Legislature(2021 - 2022)ADAMS 519

02/28/2022 02:30 PM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
Moved CSHB 64(FSH) Out of Committee
-- Public Testimony --
Moved CSHB 30(FIN) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 28, 2022                                                                                          
                         2:40 p.m.                                                                                              
2:40:47 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the  House Finance Committee meeting                                                                    
to order at 2:40 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Ben Carpenter                                                                                                    
ALSO PRESENT                                                                                                                  
Fate  Putman,  Staff,  Representative Louise  Stutes;  Jerry                                                                    
McCune,   Cordova   District   Fisherman   United,   Juneau;                                                                    
Representative   Andy  Josephson,   Sponsor;  Kevin   Smith,                                                                    
Executive Director, Alaska  Municipal League Joint Insurance                                                                    
Association, Juneau.                                                                                                            
PRESENT VIA TELECONFERENCE                                                                                                    
Phil Doherty, Executive  Director, Southeast Alaska Regional                                                                    
Dive  Fisheries Association,  Ketchikan; Wes  Humbyrd, Self,                                                                    
Homer; Eric  Croft, Former Legislator, Anchorage;  Kim Hays,                                                                    
AFL-CIO, Anchorage.                                                                                                             
HB 30     WORKERS' COMP: DEATH; PERM PARTIAL IMPAIR                                                                             
          CSHB 30(FIN)  was REPORTED  out of  committee with                                                                    
          seven  "do  pass"  recommendations and  three  "no                                                                    
          recommendation"   recommendations  and   with  one                                                                    
          previously   published  zero   fiscal  note:   FN3                                                                    
          (Gov/Various);   and   two  previously   published                                                                    
          fiscal impact notes: FN4 (ADM) and FN5 (LWF).                                                                         
HB 64     FISHERY DEVELOPMENT ASSOC.; ASSESSMENTS                                                                               
          CSHB 64(FSH)  was REPORTED  out of  committee with                                                                    
          five  "do  pass"   recommendations  and  four  "no                                                                    
          recommendation"   recommendations  and   with  one                                                                    
          previously published zero  fiscal note: FN3 (DFG);                                                                    
          and two previously  published indeterminate fiscal                                                                    
          notes: FN4 (DFG) and FN5 (REV).                                                                                       
Co-Chair Merrick reviewed the meeting agenda.                                                                                   
HOUSE BILL NO. 64                                                                                                             
     "An Act relating to regional fishery development                                                                           
     associations; and relating to developing fishery                                                                           
     management assessments."                                                                                                   
2:41:42 PM                                                                                                                    
Co-Chair Merrick  noted the bill  had been  previously heard                                                                    
on February 2.                                                                                                                  
FATE  PUTMAN, STAFF,  REPRESENTATIVE LOUISE  STUTES, relayed                                                                    
that the  bill would establish regional  fishery development                                                                    
associations  to  allow  for   the  development  of  fishery                                                                    
management  assessments in  order to  support the  growth of                                                                    
new  and developing  fisheries. He  explained that  regional                                                                    
fishery development  association fisheries  were perspective                                                                    
fisheries  within  geographic  regions   of  the  state  not                                                                    
currently  regulated  by   the  Commercial  Fisheries  Entry                                                                    
Commission  (CFEC).  In  the  case  of  new  and  developing                                                                    
fisheries, the funding  was there to help  the fisheries get                                                                    
started and to conduct surveys  and assessments in order for                                                                    
the  Department  of   Fish  and  Game  (DFG)   to  open  the                                                                    
fisheries. He highlighted that the  bill created a mechanism                                                                    
to fund the management and  new development of fisheries and                                                                    
allowed  for the  creation of  regional fishery  development                                                                    
associations.  He described  the  associations as  nonprofit                                                                    
organizations  representing  the fishery  stakeholders  that                                                                    
may elect to levy an  assessment upon themselves to help pay                                                                    
for the studies.                                                                                                                
Co-Chair Merrick OPENED public testimony.                                                                                       
2:43:14 PM                                                                                                                    
AT EASE                                                                                                                         
2:44:38 PM                                                                                                                    
JERRY  MCCUNE, CORDOVA  DISTRICT  FISHERMAN UNITED,  JUNEAU,                                                                    
testified  in   support  of  the   bill.  He   detailed  the                                                                    
organization had worked  with the bill sponsor  to develop a                                                                    
bill  that would  finance new  fisheries. He  explained that                                                                    
due to  the budget crisis  DFG did  not have the  funding to                                                                    
address every new  fishery. He detailed that  the bill would                                                                    
enable  the  financing  of   some  wintertime  fisheries  in                                                                    
Cordova  including sea  cucumbers, crab,  and potentially  a                                                                    
new  herring fishery  near Cape  Suckling. The  organization                                                                    
was exploring  whether it was  possible to generate  work in                                                                    
the winter for fishermen.                                                                                                       
PHIL DOHERTY, EXECUTIVE  DIRECTOR, SOUTHEAST ALASKA REGIONAL                                                                    
DIVE   FISHERIES   ASSOCIATION  (SARDFA),   KETCHIKAN   (via                                                                    
teleconference),  testified  in  support  of  the  bill.  He                                                                    
relayed that  SARDFA was the  only fishing  association that                                                                    
was set up "such as under  HB 64." He stated the association                                                                    
had  been  working under  its  own  legislative rules  since                                                                    
1998. The funds  had been generated to  allow dive fisheries                                                                    
in  Southeast Alaska  to help  pay the  State of  Alaska for                                                                    
management  of three  species including  sea cucumbers,  sea                                                                    
urchins,  and  geoduck  clams.   He  explained  that  monies                                                                    
generated  from the  fisheries paid  DFG for  its management                                                                    
and  assessment. He  reported the  three fisheries  combined                                                                    
had  a  vessel value  of  $15  million. He  elaborated  that                                                                    
SARDFA had  been started  because at the  time, DFG  did not                                                                    
have the  funds to conduct  management or assessment  of the                                                                    
three dive  fisheries. The method  had worked very  well. He                                                                    
relayed  the fisheries  were ongoing  throughout the  winter                                                                    
and  employed 70  to 100  divers, crew  members, boats,  and                                                                    
WES HUMBYRD,  SELF, HOMER (via teleconference),  shared that                                                                    
he was  a commercial fisherman  in all different  species of                                                                    
fisheries.  He relayed  he is  a  member of  the Cook  Inlet                                                                    
Drift Association  and noted there  was also  aquaculture in                                                                    
Cook Inlet.  He stated that a  2 percent tax was  taken from                                                                    
Cook Inlet fishermen and the  fishermen did not get anything                                                                    
back.  He hoped  that if  the bill  passed, the  legislature                                                                    
would make  certain the  fishery saw  some type  of recovery                                                                    
from the tax.  He relayed that he had friends  who fished in                                                                    
Bristol Bay,  Cook Inlet, and  other areas in the  state. He                                                                    
reported  one  of  his  friends  made  $300,000  fishing  in                                                                    
Bristol Bay  the previous year.  He suggested going  back to                                                                    
an income tax and giving some  of the generated funds to DFG                                                                    
to enable  it to  do its  job. He had  worked for  DFG years                                                                    
back  and  recalled  hearing  the state  had  no  money.  He                                                                    
implored the  legislature to figure  out a way to  get money                                                                    
without  taxing the  people if  they were  not going  to get                                                                    
anything back  from it. He  stressed the Cook  Inlet fishery                                                                    
did  not  get  anything  back  from the  tax  it  paid  into                                                                    
aquaculture.  He  provided  a personal  example  related  to                                                                    
taxes.  He  emphasized  that people  coming  to  Alaska  and                                                                    
generating revenue  from the  different fisheries  needed to                                                                    
start paying  something. He  saw where  the bill  could work                                                                    
for certain fisheries.                                                                                                          
2:50:33 PM                                                                                                                    
Co-Chair Merrick CLOSED public testimony.                                                                                       
Mr. Putman  noted there was  an individual  available online                                                                    
to answer any questions.                                                                                                        
Co-Chair    Merrick    noted   Representative    Wool    and                                                                    
Representative Thompson had joined the meeting.                                                                                 
2:51:32 PM                                                                                                                    
AT EASE                                                                                                                         
2:51:41 PM                                                                                                                    
Co-Chair  Foster  MOVED  to  REPORT   CSHB  64(FSH)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
CSHB 64(FSH)  was REPORTED  out of  committee with  five "do                                                                    
pass"   recommendations   and   four   "no   recommendation"                                                                    
recommendations  and  with  one  previously  published  zero                                                                    
fiscal  note:  FN3  (DFG);   and  two  previously  published                                                                    
indeterminate fiscal notes: FN4 (DFG) and FN5 (REV).                                                                            
2:52:07 PM                                                                                                                    
AT EASE                                                                                                                         
2:53:19 PM                                                                                                                    
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."                                                                                                           
2:53:23 PM                                                                                                                    
Co-Chair Merrick  reported the bill  had last been  heard on                                                                    
February  2.   She  asked   for  a   brief  review   of  the                                                                    
REPRESENTATIVE  ANDY  JOSEPHSON, SPONSOR,  reintroduced  the                                                                    
bill. He noted that the  bill had been previously introduced                                                                    
under the same  number in the 31   legislature. The bill was                                                                    
almost identical  to the  version that  passed the  House in                                                                    
2020. He explained  the bill did three  major things. First,                                                                    
the bill updated permanent partial  impairment rates for the                                                                    
for the whole body to  reflect inflation. He noted the rates                                                                    
had not been addressed since  2000. Second, the bill updated                                                                    
a death  benefit for non-nuclear family  dependents that had                                                                    
not been  updated in  over 50 years  and adjusted  two other                                                                    
death  benefit  amounts  for inflation.  The  bill  did  not                                                                    
change how death benefits were  calculated in general, since                                                                    
the calculation  in Alaska  was tied  to the  average weekly                                                                    
wage. Third, subject to a  forthcoming amendment to be heard                                                                    
by the  committee, the bill  would provide  employees notice                                                                    
about  death  benefits,  specifically   about  the  lack  of                                                                    
benefits for  single workers.  Additionally, the  bill would                                                                    
allow  dependent children  who were  orphaned because  their                                                                    
single parent  died on  the job,  to receive  death benefits                                                                    
for an additional  five years following their 19   birthday.                                                                    
He  noted it  had  already  been true,  but  the bill  would                                                                    
expand the group  of 19 year-olds who would  receive a death                                                                    
Co-Chair Merrick noted Representative  Edgmon had joined the                                                                    
Representative Johnson  stated the  last time the  bill head                                                                    
been  heard  Representative  Josephson  had  referenced  the                                                                    
grand  bargain  of  give  and  take  between  employers  and                                                                    
employees. She asked for a recap.                                                                                               
Representative Josephson complied.  He explained there would                                                                    
be numerous tort actions (personal  injury actions) if there                                                                    
was not  a workers'  compensation system;  employees injured                                                                    
at work would sue  their employers frequently. Workers could                                                                    
sue  employers under  the workers'  compensation statute  if                                                                    
they were deprived  of benefits. The system  was designed to                                                                    
be a win-win for employers  and employees, also known as the                                                                    
grand bargain. He explained the  win for the employer was it                                                                    
was insurable, the costs were  forecast, they knew what they                                                                    
were getting  into, and they  would not be sued  directly or                                                                    
personally. The win for the  employee was they were entitled                                                                    
to maintenance  and rehabilitation if they  could prove they                                                                    
were injured at work.                                                                                                           
2:56:49 PM                                                                                                                    
Co-Chair Merrick OPENED public testimony.                                                                                       
KEVIN  SMITH, EXECUTIVE  DIRECTOR,  ALASKA MUNICIPAL  LEAGUE                                                                    
JOINT INSURANCE  ASSOCIATION, JUNEAU, believed there  were a                                                                    
couple   of  problems   with  the   bill.  He   stated  that                                                                    
Representative  LeBon's [forthcoming]  amendment would  take                                                                    
care  of most  of the  problems. He  believed the  permanent                                                                    
partial  impairment  (PPI)  had  not been  updated  in  long                                                                    
enough that he  did not have a problem with  having to pay a                                                                    
bit  more. However,  he  stated "we're  not  ready for"  the                                                                    
other  tweaks to  the law.  He encouraged  the committee  to                                                                    
adopt an  amendment by  Representative LeBon.  Otherwise, he                                                                    
opposed the  bill without the  amendment. He had  provided a                                                                    
letter to  the committee  following the previous  hearing on                                                                    
the bill that outlined the position.                                                                                            
Vice-Chair Ortiz asked what the  statement "we are not ready                                                                    
for that kind of change" meant.                                                                                                 
Mr. Smith answered that he  was personally not ready for the                                                                    
change.  Additionally,  the   members  of  Alaska  Municipal                                                                    
League Joint  Insurance Association  (158 cities  and school                                                                    
districts) were  not ready  for the  change. He  pointed out                                                                    
that  Representative Josephson  had  indicated earlier  that                                                                    
the things could be figured  out ahead of time and actuarily                                                                    
predicted. However,  he noted  it had not  been done  in the                                                                    
bill for the Joint Insurance Association.                                                                                       
2:59:44 PM                                                                                                                    
Representative  Josephson  asked  for clarity  on  what  Mr.                                                                    
Smith's reference to "that kind of change" meant.                                                                               
Mr. Smith answered, "Increased cost."                                                                                           
Representative  Josephson  stated  that the  bill's  primary                                                                    
feature  was updating  the PPI  that  was 22  years old.  He                                                                    
referenced  a statement  in a  letter written  by Mr.  Smith                                                                    
that the amounts paid for PPI  had not changed in many years                                                                    
and it was  appropriate for them to be updated.  He asked if                                                                    
Mr. Smith agreed  that the action was  fundamentally all the                                                                    
legislation  would do  if the  amendment [by  Representative                                                                    
LeBon] was adopted.                                                                                                             
Mr. Smith  disagreed. He stated  the bill also put  a burden                                                                    
on employers  to notify  people of  changes proposed  in the                                                                    
legislation with  respect to death benefits.  He added there                                                                    
were other changes.                                                                                                             
Representative  Josephson  noted  that the  amendment  would                                                                    
remove the things Mr. Smith had mentioned.                                                                                      
Representative Wool  asked if the adoption  of the amendment                                                                    
would  resolve  Mr.  Smith's  concerns.   He  asked  if  the                                                                    
notification and cost was specifically the issue.                                                                               
Mr.  Smith answered  that the  amendment  would resolve  his                                                                    
3:01:43 PM                                                                                                                    
ERIC    CROFT,    FORMER    LEGISLATOR,    ANCHORAGE    (via                                                                    
teleconference),  stated  that  the  bill  was  appropriate,                                                                    
particularly  after the  amendment,  though  he thought  the                                                                    
notice   provisions   were    appropriate   previously.   He                                                                    
highlighted  that [the  PPI] had  not  been increased  since                                                                    
2000. He stated the benefit in  the bill was the benefit for                                                                    
workers  who  went  back  to work.  He  explained  that  the                                                                    
benefit for  workers who did  not go  back to work  who were                                                                    
disabled and  received a disability  benefit was  indexed to                                                                    
the  average weekly  wage. He  detailed that  the disability                                                                    
benefit rose along with wage  increases. The bill applied to                                                                    
workers  who faced  a  work-related  medical challenges  who                                                                    
recovered  and returned  to  work. He  shared  that his  law                                                                    
office represented  injured workers. He provided  a personal                                                                    
story about  a paralegal  who had worked  in his  office who                                                                    
had lost her  eye due to eye cancer a  couple of years back.                                                                    
She had been able to return to  work and the loss of her eye                                                                    
had not impacted her earning  capacity at the time. The bill                                                                    
applied to  injured workers who  went back to work  and were                                                                    
not claiming disability. He believed  increasing the PPI for                                                                    
inflation was  appropriate. He shared that  he had testified                                                                    
in support  of a separate bill  earlier in the day  to index                                                                    
campaign  limits  to  inflation;  the limits  had  not  been                                                                    
increased in 15  years. He believed the current  bill was as                                                                    
important  and the  PPI had  not been  increased in  over 20                                                                    
3:05:17 PM                                                                                                                    
KIM  HAYS, AFL-CIO,  ANCHORAGE (via  teleconference), shared                                                                    
information  about the  organization representing  more than                                                                    
50,000 union members across the  state. She spoke in support                                                                    
of  the   legislation.  She   noted  the   organization  had                                                                    
submitted a letter  of support to the  committee. She stated                                                                    
that the bill did just  what the organization worked toward:                                                                    
providing dignity for work done  for those injured or killed                                                                    
on the  job. She underscored  that the workplaces  in Alaska                                                                    
were dangerous  and workers in  the state were proud  of the                                                                    
work  even  in  the  face   of  danger.  She  spoke  to  the                                                                    
importance for  the State of  Alaska and employers  to honor                                                                    
the working commitment. One way  to honor the commitment was                                                                    
through PPI  benefits. She detailed  that when a  person was                                                                    
injured  on the  job  permanently, it  altered the  person's                                                                    
life and  ability to  work. She highlighted  it had  been 22                                                                    
years since  the PPI  rate had  been increased.  She pointed                                                                    
out  that much  had changed  during the  timeframe including                                                                    
the  cost of  goods and  housing. She  believed it  was only                                                                    
fair to adjust the PPI benefit upwards.                                                                                         
Ms.  Hays reported  that Alaska  currently ranked  among the                                                                    
states  with the  lowest PPI  benefit. She  believed it  was                                                                    
time to  correct the issue.  She stated that PPI  existed to                                                                    
honor  the  sacrifice  of  a  worker  injured  on  the  job.                                                                    
Additionally, the benefit provided  a safety net for workers                                                                    
searching for new  work and adjusting to a  new reality. The                                                                    
bill  also increased  the funeral  expenses for  individuals                                                                    
killed  on  the  job.  She stressed  it  was  paramount  for                                                                    
families of  Alaskans killed  at work to  not have  to worry                                                                    
about  the expenses.  She stated  the workers'  compensation                                                                    
system, including  PPI and death  benefits, was part  of the                                                                    
grand  bargain  discussed   by  Representative  Johnson  and                                                                    
Representative Josephson  earlier in the meeting.  She hoped                                                                    
the  legislature   would  elect   to  update   the  outdated                                                                    
3:07:52 PM                                                                                                                    
Co-Chair Merrick CLOSED public testimony.                                                                                       
Representative  LeBon  MOVED  to   ADOPT  Amendment  1,  32-                                                                    
LS0238\A.2 (Marx, 2/26/22):                                                                                                     
     Page 1, line 1:                                                                                                            
     Delete "relating to notice of workers' compensation                                                                        
     death benefits;"                                                                                                           
     Page 1, line 6, through page 2, line 10:                                                                                   
     Delete all material.                                                                                                       
     Page 2, line 11:                                                                                                           
     Delete "Sec. 2"                                                                                                            
     Insert "Section 1"                                                                                                         
     Renumber the following bill sections accordingly.                                                                          
     Page 2, line 21, through page 3, line 4:                                                                                   
     Delete all material.                                                                                                       
     Renumber the following bill sections accordingly.                                                                          
     Page 4, line 5:                                                                                                            
     Delete "2022"                                                                                                              
     Insert "2023"                                                                                                              
Co-Chair Merrick OBJECTED for discussion.                                                                                       
Representative  LeBon explained  the amendment  would remove                                                                    
Sections  1  and  3  and   change  the  effective  date.  He                                                                    
elaborated  that Section  1 had  created  a requirement  for                                                                    
employers to notify employees at  the time of hire regarding                                                                    
types of compensation available in the event of a work-                                                                         
related death,  notably regarding  lack of  availability for                                                                    
death benefits for a single  childless worker. He stated the                                                                    
requirement  presented  an  undue burden  on  employers  and                                                                    
likely created more questions than  answers. He expounded in                                                                    
the unfortunate  event an employee needed  program benefits,                                                                    
specific information  pertinent to their situation  would be                                                                    
available at that time.                                                                                                         
Representative LeBon  explained that  Section 3 had  added a                                                                    
requirement  for  employers  to provide  notification  to  a                                                                    
personal representative regarding the  list of legal counsel                                                                    
and grief counselors.  He relayed the section  was a problem                                                                    
as  employers were  prohibited from  directing medical  care                                                                    
and should  not be  held responsible for  providing guidance                                                                    
on  legal counsel  or  grief  counselors. Additionally,  the                                                                    
personal representatives could also  be unknown for a period                                                                    
of time.  He stated that  in a situation where  the personal                                                                    
representative  was  unknown,  the bill  provision  added  a                                                                    
burden on  employers to  have to "chase  after folks  on the                                                                    
list"  if the  personal representative  was not  immediately                                                                    
available. He continued  that an employer would  have no way                                                                    
of  knowing the  standing  relationship  with the  employee,                                                                    
spouse, or  other family members. He  relayed that generally                                                                    
employees provide an emergency  contact and employers should                                                                    
have  the right  and obligation  to contact  the individual.                                                                    
Lastly, the  bill's effective date was  changed from January                                                                    
1, 2022 to January 1, 2023.                                                                                                     
3:10:39 PM                                                                                                                    
Co-Chair Merrick WITHDREW her OBJECTION.                                                                                        
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
Co-Chair  Foster  MOVED  to  REPORT   CSHB  30(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
CSHB 30(FIN)  was REPORTED out  of committee with  seven "do                                                                    
pass"   recommendations   and  three   "no   recommendation"                                                                    
recommendations  and  with  one  previously  published  zero                                                                    
fiscal   note:  FN3   (Gov/Various);   and  two   previously                                                                    
published fiscal impact notes: FN4 (ADM) and FN5(LWF).                                                                          
Co-Chair  Merrick reviewed  the schedule  for the  following                                                                    
3:11:51 PM                                                                                                                    
The meeting was adjourned at 3:11 p.m.                                                                                          

Document Name Date/Time Subjects
HB 30 Rep. LeBon Amd A.2.pdf HFIN 2/28/2022 2:30:00 PM
HB 30