SB 120-CLAIMS BY STATE-EMPLOYED SEAMEN  CHAIR BUNDE announced SB 120 to be up for consideration. MS. SUSAN COX, Assistant Attorney General, summarized that at the last hearing she was requested to draft a response to some legal questions raised in a letter from a constituent, Lanning Trueb of Beard Stacey Trueb & Jacobsen. She laid out the background for the legal approach taken in the bill and why the Department of Law believes that approach is not only acceptable, but is expressly authorized by language in a decision of the Alaska Supreme Court. She also commented on why SB 120 would not violate the Alaska Constitution's equal protection provision, federal maritime law supremacy issues, and the argument for some need for uniformity of maritime law that would supercede state sovereign immunity. In addition, sovereign immunity is not an issue the legislature can deal with in statute. MR. PAUL GROSSI, Director, Division of Workers' Compensation, said, regarding the $71,000 fiscal note, that the division is hoping this universe of employees is not going to be too different than other employee groups and that amount would be enough to cover them. He noted it could be a little bit more. CHAIR BUNDE asked what the compensation was under the old system. MR. GROSSI replied that the division doesn't really have good records prior to the use of computers. CHAIR BUNDE asked if losses would have been higher than $71,000. MR. GROSSI replied that the fiscal note only covers the adjudication and administration of the claims. The losses would be covered through risk management but would be paid by the individual departments where those losses occurred. SENATOR SEEKINS noted that according to the data, there are more cases under the Jones Act and the awards are higher. He asked why it would cost more. MR. GROSSI explained the fiscal note reflects the cost of administrating and litigating any claims under Workers' Compensation. He didn't have a guesstimate of what the claims would be under Workers' Compensation next year. SENATOR SEEKINS asked if the division made any effort to compare the cost of litigation to what the state is now experiencing. MR. GROSSI replied this proposal uses a different system so it would be hard to say exactly what the amount would be. SENATOR SEEKINS said the committee needs more than the fiscal note to determine what the impact would be on the treasury of the State of Alaska. CHAIR BUNDE thought the committee needed a negative fiscal note from the Department of Law. MR. BRAD THOMPSON, Director, Division of Risk Management, indicated the reason the fiscal note is not negative is because of the method of funding the claims under the state's self insurance program. He explained: There is expected savings of very significant numbers. If you recall my testimony last committee meeting, comparing on a 100 full-time equivalent basis the rate of claim and the severity where the dollars paid per 100 - if you take those comparisons between the Jones Act and Workers' [Compensation] on an average of a five-year history that I presented, it should show us if it pencils out the same average - about $850,000 in the future savings. The reason I don't show a negative for that amount is again because of the method. Risk Management is appropriated the dollars that we collect from the state agencies that fiscal year for the claims to be paid that fiscal year. So, this will save the state dollars, but it's just the method that we at Risk Management are funded. CHAIR BUNDE said it should save about $800,000. MR. THOMPSON agreed. SENATOR SEEKINS asked if the division is subject to Rule 82 if there is litigation. MR. THOMPSON replied that his numbers reflect the total cost, including defense expenses. SENATOR SEEKINS moved to pass SB 120 and its fiscal note from committee with individual recommendations. The roll was called. SENATORS DAVIS, STEVENS, FRENCH, SEEKINS and BUNDE voted yea and SB 120 moved from committee.