CHAIRMEN: Senator Doyle
VICE CHAIRMEN: Representative Baram
SENATORS: Kissel, Musto, Witkos
REPRESENTATIVES: Altobello, Aman,
Bacchiochi, D'Amelio, Esposito,
Nafis, Nicastro, Rebimbas, Reed,
SENATOR DOYLE: Good morning. Good morning. Are you all set? I call to order the General Law Public Hearing, and at this point, the first hour is generally reserved for legislators, agency heads and municipal officials. We have two people signed up. I don't think they're here, so we will put -- you know, we'll invite them up when they arrive.
Is Representative Ed Jutila here? Is Representative Pat Widlitz here? Neither is here, so we're going to head to the public, and then we will -- when they arrive, we'll try to sneak them in.
Okay. So we go to the public. The first public member is Attorney Christopher Stone and Tim Shepherd, Keith Sheldon, Al Rizzo. Chris Stone, is he here? Good morning, Mr. Stone.
CHRISTOPHER STONE: Good morning, Mr. Chairman, and thank you for welcoming me and having me here to testify. I appreciate the opportunity, both of you, Representative Taborsak, congratulations to both of you upon your ascension to the co-chairmanship.
I'm here on behalf of 7-Eleven, and I'm here on a particular bill that you have before you. It's House Bill 6299.
The underlying law that we have in place is that certain entities are entitled to take advantage of what's called chain store pricing for the sale from a distributor to a retailer of cigarettes.
What we're proposing -- and the law goes back to 1990 when we first came up with the differential treatment of cigarette sales at the wholesale level. It was modified in 2005. I happened to be on the Committee at that time, and it was modified because we wanted to make sure that truly either chain stores or entities that had a vested interest in the retail establishment would be able to take advantage of chain store pricing as opposed to those what I'll call classical or standard franchisee-franchisor relationships in which the bigger company, the larger company, the franchisor, doesn't really have much to say or much control over the franchisee. They allow them to use their logos, their product, and then thereafter the retailer is on their own.
In this particular case -- and I think that the amendment that's before you addresses a very particular issue -- 7-Eleven has a rather unique relationship with its retail outlets, most notably of which is that it shares in the profits of each of its retail stores, so it's more akin to the Wal-Mart as a national company or international company and a local Wal-Mart, say, the Wal-Mart in Manchester. It's more akin to that relationship than it is to your standard franchisee-franchisor relationship.
What this would allow 7-Eleven to do is to sell cigarettes to each of its outlets at the chain store price -- it's a lower price. Fortunately, it has no effect on revenues; it's revenue neutral; there is no fiscal note. I know it hasn't been to OFA yet, but we anticipate no fiscal impact.
I've attached to my testimony a copy of the fiscal note from 2005 where we went somewhat in the other direction. That indicated no fiscal impact. I don't think that this minor carve-out, not a repeal, but a minor carve-out or clarification of the 2005 amendment would have any fiscal impact either.
I think it's important to note here that 7-Eleven, they have 51 stores in Connecticut. They employ on average about ten people per store, so approximately 500 people are employed by 7-Eleven in the state of Connecticut. You have an opportunity as the General Law Committee to do things both for business and for the consumer, which is kind of a unique position I hear at the legislature, quite frankly.
This particular bill, revenue neutral to the state, and it provides a vehicle for business to succeed, putting 7-Eleven on a fair and equal footing with other similarly situated businesses, but also provides for the retailer, our outlets, to succeed and be competitive with the market as well. As well, it's passed onto the consumer, and I know we're dealing with cigarettes, but it's still a product that is still prevalent today, and we're putting our retailers and our customers in the same position as everyone else, so it's a bill or an amendment that helps business, it's an amendment that helps the retailer, and it's an amendment that helps the consumer.
I ask the Committee for a favorable consideration. There may be some tweaks to the language that we may have to look at, and I'd be more than happy to work with the Committee and its LCO to work those out as well.
SENATOR DOYLE: Thank you. Any questions? Senator Kissel?
SENATOR KISSEL: Thank you very much, and you're all too humble as a former Chair of this Committee. You did a great job while you were serving in the legislature.
I'm just wondering. This bill proposal will bring 7-Elevens from what set of competitors to what new set of competitors? In other words, this will drive the prices, I guess, down for the cigarettes for the consumer, which is a benefit to the 7-Eleven stores, but who are they sort of competing with price-wise now and who will they then be competing with if this goes through?
CHRISTOPHER STONE: Right now, they get retail -- retail pricing consideration, so the distributor sells at a -- I don't know the exact percentage higher, but at a higher rate than what is being the chain store price. In your definitions under your statutes, you provide for a definition of distributor, the distributor and what they can sell or how much they can sell their cigarettes for, and you include within that definition chain stores, chain stores which own at least five retail outlets within the state of Connecticut.
They're allowed to provide their five retail outlets a lower price for those cigarettes. We are akin to that chain store in that we have a vested interest in the success of each and every one of our stores. Under a standard franchise-franchisee arrangement, you pay a franchise license fee, and you're off on your own. You're independent; if you make money, that's great; if you don't make money, you still pay your fee to the larger entity, the franchisor.
In this case, that's not what 7-Eleven is. That's not the way we do business. We don't fit under the classic chain store definition. We really don't fit under the classic franchisor-franchisee definition. This amendment would allow us to take advantage of that lower chain store price because we'll now be included or put back into that definition with a caveat. We have to continue to share in the vested interests of our retail establishments.
I don't know how much lower it is, Senator, but it is markedly lower and lower enough so that I believe it's three dollars a carton less, so you figure that out. It could be substantial given a certain volume. Fifty-one stores across the state of Connecticut, several thousand stores internationally, it has an impact. Obviously, this would just be applicable in Connecticut.
SENATOR KISSEL: So, the franchisor-franchisee model is probably like a Cumberland Farms or other similarly situated convenience stores where it's the more traditional model, and you want to move to a more Stop-and-Shop kind of model where they have sort of a corporate parent and --
CHRISTOPHER STONE: I'm glad you brought that up, Cumberland Farms, because they are a chain store. They're not franchisees. I didn't know that, but they own all of their stores.
SENATOR KISSEL: So would they benefit from this as well?
CHRISTOPHER STONE: They would -- no impact. They're not -- right now, they're considered a chain store distributor.
SENATOR KISSEL: So they're being treated the way you want 7-Eleven to be treated?
CHRISTOPHER STONE: Exactly. All we want to do is be on a fair and equal footing with stores like that.
SENATOR KISSEL: Okay.
CHRISTOPHER STONE: A franchisor-franchisee would be like your Mobil. Mobil gas stations are, I believe, franchisor relationships.
SENATOR KISSEL: Thank you. Thank you, Mr. Chair.
SENATOR DOYLE: Thank you. Any further questions? Representative Baram?
REP. BARAM: Thank you, Mr. Chairman. For those of us who weren't here in 2005, could you briefly explain why do we even regulate the price of cigarettes with regard to the classification of stores whether it's a chain or franchise, or whatever? Why did the legislature delve into that?
CHRISTOPHER STONE: You'd have to go back, Representative, to 1990. 2005 was merely a minor modification, but in 1990 when the bill was passed, Senator DiBella and Senator McLoughlin were discussing it on the Senate floor, and there was very scant testimony as to why the differential came about in the first place. I think in part it's because these chain stores have a vested interest in the success of their retail outlets. They own them -- they have -- if they succeed, and they're, in fact, selling to themselves.
You've got these distributors considered as chains stores selling to their retail outlets. They should be able to take advantage of that lower price that they receive and pass that on to their retail stores.
Again, we operate under the same premise. They call us something different, but, in fact, we are akin to that.
That's -- there was very -- we looked at that. There was very little testimony, little legislative history on that. I can get that to you, Senator -- Representative if you'd like that for your perusal. Maybe you can glean something outside of it than I can, sure you can, but there's not that much.
REP. BARAM: I (inaudible).
CHRISTOPHER STONE: It's even less in 2005, by the way. They didn't let me talk a lot on the House floor, so there's even less in 2005.
REP. BARAM: If you have that information, I would appreciate it.
CHRISTOPHER STONE: Sure.
REP. BARAM: Thank you.
SENATOR DOYLE: Thank you. Any further questions? Seeing none, thank you very much. Oh, sorry. Representative -- Representative Reed, sorry about that. I apologize.
REP. REED: Thank you. I'll keep it short.
I'm just trying to figure out how much of a part of your business in Connecticut is the cigarette aspect of it, and how much do you think you might be losing because of the way the law is currently constructed.
CHRISTOPHER STONE: Well, less and less with, you know, the cessation programs, the taxes on cigarettes, et cetera, so it's less than it used to be.
Let me introduce if I can, Representative Reed, with your permission, Mr. Chairman, this is Steve Watson from 7-Eleven. Steve has worked with us on the bill. He flew in -- last night, Steve?
STEVE WATSON: Yes.
CHRISTOPHER STONE: Last night from Texas, and you heard the Representative's questions. If you don't mind, Steve, because --
REP. REED: I'm just trying to figure out --
SENATOR DOYLE: Excuse me, Steve. If you pull the mike to your face and then hit the right button, so -- there you are. Thank you.
STEVE WATSON: Thanks.
SENATOR DOYLE: Thank you.
REP. REED: I promise to keep this really short. Now, I'm just trying to get a sense of it. Is this a major windfall we're talking about? Are we talking about a shrinking market? What percentage of the Connecticut 7-Elevens, what percentage of the market is cigarette sales?
STEVE WATSON: The size of the market -- how much do we sell?
REP. REED: Yes.
STEVE WATSON: Percentage-wise in our stores?
REP. REED: Yes. Do you have a sense of it?
STEVE WATSON: It's probably in the mid like 20 percent, 20-something percent of our sales.
REP. REED: And then I guess just the last part of my equation, how much money are you losing because of the way the law is currently constructed?
STEVE WATSON: Well, we're eating the increase. We can't raise the price because we need to be competitive at the store level, so our franchisees are just eating the increase.
REP. REED: So -- and does that when it brings them in to get the best price for cigarettes, they buy other things as well; that's sort of part of the equation?
STEVE WATSON: A little bit, not as much, but a little bit.
REP. REED: Okay. That's all I need to hear. Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you, Representative Reed. I'm simply clarifying. I'm not rushing you, Representative Reed.
STEVE WATSON: No, no. I just didn't see you. No problem.
SENATOR DOYLE: Chairman Taborsak?
REP. TABORSAK: Thank you, Mr. Chairman. Mr. Stone, it's good to see you again. I wanted to thank you for your service as a Chairman on this Committee. It's good to see you back here before the legislature, and I appreciate the detail you went into here on getting into the legislative history here, and also addressing the fiscal question. This information is very helpful, and we look forward to following up with you on any questions we have, but it's good to see you again.
CHRISTOPHER STONE: Thank you very much, Representative. I would want to indicate that Bob Shea also contributed to that, that effort, so he should be noted as well. Thank you.
SENATOR DOYLE: Thank you. Any further questions from Committee members? Seeing none, thank you very much. The next speaker is Tim Shepherd, Keith Sheldon, Al Rizzo, Rob Romano. Tim Shepherd?
TIM SHEPARD: Good morning, Mr. Chairman. I'm here to speak against Bill 910. I'm just going to talk a little bit about our company and how this bill affects us.
My family, the Shepherd family, has been in tobacco in one form or another since 1861. We were either growing tobacco or processing tobacco, and so forth. I'm president of the New Way Tobacco Company, which is -- was formed in 1955 for the purpose of manufacturing what's called homogenized tobacco, reconstituted tobacco, and this product goes perhaps in 85 percent of the cigars sold in the U.S. The product is used by cigar manufacturers, traditional cigar manufacturers, hand rolling cigars, and it's used for machine-made cigars.
Our company basically has currently about 84 employees. We had 54 employees back in 2000 and have gone through quite an expansion. Our employees, a lot of nice people think that we're in tobacco and we're cutting tobacco, and there's nothing wrong with farmers cutting tobacco. We used to do a lot of it, but ours is really a manufacturing facility. We pay $20 an hour for people who are up to grade. We pay 80 percent of medical. We have three weeks vacation. They have a pension; we have profit sharing. We're pretty good, pretty good corporate citizens. Most of our employees stay with us until retirement.
It seems strange. We have one person who says he's still an employee, a retired executive with us who comes in -- he's 92 years old -- comes in twice a week, but we do have an on-line worker who's been with us for 54 years, so I think this says something about our corporate philosophy and how we treat employees and the part we play.
We just made a $12 million investment which is unusual, very unusual for us and very unusual for South Windsor -- we're located in South Windsor -- and that was specifically to increase our production capacity with -- as our position in the industry has been growing. If this bill were to pass in all of the states, we would basically lay off 30 people. Connecticut and the states would lose, as you all know, a tremendous amount of excise taxes, sales taxes, an awful lot of income taxes. You know, I don't -- it would just be an awfully expensive thing if it had happened.
Although we've been a member of the cigar association probably since -- I'm assuming since its inception, I'm speaking against this bill because it really -- it penalizes a legal product, which is ours. It is, I think, the root of this is just anti-competition, and then the concern that tobacco has with illegal substances, this really does nothing to address that side, and I think we're getting confused between illegal substances. You can't control what kids or people are doing, but this is illegal, a legal product being used for illegal purposes, and so forth, so I would ask the Committee to consider rejecting this because it is. It's strictly an industry anti-competition effect.
SENATOR DOYLE: Thank you. Senator Kissel?
SENATOR KISSEL: Thank you. Nice to see you, sir.
TIM SHEPARD: Thank you.
SENATOR KISSEL: I grew up on the other side of the Connecticut River in Windsor. My first job was picking tobacco at a company called Kendricks, and when you're fourteen, that's a good base to build on as far as what difficult jobs are. Our area of the state used to be known as the Tobacco Valley. I know that Brown's is out there, and there's other -- a lot of tobacco farmers up in my neck of the woods.
I'm just wondering what exactly is a blunt wrap? How does that differ from the shade-grown tobacco that we see all over the place underneath the netting, and explain to me what's going -- what's really -- what do you think is really going on here because you said this is more about blacking out competition, and it sounds to me that you have a profitable business, you take good care of your employees. You're doing everything that we want to try to keep in the state of Connecticut, and I'm just wondering, you know. I don't want to see any adverse impact on you if you're growing and selling a legal commodity, so what do you -- what do you think is really going on here?
TIM SHEPARD: You know, it's strange. I think it's an anti-competitive attitude. If -- if the people that are selling our product which goes onto cigar machines --
SENATOR KISSEL: I don't want to be rude, but --
TIM SHEPARD: I'm sorry.
SENATOR KISSEL: First explain, what exactly is a blunt wrap? I'm not -- I'm just not familiar with the term or what that commodity is.
TIM SHEPARD: Well, a blunt was a shaped cigar, and is a shaped cigar like a Corona, a Panetella, a blunt. That's all it is, and then surprisingly there's folks that suddenly decided that they ought to cut cigars up and put some marijuana in the cigars and smoke them. It's not new. I wasn't quite aware of these things. I remember my father saying back in 1960 that down towards the border states where marijuana was more prevalent, and so forth, people were cutting cigars up and putting marijuana in there.
Percentage, I have -- I have no idea, but you know it's like what kids are doing today. I don't know what -- I don't know what -- how this gets into their minds or what they think of next, but I think that perhaps the fact that our customers are trying to go back to the roll-your-own cigar such as Back Woods. You've heard of a Back Woods being a Connecticut (inaudible) cigar, and so forth. Right on the Back Woods package it says in the good old days, if you wanted a good cigar, you rolled your own.
Well, they're making an impact doing that, and I think that the manufacturers, cigar manufacturers then say well, we know that some kids are taking these wraps and using an illegal substance, so let's go, let's go and knock that off, and then we take care of this whole market that's moving in hand rolling cigars like hand rolling cigarettes. It's just one less competitive thing, and I think if nothing -- I think -- I think there's two separate things. One is illegal substance, and that can be -- for instance, we have a company -- let me digress. We have a company in the Midwest, a distribution company, that sells 5,000 items to mom-and-pop stores. We were wondering why we were selling so many tire pressure gauges, now the old kind, chrome ones, and so forth, and finally followed up and found out that kids were taking the insides out and using them for crack pipes.
You know, this -- this is a little shocking when you're sitting in the -- in your corporate office wondering what is going on on the street, but that doesn't mean we're not going to sell tire pressure gauges.
SENATOR KISSEL: Okay. I -- I appreciate -- you don't have to go on. I get the idea now, and I'm very sympathetic. It strikes me that some folks might be trying to cut out part of your business because of this unfortunate -- unfortunate group of individuals out there that are utilizing your product in a nefarious way. But, you know what? Tomorrow it could be pipes. I know they're still out there selling, you know, cigarette rolling papers because there's a legal use and there's an illegal use, and -- but it strikes me that if what you're doing is legal, why should we penalize you if other folks are then taking that product and twisting it in a way that people's imaginations draw them to, and again, five years from now, it may not be the craze, but it seems to be right now, so I'd rather see employing all those people in our state and continuing to do their job. That's my two cents.
Thank you, Mr. Shepherd.
SENATOR DOYLE: Thank you. Any further questions from the Committee? Representative Aman?
REP. AMAN: Thank you very much, Tim, for coming in and speaking. I've known Tim for many years, and his company is probably one of the best and most respected companies around. In fact, if everybody was run like New Way Tobacco, this Committee would have about a third of the amount of work that we have because of the care they take for the environment, the care they take for their employees and things that they do, so I thank you, Tim, so much for being such a great corporate citizen.
I agree with Senator Kissel that if the wraps are banned tomorrow, it's going to take the kids probably until tomorrow morning to figure out a new substitute that they can use just as well. I think at this point we're continually trying to chase after the fact so that unless someone comes up with a very good reason why that particular substance has to be regulated or something differently be done, I can't see doing it.
I also have a tremendous amount of respect for New Way Tobacco, and if there was an easy way of keeping it out of the illegal market, he would be doing it even if it cost the company some money to do it. That's just the type of individual he and the company is, so again, unless something comes up that is very different than what I expect, I will not be supporting this when it comes up for a vote.
So, again, I thank you very much for coming aboard.
SENATOR DOYLE: Thank you. Any further questions? Seeing none, thank you very much. The next speaker is Keith Sheldon and Al Rizzo, Rob Romano, and Brian Bonner. Keith Sheldon?
KEITH SHELDON: Good afternoon, Senator Doyle, Representative Taborsak, members of the General Law Committee. My name is Keith Sheldon. I'm the manager of business affairs at the Xcel Center. Before I begin, I just want to thank each of the members of the Committee for giving me this opportunity to speak before you today in opposition to House Bill 6298, which is An Act Concerning the Fair Sale of Tickets to Entertainment Events.
By way of some background, one of my primary responsibilities at the Xcel Center is booking events. Every day I work to bring the top entertainment acts touring in the country and worldwide to the Xcel Center and to Connecticut. This is no easy task. Because concert promoters don't see Connecticut as a must-play market, they look to Boston and New York and our neighbors, Massachusetts and New York, for those markets, we have to work that much harder to book quality entertainment in this state.
With that in mind, please allow me to be very clear. House Bill 6298 will make it even more difficult for us to book these popular acts in our Connecticut venues. Here's why: Creating restrictions on the way entertainment acts sell their own tickets, as House Bill 6298 clearly does, means that for a one stop on an artist's 30-day tour, 60-day tour, whatever, means that artist and their promoter needs to change the way that they do business for that one stop. In a market that's already not must-play, make no mistake that these major entertainment acts will bypass the market altogether.
Connecticut can forget about national events play, the U.S.A. gymnastics championships, because they'll choose other venues to play their events out of state because of this -- this bill.
As a result, all of that economic spin-off activity -- the restaurant nights out, the hotel rooms, the parking, all of that -- it goes out of town -- out of state. Everybody from Connecticut will have to go to Boston or New York City and take their money there if they want to see their favorite touring artists.
What this also means is lost shows mean lost jobs. Employment for stage hands and theater workers, many of them union employees, will sharply decline at venues throughout the state, and jobs will be lost because of this bill.
Just to -- just to finally conclude, one of the -- one of the aspects of this bill states that paperless ticketing would essentially go out the window. That means that acts that currently use paperless ticketing systems like Bruce Springsteen, Metallica, and leagues and tournaments would not be able to play in the venues in Connecticut.
While paperless ticketing is, of course, an evolving technology and by no means flawless, it is, indeed, the future of ticketing. If we legislate against it now, the reality is that we will be forced to play catch-up when hard tickets go the way of the dodo, which most likely will be sooner than you think.
In conclusion and for those foregoing reasons, I would urge you to vote against House Bill 6298, and I respectfully thank you for your time today.
SENATOR DOYLE: Thank you. I'd just like to acknowledge the timer went off, so the speaking limit per person is three minutes. You can summarize after, but, of course, the Committee members have the opportunity to ask as many questions as they wish.
KEITH SHELDON: Sure.
SENATOR DOYLE: Are there any questions from Committee members? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chair. Good morning. Thank you for your testimony here this morning.
Do you or could you tell me what other states have similar proposed legislation?
KEITH SHELDON: I don't believe any at the current moment. I know Minnesota had something, but that was not passed. They had a bill that was not passed.
REP. REBIMBAS: So to the best of your knowledge, there's no other state that has something even remotely similar to this (inaudible)?
KEITH SHELDON: To the best -- to the best of my knowledge, correct, and --
REP. REBIMBAS: I think during your testimony you had indicated that the e-tickets would essentially be eliminated as a result of this. Maybe I'm reading it differently. I think that it indicates that there should not be a restriction only of will-calls, so the option of the consumer to opt for the will-call and/or e-ticket or any other option --
KEITH SHELDON: Correct.
REP. REBIMBAS: -- they still have the option. Is that correct?
KEITH SHELDON: Yeah. I believe it's Section C that I was looking at, which restricts the use of paperless ticketing, which is a new system of ticketing whereby the consumers purchase their tickets and then they can either swipe their credit card or scan their cell phone at the gate, and they're admitted in that way rather than getting the hard ticket or rather than printing their ticket off a computer.
REP. REBIMBAS: Uh-huh. And, could you just go a little bit more into detail and describe to me how -- because as I read this, it's regarding the resale of tickets. Could you just describe to me exactly how this would impact obviously the Xcel Center.
KEITH SHELDON: So I think what this bill really does is it affects the resellers of tickets as opposed to the primary sellers, so when the consumer goes to purchase their ticket, albeit a paperless ticket, what the promoter wants is for that fan to get the ticket directly from them at the prices that they set.
In the circumstance where we --
REP. REBIMBAS: Not to interrupt you, but when you say promoter, a promoter of the Xcel Center or promoter of the act?
KEITH SHELDON: Promoter of the act. The Xcel Center is just a venue in which the act plays their show, so under these circumstances, what the reseller wants really is more access to hard tickets, which makes it easier for them to, in turn, resell at enormous mark-ups to the end consumer.
REP. REBIMBAS: Thank you. No further questions, Mr. Chair.
SENATOR DOYLE: Thank you. Further questions? Representative Baram?
REP. BARAM: Thank you, Mr. Chair. Thank you for attending.
I'm just trying to understand the issue, so I have a couple of quick questions. One is, is there a distinction between the resale of a ticket and just giving the ticket away? For instance, if I subscribe to the Bushnell and I can't go on a particular night, so I give it to a friend, that friend goes to the show --
KEITH SHELDON: Uh-huh.
REP. BARAM: -- and nobody asks for an ID, and usually they just walk in, hand the ticket and go. So, does -- is that something that's of concern to, you know, venues like yourself?
KEITH SHELDON: Personally from the venue standpoint, I'm not concerned about that and, in fact, I'm not even against the secondary market per se, but the problem is that these touring acts, a lot of them are against the resale of tickets, and at the end of the day, those tickets are the act's tickets to sell, and when we restrict the way the act does business, the act is just going to bypass Connecticut altogether. I hope that's helpful.
REP. BARAM: It is. How then would you determine whether a ticket has been resold or just given away? If I give my ticket to a friend and they come to the show, how do you know whether or not I gave it to them or whether they purchased it on the secondary market?
KEITH SHELDON: With a hard ticket, you don't know. If you're using a paperless ticket, ticketing system, like I said, that system is still being perfected, but companies like (inaudible) and Ticket Master that employ those systems have ways of transferring your tickets to a friend at no fee, or a family member.
REP. BARAM: And then just one last question. One of the arguments I've heard on the other side is that, again, if I purchase season tickets and I can't go to a number of shows or events and I offer them to a secondary broker --
KEITH SHELDON: Uh-huh.
REP. BARAM: -- and they mark it up substantially, let's say, what difference does it make to your venue or your entertainer because the ticket is still being sold, a person, a patron is still coming to the show at the venue, so you have the seat filled, you've achieved your purchase price --
KEITH SHELDON: Sure.
REP. BARAM: -- because the ticket was originally purchased from you, so what is the concern about the resale even if it's at a higher price?
KEITH SHELDON: At the end of the day, we want to have these consumers in our building, and if you're looking at really protecting the consumer, you want to look at regulating the resale market of tickets because that consumer wanted to go to that event bad enough that they paid double, triple, the face value of that ticket, and that's really where they got gouged.
So, they come to the event, you know, and they've already spent a fortune on these tickets, and I think that's where the consumer isn't protected.
REP. BARAM: Just one follow-up. So, if I couldn't go to a show, do most venues in Connecticut if I called Xcel Center or the Bushnell and said I can't go to the show, can I return my ticket so you can sell it at your normal price to somebody else, do you exchange or give credit for tickets?
KEITH SHELDON: It honestly depends on the event. It's not up to the venue. Again, it's the tour's decision what they want to do with the tickets, so if the tour says the show is non-refundable and you can't resell your ticket, that's -- that's something that we have to go along with if we want that, that sort of entertainment at our venue.
REP. BARAM: Thank you very much.
KEITH SHELDON: You're welcome.
SENATOR DOYLE: Thank you. Any further questions? Representative Reed?
REP. REED: Thank you, Mr. Chairman. This is the second time we've seen this bill, and I'm trying to remind myself, what was the triggering event? Was this a Miley Cyrus concert and set-aside tickets, or what caused this bill to come before us the first time? Do you remember?
KEITH SHELDON: I honestly don't know the root effect of the reason this bill came forward. I know that resellers are certainly dissatisfied with the way that other restrictions that are put on the way that they can do business. Obviously, those paperless ticketing systems that I talked about make it extremely more difficult for a reseller to purchase the ticket, mark up the price, and then sell it to another end consumer because they have to swipe their credit card for the consumer or scan their cell phone bar code, or otherwise.
REP. REED: And, is there some sort of complaint that the resellers have about acts asking the tickets be held aside for, you know, whatever particular audience members they may want to give it to when an event is on its way to your venue?
KEITH SHELDON: Oh, I'm sure they want to get their hands on the largest number of tickets possible for an exciting event that's certainly going to sell out where they can then mark up the tickets and resell them.
REP. REED: So, if an act has asked as part of their contract to hold some tickets aside for some people they may be inviting to participate in this event and that kind of thing, this bill is -- the language in this bill would preclude them from demanding that, that all tickets would have to be available, and the act couldn't make any demands as a part of the deal they make to tour?
KEITH SHELDON: Right. There are some restrictions on the number of tickets that they can ultimately hold back, which again affects the way that that concert promoter or tour does business, and if they can hold back those tickets for whomever, albeit their fan club or sponsors, or whatever, and they can do that in Massachusetts or they can do that in New York, they'll skip Connecticut.
REP. REED: Thank you very much. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any further questions? Chairman Taborsak?
REP. TABORSAK: Thank you, Mr. Chairman. Thank you for coming today and testifying on this bill.
There are a number of different sections in the bill as I'm sure you know, and one that seems to get my attention and seems kind of innocuous, you know, just at first consideration is Section B which basically would prohibit a venue from denying access to a person who has obtained a ticket, and this -- this kind of dovetails into some of the remarks of my colleagues on this issue. I think a lot of people have a concern with that, with the idea that, you know, all right, I've purchased a ticket -- although we know it's a license -- I've purchased a ticket, I want to do whatever I want with it. If I want to give it to my brother, if I want to, you know, sell it to a friend for what I paid for it, so I guess what I'd like to learn a little bit more about from you is -- I know you mentioned that one of your primary concerns is to not discourage acts from coming to Connecticut, and we don't want to see that happen.
But, to what extent do different tours and acts really dictate how your venue has to police this, you know, concept of, you know, checking tickets, verifying who the person is? To what extent do they get into that detail? Can you kind of -- because, you know, I'm trying to imagine why this section of the bill isn't possible. If you could just comment on that, I would appreciate it.
KEITH SHELDON: Yeah. To begin, it kind of goes back to the age-old ticketing question: Is your ticket a reservation for that specific seat, or did you purchase that seat and then you can do what you will with it? That's an ongoing debate and, again, us as the venue, we're not necessarily opposed to the reselling of the ticket. What we as the venue want is we want the content, so if the act or artist itself is opposed to how that ticket is treated, then, of course, we want them to be happy so they'll play our venue, so they'll play in Connecticut, so the fans have an opportunity to see that act.
Going forward, looking at reselling a season ticket or anything like that, currently ticket holders are able to resell their ticket, but we don't want to be put in the position that, you know, let's say the Connecticut Whale or UConn basketball starts employing a paperless ticketing system at the Xcel Center, we don't want to be put in the position where they can't play here any more just because -- because they don't want to employ those mechanisms.
Do you understand what I'm saying?
REP. TABORSAK: I do. I guess I was looking for maybe an example of how a certain act has --
KEITH SHELDON: Okay.
REP. TABORSAK: -- restricted you on this issue and has dictated how you were to check tickets. I think that's what I'm looking for.
KEITH SHELDON: Recently, we had -- maybe about a year ago, we had a Miley Cyrus concert, and that was a fully paperless show, and that meant that anybody coming to the event purchased their ticket using a credit card, and then let's say you purchased four tickets to Miley Cyrus on your credit card. You would have to show up with that credit card and swipe your credit card, and then you get four admittances into that event.
Is that the easiest stuff for the venue to handle? No, because it's something different, but is that a huge event that brought tons of people to downtown Hartford? Yeah. So, we want that, you know, a hundred times out of a hundred.
REP. TABORSAK: So, if I understand you, through your contract with Miley Cyrus at the time, your venue was required to take a credit card from someone through this paperless ticket system, and as long as they had the credit card, then they could get the ticket. Do they have to show any photo ID or anything like that?
KEITH SHELDON: I don't remember the exact specifications of that event, but generally there's -- the tickets are tied to that credit card or the tickets are tied to that mobile phone where the ticket scan is sent to, the bar code is sent to.
Another way that promoters dictate the way that we do business is the way tickets are sold generally. Taylor Swift, for example, just sold out at our venue. That was a fan club presale, so Taylor Swift fans would have first crack at all those tickets, and then we did a -- they told us that we could sell a certain allotment of tickets to our building VIP's, which we essentially just opened up to everybody that has ever come to a show at the Xcel Center, and then it opened up to the general public.
Now, that's the way that Taylor Swift wants to do ticketing. Taylor Swift says I want my fans and the people that are following me on a daily basis to get first crack at those tickets, and us as the venue, who are we to say we prefer that you do it some other way?
REP. TABORSAK: Any other questions from the Committee? Thank you for your testimony.
KEITH SHELDON: Thank you.
SENATOR DOYLE: Thank you. At this point, Representative Jutila, please come up and testify. After Representative Jutila is Al Rizzo, Rob Romano, Brian Bonner and Bruce Angeloszek. Good morning, Representative.
REP. JUTILA: Good morning, Senator Doyle, and thank you, Senator Doyle and Representative Taborsak. For the record, I'm Ed Jutila, State Representative from the 37th District, and I appreciate the Committee raising House Bill 6266, An Act Concerning Automatic External Defibrillators in Health Clubs. I'm here to testify in support of this bill. It's not a new bill. It's been in this Committee before. Some of the members will remember it.
It requires that any health club in the state of Connecticut have a defibrillator available on premises, and to the extent that they already have staff there, have someone trained to use it whenever they're open.
I say that it's been here before. It actually was first brought to my attention by a constituent, Chris Barrett from Niantic who is a member of the board of directors of his local racquet club, and they went out and decided to do this on their own. They felt it was important for the safety of their members to have a defibrillator on premises, and Chris gave me a call and said, you know, I think all health clubs should have a defibrillator, and he's a pretty conservative guy and not one to want the government to tell him what to do, but he thought that in this case, the safety of the members trumps his normal conservatism, and Chris has sat here a couple of times before before this Committee and testified along with me. He couldn't come up today. He's a bit under the weather, but, you know, the point is that, you know, we've done some good things with defibrillators in the legislature over the past couple of years.
We've done some things to increase their availability in schools. We've done some things to extend immunity to those who use defibrillators in good faith, and this Committee has been very receptive to this bill in the past. It's been JF'd out of this Committee before.
It tends to get hung up on these liability issues later on, and the primary issue -- I'll say first the health clubs, I've worked together with the health club association and with the heart association, both of which have supported this, but it's the health clubs who've had a concern about the liability where not so much where someone uses it. We've been able to protect them in the bill in the past for that, but it's the non-use where someone who's on the staff and the defibrillator is there just kind of freezes up or something and fails to make use of it, and they don't want to be held liable for that.
But, I know that the bill in this Committee right now does not address the liability issue, and I think that's okay for purposes of this Committee. I'd like to see the bill get out of here and give us a chance to continue to work the other issues as it moves along through the process, and I have submitted written testimony on it, and we've also submitted Mr. Barrett's testimony for him, and I know that the Committee obviously has a lot of people to hear from today, and I'll end it with that, and thank you again.
SENATOR DOYLE: Thank you, Representative. Any questions? Seeing none, it looks like you got off easy today, Representative.
SENATOR DOYLE: Yes. The next speaker is Al Rizzo. I'm sorry. Al Rizzo, then Rob Romano, Brian Bonner, Bruce Angeloszek and Martin Acevedo. Al Rizzo?
ALBERT RIZZO: Al Rizzo --
SENATOR DOYLE: Excuse me, Al. Please push the button there. Thank you.
ALBERT RIZZO: Thank you for inviting us here this morning. My name is Al Rizzo, and I represent the Connecticut Spa and Pool Association as its current government relations committee chairman.
We have before us a bill we'd like to discuss and tell you that CONSPA was founded in the mid-sixties as a consumer advocate association. We employ at the present time somewhere between two and 5,000 people in the state of Connecticut, depending on the season, and we have approximately 150 members, and it starts from manufacturers to distributors and contractors and service people.
While we appreciate the Committee's -- I'd better get my 'glasses; I forgot to wear them -- raising S.B. Number 863 for us, we'd like to request some changes be made to its current form, and we have submitted them to you today, so you either have them now or they'll be there shortly.
But, there are two reasons that we want licensing for pool builders, two important reasons. The first one is that the consumer has a perception and confidence in their mind that when they hire a master plumber or a master electrician that they are hiring a professional that has reached a higher level of education within his industry.
Our industry at the present time has superseded all of that, and we've been teaching and training people for many, many years to get up to that level and above that level, and Rob is going to speak more to that.
The second is that if you want to build a pool today, all you have to do is go down to the state department and buy a home improvement contractor's registration, not even a license, and you can do many things under that, whatever you want to do to improve a home, the siting of a new garage, whatever, and we fall into that category.
The problem is that other people that are in that category could just build a pool if they want, like we would build it, and it would be, of course, not the same type of pool. It wouldn't have the experience or the safety that's important to us.
The most important reason is safety. Proper education is required in order to protect the consumer so that they will enjoy the pleasures and health aspects of owning a swimming pool. They will be able to feel secure in the knowledge that the pool was built correctly and safely by a licensed contractor. The license will provide for continual education and enforcement. There's none of that in place right now. Right now anybody that has an HIC doesn't have to provide continuing education, and there's no enforcement to it other than if you take money and run, or something like that, then someone will chase you, but if you do a poor job, it becomes a matter for the court after that.
So many tragedies have taken place in swimming pools that by proper education and licensing enforcement will not take place again, and we've all seen entrapment cases come up, and accidents that happen around a pool that are needless because they weren't built or taken care of properly.
We now have a license which is called an SP2, SP1. We received it about ten years ago, approximately ten years ago, and it's for service companies only, so the service parts of our companies are licensed, but the construction part is not licensed at this time.
Further, our association is linked with two other bills coming up today, S.B. 946, An Act Concerning The Enforcement of Occupational Licensing. I want you to know we're for it. And, H.B. Number 6265, an act concerning advertisement of non-licensed tradespeople.
It's appropriate that in the 1960's when I started this association, I and a group of other builders, that we started to fight what was called at that time bait and switch operations and the advertisement that was going on (inaudible), and we had to come before a committee to get word to the Department of Consumer Protection to get that accomplished, and we did.
Thank you, and Rob.
ROB ROMANO: I'll read fast. Gentlemen, I'm Rob Romano. I'm not only a pool builder, I'm also the current past-president of CONSPA and the president of the Northeast Spa and Pool Association, also known as NESPA.
NESPA is the parent association in the northeast chapters that cover Connecticut, the lower counties of New York state including Long Island, all of New Jersey and eastern Pennsylvania. I'm here today to support the Raised Bill 863, ACC licensing of swimming pool builders. I'm here today because there's a real need for oversight and standards in the swimming pool industry.
As Al mentioned, in recent years there have been some high profile instances of people becoming entrapped. I served my two-year term for CONSPA in the fall of 2007 to the fall of 2009. I became president of the chapter only two months after the tragic death of a six-year-old boy in Greenwich, an accident that may have been avoided had everyone been educated and brought up-to-date on the current code.
In September of 2004, the 2003 IRC Appendix G code went into effect in our state. The pool where the accident happened was constructed the following summer in 2005. It was built, inspected and received a certificate of occupancy. Then two years later the suction entrapment occurred. Without going into further detail of the accident, we feel it could have been avoided if the builder had been aware of the changes made to the code through continuing education. The key word here is education.
Being a licensed builder is one thing. The education afforded to the license is priceless.
NESPA and CONSPA are leading the way in educating our members from Connecticut in the health code and building code inspectors. We recently were awarded a contract from the Consumer Product Safety Commission, CPSC, to put together and deliver programs on the health and building codes and how they were impacted by the Federal Virginia Graeme Baker Swimming Pool Safety Act. We currently have four programs in the state of Connecticut alone scheduled. The first one was actually held last week. With that said, the entire Appendix G section of the building code is only one and a half pages long. The entrapment section of the code we currently use is only a half page long, but that page holds vital information on how to properly pipe a pool so that it does not become a potential trap for swimmers.
It's amazing how many builders and inspectors in our state still do not understand this code. We have an opportunity here to help them both. We are the experts in the field. To instill this license and require continuing education will force the builders who don't know, to know.
Not just pool builders are building these pools. You have landscapers, masons and home builders who do not understand how to properly pipe the pool or even know what a split main suction outlet is or a suction vacuum release system. A swimming pool builder is a person who performs excavation and grading, construction and installation of a swimming pool and water features more than 24 inches in depth, tiling and coping, decking and installation of all circulation equipment including pumps, filters and chemical feeders. Continuing education will teach them how to do it correctly.
Connecticut is in a unique situation. We are currently the only state to hold a service license to work on swimming pools. To obtain this license, one has to go through years of training that includes both classroom and field training.
We have a program in place through the Association of Pool and Spa Professionals to help train new swimming pool builders how to properly construct a swimming pool. This training is vital to the safe construction of the pool as it follows the current codes and standards on Connecticut's books today. We recognize a need to grandfather the current builders in the state in order to obtain this license. In the end, it's the consumer who benefits the most from this license. They will have the peace of mind knowing that the professional pool builder is knowledgeable in his trade and will construct a pool that is safe for their children and guests.
I support Raised Bill 863, AAC licensing of swimming pool builders, and ask that you do, too.
One last thing. The Service License, the SP License, required to serve the pool lacks one crucial item: Enforcement. We would like to see the same enforcement language applied to the SP license that is in the proposed builder's license. It's necessary to the validity and integrity of said license.
We also feel the need to include tile and coping within the work performed definition. There are certain steps and criteria one needs to take in order to properly install these items on the shell of the pool, steps that can hinder the life span and quality of the installation --
SENATOR DOYLE: Thank you.
ROB ROMANO: Okay.
SENATOR DOYLE: Thank you, gentlemen, and just for the record, both were signed up. They came up together, but they both were independently signed up.
ROB ROMANO: We were trying to save you time.
SENATOR DOYLE: Yes. I appreciate it. Just for the record (inaudible), because it's an overflow room, Room 2A has been opened, so members of the -- if you don't have seats, you can go up there and listen so you don't have to stand up, so it's an option for those in the room that would like to sit down and listen and come down if you're to testify.
Any questions for the gentlemen? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chair, and I thank you for your testimonies this morning. I just wanted to follow up on a few things that you had mentioned.
Indicating -- you had testified regarding the tragic accident in Greenwich regarding the six-year-old child. You had indicated that the pool was inspected, yet if the person who installed was aware of changes to the code possibly it may or may not have affected -- I don't want to say it would have prevented it, but may have affected the outcome.
Were there changes to the code prior to the inspection or post the inspection?
ROB ROMANO: Prior to.
The changes to the code happened in 2004. That's when they went into effect. The pool was built in '05, I think it was July of '05, so there was ten months that had gone by that -- I'm not putting blame here, but the building inspector and the pool builder could have found out about them. The problem is that there is no bulletin going out to anybody, saying that the codes are changed.
We understand that it's their responsibility to go and check if there had been code changes, but that didn't happen. It didn't happen in either case. So, with the continuing education that's applied to the builder's license, you will go -- right now we have to go with the SP license every two years to have a continuing education, and we go thoroughly through all of the code changes that have happened.
Since that happened, there's been what? Three separate instances where they've added to the code. Had we not gone to continuing education, our members and non-members and inspectors probably wouldn't have been all aware of it.
ALBERT RIZZO: He's talking about continual education. That's required by the state like a master plumber and electrician, which is every two years. You can't keep abreast of these laws on a two-year period. Our association, which is over 40 years old does this on a monthly basis, and we work. One of my engineers was down at the building inspector's association last week, talking about pools and problems and things like that, and they're going to make -- what they're going to be pushing more is enforcement.
So, our educational process is ongoing. I mean it's the only reason why he does this every day as Rob does, and it's discussed. We're a small group, 150 of us in Connecticut. It makes it easy to ahold of everybody and say hey, wait a minute, this is coming up, it's right or wrong, and we either fight it or join it.
REP. REBIMBAS: Thank you again for those responses. I believe earlier also in your testimony you had indicated that you had worked with the Consumer Protection Department related to some of these complaints that had been filed.
Would you just give us an idea of how many times maybe you've been called upon to assist in those things, or if you even have any idea regarding the statistics of complaints that have been filed?
ALBERT RIZZO: The problem is that what we've done in the association is they call me. I'm the old-timer, so they get ahold of me. They figure I've got more time.
REP. REBIMBAS: So there is --
ALBERT RIZZO: That's what's wrong with it. I'll call up the builder or the home owner and see what the problem is, try to straighten it out over the phone. If I find that he's unregistered and doesn't have a home improvement license or he's doing service work and he doesn't have an SP1 or 2 license, I then go directly to the Department of Consumer Protection.
At the present time, the law that we have to attain an SP1 and 2 license doesn't have any enforcement on it, so people that don't have it say okay, I did wrong, so what are you going to do about it? So, when I sit down with the Department of Consumer Protection, they say, well, we don't have any enforcement on it; we can't do anything about it.
REP. REBIMBAS: Do you have any idea how many pools in the state of Connecticut have been installed by licensed pool installers versus people who don't have that specific license?
ALBERT RIZZO: There are not licensed pool installers. Right now there are just people registered as home improvement contractors. Anybody (inaudible) can install a pool. There's no license for it.
The only license we hold now is to repair them.
REP. REBIMBAS: Okay. So there's only a license currently for repairing of the pool --
ALBERT RIZZO: (Inaudible.)
REP. REBIMBAS: -- not necessarily for installing (inaudible).
ALBERT RIZZO: Well, we're here today to get a license for builders, not so much installers, because we do from design work on through. All of the engineering and design work goes on within a separate company, and those are the ones -- these are the people that we want to get licensed.
REP. REBIMBAS: Thank you for your responses, and thank you, Mr. Chair.
SENATOR DOYLE: Thank you. Representative?
REP. NICASTRO: Thank you, Mr. Chairman.
In Section G of the bill, it talks about the fee for the swimming pool builder's license is $150, and that fee is good for one year. Is that something new, you know, because we've had this in front of us before, if I remember, a couple of years ago. I believe you testified at that hearing, too.
ALBERT RIZZO: Yes. Thank you.
REP. NICASTRO: Is that something new? Has that been increased, or how did they arrive at that figure that it would be 150 a year?
ALBERT RIZZO: I think it's -- I think your answer -- the answer is just the same as the SP1 and 2 license.
REP. NICASTRO: I'm sorry?
ALBERT RIZZO: It's the same. The present license that we hold now is the service company, a remodeler. It's an SP1 or 2 license, and that's what we pay for that license, and I think it's appropriate to -- home improvement?
ROB ROMANO: Yes, it is.
ALBERT RIZZO: I think it's the same as -- I didn't pick the figure out. I'm sorry. This time of the year I would think someplace. It coordinates with what we're paying now, I think, for the home improvement registration.
ROB ROMANO: Right now as an SP1 holder, I have to pay every October $150 to keep my license, and every two years I have to go through continuing education to keep my license, and I think we're just trying to follow the same footprint because it's all related. Instead of service, we're building pools. Just to try to keep things a little even or fair, and keep it at $150.
ALBERT RIZZO: Don't get confused if one license is going to (inaudible) the other. There are people in this industry that just service pools and don't maintain their license. My company does both as does Rob's, and he'll maintain the SP1 license as well as the new home builder's license.
REP. NICASTRO: Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Representative D'Amelio?
REP. D'AMELIO: Thank you, Mr. Chairman.
The swimming pool industry in Connecticut obviously is very -- it's limited, it's seasonal, and I know a few installers myself, and they have a lot of different part-time employees and different employees every year that they hire because they're not able to really retain the same employees every year.
How would we treat those employees of the contractor? Does the contractor (inaudible) the license or all of his employees, also?
ALBERT RIZZO: We're looking for the contractor's license. Within the association, we have several steps to get up to what's called certified, and most of my men and most of the people in this industry put through these steps within the association. There's no license, form or place, and they'll work under my license.
As a master plumber, I have journeymen working under me, and there's a place for them in the industry. We figure that if we get the license, the rest of you can come along after, but we're responsible. I'm responsible. I personally am responsible for every pool that my company builds or services.
And we're not interfering with any of the master pool plumbers or master plumbers or electricians. They still have -- this bill doesn't interfere with their work. They still have to -- if we need a master electrician to wire a pool (inaudible), and we need a master plumber to run gas lines and fresh water supplies. We're allowed to do the plumbing around the pool.
REP. D'AMELIO: Thank you.
SENATOR DOYLE: Any further questions? Representative Baram?
REP. BARAM: Thank you, Mr. Chairman.
With regard to some of the concerns you articulated, is there any requirement that the local building inspector inspect the installation of a new pool and, if so, is there an obligation in issuing a CO to understand the building code requirements for the pools so that there's some responsibility for monitoring and oversight by the local building inspector?
ALBERT RIZZO: It's a long question, but in each town -- there's 169 towns, and every building in these individual towns has a different sort of sets of rules that they want.
Generally, if you're building a swimming pool and it's a concrete or gunite pool, it still has to be inspected, and the reason the steel is inspected is because there's a grounding to that steel that has to be inspected.
The reason that we're connecting decks in here is because now several years ago a rule -- a law passed, a code passed that we have to have what's called equal potential bonding within the deck itself. All of these responsibilities fall on us. We're responsible for calling the building inspector. Sometimes the building inspectors say Al, what do you want me to inspect? Well, come on up and look at the steel anyways; give me your seal of approval, or something, you know?
It's -- it's -- that's why we've got (inaudible) going around that Rob was talking about, that we've been selected to go out -- we, our association -- to go out and train building inspectors what to look for.
ROB ROMANO: If I can just add to that, before the accident happened a few years back, it was the -- the onus was on the pool builder in any trade, on the tradesman to understand the codes, and they were considered the expert, and a lot of times the building officials were relying on that person to guide them through the inspections. In other words, the building inspector wasn't 100 percent trained in what he was inspecting, but now since that did happen and was such a high profile case, the inspectors are stepping up their game, and they recognize that they, too, need to understand more fully what the code that they are enforcing says, so we're playing both roles. On the association level, we're trying to teach both builders and the inspectors how to understand this code properly.
It's all of this work over a page and a half, but that page and a half is so vital and there are so many questions that are involved in it that it's -- we spend hours and hours and hours and hours, trying to put these programs together, so I think today, the benefit, the result is that you have a more educated inspector who does have a better clue on what they're looking at, and in putting this license into effect will kind of force the pool builder who wasn't looking it up, the changes on the code, to now have to go ahead and be this is it, you've got it, now it's on you to do the right thing, and they can work together better with the building inspector.
ALBERT RIZZO: Part of these (inaudible) plumbers all talk to you on the phone, and our class was really teachable, the velocity of water going into a pipe. The size of the pipe is important, the size of the suction fitting on the end of the pipe is important. He doesn't even know what I'm talking about half of the time, but yet it affects our industry as to whether you're going to get hair entrapment or limb or body entrapment in that suction point, so all of these things -- flow rates, total dynamic head -- things like that are taught to people who didn't finish algebra even, but they have to understand this is what we have to do.
SENATOR DOYLE: Some of the plumbers don't understand, so they're like me. Interesting. Representative Reed?
REP. REED: Thank you, Mr. Chairman.
I'm just trying to circle back to the training, so your association would do the training or does do the training, and is there a fee for that that you charge people who take these classes?
ALBERT RIZZO: Uh-huh. Yes.
REP. REED: Does it vary, or is there sort of a standardized fee?
ALBERT RIZZO: Well, it varies on what level you're taking.
REP. REED: Well, I mean depending on who's taking it --
ALBERT RIZZO: Yes.
REP. REED: -- if it's a building inspector or --
ROB ROMANO: On the --
ALBERT RIZZO: I think it's appropriate to say that there will be a fee to the building inspectors because there will be paid teachers, and stuff like that, but it isn't anything that's exorbitant, but within the trade ourselves, most of the teaching is done for nothing. We charge nothing to go out teaching, and our association will every month have a meeting, and if part of it has to do with a new code coming up, one of us that went to the code hearings meetings will explain it. There's never a charge within the association unless it's a day or two fee.
ROB ROMANO: The grant that we receive is from the CPSC, and those classes that were offered to the inspectors, there's no fee to the inspectors. We do that for them for free because we feel that the information they're getting is priceless and you can't put a number on it. We're offering them that service.
REP. REED: And what about the companies, the installers?
ROB ROMANO: The installers, if they're going through the educational program or builder's program, they would have to pay for the class, and the class takes -- those programs are -- it's like going to school for a week. It's their schooling, their degree in pool building.
REP. REED: And they get a certification of some sort from --
ROB ROMANO: Right.
REP. REED: -- your association that they took and passed this course?
ROB ROMANO: Right. They buy textbooks, they have -- they're provided lunch, they sit in the classroom for eight hours a day, and it's a commitment for a week, a week-long commitment both time and monetary.
REP. REED: And do you take them on location to see if they've actually accumulated this knowledge?
ROB ROMANO: It's kind of tough. We have done it, and we have facilities down in New Jersey with our parent association, with NESPA. There's a pool that's constructed inside the warehouse there that they actually can break down and rebuild and do all types of things to it and have hands-on training.
REP. REED: And then one more quick question. I've noticed just sort of anecdotally that some of these -- and I know this is not your area of expertise, and I'm wondering if you have thoughts on it -- these above-ground pools are enormous, and they have vacuum systems and recirculation systems, filtering systems, and I'm wondering. That doesn't fall under the same umbrella, that's a whole different area?
ALBERT RIZZO: It's going to fall under this umbrella. We're talking what's called above and in-ground pools. Most of that is interstate commerce. Those are produced by engineers, shipped in as a package, and then you have installers that will install them, but they have to comply to all of the codes in the local area.
REP. REED: So your sense in this bill -- unless I misread it -- this says in-ground, but you think that this will expand to include the large above ground pools as well?
ROB ROMANO: It's supposed to.
ALBERT RIZZO: It's supposed to. Now, it says here partially above-ground structures and permanently installed spas. I think you probably have a copy (inaudible).
REP. REED: It's a bigger umbrella (inaudible).
ALBERT RIZZO: Yes.
REP. REED: Okay. Thank you so much for your testimony.
ROB ROMANO: The importance is the circulation of the system, whether it's in the ground or above the ground. The split main drains and the suction vacuum relief system that's now required to put on that, they need to know what that is and understand it and know how to plumb it properly, so it affects -- the circulation doesn't change from above ground to below ground. You just need to know (inaudible).
ALBERT RIZZO: Transporting water was part of --
REP. REED: Yes, right. Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any further questions from the Committee? Chairman Taborsak?
REP. TABORSAK: Thank you, Mr. Chairman, and I thank you gentlemen for coming here today to testify.
I'd like to get your attention on the issue of experience and what the necessary experience you envision would be in order for someone to get into this business who isn't currently a builder, because in the bill that we have drafted, we asked the Commissioner of Consumer Protection to adopt regulations on this issue and define what type of experience would be required, training as well, but I just want to focus on experience for a minute.
It could be a concern of people on this Committee that if we were to create a license where there wasn't a mechanism for people to get into the business that aren't currently in it, we want, you know, entrepreneurs in our state to be able to start new businesses and to get into fields and trades. In some of the other trades, as you know, you know, the plumbers, the licensed trades, there are very clear mechanisms, apprenticeship programs in order to get the experience you need in order to take tests and get the licenses to become a licensed person in that trade.
So, this is really a two-part question, I guess. I'd like some feedback from you on, first, what you envision the type of experience should be required in order to get a pool builder's license, and two, what would the mechanism be, how would people get that experience?
ALBERT RIZZO: Apparently, it's not in the present bill, but we've already submitted to the Department of Consumer Protection our whole educational program, which is -- excuse me -- anybody that has been building pools for five years or more, to prove they've been building pools, they're automatically grandfathered in. You can't have restraint of trade and introduce this bill, so if they can show through methods of contracts, permits, and so forth, that they've been in the total area of building pools for five years, they can automatically get it.
Another method is to become certified as a APSP certified professional pool builder. I've been one, and I started a program over twenty years ago, and there's something like several hundred of us throughout the United States. If you've attained that certification, that allows you to go in if you're going to go from state to state.
In the meantime, we have a training program that brings you up to these levels so that you would have to train for four or five years, working under the supervision of someone like myself or another licensed person, and the results of 288 hours of in-school educational programs that we teach, so there's a method of getting there. It isn't like we're going to stop anybody from becoming builders. I'm about done anyway.
REP. TABORSAK: Thank you. That's what I was looking for. I was looking for a little feedback on that issue on --
ALBERT RIZZO: We have an educational program in place. It's already been working for the SP1 and 2 license, working out well, and almost the same program, except it will be for builders, has already been in place, and it will just be a matter of sitting down and working it out.
REP. TABORSAK: So it sounds like you would be in favor of some kind of an almost apprenticeship program that involved a certain level of training and certification.
ALBERT RIZZO: Right now we call them men in training, men and women in training, and that's what we use as a term (inaudible). That's what the Department of Consumer Protection asked us to do. Call them men in training for the time being.
REP. TABORSAK: Okay. Thank you for that information. Thanks for testifying.
SENATOR DOYLE: Any further questions? Thanks for the background (inaudible). I think I'm ready to apply for the apprentice's program. Representative Widlitz, please? After Representative Widlitz will be Brian Bonner, Bruce Angeloszek, Martin Acevedo, and Don Vaccaro. Representative Widlitz?
REP. WIDLITZ: Good morning. I think it's still -- still morning. Representative Taborsak, Senator Doyle, and members of the General Law Committee, I thank you for the opportunity of testifying before you today in support of House Bill 6337. I'm State Representative Pat Widlitz. I represent the 98th District including the towns of Guilford and Branford. Actually, I share Branford with Representative Reed.
During the 1970's, federal incentives and limited oversight led to a proliferation of solar contractors, some of whom lacked the actual expertise required to provide good solar installations. As a result, the public lost confidence in the expertise of installing contractors, and the industry declined.
As technology improved and the solar industry re-emerged, the need was obvious for a licensing structure that would provide consumers with a high degree of confidence in the expertise of those installing contractors.
In 2005, I was contacted by my constituent, Everett Barber, who is right here, and with your permission I'd like to ask him to join me. Okay. Everett is a solar energy expert who had been working with Richard Hurlburt at the Department of Consumer Protection to develop language for proper licensure. I then requested the assistance of General Law Committee Chairman, Representative Chris Stone -- who I understand was just here a little while ago; I couldn't believe this was back, by the way -- and on May 31st in 2005, we passed House Bill 6732 in the House. I explained the bill on the House floor, and it passed unanimously as it did in the Senate later in June.
I'm testifying today to clarify that the unquestionable legislative intent was to allow the new classification of the PV-1 contractor license holder to complete the entire working system, including connecting the system to the service panel at the home. That was clearly understood by the General Law Committee Chairmen, the Department of Consumer Protection, the solar contractors, and the members of the General Assembly.
Since the passage of the bill, over 1,500 separate PV installations have been completed in Connecticut with no record of safety incidents or known consumer complaints related to solar system installations. The PV-1 contractors have successfully turned the industry around and have greatly contributed to green energy production in our state.
It's recently come to my attention that the Electrical Work Examining Board, known as the EWB, has taken a position counter to the legislative intent of Public Act 05-211.
I urge support of House Bill 6337 and enlist the Committee's support to maintain the intent and the integrity of the underlying legislation which established the solar license framework.
I'd like to thank you for your attention to this issue. My constituent, Everett Barber, has joined me. He was very instrumental in passing the bill on the solar licensing and has unlimited information depending upon how many questions you may choose to ask. Thank you.
SENATOR DOYLE: Thank you. Any questions from the -- we're all set?
REP. WIDLITZ: Could Everett make a statement?
SENATOR DOYLE: Yes.
REP. WIDLITZ: At this point?
SENATOR DOYLE: Sure.
REP. WIDLITZ: Thank you.
EVERETT BARBER: Good afternoon. I guess it's afternoon. I will -- I have prepared testimony, so I'll leave that here, and I will skip the biography other than just to say that I've been in the solar industry for almost 40 years. I just finished a book on solar -- electric and solar thermal systems for home owners, but proceeding with my prepared testimony, I'm here in support of Raised Bill 6337, which is a clarification of the solar workers' act.
In the mid-1990's, it became evident when I was running my solar business that statutes were needed to create a work force of installers who were trained and had demonstrated competence by examination to install solar electric and solar thermal systems. While an act had been in place since 1982 for solar workers to install, quote, hot water systems, the scope of that act was narrow and did not include other work that should have been done by solar thermal system installers.
At that time, it was very difficult to find anyone with an electric license, E-1 license, for instance, who was interested in learning enough about solar technology, solar electrical systems, to install the systems competently. Courses -- very few courses were available; they wanted to be paid if they had to attend the courses; they really basically were not interested.
My first effort to bring these categories into existence began in 1998 when I met with Representative Widlitz and several other elected officials from our area, and we began a long process. There were five different attempts to get a bill enacted until the one in 2005. That is the act that Pat referred to, 05-211.
It took, as I said, a number of attempts to get that enacted. The act, 05-211, created limited licenses for solar electric workers and refined existing licenses for the solar thermal workers. The PV-1 and PV-2 license categories were created for solar electric workers, and the ST-1, ST-2 license categories were created for the existing solar thermal workers.
At no time during those efforts did they intend that the solar electric installers be limited to installing a grid-tied solar electric system and yet not be able to connect or tie that system to the grid. Further, my intention was that the solar electric contractors, PV-1's, were entitled to apply for a building permit to install such solar systems and not require that an E-licensed electrician apply for the permit to install such systems.
The present ultimately decision by the Department of Consumer Protection that only E-licensed contractors be able to apply for a permit to install a solar electric system and to be necessary to connect the electrical output of the solar electric system to the utility company (inaudible) lines is contrary to the original intent of 05-211.
That's my testimony.
REP. WIDLITZ: I would just like to add that there are inspections all along the way. It's not as if these contractors just install it and walk away. There are inspections by the local building department, by the utility companies, and if there are incentives from the Clean Energy Fund, someone from that Fund also does the inspection, so it's well inspected, there haven't been problems, and we were rather surprised to see this pop up. It's possibly a little bit of a turf war.
SENATOR DOYLE: Thank you. Any questions? Representative Reed?
REP. REED: Thank you, Mr. Chairman. I just wanted to reiterate. So in the (inaudible) solar industry, not doing so well, a lot of sort of bad feedback, but then this was created so the people who have pursued the solar industry resurrected it, made it begin to really thrive again, have made a considerable investment not only to get the correct licensure but to build their businesses, and this seems -- it does seem to suggest that there is an effort to kind of try to move into an area that these people have really, you know, done the due diligence and invested in.
Is that how you see it?
EVERETT BARBER: Well, a minor point of clarification since I started in the industry in 1972 is the industry did very well during the seventies and early eighties, and there were very few solar electric installations at that time, so when we talk about solar installations at that time, those were all solar thermal, and it wasn't until really the electrical restructuring act that took place in the mid-nineties and the creation of the renewable energy investment funds that there was a real stimulus given to grid-tied solar electric systems, and at that time with the interest, we needed a work force to be able to install the systems competently, and it didn't exist, and this seemed to be a way to do that.
REP. REED: I guess I just want from -- good to see you, Representative Widlitz. I mean you seem to be saying that the track record has been really, really good, so this sort -- this bill from your perspective re-emphasizes that reality and the fact that they created a business that is running very well as it is.
REP. WIDLITZ: Right. The 2005 legislation was intended to provide consumers with the confidence that they were dealing with a contractor who had the appropriate credentials to install those systems. That's been working just fine, and this bill that's currently before you just clarifies that that was the legislative intent and regulations will be developed that carry that throughout the regulations rather than changing it without the statutory permission actually.
REP. REED: Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any further questions? Chairman?
REP. TABORSAK: Thank you, Mr. Chairman. Thank you, Representative Widlitz, and thank you, sir, for your testimony. Can you state your name on the record? I'm sorry. I didn't get it.
EVERETT BARBER: Everett Barber.
REP. TABORSAK: Mr. Barber. I have a few questions. I think that what my concern is and why I have some -- I do have some interest in this bill. I think, you know, we started an industry here in Connecticut that is a good industry, it's a job creator, you know. Green technology is something that I think we need to do more of, and so I think there's a lot of support for the PV-1 license and what you're doing.
I think that what my primary concern is here is making sure that PV-1's have the training and experience to connect to the panel, because really that's what we're talking about. That's really the issue that has brought this up, I think, is that when we first passed this law, the PV-1 license law, there was an understanding in the trade and there may have even been an opinion out there either from -- and hopefully you can help me with this history -- from either the Department of Consumer Protection or the EWB that PV-1's could, in fact, connect to the panel.
Was there an opinion out there with some credibility on that issue at one time?
EVERETT BARBER: That was the original intent of the act which was that they be able to make that connection, and I wasn't privy to the deliberations that went on in the legislature to finally confirm the ultimate wording of the act because, as you know, what comes in as a bill often gets changed quite a bit in substance, and apparently that was left out during the final wording of the act, but that was the intent. What you just asked was very much the intent.
REP. WIDLITZ: It was with the understanding of the Department of Consumer Protection as well. Actually, we had worked with staff within the department to come up with that language, and that was certainly the full intent, that it would be a complete installation.
REP. TABORSAK: Okay. Thank you.
EVERETT BARBER: To add to that if I could just it may seem a detail, but the person at the occupational licensing board that helped with the wording, Richard (inaudible), is also a licensed E-1.
REP. TABORSAK: Okay. I guess moving on to my second question, can you tell me a little bit about the training involved, you know, in obtaining a PV-1 license specific to connecting the solar system to a panel? What sort of training is there on that specific issue?
EVERETT BARBER: The training is just a component of the whole training program that they go through that's usually NABCEP certified, which is the national organization to certify solar electric system installers, and they go through a training program, and they take an examination, and then they work as, first, an apprentice for two years for a licensed contractor, PV-1 for example, and then if they pass the exam to go to the journeyman stage, they spend another two years as a PV-2 before they can take the license for the PV-1.
So, the tie-in is just one part of all of the aspects of the solar electric installation, and it's -- actually, it's a fairly small part compared to a lot of the other grounding issues and mounting issues that they have to deal with.
So, I couldn't -- I can't answer your question specifically that it would almost have to give you some idea of how many hours of course time that are devoted to the tie-in from the inverter to the circuit breaker box, and I can't answer that question.
REP. TABORSAK: Well, okay. You did partially answer it, and part of my question was if there was actual training and studying of that part of the process, and your answer was that there is, there is time spent on that, that is part of the training.
EVERETT BARBER: That's correct.
REP. TABORSAK: Okay. Okay. Are there any other questions from the Committee? Okay.
SENATOR DOYLE: Mr. Barber, I have a quick question for you. I'm ready for this bill, but I'm always curious if I have an expert on solar.
In terms of Connecticut, how would you rate like on a scale of one to ten the effectiveness of solar in Connecticut in comparison to like Arizona in terms of the sun intensity? I'm just curious. You have written a book, so what -- I always try to ask solar people like how is Connecticut in the market.
EVERETT BARBER: In terms of -- there are two aspects or answers to that question. One is if you look at the amount of incidence, solar radiation in Connecticut versus in Albuquerque, which is better than Arizona, you will find a substantially greater insulation in Arizona or Albuquerque, but the cost of energy is three times higher in the Northeast than it is in the Southwest, so as a generalization, a solar electric or solar thermal installation is more economically viable in the Northeast than it is in the Southwest.
SENATOR DOYLE: Okay. Thank you very much. Any further questions? Thank you.
REP. WIDLITZ: Thank you.
SENATOR DOYLE: The next speaker is Brian Bonner, Bruce Angeloszek, Martin Acevedo, Don Vaccaro and Bob Muccino. Brian?
JOSEPH BRIAN BONNER: Good morning. Senator Doyle, Representative Taborsak, ranking members and other members of the General Law Committee, my name is Joseph Brian Bonner. I'm a resident of Uncasville, Connecticut, owner of Bonner Electric, Incorporated, and an unlimited E-1 license holder in the state of Connecticut.
Thank you for the opportunity to provide testimony in opposition to Raised Bill 6337, An Act Clarifying The Scope Of Solar Electricity Work. This bill seeks to require the Commissioner of Consumer Protection to adopt regulations that will allow a PV-1 license holder, a limited license, to perform complete working photovoltaic system installations without the assistance of an unlimited E-1 license holder.
Based on license holder information from the Department of Consumer Protection, there are a total of 23 active PV-1 and PV-2 licenses that are affected by this legislation. Twenty-three individuals that were granted permission to install solar photovoltaic systems on a limited scope basis. Of these 23, only 14 reside in the state of Connecticut.
It's my personal opinion that over the last couple of years, these limited licenses have consumed a tremendous amount of this Committee's time and the time of the electrical community in response to their requests for legislation changes and scope clarification.
I had hoped that this issue would be settled when the Commissioner of Consumer Protection and the Electrical Work Examining Board issued Bulletin Number 12-2010 on December 10, 2010, which very clearly clarified that by unanimous vote that a PV-1 or PV-2 license holder is not permitted to connect to any existing panel, junction box, wiring or circuits on the premises. They are limited to properly terminating their wiring into a junction box or controller of theirs that is not in any way connected to the building's existing electrical system or utility meter. Connection to the building's existing electrical systems or utility meter can only be performed by a licensed E-1 or E-2 license holder. I have attached a copy of the bulletin to my testimony.
Please don't think that a solar photovoltaic system is just some small one- or two-panel system that any home owner can buy at Home Depot. Though some systems may fall into this category, the scope of a commercial photovoltaic system can involve hundreds, even thousands of PV modules with direct current brought back to an inverter that takes the DC and converts it into alternating current, AC that can be used by the facility or sold back to the utility.
This output current can be in the thousands of amperes with commercial systems. For example, most of us have seen the commercials for Pilgrim Furniture's solar installation. This system is advertised as 341 kilowatts and is said to provide up to 80 percent of the building's lighting energy. This amount of power is equivalent to 950 amps at 208 volts. It requires large conduits and wires to carry this amount of power. In conjunction with the power produced from the system, it would also be common for the complete system, quote-unquote, to include monitoring systems and local displays with network and power wiring associated with both.
There are approximately 13,000 E-1 and E-2 electrical license holders in the state of Connecticut. As an E-1 Unlimited Electrical Contractor, I've had to serve four y ears of apprenticeship, two years as an E-2 journeyman prior to sitting for the E-1 exam. As part of these requirements to maintain --
SENATOR DOYLE: Time. Please summarize. Thank you.
JOSEPH BRIAN BONNER: Okay. Sorry.
I agree with the determination of the Electrical Work Examining Board and the Department of Consumer Protection that a limited PV-1 and PV-2 license holder should not be allowed to perform complete working photovoltaic system installations without the assistance of an E-1 license holder and ask that you please consider the safety of the public and oppose this bill.
Thank you for your time.
SENATOR DOYLE: Thank you. Any questions from Committee members? Chairman Taborsak?
REP. TABORSAK: Thank you, Mr. Chairman. Thank you for testifying today.
Can you tell me what in your training is different than in the PV-1's training that you feel disqualifies PV-1's from being able to connect two panels? Can you explain that? What about your training is different than theirs on that issue?
JOSEPH BRIAN BONNER: Well, for one, they're not required to go to continuing education every year to stay up on the recent code changes and laws that affect the industry. That's probably the primary item.
Additionally, overall training for an electrical contractor is much greater than that for a PV installer. And, we're also a licensed PV installer. We're set up with the Connecticut Clean Energy Fund to install solar systems.
REP. TABORSAK: Just to take that a step further, you said that they don't have the continuing education requirements that you have. If we were to require them to do continuing education on this issue, do you think that would address the issue?
JOSEPH BRIAN BONNER: I feel that it would help to satisfy that issue, yes, and I think a real close look needs to be taken at the initial training that is required in order to obtain the license in the first place. I think that's an open area that should be clarified.
REP. TABORSAK: Okay. Well, thank you for your testimony. It's been helpful. Are there any other questions from the Committee? Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. The next speaker is Bruce Angeloszek, Martin Acevedo, Don Vaccaro, Bob Muccino, Mary Jane Fox or Fax. Bruce?
BRUCE ANGELOSZEK: Angeloszek. I brought today our pre-apprentice. He's going for his E license. I thank you for the opportunity to speak today. This is Nick Delmoro. He's a senior in Emmett O'Brien High School, technical high school. I'm a self-employed electrical contractor in the town of Beacon Falls, providing responsible, skilled and courteous electrical services and solar energy systems since 1994.
I'm here to speak and oppose 6337. I am opposed to the limited license in the state of Connecticut for PV-1 and PV-2. Please consider sunsetting this license.
I've proudly earned my E-1 unlimited electrical license through the state of Connecticut's educational system by 720 hours of classroom training, working 12,000 hours of on-the-job training with multiple exams, and I've worked hard to start and sustain an electrical contracting company.
The sixteen state technical high schools train and educate students towards an electrical license that includes solar PV. By earning an electrical license, students are provided the base knowledge of a risky trade. I have had my license since 1989 and still learn the trade and practices -- trade practices every day.
The technical high schools in Connecticut install -- are installing energy buildings to promote solar in their electrical curriculum. I believe that a company that would like to install electrical apparatus in accordance with the National Electrical Code, Article 690 has been in the National Electrical Code since 1990 -- since 1984 and is nothing new to us electricians, and I wanted to throw that in there.
I guess what I'd like to say is I'd like to sell you on reading my testimonial, okay, and the base knowledge of the National Electrical Code I learn every day, and I brought Nick along to shadow me and for you to ask any questions because he's pretty much innocent, you know, and he won't -- he won't lie to you, you know, and that's the reason I brought Nick today because I believe that the base knowledge of the electrical trade -- I mean, if I wanted to wire gas stations, I just don't go for my E-1 and then go out and wire gas stations. I go for my E-1 and take other courses to dictate the National Electrical Code and to learn more about that subject.
I am an eligible installer through the Connecticut Clean Energy Fund, and we obtain our -- we obtain rebates for our customers, and I think -- I think you should read my testimonial clearly, and I want to sell you on it because that's -- it's very important to have a base knowledge for our younger generation in Connecticut because when the money goes, solar goes, and all of these young children or young adults that are in the PV industry have to go with it or find another occupation.
E-2 licenses are the only way to go. Thank you, and if there's any questions for Nick or I, we would be happy to answer them.
SENATOR DOYLE: Thank you. Any questions from Committee members? Chairman Taborsak?
REP. TABORSAK: Thank you, Mr. Chairman, and thanks for your testimony today.
Can you -- I think you said that you also have a PV-1. Is that correct, sir?
BRUCE ANGELOSZEK: With an E-1, I am able to install PV like TV, and we -- a long, long process through the Connecticut Clean Energy Fund to obtain rebates for our customers, and we are eligible.
REP. TABORSAK: Do you know enough about the training and study that a PV-1 goes through to speak about, you know, an opinion on whether or not they have the experience and training to make a connection to a panel? That's really -- that's really the issue I'm zeroing in on is connecting to a panel. Can you offer an opinion on that at all?
BRUCE ANGELOSZEK: Excellent, excellent question. Well, since the solar article 690 has been in the National Electrical since 1984 -- and everybody speaks of home, you know, residential hook-ups. With the PV-1 and PV-2, you can go into a commercial/industrial building where there's many obstacles and risks for an electrician even, so by granting them a license, a limited license to go into a home, you're actually granting them an industrial and commercial license as well, and that's where it gets very, very dangerous, and the training is half the time that of an E-1, so basically you need a foundation, and by creating a limited license, I believe the foundation is made on ice and will melt.
REP. TABORSAK: Well, I appreciate your testimony on that. Basically, what I'm getting from you on this issue is that you just think they don't have enough training in the general sense in the electrical code in order to make a connection to a panel? Is that what you're --
BRUCE ANGELOSZEK: Not at all. What I'm saying is -- I lost my train of thought, but yeah, that's fine.
What I'm saying is if someone wants to install electrical apparatus, they should have an electrical license. Our neighbors in Massachusetts are the same way. They don't allow PV licenses Electrical contractors are the only contractors that can install PV in the state of Massachusetts and other states as well.
I'm not saying they don't have the training. I'm saying if they want to earn their licenses like everybody else, they should earn them and align themselves with the electrical trade, and it is an electrical -- it is an electrical apparatus that they're installing.
REP. TABORSAK: Okay, great. Thank you for your testimony.
BRUCE ANGELOSZEK: (Inaudible) answered your question.
REP. TABORSAK: Well, the issue of a -- you know, we're not -- we're not looking at doing away with the PV license, and I think you're making an argument for that, but you have been helpful, and we will absolutely read your testimony, and Nick, good luck with your apprenticeship. I hope things go well for you there, and thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Nick, wait a minute. You got out of school today, so you do have a question coming your way from Representative Nicastro. Representative Nicastro, take over.
REP. NICASTRO: Thank you, Mr. Chairman. Nick, could you get yourself closer to the mike, please? I figure, you know, if you took the time to come here, then you'll get a chance to speak for a moment.
Do you feel the training that you're getting right now -- I believe you have -- how long have you been getting this training? How long have you been there?
NICK DELMORO: For the past four years.
REP. NICASTRO: I'm sorry?
NICK DELMORO: For the past four years.
REP. NICASTRO: Four years?
NICK DELMORO: Yep.
REP. NICASTRO: And you feel -- do you feel that they have covered everything basically that you need to know to pursue this for a lifetime career?
NICK DELMORO: Yeah. Well, it's basic. You start off with all the basics, and then all you're doing is moving farther and farther and more into the trade, and then after that, there's so many hours you have to complete, and that's just going to help you keep further in your education to obtain what you want. (Inaudible.)
REP. NICASTRO: Are you tested every so often?
NICK DELMORO: Pretty much once a week, and then as like myself, I'm always reviewing because there's always something new to learn. There's always upgrading the code and what-not.
REP. NICASTRO: And, as a young man pursuing this career, do you feel that this bill is not helpful? Do you feel that this bill would be more harmful than helpful?
NICK DELMORO: Well, coming from -- like I'm doing all this training to obtain my E, E-2 license, that's going to take all aspects, and then after obtaining this, you can move to doing different things in the trade, different like you were mentioning, gas stations, but before you do that, you have all the basics and know everything about it, and then you can move on further in your procedures with everything else, so I'm not -- I'm not opposed to this bill. I'm opposed to it.
BRUCE ANGELOSZEK: You're not opposed.
REP. NICASTRO: Son of a gun. Thank you very much, young man. Thank you, Mr. Chairman.
SENATOR DOYLE: Okay. Thank you for your (inaudible). Maybe you can get back and catch the last class today. Skip lunch and go catch it. I'm sorry, Lonnie. Gentlemen, Nick? Gentlemen, sorry. Nick, come back. Sorry. Senator Reed has a question. I apologize.
REP. REED: Thank you. Thank you, Mr. Chairman.
I just had a quick question. Is -- when you pursue your dream of being in this business, do you see solar being a part of it as well? Is that something that interests you as a young man these days?
NICK DELMORO: Definitely. I think there's a --
REP. REED: And, will you pursue getting the PV-1 and 2 along with, you know, the E-1, 2 and 3?
NICK DELMORO: They all start out going from the E-2, and then I go for my E-1 which holds the PV-1 (inaudible).
REP. REED: Great. I think it's great. You obviously have a very good mentor there, and I think it's great that you're going into solar and renewable. That's terrific.
NICK DELMORO: Thank you very much.
REP. REED: Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Thanks, Nick, thank you. Senator Prague, please? Senator Prague is going to speak. The next speaker after that is Martin Acevedo, Don Vaccaro, Bob Muccino, Mary Jane Fax. Senator Prague?
SENATOR PRAGUE: Thank you, Senator Doyle and Representative Taborsak and members of the General Law Committee. Thank you for this opportunity to testify on the Senate Bill 911 that you have before you. If you wait a second, I'll put my 'glasses on to see what I'm doing.
The issue in this bill about the registries and them placing people in the homes of the elderly to take care of the -- to take care of them, and then at the end of the year, the elderly person is required to pay all the state and federal taxes, it is a problem.
This bill is better than nothing because what's happening now is that the elderly person is not notified in any way that they are going to be responsible to pay these taxes. So, this bill mandates that the registry gives the client or the client's relatives the notification that they're responsible for all the taxes and the insurance.
It would be my preference if it is possible -- and the Committee on Aging has a similar issue that we're trying to deal with -- is to mandate that the registries consider these people as employees and pay the taxes and also do criminal background checks on people that they send into the homes of elderly people.
I think any organization has a responsibility to the elderly clients that they're trying to service to send people in who have been, number one, checked out, and, number two, to charge whatever is appropriate, but that they should pay the taxes and the insurance. It's easy to just have a phone and somebody calls you up and says, oh, I'm looking for work, and they say, well, go to Mrs. Smith's house for a week or two; she needs somebody to come in; she may need you even longer, I don't know, but go to Mrs. Smith's house and take care of her.
It makes me extremely nervous, so I would ask this Committee in your process of discussing this bill to see if you can adjust it in some way to make the registry do a criminal background check on the people that they're sending into the homes of the elderly and to also pay the taxes and the insurance that's required.
So, having said that, I thank you for this opportunity. This is a very serious issue. I'm hoping that you can work out some language that will be appropriate.
SENATOR DOYLE: Thank you, Senator Prague. I'm going to ask you some questions. I usually don't ask first, but I'm going to ask. Because you're a colleague, I will.
Senator Prague, your propose -- your proposed amendments, the thing is wouldn't that take away a menu option for our seniors in the sense that if you're basically converting -- if we were imposing on registries the duties to hire their, you know, their referenced individuals as employees and do criminal background checks, isn't that simply basically eliminating registries as a menu option for a senior?
You may -- you may think it's an option they shouldn't have, but do you think that's worthwhile, eliminating that as an option? I'm just curious.
SENATOR PRAGUE: I don't think that the option they have now just to send anybody without knowing anything about them and also throwing the responsibility on the elderly person to pay all the taxes and whatever else is required, I'd rather see them not have that option than to have the option the way it is.
SENATOR DOYLE: Okay. Thank you, Senator. Any other questions? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chairman. Good afternoon, Senator.
SENATOR PRAGUE: Good afternoon.
REP. REBIMBAS: This is a learning experience for me on this topic, and I think just to kind of piggyback a little bit on the Chairman's question, are there currently companies out there that have as employees homemakers -- yes, homemakers that the elderly or anybody else can elicit them for services?
SENATOR PRAGUE: Yes, there is. There are homemaker and companion agencies. Then we have CCI that also offers home care. And, I think that you're raising, you know, an issue that is of concern. Frequently people don't know where to go to get these services, and that's something else we have to work at, to make the knowledge of what's available, get that out there so that people who need home care -- and home care services are where we're really going to keep people out of nursing homes.
My concern is that you can't just send in anybody and then dump the responsibility of paying the taxes onto the elderly person.
REP. REBIMBAS: I certainly agree with you that it is, you know, obviously concerning in that regard. I'm happy to hear that there are other companies, that there are options, then that the person would be well informed, that a media background check has been done, and that they are an employee, and that the taxes and all of that stuff is being done by the company, and the person has the option to go to the company.
Do you feel that with the registry, assuming that the registry stays in place, are you -- are you aware of any information or warnings that the registry provides the person who contacts them, is it clear enough to them that the person that they're referring to their home has not possibly had a background check, and is it clear to the person who's enlisting the registry that, again, there are added costs that then the consumer, the elderly person, is going to have to obviously be faced with?
SENATOR PRAGUE: I have -- Representative Rebimbas, I have personally not had any dealings with the registries. I'm aware that there are registries and that if somebody wants a job taking care of elderly people, if they call the registry, they're on a list, and if an elderly person or a family member calls in and says I need somebody to take care of my mom, that the registry provides that person.
It's my understanding that currently there is no information given to the family member about the responsibility of paying the taxes. It's also my understanding that there is no criminal background check required by registries, so, you know, even though registries may serve a purpose, they have to do it in the right way. It's too risky not to.
REP. REBIMBAS: I would have to agree with that. It's unfortunate the registries are not providing that information and making it clear, so thank you again for your testimony.
SENATOR PRAGUE: You're welcome.
REP. REBIMBAS: Thank you, Mr. Chair.
SENATOR DOYLE: Thank you. Any further questions? Seeing none, thank you very much, Senator Prague.
SENATOR PRAGUE: Thank you.
SENATOR DOYLE: I'm sorry. Representative Baram. I'm sorry.
REP. BARAM: Thank you, Mr. Chairman, and thank you, Senator.
In looking at this proposed bill real quickly, one thing that seems to be missing is the definition of a registry. In the definitional section, there's no reference that I see made to it, and then in the body of some of the language, it talks about failure of an agency that acts as a registry, and I'm just wondering do we know the difference between a registry and some other kind of an agency? Is there some sort of custom or tradition that defines or separates those two operations?
SENATOR PRAGUE: No, Representative Baram. I truthfully cannot answer that question. Now, I know that the homemaker/companion agencies are registered with the Department of Consumer Protection. I am wondering whether the registries are registered with the Department of Consumer Protection. I don't know.
REP. BARAM: Thank you. I'll look into that further.
SENATOR PRAGUE: Thank you. Thank you.
SENATOR DOYLE: Thank you. Any questions, further questions for the Senator? Seeing none, thank you very much, Senator.
SENATOR PRAGUE: Thank you.
SENATOR DOYLE: The next speaker is Martin Acevedo, then Don Vaccaro, Bob Muccino, Mary Jane Fax, Jenn Jennings. Martin? Thank you.
MARTIN ACEVEDO: Good morning, Senator Doyle, members of the Committee, my name is Martin Acevedo. I'm the General Counsel of Companions & Homemakers, a 20-year-old homemaker-companion agency registered with the Department of Consumer Protection. With ten offices throughout the state of Connecticut, our company cares for over 2,700 elderly consumers and employs approximately 2,300 caregivers.
In 2006, our company worked very closely with the General Assembly in crafting Public Act 06-187, which was the first statute regulating the home care industry in Connecticut. Today, we are pleased to testify in support of Senate Bill 911, which is a much needed complement to that statute.
Senate Bill 911 is designed to protect elderly home care services consumers and home care workers by requiring agencies that follow the registry model to make certain disclosures concerning responsibility for payroll taxes and employee status to the consumer and to the worker.
A registry is a type of homemaker-companion agency that treats its workers as independent contractors in order to avoid having to pay payroll taxes, unemployment and workers' compensation insurance as well as Medicare and Social Security contributions.
Consumers who contract with registries are asked to make two separate payments every week for services rendered. One check is payable to the worker for all hours worked during the week. A second check goes to the registry for its fees, usually a pre-determined charge which is multiplied by the number of hours worked by the caregiver during that given week. The problem is that the registry neither takes out the taxes nor makes payroll contributions, nor does it advise the consumer of his duty to do so.
Registries do not see themselves as employers. The problem is that someone has to be the employer of record of that worker. Unbeknownst to the elderly consumer, any time the consumer hires one of these registries to provide home care services, it is the consumer who winds up becoming the employer of record in assuming the responsibility to withhold taxes, provide workers' compensation, pay unemployment contributions and match Social Security and Medicare deductions. The consumer, of course, has no idea that he or she just became what we call an accidental employer largely because the registry has negligently -- and in some cases intentionally -- failed to disclose the consequences of that arrangement to the consumer.
And, at the end of the day, everyone is a loser here. The consumer has unknowingly become the employer of record, and eventually he or his estate will face substantial liability for unpaid taxes; the worker has been cheated out of benefits and contributions; the state of Connecticut has lost millions of dollars in this underground economy, which a prominent University of Connecticut economics professor, Dr. William T. Alpert, estimates results in billions of dollars in losses to the state on an annual basis.
This bill aims to remedy that momentous problem. It requires registries to provide consumers and workers alike with a notice written in clear and unambiguous language, identifying which party is responsible for taxes, which party is the employer of the home care worker, and what are the potential legal and tax implications consumers can face if they are found to be the employer of the home care worker.
This bill is about truth in advertising in the home care industry and makes good law. The bill is cost neutral, and the bill is consistent with Connecticut public policy against intentional misclassification of workers. With respect to this last point, I would respectfully ask the Committee to add a provision making a registry's intentional misclassification of its workers a violation of the Connecticut Unfair Trade Practices Act, CUTPA.
We respectfully request the Committee to vote favorably and make Senate Bill 911 the law of the state of Connecticut.
SENATOR DOYLE: Thank you.
MARTIN ACEVEDO: I welcome any questions.
SENATOR DOYLE: Any questions? Representative Baram?
REP. BARAM: Thank you, Mr. Chairman.
So, you're here supporting Senate Bill 911.
MARTIN ACEVEDO: That's right, sir.
REP. BARAM: But, are you advocating the same kind of an amendment that Senator Prague was suggesting where the registry be required not only to give the notice you're speaking of, but to pay taxes and do background checks in addition, or are you -- is your agency and service satisfied with just the reporting requirements?
MARTIN ACEVEDO: Personally and as an attorney, I feel that the registries, they should pay the taxes. This bill, however, is -- doesn't take that step. It just takes a more conservative step which is as a matter of consumer protection the right thing to do.
You tell the person, look, this is what could happen; this is -- these are the potential responsibilities and obligations. You just don't tell the consumer don't say anything; you just don't instruct the consumer that everything is going to be okay, don't worry about the taxes, which is what these registries do in the course of their daily business.
So, you know, what I would take as a more conciliatory approach, I guess, which is maybe not necessarily converting the bill into one that would, you know, rule these employees as employees as a matter of law, but I would respectfully request that this provision making an intentional classification of workers a violation of CUTPA. I think it can go a long way to curb what to us is basically an unscrupulous set of practices.
So, if a change is going to be made to this -- to this law, to this bill, I think it should be the section concerning CUTPA. And, also, it is our position that registries as a subset of homemaker/companion agencies, they are required to conduct background checks or comprehensive background checks under current law.
But, I just wanted to raise a point in response to a point that you had raised with Senator Prague. There is a registry definition in the proposed bill, and it reads, if I may: Registry means any person or entity engaged in the business of supplying or referring an individual to or placing an individual with a consumer to provide homemaker or companion services provided by such individual when that individual providing services is either, A, directly compensated in whole or in part by the consumer or, B, treated, referred to or considered by such person or entity as an independent contractor.
So, the definition is there in the proposed bill.
REP. BARAM: Just lastly, does an agency, a registry have to register with the Department of Consumer Protection?
MARTIN ACEVEDO: They should.
REP. BARAM: But do you know if there's any mandate now under law to do that?
MARTIN ACEVEDO: Construing the law in the manner most favorably to the consumer, they should register. If they are providing homemaker and companion services, they should register, and I know that some of them have registered. There are 360 homemaker and companion agencies registered with the Department of Consumer Protection in Connecticut, and I know for a fact that various registries are registered as such, but I cannot make a representation that all registries have complied with the current law, which is codified at Chapter 400 of the General Statutes.
But, they should register. They fall under the jurisdiction of the Department of Consumer Protection.
REP. BARAM: Thank you very much.
MARTIN ACEVEDO: You're very welcome.
SENATOR DOYLE: Thank you. Any more questions from the Committee? Seeing none, thank you very much.
MARTIN ACEVEDO: Thank you.
SENATOR DOYLE: The next speaker is Don Vaccaro followed by Bob Muccino, Mary Jane Fax, I believe, Jenn Jennings and David Fay. Don Vaccaro?
DON VACCARO: Good afternoon, Senator Doyle and Representative Taborsak, and the rest of the Committee. I'd like to thank you for allowing me to speak.
Just to give you some background on my company, TicketNetwork, we're located in Vernon, Connecticut. We employ approximately 300 people there. We sell both software for the secondary ticket market. We also sell software for the primary ticket market, so we're actually in both markets that this bill is about.
This bill's a great bill. It gives customers a lot of choice, and it's choice that the customers and consumers really want and really need. This is an act for consumers, and I really don't want to go through my written testimony, you have it there, so what I want to try to do is give you some color, some history on why this bill is here and just address some of the statements, I guess, that Keith Sheldon made. I'm not exactly sure who he is or where he works, but I just want to clarify that New York state has the same provision that is in this bill that restricts primary sellers from restricting consumers to trade in tickets.
What that means is primary sellers can no longer sell tickets to New York consumers where they can't trade those tickets or give them away or something like that, and it's really interesting how that came about in New York, and that has not hurt the New York entertainment market at all. In fact, Madison Square Garden came out and supported that provision. Yankee Stadium did. Radio City did. The Nederlander organization and the Schubert organization all came out supporting that in a public hearing that they want consumers to have the right to freely transact and give their tickets to everyone.
The Schubert organization was very adamant about that point, but the history of that was if you go back to an arts and cultural fair hearing in I believe it was 2005, Bianchi said to the legislators, said -- for example, if Representative Esposito wanted to give Senator Doyle a ticket that Representative Esposito had, he'd have to pay the Yankees a fee.
The Yankees wanted a fee every time a consumer transacted or gave a ticket from one person to another, and the legislator said are you -- you're telling me if I wanted to give my friend a ticket, you'd have to give us a fee; well, not you, Senator, but anybody else, and that really set him off, and that's when that original provision came in.
If we talk about, you know, probably there's another provision in the bill that says five percent of the tickets can be held back, no more than five percent of the tickets can be held back. Well, as Keith spoke about, we're talking about -- there was a lot of talk about Miley Cyrus when she came to Connecticut the first time. I can go into those questions later if you want, but anyway, I think this bill is perfect for --
SENATOR DOYLE: Mr. Vaccaro, I think there will be questions, so don't worry. You're going to have an opportunity.
DON VACCARO: Thank you.
SENATOR DOYLE: You can try to summarize, but you'll get other questions, I'm sure.
DON VACCARO: Great. I think this bill, I think every aspect of this bill is absolutely in consumers' best interests, and if you ask any consumer out there, what do you think about this, what do you think about this, friends and relatives, they would say yes, I would like that provision.
So, it's not really what the industry people say. It's really what the consumers will say, and if you ask a consumer, they will want those rights. No consumer wants to be restricted on any product that they sell, whether it's a -- if you want a car and you can't resell it because you signed an agreement that you have to sell it back to the dealership, they don't want those restrictions.
So, thank you for your time. I'll be glad to answer any questions.
SENATOR DOYLE: Thank you. Any questions from Committee members? Senator Kissel?
SENATOR KISSEL: How would this bill impact the sort of paperless ticket, the evolution that's going on in the country?
DON VACCARO: Well, I could be quite honest with you. This is -- the paperless ticket evolution isn't so much an evolution. It's really a marketing strategy.
Dan Gilbert who runs the Cleveland Cavaliers has a company called Vara-ticks as well as Ticket Master is selling paperless tickets as well. Part of the thing with paperless tickets is I don't think anybody in the primary or secondary market has a problem with paperless tickets. We were all about technology; we're all about innovation. What we're against is we're against that the paperless ticket company would take away the rights of the consumer to give that ticket to anyone they want or trade that ticket with anyone they want or sell that ticket to anyone they want, and the live entertainment industry has really gone to an all-time low by establishing four prices where consumers can trade.
So, what they're saying is if you buy a ticket and the face value is $100, okay, and you want to sell it for $50, we won't let you do it. You have to sell it at least for $100 so you don't cannibalize our artist and our act, and our act doesn't look bad, so we have no problem with paperless tickets. Our issue is transferability, and that's what consumers want. They want transferability with the tickets.
SENATOR KISSEL: And, on the Taylor Swift sort of sell-out where she indicated that she wanted the tickets sold to her fan base first or fan club and then to another section, the VIP's and the -- the example, I guess, was the Xcel Center and then to the general public, I mean, would this bill prohibit an artist from saying I want this initial offering to go to X first, Y second and Z third?
DON VACCARO: Interestingly, last year the bill that we had had a -- had a transparency clause in it, so at least if Taylor Swift wanted to do that, all she had to do was tell consumers before her tickets went on sale, so consumers don't line up at the box office thinking that the Xcel Center has 16,000 seats they're going to sell to the public, and they go there, and there's only a couple of thousand seats, if even that.
We have, I believe -- and I'm not sure that there's either case law or something about that with supermarkets that hand out flyers, that they have products on sale, and they put the limited quantities in that they have, so I think the same thing should go with the entertainment industry as well, and I think whatever language you folks feel is good, I think we're completely amenable to working out language that addresses that issue, and it may be it isn't the specific language that's in this bill.
SENATOR KISSEL: And, my last question with the indulgence of the Chair is it's okay for me, and if you do some things -- I mean, New York is the dog that wags the tail. I mean, if you're not going to play in New York, you're giving up a huge market, so I can understand how the performers and the artists, they're going to do whatever New York says you have to do, but if there's a choice and the choice is skip over Connecticut or not, the argument being made is that passage of this bill would actually discourage some performers from coming to Connecticut and thereby hurting a lot of the places where they might perform.
DON VACCARO: Okay. I respectfully disagree with that, and let me just share with you my industry knowledge. It's not only -- I think you're specifically talking about one or two venues and New York City is the place to go, okay?
But, they have a choice. They can go to Newark, New Jersey, which is a brand new, beautiful arena. It's considered the New York market, the Ozog Center; upstate New York, Albany, Buffalo, Rochester, Syracuse, it hasn't affected it at all, and those are definitely not must-play markets.
So, I think it's a fallacy that artists won't do this, okay? There's a lot of artists when they're brought to task on this have a lot of issues with justifying their position on paperless tickets, and I'll give you a perfect example.
When Miley Cyrus was doing paperless tickets for the Hartford Civic Center, she was selling tickets for $50, but you can go through her Ticket Master's premium seat, and you can buy the same ticket for $300, and it was transferable, so she had a bad argument against her. She also on a previous tour before that, the first one when she came here, she was auctioning off tickets. In the front rows, they were going for over a thousand dollars each, so it's really about market control, and the artists that have been pressured with it -- and a lot of artists are backing away from the paperless ticket stance -- not only because of those issues, that it looks bad, but just that the consumers don't want them.
In fact, one of the major points was in New York. What happened was John Mayer was having a concert at Madison Square Garden. It was the same night as a snowstorm. People from outside Manhattan couldn't get in. They couldn't get in to see the show, and they called up. No, you can't resell them, because what they did is they switched off the ability for folks to resell the tickets because they wanted to sell the box office tickets instead.
A lot of those folks came, complained to their legislators, and the legislators listened, and they passed that, and the interesting thing was that all the buildings sided with those consumers and said those consumers need that choice; it's a bad policy; I'll be glad to get it to you. They're on videotape saying it, so they can't say that they didn't say it, and they said it's a bad policy, we don't like it, we want tickets to be transferable.
SENATOR KISSEL: Thank you. Thank you, Mr. Chair.
DON VACCARO: Thanks.
SENATOR DOYLE: Thank you. Any more questions? Representative Reed?
REP. REED: Thank you, Mr. Chairman.
Isn't there an underlying concern here about who has these tickets to begin with that when people -- the box office opens and people are primed this is a hot concert, or whatever, and they really want to get tickets, but already resale companies have already gobbled up big blocks of them, and now you've got to deal with them in the after market and pay higher prices? Isn't that one of the things that's going on out there in the entertainment business?
DON VACCARO: You know, in -- I would parse out the entertainment section. The problem has three different genres. You have sports, concerts and theater, all right?
In the sports market, we actually run a trade show called Ticket Summit in New York and Las Vegas every year where we get NBA teams, NHL teams, NFL teams coming right there to sell their tickets to ticket brokers, and what they're doing now is ticket brokers are acting as a consolidator, getting tickets and selling them for less than face value.
So, the sports market and the secondary market are basically on the same page. Many teams have secondary market providers. Even though they have official secondary market providers, they no longer try to restrict their season ticket holders from selling the tickets on any other marketplace.
In theater, there are actually secondary market providers who are now investing in shows and becoming producers of shows in New York, and there's a very open relationship with the theaters who have to sell tickets six and twelve months in advance so a show can have legs to play that long, so there's a very good relationship there.
With the concert market, it's kind of a world of its own because you have probably the largest entertainment company in the world -- that's Live Nation Ticket Master -- where you have the largest management, the largest promoter, the largest ticketer, ticketing company, and probably the largest venue operating in the world all rolled into one.
There were a lot of antitrust hearings on it, on the capital when they were merging, and there's a lot of folks fighting for who gets that ticket, and it's very important to know that those promoters -- Live Nation has a very active secondary market component to it, and they're absolutely Xcel's partner. They own tickets now; they own all access; they own about three or four secondary markets like where they extract a lot more than face value of the tickets.
So, that's the primary company who has access to all the tickets before the show goes on sale, able to sell those tickets in the secondary market without ever selling them to consumers first.
REP. REED: And, I think that's the thing we're all concerned about here is what happens to the consumer in this new world of the secondary market getting there first. It almost feels like a re-education system for consumers that they just give up on the primary market and go directly to the secondary market, and if they really want to go, they'll pay what's asked, and that's how it all works.
DON VACCARO: You know I think that's a good point, and I think I can share with you two interesting bits of information.
Forrester Research did a report on the secondary market about three or four years ago. They said in that report, being a neutral third party, that 40 percent of the tickets on a secondary market were sold either at face value or less than face value.
We've prepared a chart which I'll give to each of you members here just showing how the secondary market has lowered the price that folks pay on the secondary market just because it's so much open now. It's legal in almost every state. The only real state that has a problem with it is Arkansas, and even they are rethinking it, even that state is rethinking it, and they want -- nothing against Arkansas, but even they want to lower -- but ticket prices have substantially gone down, you know.
To give you an example, in 2006 the average concert ticket price sold in the secondary market was $164. In 2010, it's $127, so it's a significant decrease. It's not only a decrease. It's concerts, sports, Broadway is a separate category in theater in general. All of those prices are going down because of the competition between primary and secondary, and what makes secondary a little bit different than primary? Secondary does all their own marketing, so now you get a lot of primary folks who like dealing with the secondary markets, and we get consumers who say, look, I'm going to go to the secondary market first, because you want to know why? I just want a choice.
We sold well over $500 million worth of tickets last year on our exchange. We're going to probably sell well over $700 million worth of tickets this year on our exchange. It's because consumers like it. They like the choice. It's very transparent: Here is what you pay; you don't need a credit card to swipe; you don't need any restrictions; you don't have to buy other merchandise; you don't have to buy a travel package; here's the ticket; here's the price; and, many, many times you're going to buy that ticket a better seat than what's available for less than face value.
REP. REED: Thank you very much. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any -- Representative Baram?
REP. BARAM: Thank you, Mr. Chairman. Excuse me.
Question: How does the secondary market sell a ticket below price, below market price, because I assume that somebody originally purchased this ticket for the going rate, whatever the venue was offering them for sale, so you get the ticket somehow. How do you then market it at a discount price?
DON VACCARO: You know, that's a great question. I don't want to go through all of our businesses, but we also have a business that finances entertainment transactions. Over the last week, I have a call to finance a broker who's buying from a major league sports team about three or four million dollars worth of tickets. He's buying those tickets at 45 cents on the dollar of face value, and he's passing those on to consumers.
Now, the reason why the team is selling it is they just want to get the money in now, and they just want to be sure that they can do it. That's one way they can do it.
In theaters, we're often allowed to buy discounted tickets and pass those prices on.
Concerts, what you see is you see actually somewhere in the neighborhood of probably 30 to 40 percent of the concert tickets that are actually bought aren't used by the person who bought them because they find out that they can't use them, so there's a lot of times that there's a lot of tickets in that that either brokers misinterpret the market value of that show, market conditions change, weather conditions change, or something like that, and they get -- and they sell those tickets for less.
Other times, they're able to get tickets at a substantial discount of what the face value is. They're able to pass that on, and so more and more we're seeing this market being a lot more efficient; we're seeing brokers buy tickets for less than face value; and, we're seeing the annual gross margins of brokers -- like a good gross margin for a broker on a yearly basis is about 25 percent after you take all of the pluses and minuses. Brokers that I'm intimately familiar with, it's more like 18 to 22 percent.
So, the answer to your question is a lot of those discounts are brought on by the buying power of brokers able to buy multi-million-dollar packages worth of tickets, get them at a discount, and pass those discounts on to the consumer.
REP. BARAM: I can understand when the sports team or the venue decides to sell tickets en masse at a discount just to fill up the seats, but I have a vague recollection that last year when this bill came before us, the other side portrayed the concern that the secondary market would try and purchase these tickets en masse without disclosing who they were, and there was something in last year's bill that had -- there was a name to it -- had a code or something so that it would prevent that from happening, somebody just going on the Internet and buying up 500 tickets all in one swoop and then selling those on the secondary market and doing it because they were controlling a greater percentage of the tickets.
I don't see that in this bill, but is that -- is that something that happens in the secondary market where you will go to a venue, have people in the organization buying up tickets so that now you control the tickets that are marketable and perhaps have more tickets for sale than the venue itself?
DON VACCARO: I would think that -- just as a matter of logic, nobody can have more tickets than the venue because the venue ultimately controls every ticket that's sold and who it's sold to through the contractual relationships.
You know, I would say that last year the big issue with venues, if I'm correct, any venues that came here was they did not want to disclose to the public who they were selling tickets to or how many tickets they were selling to the public. That was the big issue, and I think that's basically off this bill, and there's a 5 percent clause and, again, I think -- I'm amenable, and I think consumers are amenable for anything that gives them just a little bit more transparency so they know what they're getting into as far as a purchase scenario of what's going to be available. Are the tickets going to be available because if it's not, I'm not going to get on line -- you know what I mean -- or I'm not going to even try if there's not tickets available.
So, I think that was the big issue that some venues had last year with the bill.
As far as the secondary market, it's been legal in Connecticut since 2007. I think the economic information that we get back says that prices go down all across the board. We've seen prices going down, and it has phenomenally good effects for consumers, and consumers have a lot more choice.
As far as brokers getting tickets and other people getting tickets to resell, I can tell you there's probably the biggest broker in the country is the manager of a lot of popular artists, and he sells the tickets all himself, so, you know, the concert world is a strange world, so --
REP. BARAM: And just lastly, it sounds awfully complicated with every state, you know, enacting their own laws and the possibility of entertainers bypassing a state if they don't like the laws that you've enacted. Has anybody approached this on a federal basis to create federal legislation to even the playing field among all states?
DON VACCARO: I think Representative Pasquale -- he's a Democrat from New Jersey -- proposed something a couple of years ago, and there were a lot of folks who were really ambivalent about it, thinking that it wasn't that big of an issue and they would just -- most folks in the industry were just -- were focusing whether the Department of Justice would enforce the restrictions on the Live Nation/Ticket Master merger, and I think that's where a lot of the efforts are because more people are very much afraid of a huge monopoly taking over the live entertainment business rather than anything else.
REP. BARAM: Thank you very much.
DON VACCARO: Thank you.
SENATOR DOYLE: Thank you. Any other questions from Committee members? That's it. Thank you very much.
DON VACCARO: All right. Thank you.
SENATOR DOYLE: The next speaker is Bob Muccino, Mary Jane Fay, Jenn Jennings, David Fay, Mike Silvestrini. Bob?
ROBERT MUCCINO: Good afternoon, Chairman Doyle and Chairman Taborsak. My name is Robert Muccino. I am a current licensed funeral director and embalmer in the state of Connecticut. I'm also employed by Service Corporation International and am a representative of the company here today.
I am employed as an area manager in Connecticut responsible for 15 funeral homes and a crematory the company is privileged to own and operate throughout Connecticut.
We serve the public at the most difficult loss -- at their most difficult time with a loss of a loved one.
I'm here in support for the Bill 6300, An Act Concerning Funeral Service Contracts, the partial collateral or complete assignment of an ownership of an existing life insurance policy for the purpose of funding a pre-arranged funeral service contract.
Also, I'm here today speaking as a consumer as well.
The main purpose of my testimony here today is to support the Bill 6300, the insurance assignment of policies for pre-arranging and pre-funding funeral contracts before the need arises for consumers in Connecticut. Our current statutes do not have any language provision to reflect the means using life insurance policies to pre-fund arranged contracts because it does not exist and, therefore, creates a major dilemma for consumers to safely fund their funerals in advance.
Also, this has created a wide variety of opinions across the state of Connecticut within the Department of Social Services. It needs to be clarified.
Currently, should a death occur without pre-arranging in advance, a consumer's beneficiary can assign a portion of the death benefit of the life insurance policy to cover funeral expenses for the deceased. Today more than ever consumers are living much longer. In fact, they are living well into their nineties. I personally have five family members in their nineties currently and I also read the obituaries on Monday. This past Monday there were five individuals well into their nineties that had died over the weekend.
Most of them are living on fixed income and retirement for 30 years or more mainly due to better living and modern medical care and technology that exists today. Some have, in fact, lived or outlived their family members and in some cases their children. These seniors are living in life care facilities, assisted living and skilled nursing care facilities essentially using up their assets to cover these expenses.
Most of these people have life insurance policies that they purchased some 30 and 40 years ago as a means to cover their funeral expenses upon their death, providing security to their surviving family members so they don't need to cover these costs. Most often these policies are paid up, meaning they're not paying any premiums any longer for the death benefit coverage.
Should an individual need Medicaid Title 19 assistance to cover their living expenses in skilled nursing facilities, there's an application process. Some of you may be aware of the spend-down process. Number one, they have to set up a pre-arranged funeral contract through a licensed funeral home in the state of Connecticut creating two contracts, irrevocable 5400 and a revocable burial space contract.
Individuals may only have a maximum of $1,600 in assets. They also may maintain a $1,500 life insurance policy.
The main issue today is should their life insurance policy exceed the maximum limit death benefit in the cash value combinations and assets, they need to cancel or revoke the policy to comply with the criteria. By cashing in the policy, the return is not the death benefit, much lower cash value to the policy. An example of an insured who purchased a life insurance policy some 30 years ago --
SENATOR DOYLE: Could you summarize, sir?
ROBERT MUCCINO: Sure.
SENATOR DOYLE: Thank you.
ROBERT MUCCINO: Finally, there is one certainty in life and that is we're going to have death. Consumers should have the right to finalize their wishes in advance in writing and use their life insurance policies that they have paid on for quite some time for the benefit of funding their funeral arrangements.
That usually is their only means. There is many individuals across the state that are having trouble financially, and they rely upon life insurance policies to cover their funeral arrangements, and if they can't use these policies as was originally intended, it creates a financial hardship to the extended family members.
SENATOR DOYLE: Thank you very much.
ROBERT MUCCINO: I welcome your questions.
SENATOR DOYLE: Any questions? Senator Kissel?
SENATOR KISSEL: Thank you very much, Mr. Chairman.
So, are you saying that we should change? From what I gather, it's like folks can only have, I think you said, $1,500 in life insurance?
ROBERT MUCCINO: Correct, if they need Medicaid assistance.
SENATOR KISSEL: Right. And, are you saying that we should change that standard to allow folks to have an unlimited amount of life insurance?
ROBERT MUCCINO: No. That's not what I'm saying.
If you take the policy -- for example, if they have a $10,000 policy, what we're looking to do is to propose having them assign ownership to the funeral home so that it would be exempt as being counted as an asset and it can only be used for a funeral.
SENATOR KISSEL: But, what's the -- I guess I'm wondering what's the top end? You said 10,000. Is there any top end limit?
ROBERT MUCCINO: Typically, most people in this age category don't have very large policies, ten and fifteen and $20,000. It's not -- we're not talking about million-dollar policies.
SENATOR KISSEL: All right. Let me try to be more clear.
I'm not familiar with what a funeral, a decent funeral costs nowadays, so I'm just wondering for my own edification if we had to sort of set a new limit, what would be in your mind an appropriate limit that would afford us, an individual, let's say they're in their nineties, a very nice funeral --
ROBERT MUCCINO: Uh --
SENATOR KISSEL: -- through their life insurance?
ROBERT MUCCINO: To cover the entire cost, you're looking at about $12,000.
SENATOR KISSEL: Okay. Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: The current limits under -- for Title 19 (inaudible) irrevocable or revocable contracts. They're already current law. We'll talk about that. Representative Baram?
REP. BARAM: Thank you, Mr. Chairman.
Quick question: If we were to do what you're saying, would this have any impact on federal reimbursement to the state of Connecticut?
ROBERT MUCCINO: Absolutely not. It has nothing to do with that.
REP. BARAM: And, is there any prohibition now that prevents somebody from assigning a life insurance policy?
ROBERT MUCCINO: There's nothing in place to do that pre-need. We can do it at the time of death. If an individual has died, they can certainly assign the proceeds to cover the funeral expenses, but on a pre-arranged funeral basis, there is nothing that they can do to comply with the Medicaid statutes.
The problem is that we're -- it's being done, but there's so many different variations across the state in the DSS offices of what they'll allow and what they won't allow. We're just looking to clarify it to make sure that everyone is on the same playing field, and they can pre-arrange and assign the policy in advance to cover their funeral expenses to their family members do not have to cover these costs.
REP. BARAM: Obviously, if somebody died, they can't assign the proceeds. You're talking about the beneficiary, the recipient of the life insurance proceeds assigning those proceeds to pay the funeral?
ROBERT MUCCINO: Yes, correct.
REP. BARAM: Okay. But, is there anything in state law now that prevents somebody holding a life insurance policy to make an assignment of those proceeds upon death?
ROBERT MUCCINO: It can be done upon death. It can't be done pre-need basis, and that's the real issue.
REP. BARAM: So in other words, your interest is getting the proceeds prior to death so you can hold onto them, put them in escrow?
ROBERT MUCCINO: Correct. So this way here, the family members do not have to cover the costs of their loved ones, and that's becoming a big problem. They have these policies, so they might as well be able to use them prior to their death.
SENATOR DOYLE: Thank you, and they do have to return any amount above 5,200 which is that irrevocable limit. That has to be returned to the state of Connecticut, so there is that safeguard for us for Medicaid, if the person died on Medicaid.
Any further questions? Representative?
REP. NICASTRO: Thank you, Mr. Chairman.
As we well know, there is still weekly policies that the debit collectors used to collect: John Hancock, Prudential, Metropolitan, all of them, and then you've got your monthly and then you've got your ordinary.
Now, policies, the small policies were 1,500, $800, and stuff like that. The policies today that they push out, especially if it's decreasing term or level term, those usually are $50,000, 70,000, 100,000 to cover more (inaudible), and final expenses.
What if I had a $50,000 policy? I sure as heck don't want to sign it over to you when I know my funeral is not going to cost $50,000. I'm speaking just --
ROBERT MUCCINO: Hypothetically.
REP. NICASTRO: How do we work that out with the consumer? I mean, they can't -- in other words, they have a policy. Do they have to put you on as a secondary coverage? Do you see what I'm saying? In other words, the funeral is not going to cost 50,000. If my policy is 50,000, I'm not going to sign it over to the funeral parlor.
ROBERT MUCCINO: And, I completely understand and respect your thoughts on that. The challenge is that we're most often talking about people that are in the Medicaid spend-down area, and they don't have $50,000 policies. Maybe there should be a term limit or a limit of what the face amount should be, but if they're on Medicaid, our language says that we would refund back the difference, and that is in the funeral statutes, so if the funeral cost is, we'll say, $12,000 and there is a $50,000 policy, we can't keep those proceeds anyway.
REP. NICASTRO: Okay.
ROBERT MUCCINO: We're not allowed to keep them.
REP. NICASTRO: All right. So, in other words, the person -- also, the person who is going to sign it over to you would have to be of sound mind at the time that was being done, whereas you know that could be contested in a court of law that they weren't, and how do you go about -- how do you go about sitting down with the family? No doubt there has to be somebody that's there that has to represent the family to make sure that their best interests are being served, too.
ROBERT MUCCINO: It's typically the power of attorney that's doing that, and certainly we would be going through that step by step with them. We are not proposing anything be done unscrupulous. We're looking to have this so that it allows people to use these policies to cover their funeral costs as the original intention.
Currently right now what happens is they have to cash in their policies. They could have a $20,000 policy face value, and the cash value could be 4,000 just for a hypothetical example, so they're not getting the $20,000 death benefit; they're only getting back a return of the $20,000, and they would use that to fund their funeral, so they're coming up short, and so what we're looking to do is to try to make it so that they can use the full value of the policy, the $20,000 of -- again, this is just for an example. Anything, a difference, would be refunded back to the state of Connecticut if they were on Medicaid Title 19 assistance.
We're just looking to make sure that the consumer can use what they paid for, they bought the protection, instead of the insurance company being the winner on this because the consumer paid all the premiums, the consumer is usually paid up, and the insurance company only has to pay 4,000 versus 20,000, and that's a tragedy -- a travesty for that.
REP. NICASTRO: That's if they were to cash in for the cash value.
ROBERT MUCCINO: Well --
REP. NICASTRO: That's what you're talking about to get the money back. That way they could also borrow on their life insurance policy.
ROBERT MUCCINO: We're not looking to allow them to borrow against it. It would have to be a clean policy because, obviously, if they borrow against it, then that may not cover the whole funeral cost, but, you know, again, the big problem that we are seeing trending in the wrong direction is the Baby Boomers are getting older, and so forth. You know, these policies are available. They have to cash them in to comply with Medicaid, and there isn't enough assets to cover their funeral expenses.
Oftentimes that financial burden is put onto their family members. In fact, if there is no assets, then it's going to increase the -- applying for the $1,800 death benefit to the state of Connecticut. That will certainly cost the state money. What we're proposing will not cost the state any money.
REP. NICASTRO: Thank you, Mr. Chairman. Thank you.
SENATOR DOYLE: Yeah. In the background (inaudible) Title 19, the state requires you to liquidate all your assets to pay it to the state including, you know, getting cash (inaudible), which is good for the insurance company, but in this case, the challenge we all face (inaudible) got to look at it. We had a similar issue last year with another piece of legislation. They said, well, there could be a loss because you're forcing them -- they can no longer cash it out, but then at the other end, they actually could be the beneficiary, they get the amount above it, so it's a challenge. We're going to have to have OFA look at it and see how they interpret it, but sometimes OFA looks at the short term which might be a loss, but in the long term, there may be a much bigger gain for the state.
Any further questions? Representative D'Amelio?
REP. D'AMELIO: Thank you, Mr. Chairman.
Just so I can clarify it in my mind -- because I know many people that refer to having insurance policies to pay for their funeral. It's very common within the Italian community, and I represent many people that I know have mentioned that to me.
The law prohibits them from turning over that insurance policy to you today to prepay for their --
SENATOR DOYLE: Thank you. Any more questions? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chair. Good afternoon, and my apologies if this has already been responded to earlier.
Just a quick question a little bit off the bill, but hypothetically speaking if this were to pass and someone were able to make those arrangements prior to death, what if something were to happen with the funeral company, bankruptcy, or something along those lines? What safeguards, if any, are there in place?
ROBERT MUCCINO: (Inaudible.)
REP. REBIMBAS: Okay.
ROBERT MUCCINO: (Inaudible.)
REP. REBIMBAS: Thank you.
SENATOR DOYLE: It may be (inaudible) situation where an insurance company (inaudible) when that person dies before you, it goes back to the estate, to the estate (inaudible) would get it in theory, but thank you. Any further questions from the Committee? Seeing none --
MARY JANE FAY: Thanks for letting me have time to speak. My name is Mary Jane Fay. I represent All Faiths Heating and Cooling. It's a company that I own in East Haddam, Connecticut. I'm also here today on behalf of the Plumbing, Heating & Cooling Contractors Association. I'd like to talk briefly about supporting Bill H.B. 6265, An Act Concerning Advertising By Non-Licensed Tradespeople.
I think that this is something that we're all familiar with to some degree. You can find in any local small newspaper advertisements from people stating that they're handymen and that they're licensed. They advertise that they can fix your toilet, fix your sink, they can do all kinds of repairs, electrical, and so forth.
What we'd like you to continue, there is broad support for this bill. In 2010, the bill was unanimously adopted by the Senate. In 2009, it was also unanimously adopted.
You know, what we're seeing too much of in our industry is companies, anybody can take out an ad in a book and hire, and one of the things that the plumbing and heating contractors, one of our primary goals is to help protect and serve the public, and so when people who don't belong doing license work when they advertise in newspapers, Yellow Pages and publications, it gives the public a false sense of security. They feel that if they see it in print, that it must be official.
So, what we'd like to ask you is that this become a misdemeanor if someone's advertising to do work if they're not authorized by a valid Connecticut license in that trade.
In my own community, I've seen instances where handymen have come in and installed furnaces. We'll get a no-heat call from the resident who is generally a tenant, and when we go down into the basement or crawl space, what we find is a horrific disaster of something that's been installed without any regard to the code, so this becomes a real danger when you're dealing with fuel such as oil, gas, natural gas, and part of you protecting the public and helping us protect the public would be to try to put a stop to these kinds of people.
So, that's one thing that I wanted to talk to you about today. Did you have any questions about that? Okay.
The other thing that I wanted to talk to you about regarding additional public safety is supporting S.B. 946, Act Concerning The Enforcement of Occupational Licensing Laws.
We support the goal of this legislation. In my testimony you can, you know, read all through it, but we'd like the state to increase enforcement of their existing occupational licensing provisions. The state's taken steps with this licensing, and we're appreciative of that fact; however, we'd like to see more policies and procedures that will effectively deter contractors coming in from other borders. We'll frequently see workers coming over from New York and other areas to do large jobs. They don't know our Connecticut codes, Connecticut where we're more strict and safety conscious than other areas.
I feel that this really hurts not only the industry, but it exposes consumers to unsafe conditions. It also short-changes young men and women like the apprentice who spoke. If other people are coming over, doing our work, these young people aren't getting their opportunity to meet their hours, and it's, you know, a dangerous situation for people to be in.
So, we enforce, you know, anything you can help us do to support this to prevent the deterioration and trickle-down effect from other workers crossing our borders.
In addition to that, I had a comment regarding 6337, the photovoltaic. We urge you to not support the solar workers doing any kind of electrical work inside the electrical panel. The only person who belongs in an electrical panel is a licensed electrician. There are far too many factors for -- any person, even though you might be familiar with your trade, these electricians in order to get that E-1, they've got eight years of working their way up through the ranks, so basically, they've got their doctorate in electricity, and I can't think of anyone who would want to have someone doing that kind of critical work in their home without the proper criteria.
SENATOR DOYLE: Okay. All right. Thank you. Any questions from the Committee? Seeing none, thank you very much.
MARY JANE FAY: Thanks.
SENATOR DOYLE: The next speaker, Jenn Jennings, David Fay, Mike Silvestri -- sorry -- Silvestrini, Stephen Wing and David Boomer. Jenn? Thank you.
JENNIFER JENNINGS: Good afternoon, Senator Doyle, and the General Law Committee. I'm Jennifer Jennings of the Connecticut Heating & Cooling Contractors Association. We are a trade association in Connecticut, representing over 135 companies, and there are a couple of bills that we are here on today.
First on the list, following what Mary Jane and PHCC had to say, would be the advertising bill. It has passed unanimously through this Committee as well as the Senate for the last couple of years. I'm not quite sure what it got hung up on. There is nobody in the industry to oppose it, so we do urge your passage of that bill as it would do nothing more than protect the consumer and allow licensed tradesmen to advertise the way they should be and handymen not to.
Also, touching base, I would like to make reference to an act concerning the enforcement of occupational licensing laws. The CHC and the companies that we represent are in support of this. We do want to see more enforcement; we do want to make sure that there's a licensed tradesman doing the work that a licensed tradesman should be doing.
Following that one would be an act clarifying -- let's see -- An Act Concerning Penalties For The Violation of Mechanical Contractor Registration Requirements, which is Senate Bill 867. The CHC opposes this bill as it is currently written. We are unclear. We have a few questions. I'm sure it is something that can be worked out amongst the groups who proposed it, but right now we definitely have some -- we feel that it's too broad and vague, and it just duplicates what the enforcement bill can do, so currently we do oppose that one.
While I am up here, I would like to also make reference to House Bill 6337, An Act Clarifying The Scope Of Solar Electricity Work. I know that currently makes reference to photovoltaic. There was reference made to solar thermal, and I think that applies in the same scope. We just want to make sure that photo-thermal licenses in that certification does not encroach on what a heating license should be doing.
Again, while making reference to that, Senate Bill 863, An Act Concerning The Licensing of Swimming Pool Installers, we are -- we have no concern with the language as it is currently written; however, we do want to make sure that it stays that way and does not encroach on a heating license as far as the heating systems of the pools are concerned.
SENATOR DOYLE: Thank you. Any questions? Senator Kissel?
SENATOR KISSEL: There seems to be some tension between the photovoltaic folks and the electrical folks, and you represent the contractors out there, and I'm surprised you didn't come down like with the electrical folks who really sort of said we don't want that bill at all, we hate that bill, and I didn't hear that from you, and I'm just wondering it's more nuanced than --
JENNIFER JENNINGS: The bill itself -- I mean -- it depends the way it's written. If it's going to -- I don't represent the contractors, the electricians. I represent the heating and cooling contractors, and that bill is specific to photovoltaic; however, if it said solar thermal instead of photovoltaic, I would probably be taking the exact same stand the IEC and the electricians are taking because that work should be done by a licensed (inaudible) holder, and if a solar thermal person who does go ahead and get their solar thermal license, an (inaudible); however, the (inaudible) would have its doctorate in heating, if you will.
SENATOR KISSEL: And again, I'm glad you clarified that because the electrical folks then aren't under your umbrella, but just from the information you may have gleaned over the years, I mean, if they've been doing this since 2005, have there been any accidents? Have there been any problems with them going into the box? It seems like almost like a turf war, and I understand both sides of the argument, but it's been a while now, six years, since that law was passed, and I'm wondering if there's -- was there any kind of incident that has brought us to this point, or do they have basically a good track record, and the concern is rather that the expertise really is with the electrical folks, and they're also not happy that the solar people don't have to have continuing education, whereas they do.
JENNIFER JENNINGS: I mean, again, I don't represent the electricians, but currently the photovoltaic, they do not have access to the panel. The way it currently reads, they have to stop, they cannot connect, so that's what this bill -- correct me if I'm wrong -- they are seeking to allow the PV a license to be able to connect to the actual panel.
SENATOR KISSEL: And I understand that, but it's -- but if the law was passed in 2005 and it's 2011, I can't believe that if six years went by and now they're complaining about that, I'm wondering if they were doing it and then somebody stopped them.
JENNIFER JENNINGS: It passed in the last session. The last session I'm pretty sure is where that came out of. Correct? Yes? That came out of the last session, so it's been a couple of months, and they did at that point in time want that, and everybody came to agreement, and it passed the way it passed because everybody was in agreement, and now it seems as if they want more, and the reason I note my thoughts on that is because the CHCC came to the agreement on the solar thermal license, that it is okay that they do the work -- you know, they can go ahead and get certified and become an ST license; however, not to encroach upon the work that you need more schooling and more education, which is what an S license encompasses.
SENATOR KISSEL: Okay. Thank you.
JENNIFER JENNINGS: Thank you.
SENATOR DOYLE: Thank you. Any further questions? Seeing none, thank you very much.
JENNIFER JENNINGS: Thank you.
SENATOR DOYLE: The next speaker, David Fay, Mike Silvestrini, Stephen Wing, David Boomer, Robert Shepherd. David Fay?
DAVID FAY: Thank you for allowing me to speak today. I'm David Fay. I'm the President and CEO of the Bushnell Center for Performing Arts.
Mr. Vaccaro was up here a little while ago talking about transparency and an act to protect consumers. Let's talk about transparency for a second.
Yesterday we went on to Google, and we Googled Next To Normal Tickets Hartford, and the top thing that came up was Mr. Vaccaro's Web site, not the Bushnell Web site where the show was performing at the end of this month or the end of next month. And, several others were in there, too, ticket brokers who buy their way to the top of Google searches.
We just did this. We presented this to you in written testimony. A 17-dollar balcony ticket was being offered for $120. Our 17-dollar balcony ticket had a three dollar service charge on it. Mr. Vaccaro's had a $47.20 service charge on it. The total package including all of the costs were nearly -- actually over eight times the amount if you bought the ticket from Mr. Vaccaro's Web site.
I'm not picking on Mr. Vaccaro. This is the example of what many on-line ticket brokers do. It's predatory practices. They take a public that is not really sophisticated yet in what's going on in the on-line world, they it's a convenience, they want a ticket, perhaps they're being hassled by their children to get dinner, or something else; they're looking at this Web site; they think that's what the ticket price is.
Nowhere on that Web site does it say, oh, by the way, you can buy this same ticket for $17, the exact same ticket that Mr. Vaccaro's company has not purchased. There's an inquiry that's done, and the ticket computer, his computer goes to our computer, puts the ticket on hold, and then sells it to the unsuspecting public.
We then have to deal with that patron when they come and they're looking for their front-row seat for $160 plus the 47-dollar handling fees, and they're livid over it.
We've also given you just a few examples of the literally thousands of on-line complaints about this kind of predatory practice that's going on.
Mr. Vaccaro wants a limitation of only 5 percent of tickets to be held back. That's because one of his software companies designs systems that can attack the primary box office, so on the first day of sale, the moment the tickets go on sale, the moment that switch is flipped, thousands of virtual buyers go on line. They're all his buyers, often grabbing as much as 30 percent of the available inventory. Then they weed through them over the next hour or so and take the very best tickets they can -- and this is on a hot show I'm talking about -- so they wind up then turning around and making those available at their own pace, watching the market, seeing where the price is, charging often five, six, eight, ten times, and that's on a hot show.
I also find it interesting that Mr. Vaccaro takes credit for the recession that's happened in the last several years. He pointed out to you the fact that the average ticket price for concert tickets is going down over the last few years. He and his fellow brokers would like to take the credit for that. Unfortunately, it has nothing whatsoever to do with ticket brokers. It has to do with the recession that we've all suffered. Everybody's ticket prices are going on as other prices are going down.
The reality here is that there is a group of wild West folks who simply don't want the public to know the truth. It is not the act. The act cares about their audience. Their audience and their connection to that audience is critical to their survival. They're the only ones who are keenly interested in that.
The venues who put millions of dollars into our venues have huge staff -- actually, I wish my staff was huge; it's not -- but we raise money in this community to keep the Bushnell up and open. We wrestle with these on-line brokers who grab these tickets. We actually see subscribers that look suspicious, and we go, what is this? We don't have the resources to track it down.
So, this issue of transparency, when you hear Mr. Vaccaro and other ticket scalpers -- let's call it the truth -- talking about transparency, that is the exact opposite of what they're talking about.
We have no problem with a subscriber of ours if they can't make a show selling their ticket to someone else. Generally speaking, I don't think those folks are selling the ticket. Most of them are giving it away. They're given to family or friends. They're not actually saying I'm going to sell it. We have no problems with that, never have. In fact, in certain circumstances, they'll call us and say I can't make the Tuesday night performance; can I swop for Saturday night? And, we'll go I can't give you the same seat because that's already sold, but sure, we'll swop. And, even in circumstances where they may be coming to the final performance of the show and there's a real serious problem in the family, or something, and we have contracts with the acts that demand that we don't refund without their permission. Many is the time we talk to the act and we say look, here's what happened, and they'll say okay, fine, give them their money back, or we'll -- if the act won't, we'll give them a credit to a future show at the Bushnell.
You look at the examples that we've given that we provided here, and it's just a little surface of the complaints about the secondary markets. They do not refund money.
SENATOR DOYLE: Okay.
DAVID FAY: They charge many times and never refund the money.
SENATOR DOYLE: Okay. Thank you. Any questions? Senator Kissel?
SENATOR KISSEL: Thank you very much, Mr. Chair. Having served on this Committee off and on for many years, I remember these battles. I mean, this is almost like interior designers versus architects, and for those of you who have been frequenting General Law -- you don't remember those -- days or the optometrists versus ophthalmologists. My son and I, my -- at the time he was six -- went to see The Lion King last year at the Bushnell -- you guys did an awesome job --
SENATOR DOYLE: Thank you.
DAVID FAY: -- and we were the -- I was one of the kind of consumers that -- it was in between committee meetings, and I walked across the street, and I bought the tickets right over there, so it worked out just fine.
The part that sort of tears me in two different directions with this debate is on the one hand, if I'm just a consumer and the whole thing about being snowed out and/or just giving a ticket to, you know, a friend, I want that ability to do that, and yet, when you start driving it up the food chain to these big giant entities, one that I guess nationally owns a lot of the places where the acts go, they own the acts, you know, they're just a giant player, and then you have these other major players, I mean, when the other gentleman that was in favor of the bill said that they were doing -- they had 300 employees out in Vernon and doing tens of millions of dollars worth of business, I was boggled because, you know, I guess my children don't demand as much of me as far as ticket costs go, and thankfully so.
So, the world that you're dealing in is foreign to me. You know, I read like people going to ball games and spending hundreds of dollars, they're not public servants. I don't know what they're doing to make all of that money in this recession, but somebody out there has a lot of money. My wife keeps asking me who they are, but I don't know.
SENATOR DOYLE: How do we draw this line? There's got to be a line that we can draw that's a sensible line that allows consumers some level of choice or some level of transferability, but at the same time we don't get driven into a position where we have this paperless world where everything is completely controlled and yet it may keep out these folks that charge exorbitant increases on ticket prices, but at the same time limits consumer choice, and I'm just -- is there any happen medium here at all?
DAVID FAY: I actually don't think so. The point is I don't think this can be legislated. That's the problem. The only thing that would be -- if you really wanted transparency, we would be in here saying on any Web site that is offering a ticket, they have to identify, A, whether they bought the ticket or not; they shouldn't be allowed to offer a ticket that they haven't already bought. They should identify where the originating venue is and whether the ticket could be purchased if they simply went to www dot Bushnell dot org. That would be true transparency, and we'd be in there doing that except how do you enforce that? You can't enforce it. I mean you might be able to with the one or two ticket companies that are based here in the state of Connecticut, but if you're outside the state of Connecticut, now you're in interstate commerce. If you're in the Virgin Islands, you can't even deal with it there.
So, we say this is the kind of thing that the originating -- those software folks who do our originating box office systems are constantly in a battle with -- Mr. Vaccaro's got his own technology that now can get around this -- the little squiggles that everybody sits here and tries to read, but I get -- I have to do it about four times before I get it right. They can read them now like that, and so they'll go on line and grab 30, 40 percent of the tickets with these virtual buyers.
The ticketless ticket thing nobody in the industry likes, not the acts, not anybody else. What they are is an attempt to prevent the very best tickets on a hot show from getting into the hands of these brokers because Miley Cyrus wants to put her tickets on sale for her families at 25 or $50 a ticket. The anecdotal stuff you're hearing is about other ticket brokers, maybe not Mr. Vaccaro's company, but he was offering a Miley Cyrus ticket for $300. That's not Miley Cyrus doing that. What she gets is criticized when the press picks up that there are $300 tickets for Miley Cyrus, and she's got nothing to do with it. She's been trying her hardest to prevent that from happening.
This is a battle that simply we don't believe can be legislated. It needs to be -- it's a wild West out there, and there's some sheriffs and there's some Jesse Jameses out there, and it's being fought out with technology. The minute we try to legislate it, what will happen is that a number of acts will go, you know what; we'll pass by this year until those guys get it figured out; and, if that takes two or three years, four years, they're fine; they've got lots of folks around the country here.
Even the legislation that was referenced here in New York is simply about the ability to transfer tickets. It's not about 5 percent being put on. It's not this bill at all. Mr. Vaccaro would like you to think it is. It's not that. I know of -- I do not know a single situation in the state of Connecticut where someone has been prevented from selling their ticket, a ticket that they bought with the intention of attending the show, ever being told they can't resell a ticket. We've never done that at the Bushnell, and I know of no circumstance in the state of Connecticut where that is ever happening.
Yes, I have heard about the New York Yankees situation. I'm here to tell you I'm not the New York Yankees. We're the Bushnell. We try to -- if somebody's going to get 800 percent over the face value of my tickets, I'd like to get that and put it into my education programs, not buy a new Mercedes with it.
SENATOR DOYLE: Thank you. Any questions? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chair. Good afternoon.
I just want to make a point of clarification. Earlier you had mentioned that these companies are -- would contact you and ask to put tickets on hold. Could you just explain that process a little bit --
DAVID FAY: Yes.
REP. REBIMBAS: -- regarding what the hold means?
DAVID FAY: They don't call us. What happens is if you go on line to buy a ticket at the Bushnell Web site, you go on line and you say I'd like an orchestra seat, it will show you the best two seats in the orchestra, it will show you the best two that are available. When it shows you those tickets, it puts them on hold. The system puts them on hold for you because you've got to get your credit card out, you've got to decide is that what you want, and you've got five, seven minutes to complete the transaction.
Many of the other ticket -- many of these ticket scalpers have developed systems that go immediately with thousands of virtual buyers grabbing all the tickets they can and putting them on hold, and a lot of times the thing will say you're about to run out of your time, do you need more time, and their system goes yeah, I need more time, and they just keep requesting more time electronically until they've had a chance to look through the tickets that are on hold -- now, again this is on a hot show -- pick the very best ones that they can, and then they have them. It's not just -- it's not just a ticket network. It's many of these brokers.
The honest brokers who are actually saying, like some of the Web sites that allow you to bid on tickets, and stuff like that, the honest ones are people put their tickets up that they bought, and sometimes they're sold for less. You rarely see that.
If you remember, he said buying 45 cents on the dollar. If you actually drill down on that, yeah; what he's talking about is maybe sporting events and unwanted inventory that a venue or an attraction, whatever, knows they're not going to sell. If the thing is 45 cents on the dollar, why not? He's not putting them on sale for 50 cents on the dollar.
REP. REBIMBAS: And, I appreciate the explanation which kind of explains how a system that's currently being used could be abused.
DAVID FAY: Yes.
REP. REBIMBAS: Is there a limitation on the extension of that five to seven minutes, how often someone can extend that?
DAVID FAY: Some have, but then what will happen is the minute the thing will go back, it will request again,and it may get another set of tickets or it may actually grab those back, and what they're doing is literally working to develop the technologies as fast as we are working to prevent that from happening, you know, they're doing it to get through the system and to put those things on sale.
REP. REBIMBAS: (Inaudible.)
DAVID FAY: It might have been than this. The 5 percent that's asking here, many times on a hot show way more than 5 percent winds up in the hands of these folks.
REP. REBIMBAS: And, I think I understand now because obviously it would be up to the venue then to limit, not --
DAVID FAY: Yes.
REP. REBIMBAS: -- have the option for extension. Was it the five to seven?
DAVID FAY: Exactly right.
REP. REBIMBAS: But as you're saying, obviously then their technology is getting wiser as to how to circumvent that some?
DAVID FAY: Uh-huh.
REP. REBIMBAS: Okay. Thank you for your explanation.
DAVID FAY: Right.
REP. REBIMBAS: Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any further questions? Thank you very much.
DAVID FAY: Thank you very much.
SENATOR DOYLE: The next speaker is Michael Silvestrini, then Stephen Wing, then David Boomer, Robert Shepherd and Bob Maples. I think I mispronounced that. Michael?
MICHAEL SILVESTRINI: Hello, Senator. Thank you, and thank you to the Committee. This is regarding the Raised Bill 6337 regarding clarification of the scope of solar electricity work, and I want to start off kind of globally explaining that it is -- first off, I'm the president of a solar energy company here in Connecticut.
It is the global responsibility of all solar energy companies to try the hardest to reduce the costs of solar energy deployment as much as they can so that society can gain from the environmental, the financial, the job creating benefits that we expect to extract from this technology.
It's important that as we attempt to codify the process in which this occurs we recognize the diversity of jobs and tasks associated with it so that we don't accidentally over codify this process, thereby driving up costs and having a negative effect on the cost structure of the industry.
And, first off, we've seen Massachusetts -- it's a scenario -- where what is absolutely not an electrical component of an installation, drilling a hole, for instance, drilling a drill through two pieces of metal, things that are not electrically oriented, which is part of a solar energy project, being required to be done by an electrician, thereby increasing the cost of the installation and having a negative impact on the rate payers who are supporting the deployment of solar energy in that state through an incentive program.
So, on one hand, we're increasing the costs of a technology that we so desire as a society and, therefore, slowing down its deployment. On the second hand, it's worse than that because we are simultaneously incentivizing the deployment of solar energy and increasing its costs unnecessarily.
Now, obviously safety is a primary concern in this industry. Nobody wants to have a mistake, especially not me. When we, you know, perform our installations we're always sure that an appropriately trained professional is performing the appropriate work. That said, it needs to be understood that we don't want a mismatch.
The qualifications that you have when you get an E-1 license are extreme. These are well trained professionals. They are trained in a variety of different electrical types of practices. What's necessary in solar can be subdivided into a variety of categories. You have more electrical based components where you're intertying with high voltages into an electrical grid, which is very complex stuff, very heavy-duty and certainly requires a very high level of training. You also have components of a solar energy installation that are things like craning up equipment onto the roof or installing aluminum racking or moving panels from one side to the other, and it's important that as we codify the different responsibilities of installation, we're not accidentally increasing the costs.
SENATOR DOYLE: Thank you very much. Senator Kissel?
SENATOR KISSEL: Thank you very much, Mr. Chairman, and I want to thank our staff for clarifying an issue that came up earlier because one of the previous speakers said that no, you guys haven't been doing this for six years, but it's my understanding that for about five years, we were okay with getting into the box, and then somebody made a decision in like the last one year that sort of put that in doubt. Is that correct?
MICHAEL SILVESTRINI: I don't hold any of these licenses and can't comment on that. What I can -- all I can state is that when there a dangerous level of electricity associated, an E-1 license should be and is required. You've got to pull a permit. To my knowledge, it is required, and that's probably an appropriate scenario.
What you don't want is the, you know, positions as part of a solar installation that are easily accessible without such a high degree of skill to be -- to remain in a more general and accessible work pool.
SENATOR KISSEL: Let me ask this. Based upon your experiences in Connecticut from 2005 through the beginning of 2010, were you aware of any accidents that occurred because of the installation of solar voltaic devices?
MICHAEL SILVESTRINI: No, sir, and let me explain why. There are a series of oversight institutions and instruments associated with the solar energy industry. You have this process of pulling a permit, which requires an E-1 license, and still will even if this bill were to be put down, so you need to pull a permit. You need to have electrical training, and then you have a series of inspections. Generally those inspections are four deep.
Our company, the developer, begins with our own internal inspections. It's called commissioning when you have a third party engineering firm come and assess that the product is working correctly. Prior to actually turning the system on, you go and assess the quality of the construction. Then you have a utility company. The local municipality may have their own utility -- their own inspectors. Excuse me.
You have the utility company; you have the company itself; you have third party engineerings; you have a very wide breadth of oversight on these types of installations, and that has prevented any type of drastic mistake that I'm aware of. The only time we've ever seen -- and the industry had a black eye in the seventies when there were -- it was a little bit more reckless, and, you know, the National Electric Code didn't have the degree of regulatory infrastructure for sure than it does now, but we have not seen any, not one circumstance, where an under-qualified professional was injured or injured others as a result of their certification versus the task they were trying to accomplish.
SENATOR KISSEL: Thank you.
SENATOR DOYLE: Any other questions? No. Thank you very much.
MICHAEL SILVESTRINI: Thank you.
SENATOR DOYLE: The next speaker is Stephen Wing, then Dave Boomer, Robert Shepherd, Bob Maples -- I'm not sure I'm mispronouncing (inaudible), Ken Gurin. Mr. Wing?
STEPHEN WING: Thank you, Senator Doyle, Representative Taborsak and members of the Committee.
I'm here to speak in behalf of House Bill 6338, An Act Concerning Landscape Architects. This particular bill is really an adjustment of the existing licensing act for landscape architects in Connecticut.
I'm a landscape architect. I also sit on the state Board of Landscape Architects, and except for the inability of Vince McDermott, the Chairman of the Board, to be here, he would be speaking to you.
Testimony from Mr. McDermott is in your file as is a letter from Connecticut ASLA.
This bill has two parts that I'll speak briefly about. The first section is a housekeeping measure that would make the enforcement provision of the landscape architecture licensing act consistent with the enforcement provisions of our allied boards within the Department of Consumer Protection.
At present, the landscape architectural license can only enforce a sanction which is the suspension of the license for period not to exceed one year. The provision that's in the new bill would enable the Department of Consumer Protection to place a licensee on probation, level a civil penalty of up to $1,000. And, again, these are consistent with the rules and regulations in force with the other boards under the Department of Consumer Protection.
Section 2 of the proposed act would require corporations and limited liability companies, an LLC, that provide landscape architecture services to register with the Board of Landscape Architects and to identify the individuals within that company who would be responsible for and oversee landscape architectural work. This bill does not require the person in responsible charge for the license holder to be an owner.
At present when a corporation or LLC advertises or offers to practice landscape architecture, neither the consumer nor the Board of Landscape Architects has any way of knowing that corporation has in its employ someone who is licensed to provide and oversee landscape architectural services.
We respectfully request your favorable action on House Bill 6338. Thank you very much.
REP. TABORSAK: Thank you for your testimony. Right on time. Are there any questions from the Committee? Okay.
Just a quick question. I'm sorry, I may have missed the beginning of your testimony, so if you've covered this, I apologize.
I believe you had mentioned, made the point that this will pretty much bring the landscape architects into line with how we treat regular architects. Is that -- is that fair to say?
STEPHEN WING: That's right. In terms of that enforcement provision.
REP. TABORSAK: In terms of the enforcement provision, and do you know why when -- do you know the history? Is there any history to speak of as to why we didn't -- we haven't already, at least, brought them into line? Are there any issues that you know of?
STEPHEN WING: I do not, although I know that this is not the first time that this initiative has been made.
REP. TABORSAK: Are you aware of any opposition to this bill? Are there any --
STEPHEN WING: No.
REP. TABORSAK: -- known opponents? Okay. I mean, it seems kind of common sense to bring you in align with the architects, so I appreciate your testimony today.
STEPHEN WING: Thank you very much.
REP. TABORSAK: Next is Dave Boomer followed by Robert Shepherd, followed by Bob Maples, it looks like.
DAVID BOOMER: Thank you, Mr. Chairman, and members of the Committee. I'm David Boomer with the Kowalski Group. We represent the -- I'm sorry -- International Health and Racquet Ball and Sports Club Association of Health Clubs. We have 88 member facilities in Connecticut. I'd like to offer comments on House Bill 6266 which relates to a mandate to place AED's, automatic external defibrillators in health clubs, and I've asked Joni Czajkowski with the Heart Association to join me under my three minutes because we are on the same page on this, the health clubs and the Heart Association, on what would be the best approach we believe for you to take with this bill.
And, before turning it over to Joni, I'd like to make a point that 6266 basically mandates the AED, and that's all it does. We would have to have a staff member present at all times that knows how to use it and has been trained, and the Heart Association has great programs in that regard, but what's missing here is any kind of liability protection for the employee or the health club when an AED is not used, and we're asking for liability protection in exchange for this mandate.
And, last year you passed a great bill out of Committee. It was Senate Bill 186 that had all of that protection, so we'd like to ask if maybe you'd just go with last year's bill, add in the protection, and so forth, and then I know Joni has some comments.
JONI CZAJKOWSKI: Thank you, and I just want to echo the comments that were just made. We had worked over the summer on agreed-upon language, and it just wasn't filed correctly or, at least, what we had agreed to over the summer, and we just wanted to kind of present a united front this year because obviously IHRSA would not support the bill as currently written before you, and the Heart Association wants to just make sure that the use and non-use is included in the bill going forward, and Dave referenced the bill from last year.
So, thank you.
DAVID BOOMER: And, to conclude, this is not some out of -- an unreasonable request. Of the states that have enacted a mandate for health clubs to have AED's, there have been eleven -- nine provide this use and non-use protection, so this would be mainstream, and I know the Heart Association and IHRSA worked like this in Massachusetts four or five years ago.
REP. TABORSAK: Thank you. Any questions from the Committee: Senator Kissel?
SENATOR KISSEL: Thank you, Mr. Chairman. I think I recall this bill from years past, and I think that once it gets over to Judiciary, there seems to be a bit of a headwind from the trial lawyers' association, and I'm just wondering if you folks have in the last few months chatted with those folks to see if you can work this out or not.
JONI CZAJKOWSKI: We have chatted, and I think we eventually will be able to work it out. We did work on the Good Samaritan piece about a year ago, so I think if we were able to do that after eight years, nine years, that this might be something that's likely to happen as well.
REP. TABORSAK: Thank you. Any other questions? Representative Altobello?
REP. ALTOBELLO: Thank you, Mr. Chairman. Good afternoon.
JONI CZAJKOWSKI: Good afternoon.
REP. ALTOBELLO: Last year there was an amendment filed to this bill which includes some language that was supposed to be stricken regarding the American Heart Association. (Inaudible.)
JONI CZAJKOWSKI: Was that Senator Fasano's amendment from last year?
REP. ALTOBELLO: Indeed, it is.
JONI CZAJKOWSKI: I think, yeah, he did that by accident. I remember talking with him, and he took that off the table.
REP. ALTOBELLO: So your recommendation would be to go with the file copy?
DAVID BOOMER: Yes.
JONI CZAJKOWSKI: Yes.
REP. ALTOBELLO: Thank you.
JONI CZAJKOWSKI: Thank you for bringing that to my attention. I do recall now that he accidentally filed something. Thank you.
REP. TABORSAK: Thank you. Any other questions from the Committee? Thank you for your testimony.
JONI CZAJKOWSKI: Thank you. Robert Shepherd followed by, I believe, Bob Maples with Swisher International. Robert Shepherd?
ROBERT L. SHEPHERD: Mr. Chairman, members of the Committee, thank you for the opportunity to address you on this issue. I am opposing Raised Bill 865. I am here representing Altria, a tobacco manufacturing company which through its subsidiary, U.S. Smokeless Tobacco, manufactures moist smokeless tobacco, brands -- well known brands of Copenhagen, Skoal, Red Seal and Husky.
My comments and opinions today are based on my government career in the state of New York of 25 years, the last 11 of which I was Deputy Commissioner of the New York Tax Department. Since leaving, I've been doing consulting in the industry for 13 years representing manufacturers and distributors almost exclusively in the tobacco field.
In 2000, you did the right thing by changing from an ad valorem method of taxation on moist smokeless tobacco -- these little hockey puck cans -- from an ad valorem method, that is, a percentage of the wholesale price, to a weight-based method, which means you tax it by the ounce, an ounce of tobacco.
Right now in Connecticut you get 66 cents of excise tax on these cans. An excise tax is normally a measure of volume. It's a gallon of gas, a pack of cigarettes, a wine gallon, a beer gallon, any unit of measure, as opposed to a sales tax, which is traditionally a percentage tax. So, on these cans, you get 66 cents.
If this bill is passed, this can will still carry 66 cents of excise tax, but this one will carry only 40 cents, 26 cents difference. Why would you do that? It's the exact same amount of tobacco, 1.2 ounces in either of them. Is the social cost of this can any less than this one? No, it isn't, so your tax is on line with the federal government and 20 states. You were, I think, about the third state that went over, you were one of the visionary states, but there are now 20 states plus the federal government.
Since 2000, other companies have tried to repeal it in Connecticut at least four times. You've had the wisdom to keep the system that you are on now, and just to show you that you did the right thing, the ad valorem system -- let me back up for a second -- the ad valorem system does very well when you have two things, an increasing volume and steadily increasing wholesale prices, because as the price goes up, the tax goes up.
Well, the price -- the volume of these keeps growing across the country, but the price does not. Prices of my client did not raise for about five years. The price of the number two tobacco company did not -- on their premium products did not raise for about two years, and then in April of 2009, they cut the prices by 20 percent. You didn't feel any of that because your price is by the weight.
The next company that you're going to hear has a company -- has a brand, this one, that they cut the price by a dollar a can back in 2006. Again, it didn't make any sense -- it didn't make any difference to you because you were a weight-based.
That's the way you need to stay. Weight-based gives you stability; it gives you predictability because you can predict how much cans are going to be sold, but what you don't know is is it the 40-cent can or the 66-cent can, so it gives you predictability of revenues, stability of revenues, and ease of administration.
And, since my time is up, I will answer questions there are or will attempt to, any questions that you have.
REP. TABORSAK: Thank you for your testimony. Any questions from the Committee?
If you could just -- I think you mentioned that there are 20 other states that are on the weight-based --
ROBERT L. SHEPHERD: Yes.
REP. TABORSAK: -- system?
ROBERT L. SHEPHERD: Yes.
REP. TABORSAK: Okay. And, are -- am I to assume that the rest of the states are ad valorem, is that what you said?
ROBERT L. SHEPHERD: That's -- that's correct. They haven't -- they haven't switched over yet. We're trying like heck, but --
REP. TABORSAK: Any states -- what are the states around us doing, if you could?
ROBERT L. SHEPHERD: The states around you that are doing it are Maine, Vermont, New York, Rhode Island, Connecticut is yourself, New Jersey, Delaware, Virginia, Kentucky. Those are the ones that are closest to you.
REP. TABORSAK: And, what is Massachusetts doing, if you know?
ROBERT L. SHEPHERD: Massachusetts is still on an ad valorem basis, and so is New Hampshire.
REP. TABORSAK: Thank you. Any other questions from the Committee? Representative Altobello?
REP. ALTOBELLO: Thank you. As you probably know, we're casting about for revenue in every dark corner that we can find. To the best of your knowledge, are you currently paying us royalties on the Husky brand?
ROBERT L. SHEPHERD: Royalties?
REP. ALTOBELLO: Yes.
ROBERT L. SHEPHERD: I don't -- I don't believe so.
REP. ALTOBELLO: Thank you very much. Thank you, Mr. Chairman.
REP. TABORSAK: Any other questions? A good question. Thank you for your time and testimony.
I believe Bob Maples of Swisher International -- and I apologize if I've mispronounced your name -- followed by Ken Gurin and then Sharon Massafra from the NPDA. Thank you.
ROBERT Y. MAPLES: Thank you, Mr. Chairman. You did it just right, and I want to thank Chairman Taborsak -- that's a name I struggle with; Maples is a southern name -- Ranking Member Witkos and Ranking Member Rebimbas, and members of the Committee -- Chairman Doyle is absent -- my name is Bob Maples, and I appear on behalf of Swisher International. We're a manufacturer of smokeless tobacco products, and we're supportive of Senate Bill 865 to restore tax progressivity, fairness and competitive benefits to adult consumers of Moist Snuff Tobacco products.
Now, you've heard that ad valorem does mean literally according to value. It's a tax based on the price similar to a sales tax. The other tax, the one that's imposed currently in Connecticut is weight-based, which means a tax based on the weight of the product.
I commend this bill because I think it is time to look at this tax anew. The previous speaker is correct. You changed the tax in 2000. I was running a trade association that learned about it. It was in a budget implementation bill in the year 2000 buried on page 378 of a massive piece of legislation.
But, if you look at the current revenues that you're collecting from moist snuff tobacco now, they're eroding. According to DRS information we received, the tobacco tax revenues have decreased 73 percent from 2006 through 2010. Conversely, the ad valorem tax that you kept in place on everything else other than cigarettes and moist snuff has increased 113 percent over that same period. Okay?
Now, normally, you know, after a tax increase -- this legislature, you increased the tax to the current rate Mr. Shepherd was speaking of effective 2009. You went to 55 cents an ounce from 40 cents an ounce. After a tax increase, usually -- even after this tax increase, your tax collections continued to decline.
In most of the states we work in, there is a usual kind of short-lived bump in tax collections, but here they continue to erode. Conversely, you increased the ad valorem tax from 20 to 27 and a half percent and continued to generate revenue. What's the difference other than lost revenue?
Ad valorem sweeps in all changes in a marketplace. It's a rate. Any price changes by the manufacturers, value changes, volume, manufacturer price increases, federal tax increases, which we just had the second trunk of (inaudible) go into effect just recently, and/or anything of a general inflationary nature increases, okay? Ad valorem captures that in real time without any action on behalf of the legislature.
It's a very progressive tax, it offers consumers the benefits of choice, value and variety, and it is good for this economy.
In summation, Mr. Chairman, I simply will say yes, you were one of the first states of the last decade to convert to weight-based. We hope you will find it in your wisdom and vision to be one of the first states to restore -- join the 30 states, restore ad valorem, and for that, we support the bill.
I look forward to your questions.
REP. TABORSAK: Thank you for your testimony. Any -- any questions? Senator Kissel?
SENATOR KISSEL: Thank you, Mr. Chairman.
Swisher International, I'm guessing that one arm of your company made Swisher Sweets Cigarillos.
ROBERT Y. MAPLES: That's correct.
SENATOR KISSEL: Back when I smoked cigars, that was my favorite cigar, so I give you compliments on that, and the Back Woods cigars that were alluded to earlier today, I liked those, too, so great.
But, we have two of these major tobacco experts here, one taking one side and one taking another. I'm just wondering what's the real deal? What are we really haggling about? You know, is it high-end product versus low-end product? Is it -- and I think that Representative Altobello raised a great point that we are searching for revenues, and I'm wondering if we make this change, do we end up with more revenues, because when you throw out there that we've done these things with tobacco and yet the revenues still go down, people quit, people die, and, you know, part of, you know, what we do as a government is try to drive people away from tobacco products because of the adverse health implications.
At the same time -- so that could be why, no matter what we do, revenues sink down, but I'm just wondering if we switch gears, can we expect more revenue or less revenue? Okay?
ROBERT Y. MAPLES: Well, first I want to answer, and I apologize. I'm getting over a little bit of a cold, so I have to clear my throat.
You realize that there is Connecticut shade, one of the best tobacco types grown in the world in Connecticut. I mean,it's one of the priciest next to Cuban that you can get. So, congratulations. If you knew about Green River One Sucker, I would be very impressed. That's a type grown in Kentucky, but -- and thanks for being a consumer of Cigarillos one time in your life.
What this is all about is about competition. It really is. It's a -- you have a company in this market that is so dominant and continues to be so dominant, that really the little guys, all they have to compete with them is to make a fine, fine product and put it out there for adult consumers and compete on price because we can't advertise them, we can't out lobby them, we can't out resource them in many, many ways. I mean, they're just dominant any way you cut it.
I really want you to take that, Senator, back and talk to OFA and take a look at the -- okay, you've got two tax structures in existence now. You've got real numbers you can look at now, and back when we were in this debate in '01, OFA came forward to us and said they did projections of where revenue should be. I've been in this business not as -- I'm a little younger than my friend, but a long, long time, and I was quite shocked by the numbers that we saw when I was asked to look at Connecticut to come up here.
Somewhere about $435,000 has just gone. Ad valorem is increasing, so consumers are still out there, okay, maybe the cigars that guys like you -- okay, they're out there, they're still there, but this -- this moist snuff packs category is below Rhode Island, and Connecticut does have somewhat of a history of tobacco. At one time they had the dominant manufacturing headquarters here. You know, I mean there's a history with the state, so, I mean, I'm going to continue from this. I'm going to keep looking at that because I need to be able to understand exactly what's happened here myself because I've got to go to other states and tell them what's going on in Connecticut because I think this is a perfect case study of what happens when you do move from an ad valorem to a weighted tax on these products.
And, that's the only difference. Setting aside what you said, that people have left the state, people have stopped using the products, they have deceased, they -- you know, whatever's happened, the only other explanation is you changed the tax system and --
SENATOR KISSEL: And is moist snuff chewing tobacco?
ROBERT Y. MAPLES: I don't know. We all seem to call it that, moist. Some people call it that. I mean, there's a lot of different things, dip --
SENATOR KISSEL: Okay.
ROBERT Y. MAPLES: -- but, you know, I'm from the South. People will call it chewing tobacco. They don't mean that, chewing tobacco. Chewing tobacco is what you usually think of like a big bulb in the side of your mouth, but there's a lot of different names for it.
SENATOR KISSEL: Thank you.
REP. TABORSAK: Any other questions from the Committee? Representative Altobello?
REP. ALTOBELLO: Thank you. Perhaps there's a compromise here that neither of you gentlemen would like, and that would be to put both taxes on the books, and whichever is the greater of the two shall prevail. Obviously (inaudible) and it's the same argument we've heard for a number of years, and I'm not exactly sure you've got to pick a winner or loser here, but perhaps we could have -- maybe when it gets to the Finance Committee, I'll propose that as an amendment, sir.
ROBERT Y. MAPLES: Can I add? I like that. I mean I want -- I want 865 to be brought up, I want this looked at because you're dealing with the revenue, and you need to look at what's going on and why you're losing them. You shouldn't be.
REP. TABORSAK: Any other questions? Just a question or two. Thanks for your testimony.
I missed the date. If you could refresh my memory, when did we go in Connecticut from ad valorem to weight-based? What year was it? Was that 2000?
ROBERT Y. MAPLES: I recall it being 2000.
REP. TABORSAK: 2000. And, did your company see a drop in sales when that change in policy took place, or an increase, or anything? Do you know?
ROBERT Y. MAPLES: I haven't noticed over the ten years I led the trade association for the manufacturers. Connecticut has always been a fairly steady unit kind of volume state. I mean, it's always been -- I mean you're not in the top ten; you're not in the top twenty; you're not in the top thirty; but, you are in the thirty to forty range, and you've always been, you know -- Connecticut has been there, okay, very little movement. That's why I'm so surprised that what we saw when we looked at the revenue collection numbers, that they're down, because I can't explain it any other way.
REP. TABORSAK: Some people might say that if we were to make this change, that it would provide an advantage to the lower costing products, and maybe that would cause almost like a race to the bottom as far as quality goes for the consumers because by selling a cheaper product, you gain some kind of a cost advantage or pricing advantage.
What would you say to that? Could you comment on that?
ROBERT Y. MAPLES: I don't think that will happen. I mean the race to the -- it's a very unusual situation, and I mean when Altria purchased UST, I think it gave -- Altria is a much larger organization. Phillip Morris, I used to work for them; I call them Phillip Morris. I'm sorry.
When Phillip Morris bought Altria -- UST, they had the resources to do what they knew they needed to do, which is what they did to Marlboro cigarettes in '94, Black Friday where they dropped the prices of Marlboro cigarettes dramatically. They dropped the price here.
I wish I had my young friend that's the truth sayer to testify with me, Nick. I'd say Nick, what would you say to that; do you think the tobacco manufacturers will decrease their price or increase their price, and he'd probably say increase their price. I think that's what will have to happen because these are publicly traded companies, many are, and they have responsibilities, and I foresee that, you know, with everything else going up, tobacco products will continue to increase.
Now, on the quality side, keep in mind, too, that cigarettes and smokeless tobacco are now regulated by the federal Food and Drug Administration. We are two years into our new regulatory regime in Washington, and everything in these products is now being very thoroughly reviewed, submitted to and reviewed by the FDA, so any manufacturer in this category that attempts to lower quality I think runs a risk of a very serious regulator biting them on the leg, so I don't -- I don't buy that argument at all. As a matter of fact, I think what you'll see are continuing improvements to the products over time.
REP. TABORSAK: Just one other question I suppose. A prior speaker talked about where other states stand on this issue. Have you seen in the past where other states that have gone to ad valorem, has your company seen any sort of increase in sales due to that change? Is there anything that you know of there?
ROBERT Y. MAPLES: No big market shifts. I know that one state did go back to ad valorem, and that was Wisconsin, so they did, I believe, two years ago -- I'm sorry; my mentor is over there -- two years ago I believe they reverted back to ad valorem, and I think it is interesting that Massachusetts has stayed ad valorem, and I don't know the real reason for that, but I do know that Massachusetts is a very strong anti-tobacco control state. I mean, Dr. Greg Connolly, one of my -- believe it or not, one of my -- I admire Dr. Connolly greatly; he's with Harvard, and he was just recently on the scientific advisory board to the FDA on tobacco, and he resigned.
But, anyways, he's a renowned expert on tobacco issues, and it is interesting that Massachusetts has maintained ad valorem because I know that my friends are not just working in Connecticut. I know they're working in Massachusetts and all the other states to get on this great idea, and we're working to say it's not such a great idea, but I haven't seen any, you know, no huge market shifts (inaudible), no, no.
REP. TABORSAK: Okay. Any other questions from the Committee? Thank you for your testimony.
ROBERT Y. MAPLES: Thank you. I appreciate it.
REP. TABORSAK: Ken Gurin followed by Sharon Massafra followed by Patti Urban.
KENNETH A. GURIN: Good afternoon, everybody, and thanks to the distinguished General Law Committee. I'm here to talk to you about supporting Senate Bill Number 911.
My name is Ken Gurin, and I am president of the Connecticut Chapter of the National Private Duty Association. It's also called the NPDA. I'm also the owner of Comfort Keepers, an employer-based home care agency servicing the elderly located in Shelton, Connecticut.
The NPDA is the nation's first association for providers of private duty home care who operate using only the payrolled employees versus registries who use non-employee independent contractors. The mission of the NPDA is to enhance the strength and professionalism for private duty home care, and in so doing, maintain high levels of care provided to the elderly consumer.
Our Connecticut chapter was formed four years ago to promote this mission for our residents here in Connecticut.
On average, the registries are approximately five dollars less per hour than the employer-based providers but, of course, this does come at a cost. Today's challenging economic times make the lower price on the surface especially attractive to elderly consumers; however, the registry model poses risks to both the client and the worker, seldom known by either.
Operating outside of the legal requirements of withholding payroll taxes, Social Security, Medicare, registries place misclassified independent contractors into elderly consumers' homes. Elderly consumers unknowingly become accidental employers, unaware that they are responsible for handling all payroll tax withholdings and contributions.
Shamefully, these workers are not by IRS definition or Connecticut ABC definition independent contractors, and the registries collect an hourly fee from the client for merely placing the worker in their home with no further responsibility. It's important to remember that these cost savings are coming at the expense of the citizens of Connecticut as the state's cash-strapped income is further eroded by not collecting the payroll taxes legally owed.
There are serious risks and consequences for the worker as well. Some of them have been mentioned. Most are not aware that they should be paying taxes or contributing to Social Security and Medicare, and at the time that they may need these benefits, they find out they just aren't eligible because they never -- they never contributed.
We're not questioning the quality of services delivered by the registries, but we feel full disclosure of the potential risk is critical. This way both consumers and the workers can make informed risk/benefit decisions. Non disclosure of this information serves no one except the workers -- the owners of the registries who are profiting by putting those they serve at potential risk.
Truth in advertising, a long established requirement in most industries, is sorely needed and long overdue in the home care industry as well.
This past October, I had the opportunity to --
REP. TABORSAK: I'm sorry. Could you please summarize, sir? Could you please summarize? Thank you.
KENNETH A. GURIN: This past October, I had the opportunity to address this issue with former Attorney General Richard Blumenthal, who is very supportive of requiring clear and concise disclosure by registries. A copy of his letter is attached to the testimony.
Thank you for your time to listen to my views, and I urge you to support this bill to eliminate needless risks being exposed to our most vulnerable citizens.
REP. TABORSAK: Thank you for your testimony, and we will take a look at that written testimony you submitted.
Are there any questions from the Committee? Thank you.
Sharon Massafra followed by Patti Urban.
SHARON MASSAFRA: Good afternoon Representative Taborsak and members of the General Law Committee,I am here on two accounts, one as vice president of the Connecticut chapter of the National Private Duty Association, and I am also the franchise owner and president of Home Instead Senior Care with offices located in Trumbull and Sandy Hook, Connecticut. We are a non-medical homemaker and companion agency, and we hire our own employees.
I realize we're going three minutes here. There's a number of us here who are also testifying as well, so I think you're going to learn a lot about registries. I think I'm just going to -- I would like to move right over to an example of where a caregiver, a professional caregiver was working in the home of an elderly consumer. This example, I'm going to call her Dorothy because I happen to know her. She's been hired by an agency to care for a relative of mine, so I got to know her quite well.
When the case ended, Dorothy was looking for other work, and she signed on with two other agencies. One was a registry model. It appeared no different from the other agencies that she had worked for. Caregivers often do sign on with more than one agency so that they can get assignments and work a full work week.
When I saw Dorothy about a year later, she was quite upset. Dorothy is a single mom with two children living pay check to pay check. Dorothy was taking care of a client she had received through the registry. Her client was paying her for services rendered weekly, and this went on for approximately nine months.
In December of that year, her client became gravely ill, and the client's son, who lives out of state, took over bill payment and management. He wrote out a check to Dorothy as the son's mom had been doing, but then he also informed Dorothy that he would be submitting a 1099 form in January.
Dorothy was devastated as was her client. Dorothy didn't realize she was working as an independent contractor there. She believed that her relationship was still with the registry. Dorothy never did meet the qualifications of an independent contractor and, therefore, this 1099 could not have been legally filed. She now has not paid her taxes and doesn't even money to pay the taxes. Neither client nor caregiver was informed of their responsibilities and legal liabilities placed upon each other. They were not informed of the employer-employee arrangements, and this is what I hear over and over when people come to be employed with my company, that they worked for so-and-so, and these types of things are happening.
So, this is why I am here today because I believe that we do need to clearly define the business relationships, responsibilities and the legal liabilities often between the elderly consumer, the professional caregiver and registry, and it's really imperative that we meet this now because, as you know, our senior population is growing as is the professional caregiver population.
It is incumbent upon all of us to work together to set the gold standard in homemaker and companion agency industries. I do support this bill, and I urge you to review all the testimony today and support Bill 911 as well.
REP. TABORSAK: Thank you for your testimony. Any questions from the Committee? Thank you.
SHARON MASSAFRA: Thank you.
REP. TABORSAK: Patti Urban followed by Guy Tommasi followed by Dustin Brighton.
PATTI URBAN: Okay. Good afternoon. My name is Patti Urban. I'm the owner of Comfort Keepers located in Guilford, Connecticut. I'm also a companion-homemaker agency. We employ an employment model for our caregivers. We pay their taxes, workers' compensation, liability insurance, the full gamut of being an employer.
You've heard several others' testimony today, so I'm going to cut to the chase and just go with a few examples.
The independent contractor caregivers that work for the registry receive their compensation generally directly from the client that they are working for. I had a caregiver that came to apply to me for a job, and she was in tears because a client that she had been caring for for quite a long time had suddenly passed away. She went to file for unemployment and was turned down because nothing had been paid. She was completely unaware of her rights as an employee.
Protections for this proposed bill are also for the elderly client who engages the services of registry agencies. Because they are paying the caregiver directly, they're now de facto employers. I can tell you they are completely unaware of their responsibility in this area. They don't know it. They just want someone to come in to help them. They're 80 and 90 years old. They don't have a clue about employment law.
When I was out on an assessment, a client told me a story about a caregiver they had working for them from another agency which turned out to be a registry, and this person, this caregiver had fallen on their property and broken her leg. She had to sue the clients, her client, for the medical bills because she had no medical insurance. The client's homeowner's policy would not cover the employee, and the client had to pay the medical bills in cash.
So, we really are experiencing problems for the caregivers and the clients because of misrepresentation or non-disclosure. So, I respectfully request that you support this bill because it really will make a difference in the lives of these people. Thank you.
REP. TABORSAK: Thank you for your testimony, and thanks for trying to provide us with some new information and examples that we haven't heard on these issues so far.
Are there any questions from the Committee? Thank you.
PATTI URBAN: Thank you.
REP. TABORSAK: We have Guy Tommasi followed by Dustin Brighton.
GUY TOMMASI, JR.: Good afternoon. Senator Doyle, Representative Taborsak and members of the General Law Committee, my name is Guy Tommasi. I'm the managing director of Lifetime Solutions, a private duty home care company, an affiliate of VNA Community Healthcare based in Guilford, North Haven, and Old Saybrook.
I'm here today to urge you for the support of the registry disclosure Bill 911.
As presented in the statement of purpose, I cannot emphasize the importance of these words for the protection of our most vulnerable population, the elderly, and for those who provide this much needed service, the worker. The passage of this bill will ensure that both the consumer and the worker are given the ability to make intelligent, informed decisions regarding their status as employees, independent contractors and employers.
For too long now these registries have been allowed to provide services and supply workers with little to no regard for the consequences of their actions. Independent contractors offer services to an elderly population without informing them of their legal responsibilities, that they are now considered an employer and may be held responsible for the payment of federal and state taxes, Social Security, overtime and minimum wage, unemployment, workers' comp, and many other applicable payment required under state or federal law.
Ladies and gentlemen of the Committee, I ask you, would you want one of your family members to be blindsided with this financial burden because they were not told of this upfront?
I urge you to support this bill and stop a practice that has been allowed to exist far too long. This bill will not only level the playing field and return thousands of dollars in state taxes, but most importantly, it will protect those who need it the most, our aging loves ones.
Thank you for your consideration.
REP. TABORSAK: Thank you, Mr. Tommasi. Any questions from the Committee? Thank you very much.
The next speaker is Dustin Brighton and Paul Costello, Doug Barker and Nicole Granados and Randy Mealy. Dustin?
DUSTIN BRIGHTON: Thank you, Mr. Chairman. Mr. Chairman, members of this Committee, invited guests, my name is Dustin Brighton. I'm a senior manager of government relations for eBay. EBay is the world's largest on-line marketplace with over 89 million active users worldwide who choose from a variety of categories for goods.
I'm here today to testify in support of House Bill 6298, An Act Concerning The Fair Sale Of Tickets to Entertainment.
Ticketing experiences are just one such category with eBay's marketplace, but it's one of the most popular and dynamic on eBay. In 2007, eBay expanded its ticket business by buying StubHub dot com, one of the largest ticket marketplaces that offers industry leading consumer protections.
People from all across the country visit eBay and StubHub to buy and sell tickets that are in high demand. EBay's open and StubHub's open, transparent marketplaces where buyers can see all available inventory ensures that buyers have the widest choices and sellers get the best price.
There's an important distinction to make that eBay is not a ticket broker. We do not position inventory, so I want to make that distinction here today for the Committee. But, in 2010, over 16 million tickets actually moved through eBay and StubHub in the U.S. for concerts, performances and sporting events, and we believe that a majority of these tickets were sold at or below face value, and our research shows that eBay and StubHub ticket sellers in large part are individuals who end up with more tickets than they can use and want to try to recoup at least some of their costs.
The overwhelming majority of eBay and StubHub ticket transactions occur without any problem, the seller receiving payment and the buyer receiving a legitimate ticket in the transaction. For those very few transactions that are now quite so seamless, eBay and StubHub have several effective consumer protection programs in place. These are designed to protect the buyer who never receives the ticket he bought, receives it too late to use it, receives an invalid ticket, et cetera.
For example, if a citizen of the state of Connecticut buys a ticket on StubHub and one of these problems occurs, we deploy a process which first tries to get the buyer into the event, and if that's not successful, guarantee the buyer 100 percent of their money back.
So with that, I'll conclude, and just say on behalf of the 100 StubHub employees that work at our customer support facility in East Granby and over 580,000 eBay users located in Connecticut, we appreciate the opportunity to have a voice here today.
SENATOR DOYLE: Thank you very much. Any questions? Mr. Chairman?
REP. TABORSAK: Thank you, Mr. Chairman. Thank you for your testimony today.
Some of us, you know, in looking at this issue, it seems strange that companies like your client -- not your client, your company, rather, that are not brokers but are in the business of selling tickets, are in that business, that there isn't some kind of common ground between the venues and yourself. I mean, ultimately, they want somebody -- they want people in the seats, you guys do, too, or nobody -- nobody makes any money.
Can you kind of, you know, speak to that, you know, help us understand that, what's going on there, why we can't find common ground there?
DUSTIN BRIGHTON: Well, I think in answer to your question, I would say that we're always open to listening to other opinions with regard to the resell of tickets. The problem is a lot of times it comes down to a philosophical argument of who actually owns that ticket.
A couple of years ago, there was a survey done by Wakefield. Ninety-five percent of the consumers that were asked the question stated that they thought once they bought a ticket, they should be able to do with it what they wish.
Obviously, when you have restricted paperless ticketing systems -- and I say restricted because we're not against -- obviously, eBay is not against innovation; eBay wouldn't exist if people hadn't innovated, we wouldn't be an on-line marketplace. We're not against innovation, but if you're using technology to restrict consumers rather than empower consumers, that's a problem. So, a lot of times when you start having these discussions, negotiation or the conversation breaks down when we start talking about we feel consumers should be able to resell any ticket at any price on any exchange they wish, there's just a belief out there in some instances that that shouldn't be the case, and we disagree with that.
But, with regard to your question, they weren't absolutely open to trying to figure out ways to make consumers happy. Otherwise, again, StubHub wouldn't exist.
REP. TABORSAK: One of the -- we were presented with the point that New York has been -- has made some changes on this issue, and I was wondering if you have any opinion of what's going on in New York? Is that any sort of trend that you're seeing in your business on this issue?
DUSTIN BRIGHTON: Sure. New York, frankly, was the first state that has passed a statute that says if you employ a paperless ticketing system, you do have to offer an option to the consumer of a transferable ticket, so the consumer has to be able to at least buy something that they can transfer if that's what they wish on any exchange or on any market. We consider that a very positive development for the industry. Obviously, we would endorse the concept, again, of a consumer, one of our customers being able to sell that ticket on any exchange they wish, any price. We consider ourselves one of the best in the business, and we'll compete with anybody.
REP. TABORSAK: And, have you seen any impact on your ticket sales, on ticket sales in general, in New York as a result of that change in their law? Have you seen anything there?
DUSTIN BRIGHTON: No. The fact that New York is deregulated, it's already been a very robust market. It's one of the largest entertainment markets in the world, so I would say -- I would answer that with even though they passed the paperless option, we haven't seen a negative effect on the market at all. As a matter of fact, we hear positive feedback from our customers.
REP. TABORSAK: And I'd allow you to, if you could, comment on -- there was a comment made and a fair question raised that New York -- on this very issue -- that New York, everyone wants to go to New York. We're not exactly New York. It's a big draw. There are some really big draw places in New York.
Would there -- you know, would Connecticut experience a different effect? In other words, would certain acts, certain artists say, you know what; we don't need to go to Connecticut; it's just getting too difficult there; it's not exactly New York; it's not as profitable. Any comments on that comment that was made?
DUSTIN BRIGHTON: Well, obviously, I'm -- you hear different opinions or, at least, I have in the press and in talking with those who are actually in the music business regarding open secondary markets. Some of them think it's great; they like the fact that there are tickets out there on the secondary market and people want to come see their shows. Others don't agree with it. I mean, that's been well documented in the press, et cetera.
My feeling is -- and, again, this is my opinion -- my feeling is that acts are going to go where they want to go regardless of what kind of regime is in place. I would also say that regardless of if this bill passed or not with the option that is contained therein, that it would actually incentivize those who have a very large position in the primary market and distribute tickets, it would actually incentivize them for their technology to become inter-operable with others.
In other words, a venue when their primary ticket distributor could inter-operate with a StubHub and find a way to liquidate those tickets, that inventory that they wanted to liquidate very quickly, obviously that's going to be positive for any act that comes in. It ensures, as you said earlier, Representative, there's (inaudible) in the seats, they're buying the popcorn, buying the T-shirts. I would think that would be a positive.
REP. TABORSAK: Thank you. Are there any questions? Representative Baram?
REP. BARAM: Thank you, Mr. Chairman.
In some of the prior testimony, there was discussion of transparency, and each side has their own perspective of what that means. I'm just wondering, on eBay when somebody places a ticket, do they according to whatever rules you promulgate, do they have to list what the purchase price was that they paid for, what the venue is, what they, you know, selling, reselling the ticket as an individual or as in some other capacity? How much information on eBay do you have to put?
DUSTIN BRIGHTON: Well, it differs. I would say that StubHub is very -- I mean eBay, too for that matter -- we are recognized or, at least I hope our guys have done a good job, of letting everybody know that we're a secondary marketplace. We're not -- we're not into primary sales; we're not a primary distributor.
Would somebody list a ticket on StubHub? No. They don't have to list whether or not they are reselling the ticket. I think the assumption pretty much is they're doing that, they're doing that anyway.
Obviously, we don't set the prices. The seller gets to set the price for the ticket, and that's -- you know, obviously there's a venue map there, they can see where their seat is in the venue, and then our consumer protections, our internal consumer protections take effect when that ticket is purchased by someone. In other words, we ensure that that ticket makes it to the customer who bought it, because if they don't, if it doesn't make it there, we have to make that customer whole, obviously, and then we'll track the person that was selling that ticket, and if -- there's probably a very good chance that they won't be listing on our Web site again.
REP. BARAM: There was also some discussion about mark-ups and commissions or service charges that are reaped by the broker. On eBay does it work the same way? Do you set a price that the seller pays to you upon sale of the ticket, and is that price the same across the board whether you're selling a ticket or a piece of furniture, or something else? How is that regulated?
DUSTIN BRIGHTON: Well, again, StubHub and eBay are different marketplaces. On eBay, we get a commission based upon the amount of the sale. There's a graduated scale based upon the price of the sale.
On StubHub, the way it works, we make money. We get a commission on the sale of the ticket. Regardless of price, the commission is 15 percent of whatever that ticket sold for, so if it -- obviously, you can sell a $100 ticket, we get $15 of that transaction, and the seller actually collects 85 percent, and we disclose that, obviously, pretty prominently when someone wants to sell a ticket.
REP. BARAM: Thank you very much.
REP. TABORSAK: Thank you. Any further questions? Thank you very much.
DUSTIN BRIGHTON: Thank you, Mr. Chairman.
REP. TABORSAK: The next speaker is Paul Costello, then Doug Barker then Nicole Granados and Randy Molloy and Michael Trahan.
PAUL COSTELLO: Good afternoon, Senator Doyle, Representative Taborsak, and members of the General Law Committee, my name is Paul Costello. I'm the training director for the International Brotherhood of Electrical Workers and Connecticut Chapter, and the National Electrical Contractors Association. My organization represents union electrical construction firms who employ nearly 2,000 licensed electricians and another 300 state registered apprentices throughout the state.
I do have my written testimony in front of you. I don't know if you have the complete packet with some statistics that you were looking for earlier. I do have some copies here if you do need that.
A couple of things I'd like to touch on, a few things outside of my written testimony, to try to clear up some of the facts. First of all, I'd like to draw attention back to the reason why we're talking about this bill.
The reason this is coming up, last year there was a bill, House Bill 5225, an act concerning solar work. That bill had nothing to do with this exemption as far as -- I'm sorry -- this limited license here. That was addressing allowing electrical contractors with the same (inaudible) qualifications that a PV license would be eligible for under the CCF funding.
What this is coming about is from a meeting recently through the licensing board. There was misconception -- this bill, I guess the license from what I can find out today has been out since '05. Currently, there's 23 license holders, as mentioned earlier. There's actually five registered apprentices in the program, so the numbers are actually in decline. A year ago when we spoke, there were 29 licenses with four apprentices.
This is all coming about because there was a lot of misconception in the inspection community from one municipality to the next where one inspector would say that PV license does allow someone to go into that equipment. They would work in another municipality and they couldn't, and a lot of this actually came to a head through continuing ed through the electrical licenses last year. I'm an instructor there. I have one class with about 30 inspectors. The solar bill comes up, and we're discussing it, and there was a side discussion on the interpretation, and it's not a turf war between the electrical contractor and the PV contractor.
Nothing got changed in 5225 last year changing this. This has always been on the books. It was just miscommunication from one municipality to the next on what was allowed. A letter went out through the building official on behalf of the Electrical Examining Board stating the position that was talked about earlier with the unanimous vote. The solar group that you're going to hear from shortly approached the Electrical Examining Board for interpretation. They were explained the interpretation; it was stated that nothing has been changed; it's always been this way; and, this is the result of that.
Just to give you a little history on how this came about.
REP. TABORSAK: Yes, please summarize. Thank you.
PAUL COSTELLO: Okay. Thank you.
And, you know, as far as the training, there was a question I believe Representative Taborsak had asked earlier. An unlimited E license needs to obtain a minimum of 1,400 hours of residential wiring, an additional 2,500 hours on commercial installations with another 2,200 hours on industrial installation. Just that work process alone out of our 8,000 hours required for the four-year apprenticeship program by far supersedes the total combined hours in the two-year apprenticeship required to obtain a PV license.
So that's where all this war comes in, and I think what we also need to focus back on is we're not limiting this license to just residential work. I think Mr. Bonner discussed the Pilgrim Furniture project. That was a 345, 342 kilowatt system. That's a large system, rough numbers 900 amps. There's some serious fault currents with that equipment, and people do need to be trained.
The PV license does not offer that training in a four-year program. Continuing ed, we do four to seven hours, as has been the discussion recently up here, on continuing ed for licensed electricians. There was a miscommunication earlier. PV licenses started last year with continuing ed, so it was their first year to obtain continuing ed. That's only a seven-hour course currently. By far, that does not cover any of this material. A lot of that also covers state statutes, general OSHA regulations in addition to some of the other topics, and that's only a small fraction of what the industry actually is.
So, I think that's really where we do need to focus again, and as I mentioned, in closing unlimited E-1 and E-2 licenses are trained and qualified to complete all aspects (inaudible) installations. They complete a minimum of 8,000 hours of (inaudible) training with an additional minimum of 720 hours of related instruction in addition to completing continuing education and safety training each year.
Perhaps this is the time that we really need to focus on this limited license. We're talking about point 16 percent of the electrical industry when you look at the nearly 14,000 electricians.
In my testimony, you will see that packet that has some of the other 20 -- almost 2,300 limited licenses that cover fire alarm systems, nurse's call, all of the way through phone systems. Their work starts where we leave off. They do not make any interconnections. It's a safety factor. We have equipment in those panels that house life safety equipment. There's emergency systems in there. If there's faulty wiring, we would be responsible for those systems, so it's not just the residential when we come in to 100, 200 amp panel and just land a couple of wires on a breaker, okay? This also has the ability to work on commercial and industrial establishments, very well in the building that we're working in now.
SENATOR DOYLE: Thank you. Any questions from the Committee? Mr. Chairman?
REP. TABORSAK: Thank you for your testimony. Thank you, Mr. Chairman.
One of the -- I'd just add a little bit here to the background why this bill is here to your comments. There -- as I understand what has happened over the years -- and this is a new license, so understandably not everyone in the state was 100 percent clear on the scope of it -- at one time and perhaps still now in some places, PV-1's were making these connections to panels.
PAUL COSTELLO: Correct. That -- you know, that has been the case, depending upon the municipalities -- and I'll be the first to admit not all of us were clear on it because I was part of a sub-committee that created the apprenticeship for the PV license. I myself didn't have all of the facts originally, so I am part guilty of that.
It has been corrected. It's been recognized by the industry, by the electrical inspectors in the industry, because (inaudible) from one municipality to the next. Like I said, one of my best CU classes last year was 30 electrical inspectors. We just sat back and let them argue, and then we just, you know, brought out the facts and explained what it was. That's how a lot of this ended up at the licensing board, EWB.
REP. TABORSAK: Now, just also to add a little more background for people so they understand this and why we're looking at this issue, at one time, there was also confusion or, at least, an opinion -- I don't want to say confusion -- from the Department of Consumer Protection that PV-1's could actually make these connections. So, you know, there was confusion in the building departments, in the electrical trade, you know.
PV-1's I think were probably fairly under the impression, and reasonably under the impression, that they could make these connections, and so here we are today, trying to listen to all sides of this, to figure out, you know, where we go from here, and whether or not this Committee will ultimately try to define the scope is another question for another day, and it's something we're going to continue to look at after this, after this hearing, but, you know, your testimony is helpful, and I think my primary concern is, you know, from a safety perspective and from a training perspective, and maybe you can just clarify a little bit more maybe what sort of training would be necessary to make you feel that a person is capable of making a connection with a panel for a lay person like myself, you know.
PAUL COSTELLO: Sure.
REP. TABORSAK: What would that be?
PAUL COSTELLO: Additional training on specific systems outside of just the residential because primarily that's what they are receiving in their apprenticeship currently. Because it is a limited apprenticeship, they don't have the time that it would take an E-2 electrician to qualify serving their apprenticeship.
So, someone else had mentioned that the tie-in is a very small portion of the work on a PV system when you think about the large array you have with modules on the roof and all the piping and wiring in between, so the person that's being trained to achieve or accomplish that license category is not exposed to the large portion in that orb that's required inside that panel board. We have to be familiar with an NFD (inaudible) electrical state board practices, and proper dressing. Any time we're in front of the panel, we have to wear safe protective equipment, flame retardant equipment.
That all has to be properly sized to the equipment we're working on, so there are a lot of calculations that come into it and a lot of training as far as what the hazards are that you're exposing a worker to, okay? You don't have those same hazards on a residential service. There's nowhere near the short circuit current available at that point compared to a project illustrated by Pilgrim Furniture just because that's the discussion.
So, that in itself takes a lot of classroom hours and a lot of on-the-job training hours, okay? We have to be familiar with the other circuits that are in there and how to divide those up because sometimes where the wires come in, we may have to move breakers around. This license doesn't cover that. The license does not cover anything within there because of the training hours. I believe the training hours on the industrial side are around 2,200 hours, and that's working on some fairly large equipment.
REP. TABORSAK: Take that one step further. I understand the point on the distinction between commercial and residential. Do you have an opinion on whether the training that goes into getting a PV-1 license would qualify a person to make a connection in just the residential setting?
PAUL COSTELLO: I still have concerns, I'd be honest. I wouldn't be totally comfortable with it, you know. It's something that would have to be looked at because, again, it's the on-the-job training that I'm not comfortable with, developing that experience over a period of time, because that is the final connection per se on the PV system, you know. So, depending on the amount of man hours, you're not exposing someone to all of the different extremes, okay?
If we come into a panel and the panel has 40 circuits in there. What happens when that panel that they're trying to enter is already maxed out or that system is not capable of handling more breaker space? Now we have to size a sub-panel, okay? This training doesn't cover that currently, so it's not a cookie cutter where every installation is going to be a new installation on a new dwelling where they're going to come in, plenty of room in the panel. My concern would be what happens on an older home where you have fuses? That service is probably going to have to get up there only because where are we going to put that (inaudible), so I think there's too many variables just to look at it that way. I think it's something that really does need to be looked at as an industry. I would leave it up to the Electrical Examining Board. They're the professionals of the industry.
For those same reasons, that's the reason why the C's, the L's and the T's have their limitations. They would only plug into an outlet that was previously installed. Basically, it's all the same reasons why because their training doesn't cover it.
In addition, on the telecommunications side, they talked about the monitoring of the systems and the backbones of the systems for all of that. That's not covered under the current curriculum in the apprenticeship program, where it is encompassed under the E-2 program, and that's something that is specific to the C licenses but not to the PV licenses, but that is part of this work. That's the reason it all comes under the unlimited license.
REP. TABORSAK: Thanks for that response. It's helpful. Thank you, Mr. Chairman.
SENATOR DOYLE: Any further questions? Thank you very much. The next speaker is Doug Barker, Nicole Granados, Randy MOLLOY, Michael Trahan, Jason Ross and Carolyn Humphreys. Doug Barker -- I'm not sure if I --
DOUGLAS BARKER: Barker.
SENATOR DOYLE: It is Barker?
DOUGLAS BARKER: Yes.
SENATOR DOYLE: Okay. Good.
DOUGLAS BARKER: Thank you. Good afternoon. My name's Doug Barker. Thank you for giving me the opportunity to speak. I'm with McPhee Electric. We're an electrical firm located here in Connecticut, Farmington, Stratford. We also have offices in Boston, Massachusetts. We're not only electrical contractors, but we're also general contractors.
I myself, I'm in charge of the renewable resources at McPhee Electric with fuel economy. I'm also an E-1 license holder in the state of Connecticut.
I'm here just to voice my opinion to this law, bill, going forward basically because of the delineation of work. The specific language that's out there now is going to give them free and unobstructed access into the electrical panels where they don't have knowledge, the expertise or the training that's needed.
I think what it's going to be doing is they're kind of basically giving them potential where they can compromise life, safety, the equipment and the property that was previously stated by some of the other people.
One thing that this bill also doesn't really break down is that we're focusing a lot on PV, which is photovoltaic. It also encompasses wind turbines, and there's the potential with the ambiguous language that it also could take into fuel cells.
Given that, they can go all of the way to a panel, into a panel, which could be something that was stated earlier, a large commercial installation. Lately we've been seeing a lot of large scale projects going in, some as large as the utility grade where you're tying into the utility system. That requires specific knowledge in the construction fields electrically utility specific. If this bill is passed, it would allow for them to make those connections into the utility grade. That's my major concern.
One of the things that was just stated by Paul is the fact that it really doesn't announce the limitations on the controls. There's a lot of controls that are going into this as well for communications. It was never stated before, but now it's going to be opened up to them.
Basically, that's where I am with this. I would hope that you would oppose this bill.
SENATOR DOYLE: Thank you. Any questions? Senator Kissel?
SENATOR KISSEL: Thank you, Mr. Chairman.
It's my understanding, though, that these folks were doing this from 2005 to 2010 until there was a different interpretation, and nothing adverse happened, so I'm just -- were they just lucky or did they actually employ some folks that have the (inaudible).
DOUGLAS BARKER: I can't speak to that. I think it could be a combination of both. They may have -- well, they had to apply for an electrical permit, so I'm sure if they may have applied for an electrical permit they hired an electrician to make those final connections; it may have been luck. They could have been lucky just going to the panels.
Again, we're looking at -- we're focusing mostly on residential, and I'm looking at the whole scale. I'm looking at residential, commercial and then beyond.
SENATOR KISSEL: And if I may, just because we have a lot of people (inaudible) --
DOUGLAS BARKER: Yes. I understand.
SENATOR KISSEL: And, the other one was I sort of heard another individual talk about what I would call slippage. In other words, the bright line concern that I'm hearing both sides to is getting in that box and the safety aspects, but another individual seemed to think that utilizing the more qualified individual for job duties that don't necessarily require that expertise -- and I think they were saying like drilling homes from one piece of metal to another piece of metal -- and so on a job site, how are these tasks actually parceled out so that whatever we end up coming up with, it's the most efficient way to promote these kinds of solar energy developments in our state?
DOUGLAS BARKER: That's a good point. In regards to the solar energy and the solar distribution panels, the panels are installed on what's known as racks. Those racks are UL rated. They're bonded and grounded. They're an integral part of the electrical installation. They should be performed by electricians.
That work is presently being done by Massachusetts where Massachusetts dates back. We haven't seen any adverse effects in Massachusetts based on that information.
SENATOR KISSEL: Because I'm concerned that -- I mean, is there going to be anything left for these -- if you get this photovoltaic license, is there anything that you'll actually end up being able to do, or are they basically going to need the higher qualified electrician's license to do most of the project?
DOUGLAS BARKER: The photovoltaic license specifically to the PV now -- we're not talking wind or anything else -- the photovoltaic license will allow the installer to put the racks in, put the panels in, and take it up to what's known as the inverter. The inverter converts it from what we'll call the sun energy to the street energy, and it stops there. It will not, which it doesn't now -- it will still prohibit the installation into the electric service. They won't allow for that electric service, and we just want to make sure it's clarified and it's put out that way.
SENATOR DOYLE: Thank you. Any more questions? Thank you very much.
DOUGLAS BARKER: Thank you.
SENATOR DOYLE: The next speakers are Nicole Granados and Randy MOLLOY.
NICOLE I. GRANADOS: Randy is not available to come. Duty has called as a funeral director for him, so he's assisting a family now.
Good afternoon, Senator Doyle, Representative Taborsak, and Representative Rebimbas, and the distinguished members of the General Law Committee, my name is Nicole Granados, and I'm a licensed funeral director and embalmer with practical experience for over 16 years, 12 of which have been dedicated to assisting families pre-plan their funerals.
As President of the Connecticut Funeral Directors Association, I respectfully submit this testimony.
With the matter of House Bill 6300, the Connecticut Funeral Directors Association supports this proposed bill which addresses the ongoing issue of a Medicaid applicant's ability to assign his or her ownership and beneficiary designation of their personal life insurance policy to a funeral home of their choice.
I just want to clarify that this is not a bill about funeral directors. This is a bill about helping families who are going through the Medicaid process to be able to retain their personal life insurance policies.
Regarding Medicaid eligibility, should a funeral home own an individual's personal life insurance policy? My answer is likely yes with these considerations. Most people take out personal insurance policies to provide for the financial loss that may be felt by their survivors, particularly their funeral expenses. Medicaid applicants are finding out that their personal insurance life policies, which are assets, and that they've likely maintained for years, they're finding out that that can prevent them from being eligible for Medicaid benefits. The greater good for them during this process is to become eligible for Medicaid.
The look-back period for Medicaid is five years, so you may say why can't they just assign their policy to a trusted family member? Well, with the look-back of five years, they would be unable to do that during that time frame. That puts that individual in a position to either cancel and surrender that policy for the cash value, or to try to assign it to a funeral home, number one, if the funeral home will accept it; number two, if the insurance company will accept it; and, number three, if the state of Connecticut Department of Social Services will accept it.
The danger in cashing in anyone's policy, it usually results in a significant loss of funds. The death benefit proceeds if a policy is actually realized with the death of the insured is typically greater than if you were to surrender that policy for cash.
In my experiences, I have seen most families take these significant losses, and unfortunately most policies -- may I continue? -- most policies have considerably less cash value than if the death benefit, the face amount, were realized.
There's a gray area with the Department of Social Services. The uniqueness of assigning one's policy is not in statute right now, so this is a gray area that creates -- there is a lack of uniformity for these Medicaid applicants where in some areas of the state you can't successfully assign a policy ahead of time, and in other parts of the state, the Department of Social Services is not permitting it.
So, this is what we're challenged with. I'm a funeral director, but I sit with these families, and it seems like it's the right thing to do, and I just present that testimony to you today.
Thank you for your time.
SENATOR DOYLE: Thank you very much. Any questions? Senator Kissel?
SENATOR KISSEL: Thank you, Mr. Chairman.
As head of the association, you probably know my friend John Carmon.
NICOLE I. GRANADOS: I do.
SENATOR KISSEL: Well, if you see him or talk to him, I'd love to hear his insights on this particular situation because that would be helpful for me to understand exactly what the trends are going on out there. I think the point he raises is very valid. I remember when I served on the Human Services Committee, you know, we had dilemmas regarding people impoverished even having any money for a funeral or a tombstone, and this is sort of like -- I can understand with estate planning you want to get rid of your assets so you don't fall within that five-year window, but at the same time, you're putting these people in a real bind if they want any kind of decent funeral. Funerals are costing $12,000. They're sort of putting people in that situation, and at the same time, I think it's the unintended consequences. This is a net benefit to the insurance companies that are writing these life policies, and people are sort of compelled to turn them in for cash value at much less value than they would have gotten if they had just continued along the way.
So, hopefully, there's some way that we can get our arms around this. Thank you.
NICOLE I. GRANADOS: Thank you.
SENATOR DOYLE: Thank you. Any further questions? Representative Altobello?
REP. ALTOBELLO: Thank you.
I believe your testimony included a statement that the current laws or regulations, or whatever is happening out in the field is not being applied evenly across the state?
NICOLE I. GRANADOS: Well, with regard to regulations of the Department of Social Services, as far as statutes, there's really nothing in statute currently that defines if one can or cannot.
REP. ALTOBELLO: Well, then, let's focus on the regulations. Is it your testimony that the regulations are not being followed in a uniform manner throughout the state?
NICOLE I. GRANADOS: Yes.
REP. ALTOBELLO: Are there any particular places where there's a hot spot, so to speak?
NICOLE I. GRANADOS: Well, within the association, I am aware of the areas of New Haven and Bridgeport as those DSS offices not permitting families to assign the policy to the funeral home and then be accepted for Medicaid. I'm aware that those families are having to cash in the policies.
I work in Bristol and Plainville, and in my area, they go through the New Britain Department of Social Services, and I have been successful in being able to accommodate families that choose to do that, because it's always their choice. They can either cash it in or they can try to assign it.
REP. ALTOBELLO: And as president of the Association of Funeral Directors, someone's been in contact with the Commissioner's office in DSS, and the answer is?
NICOLE I. GRANADOS: Well, we based our decision on past experiences. For example, five years ago, we had tried, again, with the Medicaid issue of --
REP. ALTOBELLO: No. The answer from the Commissioner's office is, was?
NICOLE I. GRANADOS: We haven't addressed this directly with them.
REP. ALTOBELLO: You haven't?
NICOLE I. GRANADOS: No.
REP. ALTOBELLO: Oh, okay.
NICOLE I. GRANADOS: But if I may -- if I may add to that --
REP. ALTOBELLO: Sure. Go ahead.
NICOLE I. GRANADOS: Not to criticize the Department of Social Services, but what one says, the offices do interpret them differently, and we have seen this time and time again, and I will take it as far as to say that often it may even depend on the case worker whose desk the application comes across, so even with guidelines, the Connecticut Funeral Directors feel that by putting in statute that this is an easy reference to say it's in statute and not have miscommunication or memo's not getting to the appropriate desk within the Department of Social Services.
REP. ALTOBELLO: But, but -- to the best of your knowledge, there are regulations regarding this?
NICOLE I. GRANADOS: Not assigning policies, no.
REP. ALTOBELLO: But, there are no reg's either?
NICOLE I. GRANADOS: I'm not aware of any, no.
REP. ALTOBELLO: No reg's, no statutes that you're aware of?
NICOLE I. GRANADOS: No.
REP. ALTOBELLO: Thank you.
Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any more questions? Seeing none, thank you very much.
The next speaker is Michael Trahan, Jason Ross, Carolyn Humphreys, Richard Dziadul, and John Breyault. Michael Trahan?
MICHAEL TRAHAN: Good afternoon, Chairman Doyle, and Chairman Taborsak, and members of the Committee, my name is Mike Trahan. I'm executive director of Solar Connecticut, and for the last five years our organization has been promoting solar in the state of Connecticut and working with solar installers and the issues that they face.
Our members are companies who are full-time solar electric installers, full-time solar thermal installers -- that's all they do -- and our members are also electrical companies and plumbing companies who do solar on a part-time basis. We also have members who are suppliers, manufacturers and makers of solar panels and components.
I've submitted written testimony. I'd be happy to take questions on it. I did want to make just a couple of quick points and then turn it over to the PV-1 license holders who will be following my testimony. I think some of your questions would be best addressed to them about their thoughts of the industry and where it's going.
First of all, our industry is not lucky. Nobody in the electrical industry is lucky as the previous speaker alluded to. We won't be receiving any additional abilities, anything that we don't already have. If this piece of legislation were to pass, it simply confirms current law, and there was no misinterpretation of the legislation.
You heard Representative Widlitz speak earlier that it was her intention, legislative intent, that the PV-1 contractor would have the ability to install and connect, and that law has been on the books for several years, and so our installers have been playing by those rules right up until a couple of years back when Representative Taborsak, you mentioned earlier, you referenced a couple of times a letter from the Department of Consumer Protection. It speaks to this issue. I have that letter with me, and it speaks to the PV-1 license, and I'll just read one line, and this is from Richard Hurlburt. He's the director of the Occupational and Professional Licensing Division at DCP.
His statement is: Connection to a load center, service panel, battery bank, inverter, and final connection to the grid is also allowable to complete such installation.
So, we've had a state legislator speak of legislative intent about the bill, and we've had the department affirm the fact that PV-1 license holders who put four years on the job and have passed the state exam should be able to make this connection.
It's been mentioned a couple of times that the PV-1 license holder will use his license for large scale industrial and commercial work. It's not the case. There hasn't been a PV-1 license holder that's done that kind of work in the state of Connecticut, and I can't imagine that any of them would want that work, and I've asked them themselves. Some of the work -- some of the large scale industrial work I think you can imagine that most -- or not most but many electricians would not take that work either and would seek a specialist.
Connecticut is not alone. I just want to let you know that Connecticut is not alone in allowing experienced PV-1 license holders to connect to the grid. California, which is the largest solar market in the United States and the third largest solar market in the world allows their installers there to connect to the grid, those who put years of service on the job and passed an exam.
The state of Nevada, the largest solar market in the country in terms of per capita installations. If you put four years in on the job and you pass the state exam, you can install the product, and you can connect to the grid.
Thank you for your time.
SENATOR DOYLE: Thank you. Any questions No questions. Thank you very much.
MICHAEL TRAHAN: You're welcome.
SENATOR DOYLE: The next speaker is Jason Ross, Carolyn Humphreys, Richard Dziadul, Robert Erb, John Breyault. Jason Ross?
JASON ROSS: Thank you, Chairman Doyle, Chairman Taborsak and the rest of the Committee for hearing me out here on this issue.
I'd like to start off by saying that I am in support of the proposed Bill 6337. Essentially my background, I'm a licensed PV-1 installer. I had first obtained my PV-2 license before becoming a limited electrical solar contractor here in the state of Connecticut. I went to school for electrical construction at SUNY Delhi School of Technology, I think the first or maybe the second school in the SUNY system in New York to actually offer photo -- Specific photovoltaic training which is actually distinguished from the rest of the electrical construction program is a very specific field that requires individual training.
I own a company. We're out of Brookfield, Connecticut. I'm actually a co-owner. We primarily perform residential work because that's where the -- that's the largest market sector for photovoltaic installations currently in the state of Connecticut. We have been fortunate enough to obtain some smaller municipal projects through the Connecticut Clean Energy Communities program, some schools in Stamford, Westport. We did a small installation on the Beardsley Zoo's Peacock Cafe. All of those installations I or one of my licensed employees performed the final interconnection as well as the other portions of the installation.
It seems like the final interconnections are given a lot of attention as it is definitely an integral component of a photovoltaic system. You can install a photovoltaic system without making that final interconnection. The code, the National Electric Code plays a critical role in performing that connection correctly, passing municipal inspections, making that connection safely. The same National Electric Code and a lot of the same articles and chapters that apply to the -- that would apply to the final interconnection apply throughout the entire system all the way up to the grounding and bonding that might be done on your roof.
I think at one point the electrical work board in their clarification really focused in on one particular line of the -- can I continue?
SENATOR DOYLE: Yes. Summarize, summarize. Thank you.
JASON ROSS: So essentially what we're looking for out of this proposed bill is essentially some affirmation on the PV license and the time, the four years -- I've been in the industry for about six now, but the four years that I had to spend in selling only photovoltaic systems, only doing photovoltaic interconnections, only doing inverter installations and DC wiring for four years, I would suspect that's probably quite a bit more experience performing all these tasks than most E license holders in the variety of electrical work that they do have to perform.
As a specialist in photovoltaics, I think that a PV license holder is and should be qualified to make final interconnections to the grid, and that is what proposed Bill 6337 (inaudible).
SENATOR DOYLE: Thank you. Any questions? Senator Kissel?
SENATOR KISSEL: Thank you very much. I appreciate your first-hand experience regarding this issue.
Would you have any opposition to -- I think with the E licenses, they have continuing education requirements to renew their license, and I guess it's not the same for what you hold, and I'm wondering if you would have an objection to being on the same level as those folks.
JASON ROSS: Senator Kissel, I'm very much a proponent of education in all aspects of electrical construction. Actually, I don't think -- I'm not sure who made that comment, but I don't that know was true because I've been served with a notice from the Department of Consumer Protection saying that I need to participate in continuing education and since then have been participating for the last two years. I will be again this year attending a continuing ed course as well this year.
One of the major issues actually is the fact that last year was the first year they actually offered a continuing education program specific to the PV license, and even in that continuing education program, they didn't touch on any PV specific content, so this year I talked to the same educator that I sat with last year, and that educator has actually declined to offer his course again, stating that he's not getting the turn-out maybe or I know there's been quite a few apprentices and PV applicants over the course of the last year that had, you know, been trying to enter into the -- obtain their license. Some may be qualified; some maybe not; but, I know pretty much over the last about a year, a year and a half, there's pretty much been a blanket stop on issuance of this license to qualified individuals, and I think that's a problem.
But, yes, I'm 100 percent for continuing education for the PV license.
SENATOR KISSEL: I really appreciate your answer because you have insights that I haven't heard all afternoon, and it's helpful. Thank you.
SENATOR DOYLE: Thank you. Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chairman. Thank you for your testimony this afternoon.
Do you have anyone employed at your company with an E-1 or E-2 license?
JASON ROSS: Yes. I'm actually a PV-1, unlimited electrical contractor. We employ full-time an E-2, unlimited electrical journeyman who is essentially allowed to perform all the work that my license would allow me to perform, so even though he is an unlimited electrical contractor and he's gone through all the same testing and training and experience as any E-2 or E-1, he's only allowed to work to the extent that the scope of my license allows, so essentially only on in this case solar electric systems.
REP. REBIMBAS: (Inaudible) I don't know if you heard the testimony earlier. There was -- the fact pattern was that if you went to a residential home and you were installing it and the box was at its capacity -- and you'll have to excuse me that I don't know the terminology -- but that box would be at its capacity, and it was represented that a PV-1 or PV-2 wouldn't have the expertise to deal with a situation like that.
So, in your situation, do you agree that the PV-1, PV-2 either doesn't have the experience to do it or the expertise or isn't licensed to do it, and if you were faced with that situation, what would you do, and I'm assuming you probably would just call your employee that has the E-1, E-2 to address it.
So, if you can kind of touch upon those topics.
JASON ROSS: I most certainly can. So, I would disagree with the fact that a PV license holder is not educated and appropriately trained to address that type of an issue. Our license would not allow us or permit us to pull a permit or perform the work of any electrical service upgrade, nor would I personally ever attempt to do such a thing.
I think that pretty much would hold true across the board. We kind of do the work where we make our money, and that's PV installations and not service upgrades. A lot of that -- if an upgrade were needed, that would probably -- that would be a discussion with the PV license holder or even a salesperson for a PV company are typically trained to address and we'll bring up during the sales process or before a contract is set in place. Sometimes there are ways to work around maybe an inadequate or undersize service panel which are co-compliant, and there is also always the option of bringing in a subcontractor, an E license holder, to perform the service work necessary, and we have done that in the past when the homeowner sees this is the perfect opportunity, we're getting a PV installation done, you know, I could probably get a little better of a deal if I work with them to get my -- to get another electrical contractor in here.
We do bring in electrical contractors in quite a few situations to, you know, work with them on certain aspects of a project. We do work in four states, so we -- I'm very familiar with subcontracting with unlimited electricians and appreciate their skills and expertise as well.
REP. REBIMBAS: Thank you for your testimony. Thank you, Mr. Chair.
SENATOR DOYLE: Thank you. Any further questions? Mr. Chairman?
REP. TABORSAK: Thank you, and thanks for your testimony.
To follow what my colleague was kind of, I think, driving at is we get into a slippery slope when we talk about what possibly a PV-1 could do as far as connecting to a panel and what circumstances could arise that would require a PV-1 to get an electrician in to do upgrades and add a sub panel, things like that were mentioned.
And so, as I listen to all of this, I have a hard time understanding how we would define -- if we were to agree that a PV-1 could connect to a panel, I have a hard time imagining how we would change the law and what we would say. We'd almost have to qualify that and say something along the lines unless there are circumstances that require an upgrade or electrical work that can only be performed by an E-1 or an E-2, so it would almost -- it would almost sound like we would have to say that a PV-1 can make this connection if we were to go down that road only when there are absolutely no complications and there is space on the panel.
Can you comment on that just -- you know, I'm trying to --
JASON ROSS: Most certainly.
REP. TABORSAK: -- imagine how this would be done.
JASON ROSS: Well, I guess, number one, the original regulation, I think to me from what it looks like, the way that it is worded, fairly clearly indicates the fact that a photovoltaic system would include the final interconnection. I guess I can jump around here a little bit. As far as addressing, you know, a panel and its capacity and whether it's safe or not safe to tie into, that's typically -- that question is typically asked and addressed in the contractual stage and in the design stage well before anyone is getting out there to do any work, and well before a permit is ever had.
When we go to actually pull a permit for a PV installation, we would indicate our method of tie-in, and we do on our (inaudible) indicate a method of tie-in to the electrical inspector, and that method of tie-in is kind of determined based on what we see at the electrical panel: Is the panel undersized? Maybe is it antiquated with fuses that might not be safe any more?
The code does allow you to tie in before the panel, which I've done on multiple occasions. It's a perfectly safe, effective tie-in method. In a lot of situations, you can just avoid the panel altogether. I think a lot of that comes down more to financials. The homeowner is spending -- making a financial decision on a photovoltaic installation. Now do you throw in the service upgrade. If it's necessary to install a photovoltaic system, if it's necessary to upgrade your electrical service to install a photovoltaic system, that would not be something that I would be able to go to contract on because I could not complete my contractual obligation other than if the homeowner was aware or the building owner was aware that a service upgrade was necessary, and that would be an additional expense that would -- we could bring in probably not even a sub, probably just an electrician that we work with who could do that work and permit that work. We could essentially -- as far as the actual wording would go, that would be something that I think, you know -- I've written (inaudible), you know, touched on and been, you know, fairly clear on the original intent of the bill.
REP. TABORSAK: And -- thanks. Another speaker made a point about California and what they're doing there. Would you -- I believe from what I gleaned from that was that California allows their PV-1's, whatever the equivalent is there of their license to make these connections after having four years experience. Is that -- if we were to follow -- and I'm not saying we are -- to follow California, is that something you would support, that sort of a model, that after four years of experience you'd be able to make these connections? Is that something that you would support?
JASON ROSS: That is something I would support. I believe that's kind of already the case except that there's this question now of that final connection. So, I mean currently we actually have a license -- not license, but an apprentice who's working under my license right now, and the -- he's going to need to perform 4,000 hours on-the-job training and however many -- I think it's 280 or 288 hours of classroom, and some -- it's got some OSHA in there as well, like 30 hours there, that's for him just to get his PV-2 to become a journeyman, and then he's got to -- he's got to work for another two years, an additional 4,000 hours to become an electrical contractor. That's four full years, countless hours.
I mean, that's a lot of -- that's a big commitment to photovoltaics specifically, and yeah, I would agree with the (inaudible). You know, four years is a good amount of time to really pick this work up from final tie-in to mounting the panels on the roof.
REP. TABORSAK: Just one more question. We've been talking a little bit about the amount of training, and again, I'm kind of zeroing in on this issue of connecting to the panel.
Can you tell me about the extent of training that you have as a PV-1 that you believe would qualify you and other PV-1's to make those connections in both education and, you know, on-the-job training? Can you talk about that a little bit?
JASON ROSS: Yes. As far as -- I guess my educational background, as I stated, I went to SUNY Delhi, I passed the electrical construction program, got a two-year Associate's degree --
REP. TABORSAK: Not to cut you off, I'm a little more interested in what the average PV-1's experience would be. I'm assuming the number of PV-1's don't have that degree, that's not required to get the license, so what -- you know, what as a requirement in Connecticut to become a PV-1 would qualify you and others to do that work, if you could?
JASON ROSS: I think -- you know, following the path that's recently been set for an apprenticeship program is pretty much the way at this point in time to move towards becoming a licensed limited electrical solar contractor. There are some voluntary certifications out there that would be nice to see them utilized because I think they essentially attribute a certain knowledge and experience that an individual needs to obtain in order to voluntarily obtain certifications that -- NABCEP is a big certification, the North American Board of Certified Energy Practitioners, has -- they actually have an exam that's -- every year kind of the pass rate goes down because it's a trade-based exam. You need to be in the field, you need to have done work in order to pass that exam. You can study until you're blue in the face, and you're going to need luck to pass that exam. You need to be out there.
So, that might be kind of a path to follow for the state of Connecticut when developing that kind of criteria that they might require an apprentice to --
REP. TABORSAK: We're getting a little off topic. What I'm looking for really is the apprenticeship, the program you went through to become a PV-1, how much of that training involved making connections to a panel? What was the training involved on that aspect?
JASON ROSS: The specific on-the-job training for making connections to the panel. I could say I have 110 installations permitted under my license. I've probably made the final connection on about 50 of them. My training -- at the time the license became available, I applied immediately. I had about a year's experience in the field. I probably worked on about 40 installations on all aspects, depending on what was needed throughout the course of the day. I would say probably somewhere between like 10 and 25 percent of the work load would be consumed in the final interconnection.
I don't know if that addresses your question any better, but essentially, my license was obtained not through the apprenticeship program because the apprenticeship program was not in place, but to-date, I have permitted 110 -- I think actually now 112 after today installations in the state of Connecticut, all of which we did the final interconnection under my license, many of which I've done the final interconnection myself.
As far as my qualifications and experience, I mean, I'd love to come perform a site survey in your home, Representative Taborsak, and go over some more details (inaudible).
REP. TABORSAK: I appreciate that offer, but your testimony has been helpful on this issue. Thanks for coming up. That's my last question. Thank you.
JASON ROSS: Thank you.
REP. TABORSAK: Thank you, Mr. Chairman.
SENATOR DOYLE: Any further questions? Seeing none, thank you very much.
The next speaker is Carolyn Humphreys, Richard Dziadul, Robert Erb, John Breyault, Ray Boller, Renny Wilcox maybe. Carolyn? Yes. Thank you.
CAROLYN HUMPHREYS: Good afternoon, Chairman Taborsak and Chairman Doyle, and members of the Committee. My name is Carolyn Humphreys. I am from Bethlehem, and my company is Sunlight Solar Energy out of Milford, and we're one of the oldest and largest solar companies in Connecticut. We've done well over 550 installations, over 3 megawatts of power, for the vast majority of residential, but several commercial jobs when the (inaudible) existed.
I come at this from a little bit different perspective. We have a PV-1, an E-1, three E-2's and a couple of PV-2's, so I don't really think this is an either/or. We are experiencing -- we have experienced tremendous growth, and we are projected to experience a 40 percent increase every year for the next ten years. I don't think we should be limiting the number of people we have do this. I think we should be welcoming with open arms the opportunity to have people who want this limited license to help us more solar installed. We're going to need that help.
The fact that some people would like to keep the whole pie for themselves when, in fact, they didn't actually build the industry, we did, I find sort of disturbing. You know, we've taken out of work electricians in, made them our own, trained them, because as much as electricians know -- and they know a lot -- they don't know solar, and they were tremendously helpful in teaching many of our solar people more about electricity and electrical work, and so to me I'm not really sure why -- I agree with you. It sounds like a turf war to me, and I'd really like to see -- PV-1's have been tying in for five years. We have had not one single problem. I work for a big company. If there had been a problem, we have a lot of installations. There have been none, and why now we'd like to change that?
I think we're a progressive state. I think we are a state of (inaudible), tremendous support for solar. I think that we're more in line in a trajectory like California to be a progressive state and say we can do this, we can move this forward. We're not going to go back in time. We've already been there. I already had to have a licensed E-1 to tie in. That was five years ago, six years ago, and it was fine, but you know what? They cost more, and we're trying to bring our costs down.
The only way this industry is going to grow -- and by the way, it's been funded with ratepayer funds, so every Connecticut ratepayer has built this industry -- I don't want to see it hindered in any way by greed, really, and I'd really like to see everybody continue to allow a system that works work.
SENATOR DOYLE: Thank you. Any questions? Seeing none, thank you very much.
CAROLYN HUMPHREYS: You're welcome. The last comment: Soft costs are what have to come down, and this falls into that. You know, there was 7 percent. As the years go by, they're now 30 percent, and they're projected to be 60 percent, so we can't really take more increased costs.
SENATOR DOYLE: Thank you. Richard Dziadul -- I think I mispronounced your name, Richard -- Robert Erb, John Breyault, Ray Boller, I think Renny Wilcox. Richard?
RICHARD DZIADUL: Yes, sir. I'm Richard Dziadul, and I know it's not how the name's spelled. That's just the way it is. I'm a PV-1. I'm a former electrical engineer. I'm a BSET, which is a technology piece of the electrical engineering. I'm a NABCEP Certified Professional, and I've been working in this industry for six years.
And, I'd like to say that a PV-1 is an electrician. They're just a limited electrician. I know today there's been a lot of split between an electrician, which is -- we call electricians electricians and PV-1's, but technically a PV-1 is an electrician, and you need to be able to do 100 percent of the task that you're permitted to do.
It becomes impractical, impossible to run a solar company with a PV-1 license if you can't do the whole job. (Inaudible.) It's impossible if you can't pull your own permits.
I'm the exception to the rule. I know a lot of PV-1's like to work with other PV-1's and only hire electricians when -- well, when there's a difficult box or the site -- the site requires it. I have -- in the 60 installations I have been permitted under my license, I have always used a licensed electrician for the intertie except for one time, and this time it didn't require it.
Now, I'm not saying that it's required to have an E license holder on a job to intertie, but that's been my practice. I've learned an awful lot from my electricians that work for me or used to work for me. I no longer install. I inspect now. I've had, you know, six years of on-the-job training, and I know my stuff.
I would never try to do a large commercial system. To be honest, most electricians aren't qualified to do that. I would never try to do a utility scale system. That would just be, you know, beyond the scope of what I would set out to do.
And, one last thing. If you need an electrician, hire one.
SENATOR DOYLE: Thank you. Any questions from the Committee? Senator Kissel?
SENATOR KISSEL: Yes. Just along the lines of deploying the permit, so during those five years with your PV-1 license, you were just able to go to the town hall and pull the permit, and under the change that has occurred, you can't -- someone having that license can't do that now?
RICHARD DZIADUL: That's correct. Most towns are -- follow the Hurlburt letter, the director of the Consumer Protection letter that says PV-1's are allowed to pull PV permits, so in most towns I had no problem. In those few towns that didn't recog -- didn't understand the license, then I would use the state agent of contractor form from one of my electricians to pull a permit, but that's extra time, extra expense, and extra difficulty.
SENATOR KISSEL: Thank you.
SENATOR DOYLE: Thank you. Any further questions from the Committee? Seeing none, thank you very much.
The next speaker is Robert Erb, John Breyault, Ray Boller, Renny Wilcox (inaudible), and Cameron Champlin.
ROBERT ERB: Good afternoon Chairman Taborsak, Chairman Doyle, and members of the Committee. I did not prepare a speech today because I wasn't supposed to talk, but we'll talk anyway.
I'm in support of 6337. My name is Robert Erb, and I'm from Solar Design Associates. I've been working in this industry for about 28 years.
I think the things that I've heard so far basically boil down to training, experience, and the members of the PV-1 license holders that I know are extremely well trained. They continue to get training in photovoltaics through their continuing education as well as all the other programs that are available either through vendors or from trade experts. I, too, believe it's somewhat of a turf war. It's interesting, though, that there are thousands of E-1's and E-2's and just 23 solar installers.
Again, I've been working in this industry for 28 years. I've done lots of training of other electrical contractors, electrical engineers, and people who are wanting to get in the business. I feel that there is a definite lack of training in the solar industry. Whether or not there is a lack of expertise in the PV-1 license arena for the interconnections of large commercial buildings remains to be seen, but I understand just about every commercial, institutional, industrial building that you go to is different.
Again, I've seen lots and lots of different systems. Each one I look at I'd have to analyze and understand how I can interconnect. It is one of the most violated rules throughout the industry, and that is according to code how it goes, how you're supposed to do it. You've heard talk about is the panel eligible to receive it. It's not just whether or not there's a space available. You do have to follow the code.
In closing, one of the things I recently just heard -- and I'm kind of paraphrasing -- was that is there a way to differentiate commercial buildings from the residential buildings, and if you're looking for language for a demarcation point, you might find three phase electrical systems common ground amongst the PV-1 license holders and the electrical contractors.
SENATOR DOYLE: Thank you. Any questions from the Committee? Seeing none, thank you very much.
The next speaker is John Breyault, then Ray Boller, than Renny Wilcox maybe -- I don't know -- Cameron Champlin and Sue Christolini. John?
JOHN D. BREYAULT: Thank you. Good afternoon, Messrs. Co-Chairmen, Mr. Vice Chair, Mr. and Ms. Ranking Member, and members of the Committee. My name is John Breyault, and I'm the vice president of public policy, telecommunications and fraud for the National Consumers League.
Founded in 1899, NCL is the nation's oldest consumer advocacy organization, and no, I'm not a founding member. Our non-profit mission is to advocate on behalf of consumers and workers in the United States and abroad.
I appreciate this opportunity to appear before the Committee to support and discuss the consumer impact of H.B. Number 6298.
For consumers purchasing an event ticket, it is all too often a source of confusion and frustration. Ticket buyers are faced with a multitude of outrageous service fees. To add insult to injury, consumers often stand little chance of purchasing tickets on the on-sale date as thousands of tickets are routinely held back from general public sale.
For example, at a 2009 Taylor Swift show in Tennessee, only 1,600 of 13,300 tickets were made available for public sale. Similar incidents have occurred at Keith Urban and Hannah Montana shows to name only a few. Such barriers to access to tickets have caused consumers to increasingly turn to the on-line secondary market. While consumers may pay a premium for these services, they do offer a safe, secure way for consumers to purchase tickets, often at or below face value.
The proliferation of restrictive paperless ticketing is a threat to consumer access to these on-line markets. While primary ticketers like TicketMaster advertise the convenience of requiring paperless ticketing, consumers have experienced frequent difficulties redeeming their purchases on the day of the event and transferring tickets to friends or family members.
For consumers unable to attend an event -- and as you've heard, up to 30 or 30 percent of consumers often cannot attend an event for which they purchased a ticket -- resale of tickets to paperless only events is greatly complicated, if not prevented entirely.
NCL supports the goal of H.B. 6298. The common sense consumer protections envisioned in the bill will protect consumers from some of the more egregious market practices while preserving consumers' rights to transfer or resell their tickets.
We urge, however, that the definition of a technical hold in Section 1-E be spelled out and hold-back limits be strengthened. These changes are needed to ensure that the permitted exemptions do not swallow your intended goal.
In conclusion, I thank you for the opportunity to discuss this important issue. I applaud you for your leadership in this area and look forward to answering your questions.
SENATOR DOYLE: Perfect timing. Senator Kissel?
SENATOR KISSEL: Are you with sort of a not-for-profit advocacy group, or who sort of funds what your organization does?
JOHN D. BREYAULT: Sure. The National Consumers League is a non-profit organization. We receive funding from members of the organization, which come from -- directly from consumers, from foundations and from consumers -- corporations and business interests.
SENATOR KISSEL: So you really don't have a dog in the fight as far as, you know, the parties that are battling here?
JOHN D. BREYAULT: We are a member of what's called the Fan Freedom Project, which is a new organization that is dedicated to preserving consumer access to this on-line secondary market, and there are a number of corporate organizations with dogs in this fight, and they're members of that in addition to consumer groups like ours.
SENATOR KISSEL: Thank you. Are you based in Connecticut or somewhere else?
JOHN D. BREYAULT: No. We're a national organization. We're based in Washington, D.C.
SENATOR KISSEL: Okay. So you came up. Good. Thank you.
SENATOR DOYLE: Any further questions? Thank you very much.
JOHN D. BREYAULT: Thank you.
SENATOR DOYLE: The next speaker is Ray Boller, I think, then Renny Wieland, Cameron Champlin, Sue Christolini and Ken -- Kevin Donohue.
RAY BOLLER: Good afternoon. Thank you for giving me this opportunity to provide my testimony.
My name is Ray Boller, and I'm the owner of BrightStar of Stamford/Greenwich, a private duty, private pay home care agency serving Stamford, Greenwich, Darien and New Canaan.
I'm here today to voice my support of Senate Bill Number 911.
I am a recent entrant into the health care field after 25 years in corporate America. I purchased the franchise and opened my office this past July. While there were many reasons for my getting into this field, knowing that I can provide a service that allows seniors to age in place in their own homes was an important motive for me.
As I did my research and due diligence into opening an agency, it became very clear to me that I have actually two sets of, quote-unquote, clients -- my patients and their families and my caregivers. Providing excellent customer service and care to both groups will ultimately bring success to my agency. Providing compassionate caregivers to families in need of assistance is my goal. The focus should be on the quality of care supervised by professionals, and that focus should not be diverted by having patients or the caregivers having to worry about non-care related matters.
I made a conscious decision to run my agency in a responsible, accountable manner. My business model is an expensive one to operate: Employing a nurse to provide a plan of care for all clients and supervising the caregivers, hiring caregivers as my employees, and carrying the necessary insurance to protect both my patients and my caregivers.
Over the last six months, as I heard of the horror stories of both clients and caregivers abuse from registries, I know I made the right decision.
One caregiver told us the story of how she worked for a registry and got paid directly by the patient. It was nice to make a higher hourly rate, but being responsible to pay her taxes was too complicated,and when she got hurt and dislocated her shoulder while working with a male Alzheimer's patient, she bore full responsibility for covering the bills related to her injury. No workman's comp.
One client was shocked when she got a notice from the state that she owed over $30,000 in taxes and fines after employing a caregiver from a registry to care for her dying mother. She paid the caregiver directly and didn't take any taxes out. After her mother passed away, the caregiver filed for unemployment, and the state came after her for taxes and unemployment insurance.
It is stories like these that lead me to support this bill. Having registries disclose to both prospective clients and caregivers how they operate as to supervision, taxes and insurance is important so that both groups can make an informed decision. Disclose this information up front and avoid surprises down the road. That way everyone can focus on what is really important -- providing quality care to the seniors.
Additionally, it doesn't hurt to have the state collect new-found tax revenue at a time of fiscal need.
In closing, I ask the Committee to vote in favor of Bill 911. Thank you.
SENATOR DOYLE: Thank you. Any questions from the Committee? Seeing none, thank you very much.
The next person up is Renny Wilcox -- I'm sorry, Renny. I'll have to have you clarify your name for me. And Cameron Champlin and Sue Christolini, Kevin Donohue, Joyce Wojtas.
W. RENNARD WIELAND: Do I have the right to -- okay. The name is Wieland, W-i-e-l-a-n-d, and if it's bad handwriting, I apologize.
SENATOR DOYLE: I'll clean the handwriting up.
W. RENNARD WIELAND: Okay.
SENATOR DOYLE: Thank you.
W. RENNARD WIELAND: Good afternoon, Senator Doyle, Representative Taborsak, and members of the General Law Committee.
I am a member of the National and Private Duty Association Board at (inaudible), Connecticut. My name is Renny Wieland. I have been involved with home health care for most of my working life.
I was the executive director of a visiting nurse association for 18 years, and I now own and operate a private duty home care agency in Trumbull, Connecticut, which I started about eleven years ago.
One of the points that I'd like to make is there is still, despite Medicare, despite all the titles out there, there is still a lot of confusion among the public and even law makers at times about the difference between certified home health agencies, private duty home care agencies, and referral agencies, and generally the public has this confusion, and I know that because I deal on a personal basis with most of my clients.
We receive calls from seniors who come to us for service who are confused over the fact that they were having to pay a caregiver directly. They didn't know that when they started the service, and the reason they came to us was they didn't that arrangement, and some of them did realize there were a lot of implications to that, particularly on the liability side.
Many of the frail elderly that we serve are more than willing to accept help in their homes without questioning the employment relationship that the caregiver brings in. The pamphlets and the literature -- and I have them in my possession -- handed out to senior audiences all reflect advertising which purports those agencies to specialize in home care service for the elderly without even mentioning the independent status of the caregiver being sent out.
Most of the time, independent contractors lack supervision. In many instances they're without criminal background checks or even references on file. We know this because the caregivers come to us, and they want to become employed, and they give us that information.
I'm going to tell you something shocking. The classic example of how this service goes wrong happened in Bridgeport, Connecticut, several years ago when a male aide in his thirties was sent out by a registry to care for a frail elderly female in her eighties. This woman lived in an apartment with her granddaughter. The male aide was in the process of raping the grandmother when the granddaughter arrived home from school. Obviously, an arrest was made in this case; however, the question remains: Did this person have a criminal background check? Most likely not. Was this aide now an employee of the grandmother, and was she aware of it? What type of professional liability insurance was available? Who carried it? Why was a male aide sent out to care for an elderly woman in the first place?
This is not the standard for safe home care practice.
I'm going to conclude by saying that misleading advertising can lead to extreme situations like this. The public should be fully aware of the type of service they're subscribing to and fully understand their own responsibility in choosing a registry or placement service.
I strongly support Raised Bill 911.
SENATOR DOYLE: Thank you. Any questions from the Committee? Representative Nicastro?
REP. NICASTRO: Thank you, Mr. Chairman. I'll try and be very brief.
You talked about criminal background checks. Why wouldn't the proposed employer do the background check? If I own the business and I was going -- and I'm liable for the services that I provide, why wouldn't I do the background checks on the people I'm going to hire?
It's just like in a city, municipality. Before we hire police officers or firemen, or whatever the case may be, we do background checks, and sometimes we're very shocked -- like you said -- we find things out that, you know, that you didn't know. Why wouldn't the employer do it?
W. RENNARD WIELAND: It just adds to the cost.
REP. NICASTRO: I'm sorry?
W. RENNARD WIELAND: It adds to cost.
REP. NICASTRO: I realize it adds to cost, but if you want to have a good business and you want to provide proper services and you want to have a good name out there, I would think that you should be -- that you would be willing to talk concerns.
W. RENNARD WIELAND: I think that the implication here is that hiring independent contractors is a way to cut your costs. Not doing a criminal background check on them is another way to cut your costs. There's very little, if any, oversight with regard to those types of agencies.
You know, I've been in this business for a long, long time, and what I'm saying about those agencies is absolutely the case. This is a new industry. The home care industry, even though some agencies have been in business 20 years, most of the latest entities that have come into this have come in probably in the past five or ten years. It sounds like an easy business to get into, but it's not, and I personally believe in more regulation in that direction because what you're looking at is really an emerging industry that has not had a lot of guidance and has not had a lot of oversight. That's my opinion.
REP. NICASTRO: Thank you. Thank you, Mr. Chairman.
SENATOR DOYLE: Thank you. Any further questions from the Committee? Seeing none, thank you very much.
The next speaker is Cameron Champlin, then Sue Christolini and Kevin Donohue, Joyce Wojtas, Susan (inaudible).
CAMERON CHAMPLIN: Good afternoon Senator Doyle, Representative Taborsak, and members of the Committee. You have my written testimony, so I won't read it, but I'll just tell you that I have been involved with the piping industry for 45 years. I've been a member of the Heating and Cooling Board for the last -- well, since 1986.
We need more enforcement. It's been all of the committee -- all of our committee, all of the other boards, all have been trying to get more enforcement for years, and we think this is a start. We do believe that if everything is taken into consideration of what enforcement would do, which means it would bring in more revenue for the state because you have somebody out there checking on the people that are cheating. It would help the contractors that are good contractors in the state of Connecticut from having to bid against people that are cheating all of the time. They can lower their costs by having unlicensed people, having unregistered apprentices, and that goes on every day.
I guess we'd like to -- one thing in the bill where there is a couple of changes that we were asked to mention by the DCP. I talked to Gary Bernier earlier, and he said, you know, could you do something like this. I told him I would mention it in my testimony.
Where it says number four -- shall develop a plan to increase, we would be willing to have that changed to shall develop a plan to ensure the efficient enforcement of the occupational licensing provisions contained in this chapter, which is a simple change of wording, but it really means the same thing. It's just that they would be more comfortable with that.
And, with that, I would like to thank you for the opportunity today to speak on that bill. I also -- I would like to --
SENATOR DOYLE: Cameron, excuse me. Could you repeat that language?
CAMERON CHAMPLIN: Sure. I'm sorry, Senator.
SENATOR DOYLE: Can you submit it?
CAMERON CHAMPLIN: Yes. I'll drop it off later, or whatever, at your office.
SENATOR DOYLE: Yeah, for the Clerk. Thank you. I'm sorry to interrupt you. Keep going. I interrupted you.
CAMERON CHAMPLIN: All right. And, the other -- there's two other bills that I would like to support, and you're going to hear more information from one of the -- one of the people that will be up here next, Joyce Wojtas, on S.B. 867, mechanical contractors. There would be a fine put in place for people that are cheating on that, and I would like to speak in favor of that for Local 777, and also on H.B. 6265, advertising for the unlicensed people. That's something that's very unfair, and I believe that that would be something that would really forward the industry to have that happen.
So, with that, I would like to thank you for the opportunity to testify today, and I will make sure that I get that language to you.
SENATOR DOYLE: Thank you very much, Cameron. Any questions? Seeing none, thank you very much.
The next speaker is Susan Christolini, Kevin Donohue, Joyce Wojtas, Susan Giacalone. Sue?
SUSAN CHRISTOLINI: Good afternoon. Mr. Chairman and members of the Committee, my name is Susan Christolini. I'm the president of Northwest Home Care, Incorporated, a member of the Connecticut Association of Home Care Registries, a member of the Connecticut Home Care and Companion Association, and a member of the Private Care Association. I'm speaking today against proposed -- Raised Bill 911 for the following reasons.
The bill continues the confusion of the original statute where the words employee and independent contractor are used synonymously. A distinct separation of the two words would provide more clarity to the meaning and the intent of the provisions of the statute. The words employee and independent contractor have very different meanings and are governed by distinctly different laws and regulations on a state and federal level.
In Section 3(a), if the intent of this modification is to inform the consumer of the duties, responsibilities, obligations and legal liabilities of a registry, should the consumer also be entitled to the same information from a payrolled agency?
In 3(b), one, does the bill propose requiring registries to advise the consumer that the client is responsible for items (A) through (F) or is the amendment requiring registries to provide answers as to who is responsible for (A) through (F)? If the latter is true, the Homemaker Companion Act of 2006 already contains some of the same requirements.
In Section 20-670-3 of the Regulations of the Department of Consumer Protection, all agencies registered as Homemaker Companion agencies are required to provide a clear definition of the employee, provider and client employment relationship. Raised Bill 911 is redundant here.
In 3(c), the language of this section should include the same language that is in Section 3(a)3, stating the liability of the consumer if, in fact, the consumer is deemed to be the employer.
If registries are required to comply with Section 3, Homemaker Companion agencies should also be required to comply. Elderly consumers, many with diminished cognitive capacity, are unaware of the intricacies of employment law. Having only a registry define these issues would lead consumers to believe that Homemaker Companion agencies are not responsible for the same issues. The requirement to provide information should be across the board.
Section 4(a), the list of proposed information to be given to referred individuals serves to further confuse the issues. By definition and by law, independent contractors are responsible for their own supervision, tools and equipment of their trade, and the duties they perform.
In 4(b), the statement appears to be overly cautionary and non-specific as to the lack of the protections afforded.
The bill unfairly singles out registries in a state where they have served elderly residents and anyone in need of care for over eighty years. Registry owners have worked with the Department of Consumer Protection to recommend and bring about workable regulations for all private home care agencies in the state. Several components of regulation PA187 came from recommendations of the Connecticut Association of Home Care Registries.
We deserve the respect of the legislature by not being singled out unfairly and overburdened with regulation that could bring about the demise of a valued elderly resource in a state with a rapidly escalating elderly population. Registries provide thousands of jobs to individuals who care for thousands of elderly clients in Connecticut at the lowest possible cost.
Are we trying to fit a square peg into a round hole? Instead of trying to make registries fit into legislation structured for payrolled Homemaker Companion agencies, perhaps we should look to develop separate legislation for registries. Many other states, including California, Florida, Maryland and Pennsylvania have done this to their benefit. As we've done in the past, The Connecticut Association of Home Care Registries would be very interested in talking to and working with anyone interested in this project.
Quickly as an aside --
SENATOR DOYLE: Okay. You're --
SUSAN CHRISTOLINI: -- my agency has done criminal background checks since the year 2000, six years before it was enacted into law. Other agencies in my association have done the same thing. We're registered with the Department of Consumer Production and the Department of Labor. I've been in business since 1987.
I've given you a white paper that details what a registry is, which will give you accurate information into who we are and what we do, which has not been brought forth today.
SENATOR DOYLE: Thank you. Any questions? Mr. Chairman?
REP. TABORSAK: Thank you, Mr. Chairman. Thank you for testifying.
I was wondering -- you made a comment about a specific regulation -- I missed the exact regulation number -- that requires you to define the employee/employer relationship, something along those lines, in your testimony.
SUSAN CHRISTOLINI: Yes. In the companion homemaker of the regulations of the Department of Consumer Protection, we're already required to define that -- define that regulation, that relationship, and it's in our contract. It has to be in your contract.
REP. TABORSAK: So basically if I understand you correctly, you provide that information to a client through the form of a contract. Is --
SUSAN CHRISTOLINI: Yes.
REP. TABORSAK: It's in the contract.
SUSAN CHRISTOLINI: It's required.
REP. TABORSAK: Would you be able to provide us with some language that you use so that we can get an understanding of what that looks like?
SUSAN CHRISTOLINI: Absolutely, I can.
REP. TABORSAK: That would be helpful.
SUSAN CHRISTOLINI: I can get you a copy of my contract.
REP. TABORSAK: Thank you.
SUSAN CHRISTOLINI: Okay.
SENATOR DOYLE: Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chair.
Just briefly. Do you know of any registries specifically in the state of Connecticut that may be violating or not making it clear to the people that they work with that they are independent contractors?
SUSAN CHRISTOLINI: I couldn't specifically say that because that's not -- that's not something that I look to do, but I'm sure you could look at any home care agency, any business that is in some sort of violation of some sort of law that they have to be payrolled agencies, registries. Not everybody is complying. Not everybody is registered.
REP. REBIMBAS: And it's (inaudible). It's not just in this area of employment. It's many areas of employment that if you don't have responsible employers either making it clear that they're not an employee or maybe they should actually be an employee?
SUSAN CHRISTOLINI: Exactly.
REP. REBIMBAS: Based upon the people that you have that work through your registry, the people who have come to you as home makers and have requested to work through your registry, again, as an independent contractor, have you heard the story that's been shared earlier here today regarding some, again, bad experience that they may have had with other registries?
SUSAN CHRISTOLINI: I have not, not against other -- I occasionally hear a story about another registry. I also hear stories about payrolled agencies, and I read the newspapers where you have, you know, reports of abuses of elderly, and the reports, the newspaper articles I have seen, they were employees of payrolled agencies. This isn't something that is just from registries.
REP. REBIMBAS: Okay. Thank you.
REP. TABORSAK: Thank you. And again, hopefully you'll provide us a copy of your agreement?
SUSAN CHRISTOLINI: Absolutely.
REP. TABORSAK: And, I assume you were here when Senator Prague testified?
SUSAN CHRISTOLINI: I was.
REP. TABORSAK: Do you disagree -- I assume you disagree with her?
SUSAN CHRISTOLINI: Well, she didn't seem to have a complete awareness of what a registry does, and she also didn't know that this raised legislation has a definition, the first definition of a registry in it.
REP. TABORSAK: Right. Now, I understand what the two entities do.
SUSAN CHRISTOLINI: Yeah.
REP. TABORSAK: But, I'm just trying to figure out why is it -- why do you think if you already kind of do this, if you already disclose, why is this legislation so threatening or harmful or why do you oppose it so much? I mean, if it's simply requiring you to disclose a little more, what's so wrong with it?
SUSAN CHRISTOLINI: It's -- we're already required under another law, another regulation, and if you start making similar requirements in many, many pieces of legislation, you know, the tone of it changes, and, you know, you're trying to comply with one, but you have to read the next one, and are you complying with this. It just confuses the issue.
REP. TABORSAK: Okay. Any further --
SUSAN CHRISTOLINI: We already have it in one spot. I didn't feel it was needed to be repeated in another.
REP. TABORSAK: Okay. Any further questions? Seeing none, thank you very much.
SUSAN CHRISTOLINI: Thank you.
REP. TABORSAK: The next speaker is Kevin Donohue, then Joyce Wojtas and Susan Giacalone and Andrew Clifford.
KEVIN DONOHUE: Good afternoon, Chairman Taborsak, and I guess --
REP. TABORSAK: Senator Doyle.
KEVIN DONOHUE: I want to thank you for hearing me today. I did -- my name is Kevin Donohue. I am the owner of the Danbury Nurse's Registry in Danbury, Connecticut. I'm here really speaking on behalf of the Connecticut Association of Home Care Registries. I've provided some written testimony which I may or may not get to based on prior testimony I've heard.
I just feel -- I didn't get struck down -- we've been a nurse registry since 1930. Some of these things that I've heard described here definitely are not coming from at least a reputable nurse registry. Nurse registries, there's a lot of misinformation that I heard go around the room. We don't provide care. We provide prescreened, pre-credentialed, caregivers available for immediate placement for people who would prefer to hire their own caregiver.
It's an arrangement that's been going on for 81 years. We have not had one instance of a caregiver referred through us that was held an employee of either the registry or the client. We do disclose to all of our caregivers the nature of the relationship. We do disclose to our clients that the people we send are independent contractors. It would be erroneous for me to comment to them or give them advice as to whether or not that person will maintain the independent contractor status. Certainly in Section 3(a) through (f), you would want to remove the word employee as a legal term. I agree with Sue Christolini on that.
Also, (a) through (d) of the same section would, in fact, impose more of an employer/employee relationship on the client. Directing, controlling, providing equipment, supplies are all functions of an employer/employee relationship. So by eliminating them as to what their duties would be, we would, in fact, be encouraging them to step closer to an employer/employee relationship.
These have always been determined on a case by case basis. The 20 factor common law test is pretty intricate, and it accounts for a lot of different situations. We have petitioned before the different Senators and also with the Department of Labor to get a determination to remove all this confusion so that people can actually hire an independent contractor. We've been turned down every time and have been taking it on a case by case basis.
To that end, I don't think that we should have to create a situation where we're scaring somebody, particularly in my case. I could tell them they may be the employee, they may not. It's not my determination. I'm not going to determine that even if I say they are or they aren't, but caregiver registries reduce costs to the consumer. They also allow the caregiver to keep more of the remuneration. They will have to pay taxes on it. We do absolutely disclose that to every caregiver that comes through the door. To not do so would be irresponsible.
REP. TABORSAK: Thank you for your testimony. Are there any questions from the Committee?
I just have a question or two.
KEVIN DONOHUE: Sure.
REP. TABORSAK: Thanks for coming up and testifying.
You mentioned that you do disclose to both -- I think I heard you say you disclose to both your own -- I should say the caregiver and the client.
KEVIN DONOHUE: The caregiver isn't ours. We represent them. We work as their agent and represent them to the community.
Yes, we do, both to caregiver and client.
REP. TABORSAK: Is that disclosure in writing? Is it spoken? How does --
KEVIN DONOHUE: The disclosure is in writing. We disclose to every caregiver that they incur profit and loss risks and benefits, they're responsible for their own taxes, Social Security they're not -- unemployment. They're not covered by unemployment as an independent contractor, unemployment insurance, and other insurances not limited to, you know, workmans compensation.
The client, we keep it a little bit more brief based on the, you know, audience. If we put this big huge disclaimer in there, it's going to scare the heck out of everybody from using nurse's registries, and as Sue had stated before, many other states have enjoyed the benefit of the cost reduction, and they actually will participate in certain Medicare waiver programs. As a matter of fact, in some states, it's actually the preferred method because of the cost savings.
REP. TABORSAK: On the -- on the issue of notice to the client, what exactly -- you said that it's brief and a little more to the point. Is that written notice as well?
KEVIN DONOHUE: It's -- it's -- it's in our information packet that we send out, that we say that the persons we refer are independent contractors, they're not employees, and that they are responsible -- they, meaning the caregiver is responsible for any taxes. That's the way the caregiver represents himself to us.
REP. TABORSAK: Would you be comfortable sharing that information with us?
KEVIN DONOHUE: Certainly.
REP. TABORSAK: You know, if you have to redact that portion of your contract or whatever, that's fine.
KEVIN DONOHUE: I can -- I can do that.
REP. TABORSAK: That would be great. It would be helpful, and you can get it to this Committee.
KEVIN DONOHUE: And again, I just want to, if I may, just a little bit -- I know it's late; we've been here all day -- you know, these agencies that some of my contemporaries are, you know, claiming that they misled everybody, we wouldn't be around for 81 years misleading people and have no findings that any of our caregivers were ever an employee of anyone other than themselves, so there's a right way to do it. People are doing it wrong. It shouldn't be a reflection on registries. I've seen this, you know. It just gets me angry. I've been doing this a long time. We love, you know, the success has just been fantastic, tens of thousands of caregivers, ten thousand -- tens of thousands of families that we've helped through the most difficult time in their life, and I'm proud about that, and I kind of get annoyed when people start coming at me.
REP. TABORSAK: Well, thanks for your testimony. Are there any other questions from the Committee? Thank you. Thank you for your time.
The next up is Joyce Wojtas and Susan Giacalone, Andrew Clifford, Dennis Patouhas, Ron Tully.
JOYCE A. WOJTAS: Good afternoon members of the General Law Committee. My name is Joyce Wojtas, and I am here today representing the Mechanical Contractors Association of Connecticut. I also represent the Plumbers and Pipefitters Union, and we work together on most of our issues.
I want to appear in support of Senate Bill 867, An Act Concerning Penalties for The Violation of Mechanical Contractor Registration Requirements. The mechanical contractor registration has been on the books since 1987, and the problem that we have with it is that under the current law, there is a -- if someone fails to display their certificate or displays an expired registration certificate or uses someone else's certificate, it is a violation of the unfair trade practices act, and as many of you in the legal profession know and as someone said earlier today, we can take action under that, but, of course, it's a very lengthy action and maybe after spending thousands of dollars and two or three years later in the Superior Court, we might get some results.
So, what this bill is trying to do is allow the Department of Consumer Protection to move rapidly on a violation when it is uncovered for anyone who fails to register as a mechanical contractor or registers as a mechanical contractor and fails to employ licensed people when they're offering their services to the public in the trades plumbing and pipefitting, heating, piping, cooling trades.
We know that there was some confusion about the bill from some of the smaller contractors, but the current law -- and we did not change the current law -- exempts the contractors with less than ten employees who are working on private residences or dwellings consisting of not more than four units, and that still exists. We did not change that.
It also exempts -- it doesn't apply to people who are engaged in installation, repair, alteration or replacement of sewer lines, storm lines, water lines and services, or an individual who is licensed under Chapter 393. So, I think we cleared it up. I'm not certain, but I will get back to the PHCC to make certain they're comfortable with the way we have the law written.
The other bill I'd like to support is Senate Bill 946 concerning enforcement of occupational licensing laws. This bill -- and I agree with the language that Cammie put forth, because the bill was not trying to say that the Department of Consumer Protection is not doing their job. They're doing their job, but they're very shorthanded, and we just want to work toward a future resolution for the violations that we know are out there, and we hope we can get together with them and make something work for the future.
REP. TABORSAK: Thank you very much. Any questions from the Committee members? Seeing none, thank you for your patience.
JOYCE A. WOJTAS: Thank you for yours.
SENATOR DOYLE: The next person is Susan Giacalone. Is Susan here?
REP. TABORSAK: I did not see her.
SENATOR DOYLE: She's not here. Andrew Clifford, Dennis Patouhas -- I mispronounced his name -- Ron Tully, Devon Williams, Nick Miller. Is Andrew here?
SENATOR DOYLE: Is Dennis here? Dennis, come on up. Oh, there's Andrew. Okay.
ANDREW CLIFFORD: I thought I had a moment.
SENATOR DOYLE: Not quite.
ANDREW CLIFFORD: Good afternoon, Senator Doyle, Representative Taborsak, and General Law Committee Members. My name is Andrew Clifford. I am owner of Home Instead Senior Care, a non-medical provider, an employee-based non-medical provider of home care services in New Haven County since 2002, and I'm here to express my support for Bill Number 911.
I know you hear a lot of testimony from colleagues in the business, but as a relatively new industry, non-medical home care has seen a surge of providers of late, each offering a similar scope of service which are all designed to help keep seniors safe and independent at home.
I often field calls from anxious family members faced with a crisis. Their mother has fallen and broken her hip; following a hospital and rehab stay, she is being released and definitely wants to go home, but she's simply unsafe to be alone. The caller, meanwhile, is trying to juggle home life, work life, and all her responsibilities as a mother. Meanwhile, she's trying to arrange help for her mom, and she's desperate and faced with an important decision. She's basically searching for information.
A quick search of the Yellow Pages or Google -- if you type in home care in Connecticut -- yields many different choices for a consumer; however, there is no distinction as to how providers operate. At face value, all seem to be created equal, and many consumers base their decision on the most logical factor, especially now in a tight economy, which is price.
But, in reality, when comparing different companies, they're often comparing apples and oranges based on a provider's business model. You've heard about employee-based companies; you've heard about registries.
Registries are often able to charge less than employee-based agencies. They may provide a similar scope of service, but the method in which they provide it, namely, utilizing independent contractors, is fundamentally different. This puts the consumer in an awkward and vulnerable position, and consumers often don't know the difference or are unaware of the implications.
What if the worker gets hurt assisting my mom? Who will supervise the worker? Who handles the payroll taxes? These are all key questions for consumers to ask when researching home care services, but very few know to even ask them.
I take my business very personally, and I've made it a mission and a priority of mine to educate consumers in need so that they are able to make informed decisions. Now I ask the state's assistance to be in support of Bill Number 911.
SENATOR DOYLE: Thank you. Any questions from the Committee? Seeing none, thank you very much.
The next speaker is Dennis Patouhas. Would someone pronounce his last name for me? Ron Tully, Devon Williams, Nick Miller. Again, Dennis, I'm sorry. Please pronounce your --
DENNIS PATOUHAS: It was pretty close. It's Dennis Patouhas.
SENATOR DOYLE: Thank you.
DENNIS PATOUHAS: Thank you. Thank you Chairmen and members of the Committee. My name is Dennis Patouhas. I, too, am an owner of a non-medical home care agency, Comfort Keepers, which is based in Greenwich. We're part of a 600-office network of companies around the country, providing the service. I'm also a member of the NPDA, National Private Duty Association.
We've been in business for eleven years, and when we first considered entering into the home care industry, we chose a model that we felt was the high ground in approach. We wanted to provide service to clients that only had to deal with their care and they didn't have to worry about being accidental employers having to deal with issues of employment taxes or being responsible potentially for personal injury to someone that was in their employ in their home, when homeowner's insurance will not respond. Our approach was that we wanted to be problem solvers, not problem makers.
I want to take issue, if I may, with a statement that was earlier made with regard to the registry. It seems that in part the linchpin for the registry model is the independent contractor definition, and independent contractors have been around for many, many years, and over the last 25 years, it has become very much an issue of debate, and there was an advisory that was promulgated by the Connecticut Department of Labor in December of 1998 that specifically addresses the issue of home care registries, and it was predicated upon a Connecticut Supreme Court ruling in Latimer versus Administrator that stated that the fact that a PCA, personal care assistant, placed with a client by the registry signed an agreement that they were independent contractors is of no moment. Such provisions in a contract are not effective to keep an employer outside the purview of the act when the established facts bring him within it.
It goes on to say that registry agencies should not advise their clients that the referred individual is an independent contractor. The registry agency should inform their clients that the referred individuals may well be considered the client's employees.
Over the years, we've encountered many consumers, elderly consumers' families, the elderly that have incurred in one case $50,000 of personal liability due to injury to the caregiver, and another, $25,000 for taxes that were incurred because they were construed to be the employer.
One thing that I think is very interesting and should be noted is that hospitals in the state of Connecticut may act unwittingly to assist a lack of knowledge at the consumer level. By merely providing a list of potential home care providers known to the case managers or discharge planners, the list does not distinguish between the type of agency or its structure. The consumer, rightfully so, assumes that all on that list are the same, and from that list, they find price differences and gravitate to the lower cost and are unaware of the potential liability that their selection will make, and the disclosure made by Senate Bill 911 will help to alleviate that.
SENATOR DOYLE: Thank you.
DENNIS PATOUHAS: Thank you.
SENATOR DOYLE: Any questions from the Committee? Senator Kissel?
SENATOR KISSEL: Thank you, Mr. Chairman.
You said you represented a group that has offices not only in Connecticut but outside of Connecticut?
DENNIS PATOUHAS: Yes.
SENATOR KISSEL: The part that I'm having the hardest time with is we've had testimony this afternoon from folks that have been involved in the registry business, some of them in excess of eighty years, without incident, and I've got to believe that there's a couple of things going on out there. First, we're in a recession, and we have an aging population.
So, when I've seen that in the past, that means that there's more competition for a diminishing pie, but I think with our aging population, the pool of folks that might be fooled or misled or run into problems is getting greater.
It strikes me that probably in the last ten to fifteen years may be more bad apples getting into the registry business, and also more consumers that might not really know the lay of the land, and so we have to try to address that maybe through education, or something else.
But, at the same time, if I'm hearing from them right, they're already governed by Consumer Protection and the Department of Labor, and if they have to put into their agreements or this laundry list of what is the responsibility of the people that are hiring these caregivers, then that information is in there. Maybe we have to change the type font or make it larger, put it on the front page, something like that, but what I'm sort of hearing from you is, you know, you have a different business model and that's fine, but I don't know why you're sort of kicking these other folks where there seems to be reputable folks in this area as well as disreputable folks because my guess is that in your business model, there are reputable folks and there's disreputable folks, so I don't understand why you're in this fight other than to try to get a bigger market share away from these folks to make it more difficult for their lives.
DENNIS PATOUHAS: It's -- it's not a fight. It's -- what we're trying to accomplish is people to be aware of the consequences. If someone is seeking care for themselves or an elderly relative, that's all they want. They want to be able to age gracefully in their own home, and they want to hire someone to take care of them and do the things that they can't do for themselves. They don't want to be an employer; they don't want to have to deal with the possibility of being liable for --
SENATOR KISSEL: But, you're not saying that as -- I apologize for interrupting, but you're not saying that we should outlaw registries.
DENNIS PATOUHAS: I didn't say that.
SENATOR KISSEL: But you're saying -- I know what most consumers probably want is exactly what you're saying, but there may be some that are in a financial situation, and they're not business savvy enough or for whatever reason they want to use the registry sort of business model, and they understand that there are certain consequences regarding payments of taxes and things like that.
As long as people -- as long as we as a state government try to make sure that people are aware of the ramifications of their choices, it strikes me -- and I don't want to engage in a debate, but I just sort of think that I appreciate where you're coming from, I think your industry and your business model performs a very valuable service, but I did hear from some very sincere folks with great track records this afternoon that are in that other business model, and if there's some problems out there, we have to find what the problems are without throwing the baby out with the bath water. That's all.
DENNIS PATOUHAS: No one is saying that either model should go away. It's that there is the presumption, for instance, at the hospital level. Most hospitals will not or do not know the difference between agency structure, and for that very reason, that's why I brought it up because you are discharged, you're given a list of 20 agencies, it doesn't say that this is a registry, this is an employer-based, it doesn't say that you're potentially liable for anything, but it assumes that they're all the same, and that in itself is misleading, and the hospitals themselves are potentially putting themselves in the referral liability world, because they're professionals, expected to know the difference, but as far as our objective here with Bill 911, it's intended to disclose. It's not intended to curtail anybody's business.
SENATOR DOYLE: Thank you. Any further questions? Thank you very much.
The next speaker is Ron Tully, then Devon Williams, and Nick Miller. Is Ron here?
RON WILLIAMS: Yes, I am. Mr. Chairman, members of the Committee, thank you for your time today.
I'm speaking to Senate Bill 865, which is the reversion of the tax on moist snuff from weight-based to ad valorem, and I support that legislation. I'm sorry to bring that back. It's late in the day, but I'll be very quick because I'm sure you've heard most of the points.
My company is a small tobacco manufacturer based in Louisville, Kentucky. We've been in the chewing tobacco business for over 100 years. This issue is as much about competition as it is about taxation, and the proponents are maintaining the tax system is, of course, Phillip Morris, and Phillip Morris has been very active in promoting the concept of weight-based and unit-based taxes on almost all tobacco products primarily because it maintains a particular competitive advantage relative to them on the pricing of their brands in the marketplace.
And, the more states they can get to adopt weight-based taxes, the more profitable every unit of moist snuff they sell throughout the United States.
And, that's essentially what this issue comes down to, and the real crux of the question for the state of Connecticut is how much revenue does one system generate over the other, and I sort of break it down into real simple terms.
Most tobacco manufacturers take anything from a 3 to 5 percent price increase on their products every year. If you have a weight-based tax, you get no share of that revenue increase on a year by year basis, so if you have a weight-based tax, it's a flat rate, and year on year you have to come back every year and revisit that tax to see whether or not you want to increase it, so as manufacturers take a 3 to 5 price increases on an annual basis -- and I'm sure Phillip Morris will get back into that mode at some point because they have to show profitability -- you will not share in that revenue take of the larger manufacturers who produce these products.
And, also, the federal government increases the excise taxes on tobacco products on its regular cycle. You will not share in that price increase either reflected in the overall pricing of the product, so as manufacturers take their price up, you don't get a share of that. As manufacturers take their price up and that increases the sales tax, you don't -- you don't get the full benefit in terms of the revenue take to the state, so I think at minimum and to be sure on this issue, at minimum I think the state should re-examine the question as to whether or not it's really benefiting under the current weight-based system and whether or not it should move towards reconsidering the ad valorem, just as Wisconsin has done, and just as other states are beginning to look at this issue.
I happen to live in New Jersey, and this legislation was passed a few years ago in New Jersey, and I know the Department of Revenue there are reconsidering whether or not the weight-based tax is being beneficial to the state as a whole, and there certainly have been a number of studies in the tobacco control literature that allude to this issue as to whether or not weight-based is better than ad valorem, and many of the health groups actually fall on the side of ad valorem taxes just on the basis that manufacturers are in the business to make profits, and as manufacturers in the business to make profits, they will increase their prices, and as they increase their prices, the revenue take on the product actually goes up for the state.
Thank you for your time.
SENATOR DOYLE: Thank you. Any questions? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chair. Good afternoon.
Just for a point of clarification or maybe just to state the obvious, because everyone, it's easy to hear the testimony if the prices go up, the more the state of Connecticut makes. If the manufacturer's price goes down and it's sold wholesale, I mean, obviously that would be less that we would make. Is that correct?
RON WILLIAMS: Yeah. The -- if you look historically at the price increases of tobacco over the last, say, 15 to 22 years, and you even average that out, you would see that there have been significant prices on average on tobacco products every year in the range of 3 to 5 percent.
Now, in this particular market with moist snuff, Phillip Morris made the strategic decision that it would reduce its pricing for competitive reasons. Whether or not that was to take on a larger part of the market, or whatever, they made that determination, but yes, there are incidents of manufacturers taking their prices down, but that's not sustainable, it's not profitable. It's not profitable on a unit basis particularly if you're not growing market share.
And, so, I really don't see the price discounting and price cutting that's been going on in the moist snuff segment actually lasting for any prolonged period of time.
REP. REBIMBAS: Because one of my problems, you know, the lack of consistency that any company could have in the state of Connecticut or even, you know, nationwide, and I almost feel a little schizophrenic if we have to come and revisit, you know, legislation such as this every year based on what may or may not be bringing in more revenue for the state of Connecticut one year and differentiating from the following year, et cetera, et cetera.
So, with that said, I guess there's a lot of different factors that I'm going to be taking into consideration when looking at this type of legislation.
I don't know if you mentioned this or maybe someone did -- I just don't recall right now -- currently how many states -- how many states have the legislation something similar to what's being proposed here today?
RON WILLIAMS: I believe 20 states have weight-based taxes at the moment. Most of them are specific to moist snuff. It was interesting because even in the state of Connecticut, despite the variability that other states may worry about on revenue take on tobacco products, the state still has an ad valorem system in place for many of its other tobacco products here in Connecticut, and most other states do.
What we're talking about here is a very, very isolated form of taxation designed around one particular type of tobacco product and benefits a single manufacturer in terms of maintaining a price differential between high price and low price. Phillip Morris wants the narrowest price differential they can get by having the highest burden of taxation on the lowest price product, and that's what this is all about.
So, it's interesting that on the one hand, the state continues to collect ad valorem taxes on things like cigars, but for one particular segment that impacts one large manufacturer very specifically, the state is concerned about the potential of revenue drop on the weight-based tax, but it is not concerned about a revenue drop based on cigar sales, and yet the tax is collected on an ad valorem basis.
It's essentially far easier for a distributor to base his reports directly to the state based on a single form of taxation on these other types of tobacco products other than cigarettes than on these multiple types of taxation structures that are out there, and I really don't accept the arguments from Phillip Morris that somehow over the long term the state will benefit significantly in terms of revenue take on the moist snuff in isolation because it won't, because the tradition in tobacco products overall is that segments go down, and they go down not just because -- revenue goes down not just because manufacturers adjust their pricing, but revenue also goes down because consumers start to quit and move to other product categories, and I think we'll see that type of movement between products and categories across the board.
So, if you're concerned about whether or not the weight-based system potentially has a down side, I think you've also got to look at it in relation to what is the up side in terms of the ad valorem system, so I think it's worth the state revisiting it again and asking the revenue department exactly what's been happening with -- on a comparative basis between the ad valorem tax on other tobacco products versus the weight-based tax on moist snuff, and that may give you some insights as to whether or not you would lose revenue in the long run by reverting back to an ad valorem system.
REP. REBIMBAS: I appreciate your testimony on that. Thank you. Thank you, Mr. Chair.
SENATOR DOYLE: Thank you. Senator Kissel?
SENATOR KISSEL: As an aside, it doesn't sound like you have a Kentucky or New Jersey accent, and I was just wondering (inaudible).
A VOICE: It's Irish.
RON WILLIAMS: Very close. It's Scottish actually.
SENATOR KISSEL: Thank you, sir.
RON WILLIAMS: You're welcome. Thank you.
SENATOR DOYLE: Any further questions? Seeing none, thank you.
A VOICE: I was wrong.
SENATOR DOYLE: Devon Williams, Nick Miller. Is Mr. Williams here? Yes, he is.
DEVON WILLIAMS: Mr. Chairman and members of the Committee. Thanks for having me. I'm a part of the group in support of Senate Bill 911. My name is Devon Williams, operator of ComForcare Senior Services of Danbury.
A few things I think personally have been misconstrued, and I think some of our -- two of our great friends were here earlier testified as well. We have seen or I personally know of some terrible situations with registries, and I respectfully disagree with some of your statements, Senator Kissel.
Registries in most cases that the gentleman testified to earlier is a medical registry. He wouldn't be affected on this bill from what we understand. He has LPN's, RN's, on part of his team, so those are medical professionals.
What we're targeting here are the non-skilled folks who have a salary range of 9 to $15 an hour. They operate unregulated. I understand it was on the cost, but as an employee-based institution, I personally have to absorb background checks, the sex offender registry checks, the DMV checks, the background checks, of course, the drug tests, supervisor of visits, all of those things which registries do not incorporate on their books. Bonding, insurance, workers comp, all of those things, if something happens in a client's home, it goes back to the client taking care of that or the caregivers themselves.
I've seen many applicants from registries who applied to me for a job, and they just couldn't cut the bill. They either fail the Social Security verification check, they either fail the background check, they fail the drug check, from all gamuts I'm seeing problems.
There was a recent incident in Danbury recently where a client employed a caregiver from a registry, and at the end of the day, she was told that she's liability for tax. That resulted in a heart attack; she's gone. There's another incident where some of my colleagues were at an independent living community, the executive director there testified that a caregiver beat the hell out of one of her residents. When she called the registry, the registry said they're not an employee, so we have to have some level of accountability here.
If you're talking about revenue into our coffers, this is one way that everyone has for pooling up as well. I just can't afford to play by the rules. We're asking for a level field, so-to-speak.
If that answers or clarifies some of the things or (inaudible) that we have, I would really appreciate your voting for us on Bill 911.
SENATOR DOYLE: Thank you. Any questions? Representative Rebimbas?
REP. REBIMBAS: Thank you, Mr. Chairman. I guess just to kind of clarify some of this stuff that you said, I'm a small business owner, and I can assure you I hate all of the restrictions and mandates and things that we need to comply with, and I encourage you to testify then on the many other legislation that is going to be before us that may help business owners.
With that said, I guess my struggle is there's rules and regulations already out there for registries. We had some testimony from some registries here today that have been in compliance with those rules and regulations. I do understand that there's probably, you know, hopefully, a minority and not a majority of registries out there that may not be complying with that and/or having some individuals register through them that should not be in the business.
My concern with that is additional rules or duplicative rules and regulations may not be the answer so much as maybe the enforcement of the current regulations that we have and/or the, you know, the speediness of reporting certain incidents or concerns. And, again, going back to maybe the consumers don't have all the information or it hasn't been made clear to them, so what I would implore and encourage businesses such as yours and the organizations that you guys may have is you need to be out there, promoting then what makes you different from these other businesses, and if that's, you know, bottom line, the services, background checks, all of that stuff, and that's (inaudible) if it's the personal one-on-one and you make sure the individuals who are working for you are higher quality or better qualified.
I'm just throwing this out because, again, you know, not knowing how we all may go on this particular legislation, I think it's just important to know that we all do care about, you know, the consumers, the elderly, the people who are being subjected to this. It's just how do we go about making responsible rules and regulations that ultimately is going to reach the result that we're all looking for.
So again, I thank you for your testimony and for waiting here today in order to provide that. Thank you, Mr. Chair.
DEVON WILLIAMS: Thanks for the feedback. We have to understand -- and the gentleman testified to it earlier as well -- when asked, how much detail does he provide to some of his clients. It was somewhat minute. These are vulnerable folks, so that does not need to be minute. It needs to be detailed.
SENATOR DOYLE: Thank you. Senator Kissel?
SENATOR KISSEL: Thanks. And, along the lines of what Ranking Member Rebimbas had indicated, it wasn't just the gentleman from Danbury, but there was a woman that had I believe it was like Northwestern Connecticut Registry Association, and I don't -- I didn't gather from her testimony, although I may have been mistaken, that it wasn't necessarily a nurse model that they were utilizing, and in her business, she said that she actually had done things in advance of state requirements such as criminal background checks. I believe she testified it was six years in advance of the state requiring some kind of legalization of that.
And, I guess my concern is I have no problem with requiring businesses to have a notification to potential consumers, but if we already have some things either promulgated through regulations through the Department of Consumer Protection or the Department of Labor, and they're part of contracts, whatever we end up doing here I hope doesn't muddy those waters so that at the end of the day, while we're trying to help people out, we're actually getting them more confused than they were before.
But, I think the ultimate goal, I think we're all trying to figure this one out, and all of us want to see no harm come to the consumers, we don't want anybody to have heart attacks and keel over when they get the bill from the state of Connecticut. People are already keeling over from the budget address from last week, and so I hope nobody is having any heart attacks, but, you know, it's a difficult economy, we're sensitive to that, and we have an aging population. A lot of this is educational, and we've got to get the messages out that there's various choices with various responsibilities associated therewith.
DEVON WILLIAMS: That's a great point because from my understanding, the Department of Labor already ruled in this, but it hasn't been enacted in law.
SENATOR DOYLE: Thank you. Anybody else? Chairman Taborsak?
REP. TABORSAK: Thank you. Thanks for coming up here. I just wanted to thank you for coming up and testifying and, you know, we'll certainly take a look at the information you provided and be looking at this issue closely. Thank you.
DEVON WILLIAMS: Thanks. Thank you.
SENATOR DOYLE: Thank you. The next speaker is Nick Miller. Is Nick here?
NICHOLAS MILLER: Hi, folks. Thanks for the opportunity. My name is Nick Miller. I'm also a member of the NPDA. I'm also an owner of a Comfort Keepers franchise in Connecticut.
My original testimony is pretty much out the window now, but I do want to just bring up a couple of things that I think might be relevant. Right now as a business owner, you know, I am legally obligated to, you know, display the rights, minimum wage rates and employees' rights, you know, on display somewhere in my office so my employees can see that.
One of the things I'm obligated to do by law is display their workers' comp insurance company that they can all go in there and see, so if for some reason I give them a hard time regarding their claim, they can bypass me, and it's there displayed.
You know, you're talking about level playing field. You know, the registries don't offer these things, and it's really not, I think, something that's apparent to them. We are dealing with a subset of the population. For the most part, these are not highly educated people. They're mostly, you know, my employees are mostly middle-aged women. They don't have anything more than a high school education, and to sit there and say that their awareness of these laws is the same as yours or mine, it's just not accurate, and I feel obligated to protect them. I have obligations to let them know that these things are out there for them, and I mean I would argue that if any one of you were to go out there and shop around for registries as both an employee or potential person to hire them, the processes are not that different. There's nothing really there to distinguish the two. There's not much there to distinguish the two types of agencies in terms of when you're a consumer, and I think what we're asking for is just something that says, you know, this is how we operate, and I think there's a place out there for registries.
I mean, I think that this proposed legislation will be as beneficial to them as it will be to anybody because it's going to make sure that the bad apples can't make the other registries look bad, so all we're saying is look, when you go with us, these are, you know, the responsibilities you're taking on, and these are your liabilities, and the benefit (inaudible) and you're going to be paying less money.
But, again, we should disclose both sides of the equation. We're doing that, but it's really not happening, and it really -- I mean, if you're in my area and you come by my office, there's a whole bunch of brochures for both myself and my competitors. They're the same. There's nothing on it saying oh, by the way, you know, we're not -- mostly what they argue is well, our organizational costs are not as high, where we're keeping these things down, and it's really not the case. They're not paying workers' comp insurance, they're not paying unemployment insurance, there are certain responsibilities they're not taking on, and that's why they're less expensive.
And in one specific case I can think of, Counterpoint or another registry that's in Manchester, their rates are the same as mine. They're the same as any labor agency out there, but they're still operating under that registry model, and they're just making, you know, money hand over fist by doing so, and I think that's the type of (inaudible) you want to isolate just from the other registries so they don't -- they don't compare.
But, I think for someone who's looking just to save money who doesn't mind these responsibilities and someone who's savvy, then that registry model makes a lot of sense, but I think that it just -- it's not something that's commonly known, and I think we as employers really bear the responsibility to make sure that both our employees are properly informed, and I don't think that's happening. I think we need to make sure that the public is properly informed, and I don't think that's happening now either.
And, we have the rare opportunity to address this issue. It has to be addressed in some way. I think this is a fair way of doing so.
SENATOR DOYLE: Senator Kissel?
SENATOR KISSEL: Thank you, Mr. Chairman. Are you a constituent or is your business --
NICHOLAS MILLER: I'm in Enfield on Hazard Avenue.
SENATOR KISSEL: And, do you live in the district as well?
NICHOLAS MILLER: I'm in Somers.
SENATOR KISSEL: Okay. So, I work for you and (inaudible). You know what? I thought -- I actually think that you had a really balanced approach to your testimony. In other words, it carved it out, said that there is a role for these registries, but it's educating both the caregivers as well as the employers, and that's my -- that's our goal. Is that it?
NICHOLAS MILLER: Yeah. (Inaudible.)
SENATOR KISSEL: I think your testimony made a lot of sense.
SENATOR DOYLE: Thank you. Any further questions from the Committee? Seeing none, at this point in time, we have nobody else signed up. Does anybody else want to testify? There's a person. Please come up. Please identify yourself for the record.
LINDA GRIGEREK: Yes. My name is Linda Grigerek. I'm from Companions and Homemakers, one of the largest homemaker/companion agencies in Connecticut.
Martin had testified earlier, our general counsel.
I think the thing we're missing here is that the registries are quite often arguing that they are independent contractors. What we're saying is an RN could be an independent contractor; an LPN could be an independent contractor. They're professionals. They make their own hours. They bring their own work. These are custodial caregivers. They have to be employees. There's no fairness to the workers' comp, no fairness to no Social Security. They make very little money.
The registries are piggybacking onto the medical agencies which are RN's and LPN's, and they're trying to do it with custodial care workers, and it's wrong, and that's what I think is missing in the explanation today.
SENATOR DOYLE: Thank you. Any questions? Representative Baram?
REP. BARAM: Thank you, Mr. Chairman. You raised a good point about independent contractors, and from my knowledge of the law, there are about 10, 12 factors set forth by the IRS to determine whether somebody is an independent contractor, and typically it includes things like making your own hours, having your own tools or equipment, not being under the supervision or oversight of another person, and so when you said an LPN, for instance, is an independent contractor but a homemaker may not be, may be an employee of the consumer that's getting the care, I mean, that's an interesting distinction for me because I'm not sure whether I agree or not.
But, it seems to me that if we do decide to go forward with the bill to give notice, that it might be appropriate to give notice not only to the consumer, the person receiving the home care service, but also the home care provider because both of them could be liable for various taxes --
LINDA GRIGEREK: That is in there.
REP. BARAM: -- and ultimately that decision is probably going to be made by the IRS and Department of Revenue Services because they're the ones that enforce those laws as to when taxes are due, so to me it seems prudent that if we do require some notice, that everybody get it.
LINDA GRIGEREK: I don't disagree, but it also falls under the ABC test for the Labor Department, and there's already been a Supreme Court decision in Connecticut saying that these caregivers are definitively employees and not independent contractors, so that's already been decided, and this report here, which I'd like to submit, is from 1998, which does say that the Labor Department directly addresses registries and says that these home care workers should err on the side of considering them to be an employee of either the client or of the agency, but they definitely don't fall into the independent contractor.
So, I think people are going under the IRS rule which -- I think these -- I've been doing it for 20 years. I think these caregivers fall under employees any way you look at it. It's just the dollar amount that they make on their own doesn't allow them to make their own hours. Home care in and of itself is specific hours, and it always has been. Mrs. Jones needs her breakfast from 9:00 to 12:00. They can't call up and say oh, by the way, I'm not going to give Mrs. Jones breakfast; I decided to show up for dinner. It's just -- I've never seen a case with these custodial care workers where independent contractors would ever apply.
SENATOR DOYLE: Thank you. Any further questions? Seeing none, thank you very much. Again, at this point, does anyone else in the room want to speak, testify? Seeing none, I entertain a motion to adjourn the public hearing.
A VOICE: So moved.
SENATOR DOYLE: Is there any discussion or debate on it, or are we ready to vote? All in favor, signify by saying aye. Aye. Thank you.