Legislature(2017 - 2018)BARNES 124
02/27/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB121 | |
| HB114 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 121 | TELECONFERENCED | |
| *+ | HB 114 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 121-OCC. HEALTH AND SAFETY CIVIL PENALTIES
3:17:19 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL NO. 121, "An Act relating to occupational safety and
health enforcement penalties; and providing for an effective
date."
3:17:53 PM
BIANCA CARPENETI, Staff, Representative Sam Kito, Alaska State
Legislature, presented HB 121 on behalf of the House Labor and
Commerce Standing Committee, sponsor, on which Representative
Kito serves as chair. She said the bill was requested by the
Department of Labor & Workforce Development (DLWD), which
previously presented the concept of the bill to the committee.
On January 20, 2017, the committee authorized the chair to draft
a bill on its behalf to bring the State of Alaska's Occupational
Safety and Health Administration (OSHA) state plan into
compliance with federal requirements. She expressed that HB 121
would ensure Alaska's continued eligibility for federal grant
funds, which help protect workers from workplace injuries,
illness, and fatalities.
3:18:54 PM
DEBORAH KELLY, Director, Division of Labor Standards & Safety,
Department of Labor & Workforce Development (DLWD), offered
details on HB 121. She explained that for violations of safety
and health laws, there is one minimum and five maximum penalties
set in statute. Under HB 121, DLWD would set the minimum and
maximums by regulation and the bill would limit the minimum and
maximums for each penalty type to the corresponding federal
penalty amount. She offered that the bill is purely for federal
compliance.
MS. KELLY stated that Alaska Occupational Safety and Health
(AKOSH) is Alaska's state plan which receives federal grants and
is responsible for the safety and health standards that protect
almost all Alaskan workers. She remarked, "Alaska's program may
develop and implement safety and health standards that fit
Alaska's unique environment using input from Alaska's
industries, workers, and from the public." She explained that
AKOSH inspects all private and public workplaces in Alaska with
a few federal exceptions; AKOSH can issue citations and
penalties if, during an inspection, an employer is found to be
violating a standard. A state plan such as AKOSH is required to
be at least as effective as federal OSHA.
MS. KELLY reported that in 2015, Congress passed an Act
requiring many federal agencies to adjust penalties for
inflation going back to 1990 and to continue to adjust those
penalties yearly along with a consumer price index (CPI). She
remarked:
OSHA complied and raised their penalties in July of
last year. Alaska's requirement to be at least as
effective includes maximum penalty amounts. In your
packet is the department's notification we received
from the U.S. Assistant Secretary of Labor of our
requirement to adjust our penalties to equal or higher
than federal penalties. As of January 1, 2017, we
fell out of compliance with that requirement. A
failure to come into compliance will eventually risk
the over $2 million in federal grant funds AKOSH
receives every year. This bill allows the department
to set the current federal amount in regulation - no
more and no less. [It] simply allows AKOSH to come in
compliance with federal law and stay in compliance as
penalties change from year to year.
3:21:53 PM
REPRESENTATIVE SULLIVAN-LEONARD stated her concern that under HB
121, some penalty fees would increase 70 to 80 percent. She
asked whether the penalties were previously tied to a CPI in
statute.
MS. KELLY answered that the adjustment for inflation going back
to 1990 is approximately a 73 percent increase. She explained
that CPI is part of the Federal Civil Penalties [Inflation
Adjustment] Act passed by Congress, which initiated the
requirement to tie the penalties to future CPI changes. She
offered her understanding that a previous draft of [HB 121] did
not specify the [CPI requirement].
REPRESENTATIVE SULLIVAN-LEONARD restated her concern regarding
the increase in penalties. She noted her desire to hear from
industry about the effects of HB 121.
3:23:56 PM
CHAIR KITO noted that many states, including Alaska, have
adopted the enforcement of OSHA laws. He asked, "If we do not
comply, do we risk losing our program to the federal
Occupational Safety and Health Administration?"
MS. KELLY responded, "That's correct." She stated that if
Alaska does not comply, then the state could lose its grant
funds and authorization, which would lead to federal OSHA
reclaiming authority and increasing the penalty amounts to the
federal levels at that time.
CHAIR KITO offered his conclusion that the penalties will be
increased either way.
MS. KELLY agreed. When asked if the penalty amounts can be
adjusted, she explained:
These are maximum penalties with the exception of the
one minimum penalty. They are maximum penalties, they
are not usually the amount that the employer actually
pays. There are multiple reductions that are built
into that maximum penalty - starts out with that
maximum and then it's reduced for business size, so
small businesses are not paying as much in penalties
as large businesses. It's reduced for other
mitigating factors. And we also have the discretion
to reduce during an informal conference with the
employer if they come in and talk about their safety
program or their plans to comply in the future.
3:25:42 PM
REPRESENTATIVE KNOPP asked where retroactive measures would come
in and how a maximum assessment for a violation would be set.
He remarked, "I struggle with the federal regulation stating we
must go back to 1990 to adjust for CPI going forward to set our
maximum penalty." He supposed that the federal government set
the maximum to make sure [Alaska] meets it. He asked to see:
the federal maximums and minimums, Alaska's current fees, and
the proposed fees as adjusted to CPI from 1990. He voiced his
concern that the analysis of potential generated revenue in the
fiscal notes may not be accurate since the fees can be
"bargained down." He asked how the numbers were reached. He
requested to see the language in the Federal Civil Penalties
Adjustment Act to compare the maximum rates.
MS. KELLY answered that the numbers in the fiscal notes came
from the actual penalties paid by the employees in 2016, which
she stated is realistic revenue actually received. She
explained that the percent difference between the maximum and
the actual amount brought in from the employers stays roughly
the same each year; therefore, she supposed that it is
reasonable to predict that raising the premiums by 73 percent
would lead to actual revenue increasing by 73 percent. She
noted that the first fiscal year's revenue is half of the second
year's because the rate adjustments in HB 121 are not
anticipated to be implemented until halfway through the first
fiscal year.
MS. KELLY stated that she doesn't understand the question about
retroactive measures. She explained that OSHA has a factsheet
showing the details of the maximum increases to. She informed
that serious violations, failure to abate violations, and
violations of posting requirements currently have a maximum of
$7,000 per violation; the new federal maximum is $12,471 per
violation for those violation types. The more egregious
violations, willful violations, and repeat violations currently
have a maximum of $70,000 per violation, which would increase to
$124,709 per violation. She remarked, "That's just taking the
inflation adjustment from 2015 back to 1990 which comes out to
that factor."
3:30:19 PM
REPRESENTATIVE KNOPP again asked what the federal numbers would
be.
MS. KELLY stated that her previous explanation detailed the
federal numbers the state would use under HB 121. She explained
that the initial numbers - $7,000 and $70,000, respectively -
are the current state numbers.
REPRESENTATIVE KNOPP asked whether the 73 percent increase would
bring the state into compliance with the federal mandates.
MS. KELLY answered that's correct.
3:31:14 PM
CHAIR KITO opened public testimony on HB 121.
3:31:35 PM
CHAIR KTIO announced that HB 121 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB121 Sponsor Statement 2.22.17.pdf |
HL&C 2/27/2017 3:15:00 PM |
HB 121 |
| HB121 Sectional Analysis 2.22.17.pdf |
HL&C 2/27/2017 3:15:00 PM |
HB 121 |
| HB121 Fiscal Note DOLWD-OSH 2.24.17.pdf |
HJUD 3/13/2017 1:00:00 PM HL&C 2/27/2017 3:15:00 PM |
HB 121 |
| HB121 Support Document - Federal memo to state plans 2.23.17.pdf |
HL&C 2/27/2017 3:15:00 PM |
HB 121 |
| HB114 Sponsor Statement 02.21.2017.pdf |
HL&C 2/27/2017 3:15:00 PM |
HB 114 |
| HB114 Sectional Analysis 02.21.2017.pdf |
HL&C 2/27/2017 3:15:00 PM |
HB 114 |
| HB114 Fiscal Note DOLWD-MI 2.24.17.pdf |
HL&C 2/27/2017 3:15:00 PM |
HB 114 |