Legislature(2003 - 2004)

02/25/2004 03:25 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 402-LABOR & WORKFORCE DEVELOPMENT FEES                                                                                     
VICE  CHAIR GATTO  announced  that the  final  order of  business                                                               
would be  HOUSE BILL NO.  402, "An Act  relating to fees  for the                                                               
inspection of  recreational devices, for certificates  of fitness                                                               
for  electrical   wiring  and  plumbing,  for   filing  voluntary                                                               
flexible work hour plans, and  for licenses for boiler operators;                                                               
and providing for an effective date."                                                                                           
Number 2044                                                                                                                     
GREG  O'CLARAY, Commissioner,  Department  of  Labor &  Workforce                                                               
Development,  presented HB  402  on behalf  of  the governor  and                                                               
answered questions.   He also introduced  Grey Mitchell, Director                                                               
of  the  Division of  Labor  Standards  &  Safety, who  would  be                                                               
available for questions.  Commissioner O'Claray testified:                                                                      
     Mr.  Gatto, I'm  here  protecting  the workers  against                                                                    
     themselves,  as indicated  in the  prior bill....  With                                                                    
     respect  to this  particular bill,  I am  following the                                                                    
     administration's  belief that  users of  these services                                                                    
     should bear a portion of the  cost.  This bill you have                                                                    
     before  you  delineates  some additional  increases  in                                                                    
     fees   for   various    certificates   and   activities                                                                    
     undertaken by the department, on  behalf of those folks                                                                    
     that are accessing the services ...                                                                                        
Number 2128                                                                                                                     
REPRESENTATIVE ROKEBERG asked if  this bill was a revenue-raising                                                               
device and questioned,  "Why are we increasing these  fees on the                                                               
workers of Alaska?"                                                                                                             
COMMISSIONER O'CLARAY stated:                                                                                                   
     We   are  increasing   some  fees   on  some   workers,                                                                    
     commensurate  with  the  cost   to  the  department  to                                                                    
     perform the  services.   Our main  approach here  is to                                                                    
     try to  make some  of these  services we  provide cost-                                                                    
     neutral to  state government, except in  one particular                                                                    
     case, and that  is the $100 fee for the  filing of flex                                                                    
     plans, the increases are  pretty much commensurate with                                                                    
     inflation and (indisc.).                                                                                                   
REPRESENTATIVE ROKEBERG  said he  was glad  Commissioner O'Claray                                                               
had pointed that out.                                                                                                           
Number 2189                                                                                                                     
REPRESENTATIVE   CRAWFORD  recalled   testimony  in   years  past                                                               
regarding inspections  and there being  a problem with  having an                                                               
adequate number of  inspectors.  He asked if raising  the fees as                                                               
proposed in HB 402 would allow for an increase in inspectors.                                                                   
Number 2300                                                                                                                     
GREY MITCHELL, Director, Labor Standards  & Safety, Department of                                                               
Labor & Workforce Development, testified:                                                                                       
     The costs to operate  the mechanical inspection program                                                                    
     include  inspections   for  boilers,   inspections  for                                                                    
     electrical  systems, plumbing  systems;  all come  from                                                                    
     one account.  Right  now, there is insufficient revenue                                                                    
     in that account  to fund some of the  positions that we                                                                    
     currently  have, and  to  fund our  needs  in terms  of                                                                    
     electrical inspections.                                                                                                    
     Right now,  we only  have one electrical  inspector for                                                                    
     the state,  and with the additional  revenues that this                                                                    
     bill creates, we plan to  create a statewide electrical                                                                    
     inspection force,  if you will.   Right now, we  have a                                                                    
     vacancy that  we're keeping open in  Juneau ... because                                                                    
     we don't  have the  revenue to  pay for  that position.                                                                    
     We're   planning   on   filling   that   position   and                                                                    
     establishing a new position, which  you will see in the                                                                    
     fiscal  note, which  we plan  to station  in Fairbanks.                                                                    
     That  way, we'll  have ...  statewide coverage  because                                                                    
     right now, we have an inspector in Wasilla.                                                                                
REPRESENTATIVE LYNN asked for clarification on how the funds                                                                    
resulting from the fees would be accounted for.                                                                                 
MR. MITCHELL replied:                                                                                                           
     This question gets to be a  bit complicated.  I'm not a                                                                    
     financial wizard  in the workings  of the state.   As I                                                                    
     understand   it,  there's   a   statute  that   creates                                                                    
     authority  for  revenues   that  are  produced  through                                                                    
     inspections  to be  deposited into  a "subfund"  in the                                                                    
     general  fund.    It's not  statutorily  designated  or                                                                    
     protected,  so to  speak.   It's off  on its  own in  a                                                                    
     separate  pot to  allow for  some more,  I don't  know,                                                                    
     credibility in how those funds are used.                                                                                   
     ... If you're  going to charge people for  a service, a                                                                    
     lot of  times they  want to know  that those  funds are                                                                    
     going to be  used for their benefit.   If we're talking                                                                    
     about ... fees for boilers,  those people who are being                                                                    
     charged a  fee want to  know that they're going  to get                                                                    
     adequate services in boiler inspection.                                                                                    
     In  this   case,  where   we're  increasing   fees  for                                                                    
     certificates-of-fitness,     the    primary     revenue                                                                    
     generator,   we're   talking    about   enforcing   the                                                                    
     certificate  of fitness  requirements for  electricians                                                                    
     and plumbers  throughout the state.   Those  groups are                                                                    
     people  who  currently  have those  certificates  [and]                                                                    
     tend to  support that  kind of approach.   So,  I don't                                                                    
     know if I've explained it.                                                                                                 
REPRESENTATIVE LYNN said,  "This fund is in the  general fund; it                                                               
doesn't really have a fence around it."                                                                                         
MR. MITCHELL stated that was correct.                                                                                           
VICE CHAIR GATTO noted that  the University of Alaska has tuition                                                               
that goes  directly back  to the  university, unlike  these funds                                                               
that go into the general fund but are held "harmless."                                                                          
TAPE 04-18, SIDE B                                                                                                            
Number 2374                                                                                                                     
MR. MITCHELL stated:   "As I understand it, this  is a portion of                                                               
the general fund;  it's part of a sub account  within the general                                                               
COMMISSIONER O'CLARAY  added, "Actually,  it's called  a building                                                               
safety account."                                                                                                                
Number 2364                                                                                                                     
REPRESENTATIVE ROKEBERG referred to  the sectional analysis of HB
     In Section 2 it says you  have a $200 fee for a license                                                                    
     as a boiler  operator.  In the  sectional [analysis] it                                                                    
     says $200  for a three-year  license.  Is that  what it                                                                    
     says in  the statute?   It doesn't say anything  in the                                                                    
     bill about three years.                                                                                                    
MR.  MITCHELL replied,  "The three-year  license  duration is  in                                                               
REPRESENTATIVE ROKEBERG stated:                                                                                                 
     That's not good - not if  you want to change it for the                                                                    
     statute  and  don't even  have  a  term  of it  in  the                                                                    
     statute.  That's  not a very good idea, is  it?  From a                                                                    
     bureaucrat's  standpoint, you  don't care,  but from  a                                                                    
     legislative  [standpoint],  I  guess  we  care.    It's                                                                    
     easier  for  us   to  fix  a  statute  than   it  is  a                                                                    
     regulation.  I guess I have a concern about that.                                                                          
     [In the] Section 3 language,  are there certificates of                                                                    
     fitness?  I'm trying to see  what they relate to.  It's                                                                    
     Chapter 62,  certificates of fitness,  and then  in the                                                                    
     fiscal note  it says  this is  for both  mechanical and                                                                    
     electrical  inspectors.    So,  it seems  to  me,  your                                                                    
     sectional  [analysis]  says  you are  redoing  building                                                                    
     code   inspections  in   non-municipal  areas   without                                                                    
     building   inspectors   now,    both   electrical   and                                                                    
     mechanical inspectors.                                                                                                     
Number 2270                                                                                                                     
MR. MITCHELL replied  that the jurisdiction for  state laws, with                                                               
respect  to  plumbing and  electrical  work,  is statewide.    He                                                               
stated that  his division does  not generally do  the inspections                                                               
within  municipalities  where  there are  inspectors  to  perform                                                               
those inspections.                                                                                                              
REPRESENTATIVE  ROKEBERG asked  if  his division  was doing  them                                                               
outside the municipalities.                                                                                                     
MR. MITCHELL replied that was correct.                                                                                          
REPRESENTATIVE   ROKEBERG  requested   clarification  about   the                                                               
division's building inspections in non-organized areas.                                                                         
MR.  MITCHELL  replied,  "Generally,  the  codes  only  apply  to                                                               
certain types  of projects.   Residential projects  are excluded.                                                               
I believe it's anything more than a four-plex."                                                                                 
REPRESENTATIVE  ROKEBERG  asked   for  clarifications  about  the                                                               
certificates of fitness.  He said:                                                                                              
     I'm kind  of confused because you're  talking about, in                                                                    
     the  sectional [analysis]  here, having  mechanical and                                                                    
     electrical  inspectors, and  here, you're  charging the                                                                    
     journeymen and apprentices in  that program to increase                                                                    
     their fees.  I don't get it.                                                                                               
COMMISSIONER O'CLARAY replied:                                                                                                  
     In  the sectional  [analysis],  we're indicating  where                                                                    
     the  revenue is  being  generated from,  and what  it's                                                                    
     intended  to be  used for.    In the  bill itself,  the                                                                    
     adjustment to the fees is  an increase from the current                                                                    
     $160  to  $200  for  the  certificate  of  fitness  for                                                                    
     journeymen level  for, I believe,  it's both  of those,                                                                    
     electricians and plumbers.                                                                                                 
REPRESENTATIVE ROKEBERG stated:                                                                                                 
     I  guess  I'm  not  getting   it.    If  building  code                                                                    
     inspections  for larger  commercial  style, above  four                                                                    
     plex  buildings,   are  we   not  charging   for  those                                                                    
     inspections sufficiently  to offset  the cost  of those                                                                    
COMMISSIONER O'CLARAY  replied, "Apparently not.   The raising of                                                               
this fee will generate sufficient revenue for us to."                                                                           
REPRESENTATIVE ROKEBERG  asked if  this bill covered  all trades;                                                               
did  all  journeyman trainees  have  to  acquire certificates  of                                                               
fitness, regardless of their trades?                                                                                            
COMMISSIONER O'CLARAY replied:                                                                                                  
     Under the statutes, a  journeyman electrician, in order                                                                    
     to practice  his or her  trade in the state  of Alaska,                                                                    
     or a  journeyman plumber, must  be certified or  have a                                                                    
     certificate of  fitness issued by the  (indisc.), which                                                                    
     means they have to meet certain criteria....                                                                               
REPRESENTATIVE ROKEBERG asked if  anyone from organized labor was                                                               
going to testify.                                                                                                               
VICE CHAIR GATTO noted that  the one witness from organized labor                                                               
had exited the room.                                                                                                            
REPRESENTATIVE ROKEBERG  stated that  he was concerned  and said,                                                               
"It seems to me, if I was a  member and had to have a certificate                                                               
of fitness, I'd be upset about this."                                                                                           
MR. MITCHELL replied:                                                                                                           
     These  fees have  been paid  for a  number of  years by                                                                    
     electricians and  plumbers who  are certified  in their                                                                    
     trades.   The last time  these fees were  increased was                                                                    
     in  1993.   We have  seen increases  in our  costs, and                                                                    
     this program is not  just the inspections, there's also                                                                    
     the testing  of the applicants  and the issuing  of the                                                                    
[Due to technical difficulties the  remaining log numbers on this                                                               
tape are not available.]                                                                                                        
REPRESENTATIVE ROKEBERG stated:                                                                                                 
     You're  telling  me you  need  to  increase their  fees                                                                    
     because  of  the  other  work  you're  doing?    You're                                                                    
     actually charging  people to perform a  trade and using                                                                    
     it for  other purposes.   This is  a tax on  the worker                                                                    
     here for  you to do  your work.  There's  no connection                                                                    
     between  building  inspections  and  a  certificate  of                                                                    
     fitness  that a  worker  is buying  here.   There's  no                                                                    
     connection between  these other activities  or granting                                                                    
     examinations.   There's an examination fee  right here.                                                                    
     I don't get  it.  I've heard people in  the labor force                                                                    
     that, frankly,  complain about this.   They  say, "What                                                                    
     the heck are  we paying this fee for -  it's a nuisance                                                                    
     fee, it's  a tax on  workers."  It's  just as bad  as a                                                                    
     business license.                                                                                                          
MR. MITCHELL responded:                                                                                                         
     They're not  just inspections that  are being  paid for                                                                    
     out  of this,  although I  believe the  workers in  the                                                                    
     trade, by  and large, would support  those inspections,                                                                    
     because they want  to make sure that the  work is being                                                                    
     done  to the  level that  they aspire  to perform  that                                                                    
     work to.   These workers have to go  through an intense                                                                    
     training program  and show that  they have  developed a                                                                    
     certain number of  hours - thousands of hours  - in the                                                                    
     trade, before  they can  qualify to  take this  test to                                                                    
     get  this certificate  that allows  them  to hold  this                                                                    
     journeyman license.                                                                                                        
     The people who go out  and do the inspections also make                                                                    
     sure that the  people who are doing the  work have that                                                                    
     level of credential, that they  have put in their dues,                                                                    
     so to speak.                                                                                                               
REPRESENTATIVE GATTO asked for clarification of the certificate                                                                 
of fitness:  "Has it got to do with a license?  Has it got to do                                                                
with a permit?  Is there another word that would clarify it?"                                                                   
MR. MITCHELL responded that the term "license" would be clearer.                                                                
REPRESENTATIVE  ROKEBERG   asked,  "Are   you  telling   us,  Mr.                                                               
Mitchell,  that  the certificates  of  fitness,  they are  issued                                                               
biannually, is  there a requirement  for continuing  education or                                                               
anything else to be reissued on a biannual basis?"                                                                              
MR. MITCHELL replied there was a continuing education                                                                           
requirement for electricians but not for plumbers, at this time.                                                                
REPRESENTATIVE ROKEBERG  asked:  Isn't the  certificate more like                                                               
a driver's license  since there are no criteria  for a reissuance                                                               
of a certificate for plumbers?                                                                                                  
MR. MITCHELL replied that this was correct and said:                                                                            
     The difference from a driver's  license is that the DMV                                                                    
     [Division of  Motor Vehicles] does not  put enforcement                                                                    
     people  out  on  the  street   to  check  for  driver's                                                                    
     licenses.  Our inspectors  are those enforcement people                                                                    
     who check  to make sure  that the people in  the trades                                                                    
     are credentialed to do the work.                                                                                           
REPRESENTATIVE ROKEBERG said:                                                                                                   
     Let me understand this, then.   Someone works thousands                                                                    
     of hours  and years to work  through the apprenticeship                                                                    
     program,  become a  journeyman, and  he's reached  that                                                                    
     level.  You  give him a certificate, but  then he's got                                                                    
     to go every  two years to get  another certificate when                                                                    
     he's  already reached  that level  of education.   Then                                                                    
     you're going to charge him  for this privilege.  You're                                                                    
     taxing  him  every  two years  for  this  privilege  to                                                                    
     pursue his trade.  I don't get it.                                                                                         
VICE CHAIR GATTO  noted that school nurses were  required to take                                                               
certain  certifications and  credits, and  were also  required to                                                               
pay the fee for accreditation.   He asked if that example was not                                                               
REPRESENTATIVE   ROKEBERG  noted   that  Representative   Gatto's                                                               
example was about continuing education,  but that the plumbers in                                                               
Alaska  don't have  to  have any  continuing  education [but  are                                                               
required to have certificates of fitness].                                                                                      
MR. MITCHELL noted:                                                                                                             
     In  this case,  the difference  is that  there are  two                                                                    
     functions being performed  by the Mechanical Inspection                                                                    
     section based on  this fee income.  These  are not fees                                                                    
     being charged to building owners  for inspections.  The                                                                    
     entire cost  of this  program, which includes  a public                                                                    
     safety element to  make sure that work  is performed to                                                                    
     code,   and    a   certificate-of-fitness   enforcement                                                                    
     element,  is basically  all being  funded  out of  this                                                                    
     fee.   Historically, it's  been working  that way.   We                                                                    
     haven't  really  had  a  lot  of  complaints  from  the                                                                    
     industry on this.                                                                                                          
VICE  CHAIR  GATTO  asked  if  there  had  been  complaints  from                                                               
building owners and, if so, how many.                                                                                           
MR.  MITCHELL said  he had  not received  any of  those kinds  of                                                               
REPRESENTATIVE CRAWFORD asked  if it was the intent  of this bill                                                               
to increase the number of electrical inspectors in the state.                                                                   
MR. MITCHELL replied:                                                                                                           
     The  fiscal  note  reflects  that  we  are  adding  one                                                                    
     position ... and that would  be an electrical inspector                                                                    
     position.    We  also   have  an  electrical  inspector                                                                    
     position  that we've  been forced  to maintain  vacant,                                                                    
     because  our revenue-generating  ability in  mechanical                                                                    
     inspection has been  limited to a point  where we can't                                                                    
     fill  it because  we don't  have  the money  to do  it.                                                                    
     There  are  two  positions that  have  been  maintained                                                                    
     vacant to  cover these shortages,  and it's to  do with                                                                    
     increased   costs,  shifting   of  costs,   from  other                                                                    
     departments, lease costs, all  kinds of different costs                                                                    
     have been  laid upon the Mechanical  Inspection section                                                                    
     in the last  year.  [This is so]  Especially because we                                                                    
     have  just  recently  gone  to  this  new  formula  for                                                                    
     funding  the program,  completely out  of the  building                                                                    
     safety  fund.    There  is  no  general  fund  in  this                                                                    
     program; the entire  program is funded out  of the fees                                                                    
     that  are charged  for the  services that  are provided                                                                    
     out of the program.                                                                                                        
REPRESENTATIVE GUTTENBERG asked how  many certificates of fitness                                                               
had been issued.                                                                                                                
MR.  MITCHELL  responded  that   there  are  approximately  6,000                                                               
certificate-of-fitness  holders  in this  state.    He said  [the                                                               
division]  is adding  one position,  and  it planned  to use  the                                                               
additional  revenue  [generated  by  HB 402]  to  fill  a  vacant                                                               
position and  the position it  had requested in its  fiscal note.                                                               
He said this would result  in three plumbing inspectors and three                                                               
electrical inspectors for the state.                                                                                            
REPRESENTATIVE  GUTTENBERG  wondered why  there  was  a need  for                                                               
someone  to  inspect  a certificated  worker's  work,  since  the                                                               
worker had thousands  of hours of experience and  a reputation to                                                               
maintain.   He  asked how  many  inspections the  division did  a                                                               
MR. MITCHELL replied approximately  400 inspections per year were                                                               
done  by each  inspector.   He  noted that  the inspectors  found                                                               
numerous   code  violations   during   inspections  that   needed                                                               
VICE CHAIR GATTO offered the  example of a fire extinguisher that                                                               
was out of compliance with codes.                                                                                               
REPRESENTATIVE  ROKEBERG asked  whether  or not  there were  fees                                                               
charged for building inspections in this state.                                                                                 
MR.  MITCHELL clarified  that the  Mechanical Inspection  section                                                               
does  not charge  fees for  the  inspections it  performs in  the                                                               
electrical and plumbing areas.                                                                                                  
REPRESENTATIVE  ROKEBERG  asked  if  mechanical  inspectors  were                                                               
making retro-inspections.                                                                                                       
MR.  MITCHELL clarified  that the  Mechanical Inspection  section                                                               
houses  all  of  these  inspection  functions.    The  electrical                                                               
inspections  and  the  plumbing  inspections  do  not  have  fees                                                               
associated with them.                                                                                                           
REPRESENTATIVE ROKEBERG  responded, "So  we are  charging workers                                                               
for inspection fees that building owners should be paying...."                                                                  
MR. MITCHELL replied:                                                                                                           
     I  suppose that  it  could be  characterized that  way.                                                                    
     There   is  a   fee   in  the   statute  for   plumbing                                                                    
     inspections,  but  it has  not  been  addressed by  the                                                                    
     legislature  for   many  years,   and  it's   just  not                                                                    
     something  that  we   have  charged  because  municipal                                                                    
     plumbing  inspectors charge  their  own  fees for  plan                                                                    
     reviews  and inspections,  and we  just haven't  gotten                                                                    
     into  that area  for  charging  for those  inspections.                                                                    
     It's been working pretty well as it is.                                                                                    
TAPE 04-19, SIDE A                                                                                                            
Number 0041                                                                                                                     
REPRESENTATIVE  GUTTENBERG  asked  who inspects  recreational  or                                                               
amusement rides.                                                                                                                
MR.  MITCHELL  replied  that  that   function  was  performed  by                                                               
employees of the Mechanical Inspection  section who have received                                                               
certifications for those particular inspections.                                                                                
REPRESENTATIVE ROKEBERG stated:                                                                                                 
     Section  1,  you're charging  an  inspection  fee.   In                                                                    
     Section 3,  we're not.   We're charging the  worker for                                                                    
     inspections....   According  to the  sectional analysis                                                                    
     here, $100  fee for "each voluntary  flexible work hour                                                                    
     plan  that the  employer  files  with the  department".                                                                    
     This means that if you  request that one worker in your                                                                    
     small business  wants to have  a flex work  plan, wants                                                                    
     to  do a  4-10 deal  on your  one little,  simple form,                                                                    
     which  I'd say  that  the  department easily  approves,                                                                    
     that  you're  going to  charge  the  business $100  for                                                                    
MR. MITCHELL replied, "Yes, that's the plan."                                                                                   
REPRESENTATIVE ROKEBERG expressed concern,  saying, "I don't like                                                               
this at all.... I've got a lot of problems with this section."                                                                  
Number 0188                                                                                                                     
MR. MITCHELL  noted that the  one-time fee  would be paid  by the                                                               
employer, not the employee.  He  said it did not seem onerous for                                                               
an  employer to  pay $100  for  a plan  that increased  workplace                                                               
efficiency in the business.   He also provided one clarification:                                                               
"If an employer has less than  four employees, then they would be                                                               
exempt from overtime anyway, and  a flexible-hour work plan would                                                               
not be required."                                                                                                               
Number 0282                                                                                                                     
REPRESENTATIVE  GUTTENBERG  asked how  often  a  business had  to                                                               
reapply for a flex plan.                                                                                                        
MR. MITCHELL replied:                                                                                                           
     The only time  an employer would need to  reapply is if                                                                    
     they  were  changing their  plan.    Once the  employer                                                                    
     identifies what the  hours of work are to  be, and gets                                                                    
     that approval,  then the  process allows  that to  be a                                                                    
     master,  which  then can  be  used,  at the  employer's                                                                    
     discretion, with  any employee that wants  to join into                                                                    
     that plan.  The statute  does allow for the employee to                                                                    
     voluntarily  participate   in  the  plan.     Once  the                                                                    
     employee agrees  to participate in the  plan, then they                                                                    
     are stuck  to that, except  for an opt-out  period each                                                                    
     year,  which is  a one-month  period.   If an  employee                                                                    
     decides that they don't want  to do that, they're stuck                                                                    
     with it, except  for that one period when  they can get                                                                    
     out of it.                                                                                                                 
VICE  CHAIR GATTO  noted  that  a flow  chart  could have  helped                                                               
clarify what he thought was a confusing fee schedule.                                                                           
Number 0473                                                                                                                     
REPRESENTATIVE  ROKEBERG stated  that  the bill  affects the  fee                                                               
schedule for the  working people of Alaska.   He proposed holding                                                               
the bill over so  they have a chance to testify  and "see if it's                                                               
OK with  them that  their fees  will be  raised for  landlords to                                                               
have free  building inspections."   He added, "Then I  won't make                                                               
an amendment to strip out Section 4,  yet.  We can wait for that.                                                               
Maybe the department can do a little research on this."                                                                         
Number 0526                                                                                                                     
VICE  CHAIR GATTO  stated  that he  would hold  HB  402 over  and                                                               
     When it is  up for review, I would  appreciate seeing a                                                                    
     flow  chart  ...  to  help  us  identify  those  things                                                                    
     [discussed today].   It would be up  to the individuals                                                                    
     here.   If  the public  wants to  testify, then  that's                                                                    
     certainly  their  option.    If  you  want  to  recruit                                                                    
     people,  that's fine.   It  would be  good to  get some                                                                    
     public testimony.                                                                                                          
VICE CHAIR  GATTO went  on to  note areas  of confusion:   "Who's                                                               
paying the fee - the owner, or  is it being paid by the employee,                                                               
and are these fees being paid twice?"  [HB 402 was held over.]                                                                  

Document Name Date/Time Subjects