Legislature(1999 - 2000)
04/19/2000 02:15 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE April 19, 2000 2:15 p.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Rick Halford, Vice-Chairman Senator Dave Donley Senator Johnny Ellis MEMBERS ABSENT Senator John Torgerson COMMITTEE CALENDAR Confirmation Hearings: Board of Governors of the Alaska Bar - Anastasia Cook Hoffman Commission on Judicial Conduct - Sharon Nahorney Alaska Judicial Council - Gigi Pilcher CS FOR HOUSE BILL NO. 372(FIN) am "An Act relating to criminal sentencing and restitution." -MOVED SCS CSHB 372(JUD) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 392(HES) "An Act relating to continuances for temporary custody hearings that follow emergency custody of a child; and amending Rule 10, Alaska Child in Need of Aid Rules." -MOVED CSHB 392(HES) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 294(JUD) "An Act relating to violations of an order to submit to deoxyribonucleic acid (DNA) testing, to court orders and conditions of parole to collect samples for DNA testing, to removal of material from the DNA identification registration system; and providing for an effective date." -MOVED CSHB 294(JUD) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 419(RLS) "An Act relating to the weekly rate of compensation and minimum and maximum compensation rates for workers' compensation; specifying components of a workers' compensation reemployment plan; adjusting workers' compensation benefits for permanent partial impairment, for reemployment plans, for rehabilitation benefits, for widows, widowers, and orphans, and for funerals; relating to permanent total disability of an employee receiving rehabilitation benefits; relating to calculation of gross weekly earnings for workers' compensation benefits for seasonal and temporary workers and for workers with overtime or premium pay; setting time limits for requesting a hearing on claims for workers' compensation, for selecting a rehabilitation specialist, and for payment of medical bills; relating to termination and to waiver of rehabilitation benefits, obtaining medical releases, and resolving discovery disputes relating to workers' compensation; setting an interest rate for late payments of workers' compensation; providing for updating the workers' compensation medical fee schedule; and providing for an effective date." -MOVED SCS CSHB 419(JUD) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 310(L&C) "An Act relating to the Alaska Insurance Guaranty Association." -MOVED CSHB 310(L&C) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 368(JUD) am "An Act relating to release of persons before trial and before sentencing or service of sentence; relating to when service of sentence shall begin; relating to custodians of persons released, to security posted on behalf of persons released, and to the offense of violation of conditions of release; and amending Rule 41(f), Alaska Rules of Criminal Procedure." -SCHEDULED BUT NOT HEARD CS FOR HOUSE BILL NO. 366(FIN) am "An Act relating to the rights of crime victims, the crime of violating a protective order or injunction, enforcement of protective orders, mitigating factors in sentencing for an offense, and the return of certain seized property to victims; expanding the scope of the prohibition of compromise based on civil remedy of misdemeanor crimes involving domestic violence; and amending Rules 10, 11, 13, 16, and 17, Alaska District Court Rules of Civil Procedure, and Rule 9, Alaska Rules of Administration." -SCHEDULED BUT NOT HEARD PREVIOUS SENATE COMMITTEE ACTION HB 294 - No previous action to report. HB 310 - See Labor and Commerce minutes dated 4/13/00. HB 372 - No previous action to report. HB 392 - No previous action to report. HB 419 - No previous action to report. WITNESS REGISTER Ms. Sharon Nahorney 619 East Fifth Avenue Anchorage, Alaska 99501 POSITION STATEMENT: Stood for Confirmation Ms. Gigi Pilcher 2749 Third Avenue Ketchikan, Alaska 99901 POSITION STATEMENT: Stood for Confirmation Ms. Anastasia Cooke Hoffman PO Box 2347 Bethel, Alaska 99559 POSITION STATEMENT: Stood for Confirmation Representative Fred Dyson State Capitol Building Juneau, Alaska 99801 POSITION STATEMENT: Sponsor of HB 372 Mr. Peter Torkelson Staff to Representative Dyson State Capitol Building Juneau, Alaska 99801 POSITION STATEMENT: Testified on HB 372 Mr. Dean Guaneli Assistant Attorney General Department of Law PO Box 110300 Juneau, Alaska 99811-0300 POSITION STATEMENT: Testified on HB 372 Ms. Lori Backes Staff to Representative Whitaker State Capitol Building Juneau, Alaska 99801 POSITION STATEMENT: Presented HB 392 Mr. Del Smith, Deputy Commissioner Department of Public Safety PO Box 111200 Juneau, Alaska 99811-1200 POSITION STATEMENT: Supports HB 294 Mr. John McKinnon Anchorage Police Department PO Box 196650 Anchorage, AK 99519 POSITION STATEMENT: Supports HB 294 Mr. Peter Torkelson Staff Aid to Representative Dyson State Capitol Building Juneau, Alaska 99801 POSITION STATEMENT: Testified on HB 372 Representative Norman Rokeberg State Capitol Building Juneau, Alaska 99801 POSITION STATEMENT: Testified on HB 419 Mr. Paul Grossi, Director Division of Workers' Compensation Department of Labor and Workforce Development PO Box 25512 Juneau, Alaska 99802-5512 POSITION STATEMENT: Supports HB 419 Mr. Willy Van Hemert Co-Chair, Ad Hoc Committee on Workers' Compensation 3900 Arctic Anchorage, Alaska 99501 POSITION STATEMENT: Supports HB 419 Mr. Matt O'Brien, President Alaska AFL-CIO No address furnished POSITION STATEMENT: Supports HB 419 Mr. Kevin Dougherty 2501 Commercial Anchorage, Alaska 99501 POSITION STATEMENT: Supports HB 419 Mr. Mano Frey POSITION STATEMENT: Testified on HB 310 Mr. Dan Brow Consumer Services Specialist Division of Insurance 3601 C St. Anchorage, AK 99503-5948 POSITION STATEMENT: Answered questions about COBRA insurance Mr. Mike Lessmeier Lessmeier & Winters 124 West 5th Juneau, AK 99801 POSITION STATEMENT: Testified on HB 310 Mr. Tom Andritsch 4300 Boniface Parkway, #201 Anchorage, Alaska 99504 POSITION STATEMENT: Testified on HB 310 ACTION NARRATIVE TAPE 00-24 & TAPE 00-25 TAPE 00-24, SIDE A Number 001 CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to order at 2:15. Present were SENATOR ELLIS, SENATOR DONLEY, SENATOR HALFORD and CHAIRMAN TAYLOR. The confirmations for the Alaska Commission on Judicial Conduct, the Board of Governors of the Alaska Bar Association, and the Alaska Judicial Council were the first order of business. CHAIRMAN TAYLOR asked Ms. Sharon Nahorney to discuss her reasons for wanting to serve on the Alaska Commission on Judicial Conduct. MS. SHARON NAHORNEY informed committee members she was appointed by Governors Hickel and Knowles to serve on the Commission. Part of her interest in serving is the result of working with Victims for Justice for many years. During that time she was very involved with the Court System and interacted with judges in many areas. When this opportunity arose, she felt it would be a good way to serve the community and to help those who had suffered traumas as victims of violent crimes. She has learned a great deal during the time she has served on the Commission and she believes she can be an asset to both the community and the state by continuing to serve. CHAIRMAN TAYLOR thanked Ms. Nahorney for her extensive service. SENATOR ELLIS moved to forward Ms. Nahorney's name to the full Senate for consideration. There being no objection, the motion carried. CHAIRMAN TAYLOR asked Ms. Gigi Pilcher to describe her background and desire to serve on the Alaska Judicial Council. MS. GIGI PILCHER informed committee members that she is a 27 year resident of Alaska. She volunteered at the Women in Safe Homes program in 1977 and has worked with victims of domestic violence and sexual assault as well as victims of other types of violent crimes since that time. She has served on the Alaska Sentencing Commission and the Alaska Juvenile Justice Board. She is very interested in working with victims of crime and she has had a lot of contact with the Court System. SENATOR DONLEY remarked that there has been a problem during the past few years with information coming from the Court System to the Alaska Judicial Council. An Alaska statute requires judges to produce their opinions within six months of a final argument. He believes compliance with that statute is important information for the voters to have when it comes time for judicial retention elections however counsel has requested that information in the past but the request was denied by the Court System. He asked Ms. Pilcher her policy on actively seeking that information and how she will incorporate that into her report to the voters. MS. PILCHER said she believes that is very important information that the public has a right to know and should know. Regarding her role on the Alaska Judicial Council, she is not yet aware what role or teeth the Council has to enforce that. She thinks one of the most frustrating things to the public is that when udges come up for retention, their re-election is almost automatic. She believes that having the information about how judges carry forth their duties is extremely important. SENATOR DONLEY asked Ms. Pilcher if she will be serving as a public member. MS. PILCHER said that is correct. SENATOR DONLEY noted that the Alaska Judicial Council was created by a constitutional amendment and that he is not particularly pleased with the composition of the Council because it heavily favors the Alaska Bar. He would much prefer to see a citizen, or non-lawyer dominated Council. He requested that Ms. Pilcher stick up for the general public's interest and not be intimidated by the attorneys on the Council even though she will be outnumbered. He also asked her to come to the Legislature if she needs assistance in any endeavor to improve the Court System. MS. PILCHER said she would be very willing to do that and added that Senator Taylor is aware that she is willing to speak out about things that she believes in. CHAIRMAN TAYLOR stated that he can attest that Ms. Pilcher will not back down and he thanked her for her willingness to serve. SENATOR DONLEY moved to forward Ms. Pilcher's name to the full body for consideration. There being no objection, the motion carried. CHAIRMAN TAYLOR announced that the committee would take up HB 372. Number 648 HB 372-CRIMINAL SENTENCING AND RESTITUTION REPRESENTATIVE FRED DYSON, sponsor of HB 372, explained that virtually all justice systems have traditionally focussed on restoring the victim to a pre-offense condition. In biblical times, if a cow was killed, the community would come together and require that the owner of the cow be compensated. In this country, a movement back to a restorative or reparative justice system is occurring. HB 372 is a small step that puts in statute language that permits judges to allow perpetrators of non-violent crimes to negotiate reparations for the community or for the victim which the judge can use as part of the offender's sentence. Number 819 DEAN GUANELI, Assistant Attorney General with the Criminal Division of the Department of Law (DOL), agreed with Representative Dyson that the current process of awarding restitution to victims has problems, however he does not believe HB 372 addresses the key issues. HB 372 is unfair to victims and it is unfair to other defendants. In addition it contains uncertain procedures. MR. GUANELI said first of all, putting victims in a position to, in essence, plea bargain with the defendant over the sentence puts the victim in an unequal bargaining position. Defendants have a right to counsel, and if they cannot afford one, counsel is appointed for them. Victims may not have a lawyer therefore they could be taken advantage of by defense attorneys who know the law and procedures. Nothing will be gained by the victim when negotiating directly with the defendant. Defense attorneys are likely to tell the victims if they agree to a lesser sentence, they will get paid the full amount of restitution. Although the bill contains a provision that addresses coercion or intimidation, defense attorneys will simply be using good negotiating tactics. MR. GUANELI maintained that HB 372 will create a series of uncertain procedures. When the defendant reaches an agreement with the prosecutor over a plea, it is presented to the judge. If the judge does not accept the agreement, the defendant is allowed to withdraw his plea and the case goes to trial. The agreement could be held over the victim's head by the defense attorney who might say if the victim does not agree, the case will go to trial. It raises the spectre of putting the victim in a position of having to plea bargain without being aware of all of the laws and rules of procedure. It also raises questions about the role of the probation office in presenting pre-sentence reports to the court. MR. GUANELI commented that the additional thing about creating a mitigating factor in which a defendant can make a deal with the victim allows defendants with money to buy their way out of jail time. He noted that the Senate has passed SB 4 which creates an office of victim advocacy. HB 372 will have a large impact on that agency as victims will most likely get representation from it. MR. GUANELI suggested the following changes to improve the existing system. AS 12.55.005 contains a list of factors that the court is supposed to consider when imposing a sentence. A factor about restoration of the victim and the community could be included. That would force judges to consider restoration of the victim but it would not put the victim in the position of actually having to plea bargain. The factors in the statute then will find their way into the appelate opinion. If the sentencing courts do not adequately take the factors into consideration, the appelate court has sentencing review authority so the sentence can be disapproved. Second, in imposing restitution, the court can require compensation in some form other than money. Some judges make restitution a condition of probation so that if the offender does not pay, he or she could be put back in jail. That only works for the duration of the probation period, however. He suggested making the order of restition a condition of probation and a condition of the sentence. That way, if the restitution is not paid before the probation period ends, the order of restitution can be reduced to a civil judgment and enforced by the victim. He indicated that by placing the condition of sentence in statute, all judges would use it. MR. GUANELI informed committee members that he had a list of his suggestions which could easily be put in an amendment format. Number 1338 SENATOR HALFORD noted that the title of HB 372 is broad enough to amend almost anything into it. He asked Representative Dyson how he felt about the proposed amendment. REPRESENTATIVE DYSON said he has not yet seen the list of suggestions which disturbs him. He thought they sounded good. MR. GUANELI indicated the suggestions were given to Representative Dyson's staff earlier today. CHAIRMAN TAYLOR suggested that Mr. Guaneli meet with Representative Dyson to discuss a proposed amendment. He noted that as a district judge he has seen victims hold defendants hostage. He thought HB 372 provides for victims' allocution rights and for enforcement rights that the court can give to victims. He noted that representatives of womens' shelters throughout the state expressed concern about negotiations between partners in domestic violence cases. REPRESENTATIVE DYSON pointed out that the crime of domestic violence and other crimes of violence were left out of the bill for that very reason. HB 372 only applies to the sentencing phase and it allows, not mandates, the judge to allow negotiations. CHAIRMAN TAYLOR noted in a majority of cases, sentencing occurs at arraignment. Only in a felony case will there be some delay in the sentencing process. REPRESENTATIVE DYSON said this weekend a restorative justice conference is being held in Anchorage and he will be attending one in Washington, D.C. in May. Most of the judges in Alaska see this as an opportunity to protect the rights of the victim. Many judges are referring cases to mediation which is done in a very controlled environment where the victim's rights are looked after. CHAIRMAN TAYLOR announced the committee would put the bill aside for a short time while Representative Dyson and Mr. Guaneli discuss a proposed amendment. HB 392-CONTINUANCES OF CINA HEARINGS MS. LORI BACKES, legislative assistant to Representative Whitaker, sponsor of HB 392, made the following comments about the measure. HB 392 is the result of many conversations with constituents who have concerns about the process of placing a child in the custody of the Division of Family and Youth Services (DFYS). When a child is taken into custody, it is an emotionally charged and confusing time for the parents and guardians. Most often, at the temporary custody hearing which occurs 48 hours after the child is taken into custody, the parents have not seen the allegations made against them. HB 392 gives parents and guardians an opportunity to take a little bit of time to understand the circumstances that have brought them to this point and to consider their course of action. It recognizes and affirms in statute that parents or guardians have the right to request a continuance and it requires the judge to inform them of that right. The bill is supported by the Public Defenders' Agency and the Department of Health and Social Services. There being no questions or further testimony on HB 392, SENATOR HALFORD moved to pass HB 392 out of committee with individual recommendations. There being no objection, the motion carried. Number 1727 HB 294-DNA TESTING & REGISTRATION CHAIRMAN TAYLOR announced the committee took testimony on an identical Senate bill (SB 201). MR. DEL SMITH, Deputy Commissioner of the Department of Public Safety, stated the department supports HB 294. SENATOR HALFORD moved to pass HB 294 to its next committee of referral with individual recommendations. There being no objection, the motion carried. MR. JOHN MCKINNON, Anchorage Police Department, stated support for HB 294. CHAIRMAN TAYLOR recessed the meeting at 2:50 p.m. CHAIRMAN TAYLOR called the Senate Judiciary Committee meeting back to order at 3:13 p.m. Present were Senators Ellis, Donley and Chairman Taylor. Chairman Taylor announced that HB 372 would again be up for consideration. HB 372-CRIMINAL SENTENCING AND RESTITUTION MR. PETER TORKELSON, legislative aide to Representative Dyson, informed committee members that he and Representative Dyson sat down with representatives from DOL. Representative Dyson is not opposed to incorporating Mr. Guaneli's proposed amendment into HB 372. He believes DOL intends to replace HB 372 with the proposed amendment which Representative does not support. Amendment 1 reads as follows. A M E N D M E N T 1 OFFERED IN THE SENATE DEPARTMENT OF LAW TO: CSHB 372(FIN)am *Section 1. AS 12.55.005 is amended to read: Sec. 12.55.005. Declaration of purpose. The purpose of this chapter is to provide the means for determining the appropriate sentence to be imposed upon conviction of an offense. The legislature finds that the elimination of unjustified disparity in sentences and the attainment of reasonable uniformity in sentences can best be achieved through a sentencing framework fixed by stateute as provided in thie chapter. In imposing sentence, the court shall consider (1) the seriousness of the defendant's present offense in relation to other offenses; (2) the prior criminal history of the defendant and the likelihood of rehabilitation; (3) the need to confine the defendant to prevent further harm to the public; (4) the circumstances of the offense and the extent to which the offense harmed the victim or endangered the public safety; (5) the effect of the sentence to be imposed in deterring the defendant or other members of society from future criminal conduct; [AND] (6) the effect of the sentence to be imposed as a community condemnationn of the criminal act and as a reaffirmation of societal norms; and (7) the restoration of the victim and the community. *Sec. 2AS 12.55.045(f) is amended to read: (f) If a court proposes to order a defendant to pay restitution under this section of more [LESS] than $5,000, and the defendant's sentence includes [DOES NOT INCLUDE] a period of unsuspended incarceration exceeding 90 days, the court may take into account at the time of sentencing the defendant's present and future ability to pay the restitution proposed. The court shall presume that the defendant has the ability to pay the amount proposed unless the defendant at the sentencing hearing establishes by clear and convincing [A PREPONDERANCE OF THE] evidence the inability to pay the amount proposed. *Sec. 3 AS 12.55.045 is amended by adding new subsections to read: (I) An order of restitution made under this section is a condition of the defendant's sentence and, in cases in which the court suspends all or a portion of the defendant's sentence, the order of restitution is a condition of the suspended sentence. If the court suspends imposition of sentence under AS 12.55.085, the order of restitution is a condition of the suspended imposition of sentence. SENATOR ELLIS expressed support for adding the amendment to the bill. CHAIRMAN TAYLOR noted the proposed amendment contains the word "may" so it does not mandate anything. SENATOR ELLIS moved to adopt Amendment 1 as an addition to the legislation. There being no objection, the motion carried. SENATOR ELLIS moved SCS CSHB 372(JUD) from committee with individual recommendations. There being no objection, the motion carried. HB 419-WORKERS' COMPENSATION REPRESENTATIVE NORM ROKEBERG, sponsor of HB 419, gave the following explanation of the bill. HB 419 is a major rewrite of the workers' compensation statute of 1988. This bill raises benefits to the workers and, as a result, raises premiums to employers. Premiums will increase from 7.7 percent to 8.7 percent to help defer the cost of the additional benefits provided to workers. This increase is long overdue. HB 419 was put together by the Ad Hoc Committee on Workers' Compensation, organized labor, the workers and business of the state and himself. HB 419 strikes a delicate balance therefore he counsels against making major changes to the bill. The House held substantial hearings on this bill and the Legislative Audit Division recently audited the Workers' Compensation Division. HB 419 contains the recommendations from that audit except one that would provide for stiffer penalties for underinsured employers. MR. PAUL GROSSI, Director of the Division of Workers' Compensation in the Department of Labor and Workforce Development (DOLWD) informed committee members that the department supports HB 419. It provides much needed increases in workers' compensation benefits which have not increased for 12 years. The bill also contains provisions for employers that pertain to procedures. It contains a simple method for waiving retraining benefits, it streamlines timelines, and it clarifies what benefits are paid during the rehabilitation process. It also increases the timeline for paying medical bills, it provides a two year timeline for hearing requests, it establishes a simple process to obtain medical releases and it provides for an annual update of usual and customary fees. MR. WILLY VAN HEMERT made the following comments. He is a representative of the Workers' Compensation Committee of Alaska and he co-chaired the Ad Hoc Committee. He supports HB 419 as a balanced package. It contains some reasonable increases in benefits. It currently benchmarks the maximum and minimum weekly wage which will increase from $700 to $773, the fifth highest in the United States. It also increases the death benefit to 100 percent of spendable up to the maximum weekly wage. That will make Alaska the only state that pays above 85 percent. It addresses all of the issues in the Workers' Compensation Division audit that related to legislative action. He offered to answer questions. MR. MATT O'BRIEN, President of the Alaska AFL-CIO, said without the Ad Hoc Committee system in which management and labor can work together to negotiate a settlement, opposing parties would have offered conflicting legislation that would have gone nowhere. Even with a cooperative effort, it has taken 12 years to adjust and correct some of the problems that occurred in 1988. Legislation passed in 1991 but it was vetoed by the Governor. CHAIRMAN TAYLOR interrupted the hearing on HB 419 to hear from a nominee to the Alaska Bar Association's Board of Governors. MS. ANASTASIA COOK HOFFMAN said she is interested in serving on the Board of Governors because she is interested in the field of law and she has worked for the Court System in Bethel as a cultural navigator. She will bring a rural perspective to the Board and will provide insight. She was born and raised in Bethel and attended Smith College and Stanford University, from which she graduated in 1995. She was the director of the ABCP Receiving Home and then worked for the Court System. She is currently spending her time raising two sons. TAPE 00-24, SIDE B Number 0000 CHAIRMAN TAYLOR thanked Ms. Cook Hoffman for offering to serve. SENATOR TAYLOR asked Ms. Cook Hoffman her position on mandatory versus voluntary continuing legal education. MS. COOK HOFFMAN replied she has not given that topic much thought but she believes some amount of continuing education should be mandatory because the law is always changing. SENATOR DONLEY agreed that the law is always changing but noted that one of the difficulties is that the current scheme does not require that any ongoing education be useful to one's field of practice. It heavily favors large law firms at the expense of private practitioners. He remarked that he is disappointed that the Bar has not offered ethics courses at no charge on a regular basis. It provides an ethics course for all incoming attorneys. He asked Ms. Cook Hoffman to strive to maximize participation in the ethics classes by offering them free of tuition. MS. COOK HOFFMAN thought that offering free ethics classes is a very good idea. SENATOR DONLEY asked Ms. Cook Hoffman if she has an opinion of the current dues structure and the Bar Association's budget. MS. COOK HOFFMAN said she does not because the Alaska Bar Association is very new to her. SENATOR DONLEY noted the Alaska Bar Association has some of the highest dues in the nation and, in fact, Alaska's dues are higher than those in California where attorneys rebelled and the Bar was discontinued. He expressed concern that Alaska is moving in the same direction because the current Board has not contained costs and even with a $1,000,000 surplus, it has not lowered dues. He believes the Alaska Bar needs to exercise a lot more financial restraint and better budgeting. He asked Ms. Cook Hoffman to take a fresh look at that issue as a new member. SENATOR DONLEY moved to forward Ms. Cook Hoffman's name to the full Senate for consideration. There being no objection, the motion carried. CHAIRMAN TAYLOR announced that HB 419 was again before the committee. MR. KEVIN DOUGHERTY, Co-Chair of the Ad Hoc Committee on Workers' Compensation, informed committee members that he represented the labor side during the negotiations. He supports the bill as it represents a consensus on items that the committee agreed to. REPRESENTATIVE ROKEBERG asked that any proposed amendments be faxed to the Legislative Information Offices. SENATOR DONLEY moved to adopt Amendment 1, labeled 1-LS1418\M.13. Amendment 1 reads as follows. 7/19/:0 A M E N D M E N T 1 OFFERED IN THE SENATE BY SENATOR DONLEY TO: CSHB 419(RLS) Page 3, line 31, following ";": Delete "and" Insert "[AND]" Page 4, line 3, following "plan": Insert "; and (10) a provision requiring that, after a person has been assigned to perform medical management services for an injured employee, the person shall send written notice to the employee, the employer, and the employee's physician explaining in what capacity the person is employed, whom the person represents, and the scope of the services to be provided" SENATOR DONLEY explained that Amendment 1 would require a person who is assigned to perform medical management services for injured workers to send a full disclosure notice to the injured worker and his or her physician stating who that person is representing and the scope of the services that person is to provide. CHAIRMAN TAYLOR objected to the motion for the purpose of discussion. He stated that he has encountered this problem in the past when representing people. He noted the biggest problem he has with the bill is that he cannot find an attorney to represent anyone because the attorneys fees were stripped from the bill during the last rewrite. Number 2061 MR. GROSSI commented that some employers and insurance companies employ medical management people who are usually nurses and who are assigned to a case. They review the medical records and talk with the injured employee. Often they will schedule medical evaluations and then advise the employer on the injury. The Workers' Compensation Board also has rehabilitation counselors who determine eligibility for re-employment benefits. Mr. Gross said the Department of Labor has no problem with Amendment 1. MR. VAN HEMERT asked if there will be adequate time to notify the employee, employer, and the employee's physician if the injury is serious. He said on the face of it, he does not see Amendment 1 as a problem. There being no further discussion or objection to Amendment 1, CHAIRMAN TAYLOR announced that it was adopted. SENATOR DONLEY moved to adopt Amendment 2 which reads as follows. A M E N D M E N T OFFERED IN THE SENATE BY SENATOR DONLEY TO: CSHB 419(RLS) Page 8, line 25: Delete "a new subsection" Insert "new subsections" Page 8, following line 28: Insert a new subsection to read: "(q) Unless compensation due the employee under this chapter is paid by negotiable instrument that can be cashed not more than three business days after being issued, the employer shall increase the weekly rate of compensation due the employee under AS 23.30.175 by two percent." SENATOR DONLEY explained that this provision was included in the workers' compensation bill that was passed by the legislature in 1991 but was vetoed by the Governor. It requires that when the insurance company pays compensation to an injured employee, it pay with a negotiable instrument that can be cashed no more than three days after being issued. One company paid injured workers with checks issued from the Bahamas and the workers had to wait several weeks for the checks to clear. CHAIRMAN TAYLOR objected for the purpose of discussion. Number 1713 MR. DOUGHERTY stated that both Amendments 1 and 2 are good in substance to consider long term and that those two issues were part of the 1991 bill but all participants have a commitment to stick with the bill sent to the Senate Judiciary Committee for several reasons. He suggested the Ad Hoc Committee review the proposed amendments during the summer rather than adopt them now and slow the bill down. REPRESENTATIVE ROKEBERG pointed out that the three day limit in Amendment 2 pertains to banking law, not workers' compensation. He suggested removing the three day limit and instead requiring that the negotiable instrument must be drawn on a state or federally insured financial institution. MR. GROSSI indicated that right now payments must be made within 14 days by an instrument that is negotiable in the State of Alaska. He was not sure whether Amendment 2 is more or less than current statute. MR. VAN HEMERT stated WCCA opposes Amendment 2. He added that Amendment 2 also removes Section 14 of the bill which was an issue related to the payment of interest. SENATOR DONLEY asked how much time the Ad Hoc Committee spent examining the 1991 bill that passed the legislature and why the Committee did not incorporate any of those provisions. MR. VAN HEMERT said he was not involved in 1991 but he was involved in the 1995 Ad Hoc Committee. For good or bad, labor and management bring issues to the table and that issue was not brought forward by either side. SENATOR DONLEY said he was surprised because in communications with members on the committee when it was first forming, he suggested using the 1991 amendments as the starting point. He asked Mr. Van Hemert if the Ad Hoc Committee ever considered any of those amendments. MR. VAN HEMERT said he did not have the 1991 amendments when the committee was confering. SENATOR DONLEY remarked that illustrates the weaknesses in the ad hoc process. Back in 1988, the legislature was promised that committee would continue. Many commitments were made at that time which have not been kept. When he was asked early on in the process what kinds of things the committee should look at, he suggested the 1991 bill but it was never discussed. He expressed concern about deferring to a group that was not elected to make public policy. He said he is willing to continue to work on Amendment 2 with Representative Rokeberg. He then withdrew Amendment 2. CHAIRMAN TAYLOR cited AS 21.89.030 which provides that, "an insurance company doing business in this state may not pay a judgment or settlement of a claim in this state for a loss incurred in this state with an instrument other than a negotiable bank check payable on demand and bearing even date with the date of writing or by electronic funds transfer." Number 1381 SENATOR DONLEY moved to adopt Amendment 3 which reads as follows. A M E N D M E N T 3 OFFERED IN THE SENATE BY SENATOR DONLEY TO: CSHB 419(RLS) Page 3, line 31, following ";": Delete "and" Insert "[AND]" Page 4, line 3, following "plan": Insert "; and (10) a provision relating to health insurance benefits that complies with AS 23.30.047" Page 5, following line 32: Insert a new bill section to read: "* Sec. 8. AS 23.30 is amended by adding a new section to read: Sec. 23.30.047. Benefits for health insurance. (a) An employer who pays compensation to an injured employee under AS 23.30.041(k), 23.30.180, 23.30.185, 23.30.190, 23.30.200, or 23.30.215 and who provided health insurance to the employee at the date of injury shall also reimburse the employee for health insurance coverage for the employee and covered dependents, as provided in this section. (b) Payment required under this section is equal to the employer's current contribution for health insurance or the amount paid by the employee for replacement coverage, whichever amount is less. Payment required under this section commences when the employee's health insurance provided by the employer's contribution ceases and shall continue until the employee is no longer receiving compensation described in (a) of this section, or for 18 months, whichever period is shorter. (c) Payment is not required under this section until the employee provides proof of health insurance coverage. In this subsection, "health insurance" includes (1) an individual policy of health insurance; or (2) a notice of self-payment for continuance of coverage required under 29 U.S.C. 1161 (Consolidated Omnibus Budget Reconciliation Act of 1985) or under a union health or welfare trust agreement. (d) If benefits required under this section are not paid within 30 days after the employer receives a request for payment, the employer shall pay a penalty equal to 25 percent of the amount due." Renumber the following bill sections accordingly. Page 12, line 28: Delete "2 - 19" Insert "2 - 20" Page 12, line 29: Delete "20" Insert "21" Page 12, line 30: Delete "21" Insert "22" SENATOR DONLEY explained that Amendment 3 picks up a provision that were in the 1991 legislation. That provision dealt with a situation when a worker loses a job due to an injury and collects workers' compensation whether insurance coverage provided by that employer will still be available for the worker's family members. CHAIRMAN TAYLOR asked if Amendment 3 would provide such coverage for 18 months. He thought some rights and benefits would be available under COBRA although the premium would be paid by the employee. MR. GROSSI stated the value of the health insurance can be calculated into the workers' compensation rate itself and used toward health insurance coverage. CHAIRMAN TAYLOR asked if the bill needs an offset for that calculation. MR. GROSSI said it probably does. Number 1164 SENATOR DONLEY stated the benefits are a percentage of the weekly wage so it is still at a percentage of what the total compensation package would be, evening including the health care. MR. GROSSI said it is at 80 percent of the spendable weekly wage which is 80 percent of the net. That would also include the value of the benefit. SENATOR DONLEY stated even if it is rolled in, it is discounted by 20 percent. He asked if the COBRA insurance is available at the same rate as if it had been paid for by the employer and whether the same insurance has to be made available. MR. FREY replied COBRA plans can be incrementally higher but the difference is only slightly higher than the regular premium. CHAIRMAN TAYLOR commented that under today's system, the injured employee who receives workers' compensation but is no longer employed, receives, as part of the compensation, an amount to pay for health coverage. He asked if the 80 percent net pay, with health care costs factored in, is based on the full cost of the premium or the amount that the employer contributed toward the premium, for example 80 percent. MR. FREY replied it is based on the full amount of the monthly premium. SENATOR DONLEY asked if COBRA requires coverage to be provided by the same company that was providing the coverage prior to the injury. Mr. FREY explained that COBRA is a federal law. In his experience as a trustee for the laborers' health care trust fund, the Union must offer comparable insurance upon certain triggering events. He was not certain whether the coverage must be identical but it does have to be comparable. MR. BOB LOHR, Director of the Division of Insurance, asked that Dan Brow, the Consumer Services Specialist, to address that question. MR. BROW stated that under the federal guidelines for COBRA, the insurance plan for the former employee is allowed to continue as indicated under specific circumstances. However, the ability to continue that plan is contingent upon the insurance plan remaining in existence. If an employee elected COBRA coverage, with the termination of the employer's plan, the COBRA coverage would terminate. CHAIRMAN TAYLOR commented that the COBRA coverage will remain in effect for 18 months as long as the premium is paid. He noted the insurance coverage will cost a little more while the worker's income stream will be discounted by about 20 percent because of the workers' compensation calculation. He thought this bill might have a major financial impact. SENATOR DONLEY remarked, "Mr. Chairman, now that we've created a record that shows that the public policy call is - what we really want is workers to be covered. We want their families to remain to be covered for a reasonable period of time. It is really terrible public policy that somebody injured on the job would lose their health benefits. The workers' comp system is supposed to be designed to make people whole, not to make them less than whole. If they were working, they would have this coverage. But I think, now that we've established on the record that the existing system provides 80 percent of this coverage, I'd be willing to withdraw this amendment only with that understanding, that the existing system is at least providing 80 percent of this very important valuable coverage for Alaskan families and injured workers. If it wasn't for that, then I think that this would be an absolute essential to place in this bill. So with that I'd go ahead and withdraw Amendment 3." CHAIRMAN TAYLOR announced that Amendment 3 was withdrawn with no objection. SENATOR DONLEY proposed Amendment 4 which would change, on page 10, line 8, the funeral expense provision. That provision was last set in 1982. The bill proposes to adjust the amount for inflation since 1988. He has received numerous communications from families in tragic situations over the last decade where a worker in the family has died. The families have complained about the terrible inadequacy of the $2500 funeral expense coverage. He does not believe $3300 goes far enough. He stated this should not have much of an effect actuarially because the number of workers who die on the job is small. He moved to adopt Amendment 4 to change the $3300 amount to $10,000. Number 594 MR. GROSSI estimated that 20 to 30 Alaskan workers suffer this tragedy. CHAIRMAN TAYLOR objected for the purpose of discussion. REPRESENTATIVE ROKEBERG stated that the amount is for funeral expenses and that $4500 to $6,000 should be adequate. SENATOR DONLEY agreed that the cost of a funeral is probably between $4,000 and $6,000 which makes him question why the bill only contains $3,300 for a person who is killed in the workplace. He pointed out there are other intangible costs associated with the death of the major breadwinner of a family which are very stressful for the family. He thought to pay $10,000 for the 20 or 30 Alaskan families who suffer such a loss is reasonable. CHAIRMAN TAYLOR thought $10,000 was a bit high and said he would compromise at $5,000. SENATOR DONLEY said he appreciates the committee's consideration of this issue because although it effects only a few folks, their letters are very touching. CHAIRMAN TAYLOR maintained his objection to adopt Amendment 4. AN UNIDENTIFIED SPEAKER said he agrees in principle with Senator Donley. He noted that 17 states provide $5,000 and only five states provide more than $5,000. He added the basic charge for a funeral with full services is $4,700. A roll call vote was taken on the motion to adopt Amendment 4. That amendment failed with Senators Ellis and Taylor voting "nay" and Senator Donley voting "yea." CHAIRMAN TAYLOR moved to change, on page 10, line 8, the amount of $3,300 to $5,000. There being no objection, the motion carried. REPRESENTATIVE ROKEBERG suggested changing Amendment 2 to read: (q) Unless compensation due the emmployee under this chapter is paid by negotiable instrument that is drawn on a state or federal financial institution, the employer shall increase the weekly rate of compensation due the employee under AS 23.30.175 by two percent. REPRESENTATIVE ROKEBERG noted that "a state or federal financial institution" is defined in statute. He thought that language addresses Senator Donley's concern with offshore trust-checks that are slow to clear. SENATOR DONLEY moved to adopt Amendment 2. CHAIRMAN TAYLOR objected and asked if Senator Donley intended to move Amendment 2 as amended. SENATOR DONLEY renewed his motion to adopt Amendment 2 containing the language as proposed by Representative Rokeberg. TAPE 00-25, SIDE A Number 0000 There being no further discssion, CHAIRMAN TAYLOR announced that Amendment 2 as amended was adopted. He stated his only frustration with this legislation is that the Ad Hoc Committee did not address the issue of attorney's fees and whether or not injured workers in this state would have improved representation. He believes that is one of the most serious defects in the law. There may be no incentive on the part of employees to worry about it but injured workers have difficulty finding an attorney to represent them and if that occurs, most of the great laws that are passed do not count for much. It has caused the State board to reach out beyond its authority to compensate people and it has caused some insurance companies to misuse and abuse employees. SENATOR DONLEY stated that he examined that question extensively in 1988 and he found that the defense attorney costs were in some cases four or five times the costs of the workers' attorneys. The insurance companies were spending a tremendous amount of money to defend cases while it was very difficult for injured workers to find anyone to represent them. He agreed with Chairman Taylor on that issue and added that is another weakness of the ad hoc process. While the ad hoc process has benefits from not including the actual people who represent the parties on either side, it also fails to draw from their knowledge about the specific types of things that are going wrong. REPRESENTATIVE ROKEBERG commented that Senator Donley made a good point. He suggested involving legislative Labor and Commerce Committee members or their designees in the ad hoc committee process in the future. SENATOR DONLEY moved SCS CSHB 419(JUD) from committee with individual recommendations. There being no objection, the motion carried. HB 310-ALASKA INSURANCE GUARANTY ASSOCIATION REPRESENTATIVE NORM ROKEBERG explained that HB 310 is a revision of the Alaska Insurance Guaranty Association (AIGA) for property casualty groups. Two different associations do business in Alaska. HB 310 contains the National Association of Insurance Commissioners' (NAIC) recommendations. He urged committee members to support the bill. CHAIRMAN TAYLOR asked what happens when an insurance company goes insolvent. REPRESENTATIVE ROKEBERG replied that the director of the Division of Insurance requires that a receiver is involved in the establishment of the receivorship. One of the provisions in the bill pertains to the location of the insolvent corporation and the position of the State as it relates to the insolvency of a foreign corporation. MR. MIKE LESSMEIER, representing State Farm Insurance, noted that three people were available to testify via conference: Don Thomas, the drafter of HB 310; Tom Andritch, President of the AIGA; and Dane Haberg (ph), a contract administrator for the AIGA. Those people worked to update this statutory scheme. MR. TOM ANDRITCH, President of the AIGA, stated support for HB 310. MR. DANE HABERG, Alaska Insurance Guaranty Association, explained that when an insurance company is found insolvent, the Alaska Insurance Guaranty Association has the responsibility of assessing other insurance companies who are admitted and licensed in Alaska to collect funds. Those funds are used to pay claims of the insolvent insurance carrier. CHAIRMAN TAYLOR said that it looks as though the bill amends various provisions that might impact AIGA on the proration of claims, depending upon the amount in the fund. MR. HABERG asked what section of the bill Chairman Taylor was referring to. Number 540 CHAIRMAN TAYLOR referred to new language in Section 7(C) on page 5 which reads, "the association may pay claims in any order that it determines reasonable, including the payment of claims as they are received from claimants or in groups or categories of claims; however,.... " That language modifies the remainder of that section which provides for proration. Chairman Taylor noted that AIGA would have to wait for all claims to be submitted before it could prorate them and pay anything. MR. HABERG replied that is correct and it presented a problem because claims do not come in evenly when the insolvent carrier goes down. CHAIRMAN TAYLOR asked if HB 310 provides cleanup language so that AIGA can do a more efficient job of handling an insolvent carrier and the resulting claims. MR. HABERG answered that is correct and HB 310 brings Alaska statutes more in form with the model act so that when AIGA is dealing with other states it can avoid some conflicts. SENATOR DONLEY moved HB 310 from committee with individual recommendations. There being no objection, the motion carried. SENATOR ELLIS asked Chairman Taylor what his intent was regarding the domestic violence legislation. CHAIRMAN TAYLOR replied a House bill on that subject has passed over to the Senate and vice versa. He thought most of the provisions are contained within the Senate bill but he is willing to look at the bills further. There being no further business to come before the Committee, CHAIRMAN TAYLOR adjourned the meeting at 4:22 p.m.