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