Legislature(1999 - 2000)
01/31/2000 03:18 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 January 31, 2000 3:18 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Andrew Halcro, Vice Chairman Representative Lisa Murkowski Representative John Harris Representative Tom Brice Representative Sharon Cissna Representative Jerry Sanders MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 305 "An Act relating to the membership of the State Board of Registration for Architects, Engineers and Land Surveyors; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 316 "An Act relating to standard industrial classification for, eligibility for benefits under, and the definition of 'benefit year' for, the Alaska Employment Security Act; and providing for an effective date." - HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE PREVIOUS ACTION BILL: HB 305 SHORT TITLE: BD OF ARCHITECTS ETC/LANDSCAPE ARCHITECT Jrn-Date Jrn-Page Action 1/21/00 1970 (H) READ THE FIRST TIME - REFERRALS 1/21/00 1970 (H) L&C, FIN 1/21/00 1970 (H) FISCAL NOTE (DCED) 1/21/00 1970 (H) GOVERNOR'S TRANSMITTAL LETTER 1/21/00 1970 (H) REFERRED TO LABOR & COMMERCE 1/31/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 316 SHORT TITLE: EMPLOYMENT SECURITY ACT Jrn-Date Jrn-Page Action 1/24/00 1990 (H) READ THE FIRST TIME - REFERRALS 1/24/00 1990 (H) L&C 1/24/00 1990 (H) ZERO FISCAL NOTE (LABOR) 1/24/00 1990 (H) GOVERNOR'S TRANSMITTAL LETTER 1/24/00 1990 (H) REFERRED TO LABOR & COMMERCE 1/31/00 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER LANCE MEARIG, Professional Civil Engineer P.O. Box 34752 Juneau, Alaska 99803 POSITION STATEMENT: Testified in opposition of HB 305. SHARON MACKLIN, Lobbyist Alaska Professional Design Council 315 Fifth Street, Apt. 8 Juneau, Alaska 99801 POSITION STATEMENT: Testified on HB 305. CATHERINE REARDON, Director Division of Occupational Licensing Department of Community and Economic Development P.O. Box 110806 Juneau, Alaska 99811-0806 POSITION STATEMENT: Testified on HB 305. REBECCA NANCE GAMEZ, Director Division of Employment Security Department of Labor and Workforce Development P.O. Box 255509 Juneau, Alaska 99802-5509 POSITION STATEMENT: Testified on HB 316. CHARLES BLANKENSHIP, Assistant Director Division of Employment Security Department of Labor and Workforce Development P.O. Box 255509 Juneau, Alaska 99802-5509 POSITION STATEMENT: Answered questions on HB 316. ACTION NARRATIVE TAPE 00-08, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:18 p.m. Members present at the call to order were Representatives Rokeberg, Halcro, Harris, Cissna and Sanders. Representatives Murkowski and Brice arrived as the meeting was in progress. HB 305-BD OF ARCHITECTS ETC/LANDSCAPE ARCHITECT CHAIRMAN ROKEBERG announced the first order of business would be HOUSE BILL NO. 305, "An Act relating to the membership of the State Board of Registration for Architects, Engineers and Land Surveyors; and providing for an effective date." [The bill was sponsored by the House Rules Committee, at the request of the governor.] LANCE MEARIG came forward to testify in opposition to HB 305. A licensed civil engineer in Alaska, he clarified that he was testifying on behalf of himself. He is also a member of the State Board of Registration for Architects, Engineers and Land Surveyors (AELS). He said the board supports HB 305, but he does not. He is opposed to this bill mainly because of the cost involved with adding another member. He indicated there is are relatively few landscape architects expected to be licensed in Alaska. He does not feel the cost of adding a member is warranted. REPRESENTATIVE HALCRO asked how much Mr. Mearig anticipated the cost would be raised. MR. MEARIG stated that the fiscal note associated with the bill is around $3,100. REPRESENTATIVE HARRIS wondered what adding another position would do, other than increasing the cost. MR. MEARIG said he feels it is already a fairly large board, and he thinks there are some disadvantages to having a larger board. REPRESENTATIVE HARRIS wondered what those disadvantages are. Number 0281 MR. MEARIG said he believes it is more difficult to reach a consensus. He clarified that he is not opposed to licensing landscape architects, but he does view landscape architecture as a big issue around the state with respect to violations of practice. He does not think having an additional person will add much value to the discussions the board has on other professions. REPRESENTATIVE HARRIS asked if Mr. Mearig has any idea why the Governor recommended the addition of a member. MR. MEARIG replied that the board had asked the Administration to add the position. REPRESENTATIVE CISSNA asked, "Is this borne by the membership?" MR. MEARIG replied that it is not borne by the members but by the registrants. REPRESENTATIVE CISSNA wondered if it would increase the fees per person by having an extra member. MR. MEARIG said it would either require an increase in fees or a decrease in some other board activity. REPRESENTATIVE CISSNA asked if that is why he is in opposition. MR. MEARIG said his primary reason is the cost. REPRESENTATIVE CISSNA wondered if the cost is per member. MR. MEARIG indicated it is per registrant. He explained there is no cost to the board, only to licensees. CHAIRMAN ROKEBERG clarified that "per licensee" would be the correct legislative nomenclature. Number 0470 REPRESENTATIVE CISSNA inquired if the licensees have been polled. MR. MEARIG said he does not believe they have been polled. He indicated the board recently went through a renewal process in which the fees were increased and noted there was significant opposition to the increase. REPRESENTATIVE MURKOWSKI referred to correspondence included with the bill packet. She commented there is an inference: instead of adding a member to include a landscape architect, the board recommends changing one of the existing positions to a landscape architect. She wondered if this is the source of the controversy. MR. MEARIG explained that he was made aware of this issue just prior to the meeting. He does not think it is a good idea, but that is not the reason he opposes it. CHAIRMAN ROKEBERG stated: Mr. Mearig, ... in our package there's an e-mail that indicates that because the landscape architects have a temporary representative on the board until June of 2001, it was part of the statutory requirement when it established the landscape architects as part of your board. The person that is representing the landscape architects has done a very good job, and there's a feeling that the board didn't want to vote against that person because they'd kind of be embarrassed by voting against that person .... Do you think there's any merit to that question? Number 0648 MR. MEARIG said he does not think so. There have been some frank discussions on the board regarding adding landscape architects. He believes the board has been told there is no guarantee, if a permanent member is added to the board, that it would be the temporary member. CHAIRMAN ROKEBERG asked how the membership of the board is constituted now and wondered where the membership come from. MR. MEARIG stated that members are appointed by the Governor. There are two designated civil engineer seats, two designated architect seats, two designated land surveyor seats, a public member, a mining engineer, either an electrical or mechanical engineer for one seat, and another engineer. He said right now there is an electrical engineer, a mechanical engineer, a mining engineer and two civil engineers on the board. Number 0740 CHAIRMAN ROKEBERG wondered, "Just another engineer?" MR. MEARIG explained that it is an engineer from another one of the licensed professions. CHAIRMAN ROKEBERG asked if there are basically five engineers on the board now. MR. MEARIG said that is correct. REPRESENTATIVE MURKOWSKI referred to two e-mails from Patrick Kalen, Chair, Alaska Society of Professional Land Surveyors (ASPLS), which reference two different dates (February 16, 2000, and February 23, 2000) for their annual meeting. MR. MEARIG said he did not have those e-mails. REPRESENTATIVE MURKOWSKI said she thought if the committee was considering delaying the bill, it would be important to know which is the actual date of the meeting. REPRESENTATIVE HALCRO asked what the vote of the board was to approve the switch from a temporary position to a permanent position. MR. MEARIG said the vote was six to two. REPRESENTATIVE HALCRO said: So, you have existing on the ten permanent members of the board ... a pretty diverse group of folks that are put on the board to represent the ideas and positions of their independent professional organizations, I would assume -land surveyors, mining engineers, mechanical engineers. So, all these groups are represented. And so the board consists of people who represent these specific professions. And if the board votes six to two, and one group doesn't like the outcome of the vote, why should we not honor what the board has voted? MR. MEARIG explained that the board members are not there to represent their industry or profession. They are there to protect the public. He stated that those people do provide some specific areas of knowledge to help regulate the professions. He indicated that not all of the professions that are licensed are represented on the board. He clarified he is not trying to subvert the action the board took. Number 0940 REPRESENTATIVE HALCRO said he is simply trying to understand the opposition from Mr. Mearig and that expressed in the e-mails from Mr. Kalen with respect to delaying the bill until after the ASPLS annual meeting. It is his impression a board exists to create some policy for the group. MR. MEARIG said the professional societies are separate from the board, but do impact legislation. He does not have an opinion about delaying the bill. REPRESENTATIVE HARRIS said he likes that the bill gives the board 11 members because it helps avoid a tie on a vote. Number 1030 SHARON MACKLIN, Lobbyist, Alaska Professional Design Council (APDC), came forward to testify on HB 305. She explained that APDC is a trade association of ten different design professional trade associations. She said APDC represents professions such as architects, land surveyors, landscape architects and a variety of different engineering groups that have their own separate organizations. The APDC has one voting member for every organization that belongs to APDC. She said their legislative committee took a look at this issue last Thursday evening, and the majority of the people on the conference call supported the issue. Mr. Kalen was the only person who was not supportive. His primary objection, as a land surveyor and a member of the board, is the cost. Since there was not a unanimous decision at the conference call, she noted that the full APDC Board will be meeting next week and taking this issue up. MS. MACKLIN further explained the fiscal note for the bill is $3,100 and there are 5,000 licensees; thus the cost is 62 cents per person per year. She stated: When the legislation passed a few years ago, registering landscape architects, we felt that there would be probably fewer than 50 that would get licensed. And at that time, our statute said that each category under the AELS Board had to pay their own way. ... So, there were 3,000 engineers, so their fees were less than, say, the 200 hundred architects, and it would have cost 50 landscape architects a considerable amount to be licensed. So, the APDC board took a position to change the statute just for design professionals and share the fees equally, and it was very well discussed. And the full APDC board, representing all of these different licensees, agreed to it .... In that vein, this ... additional cost is something that the APDC board will be discussing .... My guess is they will support it, but they haven't officially taken a position yet .... I hope you'll look favorably on this issue. We feel that it is beneficial to the deliberation of the board, and we know the cost is an issue. REPRESENTATIVE HALCRO suggested - since Mr. Kalen is a land surveyor and is concerned about the cost - reducing the number of land surveyors on the board from two to one and then making the landscape architect a permanent position. MS. MACKLIN said a few years ago the make-up of the board was looked at. It seemed, at the time, there were very few mining engineers getting licensed, perhaps 30 or 35. She indicated there was a discussion about whether or not the seat should be replaced with a landscape architect. She said some very strong supporters of mining in Fairbanks did not think that was a good idea. She stated, "They were very supportive of mining engineers, and so, we just took that issue off of the table at that time." Number 1321 REPRESENTATIVE MURKOWSKI asked if there is any reason, in Ms. Macklin's opinion, that action should be withheld on HB 305 until after the ASPLS meeting. MS. MACKLIN said no. The opposition stems from the fiscal impact. She clarified that the bill goes to the House Finance Committee after this committee. CHAIRMAN ROKEBERG suggested that the APDC take up a resolution on designated program receipts or contact both the House and Senate Finance Committees. He stated that he has been discussing in caucus how the Division of Occupational Licensing should be handled differently and not as part of the general fund budget. MS. MACKLIN said she appreciates Chairman Rokeberg's bringing that issue up. CHAIRMAN ROKEBERG urged Ms. Macklin to consider Representative Halcro's potential amendment to the bill, as well as the reduction of the board to nine members. He suggested deleting two members but adding the landscape architect member. REPRESENTATIVE BRICE asked, "Why don't we just move the board outside of the purview of state government and privatize it and let them run their own ...?" CHAIRMAN ROKEBERG said it is a great idea, but there is a problem because of the Alaska State Constitution. REPRESENTATIVE BRICE disagreed. CHAIRMAN ROKEBERG maintained that it is in the constitution. REPRESENTATIVE BRICE asked, "There's a Board of Landscape Architects in the constitution?" CHAIRMAN ROKEBERG said no, but there is a proviso in the constitution stating that the legislature provides the framework for boards and commissions. He commented that he has been trying for years to do the same thing Representative Brice is talking about. REPRESENTATIVE BRICE replied, "Then you should do it." Number 1499 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community and Economic Development (DCED), came forward to testify in favor of HB 305. She said the Governor introduced the bill because it was part of the legislative recommendations in the annual report of the AELS board. This is a subject the board has shown significant interest in over the last two years. In February of 1998, the board voted six to two to ask for legislation to make the seat permanent. The board as a whole felt pretty committed and interested in the issue. She noted that the cost is $3100 per year, which includes travel to board meetings and the annual meeting. If she had not included a fiscal note on the bill, then the expenditures would have had to come out of what was already being done, and the other professions might have lost their ability to participate in meetings. MS. REARDON further commented that the board has made it very clear they would like to participate more actively in national meetings of their respective professions so that they can help influence national policy. She indicated there is a policy reflected in the budget that says a single member from each board can have one state paid trip to a national meeting. This has been something that has caused the board a lot of frustration; they feel it limits their ability to represent Alaska in national situations. She thinks perhaps there is a concern on Mr. Kalen's part that there are already strict limitations on the ability to travel and participate in national events. Increasing the membership might make this worse. MS. REARDON explained that the second land surveyor member was added two or three years ago to the board. She feels the temporary board seat is not an ideal situation because the way the current law reads, the member cannot have travel to meetings paid by the state or any money spent by the state. It is awkward to have someone on a board have to pay for his or her own travel. This has brought up questions as to whether the association or the other landscape architects can sponsor this person and pay for travel. She said this is a good thought, but it sets up an awkward position in which someone outside of the state is paying to send a board member to meetings. She commented that it would be nice to not have a temporary member. At the time the Governor introduced the bill, she thinks it was done with the anticipation that there was not much opposition to the concept. If that is not the case, then she does not believe she had accurately informed him. She commented that the AELS board is unique in the division because all of the professions within the board share their costs equally and have identical fees. Number 1765 REPRESENTATIVE MURKOWSKI asked why just a temporary, non-voting member was added in 1998. MS. REARDON replied that when the bill to license landscape architects was introduced, the landscape architects were going to have to cover their own costs. The bill did not include the language for collective finances. It was going to cost $600 per license, and that was too much. The temporary member stemmed from the desire to cut costs. She explained, "Then, as the legislation went through, the board and APDC came to feel that it would be all right to share costs, but we didn't go back to that starting point and say, 'Well, can we add back on some things.' ... That's one perspective on what happened." MS. REARDON further explained that the fee would be 50 cents per licensee if the member is permanent. She said, "You could either view it as people coming back to the table and wanting more, or you could view it as ... the environment changing in which the decision's been made." Number 1865 CHAIRMAN ROKEBERG commented: On that point - regarding the institutional history - as I recall, the engineers, the land surveyors and architects were all drug screaming to the table ... basically against that idea, or, I'd say, a large number of them were against the idea of adding ... the landscape architects. However, they were convinced that it was the right thing to do, and the rationale behind the adoption of the landscape architects as part of the board was to get board certification so those landscape architects could get federal government contracts. And that was the reason. So, it was not like they were going to be highly regulated. It was because they were, in essence, board certified enough .... That was all they needed. They needed a state license to be able to qualify for those contracts, and that was the entire rationale that they sold the board on their membership on. MS. REARDON said she believes the ability for Alaskans to bid on federal contracts was a significant part; there was also some discussion of public health and safety with respect to playground design. She indicated she did not see the kicking and screaming element that Chairman Rokeberg had described. She said the board voted to support the licensure. The bill was introduced in two different legislatures to license landscape architects. It there had been significant opposition, she does not feel it would have been successful through the process. CHAIRMAN ROKEBERG acknowledged that he was over-characterizing the kicking and screaming part. REPRESENTATIVE HALCRO asked whether it is true that $3,100 spread out equates to 50 cents per licensee. MS. REARDON clarified that 60 cents is the actual amount. She said there were 4,971 licensees in the program at the beginning of the fiscal year. They are licensed for two years, so $6,200 would need to be paid by the licensees. This would be approximately $1.20 paid by each licensee for two years. Number 2014 REPRESENTATIVE HALCRO asked, "You said two years ago, when legislation was passed, it increased the number of land surveyors and it also added this temporary member; is that correct?" MS. REARDON clarified that it was two different pieces of legislation. She believes it was the board's sunset extension that made the increase in number of land surveyors. She thought maybe it was three years ago on the additional land surveyor. REPRESENTATIVE HALCRO wondered if, at that time, Mr. Kalen raised a concern about increased costs when a land surveyor was added. MS. REARDON indicated Mr. Kalen strongly supported that. He was the sole land surveyor on the board, and thought their numbers merited a second land surveyor. She said there are quite a few more land surveyors than there will ever be landscape architects, which was part of the argument for the additional land surveyor. Having an additional land surveyor also helps with the administration and development of examinations. REPRESENTATIVE MURKOWSKI asked whether a board with 11 members is reasonably constituted or becomes unwieldy. Number 2083 MS. REARDON explained that the AELS board is the largest board. She does not think there is a significant difference in the way the board would function with 11 members versus 10. She thinks there is a difference between how five-person boards operate versus nine-person boards, however. With five people, she feels that a board is less formal, which could be good or bad. She said: I think that the advantage of having fewer boards and having professions willing to oversee several professions outweigh the advantages of having small boards, personally. It's my impression that in quite a few other states you have separate boards for architects and engineers, although engineers and land surveyors are usually together - and then you get more turf battles. My opinion is that when you get people at the same table, they have to work it out. There's still probably those same concerns about where does engineering stop and architecture start, but the professions sit and work it out, whereas, if you have separate boards, you might instead just be developing regulations in isolation for each other and lobbing bombs at each other that way. So, I would like to encourage rather than discourage boards from being more inclusive. CHAIRMAN ROKEBERG said, "Ms. Reardon, you mentioned there's a policy of no travel to national meetings and no more than one member once a year. Where is that policy coming from?" MS. REARDON said the Administration was looking to cut the budget in either 1995 or 1996. One way was to be conservative about out-of-state travel. She stated that there was a $15,000 decrement to the budget in the first year. The text placed in the budget stated that the amount of travel being funded would allow one trip by one member from each board that was already traveling that year. No new boards could travel out-of-state, but already existing boards could have one trip by one member. It was an attempt to be fiscally conservative. She noted there was a $50,000 increment in the Governor's budget this year that was specifically for the participation by boards in out-of-state conferences. This figure came from adding up all the boards that had serious desires and legitimate purposes to participate in out-of-state events. She hopes the legislature will consider that increment in the budget this year. Number 2268 CHAIRMAN ROKEBERG asked whether it would make any difference if it were a designated program receipt. MS. REARDON replied that it might because the legislature might be less concerned about how a $50,000 increase would play into the overall budget figures. CHAIRMAN ROKEBERG commented that it is because her department and division are in the general fund. MS. REARDON said, "But if you moved us off [the general fund], perhaps, then you could evaluate on the merits of the travel." CHAIRMAN ROKEBERG wondered, "Or if a board or commission wanted to authorize that travel and pay for it, why should they be restricted by an artificial ceiling if they wanted to pay for it?" MS. REARDON indicated that is her perspective on it. She commented that it is difficult to manage the whole budget of the division. If there is an across-the-board budget cut, out-of- state travel is the first place she would look for reduction. She said that is not a threat, and she realizes it makes people angry. She sees out-of-state travel as a long-term investment that does not pay off right away, which is probably one of the reasons it gets short-funded. CHAIRMAN ROKEBERG indicated HB 305 would be held over until he had received more feedback. HB 316-EMPLOYMENT SECURITY ACT CHAIRMAN ROKEBERG announced that the next order of business would be HOUSE BILL NO. 316, "An Act relating to standard industrial classification for, eligibility for benefits under, and the definition of 'benefit year' for, the Alaska Employment Security Act; and providing for an effective date." Number 2392 REBECCA NANCE GAMEZ, Director, Division of Employment Security, Department of Labor and Workforce Development (DLWD), came forward to testify on HB 316. She explained that Section 1 amends AS 23.20.110 (n) and addresses the change in industry codes. The United States Department of Labor is moving from the Standard Industrial Classification System (SIC) to the North American Industry Classification System (NAICS). This would bring the (DLWD) into conformity when the new reporting system is ready. CHAIRMAN ROKEBERG asked if these are the SIC codes. MS. GAMEZ clarified that the SIC codes are going to NAICS codes, in order to conform with the U.S. Department of Labor's reporting requirements for industry. CHAIRMAN ROKEBERG wondered if it is being mandated. MS. GAMEZ replied yes. Under the Workforce Investment Act (WIA), many things are changing. There are things occurring that have already been reflected in the actions of the State of Alaska. For example, the passage of HB 40 last year created DLWD, the Department of Community and Economic Development (DCED), and the Department of Education and Early Development (DEED). She said the DLWD has been posturing itself for the workforce changes that are coming down from the national level. TAPE 00-08, SIDE B Number 0006 MS. GAMEZ further stated that Section 1 basically pertains to statistical information that the federal government requires be reported in its form. The new system will be in place in January 2001. Section 2 amends AS 23.20.179 (b) and pertains to Employer Rate Contributions, which are related to the type of industry. For example, the rate for the fishing industry is different than that of the tourism industry. Analysis done does not show that there would be any significant - if any - effect on the employer rate. MS. GAMEZ indicated Section 3 amends AS 23.20.379 (a)(2). She said: Apparently, in the late 70's, when an unemployment insurance piece of legislation went to committee, some language was accidentally dropped off. And so, we're just trying to tidy that up. MS. GAMEZ noted that a person who quits a job voluntarily has an automatic six-week disqualification of unemployment insurance benefits because it was completely in that person's control. If a person is discharged for reasons that were within that person's control, then that person will also receive a six-week disqualification. She indicated it parallels the "voluntary leaving" provision with the misconduct provision that is in law. Number 0136 MS. GAMEZ said Section 4 amends AS 23.20.382 (d). It allows for benefits to continue while a person is attending vocational training approved under the WIA. The Workforce Investment Act repeals the Job Training Partnership Act (JTPA) effective July 1, 2000. CHAIRMAN ROKEBERG asked if this is a change in nomenclature. MS. GAMEZ said JTPA is being phased out, while WIA is being phased in. The job training dollars that come into the state from the federal government will now be WIA dollars. Section 5 amends AS 23.20.520 (5). It repeals the current definition of an unemployment benefit year and replaces it with a new definition. The benefit year will begin on the Sunday of the week filed and continue for 52 weeks, which allows for a 53-week benefit year. She indicated it is a technical change, and 45 other states do this now. She said problems occur during a leap year. This cleans up the language so that a person's base period and eligibility do not get messed up. CHAIRMAN ROKEBERG wondered what is done now. Number 0217 MS. GAMEZ responded, "We spend a lot of money, with human hands touching these claims, as opposed to letting our automated system take care of the problem." CHAIRMAN ROKEBERG asked if that is because of the definition of a benefit year. MS. GAMEZ replied yes. She commented that 53 weeks are needed to eliminate the possibility of an eligible person's claiming in the prior year or the next year. Benefit weeks currently begin on a Sunday and are mutually exclusive. The change in Section 5 makes the benefit year mutually exclusive and eliminates confusion. MS. GAMEZ noted that Section (6) adds a transitional provision in uncodified law to address the benefit years that began under the current definition. These will expire under the new definition. Section 7 states that Sections 1 through 4 will take effect July 1, 2000. Section 8 states that Sections 5 and 6 will take effect on October 7, 2001. CHAIRMAN ROKEBERG asked what the significance of the October 7, 2001, date is. MS. GAMEZ said it deals with the new definition of the 53-week benefit period. CHAIRMAN ROKEBERG wondered if that is because of the federal fiscal year. MS. GAMEZ commented, "We're funded on a federal fiscal year." CHAIRMAN ROKEBERG wondered why it is October 7. MS. GAMEZ deferred to Charles Blankenship. Number 0299 CHARLES BLANKENSHIP, Assistant Director, Division of Employment Security, Department of Labor and Workforce Development, stated: The October 7 date is almost a little embarrassing, Mr. Chair. When we started looking at calendars and deciding that claims would begin on a Sunday from the enactment of this legislation forward, the first time that we would mess it up would be October 1 of the year 2001. ... To avoid that, we just went to the seventh. The 53rd-week provision in here would eliminate any problems (indisc.-coughing). The secondary reason was workload. For unemployment insurance, at the beginning of a new quarter we get a significant increase in workload because it changes the base period of earnings on which the claim would be established, and we wanted to get any change we made to our definition outside of that period of increased workload. CHAIRMAN ROKEBERG said he needs a better explanation. MS. GAMEZ replied that Dwight Perkins, Deputy Commissioner, DLWD, would be happy to provide any "bullet points" that Chairman Rokeberg would need. MR. BLANKENSHIP said a situation occurs with the workload for the claims-processing units. Whenever there is a new quarter, a new base period of earnings can be used to establish claims. An unemployed worker can take advantage of some of the wages earned during the summer when moving into the October 1 quarter. He stated, "With our seasonal employment situation in Alaska, this affects a lot of people, and we do get a significant influx during the first week." He explained that introducing a significant change to statute during the first week of any quarter runs the risk of decreasing the level of service that can be delivered. Number 0416 REPRESENTATIVE MURKOWSKI referred to Section 3, regarding discharge for misconduct. She indicated there was a constituent running a business with a zero-tolerance drug policy. An employee working there was subjected to a random drug test, failed the drug test, applied for unemployment insurance benefits, and received the benefits right away. She said the conclusion from Unemployment Insurance was that "because the circumstances involved in your discharge did not show a willful disregard of your employer's interest, it has been determined you were discharged for reasons other than misconduct in connection with your work, and, therefore, benefits are allowed to begin right away." REPRESENTATIVE MURKOWSKI said when this came to her attention, she was dumbfounded that someone could immediately receive benefits after being terminated for obvious misconduct in the workplace. She noted it had been explained to her that the employer in this particular situation had failed to appeal. She had asked Ms. Gamez previously if this was something that required some kind of a legislative fix. She indicated she ran this by Legislative Legal and Research Services, who explained "you don't necessarily want to run a laundry list of those things that constitute misconduct." She feels it is a troubling enough issue, however, that she wanted to bring it to the attention of the committee. She wondered if Ms. Gamez has any further comments regarding this issue. Number 0543 MS. GAMEZ explained there are a couple of types of misconduct. She said: There's property damages, reckless disregard, and that follows under one thing. I hate to do this under Employment Insurance, and I don't want to step too far out on the limb. We try not to do what-if's because we have a case-by-case determination of benefits. We have a lower appeals system and then the commissioner level appeals. And I would have thought that the employer would've probably been in pretty good shape had the employer [chosen] to appeal. MS. GAMEZ stated that the appeals process in the Unemployment Insurance system is very easy. A person can make a phone call or send an e-mail, fax or letter. There is also a little flexibility with the 30-day time limit. She asked Mr. Blankenship to explain the different levels of misconduct connected with Unemployment Insurance. She also asked Representative Murkowski to clarify whether or not there was a six-week waiting period in the situation she had described. REPRESENTATIVE MURKOWSKI said there was a three-day delay. MS. GAMEZ said she wished the employer had appealed. REPRESENTATIVE MURKOWSKI said she hoped that Mr. Blankenship could help clarify the situation. Number 0648 MR. BLANKENSHIP provided some background on the general disqualification for a discharge for misconduct. The federal guidelines indicate that if a worker loses his or her job for work-related misconduct there will be some disqualification imposed. In Alaska there are two levels of work-related misconduct. He stated: In Alaska, we had had just the one misconduct provision for anything that constituted a deliberate act or omission that was contrary to your employer's best interest and in connection with the work. A few year's ago, there was a second piece of legislation added - I believe it's [HB]379 D [version] - which allows for a much more significant disqualification for someone who commits a felony or a theft while on the job, and that imposes a 52-week disqual[ification]. That's, in general, the misconduct provision. You're referring specifically to why would we pay somebody unemployment insurance if they failed a drug test. We do have a fairly large body of policy on this. It's been developed from court cases, previous commissioner decisions on the issue. As I said, the basic requirement in a discharge for misconduct case is that there be a connection to the work. And in drug testing we went into a kind of a muddy area there. It's possible that 30 days ago they used some marijuana. It'll show up in a drug test, and they'll fail the test. Is there, in fact, a connection to the work there? ... Much of our precedent indicates that unless there's a showing of impairment on the job, that ... would not be disqualifying. It's very clear that if someone's under the influence or using drugs or alcohol on the job, that is work-related misconduct. The evolution of our policy, as far as drug testing and the use of intoxicants or drugs on the job, has become much less liberal and, in the case that you're referring to, ... we look at each case by the facts presented. I cannot say from the information you've given whether this decision was correct or incorrect. My assumption would be that based on the information we received from both parties, ... the decision was correct in that, for some reason, we did not have a clear connection between that drug test and the job, even though the employer may have required it. MR. BLANKENSHIP continued: There was a great increase in the requirements for random drug testing on the job in the last ten years. We found that 7-11 franchises began to require drug testing. I don't want my air traffic controller testing positive for drugs, but the guy that makes my Slurpy, I'm not sure that's really a reason to discharge him if he fails his drug test. In general, our policy now says that if you're operating any equipment that could be life-threatening or property- threatening, in a position where there's a federal or state requirement, that you ... not have drugs in your system; those are generally disqualifying provisions. Now, beyond the fact that we don't know all of the ... facts to this instant case, there is the appeal period. But I'm not going to say that the employer is under an obligation to appeal just to get a correct decision. We do try to make a correct decision, based on the initial facts. There is not an assumption that the ... unemployed worker is eligible automatically for benefits. However, since the moving party in a discharge is the employer, much of the burden does rest on him in that case to show that it was, in fact, an action that constituted misconduct, just as if, in the case of somebody quitting a job, the burden largely rests on the employee [who] quit to show that those reasons were with good cause. Number 0850 REPRESENTATIVE MURKOWSKI agreed it would be a much better case to pursue if, in fact, the employer had appealed and that appeal had been denied. She wondered if there are regulations that define what the misconduct is and if there is a so-called laundry list. MR. BLANKENSHIP replied there is a regulation that defines misconduct; the regulation does not have a laundry list. There is a significant body of written policy pertaining to the laundry list of things that a person could be discharged for. REPRESENTATIVE MURKOWSKI said: The reason I ask is because Ms. Gamez, when she was discussing Section 3, indicated that it was essentially anything that was within the individual's control. Well, I certainly look at taking drugs as being within my control, ... and if you happen to test positive for marijuana 30 days later and you're out, I say you're on your own, but that's my own personal opinion. ... It's an interesting discussion, and I guess I'm looking for a little guidance as to whether or not we should pursue to define this somewhere. Number 0920 MS. GAMEZ indicated she cannot say this case would have been overturned or that there would have been a disqualification period. It seems to her that would have been reasonable. She reiterated that the appeal process is very simple. She commented that a lot of their policy is based on the appeals that come up; there is ever-changing policy based on precedents. She said she would be happy to meet with Representative Murkowski to ensure that she has a clear understanding of the policies and regulations. REPRESENTATIVE HALCRO said that he would like to be included in that meeting. He commented: One of the things that's frustrating from an employer's standpoint is, even when you spend time developing company policies, rules and regulations, even go so far as to have an employee, at the point of hire, read the document and sign it, acknowledging the fact that they've ... received a copy and they understand it -- so, the employee knows doggone well that there's random drug testing and that they're in a sensitive area and they need to be drug-free. And, whether he's getting high at home or at lunch, I mean, that's really not the issue. The issue is he showed up for work, he was random drug tested, he had drugs in his system, and the employer should, in all fairness, have a right to discharge him without this person being able to come back and claim unemployment insurance. And my frustration with this is, like I said, even when you go to the extent of spending dollars having private legal counsel development company policies and adequately and clearly presenting them to the employee at the time of hire, there's always that loophole. ... I think there has to be a way to protect all employers. ... I certainly have had a number of experiences where you just say, ..."What is the use of even developing company policy?" if ... somebody's going to say, "Well, that really doesn't count in this case," when clearly it does. MS. GAMEZ said she welcomes the opportunity to have a discussion with Representative Halcro. She explained that she dealt with many of those same frustrations as an employer. She feels great strides have been made in the last five years. She wishes people would take advantage of the appeals process because it is so easy and has minimal impact. She noted they are always looking for ways to increase the customer service to employers. There used to be a 15-day appeal period, but that was increased because they wanted people to have the opportunity to appeal in a reasonable amount of time. She stated that an employee who receives unemployment insurance benefits but is then disqualified would have to repay those benefits. She said $126 million is paid out every year in benefits. She empathizes with the desire to protect the employer. CHAIRMAN ROKEBERG appointed a subcommittee on HB 316, consisting of Representative Murkowski, Chair; Representative Halcro; and Representative Cissna. [HB 316 was held over.] ADJOURNMENT Number 1246 There being no further business before the committee, the House Labor and Commerce Standing Committee meeting was adjourned at 4:40 p.m.