Legislature(2017 - 2018)ADAMS ROOM 519

04/11/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Scheduled but Not Heard
Moved HCS SB 32(FIN) Out of Committee
-- Public Testimony --
Moved HCS CSSSSB 4(L&C) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 306(FIN) Out of Committee
Moved HB 384 Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 11, 2018                                                                                            
                         2:18 p.m.                                                                                              
2:18:24 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 2:18 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Seth  Whitten,   Staff,  Representative   David  Guttenberg;                                                                    
Senator  Shelley  Hughes,   Sponsor;  Jane  Pierson,  Staff,                                                                    
Representative    Neal   Foster;    Sylvan   Robb,    Deputy                                                                    
Commissioner,  Department of  Administration; Rachel  Hanke,                                                                    
Staff,  Senator  Peter  Micciche;  Senator  Peter  Micciche,                                                                    
Sponsor;  Jeremy   Price,  State  Director,   Americans  for                                                                    
Prosperity;  Sara  Chambers,  Deputy Director,  Division  of                                                                    
Corporations,    Business   and    Professional   Licensing,                                                                    
Department of Commerce, Community and Economic Development.                                                                     
PRESENT VIA TELECONFERENCE                                                                                                    
Richard  Gazaway,   Administrative  Law   Judge,  Regulatory                                                                    
Commission of  Alaska; Rylan  Hanks, Director  of Regulatory                                                                    
Policy,  AMGEN, Los  Angeles,  CA;  Richard Holt,  Director,                                                                    
Board   of   Pharmacists,   Anchorage;  Marc   Boas,   Self,                                                                    
Anchorage;  Shaina  Smith,  U.S. Pain  Foundation,  Wasilla;                                                                    
Ashlyn Antonelli,  Self, Anchorage; Terry  McClelland, Self,                                                                    
Anchorage; Darae  Crews, Darae's  Salon and  Spa, Anchorage;                                                                    
Gloria  Bamberg-Merritt,  Self, Anchorage;  Kevin  McKinley,                                                                    
Chair, Board of Hairdressers, Fairbanks.                                                                                        
HB 306    PERS/TERS DISTRIBUTIONS                                                                                               
          CSHB 306(FIN)  was REPORTED out of  committee with                                                                    
          a  "do  pass"  recommendation and  with  one  zero                                                                    
          fiscal    note    from     the    Department    of                                                                    
HB 339    INCREASE BASE STUDENT ALLOCATION                                                                                      
          HB was SCHEDULED but not HEARD.                                                                                       
HB 384    REGULATORY COMM OF AK; BROADBAND INTERNET                                                                             
          HB  384 was  REPORTED out  of committee  with four                                                                    
          "do  pass" recommendations,  three  "do not  pass"                                                                    
          recommendations,    three   "no    recommendation"                                                                    
          recommendations,  and one  "amend" recommendation;                                                                    
          and  with  one  previously published  zero  fiscal                                                                    
          note: FN1 (CED).                                                                                                      
CSSSSB 4(FIN)                                                                                                                   
          HCS CSSSSB  4(L&C) was  REPORTED out  of committee                                                                    
          with  a  "do  pass" recommendation  and  with  one                                                                    
          previously published zero  fiscal note: FN3 (DEC);                                                                    
          and one  previously published fiscal  impact note:                                                                    
          FN5 (CED).                                                                                                            
SB 32     PRESCRIPTIONS FOR BIOLOGICAL PRODUCTS                                                                                 
          HCS SB 32(FIN) was  REPORTED out of committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Commerce, Community and Economic Development.                                                                         
Co-Chair Foster reviewed the meeting agenda.                                                                                    
HOUSE BILL NO. 384                                                                                                            
     "An  Act  relating  to  the  Regulatory  Commission  of                                                                    
     Alaska and broadband Internet regulations."                                                                                
2:19:35 PM                                                                                                                    
REPRESENTATIVE  DAVID  GUTTENBERG, SPONSOR,  introduced  the                                                                    
legislation  that would  add four  words  to the  Regulatory                                                                    
Commission  of Alaska's  (RCA) responsibilities:  "including                                                                    
broadband  internet   access."  He  read  a   definition  of                                                                    
telecommunications from AS.42.05.990(13) as follows:                                                                            
     (13)  "telecommunications" means  the transmission  and                                                                    
     reception  of  messages,   impressions,  pictures,  and                                                                    
     signals  by   means  of   electricity,  electromagnetic                                                                    
     waves, and any other  kind of energy, force variations,                                                                    
     or impulses  whether conveyed by cable,  wire, radiated                                                                    
     through  space,  or  transmitted  through  other  media                                                                    
     within a specified area or between designated points.                                                                      
Representative  Guttenberg  shared that  he  had  been on  a                                                                    
quest  to bring  broadband to  more Alaskan  communities. He                                                                    
explained  that   the  RCA  was  the   proper  authority  to                                                                    
investigate the  issue, but they  believed the  statute that                                                                    
granted  its  authority lacked  clarity.  He  held that  the                                                                    
statute  clearly  defined  telecommunications  as  a  public                                                                    
utility  and gave  the Regulatory  Commission of  Alaska the                                                                    
responsibility to  regulate providers  of telecommunications                                                                    
services.  The  legislation   further  clarified  the  RCA's                                                                    
responsibilities   by   specifically  including   'broadband                                                                    
internet     access'     under     the     definition     of                                                                    
telecommunications.  He  added  that  on page  2,  lines  14                                                                    
through 15 the definition of broadband was amended to read:                                                                     
     (14)  "broadband  Internet   access"  means  high-speed                                                                    
     Internet access  that is always  on and that  is faster                                                                    
     than traditional dial-up access.                                                                                           
2:23:06 PM                                                                                                                    
Co-Chair  Foster  noted  that  Representative  Kawasaki  had                                                                    
joined the meeting.                                                                                                             
Representative  Grenn spoke  about  a  letter of  opposition                                                                    
from the Alaska Communications (AC)  (copy on file). He read                                                                    
from the letter:                                                                                                                
     Consequently, there can be no doubt that internet                                                                          
     access is interstate in nature, and therefore subject                                                                      
     to federal jurisdiction, not state jurisdiction.                                                                           
Representative Grenn inquired how  the bill aligned with the                                                                    
Representative Guttenberg  answered that  it "went  right to                                                                    
the  point." He  voiced that  he did  not disagree  with the                                                                    
statement. He delineated that in  December 2017, the Federal                                                                    
Communications  Commission  (FCC)  issued and  order  titled                                                                    
"Restoring  Internet  Freedom."  The  order  rescinded  "Net                                                                    
Neutrality"  and  appropriated   the  states'  authority  to                                                                    
regulate  internet  granting  the authority  solely  to  the                                                                    
federal government  leaving the state very  limited capacity                                                                    
to regulate broadband. However,  there were actions that the                                                                    
state could engage  in to help expand  broadband service. He                                                                    
suggested that  other states  performed mapping  and created                                                                    
an environment to invite more  competition. The actions were                                                                    
not regulatory. The FCC had  stated internet service was not                                                                    
a  utility, so  regulation  was not  possible. However,  the                                                                    
Regulatory  Commission  of  Alaska  could  still  engage  in                                                                    
activities that were  in the state's best  interest like. He                                                                    
indicated that 21 states were  suing the FCC over the order.                                                                    
If they prevail  and the order was reversed  or modified the                                                                    
state would  still not be  able to  ask the RCA  to regulate                                                                    
broadband if the definition was not included in statute.                                                                        
2:26:08 PM                                                                                                                    
Representative  Wilson stated  that the  letter also  raised                                                                    
the concern  that the  bill would  change the  definition of                                                                    
public  utility.  Representative Guttenberg  disagreed  with                                                                    
the statement.  He explained that  the bill  simply included                                                                    
broadband  access  into  the statute  as  a  "definition  of                                                                    
responsibilities."    Representative    Wilson   asked    if                                                                    
Representative Guttenberg  was saying the AC  letter was not                                                                    
justified.   Representative  Guttenberg   agreed  with   the                                                                    
statement  but restated  that the  FCC  assumed the  primary                                                                    
role of regulating  broadband the prior December  and if the                                                                    
bill  was heard  last session  there would  not have  been a                                                                    
conflict. He  reiterated that the  state could  still engage                                                                    
in actions  that the FCC  did not  take on and  other states                                                                    
performed. He noted  that 30 states were  taking action that                                                                    
were not regulatory such  as mapping, creating opportunities                                                                    
for competition, and creating  opportunities for entities to                                                                    
"buildout" broadband.  He agreed  that the states  could not                                                                    
regulate broadband.                                                                                                             
2:28:24 PM                                                                                                                    
Representative  Wilson noted  that another  argument in  the                                                                    
letter was that  the internet point for  Alaska was Seattle.                                                                    
She  asked whether  the broadband  carriers  would be  under                                                                    
Washington or Alaska  law. Representative Guttenberg replied                                                                    
that  point  to  point  inside   of  Alaska  was  considered                                                                    
interstate.  He  commented that  he  was  not talking  about                                                                    
regulating interstate  or intrastate  because the  state did                                                                    
not have  a role  in regulation anymore.  He stated  that by                                                                    
clearly  identifying  that  broadband  was  under  the  RCAs                                                                    
purview  the  Regulatory  Commission  of  Alaska  could  put                                                                    
programs in place  for the private sector  to understand the                                                                    
state's needs or mapping to  inform consumers what providers                                                                    
were available.  He stated that  "there was a whole  slew of                                                                    
things that other states had  done." Alaska "could do things                                                                    
for  its citizens"  that were  not regulatory  in nature  to                                                                    
help  expand   broadband.  Representative   Wilson  remained                                                                    
confused. She commented that the  letter insinuated that the                                                                    
bill  could  place obstacles  in  the  way  of his  goal  of                                                                    
expanding  broadband service,  which  she knew  was not  the                                                                    
sponsor's   intent.  She   wondered   what  the   Regulatory                                                                    
Commission  of Alaska  and private  entities  could do  that                                                                    
they could  not accomplish without the  bill. Representative                                                                    
Guttenberg  answered  that  if the  private  companies  were                                                                    
building out broadband services to  urban and rural areas in                                                                    
Alaska he  would not be  sponsoring the bill. The  RCA could                                                                    
perform   mapping   that   charted  the   carriers   service                                                                    
throughout the  state. Current  FCC mapping  was inefficient                                                                    
and inaccurate. The RCA could  also create opportunities for                                                                    
grants  and subsidies  to build  out broadband.  However, if                                                                    
broadband  was   expanded  the   RCA  was   prohibited  from                                                                    
regulating  fees  - the  FCC  claimed  jurisdiction of  that                                                                    
2:33:01 PM                                                                                                                    
Representative Wilson understood  the regulatory issues. She                                                                    
asked whether the bill allowed  the Regulatory Commission of                                                                    
Alaska  to   promote  competition,  award  grants,   and  do                                                                    
mapping.  Representative  Guttenberg  replied  the  RCA  was                                                                    
hesitant about  saying what actions  they might take  if the                                                                    
bill was  adopted. He looked  at what other states  had done                                                                    
outside of  a regulatory role. The  Regulatory Commission of                                                                    
Alaska would  have to go  through a regulatory  type process                                                                    
with the  industry, state,  and public  to decide  what non-                                                                    
regulatory actions to  participate in. Representative Wilson                                                                    
wanted to hear the perspective of the RCA.                                                                                      
Representative Grenn  asked to  hear more about  the effects                                                                    
of adding the four words and  wondered what the RCA would be                                                                    
regulating.  He  referenced  a memorandum  from  Legislative                                                                    
Legal Services  dated February 18,  2018 (copy on  file) and                                                                    
read the following:                                                                                                             
     The bill  draft clarifies that regulatory  power of the                                                                    
     RCA  to  include  broadband  Internet;  the  Regulatory                                                                    
     Commission  of  Alaska  will  still   not  be  able  to                                                                    
    regulate any area that is preempted by federal law.                                                                         
Representative  Guttenberg answered  the  RCA  would not  be                                                                    
regulating  anything. Representative  Grenn  asked for  more                                                                    
detail on what  the additional words would able  them to do.                                                                    
Representative Guttenberg  responded that  Legislative Legal                                                                    
Services had  determined that  the Regulatory  Commission of                                                                    
Alaska  currently   had  adequate  statutory   authority  to                                                                    
regulate  broadband   if  that   was  still   allowable.  He                                                                    
expressed frustration  that the RCA had  previously declined                                                                    
to take on  the authority. He listed examples  of action the                                                                    
other  states  could do  outside  a  regulatory purview.  He                                                                    
reported that  the state of Kansas  ensured that underserved                                                                    
areas  were   built  out  and  required   broadband  service                                                                    
providers  to   show  where  broadband   was  and   was  not                                                                    
available.  He   related  that  his  office   received  many                                                                    
constituents'   calls   requesting   information   regarding                                                                    
providers, coverage  areas, service,  and fees.  He detailed                                                                    
that  the  FCC performed  mapping  using  census blocks  and                                                                    
there  may be  three  blocks for  an  entire community,  but                                                                    
service  might only  cover one  partial block.  However, the                                                                    
map  depicted  that  the   entire  area  received  highspeed                                                                    
internet. In addition, other states  set up grants to assist                                                                    
in  building out  the  infrastructure  to promote  broadband                                                                    
across the state.                                                                                                               
2:38:33 PM                                                                                                                    
Representative Thompson  remarked on  the complexity  of the                                                                    
issue and the  letters of opposition. He asked  to hear more                                                                    
about the  bill. He did not  know that he was  ready to take                                                                    
any   action  on   the  bill   at  present.   Representative                                                                    
Guttenberg  believed  that   the  Regulatory  Commission  of                                                                    
Alaska  had  the  authority  to   take  an  active  role  in                                                                    
broadband  service   in  Alaska.  However,   the  Regulatory                                                                    
Commission  of Alaska  was hesitant  to do  so due  to their                                                                    
interpretation of statute they  perceived lacked clarity. He                                                                    
maintained  that   no  one  in  the   state,  including  the                                                                    
Department  of Administration  (DOA) who  administered state                                                                    
government broadband, had authority  over broadband or taken                                                                    
on a  study of the  state's need. The bill  merely clarified                                                                    
that  the  responsibility  for broadband  was  in  the  RCAs                                                                    
purview. He wanted the RCA to act on their authority.                                                                           
Co-Chair Foster noted that  Representative Pruitt had joined                                                                    
the meeting.                                                                                                                    
Representative  Thompson cited  the letter  and referred  to                                                                    
the following statement:                                                                                                        
     "The RCA regulation of broadband internet may raise                                                                        
     federal preemption concerns."                                                                                              
Representative   Thompson   asked    for   an   explanation.                                                                    
Representative  Guttenberg replied  that the  preemption was                                                                    
referring  to  the  FCC's  action  in  removing  the  states                                                                    
authority to regulate broadband.                                                                                                
SETH  WHITTEN,   STAFF,  REPRESENTATIVE   DAVID  GUTTENBERG,                                                                    
relayed  that  part  of  the   confusion  was  the  shifting                                                                    
landscape. He  detailed that  if it was  prior to  the FCC's                                                                    
order, broadband would  still be considered by the  FCC as a                                                                    
public  utility  and  the discussion  would  not  be  taking                                                                    
place. Prior to the FCC's  order the bill would have updated                                                                    
the statute to conform to  the way broadband was categorized                                                                    
by the FCC; as a  public utility. However, the landscape had                                                                    
shifted due  to the order,  therefore the four words  in the                                                                    
bill enabled the  RCA to do anything that  was not preempted                                                                    
by  the federal  government.  Therefore,  currently the  RCA                                                                    
could  collect  network  information. The  order  disallowed                                                                    
imposition  of requirements  or regulations,  setting rates,                                                                    
terms or conditions on the offering of broadband services.                                                                      
2:42:03 PM                                                                                                                    
Co-Chair Seaton  pointed to  the note at  the bottom  of the                                                                    
memorandum  (page 1)  from  Legislative  Legal Services  and                                                                    
thought it answered many of  the questions. He read from the                                                                    
     AS.42.05.990(13)"telecommunications"      means     the                                                                    
     transmission  and reception  of messages,  impressions,                                                                    
     pictures,   and  signals   by  means   of  electricity,                                                                    
     electromagnetic waves,  and any  other kind  of energy,                                                                    
     force  variations,  or  impulses  whether  conveyed  by                                                                    
     cable,  wire, radiated  through  space, or  transmitted                                                                    
     through other media within a  specified area or between                                                                    
     designated points."  It is  my understanding  that this                                                                    
     definition includes broadband Internet services.                                                                           
Co-Chair Seaton  noted that the  attorney believed  that the                                                                    
definition   included   broadband  internet   services.   He                                                                    
continued  that   the  RCA  could   not  regulate   the  net                                                                    
neutrality portion  any longer,  but broadband  access could                                                                    
be pursued. He referred to page 1, line 11 and read:                                                                            
     (B) furnishing telecommunications service,                                                                                 
Co-Chair  Seaton   maintained  that  for  some   reason  the                                                                    
Regulatory   Commission   of    Alaska   had   a   different                                                                    
interpretation   of  the   statute   than  legal   services.                                                                    
Therefore,  by merely  clarifying  the  definition that  the                                                                    
statute did included broadband internet  access did not mean                                                                    
the  bill   violated  any  federal  regulations.   The  bill                                                                    
currently included taking any actions  that were left in the                                                                    
state's purview. He was puzzled  why some members questioned                                                                    
the bill  when it  merely clarified  the definition,  so the                                                                    
RCA  felt  more   comfortable  assuming  responsibility  for                                                                    
internet  services.  He   reiterated  that  the  legislative                                                                    
attorney's  assured  members   that  the  authority  already                                                                    
existed in  the current definition. He  asked Representative                                                                    
Guttenberg  if his  assessment  was correct.  Representative                                                                    
Guttenberg  replied in  the affirmative.  He  added that  by                                                                    
assuming responsibility the  Regulatory Commission of Alaska                                                                    
would  open a  docket  (process) to  determine what  actions                                                                    
were in the  best interest of the state. The  bill called on                                                                    
the RCA to consider acting.                                                                                                     
2:45:34 PM                                                                                                                    
Representative  Tilton  asked  if the  sponsor  foresaw  any                                                                    
costs  to   the  RCA,  state,  and   ultimately  end  users.                                                                    
Representative Guttenberg replied that  he was an example of                                                                    
an end user and he would  love to pay for improved broadband                                                                    
services and  internet access. He  shared that he  had lived                                                                    
in the  same home for  41 years  and he recalled  when power                                                                    
had been brought  to the neighborhood; he had  been happy to                                                                    
pay  $1,000  for   the  service.  He  noted   that  the  RCA                                                                    
implemented  charges for  developing  regulations but  would                                                                    
not be  regulating so he  was uncertain how its  costs would                                                                    
be covered. He  wanted the state to build  out broadband for                                                                    
its  citizens and  considered access  a significant  service                                                                    
that  builds infrastructure  into  the state  that moved  it                                                                    
into the  21st Century. He  compared internet access  to the                                                                    
development of  the national electrical  grid in  the 1930's                                                                    
or  the highway  system  in the  1950's.  He emphasized  his                                                                    
desire for enhanced broadband services in the state.                                                                            
2:48:29 PM                                                                                                                    
Representative  Kawasaki  thanked Representative  Guttenberg                                                                    
for   the   legislation.    He   referenced   Representative                                                                    
Guttenberg's opening statement that  the RCA already had the                                                                    
authority  to  regulate  broadband and  asked  for  comment.                                                                    
Representative  Guttenberg interpreted  the statute  to mean                                                                    
that it covered all  forms of telecommunications, even types                                                                    
that had  not been invented yet.  He stated that it  was not                                                                    
clear enough for the commission.  The bill further clarified                                                                    
statute.  Representative   Kawasaki  referenced   backup  in                                                                    
members' packets  related to  locations where  broadband was                                                                    
regulated [Broadband  Statutes National Conference  of State                                                                    
Legislatures]  (copy on  file). He  asked what  those states                                                                    
were  doing to  comply with  or  adjust to  the FCC  ruling.                                                                    
Representative  Guttenberg  replied   that  30  states  were                                                                    
attempting  to  reorganize broadband  as  an  industry or  a                                                                    
utility and 21 states were  suing the FCC over the Restoring                                                                    
Internet  Freedom order.  He noted  that he  had a  document                                                                    
that listed what states were doing since the ruling.                                                                            
Mr.  Whitten interjected  that the  regulatory function  had                                                                    
always  been in  question.  There had  been  a period  where                                                                    
broadband was classified as a  public utility under the FCC.                                                                    
He   delineated    that   typically   states    focused   on                                                                    
incentivizing broadband  through grant programs  rather than                                                                    
on regulation. The one area  where states had the ability to                                                                    
gather information  was in the network  information that was                                                                    
used for mapping. The RCA  compiled information on broadband                                                                    
coverage for  a legislative report  over the prior  year and                                                                    
found  there were  entities that  believed  they lacked  the                                                                    
authority  to  request  coverage   data.  The  bill  clearly                                                                    
allowed  entities  to  request   information  that  was  not                                                                    
preempted  by  the  federal government.  He  discovered  the                                                                    
recent  "Competitive  Emerging  Communications  Technologies                                                                    
Act" in Georgia that  granted the state authority consistent                                                                    
with the FCC ruling and  acknowledged that the state did not                                                                    
maintain the authority  to regulate rates and  set terms and                                                                    
conditions  on  services.  However,   the  act  contained  a                                                                    
provision that  stated the state would  assume the authority                                                                    
if the  FCC ruling  was reversed.  He commented  that states                                                                    
had  to exist  in  the constantly  shifting landscape  about                                                                    
whether  broadband was  considered a  utility. Other  states                                                                    
were trying to occupy the middle ground.                                                                                        
2:53:55 PM                                                                                                                    
Representative Guttenberg  referenced the document  from the                                                                    
NCSL  in members'  packets and  pointed  to Mississippi  and                                                                    
read  the description  of the  state's provisions  regarding                                                                    
broadband as an example of actions state could take:                                                                            
     Declares Mississippi's policy  is to provide incentives                                                                    
     for "telecommunications  enterprises" to invest  in the                                                                    
     infrastructure needed  to provide  broadband technology                                                                    
     throughout  the state  to keep  Mississippi competitive                                                                    
   and to promote economic development within the state.                                                                        
     Extends the  sales tax exemption on  sales of equipment                                                                    
     to telecommunications  enterprises that is used  in the                                                                    
     deployment  of broadband  technologies. Extends  the ad                                                                    
     valorem  tax  exemption  for   equipment  used  in  the                                                                    
     deployment     of     broadband     technologies     by                                                                    
     telecommunications enterprises.                                                                                            
Representative  Guttenberg   expounded  that   the  document                                                                    
related  what  other  states were  doing.  The  states  were                                                                    
creating  opportunities for  industry to  develop broadband.                                                                    
Currently, what  measures the RCA  would take  were unknown.                                                                    
Representative  Kawasaki did  not see  the problem  with the                                                                    
legislation  impacting the  FCC ruling  and assumed  the RCA                                                                    
would  work  within  the ruling.  Representative  Guttenberg                                                                    
answered in  the affirmative. He  pointed to  California and                                                                    
read one of the measures the state adopted:                                                                                     
     Regulates  fiber optic  cables and  broadband placement                                                                    
     on state highways.                                                                                                         
Representative Guttenberg had requested  that every time the                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
had to  repair or build  a road  they lay empty  conduit for                                                                    
any future  broadband capacity. He reported  that the Ambler                                                                    
Road  project  was planning  on  adopting  the strategy.  He                                                                    
declared  that   the  state  had  a   "broadband  deployment                                                                    
problem." He  noted that  the fiscal note  from the  RCA was                                                                    
zero.  Representative  Kawasaki  referenced the  letters  of                                                                    
opposition  in members'  packets. He  cited the  legislation                                                                    
and referred to the  words "broadband internet access" [page                                                                    
1, line  11] included  in the  definition of  public utility                                                                    
and thought  the opposition  was related  to the  wording in                                                                    
the bill.                                                                                                                       
2:59:02 PM                                                                                                                    
Mr.  Whitten  replied that  under  the  FCC order  currently                                                                    
broadband was not considered a  public utility. The question                                                                    
was  whether states  would change  statutes  every time  the                                                                    
federal government  changed its categorization  of broadband                                                                    
or created  statutes that recognized the  issue and provided                                                                    
flexibility   and   authority    to   operate   within   the                                                                    
Vice-Chair  Gara stated  that  the line  pertaining to  what                                                                    
could and could  not be regulated would  continue to change.                                                                    
He  stated that  the bill  would allow  the RCA  to regulate                                                                    
broadband  within  the  confines  of  the  FCC  rulings.  He                                                                    
believed   that  opposition   letters  from   industry  were                                                                    
inconsistent.  He  interpreted the  bill  to  mean that  the                                                                    
state would regulate broadband only  as far as the court and                                                                    
federal  government  allowed. The  line  would  move in  the                                                                    
future. In urban  and rural Alaska there was a  long list of                                                                    
grievances  among   consumers  that  needed   attention.  He                                                                    
thought the bill would enable  redress for at least, some of                                                                    
the  grievances.  He  expressed the  frustration  caused  by                                                                    
poor,  costly internet  service.  He  emphasized with  rural                                                                    
residents  who  experienced  high cost  inadequate  internet                                                                    
service. He supported the bill.                                                                                                 
3:02:32 PM                                                                                                                    
Representative  Wilson was  trying  to  understand what  the                                                                    
bill would enable the RCA to  do that it could not currently                                                                    
do.  She  was  concerned  about  how  the  commission  would                                                                    
promote  competition,  distribute  grant  funding,  and  how                                                                    
mapping would work.                                                                                                             
RICHARD  GAZAWAY,   ADMINISTRATIVE  LAW   JUDGE,  REGULATORY                                                                    
COMMISSION  OF  ALASKA  (via teleconference),  believed  the                                                                    
question  had been  answered by  Mr. Whitten.  He elaborated                                                                    
that when the commission was  tasked by the legislature with                                                                    
publishing a  broadband report  the commission  attempted to                                                                    
request network  mapping information. Some  service entities                                                                    
took the position  that the RCA lacked the  authority due to                                                                    
jurisdictional  limitations to  request the  information. He                                                                    
assumed  that  was the  reason  the  sponsor introduced  the                                                                    
bill. He believed  that the authority was  supported and not                                                                    
preempted  by   federal  law.  The  commission   would  have                                                                    
authority  that was  not preempted  but was  currently "very                                                                    
Representative  Wilson asked  whether  he  thought that  the                                                                    
bill   would  force   private  companies   to  release   the                                                                    
information.  Mr.  Gazaway  answered  in  the  negative.  He                                                                    
elaborated  that  the  issue was  a  source  of  controversy                                                                    
between the commission and the  industry. The commission did                                                                    
not force  the issue and  he maintained a  neutral position.                                                                    
Representative  Wilson restated  the question.  She inquired                                                                    
if  the bill  would give  the RCA  authority to  force other                                                                    
companies to  provide information  for mapping.  Mr. Gazaway                                                                    
replied that  the clarification in the  statutory definition                                                                    
would grant the RCA "strong  support for the authority to do                                                                    
so."  Representative   Wilson  wondered   about  proprietary                                                                    
information that companies  did not want to  provide and how                                                                    
the commission  would respond to the  situation. Mr. Gazaway                                                                    
was uncertain how the commissioners would respond.                                                                              
3:06:44 PM                                                                                                                    
Representative Wilson  asked if  the RCA  distributed grants                                                                    
and how it promoted competition.  Mr. Gazaway replied with a                                                                    
historical  example.  He  communicated that  the  commission                                                                    
previously handled a broadband  grant. The grant funding was                                                                    
a  federal farm  bill  earmark for  rural  Alaska to  obtain                                                                    
broadband internet access. The  commission and Department of                                                                    
Commerce,  Community and  Economic Development  (DCCED) were                                                                    
the grant administrators. The commission  was able to impose                                                                    
requirements  on service  levels, speeds,  rates, and  other                                                                    
conditions for the life of  the grant. He related that other                                                                    
states  had received  multiple grants  or used  general fund                                                                    
money for broadband  support. He noted the  existence of the                                                                    
Alaska  Universal  Service Fund  that  was  used to  support                                                                    
telecommunications carriers in Alaska.                                                                                          
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
3:09:30 PM                                                                                                                    
AT EASE                                                                                                                         
3:10:02 PM                                                                                                                    
Co-Chair Foster did not recall  that anyone had signed in to                                                                    
testify during  the morning meeting  when the bill  had been                                                                    
originally scheduled.                                                                                                           
Vice-Chair  Gara   read  the  zero  fiscal   note  from  the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
appropriated to the RCA.                                                                                                        
Representative Wilson  referenced analysis on page  2 of the                                                                    
fiscal note and read:                                                                                                           
     The  Regulatory Commission  of  Alaska  (RCA) would  be                                                                    
     required   to   certificate    or   implement   through                                                                    
     regulation a registration  process for Internet service                                                                    
     providers operating in Alaska.                                                                                             
Representative   Wilson   was  concerned   about   requiring                                                                    
certificates for  internet providers  and reported  that had                                                                    
not  been  her  understanding of  the  bill.  Representative                                                                    
Guttenberg  answered that  the fiscal  note showed  that the                                                                    
RCA did not anticipate any fiscal impact.                                                                                       
Mr. Gazaway  replied that a  public utility was  required to                                                                    
comply  to  a  registration or  certification  process.  The                                                                    
registration   process  was   required  for   carriers  that                                                                    
provided  service.   The  certification  process   was  more                                                                    
extensive,  and  he thought  that  a  certification was  not                                                                    
possible to  issue related to  the net neutrality  order and                                                                    
market barriers.  He indicated  that a  registration process                                                                    
was more  likely. The commission had  statutory authority to                                                                    
allow registration instead  of certification. Representative                                                                    
Wilson asked  whether the RCA  would obtain  the information                                                                    
as  part of  the  application for  a required  certification                                                                    
process. Mr.  Gazaway answered that other  states obtained a                                                                    
list of providers  to provide a service  list for consumers.                                                                    
He assumed  that was  the intent of  the bill's  sponsor. He                                                                    
added that if there was  a desire for mapping information on                                                                    
network  availability the  inquiry  would be  issued to  the                                                                    
providers listed on the registration information.                                                                               
3:14:00 PM                                                                                                                    
Representative Wilson  did not  care what other  states did.                                                                    
She was trying to determine  whether it was the commission's                                                                    
intent  to  require  a  registration  process.  Mr.  Gazaway                                                                    
answered   that  there   was  no   intent.  The   commission                                                                    
determined  what  would  be  required  under  its  statutory                                                                    
framework  if the  bill was  adopted, which  was to  develop                                                                    
some  type of  registration process  and what  that involved                                                                    
was decided on by  the commissioners. The simplified process                                                                    
was the registration process.                                                                                                   
3:15:14 PM                                                                                                                    
AT EASE                                                                                                                         
3:16:20 PM                                                                                                                    
Representative Wilson  wondered whether the language  in the                                                                    
fiscal  note  was  binding. She  suggested  using  the  word                                                                    
"might" to avoid requiring registration.                                                                                        
Representative  Guttenberg  answered  that the  bill  was  a                                                                    
blank page;  there were  no regulations  in place  and there                                                                    
were  no  regulations  defining a  process.  The  commission                                                                    
would  engage in  a public  process before  establishing any                                                                    
regulations.  Representative Wilson  stated that  the fiscal                                                                    
note had been approved by  Stephen McAlpine the chair of the                                                                    
RCA and  approved by  Catherine Reardon,  Director, Division                                                                    
of  Administrative  Services,  DCCED. Her  concern  was  the                                                                    
language  in  the  fiscal note  reflected  the  commission's                                                                    
analysis  of  the bill.  She  surmised  that the  commission                                                                    
would be  required to implement a  registration process. She                                                                    
wanted a definitive answer.                                                                                                     
Vice-Chair Gara stated that the  fiscal note was simple, and                                                                    
he  believed  the requirement  was  "a  molehill and  not  a                                                                    
mountain." He voiced that registration  was a simple process                                                                    
and nothing  in the  bill was  controversial. He  added that                                                                    
the state did not preempt the federal government                                                                                
3:20:20 PM                                                                                                                    
Co-Chair Foster voiced that at  some point the members would                                                                    
have to agree to disagree.                                                                                                      
Mr. Gazaway answered  that a public utility  was required to                                                                    
obtain  operating authority  via  statute. The  registration                                                                    
process was more informational  and informal. The commission                                                                    
would determine what process was  more relevant according to                                                                    
Co-Chair  Seaton  remarked  that   the  bill  was  merely  a                                                                    
clarification of  subsection (b) in statute.  He pointed out                                                                    
that  if  there  was  already  an  established  registration                                                                    
process for telecommunication services  than broadband was a                                                                    
subsection  of   telecommunication  services.  He   did  not                                                                    
believe  that   anything  new  was  being   established  and                                                                    
referred to the legal opinion.                                                                                                  
Representative   Wilson  believed   no   one   spoke  of   a                                                                    
certification process during the mapping discussions.                                                                           
Representative Pruitt  declared that  the bill  was invalid.                                                                    
He referred to the legal memo and read:                                                                                         
     "?under   the   Supremacy   Clause   of   the   federal                                                                    
     constitution,  state laws  that interfere  with federal                                                                    
     laws are invalid."                                                                                                         
Representative Pruitt  deduced that  it clearly  stated that                                                                    
the  federal  government  prohibited regulation  beyond  the                                                                    
authority allowed and was baffled  why the committee engaged                                                                    
in "fruitless  conversation" and  would move forward  with a                                                                    
bill that did nothing.                                                                                                          
3:24:03 PM                                                                                                                    
Vice-Chair  Gara   believed  that   Representative  Pruitt's                                                                    
characterization of the bill was  unfair. He referred to the                                                                    
NCSL  report and  ascertained  that the  bill  did what  the                                                                    
state  of Alabama  mandated; regulate  the  internet to  the                                                                    
extent permitted by federal law.                                                                                                
Representative Pruitt  read from  AC's opposition  letter as                                                                    
     As  early  as  1998  the FCC  concluded  that  applying                                                                    
     common   carrier    or   "telecommunications   service"                                                                    
     regulation  to  BIAS   would  "seriously  curtail"  the                                                                    
     regulatory freedom deemed  necessary to the development                                                                    
     of   "enhanced  services,"   as  information   services                                                                    
     formerly were known.                                                                                                       
Representative  Pruitt  contended  that creating  a  heavily                                                                    
regulated  environment would  achieve the  goal of  limiting                                                                    
expanded  broadband services  especially in  rural areas  of                                                                    
the  state.  He  believed  that  regulations  would  curtail                                                                    
broadband expansion and emphasized his opposition.                                                                              
Representative  Guttenberg provided  a counter  argument. He                                                                    
suggested  that   Representative  Pruitt  read   the  report                                                                    
included in the FCC's Restoring Internet Freedom Order from                                                                     
Commissioner Pai, Chairman  of the FCC who  stated that $1.3                                                                    
billion would  be wasted for  not building out  the internet                                                                    
consistently.  He  reiterated that  more  could  be done  to                                                                    
accomplish expanded  broadband. He voiced that  the bill was                                                                    
not preempting  federal law.  Other states  had demonstrated                                                                    
that opportunities to create  incentives and remove barriers                                                                    
to expand  broadband existed. He  stressed that  the problem                                                                    
in  Alaska  was  severe.  He reiterated  the  problems  with                                                                    
internet service in  the state. He hoped the  RCA would help                                                                    
improve  internet access  for Alaskans  with passage  of the                                                                    
3:30:23 PM                                                                                                                    
Co-Chair  Seaton MOVED  to REPORT  HB 384  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
Representative  Wilson  OBJECTED.   She  elaborated  on  her                                                                    
objection. She  stated that the  government did  not provide                                                                    
internet  services,  private   industry  did.  She  believed                                                                    
building   new  infrastructure   was   costly  for   private                                                                    
industry.  She  understood  the frustration  regarding  poor                                                                    
internet  service  but  was  not  willing  to  tell  private                                                                    
companies  how or  where to  do business.  She believed  the                                                                    
bill  would  place  private  business  inside  a  regulatory                                                                    
Representative Pruitt contended that he  did not know of any                                                                    
industry  that  grew  through  regulation.  He  opposed  the                                                                    
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Kawasaki, Ortiz, Gara, Guttenberg, Seaton, Foster                                                                     
OPPOSED: Pruitt, Thompson, Tilton, Wilson, Grenn                                                                                
The MOTION  PASSED (6/5). There  being NO OBJECTION,  it was                                                                    
so ordered.                                                                                                                     
HB 384  was REPORTED  out of committee  with four  "do pass"                                                                    
recommendations, three "do  not pass" recommendations, three                                                                    
"no   recommendation"  recommendations,   and  one   "amend"                                                                    
recommendation;  and  with  one  previously  published  zero                                                                    
fiscal note: FN1 (CED).                                                                                                         
3:34:29 PM                                                                                                                    
AT EASE                                                                                                                         
3:35:19 PM                                                                                                                    
SENATE BILL NO. 32                                                                                                            
     "An Act relating to biological products; relating to                                                                       
     the practice of pharmacy; relating to the Board of                                                                         
     Pharmacy; and providing for an effective date."                                                                            
Co-Chair  Foster  relayed  that  SB 32  was  last  heard  in                                                                    
committee on May 3, 2017.                                                                                                       
3:36:12 PM                                                                                                                    
SENATOR SHELLEY  HUGHES, SPONSOR,  provided a review  of the                                                                    
legislation.  She  reported that  since  the  bill was  last                                                                    
heard the  Alaska Board of  Pharmacy decided to  support the                                                                    
bill  and that  41  states adopted  similar legislation;  an                                                                    
increase from 33  in 2017. She detailed that  a biologic was                                                                    
made  from  a  living  cell  and  had  a  complex  molecular                                                                    
structure.  The  drugs  were the  fastest  growing  type  of                                                                    
"therapeutic products."  Approximately three  dozen biologic                                                                    
medicines were  used to treat  serious and  chronic diseases                                                                    
for  thousands of  Alaskans.  Additionally,  a generic  drug                                                                    
could be  substituted by a  pharmacist because  it contained                                                                    
"identical  chemical  recipe."  Biological  products  differ                                                                    
from  traditional generics  and were  not able  to replicate                                                                    
exactly  due  to  its complex  compounds  therefore  generic                                                                    
biologic medicines  were not  identical and  were considered                                                                    
"biosimilar."  The  federal  Food  and  Drug  Administration                                                                    
(FDA)   developed  a   "gold  standard"   or  criteria   for                                                                    
biosimilar products and  labeled them "interchangeables." An                                                                    
interchangable   biosimilar  was   highly  similar   to  the                                                                    
original  biologic and  had been  found  to produce  similar                                                                    
clinical  results. The  bill would  update  current laws  to                                                                    
allow   a    pharmacist   to    substitute   interchangeable                                                                    
biosimilars  for prescribed  brand-name biologics  that were                                                                    
approved by  the FDA but maintained  the prescribers control                                                                    
by authorizing  them to specify  whether a  substitution was                                                                    
allowable.  Patient consent  was  also  required before  any                                                                    
substitution  was made.  The chemical  results would  be the                                                                    
same. The legislation required that  within three days after                                                                    
dispensing,   the  pharmacist   must   communicate  to   the                                                                    
physician the specific biologic product dispensed.                                                                              
3:40:38 PM                                                                                                                    
Representative  Kawasaki asked  whether patient  consent for                                                                    
the substitution was necessary.  Senator Hughes responded in                                                                    
the  affirmative. Representative  Kawasaki  asked about  the                                                                    
gold standard  for interchangeable biosimilars  and wondered                                                                    
what  the  standard was.  Senator  Hughes  replied that  the                                                                    
FDA's  definition of  an approved  biosimilar  was that  the                                                                    
"interchangeable would  produce the same clinical  result as                                                                    
the    referenced   product    in   any    given   patient."                                                                    
Representative Kawasaki  asked how  the process  worked when                                                                    
the pharmacist communicated  to the prescribing practitioner                                                                    
what  specific biologic  substitute  was dispensed.  Senator                                                                    
Hughes  relayed  that  it would  happen  via  an  electronic                                                                    
system, emails, or  phone calls and allowed  3 business days                                                                    
for the communication.                                                                                                          
Co-Chair Foster moved to invited testimony.                                                                                     
3:44:29 PM                                                                                                                    
Co-Chair Foster OPENED public testimony.                                                                                        
3:44:58 PM                                                                                                                    
RICHARD  HOLT,  CHAIRMAN,  BOARD OF  PHARMACISTS,  ANCHORAGE                                                                    
(via teleconference), indicated that  the board supported SB                                                                    
32.  He reported  that the  field of  biologic medicine  was                                                                    
rapidly growing,  and the  board needed  to stay  focused on                                                                    
the industry.  He noted  that currently  Alaskan pharmacists                                                                    
would not be able to  offer interchangeables and was in full                                                                    
support of the bill.                                                                                                            
Representative  Wilson  related  that  the  board  would  be                                                                    
required to  post and maintain a  link to the FDA's  list of                                                                    
all currently  approved interchangeable  biological products                                                                    
on the board's  website. She asked whether the  board was in                                                                    
support  of  the  requirement.   Mr.  Holt  replied  in  the                                                                    
3:47:16 PM                                                                                                                    
MARC  BOAS,  SELF,  ANCHORAGE (via  teleconference),  was  a                                                                    
current  patient with  the  chronic  illness, psoriasis.  He                                                                    
spoke  in support  of SB  32. He  indicated that  he was  an                                                                    
advocate   for  a   chapter   of   the  National   Psoriasis                                                                    
Foundation. He  delineated that conventional  drug treatment                                                                    
results   diminished   over    time.   Biosimilars   offered                                                                    
significant relief  and cost savings.  He believed  the bill                                                                    
provided  the  correct  pathways   to  gain  access  to  the                                                                    
appropriate interchangeables  while protecting  the patient.                                                                    
He  urged members  not  to  delay passage  of  the bill.  He                                                                    
thanked members for their support.                                                                                              
3:49:41 PM                                                                                                                    
AT EASE                                                                                                                         
3:49:56 PM                                                                                                                    
Co-Chair  Foster would  be passing  the gavel  to Vice-Chair                                                                    
SHAINA   SMITH,   U.S.   PAIN   FOUNDATION,   WASILLA   (via                                                                    
teleconference),  spoke in  favor  of  the legislation.  She                                                                    
read from a  foundation member's letter who  was a decorated                                                                    
veteran and experienced  chronic pain for over  45 years. He                                                                    
relayed   his  experience   with   relief  from   rheumatoid                                                                    
arthritis  from  a  biologic   medicine.  He  supported  the                                                                    
opportunity  to have  an  FDA substitution  in  the case  he                                                                    
built resistance  to his current biologic.  He supported the                                                                    
3:52:08 PM                                                                                                                    
ASHLYN  ANTONELLI,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
spoke in favor of the bill.  She shared that she was a brain                                                                    
tumor  survivor  and   currently  struggled  with  psoriatic                                                                    
arthritis  and  provided  details   about  her  health.  She                                                                    
supported  the   ability  to  be  prescribed   a  biosimilar                                                                    
substitute  and noted  that many  other states  had approved                                                                    
the   substitutions.  She   related   that   her  pain   was                                                                    
debilitating, and she had to  take a three-hour nap when she                                                                    
got  home  from work.  She  hoped  the committee  would  put                                                                    
itself in the  position of a person with  chronic illness to                                                                    
understand the need for supporting the legislation.                                                                             
3:55:11 PM                                                                                                                    
TERRY  MCCLELLAND,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
testified in support  of the bill. He related that  he was a                                                                    
volunteer  for the  Colorectal  Cancer  Alliance. He  shared                                                                    
that he had  cancer twice and was  medically prohibited from                                                                    
receiving any  further chemotherapy or radiation.  He wanted                                                                    
the bill to pass to ensure  all Alaskans had access to other                                                                    
3:56:50 PM                                                                                                                    
Vice-Chair Gara noted he was  signing on as a co-sponsor for                                                                    
the bill.                                                                                                                       
Vice-Chair Gara CLOSED public testimony.                                                                                        
3:57:24 PM                                                                                                                    
AT EASE                                                                                                                         
3:58:14 PM                                                                                                                    
Representative Guttenberg asked  what the difference between                                                                    
a biologic and biosimilar was.                                                                                                  
RYLAN  HANKS,  DIRECTOR  OF REGULATORY  POLICY,  AMGEN,  LOS                                                                    
ANGELES,  CALIFORNIA  (via   teleconference),  replied  that                                                                    
since   biologics  were   made  with   living  cells   exact                                                                    
replications were impossible. He  explained that a patient's                                                                    
immune  system  recognized  the biologic  by  responding  in                                                                    
certain ways to  the small molecules. Because  of the slight                                                                    
differences in  the small molecules  between a  biologic and                                                                    
biosimilar, the biosimilar was not  an exact copy. The way a                                                                    
biosimilar reacted  in the body  was highly similar  but not                                                                    
exactly the same.                                                                                                               
Senator  Hughes   appreciated  the  committee's   time.  She                                                                    
commended  her staff,  Aimee Bushnell,  for working  hard on                                                                    
the bill.                                                                                                                       
Vice-Chair Gara MOVED a conceptual amendment.                                                                                   
Representative Wilson OBJECTED for discussion.                                                                                  
Vice-Chair Gara  explained Conceptual Amendment 1.  He cited                                                                    
that  on page  4, line  17, the  effective date  was changed                                                                    
from  July  1, 2017 to July  1, 2018 and on page  4, line 18                                                                    
the year 2018 was changed to 2019.                                                                                              
Representative Wilson WITHDREW her OBJECTION.                                                                                   
There  being NO  further OBJECTION,  Conceptual Amendment  1                                                                    
was ADOPTED.                                                                                                                    
Representative  Kawasaki  asked  whether  the  bill  applied                                                                    
specifically  to interchangeable  biological products  only.                                                                    
Senator  Hughes replied  in  the  affirmative. She  detailed                                                                    
that an  interchangeable was a sub-category  of a biosimilar                                                                    
and   only   an    interchangeable   biosimilar   could   be                                                                    
substituted.  Representative  Kawasaki  pointed  to  an  FDA                                                                    
document and read the following:                                                                                                
     An   interchangeable   biological    product   may   be                                                                    
     substituted for  the reference product by  a pharmacist                                                                    
     without  intervention  by  a  healthcare  provider  who                                                                    
     prescribed the product?                                                                                                    
Representative Kawasaki restated  his question regarding the                                                                    
provision that  the pharmacists  must notify  the prescriber                                                                    
of the  substitution. Senator Hughes  answered that  the FDA                                                                    
did not require  pharmacist's notification. However, patient                                                                    
groups  across the  country requested  the notification  and                                                                    
all  41  states  included the  notification  requirement  in                                                                    
response to public outcry.                                                                                                      
4:03:54 PM                                                                                                                    
Vice-Chair  Gara reviewed  the new  fiscal impact  note from                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development  (DCCED)  in  the   amount  of  $4,500  for  the                                                                    
regulatory process.                                                                                                             
Vice-Chair  Gara  MOVED to  REPORT  HCS  SB 32(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
HCS  SB 32(FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
4:05:55 PM                                                                                                                    
AT EASE                                                                                                                         
4:06:52 PM                                                                                                                    
HOUSE BILL NO. 306                                                                                                            
     "An  Act relating  to  disbursement  options under  the                                                                    
     Public Employees'  Retirement System of Alaska  and the                                                                    
     Teachers' Retirement System  of Alaska for participants                                                                    
     in the defined contribution  plan; and providing for an                                                                    
     effective date."                                                                                                           
4:07:21 PM                                                                                                                    
AT EASE                                                                                                                         
4:07:53 PM                                                                                                                    
Vice-Chair Gara  relayed that the bill  was previously heard                                                                    
on April 9, 2018.                                                                                                               
JANE  PIERSON, STAFF,  REPRESENTATIVE NEAL  FOSTER, reported                                                                    
the changes in the  committee substitute (CS). She explained                                                                    
that   Legislative   Legal   Services   concurred   that   a                                                                    
"diminishment  of existing  benefits" would  possibly occur.                                                                    
The CS left the  original six disbursement options unchanged                                                                    
in the  bill and  changed the  seventh disbursement  to read                                                                    
"payment  as  authorized by  regulation  or  adopted by  the                                                                    
commissioner of the Department of Administration (DOA)."                                                                        
Representative  Ortiz  wondered  about  the  impact  of  the                                                                    
change.   Ms.  Pierson   explained  that   a  constitutional                                                                    
provision   stated  that   benefits  already   promised  via                                                                    
contract could  not be diminished.  The change  ensured that                                                                    
the original distribution methods remained in statute.                                                                          
Representative   Guttenberg   asked   whether   the   Alaska                                                                    
Retirement  Management  Board  (ARMB)  could  "add  more  by                                                                    
regulation."  Ms.  Pierson  replied  that  the  payment  was                                                                    
authorized by the commissioner of DOA.                                                                                          
Representative Wilson MOVED to  ADOPT the proposed committee                                                                    
substitute  for  HB  306,  Work  Draft  30-GH2815\J  (Wayne,                                                                    
4/11/18). There being NO OBJECTION, it was so ordered.                                                                          
4:10:50 PM                                                                                                                    
SYLVAN    ROBB,   DEPUTY    COMMISSIONER,   DEPARTMENT    OF                                                                    
ADMINISTRATION,  answered  that  the  regulations  would  be                                                                    
adopted   by  the   commissioner   of   the  Department   of                                                                    
Administration based  on Alaska Retirement  Management Board                                                                    
Representative  Wilson presumed  the change  did not  impact                                                                    
the zero fiscal note. Ms. Robb replied in the affirmative.                                                                      
Vice-Chair Gara reviewed the new zero fiscal note from DOA.                                                                     
Vice-Chair  Gara  MOVED  to  REPORT  CSHB  306(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note(s). There  being NO  OBJECTION, it                                                                    
was so ordered.                                                                                                                 
CSHB  306(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with one  zero fiscal note from the                                                                    
Department of Administration.                                                                                                   
4:13:14 PM                                                                                                                    
AT EASE                                                                                                                         
4:13:58 PM                                                                                                                    
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 4(FIN) am                                                                       
     "An  Act   relating  to  the   Board  of   Barbers  and                                                                    
     Hairdressers;   relating  to   a  limited   license  to                                                                    
     practice non-chemical barbering;  relating to a license                                                                    
     to practice  hair braiding; relating to  the Department                                                                    
     of  Environmental Conservation;  and  providing for  an                                                                    
     effective date."                                                                                                           
4:14:08 PM                                                                                                                    
RACHEL HANKE,  STAFF, SENATOR  PETER MICCICHE,  reviewed the                                                                    
bill.  She  reported that  the  bill  allowed the  board  to                                                                    
enforce  existing Department  of Environmental  Conservation                                                                    
(DEC)  regulations and  issue licenses  for hairdresser  and                                                                    
barber  shops.  The bill  also  created  a new  lower  level                                                                    
licenses  for braiding  and non-chemical  barbering allowing                                                                    
for less than 1,650 hours  of training which was the current                                                                    
SENATOR PETER  MICCICHE, SPONSOR, thanked the  committee for                                                                    
hearing the  bill. He explained  that the  bill accomplished                                                                    
five  things.  He maintained  that  the  bill was  important                                                                    
because the state had  overstressed and overregulated people                                                                    
in the barbers and hairdresser  industry. He listed the five                                                                    
goals  of  the legislation.  The  number  of hours  required                                                                    
under  the current  structure  was  costly and  non-chemical                                                                    
barbers  and  braiders  could not  afford  the  license.  He                                                                    
delineated that  students or practitioners were  required by                                                                    
statute  to conspicuously  display  their licenses,  however                                                                    
the shop owner was not.  The inequity led to employees being                                                                    
fined because the shop owner's  license had lapsed. The bill                                                                    
required the  shop owner to  conspicuously display  the shop                                                                    
license.  He noted  that DEC  was no  longer providing  shop                                                                    
certifications   due   to   budget  reductions.   The   bill                                                                    
authorized  a self-certification  process regulated  through                                                                    
the Board using DEC standards.  He repeated that SB4 created                                                                    
two new license types:  braiding and non-chemical barbering.                                                                    
He reported  that non-chemical barbering only  used scissors                                                                    
and clippers and their training  hours would be dramatically                                                                    
reduced.  The braiding  license  would require  35 hours  of                                                                    
training.  Additionally,   SB  4  separated   tattooing  and                                                                    
permanent cosmetic coloring into two separate licenses.                                                                         
4:18:49 PM                                                                                                                    
Vice-Chair Gara OPENED public testimony.                                                                                        
4:20:01 PM                                                                                                                    
DARAE  CREWS,   DARAE'S  SALON   and  SPA,   ANCHORAGE  (via                                                                    
teleconference), spoke in support of  the bill. She read the                                                                    
testimony on  behalf of two  practitioners of  who performed                                                                    
permanent  coloring or  microblading. The  practitioners had                                                                    
many hours  of education  and experience.  The practitioners                                                                    
indicated  that microblading  was  not permanent  and not  a                                                                    
tattoo. They  elucidated that  the ink  was inserted  in the                                                                    
basil  layer  of the  skin  versus  the dermal  layer.  They                                                                    
explained   the   instruments   and  techniques   used   for                                                                    
sanitation  and  patient  safety  that  included  a  patient                                                                    
intake.  They  shared their  personal  stories  of how  they                                                                    
became interested in the profession  and where they received                                                                    
their  training. Ms.  Crews explained  that both  testifiers                                                                    
travelled  to Texas  to attend  a  school for  microblading.                                                                    
They  returned  to  Alaska,  opened  a  shop  and  practiced                                                                    
microblading.  A   state  investigator  forced   the  shop's                                                                    
closure  declaring the  practice illegal.  She claimed  that                                                                    
the practitioners had never found  any statute or regulation                                                                    
for  microblading and  believed they  were operating  within                                                                    
the law. She  asked for help on behalf  of the practitioners                                                                    
and supported the legislation.                                                                                                  
4:29:12 PM                                                                                                                    
Ms. Crews believed people who  had been legally trained with                                                                    
many  hours of  experience  should not  have any  additional                                                                    
educational requirements for licensure.                                                                                         
Representative  Wilson   asked  Ms.  Crews  to   submit  the                                                                    
testimony electronically. Ms. Crews agreed.                                                                                     
4:31:12 PM                                                                                                                    
JEREMY  PRICE,  STATE  DIRECTOR, AMERICANS  FOR  PROSPERITY,                                                                    
thanked  the committee  for hearing  the bill  and spoke  in                                                                    
support.   He  believed   that   the   bill  provided   more                                                                    
opportunities  for small  business  owners.  He shared  that                                                                    
many Alaskans  were experiencing  economic hardship  and the                                                                    
bill  went a  long way  to give  Alaskans an  opportunity to                                                                    
operate a small business a support themselves financially.                                                                      
4:32:29 PM                                                                                                                    
GLORIA     BAMBERG-MERRITT,     SELF,     ANCHORAGE     (via                                                                    
teleconference),  testified  in  support of  the  bill.  She                                                                    
stated  that  she  was  a  licensed  "hair  instructor"  and                                                                    
aesthetician  for 29  years and  owned  Plethora Designs  in                                                                    
Anchorage.  She  spoke  to   the  provisions  regarding  the                                                                    
braiding licensure and agreed with  the 35 hours of training                                                                    
and stated that the need  for licensure was to ensure health                                                                    
and   safety.    She   believed   the    licensure   allowed                                                                    
practitioners to operate  legally, strengthened the economy,                                                                    
increased  small  business  opportunities, and  allowed  low                                                                    
income individuals  financial opportunities. The  bill would                                                                    
benefit the  state by collecting  license fees.  She planned                                                                    
to send in testimony regarding micro-braiding.                                                                                  
Vice-Chair Gara CLOSED public testimony.                                                                                        
Representative  Wilson wondered  whether the  bill addressed                                                                    
the microblading  issue. Senator Micciche replied  there was                                                                    
clearly  a  misunderstanding.  He   explained  that  at  the                                                                    
request  of  the  board  chair,   the  bill  merely  defined                                                                    
tattooing  and  permanent  cosmetic  coloring  and  did  not                                                                    
relate to licensing requirements at  all. He stated that the                                                                    
bill did not address the  caller's issues and did not change                                                                    
any current  requirements. Senator Micciche deferred  to Mr.                                                                    
McKinley  for further  answers. Senator  Micciche reiterated                                                                    
that  the   bill  was   about  reducing   requirements,  not                                                                    
increasing them.                                                                                                                
Representative Kawasaki  referred to Section 29  of the bill                                                                    
regarding  tattooing and  microblading. He  wondered whether                                                                    
the bill's language  was a more specific  description of the                                                                    
4:38:33 PM                                                                                                                    
KEVIN  MCKINLEY,  CHAIR,  BOARD OF  HAIRDRESSERS,  FAIRBANKS                                                                    
(via teleconference), answered  that the definitions removed                                                                    
ambiguity   and    was   more   inclusive,    defined,   and                                                                    
standardized.  He  explained  that  the  new  definition  of                                                                    
tattooing did  not specify  what layers  of skin  the needle                                                                    
was inserted into. Representative  Kawasaki asked if the new                                                                    
definition was  broader than  current statute.  Mr. McKinley                                                                    
answered in  the affirmative. Representative  Kawasaki asked                                                                    
Mr. McKinley  if he heard  the testimony from Ms.  Crews and                                                                    
requested  that  he  address  the  testimony.  Mr.  McKinley                                                                    
answered in  the affirmative. He  explained that  the claims                                                                    
that micro-braiding  only inserted  into a certain  layer in                                                                    
the skin  was debatable and  questioned in the  industry. He                                                                    
stated that trade  associations classified micro-braiding as                                                                    
a form of tattooing.                                                                                                            
Vice-Chair Gara asked to hear from the department.                                                                              
4:43:08 PM                                                                                                                    
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY AND  ECONOMIC DEVELOPMENT, answered that                                                                    
the bill  broke the  licensing requirements into  sectors of                                                                    
the industry  who were  not performing  permanent tattooing,                                                                    
which would include micro-braiding  and lowered the training                                                                    
requirements. She  expounded that the board  believed micro-                                                                    
blading  to be  a form  of tattooing  according to  national                                                                    
standards. However,  the board  believed that a  full tattoo                                                                    
license  was  too  high  of   a  bar  for  practitioners  of                                                                    
microblading. The bill allowed  people to legally microbraid                                                                    
in  their   existing  shop,  perhaps  with   their  existing                                                                    
education  under the  permanent  cosmetic coloring  license.                                                                    
She clarified that the board  did not want to act punitively                                                                    
on behalf of those legitimately practicing microblading.                                                                        
4:44:48 PM                                                                                                                    
AT EASE                                                                                                                         
4:46:05 PM                                                                                                                    
Representative  Kawasaki asked  how the  35-hour requirement                                                                    
for hair  braiding was  conceived. Senator  Micciche replied                                                                    
that he compared  the state rankings around  the country and                                                                    
discovered  that   the  middle  of  the   road  ranking  was                                                                    
approximately  35 hours.  He also  spoke with  professionals                                                                    
and  solicited professional  opinions  regarding the  health                                                                    
and  safety   aspects.  He  believed  the   requirement  was                                                                    
adequate.  Representative Kawasaki  wondered whether  it was                                                                    
necessary to  license hair braiders at  all. He acknowledged                                                                    
licensure was  a policy call.  Senator Micciche  answered in                                                                    
the  affirmative.  He  stated that  braiders  were  handling                                                                    
people's hair  and health and  safety issues were  a concern                                                                    
and thought  35 hours  was minimal.  Representative Kawasaki                                                                    
referenced the  elimination of shop  inspections by  DEC. He                                                                    
asked who would be investigating shop owners.                                                                                   
Ms. Chambers  answered that DEC currently  oversaw tattooing                                                                    
inspections  and had  overseen hair  salons. She  elucidated                                                                    
that DCCED  investigators would perform  the work  in tandem                                                                    
with DEC  and leave the door  open for DEC to  take over the                                                                    
inspections if funding improved.                                                                                                
4:50:45 PM                                                                                                                    
Vice-Chair  Gara  reviewed   the  two  previously  published                                                                    
fiscal notes.                                                                                                                   
Vice-Chair Gara  MOVED to  REPORT HCS  CSSSSB 4(L&C)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
HCS CSSSSB 4(L&C)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal note: FN3 (DEC); and  one previously published fiscal                                                                    
impact note: FN5 (CED).                                                                                                         
4:52:41 PM                                                                                                                    
The meeting was adjourned at 4:52 p.m.                                                                                          

Document Name Date/Time Subjects
HB 339 Support.pdf HFIN 4/11/2018 1:30:00 PM
HB 339
SB032 Opposing Document-Opposition Letters 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB032 Sectional Analysis ver J 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB032 Sponsor Statement 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB032 Supporting Documents-Support Letters 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB32_Support_050317.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB4 Explanation of Changes ver. J to ver. N 4.2.3018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Sectional Analysis ver. N 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Sponsor Statement ver. N 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Letters 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Doc - News Articles 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Doc - Braiding Regs Report Packet Version 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Doc - DEC Letters 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
Board of Pharmacy BOP 3-22-18 SB32 Support Letter.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
HB 386 Opposition.PDF HFIN 4/11/2018 1:30:00 PM
HB 386
Alaska AMCP letter SB 32.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
HB384 2018-03-29 ATA Comments in Opposition to .pdf HFIN 4/11/2018 1:30:00 PM
HB 384
HB 384 Letter of Opposition - House Finance.pdf HFIN 4/11/2018 1:30:00 PM
HB 384
HB 385 - Sectional Analysis - 4.10.2018.pdf HFIN 4/11/2018 1:30:00 PM
HB 385
SB 32 Alaska Biosimilars one-pager.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB 32 Alaska UNITED Support doc_4.11.18.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB 32 Biologicals list under 505 pathway.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
HB 306 CS WORKDRAFT v J.pdf HFIN 4/11/2018 1:30:00 PM
HB 306