represents over 200 members across Alaska
who are committed to sound health policy and improving the
public's health. She said the bill requests an important public
health strategy that uses both policy and environmental change
to improve health outcomes for children. It directs schools and
their vendors to offer healthful and nutritious beverages and
food selections in lieu of sugar- or caffeine-filled soda and
junk food. These are important components in public health
strategies underway to address childhood obesity, oral health,
and sound nutrition.
MS. LAVIGNE noted that also of concern is that teenagers are
consuming a large portion of their daily calories and nutrition
from soda and junk foods. She reported, "Our pediatricians
report many teens experience calcium and iron deficiencies, as
well as concerns with excessive calories and weight gain. Our
dentists show concerns for the oral health of children, one of
the largest consumers of soda in recent history." She asked
that children be allowed to make the healthiest choices, while
allowing schools to continue to generate revenue from vendor
sales. She remarked, "We applaud Representative Kapsner for
bringing this bill forth and for continuing the public dialog on
this issue."
MS. LAVIGNE pointed out that schools are often used by sports
teams, especially in rural communities, later in the evenings
than 5 p.m. Removing the time of day would allow vendors to
stock healthier products for all of its sales, she suggested.
She closed by saying:
Please keep in mind that our schools provide the total
learning environment for developing and practicing
lifelong behaviors. Healthy schools, defined as those
that support good nutrition and physical activity, are
part of the total learning environment that produce
healthy students. Ensuring that healthy snacks and
foods are provided in vending machines, in school
stores, and other venues within the school's control
helps to reach this goal.
Schools nationwide that have made these changes offer
very exciting success stories, demonstrating that
students will buy and will consume healthy foods and
beverages when those options are tasty, easily
accessible, and priced right. House Bill 80 is a step
in the right direction.
Number 1153
REPRESENTATIVE GATTO asked Ms. Lavigne whether she has spent
much time in the schools and, if so, had noticed if any vending
machines there sold fruit juice and water.
MS. LAVIGNE replied that there were some fruit-juice blends and
water, and that the machines were generating a lot of money.
She also said some schools have chosen, on their own, to look at
making policy changes. She remarked, "Certainly, school boards
may choose to make policy decisions. Every time they make a
contract with their vendor, they can activate some of those
choices already. What this does is looks at a comprehensive
change across all schools in Alaska."
Number 1085
JULIAN NAYLOR, M.D., Alaskan Diabetes Consultant, Alaska Native
Medical Center, testified:
I travel around the state of Alaska helping treat
Alaska Native people who are suffering from diabetes,
who are at risk for diabetes and also suffering from
obesity. I would like to lend my support to House
Bill 80. As somebody who is on ... the front line
with Alaska Native people, helping with these chronic
disease problems, I see the effects of the growing
problem with obesity in our children and our
adolescents. I am frequently asked to consult on
young people who are battling health problems [that
have] ... to do with obesity.
One of the first questions I ask them is, "How much
soda pop are you drinking?" Especially in the rural
areas of Alaska, it is amazing how much soda kids can
take in one day. This is a huge source of empty
calories, and it's driving, I believe, in part, the
obesity epidemic that we are seeing in our young
children and our teenagers.
In Alaskan Native people, the rates of diabetes are
going up tremendously. We actually, in Indian
country, have the highest rate of increase of diabetes
of any of the Indian nations around the country, and
it's of great concern to us. And there's no question,
it links into obesity, and when obesity starts at a
young age, it leads to obesity as an adult and
increases the incidence of diabetes. I really believe
... [in] decreasing the soda pop consumption. ...
Several studies ... have shown that this does impact,
positively, weight gain in young people.
Within our rural communities, there have been several
schools that have taken the initiative to remove the
soda from the school. I am presently in Kotzebue ...
doing an annual diabetes clinic. Kotzebue is one of
the towns that have made their high school a soda pop-
free environment. Their machines here now have milk,
juice, and water as the beverage choices. I can't say
this for sure, but I know from what I've heard since
I've been in town that there's not been a lot of
grumbling from the kids, and they are very eager to
pick other choices out of the machine instead.
I would very heartily encourage the committee to
consider [HB] 80. I think we need to pay attention to
the health of our young people in Alaska, and this is
one very positive step forward ... in this battle
against obesity.
Number 0939
REPRESENTATIVE KAPSNER added, "This really isn't just an Alaska
Native issue or an Indian country issue. The school that I
visited was actually in Juneau. And there weren't very many
Native kids in the class. This is a national epidemic."
Number 0913
JENNIFER APP, Alaska Advocacy Director, American Heart
Association, noted that much of her planned testimony had
already been given by others. She stated:
We know that our children are getting heavier. We
know that in Alaska our children are getting heavier
quicker than the national average, unfortunately. We
also know that there are a multitude of causes behind
this. A decrease in physical education is a big one,
but a corresponding one is an increase in consumption
of fatty and sugary foods, and higher calories every
day. The statistics are really pretty amazing.
Young Americans have increased their annual soft-drink
consumption from 27 to 44 gallons between the '70s and
the '90s. And further, they are eating about 400 more
calories a day than they did just in the mid-'80s.
And they don't make up for it with additional
exercise. The combination of these two things really
has an impact. There's a direct correlation between
what we put in our bodies and how heavy we weigh.
Number 0809
MS. APP continued:
This also corresponds with, from the '70s to the
present, the placement of vending machines in schools.
I don't think that there's probably a person among us,
either testifying or listening to the testimony today,
that can recall that, as a young kid, we had vending
machines. I'm 32, and I know I didn't have vending
machines as a child. This is a new phenomenon. You
can track vending machine placement with the rise in
obesity. We have, in essence, surrounded our children
with bad choices and unhealthy choices. I think that
this bill is a good step forward in terms of looking
at what very simple choices we can make in offering
healthier choices.
There's one other statistic I'd like to share with
you. About 60 percent of overweight children have at
least one high-risk factor for heart disease by age
10. This is high cholesterol or high blood pressure.
This is amazing. ... We have children at age 10 who
are obese who are demonstrating that they are good
candidates to have heart disease. I can't tell you
how disturbing this is to the American Heart
Association, and to see that this trend nationwide and
in Alaska is getting worse and worse. This bill is a
good step in the right direction.
Number 0769
REPRESENTATIVE GATTO asked if Ms. App would have any objection
to diet pop.
MS. APP responded that her interpretation of the bill was that
it would allow diet pop, which isn't necessarily a healthful
option but does have a lower calorie content. She said it does
contain aspartame and other carcinogens with serious side
effects.
Number 0536
SHELLEY McLAUGHLIN-TRUE, Dental Hygienist, Haines, testified:
I work in private practice here, one week a month, and
work for Indian Health Services in Haines for the rest
of the month, year-round. I just wanted to lend my
support to this bill. I hear a lot about diet and
obesity and the diabetes problem. I'm here to tell
you that the dental aspect of this is just as
important.
Not a week goes by that I don't see one child,
probably more, totally "blown out." It's a very
distinctive decay, right at the gum line. They come
in and it's ... neglect, it's lack of education. The
place for education is in the school. And I really do
believe that these machines don't have a place in the
school. We should be consistent with the message that
we are giving. I don't think that this is a problem
that is in one socioeconomic group only. I see it
with very wealthy kids and I see it in the villages,
all over the place.
It's a very important issue. Dental hygienists have
been fighting this in the schools, ... trying to get
these machines out of the schools. And unless there
is something that says they can't be there, we lose
because those machines make lots of money. They
support sports; they support drama classes; they
support trips out of town, and those trips out of town
are very important to the schools. I think they need
to find another way to do it.
I want to lend my support for this bill. I wish it
were a lot stricter than what it is. ... One million
dollars in Alaska that is spent on Medicare is a drop
in the bucket. That does not count the charity dental
work that is given away, and it does not count, I
don't think, the Indian Health Services. You can't
believe the amount of money that is put into
children's mouths in this state.
Number 0380
CHAIR ANDERSON announced that public testimony would be kept
open and that HB 80 would be held over.
HB 450-INSURANCE & WORKERS' COMPENSATION SYSTEM
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 450, "An Act providing for a special deposit
for workers' compensation insurers; relating to the board of
governors of the Alaska Insurance Guaranty Association; relating
to covered workers' compensation claims paid by the Alaska
Insurance Guaranty Association; stating the intent of the
legislature, and setting out limitations, concerning the
interpretation, construction, and implementation of workers'
compensation laws; relating to restructuring the Alaska workers'
compensation system; eliminating the Alaska Workers'
Compensation Board; establishing a proposed Division of Workers'
Compensation within the Department of Labor and Workforce
Development and assigning certain Alaska Workers' Compensation
Board functions to the division and the Department of Labor and
Workforce Development; establishing a Workers' Compensation
Appeals Commission; assigning certain functions of the Alaska
Workers' Compensation Board to the Workers' Compensation Appeals
Commission; relating to agreements that discharge workers'
compensation liability; providing for hearing officers in
workers' compensation proceedings; relating to workers'
compensation awards; relating to an employer's failure to insure
and keep insured or provide security; providing for appeals from
compensation orders; relating to workers' compensation
proceedings; providing for supreme court jurisdiction of appeals
from the Workers' Compensation Appeals Commission; providing for
a maximum amount for the cost-of- living adjustment for workers'
compensation benefits; providing for administrative penalties
for employers uninsured or without adequate security for
workers' compensation; relating to assigned risk pools and
insurers; and providing for an effective date."
Number 0271
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development, presented the
bill, noting that he would focus on the areas that impact the
Alaska Workers' Compensation Act and would defer to Linda Hall
[director of the Division of Insurance, Department of Community
& Economic Development] on portions that address insurance
issues. He said he'd focus on three primary goals.
MR. LISANKIE pointed out that although he'd previously advised
the committee that there wouldn't be any change in benefits now
payable under the Alaska Workers' Compensation Act, he would
clarify one minor change to this statement later in his
testimony.
Number 0172
MR. LISANKIE said, second, this bill would formally establish a
Division of Workers' Compensation and a position of director of
workers' compensation. He holds this position, he noted,
although no authority in the Alaska Workers' Compensation Act
established this position or gave it particular oversight
authorities for the workers' compensation program. He related
that most responsibilities of the program aren't in the hands of
the Alaska Workers' Compensation Board; there are a number of
things the division director and the division do to implement
the board's powers. This bill would formally establish the
position and give the director responsibility over a number of
areas that are, right now, formally in the hands of the Alaska
Workers' Compensation Board.
MR. LISANKIE informed the committee that, third, this bill
attempts to reorganize and streamline the process of resolving
disputed benefit claims, and to do the same to the initial
appeal process for those disputes. This would result in a
speedier decision-making process, and more consistent and
predictable decisions. The overall goal is to have a more
stable insurance environment in terms of the insurance market.
This bill would help do that by invoking a new Workers'
Compensation Appeals Commission, which would replace the current
Alaska Workers' Compensation Board.
TAPE 04-12, SIDE A
Number 0032
MR. LISANKIE explained that most changes in the bill implement
provisions that would replace the Alaska Workers' Compensation
Board with this new commission and with new hearing officers and
a new formalized division and director of workers' compensation.
He pointed out that the sectional analysis shows a reassignment
of functions that already exist in the Alaska Workers'
Compensation Act. Because there are a multitude of references
to the board in the current Act, changing the board necessitates
a lengthy bill.
MR. LISANKIE referred to the change in the bill that would
impact benefits. He explained that, currently, weekly
compensation benefits are paid at a certain basic rate. If
someone moves to a different locality outside of Alaska, the
division "is tasked with having a company that calculates cost-
of-living differences between Alaska - I believe it's keyed to
Anchorage - and to wherever the residency of this person is
now."
Number 0190
MR. LISANKIE referred to Section 86, which proposes putting a
cap on any cost-of-living adjustments that go up. The cap would
be based on the in-state rate. There would be a comparison of
the cost of living in the new area of residence with the cost of
living in Alaska. The result would be that no one would get a
compensation rate exceeding what is paid to a resident of
Alaska. He informed the committee that this was the only change
to the benefit package in any of the 58 pages of the bill.
MR. LISANKIE explained that Section 10 establishes a director of
the Division of Workers' Compensation and outlines the
director's responsibilities. The director would be responsible
to the commissioner of the Department of Labor and Workforce
Development for the overall execution of the duties and
responsibilities of the Alaska Workers' Compensation Act and
also would be responsible for adopting regulations to implement
the Act.
Number 0491
MR. LISANKIE pointed out his division's ongoing efforts to stop
uninsured employers from operating without the required
insurance. Currently, a statute in the Alaska Workers'
Compensation Act requires that all employers either self-insure
or, more commonly, get insurance coverage through an insurer
that's approved for writing workers' compensation liability
insurance in Alaska. There is an issue when employers fail
their responsibilities to keep insured.
MR. LISANKIE reported that, at present, there is a criminal
provision that is rarely invoked because of its requirements to
get a criminal prosecution. There is also a more commonly
invoked provision whereby the investigator locates an employer
that is knowingly operating without the required insurance,
gives an accusation, and calls the employer in front of the
Alaska Workers' Compensation Board to answer. He described two
common outcomes. The employer admits to being previously
uninsured and having employees, but no longer is in operation.
This circumvents a stop-work penalty from being effective. More
commonly, the employer admits to being previously uninsured, but
is currently insured. Again, there is no reason to invoke a
stop-work order, since the employer is now properly insured.
Number 0544
MR. LISANKIE surmised that the new provision would give a
powerful new tool to the division to pursue uninsured employers
by imposing a fine of up to $100 a day for each uninsured
employee. He found 180 employers that were proven to be
operating without insurance listed in the last annual report, he
said. The total number of employees that received coverage as a
result was 2,000. He projected that if this penalty were put in
place, it could result in substantial revenue. He noted that
the primary goal would be to support a zero-tolerance policy.
He continued:
We're very concerned because the absence of insurance
means that the employer is putting their employees at
... physical risk that they may not be able to get
medical benefits if they are hurt, and financial risk
if they don't get the time-loss benefits that they are
entitled to if they get hurt. And the employer that
goes uninsured is also gaining an unfair competitive
advantage over ... other law-abiding employers in the
state.
Number 0654
REPRESENTATIVE CRAWFORD asked Mr. Lisankie if he was aware of
the committee bill in process that would require owner-operators
to provide workers' compensation insurance. He explained,
"Because of the fact that many times an owner-operator becomes
injured, and then it goes back on the general contractor to
provide insurance for that sub[contractor], wouldn't it be a
good place to insert that into this bill, rather than take our
whole bill through the process, so that more people get covered
by workers' compensation insurance?"
MR. LISANKIE noted that he was aware of that bill and that it
was possible it could be combined. He reiterated that the
current Alaska Workers' Compensation Board would be replaced by
a Workers' Compensation Appeals Commission. After the current
board hears disputed claims, they are initially appealed to the
superior court. He said the new commission would replace the
superior court as the site of that initial appeal. It would
also employ hearing officers to do the initial decision making
that is currently done by the board hearing panel. He gave the
reasoning, saying the Alaska Workers' Compensation Act was
amended at least twice, in 1988 and 2001. He explained:
The statutory intent language called for
interpretation of the Act to ensure quick, efficient,
fair, and predictable delivery of benefits to injured
workers, at reasonable cost to employers. This is
designed to address those concerns of fairness and
predictability.
The problem, very quickly, is that there are ... many
hearing panels, because they are consisting of two lay
board members and a hearing officer. Currently, we
have eight authorized hearing officers, but we only
have six [positions] that are actually filled. ... [If
HB 450 passes into law] the commission would hear the
appeal and instead of the board hearing panel, there
would just be a hearing officer that would do that
initial claim. It would go to the appeal's
commission, which would be made up of three
commissioners who are appointed by the governor,
confirmed by the legislature, based on their
experience and expertise in workers' compensation law.
... The final stage would continue to be the Alaska
Supreme Court, as it is now.
Number 0904
REPRESENTATIVE CRAWFORD asked who would pay the bill for an
injured worker who wanted to take a claim through the appeals
process all the way to the supreme court.
MR. LISANKIE replied that the employee, the injured worker, has
the primary responsibility to pay throughout the appeal process;
if the employee wins and has an attorney, then the attorney fees
and costs are paid typically by the insurer.
REPRESENTATIVE CRAWFORD asked for clarification:
So rather than going through this board, where you
have multiple voices, you would just have one voice
that could be slanted either way. And then, from that
point forward, you have to pay your own bills. So
that would preclude any injured worker that I know
from being able to "take it home" past that. I know
... when I was injured, on workers' comp, I had to go
back to work way before I was healed because I
couldn't afford to live on the $259 a week that I was
getting. I couldn't even walk right when I went back
out on a construction site. So how in the world would
I be able to pay for a lawyer to appeal it?
Number 1000
CHAIR ANDERSON asked what the current scenario is when a worker
is injured in terms of payment of fees.
MR. LISANKIE replied:
Right now there ... is a provision that ... if you get
an attorney, your attorney works on a contingency [fee
basis], and if you prevail, then your insurer is ...
ordered to pay. ... Under this new bill, if the ...
injured worker is not represented by counsel and they
are dissatisfied with the decision from the hearing
officer, the director of the division ... would be
empowered to file an appeal on their behalf. ... So,
that would actually be an improvement as far as that
goes. That is going somewhat in the direction of
getting representation without having to pay for it.
REPRESENTATIVE GATTO commented that "empowered is not required."
He asked whether that is correct.
MR. LISANKIE replied that he didn't want to comment in case he
would mislead the committee.
Number 1113
CHAIR ANDERSON announced that public testimony would remain open
and that HB 450 would be held over.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:15 p.m.
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