Legislature(2009 - 2010)BARNES 124

04/13/2009 03:15 PM House LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved Out of Committee
Moved Out of Committee
Heard & Held
-- Testimony limited to 2 min. each --
+ Bills Previously Heard/Scheduled TELECONFERENCED
HB 207-MAXIMUM BENEFIT FROM FISHERMEN'S FUND                                                                                  
3:59:42 PM                                                                                                                    
CHAIR OLSON  announced that the  next order of business  would be                                                               
HOUSE  BILL  NO.  207,  "An Act  increasing  the  allowances  for                                                               
injury, disability, or heart attack  payable from the fisherman's                                                               
fund; and providing for an effective date."                                                                                     
3:59:44 PM                                                                                                                    
JOHN  BITNEY, Staff,  Representative  John  Harris, Alaska  State                                                               
Legislature, on behalf of the  prime sponsor, Representative John                                                               
Harris,  stated   that  the  Alaska  Fisherman's   Fund  provides                                                               
services  similar to  Workers' Compensation  for  fishermen.   He                                                               
stated that the upper limit in  state law was established in 1959                                                               
at $2,500.  Health care costs have risen since that time and                                                                    
HB 207 would increase the amount of the cap to $10,000.                                                                         
4:00:49 PM                                                                                                                    
MR. BITNEY referred  to Section 1 of AS 23.35.140  (a) of HB 144,                                                               
which  read:   "Except for  compelling reasons..."  and explained                                                               
that  this provision  sets  out  conditions for  the  use of  the                                                               
Alaska  Fisherman's Fund  (AKFF).   He pointed  out the  process,                                                               
such that the  Fishermen's Fund Advisory &  Appeals Council would                                                               
discuss  a fisherman's  claim  to determine  whether  to award  a                                                               
claim  beyond the  cap.   He  explained an  injured fishermen  or                                                               
family must  go through  the claim  process for  consideration of                                                               
compensation beyond  the cap.   He opined that raising  the cap's                                                               
limit would  help speed up  the processing  of claims.   He noted                                                               
that the  claims are  paid from  fees commercial  fishermen remit                                                               
for  crew licenses  and permits.   He  related his  understanding                                                               
that the AKFF balance is currently  $11 million.  He advised that                                                               
some management  provisions are also  in place in the  event that                                                               
the fund  is drawn down  by subsequent claims.   Thus, additional                                                               
review  can  be provided,  if  necessary,  to avoid  raising  the                                                               
fishermen's license and permit fees.                                                                                            
4:03:13 PM                                                                                                                    
MR. BITNEY,  in response to Representative  Neuman, answered that                                                               
although at today's  prices the cap on the  total allowance could                                                               
be set at  $18,000, and that the reason $10,000  was selected was                                                               
to provide  for an increase  in the cap  but not to  increase the                                                               
cap to the  extent that claims might force  a subsequent increase                                                               
in fishermen's license and permit fees.   The goal is to keep the                                                               
fees  paid into  the fund  by  commercial fishermen  at the  same                                                               
level.  In further response  to Representative Neuman, Mr. Bitney                                                               
agreed that $10,000 was a reasonable  estimate for the cap on the                                                               
total allowance for an injury or disablement.                                                                                   
4:04:39 PM                                                                                                                    
REPRESENTATIVE COGHILL  asked how many  claims have been  made to                                                               
compensate  fishermen  for  injury   or  disablement  beyond  the                                                               
current cap of $2,500.                                                                                                          
MR. BITNEY said  he was not certain.  He  recalled testimony in a                                                               
prior committee  that at the upper  end a claim for  $100,000 was                                                               
made by a claimant who suffered congestive heart failure.                                                                       
4:05:17 PM                                                                                                                    
REPRESENTATIVE COGHILL  clarified that  he was interested  in the                                                               
number  of individuals  who asked  for  consideration beyond  the                                                               
$2,500 cap.                                                                                                                     
MR. BITNEY said he did not know.                                                                                                
MR.  BUCH interjected  that  he is  also a  member  of the  House                                                               
Special Committee on  Fisheries.  He recalled  that Trena Heikes,                                                               
Director, Division  of Workers' Compensation  previously provided                                                               
details to the committee                                                                                                        
4:05:49 PM                                                                                                                    
TRENA  HEIKES,  Director,   Division  of  Workers'  Compensation,                                                               
Department of  Labor & Workforce Development  (DLWD), stated that                                                               
Mr. Mike Monagle  could answer any statistical  questions for the                                                               
committee members on this matter.                                                                                               
4:06:33 PM                                                                                                                    
REPRESENTATIVE  COGHILL  asked  for  clarification  of  how  many                                                               
individual claims exceeded the $2,500 cap.                                                                                      
MIKE MONAGLE, Administrator, Fishermen's  Fund Advisory & Appeals                                                               
Council,  Department of  Labor  &  Workforce Development  (DLWD),                                                               
related  that in  FY 09  about 60  claims were  made that  ranged                                                               
between $2,500 and $10,000 to  the Fishermen's Fund.  He reviewed                                                               
historical statistics  for claims  that exceeded the  $2,500 cap,                                                               
such that 63  claims were made in  FY 08 and 65  claims were made                                                               
in FY  07.  He  related his understanding  that between 50  to 70                                                               
claims  per  year are  requested  that  fall between  $2,500  and                                                               
$10,000.   However,  he noted  that when  the department  advises                                                               
claimants that  they have  exceeded the limit  and must  fill out                                                               
additional paperwork,  the fisherman tends not  to follow through                                                               
with the claim.  He surmised  that what has been happening is the                                                               
claimant  will   pay  for  his/her  out-of-pocket   expenses  for                                                               
legitimate claims  rather than  pursue the  claim.   He explained                                                               
that claims that  exceed $10,000 tend to be pursued.   Between 26                                                               
and  30  claims  range  from   $20,000  to  $200,000,  which  are                                                               
considered catastrophic  claims, are reviewed by  the Fishermen's                                                               
Fund Advisory & Appeals Council (FFAA)  each year.  While is rare                                                               
to have claims of that  magnitude approved, the FFAA council must                                                               
consider each claim.  Since the  FFAA council meets twice a year,                                                               
someone seeking  medical treatment or medical  reimbursement must                                                               
wait six months for approval.                                                                                                   
4:09:15 PM                                                                                                                    
REPRESENTATIVE  COGHILL related  his understanding  that it  is a                                                               
matter of severity.   He stated that the $10,000  figure could be                                                               
considered a  baseline rather than a  cap.  He asked  whether Mr.                                                               
Monagle  could speculate  on the  number of  cases that  would be                                                               
paid anyway.                                                                                                                    
MR. MONAGLE  answered that he  was not certain he  understood the                                                               
REPRESENTATIVE COGHILL  suggested that  currently the cap  is set                                                               
at $2,500,  so generally  when a  fisherman makes  an application                                                               
the claim  is approved  up to  that amount.   He  understood that                                                               
under HB  207 the cap  would be increased  to $10,000.   He asked                                                               
whether $10,000 is  sufficient given current medical  costs or if                                                               
typical claims would  probably exceed the $10,000  amount and the                                                               
claimant would still need to petition the council for approval.                                                                 
MR.  MONAGLE  explained  that the  division  reviewed  the  basic                                                               
claim.  He  related a scenario in which a  person strains his/her                                                               
back.   If the  doctor advises  the patient that  he will  need a                                                               
magnetic  resonance  imaging  (MRI),  the test  could  cost  from                                                               
$2,500  to $4,000  in Alaska.   If  subsequent office  visits and                                                               
physical  therapy were  required,  the claim  could easily  reach                                                               
$5,000  to  6,000.   He  stated  that  back  strain is  a  common                                                               
occurrence for fishermen  as an occupational injury.   He offered                                                               
his  belief that  the  $10,000 was  selected  to accommodate  the                                                               
typical cost of the most common claims.                                                                                         
4:11:50 PM                                                                                                                    
REPRESENTATIVE  COGHILL  said that  he  would  like to  know  the                                                               
reason for  an allowance  of more  than $10,000.   He asked  if a                                                               
claim were made for more than  the cap, i the claimant would need                                                               
board approval.                                                                                                                 
MR. MONAGLE explained that  the division administratively screens                                                               
claims for compliance  and eligibility.  The  division conducts a                                                               
preliminary investigation  to ensure  that the  claim is  a valid                                                               
claim.   He agreed a claim  exceeding the cap would  require FFAA                                                               
council approval.                                                                                                               
REPRESENTATIVE   COGHILL    related   his    understanding   that                                                               
administratively  typical injuries  would be  covered within  the                                                               
$10,000 allowance,  but that  in instances  in which  a fisherman                                                               
suffered  a heart  attack, the  amount would  not cover  it.   He                                                               
suggested that as  long as the hurdle is  not insurmountable, the                                                               
$10,000  seemed reasonable.    He reiterated  that  he is  simply                                                               
trying to gauge that amount.                                                                                                    
4:13:04 PM                                                                                                                    
REPRESENTATIVE  BUCH recalled  testimony given  before the  House                                                               
Fisheries  committee  such that  the  Fishermen's  Fund paid  out                                                               
several of  the largest claims  in the  history of the  fund this                                                               
past year.  He further  recalled that about $250,000 collectively                                                               
was paid.                                                                                                                       
MS.  HEIKES answered  yes.   She  offered that  the FFAA  council                                                               
recently  approved payment  of $162,000  of  $205,000 in  medical                                                               
expenses and  in another  case paid  approximately $100,000  to a                                                               
fisherman who lost his arm in a winch accident.                                                                                 
REPRESENTATIVE   BUCH   related   his  understanding   that   the                                                               
Fishermen's Fund  has had a  cap of $2,500  for two decades.   He                                                               
noted that  the Fishermen's Fund  currently has a balance  of $11                                                               
million.    He  offered  his  belief that  the  increase  in  the                                                               
allowance   for  injury   or  disablement   is  reasonable,   and                                                               
considering the  amount of  fees collected  that raising  the cap                                                               
will  still represent  a  sustainable  limit.   He  asked if  the                                                               
Department of  Labor & Workforce  Development (DLWD)  agrees with                                                               
the proposed cap.                                                                                                               
MS. HEIKES  stated that the  DLWD supports  HB 207.   She related                                                               
that the fund  currently consists of $11.4 million.   In the past                                                               
few  years, the  Fishermen's  Fund has  had  a $100,000  deficit.                                                               
However,  given the  current revenue  and the  fund balance,  the                                                               
department does not anticipate any problem, she said.                                                                           
4:14:59 PM                                                                                                                    
REPRESENTATIVE  CHENAULT  referred  to  the  $11.4  million  fund                                                               
balance.    He  referred  to the  bill  sponsor  statement  which                                                               
outlines that  crew members each pay  $50 for their license.   He                                                               
inquired as to the average payout from the Fishermen's Fund.                                                                    
4:15:22 PM                                                                                                                    
MR. MONAGLE  provided statistics  from the Fisherman's  Fund such                                                               
that in  FY 08,  766 claims  were paid with  an average  claim of                                                               
$1,075 and  a total  of $823,000  in benefits.   He  advised that                                                               
about 24 claims were made beyond  the $2,500 cap, and the amounts                                                               
varied from $3,000  up, with several in excess of  $100,000.  The                                                               
FFAA council typically approves  between $200,000 and $300,000 at                                                               
its semi-annual  meetings for extended  benefit requests.   Thus,                                                               
the  FFAA council  typically approves  approximately $300,000  to                                                               
$400,000 in total claims per year.                                                                                              
MR.  MONAGLE, in  response to  Representative Chenault,  answered                                                               
that the FY 08 revenue for the Fisherman's Fund was $1,440,000.                                                                 
4:17:27 PM                                                                                                                    
PAULA  SCAVERA, Special  Assistant, Office  of the  Commissioner,                                                               
Department of  Labor & Workforce Development  (DLWD), stated that                                                               
the administration supports HB 207.                                                                                             
4:18:06 PM                                                                                                                    
GERALD  MCCUNE,  Lobbyist,  United  Fishermen  of  Alaska  (UFA),                                                               
stated that all 37 fishing  groups that comprise UFA support this                                                               
bill.  He provided additional  information on fishermen's license                                                               
fees.   He  stated that  $23.40 of  the $50  crewmember's license                                                               
fees is  paid into the  fund.  Currently,  fishermen's crewmember                                                               
license fees are  capped at $50.  He  recalled the administrative                                                               
fee cost  is $3.07.   He offered that he  also met with  the FFAA                                                               
Council  for  three  days.    This  bill  informs  fishermen  and                                                               
hospitals  that  the  allowance  for  injury  or  disablement  is                                                               
increasing from  $2,500 to $10,000.   It helps fishermen  to know                                                               
they have  a little  more flexibility  before they  must petition                                                               
the  FFAA Council  for  payment.   This  bill  represents a  good                                                               
compromise since the UFA does  not wish to burden the Fishermen's                                                               
Fund.   He recalled that  he suggested to  the DLWD and  the FFAA                                                               
that  if  HB 207  becomes  law  the  Fishermen's Fund  should  be                                                               
monitored to  ensure that  it has sufficient  funds.   He offered                                                               
that he spoke  to the Commercial Fisheries  Entry Commission with                                                               
respect the  possibility of  raising license  fees.   However, at                                                               
this time  monitoring the Fishermen's  Fund should  suffice since                                                               
the balance of the fund is $11.4 million, he said.                                                                              
4:19:49 PM                                                                                                                    
REPRESENTATIVE  BUCH  emphasized  that  there is  not  a  cap  on                                                               
payments,  but   a  total  allowance   of  $10,000,   except  for                                                               
compelling  reasons, at  which time  the payouts  can exceed  the                                                               
$10,000 subject to the FFAA Council determination.                                                                              
MR.  MCCUNE clarified  that 39  percent  of commercial  fishermen                                                               
fees are  paid into  the fund,  but the fees  are capped  at $50,                                                               
which  is  the  total  amount   that  each  commercial  fishermen                                                               
currently  pays into  the Fishermen's  Fund.   He further  agreed                                                               
that this was not a cap on the payout.                                                                                          
4:20:57 PM                                                                                                                    
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on closed HB 207.                                                                              
REPRESENTATIVE NEUMAN moved to report  HB 207, 26-LS0801\A out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no objection,  HB 207  was reported                                                               
from the House Labor and Commerce Standing Committee.                                                                           
4:21:53 PM                                                                                                                    
The committee took an at-ease from 4:21 p.m. to 4:24 p.m.                                                                       
4:23:49 PM                                                                                                                    

Document Name Date/Time Subjects
01_HB207_version_A.pdf HL&C 4/13/2009 3:15:00 PM
HB 207
02_HB207_Sponsor_Statement.pdf HL&C 4/13/2009 3:15:00 PM
HB 207
03_HB207_Fiscal_Note-1-1-041009-DFG-N.pdf HL&C 4/13/2009 3:15:00 PM
HB 207
04_HB207_Fiscal_Note-2-1-041009-LWF-Y.pdf HL&C 4/13/2009 3:15:00 PM
HB 207