Legislature(2005 - 2006)BELTZ 211

03/31/2005 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Scheduled But Not Heard
Heard & Held
Bills Previously Heard/Scheduled
Including But Not Limited to:
Moved SB 147 Out of Committee
Scheduled But Not Heard
Moved CSSB 130(L&C) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 31, 2005                                                                                         
                           1:35 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Ben Stevens                                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Bettye Davis                                                                                                            
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 130                                                                                                             
"An Act relating  to a special deposit  for workers' compensation                                                               
and  employers' liability  insurers;  relating  to assigned  risk                                                               
pools; relating  to workers'  compensation insurers;  stating the                                                               
intent  of   the  legislature,   and  setting   out  limitations,                                                               
concerning the  interpretation, construction,  and implementation                                                               
of workers'  compensation laws; relating  to the  Alaska Workers'                                                               
Compensation   Board;    assigning   certain    Alaska   Workers'                                                               
Compensation  Board   functions  to  the  division   of  workers'                                                               
compensation   in  the   Department   of   Labor  and   Workforce                                                               
Development and to that department,  and authorizing the board to                                                               
delegate administrative  and enforcement duties to  the division;                                                               
establishing   a   Workers'  Compensation   Appeals   Commission;                                                               
providing for workers' compensation  hearing officers in workers'                                                               
compensation  proceedings;  relating   to  workers'  compensation                                                               
medical benefits and  to charges for and payment of  fees for the                                                               
medical benefits; relating to  agreements that discharge workers'                                                               
compensation   liability;  relating   to  workers'   compensation                                                               
awards;  relating to  reemployment benefits  and job  dislocation                                                               
benefits; relating  to coordination of workers'  compensation and                                                               
certain  disability benefits;  relating to  division of  workers'                                                               
compensation records;  relating to release of  treatment records;                                                               
relating to an  employer's failure to insure and  keep insured or                                                               
provide  security;   providing  for  appeals   from  compensation                                                               
orders; relating to  workers' compensation proceedings; providing                                                               
for  supreme  court jurisdiction  of  appeals  from the  Workers'                                                               
Compensation Appeals  Commission; providing for a  maximum amount                                                               
for  the  cost-of-living  adjustment  for  workers'  compensation                                                               
benefits;   relating  to   attorney  fees;   providing  for   the                                                               
department to  enter into contracts with  nonprofit organizations                                                               
to  provide  information  services and  legal  representation  to                                                               
injured  employees; providing  for  administrative penalties  for                                                               
employers  uninsured or  without adequate  security for  workers'                                                               
compensation; relating to fraudulent  acts or false or misleading                                                               
statements in  workers' compensation  and penalties for  the acts                                                               
or  statements;  providing for  members  of  a limited  liability                                                               
company to  be included as  an employee for purposes  of workers'                                                               
compensation;  establishing  a   workers'  compensation  benefits                                                               
guaranty  fund;  relating  to  the  second  injury  fund;  making                                                               
conforming amendments;  providing for a  study and report  by the                                                               
medical  services   review  committee;   and  providing   for  an                                                               
effective date."                                                                                                                
     MOVED CSSB 130(L&C) OUT OF COMMITTEE                                                                                       
SENATE BILL NO. 108                                                                                                             
"An  Act  relating  to the  regulation  of  insurance,  insurance                                                               
licensing,  surplus   lines,  insurer  deposits,   motor  vehicle                                                               
service  contracts,  guaranteed automobile  protection  products,                                                               
health  discount plans,  third-party administrators,  self-funded                                                               
multiple   employer   welfare   arrangements,   and   self-funded                                                               
governmental plans; and providing for an effective date."                                                                       
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 142                                                                                                             
"An  Act relating  to  ownership of  land,  buildings, and  other                                                               
structures  by  regional  school  boards; and  providing  for  an                                                               
effective date."                                                                                                                
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 147                                                                                                             
"An  Act providing  for  a sport  fishing  facility surcharge  on                                                               
sport  fishing  licenses;  providing  for  the  construction  and                                                               
renovation  of  state  sport fishing  facilities  and  for  other                                                               
projects beneficial to  the sport fish resources of  the state as                                                               
a  public enterprise;  and authorizing  the  issuance of  revenue                                                               
bonds to finance those projects."                                                                                               
     MOVED SB 147 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 139                                                                                                             
"An  Act  relating  to  termination   and  oversight  of  boards,                                                               
commissions, and agency programs;  extending the termination date                                                               
of the Board of Marital and Family Therapy; and providing for an                                                                
effective date."                                                                                                                
     SCHEDULED BUT NOT HEARD                                                                                                    
SENATE JOINT RESOLUTION NO. 11                                                                                                  
Urging the United States Congress to amend the tax code to                                                                      
repeal the federal excise tax on communications.                                                                                
     SCHEDULED BUT NOT HEARD                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 130                                                                                                                  
SHORT TITLE: WORKERS' COMPENSATION/ INSURANCE                                                                                   
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
03/03/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/03/05       (S)       L&C, FIN                                                                                               
03/08/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/08/05       (S)       Heard & Held                                                                                           
03/08/05       (S)       MINUTE(L&C)                                                                                            
03/10/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/10/05       (S)       Heard & Held                                                                                           
03/10/05       (S)       MINUTE(L&C)                                                                                            
03/15/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/15/05       (S)       Heard & Held                                                                                           
03/15/05       (S)       MINUTE(L&C)                                                                                            
03/17/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/17/05       (S)       Heard & Held                                                                                           
03/17/05       (S)       MINUTE(L&C)                                                                                            
03/22/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/22/05       (S)       Heard & Held                                                                                           
03/22/05       (S)       MINUTE(L&C)                                                                                            
03/24/05       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
03/24/05       (S)       Heard & Held                                                                                           
03/24/05       (S)       MINUTE(L&C)                                                                                            
03/29/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/29/05       (S)       -- Meeting Canceled --                                                                                 
03/31/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 108                                                                                                                  
SHORT TITLE: INSURANCE                                                                                                          
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
02/14/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/05       (S)       L&C, FIN                                                                                               
03/31/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 142                                                                                                                  
SHORT TITLE: REGIONAL SCHOOL BD LAND/BLDG OWNERSHIP                                                                             
SPONSOR(s): LABOR & COMMERCE                                                                                                    
03/16/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/16/05       (S)       L&C, FIN                                                                                               
03/31/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 147                                                                                                                  
SHORT TITLE: SPORT FISHING FACILITY REVENUE BONDS                                                                               
SPONSOR(s): SENATOR(s) SEEKINS                                                                                                  
03/18/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/05       (S)       L&C, FIN                                                                                               
03/29/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/29/05       (S)       -- Meeting Canceled --                                                                                 
03/31/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
PAUL LISANKIE, Director                                                                                                         
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce                                                                                                 
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
Department of Labor and Workforce Development (DOLWD)                                                                           
POSITION STATEMENT: Commented on SB 130.                                                                                      
DR. WILLIAM PFEIFER, Vice President                                                                                             
Alaska Chiropractic Society                                                                                                     
POSITION STATEMENT:  Commented on SB 130.                                                                                     
JIM ROBINSON                                                                                                                    
Ad Hoc Committee                                                                                                                
Anchorage AK                                                                                                                    
POSITION STATEMENT: Commented on SB 130.                                                                                      
NOELL MCCULLOUGH                                                                                                                
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposed SB 130.                                                                                           
LINDA HALL, Director                                                                                                            
Division of Insurance                                                                                                           
Department of Community & Economic Development (DCED)                                                                           
POSITION STATEMENT: Commented on SB 108.                                                                                      
KIP KNUDSON                                                                                                                     
Deputy Commissioner of Aviation                                                                                                 
Department of Transportation &                                                                                                  
  Public Facilities                                                                                                             
3132 Channel Dr.                                                                                                                
Juneau, AK  99801-7898                                                                                                          
POSITION STATEMENT: Supported SB 142.                                                                                         
PAMELA LEWIS, Statewide Chief                                                                                                   
Aviation Leasing                                                                                                                
Department of Transportation &                                                                                                  
  Public Facilities                                                                                                             
3132 Channel Dr.                                                                                                                
Juneau, AK  99801-7898                                                                                                          
POSITION STATEMENT: Supported SB 142.                                                                                         
COLLEEN SAVOIE                                                                                                                  
Public Employees Local 71                                                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposed SB 108.                                                                                           
FRANK PUSCHAK                                                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposed SB 108.                                                                                           
KELLY HEPLER, Director                                                                                                          
Division of Sport Fish                                                                                                          
Department of Fish & Game                                                                                                       
PO Box 25526                                                                                                                    
Juneau, AK  99802-5226                                                                                                          
POSITION STATEMENT: Commented on SB 147.                                                                                      
BRIAN ALLEE, Director                                                                                                           
Alaska Sea Grant Program                                                                                                        
University of Alaska                                                                                                            
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 147.                                                                                         
MIKE ROUND, Assistant General Manager                                                                                           
Southern Southeast Regional Aquaculture Association (SSRAA)                                                                     
Petersburg AK                                                                                                                   
POSITION STATEMENT: Supported SB 147.                                                                                         
ACTION NARRATIVE                                                                                                              
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting to  order at 1:35:44 PM.  Present were Senators                                                             
Ben Stevens, Seekins, Ellis, Davis and Chair Bunde.                                                                             
                  SB 130-WORKERS' COMPENSATION                                                                              
CHAIR CON BUNDE announced SB 130 to be up for consideration.                                                                    
SENATOR SEEKINS moved to adopt CSSB 130(L&C), version G.                                                                        
SENATOR ELLIS objected for an explanation.                                                                                      
CHAIR BUNDE explained  that the CS freezes the  rate fee schedule                                                               
on page 16,  line 15, for medical claims to  the 2004 rates until                                                               
2007 when a  medical review committee report (page 28,  lines 8 -                                                               
13) is released.                                                                                                                
SENATOR ELLIS  asked if the  Governor was proposing to  set rates                                                               
back to what they were in 1999.                                                                                                 
CHAIR BUNDE  replied yes, but the  CS is proposing to  go back to                                                               
last year.                                                                                                                      
SENATOR  ELLIS  asked  if  doctors  could  have  input  into  the                                                               
solution where it is not onerous. He asked if they favor this.                                                                  
CHAIR  BUNDE  responded that  one  doctor  suggested freezing  at                                                               
current  rates and  the Chair  thought that  is a  good place  to                                                               
start the discussion.                                                                                                           
SENATOR  ELLIS  asked if  the  savings  could be  quantified  and                                                               
compared to the Governor's proposal.                                                                                            
CHAIR  BUNDE answered  that there  is  a chart  in the  committee                                                               
packet  that compares  rates, but  he based  his decision  on the                                                               
notion that  you can't  limit doctors' rates  to the  point where                                                               
there  is  no  treatment  available and  obviously  treatment  is                                                               
available now at current rates.                                                                                                 
SENATOR ELLIS asked if the CS  would have less costs savings than                                                               
the Governor's proposal.                                                                                                        
CHAIR BUNDE replied  yes, but it would also allow  more choice in                                                               
doctors for  an injured  worker. "It saves  the state  less money                                                               
and costs the doctors less money."                                                                                              
1:42:25 PM                                                                                                                    
SENATOR ELLIS  asked what the  CS does with the  Medical Services                                                               
Review Committee as compared to the original bill.                                                                              
PAUL  LISANKIE,  Director,  Division  of  Workers'  Compensation,                                                               
Department of  Labor and Workforce Development  (DOLWD), observed                                                               
that the CS language talks  about the December 2003 fee schedule,                                                               
but the fee schedule in December  2003 was published in July 2003                                                               
- in case the Chair is intending to use the '03 schedule.                                                                       
CHAIR BUNDE said  the report is designed to provide  hard data to                                                               
establish rates in 2007.                                                                                                        
1:44:50 PM                                                                                                                    
SENATOR ELLIS asked if the administration supports the changes.                                                                 
MR. LISANKIE  didn't know.  The commissioner  said that  he wants                                                               
the flexibility to get everybody  someplace they could agree. "In                                                               
the spirit of doing that, we  wouldn't see this as a roadblock to                                                               
getting where we need to get."                                                                                                  
1:46:08 PM                                                                                                                    
CHAIR BUNDE  said the  second change on  page 8  inserts language                                                               
that provides for better tracking  and oversight of the voc rehab                                                               
system. The  idea here is  that the department doesn't  have good                                                               
information like  it has in  other situations - like  AVTEC where                                                               
people receive training  and the Legislature gets  a report after                                                               
one and  two years. Voc  rehab is rather  costly and he  wanted a                                                               
tracking mechanism to see how it is serving workers.                                                                            
1:47:53 PM                                                                                                                    
CHAIR BUNDE moved on to change  3 in the CS that removes language                                                               
establishing a  new appeals  commission and  reverts back  to the                                                               
current hearing system - the Superior Court.                                                                                    
MR.   LISANKIE   commented   that   he   didn't   have   explicit                                                               
instructions, but thought the  administration wouldn't accept the                                                               
loss of the appeals commission.                                                                                                 
CHAIR BUNDE  hoped the issue  could be discussed  more thoroughly                                                               
in the next committee.                                                                                                          
1:51:25 PM                                                                                                                    
He  said change  4  clarifies  language for  use  of the  medical                                                               
guidelines.  He  asked for  a  stronger  waiver component  as  an                                                               
option  for doctors  to use  when,  in their  judgment, the  best                                                               
treatment for  a workers' comp  injury falls outside  the purview                                                               
of the  guidelines. It removes  the original language  that says,                                                               
"The  presumption   must  be  rebutted  by   a  preponderance  of                                                               
scientific evidence."                                                                                                           
SENATOR ELLIS  asked how difficult  it would  be for a  doctor to                                                               
get a waiver component and how would it work in the real world.                                                                 
CHAIR BUNDE responded  that the language is on page  15, line 18.                                                               
The intent is that the waiver  is obtainable by a doctor based on                                                               
his  professional  judgment  that  the  service  is  outside  the                                                               
SENATOR  SEEKINS envisioned  the  doctor could  certify that  the                                                               
treatment  is not  available  in the  manual,  which doesn't  set                                                               
forth all conceivable injuries.                                                                                                 
CHAIR BUNDE read page 16, line 1:                                                                                               
     The presumption  established under (o) of  this section                                                                    
     may be  rebutted by  an employee's  physician's written                                                                    
     certification explaining  the nature, extent  and scope                                                                    
     of  provided  treatment  or  the  service  that  is  at                                                                    
     variance  with the  applicable guidelines  or standards                                                                    
     and the  basis for the physician's  conclusion that the                                                                    
     provided medical  treatment or  service is  at variance                                                                    
     was  a  reasonable requirement  by  the  nature of  the                                                                    
1:55:25 PM                                                                                                                    
SENATOR ELLIS  asked if the  doctor's decision was  appealable in                                                               
any sense.                                                                                                                      
SENATOR SEEKINS said  it appeared to him that  the claim wouldn't                                                               
be reimbursable without the doctor's authority.                                                                                 
SENATOR  ELLIS said  he thought  there would  be cases  where the                                                               
doctor shouldn't  have the  power to decide  that a  treatment is                                                               
required outside  the scope of  the guidelines. The CS  takes out                                                               
the rebuttable presumption.                                                                                                     
1:57:39 PM                                                                                                                    
CHAIR  BUNDE responded  that the  other option  would be  to have                                                               
really rigid guidelines and then  an injury might go untreated or                                                               
be treated with  something less effective. "At some  point, in my                                                               
mind, we have to fall back  and rely on the professional judgment                                                               
and  the willingness  of a  doctor to  put his  integrity on  the                                                               
SENATOR  ELLIS  concluded  that they  are  granting  professional                                                               
discretion,  which   is  not  appealable  and   has  no  policing                                                               
mechanism. "It's just we're going to take a chance."                                                                            
CHAIR BUNDE  said that  Mr. Lisankie could  report abuse  back to                                                               
the Legislature and that could be changed.                                                                                      
1:59:25 PM                                                                                                                    
CHAIR  BUNDE explained  that change  5  of the  CS inserts  fraud                                                               
language that was  suggested by the Ad Hoc Committee  on pages 25                                                               
and 26.                                                                                                                         
2:00:51 PM                                                                                                                    
MR.  LISANKIE commented  this would  be the  first time  having a                                                               
provision for punitive damages and he supported it.                                                                             
SENATOR  SEEKINS  added  that  this  provision  doesn't  preclude                                                               
criminal provisions for fraud.                                                                                                  
MR. LISANKIE replied that is correct.                                                                                           
2:03:02 PM                                                                                                                    
DR.   WILLIAM  PFEIFER,   Vice  President,   Alaska  Chiropractic                                                               
Society, and delegate for  the American Chiropractic Association,                                                               
had  concerns  with  how the  American  College  of  Occupational                                                               
Environmental   Medicine   (ACOEM)    guidelines   would   handle                                                               
chiropractic and  other physical  medicines that they  lack right                                                               
now.  It creates  a  burden on  doctors who  might  have to  file                                                               
continuous   repetitive  rebuttals.   He  suggested   creating  a                                                               
variance for situations not covered under ACOEM.                                                                                
He  had   another  concern  with  the   medical  services  review                                                               
committee and would prefer a  workers' comp review committee that                                                               
would provide a broader perspective.                                                                                            
2:06:07 PM                                                                                                                    
JIM ROBINSON,  Ad Hoc  Committee, said it  continues to  meet and                                                               
will work into next year on workers' comp issues.                                                                               
2:07:09 PM                                                                                                                    
NOELL  MCCULLOUGH didn't  want to  switch  to a  new system.  She                                                               
wanted the  Legislature to make  the Workers'  Compensation Board                                                               
fully live up  to the last legislative audit and  then look where                                                               
changes need to be made. She  also asked why the ACOEM guidelines                                                               
were chosen above AMA guidelines.                                                                                               
2:08:38 PM                                                                                                                    
MR. LISANKIE  answered that the American  College of Occupational                                                               
Environmental Medicine is  a not for profit  organization and its                                                               
mission statement  says, "Physicians interested in  promoting the                                                               
optimal   health   and   safety  of   workers,   workplaces   and                                                               
environments,"  and  their  particular   focus  is  on,  "Use  of                                                               
evidence-based  medicine  and  a   focus  on  commonly  occurring                                                               
industrial  injuries,  tasks   and  treatments  with  significant                                                               
incidents, cost and practice variations."                                                                                       
2:09:22 PM                                                                                                                    
MS.  MCCULLOUGH  said the  fraud  provisions  in change  5  don't                                                               
include  attorneys as  a party  who can  be penalized  for making                                                               
fraudulent statements.                                                                                                          
CHAIR BUNDE replied, "The quick answer  to that is that they will                                                               
be covered, but it will be examined more thoroughly."                                                                           
2:10:13 PM                                                                                                                    
COMMISSIONER  GREG O'CLARAY,  Department of  Labor and  Workforce                                                               
Development  (DOLWD),   said  the   Senate  Labor   and  Commerce                                                               
Committee's  adjustments make  sense. He  supported rolling  fees                                                               
back to what they were in  2004 so that doctors will be available                                                               
to care for  people. He also felt that the  appeals commission is                                                               
a key element in the bill.                                                                                                      
2:12:56 PM                                                                                                                    
CHAIR BUNDE closed public testimony.                                                                                            
SENATOR ELLIS  said he supports  some of  the CS and  removed his                                                               
objection; and CSSB 130(L&C), version G, was adopted.                                                                           
SENATOR ELLIS  said he had  three amendments that  were requested                                                               
by a large number of voc rehab specialists.                                                                                     
SENATOR ELLIS moved Amendment 1.                                                                                                
                      A M E N D M E N T 1                                                                                   
OFFERED IN THE SENATE                          BY SENATOR ELLIS                                                                 
     TO:  SB 130                                                                                                                
Page 13, line 14, following "evaluation.":                                                                                      
Insert  "If the  company, firm,  or other  entity that  employs a                                                               
rehabilitation  specialist  selected   by  the  administrator  to                                                               
perform  an  eligibility  evaluation  under  this  subsection  is                                                               
performing  any  other work  on  the  same workers'  compensation                                                               
claim   involving  the   injured  employee,   the  rehabilitation                                                               
specialist shall inform the  administrator, and the administrator                                                               
shall select a different rehabilitation specialist."                                                                            
CHAIR BUNDE objected for an explanation.                                                                                        
SENATOR ELLIS explained that Amendment  1 would prevent conflicts                                                               
of  interest with  rehab  specialists who  have  been working  on                                                               
behalf  of an  insurance company  in a  particular case  or on  a                                                               
particular claim  from being  selected or  assigned to  write the                                                               
vocational plan for the same claimant.                                                                                          
2:15:21 PM                                                                                                                    
MR. LISANKIE  reacted favorably. He  does not favor  conflicts of                                                               
interest,  although  he did  not  have  personal knowledge  of  a                                                               
problem in this area. He knows  it's common for an injured worker                                                               
to  get  an  evaluation  and  have  a  vocational  rehabilitation                                                               
specialist assigned  to their case.  That person  recommends that                                                               
the injured  worker be found  eligible for  reemployment benefits                                                               
and that  same provider  goes on  and works up  the plan  for the                                                               
injured worker. He  wasn't sure what a rehab  specialist would be                                                               
doing for an insurance company that would promote this.                                                                         
2:17:07 PM                                                                                                                    
SENATOR SEEKINS  asked if  he seeks  to disqualify  the insurance                                                               
company or some  other entity that employs  or the rehabilitation                                                               
SENATOR  ELLIS  replied that  the  amendment  would preclude  the                                                               
rehab specialist from working for the insurance company.                                                                        
SENATOR  SEEKINS  said  he thought  that  the  language  actually                                                               
disqualifies the company,  firm or other entity  that employs the                                                               
injured worker.                                                                                                                 
SENATOR ELLIS  responded that those  weren't his  instructions to                                                               
the drafter and,  further, that the amendments  were prepared for                                                               
the  original  bill.  But,  he wouldn't  object  to  making  them                                                               
consistent with the CS. Amendment 1 could be conceptual.                                                                        
CHAIR BUNDE removed his objection with that understanding.                                                                      
2:20:00 PM                                                                                                                    
SENATOR BEN STEVENS asked if the amendment would prevent the                                                                    
same specialist from doing both the evaluation and the                                                                          
implementation of the plan.                                                                                                     
SENATOR ELLIS replied yes, "It would prevent the same person                                                                    
[from] doing both jobs." The suggestion came from voc rehab                                                                     
specialists and he thought someone would be present to explain.                                                                 
SENATOR BEN STEVENS said he didn't object to the amendment, but                                                                 
thought someone from the profession should address that                                                                         
CHAIR BUNDE announced that conceptual Amendment 1 was adopted.                                                                  
2:24:28 PM                                                                                                                    
SENATOR ELLIS moved Amendment 2.                                                                                                
                      A M E N D M E N T 2                                                                                   
OFFERED IN THE SENATE                          BY SENATOR ELLIS                                                                 
     TO:  SB 130                                                                                                                
Page 13, line 15, through page 14, line 1:                                                                                      
     Delete all material.                                                                                                       
Renumber the following bill sections accordingly.                                                                               
Page 35, line 3:                                                                                                                
     Delete "sec. 32"                                                                                                           
     Insert "sec. 31"                                                                                                           
Page 35, line 4:                                                                                                                
     Delete "sec. 32"                                                                                                           
     Insert "sec. 31"                                                                                                           
Page 37, line 2:                                                                                                                
     Delete "sec. 23"                                                                                                           
     Insert "sec. 22"                                                                                                           
Page 37, line 6:                                                                                                                
     Delete "Section 54(a)"                                                                                                     
     Insert "Section 53(a)"                                                                                                     
Page 37, line 7:                                                                                                                
     Delete "Sections 1 - 4, 32, and 56"                                                                                        
     Insert "Sections 1 - 4, 31, and 55"                                                                                        
Page 37, line 8:                                                                                                                
     Delete "Sections 5, 12, 39, 49, and 55"                                                                                    
     Insert "Sections 5, 12, 38, 48, and 54"                                                                                    
Page 37, line 13:                                                                                                               
     Delete "secs. 57- 59"                                                                                                      
     Insert "secs. 56 - 58"                                                                                                     
CHAIR BUNDE objected for an explanation.                                                                                        
SENATOR   ELLIS  explained   that   Amendment   2  adds   another                                                               
disqualifier to the job relocation benefit. The rationale is:                                                                   
     Accepting  job  dislocation  benefit from  a  different                                                                    
     case should not permanently  disqualify a worker with a                                                                    
     new and  even more  disabling injury  from reemployment                                                                    
     [Voc  rehab specialists]  are concerned  that it  would                                                                    
     exploit  younger  workers, workers  with  disabilities,                                                                    
     non-English-speaking   workers   and  those   who   are                                                                    
     desperate  for  money. There  is  no  oversight by  the                                                                    
     Division of Workers' Comp  on accepting job dislocation                                                                    
     benefits  as there  is on  settlement.  Also, no  legal                                                                    
     representation  required  in  the  bill.  So,  this  is                                                                    
     trying to address that overall concern.                                                                                    
CHAIR BUNDE asked  if this was going to just  protect people from                                                               
SENATOR ELLIS answered  that people are free to  make bad choices                                                               
in this country, but in this  case it potentially drives up costs                                                               
in the system.                                                                                                                  
CHAIR BUNDE asked  what would prevent an injured  worker who took                                                               
a  cash  settlement  from  coming back  for  a  second  unrelated                                                               
MR.  LISANKIE explained  that the  current provision  says if  an                                                               
injured worker  gets the  benefit and  goes back  to work  in the                                                               
same occupation  in terms of  physical demand,  that disqualifies                                                               
him from a second claim if he gets a second injury.                                                                             
2:30:32 PM                                                                                                                    
SENATOR ELLIS asked how often  that scenario happens and said the                                                               
money is often  much less than the rehab benefit  cost would have                                                               
MR.  LISANKIE  didn't have  hard  numbers  about how  often  that                                                               
happens and regarding the second  question, the settlement amount                                                               
might be significantly  less or similar to  what retraining would                                                               
cost. "As  a rule  of thumb  there has to  be some  inducement to                                                               
settle and  inducement is  the view that  you're saving  a little                                                               
bit of money for your client."                                                                                                  
2:31:37 PM                                                                                                                    
SENATOR ELLIS  went back  to the first  question saying  that the                                                               
department  wrote this  bill  based  on this  concern  and he  is                                                               
trying to understand it and justify changing the law.                                                                           
MR.  LISANKIE  responded that  the  premise  was built  into  the                                                               
original  act; in  1988 the  Legislature  felt that  there was  a                                                               
potential problem.                                                                                                              
2:33:13 PM                                                                                                                    
CHAIR BUNDE said  that tracking employment records  of people who                                                               
had gone through rehab would be an ancillary benefit of the CS.                                                                 
MR. LISANKIE agreed.                                                                                                            
SENATOR ELLIS asked if there would  be an answer to this question                                                               
in the future.                                                                                                                  
CHAIR  BUNDE  replied  that  he  thought  they  would  have  more                                                               
specific  information.   There  was  no  further   discussion  of                                                               
Amendment 2 and he maintained his objection.                                                                                    
MR. LISANKIE said he did not favor Amendment 2.                                                                                 
A roll  call vote  was taken: Senators  Ben Stevens,  Seekins and                                                               
Chair Bunde  voted nay; Senators  Ellis and Davis voted  yea; and                                                               
Amendment 2 failed.                                                                                                             
2:35:05 PM                                                                                                                    
SENATOR ELLIS moved Amendment 3.                                                                                                
                      A M E N D M E N T 3                                                                                   
OFFERED IN THE SENATE                                                                                                           
     TO:  SB 130                                                                                                                
Page 14, lines 27 - 30:                                                                                                         
               Delete  "The form provided by the division for                                                               
     election  shall specify  that the  employee understands  the                                                           
     scope  of  the  benefits  and rights  being  waived  by  the                                                           
     election.   The  administrator  shall serve  a  copy of  the                                                           
     executed election form  on the parties within  10 days after                                                           
     receiving the form from the employee."                                                                                 
               Insert  "Before accepting an election to accept a                                                            
     job dislocation  benefit in  place of  reemployment benefits                                                           
     from  an employee  who has  been given  a permanent  partial                                                           
     impairment rating  by a  physician, the  administrator shall                                                           
     provide  the employee  planning on  making an  election with                                                           
     individualized information  including calculations  based on                                                           
     that employee's  impairment rating to illustrate  the effect                                                           
     of  making  an election  as  well  as other  information  to                                                           
     clearly inform  the employee  of the  potential consequences                                                           
     of the employee's election.                                                                                            
               (4)  The form provided by the division for making                                                            
     an  election of  benefits must  require that  a copy  of the                                                           
     individualized calculations and  information provided to the                                                           
     employee  under  (3)  of this  subsection  be  attached  and                                                           
     incorporated as  part of  the election  and waiver  and must                                                           
     require  the  employee  to  acknowledge  that  the  employee                                                           
     understands  the  scope of  the  benefits  and rights  being                                                           
     waived by  the election.   The  administrator shall  serve a                                                           
     copy   of  the   executed  election   form,  including   the                                                           
     individualized  information attached  to  the  form, on  the                                                           
     parties within  10 days  after receiving  the form  from the                                                           
CHAIR BUNDE objected for discussion purposes.                                                                                   
SENATOR ELLIS explained:                                                                                                        
     The victim or  claimant will not know all  the risks of                                                                    
     waiving  the benefit  for what  could  be a  relatively                                                                    
     small sum of money. There is  also a concern by the voc                                                                    
     rehab specialists that adjustors  will stipulate to the                                                                    
     retraining benefit  and convince  the victim  to either                                                                    
     waive  the benefit  or go  for the  dislocation benefit                                                                    
     without communicating  it to the claimant  the value of                                                                    
     the benefit he is waiving  or the risk of accepting the                                                                    
     job dislocation benefit.                                                                                                   
CHAIR  BUNDE asked  if he  is  referring to  an injured  employee                                                               
being offered a cash settlement.                                                                                                
SENATOR ELLIS replied yes.                                                                                                      
MR. LISANKIE  elaborated that this amendment  referred to Senator                                                               
Seekins' concern  that some  people preferred  to settle  and the                                                               
board didn't have  the authority to stipulate  to certain things.                                                               
The  amendment would  allow injured  workers and  their employers                                                               
and insurers to stipulate that  the injured worker is entitled to                                                               
reemployment  benefits  and  to  go  forward  without  having  an                                                               
evaluation report prepared.  "We think it is  important that they                                                               
be allowed to stipulate."                                                                                                       
He was  not aware  that some  of the  rehab community  feels that                                                               
their role  is to  instruct the injured  worker about  what their                                                               
benefits  are or  aren't  at  any given  point.  The  bill has  a                                                               
proviso saying that  the division will get in  touch with someone                                                               
after he  has been off  work for 45 days  to explain what  is his                                                               
rights are, which is something that doesn't happen now.                                                                         
     With  all due  respect to  the rehab  people that  have                                                                    
     suggested that,  it's more important  that we  take the                                                                    
     time and  spend the money  to do an evaluation  just to                                                                    
     make  sure  that nothing  untoward  can  go forward.  I                                                                    
     think the  system would work adequately  if the parties                                                                    
     were  entitled  to  stipulate  and  move  forward  with                                                                    
     getting a plan together.                                                                                                   
2:40:29 PM                                                                                                                    
SENATOR STEVENS  wanted some clarification  on the intent  of the                                                               
MR.  LISANKIE replied  the intent  is  to delete  the ability  to                                                               
     So,  it  would  essentially  say that  if  the  injured                                                                    
     worker and  the employer  or their insurer  both agreed                                                                    
     that the  injured worker was entitled  to this benefit,                                                                    
     notwithstanding    their    mutual    agreement,    the                                                                    
     reemployment  benefits  administrator   would  have  to                                                                    
     assign  the  case  to  a  rehab  specialist  to  do  an                                                                    
     evaluation  to  confirm  the party's  belief  that  the                                                                    
     injured worker was entitled to the benefit.                                                                                
SENATOR ELLIS  said Amendment 3  is asking for an  evaluation and                                                               
there could be  a compelling state interest for  knowing what the                                                               
plan would be.                                                                                                                  
2:44:25 PM                                                                                                                    
SENATOR SEEKINS  countered if a  guy has  a crushed leg  and must                                                               
hire a voc rehab person to evaluate it, that's not right.                                                                       
     I don't see any sense  in that. If something is obvious                                                                    
     and they  stipulate to say,  'Yeah, you're  entitled to                                                                    
     vocational rehabilitation,'  they ought  to be  able to                                                                    
     do it without having to go through that step.                                                                              
SENATOR  ELLIS replied,  "There's a  lot  more to  it than  that,                                                               
SENATOR SEEKINS  said they are  trying to make sure  that someone                                                               
with  the least  amount  of  capacity one  way  or  the other  is                                                               
protected.  "However,  I  think  there are  times  when  it's  so                                                               
obvious that  we ought to  be able to stipulate  something rather                                                               
than having to go through a step that can be needless...."                                                                      
SENATOR ELLIS said  he would persist with the  amendment and hope                                                               
for compromise.                                                                                                                 
2:46:11 PM                                                                                                                    
CHAIR BUNDE  asked for  a roll call  vote. Senators  Ben Stevens,                                                               
Seekins  and Chair  Bunde  voted nay;  Senators  Davis and  Ellis                                                               
voted yea; and Amendment 3 failed.                                                                                              
2:49:08 PM                                                                                                                    
SENATOR  SEEKINS   moved  CSSB   130(L&C)  from   committee  with                                                               
individual  recommendations and  attached  fiscal notes.  Senator                                                               
Ellis objected.                                                                                                                 
Senators Ben Stevens,  Davis, Seekins and Chair  Bunde voted yea;                                                               
Senator Ellis voted nay; and CSSB 130(L&C) moved from committee.                                                                
                        SB 108-INSURANCE                                                                                    
CHAIR CON BUNDE announced SB 108 to be up for consideration.                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Community & Economic  Development (DCED), said the  purpose of SB
108  is   to  make  regulation   of  insurance   more  efficient,                                                               
consistent and good  for consumers. She went  through a sectional                                                               
analysis that was available in the committee's packets.                                                                         
2:55:54 PM                                                                                                                    
She said two sections of  the bill have created some controversy.                                                               
One deals  with service contracts and  products called guaranteed                                                               
auto protection. It  is the intent of the  Division of Insurance,                                                               
which  currently has  authority  to regulate  products under  its                                                               
very  broad definition  of insurance,  to promulgate  regulations                                                               
allowing recognition  of unique products  that are on  the market                                                               
that don't fit  a traditional definition of  insurance. She would                                                               
like to  be able to  look at  those products and  have regulatory                                                               
oversight  that allows  more flexibility  than the  definition of                                                               
insurance has today.                                                                                                            
MS.  HALL said  she  has  been working  with  Senator Seekins  to                                                               
resolve  this   and  feels  it   can  be  resolved  to   all  the                                                               
stakeholders' interests.                                                                                                        
The second  section that has  caused some  interesting discussion                                                               
is section 28. She explained:                                                                                                   
     There  is a  provision  for the  division  to set  some                                                                    
     minimum   standards  for   what's  called   self-funded                                                                    
     governmental plans.  Basically, we're talking  here are                                                                    
     not    the    political    subdivisions;    it's    not                                                                    
     municipalities,   it's  not   school  districts.   This                                                                    
     specifically speaks  to the Union Health  Trust. Today,                                                                    
     statutory  language  gives  the Division  of  Insurance                                                                    
     authority to look at various  entities and to determine                                                                    
     if  they  are  not  regulated by  another  entity  that                                                                    
     oversees   or  licenses   plans  that   provide  health                                                                    
     coverage,  they  will fall  under  Title  21. If  those                                                                    
     entities  fall  under Title  21  today,  they would  be                                                                    
     regulated as insurers.                                                                                                     
     In  March   2004,  at  the   request  of  one   of  the                                                                    
     unions....[to]  make  a  determination whether  we  had                                                                    
     regulatory oversight. I sent  letters to all five union                                                                    
     health   trusts  asking   for  information   about  who                                                                    
     regulated  them....   I  already  have   received  some                                                                    
         responses to those. We are seeking additional                                                                          
     information to make that preliminary determination.                                                                        
     This section seeks to clarify our statutory oversight                                                                      
     and to set some minimum standards....                                                                                      
CHAIR BUNDE  interrupted to say  that he had concerns  and wanted                                                               
her  to come  back at  a  future date  and give  the committee  a                                                               
detailed response.                                                                                                              
MS. HALL  replied that she would  be happy to do  that. Also, she                                                               
said,  "It's important  that there  be an  objective analysis  of                                                               
what money  is needed to pay  benefits to make sure  that benefit                                                               
money is actually there when it's needed."                                                                                      
CHAIR BUNDE announced that the bill would be held.                                                                              
         SB 142-REGIONAL SCHOOL BD LAND/BLDG OWNERSHIP                                                                      
CHAIR CON BUNDE announced SB 142 to be up for consideration.                                                                    
KIP  KNUDSON,  Deputy  Commissioner of  Aviation,  Department  of                                                               
Transportation  and Public  Facilities  (DOTPF), said  this is  a                                                               
simple technical  amendment for a state  statute that contradicts                                                               
somewhat federal obligations in  terms of FAA airport improvement                                                               
program  dollars.  It  would  make   de  jure  what  is  actually                                                               
happening now.                                                                                                                  
3:04:12 PM                                                                                                                    
SENATOR SEEKINS asked for an  explanation of, "If the state holds                                                               
less  than  fee  title  to  the land,  the  commissioner  of  the                                                               
department   having  responsibility   shall  convey   the  entire                                                               
interest of the stake in the  land to the regional school board."                                                               
- language on page 2, line 30 .                                                                                                 
MR. KNUDSON  explained that  is existing  statute and  "less than                                                               
fee  title"  would be  a  lease  or  an interim  land  management                                                               
agreement with DNR or something like that.                                                                                      
3:04:50 PM                                                                                                                    
SENATOR BEN STEVENS  wanted an example of  "other structures used                                                               
in regional attendance area schools" on page 2, lines 26 & 27.                                                                  
MR. KNUDSON replied that he  didn't understand what that language                                                               
was trying to achieve.                                                                                                          
3:05:33 PM                                                                                                                    
PAMELA LEWIS,  Statewide Chief,  Aviation Leasing,  Department of                                                               
Transportation  and   Public  Facilities  (DOTPF),   guessed  the                                                               
revisor may  have been referring  to things like fences  and fuel                                                               
SENATOR STEVENS  asked about structures  outside of  the boundary                                                               
of an airport.                                                                                                                  
CHAIR  BUNDE  said this  is  obviously  not  the simple  bill  he                                                               
thought and said he would hold SB 142 for a further hearing.                                                                    
                        SB 108-INSURANCE                                                                                    
CHAIR CON BUNDE announced SB 108  to be back up for consideration                                                               
and apologized for not taking public testimony earlier.                                                                         
COLLEEN SAVOIE,  Public Employees  Local 71,  opposed SB  108. It                                                               
imposes  unnecessary and  costly  regulation and  burdens to  the                                                               
trust health  plans that were established  through the collective                                                               
bargaining  process to  provide benefits  to state  employees. It                                                               
would  require the  trust  to file  actuarial  reports and  other                                                               
documents.  A Department  of Health  and  Social Services  (DHSS)                                                               
actuary  estimated that  it would  cost a  minimum of  $40,000 to                                                               
$50,000 per year  assuming the actuary was  already familiar with                                                               
the plan.  Administrative costs and  legal fees would  be related                                                               
to the filings as well.                                                                                                         
There is a requirement for  a fidelity bond covering the trustees                                                               
in an  amount not less  than 10 percent  of the benefits  paid in                                                               
the preceding  year. In the case  of a larger trust,  such as the                                                               
FDA, that could mean a bond of  as much as $6.4 million, which is                                                               
an unusually large bond and it may be difficult to obtain.                                                                      
MS.  SAVOIE  said  the  fiscal note  provides  for  one  customer                                                               
service specialist, but the number  of filings this bill requires                                                               
would need more.                                                                                                                
CHAIR  BUNDE said  he  has  passed her  written  concerns to  the                                                               
director  and those  would  be  addressed in  detail  in a  later                                                               
MS. SAVOIE  emphasized that  the reason  trusts are  concerned is                                                               
because  every  dollar  that goes  towards  administration  is  a                                                               
dollar that is not used for benefits.                                                                                           
FRANK  PUSCHAK, Anchorage,  said he  is  a trustee  for a  health                                                               
plan, but  he is speaking  for himself.  He said the  trusts were                                                               
set up because the state didn't  want to deal with them any more.                                                               
Sections 28  and 29 would  put them  under control of  the state,                                                               
but the trustees would be doing  all the work. SB 108 would cause                                                               
unnecessary  regulation and  burden. He  was also  confused about                                                               
what  government plans  are covered  in the  bill; he  thought it                                                               
could apply to the State of Alaska and municipalities, too.                                                                     
CHAIR  BUNDE thanked  him and  closed public  testimony. He  said                                                               
those concerns would be addressed before acting on the bill.                                                                    
          SB 147-SPORT FISHING FACILITY REVENUE BONDS                                                                       
CHAIR CON BUNDE announced SB 147 to be up for consideration.                                                                    
SENATOR  SEEKINS,   sponsor,  said   sport  fish   production  is                                                               
declining,  because of  30-year old  facilities in  the Anchorage                                                               
area and the closing of  another facility. The bond package would                                                               
fund a  new hatchery in  the Fairbanks  area close to  the Aurora                                                               
Energy Plant so waste heat  could be used. The federal government                                                               
has  come  through  with  over $6  million  already  and  another                                                               
promise for $3 million more. Now  is the time to renovate and add                                                               
to hatcheries  at Elmendorf  Air Force  Base and  Fort Richardson                                                               
and plan for the future.                                                                                                        
The bond  package would be used  for the capital project  and the                                                               
federal money would fund operating  expenses. Surcharges would be                                                               
added to the existing state fishing license fees.                                                                               
3:17:50 PM                                                                                                                    
CHAIR  BUNDE asked  if the  annual surcharge  on a  sport fishing                                                               
license would be $45.                                                                                                           
SENATOR  SEEKINS responded  yes  for a  non-resident;  but for  a                                                               
resident it would be $15 plus $8.50.                                                                                            
KELLY HEPLER,  Director, Division  of Sport  Fish, said  that the                                                               
annual non-resident sport fishing license is currently $100.                                                                    
CHAIR  BUNDE figured  that would  become  $145. He  asked if  the                                                               
ratio  between   resident  and   non-resident  fees   was  within                                                               
constitutional parameters.                                                                                                      
MR. HEPLER replied  yes; the ratio is about three  to one now and                                                               
that is  being kept  with the  surcharge. He  said the  last time                                                               
fishing license fees were raised was in 1993.                                                                                   
SENATOR SEEKINS said  the intent is that the  surcharge goes away                                                               
when the facility is paid for.                                                                                                  
CHAIR  BUNDE declared  a conflict  saying  he is  a recipient  of                                                               
benefits from the King hatchery at Ship Creek.                                                                                  
3:20:24 PM                                                                                                                    
BRIAN  ALLEE  supported  SB  147.  "I think  a  hatchery  in  the                                                               
Interior  is   really  important   and  renovation  of   the  two                                                               
hatcheries in Anchorage, as well." He  said he is director of the                                                               
Alaska Sea  Grant Program at  the University of  Alaska Fairbanks                                                               
and  knows the  value  of  hatcheries in  terms  of the  economy,                                                               
creating  jobs and  opportunities for  fishermen. The  University                                                               
would provide support to the hatchery in the Interior.                                                                          
SENATOR  SEEKINS said  part of  intent is  for the  University to                                                               
provide a research component.                                                                                                   
3:23:10 PM                                                                                                                    
MIKE  ROUND,   Assistant  General  Manager,   Southern  Southeast                                                               
Regional Aquaculture Association  (SSRAA), Petersburg, said SSRAA                                                               
is the current  contracted operator of the  Crystal Lake Hatchery                                                               
and supported  SB 147.  He read  a statement  about how  well the                                                               
hatchery is  doing. However, for  several years  many maintenance                                                               
issues have been  deferred and providing a  funding mechanism for                                                               
maintenance  and   renovation  projects   now  will   ensure  the                                                               
facility's efficient functioning into the future.                                                                               
3:25:33 PM                                                                                                                    
CHAIR BUNDE closed public testimony.                                                                                            
3:25:45 PM                                                                                                                    
SENATOR  SEEKINS  moved  to  pass  SB  147  from  committee  with                                                               
attached  fiscal notes  and individual  recommendations. Senators                                                               
Ben Stevens,  Seekins, Ellis,  Davis and  Chair Bunde  voted yea;                                                               
and SB 147 moved from committee.                                                                                                
There being no further business to come before the committee, he                                                                
adjourned the meeting at 3:27:21 PM.                                                                                          

Document Name Date/Time Subjects