Legislature(1995 - 1996)

01/16/1996 03:03 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 366 - MARINE SAFETY EDUCATION PROGRAMS                                   
 Number 120                                                                    
 REPRESENTATIVE ALAN AUSTERMAN, Prime Sponsor, said the Alaska                 
 Marine Safety Education Association (AMSEA) was organized 10 years            
 ago and its primary purpose is to reduce the loss of life and                 
 injuries in the Alaska marine environment by providing education              
 through a statewide network.  This program has been funded                    
 basically by federal grants since its inception, but those grants,            
 as most other grants, are drying up.  Representative Austerman said           
 he is looking for another source of funding to continue what he               
 considers to be a very worthwhile program.  The bottom line is that           
 AMSEA has been funded through grants in the neighborhood of                   
 $100,000 to $250,000 over the 10-year period.  The fishermen's fund           
 is being looked at to pick up the majority of the funds needed to             
 make the program go and grow.  It is estimated that the fishermen's           
 fund generates approximately $310,000 in interest each year on the            
 revenues.  He feels it is appropriate that some of those funds be             
 put into a safety program that is a direct benefit to those                   
 fishermen who are paying into the fishermen's fund.  He noted that            
 the fishermen's fund is generated by fishermen themselves through             
 license fees.  Sixty percent of the revenues generated by the                 
 licenses go into the fishermen's fund to take care of injuries to             
 fishermen and things like that.  He thinks there would be                     
 approximately $200,000 available each year and is asking for                  
 $155,000 to fund this marine safety training and education program.           
 Representative Austerman informed committee members that a number             
 of letters supporting this program were included in their committee           
 packets.  Additionally, Native organizations had submitted                    
 information which contributed to the reduction of death rates in              
 the rural areas of this program.  Representative Austerman                    
 concluded that he wanted to see this program continue, so he                  
 introduced this legislation on behalf of AMSEA in an attempt to               
 find a funding source.                                                        
 CO-CHAIR BUNDE noted for the record that Representative Rokeberg              
 joined the meeting at 3:07 p.m.                                               
 Number 379                                                                    
 CO-CHAIR TOOHEY asked Representative Austerman why he was                     
 requesting only 50 percent; was it because the other 50 percent               
 would come from the federal government?  If so, she assumed that              
 eventually the federal government will tell the state of Alaska to            
 take care of it ourselves.                                                    
 REPRESENTATIVE AUSTERMAN responded that currently the request was             
 for 50 percent of the interest earnings off the program.  He felt             
 that $155,000 would continue to give AMSEA a good program and make            
 them very viable.  He added AMSEA has initiated a dues structure of           
 their members which raises a little money, but he felt the $155,000           
 would fund the program.                                                       
 CO-CHAIR TOOHEY clarified that she was assuming there was no longer           
 any grant money coming from the federal government for this                   
 REPRESENTATIVE AUSTERMAN pointed out there will be no further                 
 federal funding as of July 1996.                                              
 Number 430                                                                    
 REPRESENTATIVE AL VEZEY said his recollection is the fishermen's              
 fund is a trust fund.                                                         
 REPRESENTATIVE AUSTERMAN said he believed that was so.                        
 REPRESENTATIVE VEZEY asked how it was funded.                                 
 REPRESENTATIVE AUSTERMAN replied from the fishermen's licenses,               
 like crew member licenses that are bought each year.                          
 REPRESENTATIVE VEZEY asked if 100 percent of the revenues from the            
 fishermen's licenses go into the fishermen's fund?                            
 REPRESENTATIVE AUSTERMAN said no, 60 percent goes into the                    
 fishermen's fund and 40 percent goes into the general fund.                   
 REPRESENTATIVE VEZEY asked if it was the policy to spend the                  
 interest of the fund on programs?                                             
 REPRESENTATIVE AUSTERMAN replied yes.                                         
 REPRESENTATIVE VEZEY asked what these programs currently included.            
 REPRESENTATIVE AUSTERMAN explained it included fishermen disability           
 when there are accidents and that type of things.  The remainder of           
 the money that is not used goes into the general fund.                        
 REPRESENTATIVE VEZEY said that this issue involving safety                    
 education and safety is a concern to most people; especially people           
 involved in industries that are subject to a high accident rate and           
 a serious accident rate.  He mentioned that he is a member of the             
 construction industry and believed the insurance rates for that               
 industry are higher than for the fishing industry because of the              
 prevailing accident rates industrywide.  They do not, however, have           
 a fund from the state to run their safety programs.  As an employer           
 and employee, he spends thousands of dollars a year sending himself           
 and his employees through professional safety training programs;              
 some which have to be done on a biannual basis and others on a                
 triennial basis.  Most of them do have to be renewed so the                   
 certification and training is considered current.  He explained he            
 does this not just because he has to in order to be legal, but as             
 an employer, he can't afford to have the accidents.  He questioned            
 whether the fishing industry didn't feel that safety is worth the             
 employer's/owner's own money, because one accident costs far more             
 than would ever be spent on education during the life of a                    
 business.  The problem he sees is that of being put in the position           
 of safety training programs competing with disability programs and            
 the result would probably be a license increase for the fishermen.            
 Representative Vezey said he was just projecting ahead and asked              
 Representative Austerman for his comments.                                    
 REPRESENTATIVE AUSTERMAN said the fishermen's fund was put in place           
 before statehood, so he wasn't able to speak to why it was set in             
 place.  He commented that the construction trade doesn't have a               
 program set up so they can draw off from the licensing systems that           
 fishermen have.  Through his involvement with the industry, he has            
 found that fishermen do tend to pay their own way, whether it is              
 through increased taxes or increased licensing fees.  He remarked             
 that if there wasn't a surplus already in this fund that has been             
 derived from the fishermen themselves, he would not have a problem            
 suggesting an increase in their license fees and he felt the                  
 fishermen would be willing to do that.  However, this fund already            
 exists and the fishermen are already paying in to it.                         
 REPRESENTATIVE VEZEY referred to Representative Austerman's comment           
 that the fund was created before Statehood, and said it therefore             
 is exempt from the statutory prohibition on dedicated funds.                  
 REPRESENTATIVE AUSTERMAN agreed that it is a dedicated fund.                  
 REPRESENTATIVE VEZEY questioned if Representative Austerman was               
 saying that there was sufficient funds to meet the disability needs           
 that the program was designed to address and can carry an                     
 additional burden of funding safety programs.                                 
 REPRESENTATIVE AUSTERMAN responded in the affirmative.                        
 Number 710                                                                    
 CO-CHAIR BUNDE asked if the money would go into the general fund if           
 it wasn't used for marine safety.                                             
 REPRESENTATIVE AUSTERMAN responded yes, it would go into the                  
 general fund.                                                                 
 CO-CHAIR BUNDE commented that while this doesn't require additional           
 revenue, it is spending general fund money.                                   
 REPRESENTATIVE AUSTERMAN agreed.                                              
 Number 724                                                                    
 CO-CHAIR BUNDE noted that it would be the policy of the House HESS            
 Committee to not pass bills out on the first hearing, unless there            
 is a special circumstance.  The committee will hear the bill and              
 allow the public to respond before it is brought up for a second              
 Number 759                                                                    
 REPRESENTATIVE AUSTERMAN pointed out there were individuals from              
 the Departments of Revenue and Labor in attendance who could answer           
 specific questions regarding total dollars and how the dollars                
 Number 778                                                                    
 REPRESENTATIVE GARY DAVIS commented on the large balance in the               
 fund, but with the number of injuries in the fishing industry, he             
 felt everything that is taken in could be spent on what this fund             
 was intended for, which was "to help defray minor medical costs               
 suffered by fishermen on the job."  He asked if there was someone             
 who could explain what kind of cost this fund was helping to                  
 CO-CHAIR BUNDE thanked Representative Austerman for his testimony             
 and introduced Paul Grossi of the Department of Labor.                        
 PAUL GROSSI, Director, Division of Workers' Compensation,                     
 Department of Labor, testified that he also acted as the chair of             
 the Fishermen's Fund Advisory Council.  He introduced Carol Bruce,            
 the administrator of the fishermen's fund.  He explained that the             
 corpus of the fund would not be touched by this legislation.  The             
 fund was set up to pay claims from fishermen for medical costs.               
 There is a limit of $2500 but the fund can pay over that amount in            
 certain cases.  It was his understanding that the proposed program            
 would actually be funded by the interest from the fishermen's fund.           
 The fund doesn't receive the interest; it goes into the general               
 fund.  The ability of the fund to pay claims would not be affected            
 by this legislation.                                                          
 Number 926                                                                    
 CO-CHAIR BUNDE wanted to clarify for his own understanding that the           
 fishermen's fund generates interest which goes into the general               
 fund and if there is an injury, the fisherman would establish a               
 claim which would basically be paid out of the general fund.                  
 MR. GROSSI interjected that was not correct; it comes out of the              
 principal.  He reiterated that the fund is funded through the                 
 licenses, so the fund is replenished annually by the license fees.            
 CO-CHAIR TOOHEY asked if they promoted health insurance or mandated           
 health insurance or hospitalization.  She asked if the fishermen's            
 fund was in lieu of that.                                                     
 MR. GROSSI said that was correct and sometimes it supplemented                
 health insurance.  If the fisherman has health insurance or some              
 type of boat insurance, a claim has to be made against that first.            
 This is basically a "safety net" for those fishermen who are not              
 CO-CHAIR TOOHEY exclaimed that $2500 doesn't pay for very much.               
 MR. GROSSI said that was true, but it does supplement and many                
 times the boat insurance has a $2500 deductible.                              
 CO-CHAIR TOOHEY clarified that it was not like car insurance                  
 whereby if you buy a car, you have to have insurance.                         
 MR. GROSSI said no, that was not the case.                                    
 CO-CHAIR BUNDE was curious why they chose to fund injuries out of             
 the principal rather than out of the interest.  He thought they               
 would want to keep the principal whole and just use the interest.             
 MR. GROSSI emphasized the fund is replenished yearly by the license           
 CO-CHAIR BUNDE interjected that it would be even larger, then.                
 MR. GROSSI said that was correct.                                             
 Number 1034                                                                   
 REPRESENTATIVE DAVIS asked if there were regulations or if it was             
 in statute as to what type of claims are allowed.                             
 MR. GROSSI said it was in statute.                                            
 REPRESENTATIVE VEZEY said he was not familiar with the insurance              
 program for fishermen and asked Mr Grossi to describe it.  He asked           
 if they were treated as employees, contractors, or what?                      
 MR. GROSSI said they are exempt from workers' compensation; they              
 have no coverage under the workers' compensation program.                     
 REPRESENTATIVE VEZEY commented that most employers are not exempt             
 from workers' compensation.  In his case, it is a substantial                 
 annual bill; equivalent to about an average of 20 percent of most             
 worker's wages.  He said prior to a court decision, which he                  
 couldn't recall the name, they  got a lot of support from the                 
 insurance industry in terms of safety programs.  It was in their              
 interest as well as their client's interest, to send experts out in           
 the field to work with employers on safety programs.  The court               
 decision said the insurance companies would then be liable if an              
 accident happened after that.  Representative Vezey said the court            
 decision has not been reversed through statute yet.                           
 MR. GROSSI said that was remedied last year through legislation.              
 He noted it was the Van Biene case and it was remedied under HB
 REPRESENTATIVE VEZEY said it sounded like there may be a serious              
 lack of insurance in the fishing industry.                                    
 Number 1169                                                                   
 CAROL BRUCE, Administrator, Fishermen's Fund Advisory & Appeals               
 Council, Department of Labor, testified that she understood that in           
 1951, or whenever the legislation came along, the fishermen                   
 themselves lobbied the legislature to come forth with a program.              
 There is no federal law that requires you have to have insurance,             
 but under Federal Maritime Law, it states that if somebody is                 
 injured on your boat, they can sue and collect for most any injury.           
 She explained that because of that, most boat owners get insurance.           
 However, there are older boats that are not eligible, and many of             
 the injuries are by the boat owner himself on the boat.  Many of              
 them are very minor; the average payout is $500 to $700.  She                 
 reiterated that because of that Federal Maritime Law, the fishermen           
 lobbied the legislature.  She thought the fishermen were under                
 Workers' Compensation but wanted it dropped because they were                 
 purchasing very similar insurance under the Federal Maritime Law.             
 She stressed that a lot of the claims are the boat owners                     
 themselves, and are very minor injuries.  Ms. Bruce explained that            
 if the fishermen have personal insurance, the amount that is                  
 applied to the deductible or the unpaid percentage is the type of             
 thing that is being paid from the fund.  She said their funding               
 source is the licensing fee which is currently $18 for a resident             
 and $54 for a nonresident.                                                    
 Number 1250                                                                   
 MR. GROSSI added that it could be that fishermen don't have enough            
 insurance, but at this point they basically lobbied to opt out of             
 Workers' Compensation and they were successful at that.  So in                
 fact, they are not covered.                                                   
 CO-CHAIR BUNDE observed that working for shares rather than wages             
 probably complicates the issue.                                               
 Number 1267                                                                   
 REPRESENTATIVE VEZEY asked if Mr. Grossi was familiar with the                
 Longshoremen and Harbor Worker's Act (LHWA).                                  
 MR. GROSSI responded that he couldn't answer detailed questions               
 about it, but he knew what it was.                                            
 REPRESENTATIVE VEZEY referred to Mr. Grossi's statement that he               
 thought fishermen were under workmens' comp at one time and asked             
 if it wasn't the LHWA that they were under.                                   
 MR. GROSSI replied that fishermen are not covered under the                   
 Longshoremen Act, which is for stevedores and similar people.  He             
 stated there is the Jones Act and then there is admiralty law.  As            
 he understood it, there are some provisions under the Jones Act               
 that cover seamen, but through common law, admiralty law, there are           
 rights to sue the boat owner or the boat itself for injuries.                 
 REPRESENTATIVE VEZEY said as an employer, if he put an individual             
 on the water or over the water, he had to pick up the LHWA coverage           
 in addition to workers' comp.  He commented that it looks like                
 somebody has been exempted very specifically from having to carry             
 MR. GROSSI said that was true.  He didn't really have an answer,              
 but noted there are some exemptions in the law, whether they are              
 right or wrong, they do exist.                                                
 Number 1351                                                                   
 REPRESENTATIVE TOM BRICE asked if tug boats are exempt from                   
 workers' comp.                                                                
 MR. GROSSI responded yes, they would probably be under a maritime             
 MS. BRUCE added not under this program; (indisc.) under the                   
 fishermen's fund.                                                             
 MR. GROSSI said he misunderstood Representative Brice's question.             
 REPRESENTATIVE BRICE commented that Ms. Bruce had followed up to              
 find out if it would be appropriate to include some type of                   
 educational training for people going to sea, not just commercial             
 fishing vessels.                                                              
 MR. GROSSI said he didn't know if that would be appropriate.  The             
 fund only covers injuries for commercial fishermen.                           
 REPRESENTATIVE BRICE asked how the fisheries industry compared to             
 other high risk industries relative to injuries.                              
 MR. GROSSI said he thought that it was pretty high.                           
 REPRESENTATIVE BRICE asked if it was the highest.                             
 MR. GROSSI stated it was comparable to the timber industry.                   
 REPRESENTATIVE AUSTERMAN said the AMSEA program is a statewide                
 program that reaches everybody including school kids.  It is not              
 just for fishermen.                                                           
 Number 1491                                                                   
 MARK JOHNSON, Chief, Community Health & Emergency Medical Services            
 Section, Division of Public Health, Department of Health & Social             
 Services, addressed the question of injuries and fatalities in the            
 commercial fishing industry.  He said the department did not have             
 a position on the source of funding, but wanted to illustrate the             
 problem that he referred to as soft funding, was an issue they have           
 tried to deal with for years.  He stated that commercial fishing is           
 one of the most dangerous occupations in Alaska and throughout the            
 United States.  The fatality rate has been well documented over               
 several years and coincident with the training done by the Alaska             
 Marine Safety Education Association over the last several years,              
 the fatality rate has dropped.  He said Mr. Ron Perkins of the                
 Alaska Native Health Service had recently done a study which showed           
 a statistically significant correlation between individuals who had           
 gone through this training and a reduction in fatalities in the               
 industry.  That is pretty solid evidence that the training has been           
 a contributor to the reduction.  He added that the new Coast Guard            
 regulations which required more safety equipment, as well as                  
 training on various types of vessels, had contributed as well.  Mr.           
 Johnson said they have tried to help AMSEA get funding through a              
 variety of sources.  Several years ago, they helped AMSEA get a               
 National Marine Fisheries grant and helped them get money from the            
 CDC, but that has all been temporary short-term money.  He                    
 expressed the importance of trying to find a way to continue this             
 program and added the department could provide additional                     
 information on the non-fatal injuries for the committee.                      
 REPRESENTATIVE BRICE commented he would like the information                  
 referred to by Mr. Johnson on the non-fatal injuries.  He asked if            
 they had anything available on fatal injuries?                                
 MR. JOHNSON noted the fatal injuries have been reduced                        
 significantly and has been correlated with the training that has              
 been done.                                                                    
 Number 1609                                                                   
 CO-CHAIR BUNDE noted his questions should not reflect with a                  
 negative attitude for the need for water safety training in Alaska.           
 He questioned the accuracy of a zero fiscal note since the money              
 generated from the fishermen's fund goes into the general fund, but           
 then money is taken back out.  Isn't that indeed spending state               
 Number 1638                                                                   
 BETTY MARTIN, Comptroller, Treasury Division, Department of                   
 Revenue, said they had questioned that also and had footnoted that            
 while the current interest amount, which they estimate is                     
 approximately $400,000 a year assuming a 5 percent rate on the                
 balance in the fund now and half of that would be $200,000, the               
 bill did not address which department of agency would be the                  
 granting agency.  She said there would be a $200,000 funding                  
 source, but in terms of designating that to a specific department,            
 the Department of Revenue was unable to do that with the                      
 information they were given.                                                  
 CO-CHAIR BUNDE said the bottom line is this bill would spend                  
 $200,000 of state revenues.                                                   
 MS. MARTIN interjected if that amount was appropriated.  From the             
 Department of Revenue's standpoint, that is the amount of money               
 currently being credited to the general fund, and would continue to           
 credit to the general fund, but then an appropriation up to that              
 amount would occur on some agency's budget.  They assumed the                 
 Department of Revenue would not supervise or manage a program like            
 this, but they would make sure (indisc.) moved back over to whoever           
 was designated.                                                               
 CO-CHAIR BUNDE noted it was not new money, but it was indeed state            
 Number 1694                                                                   
 JERRY DZUGAN, Director, Alaska Marine Safety Education Association,           
 testified via teleconference from Sitka.  He referred to the                  
 question regarding the fatality rate in the Alaska fishing industry           
 as compared to other industries and said he could give the                    
 committee those statistics.  The U.S. industrial fatality rate                
 across the United States is 7 fatalities per 100,000 workers.  The            
 Alaska industry fatality rate across the board is 30 per 100,000              
 workers and the Alaska fishing industry fatality rate is 195 per              
 100,000 workers.  At least until recently, that had been the                  
 highest risk occupation in the state of Alaska; higher than loggers           
 and higher than pilots, which people traditionally think of as high           
 risk occupations.                                                             
 REPRESENTATIVE VEZEY said he was familiar with the statistics, but            
 wanted to clarify that the overall Alaska rate includes fishing and           
 the air transport industry which accounts for about 75 percent of             
 those fatalities.  If you eliminate those fatalities, the Alaska              
 industry rate is slightly below the national average.                         
 CO-CHAIR BUNDE asked Representative Vezey is he was saying that               
 these fishermen were being killed flying to and from work.                    
 REPRESENTATIVE VEZEY pointed out that happens, too.                           
 CO-CHAIR BUNDE said he didn't understand Representative Vezey's               
 REPRESENTATIVE VEZEY said the two sources of highest work related             
 fatalities in Alaska are the fishing industry and the aviation                
 industry.  If those two industries are eliminated from Alaska's               
 industrial fatalities, then Alaska's industrial fatality rate is              
 slightly below the national average.                                          
 MR. DZUGAN emphasized that AMSEA does a lot more training than just           
 fishermen.  Of the 7000 people trained last year, 2000 were                   
 fishermen and about 3700 were children and although it is called              
 the marine safety training program, it really includes all waters             
 of the state.                                                                 
 CO-CHAIR BUNDE said he was pleased to hear that and added                     
 obviously, this state needs a lot of water safety training.                   
 Number 1812                                                                   
 REPRESENTATIVE CAREN ROBINSON asked Mr. Dzugan how someone would go           
 about getting training in their community and what does the                   
 training entail.                                                              
 MR. DZUGAN responded that AMSEA has different people who train                
 around the state and some of those people may be known in the                 
 community.  They also teach through the Native Health Service, the            
 university and other places.   Mr. Dzugan added that their main               
 office in Sitka can assist in putting you in contact with a person            
 in the community.  Referring to the second part of Representative             
 Robinson's question, Mr. Dzugan said it depends on the needs of the           
 people requesting the training.  One to two hour workshops are                
 available, as well as 7-day instructor courses.  There is a                   
 required 18-hour instructor course for fishermen that includes use            
 of survival equipment, life rafts, fire fighting and actually                 
 conducting a survival safety drill on board the boat.                         
 CO-CHAIR BUNDE said if there was no further testimony, HB 366 would           
 be held for an additional hearing.                                            

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