SB 31-PENALTIES: OSHA VIOLATIONS CAUSING DEATH  CHAIRMAN STEVENS announced SB 31 to be up for consideration. MR. RICH MASTRIANO, Director, Division of Labor Standards and Safety, supported CSSB 31. SENATOR LEMAN moved to adopt the committee substitute to SB 31, Lauterbach\C as the working document. SENATOR TORGERSON objected to hear the changes. MR. MASTRIANO replied that the changes in section 1 are that the original bill did not have total civil penalties of $25,000 for any violation and %50,000 for a willful or repeat violation. Changes in Section 1(4) say, "not subject to reduction by negotiation or settlement unless expressly approved in writing by the Commissioner of Labor and Workforce Development and the Attorney General." SENATOR LEMAN asked who wanted this CS. CHAIRMAN STEVENS replied that this came from the department. SENATOR TORGERSON asked why they subjected violations in the committee substitute to AS 18.60.010 - .105 and not (a)(b) and (c), which is in the original version. MR. MASTRIANO responded that those subsection describe what serious, willful and repeat violations are. "Basically, the existing law allows for a mandatory reduction in those penalties under (h)…" CHAIRMAN STEVENS said there were three components to section 1 in the original bill, but in the committee substitute there are four components. He asked which section was added. MR. MASTRIANO replied that on page 2, they added, "(1) inclusive of all final civil penalties under this section for all violations connected with the death of the employee;". There would be a total of $25,000 inclusive of all civil penalties. CHAIRMAN STEVENS asked what the existing statute was on that now. MR. MASTRIANO replied that now for a serious violation - up to $7,000, which can be reduced for size, good faith and history of the employer. CHAIRMAN STEVENS remarked that it says $7,000 per day. MR. MASTRIANO said that was for failure to correct a problem, but ordinarily it is corrected within that time frame, unless they ask for an extension on abatement. CHAIRMAN STEVENS asked why the department wanted to change the current statute and was it similar to OSHA regulation now. MR. MASTRIANO replied that it is similar to OSHA regulation. The department is mandated to reduce the penalty by size and history - and if it's willful, they don't give a good faith reduction. Their proposed CS would eliminate the department from automatically reducing the penalties, leaving it to the commissioner and the attorney general. This is more stringent that OSHA requirements. MR. MASTRIANO said they are required to adopt a number of guidelines by reference. "If we change anything, we have to change it and be more stringent than the OSHA requirement." CHAIRMAN STEVENS asked how many cases per year did this apply to. MR. MASTRIANO said that last year there were 18 fatalities in various industries, but he added that they don't cover the fishing industry (U.S. Department of Labor covers the fishing industry). They cover shore-based processing, construction industries and general industry. CHAIRMAN STEVENS asked who determines that the employer willfully violated the standards. MR. MASTRIANO said the OSHA enforcement officer who works for the state will write a citation and at that point there is an investigation. Currently, when a citation is given to an employer with less than 25 employees, for instance, that citation is automatically reduced by 60% (from a serious maximum of $7,000). If this is his first violation, he will get a good faith reduction of up to 20%, which results in an 80% total reduction. If he has no previous history with the department, he gets an additional 10%. So a $7,000 fine can be reduced by 90%. It can be reduced even further in a settlement. "A fatality could be reduced to $750." CHAIRMAN STEVENS asked if this would have any impact on the settlement of the individual's estate. MR. MASTRIANO replied no. SENATOR AUSTERMAN asked of the 18 deaths were the total that applied to this bill. MR. MASTRIANO said there were a total of 23, but for willful or violations of the standards that caused the death there were 18 total. SENATOR AUSTERMAN asked if these standards were stronger than federal law. MR. MASTRIANO replied they would be, because the federal law mandates that they reduce the penalty. SENATOR AUSTERMAN asked him to explain why the department wants stricter regulations than OSHA. MR. MASTRIANO replied: I think when someone loses their life in a work related accident and it's a result of a willful or serious violation on the part of the employer, to reduce that penalty for the employer failing to comply with the law to $750 or $1,500 - what value do you place on a worker? We think that there should be something that gets the employer's attention. SENATOR AUSTERMAN commented, "Irregardless of how they do it in the rest of the United States." CHAIRMAN STEVENS asked what percent of states under OSHA have more stringent requirements than OSHA. MR. MASTRIANO replied that this bill is modeled after Minnesota where it's been in effect for two years. That is the only state he is aware of having a more stringent requirement. MR. DICK CATTANAEU, Executive Director, Associated General Contractors, opposed SB 31. They did not understand why the bill was needed. I am not aware of any companies that are serial murderers - that have repeated incidents of killing people and that's what it's saying. We need to penalize the company so they don't do it again…A fatality on a job is extremely harmful to a company. And it's not just the $750 you may get fined or the $7,000. There are going to be other OSHA fines associated with that and workers' compensation claims and some civil suites as well. You can't put a price on a person's life and we're not trying to do that. We just don't see a need for this. We're concerned about the bill when it says, "not less than." SENATOR LEMAN asked if he had seen the committee substitute or did he not like either bill. MR. CATTANAEU said they didn't like either version even after meeting with the department this summer and having the reason explained to them. He reiterated that he was worried about language saying "not less than" and the idea that companies are repeat offenders. He said this statute includes airplane accidents and things like that. SENATOR TORGERSON said he agreed with him on his fundamental figures. He asked if he would be okay with increasing the $7,000 to another number, not putting the minimum in and leaving it subject to (h), which says the commissioner shall give due consideration to the size of the business of the employer being charged, the gravity of the violation, the good faith of the employer and the history of previous violations. MR. CATTANAEU replied that he agreed that $7,000 was insufficient, but by itself, it wouldn't stop someone. He reiterated, if someone dies on the job, there would be other violations. CHAIRMAN STEVENS asked if he was aware of any other states working on this issue. MR. CATTANAEU said that he didn't know of any others than Minnesota. SENATOR DAVIS asked if Minnesota was the only state that had adopted this. MR. MASTRIANO replied yes and added that there is one employer this last year that has killed more than one person. The way the committee substitute is written right now, the total fine for a fatality would be the $25,000 or the $50,000, if it were willful. SENATOR LEMAN moved to withdraw his motion to adopt the committee substitute. There were no objections and it was so ordered. CHAIRMAN STEVENS announced that they would hold the bill for further work and adjourned the meeting at 2:15 p.m.