Legislature(2009 - 2010)

04/16/2010 02:47 PM House JUD

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02:47:23 PM Start
02:48:47 PM SB303
05:41:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SB 303 - WORKERS' COMP; CONTRACTORS & OTHERS                                                                      
2:48:47 PM                                                                                                                    
CHAIR RAMRAS announced that the  final order of business would be                                                               
2d  CS FOR  SENATE  BILL  NO. 303(RLS),  "An  Act  relating to  a                                                               
subcontractor's, contractor's, and  project owner's liability for                                                               
workers'   compensation  and   excluding  certain   persons  from                                                               
liability  for  securing  the payment  of  workers'  compensation                                                               
benefits to employees; and providing for an effective date."                                                                    
2:50:23 PM                                                                                                                    
SENATOR JOE PASKVAN, Alaska State  Legislature, speaking as chair                                                               
of the Senate  Labor and Commerce Standing  Committee, sponsor of                                                               
SB  303, relayed  that according  to  the Department  of Labor  &                                                               
Workforce Development  (DLWD), there have been  455 fatalities in                                                               
the Alaska  workplace since 1993,  as well as "literally  tens of                                                               
thousands of injuries"  Alaska can  be a dangerous place to work,                                                               
and it  is therefore  imperative -  as part  of the  concept that                                                               
there  be accountability  and responsibility  in the  workplace -                                                               
that  those  who  work  in Alaska's  industries  have  access  to                                                               
justice  when they  are injured  or killed  due to  the fault  of                                                               
others.   However,  SB 303  would not  apply  in every  situation                                                               
involving injury or death; instead,  the bill would only apply in                                                               
those situations where  a worker is injured or killed  due to the                                                               
fault of a party other than his/her employer.                                                                                   
SENATOR PASKVAN  explained that due to  statutory changes enacted                                                               
in 2004  - via Senate Bill  323 - an owner  or general contractor                                                               
avoids  all  liability  for  an  injury to  or  the  death  of  a                                                               
subcontractor's  employee that  occurs  on the  job  even if  the                                                               
owner or general contractor was  acting with criminal negligence.                                                               
He offered  his understanding that  this information  is included                                                               
in  a memorandum  from Legislative  Legal  and Research  Services                                                               
that members now have in their  packets.  At issue, he opined, is                                                               
whether there is accountability  and responsibility when there is                                                               
fault,  and the  purpose of  SB 303  is to  return Alaska  to the                                                               
system that was in place prior to 2004.                                                                                         
SENATOR  PASKVAN  noted that  the  sponsor  statement for  Senate                                                               
Bill 323  - included  in  members' packets  -  claimed that  that                                                               
bill's  two  principal  modifications were,  one,  extending  the                                                               
responsibility for payment of workers'  compensation up the chain                                                               
of  contracts  to  include  project  owners,  and,  two,  barring                                                               
injured  workers collecting  workers' compensation  benefits from                                                               
also filing  a tort  claim - which  the sponsor  statement called                                                               
"double dipping."   Senator Paskvan  opined, however,  that there                                                               
was no such thing as double  dipping - that that was an erroneous                                                               
presentation -  because AS  23.30.015(g) expressly  provides that                                                               
any recovery  by an  injured person  requires a  reimbursement to                                                               
the insurance carrier for the workers' compensation benefits.                                                                   
The committee took an at-ease from 2:57 p.m. to 2:58 p.m.                                                                       
2:59:01 PM                                                                                                                    
SENATOR  PASKVAN  mentioned  that  AS  23.30.015(g)  specifically                                                               
          (g)   If   the    employee   or   the   employee's                                                                    
     representative recovers damages  from the third person,                                                                    
     the employee  or representative  shall promptly  pay to                                                                    
     the  employer the  total amounts  paid by  the employer                                                                    
     under (e)(1)(A)  - (C) of  this section insofar  as the                                                                    
     recovery is  sufficient after deducting  all litigation                                                                    
     costs  and  expenses.    Any  excess  recovery  by  the                                                                    
     employee  or representative  shall be  credited against                                                                    
     any amount payable by the  employer thereafter.  If the                                                                    
     employer is  allocated a percentage  of fault  under AS                                                                    
     09.17.080,  the  amount  due the  employer  under  this                                                                    
     subsection shall be  reduced by an amount  equal to the                                                                    
     employer's  equitable share  of damages  assessed under                                                                    
     AS 09.17.080(c).                                                                                                           
SENATOR PASKVAN, in response to  a comment, pointed out under the                                                               
"exclusive remedy provisions," the  employer of an injured worker                                                               
retains immunity  from tort claims.   Under a  capitalist system,                                                               
over time,  job safety is  promoted because employees  can choose                                                               
to work for safe employers and  employers can choose to hire safe                                                               
employees.   Furthermore, a determination was  made approximately                                                               
100  years ago  which said  that  as part  of advancing  American                                                               
commerce and  industry, each business should  inherently bear the                                                               
cost  of injury  or  death on  an overall  basis.   Again,  under                                                               
statute, there  is no double  dipping, whether it's  for benefits                                                               
paid up to the date of  the tort recovery, or for future benefits                                                               
that might be paid; such  recovery, he ventured, is viewed simply                                                               
as an advance of benefits, so  the employer has no potential risk                                                               
whatsoever - in terms of employees - of tort liability.                                                                         
SENATOR  PASKVAN  said  the  question   remaining  is  whether  a                                                               
subcontractor's  employee who's  injured  or  killed through  the                                                               
fault of the contractor or the  project owner would be taken care                                                               
of reasonably well.  [Under  the aforementioned 2004 legislation]                                                               
workers'  compensation  addresses  situations wherein  the  fault                                                               
lies  within an  employer/employee  "unit," but  not  if it  lies                                                               
outside of that unit.  He opined  that the person who is at fault                                                               
for the  injury should be the  one who is held  responsible under                                                               
the statutory  reimbursement structure.  Furthermore,  in Alaska,                                                               
fault  is  apportioned -  for  example,  if  a project  owner  or                                                               
general contractor  is found to  be 50  percent at fault  and the                                                               
employee is  found to be  50 percent  at fault, then  the project                                                               
owner  or general  contractor would  only owe  50 percent  of the                                                               
damages - and passage of SB 303 would not change that.                                                                          
3:04:53 PM                                                                                                                    
SENATOR PASKVAN,  in response to  a question, relayed that  as an                                                               
attorney, he has represented those  who've been injured or killed                                                               
on the  job, workers' compensation insurance  carriers seeking to                                                               
obtain recovery  of their costs, and  general liability insurance                                                               
carriers, and thus he believes  that he understands the [workers'                                                               
compensation] system reasonably well.   In response to a comment,                                                               
he  noted  that one  of  his  core  values  is that  of  personal                                                               
responsibility - if  a person breaks something,  then he/she pays                                                               
for  it;  particularly in  a  capitalist  system, those  who  are                                                               
engaged in activities for profit  should be responsible for their                                                               
actions.   The  whole concept  of immunity  from one's  own fault                                                               
arose out  of common  law developed in  Europe hundreds  of years                                                               
ago whereby  the king could  do no wrong,  no matter how  bad his                                                               
conduct, and  thus citizens had  no redress against the  king for                                                               
his wrongful actions.                                                                                                           
SENATOR PASKVAN ventured that Americans,  having fought a war for                                                               
independence,  disagree with  that type  of immunity  and believe                                                               
that  "the king"  should be  accountable and  responsible to  the                                                               
citizens for "the king's wrong,"  providing them with redress for                                                               
their grievances.  The  aforementioned 2004 legislation, however,                                                               
created  "little  kingdoms,"  all  seeking  immunity  from  their                                                               
actions,   even   negligent,    grossly   negligent,   criminally                                                               
negligent, or recklessly indifferent actions.   This is neither a                                                               
best policy  nor even a good  policy, he opined, and  offered his                                                               
belief that returning to the system  that was put in place during                                                               
the formation of the state and  that remained in place until 2004                                                               
would be the best policy,  particularly given that during that 45                                                               
years  in between,  there simply  was no  flood of  litigation as                                                               
proponents of Senate Bill 323  argued there was - those arguments                                                               
were overblown  and exaggerated.   The  prior system  worked well                                                               
and provided an appropriate balance,  and, at its core, contained                                                               
conservative principals and capitalist incentives.                                                                              
CHAIR  RAMRAS  expressed   disagreement  with  Senator  Paskvan's                                                               
REPRESENTATIVE  GRUENBERG questioned  whether the  immunity of  a                                                               
hotel or restaurant owner who supplies  food to a worker who then                                                               
gets sick would be affected by passage of SB 303.                                                                               
SENATOR PASKVAN indicated that it would not.                                                                                    
3:15:33 PM                                                                                                                    
DON ETHERIDGE,  Lobbyist, Alaska American Federation  of Laborers                                                               
-  Congress of  Industrial Organizations  (Alaska AFL-CIO),  said                                                               
that the Alaska  AFL-CIO is very supportive of SB  303, and is of                                                               
the same opinion  as the sponsor:  if a  person breaks something,                                                               
he/she  needs to  pay for  it.   Offering an  example of  a hotel                                                               
owner  whose  employee gets  injured  as  the result  of  illegal                                                               
actions  undertaken  by  a  bus  driver  hired  on  contract,  he                                                               
questioned whether it's  fair for the hotel owner to  have to pay                                                               
higher workers' compensation insurance rates as a result.                                                                       
CHAIR RAMRAS said yes, adding his  belief that that's the way the                                                               
system works.                                                                                                                   
MR. ETHERIDGE  remarked that most  AFL-CIO members  don't believe                                                               
that that's a  good idea.  In conclusion, he  reiterated that the                                                               
AFL-CIO is very supportive of SB 303.                                                                                           
3:17:23 PM                                                                                                                    
WAYNE  A.   STEVENS,  President/CEO,  Alaska  State   Chamber  of                                                               
Commerce  (ASCC),  said  that  the  ASCC opposes  SB  303  as  it                                                               
pertains  to  exclusive  liability, but  supports  the  statutory                                                               
changes adopted by the legislature  in 2004.  Currently, there is                                                               
a  statutory  requirement  for   immediate  employers  and  other                                                               
project  participants  to  pay  an  injured  employee's  workers'                                                               
compensation  benefits  regardless  of fault,  whereas  prior  to                                                               
2004,  he  asserted,  there  wasn't.    Under  current  law,  all                                                               
[employers],  including   subcontractors,  must   carry  workers'                                                               
compensation  insurance,  thus  ensuring  that  all  workers  are                                                               
insured regardless of who their  direct employer is, and workers'                                                               
compensation  is  the  exclusive  remedy.    Prior  to  2004,  he                                                               
asserted,  project owners,  contractors, and  subcontractors were                                                               
spending  tremendous  resources  attempting to  avoid  liability,                                                               
whereas  under current  law they  might  instead integrate  their                                                               
safety programs.                                                                                                                
MR.  STEVENS offered  his  understanding  that Alaska's  workers'                                                               
compensation  statutes are  intended to  provide injured  workers                                                               
with   reasonable   compensation    for   work-related   injuries                                                               
regardless of  fault or  cause, and that  current law  allows for                                                               
increased  safety awareness  and  coordinated  safety programs  -                                                               
interconnecting subcontractors and  project owners.  Furthermore,                                                               
he  proffered,   other  federal  and  state   agencies  have  the                                                               
authority to fine and/or shut  down companies that violate safety                                                               
standards.   The  ASCC advocates  reducing workers'  compensation                                                               
expenses,  particularly  workers' compensation  insurance  rates,                                                               
and, again, does  not support SB 303.  In  response to questions,                                                               
he offered  his belief that passage  of SB 303 will  result in an                                                               
increase in  workers' compensation insurance  rates, acknowledged                                                               
that  the current  workers' compensation  system  is unfair,  and                                                               
ventured  that  perhaps   a  task  force  could   be  created  to                                                               
investigate  what   could  be  done   to  address   the  system's                                                               
REPRESENTATIVE  LYNN, with  regard  to the  assertion that  other                                                               
federal  and state  agencies have  the authority  to fine  and/or                                                               
shut  down companies  that violate  safety standards,  questioned                                                               
how any  of that activity is  going to directly help  the injured                                                               
MR. STEVENS acknowledged that it probably wouldn't help.                                                                        
REPRESENTATIVE GRUENBERG opined that  if someone is injured, then                                                               
it's fair  that his/her expenses be  paid so that he/she  is made                                                               
whole, and that  it's fair for the person who  is responsible for                                                               
the injury  occurring to  pay those expenses.   Referring  to the                                                               
language  in  SB  303's  sponsor statement  that  read  in  part,                                                               
"... the   exclusive  liability   provisions  of   AS  23.30.055,                                                               
established  in   2004,  protect  a  project   owner  or  general                                                               
contractor from any liability when  a subcontractor's employee is                                                               
injured  or  killed,  even  when the  project  owner  or  general                                                               
contractor  acts with  criminal  negligence ...",  Representative                                                               
Gruenberg asked of  Mr. Stevens, "You're not  saying that's fair,                                                               
are you?".                                                                                                                      
MR. STEVENS said he was not.                                                                                                    
CHAIR RAMRAS  indicated that in  his view,  workers' compensation                                                               
provides  an  immediate  remedy, whereas  litigation  provides  a                                                               
delayed  remedy, and  that allowing  for litigation  would render                                                               
workers'   compensation  inadequate   and  therefore   result  in                                                               
increased insurance costs.                                                                                                      
REPRESENTATIVE GATTO indicated a  belief that criminal negligence                                                               
would be hard to prove.                                                                                                         
3:32:52 PM                                                                                                                    
JOHN LEWIS,  President; Organizer,  Ironworkers Local  Union 751,                                                               
opined that  the legislation passed in  2004 effectively provided                                                               
immunity  to project  owners and  general contractors  from legal                                                               
challenges  by a  worker injured  on the  job due  to negligence;                                                               
prior to  this change,  an injured worker  retained the  right to                                                               
pursue a remedy  from those responsible for that  negligence.  He                                                               
characterized the  argument for changing  the law in 2004  - that                                                               
it would  prevent "double dipping"  - as  a red herring  since AS                                                               
23.30.015  was already  in place  and clearly  states that  if an                                                               
injured  worker received  monies through  court action,  then the                                                               
workers'  compensation benefits  have to  be repaid.   What  that                                                               
2004 change really did, he opined,  was provide a way for project                                                               
owners and general  contractors to cut corners  on safety without                                                               
fear  of financial  loss from  having to  pay an  injured worker,                                                               
while still  allowing them  to "sue  down" or  sue subcontractors                                                               
for those very same actions.                                                                                                    
MR.  LEWIS  noted  that  under   existing  AS  23.30.055,  if  an                                                               
ironworker  is  hurt   by  the  actions  of   someone  else,  the                                                               
ironworker's employer would  be the one to bear the  cost, and so                                                               
even  just  one  accident  could raise  the  employer's  workers'                                                               
compensation insurance rates so high  that he/she would no longer                                                               
be  able to  compete for  jobs.   Why  should the  person who  is                                                               
responsible  for an  injury not  be  the one  to pay  for it,  he                                                               
queried, opining  that the  right thing would  be for  the person                                                               
who  caused an  injury  to pay  for it.    Existing AS  23.30.055                                                               
indemnifies  everyone  else who  might  be  the true  responsible                                                               
party while  essentially shifting the blame/cost  to the employer                                                               
who  may have  very well  taken  every step  humanly possible  to                                                               
safeguard his/her employee.                                                                                                     
MR.  LEWIS  offered his  understanding  that  prior to  the  2004                                                               
change, AS 23.30.055 was intended  to provide a resolution in the                                                               
event a  worker was  injured or killed  on the job  - a  means of                                                               
clarifying that the injured worker's  exclusive remedy was to use                                                               
workers'  compensation  insurance  to  take  care  of  the  costs                                                               
associated with regaining his/her  health; instead, AS 23.30.055,                                                               
as a result  of the 2004 change, has become  a method for general                                                               
contractors  and  project owners  to  push  a subcontractor  into                                                               
cutting  corners  on safety  in  order  to reduce  their  overall                                                               
costs.  In conclusion, he  asked the committee to support passage                                                               
of SB  303, surmising that  it would simply restore  the language                                                               
of AS 23.30.055 to what it was prior to the 2004 change.                                                                        
3:36:43 PM                                                                                                                    
STACY  ALLEN, R.N.C.,  Healthcare  Unit Representative,  Laborers                                                               
Local  341, said  that the  Laborers Local  341, which  has 2,200                                                               
members,  strongly  supports SB  303,  and  feels that  the  bill                                                               
supports  and enhances  a culture  of  safety that  it and  other                                                               
unions  have built  up with  management and  government over  the                                                               
long  years prior  to 2004.   Senate  Bill 303  would provide  an                                                               
incentive for employers to work  together to maintain a safe work                                                               
environment,  mostly  by  showing  that negligence  will  not  be                                                               
tolerated and  that there is a  penalty for not being  careful on                                                               
the  job  and  not  providing   a  safe  work  environment.    In                                                               
conclusion, she urged members to move SB 303 from committee.                                                                    
3:37:46 PM                                                                                                                    
ROBERT D.  STONE, Attorney  at Law, Law  Office of  Robert Stone,                                                               
LLC,   first  mentioned   that  he   has  represented   "workers'                                                               
compensation employers" - both those  that were insured and those                                                               
that were  self-ensured; is now  representing plaintiffs  "on the                                                               
liability   side";  has   represented   both   large  and   small                                                               
businesses;  has helped  workers' compensation  employers recover                                                               
their "subrogation interest" under  [AS 23.30.015(g)]; and is the                                                               
president  of  the Alaska  Association  for  Justice (AK.A.J.)  -                                                               
formerly the  Alaska Academy  of Trial Lawyers  (AATL).   He then                                                               
opined  that Senator  Paskvan  accurately  outlined the  problems                                                               
with  current law  -  as  amended in  2004  - regarding  workers'                                                               
compensation, and  why it's necessary  to change the law  [via SB
303] back to what it was prior to 2004.                                                                                         
MR.  STONE then  provided some  historical information  regarding                                                               
the workers'  compensation system, and explained  that under that                                                               
system, prior  to 2004,  an employee injured  because of  a third                                                               
party's negligence  could collect workers'  compensation benefits                                                               
from his/her  employer, then bring  suit against the  third party                                                               
that  actually  caused  his/her   injury,  and  then,  under  [AS                                                               
23.30.015(g)],  pay  back  his/her   employer  for  the  workers'                                                               
compensation benefits  that he/she  received.  After  the passage                                                               
of  Senate  Bill  323 in  2004,  however,  workers'  compensation                                                               
premiums for  small business  owners increased  because employers                                                               
were  then  being  assessed  not  only on  the  risk  that  their                                                               
actions/inactions might result in injury  to their employees, but                                                               
also on  the risk  that a  third party's  actions/inactions might                                                               
result in injury to their  employees, and the insurance companies                                                               
had  lost  their  reimbursement rights  under  [AS  23.30.015(g)]                                                               
because injured employees could no  longer bring suit against the                                                               
third party that was responsible for their injuries.                                                                            
MR. STONE  opined that  when a person  causes injury  to somebody                                                               
else,   he/she  must   be  held   accountable,   and  offered   a                                                               
hypothetical example  wherein a subcontractor on  the North Slope                                                               
gets  killed  by  the general  contractor's  negligent  employee.                                                               
Under  current law,  neither the  general contractor  nor his/her                                                               
employee  face any  liability,  but prior  to  2004, the  general                                                               
contractor and  his/her employee would  be held accountable.   In                                                               
conclusion, he ventured that there  are many such examples of why                                                               
the law should be changed back to the way it was prior to 2004.                                                                 
3:45:38 PM                                                                                                                    
HOWARD   GREY,   Director,   Anchorage  Branch,   Alaska   Miners                                                               
Association (AMA), mentioned that  he currently manages a company                                                               
and has  owned companies in  the past, and is  therefore familiar                                                               
with the workers' compensation system  in Alaska.  He offered his                                                               
belief  that the  current  system appears  to  work pretty  well,                                                               
particularly  for employees,  because  responsibility is  defined                                                               
and placed where it should be  - with the employer.  The employer                                                               
should  be responsible  for both  the supervision  and safety  of                                                               
his/her  employees,  and  if the  supervisor  doesn't  think  the                                                               
situation is safe, then he/she  shouldn't expose his/her employee                                                               
to that situation.  The current  concern the AMA has with SB 303,                                                               
he relayed, is that it will  probably create a legal morass - and                                                               
should   thus   be   avoided   -   and   could   also   encourage                                                               
[subcontractors]  to  forego or  ignore  or  try to  avoid  their                                                               
workers'  compensation responsibilities,  whereas under  existing                                                               
law, that's  not the case  - the employer has  the responsibility                                                               
and liability.                                                                                                                  
MR. GREY,  in conclusion, said that  SB 303 doesn't appear  to be                                                               
correcting  a  problem  or  an  oversight;  reiterated  that  the                                                               
current  system   seems  to  be  working   fairly  well  overall;                                                               
acknowledged that  perhaps administrative and  enforcement issues                                                               
could still be  addressed by the administration;  and offered his                                                               
belief  that  overall,  the  responsibility  is  currently  being                                                               
placed where it belongs.                                                                                                        
3:48:59 PM                                                                                                                    
KENTON   BRINE,  Assistant   Vice  President,   State  Government                                                               
Relations,  Property  Casualty  Insurers Association  of  America                                                               
(PCIAA), after  mentioning that  the property  casualty insurance                                                               
companies  belonging the  PCIAA collectively  provide about  one-                                                               
third  of the  workers' compensation  coverage in  Alaska, stated                                                               
that  the PCIAA  is opposed  SB  303, believing  it would  expose                                                               
general  contractors to  civil litigation  related to  on-the-job                                                               
injuries,   and  wouldn't   keep   workers'  compensation   rates                                                               
affordable.    He asked  legislators  to  carefully consider  the                                                               
ramifications  of passing  SB 303,  predicting  that it  couldn't                                                               
help but  have an impact  on insurance  rates and lead  to higher                                                               
costs  for  employers,  contractors,   and  subcontractors.    In                                                               
response  to  questions,  he  ventured  that  the  goals  of  any                                                               
workers' compensation  system are to provide  the greatest amount                                                               
of access  to workers' compensation coverage  to employees, treat                                                               
the injuries they  sustain on the job, and get  them back to work                                                               
as quickly as  possible.  He predicted that if  the system that's                                                               
in  place encourages  all workers'  to be  covered, and  provides                                                               
oversight to  ensure that such  policies are in place,  then it's                                                               
probably also  a system  that encourages  greater risk-management                                                               
oversight by insurers.                                                                                                          
REPRESENTATIVE  HOLMES asked  Mr.  Brine whether  he thinks  it's                                                               
fair for a  general contractor or project owner  to be completely                                                               
immune from liability  when a worker is injured or  killed on the                                                               
jobsite due  to criminal  negligence on the  part of  the general                                                               
contractor or project owner.                                                                                                    
MR. BRINE said that that doesn't  very sound fair, but added that                                                               
he couldn't  say that  there isn't  already a  remedy for  such a                                                               
worker  under  current  law.   Furthermore,  insurance  companies                                                               
don't pay  out benefits for  intentional acts,  so if there  is a                                                               
pattern of  intentional [bad]  behavior by a  project owner  or a                                                               
general contractor,  it's going  to be  difficult for  him/her to                                                               
get insurance in the first place.                                                                                               
REPRESENTATIVE  HOLMES asked  Mr.  Brine whether  he thinks  it's                                                               
fair for a subcontractor's  workers' compensation insurance rates                                                               
to go  up when  an injury  is due to  the negligence  or criminal                                                               
negligence of the general contractor or project owner.                                                                          
MR.  BRINE said  that that  doesn't sound  fair if  that's what's                                                               
actually occurring.  However, insurance  companies - through risk                                                               
management programs  - do their  best to analyze the  root causes                                                               
of workplace  accidents, he explained,  and opined that  it's not                                                               
fair  to assert  that workers'  compensation insurance  rates are                                                               
automatically going  to go up in  any given situation due  to the                                                               
negligence of others on the jobsite.                                                                                            
3:57:17 PM                                                                                                                    
KEVIN B.  DOUGHERTY, General Counsel, Alaska  District Council of                                                               
Laborers,  after  mentioning  that  he has  been  active  in  the                                                               
workers' compensation  "area" since about 1981,  said he supports                                                               
SB 303 as restoring the  traditional workers' compensation values                                                               
of looking  after injured  employees and  their families.   Those                                                               
values were  in place in  Alaska from  1915 until a  loophole was                                                               
created in 2004 [by passage of  Senate Bill 323].  He offered his                                                               
belief that SB 303 would  correct that loophole and would restore                                                               
an incentive for safety, and  listed some of the safety education                                                               
programs offered  by various companies  in Alaska prior  to 2004.                                                               
It's really  important to  ensure that  Alaska's laws  are honest                                                               
and  straightforward,   he  opined,  for  example,   by  defining                                                               
employers as  employers, not as  some other party as  current law                                                               
does  - such  political double  speak in  statute is  not a  good                                                               
thing for Alaskans and does not constitute good public policy.                                                                  
MR. DOUGHERTY  said that whenever  he's spoken  to a widow  or an                                                               
injured worker,  they've been expecting honesty  from the system,                                                               
and therefore he appreciates the  sponsor's intent to statutorily                                                               
restore  that.   In  response to  a question,  he  said that  the                                                               
statutory  definition of  employer was  artificially expanded  in                                                               
2004 with the passage of  Senate Bill 323, and characterized that                                                               
definition  as  inaccurate  and   that  expansion  as  not  being                                                               
forthright.  In response to  further questions, he said that from                                                               
a practical standpoint,  most people know who  their employer is,                                                               
and in the  workers' compensation system, people  can't sue their                                                               
employer and must simply live with  that.  For example, there was                                                               
a 19-year-old  who was killed  on the  job in Anchorage,  and his                                                               
family received  only $20,000 for  that death because  that's all                                                               
that workers'  compensation provided for.   If that man  had been                                                               
killed by  a project  owner or some  other third  party, however,                                                               
then all could  agree, he surmised, that that  third party should                                                               
be the  one to have been  held responsible.  That's  where safety                                                               
emanates from:   when people have to be  responsible, then safety                                                               
is typically taken very seriously.                                                                                              
MR.  DOUGHERTY, in  response to  other questions,  indicated that                                                               
[under SB  303], if a  general contractor was  doing construction                                                               
on an office  building and an office employee was  injured due to                                                               
the   general   contractor's   negligence,  then   that   general                                                               
contractor  would  be held  responsible,  and  proceeds from  any                                                               
resulting litigation  would go  towards reimbursing  the workers'                                                               
compensation  benefits  paid  by the  office  worker's  employer.                                                               
Regardless, though, the  employer could not be sued,  and, if the                                                               
employer  was  a  government  entity,   then  neither  could  the                                                               
citizens  whom that  government  entity was  entrusted to  serve.                                                               
Again,  under the  aforementioned traditional  values, the  party                                                               
that's negligent should have to pay, he concluded.                                                                              
4:07:04 PM                                                                                                                    
KIP  KNUDSON, Manager,  External Affairs,  Tesoro Alaska  Company                                                               
("Tesoro"), asked  the committee  to set  aside SB  303, offering                                                               
his  belief that  adoption of  its language  would undo  a reform                                                               
that  created  a safety  benefit  for  the Alaska  workplace  and                                                               
specifically for  Tesoro.  He  said he doesn't believe  that tort                                                               
liability  motivates safety  programs.   Current law  has allowed                                                               
for  the dismantling  of what  he called  cumbersome and  bizarre                                                               
legal barriers between Tesoro's safety  programs and those run by                                                               
its  contractors, and  coordinating  such programs  results in  a                                                               
better  culture  of  safety and  ultimately  a  safer  workplace.                                                               
Noting that supporters of SB 303  say it will restore the concept                                                               
of "you break it  you pay for it," he argued  that such a concept                                                               
was  never really  in place  prior  to 2004,  and predicted  that                                                               
SB 303  wouldn't  bring  that  concept  any  closer  to  fruition                                                               
MR.  KNUDSON proffered  that the  no-fault  standard of  workers'                                                               
compensation was  adopted to eliminate  uncertainty for  both the                                                               
employee  and  employer  in  cases  involving  injury  or  death;                                                               
regardless of  fault, the employee  would be compensated.   Prior                                                               
to 2004, he opined, Alaska  law contained a loophole that created                                                               
uncertainty for project owners and  contractors, and SB 303 would                                                               
reestablish  that   loophole.     He  offered  his   belief  that                                                               
currently, no employer - either  contractor or project owner - is                                                               
immune  from providing  workers' compensation  coverage, and,  in                                                               
return, the no-fault standard is applied.                                                                                       
[Chair Ramras turned the gavel over to Representative Herron.]                                                                  
MR.  KNUDSON  opined  that  if   the  concern  is  that  workers'                                                               
compensation is not  providing an adequate remedy in  the case of                                                               
injury or death, then the  debate should focus on that deficiency                                                               
rather than on expanding tort liability.                                                                                        
[Representative Herron returned the gavel to Chair Ramras.]                                                                     
MR. KNUDSON  offered his belief  that prior to 2004,  things were                                                               
unclear,  particularly regarding  control  of  the workplace  and                                                               
allocating fault.   In conclusion,  he added, "I think  the issue                                                               
of fairness  [both under current law  and prior to 2004]  ... has                                                               
been set aside in the  ... [workers' compensation] deal; it's not                                                               
fair for a  project owner to be sued regardless  of fault, as was                                                               
the case prior to 2004, for example."                                                                                           
4:10:58 PM                                                                                                                    
MAYNARD  TAPP, Owner,  Hawk  Consultants,  LLC, after  mentioning                                                               
that  his   company  is  primarily   involved  in  oil   and  gas                                                               
construction  and  maintenance  projects in  Alaska,  recommended                                                               
that SB  303 be set  aside.  He  relayed that just  recently, his                                                               
company  passed   its  "million-hour   mark  for   no  lost-time-                                                               
injuries"; that  it took  25 years to  reach that  milestone; and                                                               
that  he   believes  existing  workers'  compensation   laws  are                                                               
sufficient  in protecting  Alaska workers.   With  the industry's                                                               
current high  safety standards in  place, he opined, there  is no                                                               
need to support  SB 303, and all that its  passage would do would                                                               
be  to  increase  insurance  rates  in an  attempt  to  cover  an                                                               
indefinable  risk,  thus making  it  difficult  for companies  to                                                               
maintain  economic viability  thereby resulting  in less  project                                                               
development.  In conclusion, he said he opposes SB 303.                                                                         
MR.  TAPP, in  response to  questions, offered  his understanding                                                               
that injuries/deaths  resulting from acts of  criminal negligence                                                               
aren't covered  by workers' compensation insurance;  that acts of                                                               
criminal negligence  wouldn't be  addressed by  SB 303;  and that                                                               
all  insurance   rates  for  all  jobs   covered  under  workers'                                                               
compensation  "are  assured liability"  by  all  workers and  all                                                               
companies  within the  system, and  so it's  fair for  everyone's                                                               
rates to go up when problems with safety aren't dealt with.                                                                     
4:15:43 PM                                                                                                                    
MICHAEL COMBS,  Owner, Combs Insurance  Agency, Inc.,  noted that                                                               
under  [existing AS  23.30.045(a),] the  contractor only  becomes                                                               
liable  for the  subcontractor's employees  if the  subcontractor                                                               
fails  to  secure  workers' compensation  insurance,  whereas  in                                                               
contrast, SB  303's proposed AS  23.30.045(a) reads in  part, "If                                                               
the employer  is a  subcontractor ...,  the contractor  is liable                                                               
for  and  shall  secure  the   payment  of  the  compensation  to                                                               
employees of  the subcontractor unless the  subcontractor secures                                                           
the payment."  Furthermore, existing  AS 23.30.055 in part reads,                                                           
"The  liability of  an  employer prescribed  in  AS 23.30.045  is                                                               
exclusive  ...", and  yet, he  pointed out,  no attempt  has been                                                               
made to update  the definition of the term  "employer" beyond how                                                               
AS 23.30.395(20) defines that term:   "'employer' means the state                                                               
or its  political subdivision or  a person employing one  or more                                                               
persons in connection  with a business or  industry coming within                                                               
the scope of this chapter and carried on in this state;".                                                                       
MR. COMBS  opined that since SB  303 proposes to put  the general                                                               
contractor  within the  scope of  coverage under  AS 23.30,  even                                                               
though  he/she may  be able  to  transfer the  obligation to  the                                                               
subcontractor  by  written  contract,  unless  the  subcontractor                                                               
secures payment, the contractor should  still be eligible for the                                                               
exclusive-remedy  protection afforded  under AS  23.30.055.   "We                                                               
took and moved the general  contractor into the first position as                                                               
an employer,  in this case;  I'm not  sure why that's  been done,                                                               
but it  looks to me  like in  the language itself,  that's what's                                                               
been  done," he  added.   There  is nothing  fair about  workers'                                                               
compensation, he opined, because it  pays for both the employee's                                                               
and the  employer's negligence  regardless whether  it's [simple]                                                               
negligence or criminal negligence -  the employee is protected at                                                               
all times.   In  conclusion, he encouraged  the committee  to set                                                               
SB 303 aside.                                                                                                                   
MR. COMBS,  in response to  questions, offered  his understanding                                                               
that  although  it's  not  fair for  somebody  to  be  criminally                                                               
negligent, there are other methods  of dealing with such behavior                                                               
other  than  via the  workers'  compensation  system and  general                                                               
liability coverage;  and that with  regard to safety issues  on a                                                               
jobsite,  everyone who  sets foot  on  that jobsite  - whether  a                                                               
general contractor  or a subcontractor  - is responsible  for the                                                               
safety  conditions their  employees must  work under.   Moreover,                                                               
under  the workers'  compensation system,  it doesn't  matter who                                                               
causes  the  injury  to  an  employee or  who  has  the  workers'                                                               
compensation insurance - the employee  will be covered regardless                                                               
- though  injury claims  are going  to result  in an  increase in                                                               
workers' compensation insurance rates.                                                                                          
4:25:41 PM                                                                                                                    
[Due to  technical difficulties with the  official recording, all                                                               
volumes  must   be  set  at   maximum  for  the   period  between                                                               
4:25:42 p.m. and 4:30:06 p.m.]                                                                                                  
JEANINE  ST.  JOHN,  Vice   President,  Lynden  Logistics,  Inc.,                                                               
remarking that stable and predictable  laws are very critical for                                                               
enabling  companies  to  conduct  business in  Alaska,  said  her                                                               
company  believes that  SB  303 would  sharply  reverse the  2004                                                               
statutory  changes,  which were  recently  upheld  [as not  being                                                               
unconstitutional]  by  the Alaska  Supreme  Court  [in Schiel  v.                                                             
Union Oil  Company of  California], and  which, she  opined, were                                                             
fair, appropriate, and good -  providing the benefit of exclusive                                                               
remedy to the  companies that pay workers'  compensation.  Senate                                                               
Bill 303,  she predicted, would undermine  the underlying concept                                                               
of workers' compensation.  In  conclusion, she expressed disfavor                                                               
with changing the  current law; suggested that  before taking any                                                               
action, members  review what the court  had to say on  the issue;                                                               
and opined  that SB 303 would  result in increased costs  and was                                                               
not  the  right  answer  for  addressing  any  of  the  perceived                                                               
4:29:55 PM                                                                                                                    
REPRESENTATIVE HOLMES asked Ms. St.  John whether she thinks it's                                                               
fair for a  general contractor or project owner  to be completely                                                               
immune from liability  when a worker is injured or  killed on the                                                               
job due to  negligence or criminal negligence on the  part of the                                                               
general contractor or project owner.                                                                                            
MS.  ST. JOHN  offered her  belief  that there  would be  various                                                               
other  remedies  available  to  the  injured  worker  in  such  a                                                               
4:30:38 PM                                                                                                                    
EVERETT  H. BILLINGSLEA,  General  Counsel, Lynden  Incorporated,                                                               
added his  belief that  if a company  is absolved  of negligence,                                                               
that's consistent  with the concept of  the workers' compensation                                                               
system, and so the company  - the upstream contractors and owners                                                               
- should have the benefit of the exclusive remedy.                                                                              
REPRESENTATIVE  HOLMES asked  Mr. Billingslea  whether he  thinks                                                               
it's fair  for a subcontractor's workers'  compensation insurance                                                               
rates to go up  when an injury or death is  due to the negligence                                                               
of the general contractor or project owner.                                                                                     
MR.  BILLINGSLEA said  he doesn't  agree with  the argument  that                                                               
workers' compensation  rates either  have or are  going to  go up                                                               
due to  the statutory changes  made in 2004.   If they do  go up,                                                               
however, any  increase would be  more than offset by  the savings                                                               
on litigation costs and general  liability insurance premiums, he                                                               
4:33:43 PM                                                                                                                    
JOHN GRUMMETT, Shattuck &  Grummett Insurance; National Director,                                                               
Alaska  Independent Insurance  Agents  &  Brokers, Inc.  (AIIAB),                                                               
said that  the AIIAB is opposed  to SB 303, and  doesn't think it                                                               
would enhance the  system at all.  At issue,  he surmised, is how                                                               
the legislature wants to treat  workers in terms of ensuring that                                                               
they are covered  and getting treatment, and whether  it wants to                                                               
create another level  of litigation.  He  remarked, "There's talk                                                               
about  negligence,  here,  but  there's also  the  issue  of  ...                                                               
partners and sole proprietors and  LLCs, where people are allowed                                                               
to  ... be  excluded  from  coverage when  they  buy a  [workers'                                                               
compensation] policy,  ... whereas  on the ...  corporation side,                                                               
they're  automatically included  unless  they're  excluded."   So                                                               
although there might  be a lot of things wrong  with the workers'                                                               
compensation system, the  AIIAB doesn't believe that  SB 303 will                                                               
solve them, he concluded.                                                                                                       
REPRESENTATIVE  HOLMES asked  Mr.  Grummett whether  he thinks  a                                                               
general contractor  or project owner should  be completely immune                                                               
from liability when a worker is  injured or killed on the job due                                                               
to negligence or  criminal negligence on the part  of the general                                                               
contractor or project owner.                                                                                                    
MR.  GRUMMETT  said  he doesn't  think  general  contractors  and                                                               
project owners  should be the  only ones [to have  immunity], and                                                               
indicated  that he  is questioning  why  the bill  appears to  be                                                               
focused  on  just the  construction  industry  and not  on  every                                                               
REPRESENTATIVE HOLMES  asked Mr. Grummett whether  he thinks it's                                                               
fair for a subcontractor's  workers' compensation insurance rates                                                               
to go  up when  an injury  is due to  the negligence  or criminal                                                               
negligence of the general contractor or project owner.                                                                          
MR. GRUMMETT  said, "I  don't think  it's fair  but I  think that                                                               
that's what ... we're left to deal with right now."                                                                             
4:37:40 PM                                                                                                                    
MICHELE KAHLE  relayed that  she would be  speaking on  behalf of                                                               
her deceased son, Tyler Kahle, who  was killed while working at a                                                               
mine construction site in Nome.   She said that although the 2004                                                               
statutory  changes effected  by Senate  Bill 323  were touted  as                                                               
being  necessary in  order to  ensure that  workers were  insured                                                               
under workers' compensation,  that was already the  case prior to                                                               
2004:  everyone  - whether project owner,  general contractor, or                                                               
subcontractor   -   was   already  required   to   have   workers                                                               
compensation insurance.   Furthermore,  when Senate Bill  323 was                                                               
enacted, workers lost  all of their rights, she  opined, but most                                                               
didn't realize it at the  time, since the question wouldn't arise                                                               
until  they were  injured  or  killed; for  giving  up all  those                                                               
rights, workers received nothing in return.                                                                                     
MS. KAHLE,  with regard  to the argument  that other  federal and                                                               
state agencies  have the authority to  address safety violations,                                                               
pointed out  that such actions are  not going to make  an injured                                                               
[or killed]  employee [or his/her  family] whole.  For  the death                                                               
of  her son,  for example,  those responsible  were only  legally                                                               
required to pay  $5,000.  "Were we made whole?"  she queried, and                                                               
challenged those  present to look  her in  the eye tell  her that                                                               
her  family  was.    Alaska's  workers'  compensation  system  is                                                               
broken, and although SB 303 isn't going  to fix it, it would be a                                                               
good start, she opined, to at  least put the statute back to what                                                               
it was for the 40 years prior  to 2004 so that workers would have                                                               
some rights again in situations involving gross negligence.                                                                     
MS. KAHLE  offered her belief  that currently, an  injured worker                                                               
in Alaska  is better  off if  there isn't  any insurance  at all,                                                               
because  that's the  only way  he/she can  recover damages.   She                                                               
noted that her  son was not the only fatality  that occurred that                                                               
day -  both he and  a coworker were  dropped 60-plus feet  from a                                                               
man lift.   She  stated that  she supports  SB 303,  and surmised                                                               
that unless  a person has  experienced what she has,  that person                                                               
is  just  kidding  himself/herself  to  think  that  the  current                                                               
statute encourages safety on the job.   Since when does a lack of                                                               
accountability encourage compliance with  anything?  Although the                                                               
federal Mine Safety  & Health Administration (MSHA)  fined one of                                                               
the parties responsible  for her son's death, that  fine is still                                                               
being litigated -  that party "has all sorts of  recourse, and we                                                               
have none," she added.                                                                                                          
MS.  KAHLE  offered  her  belief  that  as  things  stand  today,                                                               
employers,  subcontractors,  and  project  owners  are  not  only                                                               
experiencing  cost  savings,  they are  actually  profiting  from                                                               
people's  deaths   and  injuries.    Employees   are  unknowingly                                                               
assuming all of  the risks, and no one is  being held accountable                                                               
for their  safety.  Tyler  and his  co-worker are proof  of that.                                                               
Going to work  should never be a grave mistake  for anyone in the                                                               
U.S., but today it is, she concluded.                                                                                           
4:44:28 PM                                                                                                                    
RALPH SEEKINS,  speaking as the  former Alaska State  Senator who                                                               
sponsored  Senate Bill  323 in  2004,  offered his  understanding                                                               
that  workers' compensation  insurance  doesn't cover  deliberate                                                               
acts,    and   expressed    agreement   with    that   exclusion.                                                               
Acknowledging that nothing  could compensate one for  the loss of                                                               
a family member  or even an employee, he indicated  that when the                                                               
legislature  was addressing  the  workers' compensation  statutes                                                               
back in 2004 via Senate Bill  323, the issue of just compensation                                                               
wasn't  addressed.   Indicating  that  passage  of SB  303  would                                                               
result in  the statutory language  reverting back to what  it was                                                               
prior to passage of Senate Bill  323 - wherein the contractor was                                                               
responsible for securing workers'  compensation for the employees                                                               
of the subcontractor  - he relayed that he'd  disagreed with that                                                               
concept,  and explained  that  Senate Bill  323  was intended  to                                                               
change  that  requirement  such  that  the  contractor  would  be                                                               
responsible for securing workers'  compensation for the employees                                                               
of the subcontractor  only if the subcontractor failed  to do so,                                                               
and  such that  if  the  contractor failed  to  do  so, then  the                                                               
project owner would be required to  do so, and thereby close what                                                               
he  considered  to  be  a  loophole.    Again,  the  compensation                                                               
schedule wasn't addressed via Senate Bill 323.                                                                                  
MR. SEEKINS accused  the State of Alaska  of scamming contractors                                                               
by requiring  them to sign  indemnification agreements  that hold                                                               
the  State of  Alaska harmless;  relayed that  research indicates                                                               
that many government  entities and large employers  have the same                                                               
requirement;  and accused  insurance adjusters  and attorneys  of                                                               
conspiring with each  other against employers.   Senate Bill 323,                                                               
he  then indicated,  was intended  to allow  small employers  the                                                               
ability to require  the same type of  indemnification while still                                                               
providing coverage  for all employees,  and to  exempt situations                                                               
involving defective  equipment so  that any employees  injured by                                                               
such  equipment  could  still file  suit  unrelated  to  workers'                                                               
compensation.  He acknowledged that  at the time he was promoting                                                               
the passage  of Senate Bill 323,  he knew that no  double dipping                                                               
was really  occurring.   He asserted,  however, that  an employer                                                               
who paid  out workers' compensation benefits,  even though he/she                                                               
might eventually  get reimbursed  as the  result of  a successful                                                               
tort action,  was then  subject to what  he called  an experience                                                               
modification on his/her insurance policy;  he referred to this as                                                               
"double jeopardy."   Mr. Seekins,  too, noted that the  court has                                                               
ruled that  the current statutes [are  not unconstitutional], and                                                               
accused Senator Paskvan of not  declaring a conflict of interest.                                                               
In conclusion, he predicted that if  SB 303 is adopted, "it" will                                                               
happen again  and the  State of Alaska  will continue  to benefit                                                               
from "it."                                                                                                                      
MR.  SEEKINS,  in response  to  a  question, indicated  that  the                                                               
Alaska  State Chamber  of Commerce  (ASCC) asked  him to  sponsor                                                               
Senate Bill 323.                                                                                                                
CHAIR RAMRAS  characterized SB 303  as an inadequate  solution to                                                               
the problems imbedded in the workers' compensation system.                                                                      
MR. SEEKINS  opined that  what employers were  after in  2004 was                                                               
the  benefit of  "the deal"  without the  "double jeopardy,"  and                                                               
again  reiterated  that  Senate  Bill 323  did  not  address  the                                                               
compensation  schedule.    He   offered  his  understanding  that                                                               
project owners  were only  seeking the  same coverage  granted to                                                               
contractors and  subcontractors, and  indicated that if  the goal                                                               
of SB  303 is  to get  rid of that  coverage for  project owners,                                                               
then  it should  also be  gotten rid  of for  all employers.   In                                                               
response to  a question,  he offered  his understanding  that the                                                               
terms, "criminal  negligence" and "gross negligence"  are defined                                                               
in  statute, opined  that such  acts shouldn't  be exempted  from                                                               
other  penalties, and  again  predicted that  passage  of SB  303                                                               
would result in litigation and "double jeopardy."                                                                               
5:07:22 PM                                                                                                                    
GAIL VOIGTLANDER,  Chief Assistant  Attorney General  - Statewide                                                               
Section  Supervisor,  Torts  and Worker's  Compensation  Section,                                                               
Civil Division (Anchorage), Department  of Law (DOL), in response                                                               
to questions, explained  that there isn't any language  in SB 303                                                               
limiting  it  to  just  the  construction  industry;  that  under                                                               
SB 303, the project owner would no  longer be required to pick up                                                               
coverage of workers' compensation and  so would also no longer be                                                               
subject to proposed  AS 23.30.055 as an employer  for purposes of                                                               
exclusive  liability; that  whether a  contract's indemnification                                                               
provisions  would protect  the project  owner and  the contractor                                                               
would  depend on  the contract  itself;  that although  contracts                                                               
vary widely, generally they address  those whom the project owner                                                               
is seeking  indemnification from;  that with regard  to contracts                                                               
entered into by  the State of Alaska, some of  what's required in                                                               
such contracts is  set forth in statute and some  is just prudent                                                               
practice, particularly  given that the  State of Alaska  could be                                                               
viewed  as a  deep  pocket in  terms of  someone  seeking a  tort                                                               
remedy  via litigation;  that although  including indemnification                                                               
in  contracts entered  into by  the  State of  Alaska provides  a                                                               
better  way to  manage risk,  it does  come at  some cost  to the                                                               
State, with  that cost being  reflected in the bidding;  and that                                                               
because of  statutory requirements, in contracts  entered into by                                                               
the State of Alaska, indemnification  can't be shifted to another                                                               
entity in situations  where negligent acts have  occurred and the                                                               
sole negligent party is the State of Alaska.                                                                                    
REPRESENTATIVE  GRUENBERG, in  response  to questions,  explained                                                               
that AS 11.81.900(a)(4) reads:                                                                                                  
          (4) a person acts with "criminal negligence" with                                                                     
     respect to a  result or to a  circumstance described by                                                                    
     a provision of law defining  an offense when the person                                                                    
     fails to perceive a  substantial and unjustifiable risk                                                                    
     that  the result  will occur  or that  the circumstance                                                                    
     exists; the  risk must be  of such a nature  and degree                                                                    
     that  the failure  to perceive  it constitutes  a gross                                                                    
     deviation from  the standard of care  that a reasonable                                                                    
     person would observe in the situation.                                                                                     
MS. VOIGTLANDER  indicated that  she has  not seen  any instances                                                               
wherein the mens rea required  under that definition of "criminal                                                               
negligence" was used in a civil context.                                                                                        
REPRESENTATIVE  GRUENBERG, in  response to  a question,  surmised                                                               
that  a   charge  of  criminally  negligent   homicide  might  be                                                               
warranted  for an  on-the-job accident,  such as  when a  party's                                                               
criminally negligent  behavior results in a  mining disaster, for                                                               
5:22:54 PM                                                                                                                    
TRENA  HEIKES, Director,  Central  Office,  Division of  Workers'                                                               
Compensation,  Department   of  Labor  &   Workforce  Development                                                               
(DLWD),  in response  to  a  question, said  that  it's been  the                                                               
reduction in injuries over the  past decade which has resulted in                                                               
workers' compensation  insurance rates declining, and  that those                                                               
rates  are set  based on  two  elements:   payroll multiplied  by                                                               
risk, with risk - or experience  modification - having to do with                                                               
the  number  of  injuries  the  employer  has  experienced.    In                                                               
response  to another  question, she  declined to  venture whether                                                               
passage of SB 303 would affect workers' compensation rates.                                                                     
[Chair Ramras turned the gavel over to Representative Herron.]                                                                  
5:24:04 PM                                                                                                                    
GREY  MITCHELL,  Director,  Central  Office,  Division  of  Labor                                                               
Standards &  Safety, Department of Labor  & Workforce Development                                                               
(DLWD),  in response  to  a question,  explained  that there  are                                                               
statutory provisions that hold a  controlling employer liable for                                                               
safety violations  at a worksite,  and that that  liability would                                                               
transfer to a general contractor,  but [neither SB 303 nor Senate                                                               
Bill  323]  change that  liability  in  terms of  complying  with                                                               
occupational safety and health standards.                                                                                       
REPRESENTATIVE  HOLMES surmised,  then,  that passage  of SB  303                                                               
wouldn't  do anything  to discourage  employers from  engaging in                                                               
safety programs.                                                                                                                
MR. MITCHELL  concurred.  In  response to a question,  he offered                                                               
his understanding that in a  recent accident that occurred during                                                               
construction  of a  [sky bridge]  between two  legislative office                                                               
buildings,  a piece  of equipment  that  was being  used was  not                                                               
actually designed for the purpose it  was being used for, and the                                                               
resulting investigation determined that  both the main contractor                                                               
and  the subcontractor  were liable  for  the resulting  accident                                                               
that injured two employees.   Neither the main contractor nor the                                                               
subcontractor, though, was found to be criminally negligent.                                                                    
REPRESENTATIVE GATTO expressed disagreement with that finding.                                                                  
[Representative Herron returned the gavel to Chair Ramras.]                                                                     
MR. MITCHELL,  in response to  a comment and a  question, offered                                                               
his understanding that a lack of  proper training was a factor in                                                               
that accident, and that no deaths resulted.                                                                                     
CHAIR  RAMRAS, after  ascertaining  that no  one  else wished  to                                                               
testify, closed public testimony on SB 303.                                                                                     
5:29:36 PM                                                                                                                    
SENATOR PASKVAN,  in wrap up, relayed  that the intent of  SB 303                                                               
is to  return Alaska to  what he referred  to as the  good public                                                               
policy that was  in place prior to 2004, and  opined that passage                                                               
of Senate  Bill 323 in 2004  resulted in the elimination  of what                                                               
he termed,  "just compensation for  at-fault conduct" and  in the                                                               
injection of  the concept of  "fault immunity" into  the workers'                                                               
compensation system.   Prior to  2004, the  tort-liability system                                                               
provided a remedy, and although it  was a delayed remedy, it held                                                               
only those at  fault accountable, and, again,  in Alaska, damages                                                               
are apportioned  according to fault.   The  workers' compensation                                                               
system is broken,  he opined, when a contractor  or project owner                                                               
who is  at fault  can kill or  injure a  subcontractor's employee                                                               
without being held  accountable.  Senate Bill 303  would fix that                                                               
problem,  and in  no way  asserts  that there  isn't currently  a                                                               
commitment  to safety.   However,  because there  are incidences,                                                               
the  question   becomes  whether,  when  there   is  fault,  that                                                               
responsibility   and   accountability   should  attach   to   the                                                               
SENATOR PASKVAN,  with regard to  the assertion  that contractual                                                               
indemnification  provisions  effect  a  scam,  pointed  out  that                                                               
although he agrees that allowing  for such provisions constitutes                                                               
bad public policy, it isn't the  workers who are involved in that                                                               
process but rather  the business owners who  are deciding whether                                                               
to assume  risk or not.   He urged the committee  to not continue                                                               
to allow the immunization of  at-fault conduct, which, he opined,                                                               
is  what current  law does.   With  regard to  the aforementioned                                                               
term, "double jeopardy", he opined  that that's the wrong term to                                                               
be using  with regard to contractual  indemnification provisions.                                                               
With regard to  the argument that passage of SB  303 would result                                                               
in litigation, he pointed out that  wasn't the case during the 45                                                               
years prior to the enactment of  Senate Bill 323, and so won't be                                                               
the  case if  SB 303  is  adopted.   And  if there  is a  concern                                                               
regarding  indemnification  provisions,  he  ventured,  then  the                                                               
statutes being  addressed via SB  303 should be returned  to what                                                               
they were prior to  2004.  The words, "and justice  for all" - as                                                               
used in  the pledge  of allegiance  - should  not be  just hollow                                                               
words for workers injured due to  the fault of someone other than                                                               
themselves or their employer, he concluded.                                                                                     
CHAIR RAMRAS  expressed a preference for  maintaining the current                                                               
5:39:57 PM                                                                                                                    
REPRESENTATIVE HERRON  moved to  report 2d  CSSB 303(RLS)  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.                                                                                                                   
CHAIR RAMRAS objected.                                                                                                          
A roll  call vote  was taken.   Representatives  Lynn, Gruenberg,                                                               
and Holmes  voted in favor of  reporting 2d CSSB 303(RLS)  out of                                                               
committee.    Representatives  Herron, Gatto,  and  Ramras  voted                                                               
against it.   Therefore, 2d  CSSB 303(RLS) failed to  be reported                                                               
from the House Judiciary Standing Committee by a vote of 3-3.                                                                   

Document Name Date/Time Subjects