Legislature(2017 - 2018)BARNES 124
03/19/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s): | |
| SB4 | |
| HB403 | |
| HB379 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 403 | TELECONFERENCED | |
| += | HB 401 | TELECONFERENCED | |
| + | HB 379 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 4 | TELECONFERENCED | |
HB 379-COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS
4:10:44 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 379, "An Act relating to claims against
protection and indemnity insurance policies of vessel owners."
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, presented HB
379 as prime sponsor. He paraphrased from the sponsor
statement, which reads as follows [original punctuation
provided]:
In 2010, the Legislature amended the Fishermen's Fund
statute to allow a vessel owner to receive 50% of the
owner's Protection & Indemnity insurance deductible
from the fund in cases where an injured crewmember
made a claim against the Fund and against the P&I
policy. The intent of this amendment was to encourage
vessel owners to obtain P&I insurance to fully cover
crewmember's medical expenses in the event of an
injury, and to reduce the financial burden on the
State.
HB 379 will allow an owner to fully recover the P&I
deductible from the Fund up to an amount of $5,000.
This would provide further financial incentive for
vessel owners to obtain P&I insurance to fully cover
crewmembers in the event of an injury or illness at
sea.
4:15:47 PM
REPRESENTATIVE KNOPP asked about the limitations on the fund.
He asked whether the funds can be used for Fish and Wildlife
issues.
4:16:47 PM
LIZ HARPOLD, Staff, Representative Dan Ortiz, Alaska State
Legislature, answered that the purpose of the Fishermen Fund
is to help fishermen who have been injured while fishing on or
offshore in Alaska. She said that to the best of her
understanding, Fish and Wildlife projects do not fall under the
fund.
REPRESENTATIVE KNOPP asked how much of the fleet currently
carries Protection and Indemnity (P&I) policies.
REPRESENTATIVE ORTIZ deferred to Mr. Kehoe.
4:18:59 PM
BOB KEHOE, Executive Director, Purse Seine Vessel Owners
Association (PSVOA), testified in support of HB 379. He
answered that those who run the fund do not collect that data.
He said that anecdotally there are owners that don't carry
insurance for themselves or their crew.
REPRESENTATIVE KNOPP asked about the pool between fishing
organizations and whether that would be a way of telling how
many carry the insurance.
MR. KEHOE answered his organization does not solicit members to
join the pool. He added the organization is not in a position
to know how many are carrying insurance.
4:22:27 PM
REPRESENTATIVE BIRCH asked how large the Fishermen's Fund is.
MR. KEHOE deferred to the department.
4:23:32 PM
MARIE MARX, Director, Division of Workers Compensation,
Department of Labor & Workforce Development (DLWD), answered
questions in the hearing on HB 379. She stated her division
administers the Fishermen's Fund. She answered the current
balance is $11.8 million. She specified that it is a dedicated
fund and a self-sustaining fund, meaning the amount of revenue
collected each year is sufficient to pay off any claims each
year.
REPRESENTATIVE BIRCH referenced the fiscal note (FY) analysis.
He said he thinks the fund must be generating close to $1
million per year. He asked what is drawing against the fund.
MS. MARX answered that the primary benefit paid by the fund is
for crewmember injury claims. She added a very small portion
goes to reimbursing the deductible paid by vessel owners.
REPRESENTATIVE BIRCH asked whether the division keeps an
estimate of total fishermen working and total annual claimants.
MS. MARX answered that if a vessel owner does not carry P&I
insurance, they can file a claim with the Fishermen's Fund. She
added that the fund is the payor of last resort. She specified
391 claims were made against the fund in FY 17, of which 294
were paid.
REPRESENTATIVE BIRCH surmised the vessel owner did not have
insurance and the fund "backstopped that."
MS. MARX answered in the affirmative. She reiterated the fund
is the payor of last resort and pays behind every other payment
system other than Medicare.
REPRESENTATIVE BIRCH asked how many fishermen are involved.
MS. MARX answered that 391 claims were made in FY 17. She
deferred to Mr. Kehoe for the total number of fishermen in
Alaska.
4:27:27 PM
CHAIR KITO suggested some of the questions might be answered by
the invited testimony.
4:27:52 PM
MR. KEHOE answered that he can't guess how many crewmembers are
working in the commercial fishing industry throughout the state.
MR. KEHOE paraphrased his prepared statement [included in
committee packet], which reads as follows [original punctuation
provided]:
My name is Bob Kehoe, and I am the Executive Director
of the Purse Seine Vessel Owners Association (PSVOA).
PSVOA supports HB 379.
The bill expands upon the Legislature's effort in 2010
to provide a financial incentive to vessel owners to
obtain insurance to fully cover their crewmembers in
the event of an injury.
Vessel owners are not required by law to carry
insurance for their crewmembers, which is different
than shoreside employers who are required by law to
insure their employees under the state's workers
compensation system. In addition, the cost of vessel
insurance is relatively high compared to the rates
paid by shoreside employers. For example, a purse
seine operation typically has four crewmembers. The
cost of insuring the crew can be as high as $400 per
man per month.
As small, independent business owners, the cost of
liability insurance is a major fixed cost. The bill
will ease the financial burden on vessel owners in
paying the cost of insurance and will further promote
the goal of ensuring all of the medical needs of an
injured crewmembers are satisfied.
PSVOA respectfully requests the Committee's support in
moving the bill forward.
4:31:01 PM
REPRESENTATIVE BIRCH asked whether the fishermen represented
have to be Alaska residents. He asked who can qualify for the
fund benefit.
MR. KEHOE answered that he does not believe that where the
vessel owner is from has any bearing of eligibility for the fund
benefits. He gave the example of a vessel owner from Seattle,
Washington, who does not carry P&I insurance. He stated his
injured crewmember from Petersburg, Alaska, is eligible to
receive the benefit. He said that under current law, the boat
owner is entitled to receive half the deductible. He added the
proposed bill would increase that amount up to $5,000.
REPRESENTATIVE BIRCH asked about the practice in other states in
the organization.
MR. KEHOE answered that, to his knowledge, Alaska is the only
state that has a fishermen's fund that would pay these claims in
the event that the vessel owner does not carry insurance. He
said he thinks Alaska is ahead compared to other states.
4:33:54 PM
FRANCES LEACH, Executive Director, United Fishermen of Alaska
(UFA), testified in support of HB 379. She said crewmembers
working on commercial fishing vessels are not covered under the
Alaska Workers Compensation system. She said injured
crewmembers are covered under federal maritime law. She said
benefits include payment of medical bills for a work-related
injury. She stated that in 2010 there was effort to encourage
vessel owners to purchase P&I insurance and to reduce the
financial burden on the state. She added there are still many
fishermen in the state who do not carry P&I insurance. She
shared a personal story of one vessel owner's decision not to
carry the insurance. She said the proposed amendment would
provide further financial incentive tp vessel owners to carry
the insurance.
4:37:43 PM
REPRESENTATIVE KNOPP surmised that if [crewmembers] can only
collect if a claim is filed, it would not incentivize [vessel
owners] to carry insurance.
MS. LEACH answered that if the deductible is $5,000 and the
[vessel owner] can get a portion back, it would be worth it.
REPRESENTATIVE KNOPP asked what crew licensing fees are.
MS. LEACH said she thinks the cost for out-of-state the fee is
$200 and in-state costs $100.
REPRESENTATIVE KNOPP asked whether there is a better use of the
fund in her opinion.
MS. LEACH answered that she is testifying on behalf of UFA and
her opinion would be that of UFA. She added she has not yet had
an opportunity to poll her members.
CHAIR KITO clarified that the reason many aren't covered is that
there are many different types of crewmembers. He said that
ranges from people trying to make a few dollars to people
starting their careers as fishermen.
REPRESENTATIVE KNOPP agreed there are many factors. He said he
is attempting to understand the incentive issue.
4:41:36 PM
CLAY BEZNEK testified in support of HB 379. He said he is
representing himself but added he is the ranking member of the
Fishermen's Fund Appeals and Advisory Board. He stated the group
would be meeting to discuss the proposed bill, but that he can
informally say that in theory that [they] support what is
happening He explained the purpose of the board is to oversee
the wellbeing of the fund. He gave some history of the fund.
He indicated it was the Fishermen's Fund board that instigated
the legislative action in 2010. He said when the fund gets
drawn down, there are stopgaps to protect the fund. He
clarified that only those fishermen injured within state waters
can receive benefits.
4:46:10 PM
REPRESENTATIVE WOOL asked what the incentive is to purchase P&I
insurance.
MR. BEZNEK answered that the Fishermen's Fund is the payor of
last resort. He gave an example of the fund paying out for
injuries. He said part of his job on the board is to encourage
vessel owners to purchase P&I insurance.
4:48:46 PM
CHAIR KITO opened public testimony on HB 379.
CHAIR KITO held over HB 379.