Legislature(2017 - 2018)BARNES 124

02/27/2017 03:15 PM LABOR & COMMERCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 121 OCC. HEALTH AND SAFETY CIVIL PENALTIES TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 114 BOILER/PRESSURE VESSEL INSPECTION REPORTS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       February 27, 2017                                                                                        
                           3:16 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 121                                                                                                              
"An Act relating to occupational safety and health enforcement                                                                  
penalties; and providing for an effective date."                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 114                                                                                                              
"An Act relating to boiler and unfired pressure vessel                                                                          
inspection reports and fees."                                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 121                                                                                                                  
SHORT TITLE: OCC. HEALTH AND SAFETY CIVIL PENALTIES                                                                             
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/13/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/17       (H)       L&C, JUD                                                                                               
02/27/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 114                                                                                                                  
SHORT TITLE: BOILER/PRESSURE VESSEL INSPECTION REPORTS                                                                          
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/10/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/10/17       (H)       L&C, FIN                                                                                               
02/27/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
BIANCA CARPENETI, Staff                                                                                                         
Representative Sam Kito                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Presented HB  121 and  HB 114 on  behalf of                                                             
the  House Labor  and Commerce  Standing  Committee, sponsor,  on                                                               
which Representative Kito serves as chair.                                                                                      
                                                                                                                                
DEBORAH KELLY, Director                                                                                                         
Division of Labor Standards & Safety                                                                                            
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Offered details on HB 121 and HB 114.                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:16:18 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting to  order at 3:16 p.m.   Representatives Knopp,                                                               
Sullivan-Leonard, Stutes, Josephson, Wool,  and Kito were present                                                               
at  the call  to  order.   Representative  Birch  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
         HB 121-OCC. HEALTH AND SAFETY CIVIL PENALTIES                                                                      
                                                                                                                                
3:17:19 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE BILL NO.  121, "An Act relating to  occupational safety and                                                               
health  enforcement penalties;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
3:17:53 PM                                                                                                                    
                                                                                                                                
BIANCA CARPENETI,  Staff, Representative  Sam Kito,  Alaska State                                                               
Legislature, presented  HB 121 on  behalf of the House  Labor and                                                               
Commerce  Standing Committee,  sponsor,  on which  Representative                                                               
Kito serves  as chair.   She said the  bill was requested  by the                                                               
Department  of  Labor  &   Workforce  Development  (DLWD),  which                                                               
previously presented  the concept of  the bill to  the committee.                                                               
On January 20, 2017, the  committee authorized the chair to draft                                                               
a bill on its behalf to  bring the State of Alaska's Occupational                                                               
Safety  and   Health  Administration   (OSHA)  state   plan  into                                                               
compliance with federal requirements.   She expressed that HB 121                                                               
would  ensure Alaska's  continued eligibility  for federal  grant                                                               
funds,  which  help  protect  workers  from  workplace  injuries,                                                               
illness, and fatalities.                                                                                                        
                                                                                                                                
3:18:54 PM                                                                                                                    
                                                                                                                                
DEBORAH KELLY,  Director, Division  of Labor Standards  & Safety,                                                               
Department  of  Labor  & Workforce  Development  (DLWD),  offered                                                               
details on HB  121.  She explained that for  violations of safety                                                               
and health laws, there is  one minimum and five maximum penalties                                                               
set in  statute.  Under  HB 121, DLWD  would set the  minimum and                                                               
maximums by regulation  and the bill would limit  the minimum and                                                               
maximums  for  each penalty  type  to  the corresponding  federal                                                               
penalty amount.  She offered that  the bill is purely for federal                                                               
compliance.                                                                                                                     
                                                                                                                                
MS.  KELLY  stated that  Alaska  Occupational  Safety and  Health                                                               
(AKOSH) is Alaska's state plan  which receives federal grants and                                                               
is responsible for  the safety and health  standards that protect                                                               
almost all Alaskan workers.   She remarked, "Alaska's program may                                                               
develop  and  implement  safety and  health  standards  that  fit                                                               
Alaska's   unique   environment   using   input   from   Alaska's                                                               
industries, workers,  and from the  public."  She  explained that                                                               
AKOSH inspects all  private and public workplaces  in Alaska with                                                               
a  few   federal  exceptions;  AKOSH  can   issue  citations  and                                                               
penalties if,  during an inspection,  an employer is found  to be                                                               
violating a standard.  A state  plan such as AKOSH is required to                                                               
be at least as effective as federal OSHA.                                                                                       
                                                                                                                                
MS.  KELLY  reported  that  in   2015,  Congress  passed  an  Act                                                               
requiring  many   federal  agencies   to  adjust   penalties  for                                                               
inflation  going back  to 1990  and to  continue to  adjust those                                                               
penalties yearly  along with a  consumer price index (CPI).   She                                                               
remarked:                                                                                                                       
                                                                                                                                
     OSHA  complied and  raised their  penalties in  July of                                                                    
     last  year.   Alaska's requirement  to be  at least  as                                                                    
     effective includes  maximum penalty  amounts.   In your                                                                    
     packet  is the  department's  notification we  received                                                                    
     from  the  U.S. Assistant  Secretary  of  Labor of  our                                                                    
     requirement to adjust our penalties  to equal or higher                                                                    
     than  federal penalties.   As  of January  1, 2017,  we                                                                    
     fell  out  of  compliance  with that  requirement.    A                                                                    
     failure to  come into  compliance will  eventually risk                                                                    
     the  over  $2  million  in federal  grant  funds  AKOSH                                                                    
     receives every  year.  This bill  allows the department                                                                    
     to set  the current federal  amount in regulation  - no                                                                    
     more and no less.  [It]  simply allows AKOSH to come in                                                                    
     compliance with  federal law and stay  in compliance as                                                                    
     penalties change from year to year.                                                                                        
                                                                                                                                
3:21:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD stated her  concern that under HB                                                               
121, some  penalty fees  would increase  70 to  80 percent.   She                                                               
asked  whether the  penalties were  previously tied  to a  CPI in                                                               
statute.                                                                                                                        
                                                                                                                                
MS. KELLY answered  that the adjustment for  inflation going back                                                               
to 1990  is approximately a  73 percent increase.   She explained                                                               
that  CPI  is part  of  the  Federal Civil  Penalties  [Inflation                                                               
Adjustment]  Act   passed  by   Congress,  which   initiated  the                                                               
requirement  to tie  the penalties  to future  CPI changes.   She                                                               
offered her understanding  that a previous draft of  [HB 121] did                                                               
not specify the [CPI requirement].                                                                                              
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD restated  her concern  regarding                                                               
the increase  in penalties.   She noted  her desire to  hear from                                                               
industry about the effects of HB 121.                                                                                           
                                                                                                                                
3:23:56 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  noted  that  many  states,  including  Alaska,  have                                                               
adopted the  enforcement of OSHA laws.   He asked, "If  we do not                                                               
comply,  do   we  risk   losing  our   program  to   the  federal                                                               
Occupational Safety and Health Administration?"                                                                                 
                                                                                                                                
MS.  KELLY  responded, "That's  correct."    She stated  that  if                                                               
Alaska  does not  comply, then  the  state could  lose its  grant                                                               
funds  and  authorization,  which  would  lead  to  federal  OSHA                                                               
reclaiming authority  and increasing  the penalty amounts  to the                                                               
federal levels at that time.                                                                                                    
                                                                                                                                
CHAIR  KITO offered  his conclusion  that the  penalties will  be                                                               
increased either way.                                                                                                           
                                                                                                                                
MS.  KELLY agreed.   When  asked if  the penalty  amounts can  be                                                               
adjusted, she explained:                                                                                                        
                                                                                                                                
     These are  maximum penalties with the  exception of the                                                                    
     one minimum penalty.  They  are maximum penalties, they                                                                    
     are not  usually the amount that  the employer actually                                                                    
     pays.   There  are multiple  reductions that  are built                                                                    
     into  that  maximum  penalty -  starts  out  with  that                                                                    
     maximum  and then  it's reduced  for business  size, so                                                                    
     small businesses  are not paying  as much  in penalties                                                                    
     as   large  businesses.     It's   reduced  for   other                                                                    
     mitigating factors.   And we  also have  the discretion                                                                    
     to  reduce  during  an  informal  conference  with  the                                                                    
     employer if  they come in  and talk about  their safety                                                                    
     program or their plans to comply in the future.                                                                            
                                                                                                                                
3:25:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked where  retroactive measures would come                                                               
in and  how a maximum  assessment for  a violation would  be set.                                                               
He remarked, "I  struggle with the federal  regulation stating we                                                               
must go back to  1990 to adjust for CPI going  forward to set our                                                               
maximum penalty."   He supposed  that the federal  government set                                                               
the maximum  to make sure  [Alaska] meets it.   He asked  to see:                                                               
the  federal maximums  and minimums,  Alaska's current  fees, and                                                               
the proposed  fees as adjusted to  CPI from 1990.   He voiced his                                                               
concern that the  analysis of potential generated  revenue in the                                                               
fiscal  notes  may  not  be   accurate  since  the  fees  can  be                                                               
"bargained down."   He asked  how the  numbers were reached.   He                                                               
requested  to see  the language  in the  Federal Civil  Penalties                                                               
Adjustment Act to compare the maximum rates.                                                                                    
                                                                                                                                
MS.  KELLY answered  that the  numbers in  the fiscal  notes came                                                               
from the  actual penalties paid  by the employees in  2016, which                                                               
she  stated   is  realistic  revenue  actually   received.    She                                                               
explained  that the  percent difference  between the  maximum and                                                               
the actual  amount brought  in from  the employers  stays roughly                                                               
the  same  each   year;  therefore,  she  supposed   that  it  is                                                               
reasonable to  predict that  raising the  premiums by  73 percent                                                               
would  lead to  actual revenue  increasing  by 73  percent.   She                                                               
noted that the first fiscal year's  revenue is half of the second                                                               
year's  because   the  rate  adjustments   in  HB  121   are  not                                                               
anticipated  to be  implemented until  halfway through  the first                                                               
fiscal year.                                                                                                                    
                                                                                                                                
MS. KELLY stated  that she doesn't understand  the question about                                                               
retroactive measures.   She explained  that OSHA has  a factsheet                                                               
showing the  details of the  maximum increases to.   She informed                                                               
that  serious  violations,  failure   to  abate  violations,  and                                                               
violations of  posting requirements  currently have a  maximum of                                                               
$7,000  per violation;  the new  federal maximum  is $12,471  per                                                               
violation  for  those  violation   types.    The  more  egregious                                                               
violations, willful  violations, and repeat  violations currently                                                               
have a maximum of $70,000  per violation, which would increase to                                                               
$124,709 per  violation.  She  remarked, "That's just  taking the                                                               
inflation adjustment  from 2015 back  to 1990 which comes  out to                                                               
that factor."                                                                                                                   
                                                                                                                                
3:30:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  again asked what the  federal numbers would                                                               
be.                                                                                                                             
                                                                                                                                
MS.  KELLY  stated that  her  previous  explanation detailed  the                                                               
federal numbers the state would use  under HB 121.  She explained                                                               
that the  initial numbers  - $7,000  and $70,000,  respectively -                                                               
are the current state numbers.                                                                                                  
                                                                                                                                
REPRESENTATIVE KNOPP asked whether  the 73 percent increase would                                                               
bring the state into compliance with the federal mandates.                                                                      
                                                                                                                                
MS. KELLY answered that's correct.                                                                                              
                                                                                                                                
3:31:14 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 121.                                                                                   
                                                                                                                                
3:31:35 PM                                                                                                                    
                                                                                                                                
CHAIR KTIO announced that HB 121 was held over.                                                                                 
                                                                                                                                
        HB 114-BOILER/PRESSURE VESSEL INSPECTION REPORTS                                                                    
                                                                                                                                
3:31:46 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final order of business  would be                                                               
HOUSE  BILL NO.  114,  "An  Act relating  to  boiler and  unfired                                                               
pressure vessel inspection reports and fees."                                                                                   
                                                                                                                                
3:32:09 PM                                                                                                                    
                                                                                                                                
BIANCA CARPENETI,  Staff, Representative  Sam Kito,  Alaska State                                                               
Legislature, presented  HB 114 on  behalf of the House  Labor and                                                               
Commerce  Standing Committee,  sponsor,  on which  Representative                                                               
Kito serves as  chair.  She explained that HB  114 was drafted by                                                               
the House  Labor and Commerce  Standing Committee at  the request                                                               
of  the  Department  of  Labor  &  Workforce  Development.    She                                                               
remarked:                                                                                                                       
                                                                                                                                
     On  January  twentieth,  the department  presented  the                                                                    
     concept behind  this bill  to the  committee.   At that                                                                    
     time  the committee  authorized  the chair  to draft  a                                                                    
     bill on  behalf of  the committee that  modifies filing                                                                    
     requirements for  boiler inspections.  The  bill before                                                                    
     you is the result.                                                                                                         
                                                                                                                                
MS. CARPENETI explained that HB 114  would do two things:  first,                                                               
it would establish a $10 fee  for each boiler and pressure vessel                                                               
inspection  report  not  filed   using  the  department's  online                                                               
system; second, it  would reduce the time allowed  to submit such                                                               
reports following  an inspection from  the current 30 days  to 15                                                               
days.                                                                                                                           
                                                                                                                                
3:33:03 PM                                                                                                                    
                                                                                                                                
DEBORAH KELLY,  Director, Division  of Labor Standards  & Safety,                                                               
Department  of Labor  & Workforce  Development (DLWD),  explained                                                               
that  HB  114 would  institute  a  $10  fee  for each  boiler  or                                                               
pressure vessel inspection report filed  with the department in a                                                               
manner  other than  using  the  department's online  direct-entry                                                               
system.   The bill would also  reduce the time allowed  to file a                                                               
report following  an inspection  from 30  days to  15 days.   She                                                               
said  boiler  and  pressure vessels  in  Alaska  receive  routine                                                               
inspections at intervals of two to  five years as a public safety                                                               
measure to  prevent catastrophic  failures.   She noted  that the                                                               
inspections  may be  done by  State  of Alaska  inspectors or  by                                                               
private inspectors who generally  work for insurance companies or                                                               
the  device owners.   The  Mechanical Inspection  section of  the                                                               
Division   of  Labor   Standards  and   Safety  administers   the                                                               
inspections of the devices.  She remarked:                                                                                      
                                                                                                                                
     Besides  performing inspections,  we  also collect  and                                                                    
     review  inspection  reports   and  ensure  that  boiler                                                                    
     owners  are  in compliance  with  state  law.   We  use                                                                    
     "Jurisdiction   Online,"   a   software   that   allows                                                                    
     inspectors  to  enter  the reports  directly  from  the                                                                    
     field and  also gives them access  to information while                                                                    
     they're in the  field.  The majority  of the inspectors                                                                    
     are  using  this  system, but  some  inspectors  submit                                                                    
     electronic  documents,  usually  in PDF  format,  which                                                                    
     require Mechanical Inspections staff  to do manual data                                                                    
     entry...                                                                                                                   
                                                                                                                                
MS. KELLY detailed that the  Mechanical Inspection section spends                                                               
350-400 man hours every year  entering data for the reports filed                                                               
without using  the department's  online system.   She  noted that                                                               
the  bill would  institute a  $10 fee  for each  report submitted                                                               
without using  "Jurisdiction Online."   The fees  collected would                                                               
be deposited into  the building safety account  to compensate the                                                               
department  for  the  data  entry and  support  provided  to  the                                                               
inspectors paying the fees.                                                                                                     
                                                                                                                                
MS. KELLY stated  that HB 114 would also reduce  the time allowed                                                               
for submission  of boiler inspection  reports.  The  current time                                                               
limit  of  30 days  was  set  when  reports  were mailed  by  the                                                               
inspector  in the  field  to the  company  headquarters and  then                                                               
mailed to  the department.   She explained  that all  reports are                                                               
now submitted  electronically, either  through direct  data entry                                                               
or  e-mailed PDFs;  most  reports  arrive within  a  week of  the                                                               
inspection.  She  said, "Shortening the time to  15 days reflects                                                               
current technology  and practice  and ensures that  device owners                                                               
are in compliance with the law in a more timely manner."                                                                        
                                                                                                                                
3:35:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked how long  it takes to enter  the data                                                               
from the reports.                                                                                                               
                                                                                                                                
MS. KELLY  answered that the  department estimates that  it takes                                                               
just a few minutes per report:   350-400 man hours are spent each                                                               
year for  3,200 reports.   She added  that the inspectors  in the                                                               
field who  don't have access  to "Jurisdiction  Online" sometimes                                                               
have to  call the department  asking for device  information that                                                               
they otherwise could have gotten from that online database.                                                                     
                                                                                                                                
REPRESENTATIVE  BIRCH offered  his  opinion that  a push  towards                                                               
electronic reporting would be good.                                                                                             
                                                                                                                                
3:37:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked how  many total reports are                                                               
filed each year.                                                                                                                
                                                                                                                                
MS. KELLY answered that the  department sees around 11,000-12,000                                                               
total inspections per year:   of those, 3,200 are being submitted                                                               
in manners  that require data  entry.   She clarified that  it is                                                               
12,000 inspections - not devices -  in a year, since most devices                                                               
are in a two- to five-year inspection interval.                                                                                 
                                                                                                                                
3:37:59 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 114.                                                                                   
                                                                                                                                
3:38:13 PM                                                                                                                    
                                                                                                                                
CHAIR KITO announced that HB 114 was held over.                                                                                 
                                                                                                                                
3:38:17 PM                                                                                                                    
                                                                                                                              
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
3:38 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB121 Sponsor Statement 2.22.17.pdf HL&C 2/27/2017 3:15:00 PM
HB 121
HB121 Sectional Analysis 2.22.17.pdf HL&C 2/27/2017 3:15:00 PM
HB 121
HB121 Fiscal Note DOLWD-OSH 2.24.17.pdf HJUD 3/13/2017 1:00:00 PM
HL&C 2/27/2017 3:15:00 PM
HB 121
HB121 Support Document - Federal memo to state plans 2.23.17.pdf HL&C 2/27/2017 3:15:00 PM
HB 121
HB114 Sponsor Statement 02.21.2017.pdf HL&C 2/27/2017 3:15:00 PM
HB 114
HB114 Sectional Analysis 02.21.2017.pdf HL&C 2/27/2017 3:15:00 PM
HB 114
HB114 Fiscal Note DOLWD-MI 2.24.17.pdf HL&C 2/27/2017 3:15:00 PM
HB 114