Legislature(1997 - 1998)

05/07/1997 01:07 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SENATE LABOR AND COMMERCE COMMITTEE                             
                          May 7, 1997                                          
                           1:07 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Loren Leman, Chairman                                                 
 Senator Jerry Mackie, Vice Chairman                                           
 Senator Lyman Hoffman                                                         
  MEMBERS ABSENT                                                               
 Senator Mike Miller                                                           
 Senator Tim Kelly                                                             
  COMMITTEE CALENDAR                                                           
 CS FOR HOUSE BILL NO. 207(JUD)                                                
 "An Act relating to employer drug and alcohol testing programs."              
  - HEARD AND HELD                                                             
 HOUSE BILL NO. 266                                                            
 "An Act relating to limited liability companies and limited                   
 partnerships; and providing for an effective date."                           
  - MOVED HB 266 OUT OF COMMITTEE                                              
  PREVIOUS SENATE COMMITTEE ACTION                                             
 HB 207 - No previous action to consider.                                      
 HB 266 - No previous action to consider.                                      
  WITNESS REGISTER                                                             
 Mr. Jeff Logan, Staff                                                         
 Representative Joe Green                                                      
 State Capitol Bldg.                                                           
 Juneau AK 99801-1182                                                          
  POSITION STATEMENT:   Staff to sponsor of HB 207.                            
 Ms. Sharen Linford, Human Resources Manager                                   
 Osborne Construction                                                          
 3510 Spenard Rd., Ste 105                                                     
 Anchorage AK 99503                                                            
  POSITION STATEMENT:   Opposed HB 207.                                        
 Mr. Frank Dillon, Executive Director                                          
 Alaska Trucking Association                                                   
 3443 Minnesota                                                                
 Anchorage AK 99503                                                            
  POSITION STATEMENT:   Supported HB 207.                                      
 Mr. Ken Jacobus, Attorney                                                     
 Vital Sign Diagnostics                                                        
 425 G St. Ste. 920                                                            
 Anchorage AK 99501                                                            
  POSITION STATEMENT:   Commented on HB 207.                                   
 Mr. Matt Fagnani, President                                                   
 Allvest Labs                                                                  
  POSITION STATEMENT:   Supported HB 207.                                      
 Mr. Dwight Perkins, Special Assistant                                         
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau AK 99802-1149                                                          
  POSITION STATEMENT:   Neutral on HB 207.                                     
 Mr. David Rogers, Attorney                                                    
 Council of Alaska Producers                                                   
 211 4th St., Ste 108                                                          
 Juneau AK 99801                                                               
  POSITION STATEMENT:   Commented on HB 207.                                   
 Ms. Pam LaBolle, President                                                    
 Alaska State Chamber of Commerce                                              
 217 2nd St.                                                                   
 Juneau AK 99801                                                               
  POSITION STATEMENT:   Supported HB 207.                                      
 Representative Joe Ryan                                                       
 State Capitol Bldg.                                                           
 Juneau AK 99801-1182                                                          
  POSITION STATEMENT:   Sponsor of HB 266.                                     
 Mr. Richard Hompesch                                                          
 119 Cushman, Ste 400                                                          
 Fairbanks AK 99701                                                            
  POSITION STATEMENT:   Commented on HB 266                                    
  ACTION NARRATIVE                                                             
  TAPE 97-24, SIDE A                                                           
 Number 001                                                                    
         HB 207 EMPLOYER DRUG & ALCOHOL TESTING PROGRAM                       
  CHAIRMAN LEMAN  called the Senate Labor and Commerce Committee               
 meeting to order at 1:07 p.m. and announced  HB 207  to be up for             
  MR. JEFF LOGAN,  Staff to Representative Joe Green, said this                
 legislation attempts to establish the first policy in the State of            
 Alaska on drug testing.  Currently around 55,000 Alaskans are                 
 tested for the presence of drugs or alcohol in the workplace.  Some           
 of that testing is due to federal regulation and some is due to               
 good business practices.                                                      
 The concept in the bill is to offer employers a certain limited               
 immunity from certain types of legal action in exchange for                   
 implementing procedures and policies dealing with drug testing.               
 The sponsor has adhered to the highest standards he can find from             
 other states.                                                                 
 The first immunity is that an employer may not be sued for actions            
 in good faith based on a positive drug or alcohol impairment test.            
 He may not be sued for the failure to test for drugs or alcohol               
 impairment or the failure to test for a specific drug or another              
 controlled substance.                                                         
 MR. LOGAN said that a person may not bring action against an                  
 employer for defamation of character, lible, slander, or damaged              
 reputation based on a drug or alcohol test with a few exceptions.             
 If the employer needs to divulge the test information, they cannot            
 be sued.                                                                      
 He said that section 23.10.615 may be one of the more important               
 sections of the bill.  It states that compliance with these                   
 provisions is voluntary and he pointed out that no one would be               
 hurt by the bill.                                                             
  CHAIRMAN LEMAN  asked how they voluntarily comply.   MR. LOGAN               
 replied that they comply be meeting the provisions of the bill.               
 The first thing they must do is establish a policy which has to be            
 written and posted or accessible to the employees.  The bill lists            
 what issues need to be in the policy and the consequences of                  
 refusal to participate in a test and what adverse personnel action            
 may be taken as a result of the test.  It is the right of the                 
 employee to get written test results.                                         
 MR. LOGAN said they had worked with employer and employee groups on           
 their rights and needs and Representative Green had amended this              
 bill 15 times.  One of the provisions they requested is that they             
 have some time to deal with the tests and results.  An employee               
 should be given time to explain in a confidential setting the                 
 results of a positive test and no adverse employment action should            
 be taken until then.  The employer may require the collection and             
 testing of a sample of an employee's or prospective employee's                
 urine or breath, but it has to be consistent with a job related               
 purpose.  The policy has to be specific as to which employees or              
 positions are subject to testing so employees know up-front who is            
 going to be tested.                                                           
 Number 150                                                                    
  CHAIRMAN LEMAN  asked why they would want to state that this bill            
 may not be construed to encourage on-site testing.   MR. LOGAN                
 replied that they didn't intend to deal with on-site testing in the           
 bill and they wanted that clear to everyone.                                  
  MR. LOGAN  said the accuracy of the test used is the highest                 
 standard in the U.S. and possibly the world.  Nationwide there are            
 71 laboratories that they can send the samples to.                            
  SENATOR HOFFMAN  asked if there were any in Alaska.  MR. LOGAN               
 replied no.  He said they allow laboratories approved by the                  
 College of American Pathologists, American Association of Clinical            
 Chemists to perform the test, the second highest standard.  If                
 there is a positive test, it must be confirmed using a different              
 analytical process than the initial test which is generally a                 
 chemical process.  The second test they require to be a gas                   
 chromatography mass spectrometry.  The employer may not rely on a             
 positive test until the confirmation test has been done.                      
 MR. LOGAN said page 7 dealt with disciplinary procedures.                     
  CHAIRMAN LEMAN  asked if there was a medical reason for restricting          
 review of the drug tests to a licensed physician or doctor of                 
 osteopathy.   MR. LOGAN  replied that the reason is because those             
 types of medical professionals are the only ones deemed by their              
 profession to be qualified to interpret the results.                          
 Number 281                                                                    
  SENATOR MACKIE  asked if a company in the rural areas of the State           
 wants to have drug testing, do they need to bring in a doctor to do           
 it.   MR. LOGAN  explained that the bill is not based on one piece of         
 model legislation, but is the best parts of several and the                   
 remoteness of Alaskan workplaces was a concern.  That's why                   
 compliance with the bill is voluntary and is not to be construed to           
 encourage, discourage, or restrict on-site testing.                           
  SENATOR MACKIE  explained that his concern was for rural employers           
 who wanted to participate in this program for safety reasons and              
 they are not allowed to do it with a health aide or PA which are              
 common in rural areas of the State.  He asked why a doctor has to             
 give the urine test.                                                          
  MR. LOGAN  clarified that there is no requirement that a physician           
 collect the sample.  The only place the physician enters into the             
 bill is after there has been an initial test that was positive. It            
 is then confirmed by a different analytical process.  Then it goes            
 to the doctor to ask the donor if there is a valid medical reason             
 for the positive.  There is no requirement for the doctor to be in            
 the rural area in those cases; he could do it by telephone, CB, or            
 other communication device.                                                   
 Number 310                                                                    
  SENATOR HOFFMAN  asked what the typical test would cost.  MR. LOGAN          
 said another person would testify later on that issue.                        
    MS. SHAREN LINFORD,  Human Resources Manager, Osborne Construction,        
 said this bill came to her attention 10 days ago.  She said they              
 had been doing drug testing for several years because they feel it            
 makes a safer work place and is part of being a responsible                   
 employer.  Their program includes every employee at the company               
 from the president on down.  Current employees are subject to 10%             
 testing, both management and labor, once a month.  Their statistics           
 show that 20% of construction workers are drug users.  They have              
 been using a field test kit that is basically a cup and a restroom            
 with a management person administering the testing.                           
 They like the speed with which you get results and the ability to             
 be able to make an employment decision immediately.  Prior to doing           
 this, they had to collect the samples, send them in by DHL to a               
 laboratory, wait up to three or four days or longer if it was a               
 weekend, then they could tell the employee if they could come to              
 work or not.                                                                  
 Their procedure, if there is a positive, is to first give the                 
 option for a second test right away.  If that's positive or if they           
 skip the option, they will send the sample to a laboratory and                
 follow up from there.                                                         
 She said they have had very good success with their program.  Their           
 concern is that unless they follow all the hoops in this bill, they           
 are subject to more litigation.  They have heard that the bill                
 claims to have the highest standards and would be impractical for             
 companies working in rural areas of the State.                                
 Number 433                                                                    
  CHAIRMAN LEMAN  said he agreed with her regarding field testing and          
 the confirmation test, only if the employee disagrees with the                
 initial test, but it's not obvious to him why she suggested                   
 deleting paragraph (e).                                                       
  MS. LINFORD  explained that they rely on the commercially available          
 kit to have already established a level of the drug to be tested              
 for.   CHAIRMAN LEMAN  said he thought that paragraph probably                
 remains valid for lab testing, although not for the field.                    
 Number 470                                                                    
  MR. FRANK DILLON,  Executive Director, Alaska Trucking Association,          
 supported HB 207 because it indemnifies people who have no                    
 influence over a result from the liability.  There are tens of                
 thousands of people who are mandated by federal law and through               
 federal regulation to be in drug testing.  They have been in a                
 mandated program for the last six years, although many companies              
 have done drug testing for the last 20 years.                                 
 The mandated program has set up a rather intricate system of checks           
 and balances that is designed to ensure that when samples are taken           
 and tests are conducted, that those tests are extremely accurate              
 and very unlikely to be false positive.  In this day and age, a               
 positive drug or alcohol test can be the absolute ruination of a              
 person's life.  Industry people feel very strongly that they do not           
 want impaired drivers or anyone else working there.  They also                
 understand that when you're going to deal with somebody's                     
 livelihood and perhaps their potential livelihood for the rest of             
 their lives that you have to be very careful when you tell them               
 they have a problem.                                                          
 They have no problem at all with on-site testing.  It is a good               
 screening method, but it does not provide the kind of                         
 accountability and degree of scientific precision that should be              
 involved when you are making a decision over someone's livelihood.            
 He said when they have followed all the rules and sent the urine              
 off to a prescribed laboratory for a test, at that point the                  
 companies' liability ceases in terms of a false positive report.              
 MR. DILLON said when you conduct a test on-site, you become the               
 laboratory.  It is an excellent screening mechanism that employers            
 should be able to use.  However, it is only an indicator as far as            
 its scientific degree of accuracy.  Therefore, they don't believe             
 it should have immunity in the same way HB 207 allows immunity for            
 people who have accepted the responsibility of being in a program             
 where they have no control over the results of a false positive.              
 He did not think passage of HB 207 would have an adverse affect on            
 anyone's operation.  What it does not do, and what he believes                
 should not do, is indemnify people who in the field conduct tests             
 and have control over those tests from reporting those results.               
 MR. DILLON said they want the focus of the bill to be on punishing            
 the people who actually don't do their job correctly.                         
 Number 531                                                                    
  SENATOR MACKIE  asked if he had specific language.   MR. DILLON  said        
 the bill may not solve all the problems in the drug testing area,             
 but it clearly helps companies that have no control over test                 
 results that are reported back to their employees.                            
  CHAIRMAN LEMAN  said he thought there was a way to deal with the Ms.         
 Linford's and Mr. Dillon's concerns and he asked them to talk to              
 staff to see what could be worked out.                                        
  MR. KEN JACOBUS,  Attorney, Vital Sign Diagnostics, said they                
 manufacture the on-site sample testing kits.  He suggested removing           
 drug testing at a certified laboratory provision from section (c)             
 and inserted into section (d).  This will make it clear that on-              
 site testing is permitted and only confirmatory testing must be               
 done at a certified laboratory.  As the bill reads now it appears             
 that all testing has to be done at a certified laboratory including           
 testing of samples that are supposed to be on-site.                           
  CHAIRMAN LEMAN  said sometimes the employee may agree with the first         
 result and not want to contest it and asked him to comment on Ms.             
 Linford's suggestion of confirmation, instead of being mandatory              
 being at the request of the employee as a way of keeping costs                
 down.   MR. JACOBUS  said it should be an employee option.                    
  MR. MATT FAGNANI,  President, Allvest Labs, said they perform third          
 party administration for over 1,400 Alaskan companies currently               
 doing drug and alcohol testing in various forms within the State of           
 Alaska.  He said there are over 53,000 Alaskans covered by                    
 mandatory federal drug and alcohol testing laws which include                 
 preemployment, post accident, reasonable cause, return to duty, and           
 follow-up testing.  There are established cut-off and confirmation            
 levels by the Department of Health and Human Services.  The on-site           
 testing industry is trying to mirror the U.S. Department of Health            
 and Human Services by putting out products that are at those same             
 cut-off levels.                                                               
 MR. FAGNANI said that drug testing has come a long way and it                 
 upsets him to hear some of the testimony about on-site test kits.             
 He explained that about 10 years ago laboratories actually did on-            
 site testing and his was the last to close because of the cost of             
 becoming a SAMSHA certified lab and the marketplace in Alaska was             
 insurmountable for them to operate.  They decided to get into third           
 party administration where they broker out the services of other              
 labs and other medical review offices to review test results.                 
 When they did testing in Alaska they did double screen tests where            
 they screen a sample.  An on-site test kit is only a screening                
 test.  The screening test is only 96% accurate.                               
  TAPE 97-24, SIDE B                                                           
  To talk about not confirming out an employee's preemployment on-             
 site test is wrong.  If on-site testing has to be put into this               
 bill, then confirmation testing must be done on all positive                  
 samples to rule out that 4% and to rule out prescription drug use.            
 He spoke with an attorney with the Institute For a Drug-free                  
 Workplace who agreed.  Without a positive test result the companies           
 that are doing on-site testing are not adequately protecting                  
 themselves from future litigation.                                            
 The other thing he has against on-site testing is that this is a              
 brand new industry.  On-site tests have just been coming into                 
 popularity with technology that has met some of the muster.  Drug             
 testing started in the early 70s with the military testing for                
 marijuana.  The technology was very expensive then, but now it is             
 very common.  The other problems with on-site test kits is that               
 they don't have adulteration prevention techniques.  A person can             
 go in the bathroom and use hot water or Mountain Dew and get the              
 temperature strip to activate on the test and it would test                   
 He said he called his lab this morning and asked how many samples             
 they analyze that have low specific gravities (a person flushing              
 their system) and they answered out of a batch of 36 they have two.           
 If there is a 6% positive rate for preemployment for marijuana,               
 cocaine, amphetamines, opiates, or PCP, which is what Alaska has              
 now, and those tests aren't being confirmed there would be a major            
 problem.  Some of those tests are prescription related and if you             
 add the adulteration prevention techniques, the lab can detect many           
 of them.                                                                      
 The standards they follow are put out by the Department of                    
 Transportation and this bill uses a lot of the federal guidelines             
 for drug testing.  Hence the use of a SAMSHA certified laboratory.            
 CAP certified laboratory was a negotiation of a laboratory that is            
 of lesser certification and might be more cost effective, but                 
 cannot be used by those in the Department of Transportation                   
 testing.  If you are a DOT employer and carry hazardous cargo or              
 drive a truck, you cannot use an on-site test kit if your program             
 is mandated by the federal government.  There are probably 1,000              
 State workers in this program as well.                                        
 The medical review officer's (MRO) job is only to review positive             
 test results, have a conference or telephone call with the donor to           
 determine if there is a legal medical use for that positive test so           
 no employment action can be taken based on legal drug use.  This is           
 the only use for an MRO.  They have over 170 collection sites                 
 throughout the State of Alaska.  Getting a test done in rural                 
 Alaska is not as big a deal as people are making it out to be, MR.            
 FAGNANI said.                                                                 
  CHAIRMAN LEMAN  asked if the test kits could also produce false              
 negatives.   MR. FAGNANI  replied yes.  He said they use very few on-         
 site tests - about 100 last year.  They have donors sign a                    
 statement that they are only doing a preliminary screening test and           
 that it has 96% accuracy rate and that sample will be sent off to             
 a lab to be reanalyzed and the laboratory result is the final                 
  MR. DWIGHT PERKINS,  Department of Labor, said they did not want to          
 take a position on this bill.                                                 
 Number 494                                                                    
  MR. DAVID ROGERS,  Council of Alaska Producers, said they would also         
 like to see field testing in the bill subject to laboratory                   
 confirmation of positive results.  He said he would have to discuss           
 the issue of false negatives with his clients.                                
  MS. PAM LABOLLE,  President, Alaska State Chamber of Commerce,               
 supported HB 207 as written.                                                  
  MR. LOGAN  responded said he wanted to make sure the committee knew          
 the sponsor's position on the on-site issues.  First, he said, this           
 bill doesn't hurt anyone.  They might not help some people, but               
 they don't hurt anybody.  If they don't do the on-site language               
 really right, they fear people will be hurt.                                  
 The company submits information to the FDA for the kits.  On the              
 front page in bold letters the manufacturer states the product                
 provides only a preliminary analytical test result.  It is only a             
 screen.  "A more specific alternate chemical method must be used in           
 order to obtain a confirmed analytical result."                               
 MR. LOGAN used the analogy of a bill that doesn't go to the floor             
 in draft form to illustrate that companies should not be allowed to           
 use a screening device, a product not intended to be a final                  
 result, to make employment decisions and decisions about people's             
 lives.  He said the sponsor would insist that all on-site tests are           
 confirmed in a laboratory.                                                    
  SENATOR MACKIE  said he would like to know if the sponsor had any            
 language that would be acceptable to him regarding the on-site                
 testing issue before the committee does anything with the bill.               
 Number 412                                                                    
  CHAIRMAN LEMAN  asked what was the time delay in getting results             
 back to make an employment decision if it goes to the laboratory.             
  MR. LOGAN  said he thought it would take three or four days.                 
  CHAIRMAN LEMAN  said that companies like Ms. Linford's wanted to             
 hire people for something in the field and they need some results             
 immediately.  He asked the cost of the on-site tests.   MR. FAGNANI           
  replied that it would cost $25 - $70 depending on what's being               
  CHAIRMAN LEMAN  said they would work with the committee aide to meet         
 some of their concerns and still do no harm.                                  
  SENATOR HOFFMAN  asked if he meant if there's a positive result in           
 the field, that the employer can't put that person on suspension              
 before the final results come in.   MR. LOGAN  said he would have to          
 consult with the sponsor on that.                                             
  CHAIRMAN LEMAN  said he would hold the bill for further work.                
               HB 266 LIMITED LIABILITY COMPANIES                             
  CHAIRMAN LEMAN  announced  HB 266  to be up for consideration.               
  REPRESENTATIVE JOE RYAN,  sponsor, said this bill updates State              
 statutes reflecting changes made in IRS regulations making it                 
 easier to form limited partnerships.  He anticipates 5,000                    
 companies being formed which would mean an extra $1 million to the            
 Department of Commerce and Economic Development.                              
  SENATOR MACKIE  asked what position the Department had on this.              
  REPRESENTATIVE RYAN  said they supported this and he hadn't heard of         
 any opposition.                                                               
  CHAIRMAN LEMAN  noted that he knew Willis Kirkpatrick supported this         
  MR. RICHARD HOMPESCH,  Attorney, said the applicability provision at         
 the end of the bill does not apply to any existing limited                    
 partnerships unless they file a statement with the Department of              
 Commerce and Economic Development that they elect to be covered by            
 this new law.  Any new limited partnerships filed after the                   
 effective date would be covered by this bill.                                 
 Secondly, he said, the bill sets out default rules for various                
 provisions.  Parties to these agreements can always agree                     
 otherwise.  This bill provides default rules if the parties do not            
 otherwise agree.  It also allows one-person limited liability                 
 companies which were authorized by treasury regulation.  It also              
 simplifies our laws.                                                          
  SENATOR MACKIE  moved to pass HB 266 from committee with individual          
 recommendations.  There were no objections and it was so ordered.             
  CHAIRMAN LEMAN  adjourned the meeting at 2:23 p.m.                           

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