Legislature(2017 - 2018)BARNES 124

02/07/2018 03:15 PM LABOR & COMMERCE

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Audio Topic
03:21:16 PM Start
03:22:24 PM Overview & Updates from Municipalities by Kathie Wasserman, Executive Director, Alaska Municipality League
04:27:58 PM Presentation: Akosh & Wage and Hour Investigators
04:44:27 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentations: TELECONFERENCED
- Overview & Updates from Municipalities by
Kathie Wasserman, Exec. Dir., AK Municipal League
- AKOSH & Wage and Hour Investigators
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                        February 7, 2018                                                                                        
                           3:21 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)                                                                                         
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Justin Parish                                                                                                    
Representative Dan Saddler                                                                                                      
Representative DeLena Johnson                                                                                                   
COMMITTEE CALENDAR                                                                                                            
OVERVIEW & UPDATES FROM MUNICIPALITIES                                                                                          
     - HEARD                                                                                                                    
PRESENTATION:  AKOSH & WAGE AND HOUR INVESTIGATORS                                                                              
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
KATHIE WASSERMAN, Executive Director                                                                                            
Alaska Municipal League (AML)                                                                                                   
POSITION STATEMENT:  Gave a presentation entitled, "Overview &                                                                
Updates from Municipalities".                                                                                                   
CHRIS DIMOND, Representative and Organizer                                                                                      
Pacific Northwest Regional Council of Carpenters (PNRCC)                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Gave  a   presentation  on   the  Alaska                                                             
Occupational  Safety  and  Health   (AKOSH)  and  Wage  and  Hour                                                               
REPRESENTATIVE JUSTIN PARISH                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Participated  in   the  discussion   on                                                             
REPRESENTATIVE DELENA JOHNSON                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Participated  in the discussion on municipal                                                             
ACTION NARRATIVE                                                                                                              
3:21:16 PM                                                                                                                    
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting to  order at 3:21 p.m.    Representatives Kito,                                                               
Wool, Birch, Josephson, Knopp,  and Sullivan-Leonard were present                                                               
at  the call  to order.    Representative Stutes  arrived as  the                                                               
meeting  was  in  progress.   Also  present  were  the  following                                                               
members  of the  House  Community and  Regional Affairs  Standing                                                               
Committee:  Representative  Justin   Parish,  Representative  Dan                                                               
Saddler, and Representative DeLena Johnson.                                                                                     
^Overview  & Updates  from  Municipalities  by Kathie  Wasserman,                                                               
Executive Director, Alaska Municipality League                                                                                  
             Overview & Updates from Municipalities                                                                         
3:22:24 PM                                                                                                                    
CHAIR KITO announced that the first  order of business would be a                                                               
presentation  from  Kathie  Wasserman  of  the  Alaska  Municipal                                                               
League (AML).                                                                                                                   
CHAIR  KITO stated  the purpose  of the  meeting was  to begin  a                                                               
discussion  about the  municipalities  and recent  shifts in  the                                                               
responsibility between state  and local governments.   He said he                                                               
wanted to initiate a conversation  about the appropriate level of                                                               
service by the state and  municipalities and the impacts of those                                                               
responsibilities.   He specified  the meeting's  discussion would                                                               
be focused on public safety.                                                                                                    
3:24:34 PM                                                                                                                    
KATHIE WASSERMAN,  Executive Director, presented an  overview and                                                               
updates  from municipalities.     She expressed  appreciation for                                                               
the  involvement  of  municipalities  in  the  discussion.    She                                                               
described the cost-cutting measures  AML had adopted, adding that                                                               
dues for membership had not increased  in 25 years.  She outlined                                                               
the work  of AML, which  includes lobbying for  municipalities on                                                               
the  state   and  federal  levels,   the  organization   of  four                                                               
conferences each  year, and local  government assistance  and the                                                               
distribution of a publication  entitled "Local Government Primer"                                                               
[included in  committee packets].   She said  she had  found that                                                               
often legislators do not know  how local government operates when                                                               
crafting  legislation that  affects municipalities.   The  League                                                               
also creates  a salary survey  showing local  government salaries                                                               
around the state.                                                                                                               
3:27:21 PM                                                                                                                    
MS.  WASSERMAN  stated  Article  10  of  the  state  constitution                                                               
establishes  local  government  and  stipulates  the  state  will                                                               
operate  with  maximum local  self-government.    She stated  AML                                                               
opposes  bills that  involve  an unfunded  mandate  or take  away                                                               
local control.  She identified  the state has 165 municipalities,                                                               
19 boroughs, 145 cities, and  1 federal reservation (Metlakatla).                                                               
A municipality  as defined in state  law is a city  or a borough.                                                               
She  added  97  percent  of  the state  population  lives  in  an                                                               
organized  government (a  borough or  a  city) and  3 percent  in                                                               
unorganized boroughs.   She reminded that the  legislature is the                                                               
assembly for all unorganized boroughs.                                                                                          
3:29:07 PM                                                                                                                    
CHAIR KITO  asked whether that  meant legislators  were non-dues-                                                               
paying members.                                                                                                                 
MS. WASSERMAN answered the legislature  had never been billed for                                                               
dues.   She  outlined all  boroughs have  three duties  under the                                                               
state  constitution -  education, planning  and zoning,  and land                                                               
use.   She  highlighted planning  and zoning  in the  unorganized                                                               
borough is something  the legislature would have  to examine very                                                               
closely  should any  property  tax be  proposed,  as property  in                                                               
unorganized  boroughs  has  not  been assessed.    She  explained                                                               
creating  the tax  would entail  sending state  assessors out  to                                                               
assess  all the  land  in unorganized  boroughs,  making it  very                                                               
MS.  WASSERMAN said  she had  been looking  at resolutions  about                                                               
federal overreach.  She stated  she had replaced "federal" in the                                                               
resolutions with  "state", and  then with  "local", and  saw that                                                               
the  objections  were  similar.     She  highlighted  that  often                                                               
municipalities  are  informed  of  legislative  action  after  it                                                               
occurs,  whereas  local  government   could  be  instrumental  in                                                               
addressing issues that affect municipalities.                                                                                   
MS.  WASSERMAN addressed  the  fiscal plan,  stating  it is  very                                                               
difficult  for municipalities  to  plan without  a  budget.   She                                                               
added  money  to municipalities  has  dropped  from $141  million                                                               
shared between 160 municipalities in  1985 to sharing $30 million                                                               
with   20  communities   on  top   of  the   160  municipalities.                                                               
Additionally, there  were recent  cost shifts  from the  state to                                                               
3:33:40 PM                                                                                                                    
MS. WASSERMAN  addressed public safety budget  cuts, highlighting                                                               
the  strain from  the opioid  crisis.   She gave  the example  of                                                               
Kotzebue, Alaska, where there is  no jail because people who were                                                               
arrested would  be transferred to Anchorage,  Alaska, and pointed                                                               
out that the weather  had to be good to allow  those people to be                                                               
flown  to  Anchorage and  said  crime  generally happens  in  the                                                               
middle of the night.  There had  to be somewhere for people to go                                                               
in  the  meantime.   She  addressed  adding  responsibilities  to                                                               
municipalities  such  as  fingerprinting and  background  checks.                                                               
She  underlined  the  FBI  does   not  answer  phone  calls  from                                                               
3:36:59 PM                                                                                                                    
CHAIR KITO  asked for some  background on the powers  of boroughs                                                               
including  the  level  at which  municipalities  accept  policing                                                               
powers and to  what degree those policing powers  are required by                                                               
the constitution, statute, or the municipality.                                                                                 
MS.  WASSERMAN  answered not  all  boroughs  have adopted  police                                                               
powers, sometimes the  city within the borough  has those powers.                                                               
She added that  most small communities don't  have police powers,                                                               
some  have  village  public  safety  officers  (VPSOs)  furnished                                                               
through the state.                                                                                                              
CHAIR KITO  surmised that when  municipalities are  forming, they                                                               
are not  required to adopt  police powers  unless it is  in their                                                               
MS. WASSERMAN answered that was  correct.  Police power insurance                                                               
is very costly and that  often prohibits smaller communities from                                                               
adopting policing powers.                                                                                                       
3:39:16 PM                                                                                                                    
REPRESENTATIVE  KNOPP  commented  that many  municipalities  have                                                               
planning powers but not all have  adopted zoning powers.  He gave                                                               
the example of the Kenai  [Peninsula] borough, which cannot adopt                                                               
police powers without a vote of the people.                                                                                     
MS. WASSERMAN added there are  many classifications of cities and                                                               
boroughs  and  each  was  different.     She  said  she  believed                                                               
approximately  20 cities  in the  unorganized  borough have  sale                                                               
tax.   All  but three  boroughs have  sales taxes.   Second-class                                                               
cities  may or  may  not  have sales  tax.    Some depend  almost                                                               
entirely on community assistance and fees.                                                                                      
CHAIR KITO mentioned one city that operates a liquor store.                                                                     
3:41:41 PM                                                                                                                    
REPRESENTATIVE  WOOL indicated  a  chart in  the publication  and                                                               
commented it  appears there  is only  one first-class  borough in                                                               
the state.                                                                                                                      
MS. WASSERMAN answered there used  to be a third-class borough in                                                               
Haines, Alaska, but there are none now.                                                                                         
REPRESENTATIVE  WOOL  spoke  to  the statewide  smoking  ban  and                                                               
surmised  AML  would  oppose  it  since  it  went  against  local                                                               
MS. WASSERMAN clarified  the board had taken a stand  in favor of                                                               
[the  statewide smoking  ban] since  it  was an  issue of  public                                                               
3:43:33 PM                                                                                                                    
REPRESENTATIVE  BIRCH  spoke  to  Anchorage,  Alaska,  issues  on                                                               
police  service areas,  stating  Seward  Highway between  Potters                                                               
Marsh  and  Portage has  been  a  point  of contention  as  state                                                               
troopers  had historically  monitored the  area but  had stopped.                                                               
He asked whether AML supports  uniform services across Alaska and                                                               
whether  it had  stepped into  the  discussion on  behalf of  the                                                               
municipality of Anchorage.                                                                                                      
MS.   WASSERMAN  stated   AML   doesn't   deal  with   individual                                                               
municipalities and  advocates for  all municipalities.   She gave                                                               
examples of  smaller communities with  no police presence  at all                                                               
and  added the  cuts to  the  Department of  Public Safety  (DPS)                                                               
affected the entire state.                                                                                                      
CHAIR KITO spoke to the  situation in Haines, Alaska, where there                                                               
was  historically a  trooper presence  in the  borough which  had                                                               
been  removed  due  to  budget  cuts.   He  underlined  that  the                                                               
legislature should  understand that cuts  to DPS put  pressure on                                                               
local governments,  some of which  may not have the  structure in                                                               
place to accommodate the added  responsibility.  He stated it was                                                               
a statewide issue.                                                                                                              
3:47:55 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON spoke  to the  transfer of  duties from                                                               
the  state to  the municipalities  and asked  why Alaska  did not                                                               
have a system of government closer to that of the Lower 48.                                                                     
MS.  WASSERMAN  stated  she  had served  on  the  Local  Boundary                                                               
Commission for  around 12 or 14  years.  She said  the intent was                                                               
to avoid problems that had arisen  in the Lower 48 and to provide                                                               
more  local  control.    She  highlighted  the  many  differences                                                               
between  Alaska   and  the  Lower  48,   including  sheriffs  and                                                               
counties, and pointed out the  responsibilities are not the same.                                                               
She  gave  some  history  of  how  the  state  was  organized  at                                                               
statehood.  She  expressed her wish that the  legislature and the                                                               
municipalities  would  craft something  that  works  for all  and                                                               
would   allow  municipalities   to   perform   duties  that   the                                                               
legislature cannot.    She said  there had not been  much room to                                                               
discuss issues outside Robert's Rules of Order.                                                                                 
3:52:16 PM                                                                                                                    
CHAIR KITO  commented that the tax  base is a consideration.   He                                                               
explained  when  the  state  was   being  formed,  model  borough                                                               
boundaries were created in the  attempt to move from territory to                                                               
organized state.  Some of  the unorganized boroughs were examined                                                               
recently for  a tax  base and  it was  determined that  coming up                                                               
with economic  drivers for  local government  was difficult.   In                                                               
Alaska,  rather  than highway  patrol  as  in other  states,  the                                                               
troopers  became  police  for  the   state  and  originally  held                                                               
investigative powers in  smaller communities.  He  said Alaska is                                                               
a hybrid with opportunities to craft solutions.                                                                                 
MS.  WASSERMAN added  the VPSO  works for  the state,  the tribal                                                               
corporation,  and the  mayor,  but  as a  state  employee is  not                                                               
allowed to carry  out municipal law enforcement.   She said there                                                               
were  a  lot  of  communities   with  "just  a  lid  on  things,"                                                               
especially remote communities.                                                                                                  
3:55:55 PM                                                                                                                    
REPRESENTATIVE  JUSTIN PARISH,  Alaska  State Legislature,  asked                                                               
about the magnitude of the cost shifts around public safety.                                                                    
MS. WASSERMAN  said she  would have to  ask each  municipality in                                                               
order to get  that information.  She added as  the state has less                                                               
and  less  money,  there  was  less  community  help  that  state                                                               
departments  offer.   She  added  she  works with  Department  of                                                               
Commerce, Community  & Economic Development (DCCED)  to put those                                                               
figures together.                                                                                                               
3:57:19 PM                                                                                                                    
CHAIR   KITO   asked   whether  impacts   of   cost   shifts   to                                                               
municipalities vary by municipality.                                                                                            
MS.  WASSERMAN  stated there  is  less  state presence  in  rural                                                               
communities  and  the biggest  impact  is  already observable  in                                                               
small communities.   She gave an example of the  mayor of Diomede                                                               
being asked whether  it was true, as Governor  Palin stated, that                                                               
they  could see  Russia from  there.   The  mayor had  responded,                                                               
"Yes, we can  see Russia.  Who's Governor Palin?"  She stated the                                                               
state  presence   has  disappeared  from  many   of  the  smaller                                                               
3:58:45 PM                                                                                                                    
REPRESENTATIVE WOOL mentioned Fairbanks,  Alaska, and "pockets of                                                               
government" and asked why some areas  of the state had a city and                                                               
a borough.                                                                                                                      
MS. WASSERMAN  replied she had  been in Fairbanks,  Alaska, twice                                                               
for large  meetings on the issue.   She said the  legislature has                                                               
allowed  it to  go  into  the hands  of  local  government.   She                                                               
mentioned that twice in 12  years Fairbanks, Alaska, had not come                                                               
together to change the structure of its local government.                                                                       
4:00:43 PM                                                                                                                    
REPRESENTATIVE BIRCH pointed to  Venitie and Metlakatla and asked                                                               
about their city status.                                                                                                        
MS.  WASSERMAN explained  Venitie was  not  a city  and AML  only                                                               
represented municipalities.                                                                                                     
CHAIR  KITO   clarified  Metlakatla  had  special   status  as  a                                                               
reservation  and  was  organized  completely  under  the  federal                                                               
government, whereas Venitie and  Arctic Village had requested but                                                               
not been granted reservation status.                                                                                            
MS.  WASSERMAN  addressed the  issue  of  jobs and  moving  money                                                               
throughout   the   state.       She   expressed   surprise   that                                                               
municipalities were  not included  in discussions  of jobs.   She                                                               
said she  would like the  state to recognize municipalities  as a                                                               
financial driver in the state,  as municipalities provide jobs in                                                               
communities  where  there  are  no  other  jobs.    Additionally,                                                               
municipalities move money around the state through taxation.                                                                    
4:03:39 PM                                                                                                                    
REPRESENTATIVE BIRCH  asked where  Ms. Wasserman saw  the state's                                                               
obligations  and role  in municipal  services such  as water  and                                                               
sewer or police powers.                                                                                                         
MS. WASSERMAN  answered she saw it  as an important role,  not to                                                               
provide  the services,  but for  help  with deferred  maintenance                                                               
including  on  water   and  sewer  systems.     She  stated  many                                                               
communities  were discussing  raising  local taxes  and said  she                                                               
thought it was  a bit unfair for the state  not to raise revenues                                                               
but find it fine for municipalities to do so.                                                                                   
REPRESENTATIVE  BIRCH said  typically  the  expectation was  that                                                               
when a service is voted in,  there is a responsibility to pay for                                                               
it.   He  said there  is around  $60 billion  in state  financial                                                               
assets and asked what role  those assets would play in supporting                                                               
4:07:41 PM                                                                                                                    
MS. WASSERMAN referenced  a letter from the  Alaska Conference of                                                               
Mayors (ACoM), who were "very  strong" in putting forth ideas for                                                               
a fiscal plan  involving earnings of the Permanent  Fund (PF) and                                                               
a broad-based tax.  She added ACoM  was "OK with cuts but at some                                                               
point, when  we can no longer  provide a safe community,  we need                                                               
to  stop  the cuts  and  perhaps  look  at  more revenue."    She                                                               
mentioned letters  sent to  each member  of the  committee asking                                                               
for a fiscal plan to budget for the municipalities.                                                                             
4:08:42 PM                                                                                                                    
REPRESENTATIVE PARISH  spoke to page  10 of the  Local Government                                                               
Primer,    "Issues    with    Sizable   Impacts    on    Alaska's                                                               
Municipalities", and  mentioned payment in  lieu of  taxes (PILT)                                                               
doesn't  currently have  a  funding source,  resulting  in a  $33                                                               
million loss  to municipalities.   He asked for  more information                                                               
on the historic funding source and the current outlook.                                                                         
MS.  WASSERMAN  said  PILT  is  going  the  direction  of  timber                                                               
receipts and  Congress has not found  a place in which  to insert                                                               
that funding.   She added in speaking with  United States Senator                                                               
Lisa  Murkowski,  the senator  had  said  PILT will  probably  be                                                               
inserted into some  bill, and PILT would probably  take the place                                                               
of  property taxes  that  municipalities give  up  for a  federal                                                               
building or  federal land.   The federal  government pays  a very                                                               
small amount on the dollar of what  the tax rate would be and can                                                               
pick  their  tax rate.    She  reiterated Senator  Murkowski  was                                                               
fairly confident PILT would be funded.                                                                                          
CHAIR  KITO stated  there are  different sources  of funding  and                                                               
different  beneficiaries of  PILT,  such as  PILT  on impacts  of                                                               
military bases,  PILT on  impacts of  ownership of  federal land,                                                               
and Tongass timber receipts.                                                                                                    
MS. WASSERMAN clarified  that PILT is on all  federal land except                                                               
military  bases,  which pay  through  another  fund.   She  added                                                               
timber receipts were outside of PILT and is no longer in effect.                                                                
CHAIR KITO asked  for confirmation that timber  receipts had been                                                               
for securing funding for rural schools.                                                                                         
MS.  WASSERMAN added  it  had  been used  to  secure funding  for                                                               
schools and roads in communities within the Tongass and Chugach.                                                                
4:11:51 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD stated  when  working with  [the                                                               
Division  of]  Community  and   Regional  Affairs  (DCRA),  local                                                               
government  specialists were  used to  work with  communities for                                                               
grant funding  and federal  matching grants.   She  asked whether                                                               
there was still that presence in rural areas.                                                                                   
MS.  WASSERMAN  answered when  state  agencies  began to  be  cut                                                               
heavily, the only funding for  DCRA for local government was from                                                               
the  federal  government.    This   had  meant  local  government                                                               
specialists  could  only  be  used  for  Rural  Utility  Business                                                               
Advisor Program (RUBA), whereas  historically the specialists had                                                               
helped with  elections and  other local  government issues.   She                                                               
stated a lot of the calls were coming to AML.                                                                                   
CHAIR  KITO  clarified RUBA  was  federally  funded and  provides                                                               
training and support to local  governments to support their water                                                               
and wastewater systems.                                                                                                         
4:14:13 PM                                                                                                                    
REPRESENTATIVE  PARISH   asked  how   much  money   from  [timber                                                               
receipts] had been in an average year.                                                                                          
MS. WASSERMAN  answered that Southeast  Alaska alone  was getting                                                               
$76 million,  almost 3  times the amount  of revenue  sharing for                                                               
the  entire state,  and  it is  gone.   Chugach  was receiving  a                                                               
little over $2  million.  In addition to  losing revenue sharing,                                                               
the  state  had   lost  $80  million,  split   between  about  30                                                               
REPRESENTATIVE PARISH  asked whether  there was any  prospect for                                                               
the funding  to return  and whether  the national  delegation was                                                               
working on the issue.                                                                                                           
MS. WASSERMAN  answered the state  legislature has  a resolution;                                                               
however, the  act had been expired  for two years.   She said she                                                               
speaks to Senator  Murkowski on the issue of  timber receipts and                                                               
that Congressman Don Young had been  supportive.   She added many                                                               
states without  timber don't  feel it  is fair  to send  money to                                                               
communities to  cut wood when no  wood was being sold.   She said                                                               
there had been talk of forest  management fees, and the state and                                                               
federal government managing the forests.                                                                                        
4:17:39 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON asked  how  long Southeast  communities                                                               
had received [timber receipts].                                                                                                 
MS.  WASSERMAN answered  it had  originally  started as  stumpage                                                               
fees.   When the timber  crash occurred, the education  and roads                                                               
programs  left those  communities.   The federal  government gave                                                               
money to states  that lost revenue from timber  as compensation -                                                               
at a  5-year rolling average  of the  stumpage fees -  for losing                                                               
the large timber  industry.  She added there need  to be tools in                                                               
place to compensate  for industries in the  event timber receipts                                                               
go away.                                                                                                                        
4:19:28 PM                                                                                                                    
REPRESENTATIVE  DELENA JOHNSON,  Alaska State  Legislature, asked                                                               
whether there had  been any discussion about asking  the state of                                                               
Alaska to pay PILT to communities.                                                                                              
MS. WASSERMAN answered she had never broached the subject.                                                                      
REPRESENTATIVE  JOHNSON  remarked that  she  was  currently in  a                                                               
position to do so.                                                                                                              
CHAIR  KITO  added  there  had   been  some  discussion  about  a                                                               
community dividend as an alternative to revenue sharing.                                                                        
4:21:53 PM                                                                                                                    
REPRESENTATIVE PARISH  asked Ms.  Wasserman what she  saw "coming                                                               
down the pike." He asked whether  there were any other sources of                                                               
federal funding  which the  state should  be advocating  to avoid                                                               
losing, or  whether she anticipates  other cuts from  the federal                                                               
government to municipalities.                                                                                                   
MS. WASSERMAN  answered the  state should always  keep an  eye on                                                               
PILT as  it provides  money to every  municipality in  the state.                                                               
She added sometimes unfunded mandates  come down from the federal                                                               
government.  She mentioned a  bill to allow ambulance services to                                                               
receive money  through Medicaid.   She said she thought  it would                                                               
mean almost $1 million for Anchorage, Alaska.                                                                                   
4:24:00 PM                                                                                                                    
CHAIR  KITO  said he  was  interested  in further  discussion  of                                                               
responsibilities of the state and  municipalities, perhaps on the                                                               
topic of roads and the shift of responsibility.                                                                                 
MS. WASSERMAN  spoke to bills  affecting municipalities,  such as                                                               
regulations  in smaller  communities.   She gave  the example  of                                                               
pesticide  regulation   in  Pelican,  Alaska.     The  regulation                                                               
required a certified person come take  care of a wasp's nest on a                                                               
public building, meaning  the local government would  have to fly                                                               
someone  out to  Pelican and  in  shoulder season  would have  to                                                               
overnight   that  person.     She   underlined  there   were  the                                                               
limitations of smaller communities to consider.                                                                                 
^Presentation:  AKOSH & Wage and Hour Investigators                                                                             
       Presentation:  AKOSH & Wage and Hour Investigators                                                                   
4:27:58 PM                                                                                                                    
CHAIR KITO announced that the final  order of business would be a                                                               
presentation  on Alaska  Occupational Safety  and Health  (AKOSH)                                                               
and Wage and Hour Investigators.                                                                                                
4:29:10 PM                                                                                                                    
CHRIS  DIMOND, Representative  and  Organizer, Pacific  Northwest                                                               
Regional  Council  of  Carpenters (PNRCC),  presented  on  Alaska                                                               
Occupational  Safety  and  Health   (AKOSH)  and  Wage  and  Hour                                                               
investigators.  He  mentioned a January 31 letter he  had sent to                                                               
the  committee  [included  in   committee  packets]  and  offered                                                               
concern that wage and hour inspectors were not properly funded.                                                                 
MR. DIMOND explained part his  job as representative of the PNRCC                                                               
is to  ensure men and women  working on job sites  are working in                                                               
safe conditions  and receiving  pay for  their work  according to                                                               
Title  36 rules.    He stated  he had  taken  information to  the                                                               
Department  of Labor  and Workforce  Development (DWLD),  who had                                                               
responded  "we do  not have  the funding  to go  after this."  He                                                               
mentioned he did not see the issue  so much in Juneau and he said                                                               
he thought Anchorage,  Alaska and Fairbanks, Alaska  did not have                                                               
the same  problem as there are  2 wage and hour  investigators in                                                               
Juneau,  Alaska, 8  in  Anchorage, Alaska,  and  3 in  Fairbanks,                                                               
MR.  DIMOND  stated a  lot  of  state  money  is being  spent  on                                                               
construction projects  and some  contractors are finding  ways to                                                               
get around  prevailed rate and  workers are not being  paid Title                                                               
36 rates.   He gave  the example of  a Craigslist ad  from Oregon                                                               
for work  in Alaska at $20  per hour, and prevailing  rate at the                                                               
time for  the work was $60  per hour.  The  contractor was paying                                                               
$40  less per  worker per  hour for  the job,  thereby preventing                                                               
contractors who  "play by  Alaska rules"  from getting  the jobs.                                                               
That case is  still ongoing three years later,  for $100 thousand                                                               
in back payroll.   He stated when an investigator  with a case is                                                               
spending  their  time  in  court,   their  time  to  go  out  and                                                               
investigate other projects is taken up.                                                                                         
MR. DIMOND  said he was  asking legislators  what can be  done to                                                               
protect the  state money being  invested in capital  projects and                                                               
to ensure  workers are not being  cheated out of their  wages and                                                               
therefore that money is not being spent in the community.                                                                       
4:33:48 PM                                                                                                                    
REPRESENTATIVE   BIRCH  stated   he  had   experience  monitoring                                                               
construction projects and surmised  what Mr. Dimond had described                                                               
was "out-and-out fraud."                                                                                                        
CHAIR KITO commented  he thought there were some gray  areas.  He                                                               
said contractors  can hire subcontractors who  may have different                                                               
MR. DIMOND replied  to Representative Birch that  it was out-and-                                                               
out fraud and stated Chair Kito  was also correct that "there are                                                               
some  independent  contractor  situations," but  legislation  had                                                               
been passed to ensure the terminology was not misused.                                                                          
REPRESENTATIVE  BIRCH spoke  to  varying  rates across  different                                                               
regions for services and for workmanship.                                                                                       
MR. DIMOND  stated the work the  carpenters do is hard,  and they                                                               
should be compensated accordingly.                                                                                              
CHAIR KITO added  the prevailing wage around the  state varies in                                                               
different  regions.   He  opined  it  is  unfair to  compare  the                                                               
prevailing wage in  Oregon with that in Alaska as  the wage for a                                                               
well-qualified worker  who comes to  Alaska may be high,  but the                                                               
wages are not being spent locally.                                                                                              
4:37:42 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD  asked  whether Mr.  Dimond  was                                                               
seeing low bidding on state  projects in the request for proposal                                                               
(RFP) process.                                                                                                                  
MR.  DIMOND  answered  abnormally  low  bids  were  beginning  to                                                               
appear, adding that part  of his job is to act  as a resource for                                                               
Department  of Labor  & Workforce  Development (DLWD)  and report                                                               
issues to the department.                                                                                                       
4:38:44 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  asked  whether  the  request  for  the                                                               
legislature was to  be aware of the situation and  that it needed                                                               
more enforcement.                                                                                                               
MR. DIMOND  answered he  thinks there is  a need  for enforcement                                                               
resources to investigate projects.   He added when he was working                                                               
in the field, he saw DLWD out on a public works job only once.                                                                  
CHAIR  KITO  reiterated  there  was  enforcement  in  more  urban                                                               
centers,  but  not   on  remote  projects.     He  surmised  some                                                               
contractors knew that  and the fine would be less  than they were                                                               
saving on inappropriate use of labor.                                                                                           
MR.  DIMOND  said  he  had   heard  mention  of  assessing  fines                                                               
differently.  He gave the example  of a project in Sitka, Alaska,                                                               
in which contractors were getting  around certified payroll.  The                                                               
paperwork listed  1,200 hours of  the 1,500 hours on  the project                                                               
as "paint  and prep."   He  emphasized there is  no way  that was                                                               
accurate for a concrete job.                                                                                                    
CHAIR KITO  asked whether that  meant they were  being reimbursed                                                               
at a higher rate as a result.                                                                                                   
MR. DIMOND  clarified it  meant the workers  were being  paid far                                                               
beneath the  carpenter rate and the  savings adds up and  gives a                                                               
huge advantage  to contractors  when they figure  out how  to get                                                               
around certified payroll.                                                                                                       
4:41:45 PM                                                                                                                    
REPRESENTATIVE  WOOL asked  Mr. Dimond  in what  capacity he  was                                                               
carrying out investigations.                                                                                                    
MR. DIMOND  answered his  organization worked  to keep  a running                                                               
market  survey to  see which  projects were  going on  around the                                                               
CHAIR KITO suggested it was to support PNRCC members.                                                                           
MR. DIMON answered  in the affirmative, adding  it supported non-                                                               
members as well.                                                                                                                
REPRESENTATIVE  WOOL asked  about  approaching  contractors on  a                                                               
non-union site about payroll.                                                                                                   
MR. DIMOND explained contractors do  not provide payroll.  Anyone                                                               
can go to DLWD and request certified payroll.                                                                                   
4:44:27 PM                                                                                                                    
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
4:44 p.m.                                                                                                                       

Document Name Date/Time Subjects
AKOSH Wage and Hour Background info.pdf HL&C 2/7/2018 3:15:00 PM
Presentation AKOSH
AKOSH Wage and Hour Letter to HLAC.pdf HL&C 2/7/2018 3:15:00 PM
Presentation AKOSH