SB 120-CLAIMS BY STATE-EMPLOYED SEAMEN    CHAIR BUNDE announced SB 120 to be up for consideration. MS. SUSAN COX, Assistant Attorney General, explained that SB 120 would have the state limit its waiver of sovereign immunity as it pertains to injury claims brought by state employees who happen to be seamen and instead provide for worker's compensation coverage for those state employees. The Governor's transmittal letter indicates that the intent of the bill is to provide state employees who are seamen with worker's compensation coverage, similar to all other state employees. To do that, the statute by which the legislature has waived the state's sovereign immunity, thereby opening itself up to litigation in tort claims, personal injury claims, and maritime personal injury claims, must be amended. MS. COX explained that amending AS 09.52.050 is an approach that was identified in a 1963 Attorney General's opinion and was referenced in an Alaska Supreme Court decision on a case known as the State of Alaska Department of Public Safety vs. Robert Brown in 1990. At that time, the [court] held that the Alaska Workers' Compensation Act could not be applied to be the exclusive remedy of state employees, because the state had waived its immunity without limitation for personal injury actions. If the state wanted to withdraw its consent to suit and apply worker's compensation to its state employees who are seamen, it could do so in a bill like this. She explained from 1983-1991 most state employed seamen who worked aboard our state ferries had collective bargaining agreements that provided for workers' compensation benefits in lieu of the Jones Act and other maritime remedies. For eight years those employees enjoyed workers' compensation coverage in lieu of litigation. In 1991, a different Alaska Supreme Court decision, another (Dale) Brown decision, said that collective bargaining agreements providing for workers' compensation instead of the Jones Act were void and therefore couldn't be negotiated as a matter of union contract. MS. COX said the purpose of this bill is to bring the state employees who are seamen under workers' compensation and take the state out of the realm of maritime remedies and Jones Act coverage. The Department of Law expects it to ultimately save the state money. The effective date is July 2003, but if enacted, it would apply only to injuries or illness occurring after that date. So, anyone who was injured in the last three years, because of the three-year statute of limitations under the Jones Act, would still be able to bring suit under the laws that exist now. MS. COX expects a legal challenge if this law is passed. She has looked at legal arguments pertaining to those. The Robert Brown decision from the Alaska Supreme Court and other cases from several jurisdictions point in this same direction. She added that decisions by the U.S. Supreme Court in the last five years have made it clear that if a state does not consent to be sued, the Congress cannot impose liability upon the state. 2:57 p.m. CHAIR BUNDE asked what the volume of claims is, how it compares with workers' compensation and what the state's net gain would be. MS. COX replied that at this point in time the Department of Law handles the litigation with ferry employees. The department expects to see a continuation of some cases for injuries that occurred in the last three years. Starting with the effective date of this law, new injuries and illnesses would go to the workers' compensation system. The state is self-insured and workers' compensation is obviously a no-fault remedy. The department would expect to see, by and large, automatic coverage of workers' compensation matters and an eventual reduction in the amount of litigation the Department of Law would have to handle. CHAIR BUNDE asked about the volume of claims the department is dealing with. He also asked if all employees of the Alaska Marine Highway System are seamen and whether they have to meet other criteria under this legislation. MS. COX replied that for all intents and purposes, those who work aboard the vessels are seamen and are covered under the maritime remedies that she referred to. Office workers onshore are not necessarily seamen. The department deals with a much higher volume of claims with respect to the maritime workers in the ferry system than other state agencies. SENATOR STEVENS asked about the Dale Brown decision and the basis for voiding the contract. MS. COX answered in the Dale Brown decision, the Alaska Supreme Court decided as a matter of labor law, that unions could not bargain away their individual members' rights, pre-injury, under the federal law. SENATOR FRENCH asked if this would put all state employees under the same workers' compensation scheme. MS. COX replied that is the plan. SENATOR SEEKINS asked if she had seen the letter from Beard, Stacy, Trueb and Jacobsen. MS. COX replied that she saw it in the hall. SENATOR SEEKINS asked for her opinion based on the theories of law that were set forth in it. MS. COX said she would be happy to do that and noted she has already evaluated some of the theories because she frequently deals with that firm in her cases. Mr. Trueb has expressed an interest in a uniform approach to maritime remedies for all seamen. The Governor disagrees and she disagrees with a number of the points Mr. Trueb raised in his letter. SENATOR SEEKINS said he was particularly interested in a couple of representations in the letter about the jurisdiction of all state courts in regard to injuries. MR. BRAD THOMPSON, Director, Division of Risk Management, said this division acts as the self-insurer and handles the claims filed by state employees. He noted he provided members with a chart that compares maritime claims to those of other state employees. The frequency of claims in 100 full time equivalent positions (FTE) for all state employees is 8 per 100 FTE. The Departments of Corrections, Transportation, Public Safety, and Administration have 10 per 100 FTE. The average cost of maritime workers' claims is $197,000 per 100 claims compared to $64,000 for workers' compensation claims. CHAIR BUNDE said he frequently hears that commercial fishing, logging and aviation are very high risk jobs and asked if he had information on how the Alaska Marine Highway System jobs compare. MR. THOMPSON replied that he thought the Worker's Compensation division would have a rate per 100 FTE on its annual report; he estimated it was about 10. CHAIR BUNDE asked if the expanded number of claims is due to the fact that working on ferries is inherently dangerous or because ferry workers are more inclined to present a claim. MR. THOMPSON replied that the remedy is different. Wages are paid to the end of the voyage and that is perhaps an incentive for frequency of claim. Workers' compensation only compensates for a time loss greater than three days. He pointed out that within the Robert Brown decision, the court clearly stated that if the state desires to limit its tort liability to the Workers' compensation Act, it may do so by legislative enactment of an exception to the waiver of sovereign immunity, which is what SB 120 is proposing. SENATOR SEEKINS asked what is so dangerous about working on a ferry and noted the claim rate is very high. MR. THOMPSON agreed the rate of claims is high. MR. JOE GELDHOF, Marine Engineers Beneficial Association, said his organization represents the marine engineers on the Alaska Marine Highway System and licensed engineers on Alaska tankers. SB 120 only relates to state workers who are seamen and a small number of people in the Departments of Fish and Game and Public Safety. He said this problem has been around for years and he is not convinced it is really good to go at this time. TAPE 03-15, SIDE A    MR. GELDHOF noted that the marine engineers and other maritime unions have worked with the state administration and with Susan Cox, who has a lot of historical knowledge, in the past. He said significant legal problems within the bill need to be addressed before it moves out of committee. He explained in one Brown case, the court struck down provisions based on a challenge to contractual language brought by an individual mariner. The other Brown case, which preceded that one by about two years, addressed sovereign immunity and how to fix the problem, but it was based on an attorney general's opinion issued in 1963 when Lyndon Johnson was in the first year of his presidency. He said that opinion is fairly dated and suggested the current attorney general update it. MR. GELDHOF said one theory is that sovereign immunity is imbedded in the Alaska Constitution so it would require a constitutional amendment rather than a statutory change. He thought it would be wise to get an opinion from legislative counsel and to then refer the bill to the Judiciary Committee. He noted the bill also needs a fiscal note regarding the administration of workers' compensation. He added that real differences account for what appears to be substantially more claims coming from marine activities. For example, cooking during an 8-hour shift in a prison is fundamentally different than on a ship when the weather gets rough. He maintained: If you take the Tustumena out to Dutch Harbor, it's probably not a stationary deck and it's long days. People are often sleep deprived.... There really are genuine differences in the maritime trades from landlubbers like me. CHAIR BUNDE asked Ms. Cox to provide a fiscal note and said that interesting legal points were raised, but the Senate President would decide whether to refer SB 120 to the Judiciary Committee. With no further business to come before the committee, he adjourned the meeting at 3:15 p.m.