Legislature(2023 - 2024)ADAMS 519

05/14/2024 09:00 AM House FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed from 5/13/24 --
+ SB 151 MISSING/MURDERED INDIGENOUS PEOPLE;REPORT TELECONFERENCED
Moved CSSB 151(FIN) Out of Committee
+ SB 183 WORKERS' COMP BENEFITS GUARANTY FUND TELECONFERENCED
Moved SB 183 Out of Committee
+= SB 34 CITIZEN ADVISORY COMM ON FEDERAL AREAS TELECONFERENCED
Moved HCS CSSB 34(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       May 14, 2024                                                                                             
                         9:06 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:06:24 AM                                                                                                                    
                                                                                                                                
[Note:  continuation  of  5/13/24  9:00  a.m.  meeting.  See                                                                    
separate minutes for detail.]                                                                                                   
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 9:06 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Neal Foster, Co-Chair                                                                                            
Representative DeLena Johnson, Co-Chair                                                                                         
Representative Julie Coulombe                                                                                                   
Representative Mike Cronk                                                                                                       
Representative Alyse Galvin                                                                                                     
Representative Sara Hannan                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Will Stapp                                                                                                       
Representative Frank Tomaszewski                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Almeria   Alcantra,  Staff,   Senator   Donny  Olson;   Lisa                                                                    
Purinton,  Director,  Division  of  Statewide  Services  and                                                                    
Acting  Legislative Liaison,  Department  of Public  Safety;                                                                    
Senator  James   Kaufman,  Sponsor;  Paul   Labolle,  Staff,                                                                    
Representative   Neal   Foster;  Senator   Jesse   Bjorkman,                                                                    
Sponsor; Laura Achee, Staff, Senator Jesse Bjorkman.                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Charles    Collins,   Director,    Division   of    Workers'                                                                    
Compensation,    Department   of    Labor   and    Workforce                                                                    
Development.                                                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 34(FIN)                                                                                                                    
          CITIZEN ADVISORY COMM ON FEDERAL AREAS                                                                                
                                                                                                                                
          HCS  CSSB 34(FIN)  was REPORTED  out of  committee                                                                    
          with  five  "do  pass" recommendations,  four  "no                                                                    
          recommendation"   recommendations,   one   "amend"                                                                    
          recommendation  and  with  one new  fiscal  impact                                                                    
          note from the Department of Natural Resources.                                                                        
                                                                                                                                
CSSB 151(FIN)                                                                                                                   
          MISSING/MURDERED INDIGENOUS PEOPLE;REPORT                                                                             
                                                                                                                                
          CSSB 151(FIN)  was REPORTED out of  committee with                                                                    
          eight  "do  pass"  recommendations  and  with  one                                                                    
          previously  published  fiscal   impact  note:  FN2                                                                    
          (DPS).                                                                                                                
                                                                                                                                
SB 183    WORKERS' COMP BENEFITS GUARANTY FUND                                                                                  
                                                                                                                                
          SB 183  was REPORTED out of  committee with eleven                                                                    
          "do pass" recommendations  and with one previously                                                                    
          published zero note: FN1 (LFW).                                                                                       
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 151(FIN)                                                                                               
                                                                                                                                
     "An   Act   relating   to  police   officer   training;                                                                    
     establishing  the   Missing  and   Murdered  Indigenous                                                                    
     Persons  Review  Commission;  relating to  missing  and                                                                    
     murdered indigenous persons; relating  to the duties of                                                                    
     the Department  of Public Safety; and  providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:07:24 AM                                                                                                                    
                                                                                                                                
Co-Chair  Foster noted  that Senator  Donny Olson,  Co-Chair                                                                    
Edgmon, Co-Chair Johnson, and  Representative Ortiz were all                                                                    
currently  attending  a  conference  committee  meeting.  He                                                                    
relayed  that the  bill  had previously  been  heard by  the                                                                    
committee. He asked for a brief review of the legislation.                                                                      
                                                                                                                                
ALMERIA  ALCANTRA, STAFF,  SENATOR DONNY  OLSON, provided  a                                                                    
brief introduction of the bill.  She clarified that the bill                                                                    
had not yet  been heard by the House  Finance Committee, but                                                                    
the   committee   had   previously   heard   the   companion                                                                    
legislation   (HB  234,   sponsored  by   Representative  CJ                                                                    
McCormick) at  the end of  April. She offered to  provide an                                                                    
explanation  of the  differences between  the two  pieces of                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair  Foster asked  for  a brief  overview  of the  bill                                                                    
including the differences.                                                                                                      
                                                                                                                                
Ms. Alcantra relayed that SB  151 required cultural training                                                                    
for   all  law   enforcement  officers   and  required   the                                                                    
Department of Public Safety (DPS)  to submit missing persons                                                                    
information  to   the  National  Missing   and  Unidentified                                                                    
Persons database  within 60 days  of the first  report filed                                                                    
with  local  law  enforcement.   She  noted  that  the  same                                                                    
requirement  in HB  234 was  set at  30 days  [of the  first                                                                    
report filed  with local law  enforcement]. The  Senate bill                                                                    
put  two  missing  and murdered  indigenous  persons  (MMIP)                                                                    
investigators  into statute  whereas  HB  234 included  four                                                                    
MMIP investigators.  She elaborated that SB  151 established                                                                    
the MMIP review commission under  DPS. She detailed that the                                                                    
commission  would  be  comprised  of nine  members  and  was                                                                    
tasked with reviewing unresolved  cases from different state                                                                    
regions to make recommendations  to enhance coordination and                                                                    
reduce instances of violence. She  noted that SB 151 did not                                                                    
contain  a sunset  date for  the commission  whereas HB  234                                                                    
contained a sunset date of  January 1, 2027, which coincided                                                                    
with requirement of a legislative  report. She noted that SB
151  required a  legislative report  every three  years. The                                                                    
Senate  bill also  included  a  needs assessment  submission                                                                    
date for  DPS by January 1,  2027. She believed the  date in                                                                    
HB 234  was January 1, 2026.  Language had been added  to SB
151 to  set term lengths  for public members and  to stagger                                                                    
the term dates initially.                                                                                                       
                                                                                                                                
9:10:31 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster asked  for a review of the  fiscal note from                                                                    
the Department of Public Safety.                                                                                                
                                                                                                                                
LISA PURINTON, DIRECTOR, DIVISION  OF STATEWIDE SERVICES AND                                                                    
ACTING  LEGISLATIVE LIAISON,  DEPARTMENT  OF PUBLIC  SAFETY,                                                                    
reviewed the  fiscal note OMB component  2325 dated 4/19/24.                                                                    
The costs  in FY 25  were $563,100. She detailed  that costs                                                                    
were  higher  in the  first  year  because it  included  the                                                                    
position  needed  to   support  the  nine-person  commission                                                                    
within  DPS.  She  noted  that the  startup  costs  for  the                                                                    
position included  setting up  computers and  a workstation.                                                                    
There were one-time costs for  contract work associated with                                                                    
a  requirement for  DPS to  take on  a needs  assessment for                                                                    
investigative  and  protective   resources  on  a  statewide                                                                    
basis.  She  explained  the   needs  assessment  was  pretty                                                                    
comprehensive  and  the  department  was  estimating  fairly                                                                    
significant costs  for a  contractor to  do a  project plan,                                                                    
stakeholder engagement,  travel and meeting  schedules, data                                                                    
collection  analysis, interim  reports, community  outreach,                                                                    
needs  assessments, invoicing,  and presentation  with final                                                                    
recommendations for  the commission  to consider.  She noted                                                                    
that the  governor's FY 25  budget request  included funding                                                                    
for two  of four MMIP  investigator positions to  ensure all                                                                    
four existing positions were fully  funded. She relayed that                                                                    
outyear costs  were associated with  the one  position added                                                                    
to support the commission.                                                                                                      
                                                                                                                                
9:13:52 AM                                                                                                                    
                                                                                                                                
Representative  Hannan  directed  a  question  to  DPS.  She                                                                    
looked at  the reporting timeline for  local notification in                                                                    
Section 2. She  noted that SB 151 included a  timeline of 60                                                                    
days whereas  HB 234 had  30 days.  She asked if  the 30-day                                                                    
timeframe was manageable and doable.                                                                                            
                                                                                                                                
Ms. Purinton  answered that law enforcement  entered missing                                                                    
and  murdered persons  information  into several  databases.                                                                    
The statewide  system was  for law  enforcement (it  was not                                                                    
public) and  the information was  also fed into  the Federal                                                                    
Bureau  of   Investigation's  (FBI)  national   database  of                                                                    
missing  person records.  She noted  that  the records  were                                                                    
entered   within  24   hours  and   within  two   hours  for                                                                    
individuals under  the age of  21. The National  Missing and                                                                    
Unidentified   Persons   (NamUs)    database   was   public.                                                                    
Additionally, DPS housed  the Missing Persons Clearinghouse,                                                                    
which took  copies of all  missing person records  (not only                                                                    
trooper  cases). She  elaborated  that  the Missing  Persons                                                                    
Clearinghouse and  the local agency  that input  the records                                                                    
were notified from the FBI  system when the records had been                                                                    
in the  system for over 30  days. She explained that  at the                                                                    
30-day  mark  the  Missing  Persons  Clearinghouse  did  the                                                                    
outreach with local  agencies and would also  put the record                                                                    
into the NamUs database.                                                                                                        
                                                                                                                                
Ms. Purinton estimated that about  98 percent of all missing                                                                    
person records in the state  (about 1,300) were entered into                                                                    
the  NamUs database.  She explained  that DPS  was currently                                                                    
doing the work,  but the 60-day mark  ensured the department                                                                    
would come  into compliance  with the  statutory requirement                                                                    
to meet  the timeline because  it allowed the  department to                                                                    
leverage the  automatic notice that  came in from  the FBI's                                                                    
law  enforcement database.  The department  was getting  the                                                                    
trooper cases  into the  system quickly,  but for  other law                                                                    
enforcement agencies,  especially smaller ones  without many                                                                    
missing persons, the timeline  provided them the benefit and                                                                    
support of  the Missing  Persons Clearinghouse to  make sure                                                                    
that if  they were not  meeting the requirement to  get into                                                                    
NamUs, the clearinghouse  would work with agencies  to get a                                                                    
record into the NamUs  database. The department's preference                                                                    
was  the 60-day  mark  because it  allowed  DPS to  leverage                                                                    
existing  technology and  the  existing  process. The  NamUs                                                                    
database was meant for long-term missing persons.                                                                               
                                                                                                                                
9:17:08 AM                                                                                                                    
                                                                                                                                
Representative  Hannan  highlighted  that  legislators  hear                                                                    
from constituents  about the importance  of making  sure law                                                                    
enforcement  was  treating  a   case  seriously  and  taking                                                                    
immediate  action. She  stated  her  understanding that  the                                                                    
department was acting quickly, but  it was the communication                                                                    
with the  national NamUs system  that required  the "trickle                                                                    
up" effect;  therefore, 60 days was  preferred. However, she                                                                    
believed that  notification within the state  was coming out                                                                    
within  30  days between  a  local  police department  or  a                                                                    
Village Public  Safety Officer (VPSO)  and DPS at  the state                                                                    
level.                                                                                                                          
                                                                                                                                
Ms. Purinton agreed. She explained  that the information was                                                                    
going into law enforcement databases  as soon as the reports                                                                    
came into  law enforcement. She  clarified that she  was not                                                                    
saying agencies were  waiting until the 60  days, they could                                                                    
put the information into to  the public NamUs database right                                                                    
away. However,  some agencies may  not have the  capacity to                                                                    
put the information  into other system. The  60 days allowed                                                                    
a  safety  net  for  the Missing  Persons  Clearinghouse  to                                                                    
support them  and do the follow  up in case it  had not been                                                                    
done already.                                                                                                                   
                                                                                                                                
Representative Hannan looked  at Section 3 where  SB 151 had                                                                    
two [investigator] positions and HB  234 had four. She asked                                                                    
if all four positions were funded in the budget.                                                                                
                                                                                                                                
Ms. Purinton answered there were  currently four filled MMIP                                                                    
investigator  positions.  The  positions  were  filled  with                                                                    
retired  troopers  who  had  investigative  experience.  She                                                                    
noted that  the troopers currently had  a staffing shortage.                                                                    
She explained  that the  strategy made  sure DPS  had enough                                                                    
investigative   resources   spread    out   throughout   the                                                                    
department. She relayed  that the commissioner [Commissioner                                                                    
Cockrell] had been vocal in  support of the bill, in support                                                                    
of  the four  positions, and  in support  of continuing  the                                                                    
work.  She  explained  that  if   one  of  the  investigator                                                                    
positions became  vacant it  would take  DPS time  to refill                                                                    
it. The intention  was to continue to have at  least four of                                                                    
the [investigator] positions at all times.                                                                                      
                                                                                                                                
Co-Chair Foster  noted that Co-Chair  Edgmon had  joined the                                                                    
meeting from conference committee.                                                                                              
                                                                                                                                
Ms. Alcantra thanked the committee for hearing the bill.                                                                        
                                                                                                                                
9:20:06 AM                                                                                                                    
                                                                                                                                
Representative Stapp  MOVED to  REPORT CSSB 151(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSSB 151(FIN) was  REPORTED out of committee  with eight "do                                                                    
pass"  recommendations  and  with one  previously  published                                                                    
fiscal impact note: FN2 (DPS).                                                                                                  
                                                                                                                                
CS FOR SENATE BILL NO. 34(FIN)                                                                                                
                                                                                                                                
     "An   Act   reestablishing   the   Citizens'   Advisory                                                                    
     Commission  on  Federal  Management  Areas  in  Alaska;                                                                    
     relating to the membership  and duties of the Citizens'                                                                    
     Advisory  Commission  on  Federal Management  Areas  in                                                                    
     Alaska; relating to the authority  of the Department of                                                                    
     Natural  Resources  regarding  the  Citizens'  Advisory                                                                    
     Commission on  Federal Management Areas in  Alaska; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:21:56 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster  asked for  a review of  the bill.  He noted                                                                    
the committee  had heard the  bill several times  during the                                                                    
previous and current sessions.                                                                                                  
                                                                                                                                
SENATOR  JAMES KAUFMAN,  SPONSOR,  explained  that the  bill                                                                    
would  reestablish  the   Citizens  Advisory  Commission  on                                                                    
Federal Management Areas (CACFA).  The commission's role was                                                                    
to  represent  the  views  of  Alaskan  citizens  concerning                                                                    
federal land management plans within the state.                                                                                 
                                                                                                                                
Co-Chair Foster  noted that he  had two amendments  to offer                                                                    
based on input from some statewide organizations.                                                                               
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  1, 33-LS0250\S.1                                                                    
(Gunther, 5/8/24) (copy on file):                                                                                               
                                                                                                                                
     Page 2, lines 11 - 12:                                                                                                     
     Delete "a federally recognized tribe and at least one                                                                      
     other member must be a shareholder of"                                                                                     
                                                                                                                                
     Insert "and represent a federally recognized tribe. At                                                                     
     least one other member must be a shareholder of and                                                                        
     represent"                                                                                                                 
                                                                                                                                
Representative Stapp OBJECTED for discussion.                                                                                   
                                                                                                                                
Co-Chair Foster  asked his  staff to come  to the  table. He                                                                    
explained  the  amendment  pertained  to two  seats  on  the                                                                    
commission. The bill  specified that one member was  to be a                                                                    
member  of  a  tribal  organization  and one  was  to  be  a                                                                    
shareholder. He  referenced his comment  at a  prior hearing                                                                    
on  the  bill  that  [under  the  bill's  current  language]                                                                    
someone  could  be  tribal  member  living  in  Florida  [or                                                                    
elsewhere out  of state]. For  example, he had  brothers who                                                                    
lived  in  the State  of  Washington  who were  both  tribal                                                                    
members and shareholders who could  technically serve on the                                                                    
commission.  He was  looking  to ensure  the  seat would  be                                                                    
filled  by someone  who was  clearly a  representative of  a                                                                    
tribe or  Native corporation. He  asked for  further details                                                                    
from his staff.                                                                                                                 
                                                                                                                                
PAUL LABOLLE, STAFF, REPRESENTATIVE  NEAL FOSTER, noted that                                                                    
the only  change made by  the amendment was the  addition of                                                                    
the  term  "and  represent."  He   explained  the  term  was                                                                    
intended to mean "to act on behalf of."                                                                                         
                                                                                                                                
Co-Chair Foster did not want  to be overly prescriptive. The                                                                    
intent  of the  amendment was  to  have the  seat filled  by                                                                    
someone for  example who was the  external affairs director,                                                                    
governmental  affairs  director,  CEO, or  president  [of  a                                                                    
federally recognized tribe]. He asked  to hear from the bill                                                                    
sponsor to ensure he was amenable to the amendment.                                                                             
                                                                                                                                
Senator Kaufman relayed  that he was very  supportive of the                                                                    
amendment. He detailed that the  amendment was reflective of                                                                    
the work his  office had done to improve  the geographic and                                                                    
cultural representation of the board.                                                                                           
                                                                                                                                
Co-Chair Foster noted that his  office had also checked with                                                                    
the Alaska Federation of Natives (AFN).                                                                                         
                                                                                                                                
Representative Stapp WITHDREW the OBJECTION.                                                                                    
                                                                                                                                
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
                                                                                                                                
9:26:04 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  2, 33-LS0250\S.3                                                                    
(Gunther, 5/9/24) (copy on file):                                                                                               
                                                                                                                                
     Page 2, line 14:                                                                                                           
     Delete "a new subsection"                                                                                                  
     Insert "new subsections"                                                                                                   
                                                                                                                                
     Page 2, following line 16:                                                                                                 
     Insert a new subsection to read:                                                                                           
     "G) Notwithstanding another  provision of this section,                                                                    
     the  commission may  not  consider,  research, or  hold                                                                    
     hearings  relating  to  public  use  on  private  land,                                                                    
     including a highway with an  easement onto private land                                                                    
     or onto public  land reserved for private  use. In this                                                                    
     subsection,  "highway"  has  the meaning  given  in  AS                                                                    
     19.59.001."                                                                                                                
                                                                                                                                
Representative Stapp OBJECTED for discussion.                                                                                   
                                                                                                                                
Co-Chair Foster explained  that some statewide organizations                                                                    
had   indicated   concern   that  the   bill   could   allow                                                                    
grandfathered trails to go over  private lands. For example,                                                                    
Alaska Native  Corporations owned large parts  of the state.                                                                    
The  entities  wanted to  make  sure  that  if there  was  a                                                                    
grandfathered trail, the bill would  not allow someone to go                                                                    
over private  lands. It would  also apply to  individuals as                                                                    
well. For example, if someone  had a farm somewhere that had                                                                    
a grandfathered trail,  it would not allow  just anyone from                                                                    
the public  to trespass over individual  landowners' private                                                                    
land.                                                                                                                           
                                                                                                                                
Mr.  Labolle noted  the amendment  included the  terminology                                                                    
"or  onto   public  land  reserved  for   private  use."  He                                                                    
explained that the language captured  tribal land, which was                                                                    
technically federal land held in trust.                                                                                         
                                                                                                                                
Co-Chair Foster asked  the bill sponsor for  any comments on                                                                    
the amendment.                                                                                                                  
                                                                                                                                
Senator  Kaufman believed  CACFA's  scope was  clear in  the                                                                    
bill as  currently written, but  he understood  the concerns                                                                    
and deferred to the will of the committee.                                                                                      
                                                                                                                                
Representative  Stapp  looked   at  the  amendment  language                                                                    
"including a  highway with an  easement onto  private land."                                                                    
He  thought it  seemed to  mean a  lot of  things. He  noted                                                                    
there were  many easements  on state  highways. He  asked if                                                                    
the  language meant  any  conversation  would be  disallowed                                                                    
just because easements ran through public highways.                                                                             
                                                                                                                                
Mr. Labolle answered that the  word "highway" was as defined                                                                    
in  statute.  He explained  the  language  was intending  to                                                                    
capture RS 2477s.                                                                                                               
                                                                                                                                
Representative Stapp WITHDREW the OBJECTION.                                                                                    
                                                                                                                                
There being NO further OBJECTION, Amendment 2 was ADOPTED.                                                                      
                                                                                                                                
Co-Chair Foster  reported that no other  amendments had been                                                                    
received. The  committee had previously reviewed  the fiscal                                                                    
note and taken public testimony.                                                                                                
                                                                                                                                
Co-Chair  Edgmon stated  he certainly  would  not object  to                                                                    
moving  the bill  from  committee. He  relayed  there was  a                                                                    
proven element to the commission  because he had been at the                                                                    
table a  number of years back  when it had been  decided the                                                                    
commission was not  needed per the cost at the  time and the                                                                    
duties of  the executive  director. He hoped  that 10  to 12                                                                    
years  later  that  with  a renewed  sense  of  purpose  the                                                                    
commission could  reestablish itself  and not return  to the                                                                    
point  where  there  were questions  about  its  germaneness                                                                    
given the amount of money to be spent on it annually.                                                                           
                                                                                                                                
Co-Chair Johnson  MOVED to  REPORT HCS  CSSB 34(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
9:31:05 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:31:29 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Johnson restated her motion.                                                                                           
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HCS CSSB  34(FIN) was  REPORTED out  of committee  with five                                                                    
"do   pass"   recommendations,  four   "no   recommendation"                                                                    
recommendations,  and one  "amend"  recommendation and  with                                                                    
one new  fiscal impact note  from the Department  of Natural                                                                    
Resources.                                                                                                                      
                                                                                                                                
Co-Chair Foster  noted the committee would  give Legislative                                                                    
Legal Services the ability to  make technical and conforming                                                                    
changes when  incorporating the two amendments  to the bill.                                                                    
He thanked the bill sponsor.                                                                                                    
                                                                                                                                
Senator Kaufman thanked the committee.                                                                                          
                                                                                                                                
SENATE BILL NO. 183                                                                                                           
                                                                                                                                
     "An Act relating to the workers' compensation benefits                                                                     
     guaranty fund; and providing for an effective date."                                                                       
                                                                                                                                
9:32:37 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster welcomed the sponsor to the table.                                                                              
                                                                                                                                
9:33:10 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:34:19 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster asked for an introduction of the bill.                                                                          
                                                                                                                                
SENATOR  JESSE BJORKMAN,  SPONSOR, explained  that the  bill                                                                    
would protect  the workers' compensation  benefits guarantee                                                                    
fund from  being swept so  that it  had the funds  needed to                                                                    
pay out workers who got hurt  on the job and their employers                                                                    
were  without  workers'  compensation insurance.  In  recent                                                                    
years, injured  workers waited up  to six months  to receive                                                                    
benefit  payments  because  the  fund had  been  empty.  The                                                                    
fund's reserves came from  civil penalties against employers                                                                    
who  did   not  carry  the  statutorily   required  workers'                                                                    
compensation insurance and  reimbursement from employers for                                                                    
injured  employee  benefits  when  the  state  was  able  to                                                                    
recover them. He elaborated that  because the revenue stream                                                                    
and benefit  payouts were irregular,  there were  times when                                                                    
benefit claims were made and  there was insufficient revenue                                                                    
in the  fund to make  payments to  workers who got  hurt. In                                                                    
the past,  the fund had  been carefully managed to  build up                                                                    
reserves that  decoupled from revenues and  claims, would be                                                                    
paid  in  a  timely  manner regardless  of  when  they  were                                                                    
received. However,  since FY  21, the  Constitutional Budget                                                                    
Reserve  (CBR) sweep  had  cleared  the unobligated  balance                                                                    
from  the fund  each year,  removing the  reserves that  had                                                                    
allowed for timely payments from the fund.                                                                                      
                                                                                                                                
Senator Bjorkman  relayed that the bill  had been introduced                                                                    
by the  Senate Labor and  Commerce Committee at  the request                                                                    
of the  Alaska Workers' Compensation Board  (AWCB) and would                                                                    
help to moderate  the fluctuations. The bill  would move the                                                                    
fund outside  of the general fund  so that it was  no longer                                                                    
subject to  the CBR  sweep and  could gradually  rebuild its                                                                    
reserves in  order to pay  claims as they were  received. He                                                                    
noted that  an individual with  the Department of  Labor and                                                                    
Workforce   Development   (DLWD)    Division   of   Workers'                                                                    
Compensation  was   available  online  to   provide  further                                                                    
details.                                                                                                                        
                                                                                                                                
9:36:45 AM                                                                                                                    
                                                                                                                                
Co-Chair  Johnson stated  her  understanding  that the  bill                                                                    
needed  to happen  because some  funds had  been swept  that                                                                    
included some workers' money. She  asked how the problem had                                                                    
been corrected.                                                                                                                 
                                                                                                                                
Senator Bjorkman  answered that when  there had been  a zero                                                                    
balance in  the fund it  was his understanding  that workers                                                                    
had to wait  or once the problem had  been identified, there                                                                    
had been  some direction given  for the benefits to  be paid                                                                    
from somewhere;  however, no one  had been able to  tell him                                                                    
where the money came from as of yet.                                                                                            
                                                                                                                                
LAURA  ACHEE, STAFF,  SENATOR JESSE  BJORKMAN, replied  that                                                                    
the  bill  would  move the  Workers'  Compensation  Benefits                                                                    
Guarantee  Fund   out  of  the   general  fund   (which  was                                                                    
sweepable),  and  make  it  a separate  fund  in  the  state                                                                    
treasury. The  intent was to  remove the fund from  the list                                                                    
of funds that were eligible to be swept.                                                                                        
                                                                                                                                
Co-Chair Johnson  stated her understanding that  some of the                                                                    
funds had been  swept and consequently it  had required some                                                                    
clean up and for some of the funds to be reinstated.                                                                            
                                                                                                                                
Co-Chair Foster  noted that conference committee  had closed                                                                    
out. He  noted that Co-Chair Johnson,  Representative Ortiz,                                                                    
and  Representative  Coulombe  had joined  the  meeting.  He                                                                    
asked to hear comments and a fiscal note review from DLWD.                                                                      
                                                                                                                                
CHARLES    COLLINS,   DIRECTOR,    DIVISION   OF    WORKERS'                                                                    
COMPENSATION, DEPARTMENT OF  LABOR AND WORKFORCE DEVELOPMENT                                                                    
(via  teleconference),   responded  to   Co-Chair  Johnson's                                                                    
question. He  relayed that  over $4  million had  been swept                                                                    
from  the  Benefit  Guarantee Fund  over  the  past  several                                                                    
years,  which had  greatly impacted  the state's  ability to                                                                    
pay  ongoing  indemnity  and  medical  benefits  to  injured                                                                    
employees and  medical providers. The department  was asking                                                                    
the  legislature   to  protect   the  funds  as   they  were                                                                    
completely made  up of settlements or  fines where employers                                                                    
had been  through the hearing  process and settled  with the                                                                    
state  for   failing  to   cover  employees   with  workers'                                                                    
compensation insurance. He noted  it reflected a minority of                                                                    
the  employers  in  Alaska; over  99  percent  of  employers                                                                    
continued to provide coverage  for their employees. However,                                                                    
those few  employers [without coverage for  their employees]                                                                    
sometimes  had  some egregious  injuries  and  had cost  the                                                                    
employee the ability to take  care of themselves. There were                                                                    
currently  several individuals  who  would  likely never  be                                                                    
able to  work again.  He elaborated that  the injury  was to                                                                    
the  extent  an  individual  was paralyzed  or  had  lost  a                                                                    
portion of  their body and  they were  no longer able  to do                                                                    
the job and in some cases any job.                                                                                              
                                                                                                                                
Mr. Collins relayed that the  department had recommended the                                                                    
bill because  the Alaska  Workers' Compensation  Board voted                                                                    
unanimously to  send a resolution requesting  the protection                                                                    
of  the fund  (copy on  file). The  fund was  established in                                                                    
2005 and it took over a  decade to achieve a decent balance,                                                                    
knowing  that occasionally  there would  be a  claim in  the                                                                    
millions of  dollars. Unfortunately,  after the  first sweep                                                                    
event, the  state had been  ordered by the supreme  court to                                                                    
pay a  claim of about  $1.1 million. The combination  of the                                                                    
two things  had greatly emptied  the fund. Since  that time,                                                                    
the state  had struggled every  fiscal year to cover  all of                                                                    
the benefits. In recent years,  the Office of Management and                                                                    
Budget (OMB)  had directed him  to pay the benefits  and pay                                                                    
from the  fund into the  negative and the benefits  would be                                                                    
covered  through reappropriation.  He highlighted  that DLWD                                                                    
had requested $530,000  in the FY 24  supplemental budget to                                                                    
cover  benefits.  He  relayed  that  the  fiscal  note  [OMB                                                                    
component  number  2820]  was zero  because  there  were  no                                                                    
changes to  the management  of the  fund. He  explained that                                                                    
the  fund  was  managed  by staff  within  the  Division  of                                                                    
Workers'  Compensation.  The   department's  goal  with  the                                                                    
legislation was merely to keep the fund from sweep action.                                                                      
                                                                                                                                
9:43:10 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
9:43:50 AM                                                                                                                    
                                                                                                                                
Representative Josephson  noted it  was an issue  his office                                                                    
had been  involved with the  previous term. He  thought that                                                                    
when the  CBR had been created  by the people in  1990, they                                                                    
would  not  have  approved  it  if they  had  known  of  the                                                                    
unintended consequence. He stated  that sweeping the fund so                                                                    
that  it  was  unable  to  meet  its  intended  purpose  was                                                                    
illogical.  He  noted  that  superior  court  Judge  [Josie]                                                                    
Garton wrote an  opinion a couple of years  ago (he believed                                                                    
related  to  power  cost  equalization)  that  said  calling                                                                    
something a separate  fund met the requirements  of the past                                                                    
supreme court decision  Hickel v Cowper. He  stated that the                                                                    
bill  before the  committee  was  one of  the  cures and  he                                                                    
applauded  the senator  for bringing  the  bill forward.  He                                                                    
stated  that the  legislature used  to routinely  repopulate                                                                    
funds; however, around 2020 it  stopped and had become a new                                                                    
weapon  that  had  never  been   used  before  to  deny  the                                                                    
repopulation of funds. He supported the bill.                                                                                   
                                                                                                                                
Representative  Hannan  observed  that  when  the  fund  was                                                                    
established one of the primary  funding mechanisms was civil                                                                    
penalty   assessments  against   uninsured  employers.   She                                                                    
referenced a packet  of information from DLWD  and looked at                                                                    
page  2 showing  revenue  including  supplemental funds  and                                                                    
investment  profits. She  asked Mr.  Collins how  much money                                                                    
the fund  received annually from civil  penalty assessments.                                                                    
She asked if it was around $750,000.                                                                                            
                                                                                                                                
Mr. Collins answered  that in a typical year  the funds were                                                                    
about $750,000, but the current  year was about $680,000. He                                                                    
noted  the previous  year had  been  a bit  better than  the                                                                    
current  year.  The   amount  generally  fluctuated  between                                                                    
$700,000  and  $750,000.  He  noted  the  division  had  one                                                                    
position tasked  with managing the payment  agreements going                                                                    
forward. He  relayed that  investigators were  constantly on                                                                    
the job.  The department tried  to remind employers  to keep                                                                    
their insurance  up. He stated  it would  be a great  day if                                                                    
all employees  were covered  with workers'  compensation and                                                                    
the guarantee  fund had no purpose.  Unfortunately, that was                                                                    
not the situation.                                                                                                              
                                                                                                                                
Representative  Hannan reasoned  there  must be  a lag  time                                                                    
between the  department becoming  aware an employer  was not                                                                    
paying  the insurance  and action  being taken  to create  a                                                                    
payment plan.  She asked if the  lag time was one  year. She                                                                    
asked if the  department was collecting money  from a year's                                                                    
arrears or longer.                                                                                                              
                                                                                                                                
9:47:25 AM                                                                                                                    
                                                                                                                                
Mr. Collins replied that he  could not say exactly how many,                                                                    
but it  was not  uncommon for the  division to  have payment                                                                    
plans set  up with employers who  did not have the  funds to                                                                    
pay the agreed upon amount. There  could be a fine levied of                                                                    
around $50,000 or more after  going through the formula laid                                                                    
out in  statute. He explained  that the employer may  not be                                                                    
able to  pay that amount.  In that  case the division  did a                                                                    
payment  agreement at  his direction,  which  over the  past                                                                    
four years had  been any amount as long as  the employer was                                                                    
always paying. For example, if  an employer was sending $100                                                                    
per month,  the division was  allowing them to  continue the                                                                    
payment.  In  most  cases  there   was  a  set  amount  that                                                                    
employers were to pay as expeditiously as possible.                                                                             
                                                                                                                                
Representative Hannan underscored the  importance of why the                                                                    
fund needed to  not be sweepable. She stated  that the sweep                                                                    
mechanism  was set  up on  an  annual fiscal  year, yet  the                                                                    
purpose  of the  fund  was  to collect  things  that may  be                                                                    
happening over  multiple fiscal years and  securing funds to                                                                    
be  available  to  meet the  fund's  intended  purpose.  She                                                                    
stated that  if a payment  plan was five years  in duration,                                                                    
yet the  fund was swept  annually, the money  never accrued.                                                                    
She remarked that  it was an important  piece of legislation                                                                    
to get across the finish line in the current session.                                                                           
                                                                                                                                
Senator  Bjorkman thanked  the committee  for questions  and                                                                    
commentary and Mr. Collins for  his diligent work in keeping                                                                    
the effort up.                                                                                                                  
                                                                                                                                
Representative  Stapp   MOVED  to  REPORT  SB   183  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
SB 183 was  REPORTED out of committee with  eleven "do pass"                                                                    
recommendations  and  with  one  previously  published  zero                                                                    
note: FN1 (LFW).                                                                                                                
                                                                                                                                
Co-Chair Foster thanked the senator and his staff.                                                                              
                                                                                                                                
Co-Chair Foster  noted that  the 10:00  am meeting  would be                                                                    
delayed.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
9:51:18 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:51 a.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 275 Public Testimony Rec'd by 051424.pdf HFIN 5/14/2024 9:00:00 AM
HB 275
SB151 Public Testimony Rec'd by 051424.pdf HFIN 5/14/2024 9:00:00 AM
SB 151