Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/24/2023 01:30 PM Senate LABOR & COMMERCE
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SB 93-FISHERMEN'S FUND: VESSEL OWNER CLAIMS 2:36:40 PM CHAIR BJORKMAN reconvened the meeting and announced the consideration of SENATE BILL NO. 93 "An Act relating to claims against protection and indemnity insurance policies of vessel owners; and providing for an effective date." He noted there was a committee substitute (CS) for the committee to consider. He solicited a motion. 2:37:02 PM SENATOR BISHOP moved to adopt the committee substitute (CS) for SB 93, work order 33-LS0538\B, as the working document. CHAIR BJORKMAN asked Ms. Achee to walk the committee through the bill, including the changes in the committee substitute. 2:37:24 PM LAURA ACHEE, Staff, Senator Jesse Bjorkman, Alaska State Legislature, Juneau, Alaska, introduced SB 93 on behalf of the Senate Labor and Commerce Committee. The Fishermes Fund Advisory and Repeals Council has requested that the maximum reimbursement that a vessel owner can receive when filing a claim for the injury or illness of a crew member be raised from the current value of $5,000. The council proposed raising it to $10,000, which matches the deductible on many of the policies owned by vessel owners. In the House Fisheries Committee the House companion bill was amended to increase the maximum claim amount to $15,000, because $10,000 isn't always enough to cover the deductible. Even with the increase, the projected disbursements from the fund leave the balance stable. 2:40:03 PM CHAIR BJORKMAN removed his objection; he found no further objection, and the CS for SB 93, work order 33-LS0538\B, was adopted as the working document. 2:421:03 PM CHARLES COLLINS, Director, Division of Workers' Compensation, which includes the Fishermen's Fund, Department of Labor and Workforce Development (DOLWD), Juneau, Alaska, testified by invitation on SB 93. He said the Fishermen's Fund Council tasked the division with representing their wishes and protecting the long-standing Fishermen's Fund. The Fund has served commercial fishermen since inception and the division take the business of protecting the fund seriously. 2:42:02 PM VELMA THOMAS, Program Coordinator for the Division of Workers' Compensation and Administrator for the Fishermen's Fund Advisory and Appeals Council, Department of Labor and Workforce Development (DOLWD), Juneau, Alaska, stated that the vessel owner reimbursement portion of the Fishermen's Fund changed in 2010. In 2012 the benefit cap was $2,500 and the vessel owner could be reimbursed up to 50 percent. That has not had a negative effect on the fund. The council requested an increase in the benefit cap to $10,000. She noted that a House committee amended the companion bill to provide a $15,000 reimbursement for the vessel owner and also $15,000 for an injured crew member. She reviewed the revenue and payouts for nine years, which included the highest benefit payments and the lowest revenue stream, and determined the Fund would not be significantly affected. She explained that the Fishermen's Fund is self-funded with a percentage of the money from commercial fishing permits and crew licenses. She stated that the agency's role is to support the council. It reviews all claims that are over the fund limit and any claims that request benefits beyond that. The council also reviews the claims that are denied. The council members are loyal and enthusiastic about the fund's management and growth. 2:46:11 PM SENATOR BISHOP asked if she modeled this research herself. MS. THOMAS answered that she began the research, and the division completed the work. SENATOR BISHOP commented that he was comfortable with the numbers. He asked Mr. Collins whether he would step up to make adjustments if the stability of the fund was threatened. 2:46:50 PM MR. COLLINS answered that the division takes the fund very seriously and wants to make sure the Fishermens Fund stays around. 2:47:35 PM CHAIR BJORKMAN asked what crew members, deck hands, vessel owners must do to be eligible to receive money from the Fishermen's Fund. MS. THOMAS answered that the primary criteria is that the injury must have occurred in Alaska, and the individual must have a valid crew member license or permit. The injury or illness must be related to commercial fishing and treatment must be sought within 120 days. The grace period used to be 60 days, but the council found that hardy workers like fishermen prefer to work through the season, so the treatment period was extended. They have one year to file a claim. If they are not able to file a claim, they can then present their case to the council for consideration. Crew members and vessel owners have ample opportunities to make claims. Claims are down and the current system serves as a good support for the commercial fishing industry. 2:50:39 PM MR. COLLINS commented that since the fund is a payer of last resort, the vessel owners would have had to have filed and have protection and indemnity (P&I) insurance. They would have to file and the Fishermens Fund would reimburse a part of the portion that the insurance company was not covering. The fund is not set up to allow a windfall. 2:51:25 PM SENATOR GRAY-JACKSON asked what happens if a fishing vessel is lost at sea. MR. COLLINS replied that Workers' Compensation is not part of the conversation; fishers are not covered by Workers Compensation under the Jones Act. The Fishermen's Fund is the payer of last resort. If a vessel or crew members are lost at sea, they hopefully have insurance. The fund would perhaps pay the deductible or some other cost that the insurance did not cover. SENATOR GRAY-JACKSON said she asked because she had a friend who was on a vessel lost at sea. 2:52:51 PM CHAIR BJORKMAN asked whether insurance is required in order to receive money from the fund. MR. COLLINS answered that the fund is not set up as the insurance for the industry; it is there to backstop the insurance. The impetus for the request for this increase is that the deductibles and the cost of insurance have continually risen. Vessel owners have opted for higher deductibles to save money. A lot of vessels work on a shared wage/reward but it is a dangerous occupation, so while a vessel owner may carry insurance it may have a fairly high deductible. The purpose of SB 93 is to help the industry self-regulate and stay healthy. 2:54:06 PM CHAIR BJORKMAN opened public testimony on SB 93. 2:54:31 PM TRACY WELCH, Executive Director, United Fishermen of Alaska (UFA), Petersburg, Alaska, testified in support of SB 93. The United Fishermen of Alaska support the deductible reimbursement for vessel owners. The fund is healthy; it is paid for by fishermen and for fishermen. This is an opportunity to help fishermen and provide an incentive for them to carry insurance on their boat and crew. She stated that UFA also supports the House companion bill. 2:55:57 PM JERRY MCCUNE, President, Cordova District Fishermen United, Cordova, Alaska, testified in support of SB 93. He believes that $15,000 each for the vessel owner and crew members is fair. He recalled that when the reimbursement was raised to $10,000 for the fishermen, one could barely walk in the ER for that amount. Insurance rates have gone up. Keeping the fund solvent is important. 2:57:28 PM CHAIR BJORKMAN closed public testimony on SB 93 and held the bill in committee.