Legislature(2009 - 2010)BARNES 124

04/09/2009 10:15 AM House FISHERIES

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10:19:24 AM Start
10:19:44 AM HB207
10:52:38 AM Confirmation(s)
12:23:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearing: TELECONFERENCED
Board of Fisheries
Moved Out of Committee
HB 207-MAXIMUM BENEFIT FROM FISHERMEN'S FUND                                                                                  
CHAIR EDGMON announced that the  first 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."                                                                                     
10:21:00 AM                                                                                                                   
JOHN BITNEY,  Staff to Representative  John Harris,  Alaska State                                                               
Legislature,  introduced HB  207, paraphrasing  from the  sponsor                                                               
statement,   which   read   as  follows   [original   punctuation                                                               
     The Alaska  Fisherman's Fund was established  [in] 1951                                                                    
     to  provide  for  the  treatment  and  care  of  Alaska                                                                    
     licensed commercial  fishermen and  crew who  have been                                                                    
     injured while fishing on shore  or off shore in Alaska.                                                                    
     The upper limit  on claims in the fund  has been $2,500                                                                    
     since 1959.   If  $2,500 in  1959 dollars  was adjusted                                                                    
     for  the  Consumer  Price  Index,  it  would  be  worth                                                                    
     approximately $18,229.64  today.  While  the limitation                                                                    
     in state law has  remained unchanged, health care costs                                                                    
     have steadily risen.                                                                                                       
     Access  to  health  insurance  and  health  care  is  a                                                                    
     concern  among  fishermen  and especially  presents  an                                                                    
     obstacle  to  younger  fishermen  who  are  seeking  to                                                                    
     continue   as   the   next   generation   in   Alaska's                                                                    
     sustainable fisheries.                                                                                                     
     HB  207 updates  the Alaska  Fishermen's Fund  limit to                                                                    
     $10,000.    This  is  intended   to  help  ensure  that                                                                    
     Alaska's fishermen  have better  access to  health care                                                                    
     when injured  while fishing.  Updating  the claim limit                                                                    
     to  $10,000 will  bring  this  very worthwhile  program                                                                    
     back to  providing a meaningful level  of assistance as                                                                    
     the payer  of last resort for  commercial fishermen and                                                                    
     crew that sustain injuries or illness while fishing.                                                                       
     The fund  is financed  from revenue received  from each                                                                    
     resident   and   nonresident   commercial   fisherman's                                                                    
     license and permit fee.   Commercial fishermen and crew                                                                    
     members pay 39%  - or up to $50 each  - of their annual                                                                    
     license fees  into this account.   In 2008,  there were                                                                    
     13,706   commercial   fishing    permit   holders   who                                                                    
     contributed to the fund.                                                                                                   
     The account has  grown to $11.5 million  even as health                                                                    
     care  costs  have  risen, due  in  part  to  continuing                                                                    
     improvements in fish industry safety.                                                                                      
        This increase is not projected to jeopardize the                                                                        
     sustainability of the fund.                                                                                                
MR.  BITNEY  relayed   that  the  intent  was   to  maintain  the                                                               
Fishermen's  Fund,  and he  noted  that  claims can  be  adjusted                                                               
accordingly  if the  number or  price  of claims  increased.   He                                                               
emphasized that  the intent was  not to increase  the fishermen's                                                               
taxes.   He  explained that  currently there  are provisions  for                                                               
fishermen with extraordinary  circumstances to request assistance                                                               
for claims above the $2,500 limit.                                                                                              
10:23:41 AM                                                                                                                   
REPRESENTATIVE KAWASAKI asked if there  was going to be testimony                                                               
about administration of the Fishermen's Fund's.                                                                                 
10:24:16 AM                                                                                                                   
MR.  BITNEY,  in response  to  Representative  Buch, stated  that                                                               
Kevin Adams,  a commercial fisherman from  Bristol Bay, furnished                                                               
the idea for HB 207, and that  there was also a companion bill in                                                               
the Senate.                                                                                                                     
10:24:54 AM                                                                                                                   
PAULA  SCAVERA, Special  Assistant, Office  of the  Commissioner,                                                               
Department of Labor & Workforce  Development (DLWD), deferred the                                                               
testimony to Trena Heikes.                                                                                                      
10:25:31 AM                                                                                                                   
TRENA  HEIKES,  Director,   Division  of  Workers'  Compensation,                                                               
Department of  Labor & Workforce Development  (DLWD), stated that                                                               
DLWD  was neutral  on  this bill,  and that  the  $2500 limit  on                                                               
claims which  had been in place  since 1951 was equal  to $27,000                                                               
in 2009 dollars.   She relayed that the  Fishermen's Fund balance                                                               
was $11.4 million,  and that the projected  increased annual cost                                                               
to the fund with a $10,000 limit would be $65,000.                                                                              
10:26:38 AM                                                                                                                   
REPRESENTATIVE  KAWASAKI  asked  if   the  Fishermen's  Fund  was                                                               
administered through  the Division of Workers'  Compensation, and                                                               
how it differed from a general workers compensation payment.                                                                    
MS. HEIKES replied that the  Alaska Workers' Compensation Act did                                                               
not cover commercial  fishermen, so this fund  was established by                                                               
the  state.   She  pointed  out  that  the Fishermen's  Fund  was                                                               
financed from  a percentage of the  Commercial Fishing Crewmember                                                               
licenses,  and  was  administered   by  a  Division  of  Workers'                                                               
Compensation program manager.  She  reported that the Fishermen's                                                               
Fund council, appointed by the  governor, considered any claimant                                                               
petitions over $2,500.00.                                                                                                       
MS.  HEIKES, in  response to  Representative Kawasaki,  said that                                                               
the fund only paid for medical benefits.                                                                                        
10:28:21 AM                                                                                                                   
REPRESENTATIVE KAWASAKI  asked about the differences  between the                                                               
fund and workers' compensation.                                                                                                 
MS.  HEIKES explained  that worker's  compensation benefits  were                                                               
usually paid  by an  insurance company,  as every  state employer                                                               
must  either  be  self-insured   or  carry  workers  compensation                                                               
insurance,  which   included  disability,   medical,  impairment,                                                               
death, and vocational benefits.   She reminded the committee that                                                               
commercial fishermen were not  eligible for workers' compensation                                                               
benefits,  and that  the Fishermen's  Fund only  provided medical                                                               
10:29:52 AM                                                                                                                   
REPRESENTATIVE  KAWASAKI  asked  if  the  $11.4  million  in  the                                                               
Fishermen's Fund was invested.                                                                                                  
MS. HEIKES replied  that it was invested only to  the same extent                                                               
of any  other state fund, as  a sub account of  the general fund,                                                               
but that the interest was paid into the general fund.                                                                           
REPRESENTATIVE   KAWASAKI  asked   about   any   impact  to   the                                                               
Fishermen's  Fund  from an  increase  in  the  claim limit.    He                                                               
inquired about an increase in the fishermen contributions.                                                                      
MS. HEIKES  replied that  she was unaware  of any  legislation to                                                               
increase  a percentage  of the  licensing revenue  paid into  the                                                               
Fishermen's Fund.   She estimated  an annual expense  increase of                                                               
$65,000.    She  detailed  that  the  Fishermen's  Fund  received                                                               
between  $800,000 and  $1 million  annually, but  that the  prior                                                               
four years had  seen a slight deficit spending.   She opined that                                                               
there  was still  ample funding  to provide  for the  claim limit                                                               
increase.   She shared  that the Fishermen's  Fund council  had a                                                               
concern,  but that  DLWD did  not foresee  any problem  given the                                                               
current status.                                                                                                                 
10:32:43 AM                                                                                                                   
REPRESENTATIVE BUCH  asked what  the largest benefit  payment was                                                               
from the Fishermen's Fund.                                                                                                      
MS. HEIKES replied that two  of the highest payments were $85,000                                                               
for the  loss of an  arm, and  $162,000 for pneumonia  which then                                                               
resulted in congestive heart failure.                                                                                           
10:34:33 AM                                                                                                                   
REPRESENTATIVE   KAWASAKI  inquired   whether  every   commercial                                                               
fisherman paid into the Fishermen's Fund.                                                                                       
MS.  HEIKES related  that 39  percent of  the Commercial  Fishing                                                               
Crewmember License  fee was directed  into the  Fishermen's Fund.                                                               
She clarified  that any other  insurance was used first,  and the                                                               
Fishermen's Fund was a fund of last resort.                                                                                     
10:35:14 AM                                                                                                                   
REPRESENTATIVE  KAWASAKI asked  to clarify  that the  Fishermen's                                                               
Fund would pay  the benefit should a commercial  fisherman lose a                                                               
finger while working on a boat.                                                                                                 
MS.  HEIKES  agreed,  and  reiterated  that  there  was  not  any                                                               
workers'  compensation  coverage  if   the  injury  was  directly                                                               
related to commercial fishing.                                                                                                  
10:35:46 AM                                                                                                                   
CHAIR EDGMON opened public testimony.                                                                                           
10:36:06 AM                                                                                                                   
PAUL  SHADURA, Executive  Director,  Kenai Peninsula  Fishermen's                                                               
Association, testified  that HB  207 offered  additional coverage                                                               
to the permit holders.                                                                                                          
10:37:13 AM                                                                                                                   
DAVE  COBB,   Business  Manager,  Valdez   Fisheries  Development                                                               
Association, testified that the  association supported HB 207 and                                                               
shared  that  the  Fishermen's  Fund was  self  sustaining.    He                                                               
reported that  the benefit payment  had not been  increased since                                                               
1959, although medical costs had increased.                                                                                     
10:38:41 AM                                                                                                                   
GERALD  McCUNE,  Lobbyist,  United  Fishermen  of  Alaska  (UFA),                                                               
described the Fishermen's Fund and  the fees that are contributed                                                               
to  the fund.    He reiterated  that this  fund  was a  secondary                                                               
insurance, but that the $2500 limit  was too low.  He opined that                                                               
HB 207 with a $10,000 limit was "a good little compromise."                                                                     
10:40:34 AM                                                                                                                   
REPRESENTATIVE  KAWASAKI offered  his  concern that  contribution                                                               
caps,  rising numbers  of uninsured  fishermen, and  an increased                                                               
payout limit could lead to insolvency  of the fund.  He asked Mr.                                                               
McCune  if  the  commercial  fishermen  would  support  increased                                                               
contributions to the fund.                                                                                                      
MR. McCUNE, in response to  Representative Kawasaki, relayed that                                                               
the Fishermen's  Fund council also  had concerns,  which included                                                               
the initial  impact on  the fund  by this  increase.   He relayed                                                               
that  he spoke  with  the Commercial  Fisheries Entry  Commission                                                               
(CFEC), as it  also paid contributions into  the Fishermen's Fund                                                               
from the  permit holders,  and he  asked for  an analysis  of the                                                               
increased   claim  limit   and  of   an  increase   in  the   fee                                                               
contributions by fishermen to the fund.                                                                                         
10:42:54 AM                                                                                                                   
REPRESENTATIVE KAWASAKI stated that  an Emergency Room (ER) visit                                                               
would generally exceed $2,500.                                                                                                  
CHAIR EDGMON pointed out that HB  207 stated up to $10,000, not a                                                               
mandatory  $10,000,  and he  predicted  that  the fund  would  be                                                               
managed in a fiduciary way.                                                                                                     
MR. McCUNE  mentioned that  expenses in  excess of  $10,000 would                                                               
require  an  appeal to  the  council.    He reiterated  that  the                                                               
Fishermen's Fund  council would review the  increased claim costs                                                               
after one year, should HB 207 pass.                                                                                             
10:44:29 AM                                                                                                                   
CHAIR EDGMON closed public testimony.                                                                                           
10:45:05 AM                                                                                                                   
REPRESENTATIVE  BUCH  asked  Ms.   Heikes  for  more  information                                                               
regarding  the  two  highest  claims   which  she  had  mentioned                                                               
previously.   He expressed his  interest in the process,  not the                                                               
medical history.                                                                                                                
MS. HEIKES explained that filing  a claim was an informal process                                                               
which requested compelling reasons  for payment above the $2,500.                                                               
She  summarized that  the Fishermen's  Fund  council would  meet,                                                               
review the claim  with its medical bills and reports,  and make a                                                               
10:47:01 AM                                                                                                                   
REPRESENTATIVE BUCH asked  if all the payouts  were determined in                                                               
this way.                                                                                                                       
MS. HEIKES  affirmed that payments  were based on receipt  of the                                                               
medical  expenses,   analysis  of  the  medical   diagnosis,  and                                                               
assessment of the statute.                                                                                                      
CHAIR EDGMON noted that Representative Munoz had arrived.                                                                       
10:47:28 AM                                                                                                                   
REPRESENTATIVE BUCH asked for the  time frame from application to                                                               
MS. HEIKES  replied that for  the above mentioned  two incidences                                                               
the payouts were approved within six months of the occurrence.                                                                  
10:48:03 AM                                                                                                                   
CHAIR EDGMON reminded that HB  207 still had two other committees                                                               
to pass through, and that there was a Senate companion bill.                                                                    
10:48:35 AM                                                                                                                   
REPRESENTATIVE  KAWASAKI  asked  how many  people  requested  the                                                               
$2500 claim limit.                                                                                                              
MS. HEIKES replied  that almost every claim was in  excess of the                                                               
$2,500 claim  limit.  She  reiterated that an analysis  of claims                                                               
between $2500 and $10,000 during  the last two years reflected an                                                               
annual cost increase of $65,000 to the fund.                                                                                    
10:49:52 AM                                                                                                                   
REPRESENTATIVE KELLER  moved to  report HB  207 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 207 was reported  from the                                                               
House Special Committee on Fisheries.                                                                                           
10:50:15 AM                                                                                                                   
The committee took an at-ease from 10:50 a.m. to 10:52 a.m.                                                                     

Document Name Date/Time Subjects
AdamsLtr--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
ATA Letter--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
HB207--Bill Packet.PDF HFSH 4/9/2009 10:15:00 AM
HB 207
Brent Johnson CV.PDF HFSH 4/9/2009 10:15:00 AM
HB207--Fiscal Note--DFG-CFEC-04-06-09.pdf HFSH 4/9/2009 10:15:00 AM
HB 207
CDFU Letter--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
CassidyEmail--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
BabbLtr--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
Cordova Mssgs--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
BeaudoinLtr--Johnson.pdf HFSH 4/9/2009 10:15:00 AM
BrandtLtr--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
Dept. of Labor Info.PDF HFSH 4/9/2009 10:15:00 AM
HB 207
HB207--Sponsor Statement.pdf HFSH 4/9/2009 10:15:00 AM
HB 207
Honea Mssg--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
IcicleLtr--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
McElroyMssg--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
KPFA Letter--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
MurrayLtr--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
RandaMssg--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
RiedelLtrRE--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
SEAS Letter--JohnsonJohnstone.PDF HFSH 4/9/2009 10:15:00 AM
TauriainenLtrRE--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
WGAFA Letter--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
ThompsonLtr--Johnson.PDF HFSH 4/9/2009 10:15:00 AM
UFA Letter--Johnson.PDF HFSH 4/9/2009 10:15:00 AM