SB 66-LABOR STANDARDS/SAFETY; WORKER COMP.  2:37:46 PM CHAIR REINBOLD reconvened the meeting and announced that the next order of business would be SENATE BILL NO. 66, "An Act relating to the division of labor standards and safety; relating to the division of workers' compensation; establishing the division of workers' safety and compensation; and providing for an effective date." 2:38:05 PM COMMISSIONER DESIGNEE LEDBETTER said that this bill proposes to merge the Division of Labor Standards, whose focus is to prevent workplace accidents and enforce laws related to workplace safety with the Division of Workers' Compensation, whose focus is to provide efficient administration of benefits to injured workers and to enforce laws related to workers' compensation requirements. She said that these two divisions' missions complement one another, such that one works to prevent accidents and the other works to provide an efficient system of benefits for injured workers. This bill would further increase the opportunities to remove "silos" and capitalize on efficiencies through a unified management structure. The proposed merger will not impact any statutes or regulations currently administered and enforced by each division. The department seeks to take advantage of position vacancies to explore opportunities to share duties between divisions where it makes sense, streamline processes and reduce unnecessary middle management supervisory functions. COMMISSIONER DESIGNEE LEDBETTER reviewed the DLWD's fiscal note. The bill would result in immediate administrative efficiencies by reclassifying the Division of Labor Standards and Safety's director to a deputy director, who will focus attention on operational aspects of the new division's inspection, consultation, and enforcement functions. This would reduce midlevel management in the Division of Occupational Safety and Health component. In addition, the two divisions will consolidate and share administrative duties where it makes sense. Future efficiencies may occur with office space consolidation, increased coordination, and improved service delivery for employers and workers. The bill would create a structure to share resources and find efficiencies over time. 2:41:08 PM GREY MITCHELL, Director, Division of Workers' Compensation, Department of Labor and Workforce Development (DOLWD), Juneau, stated the main purpose of SB 66 was to combine the two divisions as previously stated by Commissioner Designee Ledbetter. 2:41:48 PM MR. MITCHELL began a sectional analysis of SB 66. He reviewed Sections 1-6: Section 1: Renames the division of labor standards and safety to the division of workers' safety and compensation in AS18.20.410(b). Section 2: Renames the division of labor standards and safety to the division of workers' safety and compensation in AS18.20.450(a). Section 3: Renames the division of labor standards and safety to the division of workers' safety and compensation in AS18.60.055. Section 4: Renames the division of labor standards and safety to the division of workers' safety and compensation in AS18.60.055(a). Section 5: Renames the division of labor standards and safety to the division of workers' safety and compensation in AS18.60.235(a). Section 6: Renames the division of workers' compensation to the division of workers' safety and compensation in AS 23.05.067(a)(1)(B). 2:43:13 PM CHAIR REINBOLD said the committee did not need to hear the detailed changes. 2:43:43 PM SENATOR COSTELLO asked whether removing "standard" would will have any effect. MR. MITCHELL answered that the name change does not impact the statutory authority. All of the previous authorities for each division would be incorporated into the new division of Worker Safety and Compensation Division. He said that the standards for wage and hour and mechanical inspections would still occur in the merged division. 2:44:49 PM SENATOR COSTELLO asked whether there was any opposition to the bill. MR. MITCHELL has not heard any opposition to the merger. 2:45:03 PM SENATOR BISHOP asked whether the department would absorb the cost to print new letterhead. MR. MITCHELL answered yes. In further response to Senator Bishop, he agreed to inform the committee if the merger was not working. He said that it wasn't possible to predict what may arise during the merger, but if it became necessary to "beef up" some area to maintain the same level of service, the department would do so. The department does not intend on reducing services to the public and seeks to increase services. For example, currently, a workers' compensation investigator might visit an employer and several days later a wage and hour investigator would appear. However, with a little coordination the department could consolidate the inspections to increase efficiencies and provide better services to the public. 2:46:56 PM SENATOR BIRCH said he is not familiar with the two divisions. He asked whether any tension exists between the two agencies. MR. MITCHELL answered that the department does not see any conflict between the two divisions. Instead, the department views synergy, with one division focused on reducing accidents and minimizing safety hazards and the other division focused on paying benefits for incidents. Sharing data and administrative oversight between the divisions makes sense, he said. COMMISSIONER DESIGNEE LEDBETTER answered that the current division director for the Division of Workers' Compensation was previously the director of the Division of Labor Standards and Safety. The current staff has extensive experience in the field, so it provides opportunities to share knowledge and collaborate to build a rich division that would be two halves of the same whole. The department has begun the effort to share and collaborate, she said. 2:49:44 PM SENATOR GRAY-JACKSON said she was pleased to see the efficiency of $283,000 and looked forward to more efficiencies. 2:50:20 PM COMMISSIONER DESIGNEE LEDBETTER introduced her staff. 2:50:49 PM CHAIR REINBOLD opened public testimony on SB 66. 2:52:22 PM DON ETHERIDGE, Executive Director, AFLCIO, Juneau, said one concern the AFLCIO has with the merger of the divisions is that one division's function may not get adequate attention. He said that he hoped that nothing would slip through the cracks. 2:52:56 PM CHAIR REINBOLD, after first determining no one else wished to testify, closed public testimony on SB 66. 2:53:16 PM CHAIR REINBOLD reviewed upcoming announcements. 2:53:34 PM COMMISSIONER DESIGNEE LEDBETTER said that the department has long considered the merger to increase the department's effectiveness and efficiency. She said her focus is to ensure that these changes do not harm the department's current staff. She said she hoped it would proceed in a fashion that was beneficial to all. [SB 66 was held in committee]