Legislature(2003 - 2004)
04/24/2003 02:18 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 120
An Act relating to the state's sovereign immunity for
certain actions regarding injury, illness, or death of
state-employed seamen and to workers' compensation
coverage for those seamen; and providing for an
effective date.
KEVIN JARDELL, ASSISTANT COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, explained that SB 120 consists of two
issues:
· The policy question of whether or not State
employed seamen should be under a worker's
compensation model or allowed to continue to
pursue the Jones Act remedy through litigation;
· The legal issue. (He noted that the Department of
Law would discuss that concern.)
Mr. Jardell stated that the policy call of the
Administration has been around for approximately eight
years. During the 1980's, the Alaska Marine Highway System
(AMHS) union labor agreements stipulated the State to pay
Alaska Workers' Compensation Act (AWCA) benefits in lieu of
the traditional Jones Act and other maritime remedies. Many
employees preferred the AWCA as a more complete and
immediate no-fault payment (non-taxable wage indemnification
rather than a modest daily maintenance stipend) - avoiding
controversy, delays, and the extra costs inherent in
protracted civil litigation. A single employee's
constitutional challenge resulted in the Alaska Supreme
Court System decision, which precludes the practice under
current law.
Mr. Jardell pointed out that the issue has been around for
the past eight years and has finally "come to the table".
The Administration has determined that placing State
employees under workmen's compensation for injuries would be
the best policy. There are several benefits to that, most
of which center around the benefit to the employee not
needing to litigate before receiving compensation. There
would be an additional benefit of a cost savings to the
State.
SUSAN COX, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,
reiterated that the legislation would take the State
employees that are seamen and put them into the State
compensation system. It would remove the State from the
business of providing traditional maritime remedies under
the Jones Act. The legal vehicle by which the State can do
that is the amendment of State statute that waives sovereign
immunity. The State can withdraw the consent to be sued and
assert our sovereign immunity. Or instead, the State can
provide worker's compensation for the State seamen
employees.
Ms. Cox pointed out that the employees affected would
include the workers on the Alaska Marine Highway vessels,
additional seamen employed by State agencies who work on
research vessels and law enforcement vessels. The objective
would be to provide a uniform system of compensation for on
the job injuries for all State employees.
The Alaska Supreme Alaska Court System, in a decision in
1990, approved the approach that the bill takes. That
decision involved a public safety seaman, the State of
Alaska, Department of Public Safety versus Robert Brown.
The Alaska Supreme Court stated that the State could take
this approach if it was the Legislature's desire. Ms. Cox
stated that case should not be confused with the disapproved
collective bargaining which involved Dale Brown.
Ms. Cox noted that this approach has been taken by other
jurisdictions in other states. She emphasized that this
will not affect the rights of seaman in the private sector.
Ms. Cox pointed out that the idea has been a remedy that was
in effect for an eight-year period until 1991. There was
legal disagreement some years ago whether the bill would
work as a matter of federal law that could override the
State sovereign immunity even if the State choose to amend
the statute. Given the Alaska Supreme Court System
decisions of the last five years, the proposed approach is
legally viable.
Ms. Cox advised that it is expected that this approach will
save the State money in litigation costs. Additionally,
there would not be the same types of damages available in a
worker's compensation remedy that is available in a lawsuit.
Another significant savings would be in the area of illness.
Currently, an employee that becomes ill on the vessel can
leave work and be paid their unearned wages until the end of
the voyage without docking their sick leave. Under the
worker's compensation plan, unless they suffer from an
occupational disease, they would not be receiving a similar
amount of maintenance payments. Those expenses would be
transferred into their sick leave account. She acknowledged
that the system handling illness claims would be changed
dramatically.
Ms. Cox added that the effective date provision states that
st,
the change in the law would go into affect July 12003 and
would address new injuries and illnesses arriving after that
date. There is a three-year statute of limitation for
maritime lawsuits. The Department will continue to handle
litigation for a couple years into the future for those
injuries which occurred prior to the effective date of the
legislation.
BRAD THOMPSON, DIRECTOR, DIVISION OF RISK MANAGEMENT,
DEPARTMENT OF ADMINISTRATION, stated that Risk Management
acted as the insurance agency for State agencies including
maritime claims. He pointed out a zero fiscal note in the
packet, however, anticipated fiscal savings.
Risk Management is funded uniquely on a cash flow basis for
the anticipated costs on claims due to be paid back on a
fiscal period. That appropriation is collected on
assessments from State agencies based on experience in
claims, loss or exposure. The amount is calculated on the
actual costs incurred on a claim. The costs are anticipated
to decrease with the change of remedy. In time, the cost to
the Department of Transportation & Public Facilities,
Department of Public Safety and Department of Fish & Game
will decrease with a cost savings and will reflect in future
assessments. At this time, Risk Management is funded each
year on the anticipated State claims and a negative amount
is not indicated. It is a reflection of a type and method
of funding of the Risk Management program.
Mr. Thompson pointed out the analysis of the Alaska Marine
Highway claims as compared to the other State employee
claims. He reiterated that there would be a savings.
At-Ease: 2:55 P.M.
SB 108 was HELD in Committee for further consideration.
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