Legislature(1999 - 2000)
04/19/2000 02:15 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ 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
serve.
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
carried.
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
member.
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
cases.
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
bill.
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
carried.
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
carried.
CHAIRMAN TAYLOR announced that HB 419 was again before the
committee.
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.
7/19/:0
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
provided"
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
statute.
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
amendments.
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
shorter.
(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
employee.
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
calculation.
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
premium.
SENATOR DONLEY asked if COBRA requires coverage to be provided by
the same company that was providing the coverage prior to the
injury.
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
terminate.
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
objection.
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
tragedy.
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
carried.
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
insolvent.
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
corporation.
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.
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