Legislature(1999 - 2000)

04/19/2000 02:15 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE JUDICIARY COMMITTEE                                                                                        
                    April 19, 2000                                                                                              
                      2:15 p.m.                                                                                                 
MEMBERS PRESENT                                                                                                                 
Senator Robin Taylor, Chairman                                                                                                  
Senator Rick Halford, Vice-Chairman                                                                                             
Senator Dave Donley                                                                                                             
Senator Johnny Ellis                                                                                                            
MEMBERS ABSENT                                                                                                                  
Senator John Torgerson                                                                                                          
COMMITTEE CALENDAR                                                                                                              
Confirmation Hearings:                                                                                                          
     Board of Governors of the Alaska Bar - Anastasia Cook Hoffman                                                              
     Commission on Judicial Conduct - Sharon Nahorney                                                                           
     Alaska Judicial Council - Gigi Pilcher                                                                                     
CS FOR HOUSE BILL NO. 372(FIN) am                                                                                               
"An Act relating to criminal sentencing and restitution."                                                                       
     -MOVED SCS CSHB 372(JUD) OUT OF COMMITTEE                                                                                  
CS FOR HOUSE BILL NO. 392(HES)                                                                                                  
"An Act relating to continuances for temporary custody hearings                                                                 
that follow emergency custody of a child; and amending Rule 10,                                                                 
Alaska Child in Need of Aid Rules."                                                                                             
     -MOVED CSHB 392(HES) OUT OF COMMITTEE                                                                                      
CS FOR HOUSE BILL NO. 294(JUD)                                                                                                  
"An Act relating to violations of an order to submit to                                                                         
deoxyribonucleic acid (DNA) testing, to court orders and conditions                                                             
of parole to collect samples for DNA testing, to removal of                                                                     
material from the DNA identification registration system; and                                                                   
providing for an effective date."                                                                                               
     -MOVED CSHB 294(JUD) OUT OF COMMITTEE                                                                                      
CS FOR HOUSE BILL NO. 419(RLS)                                                                                                  
"An Act relating to the weekly rate of compensation and minimum and                                                             
maximum compensation rates for workers' compensation; specifying                                                                
components of a workers' compensation reemployment plan; adjusting                                                              
workers' compensation benefits for permanent partial impairment,                                                                
for reemployment plans, for rehabilitation benefits, for widows,                                                                
widowers, and orphans, and for funerals; relating to permanent                                                                  
total disability of an employee receiving rehabilitation benefits;                                                              
relating to calculation of gross weekly earnings for workers'                                                                   
compensation benefits for seasonal and temporary workers and for                                                                
workers with overtime or premium pay; setting time limits for                                                                   
requesting a hearing on claims for workers' compensation, for                                                                   
selecting a rehabilitation specialist, and for payment of medical                                                               
bills; relating to termination and to waiver of rehabilitation                                                                  
benefits, obtaining medical releases, and resolving discovery                                                                   
disputes relating to workers' compensation; setting an interest                                                                 
rate for late payments of workers' compensation; providing for                                                                  
updating the workers' compensation medical fee schedule; and                                                                    
providing for an effective date."                                                                                               
     -MOVED SCS CSHB 419(JUD) OUT OF COMMITTEE                                                                                  
CS FOR HOUSE BILL NO. 310(L&C)                                                                                                  
"An Act relating to the Alaska Insurance Guaranty Association."                                                                 
     -MOVED CSHB 310(L&C) OUT OF COMMITTEE                                                                                      
CS FOR HOUSE BILL NO. 368(JUD) am                                                                                               
"An Act relating to release of persons before trial and before                                                                  
sentencing or service of sentence; relating to when service of                                                                  
sentence shall begin; relating to custodians of persons released,                                                               
to security posted on behalf of persons released, and to the                                                                    
offense of violation of conditions of release; and amending Rule                                                                
41(f), Alaska Rules of Criminal Procedure."                                                                                     
     -SCHEDULED BUT NOT HEARD                                                                                                   
CS FOR HOUSE BILL NO. 366(FIN) am                                                                                               
"An Act relating to the rights of crime victims, the crime of                                                                   
violating a protective order or injunction, enforcement of                                                                      
protective orders, mitigating factors in sentencing for an offense,                                                             
and the return of certain seized property to victims; expanding the                                                             
scope of the prohibition of compromise based on civil remedy of                                                                 
misdemeanor crimes involving domestic violence; and amending Rules                                                              
10, 11, 13, 16, and 17, Alaska District Court Rules of Civil                                                                    
Procedure, and Rule 9, Alaska Rules of Administration."                                                                         
     -SCHEDULED BUT NOT HEARD                                                                                                   
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
HB 294 - No previous action to report.                                                                                          
HB 310 - See Labor and Commerce minutes dated 4/13/00.                                                                          
HB 372 - No previous action to report.                                                                                          
HB 392 - No previous action to report.                                                                                          
HB 419 - No previous action to report.                                                                                          
WITNESS REGISTER                                                                                                                
Ms. Sharon Nahorney                                                                                                             
619 East Fifth Avenue                                                                                                           
Anchorage, Alaska 99501                                                                                                         
POSITION STATEMENT: Stood for Confirmation                                                                                      
Ms. Gigi Pilcher                                                                                                                
2749 Third Avenue                                                                                                               
Ketchikan, Alaska 99901                                                                                                         
POSITION STATEMENT: Stood for Confirmation                                                                                      
Ms. Anastasia Cooke Hoffman                                                                                                     
PO Box 2347                                                                                                                     
Bethel, Alaska 99559                                                                                                            
POSITION STATEMENT: Stood for Confirmation                                                                                      
Representative Fred Dyson                                                                                                       
State Capitol Building                                                                                                          
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT: Sponsor of HB 372                                                                                           
Mr. Peter Torkelson                                                                                                             
Staff to Representative Dyson                                                                                                   
State Capitol Building                                                                                                          
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT: Testified on HB 372                                                                                         
Mr. Dean Guaneli                                                                                                                
Assistant Attorney General                                                                                                      
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, Alaska 99811-0300                                                                                                       
POSITION STATEMENT: Testified on HB 372                                                                                         
Ms. Lori Backes                                                                                                                 
Staff to Representative Whitaker                                                                                                
State Capitol Building                                                                                                          
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT: Presented HB 392                                                                                            
Mr. Del Smith, Deputy Commissioner                                                                                              
Department of Public Safety                                                                                                     
PO Box 111200                                                                                                                   
Juneau, Alaska 99811-1200                                                                                                       
POSITION STATEMENT: Supports HB 294                                                                                             
Mr. John McKinnon                                                                                                               
Anchorage Police Department                                                                                                     
PO Box 196650                                                                                                                   
Anchorage, AK  99519                                                                                                            
POSITION STATEMENT:  Supports HB 294                                                                                            
Mr. Peter Torkelson                                                                                                             
Staff Aid to Representative Dyson                                                                                               
State Capitol Building                                                                                                          
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT: Testified on HB 372                                                                                         
Representative Norman Rokeberg                                                                                                  
State Capitol Building                                                                                                          
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT: Testified on HB 419                                                                                         
Mr. Paul Grossi, Director                                                                                                       
Division of Workers' Compensation                                                                                               
Department of Labor and Workforce Development                                                                                   
PO Box 25512                                                                                                                    
Juneau, Alaska 99802-5512                                                                                                       
POSITION STATEMENT: Supports HB 419                                                                                             
Mr. Willy Van Hemert                                                                                                            
Co-Chair, Ad Hoc Committee on Workers' Compensation                                                                             
3900 Arctic                                                                                                                     
Anchorage, Alaska 99501                                                                                                         
POSITION STATEMENT: Supports HB 419                                                                                             
Mr. Matt O'Brien, President                                                                                                     
Alaska AFL-CIO                                                                                                                  
No address furnished                                                                                                            
POSITION STATEMENT: Supports HB 419                                                                                             
Mr. Kevin Dougherty                                                                                                             
2501 Commercial                                                                                                                 
Anchorage, Alaska 99501                                                                                                         
POSITION STATEMENT:      Supports HB 419                                                                                        
Mr. Mano Frey                                                                                                                   
POSITION STATEMENT:      Testified on HB 310                                                                                    
Mr. Dan Brow                                                                                                                    
Consumer Services Specialist                                                                                                    
Division of Insurance                                                                                                           
3601 C St.                                                                                                                      
Anchorage, AK  99503-5948                                                                                                       
POSITION STATEMENT:  Answered questions about COBRA insurance                                                                   
Mr. Mike Lessmeier                                                                                                              
Lessmeier & Winters                                                                                                             
124 West 5th                                                                                                                    
Juneau, AK  99801                                                                                                               
POSITION STATEMENT: Testified on HB 310                                                                                         
Mr. Tom Andritsch                                                                                                               
4300 Boniface Parkway, #201                                                                                                     
Anchorage, Alaska 99504                                                                                                         
POSITION STATEMENT: Testified on HB 310                                                                                         
ACTION NARRATIVE                                                                                                                
TAPE 00-24 & TAPE 00-25                                                                                                         
TAPE 00-24, SIDE A                                                                                                              
Number 001                                                                                                                      
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to                                                                 
order at 2:15.  Present were SENATOR ELLIS, SENATOR DONLEY, SENATOR                                                             
HALFORD and CHAIRMAN TAYLOR.  The confirmations for the Alaska                                                                  
Commission on Judicial Conduct, the Board of Governors of the                                                                   
Alaska Bar Association, and the Alaska Judicial Council were the                                                                
first order of business.                                                                                                        
CHAIRMAN TAYLOR asked Ms. Sharon Nahorney to discuss her reasons                                                                
for wanting to serve on the Alaska Commission on Judicial Conduct.                                                              
MS. SHARON NAHORNEY informed committee members she was appointed by                                                             
Governors Hickel and Knowles to serve on the Commission.  Part of                                                               
her interest in serving is the result of working with Victims for                                                               
Justice for many years.  During that time she was very involved                                                                 
with the Court System and interacted with judges in many areas.                                                                 
When this opportunity arose, she felt it would be a good way to                                                                 
serve the community and to help those who had suffered traumas as                                                               
victims of violent crimes.  She has learned a great deal during the                                                             
time she has served on the Commission and she believes she can be                                                               
an asset to both the community and the state by continuing to                                                                   
CHAIRMAN TAYLOR thanked Ms. Nahorney for her extensive service.                                                                 
SENATOR ELLIS moved to forward Ms. Nahorney's name to the full                                                                  
Senate for consideration.   There being no objection, the motion                                                                
CHAIRMAN TAYLOR asked Ms. Gigi Pilcher to describe her background                                                               
and desire to serve on the Alaska Judicial Council.                                                                             
MS. GIGI PILCHER informed committee members that she is a 27 year                                                               
resident of Alaska.  She volunteered at the Women in Safe Homes                                                                 
program in 1977 and has worked with victims of domestic violence                                                                
and sexual assault as well as victims of other types of violent                                                                 
crimes since that time.  She has served on the Alaska Sentencing                                                                
Commission and the Alaska Juvenile Justice Board.  She is very                                                                  
interested in working with victims of crime and she has had a lot                                                               
of contact with the Court System.                                                                                               
SENATOR DONLEY remarked that there has been a problem during the                                                                
past few years with information coming from the Court System to the                                                             
Alaska Judicial Council.  An Alaska statute requires judges to                                                                  
produce their opinions within six months of a final argument. He                                                                
believes compliance with that statute is important information for                                                              
the voters to have when it comes time for judicial retention                                                                    
elections however counsel has requested that information in the                                                                 
past but the request was denied by the Court System.  He asked Ms.                                                              
Pilcher her policy on actively seeking that information and how she                                                             
will incorporate that into her report to the voters.                                                                            
MS. PILCHER said she believes that is very important information                                                                
that the public has a right to know and should know.  Regarding her                                                             
role on the Alaska Judicial Council, she is not yet aware what role                                                             
or teeth the Council has to enforce that.  She thinks one of the                                                                
most frustrating things to the public is that when udges come up                                                                
for retention, their re-election is almost automatic.  She believes                                                             
that having the information about how judges carry forth their                                                                  
duties is extremely important.                                                                                                  
SENATOR DONLEY asked Ms. Pilcher if she will be serving as a public                                                             
MS. PILCHER said that is correct.                                                                                               
SENATOR DONLEY noted that the Alaska Judicial Council was created                                                               
by a constitutional amendment and that he is not particularly                                                                   
pleased with the composition of the Council because it heavily                                                                  
favors the Alaska Bar.  He would much prefer to see a citizen, or                                                               
non-lawyer dominated Council.  He requested that Ms. Pilcher stick                                                              
up for the general public's interest and not be intimidated by the                                                              
attorneys on the Council even though she will be outnumbered.  He                                                               
also asked her to come to the Legislature if she needs assistance                                                               
in any endeavor to improve the Court System.                                                                                    
MS. PILCHER said she would be very willing to do that and added                                                                 
that Senator Taylor is aware that she is willing to speak out about                                                             
things that she believes in.                                                                                                    
CHAIRMAN TAYLOR stated that he can attest that Ms. Pilcher will not                                                             
back down and he thanked her for her willingness to serve.                                                                      
SENATOR DONLEY moved to forward Ms. Pilcher's name to the full body                                                             
for consideration.  There being no objection, the motion carried.                                                               
CHAIRMAN TAYLOR announced that the committee would take up HB 372.                                                              
Number 648                                                                                                                      
          HB 372-CRIMINAL SENTENCING AND RESTITUTION                                                                            
REPRESENTATIVE FRED DYSON, sponsor of HB 372, explained that                                                                    
virtually all justice systems have traditionally focussed on                                                                    
restoring the victim to a pre-offense condition.  In biblical                                                                   
times, if a cow was killed, the community would come together and                                                               
require that the owner of the cow be compensated.  In this country,                                                             
a movement back to a restorative or reparative justice system is                                                                
occurring.  HB 372 is a small step that puts in statute language                                                                
that permits judges to allow perpetrators of non-violent crimes to                                                              
negotiate reparations for the community or for the victim which the                                                             
judge can use as part of the offender's sentence.                                                                               
Number 819                                                                                                                      
DEAN GUANELI, Assistant Attorney General with the Criminal Division                                                             
of the Department of Law (DOL), agreed with Representative Dyson                                                                
that the current process of awarding restitution to victims has                                                                 
problems, however he does not believe HB 372 addresses the key                                                                  
issues.  HB 372 is unfair to victims and it is unfair to other                                                                  
defendants.  In addition it contains uncertain procedures.                                                                      
MR. GUANELI said first of all, putting victims in a position to, in                                                             
essence, plea bargain with the defendant over the sentence puts the                                                             
victim in an unequal bargaining position.  Defendants have a right                                                              
to counsel, and if they cannot afford one, counsel is appointed for                                                             
them.  Victims may not have a lawyer therefore they could be taken                                                              
advantage of by defense attorneys who know the law and procedures.                                                              
Nothing will be gained by the victim when negotiating directly with                                                             
the defendant.   Defense attorneys are likely to tell the victims                                                               
if they agree to a lesser sentence, they will get paid the full                                                                 
amount of restitution.  Although the bill contains a provision that                                                             
addresses coercion or intimidation, defense attorneys will simply                                                               
be using good negotiating tactics.                                                                                              
MR. GUANELI maintained that HB 372 will create a series of                                                                      
uncertain procedures.  When the defendant reaches an agreement with                                                             
the prosecutor over a plea, it is presented to the judge.  If the                                                               
judge does not accept the agreement, the defendant is allowed to                                                                
withdraw his plea and the case goes to trial.  The agreement could                                                              
be held over the victim's head by the defense attorney who might                                                                
say if the victim does not agree, the case will go to trial.  It                                                                
raises the spectre of putting the victim in a position of having to                                                             
plea bargain without being aware of all of the laws and rules of                                                                
procedure.  It also raises questions about the role of the                                                                      
probation office in presenting pre-sentence reports to the court.                                                               
MR. GUANELI commented that the additional thing about creating a                                                                
mitigating factor in which a defendant can make a deal with the                                                                 
victim  allows defendants with money to buy their way out of jail                                                               
time.  He noted that the Senate has passed SB 4 which creates an                                                                
office of victim advocacy. HB 372 will have a large impact on that                                                              
agency as victims will most likely get representation from it.                                                                  
MR. GUANELI suggested the following changes to improve the existing                                                             
system.  AS 12.55.005 contains a list of factors that the court is                                                              
supposed to consider when imposing a sentence.  A factor about                                                                  
restoration of the victim and the community could be included.                                                                  
That would force judges to consider restoration of the victim but                                                               
it would not put the victim in the position of actually having to                                                               
plea bargain.  The factors in the statute then will find their way                                                              
into the appelate opinion.  If the sentencing courts do not                                                                     
adequately take the factors into consideration, the appelate court                                                              
has sentencing review authority so the sentence can be disapproved.                                                             
Second, in imposing restitution, the court can require compensation                                                             
in some form other than money.  Some judges make restitution a                                                                  
condition of probation so that if the offender does not pay, he or                                                              
she could be put back in jail.  That only works for the duration of                                                             
the probation period, however.   He suggested making the order of                                                               
restition a condition of probation and a condition of the sentence.                                                             
That way, if the restitution is not paid before the probation                                                                   
period ends, the order of restitution can be reduced to a civil                                                                 
judgment and enforced by the victim.  He indicated that by placing                                                              
the condition of sentence in statute, all judges would use it.                                                                  
MR. GUANELI informed committee members that he had a list of his                                                                
suggestions which could easily be put in an amendment format.                                                                   
Number 1338                                                                                                                     
SENATOR HALFORD noted that the title of HB 372 is broad enough to                                                               
amend almost anything into it.  He asked Representative Dyson how                                                               
he felt about the proposed amendment.                                                                                           
REPRESENTATIVE DYSON said he has not yet seen the list of                                                                       
suggestions which disturbs him.  He thought they sounded good.                                                                  
MR. GUANELI indicated the suggestions were given to Representative                                                              
Dyson's staff earlier today.                                                                                                    
CHAIRMAN TAYLOR suggested that Mr. Guaneli meet with Representative                                                             
Dyson to discuss a proposed amendment.  He noted that as a district                                                             
judge he has seen victims hold defendants hostage.  He thought HB
372 provides for victims' allocution rights and for enforcement                                                                 
rights that the court can give to victims.  He noted that                                                                       
representatives of womens' shelters throughout the state expressed                                                              
concern about negotiations between partners in domestic violence                                                                
REPRESENTATIVE DYSON pointed out that the crime of domestic                                                                     
violence and other crimes of violence were left out of the bill for                                                             
that very reason.  HB 372 only applies to the sentencing phase and                                                              
it allows, not mandates, the judge to allow negotiations.                                                                       
CHAIRMAN TAYLOR noted in a majority of cases, sentencing occurs at                                                              
arraignment.  Only in a felony case will there be some delay in the                                                             
sentencing process.                                                                                                             
REPRESENTATIVE DYSON said this weekend a restorative justice                                                                    
conference is being held in Anchorage and he will be attending one                                                              
in Washington, D.C. in May.  Most of the judges in Alaska see this                                                              
as an opportunity to protect the rights of the victim.  Many judges                                                             
are referring cases to mediation which is done in a very controlled                                                             
environment where the victim's rights are looked after.                                                                         
CHAIRMAN TAYLOR announced the committee would put the bill aside                                                                
for a short time while Representative Dyson and Mr. Guaneli discuss                                                             
a proposed amendment.                                                                                                           
              HB 392-CONTINUANCES OF CINA HEARINGS                                                                              
MS. LORI BACKES, legislative assistant to Representative Whitaker,                                                              
sponsor of HB 392, made the following comments about the measure.                                                               
HB 392 is the result of many conversations with constituents who                                                                
have concerns about the process of placing a child in the custody                                                               
of the Division of Family and Youth Services (DFYS). When a child                                                               
is taken into custody, it is an emotionally charged and confusing                                                               
time for the parents and guardians.  Most often, at the temporary                                                               
custody hearing which occurs 48 hours after the child is taken into                                                             
custody, the parents have not seen the allegations made against                                                                 
them.  HB 392 gives parents and guardians an opportunity to take a                                                              
little bit of time to understand the circumstances that have                                                                    
brought them to this point and to consider their course of action.                                                              
It recognizes and affirms in statute that parents or guardians have                                                             
the right to request a continuance and it requires the judge to                                                                 
inform them of that right.  The bill is supported by the Public                                                                 
Defenders' Agency and the Department of Health and Social Services.                                                             
There being no questions or further testimony on HB 392, SENATOR                                                                
HALFORD moved to pass HB 392 out of committee with individual                                                                   
recommendations.  There being no objection, the motion carried.                                                                 
Number 1727                                                                                                                     
               HB 294-DNA TESTING & REGISTRATION                                                                                
CHAIRMAN TAYLOR announced the committee took testimony on an                                                                    
identical Senate bill (SB 201).                                                                                                 
MR. DEL SMITH, Deputy Commissioner of the Department of Public                                                                  
Safety, stated the department supports HB 294.                                                                                  
SENATOR HALFORD moved to pass HB 294 to its next committee of                                                                   
referral with individual recommendations.  There being no                                                                       
objection, the motion carried.                                                                                                  
MR. JOHN MCKINNON, Anchorage Police Department, stated support for                                                              
HB 294.                                                                                                                         
CHAIRMAN TAYLOR recessed the meeting at 2:50 p.m.                                                                               
CHAIRMAN TAYLOR called the Senate Judiciary Committee meeting back                                                              
to order at 3:13 p.m. Present were Senators Ellis, Donley and                                                                   
Chairman Taylor.  Chairman Taylor announced that HB 372 would again                                                             
be up for consideration.                                                                                                        
           HB 372-CRIMINAL SENTENCING AND RESTITUTION                                                                           
MR. PETER TORKELSON, legislative aide to Representative Dyson,                                                                  
informed committee members that he and Representative Dyson sat                                                                 
down with representatives from DOL.  Representative Dyson is not                                                                
opposed to incorporating Mr. Guaneli's proposed amendment into HB
372.  He believes DOL intends to replace HB 372 with the proposed                                                               
amendment which Representative does not support.                                                                                
Amendment 1 reads as follows.                                                                                                   
                      A M E N D M E N T  1                                                                                      
OFFERED IN THE SENATE                        DEPARTMENT OF LAW                                                                  
     TO:  CSHB 372(FIN)am                                                                                                       
*Section 1.  AS 12.55.005 is amended to read:                                                                                   
          Sec. 12.55.005.  Declaration of purpose.  The purpose of                                                              
this chapter is to provide the means for determining the                                                                        
appropriate sentence to be  imposed upon conviction of an offense.                                                              
The legislature finds that the elimination of unjustified disparity                                                             
in sentences and the attainment of reasonable uniformity in                                                                     
sentences can best be achieved through a sentencing framework fixed                                                             
by stateute as provided in thie chapter.  In imposing sentence, the                                                             
court shall consider                                                                                                            
     (1)  the seriousness of the defendant's present offense in                                                                 
     relation to other offenses;                                                                                                
     (2)  the prior criminal history of the defendant and the                                                                   
     likelihood of rehabilitation;                                                                                              
     (3)  the need to confine the defendant to prevent further harm                                                             
     to the public;                                                                                                             
     (4)  the circumstances of the offense and the extent to which                                                              
     the offense harmed the victim or endangered the public safety;                                                             
     (5)  the effect of the sentence to be imposed in deterring the                                                             
     defendant or other members of society from future criminal                                                                 
     conduct; [AND]                                                                                                             
     (6)  the effect of the sentence to be imposed as a community                                                               
     condemnationn of the criminal act and as a reaffirmation of                                                                
     societal norms; and                                                                                                        
               (7)  the restoration of the victim and the community.                                                            
*Sec. 2AS 12.55.045(f) is amended to read:                                                                                      
     (f) If a court proposes to order a defendant to pay                                                                        
     restitution under this section of more [LESS] than $5,000, and                                                             
     the defendant's sentence includes [DOES NOT INCLUDE] a period                                                              
     of unsuspended incarceration exceeding 90 days, the court may                                                              
     take into account at the time of sentencing the defendant's                                                                
     present and future ability to pay the restitution proposed.                                                                
     The court shall presume that the defendant has the ability to                                                              
     pay the amount proposed unless the defendant at the sentencing                                                             
     hearing establishes by clear and convincing [A PREPONDERANCE                                                               
     OF THE] evidence the inability to pay the amount proposed.                                                                 
*Sec. 3  AS 12.55.045 is amended by adding new subsections to read:                                                             
     (I)  An order of restitution made under this section is a                                                                  
     condition of the defendant's sentence and, in cases in which                                                               
     the court suspends all or a portion of the defendant's                                                                     
     sentence, the order of restitution is a condition of the                                                                   
     suspended sentence.  If the court suspends imposition of                                                                   
     sentence under AS 12.55.085, the order of restitution is a                                                                 
     condition of the suspended imposition of sentence.                                                                         
SENATOR ELLIS expressed support for adding the amendment to the                                                                 
CHAIRMAN TAYLOR noted the proposed amendment contains the word                                                                  
"may" so it does not mandate anything.                                                                                          
SENATOR ELLIS moved to adopt Amendment 1 as an addition to the                                                                  
legislation.  There being no objection, the motion carried.                                                                     
SENATOR ELLIS moved SCS CSHB 372(JUD) from committee with                                                                       
individual recommendations.  There being no objection, the motion                                                               
                  HB 419-WORKERS' COMPENSATION                                                                                  
REPRESENTATIVE NORM ROKEBERG, sponsor of HB 419, gave the following                                                             
explanation of the bill.  HB 419 is a major rewrite of the workers'                                                             
compensation statute of 1988.  This bill raises benefits to the                                                                 
workers and, as a result, raises premiums to employers.  Premiums                                                               
will increase from 7.7 percent to 8.7 percent to help defer the                                                                 
cost of the additional benefits provided to workers.  This increase                                                             
is long overdue.  HB 419 was put together by the Ad Hoc Committee                                                               
on Workers' Compensation, organized labor, the workers and business                                                             
of the state and himself.  HB 419 strikes a delicate balance                                                                    
therefore he counsels against making major changes to the bill. The                                                             
House held substantial hearings on this bill and the Legislative                                                                
Audit Division recently audited the Workers' Compensation Division.                                                             
HB 419 contains the recommendations from that audit except one that                                                             
would provide for stiffer penalties for underinsured employers.                                                                 
MR. PAUL GROSSI, Director of the Division of Workers' Compensation                                                              
in the Department of Labor and Workforce Development (DOLWD)                                                                    
informed committee members that the department supports HB 419.  It                                                             
provides much needed increases in workers' compensation benefits                                                                
which have not increased for 12 years.  The bill also contains                                                                  
provisions for employers that pertain to procedures.  It contains                                                               
a simple method for waiving retraining benefits, it streamlines                                                                 
timelines, and it clarifies what benefits are paid during the                                                                   
rehabilitation process.  It also increases the timeline for paying                                                              
medical bills, it provides a two year timeline for hearing                                                                      
requests, it establishes a simple process to obtain medical                                                                     
releases and it provides for an annual update of usual and                                                                      
customary fees.                                                                                                                 
MR. WILLY VAN HEMERT made the following comments.  He is a                                                                      
representative of the Workers' Compensation Committee of Alaska and                                                             
he co-chaired the Ad Hoc Committee.  He supports HB 419 as a                                                                    
balanced package.  It contains some reasonable increases in                                                                     
benefits.  It currently benchmarks the maximum and minimum weekly                                                               
wage which will increase from $700 to $773, the fifth highest in                                                                
the United States.  It also increases the death benefit to 100                                                                  
percent of spendable up to the maximum weekly wage.  That will make                                                             
Alaska the only state that pays above 85 percent.  It addresses all                                                             
of the issues in the Workers' Compensation Division audit that                                                                  
related to legislative action.  He offered to answer questions.                                                                 
MR. MATT O'BRIEN, President of the Alaska AFL-CIO, said without the                                                             
Ad Hoc Committee system in which management and labor can work                                                                  
together to negotiate a settlement, opposing parties would have                                                                 
offered conflicting legislation that would have gone nowhere.  Even                                                             
with a cooperative effort, it has taken 12 years to adjust and                                                                  
correct some of the problems that occurred in 1988.  Legislation                                                                
passed in 1991 but it was vetoed by the Governor.                                                                               
CHAIRMAN TAYLOR interrupted the hearing on HB 419 to hear from a                                                                
nominee to the Alaska Bar Association's Board of Governors.                                                                     
MS. ANASTASIA COOK HOFFMAN said she is interested in serving on the                                                             
Board of Governors because she is interested in the field of law                                                                
and she has worked for the Court System in Bethel as a cultural                                                                 
navigator.  She will bring a rural perspective to the Board and                                                                 
will provide insight.  She was born and raised in Bethel and                                                                    
attended Smith College and Stanford University, from which she                                                                  
graduated in 1995.  She was the director of the ABCP Receiving Home                                                             
and then worked for the Court System.  She is currently spending                                                                
her time raising two sons.                                                                                                      
TAPE 00-24, SIDE B                                                                                                              
Number 0000                                                                                                                     
CHAIRMAN TAYLOR thanked Ms. Cook Hoffman for offering to serve.                                                                 
SENATOR TAYLOR asked Ms. Cook Hoffman her position on mandatory                                                                 
versus voluntary continuing legal education.                                                                                    
MS. COOK HOFFMAN replied she has not given that topic much thought                                                              
but she believes some amount of continuing education should be                                                                  
mandatory because the law is always changing.                                                                                   
SENATOR DONLEY agreed that the law is always changing but noted                                                                 
that one of the difficulties is that the current scheme does not                                                                
require that any ongoing education be useful to one's field of                                                                  
practice.  It heavily favors large law firms at the expense of                                                                  
private practitioners.  He remarked that he is disappointed that                                                                
the Bar has not offered ethics courses at no charge on a regular                                                                
basis.  It provides an ethics course for all incoming attorneys.                                                                
He asked Ms. Cook Hoffman to strive to maximize participation in                                                                
the ethics classes by offering them free of tuition.                                                                            
MS. COOK HOFFMAN thought that offering free ethics classes is a                                                                 
very good idea.                                                                                                                 
SENATOR DONLEY asked Ms. Cook Hoffman if she has an opinion of the                                                              
current dues structure and the Bar Association's budget.                                                                        
MS. COOK HOFFMAN said she does not because the Alaska Bar                                                                       
Association is very new to her.                                                                                                 
SENATOR DONLEY noted the Alaska Bar Association has some of the                                                                 
highest dues in the nation and, in fact, Alaska's dues are higher                                                               
than those in California where attorneys rebelled and the Bar was                                                               
discontinued.  He expressed concern that Alaska is moving in the                                                                
same direction because the current Board has not contained costs                                                                
and even with a $1,000,000 surplus, it has not lowered dues.  He                                                                
believes the Alaska Bar needs to exercise a lot more financial                                                                  
restraint and better budgeting. He asked Ms. Cook Hoffman to take                                                               
a fresh look at that issue as a new member.                                                                                     
SENATOR DONLEY moved to forward Ms. Cook Hoffman's name to the full                                                             
Senate for consideration.  There being no objection, the motion                                                                 
CHAIRMAN TAYLOR announced that HB 419 was again before the                                                                      
MR. KEVIN DOUGHERTY, Co-Chair of the Ad Hoc Committee on Workers'                                                               
Compensation, informed committee members that he represented the                                                                
labor side during the negotiations.  He supports the bill as it                                                                 
represents a consensus on items that the committee agreed to.                                                                   
REPRESENTATIVE ROKEBERG asked that any proposed amendments be faxed                                                             
to the Legislative Information Offices.                                                                                         
SENATOR DONLEY moved to adopt Amendment 1, labeled 1-LS1418\M.13.                                                               
Amendment 1 reads as follows.                                                                                                   
                       A M E N D M E N T  1                                                                                     
OFFERED IN THE SENATE                           BY SENATOR DONLEY                                                               
     TO:  CSHB 419(RLS)                                                                                                         
Page 3, line 31, following ";":                                                                                                 
     Delete "and"                                                                                                               
     Insert "[AND]"                                                                                                             
Page 4, line 3, following "plan":                                                                                               
     Insert "; and                                                                                                              
               (10)  a provision requiring that, after a person has                                                             
     been assigned to perform medical management services for an                                                                
     injured employee, the person shall send written notice to the                                                              
     employee, the employer, and the employee's physician                                                                       
     explaining in what capacity the person is employed, whom the                                                               
     person represents, and the scope of the services to be                                                                     
SENATOR DONLEY explained that Amendment 1 would require a person                                                                
who is assigned to perform medical management services for injured                                                              
workers to send a full disclosure notice to the injured worker and                                                              
his or her physician stating who that person is representing and                                                                
the scope of the services that person is to provide.                                                                            
CHAIRMAN TAYLOR objected to the motion for the purpose of                                                                       
discussion.  He stated that he has encountered this problem in the                                                              
past when representing people.  He noted the biggest problem he has                                                             
with the bill is that he cannot find an attorney to represent                                                                   
anyone because the attorneys fees were stripped from the bill                                                                   
during the last rewrite.                                                                                                        
Number 2061                                                                                                                     
MR. GROSSI commented that some employers and insurance companies                                                                
employ medical management people who are usually nurses and who are                                                             
assigned to a case.  They review the medical records and talk with                                                              
the injured employee.  Often they will schedule medical evaluations                                                             
and then advise the employer on the injury.  The Workers'                                                                       
Compensation Board also has rehabilitation counselors who determine                                                             
eligibility for re-employment benefits.  Mr. Gross said the                                                                     
Department of Labor has no problem with Amendment 1.                                                                            
MR. VAN HEMERT asked if there will be adequate time to notify the                                                               
employee, employer, and the employee's physician if the injury is                                                               
serious.  He said on the face of it, he does not see Amendment 1 as                                                             
a problem.                                                                                                                      
There being no further discussion or objection to Amendment 1,                                                                  
CHAIRMAN TAYLOR announced that it was adopted.                                                                                  
SENATOR DONLEY moved to adopt Amendment 2 which reads as follows.                                                               
                        A M E N D M E N T                                                                                       
OFFERED IN THE SENATE                           BY SENATOR DONLEY                                                               
     TO:  CSHB 419(RLS)                                                                                                         
Page 8, line 25:                                                                                                                
     Delete "a new subsection"                                                                                                  
     Insert "new subsections"                                                                                                   
Page 8, following line 28:                                                                                                      
     Insert a new subsection to read:                                                                                           
          "(q)  Unless compensation due the employee under this                                                                 
     chapter is paid by negotiable instrument that can be cashed                                                                
     not more than three business days after being issued, the                                                                  
     employer shall increase the weekly rate of compensation due                                                                
     the employee under AS 23.30.175 by two percent."                                                                           
SENATOR DONLEY explained that this provision was included in the                                                                
workers' compensation bill that was passed by the legislature in                                                                
1991 but was vetoed by the Governor.  It requires that when the                                                                 
insurance company pays compensation to an injured employee, it pay                                                              
with a negotiable instrument that can be cashed no more than three                                                              
days after being issued.  One company paid injured workers with                                                                 
checks issued from the Bahamas and the workers had to wait several                                                              
weeks for the checks to clear.                                                                                                  
CHAIRMAN TAYLOR objected for the purpose of discussion.                                                                         
Number 1713                                                                                                                     
MR. DOUGHERTY stated that both Amendments 1 and 2 are good in                                                                   
substance to consider long term and that those two issues were part                                                             
of the 1991 bill but all participants have a commitment to stick                                                                
with the bill sent to the Senate Judiciary Committee for several                                                                
reasons.  He suggested the Ad Hoc Committee review the proposed                                                                 
amendments during the summer rather than adopt them now and slow                                                                
the bill down.                                                                                                                  
REPRESENTATIVE ROKEBERG pointed out that the three day limit in                                                                 
Amendment 2 pertains to banking law, not workers' compensation.  He                                                             
suggested removing the three day limit and instead requiring that                                                               
the negotiable instrument must be drawn on a state or federally                                                                 
insured financial institution.                                                                                                  
MR. GROSSI indicated that right now payments must be made within 14                                                             
days by an instrument that is negotiable in the State of Alaska.                                                                
He was not sure whether Amendment 2 is more or less than current                                                                
MR. VAN HEMERT stated WCCA opposes Amendment 2.  He added that                                                                  
Amendment 2 also removes Section 14 of the bill which was an issue                                                              
related to the payment of interest.                                                                                             
SENATOR DONLEY asked how much time the Ad Hoc Committee spent                                                                   
examining the 1991 bill that passed the legislature and why the                                                                 
Committee did not incorporate any of those provisions.                                                                          
MR. VAN HEMERT said he was not involved in 1991 but he was involved                                                             
in the 1995 Ad Hoc Committee.  For good or bad, labor and                                                                       
management bring issues to the table and that issue was not brought                                                             
forward by either side.                                                                                                         
SENATOR DONLEY said he was surprised because in communications with                                                             
members on the committee when it was first forming, he suggested                                                                
using the 1991 amendments as the starting point.  He asked Mr. Van                                                              
Hemert if the Ad Hoc Committee ever considered any of those                                                                     
MR. VAN HEMERT said he did not have the 1991 amendments when the                                                                
committee was confering.                                                                                                        
SENATOR DONLEY remarked that illustrates the weaknesses in the ad                                                               
hoc process.  Back in 1988, the legislature was promised that                                                                   
committee would continue.  Many commitments were made at that time                                                              
which have not been kept.  When he was asked early on in the                                                                    
process what kinds of things the committee should look at, he                                                                   
suggested the 1991 bill but it was never discussed.  He expressed                                                               
concern about deferring to a group that was not elected to make                                                                 
public policy.  He said he is willing to continue to work on                                                                    
Amendment 2 with Representative Rokeberg.  He then withdrew                                                                     
Amendment 2.                                                                                                                    
CHAIRMAN TAYLOR cited AS 21.89.030 which provides that, "an                                                                     
insurance company doing business in this state may not pay a                                                                    
judgment or settlement of a claim in this state for a loss incurred                                                             
in this state with an instrument other than a negotiable bank check                                                             
payable on demand and bearing even date with the date of writing or                                                             
by electronic funds transfer."                                                                                                  
Number 1381                                                                                                                     
SENATOR DONLEY moved to adopt Amendment 3 which reads as follows.                                                               
                       A M E N D M E N T  3                                                                                     
OFFERED IN THE SENATE                           BY SENATOR DONLEY                                                               
     TO:  CSHB 419(RLS)                                                                                                         
Page 3, line 31, following ";":                                                                                                 
     Delete "and"                                                                                                               
     Insert "[AND]"                                                                                                             
Page 4, line 3, following "plan":                                                                                               
     Insert "; and                                                                                                              
               (10)  a provision relating to health insurance                                                                   
     benefits that complies with AS 23.30.047"                                                                                  
Page 5, following line 32:                                                                                                      
     Insert a new bill section to read:                                                                                         
   "* Sec. 8.  AS 23.30 is amended by adding a new section to read:                                                             
          Sec. 23.30.047.  Benefits for health insurance.  (a)  An                                                              
     employer who pays compensation to an injured employee under                                                                
     AS 23.30.041(k), 23.30.180, 23.30.185, 23.30.190, 23.30.200,                                                               
     or 23.30.215 and who provided health insurance to the employee                                                             
     at the date of injury shall also reimburse the employee for                                                                
     health insurance coverage for the employee and covered                                                                     
     dependents, as provided in this section.                                                                                   
          (b)  Payment required under this section is equal to the                                                              
     employer's current contribution for health insurance or the                                                                
     amount paid by the employee for replacement coverage,                                                                      
     whichever amount is less.  Payment required under this section                                                             
     commences when the employee's health insurance provided by the                                                             
     employer's contribution ceases and shall continue until the                                                                
     employee is no longer receiving compensation described in (a)                                                              
     of this section, or for 18 months, whichever period is                                                                     
          (c)  Payment is not required under this section until the                                                             
     employee provides proof of health insurance coverage.  In this                                                             
     subsection, "health insurance" includes                                                                                    
               (1)  an individual policy of health insurance; or                                                                
               (2)  a notice of self-payment for continuance of                                                                 
     coverage required under 29 U.S.C. 1161 (Consolidated Omnibus                                                               
     Budget Reconciliation Act of 1985) or under a union health or                                                              
     welfare trust agreement.                                                                                                   
          (d)  If benefits required under this section are not paid                                                             
     within 30 days after the employer receives a request for                                                                   
     payment, the employer shall pay a penalty equal to 25 percent                                                              
     of the amount due."                                                                                                        
Renumber the following bill sections accordingly.                                                                               
Page 12, line 28:                                                                                                               
     Delete "2 - 19"                                                                                                            
     Insert "2 - 20"                                                                                                            
Page 12, line 29:                                                                                                               
     Delete "20"                                                                                                                
     Insert "21"                                                                                                                
Page 12, line 30:                                                                                                               
     Delete "21"                                                                                                                
     Insert "22"                                                                                                                
SENATOR DONLEY explained that Amendment 3 picks up a provision that                                                             
were in the 1991 legislation.  That provision dealt with a                                                                      
situation when a worker loses a job due to an injury and collects                                                               
workers' compensation whether insurance coverage provided by that                                                               
employer will still be available for the worker's family members.                                                               
CHAIRMAN TAYLOR asked if Amendment 3 would provide such coverage                                                                
for 18 months.  He thought some rights and benefits would be                                                                    
available under COBRA although the premium would be paid by the                                                                 
MR. GROSSI stated the value of the health insurance can be                                                                      
calculated into the workers' compensation rate itself and used                                                                  
toward health insurance coverage.                                                                                               
CHAIRMAN TAYLOR asked if the bill needs an offset for that                                                                      
MR. GROSSI said it probably does.                                                                                               
Number 1164                                                                                                                     
SENATOR DONLEY stated the benefits are a percentage of the weekly                                                               
wage so it is still at a percentage of what the total compensation                                                              
package would be, evening including the health care.                                                                            
MR. GROSSI said it is at 80 percent of the spendable weekly wage                                                                
which is 80 percent of the net.  That would also include the value                                                              
of the benefit.                                                                                                                 
SENATOR DONLEY stated even if it is rolled in, it is discounted by                                                              
20 percent.  He asked if the COBRA insurance is available at the                                                                
same rate as if it had been paid for by the employer and whether                                                                
the same insurance has to be made available.                                                                                    
MR. FREY replied COBRA plans can be incrementally higher but the                                                                
difference is only slightly higher than the regular premium.                                                                    
CHAIRMAN TAYLOR commented that under today's system, the injured                                                                
employee who receives workers' compensation but is no longer                                                                    
employed, receives, as part of the compensation, an amount to pay                                                               
for health coverage.  He asked if the 80 percent net pay, with                                                                  
health care costs factored in, is based on the full cost of the                                                                 
premium or the amount that the employer contributed toward the                                                                  
premium, for example 80 percent.                                                                                                
MR. FREY replied it is based on the full amount of the monthly                                                                  
SENATOR DONLEY asked if COBRA requires coverage to be provided by                                                               
the same company that was providing the coverage prior to the                                                                   
Mr. FREY explained that COBRA is a federal law.  In his experience                                                              
as a trustee for the laborers' health care trust fund, the Union                                                                
must offer comparable insurance upon certain triggering events. He                                                              
was not certain whether the coverage must be identical but it does                                                              
have to be comparable.                                                                                                          
MR. BOB LOHR, Director of the Division of Insurance, asked that Dan                                                             
Brow, the Consumer Services Specialist, to address that question.                                                               
MR. BROW stated that under the federal guidelines for COBRA, the                                                                
insurance plan for the former employee is allowed to continue as                                                                
indicated under specific circumstances.  However, the ability to                                                                
continue that plan is contingent upon the insurance plan remaining                                                              
in existence.  If an employee elected COBRA coverage, with the                                                                  
termination of the employer's plan, the COBRA coverage would                                                                    
CHAIRMAN TAYLOR commented that the COBRA coverage will remain in                                                                
effect for 18 months as long as the premium is paid.  He noted the                                                              
insurance coverage will cost a little more while the worker's                                                                   
income stream will be discounted by about 20 percent because of the                                                             
workers' compensation calculation.  He thought this bill might have                                                             
a major financial impact.                                                                                                       
SENATOR DONLEY remarked, "Mr. Chairman, now that we've created a                                                                
record that shows that the public policy call is - what we really                                                               
want is workers to be covered.  We want their families to remain to                                                             
be covered for a reasonable period of time.  It is really terrible                                                              
public policy that somebody injured on the job would lose their                                                                 
health benefits.  The workers' comp system is supposed to be                                                                    
designed to make people whole, not to make them less than whole.                                                                
If they were working, they would have this coverage.  But I think,                                                              
now that we've established on the record that the existing system                                                               
provides 80 percent of this coverage, I'd be willing to withdraw                                                                
this amendment only with that understanding, that the existing                                                                  
system is at least providing 80 percent of this very important                                                                  
valuable coverage for Alaskan families and injured workers.  If it                                                              
wasn't for that, then I think that this would be an absolute                                                                    
essential to place in this bill.  So with that I'd go ahead and                                                                 
withdraw Amendment 3."                                                                                                          
CHAIRMAN TAYLOR announced that Amendment 3 was withdrawn with no                                                                
SENATOR DONLEY proposed Amendment 4 which would change, on page 10,                                                             
line 8, the funeral expense provision.  That provision was last set                                                             
in 1982.  The bill proposes to adjust the amount for inflation                                                                  
since 1988.  He has received numerous communications from families                                                              
in tragic situations over the last decade where a worker in the                                                                 
family has died.  The families have complained about the terrible                                                               
inadequacy of the $2500 funeral expense coverage.  He does not                                                                  
believe $3300 goes far enough. He stated this should not have much                                                              
of an effect actuarially because the number of workers who die on                                                               
the job is small. He moved to adopt Amendment 4 to change the $3300                                                             
amount to $10,000.                                                                                                              
Number 594                                                                                                                      
MR. GROSSI estimated that 20 to 30 Alaskan workers suffer this                                                                  
CHAIRMAN TAYLOR objected for the purpose of discussion.                                                                         
REPRESENTATIVE ROKEBERG stated that the amount is for funeral                                                                   
expenses and that $4500 to $6,000 should be adequate.                                                                           
SENATOR DONLEY agreed that the cost of a funeral is probably                                                                    
between $4,000 and $6,000 which makes him question why the bill                                                                 
only contains $3,300 for a person who is killed in the workplace.                                                               
He pointed out there are other intangible costs associated with the                                                             
death of the major breadwinner of a family which are very stressful                                                             
for the family.  He thought to pay $10,000 for the 20 or 30 Alaskan                                                             
families who suffer such a loss is reasonable.                                                                                  
CHAIRMAN TAYLOR thought $10,000 was a bit high and said he would                                                                
compromise at $5,000.                                                                                                           
SENATOR DONLEY said he appreciates the committee's consideration of                                                             
this issue because although it effects only a few folks, their                                                                  
letters are very touching.                                                                                                      
CHAIRMAN TAYLOR maintained his objection to adopt Amendment 4.                                                                  
AN UNIDENTIFIED SPEAKER said he agrees in principle with Senator                                                                
Donley.  He noted that 17 states provide $5,000 and only five                                                                   
states provide more than $5,000. He added the basic charge for a                                                                
funeral with full services is $4,700.                                                                                           
A roll call vote was taken on the motion to adopt Amendment 4.                                                                  
That amendment failed with Senators Ellis and Taylor voting "nay"                                                               
and Senator Donley voting "yea."                                                                                                
CHAIRMAN TAYLOR moved to change, on page 10, line 8, the amount of                                                              
$3,300 to $5,000.  There being no objection, the motion carried.                                                                
REPRESENTATIVE ROKEBERG suggested changing Amendment 2 to read:                                                                 
     (q) Unless compensation due the emmployee under this chapter                                                               
     is paid by negotiable instrument that is drawn on a state or                                                               
     federal financial institution, the employer shall increase the                                                             
     weekly rate of compensation due the employee under AS                                                                      
     23.30.175 by two percent.                                                                                                  
REPRESENTATIVE ROKEBERG noted that "a state or federal financial                                                                
institution" is defined in statute.  He thought that language                                                                   
addresses Senator Donley's concern with offshore trust-checks that                                                              
are slow to clear.                                                                                                              
SENATOR DONLEY moved to adopt Amendment 2.                                                                                      
CHAIRMAN TAYLOR objected and asked if Senator Donley intended to                                                                
move Amendment 2 as amended.                                                                                                    
SENATOR DONLEY renewed his motion to adopt Amendment 2 containing                                                               
the language as proposed by Representative Rokeberg.                                                                            
TAPE 00-25, SIDE A                                                                                                              
Number 0000                                                                                                                     
There being no further discssion, CHAIRMAN TAYLOR announced that                                                                
Amendment 2 as amended was adopted.  He stated his only frustration                                                             
with this legislation is that the Ad Hoc Committee did not address                                                              
the issue of attorney's fees and whether or not injured workers in                                                              
this state would have improved representation.  He believes that is                                                             
one of the most serious defects in the law.  There may be no                                                                    
incentive on the part of employees to worry about it but injured                                                                
workers have difficulty finding an attorney to represent them and                                                               
if that occurs, most of the great laws that are passed do not count                                                             
for much.  It has caused the State board to reach out beyond its                                                                
authority to compensate people and it has caused some insurance                                                                 
companies to misuse and abuse employees.                                                                                        
SENATOR DONLEY stated that he examined that question extensively in                                                             
1988 and he found that the defense attorney costs were in some                                                                  
cases four or five times the costs of the workers' attorneys.  The                                                              
insurance companies were spending a tremendous amount of money to                                                               
defend cases while it was very difficult for injured workers to                                                                 
find anyone to represent them.  He agreed with Chairman Taylor on                                                               
that issue and added that is another weakness of the ad hoc                                                                     
process.  While the ad hoc process has benefits from not including                                                              
the actual people who represent the parties on either side, it also                                                             
fails to draw from their knowledge about the specific types of                                                                  
things that are going wrong.                                                                                                    
REPRESENTATIVE ROKEBERG commented that Senator Donley made a good                                                               
point.  He suggested involving legislative Labor and Commerce                                                                   
Committee members or their designees in the ad hoc committee                                                                    
process in the future.                                                                                                          
SENATOR DONLEY moved SCS CSHB 419(JUD) from committee with                                                                      
individual recommendations.  There being no objection, the motion                                                               
          HB 310-ALASKA INSURANCE GUARANTY ASSOCIATION                                                                          
REPRESENTATIVE NORM ROKEBERG explained that HB 310 is a revision of                                                             
the Alaska Insurance Guaranty Association (AIGA) for property                                                                   
casualty groups.  Two different associations do business in Alaska.                                                             
HB 310 contains the National Association of Insurance                                                                           
Commissioners' (NAIC) recommendations.  He urged committee members                                                              
to support the bill.                                                                                                            
CHAIRMAN TAYLOR asked what happens when an insurance company goes                                                               
REPRESENTATIVE ROKEBERG replied that the director of the Division                                                               
of Insurance requires that a receiver is involved in the                                                                        
establishment of the receivorship.  One of the provisions in the                                                                
bill pertains to the location of the insolvent corporation and the                                                              
position of the State as it relates to the insolvency of a foreign                                                              
MR. MIKE LESSMEIER, representing State Farm Insurance, noted that                                                               
three people were available to testify via conference:  Don Thomas,                                                             
the drafter of HB 310; Tom Andritch, President of the AIGA; and                                                                 
Dane Haberg (ph), a contract administrator for the AIGA.  Those                                                                 
people worked to update this statutory scheme.                                                                                  
MR. TOM ANDRITCH, President of the AIGA, stated support for HB 310.                                                             
MR. DANE HABERG, Alaska Insurance Guaranty Association, explained                                                               
that when an insurance company is found insolvent, the Alaska                                                                   
Insurance Guaranty Association has the responsibility of assessing                                                              
other insurance companies who are admitted and licensed in Alaska                                                               
to collect funds.  Those funds are used to pay claims of the                                                                    
insolvent insurance carrier.                                                                                                    
CHAIRMAN TAYLOR said that it looks as though the bill amends                                                                    
various provisions that might impact AIGA on the proration of                                                                   
claims, depending upon the amount in the fund.                                                                                  
MR. HABERG asked what section of the bill Chairman Taylor was                                                                   
referring to.                                                                                                                   
Number 540                                                                                                                      
CHAIRMAN TAYLOR referred to new language in Section 7(C) on page 5                                                              
which reads, "the association may pay claims in any order that it                                                               
determines reasonable, including the payment of claims as they are                                                              
received from claimants or in groups or categories of claims;                                                                   
however,.... "  That language modifies the remainder of that                                                                    
section which provides for proration.  Chairman Taylor noted that                                                               
AIGA would have to wait for all claims to be submitted before it                                                                
could prorate them and pay anything.                                                                                            
MR. HABERG replied that is correct and it presented a problem                                                                   
because claims do not come in evenly when the insolvent carrier                                                                 
goes down.                                                                                                                      
CHAIRMAN TAYLOR asked if HB 310 provides cleanup language so that                                                               
AIGA can do a more efficient job of handling an insolvent carrier                                                               
and the resulting claims.                                                                                                       
MR. HABERG answered that is correct and HB 310 brings Alaska                                                                    
statutes more in form with the model act so that when AIGA is                                                                   
dealing with other states it can avoid some conflicts.                                                                          
SENATOR DONLEY moved HB 310 from committee with individual                                                                      
recommendations.  There being no objection, the motion carried.                                                                 
SENATOR ELLIS asked Chairman Taylor what his intent was regarding                                                               
the domestic violence legislation.                                                                                              
CHAIRMAN TAYLOR replied a House bill on that subject has passed                                                                 
over to the Senate and vice versa.  He thought most of the                                                                      
provisions are contained within the Senate bill but he is willing                                                               
to look at the bills further.                                                                                                   
There being no further business to come before the Committee,                                                                   
CHAIRMAN TAYLOR adjourned the meeting at 4:22 p.m.                                                                              

Document Name Date/Time Subjects