Legislature(1997 - 1998)
05/07/1997 01:07 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 consideration. 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 negative. 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 result. 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 screened. 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 bill. 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.