03/24/2005 02:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB137 | |
| SB140 | |
| SB2 | |
| SB130 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 2 | TELECONFERENCED | |
| = | SB 130 | ||
| = | SB 140 | ||
| = | SB 137 | ||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 24, 2005
2:06 p.m.
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ben Stevens
Senator Bettye Davis
MEMBERS ABSENT
Senator Ralph Seekins, Vice Chair
Senator Johnny Ellis
COMMITTEE CALENDAR
SENATE BILL NO. 137
"An Act providing that an institution providing accommodations
exempt from the provisions of the Uniform Residential Landlord
and Tenant Act may evict tenants without resorting to court
proceedings under AS 09.45.060 - 09.45.160."
MOVED SB 137 OUT OF COMMITTEE
SENATE BILL NO. 140
"An Act relating to spyware and unsolicited Internet
advertising."
MOVED SB 140 OUT OF COMMITTEE
SENATE BILL NO. 2
"An Act relating to prerequisites for obtaining and recording a
lien for payment of the contract price for labor or materials
supplied for the construction, alteration, or repair of a
building or improvement."
HEARD AND HELD
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."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 137
SHORT TITLE: EVICTING INSTITUTIONAL PROPERTY USERS
SPONSOR(s): SENATOR(s) SEEKINS
03/08/05 (S) READ THE FIRST TIME - REFERRALS
03/08/05 (S) L&C, JUD
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)
BILL: SB 140
SHORT TITLE: BAN INTERNET SPYWARE
SPONSOR(s): SENATOR(s) THERRIAULT
03/10/05 (S) READ THE FIRST TIME - REFERRALS
03/10/05 (S) L&C, JUD
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
BILL: SB 2
SHORT TITLE: LIEN REQUIREMENTS
SPONSOR(s): SENATOR(s) GUESS
01/11/05 (S) PREFILE RELEASED 12/30/04
01/11/05 (S) READ THE FIRST TIME - REFERRALS
01/11/05 (S) L&C, JUD
01/27/05 (S) L&C AT 1:30 PM BELTZ 211
01/27/05 (S) Scheduled But Not Heard
03/24/05 (S) L&C AT 2:00 PM BELTZ 211
BILL: SB 130
SHORT TITLE: WORKERS' COMPENSATION
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
WITNESS REGISTER
JOE MICHEL
Staff to Senator Seekins
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 137 for the sponsor.
DAVE STANCLIFF
Staff to Senator Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 140 for sponsor.
SENATOR GRETCHEN GUESS
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 2.
GREY MITCHELL, Director
Division of Labor Standards and Safety
Department of Labor & Workforce
Development
PO Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Commented on SB 2.
BARBARA HUFF-TUCKNESS
Alaska Labor Management Ad Hoc Committee
POSITION STATEMENT: Opposed SB 130.
PAUL LISANKIE, Director
Division of Workers' Compensation
Department of Labor & Workforce
Development
PO Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Supports SB 130.
KEVIN SMITH, Executive Director
Alaska Municipal League Joint Insurance Association (AMLJIA)
POSITION STATEMENT: Supports SB 130.
ACTION NARRATIVE
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 2:06:53 PM. Present were Senators
Davis, Ben Stevens and Chair Bunde.
SB 137-EVICTING INSTITUTIONAL PROPERTY USERS
CHAIR CON BUNDE announced SB 137 to be up for consideration.
JOE MICHEL, aide to Senator Seekins, sponsor, said that the
university and certain other institutions are exempt under the
Uniform Resident Landlord Tenant Act, AS 34.03.330. Despite the
exemptions, lower court decisions have interpreted the statutes
governing evictions to require a court action to evict a
resident that refuses to leave one of these exempt facilities.
At the university, housing privileges are not revoked
without notice or without considerable administrative
process. The process may include hearings and an
appeals process to the Superior Court. Only on rare
occasions do students insist on remaining in housing
after their lease termination. Even then significant
efforts are made to avoid confrontation.
He said that SB 137 clarifies legislative intent versus lower
court opinions.
CHAIR BUNDE said there were no questions.
2:09:32 PM
SENATOR BEN STEVENS moved to pass SB 137 with individual
recommendations and attached fiscal notes. Senators Ben Stevens,
Davis and Chair Bunde voted yea; and SB 137 moved from
committee.
SB 140-BAN INTERNET SPYWARE
CHAIR CON BUNDE announced SB 140 to be up for consideration.
DAVE STANCLIFF, staff to Senator Therriault, briefly recapped
previous testimony outlining the magnitude of the problems and
expense involved in dealing with spyware. He said the best
features of other models were incorporated in this bill.
SENATOR BETTYE DAVIS said one of her constituents from the
Environmental Summit wanted to see SB 140 pass while she was in
town, because her computer was affected by spyware.
SENATOR BEN STEVENS moved to pass SB 140 from committee.
Senators Davis, Ben Stevens and Chair Bunde voted yea; and SB
140 moved from committee.
2:13:17 PM Recess 2:13:25 PM
SB 2-LIEN REQUIREMENTS
CHAIR CON BUNDE announced SB 2 to be up for consideration.
SENATOR BEN STEVENS moved to adopt CSSB 2(L&C), version Y, for
discussion.
CHAIR BUNDE objected for discussion purposes.
SENATOR GUESS, sponsor, explained that the change can be found
on page 2, lines 17 through 19. The Department of Labor and
Workforce Development (DOLWD) requested another exemption, their
wage claim and wage assignment process.
CHAIR BUNDE removed his objection and the CS was adopted.
2:14:41 PM
SENATOR GUESS said SB 2 came from constituents. Right now a
person does not have to show that they had an agreement with the
owner of a property before filing a lien and the onus is on the
owner to try to undo the lien. She tried to balance the
importance of taking care of labor with what an owner has to do
in responding to a lien. SB 2 asks that either a contract or
other documentation showing there is a contract for the work be
presented when a lien is filed. If you don't have that, you can
get a court order that shows the existence of lien. Often
laborers go to the DOLWD that goes through a process that says
you should have been paid. The department requested the
amendment to protect its ability to file a lien against
employers after it had investigated claims of non-payment in
wages. Her goal was to stop the frivolous liens.
2:16:46 PM
SENATOR STEVENS asked if language saying "wage claim" or "wage
assignment" is boiler-plate and would the Department of Labor
now be able to go after a contractor for assignments of a wage.
SENATOR GUESS replied that the department's process determines
that a wage needs to be paid, but Mr. Mitchell would explain
that.
2:18:31 PM
GREY MITCHELL, Director, Division of Labor Standards and Safety,
explained:
It's simply a terminology issue. A wage claim is the
same thing as a wage assignment, essentially. The
people at Legislative Legal, when they were wrangling,
wanted to include both terms. So an assignment
basically means that someone has assigned their wage
claim to the Department of Labor and Workforce
Development, which means that we have the authority to
act on their behalf.
2:19:26 PM
CHAIR BUNDE asked if someone has child support to claim, would
they use this vehicle.
MR. MITCHELL replied that it applies just to wage claims
assignments.
SENATOR STEVENS asked if a garnishment is not considered an
assignment.
MR. MITCHELL replied that's true.
2:20:11 PM
CHAIR BUNDE asked if this bill applies to a situation where
someone who is undercapitalized builds a building, doesn't pay
the suppliers, leaves town, files bankruptcy so he's not
available to pay his bills and the supply company puts a lien on
the home.
MR. MITCHELL replied that he wasn't sure since it's not a labor-
related question, but he thought the supplier would have to come
forward with a contract or judgment to file a lien.
2:20:51 PM
CHAIR BUNDE said the contractors' bonds are $10,000, which
hasn't been changed in a long time and he asked if now would be
a good time to discuss changing it.
MR. MITCHELL replied that that would be up to the committee.
CHAIR BUNDE asked Senator Guess if she thought this was a good
time to review the bonding amount and if her bill covered his
concern about builders who are undercapitalized and the
homeowner gets the lien because of it.
2:21:31 PM
SENATOR GUESS replied that she hadn't considered it, but would
be more than willing to. In this bill, they would have to show
an agreement with the property owner, not with the middle
person. She promised to give it and the bond requirement more
thought.
2:22:34 PM
SENATOR GUESS said for the record, she asked to postpone the
hearing so she could meet with the laborer's community and the
Homebuilders' Association who have no problems with the bill.
CHAIR BUNDE set SB 2 aside for the time being.
SB 130-WORKERS' COMPENSATION
CHAIR CON BUNDE announced SB 130 to be up for consideration.
BARBARA HUFF-TUCKNESS, Alaska Labor Management Ad Hoc Committee,
referenced its letter in the committee packets. The Ad Hoc
Committee wanted her to explain 13 concerns regarding SB 130.
2:24:16 PM
Many of the Ad Hoc ideas are in SB 130, many other items are
included also that it has great concerns with. The first is
reimbursement of medical costs. The administration proposes to
roll back rates to 1999 rates. "We do not believe this is
reasonable." Medial costs are the largest driving factor in
workers' comp costs.
The Ad Hoc Committee requested information from both insurance
companies regarding the medical costs in November and have not
received that information and, therefore, can't make a
reasonable recommendation and deferred the issue until next
year. Language in SB 130 would impact the medical community in
such a way that physicians might decide to no longer serve
injured workers.
2:26:28 PM
The second letter had to do with the ACOM guidelines. The
committee decided it needed more information on this issue as
well. What little information it has received came from
California that recently adopted ACOM guidelines. There are
problems with how insurance companies are applying the
guidelines and denying medical claims. Either they are not being
clearly defined or are not being addressed at all.
2:28:01 PM
The third item is voc rehab and it is another issue the
committee did not receive information on. It is a huge cost
factor within the workers' comp system. Members discussed
turning it into a return to work program, but didn't receive
available information.
2:29:20 PM
Item four addresses the return to work program that she
mentioned in conjunction with the voc rehab. The committee was
looking at it in conjunction with deleting the second injury
fund. It did not believe the fund services the employer and
believes that there needs to be a truly responsive return to
work program for injured people.
2:30:03 PM
CHAIR BUNDE asked her to flesh that out.
2:30:13 PM
MS. HUFF-TUCKNESS responded that some states actually have a
return to work program. Some employers within the state of
Alaska have established a return to work program or modified
work within their own corporate structure. Some states have
formalized those programs with their workers' comp programs.
2:31:29 PM
She went on to item 5 that did not have much discussion in the
Ad Hoc Committee. But there is some concern that this would
actually increase costs to the Workers' Comp program even though
it addresses hiring attorneys to represent the injured workers.
The committee has not seen any statistical information that
would prove that one way or the other.
2:32:46 PM
The sixth item deals with the commission and the de novo review.
The committee has concerns with replacing the superior court
with a new layer of bureaucracy. A less costly idea the Ad Hoc
Committee had is having a super-senior workers' comp board
consisting of two labor and two management with a Workers' Comp
hearing officer. They would hear the appeals of decisions from
the Workers' Comp Board and would have the ability to decide
questions limited to specific issues of law. The senior members
of the board would have more knowledge of the law and would
follow the intent of the statutes without adding the cost of the
bureaucracy.
2:35:08 PM
CHAIR BUNDE asked about item 7, the fraud statute.
MS. HUFF-TUCKNESS didn't think the fraud language went far
enough. The department has never followed up on fraud that had
proof. Ad Hoc wanted greater enforcement.
2:38:06 PM
She said the temporary seasonal definition, item 8 in the
letter, affects employers around the state, but affects
construction workers the most. She noted that Ad Hoc language in
the letter was fair for the injured worker as well as the
business.
2:38:54 PM
She said she looked forward to working with the committee and
administration.
2:40:17 PM
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development (DOLWD), had no
further remarks.
CHAIR BUNDE asked him to comment on the fraud provisions in item
7 of the Ad Hoc Committee letter. He also asked to know if the
return to work program was successful in other states.
2:41:43 PM
SENATOR DAVIS said she wanted to know if other states had set up
a commission to bypass the superior court.
MR. LISANKIE replied that he has looked at other states'
statutes and some have an executive branch committee that hears
appeals of workers' compensation matters. He is not sure any
have precisely the type of proposal the Ad Hoc Committee
envisioned. That is more of a reconsideration by a different
group of the same board that made the original decision as
opposed to sending the decision to separate entity like an
appeals commission. The major difference is that under SB 130,
the appeals commission would take the place of Superior Court
and he believed that would be somewhat quicker.
2:43:56 PM
KEVIN SMITH, Executive Director, Alaska Municipal League Joint
Insurance Association (AMLJIA), said it represents 140 different
municipalities and school districts in Alaska. It permits those
public entities to self-insure as a group when they may not have
the resources to self-insure as individual entities. He said:
As far as risk financing mechanisms go, being able to
self insure as a group is a fairly efficient way to do
this. Essentially, to pay the cost of losses and pay
the cost of reinsurance and pay the cost of overhead,
that's about what goes into calculating rates. So,
there's no shareholder profit necessary as you get in
a commercial insurance arrangement. The AMLJIA has a
$300,000 self-insured retention. So, for every
workers' compensation loss that we have, we have to
fund enough to cover at least the first $300,000 of
the loss. Above and beyond that, we purchase
reinsurance or insurance for insurance companies to
make sure that if somebody is seriously injured, that
there's adequate resources to cover it.
But despite the efficiencies in the system, itself,
the costs continue to rise for the public sector in
Alaska just as they have risen for the private sector
in Alaska. The Workers' Compensation system from our
perspective is broken and needs to be fixed. The cost
has gotten to a point where a number of municipalities
can't afford to purchase the insurance any more. With
the PERS TRS problems on their plate, lack of
municipal assistance and revenue sharing, increased
fuel costs, utility costs, the increased demands
essentially on the public coffers with less resources
have forced me to cancel at least 10 municipalities in
December from coverage for Workers' comp for property
and for liability and I have canceled several more
since then.... It's a serious situation.
He said that SB 130 is a step in the right direction for
containing the increasing costs for Workers' Compensation. Some
of the positives are the ability to stipulate to agreements when
both parties are represented without getting board approval,
streamlining the voc rehab process and having a preferred
provider list for employers that is voluntary for employees.
Generic drugs are a good thing and guidelines for medical care
is a positive step. Some offset for PERS and TRS or occupational
disability is another good idea as well as phasing out the
second injury fund.
2:47:40 PM
CHAIR BUNDE asked what the public entities who are going without
workers' comp doing.
MR. SMITH replied that some of them are bending state law, but
most are scrambling to find the resources to get back into the
program. "A number of the communities have gotten to the point
where there's not a lot of employees getting hurt."
2:49:29 PM
CHAIR BUNDE reflected that no one is happy with the current
situation and he hopes to find something to make it better.
COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce
Development (DOLWD), thanked the chair for having hours of
testimony on this issue.
CHAIR BUNDE said he hoped to have a CS next week. He adjourned
the meeting at 2:52:16 PM.
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