Legislature(2005 - 2006)BELTZ 211
03/22/2005 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB140 | |
| SB137 | |
| SB130 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 137 | TELECONFERENCED | |
| *+ | SB 140 | TELECONFERENCED | |
| += | SB 130 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 22, 2005
1:36 p.m.
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ralph Seekins, Vice Chair
Senator Ben Stevens
Senator Bettye Davis
MEMBERS ABSENT
Senator Johnny Ellis
COMMITTEE CALENDAR
SENATE BILL NO. 140
"An Act relating to spyware and unsolicited Internet
advertising."
HEARD AND HELD
SENATE BILL NO. 137
"An Act providing that an institution providing accommodations
exempt from the provisions of the Uniform Residential Landlord
and Tenant Act may evict tenants without resorting to court
proceedings under AS 09.45.060 - 09.45.160."
HEARD AND HELD
SENATE BILL NO. 130
"An Act relating to a special deposit for workers' compensation
and employers' liability insurers; relating to assigned risk
pools; relating to workers' compensation insurers; stating the
intent of the legislature, and setting out limitations,
concerning the interpretation, construction, and implementation
of workers' compensation laws; relating to the Alaska Workers'
Compensation Board; assigning certain Alaska Workers'
Compensation Board functions to the division of workers'
compensation in the Department of Labor and Workforce
Development and to that department, and authorizing the board to
delegate administrative and enforcement duties to the division;
establishing a Workers' Compensation Appeals Commission;
providing for workers' compensation hearing officers in workers'
compensation proceedings; relating to workers' compensation
medical benefits and to charges for and payment of fees for the
medical benefits; relating to agreements that discharge workers'
compensation liability; relating to workers' compensation
awards; relating to reemployment benefits and job dislocation
benefits; relating to coordination of workers' compensation and
certain disability benefits; relating to division of workers'
compensation records; relating to release of treatment records;
relating to an employer's failure to insure and keep insured or
provide security; providing for appeals from compensation
orders; relating to workers' compensation proceedings; providing
for supreme court jurisdiction of appeals from the Workers'
Compensation Appeals Commission; providing for a maximum amount
for the cost-of-living adjustment for workers' compensation
benefits; relating to attorney fees; providing for the
department to enter into contracts with nonprofit organizations
to provide information services and legal representation to
injured employees; providing for administrative penalties for
employers uninsured or without adequate security for workers'
compensation; relating to fraudulent acts or false or misleading
statements in workers' compensation and penalties for the acts
or statements; providing for members of a limited liability
company to be included as an employee for purposes of workers'
compensation; establishing a workers' compensation benefits
guaranty fund; relating to the second injury fund; making
conforming amendments; providing for a study and report by the
medical services review committee; and providing for an
effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 140
SHORT TITLE: BAN INTERNET SPYWARE
SPONSOR(s): SENATOR(s) THERRIAULT
03/10/05 (S) READ THE FIRST TIME - REFERRALS
03/10/05 (S) L&C, JUD
03/22/05 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 137
SHORT TITLE: EVICTING INSTITUTIONAL PROPERTY USERS
SPONSOR(s): SENATOR(s) SEEKINS
03/08/05 (S) READ THE FIRST TIME - REFERRALS
03/08/05 (S) L&C, JUD
03/22/05 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 130
SHORT TITLE: WORKERS' COMPENSATION
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/03/05 (S) READ THE FIRST TIME - REFERRALS
03/03/05 (S) L&C, FIN
03/08/05 (S) L&C AT 1:30 PM BELTZ 211
03/08/05 (S) Heard & Held
03/08/05 (S) MINUTE(L&C)
03/10/05 (S) L&C AT 1:30 PM BELTZ 211
03/10/05 (S) Heard & Held
03/10/05 (S) MINUTE(L&C)
03/15/05 (S) L&C AT 1:30 PM BELTZ 211
03/15/05 (S) Heard & Held
03/15/05 (S) MINUTE(L&C)
03/17/05 (S) L&C AT 1:30 PM BELTZ 211
03/17/05 (S) Heard & Held
03/17/05 (S) MINUTE(L&C)
03/22/05 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
Senator Gene Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 140
CURTIS CLOTHIER, Manager
Data Processing
Legislative Affairs
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Supports SB 140.
BENJAMIN EDELMAN, PhD. student
Harvard University
Boston Massachusetts
POSITION STATEMENT: Supports SB 140.
JOE MICHEL
Staff to Senator Seekins
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 137 for sponsor.
MIKE SFRAGA
University of Alaska
Anchorage AK
POSITION STATEMENT: Supports SB 137.
MIKE HOSTINA
University Of Alaska
POSITION STATEMENT: Supports SB 137.
BARBARA WILLIAMS
Alaska Injured Workers Alliance
Anchorage AK
POSITION STATEMENT: Opposes SB 130.
JERRY FLOCK
Anchorage AK
POSITION STATEMENT: Supports SB 130.
PAUL LISANKIE, Director
Division of Workers Compensation
Department of Labor & Workforce
Development
PO Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Commented on SB 130.
ACTION NARRATIVE
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 1:36:34 PM. Present were Senators
Ben Stevens, Seekins and Chair Bunde. Senator Davis arrived at
1:38.
SB 140-BAN INTERNET SPYWARE
CHAIR CON BUNDE announced SB 140 to be up for consideration.
SENATOR THERRIAULT, sponsor of SB 140, gave a short introduction
before presenting a slide show.
I've introduced SB 140 to accomplish two main
objectives. The first is to send a message to computer
invaders that it will be illegal in Alaska to conduct
certain practices involving the injection of unwanted
and malicious programs into computers. The second
objective is to heighten through the legislative
process both the awareness of the magnitude of the
spyware problem and how to deal with it in the most
cost-effective and time-efficient manner.... We have
through research made contact with a nationally
recognized expert [Ben Edelman] who has worked with us
in drafting SB 140....
Virtually every branch of local and state governments have
spyware problems. The cost of protecting private citizens from
spyware is $21 billion nationally. This is based on the
estimated three to six minutes each day people use to clean or
otherwise deal with unwanted programs that affect their
computers. The challenge is to keep the legislation targeted at
unscrupulous and malicious sources without making it so broad
that it will damage legitimate uses of computer programs.
SENATOR THERRIAULT said that SB 140 is broadly based on the Utah
model with some features of the California version worked in. It
may be difficult to prosecute those who ply their invasive
practices in Alaska, but the magnitude of the problem moved him
to declare such activities illegal so that legal recourse is
available to those who wish to pursue the violators.
CURTIS CLOTHIER, Manager, Data Processing, Legislative Affairs,
narrated a presentation called "Spyware 101."
1:42:13 PM
He explained that spyware is software that collects personal
information or makes changes on your computer without your
knowledge or consent. Sometimes it's accompanied by an Addware
program that launches customized advertising. Spyware is
relatively new; the first document case being in early 2000. But
it started to hit radar screens in 2003 when a study indicated
that two out of 100 support calls to help desks were related to
spyware. Now it is estimated to be two out of five calls.
1:44:18 PM
CHAIR BUNDE asked if anti-virus programs would help.
MR. CLOTHIER answered no; virus guards usually check only for
viruses. Spyware usually makes its way through the Web browser.
Most virus guards are aimed at Email or viruses that are already
on a computer in files.
1:45:26 PM
He described ways spyware can get on a computer - generally by
installation of an application that is free with the end-user
license agreement too long. It generally causes a computer to
slow down or crash.
1:46:54 PM
Spyware doesn't necessarily collect bad information. Some
computers have it preloaded and it gives manufacturers
information about a computer's health. The customer is generally
informed, however. Other software has a free version and a paid
version. The free version includes advertising. "It's the
knowledge and consent thing, which I think is really critical in
loading software."
1:47:41 PM
Once spyware is on a computer, it requires a call to a technical
support person who can run several different programs, but that
is not always successful.
1:48:25 PM
MR. CLOTHIER said that despite his division's best efforts, the
legislature gets on average four to five machines a week that
are infected with spyware - each taking as much as several hours
to fix. He said that, "Spyware prevention and removal now takes
up more of our time than virus and spam issues."
He said there isn't any one good solution to the problem. He is
trying to focus on educating his customers. He tells them not to
click on advertisements to download software. Programs are being
developed, but they cost money. All indicators lead him to
believe it will be a problem well into the future.
1:51:47 PM
CHAIR BUNDE asked how enforcement would work.
MR. CLOTHIER replied that programs can trace things, but that in
the vast majority of cases, people are covering their tracks
pretty well. Many times they have moved on from a physical
location by the time they are found.
CHAIR BUNDE asked if this law were passed, would legitimate
vendors have to stop their activity while the serious criminals
would still be operating.
MR. CLOTHIER replied that license agreements are made difficult
on purpose and he was sure vendors could do a better job of
making it clear what they are intending to do with free
software. "Certainly, it's such a mess right now that no one
reads and people who aren't really savvy to the technology, just
say yes to everything and trap themselves."
CHAIR BUNDE remarked, "We need to protect people from themselves
a little bit - sort of like a seat belt law."
1:53:50 PM
BENJAMIN EDELMAN, PhD. student at Harvard University, said he is
a independent researcher testing spyware in his lab. It has
become quite a serious problem. Some do bona fide spying by
tracking purchases and credit cards, but others track your
Websites to find out which ones you like to visit and have pop
ups - generally with offers from competitors of the sites asked
for. There is nothing legitimate with putting yourself out there
as Hertz when you are Budget.
Hard enforcement is needed, because stealing credit cards is
already against the law. There is no clear benefit to passing
another law that would continue to be broken. Pop ups need to be
addressed, because some people think it is a grey area - as in
the Hertz/Budget scenario. It creates troubling economic
incentives where everyone and his brother wants to sneak on to
your computer with a pop up ad.
SB 140 focuses on pop up ads. It says it's not a legitimate
business practice to show a user an ad for one company when the
user asked for that company's competitor or for some other site
by domain name.
So, if I picked up my cell phone and I called 1-800-
American, trying to reach American Airlines, that
wouldn't be legitimate for Sprint to connect me to
United instead - even if United offered a nice
advertising fee to my cell phone company. That's not
fair competition....
Courts have gone both ways, but this bill makes it very clear
that it can't be done in Alaska.
1:59:41 PM
California passed a bill last year that names about a dozen
specific tactics that are absolutely abominable - like using one
person's computer as part of an attack against another computer.
They named a lot of behaviors that are problematic, but he
thought it was ultimately ineffective because the outrageous
tactics are not the ones that are used by the biggest companies
trying to sneak on to users' computers.
2:02:10 PM
Utah's governor signed a bill into law on which SB 140 is
modeled. He emphasized that constitutional issues need to be
looked at. Critics of bills like this might suggest granting
extra protection to trademark holders and that would, in turn,
be bad for consumers. This would suggest that Hertz has a right
to have their site displayed on screen and Budget can't
interfere with that. That is giving a windfall to Hertz.
He thought it was important to think through who exactly is
being harmed and who is being benefited.
It seems to me that users are receiving the brunt of
the benefit.... When a user types in Hertz.com, it's
quite clear the user wants Hertz. The user does not
want 10 different pop up ads for 10 different
competitors....
He was surprised at the number of software companies that
objected to the state of Utah passing any bill having to do with
soft ware. They thought they should be exempt from any
government regulation, especially from any state regulation.
"That seems entirely wrong to me. People who make products have
to comply with laws in all 50 states...."
MR. EDELMAN said that enforcement is difficult especially if the
companies are offshore, but the people who are doing the biggest
harm are big companies. Gator, a big spyware firm, is talking
about going public. Other spyware companies are big firms with
lobbyists and lawyers.
These are folks we can get to and to the extent that
they have big companies advertising with them, Budget
Car Rental or Expedia or you name it, we can get to
their advertisers, too. It is not impossible to find
these folks....
2:06:36 PM
SB 140 has two different ways to identify spyware - one is to
ask the user if he is an Alaskan resident and the other is for
the computer's IP address to indicate it's an Alaska address.
2:08:26 PM
Chair Bunde asked Senator Therriault if he knew of any
opposition to this bill from companies in Alaska.
SENATOR THERRIAULT replied that he had not heard of any
opposition. He thought the committee might ask for the
difference between a cookie and spyware.
CHAIR BUNDE asked if a cookie is a form of spyware.
MR. EDELMAN replied that it isn't a form of spyware. It is a
data file that a Website can place on a person's computer so
that it can store information, like a password. They do not slow
down a computer, make it crash or send your information anywhere
else. They don't cause problems. There is no need to talk about
cookies in a spyware bill.
SENATOR DAVIS asked what Mr. Edelman thought about this
particular bill.
MR. EDELMAN said he thinks it is a strong bill; it makes
specific people and entities accountable. It has a clear plan
for enforcement - by private parties under existing statutes
pertaining to unfair competition and consumer protection. Some
legislation in other states places the burden on the state to
hire investigators and lawyers to figure out who the spyware
purveyors are. The harm is actual and targets a lot of people;
it is a grey problem and courts haven't handled it consistently.
CHAIR BUNDE thanked him for his testimony and said SB 140 would
be addressed again on Thursday.
2:15:36 PM Recess 2:19:37 PM
SB 137-EVICTING INSTITUTIONAL PROPERTY USERS
CHAIR CON BUNDE announced SB 137 to be up for consideration.
JOE MICHEL, staff to Senator Seekins, sponsor, said the
University of Alaska requested this legislation which stems from
a few cases where disruptive students have used the court system
to stall evictions from their unit until it's most convenient
for them. The students' infractions were way beyond what was
allowed under their student housing contract. The University
needed to remove these students from their housing before their
disruptive behavior started affecting other students.
He said this bill is an attempt to correct a discrepancy between
legislative intent and some recent lower court decisions on the
Uniform Landlord Tenant Act in AS 34.03.330. It reads:
'Unless created to avoid the application of this
chapter, the following arrangements are not governed
by this chapter: residence at an institution, public
or private, if incidental to detention or provision of
medical geriatric, educational counseling, religious
or other similar services.' And [this] basically means
public service institutional entities such as
hospitals, schools, counseling centers or higher
educational establishments are not compatible with the
heightened protections that were designed under the
Landlord Tenant Act.
He said the University of Alaska has put into place a three-
strike system intending to work with students regarding their
university housing. There's a review and an appeals process for
major infractions. The university has shown a dedication to
working with students who are not observing housing rules.
2:23:48 PM
MIKE SFRAGA, University of Alaska, said it is their role and
mission to serve its students. Some students make the
environment not as productive as might be. Processes are in
place that allow the university to do a case by case review.
It is certainly not the intent of any of us to make
undue challenges to our students in terms of hurdles.
In fact, we look to do things on a case-by-case basis,
although within a framework, to address issues because
we don't want to treat all students the same way....
So, we have those processes that were presented to
you. These are internal processes, administrative
guidelines that we follow.... If we find that it is in
the best interests of the institution, our students
and a particular student, we will ask them to leave
the residence. The student has the right in a due
process procedure to appeal that to a dean of
students. Then certainly the dean of students can make
the final decision.
If the student does not agree with the final appeal decision,
they can go to superior court for an appeal as well.
I guess we would like to emphasize that this is an
educational institution. These are not arbitrary
dismissals of students. There is a process in place.
We follow that process and we have a responsibility to
make sure that our environment is conducive to
education while maintaining the processes in place and
understanding that our role is to educate out
students.
2:26:23 PM
MIKE HOSTINA, University of Alaska, said he would answer legal
questions. He said:
Our concern is we ended up in a few cases with
students really getting two bites of the apple. They
follow the administrative procedure within the
university. If they don't like that outcome, they,
then, go to court to seek to block their removal from
housing. We end up with multiple processes going on
and I think it was you, Mr. Chairman, who hit the nail
right on the head. We have some school-house lawyers
here on campus and they've cost us literally tens of
thousands of dollars and hundreds of hours of
administrative time to accomplish what everybody
agrees, even the courts agree, should be a relatively
simple process. But, the courts have felt obligated to
require an eviction action, because of the language of
the current forcible entry and detainer statute.
CHAIR BUNDE asked how many students have been a problem.
MR. HOSTINA said that just one student had cost the university
tens of thousands dollars and hundreds of hours of time in the
two years he has been there.
CHAIR BUNDE saw no further questions and said he would hold SB
137 for another hearing.
SB 130-WORKERS' COMPENSATION
CHAIR CON BUNDE announced SB 130 to be up for consideration.
BARBARA WILLIAMS, Alaska Injured Workers Alliance, did not
support SB 130, because rolling back the rates would lead to a
bigger shortage of physicians to treat injured workers. Further,
she said it didn't address the problems with the fee schedule.
Some health care providers the Alliance surveyed hold a fee
schedule and regularly have their bills reduced below the rate
set out in it. She stated:
This would mean that globally, if insurance review
companies are reducing payments, there is no clear
idea of how much a company is saving on medical costs.
What it does reveal to us is that the medical costs
are already being cut. It also tells us that not only
are insurance companies saving money, but they are
providing little information on what those savings
might be.
We also have no enforcement of the current fee
schedule. It would appear that there is more cost
shifting here than enforcement of this current fee
schedule. We need reliable data and information to
address these costs.
Her survey has information from an audit review indicating that
the bills are being reduced at Providence Hospital. Regarding
medical benefits, she said:
We do not believe that a preferred provider list or a
drug list would be appropriate for Workers'
Compensation. This further limits the care and drugs
workers could potentially receive and insurance
companies now have control over what they are willing
to pay for. The current law does not provide for
preauthorization of service and pushing a list of
providers and drugs would further complicate an
already complex process.
Equally, the injured employees would like to suggest
the employer is to be held to an independent medical
evaluator provider list. Injured workers would like to
see only one doctor at a time unless a referral is
provided. Right now, currently, injured workers are
subject to panels of doctors paid for by employers.
Adjudication of claims - We do not feel the proposed
education would better serve injured workers or
employers. There is currently no education process to
explain to them how they should participate in the
adjudication process. Complex changes in the proposed
bill will, in our view, increase time delay appeals to
about the same time that we're currently looking at.
Additionally, we do not feel that an over panel should
have the authority to set precedence over Superior and
Supreme Court. The balance must be restored to the
impartial process to create a fair chance for all
parties. We're giving a lot of power to an unbalanced
board or division and we feel this is wrong.
Retraining benefits - We feel that a clear retraining
process that provides results for injured workers
would be of greater benefit than the proposed bill.
Injured workers know little or nothing about the
retraining process and this will add more red tape and
confusion to an already complex part of the benefits
available to injured workers. Workers need to
understand and not guess about what benefits they
need.
Overall, we know that the personnel in the division
have little or no training on the complex hearing
process, the Workers' Compensation Act and little or
no medical training. Yet, they must make complex
decisions based on the information that is available
to them. We need to encourage training for all staff,
make benefits more clear and base rate increases on
tangible, factual data. We do not need to make
sacrifices for the sake of expediency, but we do need
to make informed changes based on facts. We have
little or no information on the complex [indisc.]
medical costs, rehabilitation, retraining benefits and
know the hearing process is far from impartial....
Legal counsel would not become more available unless
defense costs are fully reported. Plaintiff attorneys
are making approximately 50 cents on the dollar while
defense attorneys get dollar for dollar what they bill
for. Why not drop the defense costs to match that of
injured workers to contain costs?
Insurance premiums should be frozen until we can
figure out this mess so that employers are not
overcharged for their insurance product. Hiring
advocates in theory is good, but who wants the job?
Legal services is a non-profit and Alaska pro bono
programs are not geared for Workers' Compensation. At
minimum, it could potentially take up to two years for
them to get the nuances of the program as well as the
practices and procedures. We urge you not to pass this
bill....
MS. WILLIAMS said that a bill from Providence Hospital was
$14,000 and by not utilizing the proper fee schedule, it
collected only $11,000. She said there is no mechanism to report
accurate figures to the Division of Workers' Compensation.
2:37:57 PM
CHAIR BUNDE asked who belongs to her organization.
MS. WILLIAMS replied that the Alaska Injured Workers Alliance is
a non-profit organization educating injured workers. It is
partnering with Alaska Public Interest Research Group Alaska
Public Interest Research Group (AKPIRG) on this issue, because
she feels there are consumer issues involved.
2:38:56 PM
JERRY FLOCK, injured worker, said he has fallen through every
possible crack in the current system. "Because my employer was
uninsured, my employer got to pick what medical it would and
would not pay for."
He said there have been problems with workers' compensation for
a while. An audit report dated October 31, 1999, was written
about the insufficiencies of workers' compensation. SB 130 is
just a bandaid. The Division of Workers' Compensation already
has police powers. In his case, the state had to pay $10,000 for
an operation, because his employer wasn't insured. His employer
had an annual edit error and there is a $10,000 fine for that
and $100 per day fine for 10 days afterwards.
That means this employer owes the state a total of
$77,000. Will the state go for it? No, they don't go
for it. They don't even ask for it, but yet the state
will come after me for a $10,000 surgery that they
paid for.
2:44:58 PM
MR. FLOCK discussed the penalty section and how his employer
allowed his insurance to lapse 18 times, but was still able to
get a business license.
2:46:03 PM
CHAIR BUNDE said his point is well-taken. He said even though
Mr. Lisankie couldn't comment on Mr. Flock's case, he wanted to
know what enforcement tools the division has and how well they
are being used on people who drop their insurance.
2:46:28 PM
PAUL LISANKIE, Director, Division of Workers Compensation,
replied that he didn't have the specifics of Mr. Flock's case,
but it is well-known in the division. This is why he has
mentioned to the committee that the division needs some kind of
a hammer to get on top of an uninsured employer quickly rather
than to try to come in after the fact and clean up the mess. Mr.
Flock's testimony indicated how difficult it is to get anything
once a problem has transpired.
He disagreed that this bill doesn't change anything, however.
Under this bill, the director of the division could order a stop
work order immediately, as opposed to what happens now where an
investigator comes back, gets a hearing scheduled before the
Workers' Compensation Board and then there is a hearing to
decide if the employer is still uninsured at that moment.
I have no doubt that there are employers that do run
without insurance for a period of time. If they get
detected, their normal response oftentimes is to bring
their insurance current and go forward. That can be a
recurrent problem and that would be some of the
factors that would be considered under this
bill...that the board could consider how much to fine
that employer.
I think also based on Mr. Flock's testimony, which is
eloquent as far as what happens when you get court
orders and then you try to enforce them in the court
system against somebody who may or may not have
money....
2:49:23 PM
CHAIR BUNDE remarked that it is hard to collect money from
someone who doesn't have it. He said he would continue taking
public testimony on Thursday and would address a CS one week
from today. There being no further business to come before the
committee, he adjourned the meeting at 2:51:19 PM.
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