Legislature(2019 - 2020)SENATE FINANCE 532

04/04/2019 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 65 DEPT. OF LABOR: TECHNICAL ED. PROGRAMS TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
+ SB 66 LABOR STANDARDS/SAFETY; WORKER COMP. TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 55 TEMP. APPOINTMENTS TO COURT OF APPEALS TELECONFERENCED
Moved CSSB 55(FIN) Out of Committee
SENATE BILL NO. 66                                                                                                            
                                                                                                                                
     "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."                                                                                                           
                                                                                                                                
9:20:37 AM                                                                                                                    
                                                                                                                                
TAMIKA LEDBETTER, COMMISSIONER, DEPARTMENT OF LABOR AND                                                                         
WORKFORCE DEVELOPMENT, explained the legislation. She read                                                                      
from talking points (copy on file):                                                                                             
                                                                                                                                
      This  bill   proposes   to   merge   the   Workers                                                                     
        Compensation  and   Labor   Standards   and   Safety                                                                    
        Divisions.                                                                                                              
                                                                                                                                
      The Division  of  Labor  Standards  and  Safety  is                                                                    
        focused  on   preventing  workplace   accidents  and                                                                    
        enforcing  laws  related  to  workplace  safety  and                                                                    
        wages, while the  Division of  Workers  Compensation                                                                    
        is  focused  on  the   efficient  administration  of                                                                    
        benefits  to  injured  workers  and  enforcing  laws                                                                    
        related to workers compensation requirements.                                                                           
                                                                                                                                
      The missions of these two divisions complement each                                                                    
        other in that one works to prevent accidents and the                                                                    
        other  works  to  provide  an  efficient  system  of                                                                    
        benefits for injured workers.                                                                                           
                                                                                                                                
      The divisions have historically worked together, and                                                                   
        this  bill  is  expected  to  further  increase  the                                                                    
        opportunities to  remove  silos  and  capitalize  on                                                                    
        efficiencies through a unified management structure.                                                                    
                                                                                                                                
      The department is cognizant  of the  critical roles                                                                    
        that each of these  divisions have and  the proposed                                                                    
        merger does  not  impact  any  of  the  statutes  or                                                                    
        regulations currently  administered and  enforced by                                                                    
        each division.                                                                                                          
                                                                                                                                
      The merger  aims  to  take  advantage  od  position                                                                    
        vacancies to explore  opportunities to  share duties                                                                    
        between divisions where  it makes  sense, streamline                                                                    
        processes,  and  cut  back   on  unnecessary  middle                                                                    
        management supervisory functions.                                                                                       
                                                                                                                                
      As reflected in the fiscal note, the  bill flattens                                                                    
        the management  structure  in  Labor  Standards  and                                                                    
        Safety by  reclassifying the  Director  to a  Deputy                                                                    
        Director who  will  focus  attention on  operational                                                                    
        aspects   of   the   new    divisions    inspection,                                                                    
        consultation and  enforcement  functions. This  will                                                                    
        allow for  a mid-level  management reduction  in the                                                                    
        AKOSH component.                                                                                                        
                                                                                                                                
      In addition,  the   fiscal  note   illustrates  the                                                                    
        opportunity to consolidate and  share administrative                                                                    
        duties between  the  two  divisions where  it  makes                                                                    
        sense.                                                                                                                  
                                                                                                                                
      Future opportunities for increased efficiency could                                                                    
        come from  office space  consolidations to  increase                                                                    
        opportunity for  coordination  and improved  service                                                                    
        delivery for employers and workers.                                                                                     
                                                                                                                                
      This effort is not expected to happen overnight, but                                                                   
        will be carefully developed over time.                                                                                  
                                                                                                                                
      The bill does not propose to change the functions of                                                                   
        the Division of  Labor Standards  and Safety  or the                                                                    
        Division of Workers Compensation.                                                                                       
                                                                                                                                
      Its all about establishing a structure that creates                                                                    
        maximum opportunities to share resources and get the                                                                    
        work done more efficiently.                                                                                             
                                                                                                                                
9:23:25 AM                                                                                                                    
                                                                                                                                
GREY MITCHEL, DIRECTOR, DIVISION OF WORKERS' COMPENSATION,                                                                      
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, discussed                                                                        
the Sectional Analysis:                                                                                                         
                                                                                                                                
              BILL SUMMARY  WHAT DOES THIS BILL DO?                                                                         
                                                                                                                                
     This  bill  will  merge the  Department  of  Labor  and                                                                    
     Workforce Development divisions  of Labor Standards and                                                                    
     Safety and  Workers' Compensation  into a  new Division                                                                    
     of Workers'  Safety and Compensation. The  new division                                                                    
     would   administer   the    same   programs   currently                                                                    
     administered by  the two separate divisions.  This bill                                                                    
     is  needed  to  improve   fiscal  management  of  these                                                                    
     programs   and  to   allow  for   efficiencies  through                                                                    
     management   and   administrative   restructuring   and                                                                    
     improved   coordination  of   service  delivery.   This                                                                    
     restructuring  will  result  in  an  immediate  savings                                                                    
     estimated  at $238,000  per  year  starting in  FY2020.                                                                    
     Potential  future year  cost savings  will  have to  be                                                                    
     determined  as  position   responsibilities  and  lease                                                                    
     space needs  are evaluated  moving forward.  Also, with                                                                    
     office  consolidations  wherever possible  this  merger                                                                    
     will  improve program  services to  the public  and the                                                                    
     private sector  by giving individuals  one place  to go                                                                    
     versus multiple.                                                                                                           
                                                                                                                              
                   DETAILED SECTIONAL ANALYSIS                                                                              
     Section 1: Renames the division  of labor standards and                                                                  
     safety  to   the  division   of  workers'   safety  and                                                                    
     compensation in AS18.20.410(b).                                                                                            
     Section 2: Renames the division  of labor standards and                                                                  
     safety  to   the  division   of  workers'   safety  and                                                                    
     compensation in AS18.20.450(a).                                                                                            
     Section 3: Renames the division  of labor standards and                                                                  
     safety  to   the  division   of  workers'   safety  and                                                                    
     compensation in AS18.60.055.                                                                                               
     Section 4: Renames the division  of labor standards and                                                                  
     safety  to   the  division   of  workers'   safety  and                                                                    
     compensation in AS18.60.055(a).                                                                                            
     Section 5: Renames the division  of labor standards and                                                                  
     safety  to   the  division   of  workers'   safety  and                                                                    
     compensation in AS18.60.235(a).                                                                                            
     Section   6:   Renames   the   division   of   workers'                                                                  
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 23.05.067(a)(1)(B).                                                                                     
     Section 7: Renames the division  of labor standards and                                                                  
     safety  to   the  division   of  workers'   safety  and                                                                    
     compensation in AS 23.10.075.                                                                                              
     Section  8:  Amends  the  powers   and  duties  of  the                                                                  
     division director under AS  23.10.080 to include intent                                                                    
     language                                                                                                                   
     established   in  AS   23.30.001(1);  this   bring  the                                                                    
     legislative intent of the  current division of workers'                                                                    
     compensation into  the new division of  workers' safety                                                                    
     and compensation.                                                                                                          
     Section   9:   Renames   the   division   of   workers'                                                                  
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 23.30.025(a).                                                                                           
     Section   10:   Renames   the  division   of   workers'                                                                  
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 23.30.280(e)(2).                                                                                        
     Section   11:   Renames   the  division   of   workers'                                                                  
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 23.30.395(15).                                                                                          
     Section   12:   Renames   the  division   of   workers'                                                                  
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 23.30.395(17).                                                                                          
     Section   13:   Renames   the  division   of   workers                                                                   
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 23.30.120(c)(14).                                                                                       
     Section   14:   Renames   the  division   of   workers'                                                                  
     compensation  to the  division of  workers' safety  and                                                                    
     compensation in AS 39.25.158(b).                                                                                           
     Section  15:   Repeals  AS   23.30.002;  this   is  the                                                                  
     statutory   reference  to   the  current   division  of                                                                    
     workers'  compensation  and   its  director,  which  is                                                                    
     replaced  by  the  division   of  workers'  safety  and                                                                    
     compensation   and  its   director  established   under                                                                    
     section 7 of the bill.                                                                                                     
     Section  16: Establishes  transition provisions  in the                                                                  
     uncodified  law of  Alaska to  allow completion  of any                                                                    
     pending actions under the merged division.                                                                                 
                                                                                                                                
9:27:05 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof OPENED public testimony.                                                                                     
                                                                                                                                
9:27:15 AM                                                                                                                    
                                                                                                                                
LAURA BONNER, SELF,  ANCHORAGE (via teleconference), opposed                                                                    
the bill,  because she felt  that merging the  two divisions                                                                    
would  split each  divisions  focus.  She  worried that  one                                                                    
division director  would not be  enough to oversee  the work                                                                    
of both divisions.                                                                                                              
                                                                                                                                
9:29:00 AM                                                                                                                    
                                                                                                                                
DON ETHERIDGE,  AFL-CIO, JUNEAU, testified in  opposition to                                                                    
the  merger.  He expressed  concern  that  the merger  could                                                                    
affect the effectiveness of the individual divisions.                                                                           
                                                                                                                                
9:29:42 AM                                                                                                                    
                                                                                                                                
Senator Olson asked whether the  unions were in favor if the                                                                    
legislation.                                                                                                                    
                                                                                                                                
9:29:57 AM                                                                                                                    
                                                                                                                                
Mr.  Etheridge  replied that  unions  had  not come  out  in                                                                    
support or opposition of the legislation.                                                                                       
                                                                                                                                
9:30:07 AM                                                                                                                    
                                                                                                                                
Senator Olson looked at Section  8, which amended the powers                                                                    
and duties of the division  director. He wondered whether it                                                                    
would be  beneficial to give  the director  additional power                                                                    
when overseeing the merged division.                                                                                            
                                                                                                                                
Mr.  Etheridge thought  that  the powers  would  need to  be                                                                    
expended if the merger was  going to work and reiterated his                                                                    
concern  that one  person would  be able  to handle  all the                                                                    
responsibility  that the  merger would  place solely  on the                                                                    
one position.                                                                                                                   
                                                                                                                                
9:31:06 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof CLOSED public testimony.                                                                                     
                                                                                                                                
9:31:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  von   Imhof  invited  Commissioner   Ledbetter  to                                                                    
address the concerns of the previous testifiers.                                                                                
                                                                                                                                
9:31:23 AM                                                                                                                    
                                                                                                                                
Commissioner   Ledbetter  replied   anytime  a   change  was                                                                    
initiated it could spark concern.  She assured the committee                                                                    
that  the  change was  being  proposed  in order  to  create                                                                    
efficiencies  and to  better serve  Alaskans. She  noted the                                                                    
merger that had occurred  between the Division of Employment                                                                    
and  Training   Services  and   the  Division   of  Business                                                                    
Partnership  had  proved  successful.   She  said  that  the                                                                    
current  Division  Director  of  Workers   Compensation  was                                                                    
familiar with Labor Standards and  Safety and the new Deputy                                                                    
Director  of Labor  Standards and  Safety  had an  extensive                                                                    
background  in  safety.  She  said   that  the  two  working                                                                    
together   provided   additional   knowledge   sharing   and                                                                    
expertise. She  said that no  positions would  be eliminated                                                                    
because  of  the change  and  that  the two  divisions  were                                                                    
already working together in this manner.                                                                                        
                                                                                                                                
9:33:40 AM                                                                                                                    
                                                                                                                                
Senator  Shower appreciated  the attempt  at efficiency  and                                                                    
hoped that core competencies would be achieved.                                                                                 
                                                                                                                                
9:34:19 AM                                                                                                                    
                                                                                                                                
Senator  Olson  wondered  how  the  program  would  be  more                                                                    
efficient without the elimination of personnel.                                                                                 
                                                                                                                                
9:34:42 AM                                                                                                                    
                                                                                                                                
Commissioner Ledbetter replied said  that individuals with a                                                                    
greater capacity were  being hired. The work  was being done                                                                    
well and would continue to be done well.                                                                                        
                                                                                                                                
9:35:33 AM                                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  noted  that the  fiscal  note showed  a                                                                    
savings   of  $283,000,   although  the   fund  source   was                                                                    
incorrect.                                                                                                                      
                                                                                                                                
9:36:02 AM                                                                                                                    
                                                                                                                                
Commissioner Ledbetter deferred to Mr. Mitchell.                                                                                
                                                                                                                                
9:36:10 AM                                                                                                                    
                                                                                                                                
Mr. Mitchell  explained that there were  several areas where                                                                    
efficiencies were expected. He  said that the Administrative                                                                    
Managers over  each division would  be reclassified  so that                                                                    
one was subordinate  over the other; $8,000  would be saved.                                                                    
He said that as  functions were combined opportunities would                                                                    
present themselves.                                                                                                             
                                                                                                                                
9:37:47 AM                                                                                                                    
                                                                                                                                
Senator Micciche supported the bill  and believed it had the                                                                    
potential to deliver positive results.                                                                                          
                                                                                                                                
Co-Chair von Imhof said that updated fiscal notes would be                                                                      
discussed at a future hearing.                                                                                                  
SB 66 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
Co-Chair von Imhof discussed the following day's agenda.                                                                        
                                                                                                                                

Document Name Date/Time Subjects
SB 55 Work Draft Version U.pdf SFIN 4/4/2019 9:00:00 AM
SB 55
SB 66 support ASHBA.pdf SFIN 4/4/2019 9:00:00 AM
SB 66
SB 66 - transmittal letter.pdf SFIN 4/4/2019 9:00:00 AM
SB 66
SB 66 Commissioner Ledbetter Testimony.pdf SFIN 4/4/2019 9:00:00 AM
SB 66
SB 66 Bill and Sectional Analysis - DOLWD.pdf SFIN 4/4/2019 9:00:00 AM
SB 66