Legislature(2001 - 2002)

02/21/2002 01:52 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 262                                                                                                            
                                                                                                                                
     "An Act  relating to  accounting for and  appropriations                                                                   
     of  receipts from  fees collected  by the Department  of                                                                   
     Labor and Workforce Development  for certain inspections                                                                   
     and   for  certain   plumbing   and  electrical   worker                                                                   
     certificates of fitness;  establishing a building safety                                                                   
     account; and providing for an effective date."                                                                             
                                                                                                                                
Representative Lisa  Murkowski, Sponsor, spoke  in support of                                                                   
the legislation.  She noted that  the legislation was  at the                                                                   
request of the  department to eliminate the  sizeable backlog                                                                   
of elevator and boiler inspections.                                                                                             
                                                                                                                                
In the mid-1990s  there were five electrical  inspectors, two                                                                   
elevator   inspectors,   and  five   boiler/pressure   vessel                                                                   
inspectors to inspect approximately  600 elevators statewide.                                                                   
Currently  there  are  only two  electrical  inspectors,  one                                                                   
elevator inspector,  and three boiler pressure  inspectors to                                                                   
inspect   nearly    900   elevators,   with    nearly   6,000                                                                   
boiler/pressure vessels overdue for inspection.                                                                                 
                                                                                                                                
Representative Murkowski explained  that revenue collected by                                                                   
the four  additional inspectors  would generate enough  funds                                                                   
for  the   program  to  pay   for  itself.  She   noted  that                                                                   
discussions have  occurred regarding  the ability  of private                                                                   
industry to provide  the services. She concluded  that if the                                                                   
backlog  is going  to  be reduced  and  the safety  addressed                                                                   
additional inspectors are needed.                                                                                               
                                                                                                                                
Vice-Chair Bunde  referred to the fiscal note  and questioned                                                                   
why it is not a net zero.                                                                                                       
                                                                                                                                
REMOND  HENDERSON,   DIRECTOR,  DIVISION  OF   ADMINISTRATIVE                                                                   
SERVICES,  DEPARTMENT  OF  LABOR  AND  WORKFORCE  DEVELOPMENT                                                                   
explained that the cost of the  two boiler inspectors and the                                                                   
elevator inspectors  would be $276 thousand  dollars but that                                                                   
fees collected would only be $235  thousand dollars. The fees                                                                   
do  not  cover  100  percent   of  the  costs.  The  elevator                                                                   
inspectors  would  not  cover  their  costs;  the  mechanical                                                                   
inspectors do cover their costs.                                                                                                
                                                                                                                                
Vice-Chair Bunde  questioned why the fees were  not raised to                                                                   
cover the costs. Representative  Murkowski observed that fees                                                                   
are  uniformed, and  pointed out  that  inspections occur  in                                                                   
small remote communities, which  cannot sustain the cost. Mr.                                                                   
Henderson noted that  fees were revised to $40  - $75 dollars                                                                   
per boiler inspections, depending  on size. He added that the                                                                   
entire   component   would   be   self-sustaining   overtime,                                                                   
including elevator and boiler inspections.                                                                                      
                                                                                                                                
TAPE HFC 02 - 30, Side A                                                                                                      
                                                                                                                                
Mr. Henderson  explained that  the estimated increase  is $25                                                                   
thousand   dollars  per   year  from   fees  for   mechanical                                                                   
inspections.                                                                                                                    
                                                                                                                                
Representative  Hudson observed that  the workforce  is being                                                                   
increased to accomplish more of  the inspections, which would                                                                   
raise revenues from fees.                                                                                                       
                                                                                                                                
Mr. Henderson  clarified  that the fees  were increased,  but                                                                   
the  fees  still   do  not  cover  costs.   Vice-Chair  Bunde                                                                   
questioned why  fees are not  sufficient to cover  costs. Mr.                                                                   
Henderson stressed  that the intent is to cover  costs in the                                                                   
future.                                                                                                                         
                                                                                                                                
Representative   Lancaster  agreed   that  costs  should   be                                                                   
covered.  Representative  Murkowski acknowledged  that  there                                                                   
may need to be an amendment. Representative  Harris suggested                                                                   
that fees would have to be raised.                                                                                              
                                                                                                                                
Mr. Henderson  stressed that the  component is  being reduced                                                                   
by $363  thousand general  fund dollars  and $695.5  thousand                                                                   
dollars  in general fund  program receipts.  These funds  are                                                                   
being replaced with income from  the Building Safety Account.                                                                   
The bill addresses the whole program  with the goal of making                                                                   
it self-sufficient.                                                                                                             
                                                                                                                                
Representative  John Davies asked  for further  clarification                                                                   
of the  fiscal note.  Mr. Henderson  noted that the  Division                                                                   
takes in approximately  $1 million dollars a  year in program                                                                   
receipts,  but   only  has  authorization  to   spend  $695.0                                                                   
thousand dollars; the rest is  lapsing. Representative Davies                                                                   
concluded that the Division receives  excess receipts already                                                                   
and is  asking for  authority  to expend them  under the  new                                                                   
category.                                                                                                                       
                                                                                                                                
In  response  to  a question  by  Representative  Croft,  Mr.                                                                   
Henderson  clarified that  the  change in  revenues from  the                                                                   
increase in fees is $235.0 thousand dollars.                                                                                    
                                                                                                                                
Representative Lancaster  questioned what would  happen after                                                                   
the backlog is addressed.                                                                                                       
                                                                                                                                
REBECCA  NANCE GAMEZ,  DEPUTY DIRECTOR,  DEPARTMENT OF  LABOR                                                                   
AND WORKFORCE  DEVELOPMENT explained  that there is  an aging                                                                   
workforce  in  the mechanical  inspection  portion  of  their                                                                   
operation and thought  that attrition would take  care of the                                                                   
issue once the  backlog is handled. She noted  that there are                                                                   
a  couple of  employees  who are  slated  for retirement  but                                                                   
agreed to  stay on to assist  in the backlog. She  noted that                                                                   
the positions are difficult to fill.                                                                                            
                                                                                                                                
Representative  Whitaker  asked  how  the  legislation  would                                                                   
affect   the  fees.  Ms.   Gamez  observed   that  fees   are                                                                   
established by regulation. She  did not think that fees would                                                                   
be affected by the legislations.                                                                                                
                                                                                                                                
RICH MASTRIANO,  DIVISION OF LABOR AND  STANDARDS, DEPARTMENT                                                                   
OF LABOR  AND WORKFORCE DEVELOPMENT  explained that  the fees                                                                   
are  an averaged  based on  the  entire state.  If fees  were                                                                   
raised some outlying areas would be set at a higher rate.                                                                       
                                                                                                                                
HB  262  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  

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