Legislature(1995 - 1996)

02/28/1996 03:20 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                          
                       February 28, 1996                                       
                           3:20 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Pete Kott, Chairman                                            
 Representative Norman Rokeberg, Vice Chairman                                 
 Representative Beverly Masek                                                  
 Representative Jerry Sanders                                                  
 Representative Brian Porter                                                   
 Representative Kim Elton                                                      
 Representative Gene Kubina                                                    
 MEMBERS ABSENT                                                                
 All members present                                                           
 COMMITTEE CALENDAR                                                            
 SENATE BILL NO. 178(title am)                                                 
 "An Act increasing the number of eligible employees that constitute           
 an employer group for purposes of providing small employer health             
 insurance; amending the definition of `small employer'; and                   
 requiring an annual report from the Small Employer Health                     
 Reinsurance Association until 1999."                                          
      - PASSED OUT OF COMMITTEE                                                
 *HOUSE BILL NO. 479                                                           
 "An Act relating to civil liability for injuries or death resulting           
 from equine activities."                                                      
      - HEARD AND HELD                                                         
 HOUSE BILL NO. 311                                                            
 "An Act repealing the limitation on the hours a person may be                 
 employed in a mine; and making a related technical amendment to               
 avoid changing the penalties for failing to make payments into an             
 employee benefit fund."                                                       
      - HEARD AND HELD                                                         
 *HOUSE BILL NO. 483                                                           
 "An Act relating to the calculation of unemployment insurance                 
 benefits; and providing for an effective date."                               
      - HEARD AND HELD                                                         
 *HOUSE BILL NO. 487                                                           
 "An Act amending the Uniform Residential Landlord and Tenant Act              
 and the civil remedy of forcible entry and detainer as they relate            
 to mobile home park operators and mobile home park dwellers and               
      - SCHEDULED BUT NOT HEARD                                                
 Governor's appointments previously heard and held over                        
      - SCHEDULED BUT NOT HEARD                                                
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  SB 178                                                               
 SHORT TITLE: SMALL EMPLOYER HEALTH INSURANCE                                  
 SPONSOR(S): SENATOR(S) RIEGER                                                 
 JRN-DATE     JRN-PG                  ACTION                                   
 05/09/95      1679    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 05/09/95      1679    (S)   L&C, FIN                                          
 01/09/96              (S)   L&C AT  1:30 PM FAHRENKAMP RM 203                 
 01/09/96              (S)   MINUTE(L&C)                                       
 01/10/96      2095    (S)   L&C RPT  3DP 2NR                                  
 01/10/96      2095    (S)   ZERO FISCAL NOTE (DCED)                           
 02/06/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 02/09/96      2345    (S)   FIN RPT  4DP 3NR                                  
 02/09/96      2345    (S)   PREVIOUS ZERO FN (DCED)                           
 02/09/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 02/09/96              (S)   RLS AT 12:30 PM FAHRENKAMP RM 203                 
 02/09/96              (S)   MINUTE(FIN)                                       
 02/12/96              (S)   RLS AT  8:00 AM FAHRENKAMP RM 203                 
 02/12/96              (S)   MINUTE(RLS)                                       
 02/14/96      2427    (S)   RULES TO CALENDAR  2/14/96                        
 02/14/96      2428    (S)   READ THE SECOND TIME                              
 02/14/96      2428    (S)   ADVANCED TO THIRD READING UNAN CONSENT            
 02/14/96      2428    (S)   READ THE THIRD TIME  SB 178                       
 02/14/96      2428    (S)   TITLE AMENDMENT NO 1 ADPTD UNAN CONS              
 02/14/96      2428    (S)   PASSED Y19 N- E1                                  
 02/14/96      2428    (S)   DUNCAN  NOTICE OF RECONSIDERATION                 
 02/15/96      2447    (S)   RECONSIDERATION NOT TAKEN UP                      
 02/15/96      2448    (S)   TRANSMITTED TO (H)                                
 02/15/96      2769    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/15/96      2769    (H)   LABOR &  COMMERCE, FINANCE                        
 02/28/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 BILL:  HB 479                                                               
 SHORT TITLE: IMMUNITY FOR EQUINE ACTIVITIES                                   
 SPONSOR(S): REPRESENTATIVE(S) G.DAVIS                                         
 JRN-DATE     JRN-PG                  ACTION                                   
 02/07/96      2650    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/07/96      2650    (H)   LABOR & COMMERCE, JUDICIARY                       
 02/28/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 BILL:  HB 311                                                               
 SPONSOR(S): REPRESENTATIVE(S) VEZEY, Toohey, Martin                           
 JRN-DATE     JRN-PG                  ACTION                                   
 04/18/95      1351    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/18/95      1351    (H)   LABOR & COMMERCE, JUDICIARY                       
 01/24/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 01/24/96              (H)   MINUTE(L&C)                                       
 02/07/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 02/07/96              (H)   MINUTE(L&C)                                       
 02/14/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 02/14/96              (H)   MINUTE(L&C)                                       
 02/28/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 BILL:  HB 483                                                               
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
 JRN-DATE     JRN-PG                  ACTION                                   
 02/09/96      2689    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/09/96      2689    (H)   L&C, STATE AFFAIRS, FINANCE                       
 02/09/96      2690    (H)   FISCAL NOTE (LABOR/ALL DEPT'S)                    
 02/09/96      2690    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 02/28/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 WITNESS REGISTER                                                              
 SENATOR STEVE RIEGER                                                          
 Alaska State Legislature                                                      
 Capitol Building, Room 516                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-3879                                                    
 POSITION STATEMENT:  Sponsor of SB 178(title am).                             
 GORDON EVANS, Lobbyist                                                        
 Health Insurance Association                                                  
   of America                                                                  
 318 Fourth Street                                                             
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3210                                                    
 POSITION STATEMENT:  Testified in support of SB 178(title am).                
 REPRESENTATIVE GARY DAVIS                                                     
 Alaska State Legislature                                                      
 Capitol Building, Room 420                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-2693                                                    
 POSITION STATEMENT:  Sponsor of HB 479.                                       
 BILL TURNER, Equine Professional                                              
 Alaska State Horsemen, Incorporated                                           
 Box 871634                                                                    
 Wasilla, Alaska 99687                                                         
 Telephone:  (907) 376-6849                                                    
 POSITION STATEMENT:  Testified in support of HB 479.                          
 MARCIA BOYD, Owner                                                            
 Twinview Horse Park                                                           
 HC 31, Box 5083 P                                                             
 Wasilla, Alaska 99654                                                         
 Telephone:  (907) 376-3276                                                    
 POSITION STATEMENT:  Testified in support of HB 479.                          
 REPRESENTATIVE AL VEZEY                                                       
 Alaska State Legislature                                                      
 Capitol Building, Room 216                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-3719                                                    
 POSITION STATEMENT:  Sponsor of HB 311.                                       
 ED FLANAGAN, Deputy Commissioner                                              
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau, Alaska 99801-1149                                                     
 Telephone:  (907) 465-2700                                                    
 POSITION STATEMENT:  Testified against HB 311.  Gave testimony on             
                      HB 483.                                                  
 CLYNT NAUMAN, General Manager                                                 
 Kennecott Greens Creek Mining Company                                         
 P.O. Box 32199                                                                
 Juneau, Alaska 99803-2199                                                     
 Telephone:  (907) 789-8110                                                    
 POSITION STATEMENT:  Testified on HB 311.                                     
 ERIC KLEPFER                                                                  
 Coeur Alaska, Incorporated                                                    
 431 North Franklin Street, Suite 400                                          
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 463-5425                                                    
 POSITION STATEMENT:  Testified on HB 311.                                     
 JOE J. THOMAS                                                                 
 Alaska State AFL-CIO                                                          
 315 Barnette Street                                                           
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 452-3139                                                    
 POSITION STATEMENT:  Testified on HB 311.                                     
 ANDREW J. BEAR PIEKARSKI                                                      
 District Council of Laborers                                                  
 Mile 5, P.O. Box 831                                                          
 Eagle River, Alaska 99577                                                     
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Testified against HB 311.                                
 JIM DUCHON, Consultant                                                        
 6017 Chowen Avenue, South                                                     
 Edina, Minnesota 55410                                                        
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Testified on HB 311.                                     
 DWIGHT PERKINS, Special Assistant                                             
 Office of the Commissioner                                                    
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau, Alaska 99802-1149                                                     
 Telephone:  (907) 465-2700                                                    
 POSITION STATEMENT:  Explained HB 483.                                        
 WILLIE LEWIS                                                                  
 Laborers Union                                                                
 1629 Madison Drive                                                            
 Fairbanks, Alaska                                                             
 Telephone:  (907) 479-5842                                                    
 POSITION STATEMENT:  Testified in support of HB 483.                          
 WILLIE CREECH, President                                                      
 Vulcan Towing and Recovery                                                    
 5406 Lake Otis                                                                
 Anchorage, Alaska 99507                                                       
 POSITION STATEMENT:  Testified on HB 483.                                     
 RON TORGERSON, Chief of Appeals                                               
 ESD Appeals                                                                   
 Department of Labor                                                           
 P.O. Box 25509                                                                
 Juneau, Alaska 99811                                                          
 Telephone:  (907) 246-9300                                                    
 POSITION STATEMENT:  Answered questions on HB 483.                            
 ACTION NARRATIVE                                                              
 TAPE 96-14, SIDE A                                                            
 Number 001                                                                    
 The House Labor and Commerce Standing Committee was called to order           
 by Chairman Pete Kott at 3:20 p.m..  Members present at the call to           
 order were Representatives Sanders, Masek, Kubina, Elton, Rokeberg            
 and Kott.                                                                     
 SB 178 - SMALL EMPLOYER HEALTH INSURANCE                                    
 CHAIRMAN PETE KOTT announced the first issue the committee would              
 address would be SB 178(title am), "An Act increasing the number of           
 eligible employees that constitute an employer group for purposes             
 of providing small employer health insurance; amending the                    
 definition of `small employer'; and requiring an annual report from           
 the Small Employer Health Reinsurance Association until 1999,"                
 sponsored by Senator Rieger.  He informed the committee SB 178                
 addresses some minor changes to legislation which was passed a                
 couple of years ago.                                                          
 Number 145                                                                    
 SENATOR STEVE RIEGER, sponsor of SB 178, said a couple of years ago           
 a small group health insurance bill was passed which established              
 some of the mechanisms of a pool for the insurance of the small               
 employer groups.  He noted "small employer groups" were defined as            
 "employee groups from 2 to 25 employees."  After two years of                 
 experience, it has been proven to be working.  The intent of SB 178           
 is to broaden the statute so the definition of "small employer"               
 would be changed to 2 to 50 employees instead of 2 to 25.  He                 
 explained it increases the ability for a number of additional                 
 employers to get into the small group health insurance market that            
 was served by the original bill.                                              
 Number 243                                                                    
 REPRESENTATIVE NORMAN ROKEBERG asked the number of groups, if any,            
 have availed themselves in the previous legislation.                          
 SENATOR RIEGER indicated there are several ways to answer the                 
 question.  In a way, every group that is a 2 to 25 employer group             
 that is applying for insurance has been subject to this bill                  
 because if you are an insurer doing business in Alaska, you are by            
 definition, part of this pooling mechanism.  Senator Rieger                   
 explained the measure has sort of a automatic pooling and then it             
 has an optional second pool - a reinsurance pool, which is a buffer           
 to accommodate high risk cases where an underwriter couldn't                  
 justify underwriting the group within the band of premiums that are           
 prescribed in the bill.  There is only a couple of cases where the            
 reinsurance pooling mechanism has been necessary.  He referred to             
 testimony given in the Senate from people who said it has made it             
 easier to underwrite groups, but that is not as quantifiable                  
 because unless you go into the reinsurance pool, there is not a               
 true statistic you can point to.                                              
 Number 377                                                                    
 GORDON EVANS, Lobbyist, Health Insurance Association of America,              
 said during the three years that legislation has been in effect, it           
 seems to be working.  When the measure was originally enacted, it             
 was thought that the coverage of the bill would affect about 85               
 percent of the small businesses.  He referred to the increase from            
 25 to 50 employees and said it would probably up the figure to                
 about 92 percent of Alaska employers.  Mr. Evans noted the figures            
 came from the Health Resources Access Task Force Study which was              
 done in the late 1980s and early 1990s.  He said his organization             
 supports the bill.  Alaska would be the eighteenth state to change            
 their coverage up to 50 employees.                                            
 Number 489                                                                    
 There being no further testimony, REPRESENTATIVE ROKEBERG made a              
 motion to move SB 178(title am), out of committee with attached               
 fiscal notes and individual recommendations.                                  
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, SB
 178(title am), was moved out of the House Labor and Commerce                  
 Number 500                                                                    
 CHAIRMAN KOTT said the committee would take a brief at ease at 3:26           
 p.m.  The meeting was called back to order at 3:30 p.m.                       
 HB 479 - IMMUNITY FOR EQUINE ACTIVITIES                                     
 Number 608                                                                    
 CHAIRMAN KOTT announced the committee would address HB 479, "An Act           
 relating to civil liability for injuries or death resulting from              
 equine activities."                                                           
 REPRESENTATIVE GARY DAVIS, sponsor of HB 479, said there are a lot            
 of things that happen in this world that a lot of people aren't               
 responsible for, but other people feel that somebody must be                  
 responsible except themselves.  The bill is intended to give                  
 handlers of the equine profession extra protection from civil                 
 liability lawsuits.  The reasoning behind this proposition is that            
 horses and related animals can be unpredictable in their behavior.            
 This unpredictability is an inherent characteristic of some                   
 domestic animals, especially equines, because of their size and               
 specific utilization for human activities.  A horse that is                   
 carrying a rider can easily be spooked by a number of events.  If             
 the rider is subsequently thrown from the horse, the owner or                 
 trainer may not be directly responsible for the accident.  He noted           
 people do sometimes wear spurs and it is not always the horses or             
 their owner's fault.  This would be true as long as the owner or              
 trainer has cared for and trained the equine in the best possible             
 REPRESENTATIVE DAVIS said there are a number of exceptions to this            
 legislation.  If the owner or trainer is negligent, improperly                
 caring for the horse or uses faulty equipment, they would not be              
 immune from civil liability.  The bill also recognizes other                  
 exceptions such as placing an obviously inexperienced rider on a              
 high spirited horse known for demonstrating unpredictable behavior.           
 Representative Davis noted he has received correspondence from                
 involved parties.                                                             
 Number 751                                                                    
 REPRESENTATIVE BRIAN PORTER referred to the bill and questioned the           
 meaning of a "hinny."                                                         
 REPRESENTATIVE DAVIS indicated he didn't know.                                
 Number 785                                                                    
 REPRESENTATIVE BEVERLY MASEK referred to page 1, line 11 and asked            
 what the definition is of "reckless conduct."                                 
 REPRESENTATIVE DAVIS said he is sure everybody has their own                  
 definition.  He said this piece of legislation doesn't have the               
 definition and he couldn't answer specifically.                               
 Number 834                                                                    
 REPRESENTATIVE BRIAN PORTER explained reckless or intentional                 
 misconduct is a standard of misconduct that has been dealt with by            
 courts for a long time in the state.  There are a number of court             
 decisions that have identified exactly reckless conduct is.  In               
 other words, in legal parliaments it is understood.  It basically             
 means an act that a reasonable person would conclude would have the           
 result that did occur.  You're reckless if you fire a gun into a              
 crowd.  You may not have intended to hit anybody but the natural              
 probable result of that act was that somebody was going to get hit            
 and perhaps killed.  That is reckless conduct.  It is a very high             
 standard and it is a standard above negligence.                               
 REPRESENTATIVE MASEK questioned whether that is different from                
 gross negligence is which is on page 1, line 13 and 14.                       
 REPRESENTATIVE PORTER said that makes it even more restrictive to             
 a higher standard.                                                            
 REPRESENTATIVE GENE KUBINA said there must be an absolute                     
 definition written for the terms used.                                        
 REPRESENTATIVE PORTER explained there are definitions in various              
 statutes that apply to that particular body of law.  He said he               
 didn't know if there was one in this chapter.  The general standard           
 of severity is intentional, reckless, gross negligence and                    
 Number 1010                                                                   
 BILL TURNER, Equine Professional, Alaska State Horsemen,                      
 Incorporated, testified via teleconference from Wasilla.  He                  
 explained that his organization represents about 300 people in the            
 Anchorage Mat-Su Valley area and indirectly represents another 500            
 or 600 through affiliated clubs.  He said they feel that the bill             
 is a good bill in its general intentions.  It is good public policy           
 to have inherent risk of an activity assumed by those who have                
 chosen on their own to engage in that activity.  He said there is             
 currently a law similar to this bill but it is in regards to skiing           
 and ski areas.  Similar legislation has also been enacted in about            
 15 or 16 other states throughout the country.  Mr. Turner said this           
 would be a (indisc.) to the horse industry within the state because           
 he expects insurance premiums would be lowered and, therefore, help           
 more horse activities occur within the state.  Mr. Turner noted he            
 has faxed some suggested changes to Representative Davis which                
 would help close some of the loopholes.                                       
 Number 1142                                                                   
 MARCIA BOYD, Owner, Twinview Horse Park in Wasilla, was next to               
 testify via teleconference from Mat-Su.  She said she agrees with             
 Mr. Turner that this bill will be a boom to the horse industry in             
 Alaska.  It would open up many more activities that are currently             
 not being looked at because of the liability involved.  Ms. Boyd              
 informed the committee she has been told by her insurance company             
 that if Alaska has such a law, her insurance premiums would go                
 down.  Her insurance company would be willing to allow more                   
 (indisc.) at her facility that they are not currently willing to              
 stand behind because of the liability picture as it currently                 
 stands.  Ms. Boyd explained she has sent a statement to                       
 Representative Davis which outlines her ideas.  She said she would            
 like to elaborate on the fact that when (indisc.) his or her own              
 horse, the sponsor of an event cannot possibly determine the                  
 suitability of the horse to the rider.  The sponsor can't be                  
 expected to intervene between a horse and his rider or owner even             
 though there are countless instances where people buy horses that             
 are too much for them.  That is not anyone's business but their               
 own.  Ms. Boyd referred to page 2, line 12, and said it limits the            
 liability exemptions to people who are riding, driving or training            
 horses.  She said handlers of horses who are also at risk and don't           
 fall into any of the three above mentioned categories need to be              
 recognized as handlers from the ground.  Sponsors should be                   
 protected from liability of accidents occurring to handlers.  Ms.             
 Boyd said she doesn't think spectators should be eliminated from              
 the bill if they choose to attend an equine activity, they've made            
 that choice and just being around a horse, by nature, is dangerous            
 because of the unpredictability of the response of a horse.  You              
 can do your best to be safe and prevent accidents, but if a                   
 motorcycle drives by and sprays the horses or a helicopter flies              
 overhead, a spectator could easily be hurt and the sponsor                    
 shouldn't be held responsible.                                                
 Number 1322                                                                   
 REPRESENTATIVE KIM ELTON said normally, if you sign your child up             
 for little league or karate lessons or you join a health club,                
 generally you're asked to sign a waiver of liability.  He asked Ms.           
 Boyd if she requires that with her business.  If so, why is there             
 the additional need for legislation.                                          
 MS. BOYD explained she has a waiver of liability she had drawn up             
 by an attorney.  She said she has also been told by that attorney             
 it really won't hold up in court.                                             
 Number 1372                                                                   
 REPRESENTATIVE DAVIS explained in response to Representative                  
 Elton's question, a lot of those organizations, especially little             
 league, have a large amount of insurance that covers their events.            
 He said he thinks it is provided through their national                       
 CHAIRMAN KOTT referred to Mr. Turner sending Representative Davis             
 some suggested changes and asked Representative Davis if he cares             
 to address them.                                                              
 REPRESENTATIVE DAVIS explained he has received requests from                  
 involved people.  He said a lot of the suggested changes were what            
 he considered somewhat "boiler plate" and "housekeeping" measures.            
 He said he has decided not to request a sponsor substitute.                   
 Representative Davis explained he received some of the same                   
 recommendations from Ms. Boyd, Mr. Turner and Lee Woodman.                    
 Representative Davis referred to page 2, line 5, relating to injury           
 or death of a spectator and said he would like to see that whole              
 paragraph taken out of the bill.  He said he could come back before           
 the committee with a committee substitute.                                    
 Number 1488                                                                   
 REPRESENTATIVE PORTER referred to Ms. Boyd's concern relating to a            
 horse or an owner who should not be held responsible for the                  
 adaptability of the owner of the horse to his/her own horse.  He              
 said he doesn't think that is what is required on line 8, page 2,             
 "the failure of the equine activity sponsor or equine professional            
 who provided the equine to make reasonable efforts to determine the           
 ability of the injured person...."  Representative Porter said he             
 doesn't think that would then require someone who is just boarding            
 a horse which is owned by someone else, to make sure that that                
 "someone else" knows how to ride their own horse.                             
 REPRESENTATIVE DAVIS said, "Also, on page 2, line 6, it's probably            
 -- it doesn't seem logical to exempt equipment or tack provided by            
 an equine...  It does seem logical to provide as in a defective               
 equipment or tack - would seem to be more logical.  And another               
 amendment that I would strongly consider is page 2, line 14,                  
 indicates a defective product.  I would roll that up into line 6.             
 `A defective product, equipment or tack provided by an equine                 
 activity sponsor or professional.'"                                           
 Number 1588                                                                   
 REPRESENTATIVE ELTON said there are two kinds of defective product.           
 One would be a defective product that is provided by the                      
 manufacturer.  The other could be a defective product that is                 
 defective because of lack of upkeep on the part of the business               
 owner.  He said if they are rolled together, it may be going too              
 REPRESENTATIVE DAVIS said he agrees it should probably be spelled             
 Number 1700                                                                   
 REPRESENTATIVE ROKEBERG said it would be a matter of evidentiary              
 proof if there is a cause of action about whether the equipment is            
 defective or not.  You have the right to bring a cause of action              
 over the equipment and that is how the bill is written.  He said              
 the bill is alright as it is currently written.                               
 CHAIRMAN KOTT referred to some suggested changes faxed to his                 
 office from Wendy Yardley and asked Representative Davis if he has            
 received them.                                                                
 REPRESENTATIVE DAVIS indicated he doesn't have Ms. Yardley's                  
 CHAIRMAN KOTT said he would like to hold the bill until the                   
 following Wednesday so that a committee substitute could be                   
 HB 311 - REPEAL LIMIT ON HOURS EMPLOYED IN MINES                            
 CHAIRMAN KOTT announced the committee would address HB 311,                   
 "An Act repealing the limitation on the hours a person may be                 
 employed in a mine; and making a related technical amendment to               
 avoid changing the penalties for failing to make payments into an             
 employee benefit fund."  He said the bill had been heard twice                
 REPRESENTATIVE AL VEZEY, sponsor of HB 311, said he didn't have any           
 new comments.                                                                 
 Number 2120                                                                   
 ED FLANAGAN, Deputy Commissioner, Department of Labor, said the               
 department feels that the current law has served the state and the            
 workers in the underground mining industry well.  He said the                 
 Department of Labor is opposed to the current bill in that it                 
 removes any restrictions on the hours of underground work.  Mr.               
 Flanagan said he thinks a compromise could be worked out where a              
 ten hour limitation could be placed in the bill as long as it is              
 subject to something like the variance procedure that exists for              
 any and all of out OSHA regulations.  He explained that is where an           
 application is made and the department would have the opportunity             
 to examine the circumstances of the particular situation of the               
 particular mine to see if it is run safely and additional hours               
 would not pose an additional threat to the safety of the workers.             
 MR. FLANAGAN explained that there has been three miners killed in             
 the Juneau area over the last eight years.  He noted that is with             
 the Mine Safety and Health Administration (MSHA).  Mr. Flanagan               
 said he is not casting any aspersions on MSHA.  He said he thinks             
 the guy does a real good job, but he is one guy for the whole                 
 state.  Mr. Flanagan said mining is a hazardous industry and there            
 are people in attendance at the meeting who are better qualified to           
 speak on the issue.  He explained he has been somewhat involved in            
 the Brady Lake project.                                                       
 MR. FLANAGAN referred to tunnels and said the hazard is 360                   
 degrees.  Anything can happen.  He said the Department of Labor               
 would be willing to work with the committee on an acceptable                  
 committee substitute that has some kind of variance.  Mr. Flanagan            
 referred to Alaska's wage and hour statute and said there is a                
 provision for a four day ten hour work week.  That relates to an              
 overtime issue.  There are two specific provisions which allows for           
 an alternate work week without incurring the overtime liability for           
 over eight hours, which is state law.  One is if it is under a                
 collective bargaining agreement or, in the case of a nonunion                 
 operation, if it is under a written plan submitted and approved by            
 the Department of Labor.  He said it is not as if there isn't any             
 precedence between that, the Wage and Hour Act and the variance               
 procedure in the OSHA Act.  Mr. Flanagan said that is what the                
 department uses when they deal with seafood processing companies.             
 Although Alaska's requirements for camps is 60 square feet per                
 person, the federal minimum is 50 square feet per person.  When               
 there is a short-term situation and the company needs to put people           
 up who are working for the canneries, the department will do a                
 temporary variance and go down sometimes as low as 42 or 43 feet.             
 It is on a case by case basis.  There is public notice and an                 
 opportunity for response and public input.                                    
 MR. FLANAGAN said you can have the best mining operation in the               
 world, but the contractors come in.  At least two out of the three            
 fatalities were contractor employees.  That is another reason for             
 having a case by case basis.                                                  
 Number 2109                                                                   
 REPRESENTATIVE ROKEBERG asked Mr. Flanagan to explain the                     
 situations where the miners were killed.                                      
 MR. FLANAGAN said one accident was at Kensington mine where a                 
 worker fell down a shaft and was killed about five or six years               
 ago.  In approximately 1989, there was a driller who was working              
 alone in the A-J Mine for centennial development that got wrapped             
 around the drill and was killed.  Mr. Flanagan said there was a               
 person working for Echo Bay about a year and a half ago and there             
 was a cave in where a slab came down and killed him.  He noted he             
 didn't know if any of the deaths had to do with fatigue.  He said             
 he is sure they were operating legally within the confines of the             
 existing law where they don't work over eight hours.                          
 Number 2164                                                                   
 REPRESENTATIVE ELTON referred to the possibility of the committee             
 deciding to discuss the idea of an eight hour day with additional             
 hours being permitted by the department and asked if that would               
 take a statutory change.                                                      
 MR. FLANAGAN answered in the affirmative.  He noted it could not be           
 done by regulation.                                                           
 Number 2185                                                                   
 REPRESENTATIVE JERRY SANDERS said it was the committee's                      
 understanding that at the last meeting that there was going to be             
 some negotiations occurring between the companies and the union.              
 He asked Mr. Flanagan if he knew what happened.                               
 MR. FLANAGAN said he knows a little, but he pointed out there are             
 people in attendance at the meeting who could speak to the issue.             
 Number 2225                                                                   
 CLYNT NAUMAN, General Manager, Kennecott Greens Creek Mining                  
 Company, thanked Chairman Kott for the opportunity to address the             
 committee.  He informed the committee he is new to Southeast Alaska           
 but has spent a lot of years in Fairbanks area.  He noted he is not           
 unfamiliar with a lot of Alaskan issues.  Mr. Nauman said he is               
 giving testimony on behalf of the employees at the Kennecott Greens           
 Creek Mine located on Admiralty Island, about 18 miles away from              
 Juneau.  He said he would like to testify in support of a                     
 modification of the existing statute to increase the number of                
 hours that a person could spend underground from eight hours to ten           
 MR. NAUMAN said he would like to point out the situation that                 
 Greens Creek is currently in and what the anticipated future is.              
 Secondly, he said he would talk about the jobs issue, especially              
 the local hire issue, and the impact the bill could have on that              
 issue.  Thirdly, he stated would talk about job security or long              
 term economic viability.  He said he would also speak about the               
 capital competition and investment criteria that is required for              
 companies to invest money in the mining business in Alaska.  Mr.              
 Nauman informed the committee he would briefly address the issue of           
 the variance of permits and then summarize with a few other points.           
 MR. NAUMAN said as far as Greens Creek is concerned, Greens Creek             
 is going to reopen as a viable mining operation in the later                  
 portion of 1996.  When the mine reopens it will be a modern fully             
 Americanized underground mining operation, and when in production             
 it will be by far the largest silver producer in the United States.           
 He informed the committee they currently have 142 employees                   
 primarily to put the mine back into operation, and they are                   
 spending more than $80 million.  When the mine is back in                     
 operation, they will employ approximately 250 people.  Of the 142             
 people currently employed, 80 percent are Alaskans and 20 percent,            
 33 people, were brought into Juneau from outside of Alaska because            
 they offer the type of expertise that is needed to run the mine.              
 MR. NAUMAN referred to the jobs issue and said Greens Creek has               
 always stated and proposed to maximize its local hire.  He said               
 they recognize that in Southeast Alaska especially that not all the           
 communities are as well off as Juneau is.  The basis of Greens                
 Creek's proposal is to offer employment opportunities to people               
 outside of the Juneau area, to be able to transport those employees           
 to Juneau and keep them onsite during a normal shift rotation.  In            
 order to do that, there are two components that are critical.  The            
 first is being able to extend the underground shifts from eight               
 hours to ten hours so that they may operate on a two shift basis.             
 Secondly, they need approval from the U.S. Forrest Service to                 
 provide the housing that is required on Admiralty Island.                     
 MR. NAUMAN explained they recently advertised in Sitka and other              
 Southeastern communities for mill rights.  They were plowed under             
 with responses from people who want to go to work at Greens Creek.            
 The uniform cry of those people was, "We cannot afford to relocate            
 our family to Juneau.  We know that the cost of housing in Juneau             
 is extremely high.  Is there any way we can work at Greens Creek              
 and remain in our home communities in Southeast Alaska."  Mr.                 
 Nauman pointed out there is a tremendous demand for jobs in                   
 Southeast Alaska, especially in the communities that have been                
 adversely affected by timber problems.                                        
 MR. NAUMAN said Greens Creek is going to go into production whether           
 it is on a two shift or a three shift basis.  He referred to being            
 primarily interested in local jobs and the ability to be able to              
 house people on the island and said it will drive up the number of            
 people they are able to employ from Alaska versus what they will              
 have to bring in from the Lower 48.  He noted there are also a lot            
 of people in the Lower 48 who would like to move to Alaska to work.           
 TAPE 96-14, SIDE B                                                            
 Number 001                                                                    
 MR. NAUMAN explained his company would much prefer to employ                  
 Alaskans to keep the payroll in Alaska.                                       
 MR. NAUMAN referred to job security and said Greens Creek went out            
 of production in 1993.  The reason was because commodity prices,              
 especially silver and zinc prices were low, and costs were too                
 high.  The ability to keep the mine in production is only as good             
 as their ability to sustain the margin between net revenues and the           
 underlying cost structure of the operation.  Moving to a ten hour             
 shift at Greens Creek gives them about a 15 percent increase in               
 efficiency and helps to compete in the global marketplace and on a            
 sustained basis.                                                              
 MR. NAUMAN referred to the Greens Creek work force and said 95                
 percent of the people working underground want to work the longer             
 hours.  In fact, they would prefer to go to more than ten hours.              
 This is because to work at Greens Creek, you get up at 4:30 a.m.,             
 you catch a ferry at 4:45 a.m., you get home around 5:30 p.m.,                
 depending on sea conditions.  He said the problem is that with the            
 three shift basis, people do not get to spend enough time with                
 their families.  Moving to a two shift basis would effectively add            
 more than 20 days a year that an employee could spend with his                
 Number 071                                                                    
 MR. NAUMAN said Alaska competes with a lot of other states and                
 countries in the world for mining investment dollars.  Alaska is              
 the only state with a viable mining industry that has not addressed           
 the eight hour statute and modified it in some form or another.               
 Extension of the underground shafts would improve the economics and           
 the competitiveness of Alaska on a global basis.  It would allow              
 the mining industry to go forward in Alaska as it should.                     
 MR. NAUMAN explained his company has worked with the labor and                
 trade people over the past month to try and find some common ground           
 on which they can move forward with this issue.  He said he thinks            
 they have been successful with some of the people, but he isn't               
 sure they are going forward on a mutual basis at this point.  Mr.             
 Nauman said he would request that the bill be moved forward.                  
 MR. NAUMAN referred to moving from eight hours underground to ten             
 hours at the face and said that would be safe.  He said as far as             
 Greens Creek is concerned, it promotes opportunities for Alaskan              
 jobs.  It reduces the exposure of Greens Creek to the inevitable              
 fluctuations in the commodities market and improves the competitive           
 edge of the state in terms of investment of capital dollars for the           
 purpose of creating jobs.                                                     
 Number 152                                                                    
 CHAIRMAN KOTT referred to Mr. Nauman suggesting there should be               
 some modification to the existing statutes and said he mentioned              
 ten hours.  He said the way the bill is currently written, you                
 could go to 12 or 14 hours.  Chairman Kott asked Mr. Nauman if he             
 wants a minimum of ten hours.                                                 
 MR. NAUMAN said the Greens Creek proposal, which is supported by              
 the Council of Alaskan Producers, is for ten hours at the face.               
 There has been an considerable amount of research work that has               
 been done on safety and underground operations.  Most of the                  
 research relates to the difference of 8 hours and 12 hours                    
 underground.  The research clearly shows that safety is not an                
 issue between 8 and 12 hours, but the management at Greens Creek              
 believes the movement from 8 hours to 10 hours is absolutely safe             
 and does not compromise on any of the other issues while adding               
 value to the employees' family lives without compromising (indic.)            
 Number 208                                                                    
 REPRESENTATIVE SANDERS said he has sympathy with Mr. Nauman's                 
 desire to make the change from 8 to 10 hours.  He said that is not            
 what the bill is about.  He pointed out there would need to be a              
 bill that applied to what Mr. Nauman is asking for.                           
 MR. NAUMAN stated it is his understanding that the bill is to                 
 repeal the underground law.                                                   
 REPRESENTATIVE SANDERS answered in the affirmative.                           
 MR. NAUMAN said, "I think it is Greens Creek's position that the              
 research data and everything that has been done by the industry, in           
 general, in North America and elsewhere, is only looked at up to 12           
 hours and we believe that that's a reasonable and safe and                    
 hopefully, on a legislative basis, an achievable resolution to this           
 Number 247                                                                    
 CHAIRMAN KOTT said testimony from the Department of Labor indicated           
 that they would be supportive of a ten hour limitation subject to             
 variance procedures.  He asked Mr. Nauman to comment on the                   
 MR. NAUMAN explained that in order to put Greens Creek in                     
 production, they needed 125 permits.  While in production, they               
 have to maintain over 50 permits.  He said the problem with the               
 permitting of a variance system is that the operation and the                 
 invested capital is exposed to the vagaries if the permitting or              
 variance system.  People and mining companies, including Greens               
 Creek, will make investment decisions based on a least risk                   
 weighted basis.  Those decisions will not be made for the 10 or 12            
 hours without some assurance or a statute that the efficiency and             
 productivity can be achieved.  Mr. Nauman said the problem they see           
 with that proposal is in terms of weighing the investment                     
 opportunity against other opportunities elsewhere in the world.               
 Number 356                                                                    
 REPRESENTATIVE KUBINA referred to Mr. Nauman being in attendance on           
 behalf of his employees.  He questioned whether his employees have            
 voted to give up the right of the protection of an eight hour day.            
 MR. NAUMAN said Greens Creek is a nonunion operation.  Their                  
 employees, with the exception of one underground employee, have               
 offered support and have actually requested to be allowed to work             
 longer hours underground.  One of the problems at Greens Creek is             
 basically you put in a 12 hour day and on average, they spend 5.7             
 hours working at the face, exclusive of travel to and from the                
 mine, exclusive of travel within the mine to get to the face.                 
 REPRESENTATIVE KUBINA said with the exception of one employee,                
 every employee has asked that the hours be extended.                          
 MR. NAUMAN pointed out he is talking about underground employees.             
 Out of the 142 employees 43 of them are underground employees.  He            
 explained 42 of them want to work longer hours underground because            
 they want the additional time off with their families without                 
 compromising their earnings opportunity.                                      
 Number 382                                                                    
 REPRESENTATIVE SANDERS asked if this is a situation Greens Creek              
 needs in order to compete in the world marketplace.                           
 MR. NAUMAN said he would point to the fact that Greens Creek went             
 out of business in 1993 and put more than 200 people out of work.             
 Prices were low and costs were high.                                          
 REPRESENTATIVE SANDERS explained that what scares him about the               
 bill is it repeals the limitations.  If they need ten hours in                
 order to be viable on the world market today and the price goes               
 down a little bit, will people need 12 hours to compete next year             
 or will it go to 18 hours in two years.                                       
 MR. NAUMAN said from his perspective, the issue is safety.  The               
 primary driving issue in underground operations is safety first and           
 productivity and efficiency second.  He said the work that has been           
 done by the U.S. Bureau of Mines and other people in the business,            
 and the experience of other mines working in the North, remote                
 operations - Polaris, Nanacivic, Loopin (Sp.?), and other major               
 underground operations in Canada are working the longer hours and             
 have shift rotations.  He said those companies have actually been             
 recipients of prestigious safety awards, but none of those                    
 operations work beyond 12 hours at the face.                                  
 MR. NAUMAN explained the Greens Creek proposal is to modify the               
 language of the existing law.                                                 
 CHAIRMAN KOTT said this bill modifies it substantially.                       
 Number 536                                                                    
 REPRESENTATIVE ELTON said the committee has been waiting for the              
 results of discussion between producers and labor.  He asked who              
 has been involved in the discussions.                                         
 MR. NAUMAN explained he has taken this issue upon himself and has             
 somewhat been leading the charge on trying to educate and solicit             
 support for modification of the existing bill.  He said he                    
 recognized, from looking at prior transcripts, the efforts of                 
 trying to change this law in the past.  One of the continuing                 
 problems was the opposition of the labor and trades people.  Mr.              
 Nauman said he has spoke with those people at least to let them               
 know what is going on so there is no surprises.  As far as the                
 skilled and crafts people are concerned, they're reasonably happy             
 that Greens Creek has come forward and discussed this issue with              
 them.  He noted he had an opportunity to meet with the building               
 trades and labor people and have laid out similar things for them.            
 He said he has asked for their support in terms of modifying the              
 existing language.  One thing that has come through loud and clear            
 is that repeal of the law is not a supportable issue.  He said that           
 is why he is in attendance, to support a modification of the                  
 existing bill primarily so that Greens Creek can move forward and             
 put Alaskans to work.                                                         
 REPRESENTATIVE ELTON said he appreciates the fact about expanding             
 the discussion beyond hiring locally and hiring Alaskans.  He said            
 he would like to put forward one caution that it is sometimes                 
 easier to commute to Seattle than it is to commute to Wrangell.               
 MR. NAUMAN said Greens Creek's proposal would be one that would               
 subsidize travel of those people and they would not subsidize                 
 travel for anybody who resides outside of Alaska.                             
 Number 674                                                                    
 REPRESENTATIVE ROKEBERG asked how many underground mines are                  
 currently operating in the state.                                             
 MR. NAUMAN explained in the Mettles (Sp.?) mines there are two                
 mines in operation and two development projects.  The mines in                
 operation are Greens Creek, which has a 17 year mine life, Nix and            
 Fork, which is the only mine in operation that has a much shorter             
 mine life.  He referred to development projects and said one is the           
 A-J Mine in Juneau and the Kensington project north of Juneau.                
 Number 681                                                                    
 MR. NAUMAN referred to Greens Creek and said during the first four            
 or five years of production, 58 percent of the net revenues are               
 going to come from precious metals, primarily silver.  Later in the           
 mine life, around 2003 or 2004, silver grades will drop and zinc              
 grades will improve.  Zinc will then become the primary revenue               
 generating product at Greens Creek.  He said he can assure the                
 committee that without the opportunity to work ten hours at the               
 face, when silver prices fall below $4.50 an ounce and when zinc              
 falls below 45 cents an ounce, in the latter portion of the initial           
 ore body Greens Creek will find itself in a position similar to the           
 position it was in before.  That is why in putting the mine back              
 into operation, he wants to make sure that the 250 people they                
 employ have a maximum opportunity of remaining employed for the               
 next 15 years.  To do anything less is irresponsible.                         
 CHAIRMAN KOTT asked who the members are on the Council of Alaska              
 MR. NAUMAN said in terms of mining companies, Cominco, Coeur, Echo            
 Bay, Kennicott, Placer, Dome, Nevada Gold Fields, nearly all the              
 major mining companies in Alaska are represented.                             
 Number 856                                                                    
 REPRESENTATIVE SANDERS said it is evident that the committee isn't            
 discussing HB 311.  He asked if there is a possibility that the               
 labor organizations, the deputy commissioner of the Department of             
 Labor and Mr. Nauman could get together and craft a bill that                 
 everyone could support.                                                       
 MR. NAUMAN said he thinks the issue is really the ability to bring            
 efficiency to the underground mining industry, in Greens Creek's              
 case to be able to hire Alaskans.  He said he has been working to             
 communicate to see if he can generate support for what the                    
 committee is talking about, modification of the existing language.            
 Number 945                                                                    
 REPRESENTATIVE KUBINA said Mr. Nauman has said two different                  
 things.  He finished his testimony urging the committee to move the           
 bill, but he has also said he is against the repeal of this                   
 MR. NAUMAN said he would have to plead ignorance on the                       
 complexities of the process, but they want to see this issue move             
 forward as they need to make decisions based on that.  He said they           
 are currently recruiting and hiring people and his concern is that            
 if the bill doesn't move out of committee and gets berried, it will           
 never surface again.                                                          
 REPRESENTATIVE PORTER said what the committee would do if they                
 could ever get to the point of doing it is to consider amendments             
 to the bill.  One obvious amendment would be to amend the total               
 repeal of the 8 hour restriction to something like 10 to 12 hours.            
 He asked Mr. Nauman if it would be a fair statement in that he                
 would support that amendment.                                                 
 MR. NAUMAN answered in the affirmative.                                       
 Number 1031                                                                   
 ERIC KLEPFER, Coeur Alaska, was next to testify.  He read the                 
 following statement into the record:                                          
 "My name is Eric Klepfer, I'm with Coeur Alaska.  I would like to             
 thank the committee for the opportunity to testify today.                     
 "Coeur is the owner and operator of the Kensington Project which is           
 located 45 miles north of Juneau.  The Kensington Project is an               
 underground gold mine with an ore reserve of approximately 1.95               
 million ounces of gold.  Capital costs for the project are                    
 estimated at $195 million and will have an annual payroll of about            
 $28 million.  This project is expected to employ approximately 300            
 people during the operation and produce approximately 200,000                 
 ounces of gold per year.  Coeur is presently in the process of                
 permitting the operation and expects to be in a position to make a            
 construction decision in fourth quarter of 1996.                              
 "The Kensington Project is a remote mine operation and is                     
 accessible only by plane or boat.  Due to the remote nature and               
 limited access, we intend to build personnel camp to house                    
 employees during their off-hours.  It is Coeur's intent to provide            
 an environment in which employees can safely and productively work            
 while having a place to relax during their off shift hours.                   
 "Coeur is committed to local and Native hire and employment.                  
 Recently, we've entered into an agreement with three Native                   
 Corporations in Southeast Alaska and our goal is to develop local             
 human resources as part of our mineral resource development effort            
 at Kensington.  In order to accomplish this, we have been working             
 with the state Department of Labor, University of Alaska and the              
 Native groups to set up mine training programs in Southeast.                  
 "The best alternative Coeur can provide employees that work at a              
 remote site is a schedule that will provide extended time home with           
 their families.  Coeur needs a modification of the present eight              
 hour work day restriction for underground mines to provide this               
 employment opportunities and schedules that allow flexible work               
 shifts.  With an extension of the eight hour work day, Coeur could            
 consider schedules such as two weeks on, two weeks off, rather than           
 an eight hour alternative of two weeks on, four days off.                     
 Coeur is working with local Southeast communities including Juneau            
 and Haines to develop a `local community project concept.'  This              
 can be achieved only if there is flexibility in the current law               
 which allows us a similar flexibility in scheduling.                          
 "The majority of Alaska's extensive natural resources are located             
 in remote areas.  Development of these resources will require                 
 companies to establish remote camps and use innovative work                   
 schedules to meet project objectives and employee needs.  Remote              
 operations, by their nature, are well suited to the extended work             
 day and, more importantly, dictate different work schedules.                  
 "It is important for this committee to recognize that the eight               
 hour underground law must be changed in some manner that permits              
 Coeur to use alternative schedules to meet production and employee            
 needs for the Kensington Project while remaining competitive in a             
 world market.  Without change, Coeur is restricted in its ability             
 to provide flexible work schedules that benefit the project and               
 most importantly, our employees, Southeast Alaska and the state as            
 a whole.  Alaska is one of the last active mining states that has             
 not changed this law in some manner.                                          
 "Numerous reports and studies have been completed by organizations            
 such as the U.S. Bureau of Mines and other knowledgeable groups               
 regarding extended shifts and safety in mining.  James Duchon,                
 former U.S. Bureau of Mines, Safety Division research analyst and             
 expert on shift work and safety training in mining is here today              
 via teleconference to testify on the results of these studies and             
 answer questions the committee may have with regard to safety and             
 the extended work hour.                                                       
 "To be competitive and attract quality employees, Coeur's                     
 operations must be able to:  Provide a safe work environment; offer           
 reasonable work schedules which provide the employee opportunity to           
 spend quality time with families; meet project objective and goals;           
 and minimize costs.                                                           
 "There are several inherent benefits that Coeur and its employees             
 gain by extending the eight hour underground work day.  These                 
 include:  High paying jobs with work schedules that meet both                 
 project and employee needs; employment opportunities in communities           
 such as Haines and Juneau; minimizes the need for families from               
 outlying Alaska communities to relocate to Juneau; reduces the                
 number of helicopter flights to and from the site both from a                 
 safety and an environmental consideration; and provides much needed           
 job opportunities to Southeast Alaska communities.                            
 "As you can understand, the remote location of the project, limited           
 access and other considerations make it imperative that the eight             
 hour underground restriction be changed.  This is extremely                   
 important to the project and will play a pivotal role in the final            
 decision of project development.  Coeur must be able to operate the           
 underground mining operations beyond the eight hour work day and we           
 urge the committee to support a bill that changes this restriction.           
 By doing so, Alaska is moving in concert with other states in                 
 removing work day restrictions for underground mining operations              
 that other industries in Alaska enjoy.  Anything less will hinder             
 the future of mining in Alaska                                                
 "Coeur is committed to Alaska and the Kensington Project and we               
 would offer our assistance to the committee in anyway to change the           
 existing eight hour day restriction imposed upon the mining                   
 industry.  Thank you Mr. Chairman and committee members."                     
 CHAIRMAN KOTT asked Mr. Klepfer if he supports the bill in its                
 present form.                                                                 
 MR. KLEPFER said Coeur is looking at and supports the ten hour                
 modification that Greens Creek is proposing.  He said from Coeur's            
 perspective, they need a ten hour day.                                        
 Number 1431                                                                   
 JOE J. THOMAS, Alaska State AFL-CIO, was next to testify on HB 311.           
 He informed the committee that he did testify on the measure at a             
 previous meeting.  Since that time, he hasn't heard much to change            
 his opinion of the bill.  Mr. Thomas said his organization's                  
 primary concern is the safety of those who are working underground.           
 He showed the committee an article from a National Geographic                 
 booklet showing the largest gold mine in the world.  He said, "We             
 could probably find a lot of laws that we could change -- that if             
 we changed, we would make a particular industry come alive again or           
 reinvigorated or make it profitable."                                         
 MR. THOMAS referred to camps and said he would like to bring the              
 committee's attention to the oil industry at Prudhoe Bay.  There              
 are a lot of large camps there.  The camps serve the purpose that             
 so many people show concern for.  Once you have a camp, you can               
 bring people in from anywhere regardless of where they were going             
 to come from.  If you're controlling work shifts, it does make it             
 extremely reasonable for somebody to travel long distance depending           
 on what the work shifts are.  The longer the shifts, the more the             
 weeks can be put together, the more reasonable it is for somebody             
 to travel great distances because the money is there and the                  
 airplane tickets are relatively an insignificant cost of traveling            
 depending on what the wages are that are paid.                                
 MR. THOMAS said, "Our concern about the extension of hours - the              
 changing in this bill is I don't see the idea and somewhat see the            
 reluctance of people to agree to oversight and that concerns me               
 when there is a resistance to the idea that well a variance which             
 was discussed briefly.  The idea of a variance based on your                  
 ability to prove that what you are doing or what you intend to do             
 is reasonable."  He said that is what concerns them.                          
 MR. THOMAS said there is no doubt that competition is difficult               
 throughout the world.  World prices that vary a few cents can make            
 the difference between a mine being profitable or not.  He said he            
 doesn't think his organization can actually support the idea that             
 few cents on the market is going to cause either wage or safety               
 laws to be changed or working hours to be fluctuated to make                  
 something more profitable.  Mr. Thomas said a mine representative             
 testified that they are going to open regardless.  He said he would           
 find it hard to believe that somebody would go ahead and invest               
 tons of money on the idea that maybe the law will be changed.                 
 MR. THOMAS referred to reviewing some statistics he has received              
 and said depending on how you would interpret them, it looks to him           
 that in the twenty-second, twenty-third and twenty-fourth hours of            
 work are the safest hours somebody can work in.  He said he finds             
 that to be ridiculous.                                                        
 MR. THOMAS said the mineral industry is surviving.  He quoted from            
 an article, "The mining industry in Alaska has doubled in size in             
 the last ten years."  He said he realizes it may be a growing                 
 industry at this point, but it sounds like it is doing fine under             
 the existing conditions and laws.  There is no doubt that things              
 could be changed here and there.  He said his organization is                 
 willing to sit down and discuss it.  The concerns relate to safety,           
 the air within the mines, the rock bolting, the safety equipment,             
 the evacuation procedures, etc.  Mr. Thomas pointed out Arizona has           
 an eight hour law with no exceptions.  California allows miners to            
 work longer than eight hours when there is a collective bargaining            
 agreement or a variance reached.                                              
 MR. THOMAS said he is also concerned about the length of hours that           
 were worked in some construction projects related to tunneling                
 work.  He referred to some information the committee was given and            
 it may be inaccurate.  During the development of the Bradley Lake             
 project, they had three shifts, eight hours a day, as were most of            
 the other tunnel jobs in Alaska.  Mr. Thomas said he would be happy           
 to answer questions.                                                          
 Number 1925                                                                   
 ANDREW J. BEAR PIEKARSKI, District Council of Laborers, testified             
 against HB 311.  Mr. Piekarski informed the committee he was in a             
 tunnel cave-in on November 30, 1964, where safety was one of the              
 issues.  He said if the legislature changes this stipulation,                 
 they're changing the little "ma and pa" companies.  Safety is a               
 critical issue.  The District Council of Laborers has supported               
 mining in the state of Alaska.  He said they have tried to organize           
 the Greens Creek mine.  Mr. Piekarski said they supported Echo Bay,           
 A-J, and they helped get the Dong Road funded for the Red Dog Mine.           
 He referred to the Whittier Tunnel and said it is a pipeline tunnel           
 that runs adjacent to the tunnel that is existing there.  That was            
 ran on a three shift basis.  He referred to an eight by eight area            
 and said when something goes wrong you can't run.  Mr. Piekarski              
 informed the committee of the different projects he has worked on.            
 MR. PIEKARSKI told the committee he has been a business agent in              
 Alaska for 25 years and is elected every three years.  He                     
 represents a lot miners and a lot of people in the rock business              
 and has seen some of them killed.  He referred to long hours in               
 mines and said there will be fatigue.  Mr. Piekarski said in                  
 closing, "If you bring a law like this in, you've got people that             
 are desperate for money and you start getting into `jipos' where              
 they go in and they start working and you start bunching and                  
 stuff."  He informed the committee of some of the laws in Idaho.              
 Mr. Piekarski said he has been in the business for 25 years and               
 urged that things not be changed until more people are involved.              
 TAPE 95-15, SIDE A                                                            
 Number 050                                                                    
 JIM DUCHON, Consultant, was next to testify via teleconference.  He           
 read the following statement into the record:                                 
 "My name is James C. Duchon.  I received my Ph.D. in Experimental             
 Psychology from the Illinois Institute of Technology in Chicago,              
 Illinois.  I am currently employed as an independent consultant and           
 serve on the Board of Examiners for the Minnesota Quality Awards              
 Council.  My areas of expertise are in the areas of shift work                
 consulting and training, safety, organizational effectiveness and             
 quality improvement.                                                          
 "From 1986 to February of this year, I have worked for the Safety             
 Division of U.S. Bureau of Mines in Minneapolis, Minnesota.  As               
 many of you may know, we were a federally funded research arm of              
 the mining industry.  The focus of our research was to explore and            
 study methods to reduce the risk of accidents in mining.  My                  
 particular expertise was in the area of nights and shift work,                
 fatigue, extended work shifts and job analysis.                               
 "As a result of our research, we learned a great deal about the use           
 of extended workdays in mining.  This research appears to be of               
 direct relevance to the deliberations by the state of Alaska,                 
 regarding lengths of work shifts in underground mines.  To                    
 illustrate, I will discuss the results of a study at an underground           
 copper, lead and zinc mine that went from an 8 hour, 3 shifts per             
 day to a 12 hour, 2 shifts per day schedule.                                  
 "The purpose of this summary that I am discussing now is to present           
 an objective way some of the relevant research on safety issues               
 regarding extended workdays and to offer my recommendations                   
 regarding the use of extended work shifts in underground mining.              
 "First of all, extended work shifts - What are they?  Extended work           
 shift, workdays or compressed workweeks longer than 8 hours in                
 length, typically 10 or 12 hours, while still retaining an                    
 approximate 40 hour week.  There are at least five theoretical                
 factors that could make a difference in a worker's tolerance to the           
 "First and most obvious is the length of workday.  While it seems             
 intuitive that the longer someone works, the more likely he or she            
 will make some sort of human error.  However, our data shows that             
 the frequency of accidents is more or less equal for each hour into           
 shift.  In other words, the first hour of work is associated with             
 approximately the same number of accidents as the fifth, sixth,               
 seventh and so forth.                                                         
 "Second is the shortened time between shifts.  This would have an             
 impact on sleep length and afford less time for physical recovery             
 between shifts.                                                               
 "Third is the length of the workweek.  Extended workdays often are            
 associated with shortened workweeks of two to four days.  This                
 could create a desirable situation for two reasons.  First, our               
 circadian rhythms would not have the time needed to adjust as we              
 rapidly go from say the night shift to an off day.  This could to             
 some degree offset the negative health effects of working nights.             
 In short `occupational jet lag' is kept at a minimum.  Second, with           
 short workweeks there would be less cumulative fatigue across the             
 "Fourth, with more days off time for recovery from fatigue or sleep           
 deficit is enhanced.                                                          
 "The fifth factor is time-of-day.  Of course both extended workdays           
 and regular 8 hour shift work patterns can involve working nights             
 where work capacity is lessened.                                              
 "Safety in mining.  First I wanted to make a brief comment about              
 safety in mining today.  When discussing the idea of using extended           
 workdays in mining, it is useful to put safety in mining in                   
 perspective with other industries.                                            
 "Accident rates in mining have dropped drastically since the 1940s            
 and earlier.  We no longer count fatalities in the thousands, as we           
 once did.  For example, over 2,000 each year in the 1920s.                    
 Fatalities have in fact decreased steadily from over 300 fatalities           
 in 1973 to only 115 in 1991, for example.                                     
 "However, mining in general still has one of the highest injury and           
 fatality rates of any industry.  For example, latest figures show             
 that 43 fatalities per 100,000 individuals employed in mining, as             
 compared to 40 and 32 in agriculture and construction, which are              
 the three top most risking industries.  However, it may be an                 
 unfair comparison to lump all types of mining into one statistic.             
 For instance, incidence rates for mental/nonmetal mining, including           
 underground mines, are roughly half of those in coal mining.  This            
 sort of breakdown indicates an incident rate for metal and nonmetal           
 mines less than other high rate industries.                                   
 "I now want to talk a little about studies in all industries                  
 regarding safety in extended workdays.  It is probably noteworthy             
 and may be of historical interest to note that the earlier studies            
 of human endurance and sustained operations were conducted by the             
 U.S. Army.  They were interested in how long soldiers could work              
 before their performance was degraded.  These studies clearly                 
 showed that under certain conditions humans could work well over              
 eight hours without a loss of efficiency.  However, while it is               
 enlightening to know our limitations under these conditions, it is            
 more important to look at research associated with actual modern              
 working conditions.                                                           
 "In my review of extended research literature, which I published in           
 1994, I looked at over 50 published reports.  Of those reports,               
 there were only ten studies that actually looked at 10 or 12 hour             
 shifts.  The rest related primarily to the issue of overtime and              
 safety.  Interestingly, while most of the analyses indicated more             
 frequent accidents related to overtime, extended work shifts did              
 not.  Specifically, in a survey study of 716 12-hour works in the             
 processing, oil refinery, chemical and fertilizer industries, self-           
 reports of job performance, ability to concentrate, amount of sleep           
 and health either remained the same or improved.  Also, over 90               
 percent were satisfied with the schedule.  Mangers indicated that             
 they perceived less absenteeism, less tardiness, and no effects on            
 health and safety.  Likewise, the results of interviews with                  
 managers of 50 U.S. and Canadian chemical and petroleum plants                
 indicated similar health and safety results, including improving              
 morale.  However, both studies warned of the effects of 12 hour               
 shifts on older workers, but not provide objective data on this               
 "In a study of 8 hour versus 10 hour shifts in a manufacturing                
 plant, performance and physiological measure indicated no                     
 "In another study of English policemen, performance and                       
 physiological measure either stayed the same or improved on 12 hour           
 "However, there are some studies that have shown performance                  
 decrements with 12 hour shifts.  For example, in a study conducted            
 by NIOSH on extended workdays in a nuclear power plant, some                  
 measures did indicate a decrease in performance.                              
 "Now for the studies in underground mining, including the Bureau of           
 Mines Study.  I am aware of only one published study that looked at           
 extended workdays in underground mining.  This was conducted by               
 researchers at the Bureau of Mines where I was principal                      
 investigator.  We studied an underground copper, lead and zinc mine           
 in British Columbia that changed from an eight hour rotating shift            
 schedule to a four on, four off, 12 hour schedule.  We were invited           
 by the mine and the Provincial Ministry of Energy, Mines and                  
 petroleum Resources to evaluate their change to the new 12 hour               
 schedule.  Our recommendation following the study would be taken              
 into account by the ministry when evaluating the exemption given to           
 the mine for the introduction of 12 hour shifts.                              
 "Before and ten months after the 12 hour schedule was introduced,             
 we took measures of behavioral performance, cardiopulmonary                   
 functioning, air containment levels and a variety of self-report              
 measures.  The entire production crew was measured.  These measures           
 were directed at assessing possible effects of 12 hour shifts on              
 behavioral functions, fatigue, air contaminant exposure and job               
 "Survey results indicated an overwhelming support for the new                 
 extended workday schedule.  The 12 hour schedule was not associated           
 with a decrease in most measures of performance across the shift.             
 Most of the physiological and pulmonary data indicated few                    
 differences between 8 and 12 hour shifts.                                     
 "Based upon the overall acceptance of the new schedule by the                 
 workers and lack of evidence to suggest serious performance                   
 decrements, we recommended that the mine retain the 12 hour                   
 schedule with certain precautionary measures to ensure the safety             
 of the workers.  These were:  1) maintenance of on-site lodging for           
 12 hour workers; 2) periodic observation and measurement of the               
 work force; and 3) customized work tasks and work breaks to                   
 accommodate longer work hours.                                                
 "Now my conclusion and recommendations.  In conclusion, based upon            
 the evidence of the studies of extended workdays, including my own,           
 it is my informed judgement that extended workdays can be safely              
 used in underground mining under certain circumstances.  These are:           
      1.  Extended workdays should not be considered for jobs that             
          require extremely high physical work loads.  For example,            
          the American Industrial Hygiene Association recommends a             
          work load not to exceed 1/3 VO2max for an 8 hour workday.            
          That is a measure of physical fatigue.  Our data and other           
          (indisc.) have shown that underground miners work well               
          under this standard in today's technology;                           
      2.  Job sharing and cross training should be considered for 12           
          hour shifts or 10 hour shifts.  Changing jobs may                    
          alleviate certain physical and psychological stressors;              
      3.  Workers should not be expected to work overtime beyond the           
          12 hour shift; and                                                   
      4.  Regular evaluation and assessment are strongly                       
          recommended.  There are surveys that have been developed             
          for this purpose.                                                    
 "Finally, I would like to thank members of the committee for                  
 hearing my testimony.  I will be happy to answer any questions you            
 may have at this time."                                                       
 Number 983                                                                    
 There being no questions or further witnesses to testify on HB 311,           
 CHAIRMAN KOTT closed public testimony.                                        
 REPRESENTATIVE PORTER offered a proposed amendment that would                 
 extend the eight hour limitation to a ten hour limitation.  The               
 amendment is as follows:                                                      
 Sec. 1 is amended to read:                                                    
      Sec. 1. AS 23.10.410(a) is amended to read:                              
              (a)  A person may not be employed in an underground              
           coal mine, underground lode mine, underground placer                
           mine, underground coal, lode or placer workings, or other           
           underground mine, or working for more than ten hours in           
           24 hours, except on a day when a change of shift is made.           
           The ten hour limitation applies only to work actually             
           performed at the mining face and excludes the                     
           intermission of time for meals, traveling to the mine             
           site, traveling between the mine's portal to the face, or         
           otherwise going to or from the place where the work is              
           actually carried on, whether in going on or off shift, or           
           in going to or returning from meals.                                
 Sec. 2 is amended to read:                                                    
      Sec. 2. AS23.10.410(b) is amended to read:                               
               (b) It is the purpose of this section to limit the              
           hours of employment in 24 hours to ten hours of actual            
           labor at the face, or other place where the work or labor           
           to be done is actually performed.                                   
      Sec. 3 is deleted.                                                       
 Number 1059                                                                   
 CHAIRMAN KOTT called for a brief at ease to make copies of the                
 proposed amendment.                                                           
 CHAIRMAN KOTT said the amendment would be labeled Amendment 1.                
 REPRESENTATIVE PORTER moved Amendment 1.                                      
 REPRESENTATIVE SANDERS objected.                                              
 REPRESENTATIVE ELTON said he has a concern that the committee is              
 trying to essentially draft a new piece of legislation.  The                  
 amendment will create a whole new bill with a whole new effect.  He           
 said he would feel more comfortable if the bill were to be put in             
 a subcommittee with a time specific to bring the it back before the           
 full committee the following Wednesday.  He pointed out the                   
 amendment essentially says the ten hour limitation applies only to            
 work actually performed at the mining face.  It does not preclude             
 somebody from spending four hours in a shop above ground and then             
 another ten hours down below ground where you would still have the            
 fatigue factor.                                                               
 Number 1245                                                                   
 REPRESENTATIVE PORTER said he thinks there would be a problem with            
 the Fair Labor Standards Act (FLSA) with working four hours                   
 upstairs and ten hours downstairs.  He noted he realizes the                  
 amendment is a departure from the original bill, but the committee            
 has spent more time talking about this issue than the original                
 REPRESENTATIVE ROKEBERG said he would echo Representative Porter's            
 comments.  He noted he would support the amendment.                           
 REPRESENTATIVE KUBINA said if the committee is going to make the              
 bill a better bill, this is not the direction he would like to                
 pursue.  He said he doesn't want to change the eight hour time, but           
 he would be willing to through the collective bargaining process or           
 through waivers from the department.  Representative Kubina said it           
 takes away some of the protection, whether it is through the                  
 collective bargaining process or through the Department of Labor.             
 REPRESENTATIVE SANDERS indicated without further input from the               
 Administration and labor, he isn't prepared to vote on the                    
 amendment, and if the committee does vote on the amendment, he                
 isn't prepared to move the bill out of committee.  It should be put           
 into a subcommittee.                                                          
 REPRESENTATIVE KUBINA said he would be supportive of leaving the              
 department out of this and say that these sections can be waived by           
 a collective bargaining agreement.  He said his point is where does           
 the employee, the department or anybody have a chance to provide              
 any kind of input to this regarding safety, etc.  It is a                     
 unilateral decision by changing the law.                                      
 REPRESENTATIVE ROKEBERG said the committee isn't talking about the            
 safety or inspection of safety operations, they are just talking              
 about changing the hours.                                                     
 REPRESENTATIVE MASEK said feels the amendment would change the                
 intent of the original bill.  She said she isn't in favor of                  
 supporting the amendment at the current time.                                 
 Number 1730                                                                   
 MR. FLANAGAN said as long as there is no provision for a variance,            
 the department cannot and will not support the amendment.  He said,           
 "From Mr. Nauman's testimony, I gathered that if he's talking six             
 hours at the face and a 12 hour day, his workers right now --                 
 assuming he doesn't get his permit for his camp, you're working ten           
 hours at the face plus the six hours - that's a 16 hour sift.                 
 Their expert witness talked about overtime being the fact.  Well              
 the difference between overtime and extended shift gets rather                
 (indisc.), too (indisc.) for me to figure out, frankly.  When                 
 they're talking about working two weeks on, two weeks off and seven           
 tens -- it's not saying that this - there couldn't be all those               
 concerns laid out.  The wishes of the employees, union or nonunion,           
 would certainly be a factor in the variance, and I'm not saying we            
 would definitely mimic the variance procedure for OSHA variances,             
 but that allows for public comment.  If a worker was feeling like             
 it was being rammed down their throat, they could contact the                 
 department if they had genuine concerns - we could look at them.              
 We'd probably just talk to MSHA and see what the records were.  But           
 as some speakers said, `We're not just addressing.'  When we change           
 this law, and I'm glad to see at least the legislative declaration            
 of hazard remains in tact and the penalties.  They - we're doing it           
 for every operation, every conceivable operation in the state.  I             
 have little doubt that Greens Creek and -- none of those 125                  
 permits that they have to get are from our department.  Our                   
 department - my commissioner's family has been mining in this                 
 community for 110 years.  He is one of the staunchest advocates of            
 the industry in the Cabinet.  Everyone of these mining                        
 representatives - every time they're in town, he meets with them.             
 And we weren't party to joint conversations, but we've heard the              
 concerns of the industry, we've heard the concerns of organized               
 labor.  Obviously, including my former boss, Mr. Piekarski, doesn't           
 agree from the other side with the position that we've come up                
 with.  But - I can -- it is a compromise that addresses the                   
 concerns of both sides.  Unless there is some perception that we're           
 some bureaucratic shibboleth that's gonna come down on them and               
 stop these projects.  I don't think there is any rationale.  I                
 don't think the variance procedure for our violations has shown               
 that.  I don't think there has been any abuse or bureaucratic                 
 indifference on processing alternative work week plans under Title            
 23 on the four-tens and it is our position, which I would be remiss           
 if I did not emphasize the commissioner's position that some form             
 of variance or waiver with the department doing fact finding and              
 finding of that it was in the interest of the workers would be                
 necessary for us to remove opposition to the bill."                           
 Number 1902                                                                   
 CHAIRMAN KOTT said the committee has gone from a bill that                    
 essentially repealed the 8 hour provision, which theoretically                
 would offer a 24 hour opportunity to work underground, to an                  
 amendment that places a limitation of a maximum of 10 hours, which            
 is a 2 hour increase from the present.  Chairman Kott said if the             
 department is not supportive of that amendment, is there some kind            
 of middle ground the department would support.                                
 MR. FLANAGAN said, "Well if we screwed up by coming in with our               
 middle ground -- I mean I don't think -- we don't see it, we don't            
 see it as onerous to have.  I mean basically, this amendment with             
 a waiver or variance procedure because the discussion on collective           
 bargaining was interesting and it would be applicable in some                 
 circumstances but there are a vast array of businesses that are not           
 union and go to some lengths to remain nonunion.  That's their                
 right under the law.  That's the right of their employees.  Some of           
 the employers tend to play fast and loose with the law in keeping             
 themselves that way, but that's neither here nor there.  If it's a            
 union operation or a nonunion operation, there has to be a place in           
 a situation like this where we're changing the law, not just for              
 Greens Creek, not just for Echo Bay, not just for Coeur.  We can do           
 that.  We can individualize it for these large employers with a               
 large safety program, well organized track record, that will have             
 the resources to bird dog their contractors to make sure that every           
 contractor they bring in adheres to a standard in case those are              
 also going to be working longer hours.  I guess that's as good as             
 we can do.  We've given this a lot of thought.  We've gotten to               
 this.  The initial reaction in the department is `now the law works           
 fine.'  Eight hours, the Greens Creek ran for five years.  I didn't           
 hear anybody say that the reason Greens Creek closed in December of           
 93 was because of the eight hour limitation.  I don't think anybody           
 would dare to make that claim.  I think the findings -- I'm real              
 interested in reading these studies.  I would point out that MSHA             
 is the entity charged with mine worker safety in this country, not            
 the Bureau of Mines.  I'm sure they have an interest and do good              
 work in that direction, but I'd be interested in reading those                
 stories.  As a layman, they frankly strain crudity that it gets               
 safer in the later hours, having worked long shift in non-mining              
 industries for years, on the North Slope.  That's basically the               
 department's position.  I don't know -- I guess I'm beating it to             
 death at this point, Mr. Chairman, but we've heard the concerns of            
 the industry.  We want to address it.  So this is how we do it, we            
 say, `O.K., ten sounds reasonable if it's a good operation, if it's           
 a safe operation.'  If it's not a safe operation, we don't want the           
 blood on our hands."                                                          
 Number 2033                                                                   
 REPRESENTATIVE ROKEBERG said he would be willing to move a                    
 conceptual amendment that adopted the recommendation of the                   
 Administration if that was the will of the committee.  He asked Mr.           
 Flanagan if there is a statue that is like a waiver on overtime if            
 there was either collective bargaining or variance procedure.                 
 MR. FLANAGAN indicated there is statutory language in Title 23.10             
 on overtime.                                                                  
 REPRESENTATIVE ROKEBERG asked if there is a conceptual amendment              
 that adopted that language.  He also asked if it would fit with the           
 additional language the committee has before them.                            
 Number 2008                                                                   
 CHAIRMAN KOTT asked if the department would be agreeable of an                
 amendment to Amendment 1 that offered that variance procedures.               
 MR. FLANAGAN said conceptually they would be.  He noted he isn't              
 sure that the exact language from the wage and hour provision would           
 be applicable, something such as a plan submitted to the Department           
 of Labor and based on a finding of the commissioner that it was in            
 the best interest of the workers.  It should be language that would           
 give the department the ability to review the plan and operation              
 for the safety.                                                               
 REPRESENTATIVE KUBINA stated he would like to see it in writing.              
 REPRESENTATIVE ROKEBERG asked if the collective bargaining language           
 should be included.  He questioned whether it is in the overtime              
 statute.  He also asked if there is language in the overtime                  
 statute that says that there would be no review of the plan if                
 there were a collective bargaining agreement.                                 
 MR. FLANAGAN answered in the affirmative.  He said that is the                
 REPRESENTATIVE ELTON said he thinks the committee is very close to            
 having something that is going to allow everybody an opportunity to           
 feel a certain level of comfort when the committee votes to move it           
 out.  He said he doesn't think they want to jeopardize it, craft              
 something here and then walk away from it.  He said he assumes that           
 at some point, the commissioner of the Department of Labor isn't              
 going to the Governor and waste this effort.  If the committee                
 spends a week getting the language right, they may be saving a                
 year's time if it is done in committee.  He noted concern about               
 conceptual amendments.                                                        
 Number 2228                                                                   
 REPRESENTATIVE PORTER referred to the notion that this process                
 needs to go to a variance and said he is undecided whether it                 
 should be put at the bottom of Amendment 1 or whether it should be            
 put at the bottom of the existing statute.  He said the language              
 conceptually that he is thinking of would be that this variance               
 would be obtained from the Department of Law in a situation where             
 there wasn't a labor agreement.  He said he would agree that the              
 committee should spend time to come up with language that everybody           
 understands and hopefully agree on.                                           
 Number 2269                                                                   
 REPRESENTATIVE PORTER withdrew his motion to amend and recommended            
 the conceptual ideas go to either staff or to a subcommittee.                 
 Number 2287                                                                   
 CHAIRMAN KOTT said the bill would be held in order to work on a               
 committee substitute which would incorporate language that will               
 hopefully be agreeable to all the parties.  He said there would be            
 a committee substitute before the committee the following                     
 HB 483 - CALCULATION OF UNEMPLOYMT INS BENEFITS                             
 Number 2335                                                                   
 CHAIRMAN KOTT announced the committee would address HB 483,                   
 "An Act relating to the calculation of unemployment insurance                 
 benefits; and providing for an effective date."                               
 DWIGHT PERKINS, Special Assistant, Office of the Commissioner                 
 Department of Labor, read the following statement into the record:            
      "For years, the unemployment insurance system has enabled                
      Alaskan workers, their families, and their communities to                
      weather periods of unemployment with their economic                      
      well-being and dignity intact.  Recent events in Sitka and               
      Wrangell, as well as in other areas of the state affected by             
      plant closures or layoffs, have demonstrated all too well the            
      importance of this safety net for our working men and women.             
      "The schedule of benefits for unemployment insurance has not             
      been adjusted to increase the maximum weekly benefit amount              
      since 1990.  Alaska currently ranks forty-ninth in the nation            
      in unemployment insurance wage replacement, with the average             
      weekly benefit amount only slightly more than 27 percent of              
      the average weekly wage for the state.  In terms of the                  
      maximum weekly benefit amount, Alaska ranks thirty-fifth in              
      the nation, notwithstanding the higher cost of living here.              
      "The current benefit schedule uses a worker's yearly wage to             
      determine the weekly benefit amount.  The minimum qualifying             
      wage amount is $1,000, which provides a weekly unemployment              
      insurance benefit amount of $44.  For each $250 a worker earns           
      over $1,000, $2 is added to the benefit amount.  Weekly                  
      benefits are new capped at $212, based on maximum wages of               
      "This bill would keep the current benefit schedule in place              
      but would replace the current fixed cap with a flexible cap.             
      The new cap on wages would be 75 percent of the average annual           
      Alaska wage, exactly the same as the wage base on which                  
      employers and workers are taxed to support the system.                   
      Bringing the maximum qualifying wages up to the wage base                
      would raise the maximum benefit amount from $212 to $238 in              
      1997.  The average cost to employers in the year 2000 will be            
      approximately one dollar per employee per week.                          
      "Thirty-five states use a flexible benefits standard driven by           
      changes in the average weekly wage.  The advantage of such a             
      system is that it integrates the benefit standard into the               
      self-adjusting unemployment trust fund formula, which is                 
      directly tied to the performance of the state's economy.  As             
      average wages rise, the standard for unemployment insurance              
      benefits keeps pace in terms of income replacement.  If wages            
      fall, as they did during the 1986-1987 recession, the maximum            
      weekly benefit decreases and the employer tax burden                     
      "I want to emphasize that this is a modest proposal.  The bill           
      would raise Alaska's wage replacement less than 1 percent, to            
      a little over 28 percent.                                                
 TAPE 96-15, SIDE B                                                            
 Number 001                                                                    
 MR. PERKINS continued to read his statement.                                  
      "While not enough to change our wage replacement ranking among           
      the states, this small change would provide a measure of                 
      additional security to Alaska's average wage earners and help            
      slow the erosion of purchasing power during hard times.  As we           
      work together to strengthen Alaska's economy to provide                  
      quality jobs for Alaska's families and to move certain low-              
      income people from welfare to work, we must ensure that there            
      is an adequate safety net in place to allow unemployed workers           
      sufficient finances to remain in their homes, in their                   
      communities, and in Alaska until they are reemployed."                   
 MR. PERKINS pointed out that in the committee files there are three           
 tables that shows the average weekly wage check of $620.11.  Alaska           
 ranks fifth in the nation.  Table two is the average weekly benefit           
 amount of the check written for unemployment insurance in which               
 Alaska ranks twenty-sixth at $169.99.  The average amount that is             
 replace of that $620 in the 50 states, Alaska ranks forty-ninth of            
 the average wage replacement.                                                 
 Number 064                                                                    
 WILLIE LEWIS was next to come forward to testify.  He informed the            
 committee he has been a resident of Fairbanks for 22 years and has            
 also represented the Laborers Union, which has approximate 1,300,             
 for about the same length of time.  He noted he served on the                 
 Employment Security Advisory Board for 12 years and was appointed             
 by Governor Sheffield in 1984.  He referred to the previous                   
 increase of benefits and said it actually saved homes, etc., as               
 most of the contracts for Alaskan residents were terminated on the            
 North Slope.  He informed the committee that members of his union             
 usually work during the summer months and they have to make as much           
 as they possibly can.  Those wages have to last until the next                
 season.  Unemployment benefits helps people to survive over the               
 winter months.  He said he thinks HB 483 is a good bill and urged             
 Number 172                                                                    
 WILLIE CREECH, President, Vulcan Towing and Recovery, testified via           
 teleconference from Anchorage.  He informed the committee he                  
 recently received a letter from the Department of Labor where they            
 tried to explain why they wanted to raise unemployment insurance              
 taxes.  He informed the committee he doesn't have a problem with HB
 483, but asked the committee to not move it forward until they have           
 had some reform done unemployment benefits.  There is currently no            
 requirement to look for a job.  There is no requirement to accept             
 a job or to bring proof to the unemployment office that you're                
 actively seeking employment.  He said we have people who work the             
 required amount of time, get on unemployment and stay on it until             
 the benefits run out and then start the whole procedure again.  He            
 asked that the unemployment office requires anyone on unemployment            
 to bring proof that they are currently looking for work and will              
 accept a job if offered.  He said he called the unemployment office           
 to find out if people are required to bring proof that they are out           
 looking for a job and the answer was "no."  He said he isn't                  
 against HB 483 and doesn't mind giving an extra dollar per week for           
 an employee, but he wants to make sure that people who don't                  
 require unemployment benefits are out there trying to find a job.             
 Number 329                                                                    
 RON TORGERSON, Chief of Appeals, ESD Appeals, Department of Labor,            
 came before the committee to testify.  He informed the committee he           
 has worked as an analyst in Unemployment Insurance Program for a              
 good many years and also worked on the drafting of HB 483.  Mr.               
 Torgerson said the department does have a work search requirement.            
 It is a selective focused work search requirement which is written            
 in their regulations, AAC 85.350.  Mr. Torgerson said, "It allows             
 the department - the local office, at its discretion, to impose a             
 work search if an individual is in an occupation where employers              
 are hiring so that it would be fruitful for the person to knock on            
 doors and try to find work, and if making these kinds of personal             
 contacts is the way that people get work in those occupations and             
 as long as the individuals have been given a certain amount of time           
 to find work through the employment office.  The problem that the             
 department is seeing in this, just for information, with a blanket            
 work search requirement in Alaska is that so much of the employment           
 in this states is just seasonably unavailable, and where isn't any            
 discretion to ask -- to take into account labor market conditions,            
 we'd have people knocking on the door of the two or three employers           
 in town at a time when work was seasonally unavailable, and our               
 experience has been that employers don't appreciate this.  We've              
 gotten feedback from employers time and again that they don't want            
 to be involved in a pro forma work search effort that is being                
 imposed on claimants.  For example, when they're drawing extended             
 benefits.  Extended benefits is a program that imposes a work                 
 search automatically.  It's a federal requirement.  We certainly              
 understand the concern.  We just hope that we take into account the           
 labor market conditions and the fact that we do have the authority            
 to require a work search where it is appropriate."                            
 MR. TORGERSON said the department also instituted an eligibility              
 review program where an individual who remains unemployed in a                
 favorable labor market, their claim is reviewed periodically and              
 they can be required to make personal efforts to get back to work.            
 Number 448                                                                    
 REPRESENTATIVE PORTER asked if there is a requirement or provision            
 that a person can only be required to take employment that somewhat           
 mirrors the employment he lost.                                               
 MR. TORGERSON stated that is correct.  He said under the provision            
 of Section 385 of the Employment Security Act, which is a federally           
 imposed requirement, they have to take into account the worker's              
 past training experience earnings.  The worker can't be required to           
 accept a job that is substantially less favorable than the                    
 prevailing work in the locality, but as their unemployment                    
 lengthens they can be required to take work outside their regular             
 occupation.  It just has got to compare favorably with the average            
 conditions in the labor market.  He pointed out that at the first             
 part of their unemployment, a person is basically expected to take            
 work similar to the work that they lost.  They're not being asked             
 to downgrade their skills or take a job that pays half the wages of           
 the job they lost.  He said that period varies depending on the               
 labor market and what's reasonable.                                           
 Number 527                                                                    
 REPRESENTATIVE ROKEBERG said he would like more information about             
 the program.                                                                  
 REPRESENTATIVE PORTER asked what would be in it for the employer.             
 MR. FLANAGAN explained a lot of the communities in Alaska are                 
 dependent on unemployment insurance benefits.  There are some                 
 employers that support it because they know if they're selling the            
 basics of life that people spend this money on such as fuel,                  
 housing, food, etc., they're not going to survive and their                   
 community isn't going to survive.  He noted Alaska is one of four             
 states where the employee pays a share.  Of total benefit costs               
 over time, the employee pays 18 percent, the employers pay 82                 
 percent.  In 46 states, the employers pay the whole bill for the              
 unemployment insurance system.                                                
 MR. LEWIS said one thing that he has seen while being on the                  
 Employment Security Advisory Board is what Employment Security has            
 did over the years when people are on unemployment, they have an              
 opportunity to get (indisc.), look at the job market.  Everybody is           
 well trained.  He noted is very proud to serve on that board.                 
 MR. CREED pointed out there is a $212 maximum benefit and you could           
 go to work at McDonalds and make more than $200 per week.  He                 
 questioned why these people don't have to take a job where they               
 could make more than $212 per week.  He said the department is                
 saying if a person was making $700 per week, if they're not going             
 to get another job that they're making equal to that amount, they             
 don't have to take it.  Mr. Creed said if they got a job making               
 over $212 per week take home, they are doing better for themselves            
 that way than they are if they just collect the unemployment.                 
 There was continued general discussion regarding the unemployment             
 program and seasonal workers in Alaska.                                       
 CHAIRMAN KOTT announced the bill would be back before the committee           
 at a later date.                                                              
 Number 1288                                                                   
 CHAIRMAN KOTT adjourned the House Labor and Commerce meeting at               
 6:15 p.m.                                                                     

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