Legislature(2017 - 2018)GRUENBERG 120

02/23/2017 01:00 PM House MILITARY & VETERANS' AFFAIRS

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Audio Topic
01:05:52 PM Start
01:06:24 PM HB126
01:45:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 126(MLV) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
   HOUSE SPECIAL COMMITTEE ON MILITARY AND VETERANS' AFFAIRS                                                                  
                       February 23, 2017                                                                                        
                           1:05 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Chris Tuck, Chair                                                                                                
Representative Gabrielle LeDoux, Vice Chair                                                                                     
Representative Justin Parish (via teleconference)                                                                               
Representative Ivy Spohnholz                                                                                                    
Representative George Rauscher                                                                                                  
Representative Lora Reinbold                                                                                                    
Representative Dan Saddler                                                                                                      
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 126                                                                                                              
"An Act relating to workers' compensation benefits for members                                                                  
of the organized militia."                                                                                                      
     - MOVED CSHB 126(MLV) OUT OF COMMITTEE                                                                                     
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 126                                                                                                                  
SHORT TITLE: ORGANIZED MILITIA: WORKERS COMPENSATION                                                                            
SPONSOR(s): MILITARY & VETERANS' AFFAIRS                                                                                        
02/15/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/15/17       (H)       MLV, L&C                                                                                               
02/21/17       (H)       MLV AT 1:30 PM GRUENBERG 120                                                                           
02/21/17       (H)       Heard & Held                                                                                           
02/21/17       (H)       MINUTE(MLV)                                                                                            
02/23/17       (H)       MLV AT 1:00 PM GRUENBERG 120                                                                           
WITNESS REGISTER                                                                                                              
MARIE MARX, Director                                                                                                            
Central Office                                                                                                                  
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on HB 126.                                                                            
SCOTT JORDAN, Director                                                                                                          
Division of Risk Management                                                                                                     
Department of Administration                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on HB 126.                                                                            
ACTION NARRATIVE                                                                                                              
1:05:52 PM                                                                                                                    
CHAIR CHRIS TUCK  called the House Special  Committee on Military                                                             
and   Veterans'   Affairs  meeting   to   order   at  1:05   p.m.                                                               
Representatives Saddler, Reinbold,  Spohnholz, Rauscher, and Tuck                                                               
were present  at the call  to order.  Representatives  LeDoux and                                                               
Parish  (via  teleconference)  arrived  as  the  meeting  was  in                                                               
         HB 126-ORGANIZED MILITIA: WORKERS COMPENSATION                                                                     
1:06:24 PM                                                                                                                    
CHAIR TUCK  announced that  the only order  of business  would be                                                               
HOUSE BILL  NO. 126,  "An Act  relating to  workers' compensation                                                               
benefits for members of the organized militia."                                                                                 
CHAIR TUCK stated that HB  126 would extend workers' compensation                                                               
benefits to  organized [militia  members] while  participating in                                                               
training exercises.   Current  statute already  provides workers'                                                               
compensation benefits  to members  of the organized  militia when                                                               
called into active  service; HB 126 would extend  the benefits to                                                               
1:07:34 PM                                                                                                                    
REPRESENTATIVE  RAUSCHER  asked  what the  workers'  compensation                                                               
coverage would cost the state both before and after an injury.                                                                  
1:08:33 PM                                                                                                                    
MARIE   MARX,  Director,   Division   of  Workers   Compensation,                                                               
Department  of Labor  &  Workforce  Development (DLWD),  answered                                                               
that the remedy  for an injury without  workers' compensation, is                                                               
through litigation.  She remarked:                                                                                              
     Workers'  compensation  is  an insurance  program  that                                                                    
     provides  prompt,  efficient,  limited benefits  to  an                                                                    
     employee,   and  in   exchange   for  providing   those                                                                    
     benefits, the  injured worker gives  up their  right to                                                                    
     sue  and  gives  up  their right  to  pursue  pain  and                                                                    
     suffering and punitive  damages and so forth.   So it's                                                                    
     a limited  benefit system, and  they call it  the great                                                                    
     compromise, 'cause  that's what it  really is -  it's a                                                                    
     compromise  that really  resulted  from the  industrial                                                                    
     ...  revolution when  there  were  severe injuries  and                                                                    
     resulting lawsuits that put  employers out of business.                                                                    
     So  before  workers'  [compensation] is  in  place,  it                                                                    
     would  be  the tort  remedy  and  whatever damages  are                                                                    
     pursued through that.                                                                                                      
MS.  MARX explained  that under  HB  126, a  worker whose  injury                                                               
falls within the coverage could  receive medical costs, indemnity                                                               
benefits,  death  benefits,  and   reemployment  benefits.    The                                                               
indemnity or wage loss would  be calculated based on the workers'                                                               
gross weekly earnings, and would be capped at $1,239 per week.                                                                  
REPRESENTATIVE RAUSCHER  offered his understanding that  under HB
126,  there is  no cost  to state  unless a  covered worker  gets                                                               
hurt; the  costs of the injury  could result in a  slight rise in                                                               
premiums across the many state employees.                                                                                       
MS.   MARX responded  that the  State of  Alaska as  the employer                                                               
would not incur additional premiums:   Any benefits paid would be                                                               
the  costs.   She expressed  that there  is no  way to  know what                                                               
costs or benefits will be paid in any future case.                                                                              
1:11:21 PM                                                                                                                    
REPRESENTATIVE SADDLER  drew attention  to the zero  fiscal notes                                                               
provided  by  the  Department of  Administration,  Department  of                                                               
Labor,  and  Department of  Military  &  Veterans' Affairs.    He                                                               
offered his understanding that a  zero fiscal note is provided as                                                               
confirmation  that  the  legislation   would  have  no  financial                                                               
impact, but this piece of  legislation has an uncertain financial                                                               
impact.    He  opined  that based  on  previous  testimony  which                                                               
identified that  the costs are  unknown, an  indeterminate fiscal                                                               
note would be  more appropriate.  He requested a  new fiscal note                                                               
to reflect the uncertainty of costs.                                                                                            
Ms.  MARX responded  that the  Division of  Workers' Compensation                                                               
would not incur  any additional costs to  administer the coverage                                                               
under HB 126.                                                                                                                   
REPRESENTATIVE SADDLER  remarked, "If this is  free, great, let's                                                               
cover everybody all  the time, if it's free ...  but I suspect it                                                               
is not."                                                                                                                        
MS.  MARX  deferred   the  question  to  the   Division  of  Risk                                                               
1:13:06 PM                                                                                                                    
REPRESENTATIVE  SADDLER noted  that there  is value  in providing                                                               
workers' compensation  to the organized militia  members, and the                                                               
fiscal  notes should  reflect the  certainty  of the  costs.   He                                                               
remarked, "If we don't know what  that cost will be, I think that                                                               
deserves an indeterminate fiscal note."                                                                                         
SCOTT JORDAN,  Director, Division of Risk  Management, Department                                                               
of  Administration,   responded  that   Representative  Saddler's                                                               
comments are  not incorrect.   He explained that the  Division of                                                               
Risk Management  can calculate the  salaries and  projected costs                                                               
of most  state employees  and can generate  a rate;  however, the                                                               
division does not have accurate  data on members of the organized                                                               
militia and  is unable  to generate  a rate.   He agreed  that if                                                               
there was a claim, then there  would be a premium for that agency                                                               
for that claim, but it can't be calculated beforehand.                                                                          
REPRESENTATIVE  SADDLER expressed  that  if there  is  no way  to                                                               
calculate [the  costs], then the fiscal  impact is indeterminate.                                                               
He mentioned that militia members  would be in circumstances with                                                               
a  higher chance  of injury  than most  state workers.   He  drew                                                               
attention  to  page 1,  lines  5-9,  of  HB  126, which  read  as                                                               
     (a)  A member  of the  organized militia  who has  been                                                                  
     ordered  into  active  state service  by  the  governor                                                                  
     under AS  26.05.070 or ordered  into training  under AS                                                                  
     26.05.100, and  who suffers an injury  or disability in                                                                  
     the  line of  duty, is  an  employee of  the state  for                                                                  
     purposes of this chapter.                                                                                                  
MR. JORDAN noted  that HB 126 would add  coverage during training                                                               
and  organized  militia  members  are already  covered  while  on                                                               
active duty.                                                                                                                    
1:15:38 PM                                                                                                                    
CHAIR TUCK  asked whether  a rate  was previously  determined for                                                               
the coverage  of members of  the organized militia  during active                                                               
duty.    He  asked  if   any  injuries  have  increased  workers'                                                               
compensation payments.                                                                                                          
MR. JORDAN answered  that organized militia members  have been on                                                               
the  books for  so  long that  he is  unsure  whether rates  were                                                               
calculated  before  he started  working  with  the department  in                                                               
1998.    He offered  his  understanding  that similar  groups  of                                                               
people covered  by workers' compensation were  taken into account                                                               
when the division started generating  premiums.  He proposed that                                                               
workers' compensation  costs were  likely considered as  a whole,                                                               
not  individually.   He  remarked,  "There's  no  way for  us  to                                                               
individually count  these people because they're  not reported on                                                               
the [full-time equivalents] (FTEs)."                                                                                            
CHAIR  TUCK  offered  his  understanding   that  members  of  the                                                               
organized militia are  considered part of the  collective and the                                                               
costs would  be absorbed by  the collective.   He asked  how soon                                                               
the state  would see an  increase in workers'  compensation rates                                                               
based on the proposed provision.                                                                                                
MR. JORDAN responded that Chair  Tuck is correct that members are                                                               
calculated as a  whole.  He explained that if  a claim were filed                                                               
and concluded in  fiscal year 2017 (FY 17), then  the claim would                                                               
be on the FY 18 premiums amortized over five years.                                                                             
REPRESENTATIVE SADDLER said that he  tries to be weary of "little                                                               
foxes  that  spoil the  vineyards."    He  noted that  the  House                                                               
Special  Committee on  Military  and Veterans'  Affairs can  make                                                               
policy decisions,  but the costs  might need  to go to  the House                                                               
Finance Committee.                                                                                                              
1:18:38 PM                                                                                                                    
REPRESENTATIVE SADDLER  moved to  attach an  indeterminate fiscal                                                               
note to  HB 126.   [The  motion was  subsequently referred  to as                                                               
Amendment 1.]                                                                                                                   
1:18:53 PM                                                                                                                    
REPRESENTATIVE LEDOUX  objected to the  motion.  She  stated that                                                               
departments, not committees, decide a bill's fiscal note.                                                                       
1:19:26 PM                                                                                                                    
CHAIR TUCK offered his understanding  that fiscal notes have been                                                               
changed in committee through dialogue.                                                                                          
REPRESENTATIVE  LEDOUX responded  that her  attempt last  year to                                                               
"zero out"  a fiscal note  was overruled  by the Speaker  [of the                                                               
CHAIR  TUCK pointed  out  that neither  the  future premiums  for                                                               
workers' compensation  coverage nor  the costs of  litigation and                                                               
medical expenses  without workers'  compensation coverage  can be                                                               
accurately  predicted, but  it is  clear that  the costs  without                                                               
coverage would be  much more than the premiums.   He mentioned an                                                               
example  where one  person's  claim was  larger  than the  entire                                                               
annual budget  for the [Alaska  State Defense Force].   He asked,                                                               
"Do we  really want to  put ourselves at  that type of  risk ...,                                                               
and what is the cost of that risk?"                                                                                             
1:21:13 PM                                                                                                                    
REPRESENTATIVE SADDLER  identified that the fiscal  notes are all                                                               
the initial versions  and have not been updated.   He stated that                                                               
a potential  amendment could add  death and  disability benefits,                                                               
and the costs  would need to be re-evaluated if  the amendment is                                                               
1:21:59 PM                                                                                                                    
REPRESENTATIVE  PARISH  stated  his opposition  to  changing  the                                                               
fiscal  notes, because  they were  prepared by  professionals and                                                               
because all  envisioned scenarios show that  the state's exposure                                                               
would be lower with workers' compensation coverage.                                                                             
CHAIR TUCK announced that the  forthcoming vote would only be for                                                               
members in the room.                                                                                                            
1:23:10 PM                                                                                                                    
A  roll  call  vote  was  taken.    Representatives  Saddler  and                                                               
Reinbold voted in favor of  the motion to attach an indeterminate                                                               
fiscal note to HB 126  [subsequently referred to as Amendment 1].                                                               
Representatives  Spohnholz,  LeDoux,  Rauscher,  and  Tuck  voted                                                               
against it.  Therefore, the motion failed by a vote of 2-4.                                                                     
1:23:55 PM                                                                                                                    
REPRESENTATIVE  SADDLER  asked  if  Alaska  State  Defense  Force                                                               
(ASDF) members and [Alaska] National  Guard members are currently                                                               
covered while on active duty.                                                                                                   
MR. JORDAN answered that both  are covered as state employees and                                                               
would  receive the  same benefits  as state  employees, including                                                               
workers' compensation.                                                                                                          
REPRESENTATIVE SADDLER  asked, "The  [Alaska] National  Guard ...                                                               
when  [members]  are  undergoing  training,  are  they  currently                                                               
covered by workers' compensation as state employees?"                                                                           
MR. JORDAN offered his understanding that they are not covered.                                                                 
REPRESENTATIVE  SADDLER  asked  if ASDF  volunteers  are  covered                                                               
during training.                                                                                                                
MR. JORDAN answered that they are not covered.                                                                                  
REPRESENTATIVE SADDLER asked if death  benefits would be given if                                                               
an Alaska National Guard member died during active service.                                                                     
MR.  JORDAN answered  yes.    If members  were  activated by  the                                                               
governor, then they have benefits  as state employees; if members                                                               
were  activated by  the federal  government, then  they would  be                                                               
covered by the federal government.                                                                                              
REPRESENTATIVE SADDLER asked if there  is death coverage for ASDF                                                               
members while in active duty or training.                                                                                       
MR. JORDAN  responded that members currently  have death benefits                                                               
if activated by  the governor but do not have  death benefits for                                                               
training missions.                                                                                                              
1:26:28 PM                                                                                                                    
CHAIR  TUCK moved  to adopt  Amendment 2,  labeled 30-LS0357\D.1,                                                               
Wallace, 2/22/17, which read as follows:                                                                                        
     Page 1, line 8:                                                                                                            
          Delete "or disability:                                                                                                
          Insert ", disability, or death"                                                                                       
1:26:58 PM                                                                                                                    
REPRESENTATIVE SADDLER objected for the purpose of discussion.                                                                  
CHAIR TUCK  explained that Amendment  2 would add  death benefits                                                               
to  the coverage  for  members of  the  organized militia  during                                                               
1:27:17 PM                                                                                                                    
MS. MARX  said that language  in Amendment 2 mirrors  language in                                                               
military code.                                                                                                                  
1:27:36 PM                                                                                                                    
REPRESENTATIVE REINBOLD  asked if  the reason  for a  zero fiscal                                                               
note is because there is no anticipation of a death.                                                                            
MS.   MARX   offered   her  understanding   that   Representative                                                               
Reinbold's  question  pertains  to   the  fiscal  note  from  the                                                               
Division of  Risk Management  which would  pay the  benefits; the                                                               
Division of  Workers' Compensation would administer  benefits and                                                               
would not have any increased operational costs under HB 126.                                                                    
1:28:08 PM                                                                                                                    
MR. JORDAN stated that there  is no anticipation of death [during                                                               
training], although it is possible.   He noted that ASDF training                                                               
missions  have  only  had  one  injury, so  it  is  difficult  to                                                               
calculate   possible  costs.      He   explained  that   workers'                                                               
compensation costs  go up  and down by  millions of  dollars each                                                               
year,  but the  premiums stay  fairly consistent  as the  risk is                                                               
spread  among all  the departments.   He  commented that  a death                                                               
would be  tragic and  although it would  be expensive,  the costs                                                               
would be  spread out.  He  stated that DMVA would  not incur such                                                               
costs on its own.                                                                                                               
REPRESENTATIVE REINBOLD  asked if  [Amendment 2] would  result in                                                               
any  financial  increase  to  the  state.    She  commented  that                                                               
government  is  continuing to  grow  with  unintended costs;  she                                                               
mentioned that although there have  been massive investments, the                                                               
state still has poor statistics.                                                                                                
1:30:09 PM                                                                                                                    
MS. MARX pointed out that  workplace fatalities are rare and have                                                               
been  decreasing; there  were  17  work-related deaths  statewide                                                               
last year.   Although  the number is  lower than  previous years,                                                               
she  stated her  hope that  the state  gets to  zero work-related                                                               
REPRESENTATIVE  REINBOLD asked  if the  number includes  both the                                                               
public and private sectors.                                                                                                     
MS.  MARX  answered  that it  includes  all  work-related  deaths                                                               
suffered by  public or private  employees in Alaska.   She stated                                                               
that  she  does not  have  the  breakdown  but would  obtain  the                                                               
1:31:16 PM                                                                                                                    
CHAIR TUCK explained  that Amendment 2 would  change only section                                                               
1 of HB 126 in order to conform to other statutory language.                                                                    
1:31:51 PM                                                                                                                    
CHAIR  TUCK asked  Representative  Saddler if  he maintained  his                                                               
objection to Amendment 2.                                                                                                       
REPRESENTATIVE  SADDLER answered  yes and  he indicated  he would                                                               
like a roll call vote.                                                                                                          
1:32:10 PM                                                                                                                    
REPRESENTATIVE PARISH  spoke in  support of  Amendment 2  to make                                                               
statutory language consistent.                                                                                                  
1:32:28 PM                                                                                                                    
A roll call  vote was taken.   Representatives Rauscher, Saddler,                                                               
Reinbold,  Spohnholz,   LeDoux,  and  Tuck  voted   in  favor  of                                                               
Amendment 2.  Therefore, Amendment 2  was adopted by a vote of 6-                                                               
1:33:03 PM                                                                                                                    
REPRESENTATIVE   SADDLER   asked  for   clarification   regarding                                                               
Amendment 1.                                                                                                                    
CHAIR  TUCK   explained  that   he  had   treated  Representative                                                               
Saddler's  previous motion  for an  indeterminate fiscal  note as                                                               
being Amendment 1.                                                                                                              
1:33:22 PM                                                                                                                    
REPRESENTATIVE SADDLER said  that HB 126 would  "plug a potential                                                               
hole."   He asked  that the impacts  of HB 126  would be  and the                                                               
risks it would address.                                                                                                         
1:33:50 PM                                                                                                                    
MR. JORDAN  answered that  up to 76  ASDF members  doing training                                                               
missions would  be covered for  an additional  24 to 28  days per                                                               
REPRESENTATIVE SADDLER  characterized that the coverage  is quite                                                               
small  compared  to  the  full  scope  of  the  State  of  Alaska                                                               
MR. JORDAN agreed.                                                                                                              
1:34:58 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ said that the  volunteers who sign up to                                                               
actively  volunteer  with  ASDF  are  doing  the  state  a  great                                                               
service.   She expressed  that insuring  ASDF members  while they                                                               
prepare for  an emergency offers  members the security  needed if                                                               
something  happened that  might jeopardize  their livelihood  and                                                               
would  give  members  confidence  that their  service  would  not                                                               
jeopardize  their  families.     She  reported  that  in  Alaska,                                                               
homelessness  and bankruptcies  are  often  caused by  healthcare                                                               
crises that  put people in  financial desperation.   She conveyed                                                               
that HB  126 a way  to ensure  that those serving  Alaska through                                                               
the ASDF wouldn't have to face that risk.                                                                                       
1:36:44 PM                                                                                                                    
REPRESENTATIVE RAUSCHER offered his  support of the bill although                                                               
he noted that there might be future costs involved.                                                                             
1:37:27 PM                                                                                                                    
REPRESENTATIVE REINBOLD stated  that it is important  to have the                                                               
volunteer defense force covered in an emergency.  She remarked:                                                                 
     However, I'm going to say  that this is an inconsistent                                                                    
     message.    We  just   had  Department  of  Military  &                                                                    
     Veterans' Affairs  [Finance] Subcommittee  closeout and                                                                    
     the only  cut that we made  was a small token  of money                                                                    
     to help  empower our rural  communities to  prepare for                                                                    
     natural or manmade disaster.   And ... I think that was                                                                    
     a  terrible   mistake  in  our  [House]   Military  and                                                                    
     Veterans'  Affairs [Finance  Subcommittee] and  I would                                                                    
     just ask  you, Mr. Chairman, to  please reconsider what                                                                    
     happened there.  But with  that I'm definitely going to                                                                    
     be supporting this.                                                                                                        
1:38:21 PM                                                                                                                    
CHAIR  TUCK   responded  that  he   is  not  the  chair   of  the                                                               
aforementioned subcommittee:   The action has been  taken and any                                                               
future amendments  can be  brought forward  to the  House Finance                                                               
Standing Committee.   He stated that it is an  unfortunate cut to                                                               
a  program,   but  that   cut  is   unrelated  to   the  proposed                                                               
1:39:06 PM                                                                                                                    
REPRESENTATIVE SADDLER,  upon remarking that  HB 126 is  good and                                                               
covers unlikely  but potentially bad  risk, moved that HB  126 be                                                               
sponsored by the committee.                                                                                                     
CHAIR TUCK clarified that HB 126 was already a committee bill.                                                                  
REPRESENTATIVE LEDOUX  noted that  the committee,  [by a  vote of                                                               
4:2  during  its  organizational   discussion  on  1/26/17],  had                                                               
granted the chair  permission to draft any bill on  behalf of the                                                               
CHAIR TUCK  said he  would entertain  a motion  to object  to the                                                               
committee  sponsorship  of  HB  126.   [The  previous  motion  by                                                               
Representative Saddler  for committee  sponsorship of HB  126 was                                                               
treated as withdrawn.]                                                                                                          
REPRESENTATIVE SADDLER moved to express  his opposition to HB 126                                                               
being sponsored  by the committee.   He  added, "I was  trying to                                                               
express  support for  the  bill, but  I'm  being maneuvered  into                                                               
saying, 'No.'   But  okay, that's the  motion required,  then ...                                                               
that's my motion."                                                                                                              
CHAIR TUCK asked Representative Saddler to restate the motion.                                                                  
REPRESENTATIVE  SADDLER  said, "I  move  that  the House  Special                                                               
Committee on Military  and Veterans' Affairs not adopt  HB 126 as                                                               
a committee bill."                                                                                                              
REPRESENTATIVE  LEDOUX objected  to  the motion.   She  expressed                                                               
that  since there  had already  been a  vote on  the matter,  the                                                               
appropriate [action] would  be to move to  rescind [the committee                                                               
REPRESENTATIVE SADDLER  explained that he simply  had been trying                                                               
to  express  the  committee's  explicit approval  of  HB  126  as                                                               
opposed  to   the  universal   [approval  related   to  committee                                                               
sponsorship of legislation].   He said, "So, for the  good of the                                                               
bill  and  for  the  process  of the  committee,  I  withdraw  my                                                               
1:42:34 PM                                                                                                                    
CHAIR  TUCK  commented  that  the  majority  of  the  committee's                                                               
questions  pertain to  the  costs  associated with  HB  126.   He                                                               
stated that  without insurance, the  department has a  high risk:                                                               
one injury cost the department its  entire budget [for ASDF].  He                                                               
noted that HB  126 would not cost the state  any additional money                                                               
and would eliminate future financial risks to the state.                                                                        
1:43:59 PM                                                                                                                    
REPRESENTATIVE LEDOUX moved to report  HB 126, as amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.  There being  no objection, CSHB 126(MLV) was moved                                                               
out  of   the  House  Military  and   Veterans'  Affairs  Special                                                               
1:45:04 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Special Committee  on Military and Veterans'  Affairs meeting was                                                               
adjourned at 1:45 p.m.                                                                                                          

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