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
+ 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 fund." COMMISSIONER O'CLARAY added, "Actually, it's called a building safety account." Number 2364 REPRESENTATIVE ROKEBERG referred to the sectional analysis of HB 402: 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 regulation." 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 services? 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 certificates. [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 similar. 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 complaints. 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 year. 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 correction. 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 that? 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 asked: 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 |
|---|