Legislature(1999 - 2000)
03/20/2000 03:50 PM House L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 326-INSPECTION OF BOILERS & PRESSURE VESS. CHAIRMAN ROKEBERG announced the first order of business is HOUSE BILL NO. 326, "An Act relating to the inspection of boilers and pressure vessels and to fees for services under the boilers and pressure vessels program; and providing for an effective date." Number 0116 DWIGHT PERKINS, Deputy Commissioner, Office of the Commissioner, Department of Labor & Workforce Development, came before the committee to testify. He read the following statement into the record: Current Situation: There are a total of 24,500 active boiler and pressure vessels subject to the department's jurisdiction. Currently, the Mechanical Inspection Section [Division of Labor Standards & Safety, Department of Labor & Workforce Development] inspects approximately 3,300 vessels per year. We charge for those inspections and for a certificate of operation that is issued as a result of that inspection. Inspection fees are set by regulation and vary from a total of $60 every two years to a high of $125 every year. The number of boiler inspectors has been reduced from five to three and one-half, and we are still facing a substantial backlog of overdue inspections. The number of revenue producing inspections shrinks annually and the revenue varies unpredictably. The Proposal: Adopted from the state of Oregon, the proposed plan would issue a certificate of operation to every active boiler and pressure vessel every year and charge a certificate fee. Boiler inspections would be done free of charge. This has two major advantages: - Income would be leveled to a highly predictable rate every year. The number of active vessels does not fluctuate that greatly, and the changes that occur tend to be increases in the total number of vessels. The consumer would pay no more for the aggregate annual certificate fee than they do now for the periodic inspection and certificate fee and in many cases could pay less. - The inspection staff could schedule inspections on a needs basis, using factors such as volatility of the unit (i.e. high pressure fired versus unfired), last inspection date and so forth. In this manner the small cadre of inspectors could be used in the most effective manner. This plan simplifies the administrative support and allows management to prioritize inspections to better address the needs of the public. Number 0338 REPRESENTATIVE ANDREW HALCRO asked Mr. Perkins whether the figure 3,300 was based on the three and one-half inspectors or five inspectors. MR. PERKINS replied the figure was based on the three and one-half inspectors. Number 0390 ERNEST DUMMANN, Secretary, Alaska State Association of Boiler and Pressure Vessel Inspectors, testified via teleconference from an off-net site in Seattle, Washington. The association has some concerns about HB 326. The association would not be in favor of legislation that would reduce the need or number of inspections. The association would not be in favor of legislation that would reduce qualifications of boiler and pressure vessel inspectors. After hearing testimony from the department, he said, it sounds like the fee would be levied but the inspection would not be levied until inspectors are available. The association may have a problem with that. CHAIRMAN ROKEBERG inquired about the membership of the Alaska State Association of Boiler and Pressure Vessel Inspectors. MR. DUMMANN replied the association is comprised of private inspectors, and from time to time state inspectors are members as well. The association primarily mimics the National Board of Boiler and Pressure Vessel Inspectors, as inspectors must be certified by the national board. The Alaska State Association of Boiler and Pressure Vessel Inspectors is interested in educating the public in how to prevent pressure vessel explosions and mishaps. CHAIRMAN ROKEBERG asked Mr. Dummann whether the members of the Alaska State Association of Boiler and Pressure Vessel Inspectors would be available to contract with the state for inspections. MR. DUMMANN replied he's not sure. He would look into it. Some members, he noted, are private contractors who work for boiler manufacturers, for example. He's not aware, however, of a member who performs a service for the state under contract. Number 0614 REPRESENTATIVE HALCRO asked Mr. Dummann how many members are part of the Alaska State Association of Boiler and Pressure Vessel Inspectors. MR. DUMMANN replied, at last count, membership is in the sixties. CHAIRMAN ROKEBERG asked Mr. Perkins to comment on the concern that HB 326 is a fee-only bill in that inspections would occur only when inspectors are available. MR. PERKINS replied the department sees HB 326 as a potential to predict a certain amount of revenue for the state for the operation of the certification program. The department knows, however, that they would not charge for the periodic inspection. There are a couple of factors involved. One, it gives the department the ability to catalogue every boiler that goes into service throughout the state. Two, it gives the department the ability to know when a boiler comes on-line and when it needs to be inspected. In response to Mr. Dummann's concerns, HB 326 in no way reduces or weakens the inspections or allows for a less qualified individual to perform an inspection. MR. PERKINS updated the committee on a bill that passed last year in relation to plumbers conducting inspections on low pressure boilers. [Senate Bill 50]. The inspectors, he explained, have had their training and have sat for their examination. The program is up and running and will help reduce some of the backlog. Number 0864 J.R. "RANDY" CARR, Chief/Labor Standards & Safety, Mechanical Inspection, Division of Labor Standards & Safety, Department of Labor & Workforce Development, testified via teleconference from Anchorage. House Bill 326 was modeled after the state of Oregon that experienced the same decline in inspectors as the state of Alaska is experiencing now. The department has gone from five full-time inspectors to the equivalent of three full-time inspectors. The plumbing inspectors equate to about one-quarter of an inspector. The department has streamlined how they conduct inspections, the way they schedule their travel, and have increased inspection goals for each inspector in order to hold even with the backlog. The department is still looking at approximately 6,000 vessels that are overdue for inspection. The good news is, the department has been focusing on the older vessels so that the ones that are overdue are not nearly as overdue as they were a year ago, for example. However, until the department can find a means of insuring a level amount of program receipts that can be budgeted and through good management find room for another full-time inspector there will not be an "inroad" into the backlog, especially when the trend is for more vessels each year. The only way to meet the burden is to increase the number of inspectors in the field, and HB 326 would help the department do that. CHAIRMAN ROKEBERG asked Mr. Carr whether he thinks that if the legislature authorized the department to hire another boiler inspector he would pay for himself. Number 1006 MR. CARR replied the department is hoping that the legislature will authorize a position if it can pay for itself. The department and the industry can show that vessels are a very volatile area and if they aren't inspected in a timely manner by qualified inspectors they present a tremendous hazard in places such as schools, hospitals and apartment complexes. Number 1048 CHAIRMAN ROKEBERG asked Mr. Perkins whether a new inspector authorized by the legislature would make money for the department and pay for himself. MR. PERKINS replied it depends on the type of boiler being inspected. A high pressure boiler, for example, takes a greater amount of knowledge to inspect. CHAIRMAN ROKEBERG asked Mr. Perkins whether a new inspector would pay for himself by generating new revenue. MR. PERKINS deferred the question to Mr. Remond Henderson of the Department of Labor & Workforce Development. Number 1141 REMOND HENDERSON, Director, Central Office, Division of Administrative Services, Department of Labor & Workforce Development, came before the committee to testify. The answer to Chairman Rokeberg's question is, yes. But the department, he noted, does not have authority to spend general fund receipts generated from the program. The bill therefore would replace general funds with program receipts thereby allowing the department to use all the fees generated to actually operate the program. The bill would not change the quality of the inspectors or the time frames involved. In fact, if the department is allowed to use program receipts to get another boiler inspector or two, the department would be able to address the backlog at no additional cost to the general fund. Number 1188 REPRESENTATIVE HALCRO asked Mr. Perkins, if he had a boiler, would he receive a certificate of operation along with a bill under the current operation. MR. PERKINS deferred the question to Mr. Carr. He believes that a person does not receive a bill unless an inspection actually takes place. MR. CARR confirmed that is the current operation. He said, "If we don't come out and inspect you, you do not get a certificate of operation and no fee is rendered either for the inspection or [the] certificate." Number 1224 REPRESENTATIVE HALCRO stated, to Mr. Carr, judging from the figures presented earlier it would take seven years to inspect all of the boilers. MR. CARR replied that's correct. The numbers, however, are a bit misleading because boilers have different inspection schedules depending on the type of vessel. A high pressure steam vessel, for example, has to be inspected every year, while a propane or high volume air tank has to be inspected once every five years. CHAIRMAN ROKEBERG stated he thought that the figure was closer to eight years, and including the pressure vessels he thought that the figure was even worse than that. MR. PERKINS noted that the plumbers who are conducting inspections as well are helping in that regard. CHAIRMAN ROKEBERG remarked that the service needs to be privatized. This [legislation] is outlandish. The public safety of the state is in jeopardy. He realizes that there are fiscal problems, but HB 326 is not the answer. He said: All you're doing here is saying I'm gonna charge you a fee and if I can get around to inspecting it, I'll get around to inspecting it. That's ridiculous. Unless you think that you're going to have leverage with the finance committees because you're getting revenue coming in that you're gonna be able to put more personnel on. Either you need to put more people on and generate more revenue or you need to come up with a further contracting type mechanism where you can put some more people out there. I mean we have a public safety problem in this state over this issue. I compliment the department [in] trying to make some inroads here without costing money, this actually generates money, but to me it's almost [like] this is the end of it. In my entire career, this takes the cake. You're gonna to charge people for something you don't do. Now, this is what you're doing with this bill. Now, you have to convince me I'm wrong. Number 1356 MR. HENDERSON asked Mr. Carr whether individuals would pay less in the long run than what they pay now under the proposed legislation. MR. CARR replied that is correct. Individuals would pay the same amount or less spread out over the time frame of the number of years that they would normally be inspected. The smaller vessels in particular would pay less. Number 1384 MR. PERKINS stated: Well, Mr. Chairman, we may respectively agree to disagree on this one. I understand what you're saying, but you're right, Mr. Chairman, we do have a public safety problem out there. And I appreciate you recognizing the fact that the department is trying to address these. Obviously, our ways of doing this aren't acceptable to you, and it certainly is no disrespect to you on how we're going about this. But this is our best shot at it, and I think in the long run it'll give us an opportunity and, as I said, another tool in our box to do the people's work out there. And without this and continually every time we're going in for, as you mentioned the finance committees, we keep going in and we're taking our share of the budget reductions and we're bringing in more money than we're authorized to use already, you know, it's hard on us too. We keep reducing personnel because the department, as you know, that we have labor standards and workers' comp[ensation] are about the only general fund programs we have. It's, which one of you guys in the hopper this year for the cut? So, we're just asking for a little help here. Number 1443 CHAIRMAN ROKEBERG suggested setting HB 326 aside in order to look at hiring about a half a dozen inspectors with the money that the department would receive. MR. PERKINS indicated that the department would be willing to work with the chairman in that regard. CHAIRMAN ROKEBERG stated he doesn't want to send legislation out of the committee that charges people for not doing anything. MR. PERKINS remarked that the rationale for the legislation has been stated. Number 1480 REPRESENTATIVE HALCRO asked Mr. Perkins how the state of Oregon responded to the concerns voiced today. MR. PERKINS deferred the question to Mr. Carr. Number 1511 MR. CARR said: As I understand it, the primary concern in Oregon is one that we share. You can only do so many inspections with a given number of inspectors. There's no way you can make the math work that you're gonna be able to inspect every single vessel when it's due. But by changing the methodology of collecting the funds so that everyone shares in a certificate-of-operation fee instead of paying only when they get inspected. They have the ability to get inspected; they can request an inspection and an inspector would come out if they thought there was a problem. But it allows the managers to focus their staff on those areas that are the most volatile. To be able to go out and do the inspections on boilers that are presenting the greatest hazard and prioritize their inspections in that manner rather than going by an inspection schedule on just when a particular boiler is due for inspection. Because that's how the fees are generated, so if you don't go out and inspect it because it's due then you aren't gonna get your fees. Number 1564 REPRESENTATIVE HALCRO asked Mr. Carr, if he pays the fee and gets the certificate of operation in the mail but nobody actually inspected his boiler and something tragic happens, from a liability standpoint who stands to lose the most. MR. CARR replied he can't answer the question. He noted that some have an insurance company conduct the inspection, while some prefer no inspection at all; the only reason that a vessel is inspected, in those cases, is because of the authority given to the department in statute. CHAIRMAN ROKEBERG indicated that HB 326 would be held in committee for further consideration. He also noted that there wasn't a quorum to conduct any official business.
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