Legislature(1995 - 1996)
01/16/1996 03:03 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
January 16, 1996
3:03 p.m.
MEMBERS PRESENT
Representative Cynthia Toohey, Co-Chair
Representative Con Bunde, Co-Chair
Representative Gary Davis
Representative Norman Rokeberg
Representative Caren Robinson
Representative Tom Brice
Representative Al Vezey
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
* HOUSE BILL NO. 366
"An Act relating to marine safety training and education programs."
- HEARD AND HELD
* HOUSE BILL NO. 354
"An Act relating to a retirement incentive program for certain
employees of school districts under the teachers' retirement system
and the public employees' retirement system; and providing for an
effective date."
- HEARD AND HELD
* HOUSE BILL NO. 73
"An Act relating to licensure of manicurists."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 366
SHORT TITLE: MARINE SAFETY EDUCATION PROGRAMS
SPONSOR(S): REPRESENTATIVE(S) AUSTERMAN,Ivan
JRN-DATE JRN-PG ACTION
12/29/95 2362 (H) PREFILE RELEASED
01/08/96 2362 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2362 (H) HES, TRANSPORTATION, FINANCE
01/16/96 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 354
SHORT TITLE: RIP FOR SCHOOL DISTRICT EMPLOYEES
SPONSOR(S): REPRESENTATIVE(S) MACKIE
JRN-DATE JRN-PG ACTION
12/29/95 2359 (H) PREFILE RELEASED
01/08/96 2359 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2359 (H) HES, STATE AFFAIRS, FINANCE
01/16/96 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 73
SHORT TITLE: LICENSURE OF MANICURISTS
SPONSOR(S): REPRESENTATIVE(S) BRICE
JRN-DATE JRN-PG ACTION
01/06/95 39 (H) PREFILE RELEASED
01/16/95 39 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 39 (H) HES, L&C, FIN
01/16/96 (H) HES AT 03:00 PM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE ALAN AUSTERMAN
Alaska State Legislature
State Capitol Building, Room 434
Juneau, Alaska 99801-1182
Telephone: (907) 465-2487
POSITION STATEMENT: Gave Sponsor Statement for HB 366
PAUL GROSSI, Director
Division of Workers' Compensation
Department of Labor
P.O. Box 25512
Juneau, Alaska 99802-5512
Telephone: (907) 465-2790
POSITION STATEMENT: Answered questions on HB 366
CAROL BRUCE, Administrator
Fishermen's Fund Advisory & Appeals Council
Department of Labor
P.O. Box 21149
Juneau, Alaska 99802-1149
Telephone: (907) 465-2766
POSITION STATEMENT: Answered questions on HB 366
MARK JOHNSON, Chief
Community Health & Emergency Medical Services Section
Division of Public Health
Department of Health & Social Services
P.O. Box 110616
Juneau, Alaska 99811-0616
Telephone: (907) 465-3027
POSITION STATEMENT: Testified in support of HB 366
BETTY MARTIN, Comptroller
Treasury Division
Department of Revenue
P.O. Box 110405
Juneau, Alaska 99811-0405
Telephone: (907) 465-2350
POSITION STATEMENT: Testified on HB 366
JERRY DZUGAN, Director
Alaska Marine Safety Education Association
P.O. Box 2592
Sitka, Alaska 99835
Telephone: (907) 747-3287
POSITION STATEMENT: Testified in favor of HB 366
REPRESENTATIVE JERRY MACKIE
Alaska State Legislature
State Capitol Building, Room 404
Juneau, Alaska 99801-1182
Telephone: (907) 465-4925
POSITION STATEMENT: Sponsor of HB 354
DAVE GRAY, Legislative Assistant
to Representative Jerry Mackie
Alaska State Legislature
State Capitol Building, Room 404
Juneau, Alaska 99801-1182
Telephone: (907) 465-4925
POSITION STATEMENT: Provided information on HB 354
DAN BECK, Assistant Superintendent
Delta-Greely School District
P.O. Box 527
Delta Junction, Alaska 99737
Telephone: (907) 895-4658
POSITION STATEMENT: Testified in favor of HB 354
RICHARD SWARNER, Executive Director of
Business Management
Kenai Peninsula Borough School District
144 N. Binkley
Soldotna, Alaska 99669
Telephone: (907) 262-5846
POSITION STATEMENT: Testified in favor of HB 354
JAMES SIMEROTH
Kenai Peninsula Education Association
811 Auk Street
Kenai, Alaska 99611
Telephone: (907) 283-5177
POSITION STATEMENT: Testified in favor of HB 354
WAYNE BALLIET, Teacher
P.O. Box 1034
Bethel, Alaska 99559
Telephone: (907) 543-4149
POSITION STATEMENT: Commented on HB 354
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Commerce & Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
Telephone: (907) 465-2534
POSITION STATEMENT: Testified on HB 73
SARA EDDING, Owner
New Concepts Beauty School
3677 College Road
Fairbanks, Alaska 99709
Telephone: (907) 452-4684
POSITION STATEMENT: Testified in favor of HB 73
MARI ANN STOEFFEL, Member
Barbers and Hairdressers Board
1352 Pioneer Peek Drive
Wasilla, Alaska 99654
Telephone: (907) 376-1691
POSITION STATEMENT: Testified on HB 73
SUNDAE GRIFFIN
Nail Boutique
543 3rd Street, Suite 207
Fairbanks, Alaska 99701
Telephone: (907) 456-8415
POSITION STATEMENT: Testified on HB 73
SUNDAE RAGSDALE, Owner
Pretty Fingers
3rd Avenue, suite 109
Fairbanks, Alaska 99701
Telephone: (907) 456-8415
POSITION STATEMENT: Testified on HB 73
ACTION NARRATIVE
TAPE 96-1, SIDE A
Number 008
CO-CHAIR CON BUNDE called the House Health, Education and Social
Services Standing Committee to order at 3:03 p.m. Members present
at the call to order were Representatives Bunde, Toohey, G. Davis,
Robinson, and Brice. A quorum was present to conduct business. Co-
Chair Bunde announced the calendar was HB 366, Marine Safety
Education Programs; HB 354, Teacher Early Retirement; and HB 73,
Licensure of Manicurists.
CO-CHAIR BUNDE noted that Representative Vezey joined the meeting
at 3:04 p.m. and asked Representative Alan Austerman to present his
sponsor statement on HB 366.
HB 366 - MARINE SAFETY EDUCATION PROGRAMS
Number 120
REPRESENTATIVE ALAN AUSTERMAN, Prime Sponsor, said the Alaska
Marine Safety Education Association (AMSEA) was organized 10 years
ago and its primary purpose is to reduce the loss of life and
injuries in the Alaska marine environment by providing education
through a statewide network. This program has been funded
basically by federal grants since its inception, but those grants,
as most other grants, are drying up. Representative Austerman said
he is looking for another source of funding to continue what he
considers to be a very worthwhile program. The bottom line is that
AMSEA has been funded through grants in the neighborhood of
$100,000 to $250,000 over the 10-year period. The fishermen's fund
is being looked at to pick up the majority of the funds needed to
make the program go and grow. It is estimated that the fishermen's
fund generates approximately $310,000 in interest each year on the
revenues. He feels it is appropriate that some of those funds be
put into a safety program that is a direct benefit to those
fishermen who are paying into the fishermen's fund. He noted that
the fishermen's fund is generated by fishermen themselves through
license fees. Sixty percent of the revenues generated by the
licenses go into the fishermen's fund to take care of injuries to
fishermen and things like that. He thinks there would be
approximately $200,000 available each year and is asking for
$155,000 to fund this marine safety training and education program.
Representative Austerman informed committee members that a number
of letters supporting this program were included in their committee
packets. Additionally, Native organizations had submitted
information which contributed to the reduction of death rates in
the rural areas of this program. Representative Austerman
concluded that he wanted to see this program continue, so he
introduced this legislation on behalf of AMSEA in an attempt to
find a funding source.
CO-CHAIR BUNDE noted for the record that Representative Rokeberg
joined the meeting at 3:07 p.m.
Number 379
CO-CHAIR TOOHEY asked Representative Austerman why he was
requesting only 50 percent; was it because the other 50 percent
would come from the federal government? If so, she assumed that
eventually the federal government will tell the state of Alaska to
take care of it ourselves.
REPRESENTATIVE AUSTERMAN responded that currently the request was
for 50 percent of the interest earnings off the program. He felt
that $155,000 would continue to give AMSEA a good program and make
them very viable. He added AMSEA has initiated a dues structure of
their members which raises a little money, but he felt the $155,000
would fund the program.
CO-CHAIR TOOHEY clarified that she was assuming there was no longer
any grant money coming from the federal government for this
program.
REPRESENTATIVE AUSTERMAN pointed out there will be no further
federal funding as of July 1996.
Number 430
REPRESENTATIVE AL VEZEY said his recollection is the fishermen's
fund is a trust fund.
REPRESENTATIVE AUSTERMAN said he believed that was so.
REPRESENTATIVE VEZEY asked how it was funded.
REPRESENTATIVE AUSTERMAN replied from the fishermen's licenses,
like crew member licenses that are bought each year.
REPRESENTATIVE VEZEY asked if 100 percent of the revenues from the
fishermen's licenses go into the fishermen's fund?
REPRESENTATIVE AUSTERMAN said no, 60 percent goes into the
fishermen's fund and 40 percent goes into the general fund.
REPRESENTATIVE VEZEY asked if it was the policy to spend the
interest of the fund on programs?
REPRESENTATIVE AUSTERMAN replied yes.
REPRESENTATIVE VEZEY asked what these programs currently included.
REPRESENTATIVE AUSTERMAN explained it included fishermen disability
when there are accidents and that type of things. The remainder of
the money that is not used goes into the general fund.
REPRESENTATIVE VEZEY said that this issue involving safety
education and safety is a concern to most people; especially people
involved in industries that are subject to a high accident rate and
a serious accident rate. He mentioned that he is a member of the
construction industry and believed the insurance rates for that
industry are higher than for the fishing industry because of the
prevailing accident rates industrywide. They do not, however, have
a fund from the state to run their safety programs. As an employer
and employee, he spends thousands of dollars a year sending himself
and his employees through professional safety training programs;
some which have to be done on a biannual basis and others on a
triennial basis. Most of them do have to be renewed so the
certification and training is considered current. He explained he
does this not just because he has to in order to be legal, but as
an employer, he can't afford to have the accidents. He questioned
whether the fishing industry didn't feel that safety is worth the
employer's/owner's own money, because one accident costs far more
than would ever be spent on education during the life of a
business. The problem he sees is that of being put in the position
of safety training programs competing with disability programs and
the result would probably be a license increase for the fishermen.
Representative Vezey said he was just projecting ahead and asked
Representative Austerman for his comments.
REPRESENTATIVE AUSTERMAN said the fishermen's fund was put in place
before statehood, so he wasn't able to speak to why it was set in
place. He commented that the construction trade doesn't have a
program set up so they can draw off from the licensing systems that
fishermen have. Through his involvement with the industry, he has
found that fishermen do tend to pay their own way, whether it is
through increased taxes or increased licensing fees. He remarked
that if there wasn't a surplus already in this fund that has been
derived from the fishermen themselves, he would not have a problem
suggesting an increase in their license fees and he felt the
fishermen would be willing to do that. However, this fund already
exists and the fishermen are already paying in to it.
REPRESENTATIVE VEZEY referred to Representative Austerman's comment
that the fund was created before Statehood, and said it therefore
is exempt from the statutory prohibition on dedicated funds.
REPRESENTATIVE AUSTERMAN agreed that it is a dedicated fund.
REPRESENTATIVE VEZEY questioned if Representative Austerman was
saying that there was sufficient funds to meet the disability needs
that the program was designed to address and can carry an
additional burden of funding safety programs.
REPRESENTATIVE AUSTERMAN responded in the affirmative.
Number 710
CO-CHAIR BUNDE asked if the money would go into the general fund if
it wasn't used for marine safety.
REPRESENTATIVE AUSTERMAN responded yes, it would go into the
general fund.
CO-CHAIR BUNDE commented that while this doesn't require additional
revenue, it is spending general fund money.
REPRESENTATIVE AUSTERMAN agreed.
Number 724
CO-CHAIR BUNDE noted that it would be the policy of the House HESS
Committee to not pass bills out on the first hearing, unless there
is a special circumstance. The committee will hear the bill and
allow the public to respond before it is brought up for a second
hearing.
Number 759
REPRESENTATIVE AUSTERMAN pointed out there were individuals from
the Departments of Revenue and Labor in attendance who could answer
specific questions regarding total dollars and how the dollars
flow.
Number 778
REPRESENTATIVE GARY DAVIS commented on the large balance in the
fund, but with the number of injuries in the fishing industry, he
felt everything that is taken in could be spent on what this fund
was intended for, which was "to help defray minor medical costs
suffered by fishermen on the job." He asked if there was someone
who could explain what kind of cost this fund was helping to
defray.
CO-CHAIR BUNDE thanked Representative Austerman for his testimony
and introduced Paul Grossi of the Department of Labor.
PAUL GROSSI, Director, Division of Workers' Compensation,
Department of Labor, testified that he also acted as the chair of
the Fishermen's Fund Advisory Council. He introduced Carol Bruce,
the administrator of the fishermen's fund. He explained that the
corpus of the fund would not be touched by this legislation. The
fund was set up to pay claims from fishermen for medical costs.
There is a limit of $2500 but the fund can pay over that amount in
certain cases. It was his understanding that the proposed program
would actually be funded by the interest from the fishermen's fund.
The fund doesn't receive the interest; it goes into the general
fund. The ability of the fund to pay claims would not be affected
by this legislation.
Number 926
CO-CHAIR BUNDE wanted to clarify for his own understanding that the
fishermen's fund generates interest which goes into the general
fund and if there is an injury, the fisherman would establish a
claim which would basically be paid out of the general fund.
MR. GROSSI interjected that was not correct; it comes out of the
principal. He reiterated that the fund is funded through the
licenses, so the fund is replenished annually by the license fees.
CO-CHAIR TOOHEY asked if they promoted health insurance or mandated
health insurance or hospitalization. She asked if the fishermen's
fund was in lieu of that.
MR. GROSSI said that was correct and sometimes it supplemented
health insurance. If the fisherman has health insurance or some
type of boat insurance, a claim has to be made against that first.
This is basically a "safety net" for those fishermen who are not
covered.
CO-CHAIR TOOHEY exclaimed that $2500 doesn't pay for very much.
MR. GROSSI said that was true, but it does supplement and many
times the boat insurance has a $2500 deductible.
CO-CHAIR TOOHEY clarified that it was not like car insurance
whereby if you buy a car, you have to have insurance.
MR. GROSSI said no, that was not the case.
CO-CHAIR BUNDE was curious why they chose to fund injuries out of
the principal rather than out of the interest. He thought they
would want to keep the principal whole and just use the interest.
MR. GROSSI emphasized the fund is replenished yearly by the license
fees.
CO-CHAIR BUNDE interjected that it would be even larger, then.
MR. GROSSI said that was correct.
Number 1034
REPRESENTATIVE DAVIS asked if there were regulations or if it was
in statute as to what type of claims are allowed.
MR. GROSSI said it was in statute.
REPRESENTATIVE VEZEY said he was not familiar with the insurance
program for fishermen and asked Mr Grossi to describe it. He asked
if they were treated as employees, contractors, or what?
MR. GROSSI said they are exempt from workers' compensation; they
have no coverage under the workers' compensation program.
REPRESENTATIVE VEZEY commented that most employers are not exempt
from workers' compensation. In his case, it is a substantial
annual bill; equivalent to about an average of 20 percent of most
worker's wages. He said prior to a court decision, which he
couldn't recall the name, they got a lot of support from the
insurance industry in terms of safety programs. It was in their
interest as well as their client's interest, to send experts out in
the field to work with employers on safety programs. The court
decision said the insurance companies would then be liable if an
accident happened after that. Representative Vezey said the court
decision has not been reversed through statute yet.
MR. GROSSI said that was remedied last year through legislation.
He noted it was the Van Biene case and it was remedied under HB
237.
REPRESENTATIVE VEZEY said it sounded like there may be a serious
lack of insurance in the fishing industry.
Number 1169
CAROL BRUCE, Administrator, Fishermen's Fund Advisory & Appeals
Council, Department of Labor, testified that she understood that in
1951, or whenever the legislation came along, the fishermen
themselves lobbied the legislature to come forth with a program.
There is no federal law that requires you have to have insurance,
but under Federal Maritime Law, it states that if somebody is
injured on your boat, they can sue and collect for most any injury.
She explained that because of that, most boat owners get insurance.
However, there are older boats that are not eligible, and many of
the injuries are by the boat owner himself on the boat. Many of
them are very minor; the average payout is $500 to $700. She
reiterated that because of that Federal Maritime Law, the fishermen
lobbied the legislature. She thought the fishermen were under
Workers' Compensation but wanted it dropped because they were
purchasing very similar insurance under the Federal Maritime Law.
She stressed that a lot of the claims are the boat owners
themselves, and are very minor injuries. Ms. Bruce explained that
if the fishermen have personal insurance, the amount that is
applied to the deductible or the unpaid percentage is the type of
thing that is being paid from the fund. She said their funding
source is the licensing fee which is currently $18 for a resident
and $54 for a nonresident.
Number 1250
MR. GROSSI added that it could be that fishermen don't have enough
insurance, but at this point they basically lobbied to opt out of
Workers' Compensation and they were successful at that. So in
fact, they are not covered.
CO-CHAIR BUNDE observed that working for shares rather than wages
probably complicates the issue.
Number 1267
REPRESENTATIVE VEZEY asked if Mr. Grossi was familiar with the
Longshoremen and Harbor Worker's Act (LHWA).
MR. GROSSI responded that he couldn't answer detailed questions
about it, but he knew what it was.
REPRESENTATIVE VEZEY referred to Mr. Grossi's statement that he
thought fishermen were under workmens' comp at one time and asked
if it wasn't the LHWA that they were under.
MR. GROSSI replied that fishermen are not covered under the
Longshoremen Act, which is for stevedores and similar people. He
stated there is the Jones Act and then there is admiralty law. As
he understood it, there are some provisions under the Jones Act
that cover seamen, but through common law, admiralty law, there are
rights to sue the boat owner or the boat itself for injuries.
REPRESENTATIVE VEZEY said as an employer, if he put an individual
on the water or over the water, he had to pick up the LHWA coverage
in addition to workers' comp. He commented that it looks like
somebody has been exempted very specifically from having to carry
insurance.
MR. GROSSI said that was true. He didn't really have an answer,
but noted there are some exemptions in the law, whether they are
right or wrong, they do exist.
Number 1351
REPRESENTATIVE TOM BRICE asked if tug boats are exempt from
workers' comp.
MR. GROSSI responded yes, they would probably be under a maritime
law.
MS. BRUCE added not under this program; (indisc.) under the
fishermen's fund.
MR. GROSSI said he misunderstood Representative Brice's question.
REPRESENTATIVE BRICE commented that Ms. Bruce had followed up to
find out if it would be appropriate to include some type of
educational training for people going to sea, not just commercial
fishing vessels.
MR. GROSSI said he didn't know if that would be appropriate. The
fund only covers injuries for commercial fishermen.
REPRESENTATIVE BRICE asked how the fisheries industry compared to
other high risk industries relative to injuries.
MR. GROSSI said he thought that it was pretty high.
REPRESENTATIVE BRICE asked if it was the highest.
MR. GROSSI stated it was comparable to the timber industry.
REPRESENTATIVE AUSTERMAN said the AMSEA program is a statewide
program that reaches everybody including school kids. It is not
just for fishermen.
Number 1491
MARK JOHNSON, Chief, Community Health & Emergency Medical Services
Section, Division of Public Health, Department of Health & Social
Services, addressed the question of injuries and fatalities in the
commercial fishing industry. He said the department did not have
a position on the source of funding, but wanted to illustrate the
problem that he referred to as soft funding, was an issue they have
tried to deal with for years. He stated that commercial fishing is
one of the most dangerous occupations in Alaska and throughout the
United States. The fatality rate has been well documented over
several years and coincident with the training done by the Alaska
Marine Safety Education Association over the last several years,
the fatality rate has dropped. He said Mr. Ron Perkins of the
Alaska Native Health Service had recently done a study which showed
a statistically significant correlation between individuals who had
gone through this training and a reduction in fatalities in the
industry. That is pretty solid evidence that the training has been
a contributor to the reduction. He added that the new Coast Guard
regulations which required more safety equipment, as well as
training on various types of vessels, had contributed as well. Mr.
Johnson said they have tried to help AMSEA get funding through a
variety of sources. Several years ago, they helped AMSEA get a
National Marine Fisheries grant and helped them get money from the
CDC, but that has all been temporary short-term money. He
expressed the importance of trying to find a way to continue this
program and added the department could provide additional
information on the non-fatal injuries for the committee.
REPRESENTATIVE BRICE commented he would like the information
referred to by Mr. Johnson on the non-fatal injuries. He asked if
they had anything available on fatal injuries?
MR. JOHNSON noted the fatal injuries have been reduced
significantly and has been correlated with the training that has
been done.
Number 1609
CO-CHAIR BUNDE noted his questions should not reflect with a
negative attitude for the need for water safety training in Alaska.
He questioned the accuracy of a zero fiscal note since the money
generated from the fishermen's fund goes into the general fund, but
then money is taken back out. Isn't that indeed spending state
revenues.
Number 1638
BETTY MARTIN, Comptroller, Treasury Division, Department of
Revenue, said they had questioned that also and had footnoted that
while the current interest amount, which they estimate is
approximately $400,000 a year assuming a 5 percent rate on the
balance in the fund now and half of that would be $200,000, the
bill did not address which department of agency would be the
granting agency. She said there would be a $200,000 funding
source, but in terms of designating that to a specific department,
the Department of Revenue was unable to do that with the
information they were given.
CO-CHAIR BUNDE said the bottom line is this bill would spend
$200,000 of state revenues.
MS. MARTIN interjected if that amount was appropriated. From the
Department of Revenue's standpoint, that is the amount of money
currently being credited to the general fund, and would continue to
credit to the general fund, but then an appropriation up to that
amount would occur on some agency's budget. They assumed the
Department of Revenue would not supervise or manage a program like
this, but they would make sure (indisc.) moved back over to whoever
was designated.
CO-CHAIR BUNDE noted it was not new money, but it was indeed state
money.
Number 1694
JERRY DZUGAN, Director, Alaska Marine Safety Education Association,
testified via teleconference from Sitka. He referred to the
question regarding the fatality rate in the Alaska fishing industry
as compared to other industries and said he could give the
committee those statistics. The U.S. industrial fatality rate
across the United States is 7 fatalities per 100,000 workers. The
Alaska industry fatality rate across the board is 30 per 100,000
workers and the Alaska fishing industry fatality rate is 195 per
100,000 workers. At least until recently, that had been the
highest risk occupation in the state of Alaska; higher than loggers
and higher than pilots, which people traditionally think of as high
risk occupations.
REPRESENTATIVE VEZEY said he was familiar with the statistics, but
wanted to clarify that the overall Alaska rate includes fishing and
the air transport industry which accounts for about 75 percent of
those fatalities. If you eliminate those fatalities, the Alaska
industry rate is slightly below the national average.
CO-CHAIR BUNDE asked Representative Vezey is he was saying that
these fishermen were being killed flying to and from work.
REPRESENTATIVE VEZEY pointed out that happens, too.
CO-CHAIR BUNDE said he didn't understand Representative Vezey's
statement.
REPRESENTATIVE VEZEY said the two sources of highest work related
fatalities in Alaska are the fishing industry and the aviation
industry. If those two industries are eliminated from Alaska's
industrial fatalities, then Alaska's industrial fatality rate is
slightly below the national average.
MR. DZUGAN emphasized that AMSEA does a lot more training than just
fishermen. Of the 7000 people trained last year, 2000 were
fishermen and about 3700 were children and although it is called
the marine safety training program, it really includes all waters
of the state.
CO-CHAIR BUNDE said he was pleased to hear that and added
obviously, this state needs a lot of water safety training.
Number 1812
REPRESENTATIVE CAREN ROBINSON asked Mr. Dzugan how someone would go
about getting training in their community and what does the
training entail.
MR. DZUGAN responded that AMSEA has different people who train
around the state and some of those people may be known in the
community. They also teach through the Native Health Service, the
university and other places. Mr. Dzugan added that their main
office in Sitka can assist in putting you in contact with a person
in the community. Referring to the second part of Representative
Robinson's question, Mr. Dzugan said it depends on the needs of the
people requesting the training. One to two hour workshops are
available, as well as 7-day instructor courses. There is a
required 18-hour instructor course for fishermen that includes use
of survival equipment, life rafts, fire fighting and actually
conducting a survival safety drill on board the boat.
CO-CHAIR BUNDE said if there was no further testimony, HB 366 would
be held for an additional hearing.
HB 354 - RIP FOR SCHOOL DISTRICT EMPLOYEES
Number 1923
CO-CHAIR BUNDE said the next bill up for discussion was HB 354, and
asked Representative Mackie to give his sponsor statement.
REPRESENTATIVE JERRY MACKIE, Sponsor of HB 354, read the following
sponsor statement:
"I introduced HB 354 in response to the desire of many Alaskan
school districts to achieve operational cost savings through a
retirement incentive program. The program allows school districts
to offer early retirement to teachers at the higher end of the
district's salary scale. The savings would result from the hiring
of replacement teachers that are younger and lower on the pay
range.
"The proposed early retirement program is similar to programs
established for all public employees beginning in 1986 and ending
in 1990. In November 1991 legislative audit estimated that the
1989-90 retirement incentive program saved approximately $23
million on the early retirement of 1,764 employees taking advantage
of that program. In the 1986-87 program, 2,327 employees
participated achieving a savings of over $73 million. It should be
noted that retirement incentive programs are commonly used by
business corporations to attain a more efficient and economic
operation. Those numbers I quoted were the overall retirement
incentive program that was offered to all state employees and this
is geared directly to school districts.
"The program established in HB 354 offers three years of service
credited to eligible schools employees facing retirement. The
offer is an inducement to employees near or at retirement
eligibility to terminate their services. The resulting vacancies
allow employers to achieve savings by filling positions with
persons of lower step and pay range, and down classing positions,
or keeping positions vacant. A key provision requires agencies to
show on a case by case basis that a three year credited service
award would result in a net personnel services cost savings. It
should be stressed that participation in the program is completely
optional for either the employer or the employee.
"The three year credit must be applied in the following order:
1. To meet the age or service required for eligibility for
normal retirement;
2. to meet the age required for early retirement;
3. to reduce the actuarial adjustment required for early
retirement; and
4. as years of credited service for calculating retirement
benefits.
"An employee awarded the benefit is required to contribute to the
retirement system the amount they would have paid in had they
continued working for those three years. So that would be an up-
front contribution by the teacher, ahead of time and that was to
deal with concerns about the actuarial of the retirement fund
remaining sound. And so that would be a requirement for that to
happen. The employer's cost is the difference between the
employee's contribution and the full actuarial cost of the three
year incentive. Thus, the TRS or PERS retirement system is fully
compensated for the effects of an individual's early termination of
service. I know that concerns in the past have been raised about
what it does to the retirement system and to the fund if a bunch of
people are allowed to retire early and there wasn't substantial
contribution to make up for that. That's not the case in this
bill.
"House Bill 354 also has a sunset clause that terminates the
incentive program on July 1, 1998. So, this (indisc.-coughing)
window of opportunity for districts to participate and they either
have to get on board or it goes away.
"I believe this legislature has to make a serious effort to address
the state's continuing revenue shortfall and the need for long term
financial stability. If education is faced with reduced or frozen
budget funding levels, which I think is probably going to be the
case this year, then we have to give the school districts the tools
to make the necessary adjustments. Otherwise, the education of
Alaska's youth will directly suffer."
REPRESENTATIVE MACKIE continued that he looks at this as one of the
tools that school districts could use. This is an issue he has
worked on for a number of years, but primarily Senator Duncan and
the other body have been responsible for offering the previous
retirement programs and they continue to work with the
Administration. He said he has taken a recent interest in the
programs, and the school districts he has talked to certainly
welcome this as an option. He doesn't believe in mandating them,
so this would be an optional thing for either the school district
or the teacher to exercise. He believes that every school district
welcomes the opportunity to be able to have this as a tool. He
said he recently read that the Juneau School District could save as
much as $3 million over the next several years because of a RIP.
One of the smaller of the 12 school districts in Representative
Mackie's area indicated to him they have 8 teachers, all in the
$50,000 to $53,000 range, who would fit this criteria. These are
teachers who have been teaching for about 17 or 18 years. This
school district could realize a $340,000 savings over a three-year
period, by allowing those senior teachers to retire, if they opted
to do it, and bring in new lower cost teachers to fill those
vacancies. To a school district who has an annual budget of $1.5
million or $1.6 million, $340,000 is an incredible amount of
savings. In some cases, 10 percent to 20 percent of their entire
budget could be realized in savings.
Number 2148
REPRESENTATIVE MACKIE said money is tight and he didn't anticipate
the instructional unit value would be raised this year. He felt
the legislature would not be in a position to direct more money at
education. It would be in everyone's best interest to offer the
school districts some additional tools to save money. He
emphasized that the school districts must show there would be a
financial savings to the district, which would be certified by the
Department of Administration and would be closely monitored. He
felt it would be a win/win situation all the way around.
CO-CHAIR BUNDE referred to the cost savings realized by the
retirement of a teacher making $50,000 a year and replaced with a
teacher making $25,000 and asked if Representative Mackie had given
any thought to putting more specifications in the bill so a $50,000
a year teacher isn't replaced with a $40,000 a year teacher.
REPRESENTATIVE MACKIE responded he was reluctant to do anything
like that because that gets into micromanagement of school
districts. He is a firm believer that a school board is elected in
these communities to make those types of decisions. The spirit
behind this is not to just allow teachers to retire and then fill
the vacancy with another teacher at a similar range. The school
district would need to demonstrate very clearly they have a program
and what their starting range is, which he thinks may be in the
range of $30,000 to $32,000. On the other hand, the teachers who
are retiring are in the $50,000 to $60,000 range. His best guess
is the potential savings to a school district could be anywhere
from $25,000 to $35,000 per teacher. He noted that in a large
school district, the savings could be incredible.
Number 2240
CO-CHAIR BUNDE asked Representative Mackie to comment further on
the demonstrated savings that would have to be shown by the
districts.
REPRESENTATIVE MACKIE said he believed the savings had to be
certified by the Department of Administration.
Number 2259
DAVE GRAY, Legislative Assistant to Representative Mackie, referred
to page 2, subsection (c), line 10, which establishes the criteria
for the approval of a school district's early retirement plan. One
of the requirements is that a savings would have to be demonstrated
to the administrator.
CO-CHAIR BUNDE asked if administrator in this case referred to the
Commissioner of Education?
REPRESENTATIVE MACKIE responded it would be the administrator of
the retirement fund. The savings would need to be certified before
the plan could be approved. He added there would be no incentive
for a school district, unless it does save money.
Number 2309
CO-CHAIR BUNDE asked Representative Mackie how this bill differs
from previous legislation that was introduced.
REPRESENTATIVE MACKIE said this section was adopted by the House
last year and put into HB 217, and vetoed by the Governor. So this
bill in its entirely was once approved by the House in the form of
an amendment, and passed by the House and the Senate. This has
separated it out from the teacher tenure bill. The bill that has
been offered by the Governor, the so-called consensus bill, and
companion legislation to HB 217 which is in the other body, does
not include this provision. The only way this can be addressed is
to have it in the form of legislation.
TAPE 96-1, SIDE B
Number 005
REPRESENTATIVE MACKIE said he made a conscious decision to not get
into the overall debate about the Retirement Incentive Program. He
is not the person who can answer all the questions about it. The
Governor has put that on the table and it will be dealt with during
the legislative session. He noted if there was one thing he could
do for the school districts he represents, as well as school
districts across the state, it would be to provide them this tool.
CO-CHAIR TOOHEY referred to teachers who are ready for retirement,
but have a three-year contract that has been in place for one year,
and asked does that mean the school district would have to wait two
years. Also, what affect will this RIP bill have on new teachers
going in under a negotiated contract. She asked if there is any
way to lower the base entry to the incoming teacher.
REPRESENTATIVE MACKIE asked if Representative Toohey was referring
to the overall negotiated pay range and salary scale.
CO-CHAIR TOOHEY replied yes.
REPRESENTATIVE MACKIE said he didn't know if this bill would have
an effect on that. He noted that usually when something is
bargained in good faith, it is binding.
CO-CHAIR TOOHEY questioned if this legislation would be immaterial
then to school districts who have a two year contract left.
REPRESENTATIVE MACKIE thought this would only deal with the
individual teacher. If the individual teacher and the school
district come to an agreement on the retirement, then a new teacher
could be brought in at whatever range the negotiated contract
stated as the starting point. He commented that the starting range
is no where near the range of a teacher who has been there for 18
or 19 years.
Number 037
MR. GRAY referred to page 5, Section 6, Program Changes, which
essentially states this is a one-shot benefit that the legislature
is offering and it doesn't get involved in any other thing. It
also gives the legislature the right to change the program, so he
thought it would be apart from any contract between the district
and its employees.
CO-CHAIR BUNDE felt it was safe to say the salary of a new hire
would not be affected by this legislation. He asked Representative
Mackie to address the comment he has heard that this isn't really
early retirement, it's padded retirement for those teachers who
already have their 20 years in. Also, he asked if Representative
Mackie had considered limiting the bill to just those teachers who
don't have their 20 years in or aren't 55 years of age yet.
REPRESENTATIVE MACKIE said he hadn't considered that and he would
need to look into it. He noted that not all teachers retire after
20 years. The whole purpose is to get higher paid staff off the
books and get lower paid staff on. It is critical in some of the
school districts. This would reserve the local decision making
process at the local level, where he believes it should be. This
legislation just provides the school districts the opportunity and
also protects the retirement fund. He noted the Majority Leader
had in previous years questioned the overall retirement incentive
program because of the effect it had on the actuarial.
Representative Mackie said he really didn't understand the bigger
picture of it, but he certainly understood this is very simple in
that the money is put up front and the fund remains sound.
Number 136
DAN BECK, Assistant Superintendent, Delta/Greeley School District,
testified via teleconference from Delta Junction. He commented
that Representative Mackie had given a good picture of the fiscal
impact this legislation would have on school districts. In looking
at the possibilities in their school district, he believes they
could save a considerable amount of money, even with hiring
teachers back that weren't at the beginning step. School district
salary schedules typically run years of experience along with
education. Mr. Beck said they can hire back what they project as
master's degree with five years experience and save approximately
$10,000 a year per teacher at that range. That allows a school
district to hire some teachers in at a zero range or someone with
a master's degree and 36 hours above that. That leaves a wide
range. He pointed out there had been considerable savings the two
times they participated in the retirement incentive program. Mr.
Beck said he has a different purpose for wanting the bill to pass;
that is the Delta/Greeley School District. The impact of the Fort
Greeley base realignment is going to have a severe impact on their
population. In the next two years they are estimating a reduction
of as much as 50 percent in student enrollment, which means
probably 40 to 50 teaching positions in the district. This year
with the notification they received, all their non-tenured
(indisc.) which is about five teachers and about three or four
tenured teachers will be let go. Since seniority plays the biggest
role in who leaves, it is the lower paid teachers that are leaving.
MR. BECK said he thought there was a second factor; that being in
a healthy school, you have a mix of staff. Older teachers who have
been there a long time provide a lot of stability and leadership.
Motivation is also factor with new teachers coming in. He feels
that a mix of teachers is needed. He reiterated the base
realignment is going to be devastating and they really need help in
their district. The average salary is going to push $50,000
because the only teachers who are going to be left are the ones who
are at the top of the salary schedule. He urged the committee to
take action as quickly as possible to give the schools districts
some relief.
Number 243
CO-CHAIR BUNDE said this is not a new issue; it has been debated
for several years. He asked Mr. Beck to comment on the fact that
there are some people who want to hire the most qualified and the
most experienced teachers; yet getting rid of the most qualified
and most experienced people flies in the face of that.
MR. BECK said they very rarely hire people at the upper end of the
salary schedule. They capped the amount of experience they will
credit at five years. Therefore, a teacher who has taught for 20
years will come in at the same range as a fifth year teacher with
their school district. He reiterated the average of the teachers
hired by the Delta-Greeley School District is a master's degree
with five years experience, which is in the bottom third of the
salary schedule.
Number 286
REPRESENTATIVE GARY DAVIS referred to the organizational unit on
page 2, line 2, and said he didn't know what that would be.
MR. BECK said that would refer to the district being able to
disallow or create an organizational unit. It would allow the
district to tailor how they use the retirement incentive program.
Number 338
REPRESENTATIVE MACKIE asked if Mr. Beck had identified how many
potential participants in their school district would fit the
criteria under this program if it was offered by the legislature.
MR. BECK said he believed about 20 to 25 teachers in their district
by the sunset in 1998.
REPRESENTATIVE MACKIE asked if he had figured out what the average
savings per teacher would be.
MR. BECK replied they have not broken it down by year because it
changes. He guessed it would be somewhere around the $15,000 a
year range per slot.
REPRESENTATIVE MACKIE said that would be in excess of $300,000 to
$400,000.
MR. BECK responded in the affirmative.
CO-CHAIR BUNDE asked Mr. Beck if he had some way of knowing how
many people from this potential pool of 20 to 25 would indicate
some active interest in using the program.
MR. BECK said he thought they had 8 to 10 people that are very
serious about participating if the districts had (indisc.) and the
district adopts it.
CO-CHAIR BUNDE asked how many of the 8 to 10 people currently have
more than 20 years.
MR. BECK said he thought only three of their teachers currently
have 20 years or about 20 years.
Number 405
RICHARD SWARNER, Executive Director of Business Management, Kenai
Peninsula Borough School District, wanted to go on record as being
in favor of the legislation. He said his reason may be selfish,
but as previously outlined, they would see potential cost savings
as a result of the legislation. He assured committee members that
the Kenai Peninsula Borough School District's budget is becoming
extremely tight, so they welcomed any tool that could be made
available. Mr. Swarner referred to the previous comments about a
potential savings of 20 percent, and said the Kenai Peninsula
Borough School District would not realize that kind of savings. He
noted they have not only participated in the past state program,
but they had a similar type program within the district. They
experienced a savings of about $1.5 million from their
participation in the state retirement incentive program about seven
or eight years ago and anticipate a similar savings under this
program on a yearly basis. While there is the reduction in salary,
there is also the increased payoff in order to participate in the
program. He said the impact on their budget would be about 2.5
percent to 3 percent. Three percent would be a $1.5 million
savings. He said while it is not 20 percent, 2.5 percent or 3
percent of a $72 million budget is a significant amount of money.
He stated one of the drawbacks is the mix of teachers and they had
some reservations about that. He said quite frankly, from an
operational standpoint, the Kenai Peninsula Borough School District
is coming up against it as far as making things balance, and trying
to offer an educational program that is meaningful to their
students.
Number 540
CO-CHAIR BUNDE referred to the district retirement incentive
program and asked if Mr. Swarner could comment on how much Kenai
offered to encourage early retirement and what the net savings was.
MR. SWARNER said it was similar to what was offered in Anchorage
with a $10,000 incentive. Based on that, their savings was about
$670,000 the first year.
CO-CHAIR BUNDE asked how many people participated.
MR. SWARNER responded 32.
REPRESENTATIVE MACKIE wanted to clarify that he had suggested that
a potential as high as 20 percent could be realized in the Hoonah
district; he did not want it to imply that it would be an average,
because it could be up or down depending on the teachers. He noted
that the Hoonah School District has an extraordinary high number of
teachers at the high end of the salary schedule. For larger
districts, he thought the figures pointed out by Mr. Swarner were
more realistic.
Number 662
MR. SWARNER noted that 50 percent of the teachers in the Kenai
Peninsula Borough School District are at the top level of the
salary schedule. He explained the salary schedule has a B column
with a B+18 and a B+36. Some of the teachers are at the bottom of
each one of those columns; they are not all in the far right B+90
column. He noted there is somewhere between 35 to 50 people in his
district who would participate.
CO-CHAIR BUNDE referred to B+90 and pointed out the teachers'
salary schedule goes down per years of experience and then it goes
across per college credit. Thus a B+90 is a bachelor's plus an
additional 90 credits.
REPRESENTATIVE VEZEY asked Mr. Swarner if he knew what the Kenai
Peninsula Borough School District's past contribution rate was.
MR. SWARNER said he didn't have that figure. The last figure they
were able to obtain from the state was when they participated in
the last retirement incentive program offered by the state.
Number 721
JAMES SIMEROTH, Kenai Peninsula Education Association, testified in
favor of HB 354. The Kenai Peninsula Education Association
represents the teachers in the Kenai Peninsula Borough School
District. He said this program is needed to free up funds for
operating their school and pointed out they have one of the leaner
budgets in the state. They serve a lot of people, spread out over
a large area with 37 schools and are funded at the same rate as
some districts that are more consolidated. He noted that currently
there is a committee consisting of people from the community,
school district employees, and school administrators working on
budget planning. There is a feeling of desperation in trying to
find areas to cut to make up for increased costs. The need for a
way to free up funds for the school district is very clear. Mr.
Simeroth said while this legislation does not speak to it, it is
his hope there will be some state employee retirement incentive
program to accompany this in order to free up money in other areas
of state government.
CO-CHAIR BUNDE asked if there were additional people to testify.
Seeing none, he reminded committee members that since this was the
first hearing, further testimony would be taken in a later meeting.
REPRESENTATIVE VEZEY said last year the legislature voted to give
the teachers a retirement incentive program, but there were other
aspects that went with the bill (indisc.). He asked if
Representative Mackie didn't think there should be some of those
other aspects in this legislation.
REPRESENTATIVE MACKIE said if the Governor had included this in his
legislation, this bill wouldn't have been necessary. Also, if the
companion bill dealing with the tenure issue in the Senate had
included this, Representative Mackie wouldn't have had to introduce
the bill. He stressed he thinks this is one of the most important
things and one of the best things the legislature can do for school
districts. He reminded committee members it was his amendment on
the floor, supported by committee members and others, that put it
into the bill last year, so this was not a new issue to him. He
said it remains to be seen what the legislature will do with the
overall retirement incentive program, the tenure bill, and any
other bills regarding the education system. This is just one piece
of it, but one of the most important. He stated when that bill was
vetoed by the Governor, this program was vetoed along with it and
he is trying to resurrect that idea.
REPRESENTATIVE VEZEY said there have been many retirement incentive
bills since 1986; all of which have been structured very similar to
this legislation, if not almost verbatim. There are a lot of
different ways that a RIP bill can be structured. He asked why not
just offer a cash bonus, fund it up front for retirement and not
fool with their retirement fund.
REPRESENTATIVE MACKIE said he believed that would work with
teachers who have achieved the required number of years for
retirement and thought that is what happens to school districts
that offer the cash incentive. Unless an individual has worked the
required number of years and is within that three year window,
Representative Mackie said he didn't know how they could retire
someone if they haven't met the requirements of the retirement
system. This would allow for that to happen.
REPRESENTATIVE VEZEY recollected that under TERS, a teacher could
retire and begin to collect benefits immediately after 20 years of
service regardless of age. He asked Representative Mackie if he
was referring to individuals who would typically be in their early
40s.
REPRESENTATIVE MACKIE said that would depend on when the individual
got started.
REPRESENTATIVE VEZEY said we're talking about bringing people on
and being a recipient of the retirement program at some earlier
period of time than they were planning on and the actuaries were
planning on; why not just offer people a bonus to retire and not
risk messing with the retirement pool. He said if his recollection
of the TERS program is correct, they don't lose any benefits; they
are fully vested, but they just can't start collecting until a
certain age.
REPRESENTATIVE MACKIE said he thinks it has worked with teachers
who have qualified to start receiving retirement benefits. He
thought the $10,000 bonus offered by the Kenai Peninsula Borough
School District, had similarly been offered in Juneau and other
areas. He said that works for a teacher who can immediately start
collecting retirement benefits, but he didn't think $10,000 would
get anyone to retire ahead of time, or to give up their job if they
haven't met the requirements to start receiving benefits. He
reiterated he felt the bonus program only works with those teachers
who are beyond the 20 years.
REPRESENTATIVE VEZEY asked Representative Mackie if he thought this
incentive should be offered to teachers who have worked for 20
years or more, are already eligible for retirement, and could begin
to receive the benefits immediately.
REPRESENTATIVE MACKIE said he didn't know; he hadn't really thought
it through.
REPRESENTATIVE VEZEY said he could be mistaken, but he thought that
under the TERS program, a teacher with 20 years of service who is
allowed to buy in three years would accrue more additional benefits
than a teacher with 17 years of service.
REPRESENTATIVE MACKIE said his first thought is that he would be
reluctant to discriminate against teachers that have 20 or 21 years
of service, when we are going to offer it to teachers who have been
there 17, 18 or 19 years. He pointed out that the whole emphasis
behind this bill is to get higher range teachers to retire and
bring in teachers at a lower range. He thought the program would
be offered to teachers whether they had been there 18, 19, 20, 21
or 22 years.
Number 1095
REPRESENTATIVE VEZEY asked Representative Mackie to comment on the
possibility of including the authority of the school board to force
a retirement.
REPRESENTATIVE MACKIE said he didn't think he could personally
support that because the whole idea behind this legislation is it
is optional, not a mandate and allows both the district and the
school teacher to make the decision jointly. He questioned whether
they could force someone to retire. He referred to Representative
Vezey's question about why this bill did not include the other
items, and said he thought the Governor and other legislators were
working on that particular issue. He said every school district in
the state, school board association, teacher's organizations, and
PTAs support this particular concept. Representative Mackie
suggested that a possible amendment to the bill would be to a
certification of savings by the Department of Administration. It
could be reviewed and certified with the commissioner's approval if
the committee felt they wanted the additional layer of protection.
He would not be adverse to that amendment.
Number 1218
WAYNE BALLIET, Teacher, testified via teleconference from Bethel,
and asked if there was any possibility this bill could be extended
over a two-year period, or to the summer of 1998. He said that
would extend the window period for people to make decisions
regarding retirement.
REPRESENTATIVE MACKIE said anything is possible, but questioned why
that would make the bill better. He felt there needed to be a
deadline.
MR. BALLIET commented he had interpreted it as applying for
retirement up until December. For a teacher that would mean ending
the contract and retiring in the summer of 1997. He asked if it
was possible to extend it in case a teacher wanted to retire in
1998.
REPRESENTATIVE MACKIE referred to Section 3 which authorizes a
district to adopt a retirement incentive plan to begin June 30 and
ending December 31, 1996, and said that is when the window of
opportunity would take place for a teacher to retire at the end of
that school year. He reiterated there has to be a window of
opportunity that opens and closes, rather than having an ongoing
open retirement incentive program. The short window of opportunity
was a decision made in drafting the bill and is much like the past
retirement incentive programs.
MR. BALLIET said he understood if it couldn't be extended.
REPRESENTATIVE MACKIE said he was not suggesting that it couldn't
be extended, but that is normally why the window of opportunity is
short. He added that if Mr. Balliet wanted to send him a letter
explaining why it should be extended, he would be happy to consider
it.
Number 1391
CO-CHAIR BUNDE commented that if there wasn't an end to it, it
would become a 17- or 18-year retirement program rather than a 20-
year retirement program. He said this bill would be heard again by
the committee and thanked everyone for testifying.
HB 73 - LICENSURE OF MANICURISTS
Number 1458
CO-CHAIR BUNDE passed the gavel to CO-CHAIR TOOHEY for House Bill
73, the Licensure of Manicurists.
CO-CHAIR TOOHEY asked Representative Tom Brice to give his sponsor
statement.
REPRESENTATIVE BRICE said the genesis of this bill came about while
talking with the owner of the hair salon/school in Fairbanks where
he normally gets his hair cut. After briefly researching the
issue, it was discovered that only eight other states have no
licensing requirement for manicurists. The requirements contained
in the legislation are similar to other states and the minimum
number of hours was derived by taking a median of what other states
required. He said personally, he has not had bad results with
manicurists; however, there were some public health issues brought
to his attention which he felt needed to be addressed.
CO-CHAIR TOOHEY asked Catherine Reardon to come forward to
testify.
Number 1629
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce & Economic Development, stated this bill
adds another professional to those already currently regulated by
the Barbers and Hairdressers Board. She noted that manicures
includes pedicures in this legislation. HB 73 would handle
manicurists licensing basically the same way as barber and
hairdresser licensing. That means that schools, instructors and
shops would be licensed and students would have to complete the
number of hours of study that is determined by the board in
regulation, as well as take an exam which she anticipates will be
a written national exam and probably a practical exam, although
that is not defined in the legislation and would be left to the
board to determine. After the exam and the study, there would be
a 250-hour apprenticeship at a licensed shop. The residents of
communities with a population under 1,000 are exempted, as they are
from the barber and hairdressing requirements. It would be a Class
B misdemeanor to work as a manicurists without being licensed.
Number 1743
MS. REARDON said there are no good statistics as to how many
manicurists there are in the state since the department does not
currently license manicurists. She advised committee members the
department's fiscal note was based on guesswork and may be adjusted
as she obtains additional information. The fiscal note reflects
predominately exam costs. Since it is a national exam, she
understood that the department would collect the money from the
applicants and then pay the exam service $55 per applicant. She
referred to the $36,000 contractual on the fiscal note and said 90
percent of that is pass through money that would be sent to the
national exam service. The balance of the contractual money is to
pay for exam proctors and exam sites. The assumption was made
would be 590 manicurists. That number was determined by a review
of the FY 95 business licenses which revealed 295 businesses
licensed as a manicure/pedicure salon. The 295 was doubled
inasmuch as the department estimated an average of two licensees
per salon. Also, there could be full service hairdressing salons
that have manicurists, which were not factored in.
Number 1868
MS. REARDON said her testimony assumed the legislature or committee
would include some type of grandfathering provision, which could be
included in the amendment. For that reason, she assumed the 590
manicurists would take the exam and get grandfathered in during FY
97, which would increase the number of exams for that fiscal year.
The department would have to pay the national service for more
exams that year which explains why the fiscal note is larger in FY
97.
CO-CHAIR BUNDE referred to the grandfathering provision and asked
if the 590 manicurists would take the exam and automatically be
granted a license or is it possible they could take the exam and
find out they were not qualified?
MS. REARDON said it is possible they could fail the exam. As she
understood the grandfathering provision, people would be eligible
to take the exam if they could demonstrate to the department they
had practiced manicuring for compensation for at least 350 hours
during the last year. Certainly, they could fail the exam, but her
assumption was they would all pass and be licensed.
CO-CHAIR TOOHEY asked if this would be a national exam.
MS. REARDON responded the bill does not specify which exam the
manicurists would be given; it leaves that up to the board.
However, in the case of barbers and hairdressers, the board has
chosen to use the national exam. It was her assumption that would
also be the case with manicurists.
CO-CHAIR TOOHEY asked if manicurists licensed with a national exam
in another state would still need to go through the process in
Alaska.
MS. REARDON said Alaska does have reciprocity as long as the test
and licensing requirements were substantially the same.
CO-CHAIR TOOHEY said she assumed the exam would be taken only once.
MS. REARDON responded that was correct. The exam would be taken
once and then the license would be renewed every two years.
CO-CHAIR TOOHEY asked about the cost of the license.
MS. REARDON said the cost of the license isn't determined in
statute. It would work the same way as all the other occupational
licensing programs; that is, they set it based on the costs. She
noted that the fiscal note is all funded through programs receipts:
license fees. It is hard to know how many of the division's
existing resources would be used on the program. She referred to
page 4 of the fiscal note, and said it was anticipated at the start
up of the program they would charge $125.74 for a two year license
and a $55 charge for the exam, which she reiterated was what the
national exam service charges. The fiscal note does not ask for a
lot of new resources for the Division of Occupational Licensing, so
most of this program would be run by the existing staff. The staff
currently documents how much time is spent on each program and
their hours are billed to that program. Every two years, the time
is calculated and charged to the appropriate program.
Number 2128
CO-CHAIR BUNDE asked if individuals who put on artificial nails
would come under the manicurist provision. In other words, is
putting on artificial nails considered a manicure.
MS. REARDON said she thought the rapid growth in the field of
acrylic nails was one of the contributing factors to legislation in
this area. The possibility of infection from having nails covered
for long periods of time is one of the health risks of concern to
people. She referred to the definition of manicure and pedicure on
the last page of the bill and said she thought it would be covered.
REPRESENTATIVE DAVIS referred to the requirement to present
evidence satisfactory to the board that the person has practiced
manicure for compensation for at least 350 hours and asked if that
applied to a continued license also.
MS. REARDON said that was the grandfathering provision. For
example, an individual who puts on acrylic nails would be required
to present evidence to the board which documented they had been
doing that for money for one year. That evidence would have to be
presented again at the time of renewal of the license. It allows
a way to get the current workers in without having to go back to
school.
TAPE 96-2, SIDE A
Number 001
SARA EDDING, Owner, New Concepts Beauty School, testified via
teleconference from Fairbanks that she has worked with
Representative Brice on this issue for the last couple of years.
She believes the public is being mislead by assuming that a
manicurist or a nail technician working in a business has been
properly trained to protect the client's health and safety. She
has received calls from people who want to know who they can
contact to report or discuss injuries they received from an
untrained individual. She pointed out there are a number of
individuals practicing this trade who are trained and want to be
protected under the state licensing provision. Ms. Edding stated
she does intend to develop a curricula which will meet the state
requirements.
Number 187
MARI ANN STOEFFEL, Member, Barbers and Hairdressers Board,
testified from Mat-Su, and referenced a letter she had written to
Representative Brice which basically stated the board is in
unanimous agreement to regulate manicurists. She said in the
process of manicuring, there is the possibility of injury where
blood is drawn from using the instruments. She asked the
committee to give serious consideration to regulating manicurists;
not for additional revenues, but because it is a serious concern to
the public.
CO-CHAIR BUNDE referenced the changes in health care in the recent
past and assumed that acrylic nails were relatively new. He asked
if manicurists are re-tested when they are re-licensed as far as
update of the art.
MS. STOEFFEL pointed out that currently manicurists have not been
tested, but if there was some new development and there was a need,
they would certainly communicate that. She is fairly familiar with
the national hairdressing authority (indisc.), and assumes that
manicurists would be the same in that sanitation is paramount in
these exams. Students are examined very carefully and very
extensively in the sanitation process.
CO-CHAIR BUNDE clarified that under this legislation, manicurists
are not re-tested when they are re-licensed.
MS. STOEFFEL said the primary objective of this legislation is to
get the trade regulated and under the regulations of the Board of
Barbers and Hairdressers.
REPRESENTATIVE BRICE referred to some of the concerns expressed by
Co-Chair Bunde and said through the licensing of manicurists, a
data base would be established by which new information could be
distributed. He said the idea of continuing education is certainly
one that could be looked at. On the other hand, making sure that
manicurists are aware of new issues is an area that could be
addressed by the board, and they would have the information
available to do that.
CO-CHAIR TOOHEY asked Representative Brice if he wanted to move his
amendment?
REPRESENTATIVE BRICE suggested first hearing the rest of the
testimony.
SUNDAE GRIFFIN, Nail Boutique, testified via teleconference from
Fairbanks. She referenced page 6, line 20, and suggested that
"affixing by artificial means for the addition to or extension of
natural nail" be inserted after the word cleansing. The
application of artificial nails would be added in, just as
pedicuring was included.
CO-CHAIR TOOHEY suggested that Representative Brice look at
including that in the new amendment.
REPRESENTATIVE BRICE said he would discuss the issue and work on
some possible language to be brought back before the committee.
Number 610
SUNDAE RAGSDALE, Owner, Pretty Fingers, testified from Fairbanks.
She commented that often times clients, particularly new clients,
coming to her shop give her a questioning look when she asks them
to cleanse their hands before she starts the services. She
mentioned there are a lot of things that unlicensed people do, but
didn't want to go in to all the details.
CO-CHAIR TOOHEY suggested that Ms. Ragsdale contact Representative
Brice's office.
CO-CHAIR TOOHEY closed the meeting to public testimony. She asked
for additional comments from committee members. Hearing none, she
adjourned the meeting at 4:49 p.m.
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