HOUSE JUDICIARY STANDING COMMITTEE April 3, 2000 1:45 p.m. MEMBERS PRESENT Representative Pete Kott, Chairman Representative Joe Green Representative Norman Rokeberg Representative Jeannette James Representative Lisa Murkowski Representative Eric Croft Representative Beth Kerttula MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 419 "An Act relating to the weekly rate of compensation and minimum and maximum compensation rates for workers' compensation; specifying components of a workers' compensation reemployment plan; adjusting workers' compensation benefits for permanent partial impairment, for reemployment plans, for rehabilitation benefits, for widows, widowers, and orphans, and for funerals; relating to permanent total disability of an employee receiving rehabilitation benefits; relating to calculation of gross weekly earnings for workers' compensation benefits for seasonal and temporary workers and for workers with overtime or premium pay; setting time limits for requesting a hearing on claims for workers' compensation, for selecting a rehabilitation specialist, and for payment of medical bills; relating to termination and to waiver of rehabilitation benefits, obtaining medical releases, and resolving discovery disputes relating to workers' compensation; setting an interest rate for late payments of workers' compensation; providing for updating the workers' compensation medical fee schedule; and providing for an effective date." - MOVED CSHB 419(JUD) OUT OF COMMITTEE HOUSE BILL NO. 58 "An Act relating to certain audits regarding oil and gas royalty and net profits and to audits regarding costs relating to exploration incentive credits and oil and gas exploration licenses; and providing for an effective date." - MOVED CSHB 58(JUD) OUT OF COMMITTEE CS FOR SENATE BILL NO. 163(RLS) "An Act relating to trusts, to a trustee's duties to notify and inform beneficiaries, and to the revocation, modification, termination, reformation, construction, and trustees of trusts." - SCHEDULED BUT NOT HEARD SENATE BILL NO. 268 "An Act relating to mandatory 99-year terms of imprisonment for persons convicted of certain murders." - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 324 "An Act requiring written consent by the person who is the subject of the information before releasing personal information contained in motor vehicle records, to comply with 18 U.S.C. 2721; and providing for an effective date." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 419 SHORT TITLE: WORKERS' COMPENSATION Jrn-Date Jrn-Page Action 2/23/00 2279 (H) READ THE FIRST TIME - REFERRALS 2/23/00 2279 (H) L&C, JUD, FIN 3/08/00 (H) L&C AT 3:15 PM CAPITOL 17 3/08/00 (H) Heard & Held 3/08/00 (H) MINUTE(L&C) 3/17/00 (H) L&C AT 3:15 PM CAPITOL 17 3/17/00 (H) Heard & Held 3/17/00 (H) MINUTE(L&C) 3/20/00 (H) L&C AT 3:15 PM CAPITOL 17 3/20/00 (H) Heard & Held 3/20/00 (H) MINUTE(L&C) 3/27/00 (H) L&C AT 3:15 PM CAPITOL 17 3/27/00 (H) Moved CSHB 419(L&C) Out of Committee 3/27/00 (H) MINUTE(L&C) 3/29/00 2750 (H) L&C RPT CS(L&C) NT 1DP 5NR 3/29/00 2751 (H) DP: ROKEBERG; NR: MURKOWSKI, HARRIS, 3/29/00 2751 (H) CISSNA, SANDERS, HALCRO 3/29/00 2751 (H) 3 FNS (UA, LABOR, GOV/ALL DEPTS) 4/03/00 (H) JUD AT 1:30 PM CAPITOL 120 BILL: HB 58 SHORT TITLE: OIL & GAS AUDITS Jrn-Date Jrn-Page Action 1/22/99 65 (H) READ THE FIRST TIME - REFERRAL(S) 1/22/99 65 (H) O&G, RES, FIN 1/22/99 65 (H) 2 FISCAL NOTES (DNR, REV) 1/22/99 65 (H) GOVERNOR'S TRANSMITTAL LETTER 3/04/99 (H) O&G AT 10:00 AM CAPITOL 17 3/04/99 (H) HEARD AND HELD 3/04/99 (H) MINUTE(O&G) 3/05/99 376 (H) JUD REFERRAL ADDED AFTER RES 3/11/99 (H) O&G AT 10:00 AM CAPITOL 17 3/11/99 (H) -- MEETING CANCELED -- 4/20/99 (H) O&G AT 5:00 PM CAPITOL 17 4/20/99 (H) > 4/22/99 (H) O&G AT 5:00 PM CAPITOL 17 4/22/99 (H) MOVED OUT OF COMMITTEE 4/22/99 (H) MINUTE(O&G) 4/23/99 943 (H) O&G RPT 4DP 4NR 4/23/99 944 (H) DP:PORTER, SMALLEY, HARRIS, WHITAKER; 4/23/99 944 (H) NR: OGAN, KEMPLEN, PHILLIPS, BRICE 4/23/99 944 (H) 2 FISCAL NOTES (DNR, REV) 1/22/99 3/06/00 (H) RES AT 1:00 PM CAPITOL 124 3/06/00 (H) Moved Out of Committee 3/06/00 (H) MINUTE(RES) 3/08/00 2444 (H) RES RPT 4DP 3NR 3/08/00 2445 (H) DP: COWDERY, WHITAKER, JOULE, MASEK; 3/08/00 2445 (H) NR: MORGAN, HARRIS, HUDSON 3/08/00 2445 (H) 2 FISCAL NOTES (DNR, REV) 3/08/00 2445 (H) REFERRED TO JUD 3/31/00 (H) JUD AT 1:15 PM CAPITOL 120 3/31/00 (H) Heard & Held 3/31/00 (H) MINUTE(JUD) 4/03/00 (H) JUD AT 1:30 PM CAPITOL 120 WITNESS REGISTER PAUL GROSSI, Director Division of Workers' Compensation Department of Labor & Workforce Development P.O. Box 25512 Juneau, Alaska 99802-5512 POSITION STATEMENT: Testified in support of CSHB 419(L&C) as compromise legislation but requested more time to review Section 20 regarding religious treatment; answered questions. WILLEM (WILLY) VAN HEMERT 1633 West 15th Anchorage, Alaska 99501 POSITION STATEMENT: As co-chair representing management on the ad hoc committee and on behalf of WCCA, testified in support of CSHB 419(L&C) except for Section 20. DON ETHERIDGE, Lobbyist for AFL-CIO for Alaska 710 West 9th Street Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of HB 419 as it came out of the ad hoc committee. MARJORIE LINDER, Vocational Rehabilitation Counselor P.O. Box 230029 Anchorage, Alaska 99523 POSITION STATEMENT: Testified on HB 419; expressed concerns. MIKE JENSEN, Attorney at Law 12350 Industry Way, Number 208 Anchorage, Alaska 99515 POSITION STATEMENT: Testified on HB 419. CAROL CARROLL, Director Central Office Division of Support Services Department of Natural Resources 400 Willoughby Avenue, Fifth Floor Juneau, Alaska 99801 POSITION STATEMENT: Explained HB 58 and the need for a technical amendment. ACTION NARRATIVE TAPE 00-45, SIDE A Number 0001 CHAIRMAN PETE KOTT called the House Judiciary Standing Committee meeting to order at 1:45 p.m. Members present at the call to order were Representatives Kott, Rokeberg, Murkowski and Kerttula. Representatives Croft, Green and James arrived as the meeting was in progress. HB 419 - WORKERS' COMPENSATION CHAIRMAN KOTT announced that the first order of business would be HOUSE BILL NO. 419, "An Act relating to the weekly rate of compensation and minimum and maximum compensation rates for workers' compensation; specifying components of a workers' compensation reemployment plan; adjusting workers' compensation benefits for permanent partial impairment, for reemployment plans, for rehabilitation benefits, for widows, widowers, and orphans, and for funerals; relating to permanent total disability of an employee receiving rehabilitation benefits; relating to calculation of gross weekly earnings for workers' compensation benefits for seasonal and temporary workers and for workers with overtime or premium pay; setting time limits for requesting a hearing on claims for workers' compensation, for selecting a rehabilitation specialist, and for payment of medical bills; relating to termination and to waiver of rehabilitation benefits, obtaining medical releases, and resolving discovery disputes relating to workers' compensation; setting an interest rate for late payments of workers' compensation; providing for updating the workers' compensation medical fee schedule; and providing for an effective date." [The bill had been introduced by the House Labor and Commerce (L&C) Standing Committee, chaired by Representative Rokeberg, at the request of the Department of Labor & Workforce Development and the Alaska Labor-Management Ad Hoc Committee on Workers' Compensation. Before the committee was CSHB 419(L&C).] Number 0070 REPRESENTATIVE ROKEBERG explained that the bill is the first major rewrite of the workers' compensation laws in Alaska since 1988. It provides a long-overdue raise in benefits to Alaskan workers and, with that, a raise in premiums to the business community of the state. Representative Rokeberg referred to a letter in packets from the National Council on Compensation Insurance (NCCI) to Mr. Paul Grossi, which indicates the NCCI has determined that the impact on premiums will be between 7.7 percent and 8.9 percent. REPRESENTATIVE ROKEBERG pointed out that this bill is a delicate balance between the business community and the labor community, including organized labor, in Alaska. Of several hearings in the House L&C Committee, one was devoted entirely to the Legislative Budget and Audit Committee audit on the bill in order to have department representatives respond, on the record, to all aspects of the audit. Two amendments, which he called conforming amendments, had been made in the House L&C Committee. One regards the religious freedom section, Section 20, which has come under some fire since CSHB 419(L&C) moved out of that committee. Representative Rokeberg alerted the committee that subsection (r) under Section 7 is also controversial. He suggested that the present committee may want to focus on those aspects. He asked that Mr. Grossi go over the bill. Number 0271 PAUL GROSSI, Director, Division of Workers' Compensation, Department of Labor & Workforce Development, informed members that the department supports this bill, compromise legislation that is a product of the labor-management ad hoc committee. The bill contains provisions for both employees and employers. As mentioned, it increases benefits that have lost value over the last 12 years. It raises permanent partial impairment (PPI) benefits from $135,000 to $177,000; increases the maximum minimum compensation rate, which is indexed to the Alaska average weekly wage, so that presently it would bring the maximum up to $772 a week, with a minimum of $170 a week; raises the amount for retraining from $10,000 to $13,300; increases widows' and orphans' benefits, as well as burial expenses; allows overtime pay to be part of the calculation for the weekly compensation rate; and increases benefits during the retraining process from 60 percent of the spendable weekly wage to 70 percent. MR. GROSSI highlighted provisions that the "employer side" had agreed to, for the most part dealing with the retraining process or the reemployment benefits process. One big issue has been that the waiver of retraining benefits allows for a simple, summary way of waiving those benefits and providing that the waiver would be all-inclusive, he indicated. The bill also streamlines the time line for retraining; clarifies what benefits would be due during that process; clarifies the two-year time line for requesting a hearing; increases the time line for payment of medical bills from 14 days to 30 days; changes the interest rate on late compensation payments from 10 percent to the court rate, which is 2 percent above the prime rate, to his belief; establishes a simple, summary process for employers to obtain reasonable medical releases; and provides for an update of the "usual, customary and reasonable fee schedule" to be done each year, an item requested by employers that Mr. Grossi believes will benefit both sides. Number 0573 MR. GROSSI turned attention to the amendment regarding religious treatment [now Section 20 of CSHB 419(L&C)], which read: * Sec. 20. AS 23.30 is amended by adding a new section to read: Sec. 23.30.280. Coverage for religious nonmedical  health care services. Nothing in this chapter shall be construed to prevent an employee with an injury from relying in good faith on religious nonmedical services for healing through prayer alone or care through religious nonmedical nursing services provided by an individual, a nursing facility, or a visiting nurse service without incurring a loss or reduction of compensation or benefits due under this chapter. This section does not exempt an employee from submitting to an examination by a physician or surgeon as required under AS 23.30.095(e). MR. GROSSI explained the department's position. They do see some problems with it [Section 20]. They need time to determine whether it is a good idea and what the effect would be; they don't know that now. For example, it could affect a premium. Also, the department doesn't know how they would be able to judge those things; it would require a certain religious expertise to determine whether care is reasonable and necessary. Furthermore, how does this fit into the payment and fee schedule? What is a usual, customary and reasonable fee for this service? The department doesn't know whether it would be a problem. They believe it requires some time to look at, to see if other states do it and, if so, how it affects them and how those states render decisions based on any controversy that occurs. MR. GROSSI indicated the final issue, which he would let the ad hoc committee speak to, is concern that [the ad hoc committee] would withdraw support "if that stays in there as it is." Number 0690 CHAIRMAN KOTT asked who had requested the addition of Section 20, and what the rationale was. REPRESENTATIVE ROKEBERG answered that the request had come from Richard (Dick) Block, an advocate for Christian Scientists in Alaska who is a former director of [the Division of] Insurance. Mr. Block's testimony was that he didn't believe it would have an impact, Representative Rokeberg reported, so the language was adopted. However, because that had occurred at the final hearing in the House L&C Committee, he himself could appreciate the department's position regarding the need for review to determine fiscal impacts and how it would be administered. He noted that the same committee had recently adopted a related provision in another bill, the so-called "patients' bill of rights" [HB 211]. Number 0765 MR. GROSSI, responding to a question from Representative James, restated his earlier comments about Section 20, then elaborated. He suggested that perhaps the department could look at it closely between sessions, to maybe come up with a separate bill. It needs to be studied, some legal issues need to be clarified, and the department needs to determine whether it would affect the premium. REPRESENTATIVE JAMES read from the last sentence of Section 20. She noted that such treatment and healing would be less costly than treatment by a regular physician or physical therapist. She said it seems clear what it does, and it would provide a cost savings. Number 0916 MR. GROSSI explained that issues would include whether the provider of this care can make determinations on disability and so forth. Yes, the employer could have a person examined and perhaps even controvert [a claim] based on that examination. However, at some point, the department would probably have to evaluate that and determine which provider - or religious or medical expert - to follow, and whether a board examination was needed. If so, would they need a religious expert as well as a medical expert in order to make a determination? Those are the kinds of issues that the department doesn't know about. Mr. Grossi reiterated the desire to know whether other states do it, and, if so, what the issues are. Emphasizing the need for time to really look into it, he concluded: It could be that you're right, and we come back next year and there's absolutely nothing wrong with this, ... and someone can put in a bill and we'd possibly support it, or at least not oppose it. But we just don't know, I guess is the answer to that. Number 1026 REPRESENTATIVE JAMES replied that she doesn't think it is measurable. To her, it is either a good idea or not, on its face, and any kind of effort to determine it will "kill it," in the long run. Alluding to faith healing, Representative James said she doesn't believe that the people who do the prayer, for example, have the ability to make that decision, which is a "faith effort." MR. GROSSI again emphasized that he doesn't know but wants to at least look to guidance from other states. The section does seem to allow for all benefits to proceed as if this were a standard medical provider, he noted, and it does allow for the employer to have the employee examined. But the issue is whether that still will lead to a lot of questions. REPRESENTATIVE JAMES asked what happens, if [Section 20] is taken out, to a person who wants to get this kind of treatment. Would that person's benefits be cut off? Or would the person be ineligible for any compensation? MR. GROSSI responded that it would have to be up to some medical provider to make a determination of disability and so forth. As for treatment with prayer, the department has never had this situation come up, to his knowledge, so he doesn't know how to answer that question. Number 1171 REPRESENTATIVE CROFT asked whether a provision in the workers' compensation law says that somebody who unreasonably refuses treatment loses his or her benefits. MR. GROSSI said not per se, but that could happen if a person does something that prolongs the disability when treatment could change that; there could be a controversion of those benefits. REPRESENTATIVE CROFT asked if the more important question here isn't whether a person loses or affects other rights because of choosing prayer, for example, rather than the issue of the payment for prayer. MR. GROSSI replied that it could be, but there are a number of issues, including how the department would make these determinations, which would involve difficulties regarding expertise and what those determinations would be based upon; what the possible costs are to the system; and how the department would administer this. Number 1266 REPRESENTATIVE CROFT asked what concessions had been desired or achieved by the business community in return for raising the benefits to adjust for inflation. He noted that Sections 2 and 6 on noncooperation appear to be in that category, as well as "the waiver idea" in Section 7. MR. GROSSI pointed out a side-by-side analysis [dated March 7, 2000] that compares HB 419 with the present law. As for major areas, he first listed the waiver of the retraining or reemployment benefits in a simple manner [Section 7]. After Representative Rokeberg called attention to another document in packets [dated February 2, 2000, titled "Legislative Agenda - Year 2000"], which lists concerns of management and labor, Mr. Grossi said, "That pretty much is the major quid pro quo, I guess." Number 1445 REPRESENTATIVE CROFT questioned whether, philosophically, the process of giving away some workers' rights in return for adjusting costs for inflation every 12 years is the correct one. MR. GROSSI pointed out some increases in benefits that clearly weren't there before, such as the death benefit; if there is a widow or widower and a child, that goes from 80 percent of the spendable weekly wage to 90 percent, and if there is a widow or widower and two children or just an orphan, then it goes to 100 percent of the spendable weekly wage. Those are beyond merely adjusting for inflation. Also included is indexing of the maximum and minimum compensation rates. Compensation is based on 80 percent of the employee's spendable weekly wage, Mr. Grossi explained, up to a maximum compensation rate, which is presently $700. But this provision allows that to go beyond $700 if 80 percent of the employee's spendable weekly wage is more than $700; the same is true with minimum compensation rates. REPRESENTATIVE ROKEBERG also responded to Representative Croft, indicating he doesn't think it is an issue of balancing one with the other here, in terms of the compromise, even though some concessions have been made. Many "management side" issues relate to updating the customary and reasonable charge, which probably doesn't hurt the worker. Furthermore, he believes that the change in interest rate should have been done anyway, by this committee. A number of items merely "clarify and clean up," he said. He suggested that perhaps the people from the ad hoc committee should talk about what went on in terms of the compromise. REPRESENTATIVE CROFT agreed it seems to be a mix, with concessions by labor and management plus technical items. However, the committee is being presented with a public policy compromise that legislators didn't make, he indicated, with lots of difficulties purported if the bill is amended. He expressed some discomfort at being given legislation and being told, "You can't touch it." Representative Croft said he at least wants to know on what basis those public policy decisions have been made and whether [the committee] agrees with them. In particular, is this going to be the process used in this area forever? If the price for inflation-proofing benefits is concessions every 8 to 12 years, he believes that is an extremely poor way to do public policy in this area. He would be glad to ask the ad hoc committee about that, he added. Number 1691 REPRESENTATIVE CROFT turned attention to Section 7, which read: *Sec. 7. AS 23.30.041 is amended by adding a new subsection to read: (r) Notwithstanding AS 23.30.012, an employee may waive, at any time, any benefits or rights under this section, including an eligibility evaluation and benefits related to a reemployment plan. To waive any benefits or rights under this section, an employee must file a statement under oath with the board to notify the parties of the waiver and to specify the scope of benefits or rights that the employee seeks to waive. The statement must be on a form prescribed or approved by the board. The board shall serve the notice of waiver on all parties to the claim within 10 days after filing. The waiver is effective upon service to the party. A waiver effective under this subsection discharges the liability of the employer for the benefits or rights contained in this section. The waiver may not be modified under AS 23.30.130. REPRESENTATIVE CROFT pointed out that the new language would allow the employee to waive a benefit, whereas currently that requires board approval, in effect. He asked whether it is standard in workers' compensation to have the board approve any settlement. Number 1717 MR. GROSSI said the standard in workers' compensation is that payments are made under the formulas in the statute. Beyond that, it requires a "compromise and release." REPRESENTATIVE CROFT asked whether any waiver or increase of those requires board approval, then. MR. GROSSI said that is correct, right now. REPRESENTATIVE CROFT asked why that provision of having board approval for any waiver is in there [in current law], generally. MR. GROSSI answered that the statute reads, to his belief, that a "compromise and release" must be in the best interest of the employee. That is why it requires this review, to make that determination. Number 1749 REPRESENTATIVE ROKEBERG requested confirmation that the waiver of permanent partial impairment (PPI) currently can be done only after a finding of medical stability. MR. GROSSI answered, "The permanent partial impairment occurs after medical stability occurs, and then there's a rating. As far as waiving it, there is no provision for waiving the permanent partial impairment." Following Representative Rokeberg's comment that he thought that was the $700, Mr. Grossi confirmed that Representative Rokeberg was talking about the proposed language, then stated that the employee, under this, would be allowed to receive a lump-sum payment rather than getting it in incremental payments over time. If a person waived rehabilitation benefits through a form prescribed by the board, that form would have to indicate every possible benefit being waived, and probably would indicate telephone numbers of the information officer and the board for the person to call if there were questions. REPRESENTATIVE ROKEBERG asked if what the person would be waiving would be the rehabilitation benefits, which have a maximum value of $13,000 [under the bill]. MR. GROSSI said basically, yes. It is the retraining benefits. REPRESENTATIVE ROKEBERG said it is $10,000 now and will go up to $13,000. He asked whether all the hullabaloo is about the potential of missing out on a $13,000 benefit, when, in fact, many workers don't even want to take the prescribed training but would rather do it on their own. MR. GROSSI answered that of perhaps 300 people found eligible yearly, only approximately 25 actually complete a plan. The rest basically settle out the benefits to obtain a lump-sum payment. Number 1865 REPRESENTATIVE MURKOWSKI inquired about the difference between the "compromise and release" form now in effect and this form that the board would create under subsection (r) in Section 7 of the bill. MR. GROSSI explained that the difference is that the compromise and release requires a formal board review and determination, whereas this would be a signed waiver that would have that effect. However, it would only be for the waiver of the rehabilitation benefits, not the entire claim, he added. The difference is in the review. Number 1904 REPRESENTATIVE MURKOWSKI returned attention to Section 20 regarding religious treatment. She recalled that in the House Labor and Commerce Standing Committee it had been one of the first amendments presented, in early March. She asked, "Are you saying that nobody has had a chance to look at this and speak up, either in favor or in opposition?" MR. GROSSI recalled that the amendment was approved at the last meeting, and he saw the draft a day or two later because he had attended that meeting telephonically. He added, "We knew that there was something out there; we'd seen some letters to that effect, but we really hadn't seen the language until ... a day or so after the [hearing]." REPRESENTATIVE MURKOWSKI suggested, however, that the earlier discussion of the draft language should have been a "blip on somebody's radar screen." She would be curious to know what the ad hoc committee thinks about that when they testify, she added. Number 1979 REPRESENTATIVE GREEN followed up on Representative Croft's concern. He asked: Did it take 12 years to get agreement, or were there 12 years when this didn't need review? And could this issue be revisited in a year or two if this doesn't work? MR. GROSSI explained that originally benefits were addressed in 1988, when there was a severe recession. Wages were going down but the premium was going up, so there was a feeling that there was a need to address the premium. The overall premium has gone down quite a bit, Mr. Grossi pointed out. Furthermore, raising benefits has been under discussion for the last few years. Mr. Grossi indicated it takes some time to get enough support for these kinds of things to actually get a proposal before the legislature. He suggested asking the ad hoc committee about that but said he certainly would be willing to work in the interim to address any potential bills in the future too. He said it probably would be a good idea to revisit benefits and those types of things every couple of years. Number 2072 REPRESENTATIVE KERTTULA referred to earlier mention that the lump-sum payment is related to the waiver of rehabilitation benefits. She asked how that works, both now and under the bill. MR. GROSSI answered that [now] one can get a lump sum for waiving rehabilitation or waiving anything, but it is a formal process where there is a signed settlement; that is reviewed by the board, and it often requires a hearing to get the settlement approved. It can require some time. REPRESENTATIVE KERTTULA asked whether, after passage of the bill, one could get a lump sum simply by signing off on it. MR. GROSSI replied that one could, but it strictly would be for the waiver of reemployment benefits; those would have a maximum of $13,300, plus, potentially, some stipend benefits - 70 percent of the spendable weekly wage - that might be due during the retraining process. All of the other benefits would still require board review. Number 2140 REPRESENTATIVE KERTTULA asked: Would the person be taking the money instead of the benefits, or is it some other lump sum? MR. GROSSI answered, "The law doesn't specifically address that. You could. I don't think there would be anything preventing that." REPRESENTATIVE JAMES asked whether the partial permanent settlement that one would take in cash would be twice the $13,300 maximum amount for reemployment benefits. MR. GROSSI explained: It depends. ... The way the permanent partial impairment works is you're rated under the American Medical Association (AMA) guides for a whole-person impairment. And say your impairment was 10 percent. Presently, that would be $13,500. Under the new law, it would be $17,700. ... It's whatever percentage that it is times that number. MR. GROSSI, in response to a question by Representative James, restated that approximately 25 people complete the plan out of the 300 determined eligible. REPRESENTATIVE JAMES asked whether that is because the others took a settlement instead. MR. GROSSI said that is primarily it, for the vast majority. Number 2215 REPRESENTATIVE JAMES asked: If a person is doing the reemployment plan and is still unable to work, does this $13,300 - which is the maximum that can be spent - include the training and the ongoing monthly compensation while waiting? MR. GROSSI explained that as both present law works and the new law would work, someone who chooses the reemployment benefit is paid a permanent partial impairment in weekly increments of whatever the temporary total disability rate is, which is 80 percent of one's spendable weekly wage. If that is used, then the "stipend" would kick in and be paid until the end of the retraining process; under present law, that is 60 percent of the spendable weekly wage, and under the new law, it would be 70 percent. Therefore, there could be some additional stipend money as well. REPRESENTATIVE JAMES said, "Of the 25 out of the 300 potential, you're assuming that they take the money up-front instead of going on. Do you have any indication how many people might start and not finish, or, for some reason or other, the reemployment plan wasn't a good plan for them?" MR. GROSSI answered that there are a lot of variables. Suggesting that some "rehab people" may have a better handle on it, he then explained that people are basically told what they can be trained for under the parameters of this law, which those people may or may not want. If people don't want it, they usually settle. REPRESENTATIVE JAMES requested an overview of how much less money people receive under the settlement as opposed to taking the reemployment plan. She suggested that a person may get more in the latter case, because they may still be permanently totally disabled in the end. MR. GROSSI said he didn't know, but it could be less. Even currently, if someone doesn't want retraining in [a particular field], that person won't take that benefit. Number 2350 REPRESENTATIVE CROFT returned attention to Section 7. He asked whether the Administration would have any problem with saying that one could waive any and all benefits under the compact without board approval. MR. GROSSI answered, "We may. ... I'd have to think about that." REPRESENTATIVE CROFT asked whether it is the Administration's position that these rates, these benefits, should keep up with inflation. MR. GROSSI replied, "As best as possible, yes. I would have to say that we feel that would be the best thing. ... There's a lot of variables that have to be considered, ... one of which is ... how much can be (indisc.)." REPRESENTATIVE CROFT asked whether having the "whole-body value" go from $135,000 to $177,000 keeps up with inflation over the last 12 years. MR. GROSSI said he would defer to the ad hoc committee, but he understands that they had used the Anchorage cost-price index (CPI) for the calculation; they had started on this awhile back, so as to its present value, he doesn't know. Number 2409 REPRESENTATIVE ROKEBERG inquired about a change to allow for an annual readjustment. MR. GROSSI responded that it is annualized for the maximum and minimum compensation rates. REPRESENTATIVE ROKEBERG remarked that they had taken the weekly caps off of the benefits and put those against the "spendable." He suggested there would be an automatic increase on that, which is the stipend or weekly benefit. He asked if that is correct. MR. GROSSI replied that it has to do with the maximum compensation rate and the minimum compensation rate. REPRESENTATIVE ROKEBERG asked whether that is on a weekly basis. MR. GROSSI affirmed that. REPRESENTATIVE ROKEBERG commented, "So that goes up automatically." Number 2448 REPRESENTATIVE CROFT asked for confirmation about what goes up automatically and what doesn't. The $177,000 - which is now $135,000 - wouldn't go up automatically, but other things would start to be tied to it. Therefore, to the extent that got raised later, the other items would "float" with it. He asked whether that is accurate, then specified, "What gets raised automatically under this new bill, and what continues to need our involvement to raise it?" MR. GROSSI answered that the maximum and minimum compensation rates would be adjusted automatically, yearly. He affirmed that the $177,000 wouldn't, however, nor would the retraining benefit or funeral benefits. He thinks that is basically it. REPRESENTATIVE ROKEBERG asked to hear from the ad hoc committee. Number 2469 WILLEM (WILLY) VAN HEMERT testified via teleconference, noting that he is a resident of Alaska who currently is an owner of CRW Engineering Group. He specified that he was representing WCCA [Workers' Compensation Committee of Alaska], a management- supported organization that looks at workers' compensation issues; he mentioned that there are approximately 150 member organizations. Mr. Van Hemert further noted that he had served on the ad hoc committee as co-chair representing management. TAPE 00-45, SIDE B Number 0001 MR. VAN HEMERT reported that the ad hoc committee supports the proposed CS with the exception of Section 20 regarding coverage for religious nonmedical health care services. He said he agrees with Representative James that, on first reading, it would seem to not be an issue. He explained reasons for opposing that provision: First of all, it hasn't had a lot of thought. I think anyone who was on Representative Rokeberg's committee ... seemed to understand that the workers' comp is a very complex system. There was no review by anyone other than the committee on that particular issue. And, to our knowledge, there are no other states that have similar legislation involving ... nonmedical health care services. MR. VAN HEMERT told members that the legislation doesn't really address a problem at this time. He has talked to Mr. Block (ph), who will present his position as a Christian Scientist to the WCCA in two weeks, "and even he admits that there are currently no problems." No one has been denied benefits, Mr. Van Hemert said. Mr. Block (ph) just perceives a potential problem that he is trying to address with legislation. Mr. Van Hemert stated: We see this as being a significant problem in carrying out workers' comp Acts. We're going to be looking at a variety of home remedies while people are receiving benefits. And Mr. Block (ph) thinks that by putting in there "relying on good faith," we avoid the problems. But in the real world, when someone puts in a claim, the only way that you can undo that or argue against that claim is to controvert it. When the insurance carrier controverts that claim, it has to go before the board. The board will then have to determine whether Hinduism, Buddhism, [voodooism], being part of the [Jonestown] cult, being a Christian Scientist ... are all good-faith religions on which they can rely for nonmedical treatment. Then you're going to have a number of experts testify as to whether prayer, steambaths, marijuana, acupuncture are all reasonable remedies for whatever the injury is at hand. Those will all have to be determinations made by the board, and I think that's what Mr. Grossi was trying to allude to. Currently, the board has wide discretion in what they allow for treatment. And I think that's why it has not been a problem in the past. The last item ... is the cost factor. When you consider all these issues that are going to be brought before the board, we know a lot of these claims will be respected, and there is going to be cost associated with them. The cost, if you read in a letter from NCCI [National Council on Compensation Insurance, Inc.], does not include this provision. And I think you're going to have a very difficult time, until the provision is enacted, determining what the cost is [because], again, I don't believe any other state has this provision -- or whether the longshoremen's Act, which is a workers' compensation (indisc.). We cannot support this amendment. We think it was well-intentioned, but we think it needs more time, it needs more thought. And WCCA and the ad hoc [committee] cannot ... support its inclusion in the bill. Number 0168 MR. VAN HEMERT turned attention to Representative Croft's question regarding whether "we [are] trading increases to benefits that should be normally taken into account because of inflation by giving away benefits to the injured worker." Mr. Van Hemert declared, "Definitely not." One reason that wages haven't been adjusted is that for a number of years, the $700 represented the highest weekly maximum of any state. To his belief, currently that amount is still either the fifth or sixth highest of the 50 states. MR. VAN HEMERT explained that management recognizes that some items need to be negotiated periodically, and there are not a lot of dollar issues on the management side. Many of these are implementation issues. Once a law is written, the implementation is not always similar to what the intent was, and many times the intent has been eroded either through the court system or the board's actions. "And I think a lot of the things that we have are just trying to restore that," Mr. Van Hemert added. MR. VAN HEMER turned attention to the waiver issue. Asserting that the waiver is strictly for reemployment benefits, he said: Part of the reason that we requested this waiver is that the PPI is paid as a lump sum. ... There are times when the injured worker really does not want vocational rehabilitation. And in order to get a PPI payment, there are a number of steps he has to go through that the injured worker may not want to; that delays his payment. So this is also potential benefits to the injured worker. The other problem is ... that management does not like to see double dipping. So what occurs is sometimes if the PPI payment is made in a lump sum, and the injured worker comes back several years later and asks for vocational rehabilition, then the weekly wages that are paid come off of a separate stipend that's not included in the PPI. The PPI is basically gone or very difficult to get [back]. We did try to strengthen that with this legislation. Number 0262 REPRESENTATIVE CROFT asked whether there was a labor representative from the ad hoc committee available, and whether Mr. Van Hemert was representing the ad hoc committee itself. MR. VAN HEMERT indicated Kevin Dougherty, the ad hoc committee member who represents the [District Council of Laborers], was unavailable; however, the two men had spoken about these issues and were basically in agreement. CHAIRMAN KOTT asked whether Mr. Dougherty is also of the impression that Section 20 should be deleted. MR. VAN HEMERT answered, "Yes. He basically has no knowledge of it, and he feels that it needs more study before we can really go forward with it." CHAIRMAN KOTT asked, "Would you withdraw your support of the bill if Section 20 were retained in the bill?" MR. VAN HEMERT affirmed that. Number 0316 REPRESENTATIVE ROKEBERG returned attention to subsection (r) in Section 7 of the bill. He stated his understanding that the total amount of the benefit package for vocational retraining is now going to be limited, in the new draft, to $13,300, but that doesn't include the weekly stipend. Number 0331 MR. VAN HEMERT said no, it does not. Normally, if someone were to request vocational rehabilitation, that person's weekly stipend would be paid from their PPI lump sum until it ran out. Once the PPI lump sum runs out, they would continue to receive a stipend that comes from a different pot of money. They would not be left without a weekly stipend. He thinks there is a two-year limit on vocational rehabilitation. Number 0350 REPRESENTATIVE ROKEBERG asked if there has been a problem with some workers entering into a vocational rehabilitation program, continuing for a while, dropping out, and then asking to start another one, so that it goes on and on. MR. VAN HEMERT said he is an engineer, not a workers' compensation expert, and doesn't know about that. Nor has he heard it mentioned before. REPRESENTATIVE ROKEBERG asked how it benefits workers. MR. VAN HEMERT explained that the benefit is that the worker can get a lump-sum PPI payment immediately, without having to go the board or to have a vocational rehabilitation evaluation. Number 0401 REPRESENTATIVE ROKEBERG said he had heard in the House L&C Committee that there is some fear of coercion, such as from an insurance company that might persuade an injured worker to take a lump sum "to get rid of him," and the worker then would lose benefits including the right to come back for retraining. The implication was that there is a greater total package of benefits available if one comes back for retraining after a period of time. MR. VAN HEMERT responded that there would be no difference in benefits that he was aware of, other than the fact that an injured worker who received a PPI payment under the current system could [later] go back and get vocational rehabilitation because it is very difficult to retrieve the PPI payment, and this legislation basically undoes the double dipping. MR. VAN HEMERT explained that normally the PPI payment would go toward the weekly stipend. That is the trade-off. If one wants want vocationally rehabilitation, one doesn't get the PPI in a lump sum; it just becomes part of the stipend. Anything left over after paying out the weekly stipend would still go to the injured worker in a lump sum, but only after the weekly stipend has been paid during rehabilitation. Number 0741 REPRESENTATIVE CROFT asked where double dipping is addressed in the bill. MR. VAN HEMERT explained that it is not in the bill, which just sets time limits regarding how long after an injury a worker can request vocational rehabilitation. It has to be within two years, and there is some language more strongly reinforcing that; if a worker take the PPI as a lump sum, that amount will be taken out of the worker's weekly stipend if that worker later asks for vocational rehabilitation. Number 0500 REPRESENTATIVE ROKEBERG recalled an earlier question about the increase in the PPI. He asked if the committee's analysis was correct that the weekly benefit goes up and will continue to go up, but that there is an overall cap on the total benefit and the retraining benefit. MR. VAN HEMERT confirmed that that was a correct interpretation. Number 523 REPRESENTATIVE MURKOWSKI referred to a letter received by the committee urging rejection of Section 7, subsection (r). The writer had expressed concern that an employee could waive this [vocational rehabilitation] without appropriate legal advice or explanation. Representative Murkowski conveyed her understanding that the compromise and release form tells workers what they are waiving. "But is actual legal advice being made available to them, and is that being eliminated through this provision?" she asked. Number 0564 MR. GROSSI said a worker can obtain use of an attorney but isn't required to have one. If the worker does use an attorney, the employer may be required to pay for that. Number 0490 REPRESENTATIVE MURKOWSKI asked: If the division makes an attorney available to a worker, is that at the worker's own expense? MR. GROSSI explained that it could be, but an employer may be required to pay the attorney under certain conditions. REPRESENTATIVE MURKOWSKI summarized her understanding that if the committee were to pass this legislation, individual workers still would be able to seek their own legal counsel just as they do now. MR. GROSSI said that was correct. REPRESENTATIVE CROFT said the main thing that changes, then, is that there would no longer be board determination that a waiver is in the best interest of the worker. MR. GROSSI affirmed that. Number 0625 REPRESENTATIVE ROKEBERG inquired about a letter from Mr. Joseph A. Kalamarides that says currently the reemployment benefit is paid in a lump sum without [the worker] signing anything. Number 0545 MR. GROSSI explained that if the employee is not entitled to retraining benefits, that person is entitled to a lump-sum payment of PPI; that PPI is paid in weekly increments, as is the temporary total disability compensation rate, which is 80 percent of the spendable weekly wage. "The answer," he said, "is 'sometimes,' but only if they have not requested rehab or they are not in that process." He said that would be the same under the proposed law. Number 0690 REPRESENTATIVE ROKEBERG asked whether it is the right of the injured worker to request the reemployment training, and whether the worker has to have a certain percentage of impairment before the request can be made. MR. GROSSI explained that the worker has to have an impairment, and there has to have been a prediction that the worker is unable to return to the job held at the time of injury or any job held within the past ten years. Number 0709 REPRESENTATIVE ROKEBERG asked, "So that determination would already have been made before there is even a chance to grant a waiver? In other words, you have to qualify for these benefits before you can waive them, right?" MR. GROSSI said yes. Number 0722 REPRESENTATIVE ROKEBERG asked for clarification about the process of determination of eligibility for retraining, and asked who makes that determination. MR. GROSSI explained that the injured worker makes a request and the division refers the worker to a rehabilitation specialist. The worker is evaluated, and then there is a determination as to whether that worker is eligible or ineligible according to the statute. That determination is made by the reemployment benefits administrator. At that point, the worker can either go forward with the retraining or settle the case. Number 0760 REPRESENTATIVE ROKEBERG observed that this seems to indicate that a worker does not need a board ruling of medical stability or retrainability, for instance. MR. GROSSI replied, "As for as the referral, no. As far as the ability to return to work, there has to be a prediction by a doctor at this point." REPRESENTATIVE ROKEBERG asked whether a dispute between the worker and the adjuster about the worker's ability to return to work would go to the board. MR. GROSSI affirmed that. REPRESENTATIVE ROKEBERG asked if, when everybody agrees that a worker needs to be retrained, the adjuster can make that determination. MR. GROSSI said the adjuster can make the referral, but still the worker's eligibility has to be determined. REPRESENTATIVE ROKEBERG surmised that it would be the same under the new bill as under existing law. MR. GROSSI confirmed that it would. REPRESENTATIVE ROKEBERG said he wanted to clarify that a period of time had lapsed before this takes place. MR. GROSSI assured him, "Most of this stuff doesn't occur until medical stability. There has to be some prediction ...." REPRESENTATIVE ROKEBERG interjected, "... of whether they can return to work or not or whether they need retraining, so then the retraining benefits pop up." MR. GROSSI said that was correct. REPRESENTATIVE ROKEBERG summarized, "So the adjuster would say the retraining benefits are applicable in this case; therefore, [do] you want to waive these benefits and get them right now or do you want to go through this whole rigmarole? Okay, I got it." Number 0875 DON ETHERIDGE, Lobbyist for AFL-CIO for Alaska, said that group supports the bill as it came out of the ad hoc committee. He has heard complaints that more changes are needed, but as he was told years ago, there only way to eat an elephant is one bite at a time. "We see this as our first bite," he said, "and let's go for another one at another time, but let's go ahead and take this bite while we have an opportunity to do so." He noted that there have not been many other improvements in workers' compensation in a long time, and this is a step in the right direction. Number 0933 MARJORIE LINDER, Vocational Rehabilitation Counselor, said she has worked in the workers' compensation system since 1978, has served on the rehabilitation committee in 1988, and was instrumental in helping to draft this law, which she now considers "a Frankenstein." Back then, she thought the law was unbalanced in favor of injured workers. "But at this point," she said, "this law is so out of balance [in the opposite direction] that if it were put in a washing machine it would dance across the room." MS. LINDER told members she had been listening to the committee's questions and the explanations of what the rehabilitation benefit is and all that goes into it. She thinks those participating in the discussion have far more intelligence than the average injured worker, but even they do not understand it. She does not see how they expect this to be explained on a board form. The injured worker will not know what he/she is waiving until he/she is medically stable. This law allows the worker to waive the benefits at any time, which could happen before being medically stable or found eligible, even; the worker may be waiving benefits that he/she may or may not even have. This law also allows one to waive the benefit before a rehabilitation plan is written for it, so the person won't really know how long the rehabilitation benefit is for, and therefore how much money he or she would get. Number 1026 MS. LINDER testified that an injured worker is waiving far more than $13,000. The worker is waiving [financial] support during the period of rehabilitation. For instance, if the worker had a herniated disk, that is a PPI award of about 7 percent, "so we're talking about seven times $17,070." She said that hypothetical worker is paid at $500 a week for 17.7. After that, the worker is paid the rehabilitation stipend for the balance of what could be a two-year retraining program, which would be for 84.3 weeks. Under the new law, this would give the worker about $450 a week. So the worker is paid $450 a week while retraining for the rest of the 84.3 weeks, then is paid for tuition and supplies up to a maximum of $13,300. Ms. Linder began doing the math to come up with the total benefits that would be waived. Number 1130 REPRESENTATIVE ROKEBERG, citing a letter that Ms. Linder had written to the House L&C Committee, quoted a total of $51,235 [to which Ms. Linder concurred] that was what the injured worker was really waiving. MS. LINDER again pointed out that when Mr. Grossi had tried to explain what an injured worker was waiving, the committee members couldn't even figure it out. She emphasized the complexity. Ms. Linder expressed concern that an injured worker could be approached at any time, [perhaps] two weeks or two months after the injury, when full of optimism and thinking that he or she would be going back to work; when offered what sounded like a large cash settlement, the worker probably could not figure out what would be waived. And what happens to these people? Where do they go? "They go to the state, they go to other disability systems," she said, then concluded, "I am simply saying that we need to make people responsible who should be responsible in the first place, and get rid of this waiver, and really have a second look at it because it is an invitation to litigation." Number 1299 REPRESENTATIVE ROKEBERG asked Ms. Linder if, as a rehabilitation specialist, she writes rehabilitation plans. If so, he requested confirmation that she has a vested interest. MS. LINDER said that to some extent she does because about 10 percent of her practice consists of writing rehabilitation plans. Number 1320 REPRESENTATIVE ROKEBERG asked: If somebody now enters into a plan that does not work out, does that person then start another one? MS. LINDER said that would be very rare, and she has never had that happen. She emphasized that she objects to the language "at any time." If people want to waive this after knowing their impairment ratings and whether they are eligible for the benefit or not, she has no objection to that. However, she objects to their waiving this before knowing the outcome of their injuries or whether they will be able to return to work. Number 1389 REPRESENTATIVE JAMES said she understands Ms. Linder's concern. REPRESENTATIVE ROKEBERG observed that a point being made might have been missed in the House L&C Committee hearing, regarding the timing [of the waiver] being "at any time" versus after the finding of impairment. He suggested there might be an assumption that a person would wait until the percentage of impairment was determined before it would even be possible to make the calculation. MS. LINDER said that would a lot of sense. If the committee would remove the "at any time" and have "after medical stability," she believes that would be quite agreeable. Number 1493 REPRESENTATIVE ROKEBERG asked Mr. Van Hemert why "at any time" had been included. MR. VAN HEMERT said he did not think it was anything intentional, and actually the ad hoc committee wouldn't oppose an amendment including "after medical stability"; they want to make sure that medical stability is obtained either through the injured workers' physician or the AMA doctor, for example. MS. LINDER said she did not know, but she thinks it should be whoever knows this person best and has the most information, for example; that is a separate issue. She indicated the desire that this determination could be made after medical stability, when there is more information. She concluded by saying that "at any time" is the problem she'd had with this all along. Number 1573 REPRESENTATIVE MURKOWSKI informed members that she herself had asked this question in the House L&C Committee. She explained, "I said, it says 'at any time,' and the assurance I received was that 'it never happens at any time, it always happens after medical stability.' I agree with Ms. Linder. I think if that is the case, then we should specify it." Number 1602 MR. GROSSI responded that for all practical purposes, he agrees that this only happens after medical stability occurs because the permanent partial impairment rating cannot be done until after medical stability; neither can the determination be made of whether retraining benefits are due. Mr. Grossi said he could not speak for the ad hoc committee but did not think they would have a problem with that. Number 1708 REPRESENTATIVE ROKEBERG expressed concern about whether there is a definition of "medical stability" in the statute now. MR. GROSSI assured him that it is well defined both in statute and in case law. REPRESENTATIVE ROKEBERG asked what the definition says. MR. GROSSI said he thinks AS 23.30 says 45 days without measurable improvement. Number 1749 REPRESENTATIVE ROKEBERG suggested that the term shouldn't be "medical stability," but that the trip wire should be when the impairment has been approved and so forth. MR. GROSSI clarified that medical stability basically triggers the permanent partial impairment rating and the determination as to whether the person can go back to work or may need retraining. Number 1803 REPRESENTATIVE MURKOWSKI read the definition [from AS 23.30.395], which stated: (21) "medical stability" means the date after which further objectively measurable improvement from the effects of the compensable injury is not reasonably expected to result from additional medical care or treatment, notwithstanding the possible need for additional medical care or the possibility of improvement or deterioration resulting from the passage of time; medical stability shall be presumed in the absence of objectively measurable improvement for a period of 45 days; this presumption may be rebutted by clear and convincing evidence; REPRESENTATIVE ROKEBERG said the trouble now is the ability [of an injured worker] to come back after that. "That statute doesn't work, I don't think," he added. Number 1844 MR. GROSSI disagreed. He said he thought Representative Rokeberg was talking about the idea of whether or not the worker can come back and ask for reemployment benefits after having received [the PPI lump-sum payment]. Right now, nothing prevents that. A person could receive PPI in a lump sum, and, under current case law, that person could come back in a year or so and might be entitled to the stipend or the 60 percent of the spendable [weekly wage] - or 70 percent under the new law - and be paid that. The waiver would probably prevent that from occurring, he added. Number 1895 REPRESENTATIVE JAMES remarked that there is a very good possibility that someone could meet the criterion of being at the end of medical stability and, depending on the nature of the injury, might decide to waive [retraining benefits] and ask for [the lump-sum payment] because the person assumes there is another job out there that is different from the old one, but which he or she can do. But then the person tries the job and finds he/she cannot do it. Then the worker tries yet another job and finds he/she cannot do that either. At that point, the person would realize the need to be retrained. However, he/she would have given up the retraining benefit. MR. GROSSI acknowledged that is possible. Number 1945 REPRESENTATIVE CROFT observed that although people keep saying this waiver provision is for the benefit of the injured worker, HB 419 is essentially taking out the board determination. The reason for board approval is to ensure some check that a waiver is in the best interests of an injured worker without a job and with medical bills stacking up, he indicated. Representative Croft agreed with what Ms. Linder had pointed out. He stated: The people who are negotiating this on [the employer's] side can calculate out this $51,000. They know it, it's their job, they can figure it out. I couldn't do it now; I probably couldn't do it after another four hours of this hearing, and I don't know how you can expect an injured worker to really know what they are waiving. I thought until Ms. Linder started that it was $13,300. Now I'm not so sure, but I am more and more sure that an injured worker is not in a position to know all the things they are waiving. And all you get if you leave out Section 7 is the board saying, "Yes, this is in your best interests to do this. They have offered you something else. They have offered you a different plan that makes some sense for you." Or, "No, you're waiving much more than $13,000," and explaining it. That's what the board ... is there for, to make sure that these things are in the best interests of the worker. Number 2029 REPRESENTATIVE ROKEBERG said he thought what they were trying to avoid is having it be protracted and the litigation that comes with that. He isn't satisfied with "any time" either. But neither did he want to just regress to the current system, which isn't working. He added, "But I don't think there is anybody here other than Mr. Grossi who can explain that." REPRESENTATIVE JAMES said no one has explained to her why the current system is not working. REPRESENTATIVE ROKEBERG asked why [HB 419] had been requested, then. He suggested that what the ad hoc committee is agreeing to is use of the term "medical stability" and then allowing the adjuster to [determine] that, which would avoid the board. "I'm just concerned about stretching it beyond what they've agreed to or what they are willing to pay," he concluded. NUMBER 2206 MIKE JENSEN, Attorney at Law, testified by teleconference from Anchorage. He said he had been practicing workers' compensation law in Alaska for 15 years, representing injured workers before the Workers' Compensation Board as well as [longshoremen] cases before administrative law judges. He does not do personal injury law or represent anyone other than in the compensation situation. Mr. Jensen said it is obvious to him that "everybody here" started out with the best of intentions, and he thinks HB 419 goes in the right direction, making up for 12 years of neglect as far as workers' compensation rates. But he has some concerns, the biggest one being that just referred to by Ms. Linder. To him, this Act corrects a problem that doesn't exist. For example, currently workers can waive reemployment benefits if doing so is in their best interest. MR. JENSEN stated his belief that there is no cause for concern about double dipping. If a worker is paid permanent benefits and later discovers that the need for surgery for a herniated disk, for example, it is possible to get retraining benefits if unable to work at a former job. However, the employer gets to take back a portion of the permanent benefits that were paid out in a lump sum. There have been board decisions that require those benefits to be paid out with a deduction for the excess permanent benefits paid in the past. Number 2361 MR. JENSEN addressed Representative Rokeberg's concerns about dropping one plan and then getting into another plan. He said there is a [state] supreme court case, "Something versus Greek Corner," in which the injured worker did not finish one rehabilitation plan and wanted to start another. The supreme court said that under the circumstances, that worker could start a new rehabilitation plan but could not use up more than $10,000. Since the first rehabilitation plan had used up $5,000 of it, the worker could only get another $5,000. "In other words," he said, "you don't double dip. There's a maximum and that's it." He restated that the problems which HB 419 tries to fix are not really there, having been corrected by board decisions as well as by the supreme court. The big fault he finds with HB 419 is that it adds new time lines and makes the system even more complex because it now allows for at least two or three different ways to forfeit one's benefits that weren't there before. TAPE 00-46, SIDE A    MR. JENSEN continued. He said this is not a field of the law that attorneys are clamoring to get into. With this system, there is going to be the need for even more attorneys. It makes it too complex. When he started out 15 years ago, a person could go through the whole system, have a hearing and get benefits if so-entitled without meeting an attorney, which is impossible anymore. His biggest complaint with the proposed changes is the waiver of the reemployment benefits, which someone could do at any time. As far as legal advice, injured workers do not come to see an attorney like himself until something has gone wrong. With this proposal, once the worker has waived the right it is too late, because there is no recourse to appeal it or change it. A worker can waive it at any time without the benefit of advice; by the time the worker finds out that he/she made a big mistake, no attorney will get those benefits reinstated. Mr. Jensen encouraged the committee to propose an amendment to allow for an informed waiver made only with the appreciation of the seriousness of the disability. Number 0225 REPRESENTATIVE CROFT indicated Mr. Jensen used to practice with Representative Croft's father, who is one of the other five who still practice workers' compensation law. REPRESENTATIVE MURKOWSKI surmised that if the committee were to amend the bill, then Mr. Jensen would also want them to delete the reference to "at any time." MR. JENSEN replied, "Yes, definitely." He again proposed that it should say, "an appreciation of the seriousness of their disability or injury." REPRESENTATIVE ROKEBERG commented that it is impossible. He agrees regarding [removing] "at any time," he said, but thinks it has to do with trying to determine the standard. If they did use "medical stability," how would that be determined? He indicated the need to keep it out of the Workers' Compensation Board because of cost. He wondered if rehabilitation plan would be needed, and what the fee would be. REPRESENTATIVE CROFT indicated the committee could have that debate under the bill or amendments, but in his opinion they are going to want Workers' Compensation Board involvement rather than a bunch of lawyers trying to apprise injured workers of all the consequences at that time. Workers could be informed beforehand and sign a waiver indicating complete understanding of the consequences, or a determination could be made afterwards by a neutral body that it was done in the worker's best interest. He added, "That's the system we put in, and it makes some sense." Number 0407 REPRESENTATIVE JAMES asked whose interest the Workers' Compensation Board is representing. REPRESENTATIVE CROFT replied, "We've got one business, one labor, and one in-between," the latter being a professional who studies the law. REPRESENTATIVE ROKEBERG suggested that the Workers' Compensation Board is a quasi-judicial board funded by the Governor. CHAIRMAN KOTT asked Mr. Grossi to define the make-up of the board. MR. GROSSI clarified that any given panel that makes a decision on a case consists of a labor member and an industry-seat member. He said, "It can be the commissioner of [the Department of] Labor or his designee." The designee is an employee of the state, often an attorney or someone trained in workers' compensation. The entire board makes decisions on workers' compensation claims. The determination on a case would be whether the employee statutorily has a right to a benefit or whether the employer has the right to stop a benefit. In answer to further questions from the committee, he said it is a "pre-court" decision. The board has a fact-finding role and makes determinations of law. That is usually where it ends, but a percentage of cases are appealed to the courts. Number 0599 REPRESENTATIVE ROKEBERG indicated he can live with "medical stability" but doesn't think it should go to the board to adjudicate medical stability. MR. GROSSI explained that the determinations of medical stability and permanent impairment are always provided by a physician because they are medical determinations. With respect to retraining eligibility, it is a combination of medical issues and a determination made by a rehabilitation specialist. REPRESENTATIVE ROKEBERG referred to Mr. Kalamarides' letter [dated April 3, 2000] in which he states that there is an automatic lump-sum payment if there is a waiver now. He asked Mr. Jensen if a worker would have to go to the board for a determination. MR. JENSEN responded, "You don't if the doctors all agree that you don't need retraining - if you don't need retraining or even if the doctors agree that you do need retraining, but because the way the statute was written, you can still be denied rehab even if you can't return back to your regular job." Mr. Jensen pointed out that two supreme court decisions have asked the legislature to correct this, but it has not happened yet. If a person is denied retraining, and if he/she is medically stable and rated, then that person is automatically paid the lump-sum benefits. REPRESENTATIVE ROKEBERG said, "Unless you go into a plan." MR. JENSEN responded that a person would not go into a plan unless he/she were found entitled to retraining benefits. REPRESENTATIVE ROKEBERG asked what entitles a person to retraining benefits. MR. JENSEN indicated a person first needs to be found to have requested retraining within 90 days of the injury or disability. Then the person has to be declared eligible, which occurs after a physician determines that the person cannot do his or her regular job or a job that has been done in the last ten years. Once a person is eligible, the rehabilitation administrator writes a letter indicating a counselor needs to be chosen within ten days in order to prepare a plan. A counselor is chosen and needs to then be approved by the rehabilitation counselor. The counselor has 90 days to prepare the plan. After the plan is prepared and approved by the rehabilitation counselor, either side can appeal the plan to the board. This process can be very long and drawn out if the employee or the insurer raises objections along the line. REPRESENTATIVE ROKEBERG asked whether, anywhere along that line, it would be appropriate to make a cut-off and allow the waiver to occur. MR. JENSEN restated that he does not think the current system is broken or needs to be fixed. He said he supposes that the appropriate time would be, at a minimum, when the injured worker is determined stable and it is decided whether he/she will suffer a permanent impairment. REPRESENTATIVE ROKEBERG inquired whether the person has to be found eligible for retraining. MR. JENSEN said yes. The current problem is that a doctor can say a person is stable, but not all doctors do ratings. Many injured workers cannot afford to obtain the ratings, so the injured worker may wait months to get the money or find a doctor who is willing to do the rating. There can be a huge gap between the date of stability and the rating date, but the doctor will know whether the injured worker will have a permanent impairment at the time that the doctor pronounces the injured worker stable. Mr. Jensen observed that the doctor just may not do the rating because of the cost involved or because he/she does not feel qualified to do it. Mr. Jensen noted that at a minimum the rating should be stated when the doctor determines that the injured worker is stable and predicts that the injured worker will suffer permanent impairment. Number 0934 REPRESENTATIVE ROKEBERG asked if the rating by a doctor is taken care of [in the bill] somewhere. MR. GROSSI answered that the rating is determined either by the treating doctor, the employer's doctor, or a board doctor under the proposed law, so there would at least be more opportunity for the rating to occur in an expedited fashion. MR. VAN HEMERT, in response to a comment by Representative Rokeberg, clarified that his position is that he would support the inclusion of "any time after medical stability." In response to a further question regarding whether the eligibility is for retraining, Mr. Van Hemert said no. He emphasized that the base rate, range two, is medical stability, and Mr. Jensen had indicated that when a point of medical stability is reached, that tells whether or not the injured worker has a partial or permanent impairment. Number 1031 CHAIRMAN KOTT asked whether anyone else wished to testify. There being no response, he closed public testimony. Number 1060 REPRESENTATIVE ROKEBERG made a motion to adopt a conceptual amendment [Amendment 1] to Section 7, subsection (r), as follows: on page 5, line 26, to delete the words "at any time" and insert the phrase "after medical stability has been determined, as defined by 'AS whatever-it-is, or something to that effect.'" Representative Rokeberg specified that the intent is to put medical stability in there, however it can be fitted in. He then suggested, "... may waive after medical stability has been determined ... under our statute." Number 1118 CHAIRMAN KOTT called an at-ease at 3:35 p.m. He called the meeting back to order at 3:36 p.m. REPRESENTATIVE JAMES said she has a feeling that what the employee gives up won't be represented by anybody who has that employee's best interests at heart. CHAIRMAN KOTT asked Mr. Grossi whether he wished to comment. Number 1143 MR. GROSSI said he believes that the proposed language talks about this waiver being on a form prescribed by the board. Those various aspects would have to be on that form, which would be drafted not by the insurance company but by the board. It would have to be approved by the board at one of their meetings. REPRESENTATIVE JAMES said that is the form but doesn't say what is on the form. She doesn't know how much would be preprinted or added in. REPRESENTATIVE CROFT pointed out that he hadn't heard any objection to Representative Rokeberg's conceptual amendment [Amendment 1] on that, however. Although he doesn't know how easy it will to draft, the effort can be made. Representative Croft noted that he would make a motion to delete Section 7 afterwards. He then specified that he has no objection to this current amendment, taking out "at any time" and adding "after medical stability," however the drafter believes that it should be done. Number 1216 REPRESENTATIVE MURKOWSKI specified that the citation is [AS] 23.30.395(21). CHAIRMAN KOTT restated conceptual Amendment 1, noting that it would delete the words "at any time" and say something to the effect of "may waive after medical stability has been determined, in accordance with [AS] 23.[30].395(21). There being no objection, Amendment 1 was adopted. REPRESENTATIVE CROFT made a motion to adopt Amendment 2, to delete Section 7 [as amended]. REPRESENTATIVE ROKEBERG objected. CHAIRMAN KOTT said he would like hear from Mr. Grossi to see what the net effect would be. He asked Representative Croft to speak on it while Mr. Grossi came forward. REPRESENTATIVE CROFT explained that there were two issues. The first and most fundamental is that he objects to injured workers having to bargain away substantive rights to give cost-of-living updates to benefits because of inflation. That is extremely poor public policy to do to injured workers. It ends up eventually in a slow whittling away of all their rights if it continues to be done this way. Five, ten or twelve years from now, in order to get inflation up from $177,000 to whatever it would be, the workers need to get rid of this or that. The rights of injured workers end up being the elephant that gets eaten piece by piece. He objects on that basis and to the extent that this is the most substantial objectionable part of what was a concession the other way. REPRESENTATIVE CROFT said there hasn't been sufficient evidence put before the committee that this is substantially broken. He wants in each of these cases a final look by the board. This area of law has gotten more and more complicated, to the point where an attorney probably is needed now. Ideally, it would be simplified, and the board would be there as a final watch to make sure that people's rights were protected, things were done accurately and people had good notice. A shift away from the board taking a look at this shifts almost into more lawyers and litigation. This is the board's job; the board already is a compromise between labor and business in that there is one representative of each. He isn't sure this section is broken, and it shouldn't be fixed. Number 1424 REPRESENTATIVE ROKEBERG remarked that he believes that they had amended this section to take away some of the biggest problems voiced by a number of people. Ms. Linder and Mr. Jensen had both agreed it was an improvement, he said, and there was an agreement by the ad hoc committee. If it [Section 7] is removed entirely, the bill may be jeopardized. The primary thrust of the bill is to raise benefits to the workers. It raises premiums by as much as 8 percent to the business community in the state; that is no little concession. He agreed with Representative Croft on the matrix of a decision that there has to be rationality. He is not sure what the delicate balance is, but historically the tinkering has be kept to a minimum. Notwithstanding a responsibility to the public to assert the rights, power and authority of the legislature, he said this has had substantial review in the House L&C Committee, and today has been a good hearing where the bill has been improved. He would hate to lose this bill down the road because of this, he concluded. Number 1502 REPRESENTATIVE JAMES asked Mr. Grossi to delineate the difference between what exists currently and this, now that it is amended. There is an attorney on this board, she noted, and she is not convinced that that attorney does anything else except to see what side would be more challenged as to whether it is a balanced decision. One thing this does is say, "This is it." Provide notice to the people, and ten days later it is over, she said. She asked how that is different than the current system besides not having to go in front of the board with this issue. Number 1570 MR. GROSSI replied that not going before the board is the big difference. Once someone goes before the board and waives those [benefits], and the board approves it, it is over. The difference is this wouldn't require going through that process, which can be time-consuming and can involve some litigation. The major difference is it can be done with this relatively simple form; although it would be on a board-prescribed form, it would have to indicate the various benefits [being waived]. Substantively, the only difference would be the board's review in determining whether this would be in the best interest of the employee. REPRESENTATIVE GREEN requested clarification about the numbers of people who go before the board now. MR. GROSSI restated that of the 300 people found eligible for reemployment benefits, about 25 complete [the program]. The percentage that actually go before the board is relatively small. Most people get their benefits under the formulas and go back to work. Approximately 28,000 people are injured a year. Of that number, maybe 1,200 come to the board for anything; most of those issues are resolved informally, and about 300-350 [cases] are actually decided by the board. As far as compromises and releases, approximately 600 of those are done a year. REPRESENTATIVE GREEN commented that it is still down in the single-digit as far as percentage. He asked if that would still constitute a burden to continue that way as opposed to having the waiver. Since this says "may," he asked Mr. Grossi if he feels there will be a significant difference in the way things are handled. MR. GROSSI stated that he doesn't believe there will be a significant difference. He suspects that the people who waive the benefit under the current law will be the ones that will waive it under the new law. It will just happen in a simpler fashion. This is a prediction. However, if the support of either management or labor is lost, the chances of this bill being passed are probably fairly negligible. He suggested that the whole bill needs to be looked at to see what it does. It does make a lot of important improvements for injured workers, he noted; he would hate to lose those. The windows of opportunity haven't been numerous over the last 12 years. He is concerned they would have to go another 12 years or a period of time before they could again get to this point of being able to make some substantive changes for injured workers and for those who are affected by the law. As far as doing business the way they are now, they're doing it. REPRESENTATIVE GREEN asked Mr. Grossi whether he feels, as Mr. Kalamarides' letter says, that this section would provide an opportunity that isn't there now for an injured employee to be taken advantage of. MR. GROSSI said that is hard question. He doesn't like to believe that of people. REPRESENTATIVE GREEN mentioned being forced to take a longer time than just writing on a form. MR. GROSSI said it could happen. However, he suspects that with the amendment where one waits until medical stability occurs, there is probably less chance of that happening because now the healing process has occurred. Those health problem stressors are no longer there. Number 1862 REPRESENTATIVE MURKOWSKI noted that a provision in statutes allows the board to make modifications of an award. She asked: If someone finds out that he/she has signed a waiver but really didn't understand what the disability was going to be, could the board, on its own, make a retraction for that person? MR. GROSSI said the way this is written, no, because modification occurs of AS 23.30.130 and that is taken away. In the current law, he doesn't believe modification applies. REPRESENTATIVE MURKOWSKI asked, "So we're eliminating the modification provision?" MR. GROSSI said yes. It is also eliminated once the compromise (indisc.), so one doesn't have the ability to modify under the current law either. REPRESENTATIVE MURKOWSKI asked: At no point, for no reason, would the board have the ability to modify any workers' compensation award? MR. GROSSI said no, he believes they could modify [an award]. There would be that potential if fraud, duress or those types of special situations were to occur. REPRESENTATIVE MURKOWSKI conveyed her understanding that Mr. Grossi was saying those provisions are taken out with this law. MR. GROSSI clarified that modification is under AS 23.30.130. He indicated AS 23.30.012, regarding agreement, also has a provision. Number 1984 REPRESENTATIVE CROFT quoted in part from AS 23.30.130(a), which read: Sec. 23.30.130. Modification of awards. (a) Upon its own initiative, or upon the application of any party in interest on the ground of a change in conditions, including, for the purposes of AS 23.30.175, a change in residence, or because of a mistake in its determination of a fact, the board may, before one year after the date of the last payment of compensation benefits under AS 23.30.180, 23.30.185, 23.30.190, 23.30.200, or 23.30.215, whether or not a compensation order has been issued, or before one year after the rejection of a claim, review a compensation case under the procedure prescribed in respect of claims in AS 23.30.110. Under AS 23.30.110 the board may issue a new compensation order which terminates, continues, reinstates, increases, or decreases the compensation, or award compensation. REPRESENTATIVE CROFT commented, "So this says it cannot be modified under this anymore." MR. GROSSI referred to AS 23.30.012, regarding compromise and release settlement agreements relating to claims, and restated that there is a similar provision in that. REPRESENTATIVE CROFT replied, "But this wouldn't be the subject of a compromise and release anymore. So that wouldn't apply, right? This is explicitly outside of any ...." REPRESENTATIVE JAMES interjected that this is a "done deal." MR. GROSSI affirmed that. REPRESENTATIVE CROFT added that it looks irrevocable and unmodifiable. MR. GROSS replied, "Yes, but what I'm saying is, if it was settled under a compromise and release, it would be ...." Number 2033 REPRESENTATIVE KERTTULA asked whether anyone could provide an actual example where a waiver had gone awry. REPRESENTATIVE CROFT further asked whether the board had rejected a waiver of benefits. MR. GROSSI answered: They deny compromise and releases ... for various reasons, and, yes, I'm sure that waiver of rehab has been subject -- usually, most compromise and releases do make it before the board. ... Sometimes they have to address certain issues to make that happen, and sometimes it has to be done by way of a hearing. In fact, the majority of them do get approved ultimately. REPRESENTATIVE JAMES asked whether the goal here is to avoid a hearing. MR. GROSSI affirmed that, saying that is basically what is going on here. Number 2092 REPRESENTATIVE ROKEBERG requested confirmation that right now, all of these waivers would have to come before the board. MR. GROSSI affirmed that. REPRESENTATIVE ROKEBERG conveyed his understanding from testimony that there is a lump-sum payment that is automatic if the adjuster and everybody agrees to it, which doesn't go to the board. MR. GROSSI clarified that the PPI is always due in a lump-sum payment unless there is a retraining benefit. REPRESENTATIVE ROKEBERG asked whether it goes to the board now only if retraining comes into play. MR. GROSSI answered, "In order to waive it, yes, ... or waive any benefit, for that matter. It goes to the board." REPRESENTATIVE ROKEBERG said the effect of Section 7, subsection (r), is to still provide for a lump-sum benefit but stops the process from having to go to the board to be reviewed. MR. GROSSI affirmed that. Number 2150 REPRESENTATIVE ROKEBERG commented: And we found that the language makes that waiver irrevocable. But we've heard testimony today - and I understand it now a little better - was that it can be like 90 days or it can be a protracted period, ... almost like a year to get even to the board sometimes. And we also heard testimony earlier that this should benefit the workers, too, because they'll get the money faster. REPRESENTATIVE JAMES responded, "But not nearly as much." REPRESENTATIVE ROKEBERG countered, "No, not necessarily." He agreed that there is some confusion about it, saying he is confused himself. REPRESENTATIVE GREEN said that is reassuring. REPRESENTATIVE ROKEBERG continued, saying it is only if there is a vocational rehabilitation put in place where the stipend is paid out, but that is paid out of the PPI, up to the $13,300, but can actually go beyond that, according to testimony heard that day. MR. GROSSI said under the new law it would be a percentage of the $177,000, which would make those benefits last longer. Number 2203 REPRESENTATIVE ROKEBERG commented that the more he looks at this, the more confused he gets. He said he was trying to get a benefit to the worker to "cut this thing off," rather than having it be protracted. It keeps [workers] from having to hire attorneys, he suggested. He asked whether the employers hire attorneys to go before the board. MR. GROSSI affirmed that. REPRESENTATIVE JAMES requested confirmation that no labor representative was available to talk on this. REPRESENTATIVE ROKEBERG replied that Mr. Dougherty was quite clear in his testimony before the House Labor & Commerce Committee. MR. GROSSI added that [Mr. Dougherty] was also co-chair of the ad hoc committee, along with Mr. Van Hemert. Number 2247 CHAIRMAN KOTT restated that Amendment 2 was to delete Section 7 in its entirety. He asked Mr. Van Hemert whether, if Section 7 were deleted from the bill, support would be withdrawn. MR. VAN HEMERT answered that right now, probably yes. Although it goes a little beyond his own knowledge, in the past this has been an issue. It eliminates a need to go before the board, and testimony has indicated it can take up to six months to do that. He believes that nothing prevents the injured worker from obtaining all of the benefits under this provision, and there is no issue of how much of the benefit the worker can obtain. Referring to confusion expressed about the amount of the benefits, he said Ms. Linder was referring to how much in actual benefits a person could obtain under vocational rehabilitation, yet this isn't something that the injured worker would get in a lump sum in exchange for not going to vocational rehabilitation. MR. VAN HEMERT continued. He said at some point, one needs to respect the injured worker's intelligence level. He believes a great effort is being made to protect the injured worker, and he himself has no problem with that, but this is a form prescribed by the board. If the information isn't correctly documented, that person can go back to the board because it was fraud or it wasn't properly explained, Mr. Van Hemert asserted. He concluded, "I would have to say, at this point in time, that I think management would object and not support the bill if this was completely taken out. I think we made a compromise to (indisc.) 'after medical stability,' and I think that's where we'd like to leave it." CHAIRMAN KOTT noted that there was an objection to Amendment 2. A roll call vote was taken. Voting to adopt Amendment 2 were Representatives Croft, Kerttula and Kott. Voting against it were Representatives Murkowski, Rokeberg and James. [Representative Green was absent.] Therefore, Amendment 2 failed by a vote of 3- 3. Number 2414 REPRESENTATIVE CROFT made a motion to adopt Amendment 3, to replace "$177,000" on page 10, line 9, with "$189,662". He explained that on page 10, line 9, the amount of $135,000 had been changed to $177,000; however, the legislative audit on the Workers' Compensation Division, on page 43, says that "the value of the 1988 whole-body compensation of $135,000 would equal $189,662 in today's dollars." Representative Croft emphasized the need to update for inflation correctly. He added to the amendment, "I guess I'll combine it, that that number, the reemployment number of $13,300 and the funeral number of $3,300 be indexed for inflation." He suggested these should be at the appropriate number and then indexed so that the legislature doesn't have to mess with this every five, ten or twenty years. Number 2448 REPRESENTATIVE ROKEBERG objected to Amendment 3. He provided the following reasons: the committee had just done away with indexing on another bill; the amendment is incomplete in terms of what index is being used or how it would be calculated; there is no footnote showing the calculation [in the audit], which he suggested is a "throwaway figure" without support for the dollar figure; the calculation is based on "the delicate negotiations in the ad hoc committee"; and the amendment would kill the bill. TAPE 00-46, SIDE B Number 0001 REPRESENTATIVE JAMES explained that she had struggled to say "no" on that last amendment because of testimony that management would pull out of it. Now, if she does something on [Amendment 3], the other side will be "out of balance." She announced that she wasn't interested in doing any more amendments. REPRESENTATIVE CROFT said that was his last one anyway. He then emphasized the need to look at these to see whether they make public policy sense and, more importantly, to see whether they strike the right balance. Although it is fine to have an ad hoc group provide a proposal, he said, it is objectionable to him to have that group insist upon that as the only proposal the legislature can look at. As for killing the bill, the only thing that can do that is lack of votes in the House and Senate. He again emphasized the need to approach this on its merits, not merely on whether it has the stamp of labor or business. Number 0084 REPRESENTATIVE ROKEBERG, in response to a query from Chairman Kott, affirmed that he maintained his objection. He said the bill has been amended in the previous committee and this one, and he doesn't buy that argument. CHAIRMAN KOTT pointed out that as these bills have come before the legislature in the past, they have tinkered with them to some degree, "but there have never been any substantive changes from both the ad hoc committee or the WCCA group." He said he had sat in on some of those meetings. However, this bill has a House Finance Committee referral, and his own vote will reflect [the desire to have it] go on to that committee to deal with that particular issue. A roll call vote was taken. Voting to adopt Amendment 3 was Representative Croft. Voting against it were Representatives Kerttula, Rokeberg, Murkowski and Kott. [Representatives Green and James were not present.] Therefore, Amendment 3 failed by a vote of 4-1. Number 0135 REPRESENTATIVE KERTTULA offered Amendment 4, to delete Section 20 of the bill. REPRESENTATIVE JAMES objected. CHAIRMAN KOTT said he couldn't recall whether earlier testimony had indicated that inclusion of Section 20 would diminish support from both sides. REPRESENTATIVE ROKEBERG responded, "In the affirmative." Number 0160 REPRESENTATIVE KERTTULA replied that she believes that is a terrible argument, but she doesn't know, for instance, what religious nonmedical nursing services encompasses. It is too amorphous. For that reason, she would like to see it deleted. REPRESENTATIVE ROKEBERG remarked that testimony of the director of the Division of Workers' Compensation was that they weren't sure what the cost ramifications would be. REPRESENTATIVE KERTTULA acknowledged that testimony, but specified that the argument she likes is that she doesn't know what these items are or what the impact will be. She feels very uncomfortable including [Section 20]. REPRESENTATIVE JAMES affirmed that she maintained her objection. A roll call vote was taken. Voting to adopt Amendment 4 were Representatives Kerttula, Rokeberg, Murkowski and Kott. Voting against it were Representatives James and Croft. [Representative Green was absent.] Therefore, Amendment 4, deleting Section 20, was adopted by a vote of 4-2. Number 0261 REPRESENTATIVE ROKEBERG offered conceptual Amendment 5. Noting that page 5, line 31, says "a statement may be in a form prescribed or approved by the board", he specified that the amendment would be to insert, following "board", the phrase "and include a statement informing the applicant that it should seek legal counsel before waiver, in a follow-up statement." REPRESENTATIVE CROFT commented, "Take out the board and put in the lawyers." AN UNIDENTIFIED MEMBER asked whether it would be "should" or "may." REPRESENTATIVE ROKEBERG responded, "Should." Number 0290 CHAIRMAN KOTT objected to the motion. REPRESENTATIVE ROKEBERG explained that this had been discussed in the House L&C Committee by others too, just as a form to make sure that people who were waiving [their rights] were notified. CHAIRMAN KOTT said he thinks it is a good idea but he would probably hold the bill over in order to check with a few people. REPRESENTATIVE ROKEBERG responded that in that case, he would just remove the amendment. [Amendment 5 was thus withdrawn.] Number 0325 REPRESENTATIVE KERTTULA made a motion to move CSHB 419(L&C), as amended, from the committee with individual recommendations and the attached fiscal notes. There being no objection, CSHB 419(JUD) moved from the House Judiciary Standing Committee. CHAIRMAN KOTT indicated he was adjourning the meeting at 4:15 p.m. but called the meeting back to order almost immediately thereafter in order to take up another bill. HB 58 - OIL & GAS AUDITS CHAIRMAN KOTT announced that the final order of business would be HOUSE BILL NO. 58, "An Act relating to certain audits regarding oil and gas royalty and net profits and to audits regarding costs relating to exploration incentive credits and oil and gas exploration licenses; and providing for an effective date." Number 0342 CAROL CARROLL, Director, Central Office, Division of Support Services, Department of Natural Resources, came forward to explain HB 58. She advised members that the bill simply transfers some oil and gas auditors from the Department of Revenue back to the Department of Natural Resources. Both departments agree this should be done, and it will increase efficiency and productivity. She noted that Mike Barnhill was present from the Department of Law to answer legal questions. [End of tape 00-46; no testimony is missing.] TAPE 00-47, SIDE A REPRESENTATIVE KERTTULA asked if the written amendment in packets was necessary to change the title. That amendment read: Change title by adding the underlined An Act relating to certain audits regarding oil and gas royalty and net profits and to audits regarding costs relating to exploration incentive credits and oil and gas exploration licenses; repealing the notice requirement for the issuance of final written findings regarding sale, lease, or disposal of an interest in state land or resources for oil and gas subject to AS 38.05.180(b); and providing for an effective date. Add to page 4 line 28 the underlined Sec. 7. AS 38.05.036(d), 38.05.036(e), 38.05.945(a)(3)(B), and AS 43.05.010(15) are repealed. MS. CARROLL answered that it is an amendment from the department, but she didn't necessarily believe it had to be adopted because HB 259, which is in this committee, does the same thing. She then advised members that since [HB 58] was introduced last year, it has an effective date of 1999 that, if the committee wishes, should be changed to 2000. CHAIRMAN KOTT noted that his staff had pointed that out to him earlier. [It was then indicated that a proposed committee substitute (CS) had already been requested regarding the updated effective date.] Number 0167 REPRESENTATIVE JAMES made a motion to move HB 58 from the committee with individual recommendations and the attached zero fiscal note. There being no objection, it was so ordered and [because of the technical amendment changing the effective date] CSHB 58(JUD) was moved from the House Judiciary Standing Committee. ADJOURNMENT There being no further business before the committee, the House Judiciary Standing Committee meeting was adjourned at 4:20 p.m.