HOUSE LABOR AND COMMERCE STANDING COMMITTEE April 21, 1999 3:21 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Jerry Sanders Representative Lisa Murkowski Representative John Harris Representative Tom Brice Representative Sharon Cissna MEMBERS ABSENT Representative Andrew Halcro, Vice Chairman COMMITTEE CALENDAR * HOUSE BILL NO. 201 "An Act relating to the computation of overtime; and providing for an effective date." - MOVED CSHB 201(L&C) OUT OF COMMITTEE SENATE BILL NO. 50 am "An Act relating to certain boiler and pressure vessel inspections and inspectors; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 201 SHORT TITLE: OVERTIME COMPENSATION COMPUTATION SPONSOR(S): LABOR & COMMERCE Jrn-Date Jrn-Page Action 4/15/99 824 (H) READ THE FIRST TIME - REFERRAL(S) 4/15/99 824 (H) L&C, FIN 4/21/99 (H) L&C AT 3:15 PM CAPITOL 17 BILL: SB 50 SHORT TITLE: BOILER AND PRESSURE VESSEL INSPECTIONS SPONSOR(S): LABOR & COMMERCE BY REQUEST Jrn-Date Jrn-Page Action 1/28/99 109 (S) READ THE FIRST TIME - REFERRAL(S) 1/28/99 110 (S) L&C 2/18/99 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 2/18/99 (S) MINUTE(L&C) 2/19/99 306 (S) L&C RPT 3DP 1NR 2/19/99 306 (S) DP: MACKIE, HOFFMAN, DONLEY; NR: 2/19/99 306 (S) LEMAN 2/19/99 306 (S) FISCAL NOTE (LABOR) 2/19/99 306 (S) FIN REFERRAL ADDED 3/09/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 3/09/99 (S) MOVED OUT OF COMMITTEE 3/09/99 (S) MINUTE(FIN) 3/09/99 452 (S) FIN RPT 3DP 5NR 3/09/99 452 (S) DP: TORGERSON, ADAMS, DONLEY; 3/09/99 452 (S) NR: PARNELL, GREEN, PETE KELLY, 3/09/99 452 (S) WILKEN, LEMAN 3/09/99 452 (S) PREVIOUS FN (LABOR) 3/10/99 (S) RLS AT 11:45 AM FAHRENKAMP 203 3/10/99 (S) MINUTE(RLS) 3/11/99 475 (S) RULES TO CALENDAR 3/11/99 3/11/99 476 (S) READ THE SECOND TIME 3/11/99 477 (S) MOTION TO ADVANCE TO 3RD W/DRAWN 3/11/99 477 (S) THIRD READING 3/12 CALENDAR 3/12/99 495 (S) READ THE THIRD TIME SB 50 3/12/99 495 (S) RETURN TO SECOND FOR AM 1 UNAN 3/12/99 495 (S) CONSENT 3/12/99 495 (S) AM NO 1 ADOPTED UNAN CONSENT 3/12/99 495 (S) AUTOMATICALLY IN THIRD READING 3/12/99 496 (S) PASSED Y16 N1 E3 3/12/99 496 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 3/12/99 497 (S) TRANSMITTED TO (H) 3/15/99 453 (H) READ THE FIRST TIME - REFERRAL(S) 3/15/99 453 (H) L&C, FIN 4/21/99 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER JANET SEITZ, Legislative Assistant to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 Telephone: (907) 465-4968 POSITION STATEMENT: Presented HB 201 as aide to the House Labor and Commerce Standing Committee. ED FLANAGAN, Commissioner-designee Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Testified in support of HB 201, indicated the Version D committee substitute is acceptable to the department and that the suggested amendment originated with the department. DON ETHERIDGE Alaska State District Council of Laborers 710 West Ninth Street Juneau, Alaska 99801 Telephone: (907) 586-3707 POSITION STATEMENT: Testified in support of HB 201. THYES SHAUB, Lobbyist for the National Federation of Independent Business 217 Second Street, Number 206 Juneau, Alaska 99801 Telephone: (907) 463-5118 POSITION STATEMENT: Testified in support of HB 201. PAM LaBOLLE, President Alaska State Chamber of Commerce 217 Second Street, Number 201 Juneau, Alaska 99801 Telephone: (907) 586-2323 POSITION STATEMENT: Testified in support of HB 201. BOB DINDINGER, Vice President of Government Relations Alaska Visitors Association 9085 Glacier Highway Juneau, Alaska 99801 Telephone: (907) 789-0052 POSITION STATEMENT: Testified in support of HB 201. KIM ROSS, Executive Director Alaska Air Carriers Association 929 East 81st Street, Suite 108 Anchorage, Alaska 99518 Telephone: (907) 277-0071 POSITION STATEMENT: Testified in support of HB 201. DWIGHT PERKINS, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Agreed to request statistical information and answered questions regarding HB 201; testified in support of SB 50 am. AL DWYER, Director Division of Labor Standards and Safety Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-4855 POSITION STATEMENT: Answered questions and accepted chairman's directive regarding SB 50 am. ACTION NARRATIVE TAPE 99-43, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:21 p.m. Members present at the call to order were Representatives Rokeberg, Sanders, Harris and Brice. Representatives Cissna and Murkowski arrived at 3:23 p.m. and 3:24 p.m., respectively. HB 201 - OVERTIME COMPENSATION COMPUTATION Number 0059 CHAIRMAN ROKEBERG announced the committee's first order of business is HB 201, "An Act relating to the computation of overtime; and providing for an effective date." Number 0075 JANET SEITZ, Legislative Assistant to Representative Norman Rokeberg, Alaska State Legislature, came forward to present HB 201 as aide to the House Labor and Commerce Standing Committee. House Bill 201 was generated by a recent court decision regarding overtime computation [Hallam v. Holland America Line, Inc., d/b/a/ Westours Motor Coaches, Inc.]. The court is approving what is termed "pyramiding." For lack of a better description, Ms. Seitz termed it "paying double for overtime." Ms. Seitz indicated that if a person works 11 hours on Monday and 8 hours each subsequent weekday including Friday, that person would receive 3 hours of overtime pay for those 3 overtime hours on Monday and also an additional 3 hours of overtime pay on Friday for those 3 hours above 40 hours per week. In effect, the person would receive 6 hours in overtime, as Ms. Seitz understands it. House Bill 201 is to make it clear that overtime is for 8 hours a day or 40 hours a week. CHAIRMAN ROKEBERG noted this has been the interpretation of the department since statehood, asking if that was correct. He invited Commissioner-designee Flanagan, Department of Labor, forward. Number 0159 ED FLANAGAN, Commissioner-designee, Department of Labor, came forward to testify in support of HB 201. This legislation corrects an interpretation that goes against the common understanding and interpretation by labor, management, and the Department of Labor since, he thinks, Territorial days before 1959. The Department of Labor strongly supports and will always advocate to retain its overtime provision requiring the payment of overtime over 8 hours in a day, but, in the department's opinion, it is ludicrous to suggest that the employer should not be entitled to receive 40 hours of straight-time [per week]. Under the superior court's interpretation, an employee working six 10-hour days [in a week] would be required to be paid for 32 hours straight-time and 28 hours overtime, rather than the current 40 hours straight-time and 20 hours overtime. COMMISSIONER-DESIGNEE FLANAGAN indicated the additional overtime required by the court's decision results from including both overtime and straight-time hours to determine when the weekly 40-hour mark has been reached. Commissioner-designee Flanagan stated he thinks this is a necessary fix to preserve the state's 8-hour law, and he thinks the court's interpretation creates an incredible, unjustified and unfair liability for the state's employers who are paying according to the department's own instructions and through what has been everyone's understanding for decades. Commissioner-designee Flanagan commented the department will support the bill, as currently written, strongly through the process. He noted the title is rather broad but does not think it will "invite any mischief" because the agreement is that this needs to be done quickly and cleanly. Number 0353 CHAIRMAN ROKEBERG noted there is a proposed committee substitute (CS) the committee will be adopting and also a proposed amendment from the department. COMMISSIONER-DESIGNEE FLANAGAN responded he has reviewed those, commenting he thinks the committee substitute's Section 2 is more clear. Regarding the proposed amendment, Commissioner-designee Flanagan added it was the suggestion of the department's assistant AG [attorney general] that the legislation's findings section should probably cite the specific case to eliminate any doubt. Number 0387 REPRESENTATIVE MURKOWSKI made a motion to adopt Version D as the proposed CS for HB 201. Version D is labeled 1-LS0872\D, Cramer, 4/15/99. There being no objection, Version D was before the committee. Number 0395 REPRESENTATIVE BRICE made a motion to adopt Amendment D.1 offered by the chairman. Amendment D.1, labeled 1-LS0872\D.1, Cramer, 4/20/99, read: Page 1, following line 14: Insert a new paragraph to read: "(2) the intent of this bill is to override the superior court's decision in Hallam v. Holland America Line, Inc., d/b/a/ Westours Motor Coaches, Inc., 1JU-96-1734 CI, concerning the calculation of overtime wages; the court in that case misinterpreted the intent of AS 23.10.060(b);" Renumber the following paragraphs accordingly. Page 2, line 6: Delete "(2)" Insert "(3)" CHAIRMAN ROKEBERG questioned if the committee understood the amendment and if there were any objections. He recognized Representative Harris regarding clarification. REPRESENTATIVE HARRIS asked about the second part of the amendment, page 2, line 6, indicating he thinks it is not correct upon examining that portion of Version D. CHAIRMAN ROKEBERG explained the findings become [subsection] (2) and then it is renumbered according. The chairman commented he had had the same question earlier. With that point clarified, the chairman questioned if there were any objections to "Amendment 1" moved by Representative Brice. Number 0484 REPRESENTATIVE MURKOWSKI spoke to the amendment, commenting she is certainly in support. However, she is questioning the last portion of the amendment which states, "the court in that case misinterpreted the intent". She wonders if it is necessary to go so far as to specifically say that. CHAIRMAN ROKEBERG indicated this was the assistant AG's recommendation and he is willing to accept it in this instance where the legislative and executive branches are in agreement, and this is the interpretation which has been in existence since before statehood. The chairman noted he appreciated Representative Murkowski's comment as a member of the legal profession. There being no further objection, Amendment 1 [Amendment D.1] was adopted. Number 0575 REPRESENTATIVE SANDERS asked for confirmation that this would still mean that if a person works three 10-hour days, the person would receive 24 regular hours and 6 overtime hours. COMMISSIONER-DESIGNEE FLANAGAN replied that was correct. REPRESENTATIVE MURKOWSKI questioned if there would be any negative effects to taking the retroactivity back to May 4, 1959. She asked if someone who felt he/she had an erroneously determined wage claim in the 1970s could use this retroactivity to say the employer owes that person all these dollars in overtime pay. COMMISSIONER-DESIGNEE FLANAGAN answered that is exactly what the retroactivity is attempting to avoid. He noted there is a two-year statute of limitations for most wage claims. The department's assistant AG had had a question about the retroactivity upon first examination of the bill which she checked out with Deborah Behr [Assistant Attorney General, Legislation and Regulations Section, Civil Division (Juneau), Department of Law] who saw no problem with that. Number 0671 REPRESENTATIVE MURKOWSKI noted, then, it was being taken all the way back to avoid any opportunity for anyone to bring claim. COMMISSIONER-DESIGNEE FLANAGAN replied that is his understanding. He believes the chairman came up with the 1959 date, but the department does not see any problem with it. Commissioner-designee Flanagan indicated the department does not interpret this as a change in the existing wage and hour law; if this legislation is not passed, the state is changing the rules on the employers in a very deleterious manner. Commissioner-designee Flanagan thinks they need to be fully retroactive and the department supports that. CHAIRMAN ROKEBERG noted the committee had received a letter in support of the legislation from Lynden Transport [Lynden, Inc.; April 20, 1999]. The chairman questioned if there were any witnesses. Number 0766 DON ETHERIDGE, Alaska State District Council of Laborers, came forward to testify in support of HB 201. He said Commissioner-designee Flanagan has convinced them it is a good idea. Number 0809 THYES SHAUB, Lobbyist for the National Federation of Independent Business (NFIB), came forward to testify in support of HB 201. She indicated they are in full support of the legislation and would be providing a written statement of support. CHAIRMAN ROKEBERG asked Ms. Shaub if she had any idea what the ramifications would be to small businesses around the state. MS. SHAUB replied this would be a huge impact on small business, especially for many tourism businesses that have a lot of overtime hours during the summer. Number 0858 PAM LaBOLLE, President, Alaska State Chamber of Commerce, came forward to testify in support of HB 201. She indicated the Alaska State Chamber of Commerce feels this to be a misinterpretation of what everyone has understood overtime to be, and it would be a tremendous impact on business should the court's interpretation be allowed to stand. CHAIRMAN ROKEBERG asked if anyone has any idea of what the failure to pass this legislation would be. He wondered if any attempted calculations of the impact had been made. MS. LaBOLLE responded that no one has provided her with any calculations they might have done. CHAIRMAN ROKEBERG indicated this would be requested from the Department of Labor. He asked her if she could narratively indicate the impacts on business. MS. LaBOLLE said it essentially has the potential of being twice the overtime impact that they have had in their business. She believes businesses make strong efforts to keep overtime costs down. Ms. LaBolle added, "Considering they're already paying half again what the regular wage is and then through this it's three times what the regular wage is." She is sure that would be a very significant impact. Number 0944 CHAIRMAN ROKEBERG stated the committee would be asking the department shortly to do some analysis, but he indicated something from the Alaska State Chamber of Commerce would be helpful. He noted, "Even a broad conceptual idea of the impacts on business, business failures, and the totality on the economy ...." MS. LaBOLLE responded she could send out a quick call for survey information regarding the possible impact of this to their membership. CHAIRMAN ROKEBERG indicated he would also appreciate the notification of other chambers of commerce throughout the state so that they are aware of the situation. Number 1031 BOB DINDINGER, Vice President of Government Relations, Alaska Visitors Association (AVA), came forward to testify in support of HB 201. He is pleased there is this corrective legislation; he believes it is a misinterpretation or certainly an unanticipated interpretation of Alaska labor law. Mr. Dindinger noted his business, Alaska Travel Adventures, has approximately 200 employees in the summertime. If they are typical of tourism businesses, labor makes up about of 70 percent of their costs. Their average employee receives between 15 and 20 percent of his/her hours at overtime rates. It is pretty typical for his employees to receive 8 to 10 hours of overtime a week. Mr. Dindinger indicated the short-term punitive effect of this new overtime interpretation would be borne by the employer because the summer season is so near and most of the recruitment has already occurred. MR. DINDINGER believes, however, that over the long term, if he is paying for hours not worked - which is the net effect of this - his company will just hire more employees. Ultimately, those college students and seasonal employees currently collecting those overtime wages will be replaced with more full-time employees working fewer hours. He thinks that would be a detrimental effect, and would be considered a detrimental effect to much of his company's labor base. Because what they sell in the tourism business is labor, increasing the labor costs of small businesses by this percentage over the short-term could lead many small businesses to the brink of bankruptcy. Mr. Dindinger added that if there were class action suits going back two years to recover these wages, that would almost certainly bankrupt many small businesses; he emphasized having a retroactive effect for the legislation is extremely important. Number 1149 REPRESENTATIVE MURKOWSKI observed she thinks Mr. Dindinger is going into dangerous ground if he suggests possible impact of Judge Weeks' decision is that Mr. Dindinger might be forced to hire more full-time employees because they might view this as an opportunity at the expense of those businesses. She agrees that it would be to the ultimate detriment of those businesses to do it, but she doesn't want anyone to get the wrong impression that this might be a way to employ more Alaskans. MR. DINDINGER noted the burden of paying those employees would come from the existing employees. Instead of the existing employees receiving the overtime rate on a significant portion of their payroll, they will receive fewer hours to pay the additional employees. He commented that would be the only way his business could afford to deal with it over the long term. He added Representative Murkowski's point is well-taken. CHAIRMAN ROKEBERG commented he had intended to make the same point. The chairman is concerned about Mr. Dindinger's statement because he wondered if it was possible to have straight-time employees picking up those portions of overtime that Mr. Dindinger's employees performed. The chairman questioned whether Mr. Dindinger could manage that that precisely, and if that is entirely conceivable. Additionally, the chairman questioned if Mr. Dindinger didn't want to have a certain overtime premium to hire better quality people. He asked how that works. Number 1227 MR. DINDINGER answered the more a person can make during the summer season, the more attractive the job is in total to the person. However, if the difference is the entire company profit, it is just not an allowable expense. He noted his company has enough employees - instead of having five people doing the job and working six days a week, which is pretty typical in their business - they would have their employees working five days a week, hiring seven employees and rotating them through. It certainly might have a downward effect of the quality of employees the company is able to attract. CHAIRMAN ROKEBERG noted on this point the idea of overtime is a penalty to employers so they don't overwork their employees; therefore, they need to take due care. Number 1289 KIM ROSS, Executive Director, Alaska Air Carriers Association (AACA), came forward to testify in support of HB 201. The association represents about 180 airlines in Alaska and associated aviation businesses. She offered AACA's support to HB 201 and informed the committee this will be an issue addressed by the association's board at its next meeting. Ms. Ross noted the board could come up with a resolution if the committee desired. CHAIRMAN ROKEBERG indicated that would be appreciated. The chairman invited Mr. Perkins forward. Number 1336 DWIGHT PERKINS, Deputy Commissioner, Department of Labor, came forward. CHAIRMAN ROKEBERG requested Mr. Perkins ask the department's statisticians to make some very rough estimates of the costs and ramifications to employment levels and the businesses of the state, were this case law not to be repealed by this legislation. MR. PERKINS indicated he will discuss this with the department's research and analysis section to see what can be quickly provided. CHAIRMAN ROKEBERG asked if the department has a contingency plan regarding inquiries made. The chairman questioned if businesses were going to be "enforced" to calculate [overtime] according to the court's interpretation until this legislation is passed and signed by the governor. The chairman asked if any emergency regulations had been made. MR. PERKINS answered they have not. CHAIRMAN ROKEBERG asked if the department was going to check with the Attorney General. MR. PERKINS indicated the department would be checking with its assistant attorney general, but it has not been advised to do so as of yet. Mr. Perkins commented on part of the urgency expressed by Commissioner-designee Flanagan about this legislation passing through. CHAIRMAN ROKEBERG asked Mr. Perkins to look into that and then report back. The chairman confirmed there were no further questions or suggestions for Mr. Perkins. Chairman Rokeberg confirmed no one else wished to testify on HB 201. Number 1429 REPRESENTATIVE MURKOWSKI made a motion to move the CS for HB 201 [Version D], as amended, out of committee with individual recommendations and the attached zero fiscal note. There being no objection, CSHB 201(L&C) moved out of the House Labor and Commerce Standing Committee. Number 1469 CHAIRMAN ROKEBERG called a brief at-ease at 3:44 p.m. The committee came back to order at 3:45 p.m. SB 50 am - BOILER AND PRESSURE VESSEL INSPECTIONS Number 1470 CHAIRMAN ROKEBERG announced the committee's next order of business is SB 50 am, "An Act relating to certain boiler and pressure vessel inspections and inspectors; and providing for an effective date." He invited Mr. Perkins forward. Number 1490 DWIGHT PERKINS, Deputy Commissioner, Department of Labor, came forward to testify in support of SB 50 am. The department is currently severely backlogged with inspections of boilers and pressure vessels. Mr. Perkins indicated more than half of the 6,000-plus vessels overdue for inspection are of the type that would be affected by this legislation. SB 50 am would allow the commissioner of the Department of Labor to identify certain existing state personnel - plumbing inspectors - and qualify them to perform these particular inspections with some minimum training. The newly-trained inspectors would be required to take an examination and be passed off per the director of the Division of Labor Standards and Safety's oversight. Mr. Perkins indicated these personnel would be different from inspectors certified by the National Board of Boiler and Pressure Vessel Inspectors (NBBI). He noted the department is trying to reduce its backlog on these smaller-type boilers that need to be routinely checked. Mr. Perkins further indicated the legislation would result in approximately 40,000 new general fund dollars to the state because the department charges fees for this service, thus the positive fiscal note. It would also free up the department's NBBI-approved inspector to perform the inspections needed on the larger-type boilers and pressure vessels. Mr. Perkins emphasized the department would be using existing personnel, this would help reduce the department's backlog and help it service its clients, and would bring new revenue to the general fund. Number 1596 REPRESENTATIVE MURKOWSKI asked the difference between an exam approved by the director [of the Division of Labor Standards and Safety] for these "lightweight" inspections versus the examination described in AS 18.60.290. MR. PERKINS replied the examination the department would be administering would only be a portion of the national board examination. Mr. Perkins commented in past the department has sent boiler inspectors outside the state for training, at a large expense to the state. However, he indicated the department has not been able to keep these board-certified individuals once they return because of the higher pay available in the private sector, both inside and outside the state. He indicated this legislation would allow the administering of only a portion of the NBBI test, scoped to apply to the small pressure vessels. Mr. Perkins noted the department's existing employees are qualified to look at these [vessels] and have worked with the tools; they are plumbing inspectors who have been around for many years and know the systems. He indicated the inspections they are speaking of would be, for example, making sure the pressure relief valve - the low-water cut-off that could send off an alarm or shutdown - is working properly in a six-plex apartment building. They are not speaking of the large, industrial-type [vessels]. REPRESENTATIVE MURKOWSKI asked if there would then be an expense to the department to administer this reduced portion of the exam to these plumbers. MR. PERKINS thinks it is a negligible cost; the department does not see any kind of fiscal impact for that. Number 1708 CHAIRMAN ROKEBERG questioned why building officials in other jurisdictions cannot be used for this purpose, if the jurisdictions already have a building safety official and inspector. MR. PERKINS indicated he and the chairman have discussed this subject once previously. Mr. Perkins understands that it has to do with the population base per the national code. Alaska does not have the 1 million population base. It is Mr. Perkins' understanding the state cannot give its jurisdiction out to other entities - that the state has to oversee this. CHAIRMAN ROKEBERG asked Mr. Perkins, then, to explain the legislation currently in the committee, euphemistically known as "potty parity" [SB 8], which changes the Uniform Plumbing Code ["National Plumbing Code"] to acquire more fixtures, therefore deviating from the code. The chairman questioned why the population specifications of the plumbing code could not be changed to accommodate lower-population jurisdictions. MR. PERKINS deferred the question to Al Dwyer of Labor Standards and Safety. Number 1779 AL DWYER, Director, Division of Labor Standards and Safety, Department of Labor, came forward. Mr. Dwyer stated the 1 million population requirement is a national board requirement [National Board of Boiler and Pressure Vessel Inspectors]. It could be delegated to any municipality willing to take the responsibility. The statute would have to be changed. Mr. Dwyer indicated that presently the state can delegate to NBBI-certified insurance company personnel, and NBBI-certified personnel employed by "owner-user companies" like oil companies which can afford to hire national board-certified people. Mr. Dwyer indicated these inspections are delegated out but the department retains control. Copies of the inspection reports, frequency of inspection, organizational charts, et cetera, are sent to the department so that the department knows the inspector has authority to enforce the code [American Society of Mechanical Engineers (ASME) Boiler and Pressure Vessel Code]. The legislature could add municipalities to that, but Mr. Dwyer thinks there would have to be some discussion as to what the department's role would be in that situation. Mr. Dwyer indicated the department's chief inspector, a national board-certified individual, would have to have some control over the activities and scheduling of boilers and pressure vessels. CHAIRMAN ROKEBERG questioned why a board-certified local inspector with the proper credentials couldn't do the inspections on the residential-type or small commercial boilers. MR. DWYER confirmed the chairman is referring to someone who has passed the national board test but who is not working for the state, an insurance company, or an "owner-user." Mr. Dwyer stated it would not matter whether the individual is national board-certified; the national board would not recognize the inspections done by municipalities unless they had a population over 1 million. Therefore, it would be a moot question. Mr. Dwyer indicated the department could probably require the municipalities to employ a national board-certified inspector if the department would delegate that out. Number 1882 CHAIRMAN ROKEBERG asked, "But the national board wouldn't accept the inspection, ... and it then creates an insurance problem, is that the issue here or what?" MR. DWYER answered he thinks it might, but he can't say for sure. The insurance companies have a vested interest in these boilers and they generally inspect their own boilers with certified people. Mr. Dwyer indicated he thinks the problem the state has is making sure that the inspections are done. He noted they have delegated out elevator inspections, for instance, to the Municipality of Anchorage. The municipality has a competent elevator inspector who reports to the department on a quarterly basis. The department does not have any control over what this inspector does or how he does it; the way the delegation is, the department simply receives a report which notes the inspector has inspected certain elevators. Mr. Dwyer questioned whether the legislature wished to do this with boilers. CHAIRMAN ROKEBERG asked how many of the 6,000 uninspected boilers are in the Anchorage area. MR. DWYER replied probably a very small number. Most of uninspected ones are the ones that are remote. He added, "And that keeps changing as we do the (indisc.)..." CHAIRMAN ROKEBERG interjected, "And if we had the Anchorage boilers inspected by the Anchorage building department, then your state guy could go out and do the remote ones, or am I wrong?" MR. DWYER replied the chairman is absolutely correct. CHAIRMAN ROKEBERG noted he had asked this before, and was under the impression that it was because the insurance underwriters would not accept a non-board-certified inspector who wasn't authorized by the state. Number 1954 MR. DWYER responded that had been his impression - that the insurance company would not like this. However, Mr. Dwyer said he could be incorrect on that. CHAIRMAN ROKEBERG questioned whether Mr. Dwyer had checked on that, noting the chairman had inquired about doing that, and that is the reason the legislation is before the committee. The chairman commented he will return the legislation to the Senate if necessary. He noted they are trying to solve the problem here. One way to do it would be to have board-certified personnel in the local jurisdictions [perform the inspections], if the provisions existed in the statute giving them the right to do that under the department's purview so it is done properly. This would lower the department's manpower requirement and allow the local governments to do this work. The chairman indicated the local governments would presumably be more timely and, therefore, because this is a safety issue, it would be a safer circumstance. The chairman questioned if the department did not want to give up any authority, power, or something, expressing his incomprehension. In response to Mr. Dwyer's comment as to whether that was a question, the chairman asked, "Does the department not want to give up any power or why couldn't we - why can't we (indisc.)..?" MR. DWYER spoke over, "(Indisc.) that's not an issue with us, Mr. Chairman. It's up to the legislature to change the statute if they want to delegate this activity to municipalities." Mr. Dwyer indicated the department would have to research the impact of that with the insurance companies. He added that perhaps the Municipality of Anchorage would not want to accept that liability - he has not spoken with anyone from the Municipality. CHAIRMAN ROKEBERG asked, "On that point, are there -- is the liability created by the inspection and would the building department have the liability when they inspect it? I think that's the case, right?" MR. DWYER answered it is a good question; he thinks it might be the case. CHAIRMAN ROKEBERG indicated there is case law showing that building departments have liability if they fail, or by omission don't inspect correctly. He asked if that was not correct. MR. DWYER answered it is his understanding, stating, "If you should have caught it and didn't (indisc.) liable." CHAIRMAN ROKEBERG commented there is a lot of case law on that. He expressed his disappointment, noting he thought that had been clear, and Mr. Dwyer is answering a little differently than he (the chairman) had thought. The chairman indicated it has been his desire to try to farm some of this out to basically increase the number of inspectors on the job without any fiscal impact. He noted there are several building departments in the larger population centers of the state that presumably have people who would or could become board-certified and who would be able to do these things. Number 2060 MR. DWYER commented it is probably not necessary that they be board-certified if they don't look at "the real serious high-pressure boilers in large buildings." He indicated non-board-certified inspectors could inspect the smaller boilers in six-plexes and things of that sort. Therefore, there are different levels of delegation that could be considered - there are any number of ways to approach this. CHAIRMAN ROKEBERG said, "Well, next time I have questions about plumbing bills, I'll bring you over here first before we - and put you on the record before we ask more questions, because that's fundamentally what I've been seeking from the department is some answers along those lines. And I got responses in the negative before, and now I'm getting them more in the positive, so I don't understand what's going on." MR. DWYER stated, "I'm sorry for misleading you, Mr. Chairman, but it was my understanding at that time that the insurance companies would not favor that, and that there'd be a liability situation. I've been told that there're other cities in the country where the state has authority to inspect boilers - that certain cities under the population of 1 million are inspecting them. And it's just that they're not national board-certified; they're not recognized by the national board." CHAIRMAN ROKEBERG noted, "(Indisc.) type inspectors in Section - the first section (indisc.). I mean, wouldn't that be a feasible method if we would grant that authority to the -- (indisc.) it looks like the title is loose enough." MR. DWYER agreed; he thinks that would be a way to do it. CHAIRMAN ROKEBERG asked if Mr. Dwyer had made inquiries of any of the building departments around the state, if they would be interested. MR. DWYER replied his last instructions were to provide a list of all the building officials to the deputy commissioner, which he did, and Mr. Dwyer thought that list would be provided to the chairman. CHAIRMAN ROKEBERG indicated that was regarding SB 8. The chairman noted the existence of plenty of code problems this year. He informed the committee it has been the legislature's goal, by statute, to remove all building code statutory reauthorizations and grant them to the department. This allows the department to handle the adoption of the periodic changes in the building codes by regulation, so the politics can be removed. However, the chairman noted that apparently the Senate has not received the word on that yet. Number 2173 MR. PERKINS commented that, to the chairman's credit, he is absolutely correct and the department has appreciated this in the last few years. It has certainly made everyone's job and life a little bit easier when it has been time to renew codes. CHAIRMAN ROKEBERG questioned, "Wouldn't (indisc.) this make it easier? I mean, I've been talking to the department for several months about this bill and asked it if you could add a provision that would allow local inspection. Wouldn't that save you money and save the state money and increase public safety, if it was administered correctly? ... If the program was designed right? I mean, is that possible or am I off-base here?" MR. DWYER responded he would have to research that. He noted it sounds like a very possible thing to do. He noted, "It would be a question of delegating that to the municipalities..." Number 2213 CHAIRMAN ROKEBERG interjected a course of action. He noted the legislation would be held over and suggested that Mr. Dwyer call the chief building officials in Anchorage, Juneau and Fairbanks to find out if they have any qualified people and if they're interested in taking this on. The chairman noted the committee would then take the legislation up again and Mr. Dwyer could answer that in front of the committee. MR. DWYER indicated his agreement with the idea and directive. CHAIRMAN ROKEBERG questioned whether anyone else wished to testify on SB 50 am. There being no one, SB 50 am was held over. ADJOURNMENT Number 2241 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee meeting at 4:05 p.m.