Legislature(1997 - 1998)
03/10/1998 03:55 PM Senate L&C
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SENATE LABOR AND COMMERCE COMMITTEE
March 10, 1998
3:55 P.M.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jerry Mackie, Vice Chairman
Senator Tim Kelly
Senator Mike Miller
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 319
"An Act relating to arbitration; amending Rules 57(a) and 77(g),
Alaska Rules of Civil Procedure; and providing for an effective
date."
- HEARD AND HELD
SENATE BILL NO. 245
"An Act repealing the termination date of the state training and
employment program; and providing for an effective date."
- PASSED CSSB 245(L&C) OUT OF COMMITTEE
SENATE BILL NO. 305
"An Act relating to rehabilitation of injured workers."
- PASSED CSSB 305(L&C) OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 319 - No previous action to be considered.
SB 245 - No previous action to be considered.
SB 305 - No previous action to be considered.
WITNESS REGISTER
Ms. Steve Devries, Assistant Attorney General
Department of Law
1031 W 4th, Suite 200
Anchorage, AK 99501-1994
POSITION STATEMENT: Commented on SB 319.
Mr. Bill McNall, Attorney
Anchorage, AK
(907) 276-2535
POSITION STATEMENT: Supported SB 319.
Mr. Mike Andrews
Anchorage, AK
(907) 269-7490
POSITION STATEMENT: Supported SB 245
Mr. Dwight Perkins, Special Assistant
Department of Labor
P.O. Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Supported SB 245.
Ms. Arbe Williams, Director
Division of Administrative Services
Department of Labor
P.O. Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Supported SB 245.
Ms. Yvonne Chase, Director
Division of Community and Rural Development
Department of Community And Regional Affairs
333 W 4th Ave., Ste 220
Anchorage, AK 99501
POSITION STATEMENT: Supported SB 245.
Ms. Mary Shields
Northwest Technical Services
3330 Arctic Blvd.
Anchorage, AK
POSITION STATEMENT: Supported SB 245.
Ms. Sandy Burd, Staff
Senator Jim Duncan
State Capitol Bldg.
Juneau, AK 99802-1182
POSITION STATEMENT: Commented on SB 305 for sponsor.
Mr. Paul Grossi, Director
Division of Worker's Compensation
Department of Labor
P.O. Box 25512
Juneau, AK 99802-5512
POSITION STATEMENT: Supported SB 305.
ACTION NARRATIVE
TAPE 98-13, SIDE A
Number 001
SB 319 - ARBITRATION
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee
meeting to order at 3:55 p.m. and announced SB 319 to be up for
consideration.
MR. JERRY BURNETT, Staff to Representative Randy Phillips,
explained that last year the legislature directed the Judicial
Council to propose a program for alternative dispute resolution for
arbitration which is now being used as a standard procedure in
contracts. One of the most common uses where it affects a number
of people is in real estate contracts where people don't fully
realize the implications of arbitration. There are no guidelines
currently established anywhere governing many aspects of an
arbitration proceeding. There are no provisions that arbitration
be preceded by mediation. The arbitrator doesn't have a state law
or any other law in making a decision and there is no limit on the
amount of money requested by a party to arbitration by another and
no limit on the time in which an arbitration can be pursued after
a contract is signed.
SB 319 requires language in a contract subject to arbitration
stating clearly that a party to arbitration may be limiting or
waiving rights to other remedies, including appeal of an
arbitrators decision to a court of law, and limits the amount that
can be arbitrated to $5,000.
MR. BURNETT pointed out that Section 11 refers to Section Five and
it should refer to Section Six and needs to be amended.
CHAIRMAN LEMAN said he didn't know why they chose $5,000 as the
limit instead of the $7,500 limit for small claims court. (This
technical error was corrected in a later hearing - committee
staff.)
Number 86
MR. STEVE DEVRIES, Department of Law, said he had two minor
problems with the proposed bill in Section Three,(b))(4)
determination of whether a dispute under the contract is
arbitrable, seems to be at odds with existing Supreme Court
precedent, and (b)(9), waiving your right to recover punitive
damages, would only exist in law if there was an express
prohibition on recovery of punitive damages in the underlying
contract. This was in a decision that came down from a U.S.
Supreme Court in 1995.
CHAIRMAN LEMAN asked him to provide suggested language that would
correct the problems.
MR. BILL MCNALL, said he was representing no one in particular, but
he has clients he represents in arbitration who are real estate
agents as well as just plain folks. It is obvious in the
arbitration process that the lack of guidelines was going to be a
real hindrance and the lack of knowledge on behalf of both the real
estate professional and the consuming public about what arbitration
was vastly different than what they expected. Everyone thought
that it would be easier and less expensive than litigation. The
truth is that it can be more complex, expensive, and take longer
than litigation, because of the lack of rules.
He explained the reason for the $5,000 limit is because there is a
trouble/damage section in the seller's disclosure law and if it
turns out that someone intentionally doesn't disclose something,
they can be liable for up to $15,000. As a result, it was felt if
the treble damage amount was low enough, arbitration might still be
an effective way to deal with it.
He said this bill is trying to help the consuming public by giving
them some advance notice of what it means to go to arbitration.
SENATOR KELLY thought they should consider repealing what they did
last year, rather than try to go forward and fix a broken system.
MR. MCNALL said it seems to him that a lot of the small dollar
amounts could be handled in small claims court a whole lot more
efficiently than in the arbitration process. The only way to fix
it is to make arbitration available only to matters that are above
the small claims limit.
CHAIRMAN LEMAN said the Committee would hold the bill for further
work.
SB 245 - EXTEND STATE TRAINING AND EMPLOYMENT PROG
CHAIRMAN LEMAN announced SB 245 to be up for consideration.
MR. MIKE ANDREWS testified in 1996 when the Legislature
reauthorized the State Training Employment Program (STEP), it gave
the Alaska Human Resources Investment Council more authority for
oversight and mandated that they monitor the program to do several
things: to track eight cost categories for spending, to reduce the
amount of money recaptured by the Unemployment Trust, so that more
money could be used for the job seekers, and hold administrative
costs to below 20 percent. The Committee should have a final
assessment report for FY 97 that was prepared by the Alaska Human
Resources Investment Council in their packets indicating that the
legislative mandates were met, he said. They were able to serve
443 more customers this year with about the same funds they had
last year, reducing the costs per client from about $2,000 to
$1,500. They have also held the costs for administration to below
20 percent. The STEP program is the only State-funded job training
program under AHRIC oversight. Of their 17 programs, 16 are
federally funded. This was the only State-funded one and it comes
from the worker's contribution to the Unemployment Trust. For
clients it has reduced the amount of unemployment insurance claims,
has lengthened their annual salary, their weeks of work and is a
very efficient and effective job training program for the State.
He urged continued support of the STEP program.
Number 240
MR. DWIGHT PERKINS, Special Assistant, Department of Labor, said
the STEP was enacted in 1989 as a temporary two-year pilot program.
Its success led the legislature to extend it three more times. The
last extension in 1996 made the STEP permanent, but subject to
sunset provision. Since the last extension, STEP has made great
strides in addressing legislative concerns with the program.
MS. ARBE WILLIAMS, Director, Administrative Services, Department of
Labor, said that one tenth of one percent of an employee's wage is
deposited to the STEP account. The STEP status report shows that
more of these funds are getting out on the street than ever before.
Less than $307,000, at most, will be returned to the U.I. Trust
Fund for FY 97. She said the report is based on actual payments
made and has been reconciled to financial information by State
delivery area, program elements listed in the legislation, and
includes better detail.
Number 290
MS. YVONNE CHASE, Director, Division of Community and Rural
Development, said there are a number of ways they measure the
success of the STEP program: the reduction in claims filed against
the U.I. Fund (down to 345 from 538 in the year after the
participants completed the STEP), the reductions in the benefits
paid out of the Fund as a result of that decrease (in FY 95 from
$1.6 million prior to the client's entering STEP to a little over
$800,000 after they left the program), and the increase in new
business created in Alaska as a result of having a trained work
force. They measure that by looking at the STEP participants who
complete the program and enter newly created jobs. Statistics of
newly created jobs are fairly phenomenal, 251 (about 29 percent)
actually entered newly created jobs in FY 95. In FY 96 that
number jumped to 48 percent (353).
Number 338
CHAIRMAN LEMAN asked why they didn't just extend the sunset date
instead of removing the clause.
MR. PERKINS answered that since 1989 it was a pilot program, but
has proved itself to be such a worthwhile program that could be
made permanent by removing the sunset provision.
CHAIRMAN LEMAN said he didn't really agree with that.
SENATOR MACKIE said he thought this was a good program and that he
wanted to support it. He thought that the way they treat the other
programs that are also critical is with a sunset, so it can be
reviewed. He thought there might be more problems being repealed
than extending the sunset date.
MR. PERKINS said they could accommodate a four-year sunset. He
pointed out again that they had stayed within the financial and
administrative limits the legislature gave them two years ago.
SENATOR MACKIE made a conceptual amendment to delete Sections One
and Two and insert standard language extending the program until
June 30, 2002. There were no objections and it was so ordered. He
said it was his intent to have the title redrafted according to the
standard extension date language.
SENATOR KELLY said he thought because there really aren't any
federal regulations guiding the use of this money, it would be easy
for it to be used inappropriately. But since it's such a good
program, it should continue as long as the legislature could keep
an eye on it. Senator Torgerson had questioned whether they had
really reached their targeted 20 percent reduction, he added.
Number 424
MS. MARY SHIELDS, Northwest Employment Service, said she is
extremely pleased that they are all up to speed on this program.
SENATOR MACKIE moved to pass CSSB 245 (L&C) from Committee with
individual recommendations. There were no objections and it was so
ordered.
SB 305 - IMPLEMENTATION OF WORK COMP EDITION
CHAIRMAN LEMAN announced SB 305 to be up for consideration.
MS. SANDY BURD, Staff to Senator Duncan, sponsor, said it was
discovered in February that selected characteristics defined in the
Dictionary of Occupational Title were the 1993 version which hadn't
been adopted. This meant they were using the 1981 version.
Originally this bill corrected that. This morning she found,
however, that the U.S Department of Labor is working on a new
system and there is an amendment to change it so that if the new
system comes on-line, the Occupational Information Network can be
adopted as a replacement.
SENATOR MACKIE moved to adopt Amendment One. There were no
objections and it was so ordered.
SENATOR KELLY moved a conceptual amendment to tighten the title to
what is being dealt with in the bill. There were no objections and
it was so ordered.
Number 471
MR. PAUL GROSSI, Director, Division of Worker's Compensation, said
the Department supported this bill and the amendments. He said it
allows them to use the most current data available from the U.S.
Department of Labor regarding job characteristics, so
determinations can be made regarding retraining benefits.
CHAIRMAN LEMAN asked if Ms. Tatlow had any comments.
MS. SHIELDS indicated that Ms. Janice Tatlow wanted to support SB
245, but had left when the Committee passed it.
SENATOR MACKIE moved to pass CSSB 305(L&C) with individual
recommendations. There were no objections and it was so ordered.
CHAIRMAN LEMAN adjourned the meeting at 4:35 p.m.
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