04/10/2000 04:10 PM House RLS

HB 378-WORKERS COMP AND WORKER SAFETY                                                                                           
                                                                                                                                
CHAIRMAN COWDERY announced that the final order of business would                                                               
be HOUSE BILL NO. 378, "An Act eliminating certain taxes under AS                                                               
21.09 on premiums from the sale of workers' compensation insurance;                                                             
relating to the establishment, assessment, collection, and                                                                      
accounting for service fees for state administration of workers'                                                                
compensation and worker safety programs; establishing civil                                                                     
penalties and sanctions for late payment or nonpayment of the                                                                   
service fee; and providing for an effective date."                                                                              
                                                                                                                                
REPRESENTATIVE ROKEBERG informed the committee that subsequent to                                                               
passage of HB 378 from the House Labor & Commerce Committee it was                                                              
discovered that there was an unintended consequence.  He requested                                                              
that Mr. Grossi speak to that unintended consequence.                                                                           
                                                                                                                                
Number 2039                                                                                                                     
                                                                                                                                
PAUL GROSSI, Director, Division of Workers' Compensation,                                                                       
Department of Labor & Workforce Development, informed the committee                                                             
that the unintended consequence had to do with the annual fee being                                                             
charged on claims from injuries prior to the effective date in                                                                  
which a premium tax had been previously charged.  Therefore, the                                                                
insurance industry developed a way in which that fee could be                                                                   
repaid through the premium tax in order to prevent that "double                                                                 
charge."                                                                                                                        
                                                                                                                                
REPRESENTATIVE PORTER moved to adopt CSHB 378, version GH2072\G,                                                                
Ford, 4/10/00, as the working document before the committee.  There                                                             
being no objection, it was so ordered.                                                                                          
                                                                                                                                
CHAIRMAN COWDERY inquired as to the difference between the original                                                             
version and version G.                                                                                                          
                                                                                                                                
MR. GROSSI explained that the problem, as pointed out by the                                                                    
insurance industry, with the current language is that it would                                                                  
cause the fee to be charged on injuries prior to the effective date                                                             
in which a premium tax had been charged on the premium.  In order                                                               
to prevent that, the insurance industry offered language that would                                                             
allow the fee to come out of the premium tax and prevent "double                                                                
charging."  He agreed that version G fixes that problem.                                                                        
                                                                                                                                
Number 2209                                                                                                                     
                                                                                                                                
REPRESENTATIVE PORTER moved to report CSHB 378, version G, out of                                                               
committee with individual recommendations.  There being no                                                                      
objection, it was so ordered and CSHB 378(RLS) was reported from                                                                
the House Rules Standing Committee.