ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 13, 2009
3:24 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mark Neuman, Vice Chair
Representative Mike Chenault
Representative John Coghill
Representative Bob Lynn
Representative Robert L. "Bob" Buch
Representative Lindsey Holmes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 144
"An Act relating to the Uniform Probate Code, including wills,
trusts, nonprobate transfers, augmented estates, personal
representatives, and trustees; and amending Rules 3 and 8,
Alaska Rules of Civil Procedure, Rule 1, Alaska Rules of Probate
Procedure, and Rule 37.5, Alaska Rules of Administration."
- MOVED HB 144 OUT OF COMMITTEE
HOUSE BILL NO. 207
"An Act increasing the allowances for injury, disability, or
heart attack payable from the fisherman's fund; and providing
for an effective date."
- MOVED HB 207 OUT OF COMMITTEE
HOUSE BILL NO. 37
"An Act relating to the relationship between employees and labor
organizations; prohibiting collective bargaining contracts that
require employees to join a labor or employee organization;
extending the policy and limitations set out in this Act to
public employers and public employees subject to the Public
Employment Relations Act; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 144
SHORT TITLE: UNIFORM PROBATE CODE; TRUSTS, WILLS
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
02/23/09 (H) READ THE FIRST TIME - REFERRALS
02/23/09 (H) L&C, JUD
04/08/09 (H) L&C AT 3:15 PM BARNES 124
04/08/09 (H) Scheduled But Not Heard
04/13/09 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 207
SHORT TITLE: MAXIMUM BENEFIT FROM FISHERMEN'S FUND
SPONSOR(s): REPRESENTATIVE(s) HARRIS
03/27/09 (H) READ THE FIRST TIME - REFERRALS
03/27/09 (H) FSH, L&C, FIN
04/09/09 (H) FSH AT 10:15 AM BARNES 124
04/09/09 (H) Moved Out of Committee
04/09/09 (H) MINUTE(FSH)
04/10/09 (H) FSH RPT 3DP 3NR
04/10/09 (H) DP: BUCH, MUNOZ, EDGMON
04/10/09 (H) NR: JOHNSON, KAWASAKI, KELLER
04/13/09 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 37
SHORT TITLE: RIGHT TO WORK
SPONSOR(s): REPRESENTATIVE(s) GATTO
01/20/09 (H) PREFILE RELEASED 1/9/09
01/20/09 (H) READ THE FIRST TIME - REFERRALS
01/20/09 (H) L&C, JUD
03/27/09 (H) L&C AT 3:15 PM BARNES 124
03/27/09 (H) Scheduled But Not Heard
04/08/09 (H) L&C AT 3:15 PM BARNES 124
04/08/09 (H) Heard & Held
04/08/09 (H) MINUTE(L&C)
04/13/09 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
JANE W. PIERSON, Staff
Representative Jay Ramras
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on HB 144 on behalf of the prime
sponsor, Representative Jay Ramras.
DAVID SHAFTEL
Attorney
David Shaftel Law Offices, PC
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 144.
DOUG BLATTMACHR
President
Alaska Trust Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 144.
RICHARD HOMPESCH II
Attorney
Hompesch & Evans, PC
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 144.
JOHN BITNEY, Staff
Representative John Harris
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 207 on behalf of the prime
sponsor, Representative John Harris.
TRENA HEIKES, Director
Division of Workers' Compensation
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 207.
MIKE MONAGLE, Administrator
Fishermen's Fund Advisory & Appeals Council
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 207.
PAULA SCAVERA, Special Assistant
Office of the Commissioner
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 207.
GERALD MCCUNE, Lobbyist,
United Fishermen of Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 207.
ZINN DECKER
Fairbanks, Alaska
POSITION STATEMENT: Testified during the discussion of HB 37.
JOHN BROWN
Retiree
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
MIKE LITTLEFIELD, Business Agent
Teamsters Local 959
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
TIM SHARP
Business Manager
Alaska District Council of Laborers, Local 942
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
RANDY GRIFFIN
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 37.
MARK DRYGAS, Battalion Chief
Alaska Professional Firefighters Association (APFA)
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
TIM EVANS
Retiree
Kenai, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
CHRIS GARCIA
Kenai, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
ALLEN BUTE
Kenai, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
BRANDON NICHOLS
Kenai, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
RICHARD HENDREN
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 37.
VINCE BELTRAMI, President
Alaska American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO)
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
MIKE NOTAR, President
Juneau and Vicinity Construction Trades Council, Inc.
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
TOM CASHEN
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
ED FLANAGAN
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
RICK CANOY, Business Representative
Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
RICK TRANI, Executive Director
Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
JED WHITTAKER
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 37.
LARRY BENSON, President
American Postal Workers Union
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
TIM MORGAN, Business Representative
Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
DENNIS KNEBLE
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
SCOTT SAMMONS
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 37.
RON MCPHETERS, President
Laborers Local 341
Palmer, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
SERGIO ACUNA
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 37.
ACTION NARRATIVE
3:24:15 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:24 p.m. Representatives Buch,
Chenault, Holmes, Lynn, and Olson were present at the call to
order. Representatives Coghill and Neuman arrived as the
meeting was in progress.
3:24:36 PM
HB 144-UNIFORM PROBATE CODE; TRUSTS, WILLS
3:24:57 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 144, "An Act relating to the Uniform Probate
Code, including wills, trusts, nonprobate transfers, augmented
estates, personal representatives, and trustees; and amending
Rules 3 and 8, Alaska Rules of Civil Procedure, Rule 1, Alaska
Rules of Probate Procedure, and Rule 37.5, Alaska Rules of
Administration."
3:25:01 PM
JANE W. PIERSON, Staff, Representative Jay Ramras, Alaska State
Legislature, on behalf of the prime sponsor, Representative Jay
Ramras, stated that HB 144 will amend the Uniform Probate Code.
She explained the bill would add provisions that would allow the
settlor of a trust to designate a representative for an
incapacitated person in proceedings related to the trust
administration. Ms. Pierson stated that HB 144 would establish
that an augmented estate does not include property transferred
to an irrevocable trust if the settlor is a discretionary
beneficiary of the trust and when the transfer is made more than
30 days before marriage or with the consent of the decedent's
spouse. She pointed out that this provision is similar to
Delaware's statutes for trusts. She stated that the value of
the estate is calculated only if the surviving spouse declines
whatever he or she is left by the will.
3:26:29 PM
MS. PIERSON related that HB 144 also creates a procedure for the
establishment of a will and trust validity before death. She
explained that situations may arise in which there may be a
question concerning a person's capacity to execute a will or
trust, or whether the document was executed as a result of undue
influence, duress, fraud, or mistake. The new procedure under
the bill will allow these issues to be brought before the court
while the testator or the settler is alive, and when evidence is
fresh. She mentioned that similar procedures are allowed in
three other states. This bill would provide a venue for probate
proceeding if the decedent is not domiciled in Alaska, but
significant assets are located within the state. The passage of
HB 144 will ensure Alaska remains a premier state in which to
establish trusts and estates.
3:27:17 PM
MS. PIERSON related Section 1 of HB 144 amends AS 13.06.120(2),
which lists the situations when persons are bound by orders
binding others in proceedings under the Uniform Probate Code
(UPC). This provision would allow a person designated by a
trust instrument to represent and bind a born or unborn trust
beneficiary. It allows a designated person serving as a trustee
to represent and bind the beneficiaries in various ways. It
generally does not allow a designated person serving as a
trustee to represent and bind the beneficiaries. It generally
does not allow the designated person to represent and bind a
beneficiary if the designated person is also a beneficiary.
MS. PIERSON explained that Section 1 also provides certain
persons who represent other persons under AS 13.06.120(2)(A)-(F)
are not liable for good faith acts and omissions to the
beneficiaries whose interests are represented or to persons
claiming through those beneficiaries.
3:28:19 PM
MS. PIERSON stated that Section 2 amends AS 13.12.201 (b)(9),
and makes grammatical and conforming amendments to the
definition of "transfer" for certain provisions of the Uniform
Probate Code that relates to the elective share of a surviving
spouse.
MS. PIERSON explained that Section 3 of HB 144 amends AS
13.12.205, which relates to a decedent's nonprobate transfers to
other persons. It would also delete an irrevocable transfer in
trust with a transfer restriction from the property that is
included in the augmented estate.
3:28:48 PM
MS. PIERSON related that Section 4, proposed AS 13.12.205(b)
would provide that the augmented estate does not include
property transferred to an irrevocable trust with a transfer
restriction if two conditions are met relating to the trust's
settlors and the transfers timing.
MS. PIERSON referred to Section 5, 6, and 7, which represent
conforming amendments for the bill.
3:29:29 PM
MS. PIERSON stated that Section 8 adds a new set of sections
that provide for establishing the validity of wills and trusts
before the testator's death including adding proposed sections
which she clarified by reading from the sectional analysis of
the bill as follows:
AS 13.12.530. Allows certain persons to petition the
court to determine the validity of a will.
AS 13.12.535. Allows certain persons to petition the
court to determine the validity of a will before a
person's death.
AS 13.12.540. Establishes the venue.
AS 13.12.545. Identifies what a petition for will
validity must contain as does AS 13.12.550.
AS 13.12.555. Authorizes a court to declare a will or
trust to be valid. Declares that the will has full
legal effect and must be admitted to probate on
request of the testator's death, unless modified or
revoked after the court's declaration.
3:30:07 PM
MS. PIERSON continued reading a sectional analysis of HB 144, as
follows:
AS 13.12.560. Makes the court's validity declaration
binding on other persons.
AS 13.12.565. Directs the court to hold a hearing
after a petition is filed. Requires the petitioner to
notify the spouse, children, and heirs of the testator
or settlor. For a will, this provision also requires
the petitioner to notify the testator, the personal
representatives nominated in the will, and the
devisees under the will. For a trust, this provision
also requires the petitioner to notify the settlor,
and parties in interest.
AS 13.12.570. Establishes the burden of proof for the
petitions.
3:30:43 PM
MS. PIERSON continued to read a sectional analysis of HB 144, as
follows:
AS 13.12.575. Allows a testator to modify or revoke
the will or codicil after the court's declaration.
AS 13.12.580. Allows a trust to be modified,
terminated, revoked, or reformed after the court's
declaration.
AS 13.12.585. Establishes which records related to a
petition are public, which are available only to
certain persons, and which are confidential. Allows
the court to order confidential records to be made
available to other persons when good cause is shown.
AS 131.12.590. Defines the terms used in the new
article.
3:31:18 PM
MS. PIERSON continued to read a sectional analysis, as follows:
Section 10 would amend AS 13.16.410 and allow a
personal representative to consider discretionary
distributions to a beneficiary as being made from
capital gains during the year.
Section 11. Amends AS 13.36.109 and allows trustees
to consider discretionary distributions to a
beneficiary as being made from capital gains realized
during the year.
Section 12. Indicates how certain provisions of the
bill amends court rules.
Section 13. States that those sections that amend the
court rules only take effect if the bill section 11 is
approved by a two-thirds vote.
3:32:00 PM
CHAIR OLSON asked if these statutes were changed last year.
MS. PIERSON explained that these statutes are frequently amended
since Alaska, like Delaware, is one of the premier places for
trust estates. Additionally, since this state does not impose a
state income tax there is significant benefit for trust estates
in the state. She related that $50 million deposited in
Alaska's banks can be used by its citizens and businesses.
Further, the state imposes a 6 percent tax on any insurance
premiums sold.
3:32:47 PM
REPRESENTATIVE BUCH referred to AS 13.12.205, which relates to a
decedent's nonprobate transfers. He asked how these transfers
are conducted.
3:33:51 PM
DAVID SHAFTEL, Attorney, David Shaftel Law Offices PC, stated
that he has been a member of an informal group of trust officers
who have worked with the legislature since 1997 on estate law.
He explained that he has worked with legislative staff on
proposed language for HB 144. He recalled Ms. Pierson's
comments on how estate legislation has assisted the state
financially. He suggested, more importantly, that estate law is
one area of law that every resident will be affected by at one
point or another, either by virtue of their relatives passing
away or upon their own death.
3:35:43 PM
MR. SHAFTEL related that the estate and trust statutes are very
important to constituents. He highlighted the significant
changes in this bill facilitate the ability to designate a
representative who can stand in for incapacitated people. He
suggested if a person was drafting a will or trust for his
children and grandchildren that he/she may decide to appoint
someone. In the event that his children or grandchildren would
be affected by some court proceeding relating to his estate or
trust, the designated person would represent and make decisions
for them. He offered that this bill was modeled after recent
Florida statutes. He opined that this bill will help to avoid
some complex proceedings, including appointment of a guardian ad
litum to represent any minor children, unborn grandchildren, or
incapacitated children.
3:37:55 PM
MR. SHAFTEL pointed out one significant change. He explained
that years from now when the Chair is elderly he may have a
relative that challenges the will, and it may be that the
challenge is made after his death, such as an allegation of
undue influence or fraud. However, this bill would allow a
person to currently petition the court to seek a determination
that his/her will is carried out and ensure the person's wishes
are made without incapacitation, without fraud, or undue
influence. He opined that this is unique since only three other
states have these types of proceedings called advisory opinions,
yet none are as well-written as the provisions in HB 144.
3:40:16 PM
MR. SHAFTEL stated that many practitioners in this field often
see capacity challenges and otherwise unnecessary litigation.
3:41:07 PM
MR. SHAFTEL noted this bill clarifies that a nonresident of
Alaska can have a venue located in Alaska even for assets not
located in Alaska. He mentioned that the bill makes one tax
change, with respect to discretionary distribution of personal
representative or trustees and allows the personal
representative or trustee to designate those as capital gains,
which in some situations will also allow for tax savings. He
opined that this is a good statute. He urged members to give
consideration to HB 144 and approve it.
3:41:50 PM
REPRESENTATIVE BUCH stated he is interested in hearing the
dangers of not having a will.
MR. SHAFTEL explained that those who do not have a will are
considered to have died intestate, and the state provides the
mechanism of a default will for them. First, proceedings
similar to probate proceedings would be held in state court, and
the court would appoint a manager for that process, an
administrator for the intestate estate. He highlighted that the
administrator may not be someone the person would have chosen to
represent him/herself. The administrator would gather assets,
value them, pay income and transfer taxes, as well as any
federal estate taxes, notify creditors, pay creditors, and
challenge faulty or false claims. Once finished, the assets
would be distributed according to a pattern the state has laid
out such that a surviving spouse and children would receive
specific portions of the estate.
MR. SHAFTEL offered that assets may end up being disbursed
outright, rather than distributed according to a trust. It is
often more valuable to have assets held in trust, which allows
protection of the assets, provides better management and
investment, and allows for distributions to be made according to
the needs of young people rather than at the whim of their
desires or urges. Additionally, he suggested a trust allows for
better tax planning. Thus, a variety of tools are available to
the person sets out their wishes in a will. However, absent a
plan, the state provides a skeletal type of plan for you. He
mentioned his office has clients who are surviving spouses or
surviving adult children and the default probate process has
proven to be more expensive and often resulted in poor tax
planning, or in assets being disbursed in directions the person
who died never would have wanted.
3:46:38 PM
REPRESENTATIVE BUCH said that he appreciated Mr. Shaftel's
comments. He acknowledged that these are very important issues
to consider.
3:47:19 PM
REPRESENTATIVE COGHILL referred to Section 3 of HB 144, which
relates to descendents nonprobate asset transfers to others. He
then referred to page 6, lines 11 to 13 which removes language
that reads ", INCLUDING AN IRREVOCABLE TRANSFER IN TRUST WITH A
TRANSFER RESTRICTION UNDER AS 34.40 110(a)," and asked for
clarification.
MR. SHAFTEL explained that this provision deals with a very
narrow right, called the widow's election. He explained that in
the event a person does not provide for his/her spouse in the
will, the spouse can take one-third of the combined assets of
the family. The augmented estate is comprised of what is
gathered together and represents the entire estate. He pointed
out that a type of trust was initiated in 1997 in Alaska. He
noted that 11 other states implemented this provision, which is
an irrevocable trust. He related a scenario in which a person
created the trust. He offered that the person could be a
discretionary beneficiary of the trust, and could place assets
into trust, yet creditors are prohibited from accessing the
assets in the trust. He explained that most states allow a
self-settled trust, in which a person places assets in the
trust, but creditors can reach the assets to the maximum extent
that the trustee can make distributions. Thus, in that scenario
a trustee has absolute discretion to make distributions to a
person, a spouse, and their children, and the maximum amount
would be all of the trust's assets. Therefore, a creditor could
reach all of the assets in that trust.
3:50:31 PM
MR. SHAFTEL related that the Alaska estate law changed in 1997,
such that a trust is not to avoid creditors at the time the
trust is established. The purpose in establishing a trust is to
be assured that funds placed in the trust are safe in the event
of an accidental death. He reiterated that a trust does not
protect against existing creditors. He stated that if a trust
is created 30 days prior to a marriage, or if a spouse consents
to a trust after the marriage, the trust funds are protected
from any spousal claims during a divorce. He opined that this
option benefits any children involved.
3:52:20 PM
MR. SHAFTEL indicated that the informal group he previously
mentioned had inadvertently failed to conform to the widow's
election. He explained the changes contained Section 3 and 4 or
HB 144 remedy that omission. In the scenario in which a person
created a trust prior to marriage, placed assets in the trust,
and designated the beneficiaries and disbursement, when the
person dies, the wife could elect against the estate. He
referred to the provision in question and stated that the
widow's election would prevent the spouse from including in the
augmented estate any trust created prior to marriage, nor could
she include in the augmented estate any trust she consented to
after the marriage. Those are the changes contained in Sections
3 and 4 of the bill, he said.
3:53:38 PM
REPRESENTATIVE COGHILL stated he had was unaware of the widow's
trust issue and related that he would consider this provision
further.
REPRESENTATIVE HOLMES said her question was already answered.
DOUG BLATTMACHR, President, Alaska Trust Company, offered his
strong support for HB 144.
RICHARD HOMPESCH II, Attorney, Hompesch, & Evans, PC, noted that
one of his clients has a son who may contest his/her will.
3:56:01 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 144.
3:56:48 PM
REPRESENTATIVE NEUMAN moved to report HB 144 out of committee
with individual recommendations and the accompanying fiscal
note. There being no objection, HB 144 was reported from the
House Labor and Commerce Standing Committee.
3:57:38 PM
The committee took an at-ease from 3:57 p.m. to 3:59 p.m.
3:59:41 PM
HB 207-MAXIMUM BENEFIT FROM FISHERMEN'S FUND
3:59:42 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 207, "An Act increasing the allowances for
injury, disability, or heart attack payable from the fisherman's
fund; and providing for an effective date."
3:59:44 PM
JOHN BITNEY, Staff, Representative John Harris, Alaska State
Legislature, on behalf of the prime sponsor, Representative John
Harris, stated that the Alaska Fisherman's Fund provides
services similar to Workers' Compensation for fishermen. He
stated that the upper limit in state law was established in 1959
at $2,500. Health care costs have risen since that time and
HB 207 would increase the amount of the cap to $10,000.
4:00:49 PM
MR. BITNEY referred to Section 1 of AS 23.35.140 (a) of HB 144,
which read: "Except for compelling reasons..." and explained
that this provision sets out conditions for the use of the
Alaska Fisherman's Fund (AKFF). He pointed out the process,
such that the Fishermen's Fund Advisory & Appeals Council would
discuss a fisherman's claim to determine whether to award a
claim beyond the cap. He explained an injured fishermen or
family must go through the claim process for consideration of
compensation beyond the cap. He opined that raising the cap's
limit would help speed up the processing of claims. He noted
that the claims are paid from fees commercial fishermen remit
for crew licenses and permits. He related his understanding
that the AKFF balance is currently $11 million. He advised that
some management provisions are also in place in the event that
the fund is drawn down by subsequent claims. Thus, additional
review can be provided, if necessary, to avoid raising the
fishermen's license and permit fees.
4:03:13 PM
MR. BITNEY, in response to Representative Neuman, answered that
although at today's prices the cap on the total allowance could
be set at $18,000, and that the reason $10,000 was selected was
to provide for an increase in the cap but not to increase the
cap to the extent that claims might force a subsequent increase
in fishermen's license and permit fees. The goal is to keep the
fees paid into the fund by commercial fishermen at the same
level. In further response to Representative Neuman, Mr. Bitney
agreed that $10,000 was a reasonable estimate for the cap on the
total allowance for an injury or disablement.
4:04:39 PM
REPRESENTATIVE COGHILL asked how many claims have been made to
compensate fishermen for injury or disablement beyond the
current cap of $2,500.
MR. BITNEY said he was not certain. He recalled testimony in a
prior committee that at the upper end a claim for $100,000 was
made by a claimant who suffered congestive heart failure.
4:05:17 PM
REPRESENTATIVE COGHILL clarified that he was interested in the
number of individuals who asked for consideration beyond the
$2,500 cap.
MR. BITNEY said he did not know.
MR. BUCH interjected that he is also a member of the House
Special Committee on Fisheries. He recalled that Trena Heikes,
Director, Division of Workers' Compensation previously provided
details to the committee
4:05:49 PM
TRENA HEIKES, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DLWD), stated that
Mr. Mike Monagle could answer any statistical questions for the
committee members on this matter.
4:06:33 PM
REPRESENTATIVE COGHILL asked for clarification of how many
individual claims exceeded the $2,500 cap.
MIKE MONAGLE, Administrator, Fishermen's Fund Advisory & Appeals
Council, Department of Labor & Workforce Development (DLWD),
related that in FY 09 about 60 claims were made that ranged
between $2,500 and $10,000 to the Fishermen's Fund. He reviewed
historical statistics for claims that exceeded the $2,500 cap,
such that 63 claims were made in FY 08 and 65 claims were made
in FY 07. He related his understanding that between 50 to 70
claims per year are requested that fall between $2,500 and
$10,000. However, he noted that when the department advises
claimants that they have exceeded the limit and must fill out
additional paperwork, the fisherman tends not to follow through
with the claim. He surmised that what has been happening is the
claimant will pay for his/her out-of-pocket expenses for
legitimate claims rather than pursue the claim. He explained
that claims that exceed $10,000 tend to be pursued. Between 26
and 30 claims range from $20,000 to $200,000, which are
considered catastrophic claims, are reviewed by the Fishermen's
Fund Advisory & Appeals Council (FFAA) each year. While is rare
to have claims of that magnitude approved, the FFAA council must
consider each claim. Since the FFAA council meets twice a year,
someone seeking medical treatment or medical reimbursement must
wait six months for approval.
4:09:15 PM
REPRESENTATIVE COGHILL related his understanding that it is a
matter of severity. He stated that the $10,000 figure could be
considered a baseline rather than a cap. He asked whether Mr.
Monagle could speculate on the number of cases that would be
paid anyway.
MR. MONAGLE answered that he was not certain he understood the
question.
REPRESENTATIVE COGHILL suggested that currently the cap is set
at $2,500, so generally when a fisherman makes an application
the claim is approved up to that amount. He understood that
under HB 207 the cap would be increased to $10,000. He asked
whether $10,000 is sufficient given current medical costs or if
typical claims would probably exceed the $10,000 amount and the
claimant would still need to petition the council for approval.
MR. MONAGLE explained that the division reviewed the basic
claim. He related a scenario in which a person strains his/her
back. If the doctor advises the patient that he will need a
magnetic resonance imaging (MRI), the test could cost from
$2,500 to $4,000 in Alaska. If subsequent office visits and
physical therapy were required, the claim could easily reach
$5,000 to 6,000. He stated that back strain is a common
occurrence for fishermen as an occupational injury. He offered
his belief that the $10,000 was selected to accommodate the
typical cost of the most common claims.
4:11:50 PM
REPRESENTATIVE COGHILL said that he would like to know the
reason for an allowance of more than $10,000. He asked if a
claim were made for more than the cap, i the claimant would need
board approval.
MR. MONAGLE explained that the division administratively screens
claims for compliance and eligibility. The division conducts a
preliminary investigation to ensure that the claim is a valid
claim. He agreed a claim exceeding the cap would require FFAA
council approval.
REPRESENTATIVE COGHILL related his understanding that
administratively typical injuries would be covered within the
$10,000 allowance, but that in instances in which a fisherman
suffered a heart attack, the amount would not cover it. He
suggested that as long as the hurdle is not insurmountable, the
$10,000 seemed reasonable. He reiterated that he is simply
trying to gauge that amount.
4:13:04 PM
REPRESENTATIVE BUCH recalled testimony given before the House
Fisheries committee such that the Fishermen's Fund paid out
several of the largest claims in the history of the fund this
past year. He further recalled that about $250,000 collectively
was paid.
MS. HEIKES answered yes. She offered that the FFAA council
recently approved payment of $162,000 of $205,000 in medical
expenses and in another case paid approximately $100,000 to a
fisherman who lost his arm in a winch accident.
REPRESENTATIVE BUCH related his understanding that the
Fishermen's Fund has had a cap of $2,500 for two decades. He
noted that the Fishermen's Fund currently has a balance of $11
million. He offered his belief that the increase in the
allowance for injury or disablement is reasonable, and
considering the amount of fees collected that raising the cap
will still represent a sustainable limit. He asked if the
Department of Labor & Workforce Development (DLWD) agrees with
the proposed cap.
MS. HEIKES stated that the DLWD supports HB 207. She related
that the fund currently consists of $11.4 million. In the past
few years, the Fishermen's Fund has had a $100,000 deficit.
However, given the current revenue and the fund balance, the
department does not anticipate any problem, she said.
4:14:59 PM
REPRESENTATIVE CHENAULT referred to the $11.4 million fund
balance. He referred to the bill sponsor statement which
outlines that crew members each pay $50 for their license. He
inquired as to the average payout from the Fishermen's Fund.
4:15:22 PM
MR. MONAGLE provided statistics from the Fisherman's Fund such
that in FY 08, 766 claims were paid with an average claim of
$1,075 and a total of $823,000 in benefits. He advised that
about 24 claims were made beyond the $2,500 cap, and the amounts
varied from $3,000 up, with several in excess of $100,000. The
FFAA council typically approves between $200,000 and $300,000 at
its semi-annual meetings for extended benefit requests. Thus,
the FFAA council typically approves approximately $300,000 to
$400,000 in total claims per year.
MR. MONAGLE, in response to Representative Chenault, answered
that the FY 08 revenue for the Fisherman's Fund was $1,440,000.
4:17:27 PM
PAULA SCAVERA, Special Assistant, Office of the Commissioner,
Department of Labor & Workforce Development (DLWD), stated that
the administration supports HB 207.
4:18:06 PM
GERALD MCCUNE, Lobbyist, United Fishermen of Alaska (UFA),
stated that all 37 fishing groups that comprise UFA support this
bill. He provided additional information on fishermen's license
fees. He stated that $23.40 of the $50 crewmember's license
fees is paid into the fund. Currently, fishermen's crewmember
license fees are capped at $50. He recalled the administrative
fee cost is $3.07. He offered that he also met with the FFAA
Council for three days. This bill informs fishermen and
hospitals that the allowance for injury or disablement is
increasing from $2,500 to $10,000. It helps fishermen to know
they have a little more flexibility before they must petition
the FFAA Council for payment. This bill represents a good
compromise since the UFA does not wish to burden the Fishermen's
Fund. He recalled that he suggested to the DLWD and the FFAA
that if HB 207 becomes law the Fishermen's Fund should be
monitored to ensure that it has sufficient funds. He offered
that he spoke to the Commercial Fisheries Entry Commission with
respect the possibility of raising license fees. However, at
this time monitoring the Fishermen's Fund should suffice since
the balance of the fund is $11.4 million, he said.
4:19:49 PM
REPRESENTATIVE BUCH emphasized that there is not a cap on
payments, but a total allowance of $10,000, except for
compelling reasons, at which time the payouts can exceed the
$10,000 subject to the FFAA Council determination.
MR. MCCUNE clarified that 39 percent of commercial fishermen
fees are paid into the fund, but the fees are capped at $50,
which is the total amount that each commercial fishermen
currently pays into the Fishermen's Fund. He further agreed
that this was not a cap on the payout.
4:20:57 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on closed HB 207.
REPRESENTATIVE NEUMAN moved to report HB 207, 26-LS0801\A out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, HB 207 was reported
from the House Labor and Commerce Standing Committee.
4:21:53 PM
The committee took an at-ease from 4:21 p.m. to 4:24 p.m.
4:23:49 PM
HB 37- RIGHT TO WORK
4:23:51 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 37, "An Act relating to the relationship between
employees and labor organizations; prohibiting collective
bargaining contracts that require employees to join a labor or
employee organization; extending the policy and limitations set
out in this Act to public employers and public employees subject
to the Public Employment Relations Act; and providing for an
effective date."
4:23:54 PM
CHAIR OLSON stated that the committee would take public
testimony. He noted that many people who wanted to testify did
not get an opportunity to do so at the last hearing.
4:24:15 PM
ZINN DECKER stated that he is a 40-year Alaska resident and a
union electrician. He expressed concern with HB 37, since it
affects his union's ability to negotiate a living wage, provide
adequate retirement to allow his family to remain in Alaska, and
also provide sufficient medical coverage. He offered that
nonunion employees have 401(k) plans, but that is not nearly
enough for retirement. He opined that HB 37 would lower wages,
medical and retirement benefits for union and nonunion
employees. The bill does not allow people to keep up with
inflation costs and the higher cost of living in Alaska.
Enacting HB 37 into law would be a bad decision as states that
have Right to Work laws do not admit to lower wages, medical
benefits, or insufficient retirement plans.
4:26:20 PM
JOHN BROWN stated he is a retired operating engineer. He opined
that HB 37 does not have anything to do with the Right to Work
and this legislation has been around for many years. He stated
that the bill would allow people to obtain something for
nothing, which is wrong. He opined the fact is that no matter
what industry, a person working under a union contract will make
30 to 35 percent more in wages and benefits. He stressed there
is a value to a union contract. However, it costs funds to put
a union plan into place. This bill would allow individuals to
decide to take the benefits but not pay anything for it. He
opined that the unions ask employees to pay a fair share. He
stated that no one has to join, but they must pay fees which
generally range from two and four percent. He also stated that
the unions are good for everyone, including communities since
wages create a ripple effect through the economy. He urged
members to not support HB 37.
MIKE LITTLEFIELD, Business Agent, Teamsters Local 959, stated
that he is a member of Teamsters Local 959. He offered that the
Teamsters Local 959 is opposed to HB 37. He cited statistics
from the U.S. Department of Labor and extrapolated that HB 37
would reduce wages for working families by nearly $5,500 per
year, increase poverty rates by over 12.5 percent, increase
those without health insurance by 21 percent, and increase
infant mortality by 16 percent. Lastly, nonunion workers have a
51 percent higher death and injury rate on the job. He opined
that this bill is a direct attack on unions and working
Alaskans. He said, "I just don't think this legislation needs
to be passed."
4:30:00 PM
TIM SHARP, Business Manager, Alaska District Council of
Laborers, Local 942, stated that on behalf of 5,000 working
Alaska, he wished to speak in opposition to HB 37. He expressed
concern that with issues Alaska is facing such as the gasline,
energy concerns, and a huge recession, that someone would choose
to fight with organized labor in Alaska. "Right to Work for
less" laws speak for themselves, as do the organized labor laws,
which drive up better wages, benefits, and working conditions.
"It seems that some of our legislators have decided the real
problem in Alaska is that working people in this state are
making too much money so they want to bring the average wage
down for all Alaskan workers - union and nonunion." The "Right
to Work for less" law is designed by business to legislatively
kill or neuter unions, the only remaining viable voice for the
American worker. When this has happened in other states, wages
dropped or staggered and benefits atrophied. "Why would anyone
want this for Alaskans," he asked. Nationwide, unions represent
only 12 to 14 percent of the American workforce, but in Alaska
unions represent 20 to 25 percent of the workforce. The average
wages and benefits show the results of the demographics. As
recently as three weeks ago a national poll in Parade magazine
showed that 90 percent of Americans still support the need for
labor unions; they don't support the need for weakened unions.
"It's curious to me that some of the very same people that
oppose minimum wage increases, improved safety and health
standards, prevailing wage standards, and project labor
agreements are connected with sponsoring this bill," he said.
Some people look for fights and problems to cover up and take
the people's focus away from the truly important issues for
Alaska. There's an old Irish saying that goes, "May the devil
take the toes of all our foes that we would know them by their
limping. As far as our labor organization goes anyone that
votes to support the "Right to Work for less" law for Alaskans
will be seen as limping," he said. The union record speaks for
itself. "Please vote against HB 37. It's bad for unions, bad
for workers, and bad for Alaska," he said.
4:33:02 PM
RANDY GRIFFIN opined that he is in favor of HB 37 since he is
also pro-freedom. He stated that the United States is supposed
to be a place of freedom, and Alaska is supposed to be the land
of the free. He opined that freedom means that one individual
can make a deal with another without guns pointed at our heads
or any coercion directed from our federal government.
Additionally, he stated that he supports the right of private
property. He offered his belief that people have lost many
freedoms in this country, but still retains the ability to
testify. He offered that he has worked as a union member in the
1970s, and was also a laborer during construction of the Trans-
Alaska Pipeline System. He further stated that he is currently
a nonunion worker in building maintenance. He opined that the
1935 National Labor Relations Act is wrong or at least aspects
of it are wrong. He related that the first labor act, the
National Industrial Recovery Act was struck down as
unconstitutional. He said:
Now, union people are good. And everybody wants good
working conditions. And so do I, and high wages.
But, it's whether we stick a gun at someone's head to
get them. That's what's wrong. The unions, if they
get out of hand they can destroy the steel industry,
the auto industry, and a lot of people think that the
unions raise wages. They certainly do but they don't
raise the total productivity of the nation.
Therefore, they don't raise the whole lot of the
votes. I see I've gone over the time and I don't want
to be unfair.
MR. GRIFFIN urged the committee to vote yes on HB 37.
4:35:29 PM
MARK DRYGAS, Battalion Chief, Alaska Professional Fire
Association (APFA) stated that the nearly 500 APFA members
respond to 75 percent of all 911 calls in Alaska. He stated
that he is opposed to HB 37. He recalled earlier testimony by
the bill's sponsor, and advised that there is not any
prohibition for any of its members to volunteer for any
volunteer fire department. He related his understanding that in
the past 20 years no one has been disciplined for doing so. He
highlighted that this practice happens in Fairbanks and in many
locations in the state.
4:36:47 PM
TIM EVANS stated that he is very opposed to HB 37. He offered
some reasons for his opposition including that all union and
nonunion wages and benefits would be reduced, and his belief
that 21 percent of Right to Work states lack health insurance.
He related that safety and health standards are reduced in non
free bargaining unit states. He opined that deaths are 51
percent higher in Right to Work states. He asked why someone
should enjoy the benefits of a bargaining unit and not pay their
fair share since unions provide the same representation for
nonunion employees. He further opined that unions offer better
wages, benefits, and representation. The majority of employees
would be harmed if some employees do not pay for representation.
It is not workers who benefit from Right to Work legislation,
but the greed of corporation and large contractors. He asked
committee members to please vote no on HB 37.
4:38:41 PM
CHRIS GARCIA stated that he is opposed to HB 37. He said he has
worked in Right to Work states. "Calling Right to Work right to
work would be like putting a euthanasia bill or a pro-abortion
bill in the legislature and calling it right to life," he said.
He also urged members to oppose HB 37. In response to Chair
Olson, Mr. Garcia remarked that he is also in favor of HB 207,
the Maximum Benefit from Fishermen's Fund bill.
4:39:48 PM
ALLEN BUTE stated that he is totally against HB 37. He said he
just returned from Arizona and where people are looking for work
at $4 and $5 an hour. If this bill passes it will bring people
into the state from India and China, he said. The only reason
he can live here is because he receives a decent retirement. If
members are serious about labor issues, local hire is an issue
the legislature should address. He said that when people come
up from Salt Lake City, they go right to the North Slope. The
only way control this is through the project labor agreements.
In response to Representative Buch, he stated that he is
retired. "Don't pass this bill, whatever you do," he said.
4:42:39 PM
BRANDON NICHOLS stated he is a member of International
Brotherhood of Electrical Workers (IBEW). He said that he is
strongly opposed to HB 37. Unions have been a great asset to
our workers since they provide improved safety, good wages, and
medical benefits. Union friendly states have higher wages and
more medical coverage and union companies are much more
prosperous, he stated. He offered that he cannot think of a
single country opposed to unions that the U.S. should try to
emulate. He urged members not to support HB 37.
4:43:46 PM
RICHARD HENDREN stated that he is an Alaskan citizen. He
offered his belief that HB 37 restores liberty to Alaska's
citizens. He suggested that members swore an oath of office to
uphold the constitution and today members have an opportunity to
do so. He opined that Alaska's constitution is dedicated to the
principles that all persons have a natural right to life,
liberty, and the pursuit of happiness and the enjoyment of the
rewards of their own industry. Elected officials are entrusted
to uphold these rights. The restrictions imposed in law must be
necessary to protect citizens' rights and must not violate
people's rights. He stated that the [federal law] as written
requires employees to make payments to private organizations
they may or may not support, even if it against their religious
beliefs. He said he is also opposed to union dues. This
federal law is patently unjust. Unions paint bleak pictures of
Right to Work states, he said. He urged members to respect
their oaths and support the rights of citizens.
4:46:55 PM
REPRESENTATIVE BUCH asked since he is "standing up for himself,"
if anyone else stands up for him.
MR. HENDREN stated that Representative Buch does as a
legislator.
REPRESENTATIVE BUCH explained that he previously has worked as a
union organizer. In that capacity, his job was to represent the
unrepresented workers and he provided that service for
unrepresented workers in his region. He stood up for all
workers, including workers like Mr. Hendren, he said.
4:48:13 PM
VINCE BELTRAMI, President, Alaska American Federation of Labor
and Congress of Industrial Organizations (AFL-CIO), mentioned
that at the last hearing over 30 people were at the Anchorage
Legislative Information Office (LIO) to testify but were unable
to do so. He expressed concern that testifiers were limited to
testimony time, yet representatives from the national Right to
Work committee were allowed more time to testify.
CHAIR OLSON offered that a former commissioner testified for an
even longer time. Additionally, he noted that some people are
not testifying as public members, but are testifying at the
request of the sponsor.
MR. BELTRAMI quoted statistics such that in Right to Work states
women receive 25 percent less in wages, African Americans earn
22.5 percent less, and Hispanic workers earn 37 percent less in
wages. Additionally, the disparity between union and nonunion
workers is over 30 percent. He opined that this bill would have
a negative impact on women and people of color. He related that
no one is forced to join unions as that right is guaranteed by
law and has been settled by the U.S. Supreme Court. He referred
to some cases such as the U.S. Supreme Court case, 373 U.S. 734,
National Labor Relations Board v. General Motors Corporation, or
Communications Workers v. Beck, 487 U.S. 735 (1988). Thus, he
opined that the right to not join a union is a moot point.
MR. BELTRAMI opined that the National Right to Work Committee
(NRTWC) committee promotes these bills around the country and
are funded by big corporate businesses. He further opined that
one of their main spokesperson has been billionaire Steve
Forbes. He offered his belief that the stance of acting as
though the organization cares about workers seems disingenuous
to him. He said:
Right to Work laws have nothing to do with
constitutional freedoms or personal liberties as the
gentlemen just mentioned. This legislation is nothing
more than a thinly veiled attempt to allow free riders
to get all the benefits without paying their fair
share. And as Representative Coghill questioned
accurately and assessed workers who opt not to pay
dues. They basically get the full benefit of
increases to wages and other fringe benefits without
investing in any of the costs associated with that
representation whatsoever. And that is flat out un-
American. Just to summarize: It's already legal for
people to refuse to join a union if they choose and
refuse to pay the portion of dues that might go
towards the union's political activity. Right to Work
laws hurts union workers as well as nonunion workers.
They hurt women and minorities more severely than
others. And it would hurt Alaska businesses. And all
the credible data show negative economic impacts when
Right to Work law is passed. Alaska deserves better
and I encourage you not to pass this bill out of
committee. Thank you.
4:52:26 PM
CHAIR OLSON emphasized that it is not his intention to move this
bill until everyone has weighed in on this issue.
MR. BELTRAMI suggested there were many people who still wish to
testify on this bill.
4:53:06 PM
REPRESENTATIVE NEUMAN stated he has never been a union worker.
He asked if Mr. Beltrami was calling him un-American.
MR. BELTRAMI answered no. He offered his belief that it would
be un-American to pass a law like this.
4:54:03 PM
REPRESENTATIVE NEUMAN related information from the United Food
and Commercial Workers (UFCW). He stated that the retirement
benefit actuarial rate has been reduced to zero percent this
year. That means the plan does not provide any additional
benefits after March 9. He discussed the actuarial rates. He
stated that the actuarial rate relates to the stock market. He
offered that the point he wants to make is that no one wants to
see a reduction, but the state moved from Tier I to Tier IV for
the same reason. He highlighted that everyone is hurt during a
bad economy and everyone is forced to make tough decisions on
benefit rates and retirement amounts.
MR. BELTRAMI said that it is not uncommon for pension funds to
have to adjust their actuarial assumptions depending on what is
happening in the market. He agreed that in good years they have
increased benefits. The reason the economy has declined is due
to poor investments made with the American taxpayers' pension
funds. Wall Street investors made bad decisions. Now everyone
must bear the brunt of those decisions. He opined workers did
not have enough voice in the matter. He further opined that
passing HB 37 would exacerbate the problem. Defined benefit
plans have suffered, but have done significantly better than
defined contribution plans. He stated that nonunion members are
generally in a defined contribution plan.
REPRESENTATIVE NEUMAN offered his belief with respect to pension
funds that there are no guarantees for union or nonunion
workers.
4:57:41 PM
MIKE NOTAR, President, Juneau and Vicinity Construction Trades
Council, Inc., highlighted his view that HB 37 is a proposed
abomination on the state and its working people. He opined that
the bill was not filed on behalf of working families. He
further opined that HB 37 would make Alaska a Right to Work
state, which is an appalling misnomer since workers have an
inherent Right to Work. He read from prepared notes:
It should simply be called work for less. This is
just union busting disguised with a nice sounding
label. These laws weaken unions' abilities to
collectively bargain by prohibiting union security
provisions in collective bargaining agreements both
approved by the majority of employees and the
employer. These provisions provide that all that
benefit from a collective bargaining agreement should
pay their fair share of the costs of that union
representation. In the U.S. Supreme Court decision in
1977, Abood v. Detroit Board of Education, the court
said, "A union shop arrangement has been thought to
distribute fairly the cost of these representative
activities among those who benefit and it counteracts
the incentive that employees might otherwise have to
become free riders. To refuse to contribute to the
union while obtaining benefits from union
representation that necessarily accrue to all
employees." Worst of all these laws translate into
lower wages and benefits, a diminished standard of
living, and substandard legal protections for workers
in those states with these laws. Let's remember, when
wages fall, so do dollars circulating in Alaska's
economy, certainly not something we presently need
given the state of our national and state economies.
Alaska doesn't want or need this regressive sort of
legislation. HB 37 is a dreadful public policy and is
not being asked for by working Alaskans. I urge you
all to vote against passing it out of committee.
5:00:00 PM
TOM CASHEN stated that he is a retired member of the
International Brotherhood of Electrical Workers (IBEW) and a
former commissioner of the Alaska Department of Labor &
Workforce Development (DLWD). He related that he spent a
lifetime in labor movement in Alaska. He informed members that
one of the electrical industry training centers in Anchorage is
named "Tom Cashen Electrical Training Center". He said he'd
like to add his name to the list of people who oppose HB 37.
5:01:04 PM
REPRESENTATIVE BUCH thanked Mr. Cashen for his former service
and his endeavor on behalf of workers across the state.
5:01:41 PM
The committee took an at-ease from 5:01 p.m. to 5:02 p.m.
5:02:28 PM
ED FLANAGAN stated that he also is a former Commissioner of the
Alaska Department of Labor & Workforce Development (DLWD). He
joined his colleagues in opposing HB 37. He recalled that he
was the DOL commissioner in 2000 when the first Right to Work
bill was introduced. He characterized it as a sad day when the
bill had a hearing before the House State Affairs Standing
Committee. He also recalled that the issue came up during
Alaska's Constitutional Convention. He offered his belief that
Representative Coghill would have been one of 40 who voted to
oppose the issue at that time. He offered his belief that
members decided that Right to Work legislation is the last thing
Alaska needed. He further opined that the Republican
legislators "ran the punk out of the room." He also recalled
eloquent testimony given today to provide reasons to support
union workers. He asked Chair Olson to "get everybody heard on
this, Mr. Chairman."
5:04:39 PM
CHAIR OLSON reassured Mr. Flanagan that the committee would not
be taking action on HB 37 until everyone who wants to have an
opportunity to can weigh in on the bill.
5:05:07 PM
RICK CANOY, Business Representative, Teamsters Local 959, stated
that he came to Alaska from a Right to Work state and some of
his family members have endured hardships due to misguided laws
such as the Right to Work bills. He recalled testimony on how
unions and non-unions are impacted by Right to Work bills
including reduction in wages and benefits. He mentioned this
issue compounds the difficulties for unions to negotiate strong
agreements. Alaska faces uncertain economics, and he cannot
think of a worse time to consider such an ill conceived notion
as HB 37, he said. Union workers in Alaska have provided
stellar labor and services for Alaskans. He also said he thinks
that this is quite a troublesome payback to attempt to derail
the faithful workers that are represented by organized labor
organizations in this state. He implored members to not pass
this bill out of committee. "Kill this, and maybe do this as a
show of gratitude. And thanks to those who preceded us and
those who are going to work with us side by side now and will
follow us in the future. Give us the opportunity to get the
best for our people that they may give the best back to the
state," he said.
5:07:28 PM
RICK TRANI, Executive Director, Teamsters Local 959, urged
members to vote in opposition to HB 37. He speculated that this
bill would subvert the collective bargaining process. He opined
that workplaces offering union wages have better health care,
wages, benefits, and work rules. He argued that unions have a
more productive workforce and are held to that standard. Thus,
unions ask for better wages and conditions. He opined that
unions have negotiated better terms of employment contract after
contract and these gains are solidified and passed on to
generations of successive employees. The collective bargaining
process which secures benefits and wages is dependent upon
employees to participate as a whole, and added that to allow
other employees to secure these gains without participating in
the process defeats the inherent purpose of having a bargaining
unit. He expressed concern that this HB 37 is even before the
legislature. He offered his belief in the National Labor
Relations Act and the Public Employee Relations Act. The
federal acts do not currently need amendments or changes. He
urged the legislature to not needlessly amend the laws. He
stated that HB 37 would make the existing bargaining units less
secure in their position, weaken safe work place rules, lower
wages and benefits, and tilt the balance of the
employer/employee relationship unfavorably with respect to the
employee. He urged Chair Olson not to limit public testimony on
HB 37 to only two minutes as the public's testimony should be
heard in full. He urged members to vote no on HB 37.
5:09:23 PM
JED WHITTAKER speculated that about 40 people are currently
present who will probably not have chance to testify today. He
opined that the Right to Work law is a red herring that poses as
freedom for the individual but in reality is designed to weaken
unions, collective bargaining, and keep wages low. He offered
his belief that Right to Work states have a lower per capita
income and a higher rate of poverty. He further opined that
unions brought America the middle class through the minimum
wage, the 40 hour work week, overtime pay, health care benefits,
pension plans, and worker safety. He noted that a healthy
economy is one in which people have money in their pockets. He
stated that Henry Ford understood this and initially Mr. Ford
paid his employees $5 per hour, which was an unheard of wage.
He stated that Mr. Ford was asked why and he said, "Who will buy
my cars?" He asserted that Republicans in the Congress blame
the unions for the problems. However, he recalled an article in
a recent Wall Street Journal which indicates the money General
Motors and Ford has invested in their companies could have
bought Toyota, Honda, and Nissan outright. He offered his
belief that poor management and poor asset allocation has
happened, but instead of blaming management, some legislators
blame the unions. He said, "I don't understand why Republicans
hate unions. I'm here to tell you unions don't hate
Republicans. My union, the Laborers Local 341 endorsed Senator
[Ted] Stevens and Representative Don Young." He urged members
to defeat HB 37.
5:11:24 PM
REPRESENTATIVE NEUMAN clarified that he does not hold anything
against unions. He assured members he would look at HB 37 with
an open mind. He reiterated that he is not anti-union.
5:11:43 PM
LARRY BENSON, President, American Postal Workers Union, stated
that the U.S. is in a profound crisis. He opined that HB 37
lends to a further weakening of the economy by providing lower
wages, jobs without benefits, and an inability for workers to
sustain a middle class living standard. He said:
For thirty years America's economic elites and
political allies such as the national Right to Work
Group have pursued polices designed to produce this
low-wage level economy just as HB 37 does. At the
same time, policy makers have sought with some success
to maintain high levels of consumer spending. Now,
the creation of this low-wage high-spending economy
has systematically destroyed the various wages that we
individually and collectively save and invest.
Instead of an income driven economy, we have become an
economy driven by asset bubbles fueled with cheap
debt. And the ultimate un-sustainability of this
strategy has brought us to our current crisis. The
assault on good jobs has proceeded on two fronts, in
the purely domestic realm starting with the effective
abolition of the right to form unions in the private
sector; both the formal and informal structures that
encourage the growth of worker bargaining power have
been dismantled. HB 37 will further bring about this
dismantling. This bill does nothing to improve an
economy driven by wages but instead drives further
into the abyss an economy driven by asset bubbles
fueled with cheap debt again, and will reduce Alaska's
wages and jeopardize employer provided health care.
You know, "North to the Future" is Alaska's motto. HB
37 does not reflect our true Alaskan spirit. It would
be an insult to pass a bill like this. The American
Postal Workers Union is opposed to this bill for the
reasons I've stated and I urge you to oppose this so
called Right to Work bill.
5:13:59 PM
TIM MORGAN, Business Representative, Teamsters Local 959, stated
that the groups he represents voted for union representation by
a majority vote, similar to how legislators are elected by a
majority vote. He opined that the Right to Work bill would be
like saying if a person did not vote in support of the union,
that the person does not need to pay their dues to support their
wages. He asked members to vote against HB 37. He offered his
belief that his children and grandchildren would not be able to
make a decent living in a Right to Work state.
5:15:20 PM
DENNIS KNEBLE stated that he is a member of the IBEW. He
related a scenario as a comparison between a small town and a
union such that when candidate wins by a majority, the taxes are
paid by all residents, regardless of whether taxes are increased
or decreased. He compared this to how a union works, such that
when its members vote to pass a contract, everyone is
represented regardless of their position. He asked members to
oppose the Right to Work bill.
5:16:29 PM
SCOTT SAMMONS stated that he is a member of the Laborers Local
341. He related that he moved to Alaska six years ago from his
home state of Arkansas to seek a better living than he could
provide for his family when living in Arkansas. He offered his
belief that Arkansas, which is a Right to Work state, sets the
prevailing wage on a Davis-Bacon job for a licensed electrician
at $13.85. If he earned $2 over the $6.25 minimum wage in
Arkansas, he would be considered doing very well. He indicated
that he researched Right to Work states and found that most
states adopted Right to Work laws 50 years ago when Alaska
decided not to do so. Alaska avoided Right to Work which has
served the state well, and Alaska has prospered. Alaska's
unions provide workers with excellent training, health, and
retirement benefits, which also provide employers the benefits
of a highly skilled work force. Furthermore, employers need a
well-trained work force since most people do not work in one job
from high school or college graduation until retirement. He
mentioned that union jobs offer easy transferability of earned
benefits to multiple companies. He emphasized the need for a
strong resident work force. He opined that strong unions create
a level playing field by setting the standards of employee
compensation for union and nonunion companies alike. He said,
"Without a strong voice to demand fair treatment and
compensation for workers, Alaska could easily sink to the
standard of living enjoyed in Arkansas, Mississippi, South
Carolina, etc. etc. Thank you very much."
5:19:03 PM
RON MCPHETERS, President, Laborers Local 341, explained that he
represents over 2,200 members in Southcentral Alaska. He opined
that the Right to Work bill would hurt the state's economy,
degrade workers' rights, inflate health care costs, and endanger
employees. The real issue for him is that the legislature would
even consider this bill, since it is such a radical bill, he
said. He offered his belief that the legislature has a
responsibility to train more Alaskans. He asked, "Why would
this committee want to take out the organizations that will
assure true Alaskan hire? This is not only true for the
laborers, but is true for all unions in the state." He offered
his belief that "Right to Work for less" laws deliberately
intend to financially cripple unions. Without dues that unions
will not have any source of income, which would lead to an
unrepresented work force that would earn less, spend less, and
hurt Alaska's economy. Without a union, workers are less likely
to have health care insurance and the top-notch training earned
through apprenticeship programs. "Without these added benefits,
who do you think will be having to pay for these uninsured
visits to the hospital," he asked. He urged members to vote no
on HB 37.
5:20:51 PM
CHAIR OLSON offered that the legislature considers about 500
bills each session and he disagrees with about half of them. He
related that the committee spends time hearing many bills that
many members do not support. One of the side effects of a 90-
day session is that it limits the amount public testimony. He
apologized to the public for the shortened public testimony
time. He stated that everyone who wishes to speak on HB 37 will
have an opportunity to provide testimony.
5:22:05 PM
SERGIO ACUNA stated that he is a union laborer and spoke in
opposition to HB 37. He recalled that 22 states have the Right
to Work provision. He said, "Alaska does not need to become the
23rd. I have personally has struggled with the consequences of
Right to Work law in other states such as Texas and Nevada." He
opined that Right to Work states have lower wages, disrespectful
conditions, discrimination, and unsafe working conditions. He
offered that his work is important and he takes pride in his
work. He stated that he needs to be able to earn enough to
provide for more than just "beans and tortillas." Alaskans need
decent wages, fair and safe working conditions. He concluded by
stating "Alaska does not need Right to Work for less law," he
said.
5:23:33 PM
CHAIR OLSON announced that HB 37 would be held over for further
consideration.
5:23:47 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:23 p.m.