Legislature(2017 - 2018)ADAMS ROOM 519

03/16/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 346 DENTIST: TEMPORARY PERMIT TELECONFERENCED
Moved CSHB 346(L&C) Out of Committee
-- Public Testimony --
+ HB 217 RAW MILK SALES; FOOD EXEMPT FROM REGS TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony --
+= HB 216 TRANSFERS FROM DIVIDEND FUND; CRIMES TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 285 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Moved CSHB 285(FIN) Out of Committee
+= HB 286 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Moved CSHB 286(FIN) Out of Committee
+= HB 255 PLUMBING/ELECTRIC CERTIFICATE OF FITNESS TELECONFERENCED
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 16, 2018                                                                                            
                         1:34 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:34:05 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Seaton  called the House Finance  Committee meeting                                                                    
to order at 1:34 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Steve Thompson                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Sam  Kito,  Sponsor; Caitlyn  Ellis,  Staff,                                                                    
Representative  Sam   Kito;  David  Logan,   DDS,  Executive                                                                    
Director, Alaska Dental  Society; Representative Chris Tuck,                                                                    
Sponsor; Kendra  Kloster, Staff, Representative  Chris Tuck;                                                                    
Deborah  Kelly, Director,  Division of  Labor Standards  and                                                                    
Safety, Department of Labor and Workforce Development.                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Will Harlan,  Section Chief, Mechanical  Inspection Section,                                                                    
Division of Labor Standards and  Safety, Department of Labor                                                                    
and Workforce Development.                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 255    PLUMBING/ELECTRIC CERTIFICATE OF FITNESS                                                                              
          HB  255  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 285    APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          CSHB 285(FIN)  was REPORTED out of  committee with                                                                    
          four   "do   pass"    recommendations,   one   "no                                                                    
          recommendation"  recommendation, and  five "amend"                                                                    
          recommendations.                                                                                                      
                                                                                                                                
HB 286    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          CSHB 286(FIN)  was REPORTED out of  committee with                                                                    
          four   "do   pass"    recommendations,   one   "no                                                                    
          recommendation"  recommendation, and  five "amend"                                                                    
          recommendations.                                                                                                      
                                                                                                                                
HB 346    DENTIST: TEMPORARY PERMIT                                                                                             
                                                                                                                                
          HB 346  was REPORTED out  of committee with  a "do                                                                    
          pass"    recommendation   and    with   previously                                                                    
         published fiscal impact note: FN1 (CED).                                                                               
                                                                                                                                
Co-Chair Seaton reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 285                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
HOUSE BILL NO. 286                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     making  appropriations  under   art.  IX,  sec.  17(c),                                                                    
     Constitution  of   the  State   of  Alaska,   from  the                                                                    
     constitutional budget  reserve fund; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:35:04 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton relayed  the  committee  had finished  with                                                                    
amendments to the  bills the previous day.  He reported that                                                                    
the  Legislative  Finance  Division  (LFD)  and  Legislative                                                                    
Legal Services  had developed two new  committee substitutes                                                                    
(CS) based  on adopted  amendments. He  noted that  an error                                                                    
had been discovered during review  and had been corrected in                                                                    
the new CS  for the operating budget (HB 286).  He read from                                                                    
an explanation:                                                                                                                 
                                                                                                                                
     A  subsection reference  was  inadvertently omitted  in                                                                    
     the  Permanent Fund  inflation proofing  amendment that                                                                    
     was H  SAP 24. The  beginning of the amendment  on line                                                                    
     23 read  'the amount  calculated under  AS 37.13.145(c)                                                                    
     after the  appropriations made in (c)  of this section,                                                                    
     estimated  to be  $942 million.'  It  should have  read                                                                    
     'the amount calculated under  AS 37.13.145(c) after the                                                                    
     appropriations  made in  (c) and  (d) of  this section,                                                                    
     estimated to  be $942 million.'  Subsection (c)  is the                                                                    
     earnings reserve  account draw to the  General Fund and                                                                    
     subsection (d)  is the ERA  draw to the  Permanent Fund                                                                    
     Dividend   (PFD).   Legal    Services   corrected   the                                                                    
     subsection  8(e)  phrase  so   that  it  now  reads  as                                                                    
     intended 'after the appropriations  made in (c) and (d)                                                                    
     of this section.'                                                                                                          
                                                                                                                                
     There were three Legislative  Finance Reports. They are                                                                    
     stapled  together  in  members'  packets  and  will  be                                                                    
     posted on the Legislative  Finance website once the new                                                                    
     committee  substitutes  are  adopted.  In  addition  to                                                                    
     these  reports,  Legislative  Finance  will  also  post                                                                    
     their usual array of department reports.                                                                                   
                                                                                                                                
     The  budget's general  funds totals  $5.35 billion  and                                                                    
     all  funds  total  $10.44   billion.  You'll  note  the                                                                    
     general  fund  report  shows  and  increase  of  $170.8                                                                    
     million  from  the FY  18  management  plan budget  for                                                                    
     agency   and    statewide   operations.    The   larger                                                                    
     unrestricted  general fund  changes that  the committee                                                                    
     made  include  the  addition of  $19  million  for  the                                                                    
     University  of Alaska;  the temporary  addition of  $18                                                                    
     million for K-12  to replace the $18  million of Public                                                                    
     School Trust  Funds until  legislation is  adopted; the                                                                    
     temporary  deletion  of  $20 million  from  the  senior                                                                    
     benefits  payment  program, until  the  reauthorization                                                                    
     legislation  is  adopted  (we also  adopted  intent  to                                                                    
     fully fund  the program),  the addition of  $49 million                                                                    
     to capitalize the  Oil and Gas Tax Credit  Fund and the                                                                    
     deletion of the $27 million  for the governor's oil and                                                                    
     gas  tax  credit  financing  legislation,  as  the  $27                                                                    
     million  should  come forward  as  a  fiscal note;  the                                                                    
     addition $1 million for four  attorneys and one support                                                                    
     staff in  the Public Defender Agency;  and the addition                                                                    
     of  nearly $500,000  for four  additional guardians  ad                                                                    
     litem to represent children including  Child in Need of                                                                    
     Aid cases.                                                                                                                 
                                                                                                                                
     HB 286  includes a  4.75 percent  of market  value draw                                                                    
     from the  Permanent Fund  Earnings Reserve  Account; 67                                                                    
     percent  of   the  draw  or  $1.65   billion  would  be                                                                    
     deposited into the  General Fund and 33  percent of the                                                                    
     draw  or  $813  million  would be  deposited  into  the                                                                    
     dividend  fund,  resulting  in   an  estimated  PFD  of                                                                    
     $1,258.  We  added  the estimate  of  $942  million  to                                                                    
     inflation  proof the  Permanent Fund  in FY  19 and  we                                                                    
     added  $1  billion  of  expenditure  authority  to  the                                                                    
     Alaska Gasline Development Corporation  in FY 18 and FY                                                                    
     19  to   help  advance  the  development   of  the  gas                                                                    
     pipeline.  We  added  one-time  fund  balances  to  the                                                                    
     disaster relief  fund, so the state  is better prepared                                                                    
     to respond to disasters.                                                                                                   
                                                                                                                                
1:39:05 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton continued to read from a statement:                                                                             
                                                                                                                                
     This budget  fully funds the community  assistance fund                                                                    
     so that  the communities can  plan for the  $30 million                                                                    
     distribution in FY 20. We  added one-time funds to both                                                                    
     the  Department  of  Health  and  Social  Services  and                                                                    
     Department of Fish and Game  to be able to receive more                                                                    
     of the federal funds that  the state had previously had                                                                    
     to revert to  the federal government or  simply had not                                                                    
     been able to claim due to  a lack in matching funds. In                                                                    
     this  budget  the  Constitutional Budget  Reserve  fund                                                                    
     would  contribute  $1  billion to  filling  the  budget                                                                    
     deficit   plus  $100   million  for   possible  FY   19                                                                    
     supplementals. Those are some  of the larger amendments                                                                    
     we've adopted.                                                                                                             
                                                                                                                                
1:39:59 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster MOVED to ADOPT the proposed committee                                                                           
substitute for HB 286, Work Draft 30-GH2564\R (Wallace,                                                                         
3/16/18).                                                                                                                       
                                                                                                                                
Representative Wilson  OBJECTED. She did not  support a $170                                                                    
million increase at  a time when the state did  not have the                                                                    
money.                                                                                                                          
                                                                                                                                
Co-Chair Seaton pointed  out that $100 million  of the total                                                                    
was  for Medicaid,  $19 million  was for  the University  of                                                                    
Alaska, and $43 million was for transportation.                                                                                 
                                                                                                                                
1:41:13 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara supported  the budget.  He stated  that for                                                                    
the past  five years  the legislature  had been  cutting the                                                                    
budget repeatedly. He cautioned that  the next round of cuts                                                                    
would mean  larger class  sizes. He  spoke about  the safety                                                                    
net that provided  stability for people and  enabled them to                                                                    
work. He  stressed that the unrestricted  general fund (UGF)                                                                    
budget was currently $560 million  lower than 2015. Cuts had                                                                    
resulted  in the  loss of  over 1,000  teachers and  support                                                                    
staff since 2013. He did not  believe it was something to be                                                                    
proud  of. In  prior years  there had  been a  fight against                                                                    
individuals who wanted to cut  education further. He pointed                                                                    
to a  proposal the  preceding year to  cut education  by $70                                                                    
million more. He was glad the  cut had been staved off. Even                                                                    
a flat-funded  education budget would  likely mean  the loss                                                                    
of another 200 teachers and support staff.                                                                                      
                                                                                                                                
Vice-Chair  Gara underscored  the current  budget was  not a                                                                    
luxury budget. Cutting over $500  million since 2015 had not                                                                    
been without  impacts. In the  current budget cycle,  he had                                                                    
been alarmed to learn that  there was still a revolving door                                                                    
at the Alaska Psychiatric  Institute (API). He detailed that                                                                    
patients returned  to API because  there were not  follow up                                                                    
services  to help  the individuals  stand on  their own.  He                                                                    
reported that 30  percent of the people  discharged from API                                                                    
were back within six months.                                                                                                    
                                                                                                                                
Vice-Chair Gara  discussed Medicaid  and explained  that the                                                                    
way federal and state law  was written, the lower a person's                                                                    
income, the more  likely they were to  qualify for Medicaid.                                                                    
He continued  that all  the state had  done on  Medicaid was                                                                    
find  efficiencies and  cut costs  paid  to providers.  With                                                                    
33,000  more people  on Medicaid  since  2015, the  Medicaid                                                                    
budget  was lower  than  it had  been in  2015.  He did  not                                                                    
believe the legislature  had come together in a  way to deal                                                                    
with the  current recession. As  long as the  state remained                                                                    
in  recession, the  Medicaid budget  would increase  because                                                                    
every time someone lost their  job or had lower income, they                                                                    
were  more likely  to qualify  for Medicaid.  He underscored                                                                    
that the  state could not deny  individuals medical coverage                                                                    
when   statute  specified   individuals  were   entitled  to                                                                    
Medicaid coverage  at low  incomes. He  noted that  the vast                                                                    
majority of Medicaid recipients  were seniors, children, and                                                                    
people with  disabilities. He did not  support cutting their                                                                    
services. The remaining majority  of Medicaid recipients had                                                                    
lower income  given the recession.  The state had  not added                                                                    
Medicaid services. He  stated it was a tough  budget to deal                                                                    
with, but it  was not a luxury when  200 additional teachers                                                                    
would be  lost in the  coming year and  API was acting  as a                                                                    
revolving door.                                                                                                                 
                                                                                                                                
1:45:35 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt  opposed  the budget.  He  emphasized                                                                    
that the  issue facing the  committee was about  whether the                                                                    
legislature was  willing to  manage what  it was  facing. He                                                                    
stated  that Republican  Minority amendments  that had  been                                                                    
offered in committee  had not made drastic  cuts. He pointed                                                                    
out that they  had not touched the education  budget and had                                                                    
agreed  with other  members about  the  amount. He  recalled                                                                    
that in 2017 he and  his colleagues had been denied proposed                                                                    
cuts they  had based off  of previous years. In  the current                                                                    
process they  had looked at  years like FY 17  for reference                                                                    
but had not  proposed reducing the budget to  that level. He                                                                    
reported   that  their   amendments   had  proposed   slight                                                                    
reductions, but they had all been denied.                                                                                       
                                                                                                                                
Representative    Pruitt    stated   that    whatever    the                                                                    
administration  said  had  been  treated  like  gospel.  Yet                                                                    
research by  their competent  staff had  initiated realistic                                                                    
discussions on how  to manage the situation.  He believed if                                                                    
the public was  asked to participate via a  PFD reduction or                                                                    
tax, it  would be necessary  to prove the  legislature would                                                                    
analyze every  line of  the budget. He  did not  believe the                                                                    
committee  had  done  that. He  thought  the  committee  had                                                                    
merely  "said no  to say  no." He  detailed that  during the                                                                    
process the  committee had  heard from people  on why  a cut                                                                    
should  not  be   made.  He  opined  that   many  times  the                                                                    
individuals had  not been able  to give  justifiable reasons                                                                    
the cuts should  not be made. He stated  that amendments had                                                                    
been turned down anyway.                                                                                                        
                                                                                                                                
Representative   Pruitt   stated   it   was   necessary   to                                                                    
continually  analyze how  things were  delivered across  the                                                                    
scope  of government  agencies in  order  to prevent  larger                                                                    
class sizes and reductions to  Medicaid and other things. He                                                                    
did not believe it was  tenable to turn down everything that                                                                    
was  offered.  He  thought the  legislature  should  have  a                                                                    
dynamic process that could be  adjusted based on what it was                                                                    
facing.  He  stressed  it was  the  difference  between  the                                                                    
government and the private sector.  He stated that something                                                                    
would collapse and cease to  exist if it was not innovative.                                                                    
He shared that he had  previously worked for two Fortune 500                                                                    
companies - one was innovative  and continued to grow, while                                                                    
the other was  not innovative and was  faltering. He thought                                                                    
the legislature was acting like  it should not be innovative                                                                    
when  it failed  to  consider making  spending changes.  His                                                                    
concern  with the  budget was  that the  committee had  just                                                                    
decided  it  was  done   with  cuts,  despite  strategically                                                                    
crafted amendments that had been  done with a scalpel, which                                                                    
had all been turned down.                                                                                                       
                                                                                                                                
Representative Pruitt did not  believe the legislature would                                                                    
gain the public's  trust if it could not  prove the public's                                                                    
contribution would  be spent appropriately. He  believed the                                                                    
committee needed to  consider whether it wanted  to tell the                                                                    
public it was  satisfied with the current  budget. He opined                                                                    
the public  would vocalize that  it still did not  trust the                                                                    
legislature.  He thought  they should  take time  to rethink                                                                    
some of the things that had been offered.                                                                                       
                                                                                                                                
1:50:44 PM                                                                                                                    
                                                                                                                                
Representative  Tilton expressed  opposition to  the budget.                                                                    
She  echoed comments  of her  colleagues.  She stressed  the                                                                    
budget had increased by $170  million. She pointed out there                                                                    
was  a  travel  freeze,  but  the  committee  had  increased                                                                    
travel. Additionally,  there was  a hiring freeze,  but PCNs                                                                    
[position   control   numbers]   and  employees   had   been                                                                    
increased.  She stated  the budget  had  not been  increased                                                                    
higher than  $170 million because  the legislature  had used                                                                    
some money from  other funds. She characterized  the move as                                                                    
creative and clarified that it  was not always bad but would                                                                    
leave some  holes in  the next budget  cycle. She  stated it                                                                    
was  one of  the reasons  for the  current situation  - some                                                                    
holes  had  been  left  from  the  last  budget  cycle.  She                                                                    
stressed that her  constituents did not want  an increase in                                                                    
government spending.  She was opposed to  the current budget                                                                    
because it gave more money to government.                                                                                       
                                                                                                                                
1:52:07 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  spoke in  support of  the budget.                                                                    
He   believed  the   amendment   process  demonstrated   how                                                                    
difficult  it  was  to  strategically  strike  and  cut  the                                                                    
budget. He  stated there  had been  proposed cuts  that were                                                                    
below the  typical level.  He reasoned that  if some  of the                                                                    
cuts   had  been   accepted  they   would  hinder   economic                                                                    
development  through  the  Department of  Natural  Resources                                                                    
related to permitting and public  information on the state's                                                                    
resources.  He   believed  the  committee   had  illustrated                                                                    
significant restraint.  He stressed that the  money going to                                                                    
the   University  associated   with   Arctic  research   was                                                                    
important  in   terms  of   Alaska's  global   position.  He                                                                    
mentioned  a recently  published Alaska  Gasline Development                                                                    
Corporation (AGDC) report showing  the perspective on Alaska                                                                    
was closer  to 80 percent  of the industrial world  than any                                                                    
other  location.  He  believed  the  distance  would  close;                                                                    
Alaska  was  centrally  located,  and it  was  important  to                                                                    
ensure the  state was prepared.  He remarked that  the state                                                                    
had  not  gone far  enough  "in  those economic  development                                                                    
things," but he  did not believe it was  currently poised to                                                                    
get there.                                                                                                                      
                                                                                                                                
Representative Guttenberg  continued that if the  budget had                                                                    
not  addressed issues  pertaining to  public defenders,  the                                                                    
state's  criminal   justice  and  courts  would   have  been                                                                    
incapacitated  because a  balance  was needed.  When he  had                                                                    
considered  the overall  budget  cuts and  actions that  had                                                                    
been taken he  recognized how difficult it had  been to make                                                                    
the cuts.  Many of the  people the committee had  heard from                                                                    
who  had discussed  the  size of  government  and what  they                                                                    
wanted to do, clearly  illustrated the services were needed.                                                                    
He  noted   that  some  people  merely   say  government  is                                                                    
government,  but  he   countered  that  government  provided                                                                    
services  to  the  people  of  Alaska  including  education,                                                                    
criminal  justice, and  Medicaid coverage.  There were  many                                                                    
things the state  needed to be doing that it  was not doing,                                                                    
but he  acknowledged the fiscal  crisis and reasoned  it was                                                                    
not possible to do everything that was needed.                                                                                  
                                                                                                                                
Representative  Guttenberg looked  forward  to  the day  the                                                                    
state could  dig itself out  of its deficit and  he reasoned                                                                    
the problem would  be solved by filling the hole  in, not by                                                                    
digging deeper.  He spoke  about roads  that were  not being                                                                    
plowed  on time  - the  priority of  roads was  slow in  the                                                                    
Interior. He  noted the  region had  experienced one  of its                                                                    
snowiest  winters  during  the current  year.  While  people                                                                    
wanted  to   see  government  cut,  they   also  wanted  the                                                                    
services.   He  detailed   that  individuals   wanted  their                                                                    
children in  school, a college education,  plowed roads, and                                                                    
industrial  services  (i.e.  permits  granted  for  resource                                                                    
development,   projects,  and   jobs).   He  reported   that                                                                    
residents on  the North Slope  were losing jobs  faster than                                                                    
nonresidents. The  budget was tight and  would likely remain                                                                    
tight  for some  time.  He  thought the  state  had done  an                                                                    
economic  job  of  suppressing   budget  growth  because  it                                                                    
happened whether the legislature did anything or not.                                                                           
                                                                                                                                
1:56:19 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton responded  to some  of the  points made  by                                                                    
Minority  members. He  referenced  the  general funds  chart                                                                    
[provided  by   the  Legislative  Finance   Division  titled                                                                    
"Multi-year  Agency Summary  -  Operating Budget  - FY  2019                                                                    
House  Structure"  dated  March  16, 2018  (copy  on  file)]                                                                    
showing  all UGF  and designated  general  funds (DGF).  The                                                                    
right  column, compared  to  the  governor's budget,  showed                                                                    
five  line items  with reductions  and six  line items  with                                                                    
increases.  The chart  identified all  of the  agencies that                                                                    
received either  reductions or increases. The  second column                                                                    
showed $21  million in the Department  of Corrections (DOC).                                                                    
He  explained there  had  been  a $21  million  hole in  the                                                                    
budget  because it  had been  left for  a supplemental.  The                                                                    
current budget  filled the hole, which  should eliminate the                                                                    
supplemental the following year.  He explained that they had                                                                    
tried to use the process  throughout the entire budget. They                                                                    
had  capitalized   funds  for   disaster  relief   and  fire                                                                    
suppression to  avoid supplementals  in the coming  year. He                                                                    
acknowledged  the items  made the  budget look  heavier, but                                                                    
the approach was more honest.                                                                                                   
                                                                                                                                
Co-Chair Seaton pointed to the  far right column showing all                                                                    
general funds, which  included $18 million for  K-12 and $19                                                                    
million for  the University. He explained  the importance of                                                                    
the  numbers  that compared  the  FY  19 governor's  amended                                                                    
budget  to  the House  Finance  Committee  final budget.  He                                                                    
acknowledged the hard work put  in by finance subcommittees.                                                                    
He noted  that there had  been almost as many  reductions to                                                                    
agencies as there had been  additions. He hoped to ensure as                                                                    
much transparency  as possible in the  budgeting process. He                                                                    
appreciated all  of the  comments made  by the  Minority and                                                                    
Majority during the process. He  hoped there would be better                                                                    
ways to  get down to  appropriation and allocation  lines in                                                                    
the  future,   which  would  result  in   a  more  strategic                                                                    
conversation.  He thanked  all committee  members for  their                                                                    
participation in the process.                                                                                                   
                                                                                                                                
1:59:42 PM                                                                                                                    
                                                                                                                                
Representative Wilson pointed  to page 2, line 1  of the LFD                                                                    
multi-year  agency  summary.  She  referenced  the  negative                                                                    
$5.913 million associated with the  Permanent Fund under the                                                                    
FY  19  governor  amended  column. She  asked  if  the  POMV                                                                    
[percent of market  value] and the 33 percent  [for the PFD]                                                                    
meant there  would be  $5.913 million  less to  be allocated                                                                    
toward the PFD.  She was trying to understand  where the 0.7                                                                    
percent decrease  [shown in  the last  column on  the right]                                                                    
came from.                                                                                                                      
                                                                                                                                
2:00:25 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:01:17 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Seaton pointed  to the  FY  19 governor's  amended                                                                    
budget under the  third column on page  2 showing $818,876.5                                                                    
million. He explained the figure  had been based on a higher                                                                    
number  of participants  in  the PFD,  even  though the  PFD                                                                    
calculation  was  lower.  The legislature  had  received  an                                                                    
updated number of estimated participants.  He pointed to the                                                                    
fourth column  showing $812,963.0  million that  reflected a                                                                    
slightly higher dividend and a  lower number of participants                                                                    
due to some outmigration.                                                                                                       
                                                                                                                                
Representative Wilson  thought that because the  POMV was in                                                                    
the budget,  66 percent  would go to  the government  and 33                                                                    
percent went  to the people.  She did not believe  the money                                                                    
shown  in the  chart should  change based  on the  number of                                                                    
participants. She detailed the amount  was set and no longer                                                                    
used a formula like in the  past. She did not understand how                                                                    
participants  had anything  to do  with it.  She thought  it                                                                    
appeared they were lowering the  individual share, which she                                                                    
did  not believe  made sense  because the  amount should  be                                                                    
set.                                                                                                                            
                                                                                                                                
2:03:15 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt  explained   that  the  governor  had                                                                    
included 5 percent  with the 30 percent. One  of the changes                                                                    
made by the co-chair was a  4.75 percent [POMV draw] with 33                                                                    
percent directed  to the  PFD. While  there was  less money,                                                                    
the  figure reflecting  fewer people  resulted  in a  higher                                                                    
PFD, but it  was the reason for the reduction  of $6 million                                                                    
(it was  the change in the  structure for the POMV  draw and                                                                    
where it went).                                                                                                                 
                                                                                                                                
Co-Chair Seaton  agreed that the governor's  proposed budget                                                                    
included a 5  percent POMV, and the  House Finance Committee                                                                    
CS included  a 4.75 percent  draw. The change  accounted for                                                                    
the difference in the gross amount of money.                                                                                    
                                                                                                                                
Representative Wilson asked  for verification the difference                                                                    
[in the  third and fourth column  on page 2] was  related to                                                                    
the draw percentage, not to the participants.                                                                                   
                                                                                                                                
Co-Chair Seaton agreed.                                                                                                         
                                                                                                                                
Vice-Chair Gara remarked that there  was no agreement in the                                                                    
legislature  on  what  the dividend  amount  should  be.  He                                                                    
recalled   the  current   Republican  Minority   leader  had                                                                    
proposed $1,000  dividends two years  back. There  were also                                                                    
others in  both parties  who were on  the opposite  end. The                                                                    
House Finance  Committee had determined the  $1,000 dividend                                                                    
was too small.  He elaborated that the  committee had worked                                                                    
for  a $1,200  dividend  in  2017, but  the  Senate had  not                                                                    
agreed  and a  dividend of  $1,100 had  been decided  on. He                                                                    
highlighted that  the current budget included  a $1,250 PFD.                                                                    
He reiterated there was  huge disagreement among legislators                                                                    
within their own parties on what the amount should be.                                                                          
                                                                                                                                
Co-Chair Seaton pointed out that  the current discussion had                                                                    
been  about the  gross  amount taken  for  the dividend.  He                                                                    
corrected   his  earlier   statements   pertaining  to   the                                                                    
difference between the two columns  [columns 3 and 4 on page                                                                    
2 of the  LFD multi-year agency summary].  He explained that                                                                    
Representative  Pruitt was  correct  the difference  between                                                                    
the two  columns was  a 5  percent draw  and a  4.75 percent                                                                    
draw.  He detailed  that a  5 percent  POMV draw  would take                                                                    
more  out of  the Permanent  Fund than  a 4.75  percent POMV                                                                    
draw.                                                                                                                           
                                                                                                                                
Representative Wilson clarified the  money would come out of                                                                    
the  Permanent  Fund  Earnings Reserve  Account  (ERA);  the                                                                    
legislature could  not draw from the  Permanent Fund corpus.                                                                    
She  believed they  needed to  be careful  with terminology.                                                                    
She underscored  that the proposed budget  did not guarantee                                                                    
$1,250  PFDs.  She  detailed the  budget  included  a  66/33                                                                    
percent  cut [directed  to government  spending and  the PFD                                                                    
respectively] of the 4.75 percent  [POMV draw from the ERA].                                                                    
The  number  of  individuals  eligible  for  the  PFD  would                                                                    
determine  the dividend  amount  (the  calculation would  be                                                                    
whatever  the 33  percent  came  out to  be  divided by  the                                                                    
number  of eligible  recipients).  She  emphasized that  the                                                                    
proposed budget may  result in PFDs of $1,250,  but they may                                                                    
be a little  more or less. She did not  think it was prudent                                                                    
to discuss  what the other body  would or would not  do. She                                                                    
wanted to keep the conversation to the details of the bill.                                                                     
                                                                                                                                
2:07:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  corrected that the  POMV was  calculated on                                                                    
the average  value of the  five years preceding  the current                                                                    
year, which was on the  total average value of the Permanent                                                                    
Fund.  The draw  would come  from the  ERA, but  the average                                                                    
value calculation included the ERA and the corpus.                                                                              
                                                                                                                                
Representative  Wilson  wanted  to ensure  the  public  knew                                                                    
something "was still sacred in this world."                                                                                     
                                                                                                                                
Co-Chair Seaton agreed.                                                                                                         
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll  call vote was  taken on the  motion to adopt  the CS                                                                    
for HB 286.                                                                                                                     
                                                                                                                                
IN FAVOR: Gara, Grenn, Guttenberg,  Kawasaki, Ortiz, Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Wilson, Tilton, Pruitt                                                                                                 
                                                                                                                                
Representative Thompson was absent from the vote.                                                                               
                                                                                                                                
The MOTION  PASSED (7/3). There being  NO further OBJECTION,                                                                    
Work Draft 30-GH2564\R for HB 286 was ADOPTED.                                                                                  
                                                                                                                                
Co-Chair  Foster  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute  for HB  285,  Work  Draft 30-GH2566\U  (Wallace,                                                                    
3/16/18).                                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED  for discussion. She believed                                                                    
the  committee  needed  to  mature.   She  did  not  support                                                                    
removing a project so the  other body could remove a project                                                                    
in  order to  take  the bill  to  conference committee.  She                                                                    
believed  the  legislature  had better  things  to  do.  She                                                                    
elaborated  that the  Alaska Mental  Health Trust  Authority                                                                    
(AMHTA) went  through its budget very  closely and decisions                                                                    
were made  by the board. She  thought it was time  to change                                                                    
the practice of continuing something  because it was the way                                                                    
it had always been done. She WITHDREW her OBJECTION.                                                                            
                                                                                                                                
There  being NO  further OBJECTION,  Work Draft  30-GH2566\U                                                                    
for HB 285 was ADOPTED.                                                                                                         
                                                                                                                                
2:10:13 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  MOVED  to  REPORT  CSHB  286(FIN)  out  of                                                                    
committee with individual recommendations.                                                                                      
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
2:10:33 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:10:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Grenn, Guttenberg, Kawasaki,  Ortiz, Gara, Seaton,                                                                    
Foster                                                                                                                          
OPPOSED: Pruitt, Tilton, Wilson                                                                                                 
                                                                                                                                
Representative Thompson was absent from the vote.                                                                               
                                                                                                                                
The MOTION PASSED (7/3).                                                                                                        
                                                                                                                                
There  being   NO  further  OBJECTION,  CSHB   286(FIN)  was                                                                    
REPORTED   out   of   committee    with   four   "do   pass"                                                                    
recommendations,  one  "no  recommendation"  recommendation,                                                                    
and five "amend" recommendations.                                                                                               
                                                                                                                                
2:11:52 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:14:34 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  MOVED  to  REPORT  CSHB  285(FIN)  out  of                                                                    
committee with individual recommendations.                                                                                      
                                                                                                                                
There being NO OBJECTION, CSHB  285(FIN) was REPORTED out of                                                                    
committee  with  four  "do pass"  recommendations,  one  "no                                                                    
recommendation"    recommendation,    and    five    "amend"                                                                    
recommendations.                                                                                                                
                                                                                                                                
2:15:11 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:16:32 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Seaton thanked members and  staff for their work on                                                                    
the  budget.  Additionally,  he  thanked  Legislative  Legal                                                                    
Service, LFD, and his staff.                                                                                                    
                                                                                                                                
HOUSE BILL NO. 346                                                                                                            
                                                                                                                                
     "An Act relating to the licensure of dentists."                                                                            
                                                                                                                                
2:17:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SAM KITO,  SPONSOR, shared  that he  was the                                                                    
chair of the  House Labor and Commerce  Committee, which had                                                                    
introduced the  bill. He asked  his staff to provide  a bill                                                                    
introduction.                                                                                                                   
                                                                                                                                
CAITLYN  ELLIS,  STAFF,  REPRESENTATIVE SAM  KITO,  provided                                                                    
detail  on the  bill.  The  bill would  allow  the Board  of                                                                    
Dental  Examiners   to  grant  temporary  licenses   for  an                                                                    
emergency  replacement of  a  dental  specialist or  dentist                                                                    
serving in  a community  without additional  dentists. There                                                                    
were only  136 dental  specialists covering  eight different                                                                    
specialties  in  Alaska.  The numbers  were  slim  in  small                                                                    
communities making it difficult to  get care. The bill would                                                                    
open up dental  licenses to be determined by  the board. The                                                                    
licenses would be granted for 90  days with the option for a                                                                    
couple  of  extensions.  The   bill  would  open  additional                                                                    
opportunities for care by addressing  the gap in coverage in                                                                    
small  communities where  dental specialists  were difficult                                                                    
to reach.                                                                                                                       
                                                                                                                                
Representative Kito added the  bill aimed to cover temporary                                                                    
emergency situations  where a dentist was  unable to perform                                                                    
a  service and  was unable  to find  someone to  perform the                                                                    
service. The  bill would  allow the dentist  to draw  from a                                                                    
pool of  dentists licensed from  other states to help  on an                                                                    
emergency  and temporary  basis.  If the  dentists were  not                                                                    
licensed  and  were  interested in  providing  more  regular                                                                    
service in  Alaska, they would  be responsible  for becoming                                                                    
licensed.  The   bill  only   provided  for   temporary  and                                                                    
emergency situations.                                                                                                           
                                                                                                                                
Representative Wilson  asked if the Alaska  Mission of Mercy                                                                    
that brought  dentists in to  work in  Fairbanks, Anchorage,                                                                    
and other locations fell under  different licensing than the                                                                    
licensing in the bill.                                                                                                          
                                                                                                                                
Representative  Kito deferred  the  question  to the  Alaska                                                                    
Dental Society.                                                                                                                 
                                                                                                                                
DAVID   LOGAN,  DDS,   EXECUTIVE  DIRECTOR,   ALASKA  DENTAL                                                                    
SOCIETY,  answered there  were  two  separate licenses.  The                                                                    
Mission  of  Mercy  used a  courtesy  license  that  allowed                                                                    
people to  work for pro  bono events. The  temporary license                                                                    
[used in the  bill] would allow someone to come  in and work                                                                    
in a private office or salaried position for compensation.                                                                      
                                                                                                                                
2:20:59 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg shared that  a number of years ago                                                                    
a  friend  had  married  a dentist  from  New  Zealand.  The                                                                    
dentist had not  been able to get licensed in  Alaska by the                                                                    
board  despite  his  work  as  a  licensed  dentist  in  New                                                                    
Zealand.  He wondered  if the  temporary license  allowed by                                                                    
the bill  would apply to  an international person.  He asked                                                                    
if a  person had to be  already licensed in Alaska  or could                                                                    
be licensed somewhere else within the United States.                                                                            
                                                                                                                                
Mr.  Logan responded  that  the bill  would  not change  the                                                                    
particular    situation   highlighted    by   Representative                                                                    
Guttenberg. There was now an  avenue for someone licensed in                                                                    
another country to gain a  license. The bill would require a                                                                    
dentist to  be licensed  in the  U.S. in  order to  obtain a                                                                    
temporary permit.                                                                                                               
                                                                                                                                
Representative  Guttenberg asked  if there  was currently  a                                                                    
national  shortage  of  specialists. He  wondered  if  there                                                                    
would be specialists available from  other states to come to                                                                    
Alaska in the event of a shortage.                                                                                              
                                                                                                                                
Mr. Logan responded  that Alaska did not have  a shortage of                                                                    
specialists, but it  had just enough. If  one specialist was                                                                    
suddenly incapacitated  there was no  room in the  system to                                                                    
pick  up  the  slack,  especially if  they  were  practicing                                                                    
outside  of Anchorage.  He speculated  that Anchorage  could                                                                    
perhaps   pick  up   the  slack,   but  the   workforce  was                                                                    
unavailable anywhere else  in Alaska. There was  not a large                                                                    
pool of specialists to pull from in Alaska.                                                                                     
                                                                                                                                
Representative   Guttenberg  asked   whether  the   national                                                                    
specialist  pool was  tight or  loose. He  wondered what  it                                                                    
would take to entice a  specialist to work under a temporary                                                                    
permit in Alaska.                                                                                                               
                                                                                                                                
Mr.  Logan  replied that  bill  attempted  to tap  into  the                                                                    
national  pool. The  bill would  allow someone  licensed and                                                                    
practicing in another  state to come to Alaska to  help in a                                                                    
temporary situation.  There was an abundance  of specialists                                                                    
in the larger  urban areas of the U.S. There  was not a lack                                                                    
of dentists  in the U.S.;  however, they were  over centered                                                                    
in urban  areas and under  centered in rural areas  - Alaska                                                                    
was no exception.                                                                                                               
                                                                                                                                
2:23:39 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  stated that  years back  a friend                                                                    
had started  Mushing Magazine and  the hospital  had thanked                                                                    
him  because it  had been  their best  recruitment tool.  He                                                                    
elaborated that many doctors had  come up from Minnesota and                                                                    
northern  areas.  He asked  what  it  would take  to  entice                                                                    
people to come up to Alaska.                                                                                                    
                                                                                                                                
Mr. Logan replied  that if a dentist  was incapacitated they                                                                    
would  likely  reach out  to  classmates  they had  gone  to                                                                    
specialty   school  with   or  people   they  know   through                                                                    
professional  organizations.  He   provided  a  hypothetical                                                                    
scenario where  a dentist  broke a hand  and could  not work                                                                    
for  several  months.  More  than  likely  they  would  find                                                                    
someone  to  come  up  and  help  by  working  evenings  and                                                                    
weekends. He explained  it would be a sacrifice  on the part                                                                    
of the specialist, but communities  that would otherwise not                                                                    
receive care would have an avenue towards care.                                                                                 
                                                                                                                                
Representative  Guttenberg  asked  if   there  was  a  chart                                                                    
showing the  pay differential between specialists  in Alaska                                                                    
and specialists in other states.  He added he was supportive                                                                    
of the bill.                                                                                                                    
                                                                                                                                
Mr. Logan  replied not to his  knowledge. He had seen  a pay                                                                    
differential   chart   for   general   dentists,   but   not                                                                    
specialists.                                                                                                                    
                                                                                                                                
Vice-Chair Gara  stated that he had  initially misunderstood                                                                    
the  bill. He  asked for  verification that  the bill  would                                                                    
enable  individuals  licensed  in   another  state  to  work                                                                    
temporarily in Alaska.                                                                                                          
                                                                                                                                
Mr.  Logan answered  in the  affirmative. He  clarified that                                                                    
someone trained in one specialty  would not have the ability                                                                    
to work in  another specialty, given an  absence of training                                                                    
in  the other  specialty. The  bill  would be  an avenue  to                                                                    
allow  out-of-state  dentists  to  work in  Alaska  under  a                                                                    
temporary  permit.  He  explained  that  if  a  dentist  was                                                                    
already  licensed  in  Alaska,  they had  no  need  for  the                                                                    
legislation and could move around the state at will.                                                                            
                                                                                                                                
2:26:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  OPENED  and CLOSED  public  testimony.  He                                                                    
provided  the  House  Finance Committee  email  address  for                                                                    
written comments.                                                                                                               
                                                                                                                                
Vice-Chair Gara  addressed the one  fiscal impact  note from                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development. The  note showed $2,600 in  receipt services to                                                                    
be  paid  for  by  licensees for  the  cost  of  potentially                                                                    
amending regulations.                                                                                                           
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  346(L&C)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, CSHB  346(L&C) was REPORTED out of                                                                    
committee  with  a "do  pass"  recommendation  and with  one                                                                    
previously published fiscal impact note: FN1 (CED).                                                                             
                                                                                                                                
2:28:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:29:23 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 255                                                                                                            
                                                                                                                                
     "An Act relating to individuals  and employees who must                                                                    
     have  certificates   of  fitness  to   perform  certain                                                                    
     plumbing  and electrical  work; and  relating to  civil                                                                    
     penalties  and  violations   for  not  having  required                                                                    
     certificates of fitness."                                                                                                  
                                                                                                                                
2:29:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHRIS  TUCK, SPONSOR, introduced  himself and                                                                    
his staff.                                                                                                                      
                                                                                                                                
KENDRA KLOSTER,  STAFF, REPRESENTATIVE CHRIS  TUCK, provided                                                                    
detail on the bill. The  bill would change the penalties for                                                                    
performing plumbing  and electrical work without  a license,                                                                    
which was  called a certificate  of fitness. The  bill would                                                                    
replace  the existing  criminal  penalty  with a  nonviolent                                                                    
penalty.  Currently,  the penalty  was  a  $500 fine  and  a                                                                    
misdemeanor.  The  bill  would  change  the  penalty  to  an                                                                    
administrative fine and a violation.  She explained that the                                                                    
original  bill  made  several  changes  to  the  way  things                                                                    
worked. She detailed that the  bill would reduce the penalty                                                                    
to $125 [for  an individual] and $250 [for  an employer] for                                                                    
a first offense. A second offense  would mean a fine of $250                                                                    
for an individual and $500 for an employer.                                                                                     
                                                                                                                                
Ms. Kloster  addressed changes made  in the House  Labor and                                                                    
Commerce  Committee.   There  had  been  concerns   about  a                                                                    
violation  going on  an  employee's  record; therefore,  the                                                                    
provision had  been changed. She  provided an example  of an                                                                    
employee without  a certificate of fitness  being instructed                                                                    
by  an  employer to  conduct  plumbing  or electrical  work.                                                                    
Under  the circumstance,  the sponsor  wanted to  ensure the                                                                    
employee  was  not  given  a   violation  on  their  record;                                                                    
however,  the individual  could  be charged  a  fine by  the                                                                    
Department  of Labor  and Workforce  Development (DLWD)  for                                                                    
conducting the work without  the certificate. She elaborated                                                                    
that  the violation  would  show  up on  the  record of  the                                                                    
employer if  they continued to  practice without  a license.                                                                    
The bill had  been brought forward during work  with DLWD to                                                                    
provide the  department with  better enforcement  tools. The                                                                    
current penalties  went through the Department  of Law (DOL)                                                                    
and the process  was cumbersome. She explained  they did not                                                                    
necessarily  want to  charge individuals  with misdemeanors.                                                                    
The  bill would  provide the  state with  better enforcement                                                                    
tools to ensure the law was effective.                                                                                          
                                                                                                                                
2:32:44 PM                                                                                                                    
                                                                                                                                
Representative   Ortiz  asked   for   verification  that   a                                                                    
certificate  of fitness  was the  lone license  electricians                                                                    
and plumbers had in Alaska.                                                                                                     
                                                                                                                                
Representative Tuck replied in  the affirmative. He detailed                                                                    
the term certificate of fitness  meant an individual was fit                                                                    
to  perform  the   work  once  they  had   gone  through  an                                                                    
apprenticeship program, passed a  test, and had demonstrated                                                                    
the  required  hours.  He  confirmed  that  the  certificate                                                                    
equated to a license.                                                                                                           
                                                                                                                                
Representative Ortiz asked  about the need for  the bill. He                                                                    
wondered  if there  was significant  work taking  place that                                                                    
was unlicensed. He asked if  the perception was anecdotal or                                                                    
based on statistics.                                                                                                            
                                                                                                                                
Representative  Tuck  answered  that  primarily  there  were                                                                    
numerous people  doing site jobs in  people's places without                                                                    
an  electrical license.  He explained  it  was difficult  to                                                                    
keep  track  of the  occurrences  and  to enforce  the  law.                                                                    
Currently, the  offense was a  misdemeanor and a fine  up to                                                                    
$500. It was costly  to go to DOL to get  a prosecutor to do                                                                    
a cease  and desist  order and  prosecute for  a misdemeanor                                                                    
conviction. The bill  would allow a simple fine  for DLWD to                                                                    
enforce. Additionally, there was  no ability to enforce when                                                                    
people let their licenses expire and continued to work.                                                                         
                                                                                                                                
DEBORAH  KELLY, DIRECTOR,  DIVISION OF  LABOR STANDARDS  AND                                                                    
SAFETY,  DEPARTMENT  OF  LABOR  AND  WORKFORCE  DEVELOPMENT,                                                                    
pointed  to  the  department's fiscal  note  [OMB  Component                                                                    
Number 346].  The department had  used a  three-year average                                                                    
of  its cease  and desist  orders for  people found  working                                                                    
without a  certificate of  fitness [shown on  page 2  of the                                                                    
fiscal note]:                                                                                                                   
                                                                                                                                
      46 individuals engaging in work without a valid                                                                        
        certificate                                                                                                             
      5 individuals engaging in work without a valid                                                                         
        certificate                                                                                                             
      22 employers using workers without a valid                                                                             
        certificate                                                                                                             
      9 employers using workers without a valid                                                                              
        certificate                                                                                                             
                                                                                                                                
Ms.  Kelly   added  that  the  bill   would  address  repeat                                                                    
offenders who  realize the department gave  cease and desist                                                                    
orders but did not  typically follow through on misdemeanors                                                                    
because  the  court  system  district  attorneys  had  other                                                                    
priorities. Once an offender saw  the piece of paper did not                                                                    
have much  force, some  of the  repeat offenders  refused to                                                                    
come into compliance.                                                                                                           
                                                                                                                                
Representative  Ortiz  asked for  a  brief  overview of  how                                                                    
enforcement happened.  He wondered  how a person  got caught                                                                    
and cited for working without a certificate.                                                                                    
                                                                                                                                
Ms. Kelly  replied that DLWD  had multiple employees  in the                                                                    
field   including    a   full-time    contractor   licensing                                                                    
investigator,  several  plumbing   inspectors,  and  several                                                                    
electrical  inspectors. The  employees were  on construction                                                                    
sites constantly as  part of their job.  The department also                                                                    
had  wage and  hour investigators  who were  able to  detect                                                                    
people  doing unlicensed  work.  The employees  knew how  to                                                                    
identify the work and what was  subject to the code and they                                                                    
performed enforcement.                                                                                                          
                                                                                                                                
Representative  Ortiz  asked how  the  bill  gave DLWD  more                                                                    
ability to enforce the certificate requirement.                                                                                 
                                                                                                                                
Ms. Kelly  answered that the  bill enabled DLWD  the ability                                                                    
to issue an administrative fine  and violation for first and                                                                    
subsequent offenses.  Currently, the department  could issue                                                                    
a cease and  desist on a piece of paper.  She explained that                                                                    
if a  person continued to  violate the law,  the misdemeanor                                                                    
penalty was  "pretty toothless" because DLWD  had to request                                                                    
a district attorney to prosecute.                                                                                               
                                                                                                                                
2:38:12 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  if there  was one  certificate                                                                    
for  a plumber  and one  for an  electrician. Alternatively,                                                                    
she  asked  if there  were  multiple  certificates for  some                                                                    
trades.                                                                                                                         
                                                                                                                                
Representative  Tuck replied  there  was  a certificate  for                                                                    
electricians, linemen,  and plumbing  code. For  example, an                                                                    
electrician  could  be  an  "inside  wireman"  with  a  full                                                                    
commercial    license    that   required    an    8,000-hour                                                                    
apprenticeship   program.   There  were   also   residential                                                                    
electricians  that were  required  to  complete a  4000-hour                                                                    
program.  An  apprentice could  also  get  a certificate  of                                                                    
fitness in  one of  the two categories.  Additionally, there                                                                    
was a certificate  of fitness for power  linemen and another                                                                    
for plumbers.                                                                                                                   
                                                                                                                                
Representative  Wilson asked  if the  state had  always been                                                                    
able  to  impose  a misdemeanor  penalty  on  employees  and                                                                    
employers.                                                                                                                      
                                                                                                                                
Representative Tuck  responded in the affirmative  and cited                                                                    
AS  18.62.080.  The definition  in  statute  referred to  "a                                                                    
person"  who could  be an  employer and  employee or  anyone                                                                    
performing  work  under  the  jurisdictions.  He  read  from                                                                    
statute:                                                                                                                        
                                                                                                                                
     A person, either an employer  or employee, who violates                                                                    
     a provision of this chapter  or of a regulation adopted                                                                    
     under  this chapter  is guilty  of  a misdemeanor  and,                                                                    
     upon conviction,  is punishable by  a fine of  not more                                                                    
     than $500.                                                                                                                 
                                                                                                                                
Representative Wilson thought it  appeared that Section 3 of                                                                    
the bill opened it up more  than in the past. She pointed to                                                                    
page 2,  lines 14 through  17, pertaining to  penalties. She                                                                    
observed that the bill would  remove employer [from line 14]                                                                    
and would add the words "other  than" to read as follows: "A                                                                    
person, other than an employee,  who violates a provision of                                                                    
this  chapter..."  She  asked   about  the  reason  for  the                                                                    
language change. She wondered who else would be included.                                                                       
                                                                                                                                
Representative Tuck answered that  within the provision, the                                                                    
bill would  separate the difference between  an employer and                                                                    
someone other than an employer  because the bill would split                                                                    
up the fines. He did  not believe an employee should receive                                                                    
the  same fine  as an  employer. He  explained that  a first                                                                    
offense for an employer was  $250 and each following offense                                                                    
was  $500. Whereas,  the first  offense for  an employee  is                                                                    
$125  and each  following  offense was  $250. He  elaborated                                                                    
that the  section recognized  that a  person, other  than an                                                                    
employee,  who  violated  the  provision  was  guilty  of  a                                                                    
violation  rather  than a  misdemeanor.  He  cited that  the                                                                    
person would be  punished as prescribed under AS  12.55 by a                                                                    
fine of not more than $500.                                                                                                     
                                                                                                                                
2:41:44 PM                                                                                                                    
                                                                                                                                
Representative Wilson provided a  scenario where an employee                                                                    
with  a certificate  of fitness  was asked  to do  a job  by                                                                    
their  employer that  the employee  believed was  covered by                                                                    
their  certificate. She  used an  example of  installing and                                                                    
covering  up conduit.  She wondered  if there  was a  chance                                                                    
DLWD may  claim the employee  was doing work not  covered by                                                                    
the certificate and could subsequently fine the employee.                                                                       
                                                                                                                                
Representative Tuck replied that as  long as an employee had                                                                    
a certificate  of fitness  they could  do all  provisions of                                                                    
the  electrical code,  which included  back fillings  (as in                                                                    
Representative Wilson's example).                                                                                               
                                                                                                                                
Representative  Wilson asked  for  verification there  would                                                                    
never be a  situation where an employee would  have to check                                                                    
their certificate of fitness to  ensure the employer was not                                                                    
asking them to  do something that could be  a violation. She                                                                    
had  no problem  with  the [bill's  provision pertaining  to                                                                    
the] employer. She  believed an employer should  know all of                                                                    
the  rules  associated  with  a  job.  She  considered  that                                                                    
perhaps  there were  nuances where  one union  could do  one                                                                    
thing, and  another could do  something else. She  wanted to                                                                    
avoid someone  being fired because they  were uncertain they                                                                    
could do the work legally or  being fined for doing was what                                                                    
their boss asked.                                                                                                               
                                                                                                                                
Representative Tuck clarified that  a certificate of fitness                                                                    
was  not a  document that  gave an  employer the  ability or                                                                    
jurisdiction to do the work.  A certificate of fitness was a                                                                    
license for  and owned by the  individual. Typically, people                                                                    
licensed in a  field knew what they could and  could not do.                                                                    
An employer was required  to have an administrator's license                                                                    
to do the work. He  explained that contractors could not all                                                                    
perform  electrical work.  He elaborated  that a  contractor                                                                    
was required  to have an  administrator's license.  Before a                                                                    
contractor could  obtain the license, they  were required to                                                                    
have a  certificate of  fitness for  a designated  amount of                                                                    
time. They  were also required  to get three people  with an                                                                    
administrator's license to  sponsor them to be  able to take                                                                    
the test to become a contractor.                                                                                                
                                                                                                                                
Representative  Tuck confirmed  that  under  current law  an                                                                    
employee and employer  would get in trouble  if a contractor                                                                    
who was or  was not an administrator  instructed an employee                                                                    
without  a  certificate  of  fitness  to  perform  work.  He                                                                    
detailed   both  individuals   could  be   charged  with   a                                                                    
misdemeanor  under current  law.  He  believed the  employee                                                                    
should  not be  punished  as severely  as  the employer.  He                                                                    
explained it  was no different  than an employer  telling an                                                                    
employee without  a commercial  driver's license to  drive a                                                                    
tractor  and trailer  across town  to deliver  materials. He                                                                    
reiterated  his  understanding  of  Representative  Wilson's                                                                    
question.                                                                                                                       
                                                                                                                                
2:45:47 PM                                                                                                                    
                                                                                                                                
Representative Wilson explained that  her question was about                                                                    
someone  with a  certificate of  fitness who  performed work                                                                    
they believed  to be  covered by  their certificate,  but it                                                                    
was not.  She referenced  Representative Tuck's  example and                                                                    
noted  there  was  a project  administrator,  employee,  and                                                                    
perhaps  the  administrator's   boss  overseeing  the  whole                                                                    
project. She  asked if  all three  individuals would  get in                                                                    
trouble if one person was doing the wrong thing.                                                                                
                                                                                                                                
Representative Tuck  replied that only the  employer and the                                                                    
person who performed the work [would get in trouble].                                                                           
                                                                                                                                
Representative  Wilson asked  if  the  administrator had  no                                                                    
responsibility.                                                                                                                 
                                                                                                                                
Representative Tuck answered that  the administrator had the                                                                    
authority to do the work;  therefore, they would not receive                                                                    
a violation.                                                                                                                    
                                                                                                                                
Ms. Kelly elucidated that  an electrical administrator could                                                                    
be the employer,  employee, or could hire  the employer. She                                                                    
clarified  that being  an  administrator  required an  extra                                                                    
license. She  explained that the administrator's  job was to                                                                    
ensure the  electrical work or plumbing  work had integrity.                                                                    
The administrator  was not  necessarily telling  people what                                                                    
to do  or directing the  work. She elaborated they  could be                                                                    
conducting  site inspections  or reviewing  plans to  ensure                                                                    
the   work   was   sound.  Administrators   were   generally                                                                    
journeymen certificate  holders who took an  additional step                                                                    
to pass  additional qualifications, which  were administered                                                                    
by  the  Department  of  Commerce,  Community  and  Economic                                                                    
Development (DCCED). She  added that DLWD would  not look at                                                                    
the  administrator when  conducting  certificate of  fitness                                                                    
enforcement.                                                                                                                    
                                                                                                                                
2:47:56 PM                                                                                                                    
                                                                                                                                
Representative Grenn  asked for  detail on what  happened to                                                                    
an employee when a violation was discovered.                                                                                    
                                                                                                                                
Representative  Tuck agreed  and noted  the process  was the                                                                    
same for  hairdressers and other individuals  when they were                                                                    
found to be working outside their license.                                                                                      
                                                                                                                                
Ms. Kelly deferred to a colleague.                                                                                              
                                                                                                                                
WILL HARLAN,  SECTION CHIEF, MECHANICAL  INSPECTION SECTION,                                                                    
DIVISION OF LABOR STANDARDS AND  SAFETY, DEPARTMENT OF LABOR                                                                    
AND  WORKFORCE   DEVELOPMENT  (via   teleconference),  asked                                                                    
Representative Grenn to restate the question.                                                                                   
                                                                                                                                
Representative  Grenn asked  what  happened  to an  employee                                                                    
when  a  violation was  discovered.  He  wondered about  the                                                                    
citation procedure and the civil penalty.                                                                                       
                                                                                                                                
Mr.  Harlan  replied that  it  was  similar to  the  current                                                                    
contractor  licensing  enforcement  programs.  He  explained                                                                    
there  were  a  couple   of  things  that  happen  including                                                                    
administrative fines,  which had already been  discussed. He                                                                    
detailed that when  an inspector visited a job  site and saw                                                                    
someone  performing code  work  requiring  a certificate  of                                                                    
fitness,  they  would  ask  to   see  the  license.  If  the                                                                    
individual did not have a  license, under HB 255, DLWD would                                                                    
have the ability to write  an administrative fine of $125 to                                                                    
the   person   performing   the  work.   Additionally,   the                                                                    
department would  seek out  and fine  the employer.  Both of                                                                    
the fines  would go  through the same  due process  that any                                                                    
other  administrative  fine  went through.  The  individuals                                                                    
would have the chance to  appeal the fine, a hearing officer                                                                    
could  be appointed,  and the  individuals  could choose  to                                                                    
appeal the decision.  The individuals could pay  the fine or                                                                    
appeal. He  noted there  were some  other legal  things that                                                                    
would take place.                                                                                                               
                                                                                                                                
Mr.  Harlan  explained  that  the  violation  was  the  same                                                                    
process as a traffic ticket.  He provided an example where a                                                                    
person performing the  work was known to  the department and                                                                    
had ignored  previous administrative  fines. At  that point,                                                                    
the inspector could  write an Alaska uniform  citation to be                                                                    
filed with  the court system  in traffic court;  the company                                                                    
would  also receive  a citation.  The individual  would then                                                                    
proceed through traffic  court and would have  the same kind                                                                    
of  hearing  that  took  place for  a  speeding  ticket.  If                                                                    
convicted, the judge  would set the fine up to  a maximum of                                                                    
$500.                                                                                                                           
                                                                                                                                
Representative Grenn  referenced Mr.  Harlan's example  of a                                                                    
person committing  the offense  multiple times. He  asked if                                                                    
the offenses went on their record.                                                                                              
                                                                                                                                
Mr. Harlan  replied that a violation  appeared on CourtView.                                                                    
He  elaborated that  a  citation issued  to  an employee  or                                                                    
employer also  appeared on CourtView like  any other traffic                                                                    
citation.  The administrative  fine  did not  appear on  any                                                                    
permanent  record. He  detailed  that the  document was  not                                                                    
published  on  a   website,  but  it  was   public  and  was                                                                    
retrievable under the public records request system.                                                                            
                                                                                                                                
2:53:00 PM                                                                                                                    
                                                                                                                                
Ms. Kelly corrected that under  HB 255 an employee would not                                                                    
be  subject  to a  citation  and  violation; therefore,  the                                                                    
offense  would not  go on  a record  in CourtView  under any                                                                    
circumstances (if they were an employee).                                                                                       
                                                                                                                                
Representative Tuck  explained the reason for  the provision                                                                    
identifying "a person, other than  an employee." He detailed                                                                    
there  were   individuals  performing  work  who   were  not                                                                    
necessarily  employed  by  someone else.  Those  individuals                                                                    
would  receive a  violation, which  would enable  someone to                                                                    
look  up whether  the person  was  reputable. Someone  would                                                                    
have the  ability to determine  whether the employer  or any                                                                    
individual performing work on their  own was adhering to the                                                                    
law. The bill  changed the provision, so  the employee would                                                                    
not have the record.                                                                                                            
                                                                                                                                
Representative Grenn  spoke to  how the process  was handled                                                                    
for an employee. He referenced  a letter in members' packets                                                                    
from  the  International  Union of  Operating  Engineers  in                                                                    
opposition  to the  bill (copy  on file).  Pertaining to  an                                                                    
employee,  the  letter suggested  a  stern  warning for  the                                                                    
first  violation   and  a  $50   citation  for   the  second                                                                    
violation. He asked for comment from the bill sponsor.                                                                          
                                                                                                                                
Representative Tuck  replied the bill would  reduce the fine                                                                    
[for an  employee] from $500  and a misdemeanor to  $125 and                                                                    
no  record.  The  bill  also  encapsulated  people  with  an                                                                    
expired certificate of fitness who were continuing to work.                                                                     
                                                                                                                                
Representative  Grenn surmised  that  given  the bill  would                                                                    
drop  the fine  from $500  to  $125, the  suggestion in  the                                                                    
letter would  be a  further drop and  would perhaps  fail to                                                                    
act as a deterrent.                                                                                                             
Representative Tuck  answered that  if the  committee wanted                                                                    
to eliminate  any violations it would  be up to the  will of                                                                    
the  committee, but  it was  not  his desire.  He wanted  to                                                                    
allow DLWD to enforce and  issue quick fines due to numerous                                                                    
repeat offenders. He  referenced other professional licenses                                                                    
issued by the state. He detailed  that the penalty was a was                                                                    
a Class  B misdemeanor  and a  fine of up  to $2,000  for an                                                                    
individual  practicing hairdressing,  aesthetics, tattooing,                                                                    
or body  piercing. He  referred to the  provision in  HB 255                                                                    
and did  not know how  much looser it could  get. Electrical                                                                    
work was  in Article 18  of the state's code,  pertaining to                                                                    
health, safety, and housing. Chapter  60 pertained to safety                                                                    
and  its  Articles  6 through  8  dealt  with  electricians,                                                                    
linemen, and  plumbing codes.  The bill  did not  pertain to                                                                    
those  sections of  law;  it only  pertained  to Chapter  62                                                                    
related to the need for  a certificate of fitness to perform                                                                    
work.                                                                                                                           
                                                                                                                                
2:56:25 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  reviewed his understanding of  the bill. He                                                                    
discussed that  the bill  addressed contractors  working for                                                                    
themselves without  a certificate  of fitness  and employees                                                                    
who  were  told by  an  employer  to  do work  beyond  their                                                                    
license skills.  He asked for verification  that contractors                                                                    
working for  themselves would receive a  fine and violation,                                                                    
which would be visible on CourtView.                                                                                            
                                                                                                                                
Representative Tuck answered in the affirmative.                                                                                
                                                                                                                                
Vice-Chair Gara  remarked that the bill  would eliminate the                                                                    
misdemeanor penalty  for both types of  workers [highlighted                                                                    
in  his  previous  question] without  proper  licensing.  He                                                                    
asked for  verification that the initial  and any subsequent                                                                    
fines for an independent contractor was a maximum of $500.                                                                      
                                                                                                                                
Representative  Tuck agreed  but  corrected  that the  first                                                                    
offense was a fine of $250.                                                                                                     
                                                                                                                                
Vice-Chair  Gara  asked  for  verification  that  the  first                                                                    
offense  for  an independent  contractor  was  $250 and  any                                                                    
subsequent offenses were $500.                                                                                                  
                                                                                                                                
Representative Tuck replied in the affirmative.                                                                                 
                                                                                                                                
Vice-Chair  Gara  asked  for  verification  that  the  first                                                                    
offense  for  an  employee  was  a  fine  of  $125  and  any                                                                    
subsequent offenses were $250.                                                                                                  
                                                                                                                                
Representative Tuck responded in the affirmative.                                                                               
                                                                                                                                
Vice-Chair  Gara spoke  to his  one concern.  He agreed  the                                                                    
offense should not  be a misdemeanor. He  was concerned that                                                                    
a $500 fine  would not be a sufficient incentive  to deter a                                                                    
contractor from operating without a  license. He asked if he                                                                    
was assuming something wrong.                                                                                                   
                                                                                                                                
Representative  Tuck answered  that the  bill addressed  the                                                                    
issue. He deferred the question to Ms. Kelly for detail.                                                                        
                                                                                                                                
Ms.  Kelly  pointed  out   that  an  independent  contractor                                                                    
operating  without   the  proper  certifications   would  be                                                                    
subject to  a violation and contractor  licensing fines. She                                                                    
noted that Mr. Harlan  could answer detailed questions about                                                                    
contractor  licensing. She  added  that  the penalties  were                                                                    
quite a bit higher.                                                                                                             
                                                                                                                                
Vice-Chair  Gara stated  that  his primary  concern was  not                                                                    
about  punishing an  employee for  doing work  outside their                                                                    
purview  when  they  were  instructed  to  do  so  by  their                                                                    
employer. His real concern was the  extent of the fine for a                                                                    
person  who advertised  themselves  as  an electrician  when                                                                    
they did not  have the training and  repeatedly violated the                                                                    
law.                                                                                                                            
                                                                                                                                
Mr. Harlan  addressed the example  of a  person representing                                                                    
themselves as  an electrician and working  in people's homes                                                                    
without a license.  He stated aside from  the certificate of                                                                    
fitness,  there   would  be   a  violation   for  contractor                                                                    
licensing, which began at a  $1,000 administrative fine. The                                                                    
fine  for the  second  offense was  $1,500.  The fines  also                                                                    
triggered the withholding of the  issuance of a contractor's                                                                    
license  until  they  were paid.  Additionally,  there  were                                                                    
citations, which capped  out at $500 per  citation ($500 was                                                                    
the statutory  limit on  minor offense  citations). However,                                                                    
the  fines  began  at  $25,000   when  the  offender  was  a                                                                    
corporation  or  incorporated  business  potentially  for  a                                                                    
contractor business.  He noted  the fine would  be set  by a                                                                    
judge at the time of sentencing.                                                                                                
                                                                                                                                
3:02:00 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  stated  that  if  a  person  was                                                                    
working on a commercial contract,  they were in violation if                                                                    
they  were   working  without  an   electrical  contractor's                                                                    
license.  He continued  that in  order  to do  the work,  an                                                                    
administrator's  license  was  needed. He  wondered  why  an                                                                    
administrator  would hire  people without  a certificate  of                                                                    
fitness to work as electricians.                                                                                                
                                                                                                                                
Representative  Tuck  responded   that  under  the  scenario                                                                    
provided  by Representative  Guttenberg  a contractor  would                                                                    
probably  not hire  employees  without  a license.  However,                                                                    
sometimes  there may  be  a material  handler  or yard  hand                                                                    
fabricating  and doing  things  that were  against the  law.                                                                    
Under the scenario,  the employer would be  in violation. He                                                                    
spoke  to  the  need   for  employers  to  ensure  employees                                                                    
continued with  their education. Employees were  required to                                                                    
complete 16 hours of continued  education every two years to                                                                    
maintain their license. He detailed  that if someone did not                                                                    
maintain their continued education  it could be a violation.                                                                    
He stated  a person could  have initially been hired  with a                                                                    
license and may no longer have a license.                                                                                       
                                                                                                                                
Representative Guttenberg spoke  about doing electrical work                                                                    
(including  working   with  hot   wires  and   ensuring  the                                                                    
connections  were  correct  in  order to  avoid  a  fire  or                                                                    
damage),  which required  an administrator  to sign  off on.                                                                    
Provided  a hypothetical  scenario  where  an argument  took                                                                    
place over  whose jurisdiction specific work  fell under. He                                                                    
asked  who set  the parameters  to determine  whose work  it                                                                    
was.                                                                                                                            
                                                                                                                                
Representative Tuck  replied that  the bill did  not address                                                                    
the subject. He  elaborated that the issue  was addressed in                                                                    
different  sections of  statute and  was defined  in Article                                                                    
18, Sections 6 through 8. The bill only pertained to fines.                                                                     
                                                                                                                                
3:06:16 PM                                                                                                                    
                                                                                                                                
Ms. Kelly  replied that jurisdiction was  determined through                                                                    
plumbing  and electrical  statutes  that  adopt the  state's                                                                    
minimum  plumbing and  electrical code.  She explained  that                                                                    
the codes had been adopted  for a public safety mission. The                                                                    
department  began  with the  code  and  considered what  was                                                                    
important to  the safety and integrity  of the installations                                                                    
made  under  the  code.  There  were  some  exceptions.  The                                                                    
department  did   not  draw  a  hard   line  on  classifying                                                                    
something as  certificate of  fitness work  if it  was under                                                                    
the  code.  There  may  be   exceptions  made  if  something                                                                    
presented a  minimal public safety  risk or minimal  risk to                                                                    
the  integrity  of  the installation.  Ultimately,  in  gray                                                                    
areas, the department decided where something lay.                                                                              
                                                                                                                                
Representative Guttenberg disagreed and  stated that was not                                                                    
where it was decided. He stated  there was a large gray area                                                                    
in the work field. He believed  that part of the problem was                                                                    
put  on the  material handler  who  may work  for a  general                                                                    
contractor. He elaborated on the scenario.                                                                                      
                                                                                                                                
Ms. Kelly understood there  were many jurisdictional battles                                                                    
that took  place. She clarified  that the  scenario provided                                                                    
by  Representative Guttenberg  related  to  the handling  of                                                                    
materials,  was   not  certificate  of  fitness   work.  The                                                                    
department  tried its  best to  stay  out of  jurisdictional                                                                    
battles, but  because of  the nature  of the  certificate of                                                                    
fitness  being a  certification for  certain types  of work,                                                                    
DLWD ended up in the  middle sometimes. The department tried                                                                    
to look  at what installation  work was subject to  the code                                                                    
and  comported  with  the  public   safety  mission  of  the                                                                    
statutes.                                                                                                                       
                                                                                                                                
Representative  Guttenberg continued  with the  scenario and                                                                    
discussed associated fines.  He had a problem  with the gray                                                                    
area  related  to  the  jurisdiction   of  the  handling  of                                                                    
materials.                                                                                                                      
                                                                                                                                
Representative Tuck  replied that the issue  did not pertain                                                                    
to the bill or statute.  He underscored that the statutes in                                                                    
the bill  dealt with installations, not  moving material. He                                                                    
stated there may  be a dispute between  contractors on whose                                                                    
work  something  was, but  that  pertained  to whatever  was                                                                    
written in someone's contract.  Nothing in statute specified                                                                    
that a worker  could not move material around.  There was no                                                                    
way  for anyone  to be  fined  in the  scenario provided  by                                                                    
Representative  Guttenberg  because  the code  and  statutes                                                                    
dealt  with installations.  However,  someone  would get  in                                                                    
trouble  if the  scenario involved  mounting something  on a                                                                    
wall.                                                                                                                           
                                                                                                                                
3:11:17 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  shared that he was  trying to get                                                                    
the  Department  of  Transportation  and  Public  Facilities                                                                    
(DOT) to  put conduit  in every  time it  opened a  road. He                                                                    
stated  that   at  some  point   someone  may   string  some                                                                    
fiberoptic cable. He wondered why  they should open the road                                                                    
twice. He  provided a hypothetical  scenario where  a person                                                                    
could  not  do  something  because   they  did  not  have  a                                                                    
certificate of  fitness. He wondered about  the relevance of                                                                    
his example in terms of the bill.                                                                                               
                                                                                                                                
Representative   Tuck   answered    that   most   electrical                                                                    
installations  were dealing  with vertical  construction for                                                                    
high   voltage   power   alignment,   including   hospitals,                                                                    
residential housing, and commercial  buildings. He noted the                                                                    
importance of  maintaining the integrity of  the systems. He                                                                    
reasoned there may be a  unique situation where there may be                                                                    
a  dispute between  two contractors  on whose  work it  was.                                                                    
However, the  bill did not  address the issue. He  was happy                                                                    
to work  with Representative  Guttenberg on the  topic later                                                                    
on. The bill would change a  penalty from a misdemeanor to a                                                                    
citation [for working without a certificate of fitness].                                                                        
                                                                                                                                
3:12:54 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  wanted  to  make sure  the  bill  did  not                                                                    
contain anything that would change  the ability of a private                                                                    
property owner to do their own work.                                                                                            
                                                                                                                                
Representative Tuck  replied that  the bill did  not address                                                                    
any jurisdiction at all or  current statutes allowing people                                                                    
to perform  or not  perform work. The  bill only  dealt with                                                                    
offenses.                                                                                                                       
                                                                                                                                
Representative Tilton  referenced the analysis on  page 2 of                                                                    
the fiscal note that specified FY  13 to FY 17 data had been                                                                    
used. She was trying to gage  the size of the challenge. She                                                                    
asked  how  many inspections  the  department  did and  what                                                                    
triggered the inspection.                                                                                                       
                                                                                                                                
Ms.  Kelly responded  that the  checks by  DLWD were  in the                                                                    
thousands  per   year  and  were   done  primarily   by  the                                                                    
contractor  licensing   investigator,  the   three  plumbing                                                                    
inspectors,  and   the  three  electrical   inspectors.  She                                                                    
deferred  to  Mr.  Harlan  for   information  on  how  staff                                                                    
determined where to do an inspection.                                                                                           
                                                                                                                                
Mr. Harlan answered  that in FY 17 his  office conducted 797                                                                    
electrical  inspections,   734  plumbing   inspections,  and                                                                    
performed  well  over  1,000  individual  construction  site                                                                    
visits  statewide.  The  department  identified  individuals                                                                    
working   without  a   certificate   or   with  an   expired                                                                    
certificate  through its  inspections and  site visits.  The                                                                    
department  also  responded  to  complaints  statewide  from                                                                    
owners who had encountered unlicensed individuals.                                                                              
                                                                                                                                
3:15:47 PM                                                                                                                    
                                                                                                                                
Representative   Tilton   surmised    that   responding   to                                                                    
complaints triggered  inspections. She  asked if  Mr. Harlan                                                                    
had stated  that the  department also  looked at  an expired                                                                    
list of licenses.                                                                                                               
                                                                                                                                
Mr. Harlan  replied that the  department did not  know where                                                                    
individuals were working  at any given time -  there was not                                                                    
a state  plumbing and electrical  permit system  actively in                                                                    
place. Some  inspections were  found through  random chance.                                                                    
Additionally,  the  department   reviewed  building  permits                                                                    
published   by   local   jurisdictions   to   discover   new                                                                    
installation work.  A great deal  of time was  spent driving                                                                    
around  looking for  construction. The  department was  also                                                                    
directed to  construction sites by complaints.  He explained                                                                    
that  because the  department did  not  know where  specific                                                                    
contractors were working at any  given time, the process did                                                                    
not involve identifying someone  beforehand and going to get                                                                    
them. He stated  that when the department  found an offender                                                                    
it was a matter of stumbling across them.                                                                                       
                                                                                                                                
3:17:06 PM                                                                                                                    
                                                                                                                                
Representative    Pruitt    returned    to    Representative                                                                    
Guttenberg's  earlier  questions.  He  asked  if  the  tasks                                                                    
assigned to an  electrician, an operator, or  other, were in                                                                    
black and white.                                                                                                                
                                                                                                                                
Representative  Tuck  answered  that   it  depended  on  the                                                                    
project.  Title 36  related to  work  being performed  under                                                                    
state contracts was  pretty black and white.  He stated that                                                                    
it  was  usually  spelled  out  for  a  private  contractor.                                                                    
Additionally,  subcontractors who  bid work  usually spelled                                                                    
out  exclusions or  inclusions on  their scope  of work.  He                                                                    
explained what a contractor was  responsible for was usually                                                                    
defined  in a  contract. Often  times  a when  a person  was                                                                    
doing electrical or plumbing work  it was spelled off to the                                                                    
side  because   a  general  contractor   did  not   have  an                                                                    
administrator's license to be able to do the work.                                                                              
                                                                                                                                
Representative  Pruitt  surmised   the  contractor  had  the                                                                    
ability to determine  certain things that may  fall within a                                                                    
gray area.                                                                                                                      
                                                                                                                                
Representative Tuck  thought Representative Pruitt  had been                                                                    
referring   to  a   scenario   provided  by   Representative                                                                    
Guttenberg.   Material   handling    was   not   under   the                                                                    
jurisdiction of  DLWD -  there was  nothing in  statute. The                                                                    
issue was between the general  contractor and the contractor                                                                    
because a license was not required.                                                                                             
                                                                                                                                
Representative   Pruitt  replied   that  his   question  was                                                                    
primarily   related   to    the   tone   of   Representative                                                                    
Guttenberg's scenario  and not specific examples.  He stated                                                                    
that  the  bill had  obviously  arisen  from something.  The                                                                    
committee had  heard earlier that the  department would play                                                                    
a role  in determining  jurisdiction. He  did not  see there                                                                    
was any way  the department did not play a  role if the goal                                                                    
was to  go in and  fine people and  enforce the law.  He did                                                                    
not know how  the department would not get in  the middle of                                                                    
determining  jurisdiction.  If  some   of  the  things  were                                                                    
potentially determined  by the  contract or  the contractor,                                                                    
he  wondered  if  the state  was  interjecting  itself  into                                                                    
something  that  may  become  complex  and  problematic.  He                                                                    
considered  that   bureaucrats  could  be   determining  the                                                                    
particular things as opposed to  the experts or those out in                                                                    
the field doing the work.                                                                                                       
                                                                                                                                
Representative Tuck answered that  all of the work performed                                                                    
in the  electrical industry  by commercial  electricians was                                                                    
under  the  jurisdiction  of the  National  Fire  Protection                                                                    
Association (NFPA),  Section 70.  There were 19  panels that                                                                    
reviewed  the code,  which was  updated  every three  years.                                                                    
Alaska was currently under the  2014 code; the 2017 code had                                                                    
not  yet   been  adopted.  The   2017  code  would   be  the                                                                    
jurisdiction  once  adopted.  He  relayed it  was  based  on                                                                    
national standards.                                                                                                             
                                                                                                                                
3:20:55 PM                                                                                                                    
                                                                                                                                
Ms.  Kelly  responded  that DLWD  had  been  conducting  the                                                                    
enforcement  for  over  30  years.   She  relayed  that  the                                                                    
enforcement tools  were not what  the department  would like                                                                    
them  to be,  but  they  had been  determining  how to  best                                                                    
enforce the codes and where  to draw the lines for requiring                                                                    
a certificate of fitness for  many years. The department did                                                                    
not want to  get involved in jurisdictional  battles, but it                                                                    
sometimes ended up  there by the nature  of the occupational                                                                    
licenses.  She stated  that just  like contractor  licensing                                                                    
enforcement  or wage  and hour  law enforcement,  DLWD could                                                                    
just  happen  to  get  into  the  blurry  lines  that  could                                                                    
sometimes happen  between an  independent contractor  and an                                                                    
employee. The  department did its  best to draw  lines well,                                                                    
follow the  statutes, and follow its  public safety mission.                                                                    
The  department  had not  interest  in  getting involved  in                                                                    
jurisdictional contractor or other labor disputes.                                                                              
                                                                                                                                
Representative   Pruitt   stated   that  changing   from   a                                                                    
misdemeanor approach  to citations  would mean all  it would                                                                    
take  was the  department's time  to write  down a  citation                                                                    
compared   to  going   through   a  process   of  filing   a                                                                    
misdemeanor.  He thought  changing  the  process meant  DLWD                                                                    
would  be  more  active  and   engaged  in  determining  and                                                                    
separating what was  what. He believed it  meant there would                                                                    
be  more people  concerned  with the  decision  made by  the                                                                    
department.                                                                                                                     
                                                                                                                                
Ms.  Kelly answered  that she  would love  for people  to be                                                                    
more  concerned with  the decisions  made by  the department                                                                    
and  for it  to be  more  of a  process in  the future.  She                                                                    
explained that  when DLWD went into  jurisdictional battles,                                                                    
individuals  involved followed  the  department's cease  and                                                                    
desist orders.  She understood the concern,  but stressed it                                                                    
was not  an area  the department  saw repeat  offenders. The                                                                    
repeat   violators  were   generally  people   operating  as                                                                    
plumbers  or electricians  with the  knowledge they  did not                                                                    
have  the  training  or  licensure.   She  added  the  issue                                                                    
typically  occurred  in  residential  and  small  commercial                                                                    
operations.                                                                                                                     
                                                                                                                                
3:23:46 PM                                                                                                                    
                                                                                                                                
Representative Tuck cited  ophthalmologists and optometrists                                                                    
as an  example of another  field where there was  probably a                                                                    
blending of some work  performances. He believed enforcement                                                                    
probably went back to code  licensing requirements. The bill                                                                    
did not interfere with requirements  to obtain a certificate                                                                    
of fitness  under existing statute. The  bill only pertained                                                                    
to a citation. He  understood that Representative Pruitt was                                                                    
concerned with the process. He  believed the committee would                                                                    
have  to  determine  whether  it  wanted  an  administrative                                                                    
process or  a court process. He  referenced public testimony                                                                    
from  the  House  Labor and  Commerce  Committee  where  the                                                                    
committee  had heard  from a  contractor who  had come  from                                                                    
Texas  to  retrofit numerous  Walmart  stores  and had  used                                                                    
electricians   who  were   not  licensed   in  Alaska.   The                                                                    
individuals  had performed  all of  the work  and there  was                                                                    
nothing  the  state could  do.  The  bill aimed  to  provide                                                                    
opportunities  to  get  after illegitimate  businesses  that                                                                    
were repeat offenders.                                                                                                          
                                                                                                                                
Representative  Pruitt   pointed  to   a  letter   from  the                                                                    
Association  of General  Contractors of  Alaska in  members'                                                                    
packets  (copy on  file). The  letter  highlighted that  the                                                                    
department  had made  some determination  of what  equipment                                                                    
operators   were   able   to   do   compared   to   licensed                                                                    
electricians.  It seemed  to him  it may  be the  department                                                                    
making  a determination  beyond  what the  code  may be  and                                                                    
injecting   itself  in   a  jurisdictional   discussion.  He                                                                    
reasoned  that if  the  department was  more  active in  the                                                                    
engagement,   it   could   potentially  be   determining   a                                                                    
jurisdictional  decision five  times per  day as  opposed to                                                                    
one time  per day. He  thought it would mean  the department                                                                    
would  have to  start  considering  certain regulations  and                                                                    
write new things that could start  to blur the lines and pit                                                                    
certain people against each  other. Whereas, previously, the                                                                    
gray area had been determined by the contractor.                                                                                
                                                                                                                                
Ms.  Kelly   replied  that  contractors  and   workers  were                                                                    
passionate  about their  jurisdiction.  However, DLWD  would                                                                    
not  increase  the  number  of   checks  of  the  number  of                                                                    
sanctions placed.  The nature  would change,  referenced the                                                                    
letter highlighted  by Representative Pruitt  and reiterated                                                                    
that those individuals followed  cease and desist orders and                                                                    
did  not  repeat  violations.  The  department  was  already                                                                    
having to  take those things  into consideration on  a daily                                                                    
basis. The  bill would  not change  jurisdiction or  how the                                                                    
department addressed jurisdiction.                                                                                              
                                                                                                                                
Representative Pruitt asked for the purpose of the bill.                                                                        
                                                                                                                                
Ms.   Kelly  responded   that  the   problem  was   not  the                                                                    
contractors  and  the  other contractors  deciding  who  was                                                                    
doing  the  work.  The  problem   was  the  "fly  by  night"                                                                    
individuals who  were operating illegitimate  businesses who                                                                    
were   presenting  themselves   as  licensed   plumbers  and                                                                    
electricians and  refusing to come into  compliance with the                                                                    
law.                                                                                                                            
                                                                                                                                
Representative Pruitt  thought the state would  want to send                                                                    
the  individuals to  the court  system.  Ms. Kelly  answered                                                                    
that  it  would be  great,  but  in  the past  the  district                                                                    
attorney  did   not  have  the  resources   to  dedicate  to                                                                    
something as small as a minor misdemeanor.                                                                                      
                                                                                                                                
Representative Pruitt  referenced a man in  a criminal case,                                                                    
(who  was  unrelated  to  the current  issue)  who  owed  $3                                                                    
million in fines to the court  system. If the concern was an                                                                    
unlicensed individual, he wondered  what would stop a person                                                                    
from racking  up thousands of  dollars in fines if  they did                                                                    
not have to go to court.                                                                                                        
                                                                                                                                
Ms. Kelly replied  that if a misdemeanor  was not effective,                                                                    
she was not sure that a  violation would be any more or less                                                                    
effective. The department believed  the violation would be a                                                                    
tool to fit the vast majority of cases.                                                                                         
                                                                                                                                
3:28:32 PM                                                                                                                    
                                                                                                                                
Representative Wilson  read from page  2, lines 20 to  21 of                                                                    
the bill related to issues  of citations: "If the department                                                                    
has probable cause  to believe that a person  has violated a                                                                    
provision of  this chapter or  a regulation  adopted..." She                                                                    
remarked  that the  bill  involved  setting regulation.  She                                                                    
wondered why the language read  "probable cause to believe."                                                                    
She  thought   that  based  on  the   scenario  provided  by                                                                    
Representative Tuck  that when  the department asked  to see                                                                    
someone's license, the individual either  had it or did not.                                                                    
She thought  the language  on page 2  was much  broader. She                                                                    
thought the  language meant the  department did not  have to                                                                    
ask for the person's license and could write a citation.                                                                        
                                                                                                                                
Representative Tuck  answered that a person  was supposed to                                                                    
carry their license,  but they may have left it  at home. He                                                                    
stated that  if a person  was not carrying their  license it                                                                    
was probable cause that they did not have a license.                                                                            
                                                                                                                                
Representative  Wilson asked  who a  certificate of  fitness                                                                    
was recorded with when an individual obtained the license.                                                                      
                                                                                                                                
Representative  Tuck answered  that DLWD  kept track  of who                                                                    
did or did not have a certificate of fitness.                                                                                   
                                                                                                                                
Representative Wilson  asked whether  the DLWD staff  in the                                                                    
field  checking the  license could  call  DLWD to  determine                                                                    
whether a  person had  a license instead  of writing  them a                                                                    
ticket.                                                                                                                         
                                                                                                                                
Representative  Tuck answered  that he  imagined the  answer                                                                    
was yes if the department  had the resources available to do                                                                    
so.                                                                                                                             
                                                                                                                                
Representative Wilson hoped the  resources were there before                                                                    
a ticket  was issued. She  was concerned about what  kind of                                                                    
regulation the department expected to  go on top of statute.                                                                    
She stated  the statute was clear  that a person had  or did                                                                    
not have a certificate.                                                                                                         
                                                                                                                                
Ms.  Kelly replied  that the  language had  been taken  from                                                                    
current  statute and  had been  moved  around to  add a  new                                                                    
section. The regulations  defined the scope of  each type of                                                                    
certificate  of fitness  (e.g.  trainee plumber,  journeyman                                                                    
plumber,  and  plumber  utility).  The  department  was  not                                                                    
intending to pass new regulations.  The language ensured the                                                                    
department  could hold  people accountable  for holding  the                                                                    
correct  certificate. She  explained  that if  a person  was                                                                    
doing electrical  work and held  a plumbing  certificate, it                                                                    
was in regulation, not statute.                                                                                                 
                                                                                                                                
Representative  Wilson  thought  it   seemed  odd.  She  was                                                                    
concerned the bill did not appear  to do just one thing. She                                                                    
did not want [the state] to  get involved in a fight between                                                                    
trade unions.                                                                                                                   
                                                                                                                                
HB  255  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster reviewed  the  schedule  for the  following                                                                    
week.                                                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:32:18 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:32 p.m.                                                                                          

Document Name Date/Time Subjects
HB 216 CS WORKDRAFT vL.pdf HFIN 3/16/2018 1:30:00 PM
HB 216
HB216 Support Letter from ANDVSA 3.6.2018.pdf HFIN 3/16/2018 1:30:00 PM
HB 216
HB216 Support Document Resolution from the Anchorage Assembly AR 2017-255 3.6.2018.pdf HFIN 3/16/2018 1:30:00 PM
HB 216
HB346 Explanation of Changes ver A to ver D 2.23.18.pdf HFIN 3/16/2018 1:30:00 PM
HB 346
HB346 Letters of Support 2.17.18.pdf HFIN 3/16/2018 1:30:00 PM
HB 346
HB346 Sponsor Statement.pdf HFIN 3/16/2018 1:30:00 PM
HB 346
HB346 Supporting Document - Dentist specialty numbers.pdf HFIN 3/16/2018 1:30:00 PM
HB 346
HB 217 CS RES Alaska Food Freedom Sponsor Statement 2-16-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 217 CS RES Supporting Document - Food Hub.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 217 CS RES Supporting Document - Wagner 2.9.18.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 217 CS Ver J Supporting Document Farm Bureau Support 2.8.18.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 217 Version O RES Sectional Analysis 2.20.18.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB217 CS RES Supporting Document - Tanana Valley Farmers Market 2.8.18.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB217 CS RES Supporting Document-Alaska Chamber.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 217 DEC letter with enclosures 03.09.2018.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 217 Alaska Food Freedom 1-31-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 217
HB 285 CS v U 3-15-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 285
HB 286 HB 285 vR HCS2 All Funds-Multi Year Agency Summary 3-16-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 285
HB 286
HB 286 HB 285 vR HCS2 GF Only-Multi Year Agency Summary 3-16-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 285
HB 286
HB 286 HB 285 vR HCS2 UGF Only-Multi Year Agency Summary 3-16-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 285
HB 286
HB 286 HB 285 vR LEGAL language comparison document 30-GH2564_O and 30-GH2564_R.pdf HFIN 3/16/2018 1:30:00 PM
HB 285
HB 286
HB 286 CS vR 3-16-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 286
HB 285 CS v U 3-15-18.pdf HFIN 3/16/2018 1:30:00 PM
HB 285
HB 255 Letters of Opposition.pdf HFIN 3/16/2018 1:30:00 PM
HB 255
HB 255 APAoppositionCSHB 255.pdf HFIN 3/16/2018 1:30:00 PM
HB 255