Legislature(1999 - 2000)

04/07/2000 02:30 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 7, 2000                                                                                            
                         2:30 P.M.                                                                                              
                                                                                                                                
TAPE HFC 00 - 109, Side 1                                                                                                       
TAPE HFC 00 - 109, Side 2                                                                                                       
TAPE HFC 00 - 110, Side 1                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Therriault  called   the  House  Finance  Committee                                                                   
meeting to order at 2:30 p.m.                                                                                                   
                                                                                                                                
PRESENT                                                                                                                       
                                                                                                                                
Co-Chair Mulder                                                                                                                 
Co-Chair Therriault            Representative Foster                                                                            
Vice Chair Bunde               Representative Grussendorf                                                                       
Representative Austerman       Representative Phillips                                                                          
Representative G. Davis        Representative Williams                                                                          
                                                                                                                                
Representative  J.  Davies  and   Representative  Moses  were                                                                   
absent from the meeting.                                                                                                        
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Brian Porter;  Representative Norm  Rokeberg;                                                                   
Mike    Tibbles,     Staff,    Representative     Therriault;                                                                   
Representative   Andrew   Halcro;   Jonathan   Lack,   Staff,                                                                   
Representative  Halcro; Paul  Grossi,  Director, Division  of                                                                   
Workers'  Compensation,  Department  of Labor  and  Workforce                                                                   
Development; Guy  Bell, Director, Division of  Retirement and                                                                   
Benefits,  Department of  Administration;  Barbara Sue  Roth,                                                                   
Private Rehabilitation Counselor, Juneau.                                                                                       
                                                                                                                                
TESTIFIED VIA TELECONFERENCE                                                                                                  
                                                                                                                                
Chancy  Croft,   Attorney,  Anchorage;  Willy   Van  Hermert,                                                                   
Anchorage;  Kevin  Dougherty, Attorney,  Anchorage;  Margorie                                                                   
Linder, Anchorage;  Charles W.  Coe, Anchorage;  Ron Johnson,                                                                   
Kenai; Sharon Boyd, Anchorage                                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 207    "An  Act relating  to the  registration of  persons                                                                   
          who perform home inspections; and providing for an                                                                    
          effective date."                                                                                                      
                                                                                                                                
          CSHB 207 (FIN) was REPORTED out of Committee with                                                                     
          "no recommendation" and with a new fiscal impact                                                                      
          note by the Department of Community and Economic                                                                      
          Development.                                                                                                          
                                                                                                                                
HB 277    "An Act relating to payment of retirement benefits                                                                    
          for subsequently reemployed  retired members of the                                                                   
          teachers' retirement system."                                                                                         
                                                                                                                                
          CSHB 277  (FIN) was REPORTED out of  Committee with                                                                   
          a "do  pass" recommendation and with  fiscal impact                                                                   
          note   by   the   Department   of   Administration,                                                                   
          published date 2/15/00.                                                                                               
                                                                                                                                
HB 320    "An Act approving the application for and                                                                             
          acceptance  of a grant  of certain federal  land by                                                                   
          the  Alaska  Railroad  Corporation;  approving  the                                                                   
          conveyance  of the entire interest in  the Whittier                                                                   
          DeLong Dock and associated  uplands, tidelands, and                                                                   
          submerged    lands   by    the   Alaska    Railroad                                                                   
          Corporation;  relating  to use  and disposition  of                                                                   
          the Whittier  DeLong Dock and associated  land; and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          CSHB 320 (FIN) was REPORTED out of Committee with                                                                     
          a "do  pass" recommendation and with  a zero fiscal                                                                   
          note by the House Transportation  Committee for the                                                                   
          Department of Community and Economic Development.                                                                     
                                                                                                                                
HB 419    "An Act relating to the weekly rate of                                                                                
          compensation  and minimum and maximum  compensation                                                                   
          rates   for   workers'   compensation;   specifying                                                                   
          components of a workers'  compensation reemployment                                                                   
          plan; adjusting workers'  compensation benefits for                                                                   
          permanent  partial   impairment,  for  reemployment                                                                   
          plans,  for  rehabilitation benefits,  for  widows,                                                                   
          widowers,  and orphans, and for  funerals; relating                                                                   
          to  permanent  total   disability  of  an  employee                                                                   
          receiving  rehabilitation   benefits;  relating  to                                                                   
          calculation  of gross weekly earnings  for workers'                                                                   
          compensation  benefits for  seasonal and  temporary                                                                   
          workers  and for workers  with overtime  or premium                                                                   
          pay; setting  time limits for requesting  a hearing                                                                   
          on claims for workers'  compensation, for selecting                                                                   
          a  rehabilitation specialist,  and  for payment  of                                                                   
          medical  bills;  relating  to  termination  and  to                                                                   
          waiver   of  rehabilitation   benefits,   obtaining                                                                   
          medical releases, and  resolving discovery disputes                                                                   
          relating  to  workers'   compensation;  setting  an                                                                   
          interest   rate  for  late  payments   of  workers'                                                                   
          compensation;  providing for updating  the workers'                                                                   
          compensation  medical fee  schedule; and  providing                                                                   
          for an effective date."                                                                                               
                                                                                                                                
          HB 419 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HCR 22    Establishing the Joint Special Committee on Ways                                                                      
          and Means as a joint  committee of the legislature.                                                                   
                                                                                                                                
          CSHCR 22 (FIN) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation and with a new zero                                                                        
          fiscal note by the Legislative Affairs Agency.                                                                        
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 22                                                                                            
                                                                                                                                
     Establishing the Joint Special Committee on Ways and                                                                       
     Means as a joint committee of the legislature.                                                                             
                                                                                                                                
Co-Chair   Mulder   MOVED   to   ADOPT   proposed   committee                                                                   
substitute,  work  draft  1-LS1515\K,  dated  3/31/00.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
REPRESENTATIVE BRIAN PORTER, SPONSOR  testified in support of                                                                   
the legislation.  He observed that  given the amount  of time                                                                   
left in the  current legislative session that  it is doubtful                                                                   
that the  legislature will be  able to formulate  a complete,                                                                   
total fiscal  plan for  the revenue side  of the  fiscal gap.                                                                   
The resolution  asks that  the Legislative  Budget and  Audit                                                                   
Committee look at  the issues and formulate a  report so that                                                                   
the next legislature can "hit  the ground running and be in a                                                                   
position  to formulate  a plan  that  can take  the state  of                                                                   
Alaska into the  future." The legislation would  not preclude                                                                   
the Legislative  Budget  and Audit Committee  from adding  or                                                                   
developing additional items.                                                                                                    
                                                                                                                                
Vice Chair  Bunde observed  that the report  would be  due on                                                                   
January 5, 2001.                                                                                                                
                                                                                                                                
Representative   Austerman   expressed    support   for   the                                                                   
legislation,  but  emphasized  that  he  would  like  to  see                                                                   
something accomplished in the current year.                                                                                     
                                                                                                                                
Co-Chair  Mulder  MOVED  to  report CSHCR  22  (FIN)  out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHCR  22 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with a new zero fiscal  note by the                                                                   
Legislative Affairs Agency.                                                                                                     
                                                                                                                                
HOUSE BILL NO. 207                                                                                                            
                                                                                                                                
     "An Act relating to the registration of persons who                                                                        
     perform home inspections; and providing for an                                                                             
     effective date."                                                                                                           
                                                                                                                                
Co-Chair Therriault  provided members  with Amendments 1  - 6                                                                   
(see below).                                                                                                                    
                                                                                                                                
MIKE  TIBBLES,  STAFF,  REPRESENTATIVE   THERRIAULT  provided                                                                   
information on Amendment 1:                                                                                                     
                                                                                                                                
     Page 6, line 5:                                                                                                            
     After "without"                                                                                                            
     Delete "alleging and'                                                                                                      
                                                                                                                                
Mr.  Tibbles observed  that the  language  was confusing  and                                                                   
explained that  the drafter indicated  that the  language was                                                                   
not needed.                                                                                                                     
                                                                                                                                
Representative  Phillips  MOVED  to  ADOPT.  There  being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT Amendment 2:                                                                                 
                                                                                                                                
     Page 2, line 7:                                                                                                            
     After education of"                                                                                                        
     Insert licensed'                                                                                                           
                                                                                                                                
     Page 4, line 15:                                                                                                           
     After "licensed'                                                                                                           
     Insert 'or registered"                                                                                                     
                                                                                                                                
     Page 4, line 18:                                                                                                           
     After 'inspector'                                                                                                          
     Insert 'or associate home inspector'                                                                                       
                                                                                                                                
     Page 4, line 20:                                                                                                           
     After "license"                                                                                                            
     Insert "or registration"                                                                                                   
                                                                                                                                
     Page 6, line 1:                                                                                                            
     After "applicant'                                                                                                          
     Insert "for licensure'                                                                                                     
                                                                                                                                
     Page 6, line 4:                                                                                                            
     After 'license'                                                                                                            
     Insert "or registration'                                                                                                   
                                                                                                                                
     Page 6, line 21:                                                                                                           
     After "licensee'                                                                                                           
     Insert "or an associate home inspector"                                                                                    
                                                                                                                                
Mr.  Tibbles  explained  that the  amendment  adds  technical                                                                   
changes to make the legislation  consistent. It adds language                                                                   
where  either   a  license   or  registration  is   required.                                                                   
Representative Rokeberg  questioned if "or an  associate home                                                                   
inspector"  was necessary.  Mr.  Tibbles  explained that  the                                                                   
language is needed to clarify  the reference to a licensee or                                                                   
an associate home  inspector on line 13. The  amendment would                                                                   
make the two sections consistent.                                                                                               
                                                                                                                                
There being NO OBJECTION, Amendment 2 was adopted.                                                                              
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT Amendment 3:                                                                                 
                                                                                                                                
     Page 3, line 26:                                                                                                           
     After "AS 08.57.060."                                                                                                      
     Insert "No license may be reinstated if the license has                                                                  
     been lapsed for more than five years."                                                                                     
                                                                                                                                
Mr. Tibbles explained that AS  0.8.01.100(d) provides that an                                                                   
individual with a license that  has lapsed for more than five                                                                   
years  may   not  reinstate  the  license.   The  legislation                                                                   
contains  procedures  for  an  individual who  has  a  lapsed                                                                   
license for  more than  two years but  does not specify  what                                                                   
happens  after  five  years.   The  amendment  would  address                                                                   
licenses that have lapsed for more than five years.                                                                             
                                                                                                                                
Representative G. Davis observed  that the amendment does not                                                                   
preclude  an individual  from  obtaining a  new license.  Co-                                                                   
Chair  Therriault  agreed that  a  person whose  license  has                                                                   
lapsed  for  more  than  five years  would  not  renew  their                                                                   
license; they would have to get a new license.                                                                                  
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT Amendment 4:                                                                                 
                                                                                                                                
     Delete "or'                                                                                                                
                                                                                                                                
     Page 7, line 14, following 'premises;":                                                                                    
                                                                                                                                
     Insert "or                                                                                                                 
                                                                                                                                
     (C)  by  the  home inspector  in  an  administrative  or                                                                   
     judicial  proceeding  in which  disclosure  of the  home                                                                   
     inspection  report  is  relevant to  resolution  of  the                                                                   
     legal issues in the proceeding;"                                                                                           
                                                                                                                                
Representative Rokeberg observed  that an inspector could not                                                                   
expect to  get written  permission or  consent from  a client                                                                   
that  to  issue a  copy  of  the report  to  the  inspector's                                                                   
attorney  if   the  client  was  suing  the   inspector.  The                                                                   
amendment was  intended to address the  issue. Representative                                                                   
Rokeberg  recommended the  Amendment be  amended: (c)  by the                                                                   
home inspector  in which  disclosure of  the home  inspection                                                                   
report is relevant to resolution of the legal issues.                                                                           
                                                                                                                                
Co-Chair Therriault observed that  an inspector that is being                                                                   
sued by  his client  needs the  ability to  give his  defense                                                                   
attorney a  copy of the report.  Mr. Tibbles did  not discuss                                                                   
the amendment with legal counsel.                                                                                               
                                                                                                                                
Co-Chair Therriault  WITHDREW Amendment  4 in order  to allow                                                                   
it to be redrafted.                                                                                                             
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT Amendment 5:                                                                                 
                                                                                                                                
     "(8) certified  to demonstrate that a  building complies                                                                   
     with the thermal and lighting  energy standards required                                                                   
     by AS 46.11.040  and is performing only  activities that                                                                   
     are authorized under that certification."                                                                                  
                                                                                                                                
Mr.  Tibbles explained  that  the  amendment  was drafted  to                                                                   
address     individuals    that     provide     energy-rating                                                                   
certification. The  amendment clarifies that that  they would                                                                   
not be required to acquire a license.  The issue was based on                                                                   
the definition of home inspector.                                                                                               
                                                                                                                                
Co-Chair Therriault  recalled  concerns by Representative  J.                                                                   
Davies  that the legislation  would sweep  in energy  raters.                                                                   
The Alaska Housing Finance Corporation  (AHFC) certifies most                                                                   
of the energy raters; builders can also be certified.                                                                           
                                                                                                                                
Representative  Rokeberg spoke  in support  of the  amendment                                                                   
and noted that  it is not the intent to cover  energy raters,                                                                   
which are trained and handled separately.                                                                                       
                                                                                                                                
There being NO OBJECTION, Amendment 5 was adopted.                                                                              
                                                                                                                                
Co-Chair Therriault  MOVED to ADOPT Amendment  6. Amendment 6                                                                   
would  change the  sunset provision  from 2004  to 2003.  The                                                                   
amendment  was drafted  in response to  concerns by  Co-Chair                                                                   
Mulder.                                                                                                                         
                                                                                                                                
Mr. Tibbles stated that it was  his understanding, based on a                                                                   
conversation  with Catherine Reardon,  Director, Division  of                                                                   
Occupational  Licensing, that everyone  would need  a license                                                                   
or a transactional license by July 2001.                                                                                        
                                                                                                                                
Representative   Rokeberg   spoke   in  opposition   to   the                                                                   
amendment. He  noted that fees  are on a biannual  basis. Co-                                                                   
Chair Therriault pointed out that  there would be a wind down                                                                   
year.                                                                                                                           
                                                                                                                                
There being NO OBJECTION, Amendment 6 was adopted.                                                                              
                                                                                                                                
Co-Chair  Therriault   reintroduced  Amendment   4.  Co-Chair                                                                   
Therriault  MOVED  to  ADOPT  Amendment  4.  There  being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
RON   JOHNSON,  KENAI   testified   via  teleconference.   He                                                                   
expressed concerns with consumer  protections. He pointed out                                                                   
that  there  are  a  large  number  of  educational  programs                                                                   
available on the  Internet. He maintained that  the report is                                                                   
being construed as a warranty  or guarantee. He stressed that                                                                   
it should  be viewed as  a snap shot  of the property;  it is                                                                   
not evidence  of future  problems or  a warranty. He  pointed                                                                   
out that the  state of Connecticut's application  fee is only                                                                   
$40  dollars  and  the  biannual   renewal  is  $200  hundred                                                                   
dollars.                                                                                                                        
                                                                                                                                
In response to a question by Representative  Grussendorf, Mr.                                                                   
Johnson stated  that his understanding  of the intent  of the                                                                   
legislation is to control an industry  and allow the state to                                                                   
retaliate  on behalf  of  the  public if  there  is harm.  He                                                                   
pointed  out  that   if  a  home  inspector   says  that  the                                                                   
foundation of  a building  is fine and  then two  weeks later                                                                   
there  is water  running  in under  the  foundation that  the                                                                   
harmed consumer has no recourse.                                                                                                
                                                                                                                                
Representative  Rokeberg  disagreed  with statements  by  Mr.                                                                   
Johnson.  He emphasized  that  the visual  inspection of  the                                                                   
foundation  by a home  inspector is  only "visual".  The home                                                                   
inspector cannot  be responsible. Liability would  only occur                                                                   
if  he omits  a defect  or  should have  been  aware of  some                                                                   
anomaly.  The consumer  protection is  the ability to  revoke                                                                   
the license to do business or to fine the inspector.                                                                            
                                                                                                                                
Representative Foster  MOVED to report CSHB 207  (FIN) out of                                                                   
Committee with the accompanying fiscal note                                                                                     
                                                                                                                                
CSHB  207  (FIN)  was REPORTED  out  of  Committee  with  "no                                                                   
recommendation"  and with  a new  fiscal impact  note by  the                                                                   
Department of Community and Economic Development.                                                                               
                                                                                                                                
HOUSE BILL NO. 277                                                                                                            
                                                                                                                                
     "An Act relating to payment of retirement benefits for                                                                     
     subsequently reemployed retired members of the                                                                             
     teachers' retirement system."                                                                                              
                                                                                                                                
Vice  Chair Bunde  provided members  with proposed  committee                                                                   
substitute, work  draft 1-LS1202\I,  Cramer, 4/4/00  (copy on                                                                   
file). He  noted that the  proposed committee  substitute was                                                                   
the work of the Subcommittee and the sponsor.                                                                                   
                                                                                                                                
JONATHAN  LACK,  STAFF, REPRESENTATIVE  HALCRO  reviewed  the                                                                   
proposed committee substitute.  He observed that the original                                                                   
legislation allowed  all retired  teachers to return  to work                                                                   
and receive  retirement and  pay benefits  at the same  time.                                                                   
The committee  substitute requires that each  school district                                                                   
demonstrate a need  in an area or discipline  before rehiring                                                                   
a teacher.  Teachers would  not necessarily  return  at their                                                                   
retirement  level. The  emphasis of  the bill  is to  address                                                                   
teacher shortages.                                                                                                              
                                                                                                                                
Representative  Phillips  questioned  if  the  Department  of                                                                   
Education and Early Development would verify the need.                                                                          
                                                                                                                                
Mr.  Lack responded  that the  committee substitute  provides                                                                   
that individual  school districts  would adopt a  policy. The                                                                   
Department of  Education and Early  Development would  not be                                                                   
involved. He  noted that the  subcommittee's intent  was that                                                                   
individual   school  districts   report   to  the   Teacher's                                                                   
Retirement System (TRS) in order  to track costs. (See letter                                                                   
dated   April   7,   2000   to   Co-Chair   Therriault   from                                                                   
Representative Halcro, copy on  file.) There is a 2003 sunset                                                                   
clause.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  ANDREW HALCRO  explained that  the intent  of                                                                   
the legislation  is to address  the shortage of  teachers and                                                                   
provide and  incentive for  retired teachers  to stay  in the                                                                   
state.  There are 8,000  retired teachers  living outside  of                                                                   
Alaska, many of which are teaching in other states.                                                                             
                                                                                                                                
Representative  Austerman clarified  that  a retired  teacher                                                                   
could receive  full benefits and  a negotiated salary  at the                                                                   
same time.                                                                                                                      
                                                                                                                                
Mr. Lack affirmed  and explained that school  districts would                                                                   
need to negotiate  contract terms for rehired  teachers. Hire                                                                   
would not  be made  unless the  school district approved  the                                                                   
terms.                                                                                                                          
                                                                                                                                
Representative   Foster   expressed  appreciation   for   the                                                                   
legislation and  referred to a  letter by Dr. John  A. Davis,                                                                   
Superintendent,  Bering  Strait   School  District  (copy  on                                                                   
file.)  He questioned  if  issues raised  by  Dr. Davis  were                                                                   
addressed in the  committee substitute. Mr. Lack  pointed out                                                                   
that  Dr.  Davis  supports the  legislation  and  noted  that                                                                   
several  of the  issues  were addressed.  He  noted that  Dr.                                                                   
Davis expressed support for two-year  contracts. He explained                                                                   
that  the   decision  was  made   to  remain   with  one-year                                                                   
contracts,  to  slowly review  the  process.  He argued  that                                                                   
working teachers should pay into a retirement system.                                                                           
                                                                                                                                
Representative   Grussendorf   spoke   in  support   of   the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Vice Chair Bunde  pointed out that federal law  requires that                                                                   
rehired teachers  be under a  retirement system.  He stressed                                                                   
that it would be difficult to  set up contributions to Social                                                                   
Security for a small number of teachers.                                                                                        
                                                                                                                                
Co-Chair  Therriault   noted  that  Representative   Halcro's                                                                   
letter of  intent was  not adopted and  suggested that  it be                                                                   
redrafted  and  submitted  to  the  full  body  during  floor                                                                   
session.                                                                                                                        
                                                                                                                                
Representative  Austerman   acknowledged  that  there   is  a                                                                   
teacher shortage.  He felt  that the  legislation would  be a                                                                   
band  aide and  questioned if  the legislation  is the  right                                                                   
answer. He  noted that  the fiscal impact  would fall  on the                                                                   
state since school  districts are supported by  the state. He                                                                   
noted that  school funding has  not increased  with inflation                                                                   
over the last 10 - 15 years.                                                                                                    
                                                                                                                                
Co-Chair  Therriault   noted  that  the  hiring   process  is                                                                   
controlled by the school district.                                                                                              
                                                                                                                                
Representative Halcro acknowledged  that the legislation is a                                                                   
band aide but emphasized that it is a needed band aide.                                                                         
                                                                                                                                
(TAPE CHANGE, HFC 00 - 109, SIDE 2)                                                                                           
                                                                                                                              
Representative  Austerman clarified  that there  is a  sunset                                                                   
clause on page 2, line 28.                                                                                                      
                                                                                                                                
Vice Chair  Bunde noted  that the laws  of supply  and demand                                                                   
remain. He  stressed that  a raise  in salary would  increase                                                                   
applicants.                                                                                                                     
                                                                                                                                
Co-Chair  Mulder  MOVED  to  ADOPT   work  draft  1-LS1202\I,                                                                   
Cramer, 4/4/00. There being NO  OBJECTION, it was so ordered.                                                                   
                                                                                                                                
GUY  BELL, DIRECTOR,  DIVISION  OF RETIREMENT  AND  BENEFITS,                                                                   
DEPARTMENT  OF  ADMINISTRATION  provided information  on  the                                                                   
fiscal  note. He observed  that the  department submitted  an                                                                   
indeterminate  fiscal note. The  cost to  TRS will  depend on                                                                   
the amount of teachers that are  rehired. He pointed out that                                                                   
controls  were   placed  on  the  legislation.   A  reporting                                                                   
requirement was  added. He stated  that the department  could                                                                   
determine if the legislation results  in a cost savings after                                                                   
the fact.                                                                                                                       
                                                                                                                                
Co-Chair  Mulder  MOVED  to  report CSHB  277  (FIN)  out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  277 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation  and with  fiscal  impact  note by  the                                                                   
Department of Administration, published date 2/15/00.                                                                           
                                                                                                                                
HOUSE BILL NO. 419                                                                                                            
                                                                                                                                
     "An Act relating to the weekly  rate of compensation and                                                                   
     minimum  and  maximum compensation  rates  for  workers'                                                                   
     compensation;   specifying  components  of   a  workers'                                                                   
     compensation   reemployment  plan;  adjusting   workers'                                                                   
     compensation benefits for  permanent partial impairment,                                                                   
     for  reemployment  plans, for  rehabilitation  benefits,                                                                   
     for  widows, widowers,  and orphans,  and for  funerals;                                                                   
     relating  to permanent total  disability of  an employee                                                                   
     receiving    rehabilitation   benefits;    relating   to                                                                   
     calculation  of  gross  weekly   earnings  for  workers'                                                                   
     compensation   benefits  for   seasonal  and   temporary                                                                   
     workers and  for workers  with overtime or  premium pay;                                                                   
     setting time  limits for requesting a hearing  on claims                                                                   
     for    workers'    compensation,   for    selecting    a                                                                   
     rehabilitation  specialist, and  for payment of  medical                                                                   
     bills;  relating   to  termination  and  to   waiver  of                                                                   
     rehabilitation  benefits,  obtaining  medical  releases,                                                                   
     and resolving  discovery  disputes relating to  workers'                                                                   
     compensation;   setting  an   interest  rate   for  late                                                                   
     payments   of  workers'   compensation;  providing   for                                                                   
     updating   the   workers'   compensation   medical   fee                                                                   
     schedule; and providing for an effective date."                                                                            
                                                                                                                                
PAUL  GROSSI, DIRECTOR,  DIVISION  OF WORKERS'  COMPENSATION,                                                                   
DEPARTMENT OF  LABOR AND  WORKFORCE DEVELOPMENT testified  in                                                                   
support of the legislation. He  observed that the legislation                                                                   
was   an  agreement   between  labor   and  management.   The                                                                   
legislation provides  something for  both sides.  It provides                                                                   
needed benefit  increases; benefits  have not been  increased                                                                   
for 12  years. He gave examples  of items that  received rate                                                                   
increases:  permanent-partial  impairment  benefits,  minimum                                                                   
and maximum compensation, and  widows' and orphans' benefits.                                                                   
The  calculation for  overtime  payment is  included for  the                                                                   
determination of a compensation  rate. The retraining stipend                                                                   
was  increased  from   60  percent  to  70   percent  of  the                                                                   
expendable wage.                                                                                                                
                                                                                                                                
Mr.  Grossi   noted  that   the  legislation  also   includes                                                                   
provisions   requested   by    employers.   The   legislation                                                                   
simplifies the  waiving of retraining benefits.  It clarifies                                                                   
what  benefits are  due during  the  retraining process.  The                                                                   
legislation also clarifies the  two-year timeframe allowed to                                                                   
request  a claim.  It allows 30  days to  pay medical  bills,                                                                   
changes the  interest rate to  2 percent above the  prime. It                                                                   
would simplify  the summary process for  obtaining reasonable                                                                   
medical releases and provide annual  update for the usual and                                                                   
customary  fee schedules.  The legislation  is a  compromise,                                                                   
but it is fair and provides a needed increase in benefits.                                                                      
                                                                                                                                
Mr.  Grossi  reviewed   fiscal  notes.  He  noted   that  the                                                                   
Department of  Labor and Workforce Development's  fiscal note                                                                   
of $6.0  thousand dollars  covers the  annual update  for the                                                                   
fee  schedule.   The  Department  of  Administration   covers                                                                   
increased state cost.                                                                                                           
                                                                                                                                
CHANCY    CROFT,    ATTORNEY,   ANCHORAGE    testified    via                                                                   
teleconference  in opposition  to the  legislation. He  noted                                                                   
that  the Legislative  Budget  and Audit  Committee  proposed                                                                   
that the  director propose  increases  to straighten  out the                                                                   
legislative  inequities. He maintained  that the  legislation                                                                   
does not  meet the  LBA audit  committee goal. He  maintained                                                                   
that what  is provided to  injured workers is  inadequate and                                                                   
provided at a  terrible cost of other rights.  He referred to                                                                   
section  4,  page  4: "An  employee  may  not  be  considered                                                                   
permanently  totally  disabled so  long  as  the employee  is                                                                   
involved in  the rehabilitation process under  this chapter."                                                                   
He maintained  that the statute  would prevent  an individual                                                                   
from receiving  permanent total  disability even if  they are                                                                   
receiving no  benefits. He recommended  that the  language be                                                                   
changed to  disallow permanent  total disability  status only                                                                   
if the employee is receiving full rehabilitation benefits.                                                                      
                                                                                                                                
Mr. Croft  discussed section 5,  page 4. The amount  paid for                                                                   
rehabilitation is changed from  $10 thousand dollars to $13.3                                                                   
thousand dollars.  He acknowledged  that this is  an increase                                                                   
of 33 percent,  but emphasized that it does not  keep up with                                                                   
the 40  percent increase in the  cost of living  increase. He                                                                   
suggested that this be raised to $20.0 thousand dollars.                                                                        
                                                                                                                                
Mr. Croft spoke against section  7, page 5. An injured worker                                                                   
would  be  allowed  to  waive   all  rehabilitation  benefits                                                                   
without board  approval. He  pointed out that  rehabilitation                                                                   
benefits could  amount to as much  as one-half of  an injured                                                                   
worker's benefits.  There is no way to change  the waiver. He                                                                   
suggested that  injured workers  could be taken  advantage of                                                                   
through this section.                                                                                                           
                                                                                                                                
Mr. Croft reviewed sections 11  and 12. Injured workers could                                                                   
be  provided  with  a  relief  to  sign  in  order  to  allow                                                                   
adjusters  to obtain  information.  The  type of  information                                                                   
that  an adjuster  can obtain  is not  specified. This  would                                                                   
penalize   workers   without   a  penalty   to   unscrupulous                                                                   
adjusters. He recommended that  a 50 percent penalty be added                                                                   
to  an injured  worker's compensation  in the  event that  an                                                                   
adjuster seeks inappropriate information.                                                                                       
                                                                                                                                
Mr. Croft  discussed section  13, page  8. He suggested  that                                                                   
the period of time for the dismissal  starts when an employer                                                                   
files a petition  to dismiss a claim and the  worker does not                                                                   
request a hearing within two-years.                                                                                             
                                                                                                                                
Mr. Croft referred  to section 15, page 9. He  noted that the                                                                   
increase  in  the  maximum compensation  rate  would  be  120                                                                   
percent  of the  average  weekly  wage. The  current  average                                                                   
weekly wage  is $635  dollars. The maximum  wage by  would be                                                                   
increased $62  dollars. The minimum  would be raised  by $154                                                                   
dollars to  $168 or 9 percent.  This is less than  75 percent                                                                   
of  the minimum  wage.  He  suggested  that the  minimum  and                                                                   
maximum amounts should be increased  by 19 percent to $226 or                                                                   
$1,000 dollars a week.                                                                                                          
                                                                                                                                
Mr. Croft discussed section 17.  Partial permanent impairment                                                                   
was increased  to $177,000 dollars from $135,000  dollars. He                                                                   
noted that the LBA audit recommended  an increase to $190,000                                                                   
dollars.  He  maintained  that   injured  workers  are  being                                                                   
shortchanged. He  noted that the  average Alaskan at  the age                                                                   
of  30  working for  30  years  would  receive less  than  30                                                                   
percent  of their  actual loss  through  the legislation.  He                                                                   
noted that there  is no provision to change  the compensation                                                                   
rate if the board decides that it is unfair.                                                                                    
                                                                                                                                
In response  to a  question by  Vice Chair  Bunde, Mr.  Croft                                                                   
reiterated  that  most states  require  waiver  of rights  by                                                                   
workers to be validated by their  boards. He noted that if an                                                                   
adjuster  has the  authority to  withhold  benefits that  the                                                                   
worker  could   be  starved  into  agreement   and  would  be                                                                   
disadvantaged. Injured  workers can currently agree  to waive                                                                   
their rights with approval of the board.                                                                                        
                                                                                                                                
Representative Grussendorf expressed  concern with sections 7                                                                   
and 11.  Mr. Croft  stressed that  section  7 takes away  the                                                                   
board's  review  of  an agreement.  He  maintained  that  the                                                                   
section  allows for  waiver  of benefits.  The  board has  to                                                                   
determine if it is in the best interest of the employee.                                                                        
                                                                                                                                
Representative  Grussendorf agreed that  section 11  could be                                                                   
viewed as a threat to an employee.                                                                                              
                                                                                                                                
WILLY VAN HERMERT, WORKERS COMPENSATION  COMMITTEE OF ALASKA,                                                                   
ANCHORAGE  testified via  teleconference  in  support of  the                                                                   
legislation.  He   felt  that  a  two-year   time  frame  was                                                                   
adequate. He stressed  that the maximum wage  of $700 dollars                                                                   
         th                                                                                                                     
is the  7  highest rate in  the United States.  He maintained                                                                   
that the minimum wage does not  come into play. Another issue                                                                   
important to labor, the death  benefit, was increased to 100%                                                                   
of the spendable  amount. Alaska will have the  highest death                                                                   
benefit of any state.                                                                                                           
                                                                                                                                
Mr.  Hermert  spoke to  the  "waiver".  He pointed  out  that                                                                   
injured  workers  have  to  sign   a  form  indicating  which                                                                   
benefits would be given up.                                                                                                     
                                                                                                                                
Mr. Hermert stressed  that the legislation was  negotiated in                                                                   
"good faith" and is an improvement over the current system.                                                                     
                                                                                                                                
KEVIN DOUGHERTY,  ALASKA LABORERS UNION,  ANCHORAGE testified                                                                   
via teleconference.  He noted that he served with  the ad hoc                                                                   
committee and reviewed the committee's makeup.                                                                                  
                                                                                                                                
(TAPE CHANGE, HFC 00 - 110, Side 1).                                                                                          
                                                                                                                                
Mr. Dougherty  stressed that the legislation  is balanced and                                                                   
noted that it represents a 7.7  - 10 percent increase for the                                                                   
employer  industry.  He pointed  out  that  the bulk  of  the                                                                   
increases are going to death benefits.                                                                                          
                                                                                                                                
Mr. Dougherty  continues  his review of  the legislation.  He                                                                   
noted that benefits were raised.  He observed that the ad hoc                                                                   
committee used  different CIP  amounts. He observed  that the                                                                   
legislation resolved  all the  issue, which could  be jointly                                                                   
agreed  upon  and  maintained  that  the  bill  is  a  stride                                                                   
forward.                                                                                                                        
                                                                                                                                
Representative  Grussendorf  asked   about  "injured  worker"                                                                   
rehabilitation rights.   Mr. Dougherty stated  that under the                                                                   
current law that an employee cannot  waive his rights without                                                                   
the board's approval. He acknowledged  that the process would                                                                   
be  changed  and pointed  out  that  the form  would  contain                                                                   
information to protect the employee's  rights. Representative                                                                   
Grussendorf stated  that he is  still uncomfortable  with the                                                                   
provision.                                                                                                                      
                                                                                                                                
MARGORIE  LINDER, VOCATIONAL  EDUCATION COUNSELOR,  ANCHORAGE                                                                   
testified via teleconference in  opposition to section 7 (R).                                                                   
She spoke  against the  waiver provision.  She stressed  that                                                                   
compensation  is  complex  and that  workers  need  extensive                                                                   
information before  a waiver is  indicated. She  reviewed the                                                                   
benefits. She presented a hypothetical  case with a 5 percent                                                                   
permanent   partial  impairment   rating  (PPI).  Under   the                                                                   
proposal  each  point is  worth  $1,770 dollars.  The  weekly                                                                   
benefit  would be  $500 a  week  for 17.7  weeks. The  worker                                                                   
would also  be eligible  for $13,300  for tuition,  books and                                                                   
supplies. After  the initial 17.7  weeks the worker  would be                                                                   
eligible for .014K benefits worth  $450 a week for 84.3 weeks                                                                   
or $37,935 dollars. A worker who  accepts an adjuster's offer                                                                   
of  a permanent  injury  payout  of  $8,850 dollars  in  lieu                                                                   
rehabilitation would  lose $51,200 dollars worth  of benefits                                                                   
if they did not return to work.  She stressed the cost to the                                                                   
state   for  public   assistance   if  the   worker  is   not                                                                   
rehabilitated back into the workforce.  She stressed that the                                                                   
proposal  would  allow  an injured  employee  that  does  not                                                                   
understand what would be lost to waive their benefits.                                                                          
                                                                                                                                
CHARLES   W.   COE,   ATTORNEY,   ANCHORAGE   testified   via                                                                   
teleconference.  He  expressed  concerned  that  the  minimum                                                                   
compensation rate  received by  injured workers is  below the                                                                   
minimum   wage.   He   noted  that   many   workers   receive                                                                   
unemployment benefits that are  not factored into their wage.                                                                   
He noted that people cannot live  on the minimum compensation                                                                   
rate without being on public assistance.                                                                                        
                                                                                                                                
Mr. Coe discussed the waiver provision.  He recalled that, in                                                                   
1988,  insurance companies  were  attempting  to get  injured                                                                   
workers to sign waivers, which  would give up their rights to                                                                   
rehabilitation,  in order  to  receive lump  sum payments  of                                                                   
their PPI rating. As a result,  the board required waivers to                                                                   
be approved. He  noted that people sign waivers  because they                                                                   
need  the  money  immediately.  He  maintained  that  workers                                                                   
cannot double  collect. He asserted that  insurance companies                                                                   
are trying  to get the  state to adopt  a system  that allows                                                                   
injured workers  to give  up their vocational  rehabilitation                                                                   
rights.  He  noted  that  individuals   that  give  up  their                                                                   
vocational  rehabilitation   rights  through   the  insurance                                                                   
companies  often  end  up  at   the  Division  of  Vocational                                                                   
Rehabilitation.  He  stressed that  the  state  of Alaska  is                                                                   
paying for the  rehabilitation of individuals  that should be                                                                   
supported by  their insurance  companies. Mr. Coe  added that                                                                   
the  statute  of  limitation clause  would  be  difficult  to                                                                   
enforce. He concluded that the  legislation would be a burden                                                                   
on  injured workers.  He  noted that  injured  workers are  a                                                                   
growing group.                                                                                                                  
                                                                                                                                
SHARON  BOYD,  ANCHORAGE testified  via  teleconference.  She                                                                   
noted that she is an injured worker.  She spoke in support of                                                                   
extensions. She spoke against blanket releases.                                                                                 
                                                                                                                                
DON ETHERIDGE,  AFL-CIO, JUNEAU  testified in support  of the                                                                   
legislation.  He maintained  that the  legislation is  a fair                                                                   
compromise.                                                                                                                     
                                                                                                                                
In response to a question by Vice  Chair Bunde, Mr. Etheridge                                                                   
noted  that they  are  aware of  the Legislative  Budget  and                                                                   
Audit Committee audit.  He noted that portions  of the report                                                                   
are included in the legislation.                                                                                                
                                                                                                                                
Representative   Grussendorf   questioned  if   the  Ad   Hoc                                                                   
Committee spoke to attorneys.  Mr. Etheridge noted that Kevin                                                                   
Dougherty, Attorney, Anchorage was on the Committee.                                                                            
                                                                                                                                
BARBARA SUE  ROTH, PRIVATE  REHABILITATION COUNSELOR,  JUNEAU                                                                   
spoke in  support of the  legislation. She stressed  that the                                                                   
state of  Alaska has  a good program.  She observed  that the                                                                   
current  law  states that  funds  are  paid as  services  are                                                                   
rendered. She  observed that there  are injured  workers that                                                                   
do not  want the services.  She emphasized the  difficulty of                                                                   
working with people who do not  want services. She emphasized                                                                   
the importance of raising the compensation rate.                                                                                
                                                                                                                                
HB  419  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
(TAPE CHANGE, HFC 00 - 110, SIDE 2)                                                                                           
                                                                                                                                
HOUSE BILL NO. 320                                                                                                            
                                                                                                                                
     "An Act approving the application  for and acceptance of                                                                   
     a grant of  certain federal land by the  Alaska Railroad                                                                   
     Corporation;  approving  the  conveyance of  the  entire                                                                   
     interest  in the  Whittier  DeLong  Dock and  associated                                                                   
     uplands,  tidelands, and submerged  lands by  the Alaska                                                                   
     Railroad  Corporation; relating  to use and  disposition                                                                   
     of  the Whittier  DeLong Dock and  associated land;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair Therriault  observed that  CSHB 320 (FIN)  was MOVED                                                                   
from Committee  on 4/6/00.  He explained  that the  title for                                                                   
CSHB  320  (FIN)  needs  to  be  tightened  to  encompass  an                                                                   
amendment to disallow  a sole source contract  for the DeLong                                                                   
Dock.                                                                                                                           
                                                                                                                                
Vice Chair Bunde  MOVED to RESCIND the Committee's  action in                                                                   
reporting  CSHB  320 (FIN)  from  Committee.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT  a conceptual amendment to                                                                   
tighten language  disallowing a  sole source contract.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair  Mulder  MOVED  to  report CSHB  320  (FIN)  out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  320 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  a zero  fiscal  note by  the                                                                   
House  Transportation   Committee   for  the  Department   of                                                                   
Community and Economic Development.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:55 p.m.                                                                                          

Document Name Date/Time Subjects