Legislature(2019 - 2020)ADAMS ROOM 519

05/06/2019 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to a Call of the Chair --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
-- Public Testimony --
Moved CSHB 31(FIN) Out of Committee
HOUSE BILL NO. 68                                                                                                             
     "An  Act relating  to the  division of  labor standards                                                                    
     and  safety;  relating  to  the  division  of  workers'                                                                    
     compensation;  establishing  the division  of  workers'                                                                    
     safety   and  compensation;   and   providing  for   an                                                                    
     effective date."                                                                                                           
2:35:55 PM                                                                                                                    
Vice-Chair  Johnston  MOVED   to  ADOPT  proposed  committee                                                                    
substitute   for  HB   68,   Work  Draft   31-GH1049\U(Marx,                                                                    
05/03/19) (copy on file).                                                                                                       
There being NO OBJECTION, it was so ordered.                                                                                    
Co-Chair  Wilson invited  the  department  to the  testifier                                                                    
table. The  committee would hear  from the department  and a                                                                    
review of the committee substitute would follow.                                                                                
2:36:29 PM                                                                                                                    
GREY  MITCHELL,  DIRECTOR, WORKER'S  COMPENSATION  DIVISION,                                                                    
DEPARTMENT OF LABOR AND  WORKFORCE DEVELOPMENT, relayed that                                                                    
the  bill  merged  the  Division  of  Worker's  Compensation                                                                    
together with  the Division of  Labor Standards  and Safety.                                                                    
The divisions  shared complimentary missions  and functions.                                                                    
One  division worked  to prevent  accidents,  and the  other                                                                    
worked to  provide compensation for  lost wages  and medical                                                                    
costs  if there  was an  injury. Merging  the two  divisions                                                                    
made good sense  in many ways. The  department was cognizant                                                                    
of the critical rolls each  division played. The merger bill                                                                    
would not  impact any of  the legal or regulatory  duties of                                                                    
either  division. He  aimed to  take  advantage of  position                                                                    
vacancies and explore  opportunities to streamline processes                                                                    
wherever possible.                                                                                                              
Mr.  Mitchell  continued  that  the  fiscal  note  reflected                                                                    
streamlining in a couple of  areas. The merger would flatten                                                                    
the management  structure and labor standards  and safety by                                                                    
reclassifying  the division  director to  a deputy  director                                                                    
position.  The   new  position  would   focus  on   the  new                                                                    
division's   inspection,   consultation,   and   enforcement                                                                    
functions. It would allow for  a middle management reduction                                                                    
in the  Alaska Occupational Safety Health  (OSHA) component.                                                                    
He expected  to see additional opportunities  to consolidate                                                                    
and share administrative duties  between the division as the                                                                    
merger matured. The  merger would not happen  over night but                                                                    
would be  carefully developed  over time.  The bill  did not                                                                    
propose  to  change   any  of  the  functions   of  the  two                                                                    
divisions. He  expected it to  produce opportunities  as the                                                                    
year progressed to share resources  and to be more efficient                                                                    
and effective moving forward delivering  the services of the                                                                    
two divisions.                                                                                                                  
Co-Chair  Wilson  asked her  staff  to  further discuss  the                                                                    
2:39:01 PM                                                                                                                    
LYNN  GATTIS, STAFF,  REPRESENTATIVE  TAMMIE WILSON,  review                                                                    
the  changes   in  the  bill.   On  page  7,   lines  20-22,                                                                    
"grandparent"  was  added  to  AS  23.10.330(a)  -  exempted                                                                    
employment which would  allow a child to work  in a business                                                                    
that was  owned and  operated by a  parent or  a grandparent                                                                    
under the  section. She  referred next to  page 7,  line 26.                                                                    
The number "17" was changed  to "16" to remove authorization                                                                    
of a work requirement  for a 16 year old. On  page 8, line 3                                                                    
"5:00  a.m. to  9:00  p.m."  was changed  to  "7:00 a.m.  to                                                                    
9:00 p.m." defining the  time during the day that  a 14 year                                                                    
old  or 15  year old  child  could perform  work outside  of                                                                    
school  hours. She  continued to  page 8,  lines 8-15  which                                                                    
added a  new section  to redefine  the conditions  and hours                                                                    
during a day that  a 14 year old or 15  year old child could                                                                    
perform work between  June 1 and ending the  first Monday of                                                                    
September  of each  year  as  7:00 a.m.  to  10:00 p.m.  She                                                                    
completed reviewing the changes.                                                                                                
Representative  Knopp  asked   about  the  period  beginning                                                                    
June 1  and ending  on the  first Monday  of September  each                                                                    
year. He  clarified that kids  would not be allowed  to work                                                                    
starting in September. Co-Chair  Wilson indicated there were                                                                    
two  times designated  for youth  ages 14-15  to be  able to                                                                    
work during  school. They  would be able  to work  from 7:00                                                                    
a.m. to  9:00 p.m. When they  were not in school  they would                                                                    
be allowed to work from 7:00 a.m. to 10 p.m.                                                                                    
Representative  Knopp  did  not   understand  the  need  for                                                                    
defining the  hours. Co-Chair Wilson explained  that defined                                                                    
times  were necessary  because of  the Fair  Labor Standards                                                                    
Representative LeBon  asked if  there would be  an advantage                                                                    
to  moving the  dates back  to  May 20th.  Most high  school                                                                    
graduation  dates  fell  before May  20th.  Co-Chair  Wilson                                                                    
relayed that the federal government would not allow it.                                                                         
2:43:06 PM                                                                                                                    
Co-Chair Wilson OPENED Public Testimony.                                                                                        
2:43:15 PM                                                                                                                    
Co-Chair Wilson CLOSED Public Testimony.                                                                                        
Co-Chair Wilson invited the department  to review the fiscal                                                                    
2:43:43 PM                                                                                                                    
PALOMA    HARBOUR,    ADMINISTRATIVE   SERVICES    DIRECTOR,                                                                    
DEPARTMENT  OF LABOR  AND WORKFORCE  DEVELOPMENT, OFFICE  OF                                                                    
MANAGEMENT AND  BUDGET, relayed that  fiscal note 1  was for                                                                    
the Workers'  Compensation component.  It was a  zero fiscal                                                                    
note. The  department did  not anticipate  immediate savings                                                                    
in Workers'  Compensation as  a part of  the merger,  but it                                                                    
expected out years savings  not presently identified. Fiscal                                                                    
note 2 was  for the OSHA component where  the department was                                                                    
finding  savings in  some  administrative  support and  some                                                                    
mid-level  management. The  total  savings  was $283,000  of                                                                    
Workers' Safety Compensation Administration account funds.                                                                      
Representative  Knopp was  curious  about  the reduction  of                                                                    
$283,000 in the personal  services line. He highlighted that                                                                    
the funds  were listed as DGF.  He asked if the  savings was                                                                    
from  inter-agency receipts  or program  receipts. He  asked                                                                    
what would happen to the savings.                                                                                               
Ms.  Harbour  responded  that   the  funds  were  designated                                                                    
general   funds  from   the  Workers'   Safety  Compensation                                                                    
Administration account.  It was a fee  on insurance premiums                                                                    
that went into  a DGF account and could  go towards Workers'                                                                    
Compensation and safety program  administration. It would be                                                                    
a savings to  the account and would stay in  the account for                                                                    
future year spending.                                                                                                           
Representative Knopp asked if  there would be any reductions                                                                    
in  employer premiums.  Ms. Harbour  replied  that the  cost                                                                    
savings would not result in  premium savings. However, there                                                                    
had  been  premium savings  which  resulted  in the  revenue                                                                    
going into the  account being lower. She  indicated the bill                                                                    
would help the state to stay at the lower revenue amount.                                                                       
Co-Chair  Wilson  indicated  amendments   were  due  to  the                                                                    
co-chair's office by May 7, 2019 at 9:00 a.m.                                                                                   
Representative   Knopp   appreciated   the   bill,   as   it                                                                    
represented   the   department's    efforts   towards   true                                                                    
consolidation and efficiencies.                                                                                                 
HB  68  was   HEARD  and  HELD  in   committee  for  further                                                                    

Document Name Date/Time Subjects
HB 31 3 SLIDES.pdf HFIN 5/6/2019 1:30:00 PM
HB 31
HB031 Amendment 1 Wilson 5.6.19.pdf HFIN 5/6/2019 1:30:00 PM
HB 31