SENATE LABOR AND COMMERCE COMMITTEE April 20, 1995 2:10 P.M. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator John Torgerson, Vice Chairman Senator Mike Miller Senator Judy Salo MEMBERS ABSENT Senator Jim Duncan COMMITTEE CALENDAR CS FOR SENATE BILL NO. 28(TRA) "An Act relating to transfer of motor vehicle ownership, motor vehicle registration fees, and motor vehicle emissions inspection; and providing for an effective date." CS FOR HOUSE BILL NO. 220(L&C) "An Act relating to the duties of the commissioner of commerce and economic development concerning the Alaska Tourism Marketing Council; relating to the per diem travel expenses of the council's board of directors; relating to the powers and duties of the council; extending the termination date of the council; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 28 - See Senate Transportation minutes dated 3/28/95 and 4/18/95. HB 220 - No previous action to record. WITNESS REGISTER Senator Dave Donley State Capitol Juneau, AK 99811-1182 POSITION STATEMENT: Sponsor of SB 28. Juanita Hensley, Director Division of Motor Vehicles P.O. Box 20020 Juneau, AK 99811-0020 POSITION STATEMENT: Commented on SB 28. Wally Hopkins, Chief Executive Officer Quick Lube 1780 Peger Rd. Fairbanks, AK 99709 POSITION STATEMENT: Supported SB 28. Representative Joe Green State Capitol Juneau, AK 99811-1182 POSITION STATEMENT: Sponsor of HB 46. Catherine Reardon, Director Division of Occupational Licensing P.O. Box 110806 Juneau, AK 99811-0806 POSITION STATEMENT: Supported HB 46. Vernon Akin, Registered Mechanical Engineer P.O. Box 22104 Juneau, AK 99801 POSITION STATEMENT: Opposed HB 46. Graham Rolstad, Vice President Engineering Construction Matanuska Telephone Association Representing the Alaska Telephone Association 1740 S. Chugach St. Palmer, AK 99645 POSITION STATEMENT: Supported HB 46 as written. Nancy Schoephoester ARCO, Alaska P.O. Box 100360 Anchorage, AK 99508 POSITION STATEMENT: Supported HB 46. Lee Holmes RSA Engineering 2710 Scarborough Dr. Anchorage, AK 99504 POSITION STATEMENT: Supported HB 46 and the intent of Section 3. Dick Armstrong, Chairman ALS Board Anchorage, AK POSITION STATEMENT: Commented on HB 46. Patrick Dooley, President Nanatest P.O. Box 202807 Anchorage, AK 99520 POSITION STATEMENT: Supported HB 46. Janet Reeser Nanatest P.O. Box 202807 Anchorage, AK 99520 POSITION STATEMENT: Supported HB 46. Kimberly Chancy Nanatest P.O. Box 202807 Anchorage, AK 99520 POSITION STATEMENT: Supported HB 46. Steve Altech Nanatest P.O. Box 202807 Anchorage, AK 99520 POSITION STATEMENT: Supported HB 46. Rob White, Project Manager Raytheon ARCO Alliance Contract POSITION STATEMENT: Supported HB 46. John Burdick 300 Hermit, Ste. #7 Juneau, AK 99801 POSITION STATEMENT: Commented on HB 46. Jim Rowe, Executive Director Alaska Telephone Association 4341 B St., Suite 304 Anchorage, AK 99508 POSITION STATEMENT: Supported HB 46. Colin Maynard 1400 W. Benson Ave., #500 Anchorage, AK 99517 POSITION STATEMENT: Commented on HB 46. Ken Brock ARCO, Alaska P.O. Box 100360 Anchorage, AK 99508 POSITION STATEMENT: Supported HB 46. Bob Hancock Anchorage Telephone Utility 600 Telephone Ave. Anchorage, AK 99507 POSITION STATEMENT: Supported HB 46 as written. John Litten P.O. Box 1001 Sitka, AK 99835 POSITION STATEMENT: Supported HB 220. ACTION NARRATIVE TAPE 95-18, SIDE A Number 001 SB 28 MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS  CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 2:10 and announced SB 28 to be up for consideration. SENATOR DAVE DONLEY, sponsor, said SB 28 is designed to change the I.M. testing program in Alaska from every year to every other year. Almost all other states, including California, do it every other year. He said, at the request of Senator Rieger, there was a restructuring of DMV fees. Currently, there is an additional $10 fee if you come to a DMV office in person when you could do it by mail. Senator Rieger thought the fees should be $10 with a rebate if you use the mail. Personally, he said, he is very ambivalent about this change and really wanted to just do away with the fee. However, financially it is hard to do that since DMV has become dependent on that extra revenue. SENATOR DONLEY said the point of the legislation is to get bi- annual testing which would be a real positive thing to do for the people of Alaska. SENATOR KELLY asked if you still have to register every year, but get the emission test every second year. SENATOR DONLEY responded that was correct. He elaborated that there has been interest in bi-annual registration, but the argument against it in past years has been because we have to get I.M. tests every year and there is the shock of having to pay twice as much every other year rather than scheduling the payments out, so to speak. He thought bi- annual registration would save the state a lot of money in administrative costs, but this particular bill doesn't do that. Number 93 JUANITA HENSLEY, Division of Motor Vehicles, explained the reason they have not gone to bi-annual registration is because of programs that have been added over the years, such as the yearly emissions program and the collection of 13 communities' motor vehicle registration taxes which are collected on an annual basis. SENATOR SALO asked why you couldn't collect taxes on a bi-annual basis. MS. HENSLEY explained the statute says it has to be collected annually. SENATOR TORGERSON asked if insurance was required before you register your vehicle now. MS. HENSLEY answered that is a requirement. SENATOR TORGERSON asked what would bi-annual do to that. MS. HENSLEY said they don't look at insurance verification. They just have the person sign a certified statement on the registration saying they have insurance as required by law and they are expected to keep it. WALLY HOPKINS, Quick Lube Chief Executive Officer, said they are the largest provider of emission testing in the state, employing 25 people in the Anchorage and Fairbanks emissions program. The annual payroll for these people is $1.1 million. In recent years the violation of federal standard has fallen a maximum of three or four times a year when Anchorage or Fairbanks has an extreme temperature inversion. Current programs operating in Anchorage and Fairbanks are recently new, he explained. They have invested over $1 million in facilities, equipment, and personnel to be able to provide these services. After a successful 90-day pilot program in Anchorage, including a reregistration service, they hoped to open another facility in Fairbanks within the next 30 days. He thought this was a prime example of private enterprise and government working together. With the reregistration process the state does not have any cost and they are not charging their customers any fee for this service. At their facility in Anchorage they can test eight cars at a time and they are gearing up to do 12 cars at a time. The average wait to get a vehicle tested there is less than 10 minutes. They are currently testing 22 1/2% of vehicles in Anchorage, according to the number of registrations that are being mailed out to the public in Anchorage. He concluded saying that if this bill passes, it will eliminate 50% or more of the jobs within the emission testing industry. It will put a hardship on the residents of Alaska who are subject to emissions testing by doubling the cost of repairs for failed vehicles. It would put an extreme hardship on good businesses that in good faith planned, developed, and provided emission testing based on established programs. SENATOR KELLY asked Ms. Hensley if there was a cap for an emission inspection in statute. She replied that she didn't have that answer, but knew that DMV collects $1 for the processing of those certificates. In this bill it would go up to $2. SENATOR KELLY asked if there was a set fee for emission inspections at his shops. MR. HOPKINS said they are charging $29.95 for the inspection and they add the $10 registration fee at this time. He said he thought Anchorage had $45 as a cap. Fairbanks has something like $65. Number 260 RON KING, Department of Environmental Conservation, said that state statute and regulations do not limit what an inspection cost could be. Local statutes and ordinances in Anchorage and Fairbanks limit what the facility can charge. In Anchorage it is $40 and Fairbanks has a $40 or $45 upper limit. SENATOR KELLY asked him how many vehicles are tested in Anchorage every year. MR. KING replied approximately 150,000 vehicles that qualify for this program are in Anchorage and approximately 50,000 in Fairbanks. SENATOR TORGERSON asked if he had a position on going to two years. MR. KING replied that the department has been concerned with going to an every other year inspection until the communities have attained the standard. Based on the failure rates, however, and working with DMV and Senator Donley, they believe they put together a package that will enable them to convince EPA to approve an every other year inspection. SENATOR KELLY commented that Mr. Hopkins has already recovered his investment. MR. HOPKINS disagreed and explained that it would take about three years to amortize their investment. Number 291 SENATOR TORGERSON asked Mr. Hopkins what the average cost of fixing an emission problem would be. MR. HOPKINS replied the average cost would be about $100 - $125 per repair. He explained with an every other year scenario, instead of 17% of vehicles failing (the figure for now) there would about 35% or more. SENATOR DONLEY said the last committee changed the effective date to 1996 which would give businesses time to adjust to the new plan. The Division would have some discretion to deal with problem automobiles. They also have some authority, through regulation, to address the cost issue. He noted that after some review of correspondence, he was struck with the discrepancy between fees charged for I.M. testing in Alaska versus other states. Our fees up here are twice as much. SENATOR KELLY said he liked the idea of bi-annual registration, but he didn't think there would be time with 30 days left to go. He hoped legislation like that would be introduced at a later time. SENATOR SALO said she was concerned because she had many constituents call her about the $10 fee and thought the bill just flip flopped the issue around. If the argument is revenue, and having become dependent on that revenue, she thought that was negated by the fact that every one of those fees is going up $10. She would like to see the elimination of that section unless there is compelling information from the DMV that it's a good idea. SENATOR DONLEY commented that section is not related to the bi- annual testing proposal. MS. HENSLEY said the original bill did do away with the $10 fee proposal if you walked in as opposed to mailing in the registration. Since they have gone to the $10 fee, mail has been increased to total 60%. Senator Rieger's amendment would increase everyone's registration by $10 unless you mail it in and get a rebate, with the exception on page 2, lines 9 - 12, which deletes language that allowed them to waive the $10 fee if you are required to be in the office to handle a transaction. People who choose to register their cars at the I.M. stations are not charged the $10 walk-in fee, although some of the stations charge a $10 processing fee. This bill makes it equitable for everyone and will generate approximately $2.5 in general fund revenue which their department doesn't receive unless it is appropriated to them, MS. HENSLEY explained. SENATOR KELLY asked if SB 28 encouraged smaller lines in the DMV offices. MS. HENSLEY agreed that it did. SENATOR DONLEY said he didn't think the fees section of the bill had an effect one way or the other on that. He said SB 28 didn't change the incentive to register by mail. He said the committee could delete the fee section and the status quo would remain that the division would be assessing the $10. SENATOR SALO said her intention would be to take out the section so they would lose the ability to collect the $10. She didn't think people would automatically start going back to DMV instead of using the mail. MS. HENSLEY said offering a program with incentive to keep people from standing in a line so you can give better service to someone who has to be there is what they are seeking. She said it was working. Number 435 SENATOR KELLY commented that even if this bill passes people could still register their vessels at the various I.M. stations. MS. HENSLEY agreed that was correct. SENATOR KELLY asked if DMV supported this bill. MS. HENSLEY said they support it as drafted. SENATOR DONLEY said one amendment was recommended by DEC to make a different effective date to allow them to begin enforcement earlier. SENATOR TORGERSON moved amendment #1. There were no objections and it was so ordered. SENATOR TORGERSON moved to pass CSSB 28 (L&C) from committee with individual recommendations. There were no objections and it was so ordered. HB 46 ARCHITECT, ENGINEER & SURVEYOR REGULATION  SENATOR KELLY announced HB 46 to be up for consideration. REPRESENTATIVE JOE GREEN, sponsor, explained that HB 46 is a "fix bill." It straightens out when a registrant will issue drawings or reports, etc. that will be sealed. Section 2 was an attempt to tighten up who can actually be called an engineer, because some people were calling themselves engineers without being registered engineers. Section 3 is the addition of engineering types of people under the exemption category that compromises 8.48.331 of the code. It attempts to exempt engineers who do not perform engineering functions for the public. In other words, they are doing it for their employer and it is to be used only in that connection. CATHERINE REARDON, Director, Division of Occupational Licensing, first discussed section 3, where the exemption for employees who are doing engineering work for their companies is added into the law. The reason people support this is because they believe the statutory definition of the practice of engineering is broad and ambiguous. There is a certain degree of mistrust of the architects, engineers, and land surveyors Board and believe they use this broad language to require engineers where they aren't really necessary. She felt that if the Board was extending the definition of engineering excessively, that could be corrected by creating a more balanced board. Another argument you can hear is that industry has technicians who do not have formal engineering education, but have on-the-job experience who are as good or better than registered engineers. Their position is that while unlicensed employees can certainly safely perform some design work, there are some types of work that require the educational background of a registered engineer. She pointed out that HB 46 does not just exempt utilities or the oil industry or some of the larger businesses in the state from the use of engineers, it exempts everyone and it doesn't require that well trained technicians do the work in the place of engineers. It says that any employee can which raises the possibility that a day laborer, for example, could be designing and constructing a public building. Finally, MS. REARDON said, one of the arguments they would hear is that the occupational licensing statutes should not determine when a registered engineer is required, because that's the proper role of other regulatory agencies, like DEC or the fire marshall. She argued that the whole purpose of occupational licensing statutes is to determine who is adequately prepared to safely perform certain service and who should be prevented from doing that work, because there is potential public danger. That is what a medical statute does, also. The CS to HB 46 does not completely satisfy the division's responsibility to protect public health and safety, MS. REARDON said. Although on page 3, buildings and structures that are primarily used for public occupancy are excluded from the exemption. Buildings and structures that are used by employees are still exempted. They still have some concern with fish processing plants and office buildings that are used specifically by one company and making sure they are all structurally sound. The second concern would be electrical systems. It is not just utilities who design and construct electrical systems. Finally, MS. REARDON said, there is discussion that the uniform building code, through the fire marshall, is providing protection for structural soundness. However, the fire marshall only reviews plans to see if they satisfy the fire standards. No one looks at the plans to see if the structural requirements of the uniform building code are being met and there is no one to investigate a complaint that a building does not meet a building code. She, therefore, supported an amendment which would narrow the exemption. She suggested to do this would be to exempt electrical systems over 35 kilovolts and exempt all buildings rather than those just used for public occupancy. Another alternative would be to simply delete the word "public occupancy" from line 29 on page 3 and replace it with "human occupancy." SENATOR KELLY asked her if her department had the same position on the House bill. MS. REARDON replied that when it went through the House, their position was that they would listen to public testimony and hope there would be a compromise developed that would protect both public safety and address industry interests. Number 576 VERNON AKIN, Registered Mechanical Engineer, said the word engineer is used very loosely these days. The reason "registered" was dropped from in front of "engineer" was so that #10 would be legal. He supported keeping the word "registered," because that is being specific. TAPE 95-18, SIDE B MR. AKIN said that registration of an architect, engineer, or land surveyor shows that an individual has passed the requirements of the state and has the proficiency required to practice the profession. Doctors, dentists, lawyers, chiropractors, and barbers, etc. must all be registered. Boards were established to give the public some measure of confidence that a member that is registered in that field has competence. It also puts the responsibility on the members that they either perform as required or lose their license. Item 10 was added so that an employee of large company could do engineering work even though he had no proof required by the state to indicate he was qualified to design. This allows a company to produce a design by a non-registered individual and the company guarantees the work. He pointed out that there is little solace in that for any injured or dead persons who suffer because of poor design. Yet it says that 10 does not apply to buildings or structures whose primary use is public occupancy. He asked what kind of building wouldn't be used for public occupancy or could be used for it in the future. He asked why would we want to lower our standards to allow more chance of incompetent designs. MR. AKIN opposed HB 46. Number 570 SENATOR LEMAN said he is a registered professional engineer, although his work would not be in the possible exemptions. He said it is his opinion that some relief is necessary to accommodate utility companies and industry who do a lot of this work, because of how the 1990 change has been enforced. To make a change as broad as this restores almost exactly the wording that was in there in 1990 and is the wrong approach. He proposed putting in a new "e" that would provide some size limit to what a commercial building could be. In item 10 he proposed on line 3 inserting "unless the health, safety, or well-fare of the public, including employees and visitors is involved." He also suggested added "employees and visitors" in other appropriate places and adding "high voltage electrical systems." Third, he suggested inserting "other requirements of state law, local ordinances, building officials, property owners, or adopted construction and safety codes." He noted that there are requirements other places in state law for engineering seals on designs and engineering reports. It needs to be clear that these are not exempted and this is not what is being sought. He also said there may be future possibilities for exemptions that come up and he thought those should be addressed when they come up and suggested item 11 "other exemptions granted by the ALS Board by regulation when the health, safety, or welfare of the public are not substantially involved." Number 511 SENATOR SALO asked if the bill needed language to assure that other requirements in law for a P.E. certification, as well as municipal ordinances requiring P.E. certification. SENATOR LEMAN said he would like that comfort, although the drafting attorney might not think it necessary. GRAHAM ROLSTAD, Vice President, Engineering Construction, Matanuska Telephone said he represented the Alaska Telephone Association. He said he supported the bill as written and felt that section 3, item 10 is very critical to the telephone utilities in providing cost effective services to their customers. MR. ROLSTAD said prior to 1990 there was an exemption that was removed without public hearing. He said there wasn't a problem up until that time, and he didn't see the need for over-regulation. He said there are specialists in telephone work and national standards they live by which allow them to put in telecommunication facilities that protect the public. The bottom line is that the people are well trained and the companies are responsible for their work and they take that responsibility seriously. Number 450 NANCY SCHOEPHOESTER, ARCO, Alaska, supported CSHB 46. She noted that section 3, reinstating the in-house exemption for engineers which existed in Alaska prior to 1990 currently exists in 37 other states. They feel there is a licensing board whose duty it is to determine what the qualifications are to become a licensed engineer. They feel it is within the purview of the regulating local state and federal agencies to determine and regulate the activity. She said that Ken Thompson, President of ARCO has established as one of his priorities within ARCO that there will be a safe, low- cost, and long-term company. LEE HOLMES said he is a licensed mechanical engineer in Alaska. He supported the first two parts of the bill and the intent of the third part of the bill. The exception he has is with the wording. He didn't have a problem with MTA, for instance, in designing telephone systems, but he didn't see where that would qualify them to design a new office building for MTA. The wording of the exception would allow them to do that. Number 426 DICK ARMSTRONG, Chairman, ALS Board, opposed HB 46, because they feel the exemption proposed in section 3 is too broad and does not protect the public from unsafe buildings or facilities. With the amount of remote construction that occurs in Alaska and the relatively few building code officials, passage of this exemption will lose a key component of safety in resulting facility construction. Future purchasers of facilities that are not designed by licensed professionals are going to be purchasing potentially non-code conforming properties that are a very real threat to public safety. PATRICK DOOLEY said he supported HB 46 without change. He said all it does is restore the exemption for in-house engineering work which would save the state many millions of dollars. Their experience with those people is that their work is professional and in compliance. JANET REESER, Engineering Services Manager, said they are well regulated and very responsible and supported HB 46 as written. Number 362 KIMBERLY CHANCY, registered engineer, said that registration alone does not insure individual competency to work in specific industrial applications. She has found that the industry is pretty comfortable in knowing where their reputations lie. STEVE ALTECH, Manufacturing Manager, supported HB 46 without change. ROB WHITE, Raytheon ARCO Alliance Contract, supported HB 46 in its unamended form. This bill is in the best interests of Alaskans providing quality control. He specifically mentioned he supported section 3. Number 294 JOHN BURDICK, registered engineer in Alaska, said he thought section 10 was too broad as written. In addition the increased cost is a red herring. He said a lot of his students work for ARCO and it wouldn't be hard for them to become registered and it would be a hurdle that would protect the public. JIM ROWE, Executive Director, Alaska Telephone Association, supported HB 46 in its current version. He emphasized that this is a compromise piece of legislation. He appreciated the legislature making review of this issue a very public process as it didn't happen in 1990 when essentially the same wording in section 3 was taken out. In the interests of his customers who will bear the burden of the increased cost of having registered engineers do every piece of infrastructure development he pleaded that they do not increase their telecommunications costs. KEN BROCK, Engineer with ARCO Alaska, supported HB 46 and in particular the reinstatement of licenses and exemptions for in- house engineers. COLIN MAYNARD said the registration law is to protect public safety by requiring minimum qualification to do engineering work. The state has the responsibility to make sure that engineering is done by qualified people. He supported HB 46 and the language Senator Leman proposed. SENATOR KELLY asked if professional engineers were required to keep up continuing education. SENATOR LEMAN replied no. Number 169 BOB HANCOCK, Anchorage Telephone Utility, supported HB 46 as written. He said their plant is designed in accordance with industry standards. They use AT&T guidelines and national safety codes. They have had no complaints of substandard construction. They have had no incidences of physical injury or harm caused by construction or their engineering methods. They do not offer engineering services outside of their business. SENATOR TORGERSON moved to pass HB 46 from committee with individual recommendations. There were no objections and it was so ordered. HB 220 ALASKA TOURISM MARKETING COUNCIL   SENATOR KELLY announced HB 220 to be up for consideration and said the committee was concerned with the travel provision in this bill. SENATOR MILLER moved to adopt a conceptual amendment adopting the senate language into HB 220. SENATOR KELLY asked Jerry Gernigan and John Litton if they supported this bill. JOHN LITTEN said they supported it. There were no objections and it was so ordered. SENATOR MILLER moved to pass SCSHB 220 (L&C) from committee with individual recommendations. There were no objections and it was so ordered. SENATOR KELLY adjourned the meeting at 3:40 p.m.