03/09/2004 01:30 PM Senate L&C

          SB 323-WORKERS COMPENSATION AND CONTRACTORS                                                                       
                                                                                                                                
CHAIR CON BUNDE announced SB 323 to be up for consideration.                                                                    
                                                                                                                                
SENATOR RALPH SEEKINS,  sponsor, said he felt the  same way about                                                               
a contractor's  responsibility now  as he did  when he  first had                                                               
the  bill  drafted. When  a  homeowner  hires a  professional  to                                                               
perform work,  they shouldn't have to  rise to the same  level of                                                               
professional responsibility  as a project owner.  A contractor in                                                               
the business  of building homes,  who hires subcontractors  to do                                                               
framing, plumbing and electrical work,  should bear that level of                                                               
responsibility because  of their professional  capabilities. That                                                               
is why homeowners are deliberately left out of the bill.                                                                        
                                                                                                                                
MR. PHIL EIDE, Counsel to  the State Chamber of Commerce, offered                                                               
to answer  questions on the  bill along with his  colleague, Jack                                                               
Miller, both from the firm of Eide, Miller & Pate.                                                                              
                                                                                                                                
CHAIR  BUNDE  pointed  out  that  E-mail  from  Mr.  Jack  Miller                                                               
discussed  how the  chain of  responsibility  from project  owner                                                               
through subcontractor would occur.                                                                                              
                                                                                                                                
     As I read this, it  expands the obligation for workers'                                                                    
     compensation  up to  the project  owner and  the people                                                                    
     below  them   that  may  or   may  not   have  workers'                                                                    
     compensation, but the buck stops  at the top. That's if                                                                    
     I understand it correctly.                                                                                                 
                                                                                                                                
MR. JACK MILLER,  Counsel to the State Chamber  of Commerce, said                                                               
that is  a correct interpretation  and this bill does  not affect                                                               
the  state  statute  that  requires  companies  to  get  workers'                                                               
compensation insurance.                                                                                                         
                                                                                                                                
TAPE 04-21, SIDE B                                                                                                            
                                                                                                                                
MR.  MILLER  said that  is  a  moot  point  in relation  to  this                                                               
legislation.                                                                                                                    
                                                                                                                                
MS. MARY SHIELDS, General  Manager, Northwest Technical Services,                                                               
said that she supports SB 323. She stated:                                                                                      
                                                                                                                                
     Workers' compensation, as we  all know, was established                                                                    
     to  cover workplace  injuries without  the  need of  an                                                                    
     employee to  file in  court for  just medical  and wage                                                                    
     compensation  occurred  at  the   job  site.  This  has                                                                    
     enabled employees  and employers to be  assured that if                                                                    
     the  employee  was injured  on  the  job, the  employee                                                                    
     would not  be abandoned  and we would  not end  up with                                                                    
     court  cases. However,  the increased  use of  contract                                                                    
     employees  in the  workplace has  left  an opening  for                                                                    
     additional    recoveries,    which   I    believe    is                                                                    
     inappropriate    except   in    the   most    egregious                                                                    
     circumstances.                                                                                                             
                                                                                                                                
     Northwest   Technical  Services   is   a  provider   of                                                                    
     personnel to a large variety  of companies in the State                                                                    
     of  Alaska.   It  is   our  responsibility   to  assure                                                                    
     appropriate  workers'   compensation  coverage   is  in                                                                    
     place.  It should  not also  be  our responsibility  to                                                                    
     cover tort liability lawsuits in  the event an employee                                                                    
     should  seek  action  against  a   client  based  on  a                                                                    
     workplace  injury,  as workers'  compensation  coverage                                                                    
     should extend  up the  line to  the client  company, as                                                                    
     well.                                                                                                                      
                                                                                                                                
     While there  may rest a  need in this law  to establish                                                                    
     an  exception  for   deliberate  negligence  action  or                                                                    
     inaction  in maintaining  a safe  workplace environment                                                                    
     by a  company, this  is a necessary  bill and  needs to                                                                    
     move  forward.  I  thank you,  Mr.  Chairman,  and  the                                                                    
     members of the committee for your time.                                                                                    
                                                                                                                                
CHAIR BUNDE asked  if anyone else in Juneau wanted  to testify on                                                               
SB  323. There  was no  response  and he  asked the  will of  the                                                               
committee.                                                                                                                      
                                                                                                                                
SENATOR  SEEKINS  moved  to  pass  SB  323  from  committee  with                                                               
individual recommendations and attached fiscal note.                                                                            
                                                                                                                                
SENATOR  FRENCH  objected  and  said that  he  thought  the  last                                                               
comment  from Mr.  Miller pointed  out  that this  bill would  do                                                               
nothing to increase the amount  of workers' compensation coverage                                                               
or  expand the  obligation  to procure  it and  it  takes away  a                                                               
workers' right to  sue a project owner for  unsafe conditions. "I                                                               
think that's  a bad exchange and  for that reason I'm  opposed to                                                               
that idea."                                                                                                                     
                                                                                                                                
SENATOR SEEKINS countered:                                                                                                      
                                                                                                                                
     It doesn't  change anything that  is there now,  but if                                                                    
     you look  at the last  part, if  they fail to  do so...                                                                    
     and  a contractor  or subcontractor  does not  have the                                                                    
     required insurance, a claim would  be covered under the                                                                    
     project owner's  policy - extending the  obligation for                                                                    
     paying workers'  compensation benefits for  an extended                                                                    
     worker  to  the  project  owner,  contractors  and  his                                                                    
     subcontractors.  That's the  intent of  the bill  and I                                                                    
     think it gives significant benefit to those people who                                                                     
     are on the job.                                                                                                            
                                                                                                                                
CHAIR BUNDE  asked for a  roll call vote. Senators  Gary Stevens,                                                               
Ralph  Seekins and  Chair  Con Bunde  voted  yea; Senator  Bettye                                                               
Davis  and  Hollis French  voted  nay;  and  SB 323  passed  from                                                               
committee.