03/16/1993 03:00 PM House L&C

  HB 203 - ADMINISTRATIVE FEE FOR WORKERS' COMP.                               
                                                                               
  CHAIRMAN HUDSON noted that at the last meeting there were                    
  deep concerns from the community as to the effects of HB
.  Chairman Hudson believed that the committee should                     
  come up with a measure that would be both constructive as                    
  well as satisfy the reasons why this bill was drafted in the                 
  first place.                                                                 
                                                                               
  Number 137                                                                   
                                                                               
  PAUL ARNOLDT, DIRECTOR, DIVISION OF WORKERS' COMPENSATION,                   
  DEPARTMENT OF LABOR, stated that as a result of the last                     
  committee hearing, he met with some of the members of the                    
  industry on this issue.  At that meeting, the group                          
  discussed the major issues facing workers' compensation and                  
  how it affects business; the fact that there is a shortage                   
  of funding; what alternatives for funding exist, etc.                        
                                                                               
  MR. ARNOLDT said it was his understanding that the                           
  representatives of business left the meeting with the charge                 
  that they contact their constituency and get a consensus on                  
  where the members stood on the various issues.                               
  Unfortunately, the time frame was too short to allow that                    
  sort of extensive polling before today's meeting.                            
                                                                               
  MR. ARNOLDT discussed further the ramifications of the                       
  underfunding of the Division of Workers' Compensation.                       
                                                                               
  Number 269                                                                   
                                                                               
  JERRY REINWAND, ALASKA TIMBER INSURANCE EXCHANGE, testified                  
  in opposition to any fee increases on business.  Mr.                         
  Reinwand further stated that he believes the division has a                  
  budget problem that needs to be addressed through the                        
  general fund, but not on the backs of business by means of a                 
  tax of any other increase.                                                   
                                                                               
  FORMER REPRESENTATIVE DAVID THOMPSON, ALASKA CENTER FOR DEAF                 
  AND BLIND ADULTS, testified in support of more funding for                   
  the Division of Workers' Compensation.                                       
                                                                               
  Number 331                                                                   
                                                                               
  RESA JERREL, NATIONAL FEDERATION OF INDEPENDENT BUSINESS                     
  (NFIB), testified that 92 percent of the members of NFIB are                 
  opposed to increasing the fees business has to pay for                       
  workers' compensation.                                                       
                                                                               
  Number 389                                                                   
                                                                               
  CHAIRMAN HUDSON stated that it was not his intention to move                 
  HB 203 out of committee today.  The Chairman's intention was                 
  to address what the original purpose of the bill was to find                 
  a mechanism whereby industry could help locate                               
  indiscriminate spending or improper spending.  Otherwise, if                 
  adequate force is absent, industry will have to pay more and                 
  more in claims.                                                              
                                                                               
  Number 408                                                                   
                                                                               
  JAY FRANK, STATE FARM INSURANCE AND ALLSTATE INSURANCE,                      
  echoed comments by Ms. Jerrel in opposition to HB 203.                       
                                                                               
  Number 420                                                                   
                                                                               
  JOHN GEORGE, NATIONAL ASSOCIATION OF INDEPENDENT INSURERS,                   
  also echoed the comments of Mr. Jerrel and Mr. Frank.  Mr.                   
  George believes it was appropriate to look at which services                 
  the division is providing that are deserving of funding and                  
  which are not.  Mr. George said he plans on asking his                       
  industry to help home prioritize the services provided by                    
  the division.                                                                
                                                                               
  Number 444                                                                   
                                                                               
  CHAIRMAN HUDSON noted that there is a tremendous amount of                   
  workmen's compensation fraud happening across the nation.                    
                                                                               
  Number 457                                                                   
                                                                               
  JOE POOR, JUNEAU CHAMBER OF COMMERCE, testified that anytime                 
  you add cost for doing business in Juneau it hurts the                       
  economy.  He further stated that workers' compensation is                    
  the most expensive part of doing business.  Mr. Poor stated                  
  his opposition to HB 203.                                                    
                                                                               
  Number 570                                                                   
                                                                               
  CHAIRMAN HUDSON again stated that this bill was an attempt                   
  to open the lines of communication between business, the                     
  insurance industry, and government in an attempt to help                     
  government streamline its programs and help make the                         
  business climate more favorable especially in light of the                   
  economy.  It is not the wishes of the chairman to simply                     
  raise the costs of doing business in the state.                              
                                                                               
  CHAIRMAN HUDSON adjourned the meeting at 5:15 p.m.