HB 105-COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS  10:51:43 AM CHAIR STUTES announced that the final order of business would be HOUSE BILL NO. 105, "An Act relating to claims against protection and indemnity insurance policies of vessel owners." 10:52:26 AM REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, as prime sponsor of HB 105, said that the proposed legislation was heard in a prior session and was based on the Fishermen's Fund which was created in 1951. The fund provided the treatment and care of Alaska's licensed and commercial fishermen who were injured while fishing, on shore or offshore, in Alaska. It was created by fishermen, for fishermen, from a portion of every fishermen's license fee. He explained that in 2010 the legislature amended the fishermen's funds statutes to allow a vessel owner to file a claim against the fund for 50 percent of the owner's protection and indemnity insurance deductible from the fund. A vessel owner could file a claim if an injured crew member filed a claim against both the fishermen's fund and the vessel owner's insurance. He told the committee the idea behind this was that the fishermen's fund was essentially a payor of last resort. If a vessel owner carries protection and indemnity insurance to fully cover a crew members medical expenses in the event of an injury, then there would be a reduced burden on the fishermen's fund. Representative Ortiz said HB 105 would allow a vessel owner to fully recover the protection and indemnity deductible from the fund up to the amount of $5000. He reiterated the fishermen's fund is self-funded by the fishermen. 10:55:12 AM REPRESENTATIVE KOPP asked if there had been any modeling of claims in order to know what was paid out of the fishermen's fund over a period of time. REPRESENTATIVE ORTIZ shared what the fund had paid out on deductibles between 2014 and 2017. He said the sustainability of the fund would remain intact and overall performance of the fund would be the same if HB 105 passed. He shared that the fund managers are responsible for making sure the fund is sustainable, and they support the bill. 10:57:38 AM REPRESENTATIVE VANCE asked how much money was in the Fishermen's Fund and what the annual contribution to the fund was. 10:57:58 AM LIZ HARPOLD, Staff, Representative Dan Ortiz, Alaska State Legislature, explained that the current value of the fund is $11.7 million, and the ten-year average value of the fund had been around $11.5 million. She continued her answer by sharing that about $1.1 million goes into the fund annually. In further response to Representative Kopp's question, she stated that last year there were 110 crew member claims that were filed in 2018 and paid out for a little over $500,000 total. In 2017, there were 924 crew member claims, with a value paid out of just over $731,000. She explained that crew member claims are quite a bit higher than vessel owner claims; therefore, shifting the financial burden to the vessel owner's insurance would help protect the fund. 10:58:49 AM REPRESENTATIVE KREISS-TOMKINS asked for clarification whether the fiscal note was correct because it seemed like a small price to pay. MS. HARPOLD expressed agreement that the fiscal note of $16 thousand was a small price for a great benefit. 11:00:06 AM CHAIR STUTES opened invited testimony on HB 105. 11:00:27 AM BOB KEHOE, Executive Director, Purse Seine Vessel Owners Association, told the committee his organization managed three fishermen-owned marine insurance pools, and profits created by the pools were distributed back to the pool members to help control the cost of liability insurance. He continued his testimony by saying the Purse Seine Vessel Owners Association supported the bill and thanked Representative Ortiz for sponsoring the bill. 11:03:11 AM CLAY BEZENEK, Commercial Fisherman, reported that he had served on the Fishermen's Fund Board in the past. He explained that in 2009 the board introduced similar legislation to the current bill. He testified in support of HB 105. 11:05:54 AM FRANCES LEACH, Executive Director, United Fishermen of Alaska, said that United Fishermen of Alaska would like to be on the record in support of HB 105, and on behalf of the organization she thanked Representative Ortiz for bringing the bill forward. She said the bill provided additional incentive for owners to purchase liability insurance for crew members in order to cover the full cost of an injured crew members medical care in the event of an injury, rather than relying on the fishermen's fund. 11:07:19 AM CHAIR STUTES opened public testimony on HB 105. After determining that no one wished to testify, she closed public testimony. 11:07:41 AM CHAIR STUTES announced that HB 105 was held over.