Legislature(2017 - 2018)ADAMS ROOM 519
03/16/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB285 || HB286 | |
| HB346 | |
| HB255 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 346 | TELECONFERENCED | |
| + | HB 217 | TELECONFERENCED | |
| += | HB 216 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 285 | TELECONFERENCED | |
| += | HB 286 | TELECONFERENCED | |
| += | HB 255 | TELECONFERENCED | |
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.