Legislature(1995 - 1996)

01/16/1996 03:03 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
          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.                                            
                                                                               

Document Name Date/Time Subjects