Legislature(1995 - 1996)
02/28/1996 03:20 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE February 28, 1996 3:20 p.m. MEMBERS PRESENT Representative Pete Kott, Chairman Representative Norman Rokeberg, Vice Chairman Representative Beverly Masek Representative Jerry Sanders Representative Brian Porter Representative Kim Elton Representative Gene Kubina MEMBERS ABSENT All members present COMMITTEE CALENDAR SENATE BILL NO. 178(title am) "An Act increasing the number of eligible employees that constitute an employer group for purposes of providing small employer health insurance; amending the definition of `small employer'; and requiring an annual report from the Small Employer Health Reinsurance Association until 1999." - PASSED OUT OF COMMITTEE *HOUSE BILL NO. 479 "An Act relating to civil liability for injuries or death resulting from equine activities." - HEARD AND HELD HOUSE BILL NO. 311 "An Act repealing the limitation on the hours a person may be employed in a mine; and making a related technical amendment to avoid changing the penalties for failing to make payments into an employee benefit fund." - HEARD AND HELD *HOUSE BILL NO. 483 "An Act relating to the calculation of unemployment insurance benefits; and providing for an effective date." - HEARD AND HELD *HOUSE BILL NO. 487 "An Act amending the Uniform Residential Landlord and Tenant Act and the civil remedy of forcible entry and detainer as they relate to mobile home park operators and mobile home park dwellers and tenants." - SCHEDULED BUT NOT HEARD Governor's appointments previously heard and held over - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: SB 178 SHORT TITLE: SMALL EMPLOYER HEALTH INSURANCE SPONSOR(S): SENATOR(S) RIEGER JRN-DATE JRN-PG ACTION 05/09/95 1679 (S) READ THE FIRST TIME - REFERRAL(S) 05/09/95 1679 (S) L&C, FIN 01/09/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 01/09/96 (S) MINUTE(L&C) 01/10/96 2095 (S) L&C RPT 3DP 2NR 01/10/96 2095 (S) ZERO FISCAL NOTE (DCED) 02/06/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 02/09/96 2345 (S) FIN RPT 4DP 3NR 02/09/96 2345 (S) PREVIOUS ZERO FN (DCED) 02/09/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 02/09/96 (S) RLS AT 12:30 PM FAHRENKAMP RM 203 02/09/96 (S) MINUTE(FIN) 02/12/96 (S) RLS AT 8:00 AM FAHRENKAMP RM 203 02/12/96 (S) MINUTE(RLS) 02/14/96 2427 (S) RULES TO CALENDAR 2/14/96 02/14/96 2428 (S) READ THE SECOND TIME 02/14/96 2428 (S) ADVANCED TO THIRD READING UNAN CONSENT 02/14/96 2428 (S) READ THE THIRD TIME SB 178 02/14/96 2428 (S) TITLE AMENDMENT NO 1 ADPTD UNAN CONS 02/14/96 2428 (S) PASSED Y19 N- E1 02/14/96 2428 (S) DUNCAN NOTICE OF RECONSIDERATION 02/15/96 2447 (S) RECONSIDERATION NOT TAKEN UP 02/15/96 2448 (S) TRANSMITTED TO (H) 02/15/96 2769 (H) READ THE FIRST TIME - REFERRAL(S) 02/15/96 2769 (H) LABOR & COMMERCE, FINANCE 02/28/96 (H) L&C AT 3:00 PM CAPITOL 17 BILL: HB 479 SHORT TITLE: IMMUNITY FOR EQUINE ACTIVITIES SPONSOR(S): REPRESENTATIVE(S) G.DAVIS JRN-DATE JRN-PG ACTION 02/07/96 2650 (H) READ THE FIRST TIME - REFERRAL(S) 02/07/96 2650 (H) LABOR & COMMERCE, JUDICIARY 02/28/96 (H) L&C AT 3:00 PM CAPITOL 17 BILL: HB 311 SHORT TITLE: REPEAL LIMIT ON HOURS EMPLOYED IN MINES SPONSOR(S): REPRESENTATIVE(S) VEZEY, Toohey, Martin JRN-DATE JRN-PG ACTION 04/18/95 1351 (H) READ THE FIRST TIME - REFERRAL(S) 04/18/95 1351 (H) LABOR & COMMERCE, JUDICIARY 01/24/96 (H) L&C AT 3:00 PM CAPITOL 17 01/24/96 (H) MINUTE(L&C) 02/07/96 (H) L&C AT 3:00 PM CAPITOL 17 02/07/96 (H) MINUTE(L&C) 02/14/96 (H) L&C AT 3:00 PM CAPITOL 17 02/14/96 (H) MINUTE(L&C) 02/28/96 (H) L&C AT 3:00 PM CAPITOL 17 BILL: HB 483 SHORT TITLE: CALCULATION OF UNEMPLOYMT INS BENEFITS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 02/09/96 2689 (H) READ THE FIRST TIME - REFERRAL(S) 02/09/96 2689 (H) L&C, STATE AFFAIRS, FINANCE 02/09/96 2690 (H) FISCAL NOTE (LABOR/ALL DEPT'S) 02/09/96 2690 (H) GOVERNOR'S TRANSMITTAL LETTER 02/28/96 (H) L&C AT 3:00 PM CAPITOL 17 WITNESS REGISTER SENATOR STEVE RIEGER Alaska State Legislature Capitol Building, Room 516 Juneau, Alaska 99801 Telephone: (907) 465-3879 POSITION STATEMENT: Sponsor of SB 178(title am). GORDON EVANS, Lobbyist Health Insurance Association of America 318 Fourth Street Juneau, Alaska 99801 Telephone: (907) 586-3210 POSITION STATEMENT: Testified in support of SB 178(title am). REPRESENTATIVE GARY DAVIS Alaska State Legislature Capitol Building, Room 420 Juneau, Alaska 99801 Telephone: (907) 465-2693 POSITION STATEMENT: Sponsor of HB 479. BILL TURNER, Equine Professional Alaska State Horsemen, Incorporated Box 871634 Wasilla, Alaska 99687 Telephone: (907) 376-6849 POSITION STATEMENT: Testified in support of HB 479. MARCIA BOYD, Owner Twinview Horse Park HC 31, Box 5083 P Wasilla, Alaska 99654 Telephone: (907) 376-3276 POSITION STATEMENT: Testified in support of HB 479. REPRESENTATIVE AL VEZEY Alaska State Legislature Capitol Building, Room 216 Juneau, Alaska 99801 Telephone: (907) 465-3719 POSITION STATEMENT: Sponsor of HB 311. ED FLANAGAN, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99801-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Testified against HB 311. Gave testimony on HB 483. CLYNT NAUMAN, General Manager Kennecott Greens Creek Mining Company P.O. Box 32199 Juneau, Alaska 99803-2199 Telephone: (907) 789-8110 POSITION STATEMENT: Testified on HB 311. ERIC KLEPFER Coeur Alaska, Incorporated 431 North Franklin Street, Suite 400 Juneau, Alaska 99801 Telephone: (907) 463-5425 POSITION STATEMENT: Testified on HB 311. JOE J. THOMAS Alaska State AFL-CIO 315 Barnette Street Fairbanks, Alaska 99701 Telephone: (907) 452-3139 POSITION STATEMENT: Testified on HB 311. ANDREW J. BEAR PIEKARSKI District Council of Laborers Mile 5, P.O. Box 831 Eagle River, Alaska 99577 Telephone: Not provided POSITION STATEMENT: Testified against HB 311. JIM DUCHON, Consultant 6017 Chowen Avenue, South Edina, Minnesota 55410 Telephone: Not provided POSITION STATEMENT: Testified on HB 311. DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Explained HB 483. WILLIE LEWIS Laborers Union 1629 Madison Drive Fairbanks, Alaska Telephone: (907) 479-5842 POSITION STATEMENT: Testified in support of HB 483. WILLIE CREECH, President Vulcan Towing and Recovery 5406 Lake Otis Anchorage, Alaska 99507 POSITION STATEMENT: Testified on HB 483. RON TORGERSON, Chief of Appeals ESD Appeals Department of Labor P.O. Box 25509 Juneau, Alaska 99811 Telephone: (907) 246-9300 POSITION STATEMENT: Answered questions on HB 483. ACTION NARRATIVE TAPE 96-14, SIDE A Number 001 The House Labor and Commerce Standing Committee was called to order by Chairman Pete Kott at 3:20 p.m.. Members present at the call to order were Representatives Sanders, Masek, Kubina, Elton, Rokeberg and Kott. SB 178 - SMALL EMPLOYER HEALTH INSURANCE CHAIRMAN PETE KOTT announced the first issue the committee would address would be SB 178(title am), "An Act increasing the number of eligible employees that constitute an employer group for purposes of providing small employer health insurance; amending the definition of `small employer'; and requiring an annual report from the Small Employer Health Reinsurance Association until 1999," sponsored by Senator Rieger. He informed the committee SB 178 addresses some minor changes to legislation which was passed a couple of years ago. Number 145 SENATOR STEVE RIEGER, sponsor of SB 178, said a couple of years ago a small group health insurance bill was passed which established some of the mechanisms of a pool for the insurance of the small employer groups. He noted "small employer groups" were defined as "employee groups from 2 to 25 employees." After two years of experience, it has been proven to be working. The intent of SB 178 is to broaden the statute so the definition of "small employer" would be changed to 2 to 50 employees instead of 2 to 25. He explained it increases the ability for a number of additional employers to get into the small group health insurance market that was served by the original bill. Number 243 REPRESENTATIVE NORMAN ROKEBERG asked the number of groups, if any, have availed themselves in the previous legislation. SENATOR RIEGER indicated there are several ways to answer the question. In a way, every group that is a 2 to 25 employer group that is applying for insurance has been subject to this bill because if you are an insurer doing business in Alaska, you are by definition, part of this pooling mechanism. Senator Rieger explained the measure has sort of a automatic pooling and then it has an optional second pool - a reinsurance pool, which is a buffer to accommodate high risk cases where an underwriter couldn't justify underwriting the group within the band of premiums that are prescribed in the bill. There is only a couple of cases where the reinsurance pooling mechanism has been necessary. He referred to testimony given in the Senate from people who said it has made it easier to underwrite groups, but that is not as quantifiable because unless you go into the reinsurance pool, there is not a true statistic you can point to. Number 377 GORDON EVANS, Lobbyist, Health Insurance Association of America, said during the three years that legislation has been in effect, it seems to be working. When the measure was originally enacted, it was thought that the coverage of the bill would affect about 85 percent of the small businesses. He referred to the increase from 25 to 50 employees and said it would probably up the figure to about 92 percent of Alaska employers. Mr. Evans noted the figures came from the Health Resources Access Task Force Study which was done in the late 1980s and early 1990s. He said his organization supports the bill. Alaska would be the eighteenth state to change their coverage up to 50 employees. Number 489 There being no further testimony, REPRESENTATIVE ROKEBERG made a motion to move SB 178(title am), out of committee with attached fiscal notes and individual recommendations. CHAIRMAN KOTT asked if there was an objection. Hearing none, SB 178(title am), was moved out of the House Labor and Commerce Committee. Number 500 CHAIRMAN KOTT said the committee would take a brief at ease at 3:26 p.m. The meeting was called back to order at 3:30 p.m. HB 479 - IMMUNITY FOR EQUINE ACTIVITIES Number 608 CHAIRMAN KOTT announced the committee would address HB 479, "An Act relating to civil liability for injuries or death resulting from equine activities." REPRESENTATIVE GARY DAVIS, sponsor of HB 479, said there are a lot of things that happen in this world that a lot of people aren't responsible for, but other people feel that somebody must be responsible except themselves. The bill is intended to give handlers of the equine profession extra protection from civil liability lawsuits. The reasoning behind this proposition is that horses and related animals can be unpredictable in their behavior. This unpredictability is an inherent characteristic of some domestic animals, especially equines, because of their size and specific utilization for human activities. A horse that is carrying a rider can easily be spooked by a number of events. If the rider is subsequently thrown from the horse, the owner or trainer may not be directly responsible for the accident. He noted people do sometimes wear spurs and it is not always the horses or their owner's fault. This would be true as long as the owner or trainer has cared for and trained the equine in the best possible manner. REPRESENTATIVE DAVIS said there are a number of exceptions to this legislation. If the owner or trainer is negligent, improperly caring for the horse or uses faulty equipment, they would not be immune from civil liability. The bill also recognizes other exceptions such as placing an obviously inexperienced rider on a high spirited horse known for demonstrating unpredictable behavior. Representative Davis noted he has received correspondence from involved parties. Number 751 REPRESENTATIVE BRIAN PORTER referred to the bill and questioned the meaning of a "hinny." REPRESENTATIVE DAVIS indicated he didn't know. Number 785 REPRESENTATIVE BEVERLY MASEK referred to page 1, line 11 and asked what the definition is of "reckless conduct." REPRESENTATIVE DAVIS said he is sure everybody has their own definition. He said this piece of legislation doesn't have the definition and he couldn't answer specifically. Number 834 REPRESENTATIVE BRIAN PORTER explained reckless or intentional misconduct is a standard of misconduct that has been dealt with by courts for a long time in the state. There are a number of court decisions that have identified exactly reckless conduct is. In other words, in legal parliaments it is understood. It basically means an act that a reasonable person would conclude would have the result that did occur. You're reckless if you fire a gun into a crowd. You may not have intended to hit anybody but the natural probable result of that act was that somebody was going to get hit and perhaps killed. That is reckless conduct. It is a very high standard and it is a standard above negligence. REPRESENTATIVE MASEK questioned whether that is different from gross negligence is which is on page 1, line 13 and 14. REPRESENTATIVE PORTER said that makes it even more restrictive to a higher standard. REPRESENTATIVE GENE KUBINA said there must be an absolute definition written for the terms used. REPRESENTATIVE PORTER explained there are definitions in various statutes that apply to that particular body of law. He said he didn't know if there was one in this chapter. The general standard of severity is intentional, reckless, gross negligence and negligence. Number 1010 BILL TURNER, Equine Professional, Alaska State Horsemen, Incorporated, testified via teleconference from Wasilla. He explained that his organization represents about 300 people in the Anchorage Mat-Su Valley area and indirectly represents another 500 or 600 through affiliated clubs. He said they feel that the bill is a good bill in its general intentions. It is good public policy to have inherent risk of an activity assumed by those who have chosen on their own to engage in that activity. He said there is currently a law similar to this bill but it is in regards to skiing and ski areas. Similar legislation has also been enacted in about 15 or 16 other states throughout the country. Mr. Turner said this would be a (indisc.) to the horse industry within the state because he expects insurance premiums would be lowered and, therefore, help more horse activities occur within the state. Mr. Turner noted he has faxed some suggested changes to Representative Davis which would help close some of the loopholes. Number 1142 MARCIA BOYD, Owner, Twinview Horse Park in Wasilla, was next to testify via teleconference from Mat-Su. She said she agrees with Mr. Turner that this bill will be a boom to the horse industry in Alaska. It would open up many more activities that are currently not being looked at because of the liability involved. Ms. Boyd informed the committee she has been told by her insurance company that if Alaska has such a law, her insurance premiums would go down. Her insurance company would be willing to allow more (indisc.) at her facility that they are not currently willing to stand behind because of the liability picture as it currently stands. Ms. Boyd explained she has sent a statement to Representative Davis which outlines her ideas. She said she would like to elaborate on the fact that when (indisc.) his or her own horse, the sponsor of an event cannot possibly determine the suitability of the horse to the rider. The sponsor can't be expected to intervene between a horse and his rider or owner even though there are countless instances where people buy horses that are too much for them. That is not anyone's business but their own. Ms. Boyd referred to page 2, line 12, and said it limits the liability exemptions to people who are riding, driving or training horses. She said handlers of horses who are also at risk and don't fall into any of the three above mentioned categories need to be recognized as handlers from the ground. Sponsors should be protected from liability of accidents occurring to handlers. Ms. Boyd said she doesn't think spectators should be eliminated from the bill if they choose to attend an equine activity, they've made that choice and just being around a horse, by nature, is dangerous because of the unpredictability of the response of a horse. You can do your best to be safe and prevent accidents, but if a motorcycle drives by and sprays the horses or a helicopter flies overhead, a spectator could easily be hurt and the sponsor shouldn't be held responsible. Number 1322 REPRESENTATIVE KIM ELTON said normally, if you sign your child up for little league or karate lessons or you join a health club, generally you're asked to sign a waiver of liability. He asked Ms. Boyd if she requires that with her business. If so, why is there the additional need for legislation. MS. BOYD explained she has a waiver of liability she had drawn up by an attorney. She said she has also been told by that attorney it really won't hold up in court. Number 1372 REPRESENTATIVE DAVIS explained in response to Representative Elton's question, a lot of those organizations, especially little league, have a large amount of insurance that covers their events. He said he thinks it is provided through their national organization. CHAIRMAN KOTT referred to Mr. Turner sending Representative Davis some suggested changes and asked Representative Davis if he cares to address them. REPRESENTATIVE DAVIS explained he has received requests from involved people. He said a lot of the suggested changes were what he considered somewhat "boiler plate" and "housekeeping" measures. He said he has decided not to request a sponsor substitute. Representative Davis explained he received some of the same recommendations from Ms. Boyd, Mr. Turner and Lee Woodman. Representative Davis referred to page 2, line 5, relating to injury or death of a spectator and said he would like to see that whole paragraph taken out of the bill. He said he could come back before the committee with a committee substitute. Number 1488 REPRESENTATIVE PORTER referred to Ms. Boyd's concern relating to a horse or an owner who should not be held responsible for the adaptability of the owner of the horse to his/her own horse. He said he doesn't think that is what is required on line 8, page 2, "the failure of the equine activity sponsor or equine professional who provided the equine to make reasonable efforts to determine the ability of the injured person...." Representative Porter said he doesn't think that would then require someone who is just boarding a horse which is owned by someone else, to make sure that that "someone else" knows how to ride their own horse. REPRESENTATIVE DAVIS said, "Also, on page 2, line 6, it's probably -- it doesn't seem logical to exempt equipment or tack provided by an equine... It does seem logical to provide as in a defective equipment or tack - would seem to be more logical. And another amendment that I would strongly consider is page 2, line 14, indicates a defective product. I would roll that up into line 6. `A defective product, equipment or tack provided by an equine activity sponsor or professional.'" Number 1588 REPRESENTATIVE ELTON said there are two kinds of defective product. One would be a defective product that is provided by the manufacturer. The other could be a defective product that is defective because of lack of upkeep on the part of the business owner. He said if they are rolled together, it may be going too far. REPRESENTATIVE DAVIS said he agrees it should probably be spelled out. Number 1700 REPRESENTATIVE ROKEBERG said it would be a matter of evidentiary proof if there is a cause of action about whether the equipment is defective or not. You have the right to bring a cause of action over the equipment and that is how the bill is written. He said the bill is alright as it is currently written. CHAIRMAN KOTT referred to some suggested changes faxed to his office from Wendy Yardley and asked Representative Davis if he has received them. REPRESENTATIVE DAVIS indicated he doesn't have Ms. Yardley's information. CHAIRMAN KOTT said he would like to hold the bill until the following Wednesday so that a committee substitute could be developed. HB 311 - REPEAL LIMIT ON HOURS EMPLOYED IN MINES CHAIRMAN KOTT announced the committee would address HB 311, "An Act repealing the limitation on the hours a person may be employed in a mine; and making a related technical amendment to avoid changing the penalties for failing to make payments into an employee benefit fund." He said the bill had been heard twice previously. REPRESENTATIVE AL VEZEY, sponsor of HB 311, said he didn't have any new comments. Number 2120 ED FLANAGAN, Deputy Commissioner, Department of Labor, said the department feels that the current law has served the state and the workers in the underground mining industry well. He said the Department of Labor is opposed to the current bill in that it removes any restrictions on the hours of underground work. Mr. Flanagan said he thinks a compromise could be worked out where a ten hour limitation could be placed in the bill as long as it is subject to something like the variance procedure that exists for any and all of out OSHA regulations. He explained that is where an application is made and the department would have the opportunity to examine the circumstances of the particular situation of the particular mine to see if it is run safely and additional hours would not pose an additional threat to the safety of the workers. MR. FLANAGAN explained that there has been three miners killed in the Juneau area over the last eight years. He noted that is with the Mine Safety and Health Administration (MSHA). Mr. Flanagan said he is not casting any aspersions on MSHA. He said he thinks the guy does a real good job, but he is one guy for the whole state. Mr. Flanagan said mining is a hazardous industry and there are people in attendance at the meeting who are better qualified to speak on the issue. He explained he has been somewhat involved in the Brady Lake project. MR. FLANAGAN referred to tunnels and said the hazard is 360 degrees. Anything can happen. He said the Department of Labor would be willing to work with the committee on an acceptable committee substitute that has some kind of variance. Mr. Flanagan referred to Alaska's wage and hour statute and said there is a provision for a four day ten hour work week. That relates to an overtime issue. There are two specific provisions which allows for an alternate work week without incurring the overtime liability for over eight hours, which is state law. One is if it is under a collective bargaining agreement or, in the case of a nonunion operation, if it is under a written plan submitted and approved by the Department of Labor. He said it is not as if there isn't any precedence between that, the Wage and Hour Act and the variance procedure in the OSHA Act. Mr. Flanagan said that is what the department uses when they deal with seafood processing companies. Although Alaska's requirements for camps is 60 square feet per person, the federal minimum is 50 square feet per person. When there is a short-term situation and the company needs to put people up who are working for the canneries, the department will do a temporary variance and go down sometimes as low as 42 or 43 feet. It is on a case by case basis. There is public notice and an opportunity for response and public input. MR. FLANAGAN said you can have the best mining operation in the world, but the contractors come in. At least two out of the three fatalities were contractor employees. That is another reason for having a case by case basis. Number 2109 REPRESENTATIVE ROKEBERG asked Mr. Flanagan to explain the situations where the miners were killed. MR. FLANAGAN said one accident was at Kensington mine where a worker fell down a shaft and was killed about five or six years ago. In approximately 1989, there was a driller who was working alone in the A-J Mine for centennial development that got wrapped around the drill and was killed. Mr. Flanagan said there was a person working for Echo Bay about a year and a half ago and there was a cave in where a slab came down and killed him. He noted he didn't know if any of the deaths had to do with fatigue. He said he is sure they were operating legally within the confines of the existing law where they don't work over eight hours. Number 2164 REPRESENTATIVE ELTON referred to the possibility of the committee deciding to discuss the idea of an eight hour day with additional hours being permitted by the department and asked if that would take a statutory change. MR. FLANAGAN answered in the affirmative. He noted it could not be done by regulation. Number 2185 REPRESENTATIVE JERRY SANDERS said it was the committee's understanding that at the last meeting that there was going to be some negotiations occurring between the companies and the union. He asked Mr. Flanagan if he knew what happened. MR. FLANAGAN said he knows a little, but he pointed out there are people in attendance at the meeting who could speak to the issue. Number 2225 CLYNT NAUMAN, General Manager, Kennecott Greens Creek Mining Company, thanked Chairman Kott for the opportunity to address the committee. He informed the committee he is new to Southeast Alaska but has spent a lot of years in Fairbanks area. He noted he is not unfamiliar with a lot of Alaskan issues. Mr. Nauman said he is giving testimony on behalf of the employees at the Kennecott Greens Creek Mine located on Admiralty Island, about 18 miles away from Juneau. He said he would like to testify in support of a modification of the existing statute to increase the number of hours that a person could spend underground from eight hours to ten hours. MR. NAUMAN said he would like to point out the situation that Greens Creek is currently in and what the anticipated future is. Secondly, he said he would talk about the jobs issue, especially the local hire issue, and the impact the bill could have on that issue. Thirdly, he stated would talk about job security or long term economic viability. He said he would also speak about the capital competition and investment criteria that is required for companies to invest money in the mining business in Alaska. Mr. Nauman informed the committee he would briefly address the issue of the variance of permits and then summarize with a few other points. MR. NAUMAN said as far as Greens Creek is concerned, Greens Creek is going to reopen as a viable mining operation in the later portion of 1996. When the mine reopens it will be a modern fully Americanized underground mining operation, and when in production it will be by far the largest silver producer in the United States. He informed the committee they currently have 142 employees primarily to put the mine back into operation, and they are spending more than $80 million. When the mine is back in operation, they will employ approximately 250 people. Of the 142 people currently employed, 80 percent are Alaskans and 20 percent, 33 people, were brought into Juneau from outside of Alaska because they offer the type of expertise that is needed to run the mine. MR. NAUMAN referred to the jobs issue and said Greens Creek has always stated and proposed to maximize its local hire. He said they recognize that in Southeast Alaska especially that not all the communities are as well off as Juneau is. The basis of Greens Creek's proposal is to offer employment opportunities to people outside of the Juneau area, to be able to transport those employees to Juneau and keep them onsite during a normal shift rotation. In order to do that, there are two components that are critical. The first is being able to extend the underground shifts from eight hours to ten hours so that they may operate on a two shift basis. Secondly, they need approval from the U.S. Forrest Service to provide the housing that is required on Admiralty Island. MR. NAUMAN explained they recently advertised in Sitka and other Southeastern communities for mill rights. They were plowed under with responses from people who want to go to work at Greens Creek. The uniform cry of those people was, "We cannot afford to relocate our family to Juneau. We know that the cost of housing in Juneau is extremely high. Is there any way we can work at Greens Creek and remain in our home communities in Southeast Alaska." Mr. Nauman pointed out there is a tremendous demand for jobs in Southeast Alaska, especially in the communities that have been adversely affected by timber problems. MR. NAUMAN said Greens Creek is going to go into production whether it is on a two shift or a three shift basis. He referred to being primarily interested in local jobs and the ability to be able to house people on the island and said it will drive up the number of people they are able to employ from Alaska versus what they will have to bring in from the Lower 48. He noted there are also a lot of people in the Lower 48 who would like to move to Alaska to work. TAPE 96-14, SIDE B Number 001 MR. NAUMAN explained his company would much prefer to employ Alaskans to keep the payroll in Alaska. MR. NAUMAN referred to job security and said Greens Creek went out of production in 1993. The reason was because commodity prices, especially silver and zinc prices were low, and costs were too high. The ability to keep the mine in production is only as good as their ability to sustain the margin between net revenues and the underlying cost structure of the operation. Moving to a ten hour shift at Greens Creek gives them about a 15 percent increase in efficiency and helps to compete in the global marketplace and on a sustained basis. MR. NAUMAN referred to the Greens Creek work force and said 95 percent of the people working underground want to work the longer hours. In fact, they would prefer to go to more than ten hours. This is because to work at Greens Creek, you get up at 4:30 a.m., you catch a ferry at 4:45 a.m., you get home around 5:30 p.m., depending on sea conditions. He said the problem is that with the three shift basis, people do not get to spend enough time with their families. Moving to a two shift basis would effectively add more than 20 days a year that an employee could spend with his family. Number 071 MR. NAUMAN said Alaska competes with a lot of other states and countries in the world for mining investment dollars. Alaska is the only state with a viable mining industry that has not addressed the eight hour statute and modified it in some form or another. Extension of the underground shafts would improve the economics and the competitiveness of Alaska on a global basis. It would allow the mining industry to go forward in Alaska as it should. MR. NAUMAN explained his company has worked with the labor and trade people over the past month to try and find some common ground on which they can move forward with this issue. He said he thinks they have been successful with some of the people, but he isn't sure they are going forward on a mutual basis at this point. Mr. Nauman said he would request that the bill be moved forward. MR. NAUMAN referred to moving from eight hours underground to ten hours at the face and said that would be safe. He said as far as Greens Creek is concerned, it promotes opportunities for Alaskan jobs. It reduces the exposure of Greens Creek to the inevitable fluctuations in the commodities market and improves the competitive edge of the state in terms of investment of capital dollars for the purpose of creating jobs. Number 152 CHAIRMAN KOTT referred to Mr. Nauman suggesting there should be some modification to the existing statutes and said he mentioned ten hours. He said the way the bill is currently written, you could go to 12 or 14 hours. Chairman Kott asked Mr. Nauman if he wants a minimum of ten hours. MR. NAUMAN said the Greens Creek proposal, which is supported by the Council of Alaskan Producers, is for ten hours at the face. There has been an considerable amount of research work that has been done on safety and underground operations. Most of the research relates to the difference of 8 hours and 12 hours underground. The research clearly shows that safety is not an issue between 8 and 12 hours, but the management at Greens Creek believes the movement from 8 hours to 10 hours is absolutely safe and does not compromise on any of the other issues while adding value to the employees' family lives without compromising (indic.) opportunity. Number 208 REPRESENTATIVE SANDERS said he has sympathy with Mr. Nauman's desire to make the change from 8 to 10 hours. He said that is not what the bill is about. He pointed out there would need to be a bill that applied to what Mr. Nauman is asking for. MR. NAUMAN stated it is his understanding that the bill is to repeal the underground law. REPRESENTATIVE SANDERS answered in the affirmative. MR. NAUMAN said, "I think it is Greens Creek's position that the research data and everything that has been done by the industry, in general, in North America and elsewhere, is only looked at up to 12 hours and we believe that that's a reasonable and safe and hopefully, on a legislative basis, an achievable resolution to this problem." Number 247 CHAIRMAN KOTT said testimony from the Department of Labor indicated that they would be supportive of a ten hour limitation subject to variance procedures. He asked Mr. Nauman to comment on the proposal. MR. NAUMAN explained that in order to put Greens Creek in production, they needed 125 permits. While in production, they have to maintain over 50 permits. He said the problem with the permitting of a variance system is that the operation and the invested capital is exposed to the vagaries if the permitting or variance system. People and mining companies, including Greens Creek, will make investment decisions based on a least risk weighted basis. Those decisions will not be made for the 10 or 12 hours without some assurance or a statute that the efficiency and productivity can be achieved. Mr. Nauman said the problem they see with that proposal is in terms of weighing the investment opportunity against other opportunities elsewhere in the world. Number 356 REPRESENTATIVE KUBINA referred to Mr. Nauman being in attendance on behalf of his employees. He questioned whether his employees have voted to give up the right of the protection of an eight hour day. MR. NAUMAN said Greens Creek is a nonunion operation. Their employees, with the exception of one underground employee, have offered support and have actually requested to be allowed to work longer hours underground. One of the problems at Greens Creek is basically you put in a 12 hour day and on average, they spend 5.7 hours working at the face, exclusive of travel to and from the mine, exclusive of travel within the mine to get to the face. REPRESENTATIVE KUBINA said with the exception of one employee, every employee has asked that the hours be extended. MR. NAUMAN pointed out he is talking about underground employees. Out of the 142 employees 43 of them are underground employees. He explained 42 of them want to work longer hours underground because they want the additional time off with their families without compromising their earnings opportunity. Number 382 REPRESENTATIVE SANDERS asked if this is a situation Greens Creek needs in order to compete in the world marketplace. MR. NAUMAN said he would point to the fact that Greens Creek went out of business in 1993 and put more than 200 people out of work. Prices were low and costs were high. REPRESENTATIVE SANDERS explained that what scares him about the bill is it repeals the limitations. If they need ten hours in order to be viable on the world market today and the price goes down a little bit, will people need 12 hours to compete next year or will it go to 18 hours in two years. MR. NAUMAN said from his perspective, the issue is safety. The primary driving issue in underground operations is safety first and productivity and efficiency second. He said the work that has been done by the U.S. Bureau of Mines and other people in the business, and the experience of other mines working in the North, remote operations - Polaris, Nanacivic, Loopin (Sp.?), and other major underground operations in Canada are working the longer hours and have shift rotations. He said those companies have actually been recipients of prestigious safety awards, but none of those operations work beyond 12 hours at the face. MR. NAUMAN explained the Greens Creek proposal is to modify the language of the existing law. CHAIRMAN KOTT said this bill modifies it substantially. Number 536 REPRESENTATIVE ELTON said the committee has been waiting for the results of discussion between producers and labor. He asked who has been involved in the discussions. MR. NAUMAN explained he has taken this issue upon himself and has somewhat been leading the charge on trying to educate and solicit support for modification of the existing bill. He said he recognized, from looking at prior transcripts, the efforts of trying to change this law in the past. One of the continuing problems was the opposition of the labor and trades people. Mr. Nauman said he has spoke with those people at least to let them know what is going on so there is no surprises. As far as the skilled and crafts people are concerned, they're reasonably happy that Greens Creek has come forward and discussed this issue with them. He noted he had an opportunity to meet with the building trades and labor people and have laid out similar things for them. He said he has asked for their support in terms of modifying the existing language. One thing that has come through loud and clear is that repeal of the law is not a supportable issue. He said that is why he is in attendance, to support a modification of the existing bill primarily so that Greens Creek can move forward and put Alaskans to work. REPRESENTATIVE ELTON said he appreciates the fact about expanding the discussion beyond hiring locally and hiring Alaskans. He said he would like to put forward one caution that it is sometimes easier to commute to Seattle than it is to commute to Wrangell. MR. NAUMAN said Greens Creek's proposal would be one that would subsidize travel of those people and they would not subsidize travel for anybody who resides outside of Alaska. Number 674 REPRESENTATIVE ROKEBERG asked how many underground mines are currently operating in the state. MR. NAUMAN explained in the Mettles (Sp.?) mines there are two mines in operation and two development projects. The mines in operation are Greens Creek, which has a 17 year mine life, Nix and Fork, which is the only mine in operation that has a much shorter mine life. He referred to development projects and said one is the A-J Mine in Juneau and the Kensington project north of Juneau. Number 681 MR. NAUMAN referred to Greens Creek and said during the first four or five years of production, 58 percent of the net revenues are going to come from precious metals, primarily silver. Later in the mine life, around 2003 or 2004, silver grades will drop and zinc grades will improve. Zinc will then become the primary revenue generating product at Greens Creek. He said he can assure the committee that without the opportunity to work ten hours at the face, when silver prices fall below $4.50 an ounce and when zinc falls below 45 cents an ounce, in the latter portion of the initial ore body Greens Creek will find itself in a position similar to the position it was in before. That is why in putting the mine back into operation, he wants to make sure that the 250 people they employ have a maximum opportunity of remaining employed for the next 15 years. To do anything less is irresponsible. CHAIRMAN KOTT asked who the members are on the Council of Alaska Producers. MR. NAUMAN said in terms of mining companies, Cominco, Coeur, Echo Bay, Kennicott, Placer, Dome, Nevada Gold Fields, nearly all the major mining companies in Alaska are represented. Number 856 REPRESENTATIVE SANDERS said it is evident that the committee isn't discussing HB 311. He asked if there is a possibility that the labor organizations, the deputy commissioner of the Department of Labor and Mr. Nauman could get together and craft a bill that everyone could support. MR. NAUMAN said he thinks the issue is really the ability to bring efficiency to the underground mining industry, in Greens Creek's case to be able to hire Alaskans. He said he has been working to communicate to see if he can generate support for what the committee is talking about, modification of the existing language. Number 945 REPRESENTATIVE KUBINA said Mr. Nauman has said two different things. He finished his testimony urging the committee to move the bill, but he has also said he is against the repeal of this statute. MR. NAUMAN said he would have to plead ignorance on the complexities of the process, but they want to see this issue move forward as they need to make decisions based on that. He said they are currently recruiting and hiring people and his concern is that if the bill doesn't move out of committee and gets berried, it will never surface again. REPRESENTATIVE PORTER said what the committee would do if they could ever get to the point of doing it is to consider amendments to the bill. One obvious amendment would be to amend the total repeal of the 8 hour restriction to something like 10 to 12 hours. He asked Mr. Nauman if it would be a fair statement in that he would support that amendment. MR. NAUMAN answered in the affirmative. Number 1031 ERIC KLEPFER, Coeur Alaska, was next to testify. He read the following statement into the record: "My name is Eric Klepfer, I'm with Coeur Alaska. I would like to thank the committee for the opportunity to testify today. "Coeur is the owner and operator of the Kensington Project which is located 45 miles north of Juneau. The Kensington Project is an underground gold mine with an ore reserve of approximately 1.95 million ounces of gold. Capital costs for the project are estimated at $195 million and will have an annual payroll of about $28 million. This project is expected to employ approximately 300 people during the operation and produce approximately 200,000 ounces of gold per year. Coeur is presently in the process of permitting the operation and expects to be in a position to make a construction decision in fourth quarter of 1996. "The Kensington Project is a remote mine operation and is accessible only by plane or boat. Due to the remote nature and limited access, we intend to build personnel camp to house employees during their off-hours. It is Coeur's intent to provide an environment in which employees can safely and productively work while having a place to relax during their off shift hours. "Coeur is committed to local and Native hire and employment. Recently, we've entered into an agreement with three Native Corporations in Southeast Alaska and our goal is to develop local human resources as part of our mineral resource development effort at Kensington. In order to accomplish this, we have been working with the state Department of Labor, University of Alaska and the Native groups to set up mine training programs in Southeast. "The best alternative Coeur can provide employees that work at a remote site is a schedule that will provide extended time home with their families. Coeur needs a modification of the present eight hour work day restriction for underground mines to provide this employment opportunities and schedules that allow flexible work shifts. With an extension of the eight hour work day, Coeur could consider schedules such as two weeks on, two weeks off, rather than an eight hour alternative of two weeks on, four days off. Coeur is working with local Southeast communities including Juneau and Haines to develop a `local community project concept.' This can be achieved only if there is flexibility in the current law which allows us a similar flexibility in scheduling. "The majority of Alaska's extensive natural resources are located in remote areas. Development of these resources will require companies to establish remote camps and use innovative work schedules to meet project objectives and employee needs. Remote operations, by their nature, are well suited to the extended work day and, more importantly, dictate different work schedules. "It is important for this committee to recognize that the eight hour underground law must be changed in some manner that permits Coeur to use alternative schedules to meet production and employee needs for the Kensington Project while remaining competitive in a world market. Without change, Coeur is restricted in its ability to provide flexible work schedules that benefit the project and most importantly, our employees, Southeast Alaska and the state as a whole. Alaska is one of the last active mining states that has not changed this law in some manner. "Numerous reports and studies have been completed by organizations such as the U.S. Bureau of Mines and other knowledgeable groups regarding extended shifts and safety in mining. James Duchon, former U.S. Bureau of Mines, Safety Division research analyst and expert on shift work and safety training in mining is here today via teleconference to testify on the results of these studies and answer questions the committee may have with regard to safety and the extended work hour. "To be competitive and attract quality employees, Coeur's operations must be able to: Provide a safe work environment; offer reasonable work schedules which provide the employee opportunity to spend quality time with families; meet project objective and goals; and minimize costs. "There are several inherent benefits that Coeur and its employees gain by extending the eight hour underground work day. These include: High paying jobs with work schedules that meet both project and employee needs; employment opportunities in communities such as Haines and Juneau; minimizes the need for families from outlying Alaska communities to relocate to Juneau; reduces the number of helicopter flights to and from the site both from a safety and an environmental consideration; and provides much needed job opportunities to Southeast Alaska communities. "As you can understand, the remote location of the project, limited access and other considerations make it imperative that the eight hour underground restriction be changed. This is extremely important to the project and will play a pivotal role in the final decision of project development. Coeur must be able to operate the underground mining operations beyond the eight hour work day and we urge the committee to support a bill that changes this restriction. By doing so, Alaska is moving in concert with other states in removing work day restrictions for underground mining operations that other industries in Alaska enjoy. Anything less will hinder the future of mining in Alaska "Coeur is committed to Alaska and the Kensington Project and we would offer our assistance to the committee in anyway to change the existing eight hour day restriction imposed upon the mining industry. Thank you Mr. Chairman and committee members." CHAIRMAN KOTT asked Mr. Klepfer if he supports the bill in its present form. MR. KLEPFER said Coeur is looking at and supports the ten hour modification that Greens Creek is proposing. He said from Coeur's perspective, they need a ten hour day. Number 1431 JOE J. THOMAS, Alaska State AFL-CIO, was next to testify on HB 311. He informed the committee that he did testify on the measure at a previous meeting. Since that time, he hasn't heard much to change his opinion of the bill. Mr. Thomas said his organization's primary concern is the safety of those who are working underground. He showed the committee an article from a National Geographic booklet showing the largest gold mine in the world. He said, "We could probably find a lot of laws that we could change -- that if we changed, we would make a particular industry come alive again or reinvigorated or make it profitable." MR. THOMAS referred to camps and said he would like to bring the committee's attention to the oil industry at Prudhoe Bay. There are a lot of large camps there. The camps serve the purpose that so many people show concern for. Once you have a camp, you can bring people in from anywhere regardless of where they were going to come from. If you're controlling work shifts, it does make it extremely reasonable for somebody to travel long distance depending on what the work shifts are. The longer the shifts, the more the weeks can be put together, the more reasonable it is for somebody to travel great distances because the money is there and the airplane tickets are relatively an insignificant cost of traveling depending on what the wages are that are paid. MR. THOMAS said, "Our concern about the extension of hours - the changing in this bill is I don't see the idea and somewhat see the reluctance of people to agree to oversight and that concerns me when there is a resistance to the idea that well a variance which was discussed briefly. The idea of a variance based on your ability to prove that what you are doing or what you intend to do is reasonable." He said that is what concerns them. MR. THOMAS said there is no doubt that competition is difficult throughout the world. World prices that vary a few cents can make the difference between a mine being profitable or not. He said he doesn't think his organization can actually support the idea that few cents on the market is going to cause either wage or safety laws to be changed or working hours to be fluctuated to make something more profitable. Mr. Thomas said a mine representative testified that they are going to open regardless. He said he would find it hard to believe that somebody would go ahead and invest tons of money on the idea that maybe the law will be changed. MR. THOMAS referred to reviewing some statistics he has received and said depending on how you would interpret them, it looks to him that in the twenty-second, twenty-third and twenty-fourth hours of work are the safest hours somebody can work in. He said he finds that to be ridiculous. MR. THOMAS said the mineral industry is surviving. He quoted from an article, "The mining industry in Alaska has doubled in size in the last ten years." He said he realizes it may be a growing industry at this point, but it sounds like it is doing fine under the existing conditions and laws. There is no doubt that things could be changed here and there. He said his organization is willing to sit down and discuss it. The concerns relate to safety, the air within the mines, the rock bolting, the safety equipment, the evacuation procedures, etc. Mr. Thomas pointed out Arizona has an eight hour law with no exceptions. California allows miners to work longer than eight hours when there is a collective bargaining agreement or a variance reached. MR. THOMAS said he is also concerned about the length of hours that were worked in some construction projects related to tunneling work. He referred to some information the committee was given and it may be inaccurate. During the development of the Bradley Lake project, they had three shifts, eight hours a day, as were most of the other tunnel jobs in Alaska. Mr. Thomas said he would be happy to answer questions. Number 1925 ANDREW J. BEAR PIEKARSKI, District Council of Laborers, testified against HB 311. Mr. Piekarski informed the committee he was in a tunnel cave-in on November 30, 1964, where safety was one of the issues. He said if the legislature changes this stipulation, they're changing the little "ma and pa" companies. Safety is a critical issue. The District Council of Laborers has supported mining in the state of Alaska. He said they have tried to organize the Greens Creek mine. Mr. Piekarski said they supported Echo Bay, A-J, and they helped get the Dong Road funded for the Red Dog Mine. He referred to the Whittier Tunnel and said it is a pipeline tunnel that runs adjacent to the tunnel that is existing there. That was ran on a three shift basis. He referred to an eight by eight area and said when something goes wrong you can't run. Mr. Piekarski informed the committee of the different projects he has worked on. MR. PIEKARSKI told the committee he has been a business agent in Alaska for 25 years and is elected every three years. He represents a lot miners and a lot of people in the rock business and has seen some of them killed. He referred to long hours in mines and said there will be fatigue. Mr. Piekarski said in closing, "If you bring a law like this in, you've got people that are desperate for money and you start getting into `jipos' where they go in and they start working and you start bunching and stuff." He informed the committee of some of the laws in Idaho. Mr. Piekarski said he has been in the business for 25 years and urged that things not be changed until more people are involved. TAPE 95-15, SIDE A Number 050 JIM DUCHON, Consultant, was next to testify via teleconference. He read the following statement into the record: "My name is James C. Duchon. I received my Ph.D. in Experimental Psychology from the Illinois Institute of Technology in Chicago, Illinois. I am currently employed as an independent consultant and serve on the Board of Examiners for the Minnesota Quality Awards Council. My areas of expertise are in the areas of shift work consulting and training, safety, organizational effectiveness and quality improvement. "From 1986 to February of this year, I have worked for the Safety Division of U.S. Bureau of Mines in Minneapolis, Minnesota. As many of you may know, we were a federally funded research arm of the mining industry. The focus of our research was to explore and study methods to reduce the risk of accidents in mining. My particular expertise was in the area of nights and shift work, fatigue, extended work shifts and job analysis. "As a result of our research, we learned a great deal about the use of extended workdays in mining. This research appears to be of direct relevance to the deliberations by the state of Alaska, regarding lengths of work shifts in underground mines. To illustrate, I will discuss the results of a study at an underground copper, lead and zinc mine that went from an 8 hour, 3 shifts per day to a 12 hour, 2 shifts per day schedule. "The purpose of this summary that I am discussing now is to present an objective way some of the relevant research on safety issues regarding extended workdays and to offer my recommendations regarding the use of extended work shifts in underground mining. "First of all, extended work shifts - What are they? Extended work shift, workdays or compressed workweeks longer than 8 hours in length, typically 10 or 12 hours, while still retaining an approximate 40 hour week. There are at least five theoretical factors that could make a difference in a worker's tolerance to the shift. "First and most obvious is the length of workday. While it seems intuitive that the longer someone works, the more likely he or she will make some sort of human error. However, our data shows that the frequency of accidents is more or less equal for each hour into shift. In other words, the first hour of work is associated with approximately the same number of accidents as the fifth, sixth, seventh and so forth. "Second is the shortened time between shifts. This would have an impact on sleep length and afford less time for physical recovery between shifts. "Third is the length of the workweek. Extended workdays often are associated with shortened workweeks of two to four days. This could create a desirable situation for two reasons. First, our circadian rhythms would not have the time needed to adjust as we rapidly go from say the night shift to an off day. This could to some degree offset the negative health effects of working nights. In short `occupational jet lag' is kept at a minimum. Second, with short workweeks there would be less cumulative fatigue across the workweek. "Fourth, with more days off time for recovery from fatigue or sleep deficit is enhanced. "The fifth factor is time-of-day. Of course both extended workdays and regular 8 hour shift work patterns can involve working nights where work capacity is lessened. "Safety in mining. First I wanted to make a brief comment about safety in mining today. When discussing the idea of using extended workdays in mining, it is useful to put safety in mining in perspective with other industries. "Accident rates in mining have dropped drastically since the 1940s and earlier. We no longer count fatalities in the thousands, as we once did. For example, over 2,000 each year in the 1920s. Fatalities have in fact decreased steadily from over 300 fatalities in 1973 to only 115 in 1991, for example. "However, mining in general still has one of the highest injury and fatality rates of any industry. For example, latest figures show that 43 fatalities per 100,000 individuals employed in mining, as compared to 40 and 32 in agriculture and construction, which are the three top most risking industries. However, it may be an unfair comparison to lump all types of mining into one statistic. For instance, incidence rates for mental/nonmetal mining, including underground mines, are roughly half of those in coal mining. This sort of breakdown indicates an incident rate for metal and nonmetal mines less than other high rate industries. "I now want to talk a little about studies in all industries regarding safety in extended workdays. It is probably noteworthy and may be of historical interest to note that the earlier studies of human endurance and sustained operations were conducted by the U.S. Army. They were interested in how long soldiers could work before their performance was degraded. These studies clearly showed that under certain conditions humans could work well over eight hours without a loss of efficiency. However, while it is enlightening to know our limitations under these conditions, it is more important to look at research associated with actual modern working conditions. "In my review of extended research literature, which I published in 1994, I looked at over 50 published reports. Of those reports, there were only ten studies that actually looked at 10 or 12 hour shifts. The rest related primarily to the issue of overtime and safety. Interestingly, while most of the analyses indicated more frequent accidents related to overtime, extended work shifts did not. Specifically, in a survey study of 716 12-hour works in the processing, oil refinery, chemical and fertilizer industries, self- reports of job performance, ability to concentrate, amount of sleep and health either remained the same or improved. Also, over 90 percent were satisfied with the schedule. Mangers indicated that they perceived less absenteeism, less tardiness, and no effects on health and safety. Likewise, the results of interviews with managers of 50 U.S. and Canadian chemical and petroleum plants indicated similar health and safety results, including improving morale. However, both studies warned of the effects of 12 hour shifts on older workers, but not provide objective data on this topic. "In a study of 8 hour versus 10 hour shifts in a manufacturing plant, performance and physiological measure indicated no difference. "In another study of English policemen, performance and physiological measure either stayed the same or improved on 12 hour shifts. "However, there are some studies that have shown performance decrements with 12 hour shifts. For example, in a study conducted by NIOSH on extended workdays in a nuclear power plant, some measures did indicate a decrease in performance. "Now for the studies in underground mining, including the Bureau of Mines Study. I am aware of only one published study that looked at extended workdays in underground mining. This was conducted by researchers at the Bureau of Mines where I was principal investigator. We studied an underground copper, lead and zinc mine in British Columbia that changed from an eight hour rotating shift schedule to a four on, four off, 12 hour schedule. We were invited by the mine and the Provincial Ministry of Energy, Mines and petroleum Resources to evaluate their change to the new 12 hour schedule. Our recommendation following the study would be taken into account by the ministry when evaluating the exemption given to the mine for the introduction of 12 hour shifts. "Before and ten months after the 12 hour schedule was introduced, we took measures of behavioral performance, cardiopulmonary functioning, air containment levels and a variety of self-report measures. The entire production crew was measured. These measures were directed at assessing possible effects of 12 hour shifts on behavioral functions, fatigue, air contaminant exposure and job satisfaction. "Survey results indicated an overwhelming support for the new extended workday schedule. The 12 hour schedule was not associated with a decrease in most measures of performance across the shift. Most of the physiological and pulmonary data indicated few differences between 8 and 12 hour shifts. "Based upon the overall acceptance of the new schedule by the workers and lack of evidence to suggest serious performance decrements, we recommended that the mine retain the 12 hour schedule with certain precautionary measures to ensure the safety of the workers. These were: 1) maintenance of on-site lodging for 12 hour workers; 2) periodic observation and measurement of the work force; and 3) customized work tasks and work breaks to accommodate longer work hours. "Now my conclusion and recommendations. In conclusion, based upon the evidence of the studies of extended workdays, including my own, it is my informed judgement that extended workdays can be safely used in underground mining under certain circumstances. These are: 1. Extended workdays should not be considered for jobs that require extremely high physical work loads. For example, the American Industrial Hygiene Association recommends a work load not to exceed 1/3 VO2max for an 8 hour workday. That is a measure of physical fatigue. Our data and other (indisc.) have shown that underground miners work well under this standard in today's technology; 2. Job sharing and cross training should be considered for 12 hour shifts or 10 hour shifts. Changing jobs may alleviate certain physical and psychological stressors; 3. Workers should not be expected to work overtime beyond the 12 hour shift; and 4. Regular evaluation and assessment are strongly recommended. There are surveys that have been developed for this purpose. "Finally, I would like to thank members of the committee for hearing my testimony. I will be happy to answer any questions you may have at this time." Number 983 There being no questions or further witnesses to testify on HB 311, CHAIRMAN KOTT closed public testimony. REPRESENTATIVE PORTER offered a proposed amendment that would extend the eight hour limitation to a ten hour limitation. The amendment is as follows: Sec. 1 is amended to read: Sec. 1. AS 23.10.410(a) is amended to read: (a) A person may not be employed in an underground coal mine, underground lode mine, underground placer mine, underground coal, lode or placer workings, or other underground mine, or working for more than ten hours in 24 hours, except on a day when a change of shift is made. The ten hour limitation applies only to work actually performed at the mining face and excludes the intermission of time for meals, traveling to the mine site, traveling between the mine's portal to the face, or otherwise going to or from the place where the work is actually carried on, whether in going on or off shift, or in going to or returning from meals. Sec. 2 is amended to read: Sec. 2. AS23.10.410(b) is amended to read: (b) It is the purpose of this section to limit the hours of employment in 24 hours to ten hours of actual labor at the face, or other place where the work or labor to be done is actually performed. Sec. 3 is deleted. Number 1059 CHAIRMAN KOTT called for a brief at ease to make copies of the proposed amendment. CHAIRMAN KOTT said the amendment would be labeled Amendment 1. REPRESENTATIVE PORTER moved Amendment 1. REPRESENTATIVE SANDERS objected. REPRESENTATIVE ELTON said he has a concern that the committee is trying to essentially draft a new piece of legislation. The amendment will create a whole new bill with a whole new effect. He said he would feel more comfortable if the bill were to be put in a subcommittee with a time specific to bring the it back before the full committee the following Wednesday. He pointed out the amendment essentially says the ten hour limitation applies only to work actually performed at the mining face. It does not preclude somebody from spending four hours in a shop above ground and then another ten hours down below ground where you would still have the fatigue factor. Number 1245 REPRESENTATIVE PORTER said he thinks there would be a problem with the Fair Labor Standards Act (FLSA) with working four hours upstairs and ten hours downstairs. He noted he realizes the amendment is a departure from the original bill, but the committee has spent more time talking about this issue than the original bill. REPRESENTATIVE ROKEBERG said he would echo Representative Porter's comments. He noted he would support the amendment. REPRESENTATIVE KUBINA said if the committee is going to make the bill a better bill, this is not the direction he would like to pursue. He said he doesn't want to change the eight hour time, but he would be willing to through the collective bargaining process or through waivers from the department. Representative Kubina said it takes away some of the protection, whether it is through the collective bargaining process or through the Department of Labor. REPRESENTATIVE SANDERS indicated without further input from the Administration and labor, he isn't prepared to vote on the amendment, and if the committee does vote on the amendment, he isn't prepared to move the bill out of committee. It should be put into a subcommittee. REPRESENTATIVE KUBINA said he would be supportive of leaving the department out of this and say that these sections can be waived by a collective bargaining agreement. He said his point is where does the employee, the department or anybody have a chance to provide any kind of input to this regarding safety, etc. It is a unilateral decision by changing the law. REPRESENTATIVE ROKEBERG said the committee isn't talking about the safety or inspection of safety operations, they are just talking about changing the hours. REPRESENTATIVE MASEK said feels the amendment would change the intent of the original bill. She said she isn't in favor of supporting the amendment at the current time. Number 1730 MR. FLANAGAN said as long as there is no provision for a variance, the department cannot and will not support the amendment. He said, "From Mr. Nauman's testimony, I gathered that if he's talking six hours at the face and a 12 hour day, his workers right now -- assuming he doesn't get his permit for his camp, you're working ten hours at the face plus the six hours - that's a 16 hour sift. Their expert witness talked about overtime being the fact. Well the difference between overtime and extended shift gets rather (indisc.), too (indisc.) for me to figure out, frankly. When they're talking about working two weeks on, two weeks off and seven tens -- it's not saying that this - there couldn't be all those concerns laid out. The wishes of the employees, union or nonunion, would certainly be a factor in the variance, and I'm not saying we would definitely mimic the variance procedure for OSHA variances, but that allows for public comment. If a worker was feeling like it was being rammed down their throat, they could contact the department if they had genuine concerns - we could look at them. We'd probably just talk to MSHA and see what the records were. But as some speakers said, `We're not just addressing.' When we change this law, and I'm glad to see at least the legislative declaration of hazard remains in tact and the penalties. They - we're doing it for every operation, every conceivable operation in the state. I have little doubt that Greens Creek and -- none of those 125 permits that they have to get are from our department. Our department - my commissioner's family has been mining in this community for 110 years. He is one of the staunchest advocates of the industry in the Cabinet. Everyone of these mining representatives - every time they're in town, he meets with them. And we weren't party to joint conversations, but we've heard the concerns of the industry, we've heard the concerns of organized labor. Obviously, including my former boss, Mr. Piekarski, doesn't agree from the other side with the position that we've come up with. But - I can -- it is a compromise that addresses the concerns of both sides. Unless there is some perception that we're some bureaucratic shibboleth that's gonna come down on them and stop these projects. I don't think there is any rationale. I don't think the variance procedure for our violations has shown that. I don't think there has been any abuse or bureaucratic indifference on processing alternative work week plans under Title 23 on the four-tens and it is our position, which I would be remiss if I did not emphasize the commissioner's position that some form of variance or waiver with the department doing fact finding and finding of that it was in the interest of the workers would be necessary for us to remove opposition to the bill." Number 1902 CHAIRMAN KOTT said the committee has gone from a bill that essentially repealed the 8 hour provision, which theoretically would offer a 24 hour opportunity to work underground, to an amendment that places a limitation of a maximum of 10 hours, which is a 2 hour increase from the present. Chairman Kott said if the department is not supportive of that amendment, is there some kind of middle ground the department would support. MR. FLANAGAN said, "Well if we screwed up by coming in with our middle ground -- I mean I don't think -- we don't see it, we don't see it as onerous to have. I mean basically, this amendment with a waiver or variance procedure because the discussion on collective bargaining was interesting and it would be applicable in some circumstances but there are a vast array of businesses that are not union and go to some lengths to remain nonunion. That's their right under the law. That's the right of their employees. Some of the employers tend to play fast and loose with the law in keeping themselves that way, but that's neither here nor there. If it's a union operation or a nonunion operation, there has to be a place in a situation like this where we're changing the law, not just for Greens Creek, not just for Echo Bay, not just for Coeur. We can do that. We can individualize it for these large employers with a large safety program, well organized track record, that will have the resources to bird dog their contractors to make sure that every contractor they bring in adheres to a standard in case those are also going to be working longer hours. I guess that's as good as we can do. We've given this a lot of thought. We've gotten to this. The initial reaction in the department is `now the law works fine.' Eight hours, the Greens Creek ran for five years. I didn't hear anybody say that the reason Greens Creek closed in December of 93 was because of the eight hour limitation. I don't think anybody would dare to make that claim. I think the findings -- I'm real interested in reading these studies. I would point out that MSHA is the entity charged with mine worker safety in this country, not the Bureau of Mines. I'm sure they have an interest and do good work in that direction, but I'd be interested in reading those stories. As a layman, they frankly strain crudity that it gets safer in the later hours, having worked long shift in non-mining industries for years, on the North Slope. That's basically the department's position. I don't know -- I guess I'm beating it to death at this point, Mr. Chairman, but we've heard the concerns of the industry. We want to address it. So this is how we do it, we say, `O.K., ten sounds reasonable if it's a good operation, if it's a safe operation.' If it's not a safe operation, we don't want the blood on our hands." Number 2033 REPRESENTATIVE ROKEBERG said he would be willing to move a conceptual amendment that adopted the recommendation of the Administration if that was the will of the committee. He asked Mr. Flanagan if there is a statue that is like a waiver on overtime if there was either collective bargaining or variance procedure. MR. FLANAGAN indicated there is statutory language in Title 23.10 on overtime. REPRESENTATIVE ROKEBERG asked if there is a conceptual amendment that adopted that language. He also asked if it would fit with the additional language the committee has before them. Number 2008 CHAIRMAN KOTT asked if the department would be agreeable of an amendment to Amendment 1 that offered that variance procedures. MR. FLANAGAN said conceptually they would be. He noted he isn't sure that the exact language from the wage and hour provision would be applicable, something such as a plan submitted to the Department of Labor and based on a finding of the commissioner that it was in the best interest of the workers. It should be language that would give the department the ability to review the plan and operation for the safety. REPRESENTATIVE KUBINA stated he would like to see it in writing. REPRESENTATIVE ROKEBERG asked if the collective bargaining language should be included. He questioned whether it is in the overtime statute. He also asked if there is language in the overtime statute that says that there would be no review of the plan if there were a collective bargaining agreement. MR. FLANAGAN answered in the affirmative. He said that is the effect. REPRESENTATIVE ELTON said he thinks the committee is very close to having something that is going to allow everybody an opportunity to feel a certain level of comfort when the committee votes to move it out. He said he doesn't think they want to jeopardize it, craft something here and then walk away from it. He said he assumes that at some point, the commissioner of the Department of Labor isn't going to the Governor and waste this effort. If the committee spends a week getting the language right, they may be saving a year's time if it is done in committee. He noted concern about conceptual amendments. Number 2228 REPRESENTATIVE PORTER referred to the notion that this process needs to go to a variance and said he is undecided whether it should be put at the bottom of Amendment 1 or whether it should be put at the bottom of the existing statute. He said the language conceptually that he is thinking of would be that this variance would be obtained from the Department of Law in a situation where there wasn't a labor agreement. He said he would agree that the committee should spend time to come up with language that everybody understands and hopefully agree on. Number 2269 REPRESENTATIVE PORTER withdrew his motion to amend and recommended the conceptual ideas go to either staff or to a subcommittee. Number 2287 CHAIRMAN KOTT said the bill would be held in order to work on a committee substitute which would incorporate language that will hopefully be agreeable to all the parties. He said there would be a committee substitute before the committee the following Wednesday. HB 483 - CALCULATION OF UNEMPLOYMT INS BENEFITS Number 2335 CHAIRMAN KOTT announced the committee would address HB 483, "An Act relating to the calculation of unemployment insurance benefits; and providing for an effective date." DWIGHT PERKINS, Special Assistant, Office of the Commissioner Department of Labor, read the following statement into the record: "For years, the unemployment insurance system has enabled Alaskan workers, their families, and their communities to weather periods of unemployment with their economic well-being and dignity intact. Recent events in Sitka and Wrangell, as well as in other areas of the state affected by plant closures or layoffs, have demonstrated all too well the importance of this safety net for our working men and women. "The schedule of benefits for unemployment insurance has not been adjusted to increase the maximum weekly benefit amount since 1990. Alaska currently ranks forty-ninth in the nation in unemployment insurance wage replacement, with the average weekly benefit amount only slightly more than 27 percent of the average weekly wage for the state. In terms of the maximum weekly benefit amount, Alaska ranks thirty-fifth in the nation, notwithstanding the higher cost of living here. "The current benefit schedule uses a worker's yearly wage to determine the weekly benefit amount. The minimum qualifying wage amount is $1,000, which provides a weekly unemployment insurance benefit amount of $44. For each $250 a worker earns over $1,000, $2 is added to the benefit amount. Weekly benefits are new capped at $212, based on maximum wages of $22,250. "This bill would keep the current benefit schedule in place but would replace the current fixed cap with a flexible cap. The new cap on wages would be 75 percent of the average annual Alaska wage, exactly the same as the wage base on which employers and workers are taxed to support the system. Bringing the maximum qualifying wages up to the wage base would raise the maximum benefit amount from $212 to $238 in 1997. The average cost to employers in the year 2000 will be approximately one dollar per employee per week. "Thirty-five states use a flexible benefits standard driven by changes in the average weekly wage. The advantage of such a system is that it integrates the benefit standard into the self-adjusting unemployment trust fund formula, which is directly tied to the performance of the state's economy. As average wages rise, the standard for unemployment insurance benefits keeps pace in terms of income replacement. If wages fall, as they did during the 1986-1987 recession, the maximum weekly benefit decreases and the employer tax burden decreases. "I want to emphasize that this is a modest proposal. The bill would raise Alaska's wage replacement less than 1 percent, to a little over 28 percent. TAPE 96-15, SIDE B Number 001 MR. PERKINS continued to read his statement. "While not enough to change our wage replacement ranking among the states, this small change would provide a measure of additional security to Alaska's average wage earners and help slow the erosion of purchasing power during hard times. As we work together to strengthen Alaska's economy to provide quality jobs for Alaska's families and to move certain low- income people from welfare to work, we must ensure that there is an adequate safety net in place to allow unemployed workers sufficient finances to remain in their homes, in their communities, and in Alaska until they are reemployed." MR. PERKINS pointed out that in the committee files there are three tables that shows the average weekly wage check of $620.11. Alaska ranks fifth in the nation. Table two is the average weekly benefit amount of the check written for unemployment insurance in which Alaska ranks twenty-sixth at $169.99. The average amount that is replace of that $620 in the 50 states, Alaska ranks forty-ninth of the average wage replacement. Number 064 WILLIE LEWIS was next to come forward to testify. He informed the committee he has been a resident of Fairbanks for 22 years and has also represented the Laborers Union, which has approximate 1,300, for about the same length of time. He noted he served on the Employment Security Advisory Board for 12 years and was appointed by Governor Sheffield in 1984. He referred to the previous increase of benefits and said it actually saved homes, etc., as most of the contracts for Alaskan residents were terminated on the North Slope. He informed the committee that members of his union usually work during the summer months and they have to make as much as they possibly can. Those wages have to last until the next season. Unemployment benefits helps people to survive over the winter months. He said he thinks HB 483 is a good bill and urged passage. Number 172 WILLIE CREECH, President, Vulcan Towing and Recovery, testified via teleconference from Anchorage. He informed the committee he recently received a letter from the Department of Labor where they tried to explain why they wanted to raise unemployment insurance taxes. He informed the committee he doesn't have a problem with HB 483, but asked the committee to not move it forward until they have had some reform done unemployment benefits. There is currently no requirement to look for a job. There is no requirement to accept a job or to bring proof to the unemployment office that you're actively seeking employment. He said we have people who work the required amount of time, get on unemployment and stay on it until the benefits run out and then start the whole procedure again. He asked that the unemployment office requires anyone on unemployment to bring proof that they are currently looking for work and will accept a job if offered. He said he called the unemployment office to find out if people are required to bring proof that they are out looking for a job and the answer was "no." He said he isn't against HB 483 and doesn't mind giving an extra dollar per week for an employee, but he wants to make sure that people who don't require unemployment benefits are out there trying to find a job. Number 329 RON TORGERSON, Chief of Appeals, ESD Appeals, Department of Labor, came before the committee to testify. He informed the committee he has worked as an analyst in Unemployment Insurance Program for a good many years and also worked on the drafting of HB 483. Mr. Torgerson said the department does have a work search requirement. It is a selective focused work search requirement which is written in their regulations, AAC 85.350. Mr. Torgerson said, "It allows the department - the local office, at its discretion, to impose a work search if an individual is in an occupation where employers are hiring so that it would be fruitful for the person to knock on doors and try to find work, and if making these kinds of personal contacts is the way that people get work in those occupations and as long as the individuals have been given a certain amount of time to find work through the employment office. The problem that the department is seeing in this, just for information, with a blanket work search requirement in Alaska is that so much of the employment in this states is just seasonably unavailable, and where isn't any discretion to ask -- to take into account labor market conditions, we'd have people knocking on the door of the two or three employers in town at a time when work was seasonally unavailable, and our experience has been that employers don't appreciate this. We've gotten feedback from employers time and again that they don't want to be involved in a pro forma work search effort that is being imposed on claimants. For example, when they're drawing extended benefits. Extended benefits is a program that imposes a work search automatically. It's a federal requirement. We certainly understand the concern. We just hope that we take into account the labor market conditions and the fact that we do have the authority to require a work search where it is appropriate." MR. TORGERSON said the department also instituted an eligibility review program where an individual who remains unemployed in a favorable labor market, their claim is reviewed periodically and they can be required to make personal efforts to get back to work. Number 448 REPRESENTATIVE PORTER asked if there is a requirement or provision that a person can only be required to take employment that somewhat mirrors the employment he lost. MR. TORGERSON stated that is correct. He said under the provision of Section 385 of the Employment Security Act, which is a federally imposed requirement, they have to take into account the worker's past training experience earnings. The worker can't be required to accept a job that is substantially less favorable than the prevailing work in the locality, but as their unemployment lengthens they can be required to take work outside their regular occupation. It just has got to compare favorably with the average conditions in the labor market. He pointed out that at the first part of their unemployment, a person is basically expected to take work similar to the work that they lost. They're not being asked to downgrade their skills or take a job that pays half the wages of the job they lost. He said that period varies depending on the labor market and what's reasonable. Number 527 REPRESENTATIVE ROKEBERG said he would like more information about the program. REPRESENTATIVE PORTER asked what would be in it for the employer. MR. FLANAGAN explained a lot of the communities in Alaska are dependent on unemployment insurance benefits. There are some employers that support it because they know if they're selling the basics of life that people spend this money on such as fuel, housing, food, etc., they're not going to survive and their community isn't going to survive. He noted Alaska is one of four states where the employee pays a share. Of total benefit costs over time, the employee pays 18 percent, the employers pay 82 percent. In 46 states, the employers pay the whole bill for the unemployment insurance system. MR. LEWIS said one thing that he has seen while being on the Employment Security Advisory Board is what Employment Security has did over the years when people are on unemployment, they have an opportunity to get (indisc.), look at the job market. Everybody is well trained. He noted is very proud to serve on that board. MR. CREED pointed out there is a $212 maximum benefit and you could go to work at McDonalds and make more than $200 per week. He questioned why these people don't have to take a job where they could make more than $212 per week. He said the department is saying if a person was making $700 per week, if they're not going to get another job that they're making equal to that amount, they don't have to take it. Mr. Creed said if they got a job making over $212 per week take home, they are doing better for themselves that way than they are if they just collect the unemployment. There was continued general discussion regarding the unemployment program and seasonal workers in Alaska. CHAIRMAN KOTT announced the bill would be back before the committee at a later date. ADJOURNMENT Number 1288 CHAIRMAN KOTT adjourned the House Labor and Commerce meeting at 6:15 p.m.