Legislature(2009 - 2010)BUTROVICH 205

04/07/2010 08:30 AM Senate JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued from 4/5/10 Meeting --
-- Please Note Time Change --
Uniform Rule 23 Waived
Moved CSSB 222(JUD) Out of Committee
Moved CSSB 303(JUD) Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved Out of Committee on 4/5/10
Scheduled But Not Heard
          SB 303-WORKERS' COMPENSATION AND CONTRACTORS                                                                      
8:35:01 AM                                                                                                                    
CHAIR  FRENCH announced  the consideration  of SB  303 and  noted                                                               
that there was  a committee substitute (CS) for  the committee to                                                               
consider. Public testimony  was taken and closed  at the previous                                                               
Senator McGuire joined the committee.                                                                                           
SENATOR  WIELECHOWSKI moved  to adopt  the work  draft CS  for SB
303, labeled  26-LS1089\S, as the  working document.  There being                                                               
no objection, version S was before the committee.                                                                               
SENATOR JOE PASKVAN  recapped that SB 303 is  designed to restore                                                               
the  structure  of  the workers'  compensation  statutes  to  the                                                               
policy  that was  intended at  statehood, which  is that  "if you                                                               
break it  you pay  for it."  That policy  worked well  until 2004                                                               
when it was  changed to give immunity to  project owners, general                                                               
contractors,  or  others  who,  even  with  criminal  negligence,                                                               
injured  or killed  an employee  of the  subcontractor. "I  would                                                               
submit that that's bad public policy," he stated.                                                                               
SENATOR  PASKVAN  related  that  Sections 1,  2,  and  4  contain                                                               
changes  that would  re-implement the  previous, more  protective                                                               
law. Section  3 adds new  subsections [AS 23.30.045(g)  and (h)].                                                               
Subsection  (g) says  that a  subcontractor  who is  hired as  an                                                               
independent  contractor   by  the  contractor  and   who  has  no                                                               
employees  during the  term of  the  contract is  liable for  and                                                               
shall  secure  the payment  of  compensation  under the  workers'                                                               
compensation statute and shall produce  a certificate of workers'                                                               
compensation insurance  coverage for the project.  Subsection (h)                                                               
says that if  a subcontractor fails to do that  and it results in                                                               
a premium that is billed  to the contractor. The subcontractor is                                                               
liable   for  that   additional  premium   plus  any   associated                                                               
penalties.   This  is   good  social   policy  in   the  workers'                                                               
compensation context, he said.                                                                                                  
8:37:58 AM                                                                                                                    
SENATOR WIELECHOWSKI  moved to report  CS for SB 303,  version S,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
SENATOR COGHILL  objected to  make an  observation. He  said he's                                                               
beginning to understand  the need for this bill, but  he wants to                                                               
talk  to the  sponsor  about the  requirement  for an  individual                                                               
subcontractor to buy the insurance  because it looks like it's an                                                               
economic levelizer rather than a compensation problem.                                                                          
He  related  that  what  appealed   initially  was  the  fairness                                                               
standard and  the idea that  if you break  it you should  fix it.                                                               
His understanding is  that now the owner of a  project is subject                                                               
to the  workers' compensation  laws, which  is not  sufficient in                                                               
some  circumstances. This  bill makes  the owner  liable, but  it                                                               
leaves  the  main  contractor  under  workers'  compensation  and                                                               
without having  to bear the  same responsibility as the  owner so                                                               
the  fairness standard  only goes  part  way, he  said. "I  don't                                                               
understand why  we're not going the  whole way, but I  don't know                                                               
enough about the  system to put an amendment in  to say we should                                                               
do that because  then the whole reason for workers'  comp kind of                                                               
starts dissipating," he said.                                                                                                   
8:40:08 AM                                                                                                                    
He  said the  testimony  from Tesoro  indicated  that they  would                                                               
become significantly liable while  some contractors who they work                                                               
with wouldn't  bear that  same liability so  it's not  clear that                                                               
this   will  reach   the  fairness   that  the   sponsor  sought.                                                               
Nevertheless,  I'm  willing  to   continue  the  dialog  so  I'll                                                               
therefore remove my objection, he concluded.                                                                                    
CHAIR  FRENCH announced  that  without  objection, CSSB  303(JUD)                                                               
moved from the Senate Judiciary Standing Committee.                                                                             

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