Legislature(2021 - 2022)BARNES 124
03/03/2021 05:45 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB36 | |
| HB30 | |
| Board of Pharmacy | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 36 | TELECONFERENCED | |
| *+ | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 3, 2021
6:03 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair (via teleconference)
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage (via teleconference)
Representative Liz Snyder (via teleconference)
Representative David Nelson (via teleconference)
Representative James Kaufman
Representative Ken McCarty
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 36
"An Act relating to an application for a license to operate as a
dealer in motor vehicles; and requiring a dealer in motor
vehicles to maintain liability and property insurance."
- HEARD & HELD
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."
- HEARD & HELD
CONFIRMATION HEARING(S):
Board of Dental Examiners
Kelly Lucas - Dillingham
- HEARD AND HELD
Board of Massage Therapists
Julie Endle - Palmer
- HEARD AND HELD
Board of Nursing
Catherine Hample - Wasilla
- HEARD AND HELD
Board of Pharmacy
James Hendersen - Soldotna
Tammy Lindemuth - Anchorage
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 36
SHORT TITLE: MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE
SPONSOR(s): REPRESENTATIVE(s) CLAMAN
02/18/21 (H) PREFILE RELEASED 1/8/21
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) L&C, FIN
03/03/21 (H) L&C AT 5:45 PM BARNES 124
BILL: HB 30
SHORT TITLE: WORKERS' COMP: DEATH; PERM PARTIAL IMPAIR
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
02/18/21 (H) PREFILE RELEASED 1/8/21
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) L&C, FIN
03/03/21 (H) L&C AT 5:45 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE MATT CLAMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 36.
SOPHIE JONAS, Staff
Representative Matt Claman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for HB 36
on behalf of Representative Claman, prime sponsor.
JEFFERY SCHMITZ, Director
Division of Motor Vehicles
Department of Administration
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
36.
MARCUS WAEHLER
Alaska Automotive Dealer Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 36.
MARTIN MARTINSEN, Owner
Continental Auto Group
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 36.
STEVE ALLWINE, Owner
Mendenhall Auto
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 36.
REPRESENTATIVE ANDY JOSEPHSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 30..
ELISE SORUM-BIRK, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 30 via a PowerPoint
presentation on behalf of Representative Josephson, prime
sponsor.
CHARLES COLLINS, Director
Division of Workers' Compensation
Department of Labor and Workforce Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
30.
KELLY LUCAS, Appointee
Board of Dental Examiners
Dillingham, Alaska
POSITION STATEMENT: Spoke as an appointee to the Board of
Dental Examiners.
JULIE ENDLE, Appointee
Board of Massage Therapists
Palmer, Alaska
POSITION STATEMENT: Spoke as an appointee to the Board of
Massage Therapists.
CATHERINE HAMPLE, Appointee
Board of Nursing
Wasilla, Alaska
POSITION STATEMENT: Spoke as an appointee to the Board of
Nursing.
JAMES HENDERSON, Appointee
Board of Pharmacy
Soldotna, Alaska
POSITION STATEMENT: Spoke as an appointee to the Board of
Pharmacy.
TAMMY LINDEMUTH, Appointee
Board of Pharmacy
Anchorage, Alaska
POSITION STATEMENT: Spoke as an appointee to the Board of
Pharmacy.
ACTION NARRATIVE
6:02:56 PM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 6:02 p.m.
Representatives Spohnholz, McCarty, Snyder (via teleconference),
Schrage (via teleconference), and Nelson (via teleconference)
were present at the call to order (via teleconference).
Representative Kaufman arrived as the meeting was in progress.
HB 36-MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE
6:04:12 PM
CO-CHAIR SPOHNHOLZ announced that the first order of business
would be HOUSE BILL NO. 36, "An Act relating to an application
for a license to operate as a dealer in motor vehicles; and
requiring a dealer in motor vehicles to maintain liability and
property insurance."
6:05:03 PM
REPRESENTATIVE MATT CLAMAN, Alaska State Legislature, as prime
sponsor, presented HB 36. He paraphrased from the Sponsor
Statement[hard copy included in the committee packet], which
read as follows [original punctuation provided]:
The purpose of House Bill 36 is to improve consumer
protections for those purchasing motor vehicles by
strengthening the requirements for motor vehicle
dealers. Under current law, a motor vehicle dealer in
Alaska must register biennially by filling out an
application that requires an address, but not a valid
telephone number. The application must be accompanied
by a $50 registration fee and a surety bond of
$50,000. There is no current requirement that dealers
carry liability insurance even though Alaska requires
drivers to have liability insurance for their
vehiclesand dealers may allow uninsured drivers to
take dealer-owned cards for a test drive.
Alaska's current statutory requirements for motor
vehicle dealers are some of the least stringent in the
country. By way of comparison, here are the
requirements for an automobile dealership application
to be valid in other states:
Oregon Chapter 822 of Oregon State Statutes
provides for civil penalties for acting as a
vehicle dealer without a certificate (.005-.009), the
processes of applying for, and maintaining, an
automobile dealer license and related exemptions,
requirements, and privileges (.025-.042), grounds for
revocation, suspension, or cancellation of the
dealership certificate (.050), and further definition
of illegal practices and associated penalties (.055-
.080).
? Delaware Title 21, Chapter 63 of the Delaware
State Statutes provides for proof-of location
requirements and recordkeeping (? 6303), license
expiration and renewal procedures (? 6304), retainment
of bill of sale records for a period of at least five
years (?6305), in addition to grounds for revocation
of dealer licenses (? 6313);
? Texas Title 14, Subtitle A, Chapter 2301 of
the state's Occupations Code provides for public
interest information and complaint procedures
(Subchapter E), licensing requirements (Subchapter F),
license expiration and renewal (Subchapter G), dealer
operations (Subchapter H), grounds for license
revocation (Subchapter N), as well as procedures for
complaint hearings, judicial review, and penalties
(Subchapters O, P, and Q).
Comparatively speaking, Alaska Statutes Title 8,
Chapter 66 addresses the application form (.040) and
registration renewal (.050); sets the minimum bond
amount (.060), defines allowable action on bonds and
defines failure to file a bond as a class A
misdemeanor (.070, .080); and holds the dealer
responsible for maintaining a record of each motor
vehicle transaction (.320). Unlike Texas, Oregon, and
Delaware, there are no statutes explicitly providing
for a grievance process nor grounds for revocation of
the license in question.
HB 36 aims to strengthen consumer protection by
addressing two scenarios that may create problems for
both consumers and dealers:
HB 36 seeks to provide better protection when one
selling dealer sells multiple vehicles to a buying
dealer and receives payment without providing titles
(the titles are being held by the bank that provides a
credit line for purchasing vehicles). The selling
dealer plans to pay for the vehicles and get the
titles, but runs into financial difficulties and is
unable to continue making payments. When this happens,
the bank repossesses the vehicles from the buying
dealer. The buying dealer has now lost the money and
decides to seek recompense from the selling dealer's
bond. At present, the bond requirement under state law
is $50,000, which, depending on the type and quantity
of vehicles, may be only a fraction of what is owed.
Raising the bond amount will help protect the buying
dealer in the event that the bank repossesses their
new stock.
Another scenario that this bill addresses is
"curbstoning," which is the act of selling used
vehicles under the false pretense of being the car's
owner in order to evade regulations that are imposed
on state-licensed automobile dealers. When a dealer
obtains a license, they are qualified to purchase cars
at "dealer only" auctions at steep discounts. In these
scenarios, the dealer is not required to disclose the
fact that they are a licensed car dealer or that the
vehicle has a reconstructed title or has known
defects. If deemed a personal vehicle, the vehicle is
not subject to a routine safety inspection. Often, the
title is not placed in the dealer's name, the contact
information provided is not the dealer's information,
or the transaction takes place in cash, leaving little
paper trail for the consumer to follow if issues
arise. Requiring a verified working telephone number
increases the consumer's ability to locate the dealer.
HB 36 would help protect against these two scenarios
by requiring that those registering as motor vehicle
dealers include more detailed information about their
business in the application, register a bond for
$100,000 instead of $50,000, and maintain liability
insurance that covers collisions with dealer-owned
cars.
6:08:37 PM
SOPHIE JONAS, Staff, Representative Matt Claman, Alaska State
Legislature, offered the Sectional Analysis to HB 36 [hard copy
included in the committee packet] on behalf of Representative
Claman, prime sponsor. The Sectional Analysis read as follows
[original punctuation provided]:
Section 1
AS 08.66.030. Form of application.
Adds the following requirements to dealer registration
applications:
? a valid telephone number for the business;
? a statement that no person holding a five percent or
greater interest in the business has been convicted of
a felony involving fraud, embezzlement, or
misappropriation of property within five years
preceding the date of application;
? a statement acknowledging that the applicant has
reviewed the requirements for workers'
compensation insurance and will maintain workers'
compensation insurance under AS
23.30, if applicable; and
a copy of the liability insurance policy in
compliance with section 3 of this bill.
Section 2
AS 08.66.060. Bond.
Raises the amount of the bond required for dealer
registration applicants from $50,000 to $100,000.
Section 3
AS 08.66.085. Insurance requirements.
Adds a new section to AS 08.66 that requires dealers
maintain public liability and property damage
insurance of not less than $50,000 for property
damage, $100,000 for injury to a single person, and
$200,000 for injury, including death, to more than one
person.
MS. JONAS concluded by inviting questions from the committee.
6:10:24 PM
REPRESENTATIVE MCCARTY posed a question to Representative Claman
about how the bill would impact private individuals who are
selling their personal cars or have several cars that they are
selling over a period of time. He asked for clarification on
the bill's purpose.
REPRESENTATIVE CLAMAN responded that the bill would have no
impact on individuals making private sales.
REPRESENTATIVE MCCARTY directed attention to language on page 2,
line 7 of the bill, which read as follows:
(8) a statement that the applicant has reviewed the
workers' compensation insurance requirements of AS
23.31 and will maintain applicable workers'
compensation insurance as required under AS 23.30;
REPRESENTATIVE MCCARTY asked for clarification.
REPRESENTATIVE CLAMAN explained that since some people are not
aware of the requirement to provide workers' compensation, this
language would protect employees and ensure that smaller car
dealers are aware of that law [by requiring a statement signed
to that effect].
6:12:31 PM
REPRESENTATIVE SNYDER asked Representative Claman if he could
speak about the motivation behind one of the new requirements
for dealer applications [in Section 1, paragraph (7) of HB 36,
on page 2, lines 3-6], which read as follows:
(7) a statement that no person holding a five percent
or greater interest in the business has, during the
five-year period immediately preceding the date of the
application, been convicted of a felony involving
fraud, embezzlement, or misappropriation of property;
REPRESENTATIVE CLAMAN responded that the interest in this bill
came from motor vehicle dealers. The Motor Dealer Association
came to his office and expressed concerns about people that may
be in the motor dealer business who had recent convictions, and
asked how to best protect consumers. He stated that the goal in
paragraph (7) was to make that limitation as narrow as possible
and to ensure that the convictions were specifically related to
crimes relevant to the auto business, such as fraud and
financial crimes, that took place in the past five years. He
and his staff thought that five years would be a reasonable
amount of time to allow someone to get back into the business.
6:14:11 PM
REPRESENTATIVE NELSON asked about the prevalence of curb-
stoning.
REPRESENTATIVE CLAMAN shared that two of the invited testifiers
are car dealers and that these testifiers will be able to
address that question better, but that he knows that it goes on.
Some consumers buy vehicles online and do not realize that they
are purchasing from a dealer, he added.
REPRESENTATIVE NELSON asked what the current recourse is to
those people injured by curb-stoning.
REPRESENTATIVE CLAMAN said that there is no recourse if the
consumer doesn't know they are purchasing from a dealer.
REPRESENTATIVE NELSON asked if this would be addressed in the
bill.
REPRESENTATIVE CLAMAN responded that there is a larger statutory
structure that involves requirements for motor vehicle dealers
and requirements for their business, such as inspection
requirements. The bill increases transparency of dealers and
the statute applies to the dealers as well. He added that he
would be happy to meet with Representative Nelson outside of the
meeting to discuss the details of the statutes if Representative
Nelson would like more information.
6:16:43 PM
REPRESENTATIVE MCCARTY asked about felonies and whether
background checks would be mandated for all car business owners.
REPRESENTATIVE CLAMAN answered no, the bill doesn't mandate a
background check. There are a limited group of felonies that
fit the description, he said. If individuals misrepresent
themselves, there are criminal penalties that would apply.
6:17:46 PM
REPRESENTATIVE KAUFMAN mentioned the requirement for dealerships
to provide the name and make of all vehicles handled. He
commented that it might be beneficial to hear from the
testifiers on that topic.
REPRESENTATIVE CLAMAN explained that Representative Kaufman is
referring to line 13, paragraph (4) of Section 1 and deferred
his question to a testifier on the phone, Jeffrey Schmitz.
REPRESENTATIVE KAUFMAN questioned how that information is
provided in common practice and whether complying with it has
ever been a problem.
6:19:53 PM
JEFFERY SCHMITZ, Director, Division of Motor Vehicles,
Department of Administration, responded that the Division of
Motor Vehicles (DMV) does not monitor this issue.
CO-CHAIR SPOHNHOLZ asked what the practice is for listing the
name and make of all vehicles handled, and whether used vehicles
are handled. She asked how that is done specifically and
whether there is a standard practice.
MR. SCHMITZ responded that this is a required document that is
filled out at the time of application by a person applying for a
dealership license.
6:21:07 PM
REPRESENTATIVE CLAMAN shared his understanding that the
application in question is a short form that is one to two pages
long, and that it strikes him that if he were a used car
salesperson and sold every make and model of car, filling out
that application would require pages and pages of possible cars
that one might sell. He asked how it is filled in today and how
much information is required.
CO-CHAIR SPOHNHOLZ interjected and asked if Mr. Schmitz could
provide a sample of the application form, which might help
inform a future conversation.
MR. SCHMITZ responded yes.
6:22:44 PM
CO-CHAIR SPOHNHOLZ opened invited testimony.
6:22:53 PM
MARCUS WAEHLER, Alaska Automotive Dealer Association, gave some
history of his experience in the automotive industry, which
involved 12 years of purchasing vehicles through auctions,
managing inventories, seeing vehicles through inspections, and
12 subsequent years of working at the helm of a small dealership
in Anchorage, Alaska called Red White & Blue Auto Sales. He
shared that he began to notice some negative changes in the
industry about seven years ago, and brought his concerns to the
Alaska Automotive Dealer Association. He shared his opinion
that Alaska's dealer licensing requirements are the most
deficient in the country. In Alaska, he explained, an
individual can obtain a dealer's license and begin purchasing
through dealer-only auctions by paying a $50 dollar registration
fee and a $500 dollar bond. He added that some unscrupulous
dealers will sell cars in various states of disrepair from these
auctions discreetly on Craigslist without having done any
inspections or disclosure, and there is no recourse for this
activity. The unwitting consumer doesn't know they purchased
from a dealer, and the fraud is complete, he said. He shared
that he goes to these auctions frequently and sees cars that
were at an auction posted on Craigslist "before the sun sets"
that same day as private party sales. He estimated that this
happens thousands of times a year.
MR. WAEHLER concluded with a personal story about a woman who
had visited his dealership recently with a car that she wanted
to trade in. He performed an inspection and looked up the
information about the vehicle using an application ("app") on
his phone by using the vehicle identification number (VIN) and
found that the woman had purchased the vehicle on Craigslist
from a private seller for $6,500 dollars. He continued that she
had only had the vehicle for a few weeks and it had a value of
about $2,000 by the time she brought it to him. A further
inspection illuminated him to the fact that the oil pressure
light in the engine had been removed, and according to the
information he retrieved using the app on his phone, this light
had been on when the car went through auction. He shared that
this woman was 86 years old, and that this is a regular
occurrence.
6:27:29 PM
REPRESENTATIVE KAUFMAN directed attention to the statement
provided to the committee from the Alaska Automobile Dealer
Association, which mentions "no disclosure of reconstructed
title, no disclosure of known defects," and he asked about the
process of a vehicle getting a reconstructed title. If a
vehicle is wrecked, totaled, and sold, he asked if that process
puts a "salvage" indication on the title.
MR. WAEHLER responded that yes, an indication is added to the
title, however there is often a delay in the processing time.
He explained that one of the ways that this can happen is that
the status of the title hasn't been changed from clean to
reconstructed, or that the title is not readily available and
the unwitting consumer doesn't even know to check for that
information. He gave an example of a couple who came to him
with a vehicle they bought at full retail price with a clean
title, which had been financed by a bank. When the couple got
the title back, he continued, they discovered that the title and
the vehicle were both reconstructed. The couple purchased the
vehicle from a dealer and they had no contact information and no
recourse.
6:29:39 PM
CO-CHAIR SPOHNHOLZ asked what the process is for changing the
title to reflect that it is reconstructed. She asked who bears
the responsibility for ensuring that that happens.
MR. WAEHLER answered that he thinks the DMV is responsible for
that, but he is not sure of the exact process.
6:30:37 PM
CO-CHAIR SPOHNHOLZ posed the same question to Mr. Schmitz.
MR. SCHMITZ responded that the DMV is informed through a number
of means about the status of the vehicle, for example, the
insurance company could inform the DMV after an accident has
occurred, or a consumer could inform the DMV. He shared that
once a vehicle and a title are branded as "reconstructed," that
brand will remain for the remainder of the life of the vehicle.
CO-CHAIR SPOHNHOLZ asked if someone were to reconstruct a
vehicle and not make the appropriate change in the title, what
the penalty would be for that indiscretion.
MR. SCHMITZ answered that he thinks that falls into the category
of a court case. He said that the seller of the vehicle is
responsible for providing a current title that reflects the
current state of the vehicle. He does not know the legal
implications of failing to disclose that information.
6:32:45 PM
CO-CHAIR SPOHNHOLZ posed the question again to Representative
Claman.
REPRESENTATIVE CLAMAN responded that he doesn't know what the
penalty is for falsifying information. He said he thinks that
there are requirements in the statutes. He shared his
understanding that it is the dealer's responsibility to ensure
that the information on the title is accurate, but that small
dealers are not required to check the title for inaccuracies,
only large ones.
CO-CHAIR SPOHNHOLZ asked if Representative Claman could bring an
answer to that question back to the committee meeting the next
time it hears HB 36.
6:33:56 PM
MR. WAEHLER added that what usually happens when an individual
has a vehicle that has been wrecked but still has a clean title
because a new title has not been processed yet, is the
individual sells the vehicle with the old clean title and there
is no disclosure of the wreckage. When that title gets
transferred into the new owner's name, that is often when the
reconstructed status gets discovered, he said. When this
happens, there is no paper trail that shows that the vehicle has
been reconstructed.
6:35:03 PM
MARTIN MARTINSEN, Owner, Continental Auto Group, said that his
business is in Anchorage, Alaska and he noted that he is a board
member of the Alaska Auto dealer Association. He began by
answering the earlier question about the requirement to provide
the make and model of all cars sold on the dealer application,
and shared that that pertains only to new car franchise
dealers.; it does not pertain to used car dealers. He continued
by talking about how often curbstoning happens, and he agreed
that it happens quite frequently. He said that in fact, former
Alaska Attorney General Ed Sniffen said that curbstoning was one
of the largest complaints that Mr. Sniffen got.
MR. MARTINSEN gave an example of curbstoning in his personal
life in which a friend of his who was interested in buying a
Mazda-3 went to Mr. Martinsen for his opinion on that make and
model. He said that he shared with his friend that Mazda-3 cars
have a great consumer report and are "typically a very good
car." He offered to look up the VIN for his friend in order to
tell him if there were any problems with the car. When he
looked up the car, he discovered that his dealership had just
sold that exact car three day earlier at a dealer's auto
auction. Mr. Martinsen contacted his manager about the car, and
was told by the manager that the car had a bad transmission.
The dealership chose to sell the car at auction instead of
replacing the transmission because it would've been too
expensive, and he continued that both the dealership and the
auction was aware that the car would be sold "as is" and that
there was no warranty for it. An individual purchased this car
from the auction, and it was on Craigslist the next day, he
said. He reiterated that the Office of the Attorney General
receives this complaint repeatedly, and he shared his opinion
that the proposed legislation would help add more requirements
to the process to get rid of these "shady characters" getting
dealer licenses.
6:40:21 PM
REPRESENTATIVE MCCARTY asked how this bill would remedy the
situation that Mr. Martinsen described.
MR. MARTINSEN replied that it would not. He stated that there
was a lot of discussion about the extent of the requirements,
and the restrictiveness that was determined to be appropriate is
what is in the legislation. He shared that there were members
on the board that wanted the requirements to be more stringent
and there were others who felt differently, and the compromise
is what can be seen in the bill.
REPRESENTATIVE MCCARTY asked if car dealers currently have
liability insurance.
MR. MARTINSEN responded that no, they do not have to have
liability insurance. He commented that Continental Auto Group
has insurance in order to be a franchise dealer, but that would
be one of the additional requirements.
REPRESENTATIVE MCCARTY asked for clarity as to whether mandating
liability insurance would be the remedy.
MR. MARTINSEN responded yes, absolutely. He added that
curbstoning is fraud but it's very difficult to prove it has
occurred. The individuals committing this fraud are able to buy
a car from Craigslist and sign it over to a new unsuspecting
buyer without leaving a paper trail.
6:43:13 PM
STEVE ALLWINE, Owner, Mendenhall Auto, Member of Alaska
Automobile Association, Board member of the Alaska Auto Dealer
Association, commented that the object of the legislation is not
to preclude people from the auto dealer industry, it is to make
the requirements more stringent to discourage the individuals
committing fraud from being able to enter the industry. He
opined that HB 36 is a positive step in the right direction, but
it would not fix everything.
[HB 36 was held over.]
HB 30-WORKERS' COMP: DEATH; PERM PARTIAL IMPAIR
6:44:37 PM
CO-CHAIR SPOHNHOLZ announced that the next order of business
would be 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."
6:44:45 PM
REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, as
prime sponsor, presented HB 30. He stated that the proposed
bill is fairly straightforward. He shared that the catalyst for
the bill originally was his learning about a young woman who had
died in an electrical accident, and since she did not have a
spouse or have children, there was no one to sue on her behalf.
He explained that there was no workers' compensation remedy
under title AS 23. This situation made him interested in
worker's compensation and researching AS 23. He shared that
when he began investigating this seven or eight years ago, he
discovered that Alaska's permanent partial impairment rating had
not been updated since the year 2000, and it still has not been
updated to this day. He explained that a permanent partial
impairment rating refers to situations in which a person lives
through an injury, but has a permanent disability rating due to
a body part no longer functioning properly because of permanent
injuries sustained from the accident.
REPRESENTATIVE JOSEPHSON continued by sharing the formula for
what he referred to as the "whole body number" which is
multiplied by the percentage of disability. He cited Section 2
of HB 30 on page 2:
* Sec. 2. AS 23.30.190(a) is amended to read:
(a) In case of impairment partial in
character but permanent in quality, and not resulting
in permanent total disability, the compensation is
$273,000 [$177,000]multiplied by the employee's
percentage of permanent impairment of the whole
person. The percentage of permanent impairment of the
whole person is the percentage of impairment to the
particular body part, system, or function converted to
the percentage of impairment to the whole person as
provided under (b) of this section. The compensation
is payable in a single lump sum, except as otherwise
provided in AS 23.30.041, but the compensation may not
be discounted for any present value considerations.
REPRESENTATIVE JOSEPHSON shared that the impact of amending this
legislation is that Alaska would move from "something like the
forty-fifth [most generous] state" in terms of workers'
compensation, with only four states less generous than Alaska,
"to the middle of the pack." He reiterated that the key
component of the bill is to update permanent partial impairment.
6:48:07 PM
REPRESENTATIVE JOSEPHSON explained that he had originally
proposed a death benefit to be included in the bill for
individuals such as the previously mentioned woman who died
childless and without a spouse; however, that addition was met
with objection during the drafting of the bill and was removed.
He emphasized that the bill in its current state is "almost
strictly" an inflation adjustment that updates various numbers
in workers' compensation law. He noted that he said "almost
strictly" because the bill also creates notice requirements for
death benefits and also for the process of getting grievance
counseling.
REPRESENTATIVE JOSEPHSON continued that the theory behind the
bill is the following: if an unmarried and childless 18-year-
old person died on a construction worksite, the person's parents
would have no remedy to the individual's death because they
couldn't sue in personal injury. He shared his thought process
that the employer should notify their employees that workers'
compensation will not provide anything in the case of the
employees' death, and that the employees should get life
insurance to be fully covered.
REPRESENTATIVE JOSEPHSON directed attention to page 3 of HB 30
and shared that the bill would update funeral costs from $10,000
to $12,000. It would also update an amendment that was last
adjusted in 1968 by increasing compensation for individuals that
were dependent upon a deceased individual, but do not qualify as
direct descendants, from $20,000 to $150,000.
6:50:25 PM
REPRESENTATIVE JOSEPHSON then directed attention to Section 5 of
the bill. He said currently when a parent dies and leaves a
child with no other parent providing for the child, under law,
the child would receive workers' compensation benefits though
age 19 and then would get benefits for another four years if
attending vocational school or college. Under Section 5, that
benefit would extend to individuals who might be in the military
instead of vocational school or college. He added that the bill
has two fiscal notes, which net out to around $270,000 as a cost
to the state.
REPRESENTATIVE JOSEPHSON concluded that his office received a
letter from the Alaska Municipal League (AML) in opposition to
the bill; however, he noted that the last paragraph of the
letter states that the key feature of the bill, the permanent
partial impairment rating, should be changed. Not only that, he
added, but the letter states that the rating should be inflation
proof, which is a suggestion that is more extensive than what is
being proposed under HB 30.
6:53:14 PM
ELISE SORUM-BIRK, Staff, Representative Andy Josephson, Alaska
State Legislature, offered a PowerPoint presentation on HB 30 on
behalf of Representative Josephson, prime sponsor. She began on
slide 2 of her presentation, "Four Major Goals," and listed the
goals, which read as follows [original punctuation provided]:
• To adjust Permanent Partial Impairment (PPI)
rates for inflation
• To adjust rates for funeral expenses and death
benefits for inflation
• To ensure that workers are made aware of the
disparity in benefits for single and childless
workers
• to clarify the law relating to benefit payments
for orphan children after age 19
MS. SORUM-BIRK proceeded to slide 3, "Permanent Partial
Impairment (PPI) rates have not been adjusted for inflation
since 2000," and reiterated that PPI is based on percentage of
the whole body. She summarized the slide and explained that the
method of calculating PPI was established in 1988 and has only
been updated once since then in the year 2000. She shared that
HB 30 adjusts the $177,000 PPI rate established in 2000 to
$273,000 to account for inflation.
6:55:49 PM
MS. SORUM-BIRK continued to slide 4, "'How much is a limb worth
-ProPublica,'" which included a graphic from a report done by
ProPublica showing the comparison of how much a limb is worth in
Alaska compared to the national average based off PPI rates.
She shared that the graphic is customizable and committee
members can go to the website to see how Alaska compares to
other states.
MS. SORUM-BIRK moved on to slide 5, "The death benefit paid to
non-child dependents has not been adjusted in over 50 years,"
and said that other than PPI rates, the bill would also update
some death benefit rates. She summarized the slide, which read
as follows [original punctuation provided]:
• Under AS 23.20.215(a)(4) the death benefit paid to a
dependent father, mother, grandchild, brother or
sister is a maximum of only $20,000
• This amount was set in 1968
• HB 30 amends this statute to adjust for inflation and
sets new amount at $150,000
MS. SORUM-BIRK advanced to slide 6, "Lump sum amounts for
funeral expenses and one-time payments to widow or widower are
updated," and explained that there are two more updated dollar
amounts outlined in Section 4 of the bill, which are lump sum
amounts for funeral expenses and one-time payments to a widow or
widower of the deceased. She gave examples from the slide,
which read as follows [original punctuation provided]:
• Under AS 23.30.215(a)(1) the cap amount for
funeral expenses is set at a maximum of $10,000
- HB 30 sets new amount at $12,000
• Under AS 23.30.215(a)(5) the lump sum amount
given to a widow/widower (or child if no
surviving spouse) expenses is set at $5,000
- HB 30 adjusts this amount to $8,000
• The current rates for both benefits were
established in 2000.
MS. SORUM-BIRK continued to slide 7, "Definition of 'child,'"
and shared that a child is defined differently for workers'
compensation purposes. She read the definition from the slide,
which read as follows [original punctuation provided]:
• AS 23.30.395(8) includes
• "persons who are under 19"
• "persons who, though 19 years of age or over, are
wholly dependent upon the deceased employees and
incapable of self-support by reason of mental or
physical disability"
• "persons of any age while they are attending the
first four years of vocational school, trade
school, or college"
• "persons of any age while attending high school"
• HB 30 creates a new subsection AS
23.30.215(j)that extends the payment for
"dependent children" (whose single parent died at
work) to age 23 across the board.
6:59:42 PM
MS. SORUM-BIRK proceeded to slide 8, "The Elevator Paradigm,"
and explained that it shows how few benefits a single and
childless worker would receive compared to their married
counterpart with children. The slide read as follows [original
punctuation provided]:
What damages do they receive?
Customer-
• Economic damages
• Non-economic damages
• Pain and Suffering
• Loss of Consortium
• Punitive
• Up to $1.5 million
Single childless worker -
• Funeral Expenses
MS. SORUM-BIRK moved on to slide 9, "The parent or estate of a
single worker with no dependents who dies on the job has no
remedy," and shared that Section 1 of HB 30 addresses providing
notice to employees about the available death benefits and how
those benefits differ for single childless workers. She
emphasized the importance of single childless workers being made
aware of the difference in benefits. The slide read as follows
[original punctuation provided]:
• Under current law single workers without
dependents are the only class of worker who
receives only funeral expenses
• Parents cannot collect worker's compensation
• HB 30 does not add a new benefit for this class
of workers like previous iterations of this
legislation have
• HB 30 adds a new section AS 23.10.435 to provide
all employees with notice of a death benefits and
to make them aware of the lack of benefits for
single workers without dependents
7:01:51 PM
REPRESENTATIVE MCCARTY asked what the increases in workers'
compensation have been over the years.
REPRESENTATIVE JOSEPHSON interjected that he believes workers'
compensation has decreased, not increased.
7:02:43 PM
MS. SORUM-BIRK responded that between 2004 and 2017 there was a
27 percent decline in the amount spent by businesses on workers'
compensation related to total wages paid. Comparatively,
indemnity benefits decreased from $0.65 to $0.38 per $100 spent
on wages between 2004 and 2017. Overall, indemnity benefits
shrunk by 40.8 percent during that time period.
7:03:51 PM
CO-CHAIR FIELDS added that workers' compensation rates have
decreased by more than 50 percent in the last four years, which
has been driven by a decline in on-the-job injuries. He shared
that Alaska is now tenth in the nation whereas a few years ago,
Alaska was first.
7:04:20 PM
REPRESENTATIVE KAUFMAN stated that he just performed an online
search and shared that the search shows Alaska as having the
highest workers' compensation rate.
CO-CHAIR SPOHNHOLZ asked for his source.
REPRESENTATIVE KAUFMAN said that the website he found,
"howmuch.com, understanding money," used the workers'
compensation information sourced from the National Academy of
Social Insurance in 2017.
7:05:40 PM
CO-CHAIR FIELDS shared that the number Representative Kaufman
found was correct years ago but is not correct anymore. He said
that he would be happy to follow up on this and get
Representative Kaufman the correct figures.
7:05:58 PM
REPRESENTATIVE JOSEPHSON explained that part of what
Representative Kaufman may be referring to is the high cost of
medical care. He said that HB 30 does not concern the cost of
health care, it concerns situations of death. Some of the
factors that contribute to the higher costs of workers'
compensation in Alaska wouldn't apply in this situation, he
explained. He added that this bill should cost the state some
money since the purpose of it is to increase the amount of money
paid to people who are permanently disabled. He continued with
an example, sharing that if a person in Alaska lost an index
finger while working, the person would only get about $5,000 in
compensation. If an individual were to lose an arm in Nevada,
that person would get $800,000, while in Alaska the benefit is
just over $100,000. The median in the country for a lost arm is
$170,000, he said. He reiterated that the intended purpose is
to address permanent disability or death.
7:08:06 PM
CO-CHAIR SOHNHOLZ thanked Representative Josephson for the
important clarification.
7:08:36 PM
REPRESENTATIVE NELSON asked what the impact to premiums would be
for workers' compensation.
MS. SORUM-BIRK responded that that information is included in
the fiscal note from the Department of Labor & Workforce
Development that is in the packets that members received.
7:09:34 PM
CHARLES COLLINS, Director, Division of Workers' Compensation,
shared that the National Council of Commercial Insurance (NCCI)
- the actuarial for the State of Alaska - did a workup on HB 30
and found that rates would increase by 2.9 percent if the bill
were implemented January 1, 2022. He noted that on January 1,
2021, insurance rates had been lowered for the eighth year in a
row by 14 percent.
7:10:59 PM
CO-CHAIR SPOHNHOLZ announced HB 30 was held over.
^CONFIRMATION HEARING(S):
CONFIRMATION HEARING(S):
^Board of Dental Examiners
Board of Dental Examiners
^Board of Massage Therapists
Board of Massage Therapists
^Board of Nursing
Board of Nursing
^Board of Pharmacy
Board of Pharmacy
7:11:46 PM
CO-CHAIR SPOHNHOLZ announced that the final order of business
would be confirmation hearings for the governor's appointees to
the various boards.
7:12:11 PM
KELLY LUCAS, Appointee, Board of Dental Examiners, shared that
he has been a dentist in Alaska for 35 years, has served as a
public health service officer, has served as a dental officer in
the Army National Guard, and has served in private practices.
He has served on the island of Saint Paul, Alaska and in Naknek,
Alaska in collaboration with those cities and boroughs, and
currently has private practices in Anchorage, Naknek, and
Dillingham. He stated that he thinks that his broad experience
in these "mini dental walks of life" brings perspective. He has
served on the board for two years and he shared that he plans to
serve another four with the legislature's support.
7:13:54 PM
CO-CHAIR SPOHNHOLZ opened public testimony on the confirmation
hearing of Kelly Lucas, appointee to the Board of Dental
Examiners. After ascertaining that there was no one who wished
to testify, she closed public testimony.
7:14:11 PM
JULIE ENDLE, Appointee, Board of Massage Therapists, shared that
she is currently serving as a public board member on the Board
of Massage. She said that she is adept at noticing details and
scrutinizes every line when the board receives an application.
She stated that she has been serving for a couple of years, she
is excited to learn more, and she considers the opportunity an
honor.
7:15:38 PM
REPRESENTATIVE MCCARTY asked how many years Ms. Endle has served
and how many more years the appointment would allow.
MS. ENDLE said that she has served for two years and believes
that the appointment is for another two years.
7:16:19 PM
CO-CHAIR SPOHNHOLZ asked what Ms. Endle's interest is in the
board.
MS. ENDLE responded that she loves massage and that when she was
asked if she would be interested in serving on a board, the
Board of Massage was one of the available options. She's
learned that the position is a lot more demanding than she
originally expected, and she has learned more about massage
itself. She shared that she is excited to continue learning
more. She added that it was pointed out that the board was
created for [regulation] of human trafficking and sex
trafficking and she believes that the board has been able to
thwart applications of traffickers attempting to come to Alaska
to get licensed here.
CO-CHAIR SPOHNHOLZ asked about the change in regulations
relating to licensure for massage therapists which would require
additional licensure for every practice where a massage
therapist works. She asked what the rationale was for making
that change.
MS. ENDLE questioned if this regulatory change had occurred
before she joined the board. She shared her understanding that
in order to practice massage therapy, one must be licensed.
7:20:16 PM
REPRESENTATIVE MCCARTY said that this regulatory change is
currently being considered. This would include a rate increase
to $300 per site at which a massage therapist practices. He
asked if she had any information about that regulatory change.
MS. ENDLE responded that "per site" applies to establishments,
and that the board requires that the board be notified when
there is an establishment with a new license.
REPRESENTATIVE MCCARTY asked whether a massage therapist who
worked at a chiropractic office one day a week and an athletic
club on another would have to pay the $300 fee or whether each
establishment would have to pay the $300 fee.
MS. ENDLE clarified that the establishment pays the $300. The
licensed massage therapists do not have to pay the fee if they
work in different establishments.
REPRESENTATIVE MCCARTY asked if the fee is per massage therapist
or per establishment.
MS. ENDLE responded that the fee is per establishment. If, for
example, she were to open up a spa and employ ten massage
therapists, she would pay $300 total, she said.
7:23:19 PM
CO-CHAIR FIELDS expressed his appreciation to Ms. Endle and the
other board members for their work on human trafficking.
CO-CHAIR SPOHNHOLZ echoed Co-Chair Fields' sentiment.
7:23:42 PM
CO-CHAIR SPOHNHOLZ opened public testimony for the confirmation
hearing of Julie Endle, appointee to the Board of Massage
Therapists. After ascertaining that there was no one who wished
to testify, she closed public testimony.
7:24:06 PM
CATHERINE HAMPLE, Appointee, Board of Nursing, shared that she
is a registered nurse and has been in nursing for 46 years. She
started in entry-level positions and got her bachelor's degree,
completed three master's degrees, and worked on her doctorate
degree. She shared that she likes supporting nurses and
ensuring that they are practicing safely.
CO-CHAIR SPOHNHOLZ asked why Ms. Hample is interested in serving
on the board.
MS. HAMPLE responded that she wants to ensure that safe care is
delivered to Alaskans and that students get the necessary
education when they go through the nursing programs.
CO-CHAIR SPOHNHOLZ noted that Ms. Hample is an adjunct professor
for the School of Nursing at the University of Alaska and asked
what she teaches.
MS. HAMPLE replied that she was, but is now teaching at Charter
College. She said she teaches topics such as pharmacy, bedside
nursing, critical care, and medical surgery.
CO-CHAIR SPOHNOLZ asked if Ms. Hample was doctor.
MS. HAMPLE responded in the affirmative.
CO-CHAIR SPOHNHOLZ referred to Dr. Hample as such, and stated
that she tries to recognize people's education when possible.
7:25:50 PM
REPRESENTATIVE MCCARTY asked Ms. Hample to share any concerns
she may have regarding the board.
MS. HAMPLE responded that she thinks the board is doing really
well but needs an executive director. The search has begun for
candidates for that position, and she explained that other board
members are currently performing the duties of the executive
director in the meantime.
7:26:55 PM
CO-CHAIR SPOHNHOLZ opened public testimony on the confirmation
hearing of Catherine Hample, appointee to the Board of Nursing.
After ascertaining that there was no one who wished to testify,
she closed public testimony.
7:27:17 PM
JAMES HENDERSON, Appointee, Board of Pharmacy, said that he is a
working pharmacist and graduated from pharmacy school in 1995.
He worked for a pharmacy in Soldotna, Alaska, for a number of
years and then purchased a pharmacy in Soldotna that serves the
Kenai Peninsula which he runs to this day. He shared that he's
been on the board for the past few years and wants to be able to
continue to serve on the board and keep the people of Alaska
safe and do his civic duty.
7:28:45 PM
REPRESENTATIVE MCCARTY asked if Mr. Henderson could share some
concerns he has regarding pharmacy and distribution of
medication.
MR. HENDERSON explained that some of the things the board has
been working on are the controlled substance issue and opioid
abuse. He shared that they have been adjusting to the impact of
COVID-19 and that they are working on making it possible for
technicians to administer vaccines, including the COVID-19
vaccines.
7:30:15 PM
CO-CHAIR SPOHNHOLZ opened public testimony on the confirmation
hearing for James Henderson, appointee to the Board of Pharmacy.
After ascertaining that there was no one who wished to testify,
she closed public testimony.
7:30:57 PM
TAMMY LINDEMUTH, Appointee, Board of Pharmacy, explained that
she has served on a public seat for three years on the Board of
Pharmacy and that this is a renomination for another four years.
She said that she has a science degree and has worked as a
medical language specialist in various fields for the past 25
years. It's been "a treat" to be able to help out in the
medical field in this capacity, she said. Some of her duties
have included helping out with the opioid epidemic, being the
chair of the Controlled Substance Advisory Committee, and
learning what Alaska is doing in order to make the state
healthier and safer.
7:32:21 PM
CO-CHAIR SPOHNHOLZ asked Ms. Lindemuth what motivated her to
serve on the board.
MS. LINDEMUTH said she wanted to help out and make a difference.
She said it brings her a sense of purpose to feel like she is
helping in the opioid epidemic.
CO-CHAIR SPOHNHOLZ agreed that the board has done important work
particularly on the prescription monitoring program and that she
is appreciative of the work and progress they have been able to
make.
7:33:15 PM
CO-CHAIR SPOHNHOLZ opened public testimony on the confirmation
hearing of Tammy Lindemuth, appointee to the Board of Pharmacy.
After ascertaining that there was no one who wished to testify,
she closed public testimony.
7:33:32 PM
CO-CHAIR SPOHNHOLZ clarified that Ms. Hample had completed her
studies in pursuing a doctorate in nursing but has not yet
completed her dissertation, and is therefore not officially a
doctor at this time.
[The confirmations of Catherine Hample, appointee to the Board
of Nursing, Kelly Lucas, appointee to the Board of Dental
Examiners; Julie Endle, appointee to the Board of Massage
Therapists; and James Henderson and Tammy Lindemuth, appointees
to the Board of Pharmacy, were treated as held over.]
7:34:52 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
7:35 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Tammy Lindemuth Board Application.pdf |
HL&C 3/3/2021 5:45:00 PM |
HL&C Confirmations 2021 |
| James Henderson Board Application.pdf |
HL&C 3/3/2021 5:45:00 PM |
HL&C Confirmations 2021 |
| Catherine Hample resume.pdf |
HL&C 3/3/2021 5:45:00 PM |
HL&C CONFIRMATIONS 2021 |
| Julie Endle Board Application.pdf |
HL&C 3/3/2021 5:45:00 PM |
HL&C CONFIRMATIONS 2021 |
| Kelly Lucas Board Application.pdf |
HL&C 3/3/2021 5:45:00 PM |
HL&C CONFIRMATIONS 2021 |
| HB 36 Sectional Analysis v. A 2.23.2021.pdf |
HL&C 3/3/2021 5:45:00 PM HL&C 3/12/2021 3:15:00 PM |
HB 36 |
| HB 36 Sponsor Statement 2.23.2021.pdf |
HL&C 3/3/2021 5:45:00 PM HL&C 3/12/2021 3:15:00 PM |
HB 36 |
| HB 36 3.2.21.PDF |
HL&C 3/3/2021 5:45:00 PM HL&C 3/12/2021 3:15:00 PM |
HB 36 |
| HB 36 Fiscal Note DOA-DMV 2.26.21.pdf |
HL&C 3/3/2021 5:45:00 PM HL&C 3/12/2021 3:15:00 PM |
HB 36 |
| HB 36 Testimony - Received as of 2.23.2021.pdf |
HL&C 3/3/2021 5:45:00 PM HL&C 3/12/2021 3:15:00 PM |
HB 36 |
| HB 30 Presentation Labor and Commerce 2.23.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB30 version A.PDF |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB30 Sectional Analysis 2.23.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB 30 Fiscal Notes DOLWD-WC 1.21.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB30 Fiscal Note DOA-DRM 2.26.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB 30 Supporting Document- ProPublica Graphic- How Much is a Limb Worth 2.23.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB 30 Supporting Document- ProPublica Graphic- Alaska v National Average 2.23.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB 30 WCRI Death Benefits By State 2.23.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB030 Supporting Document - PPI by State 02.23.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| Letter of Opposition - AMLJIA, 3.3.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB 30 Letter of Support - AFL-CIO 3.3.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |
| HB30 Sponsor Statement 3.3.21.pdf |
HL&C 3/3/2021 5:45:00 PM |
HB 30 |