Legislature(2021 - 2022)ADAMS 519

02/02/2022 01:30 PM House FINANCE

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                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 2, 2022                                                                                           
                         1:36 p.m.                                                                                              
1:36:19 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:36 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter via teleconference                                                                                 
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon via teleconference                                                                                    
Representative Sara Rasmussen via teleconference                                                                                
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Representative  James  Kaufman,   Sponsor;  Matthew  Harvey,                                                                    
Staff,  Representative Kaufman;  Neil Steininger,  Director,                                                                    
Office  of Management  and Budget,  Office of  the Governor;                                                                    
Representative Louise  Stutes, Sponsor; Fate  Putman, Staff,                                                                    
Representative Stutes; Jerry  McCune, Representative, United                                                                    
Fishermen's  Association  and  President,  Cordova  District                                                                    
Fishermen   United;  Makena   O'Toole,  Shellfish   Division                                                                    
Representative,  Cordova  District Fishermen  United;  Elise                                                                    
Sorum-Burke,   Staff,   Representative  Josephson;   Charles                                                                    
Collins,   Director,  Division   of  Workers   Compensation,                                                                    
Department  of   Labor  and  Workforce   Development;  Scott                                                                    
Jordan,  Director, Division  of Risk  Management, Department                                                                    
of Administration.                                                                                                              
PRESENT VIA TELECONFERENCE                                                                                                    
Representative  Louise   Stutes,  Sponsor;   Forest  Bowers,                                                                    
Deputy  Director, Commercial  Fisheries, Department  of Fish                                                                    
and  Game;  Phil   Doherty,  Executive  Director,  Southeast                                                                    
Alaska  Regional Dive  Association; Ronald  Blake, Southeast                                                                    
Alaska Regional  Dive Association, Cordova;  Mike Mickelson,                                                                    
President,  Cordova  Fishermen's  united;  Nicole  Reynolds,                                                                    
Deputy  Director   Tax  Division,  Department   of  Revenue;                                                                    
Caroline Schultz,  Policy Analyst, Office of  Management and                                                                    
Budget, Office of the Governor.                                                                                                 
HB 30     WORKERS' COMP: DEATH; PERM PARTIAL IMPAIR                                                                             
HB 64     FISHERY DEVELOPMENT ASSOC.; ASSESSMENTS                                                                               
HB 187    STATE AGENCY PUBLICATIONS                                                                                             
Co-Chair Foster reviewed the agenda for the meeting.                                                                            
HOUSE BILL NO. 187                                                                                                            
     "An Act relating to the  elimination or modification of                                                                    
     state   agency   publications    that   are   outdated,                                                                    
     duplicative, or excessive or that  could be improved or                                                                    
     consolidated  with  other publications  or  exclusively                                                                    
     delivered   electronically;   and  providing   for   an                                                                    
     effective date."                                                                                                           
1:37:31 PM                                                                                                                    
REPRESENTATIVE JAMES  KAUFMAN, SPONSOR,  introduced himself.                                                                    
He  thanked   the  committee  for   hearing  his   bill.  He                                                                    
characterized  HB  187  as   a   simplification  bill   that                                                                    
created  cost   efficiencies.  He  read  from   the  sponsor                                                                    
     HB 187  in its  current form,  is intended  to conserve                                                                    
     resources  expended  in   the  production,  processing,                                                                    
     transportation,  distribution storage  and disposal  of                                                                    
     excess state agency publications.                                                                                          
Representative  Kaufman  explained  that the  bill  required                                                                    
state agencies  to compile a  list of  publications produced                                                                    
each year and look for  opportunities to reduce or eliminate                                                                    
them. His goal was to prevent  the state from doing the same                                                                    
things over and over if unnecessary.                                                                                            
1:39:50 PM                                                                                                                    
MATTHEW HARVEY, STAFF,  REPRESENTATIVE KAUFMAN, reviewed the                                                                    
sectional analysis.  He referred  to the  sectional analysis                                                                    
which he read:                                                                                                                  
     Section 1:                                                                                                                 
     Amends  AS  37.07.020  to add  a  requirement  for  the                                                                    
     governor  to  submit  legislation to  remove  or  amend                                                                    
     statutory  requirements for  publications deemed  to be                                                                    
     outdated, duplicative  or excessive,  or that  could be                                                                    
     consolidated  with  other  publications, and  which  of                                                                    
     those  could   be  delivered  in  electronic   form  as                                                                    
     directed in Section 2.                                                                                                     
     Section 2:                                                                                                                 
     Repeals  and  reenacts  AS  44.99.220  requiring  state                                                                    
     agencies  to  use  a list  of  publications,  which  is                                                                    
     already  statutorily  required   to  be  developed,  to                                                                    
     identify  and  highlight   publications  deemed  to  be                                                                    
     outdated, duplicative  or excessive,  or that  could be                                                                    
     consolidated  with other  publications, or  which could                                                                    
     be delivered in electronic form.                                                                                           
     This  list   of  publications,   including  highlighted                                                                    
     publications,   is   required  to   be   electronically                                                                    
     submitted  to  the  governor and  both  bodies  of  the                                                                    
     Section 3:                                                                                                                 
     Provides for an immediate effective date.                                                                                  
Co-Chair  Foster  asked if  members  had  any questions.  He                                                                    
commented that  choosing which  publications were  worthy of                                                                    
publication   was   subjective.   He   offered   that   some                                                                    
publications  were widely  read,  and some  were  read by  a                                                                    
limited  number of  readers. He  wondered how  the decisions                                                                    
would be made.                                                                                                                  
Representative  Kaufman answered  that  the  bill created  a                                                                    
feedback   loop;  after   the   assessment   was  made   and                                                                    
legislation  was introduced  it  was up  to the  legislative                                                                    
process to  determine whether  the publications  were viable                                                                    
or  not. There  would be  an opportunity  to hear  testimony                                                                    
regarding the publications through the public process.                                                                          
1:43:01 PM                                                                                                                    
Representative  Edgmon   thought  similar   legislation  had                                                                    
already  been  passed.  He  recalled  discussions  regarding                                                                    
balancing  the  needs  to  save   money  and  resources  and                                                                    
concluding  that digital  versions  were just  as useful  as                                                                    
hardcopy. He generally  approved of the bill  and thought it                                                                    
was  well intended.   However, he noted that  there had been                                                                    
some  complications  in  rural Alaska  because  of  internet                                                                    
connections. He  believed that  some publications  were very                                                                    
important and  rural residents were accustomed  to receiving                                                                    
the information via mail.                                                                                                       
Co-Chair Foster indicated  that Representative Rasmussen was                                                                    
Representative  Kaufman  responded  that he  considered  the                                                                    
issue,  which  was  why  the  bill  did  not  authorize  the                                                                    
executive  branch to  eliminate  the  publications. He  felt                                                                    
that  the bill  included  a "change  management piece"  that                                                                    
acted as  a check via  the legislative process  to determine                                                                    
if eliminating  a paper publication would  unduly affect its                                                                    
1:45:16 PM                                                                                                                    
Representative Wool recalled  that Representative Edgmon was                                                                    
referring  to a  bill introduced  by Representative  Kreiss-                                                                    
Tomkins.  He  recollected  the  discussions  concerning  the                                                                    
benefits  and drawbacks  of electronic  versus hard  copies.                                                                    
Although  he  agreed  with  the idea  of  saving  paper  and                                                                    
resources, he  was inclined to  read hard copies  of reports                                                                    
he received  versus being informed that  the information was                                                                    
available online.  He determined that if  it required active                                                                    
investigation  to  find a  report,  he  might not  seek  the                                                                    
information out. He  deemed that there was  a passive versus                                                                    
active  component  to  consider. He  believed  that  printed                                                                    
publications  still had  value.  He agreed  that there  were                                                                    
likely too many publications.  He favored striking a balance                                                                    
between publications in various forms.                                                                                          
1:47:07 PM                                                                                                                    
Representative Carpenter thought that  the value of the bill                                                                    
was not  the paper that  would be  saved, it was  the  habit                                                                    
changes  within  the various  agencies that  would challenge                                                                    
established thinking  on how to do  things more efficiently.                                                                    
He  thought  the bill  helped  to  move people  towards  the                                                                    
digital   age  of   the  younger   generation  and   changed                                                                    
organizational thinking  regarding how  to do  things better                                                                    
and more efficiently as a new habit.                                                                                            
1:48:34 PM                                                                                                                    
Co-Chair Foster commented  that the local paper  in Nome was                                                                    
very popular  and heavily  relied on.  He observed  that the                                                                    
state  was putting  less announcements  in  newspapers as  a                                                                    
cost saving measures.  He asked if any provisions  in HB 187                                                                    
affected  announcements placed  in the  classified sections.                                                                    
Representative  Kaufman   responded  in  the   negative.  He                                                                    
recounted   that  the   intent  of   the  bill   focused  on                                                                    
publications  within the  executive  branch  and created  an                                                                    
opportunity to review whether a publication had value.                                                                          
Representative  LeBon asked  if the  sponsor had  an opinion                                                                    
about the potential savings resulting from the bill.                                                                            
1:51:46 PM                                                                                                                    
Mr. Harvey answered  that Representative Kreiss-Tompkins had                                                                    
a  similar bill  requiring that  all reports  were digitally                                                                    
delivered.  He  indicated  that   he  obtained  the  savings                                                                    
information from  the work  done for  Representative Kreiss-                                                                    
Tompkins' bill. He  relayed that the state  had 189 statutes                                                                    
that  required  reports and  the  savings  for printing  was                                                                    
estimated at over  $585,000. He qualified that  since HB 187                                                                    
was  not  a  blanket  mandate to  deliver  all  publications                                                                    
electronically,   he   anticipated    less   cost   savings.                                                                    
Representative LeBon commented that  in the banking business                                                                    
financial statement  delivery was evolving into  all digital                                                                    
1:52:59 PM                                                                                                                    
Representative  Josephson relayed  his understanding  of the                                                                    
bill  and  thought  that  it  put  the  legislature  on  the                                                                    
 defensive.  He asked whether the  legislature would have to                                                                    
 step up to  the plate  and decide on  publications for each                                                                    
of  the   reports  the   executive  branch   identified  for                                                                    
elimination or modification.                                                                                                    
Representative Kaufman replied that  the governors  bill had                                                                    
to  be   moved  through  the  legislative   process  by  the                                                                    
legislature. He did not perceive  it as a defensive position                                                                    
since it would  be moved through the  legislative process by                                                                    
the will of the legislature.  However, he thought that would                                                                    
be the  benefit of HB  187 - to determine  what publications                                                                    
were being valued through debate and discussions.                                                                               
Representative Josephson cited a  document in members  files                                                                    
[Research  Brief    State Agency Reports Required  by Alaska                                                                    
Statute LRS  Report 15.248  (copy  on file)]. He  pointed to                                                                    
the listed  Annual  Report on Mining Activity  in the State                                                                     
and deduced  that it would  warrant a  tremendous  amount of                                                                    
interest   and would  likely be  safeguarded. Representative                                                                    
Kaufman   answered   in   the   affirmative.   He   reminded                                                                    
Representative Josephson  that the  purpose was not  to  get                                                                    
rid of  things  it was  to access and avoid  repetitive ways                                                                    
of doing things. He hypothesized  that the mining report may                                                                    
be duplicative  and all the  costs of not  only publication,                                                                    
but of distribution  and disposal had to be  factored in. He                                                                    
concluded  that  bill  ensured that  the  publications  were                                                                    
delivering value.                                                                                                               
1:56:25 PM                                                                                                                    
Representative Thompson  thought the bill was  a great idea.                                                                    
He guessed  that the 2015  research would  currently include                                                                    
many  more  mandated  reports.  He  relayed  his  experience                                                                    
attempting to  determine the number  of reports  required by                                                                    
school districts  in a cost  saving exercise.  He discovered                                                                    
that sometimes  the  reports went into a file   and were not                                                                    
used and  wondered what the additional  savings in personnel                                                                    
costs could  be achieved. Representative  Kaufman emphasized                                                                    
the  lack of  job satisfaction  in producing  something that                                                                    
was not valued. He determined  that loss of job satisfaction                                                                    
had a  cost as well as  other value added work  the employee                                                                    
could  perform instead.  The savings  could  be much  deeper                                                                    
than the production costs.                                                                                                      
Co-Chair  Foster  relayed  that  there  was  a  fiscal  note                                                                    
associated with the bill.                                                                                                       
1:58:57 PM                                                                                                                    
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE  OF THE  GOVERNOR,  relayed that  the  Office of  the                                                                    
Governor fiscal note (FN2 (GOV)  was zero. He explained that                                                                    
it was determined  that the Office of  Management and Budget                                                                    
(OMB)   would  accommodate   the   additional  workload   of                                                                    
compiling a list of publications with existing resources.                                                                       
Representative Kaufman  commented that  the bill  was better                                                                    
than a zero fiscal note by actually creating savings.                                                                           
Representative  Wool  asked  if   the  bill  was  about  not                                                                    
printing  reports or  not  writing the  reports  at all.  He                                                                    
presented  a scenario  where he  was reminded  the committee                                                                    
requested  a  report  in  the previous  year  and  they  had                                                                    
forgotten  about it.  He asked  whether  they were  reducing                                                                    
report   requirements  or   only  the   printing  of   them.                                                                    
Representative Kaufman  responded that the  bill encompassed                                                                    
the  total  production of  reports  and  may result  in  the                                                                    
elimination of  some reports.  He believed  that in  a large                                                                    
and  complex  organization it  was   usually   easy to  find                                                                    
efficiencies  if  mechanisms  were   created  to  start  the                                                                    
discussion. He  reviewed the  total existence  of a report;                                                                     
from the conceptualization,  compiling information, writing,                                                                    
transmission,  or  delivery   that  included  transportation                                                                    
emissions to  disposal with  possible landfill  issues, etc.                                                                    
He  noted the  layers and  layers of  benefits from  halting                                                                    
doing something  unnecessary. The discussions in  the review                                                                    
cycle  would  include all  publishing  options  and all  the                                                                    
ramifications.  Representative Wool  wondered how  simple it                                                                    
would be  to eliminate  the statute  requiring a  report. He                                                                    
noted the fiscal  note was zero. He wondered if  there was a                                                                    
fiscal aspect or why the  finance committee was referred the                                                                    
bill. Representative Kaufman responded  that the fiscal note                                                                    
was zero  but was  likely a savings  bill. He  believed that                                                                    
agencies knew the  number of reports that  were required and                                                                    
their  intrinsic value  and  therefore the  list  was not  a                                                                    
burden. He guessed that the  referral was an  artifact   but                                                                    
he  viewed it  as an  opportunity to  discuss ideas  such as                                                                    
Co-Chair Foster  indicated he would  set the bill  aside and                                                                    
thanked the bill sponsor.                                                                                                       
HOUSE BILL NO. 64                                                                                                             
     "An Act relating to regional fishery development                                                                           
     associations; and relating to developing fishery                                                                           
     management assessments."                                                                                                   
2:05:41 PM                                                                                                                    
Co-Chair   Foster  indicated   there  were   several  people                                                                    
available online for questions.                                                                                                 
2:06:42 PM                                                                                                                    
FATE  PUTMAN,  STAFF,  REPRESENTATIVE STUTES,  provided  the                                                                    
committee with  an overview of  the bill. He  explained that                                                                    
HB   64    established   regional    fisheries   development                                                                    
associations  to   support  commercial   fishing  management                                                                    
assessments  in  order  to   facilitate  new  or  developing                                                                    
fisheries  within   a  geographic  region.   The  developing                                                                    
fisheries   were  perspective   fisheries   that  were   not                                                                    
currently regulated  or controlled by the  Alaska Commercial                                                                    
Fisheries  Entry  Commission  (CFEC). The  definition  of  a                                                                    
developing  fishery  was designated  as  an  area where  the                                                                    
optimum yield  of the resource  had not been reached  or the                                                                    
sustained  yield has  not been  estimated, and  annual stock                                                                    
assessments were not conducted.  He furthered that declining                                                                    
state  funding hindered  the Department  of Fish  and Games                                                                     
(DFG)  ability to  manage and  establish new  and developing                                                                    
fisheries. He  delineated that  DFG managed  state fisheries                                                                    
by performing  annual surveys  and assessments  of fisheries                                                                    
resources  in   order  to  identify  the   biomass  and  the                                                                    
sustainable  yield of  seafood  as required  by the  states                                                                     
Constitution  Article 8,  Section  4  called the   Sustained                                                                    
Yield  Principle.   In  the  case   of  new  and  developing                                                                    
fisheries  the funding  to  perform  assessment surveys  and                                                                    
studies  was  lacking  and  prohibited  the  fisheries  from                                                                    
opening.  He  shared  that the  Speaker's  office  had  been                                                                    
contacted  by a  constituent  in Prince  Willian Sound  that                                                                    
wanted to  fish for Tanner  Crab, which remained  closed for                                                                    
30 years due to lack  of funding for current assessments. He                                                                    
indicated   that  annual   surveys   were  currently   being                                                                    
conducted  and the  stocks were  adequate  for a  commercial                                                                    
fishery.  The fishery  was recently  opened and  anyone that                                                                    
wanted  to fish  could  obtain an  interim  use permit  from                                                                    
CFEC.  He  elucidated  that  HB   64  was  designed  to  let                                                                    
developing fisheries  open by providing a  source of funding                                                                    
for the  annual biomass  survey. Currently,  the constituent                                                                    
could  fish  for  Tanner  Crab   in  Prince  William  Sound,                                                                    
however; legislation  was necessary for other  developing or                                                                    
new  fisheries. The  bill created  a fund  that allowed  for                                                                    
management of  new and developing fisheries  and allowed the                                                                    
creation  of  regional fisheries  development  associations,                                                                    
which   were  non-profit   organizations  representing   the                                                                    
stakeholders. He  conveyed that  the associations  may elect                                                                    
to levy an  assessment that would fund the  DFG studies. The                                                                    
fees called   management assessments  were collected  at the                                                                    
time of sale so that  the buyer would submit the assessments                                                                    
on a quarterly basis to  the Department of Revenue (DOR) who                                                                    
would  remit   the  funds  back  to   the  Regional  Fishery                                                                    
Development Associations  (RFDA). The RFDA would  develop an                                                                    
annual  operating  plan  in  tandem with  DFG  in  order  to                                                                    
conduct  the surveys.  He noted  a similar  association with                                                                    
the  dive  fisheries  in the  state;  the  Southeast  Alaska                                                                    
Regional Dive  Fishery Association developed by  statute had                                                                    
used the  model since  1998 to  manage geoduck,  sea urchin,                                                                    
and  sea cucumber  fisheries. The  bill was  developed using                                                                    
the  dive  fisheries  statute that  granted  the  developing                                                                    
fisheries  the  mechanism to  fund  themselves  in order  to                                                                    
become  an established  fishery. He  listed the  benefits of                                                                    
commercial  fisheries  in  the   state  and  noted  the  job                                                                    
creation and revenue potential.                                                                                                 
Co-Chair  Foster indicated  there were  no questions  on the                                                                    
sectional analysis.                                                                                                             
Co-Chair  Foster  noted the  committee  had  been joined  by                                                                    
Representative Johnson.                                                                                                         
Representative  Edgmon  asked  for  an  explanation  of  the                                                                    
difference  between a  regional  seafood  association and  a                                                                    
regional  fishery  association.   Mr.  Putman  deferred  the                                                                    
2:14:01 PM                                                                                                                    
FOREST  BOWERS,   DEPUTY  DIRECTOR,   COMMERCIAL  FIAHERIES,                                                                    
DEPARTMENT  OF FISH  AND  GAME  (via teleconference),  asked                                                                    
that    the    representative    restate    his    question.                                                                    
Representative  Edgmon complied.  Mr.  Bowers answered  that                                                                    
the  Regional  Seafood  Development Association  (RSDA)  was                                                                    
developed via statute through  the legislature. He explained                                                                    
that  the  RSDA  was  developed  to  enhance  the  value  of                                                                    
fisheries  via the  marketing aspect  of commercial  fishing                                                                    
and was housed in the  Department of Commerce, Community and                                                                    
Economic Development  (DCCED). The current bill  was focused                                                                    
on stock  assessment and biology and  was more appropriately                                                                    
related  to  DFG.   Representative  Edgmon  appreciated  Mr.                                                                    
Bowers'  response,   but  he  was  not   convinced  why  two                                                                    
different entities  were necessary.  He wondered why  it was                                                                    
not housed in the same shop.                                                                                                    
Mr. Putman  was not familiar  with the marketing  portion of                                                                    
the industry.                                                                                                                   
2:16:23 PM                                                                                                                    
JERRY    MCCUNE,    REPRESENTATIVE,    UNITED    FISHERMEN'S                                                                    
ASSOCIATION  AND   PRESIDENT,  CORDOVA   DISTRICT  FISHERMEN                                                                    
UNITED,  explained that  the marketing  association required                                                                    
members to  be a permit holder  of a specific gear  type and                                                                    
operate  a  boat  and  pay  fees  to  the  association.  The                                                                    
association  had control  over  the  assessments. He  agreed                                                                    
with the previous testifier  that the marketing associations                                                                    
operated differently  than the regional  associations would.                                                                    
He  restated that  the  proposed  association was  concerned                                                                    
with  stock assessment  and biology.  He furthered  that the                                                                    
marketing  association  bylaws  were  limited  and  did  not                                                                    
address the needs of the proposed RFDAs; they did not mesh.                                                                     
Representative  Edgmon  wanted   to  learn  the  distinction                                                                    
between the two associations. He  guessed that they may have                                                                    
similar  duties and  suggested the  state was  in an  era of                                                                    
consolidation and creating efficiencies.                                                                                        
Representative  Josephson  wondered  whether  new  fisheries                                                                    
alluded  to a  situation  like Tanner  Crab reopening  after                                                                    
many  years  or if  they  were  creating fisheries  for  new                                                                    
species  that never  had a  commercial  fishery. Mr.  McCune                                                                    
replied that  there were two  developing fisheries  that had                                                                    
never  been  open  before  in   Prince  William  Sound:  sea                                                                    
cucumbers  and octopus.  They were  looking  for species  to                                                                    
keep the  fisheries open  in the winter.  He noted  that the                                                                    
bill encompassed  the entire state  and was  not exclusively                                                                    
for Prince William Sound.  Representative Josephson asked if                                                                    
there  was a  point  in time  in the  process  where a  non-                                                                    
commercial  user could  speak against  the development  of a                                                                    
new fishery.                                                                                                                    
Mr. Putman  responded that the appropriate  venue to address                                                                    
the issue would be during a Board of Fish hearing.                                                                              
Representative  Carpenter cited  the  regional dive  fishery                                                                    
association.  He inquired  whether General  Funds (GF)  were                                                                    
ever  necessary to  support  the dive  fisheries  and if  he                                                                    
expected that  the RDFAs  would  need state support  at some                                                                    
point. He  expressed concerns regarding whether  GF would be                                                                    
necessary.  He hoped  the program  was an  economic stimulus                                                                    
and  created  opportunity.  Mr. Putnam  responded  that  the                                                                    
general idea of a RFDA was  to use the funds associated with                                                                    
the  collection  of  fees  from the  fishermen  to  pay  for                                                                    
assessments to keep the fishery open in the future.                                                                             
2:21:28 PM                                                                                                                    
PHIL DOHERTY, EXECUTIVE  DIRECTOR, SOUTHEAST ALASKA REGIONAL                                                                    
DIVE  ASSOCIATION  (SARDA)(via  teleconference),  he  shared                                                                    
that prior  to his  directorship he  was an  area management                                                                    
biologist for  commercial fisheries  in the  Ketchikan area.                                                                    
He   addressed  Representative   Carpenters   question   and                                                                    
answered  in  the  negative.  He  explained  that  the  dive                                                                    
association  continued to  tax  themselves; three  different                                                                    
species were taxed at different  rates: sea urchins, geoduck                                                                    
clams, and  sea cucumbers. The tax  was paid at the  time of                                                                    
delivery and was added to  the fishers  fish ticket and sent                                                                    
to  DOR  who  remitted  it  back  to  the  association.  The                                                                    
association  met  every  year  with  DFG  and  submitted  an                                                                    
operating   plan   and   transferred   funding   for   stock                                                                    
assessments and  fishery management.  He maintained  that GF                                                                    
was never used in the process.                                                                                                  
2:23:30 PM                                                                                                                    
Representative Edgmon  favored the  bill and thought  it was                                                                    
necessary. He  understood that  developing fisheries  had to                                                                    
have commercial value  and in order to  be commercialized to                                                                    
the point of  paying an assessment fees other  things had to                                                                    
happen to  form the  association. He  commented on  the zero                                                                    
fiscal  impact note.  He wondered  whether  he was   missing                                                                    
something.   Mr.  Putman replied  that  the  concept was  to                                                                    
allow   the  fisheries   to   initially   operate  under   a                                                                    
commissioners   permit, which  allowed a  new or  developing                                                                    
fishery to occur. At that point,  it was not an open fishery                                                                    
yet,  it was  a test  fishery. The  fish were  brought to  a                                                                    
buyer  and a  fee was  assessed, eventually  the fees  would                                                                    
build  up  enough  to  develop into  a  full  fishery.  Once                                                                    
developed into   a full  fishery the fishers  operated under                                                                    
an Interim  Use Permit (IUP),  the fees were  collected, and                                                                    
the stock  assessments would  happen on  an annual  basis to                                                                    
keep the fishery open.                                                                                                          
Vice-Chair Ortiz spoke in support  of the bill. He noted the                                                                    
benefits of  the development  associations such  as creating                                                                    
economic  opportunity and  more jobs.  He remarked  that the                                                                    
resource was renewable, if managed correctly.                                                                                   
Co-Chair  Foster thanked  Mr.  Putman and  moved to  invited                                                                    
2:26:47 PM                                                                                                                    
MAKENA O'TOOLE,  SHELLFISH DIVISION  REPRESENTATIVE, CORDOVA                                                                    
DISTRICT FISHERMEN  UNITED, spoke in  favor of the  bill. He                                                                    
shared  that  he  had  spent many  years  trying  to  revive                                                                    
defunct   and   underutilized   fisheries.   He   used   the                                                                    
commissioners   license process  for  sea cucumbers,  squid,                                                                    
green sea  urchin, skates, etc.  He elucidated that  DFG was                                                                    
unable  to   engage  with  the  fishers   due  to  budgetary                                                                    
constraints and  lack of  a funding  mechanism. A  few years                                                                    
ago,  some  local  fishers formed  a  fisheries  development                                                                    
committee and  ascertained that they could  contribute funds                                                                    
for the  stock assessments for fisheries  they believed were                                                                    
viable. They  discovered that a legal  avenue was necessary,                                                                    
and  SARDA   was  a  model.   He  elaborated  that   he  had                                                                    
participated  in the  Southeast  Alaska  dive fisheries  for                                                                    
over  a decade.  He characterized  the relationship  between                                                                    
industry and  management through  SARDA as  very functional.                                                                    
He thanked  Speaker Stutes for  assisting with the  bill. He                                                                    
addressed  questions   from  the  hearing   discussions.  He                                                                    
highlighted  defunct  versus  new fisheries  and  elaborated                                                                    
that there  were many defunct  fisheries that  would benefit                                                                    
from  the passage  of the  bill because  DFG simply  did not                                                                    
have  the  funding  to  perform  assessments.  Some  of  the                                                                    
defunct  species included  herring  ,Tanner crab,  Dungeness                                                                    
crab, Red, Blue,  and Brown King crab, and  razor clams. The                                                                    
legislation also covered new fisheries  such as Norton Sound                                                                    
salmon fisheries,  hooligan, California Market  squid, green                                                                    
sea urchins,  octopus, skates, dog sharks,  black rock fish,                                                                    
etc. There  were many underutilized resources  in the state.                                                                    
He   opined  that   while  the   state   was  investing   in                                                                    
mariculture,  the  state also  needed  to  discover what  it                                                                    
already had for development.                                                                                                    
Representative  Edgmon thanked  the  testifier and  believed                                                                    
that he outlined the distinction between RSDAs and RSFAs.                                                                       
2:31:01 PM                                                                                                                    
RONALD  BLAKE, SOUTHEAST  ALASKA REGIONAL  DIVE ASSOCIATION,                                                                    
CORDOVA (via  teleconference), related that  he participated                                                                    
in the  Southeast dive fisheries  since 1990. He  echoed Mr.                                                                    
O'Toole's  testimony  regarding   the  relationship  between                                                                    
SARDA  and  DFG. He  offered  that  while working  with  the                                                                    
department on  developing a sea cucumber  fishery [in Prince                                                                    
William  Sound] it  asked the  fishers to  establish a  dive                                                                    
association  and they  discovered  it could  not legally  be                                                                    
done. House  Bill 64 became  the mechanism that  allowed the                                                                    
fishers to comply with the DFGs request.                                                                                        
2:32:33 PM                                                                                                                    
MIKE MICKELSON,  PRESIDENT, CORDOVA FISHERMEN'S  UNITED (via                                                                    
teleconference),  supported  the  legislation.  He  remarked                                                                    
that  he  did  not  have   anything  to  add  to  the  prior                                                                    
testimony. He had worked with  the biologists and discovered                                                                    
that  there  was  enough  biomass to  support  some  of  the                                                                    
fisheries, which he  felt was the key factor.  The fish were                                                                    
available,  and  the  bill  facilitated  the  start  of  new                                                                    
Co-Chair Foster asked Mr. Bowers  to review the fiscal notes                                                                    
from DFG.                                                                                                                       
Mr.  Bowers explained  that the  published fiscal  note from                                                                    
DFG  for Commercial  Fisheries  (FN4  (DFG))had zero  fiscal                                                                    
impact involving  very little staff  time. He  conveyed that                                                                    
the   department's  overall   role  in   the  creation   and                                                                    
management  of  these  associations would  be  minimal.  The                                                                    
associations would qualify under  the provisions of the bill                                                                    
and would  engage with the Commercial  Fisheries Division to                                                                    
formulate a  cooperative agreement  which described  how any                                                                    
revenue  generated from  the  tax would  be  used for  stock                                                                    
assessment.  The  revenue  was   indeterminate  due  to  the                                                                    
inability to  predict the amount  of revenue the  bill would                                                                    
Co-Chair Foster moved to the next fiscal note.                                                                                  
Mr. Haghayeghi spoke  to the published DFG  zero fiscal note                                                                    
for the CFEC (FN3 (DFG)).  The commission did not anticipate                                                                    
any   additional  fiscal   impact   from   passage  of   the                                                                    
2:36:41 PM                                                                                                                    
NICOLE  REYNOLDS, DEPUTY  DIRECTOR TAX  DIVISION, DEPARTMENT                                                                    
OF REVENUE (via teleconference),  relayed that the published                                                                    
DOR fiscal  note (FN5 (REV))  was indeterminate in  terms of                                                                    
the revenue impact. The revenue  impact of this bill was not                                                                    
able to  be determined  at this  time. The  department would                                                                    
absorb  the costs  of  the  small additional  administrative                                                                    
burden to implement the program with existing resources.                                                                        
Representative   Carpenter  asked   if   any  personal   use                                                                    
fisheries would be impacted if  a new commercial fishery was                                                                    
developed. He  deduced that his  question may  be premature.                                                                    
Mr. Putman  responded that there  was often  little relation                                                                    
between  personal use  and  commercial  fishing because  the                                                                    
Board of  Fish allocated  the resources.  He noted  that all                                                                    
salmon fisheries  were limited and that  did impact personal                                                                    
use. He  did not  know if he  could directly  answer without                                                                    
knowing the specific fishery. He  thought the decision would                                                                    
be up  to the department  to decide  if a new  fishery would                                                                    
impact personal use.  Representative Carpenter remarked that                                                                    
his question  was premature but  important. He  felt assured                                                                    
knowing   that  there   was  a   process   for  making   the                                                                    
determination at a later stage.                                                                                                 
2:39:52 PM                                                                                                                    
Vice-Chair  Ortiz asked  that with  the establishment  of an                                                                    
association who  decided on the  membership. He  wondered if                                                                    
there  would eventually  be too  much  membership demand  to                                                                    
sustain  the fishery.  Mr. Putman  indicate that  Vice-Chair                                                                    
Ortiz's question was  a good one. He  clarified the question                                                                    
was  how  to sustain  the  fishery  if  there was  too  much                                                                    
fishing pressure.  He replied that  one of the  functions of                                                                    
the  limited entry  commission was  to  determine where  the                                                                    
pressure was  applied and whether there  was enough resource                                                                    
for both  commercial and personal  use. They  were difficult                                                                    
questions to  answer. He  deferred to DFG  who might  have a                                                                    
better answer.  Vice-Chair Ortiz clarified his  question. He                                                                    
inquired if  all of  the fishers  who formed  an association                                                                    
would  be able  to participate  in the  fishery. Mr.  Putman                                                                    
replied that anyone  was able to be part  of the association                                                                    
and they  would vote on how  to assess the fishery;  not all                                                                    
members were commercial fishers.  He noted that formation of                                                                    
the association was loosely defined  in the bill. There were                                                                    
outstanding issues  with the workings of  the committee that                                                                    
needed to  be addressed, but  the sponsor wanted to  keep it                                                                    
flexible  so that  anyone who  wanted to  be a  part of  the                                                                    
association  could  participate  and  vote on  how  to  move                                                                    
2:43:19 PM                                                                                                                    
Vice-Chair Ortiz  asked how SARDFA  worked. He asked  if the                                                                    
membership was open and how it was controlled.                                                                                  
Mr. Doherty  answered that  if someone  was a  permit holder                                                                    
through CFEC, whether interim use  or permanent, they were a                                                                    
part  of the  association. The  dive association  membership                                                                    
did not include any  non-permit holders. The membership duty                                                                    
was to  pay the  landing tax.  He restated  that as  soon as                                                                    
someone   purchased   the   limited   entry   permit,   they                                                                    
automatically became  part of the  association and  paid the                                                                    
Representative Wool referenced  the associations  assessment                                                                    
fee. He  asked how the  assessment rate was  determined. Mr.                                                                    
Putman  replied  that  the bill  specified  the  amounts  of                                                                    
assessments  the associations   members could  vote for.  He                                                                    
pointed out  that it began at  2.5 percent up to  30 percent                                                                    
of the value  of the fish. He reiterated that  the money was                                                                    
housed  in   DOR  and  given   to  DFG  for   stock  biomass                                                                    
assessments  to   determine  if  the  fishery   was  viable.                                                                    
Representative  Wool wondered  what happened  if the  amount                                                                    
voted on  was insufficient  to perform the  biomass studies.                                                                    
He  asked  how the  department  handled  the situation.  Mr.                                                                    
Putman  responded  that  if funds  were  insufficient  there                                                                    
would be  no fishery and  it incentivized choosing  a higher                                                                    
tax rate. The commissioner had  to approve the ballot and if                                                                    
the  commissioner  decided  the  amount was  not  enough  to                                                                    
perform the assessment the vote could be rejected.                                                                              
2:47:46 PM                                                                                                                    
Representative Wool  provided a  scenario and asked  how the                                                                    
commissioner ascertained  how much was necessary  to perform                                                                    
the  study or  what happened  if  the funding  proved to  be                                                                    
insufficient   to  complete   the  assessment.   Mr.  Putman                                                                    
answered  that  DFG had  a   good  handle   on the  cost  of                                                                    
assessments.  He deemed  that if  the association  was small                                                                    
and  the tax  amount  was too  low,  the commissioner  would                                                                    
likely  reject  the vote  and  ask  for  a higher  fee.  The                                                                    
process  would make  certain the  amount was  functional and                                                                    
could move  forward with an assessment.  Representative Wool                                                                    
inquired  whether an  association could  keep repeating  the                                                                    
experimental opening  process if it lacked  enough money for                                                                    
an  assessment.  He deduced  that  it  was not  possible  to                                                                    
establish a new fishery  without an adequate assessment. Mr.                                                                    
Putman  answered  in  the   affirmative.  He  restated  that                                                                    
lacking a sustainable yield  would violate the constitution.                                                                    
He  relayed that  DFG was  vigilant  regarding not  allowing                                                                    
commercial fishing without a biomass study.                                                                                     
2:49:51 PM                                                                                                                    
Mr.  Putman  provided  closing remarks.  He  referenced  the                                                                    
aging of the commercial fishing  fleet and believed that the                                                                    
bill presented an  effort to open new  fisheries and younger                                                                    
fishers  could  start  without purchasing  a  limited  entry                                                                    
HB  64  was   HEARD  and  HELD  in   committee  for  further                                                                    
HOUSE BILL NO. 30                                                                                                             
     "An  Act relating  to notice  of workers'  compensation                                                                    
     death  benefits; relating  to the  payment of  workers'                                                                    
     compensation benefits in the  case of permanent partial                                                                    
     impairment;  relating   to  the  payment   of  workers'                                                                    
     compensation  death  benefits;  and  providing  for  an                                                                    
     effective date."                                                                                                           
2:51:15 PM                                                                                                                    
Co-Chair Foster  moved to  the last bill  on the  agenda and                                                                    
indicated it was the bills first hearing.                                                                                       
REPRESENTATIVE   ANDY   JOSEPHSON,  SPONSOR,   thanked   the                                                                    
committee for  hearing the bill.  He relayed the  history of                                                                    
the  legislation. He  first took  up  the permanent  partial                                                                    
impairment bill in 2014. The bill  had a hearing in 2015 and                                                                    
passed  out of  the  House  in 2018.  It  languished in  the                                                                    
Senate Finance  Committee. In 2019,  a unique  death benefit                                                                    
that  12 other  states  had was  removed.  The  clean  bill                                                                     
passed in 2020. He noted that  at least four or five members                                                                    
of  the current  committee voted  in favor  of the  bill. He                                                                    
explained that a  partial impairment was an  injury that was                                                                    
determined by a  medical doctor to be  permanent and partial                                                                    
related to  the fact that  the person was still  living. The                                                                    
rating  the state  operated under  the   whole body  rating                                                                     
while some states  measured the loss by body  part. The rate                                                                    
was calculated by the doctor  determining the percent of the                                                                    
damage and the  percentage was multiplied by  the whole body                                                                    
number. The  legislation was attempting to  modify the whole                                                                    
body rating by  increasing it from the current  rate of $177                                                                    
thousand,  which placed  the state  in the  bottom 5  states                                                                    
nationally.  He   reported  that  the  rate   had  not  been                                                                    
increased in 22  years and indicated that  the bill proposed                                                                    
raising it to $273 thousand.  He added that factoring in for                                                                    
inflation the rate should be  $286 thousand. He offered that                                                                    
the   bill  updated   all  matters   related  to   permanent                                                                    
impairment.  Representative  Josephson  continued  that  the                                                                    
bill  addressed  increasing the  rate  for  the death  of  a                                                                    
family  member   with  dependents.  The  current   rate  was                                                                    
established  in  1968.  He characterized  the  provision  as                                                                    
 anti-  elitist.  He  delineated  that currently,  financial                                                                    
support was  typically cut  off when a  dependent of  a sole                                                                    
surviving parent  turned 19, unless the  child was attending                                                                    
a  university until  the age  of 23.  The bill  extended the                                                                    
benefits to all dependents between the ages of 19 and 23.                                                                       
Representative  Josephson  discussed  workers   compensation                                                                    
premiums.  He  observed that  there  was  a perception  that                                                                    
premiums were rising. However,  premiums were not increasing                                                                    
but  actually decreasing  particularly  in  the category  of                                                                    
indemnity.  He  specified  that  indemnity  meant  death  or                                                                    
impairment  and  asserted that  the  cost  of indemnity  had                                                                    
decreased. He  pointed out  that the  cost of  indemnity was                                                                    
14.5  percent of  the entire  cost of  premiums. Within  the                                                                    
portion  of  indemnity  (14.5   percent)  there  were  large                                                                    
decreases of about 40 percent.  He explained that it was due                                                                    
to improved  workplace safety. He  emphasized that  the cost                                                                    
of  the  bill  to  cover   all  workers  in  the  state  was                                                                    
approximately $4.8  million, which may  seem like a  lot but                                                                    
was  divided  by  hundreds  of   thousands  of  workers.  He                                                                    
acknowledged  that the  bill would  increase  premiums by  2                                                                    
percent, but premiums  had dropped 14 percent  over the last                                                                    
several years. He  surmised that the trend  line on premiums                                                                    
was still  decreasing. He highlighted  how poorly  the state                                                                    
treated  its  injured workers.  A  person  who lost  an  arm                                                                    
received $106 thousand in a  PPI award. In the highest state                                                                    
of  Pennsylvania, the  person  received  $389 thousand.  The                                                                    
state  ranked 45   in  the loss  of an  arm and  an eye.  In                                                                    
Maryland, if  a person lost an  eye at work, they  were paid                                                                    
over  $250,000 versus  in  Alaska where  a  person would  be                                                                    
compensated only $44,000. He contended  that the state could                                                                    
and must do better.                                                                                                             
2:59:43 PM                                                                                                                    
Co-Chair Merrick asked how many  people in Alaska received a                                                                    
partial  impairment  every  year.  Representative  Josephson                                                                    
could not recall  and deferred the answer  to the Department                                                                    
of Labor and Workforce Development (DLWD).                                                                                      
3:00:13 PM                                                                                                                    
Representative Edgmon  thanked the sponsor for  bringing the                                                                    
bill  forward  and  felt it  was   highly  commendable.   He                                                                    
mentioned the  impending federal infrastructure  funding and                                                                    
workforce  that will  be necessary  for  building roads  and                                                                    
working  on infrastructure  projects  in  light of  Alaska's                                                                    
extreme weather  events. He noted someone  from his hometown                                                                    
being  injured on  the  job related  to  an extreme  weather                                                                    
event.  He  asked  for  a  better  sense  of  who  the  bill                                                                    
pertained  to. Representative  Josephson  responded that  it                                                                    
applied to  every worker  who was  an employee;  blue collar                                                                    
workers, white collar workers,  and those not self-employed.                                                                    
He  shared from  personal experience  that he  had purchased                                                                    
workers   compensation  for  a prior  campaign  manager  and                                                                    
added that it encompassed a broad pool of workers.                                                                              
3:02:29 PM                                                                                                                    
ELISE  SORUM-BURKE, STAFF,  REPRESENTATIVE JOSEPHSON,  added                                                                    
that there  was a separate category  for commercial fishers,                                                                    
who were not covered either.                                                                                                    
3:02:52 PM                                                                                                                    
Representative  Carpenter  asked  that  when  comparing  the                                                                    
state   to   national   averages   or   other   states   for                                                                    
compensation,   if   the   total  compensation   and   other                                                                    
associated costs were  factored in. He noted  that the state                                                                    
offered retraining  which added  costs. He asked  how Alaska                                                                    
compared  to  other  states that  did  not  have  retraining                                                                    
programs or  had their own  retraining process instead  of a                                                                    
lump sum payment. Representative  Josephson answered that it                                                                    
would  be  less  generous  than expected.  He  deferred  the                                                                    
answer to  DOL for comment.  He recalled that a  person only                                                                    
had the option  of the reward or the training  but not both.                                                                    
He  reminded the  committee that  there  was no  way to  sue                                                                    
except  for third  party liability.  He exemplified  that if                                                                    
the rung of a ladder  was defective, the injured party could                                                                    
sue the  ladder company.  Mostly, workers   compensation was                                                                    
designed  to   avoid  litigation,  but  the   worker  likely                                                                    
received less.  He thought  a person  would be  awarded much                                                                    
more  in personal  injury court  if it  was not  a workplace                                                                    
injury. He characterized workers   compensation as part of a                                                                    
 grand    bargain    that    moved    the   process    along                                                                    
 expeditiously   and  was part  of  a   give and  take.   An                                                                    
employer paid for the injury  without explanation because it                                                                    
was  a  no  fault   strict liability,  however, the  injured                                                                    
employee would not recover as much as possible.                                                                                 
Co-Chair Foster invited Mr. Collins to the table.                                                                               
3:06:18 PM                                                                                                                    
CHARLES    COLLINS,    DIRECTOR,   DIVISION    OF    WORKERS                                                                    
COMPENSATION,    DEPARTMENT   OF    LABOR   AND    WORKFORCE                                                                    
DEVELOPMENT, responded  that he  could not recall  the exact                                                                    
number of claims involving PPI,  but remembered that in 2020                                                                    
the state paid  out $7.3 million for PPI.  He expounded that                                                                    
many claims had   a number of  different indemnity portions;                                                                    
an injured worker could elect  to also take reemployment and                                                                    
rehabilitation benefits  depending on each  individual plan.                                                                    
Some claimants  might take a  lump sum of PPI  benefits, and                                                                    
some  retrain and  receive their  benefit  as a  replacement                                                                    
wage until it  ran out. He commented that  the benefits were                                                                    
very complex  and varied per  individual case.  He requested                                                                    
that the second question be repeated.                                                                                           
3:08:11 PM                                                                                                                    
Representative  Carpenter restated  his  question about  the                                                                    
compensation  and  comparing  the total  benefit,  including                                                                    
retraining  to national  averages -  he asked  if they  were                                                                    
comparing  apples-to-apples.  He  would  argue  that  Alaska                                                                    
would be in  a top tier of compensation  if retraining costs                                                                    
were included with the payout.  Mr. Collins replied that all                                                                    
workers   compensation benefits  were paid  by the  workers                                                                     
employers  or   their  carriers,  which   were  self-insured                                                                    
entities  like the  state of  Alaska who  paid the  benefits                                                                    
directly  rather  than  through  an  insurance  company.  He                                                                    
delineated that  reemployment payments in Alaska  through AS                                                                    
23.30.041  were limited  in scope  and amount.  He explained                                                                    
that the  injured state  worker was  evaluated and  if found                                                                    
eligible  for reemployment  benefits an  education plan  was                                                                    
developed and the most the  state paid was $13.3 thousand in                                                                    
reemployment benefits. The caveat  was that wage replacement                                                                    
called  041K   derived from AS  23.30.041 (k) paid  a weekly                                                                    
stipend  while  retraining.   As  for  other  jurisdictions,                                                                    
outside of  Alaska, he expounded that  each jurisdiction had                                                                    
its own set  of laws governing worker's  compensation and no                                                                    
two states  were the  same. He  noted that  in the  state of                                                                    
Washington  everything  was  done  through  the  state;  the                                                                    
insurance  policy was  purchased through  the state  and ran                                                                    
the  retraining programs.  In Alaska,  workers  compensation                                                                    
was  run through  the carriers   organization and  the state                                                                    
was removed  from the  process. He  recounted that  in 2020,                                                                    
there was  more than  $7 million  in replacement  wages paid                                                                    
out on  111 active  plans and the  plans dated  back several                                                                    
years  through to  the present.  At any  given time,  people                                                                    
were working  through the  system and  would accept  some of                                                                    
the  041K replacement  wage, which  was  the most  expensive                                                                    
portion   of  workers    compensation.  He   furthered  that                                                                    
according  to  AS  24.30.041  a  person  could  take  a  job                                                                    
dislocation  settlement. Even  if an  injured employee  took                                                                    
either  of the  aforementioned benefits,  PPI payments  were                                                                    
typically paid directly to the injured employee.                                                                                
3:12:21 PM                                                                                                                    
Representative Carpenter understood  that the injured worker                                                                    
received  PPI compensation  and retraining.  He asked  if he                                                                    
had  made   an  accurate  statement.  Mr.   Collins  thought                                                                    
Representative  Carpenter's   comments  were   accurate.  He                                                                    
qualified  that if  someone elected  retraining before  they                                                                    
can  collect 041K  they had  to  utilize their  PPI. If  the                                                                    
injured person  was in a  retraining program, their  PPI was                                                                    
paid  weekly  while  in  the   retraining  program.  It  was                                                                    
possible  that  if a  person  ran  out  of PPI  while  still                                                                    
retraining, they could collect  more 041K wage replacements.                                                                    
He noted that  the individuals  plans had to  be approved by                                                                    
the employer  as well  as the  department and  the employee.                                                                    
Representative  Carpenter deduced  that the  issue was  more                                                                    
complex  that what  he had  originally  thought. He  thought                                                                    
that the complexity made it  difficult to compare merely the                                                                    
PPI  payments to  other states.  He determined  that it  was                                                                    
necessary  to  compare the  entire  package.  He was  hoping                                                                    
someone could  provide more  information regarding  the cost                                                                    
3:14:52 PM                                                                                                                    
Representative LeBon  observed that the purpose  of the bill                                                                    
was to  bring the benefit  up to  a hold harmless  level for                                                                    
inflation.   Representative  Josephson   responded  in   the                                                                    
affirmative. He referenced the  statements that premiums had                                                                    
decreased and  wondered whether the  reason was  that claims                                                                    
were  decreasing.  Representative Josephson  concurred  that                                                                    
indemnity claims  had decreased and deferred  further answer                                                                    
to Mr. Collins.                                                                                                                 
Mr. Collins reported that for the  past 9 years the state of                                                                    
Alaska  actuary National  Council on  Compensation Insurance                                                                    
(NCCI)  had recommended  lowering the  workers  compensation                                                                    
rates in Alaska.  The reason pertained to  2 factors; Alaska                                                                    
was a  safer place to  work and with  the adoption of  a fee                                                                    
schedule based on relative values  versus based on the prior                                                                    
usual  and   customary  costs.  The  medical   portion  also                                                                    
decreased.  The lowest  NCCI rates  were lowered  roughly 13                                                                    
Representative LeBon  thought it  was good news.  He relayed                                                                    
from personal  experience that early  in his  employment his                                                                    
employer offered  accidental death and  disability insurance                                                                    
and  the premiums  were  shared 50  percent  and 50  percent                                                                    
(50/50). He  noted that most  of the workers  took advantage                                                                    
of  the   supplemental  program  over  and   above  workers                                                                     
compensation.  He commented  that workers   compensation was                                                                    
likely not as robust as it should have been.                                                                                    
3:18:09 PM                                                                                                                    
Representative Edgmon  asked Mr.  Collins about  his comment                                                                    
made that  Alaska was one of  the safest states to  work in.                                                                    
He  deemed that  Alaska  was  not the  safest  place due  to                                                                    
weather and  other conditions. Mr. Collins  answered that he                                                                    
might  have  misspoken.  He  stated  that  he  said  it  was                                                                    
currently   safer  to  work in  Alaska than  10 to  20 years                                                                    
ago. He added that the  data proved the statement. There had                                                                    
been less claims every year  since 2015 and he attributed it                                                                    
to  an overall  safer workplace  environment. Representative                                                                    
Edgmon  thought   he  might  not  have   heard  Mr.  Collins                                                                    
Representative Wool  referenced the  $7 million paid  out in                                                                    
claims. He asked  whether the amount was  paid expressly for                                                                    
PPI. He  asked about added  costs. Mr. Collins  replied that                                                                    
the $7.3  million paid was only  for PPI in 2020.  The total                                                                    
indemnity  payments   in  2020  was  $57.1   million,  which                                                                    
included   total  disability   payments,   PPI,  and   other                                                                    
associated benefits.                                                                                                            
3:21:10 PM                                                                                                                    
Representative Wool  deduced that  if the bill  were adopted                                                                    
it would  compensate for inflation.  He asked where  the PPI                                                                    
payments came  from. Mr. Collins  answered that  the portion                                                                    
of PPI addressed  in HB 30 was only one  component but would                                                                    
likely  increase the  payout amount  substantially. However,                                                                    
the  premiums   would  rise  only  by   about  2.9  percent.                                                                    
Representative  Wool remained  curious about  the number  of                                                                    
incidents  the $7  million represented.  He queried  whether                                                                    
there was  a formula  that established  the PPI  payouts and                                                                    
whether the  bill proposed to  retain the same  formula. Mr.                                                                    
Collins responded that there was  a formula contained in the                                                                    
sixth  edition of  the  AMA  Guide,   [The American  Medical                                                                    
Association's   Guides  to   the  Evaluation   of  Permanent                                                                    
Impairment,  6th Edition,  2021].  He indicated  he was  not                                                                    
qualified  to confer  a rating.  The process  was done  by a                                                                    
doctor  that  was certified  to  provide  a PPI  rating.  He                                                                    
warned that the  process was complicated. He  used the index                                                                    
finger as an example. He  elaborated that could equate to 11                                                                    
percent  of the  whole  body base  rating  of $177  thousand                                                                    
established in the year 2000.                                                                                                   
3:24:27 PM                                                                                                                    
Representative  Thompson opined  that the  reduction in  on-                                                                    
site  injuries was  attributed to   big programs  in Alaska                                                                     
geared towards job safety.  He mentioned that apprenticeship                                                                    
programs  included job  safety training  and most  companies                                                                    
had  yearly  safety training.  He  thought  that Alaska  had                                                                    
changed its  way of doing  business to prevent  job injuries                                                                    
and was pleased.                                                                                                                
3:25:15 PM                                                                                                                    
Representative   Carpenter    agreed   with   Representative                                                                    
Thompson that  the work  culture had  changed in  Alaska. He                                                                    
asked  about  workers  compensation   compared  to  what  an                                                                    
employer  might  offer  for   life  and  disability  through                                                                    
private insurers  and what premiums they  would pay compared                                                                    
to    paying    for    workers     compensation    benefits.                                                                    
Representative Josephson  answered that he did  not have any                                                                    
idea.  Representative   Carpenter  commented  that   it  was                                                                    
valuable to the  conversation to know if the  industry had a                                                                    
comparable or less  expensive way to provide  it. He thought                                                                    
maybe  the   state  needed  to  consider   handling  workers                                                                    
compensation  differently.  He  wondered   if  there  was  a                                                                    
comparable  alternative to  workers compensation  that would                                                                    
decrease the cost to employers without duplicating efforts.                                                                     
3:27:31 PM                                                                                                                    
Representative  Josephson  relayed   that  every  state  had                                                                    
workers   compensation  and  either offered  it  or  allowed                                                                    
workers to  sue their employers.  He reiterated that  it was                                                                    
part of  the  grand  bargain  originally established  in the                                                                    
late  1800s   in Germany.  He  informed  the committee  that                                                                    
worker's   compensation  was   relatively  inexpensive   per                                                                    
individual. He  surmised that it  was costly for  a business                                                                    
with  scores  of  workers  engaged  in  dangerous  work.  He                                                                    
referenced   Mr.  Collins   statements  that   premiums  had                                                                    
3:28:20 PM                                                                                                                    
Ms.  Sorum-Burke   reminded  the  committee   that  worker's                                                                    
compensation was required by law  for every employer, and it                                                                    
was a  no-fault system. She  elucidated that the  reason for                                                                    
Worker's Compensation had to do  with employer liability and                                                                    
whether the employee  could sue the employer.  She turned to                                                                    
a presentation titled  HB 30   (copy on file). She addressed                                                                    
Slide 8  titled  The Elevator Paradigm.   The slide depicted                                                                    
a customer  and an  employee in an  elevator that  fell. The                                                                    
paradigm asks  the question regarding  what damages  do each                                                                    
receive.  The  example was  a  single  childless worker  who                                                                    
would  only receive  funeral expenses.  The slide  contained                                                                    
the following:                                                                                                                  
     What damages do they receive?                                                                                              
          Economic Damages                                                                                                      
          Non-Economic Damages                                                                                                  
          Pain and suffering                                                                                                    
          Loss of Consortium                                                                                                    
          Punitive damages                                                                                                      
          Up to $1.5 million                                                                                                    
Ms.   Sorum-Burke  maintained   that  workers   compensation                                                                    
existed to protect employers  and provided some compensation                                                                    
for  employees. She  noted that  one state  allowed workers                                                                     
compensation as an option, which  was Texas. She stated that                                                                    
the  employer was  opening itself  up to  liability if  they                                                                    
chose not to opt for the program in Texas.                                                                                      
Representative   Carpenter   understood  the   participation                                                                    
requirement.  He  felt that  the  state  could do  something                                                                    
different than  workers  compensation.  He recalled  that he                                                                    
was  never  offered  disability   insurance  when  he  began                                                                    
working.  If  the  employer   was  offering  disability,  he                                                                    
wondered whether it was cheaper  via a private insurer  than                                                                    
paying benefits  through workers   compensation. He  was not                                                                    
suggesting that  liability insurance should not  be provided                                                                    
he questioned  whether workers   compensation was  the least                                                                    
costly way and  wanted to look at the  big  picture  and not                                                                    
just throw a bunch of money and increase payments.                                                                              
3:31:53 PM                                                                                                                    
Representative Thompson  shared that he was  on the Worker's                                                                    
Compensation Board from  1984 to 1994. He  recalled that the                                                                    
board  discovered  that  many employers  were  not  carrying                                                                    
workers   compensation.  He asked  if  the  state was  still                                                                    
monitoring employers to ensure  that they were not  cheating                                                                    
the  system  and  driving  up the  costs  for employers  who                                                                    
carried it. Mr.  Collins replied that the state  had 5 full-                                                                    
time  inspectors  and less  than  .01  percent of  employers                                                                    
failed to  insure. He  furthered that  all the  fines levied                                                                    
against employers that  failed to insure were  placed in the                                                                    
 Benefits  Guarantee Fund,   which paid  for employees  that                                                                    
worked  for an  uninsured employer.  The state  had done  an                                                                    
excellent job  of making sure that  employers were following                                                                    
the law  and took  care of employees  that were  injured who                                                                    
worked  for an  uncovered employer.  Representative Thompson                                                                    
was pleased to hear of the states diligence.                                                                                    
Co-Chair  Merrick   invited  Mr.   Collins  to   review  the                                                                    
published  fiscal  note from  the  Department  of Labor  and                                                                    
Workforce Development for Workers   Compensation (FN 5 (LFW)                                                                    
that reported changes in revenues.                                                                                              
Mr. Collins reported that the  fiscal note showed no cost to                                                                    
the   state.  He   elaborated  that   Workers'  Compensation                                                                    
insurance premiums were paid by  insurers or by self-insured                                                                    
employers  and  were  paid  to   the  Division  of  Workers'                                                                    
Compensation  and  assessed  at  a  statutory  rate  of  2.9                                                                    
percent. The  state would gain  revenue due to  higher sales                                                                    
of premiums, which was reflected in the fiscal note.                                                                            
Co-Chair  Merrick  moved  to  the  published  fiscal  impact                                                                    
fiscal note from the Department  of Administration (DOA) for                                                                    
Risk Management (FN4 (ADM)                                                                                                      
3:34:52 PM                                                                                                                    
SCOTT  JORDAN,   DIRECTOR,  DIVISION  OF   RISK  MANAGEMENT,                                                                    
DEPARTMENT OF  ADMINISTRATION, reviewed the fiscal  note. He                                                                    
explained  that  the  amount proposed  currently  under  the                                                                    
Alaska  Worker's Compensation  Act,  AS  23.30.190 (a),  the                                                                    
whole  body  rating was  $177,000.  The  bill increased  the                                                                    
rating by  54.24 percent to  $273,000 based on the  ten year                                                                    
average (FY 2012-  FY 2021) of whole  body Permanent Partial                                                                    
Impairment  (PPI).  The  54.24 percent  would  increase  the                                                                    
average  annual payout  by $423,254  thousand. Based  on the                                                                    
$423,254  thousand the  division  anticipated an  additional                                                                    
payout in  second injury fund  fees of 6 percent  or $25,395                                                                    
thousand  totaling  $449 thousand  as  noted  in the  fiscal                                                                    
Co-Chair Merrick  turned to the final  published zero fiscal                                                                    
note, Various for All Branches.                                                                                                 
3:36:41 PM                                                                                                                    
CAROLINE SCHULTZ,  POLICY ANALYST, OFFICE OF  MANAGEMENT AND                                                                    
BUDGET,  OFFICE   OF  THE  GOVERNOR   (via  teleconference),                                                                    
reported there  was a zero  fiscal note for  the designation                                                                    
 Various  that  represented all branches of  government. She                                                                    
indicated  that Risk  Management  estimated the  legislation                                                                    
would increase  costs by  $449 thousand  annually, amounting                                                                    
to a roughly  2 percent average increase  in risk management                                                                    
costs borne by  paying all agencies. The state  would not be                                                                    
increasing the associated budgets by the amount.                                                                                
Co-Chair Merrick  thanked the  presenters. She  reviewed the                                                                    
agenda for the following day.                                                                                                   
3:37:37 PM                                                                                                                    
The meeting was adjourned at 3:37 p.m.                                                                                          

Document Name Date/Time Subjects
HB 187 1.26.2022 CS Sponsor Statement.pdf HFIN 2/2/2022 1:30:00 PM
HB 187
HB 30 Presentation 2.23.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 side-by-side 4.8.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 Supporting Document- ProPublica Graphic- Alaska v National Average 2.23.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 Supporting Document- ProPublica Graphic- How Much is a Limb Worth 2.23.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 WCRI Death Benefits By State 2.23.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 workers compesation cost chart 4.1.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB30 Sectional Analysis 2.23.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB30 Sponsor Statement 3.3.21.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 187 Additional Info - Leg Research_15-248.pdf HFIN 2/2/2022 1:30:00 PM
HB 187
HB 64 Explanation of Changes 012822 v.I .pdf HFIN 2/2/2022 1:30:00 PM
HB 64
HB 64 Sectional Analysis.pdf HFIN 2/2/2022 1:30:00 PM
HB 64
HB 64 Sponsor Statements v.I 012822 .pdf HFIN 2/2/2022 1:30:00 PM
HB 64
HB 187 Additional Info - Leg Research_15-248.pdf HFIN 2/2/2022 1:30:00 PM
HB 187
HB 187 Explanation of Changes (STA) Version W 013122 .pdf HFIN 2/2/2022 1:30:00 PM
HB 187
HB 187 Sectional Analysis - Version W 1.31.2022.pdf HFIN 2/2/2022 1:30:00 PM
HB 187
HB 30 Public Testimony rec'd by 020222.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 Supporting Document- DOLWD Press Release October 2020 2.2.22.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30- WC cost reductions- 2.2.22.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 Memo_AK AFL-CIO.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 Letter of Support ACOA HFIN 021522.pdf HFIN 2/2/2022 1:30:00 PM
HB 30
HB 30 letter of support NW Carpenters HFIN 021522.pdf HFIN 2/2/2022 1:30:00 PM
HB 30