Legislature(1995 - 1996)
01/16/1996 03:03 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 program. 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 hearing. 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 flow. 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 defray. 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 covered. 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 fees. 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 237. 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 insurance. 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 law. 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 revenues. 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 money. 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 statement. 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.