Legislature(2001 - 2002)
03/23/2001 01:47 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MARCH 23, 2001
1:47 P.M.
TAPE HFC 01 - 60, Side A
TAPE HFC 01 - 60, Side B
TAPE HFC 01 - 61, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:47 P.M.
MEMBERS PRESENT
Representative Bill Williams, Co-Chair
Representative Eldon Mulder, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
MEMBERS ABSENT
Representative Carl Moses
Representative Jim Whitaker
ALSO PRESENT
Representative Hugh Fate; Representative Mike Chenault;
Catherine Reardon, Director, Division of Occupational
Licensing, Department of Community and Economic Development;
Margot Knuth, Assistant Attorney General, Department of
Corrections; Devon Mitchell, Executive Director, Alaska
Municipal Bond Bank Authority, Department of Revenue; David
Logan, President, Dental Board, Juneau; Cheryl Sutton,
Southeast Alaska Regional Dive Fisheries Association
(SARDFA), Juneau; Dave Stancliff, Staff, Representative
Scott Ogan.
PRESENT VIA TELECONFERENCE
Janice Adair, Director, Division of Environmental Health,
Department of Environmental Conservation, Anchorage; Dr.
George Schaffer, Dental Board, Ketchikan; Debra Stauffer,
President, Alaska State Dental Association, Anchorage; Dr.
Richard Gregorin, Dental Board, Anchorage; Hart Hodges,
Anchorage; Tom Livingston, Architect, Anchorage.
SUMMARY
HB 51 An Act giving notice of and approving the entry
into, and the issuance of certificates of
participation for, a lease-purchase agreement for
a seafood and food safety laboratory facility; and
providing for an effective date.
HB 51 was HEARD and HELD in Committee for further
consideration.
HB 81 An Act extending the termination date of the Board
of Dental Examiners.
CS HB 81 (FIN) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by Department of Community & Economic Development.
HB 149 An Act relating to correctional facility space and
to authorizing the Department of Corrections to
enter into an agreement to lease facilities for
the confinement and care of prisoners within the
Kenai Peninsula Borough.
HB 149 was HEARD and HELD in Committee for further
consideration. A Subcommittee consisting of Chair
Representative Mulder, and members Representative
Bunde and Representative Moses were appointed to
discuss the legislation.
Co-Chair Williams opened the House Finance Committee meeting
and noted that Speaker Porter had referred the State
Assessment Review Board document to the Committee for
approval. He noted that it would not be considered at this
scheduled meeting and asked that if any member disagreed
with the document, they should contact his office.
HOUSE BILL NO. 51
An Act giving notice of and approving the entry into,
and the issuance of certificates of participation for,
a lease-purchase agreement for a seafood and food
safety laboratory facility; and providing for an
effective date.
JANICE ADAIR, DIRECTOR, DIVISION OF ENVIRONMENTAL HEALTH,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, explained that the
legislation would address the following concerns:
· Noted that the lease expired in December of last
year, and could only be extended on a short-term
basis. AS 36.30.083 allows the Division of
General Services to extend a lease under two
conditions: 1) A 1% lease reduction can be
achieved or 2) A 10% reduction could be achieved
and the American with Disabilities Act (ADA)
requirements met. In the case of the current
facility, the lease rate is $1.03/square foot and
complies with ADA. She stated that the owners are
not interested in a 15% reduction in their lease
rate. Additionally, the building is up for sale.
· Indicated that one way or the other, the lab will
have to move. With money previously appropriated
by the Legislature to look at the most cost-
effective way to replace the lab, a private
consultant was hired to do an economic evaluation.
He determined that "hands down", the most cost-
effective means would be a state-owned facility.
In fact, leasing a laboratory rather than owning
would cost the State 56% more over the 20-year
term of the bond repayment.
· Added that the functions of such a site are
required regulatory functions for the sale of
shellfish and diary products in national and
international commerce markets. No other
laboratories in the State perform the functions,
nor could they under federal rules.
· The laboratory also certifies private, commercial
laboratories to conduct tests required under the
Safe Drinking Water Act (SDWA) for public water
systems. Unless a private laboratory is
certified, Environmental Protection Agency (EPA)
will not accept their test results. Since Alaska
is a primary State for the drinking water program,
we could not accept them either.
Ms. Adair noted that the laboratory is currently located in
Palmer, and the plan includes relocating it to Anchorage.
She enumerated the reasons for the move:
· Anchorage is a central location that could receive
shellfish samples as quickly as possible from many
areas of the State.
· The site needs to be on a public sewer system, as
many chemicals are used.
· A site is needed where there is no excessive
vibrations, dust or electron-magnetic interference
for the performance of the analytical equipment.
· The lot size should be between 4-6 acres to
accommodate the building, parking and snow machine
storage.
· The land should be State owned to keep the price
as low as possible.
Ms. Adair concluded that the location in Anchorage would
significantly benefit the shellfish industry. That location
would reduce the costs slightly, but most importantly it
would speed up the delivery of the time-sensitive sample to
the laboratory for testing.
Co-Chair Mulder inquired what the anticipated size of the
facility would be. Ms. Adair replied it would be 20,530
square feet. The current space is 10,000 square feet, which
is extremely inadequate and has unsafe conditions. She
noted that eleven employees would be moved to Anchorage and
that two offices, one in Homer and one in Wasilla would be
combined. She commented that fourteen employees would
remain in Palmer. In response to Co-Chair Mulder, she noted
that there is food testing only in these laboratories, not
agricultural testing. Ms. Adair discussed the functions,
which would remain outside of Anchorage.
Co-Chair Mulder asked the number of employees in the future
expected to be using the new facility. Ms. Adair replied
that the Department is not planning any growth in the
laboratory staff in the near future.
Co-Chair Mulder noted that in an analysis provided by the
Department, it was indicated that without the bill, they
would be forced to go out and get a request for proposal
(RFP) this summer. Ms. Adair emphasized that the lease
cannot be extended at the current location. By December 31,
2002, the last of the extensions will be over. A long-term
extension cannot be done in that spot, consequently no RFP
for a long-term lease.
Co-Chair Mulder questioned that reasoning. He stated that
there were provisions in current statute that allowed for
the extension, however, the current landlord would have to
agree to a certain amount of reductions. Ms. Adair replied
that the current landlord is not interested in a 15%
reduction. Co-Chair Mulder asked if there was documentation
supporting that statement. Ms. Adair stated that there was
nothing in writing as all the conversations had taken place
on the phone. She offered to check into it.
Co-Chair Mulder questioned the opposition to privatizing the
services. Ms. Adair explained that there is information
available from the Food and Drug Administration (FDA)
regarding that concern. They technically have a program
doing that, but there is no staff or funding. There is no
state in the United States that does not provide this
service through a state laboratory. Co-Chair Mulder
requested that further information be forwarded to him.
Representative Croft referenced the "owning" versus the
"leasing" language. He asked why it would be better to own
the lab by the State. Ms. Adair explained that the
functions of the laboratory would be needed on a long-term
basis. She pointed out that the shellfish industry is
growing and at this time, there is no private lab in the
State that provides these services. She enumerated the
reasons indicating why the State should own their own
facility. It is important that the lab can be configured so
that it would provide more advantages over time. Ms. Adair
indicated that General Services Division had assisted in
developing the plan.
Representative Hudson inquired how much had been invested in
the proposal to date. Ms. Adair stated that in FY99, $145.7
thousand general fund dollars had been allocated, and that
last year, an additional $240 thousand general fund dollars
had been invested into the project, which to date, has
almost been used up.
Representative Hudson asked if the lease purchase would be
used over a 20-year period of time. Ms. Adair acknowledged
that was correct and that it would cost approximately $1.2
million dollars per year. Present lease costs are run
annually at $115 thousand dollars.
Representative Hudson questioned when the Department would
be able to occupy the facility. Ms. Adair replied that it
would take 2.5 to 3 years to build. The current lease
expires in December 2002. She stated that there would need
to be some lease extension if the facility was to be built.
Representative Hudson asked about the RFP and if a private
company could build the facility for less money. Ms. Adair
replied that the Department had not prepared an RFP because
the laboratory specifics would be very complex and that the
Department does not have the expertise to outline that type
of detail.
Representative Lancaster voiced concern that the General
Services Division had not contracted an RFP. Ms. Adair
agreed that they could do that but that would require
funding which is not available for hiring those people.
Representative Lancaster thought that the square footage
price being requested seemed excessive. Ms. Adair replied
that laboratory areas need more space for equipment and
ventilation systems. Representative Lancaster reiterated
that $5 dollars a square foot was excessive; he noted that
it is double what "Class A" office space would cost.
Vice-Chair Bunde commented that there currently is a lot of
space available in Anchorage. Ms. Adair replied that there
is no laboratory space available at this time and that any
space would need tremendous remodeling costs. To renovate
any existing space would cost more than to build a new space
for the specifics required. She stressed that it would not
be good to have to move twice. The Lab is hoping to extend
the current lease until the new building is finished.
Representative Harris pointed out that there is strong
opposition to the move in the Palmer area. He questioned
how such concerns should be addressed. Ms. Adair agreed
that the solution presents a dilemma in such a large state.
The Department always tries to balance the needs of the
industry and the size of the State. She added that the
Department is trying to be responsive to those who use the
facility and stated that only those employees directly
associated with these concerns would be moved and that most
of the employees would remain in Palmer.
In response to Representative Harris concern, Ms. Adair
reiterated that there is no suitable space available in
Anchorage at this time.
Co-Chair Mulder referenced the Certificates-of-Participation
(COP), and noted that they were generally issued when there
was a private contractor building the facility. He asked if
that was still the anticipated arrangement. Ms. Adair
stated that it was and asked the Devon Mitchell be called on
to testify regarding that concern. Co-Chair Mulder
reiterated his concerns with the cost being $666 dollars per
square foot. He pointed out that the lease cost was
equivalent to $60 dollars per square foot.
Representative Croft emphasized that this lab must not be
compared to office space rental. He requested material on
cost comparisons of laboratory space throughout the country.
Representative Croft recommended that the RFP concept not be
the focus. He indicated his surprise with the letter
included in member's packets from Representative Ogen
voicing his opposition to the legislation.
Representative Hudson asked if the current building was for
sale and if so, how much would it cost. He inquired if that
consideration had been made. Ms. Adair replied that the
current building is a reconverted Piggley Wiggley grocery
store. There are many operations that are insufficient for
labatory analysis which cannot be handled in that facility.
She stressed that it would take significant renovation costs
to make that building functionable.
Representative Lancaster inquired if the Food and Drug
Administration (FDA) could help with the design and layout
of a facility. Ms. Adair responded that the FDA does not
provide that service to the State.
Representative Lancaster asked if there currently was a
design available. Ms. Adair replied that the current
crafting would be a design award and then a build award.
Co-Chair Mulder questioned if the size were decreased, what
would be left out of the new project. Ms. Adair replied
that the Department would ponder that concern.
CHERYL SUTTON, SOUTHEAST ALASKA REGIONAL DIVE FISHERIES
ASSOCIATION (SARDFA), JUNEAU, noted the current lab is used
for processing gooey duck clams. SARDFA is developing the
gooey duck clam fishery. Fisheries are often times located
in remote areas throughout the State. When weather is bad,
it is difficult to access the lab services. She noted that
there is a 30-hour limit on water sampling time. The
current lab location is difficult to access. Anchorage
would be a better location for the industry for
accessibility. Ms. Sutton noted that SARDFA has worked with
the Department on these issues. She supported the idea of
satellite labs for better accessibility.
TAPE HFC 01 - 60, Side B
Ms. Sutton stated that any cost streamlining would be
beneficial to the industry. She concluded, advising that
SARDFA supported HB 51.
Representative Hudson asked if the laboratory at the
Anchorage Seafood facility would be sufficient. Ms. Sutton
exclaimed that she had not been in that lab. One of the
difficulties is that the FDA dictates standards and for
paralytic shellfish poisoning (PSP), and those standards are
rigid.
Representative Hudson recommended that a determination be
made to see if that lab would be sufficient.
Representative Lancaster inquired if products were "dumped"
if they did not make the 30-hour test. Ms. Sutton explained
that the 30-hour rule exists for water sampling. For
products, there also is a very time sensitive limit matter.
The Department of Environmental Conservation is currently
working with the industry.
DAVE STANCLIFF, STAFF, REPRESENTATIVE SCOTT OGEN, testified
that both the lease and the options should be reconsidered.
He encouraged the Committee to check out the options of that
lease. He suggested that the space could be modified and
that the owner of the building was willing to make changes.
Mr. Stancliff agreed that the facility is crowded and that
the space is tight, however, the requested square foot
expansion appears to be fairly "liberal". He questioned how
much of the new space was intended to be used for labatory
versus clerical. Mr. Stancliff noted that Representative
Ogan's office would attempt to work with the Department.
Ms. Adair responded to Representative Hudson's concern,
noting that the ASI lab was very small, and acts as a
quality standards lab. If comparing it to the needs of the
Department, it would be an "apples" to "oranges" compromise.
She added that she had met with Representative Ogan's office
and that they had discussed that the new lab would be
laboratory space and not new employee space.
HART HODGES, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE,
offered to answer questions of the Committee.
Representative Davies asked the appropriate industry
standard for the space size needed.
TOM LIVINGSTON, (TESTIFIED VIA TELECONFERENCE), ARCHITECT,
ANCHORAGE, noted that the space consideration had been
technically analyzed and reconsidered. He noted that there
are two specifications, which drive the needs of the lab:
· The first is safety of the staff; and
· The second is the quality of the science. He
added that the laboratory intensive building would
make it very expensive.
Representative Davies requested a comparison of other health
lab costs. Mr. Livingston noted that he would submit that
information to the Committee.
HB 51 was HELD in Committee for further consideration.
HOUSE BILL NO. 81
An Act extending the termination date of the Board of
Dental Examiners.
REPRESENTATIVE HUGH FATE noted that under Title 8 of the
Alaska Statutes, the Board of Dental Examiners would
terminate on June 30, 2001. A report released by the
Legislative Budget and Audit (LBA) Committee recommended
that the Legislature extend the Board's date to June 30,
2005. He claimed that the regulation and licensing of
qualified dentists and hygienists benefits the public's
safety and welfare. HB 81 would accomplish that task. The
legislation also addresses some of the concerns of the
Dental Board of Examiners and the Alaska Dental Society.
Representative Fate provided a sectional analysis of the
bill and the changes made in the previous committee of
referral.
Section 1, Page 1, Line 6 - Extends the
th
termination date from June 30, 2005.
Section 2, Page 2, Line 1 - Removes
prophylactic, which is duplicate language to preventative,
which is covered under preventative agent. Prophylactic is
also confusing language because it is similar to other
dental terms like prophylaxis.
Section 3, Page 2, Line 11 - Same reason
[Prophylactic was taken out of both locations because the
Department of Law said if one went, they both had to.]
Section 4, Page 2, Line 14 - Adds wording that
says, the Governor, when making appointments, will consider
licensed dentists nominated by the Alaska Dental Society and
licensed dental hygienists nominated by the Dental
Hygienists' Association.
Section 5, Page 2, Line 22 - The president of the
Board of Dental Examiners must be a licensed dentist under
this chapter.
Section 6, Page 3, Lines 5-13 - Allows a board
authorized inspector to determine whether the owner or
lessee of dental radiological equipment is in compliance
with the inspection standards of the board, collect the
appropriate fee and remit the fee to the board, and issues
an inspection seal. The inspector would then remit the
paperwork to the board and determine whether a seal is
issued or not.
Section 7, Page 3, Lines 16-18 - Makes a passing
score on a clinical exam given by the Central Regional
Dental Testing Service, Inc. an acceptable alternative to
the Western Regional Examining Board examination as long as
the exam was passed after January 1, 2001.
Section 8, Page 4, Line 1 - Requires that the
dentist be currently licensed in another state, with the
same requirements as Alaska, in order avoid re-examination
to practice in Alaska.
Section 8, Page 4, Line 2,3 - Language that states
a dentist could have taken a dental exam in one state and be
practicing in another, and as long as the state they are
licensed in has equivalent requirements to Alaska, the
dentist can practice in Alaska.
Section 9, Page 6, Line 2 - Licensed and
practicing in the same state in order for them to practice
in Alaska, if that state has equivalent requirements.
Section 10
Page 6 Lines 27 to 31 - Expands the current
Page 7 Lines I to 3 definition of
Dentistry to included the American Dental Association's
definition of dentistry which allows a dentist to evaluate,
diagnose, treat, or perform preventive procedures relating
to diseases, disorders, or conditions of the oral cavity,
maxillofacial area, or adjacent and associated structures.
Representative Davies asked what it would take to satisfy
the Dental Board if the Governor had considered their list.
Representative Fate explained that there is no obligation to
choose from that list.
Representative Fate requested that Section 5 be removed from
the bill. Representative Harris asked why the House Labor
and Commerce Committee had added that language.
Representative Fate explained that at the time of that
hearing, Catherine Reardon, Director, Division of
Occupational Licensing, Department of Community and Economic
Development, had voiced a concern about that language.
Representative Fate noted that the Department's concerns had
been addressed in other parts of the legislation.
Representative Croft asked if there had been a controversy
in the past with non-dentists on the Board. Representative
Fate acknowledged that there are lay people on the Board.
Representative Foster MOVED to delete Section 5, Page 2,
Lines 19-22. There being NO OBJECTION, it was adopted.
DEBRA STAUFFER, (TESTIFIED VIA TELECONFERENCE), PRESIDENT,
ALASKA STATE DENTAL ASSOCIATION, ANCHORAGE, voiced full
support for HB 81 and the changes made.
DR. RICHARD GREGORIN, (TESTIFIED VIA TELECONFERENCE),
ANCHORAGE, testified in support that the language placed in
the bill in the House Labor and Commerce Committee remain in
the bill. He reiterated that he did not agree with the
change adopted by the House Finance Committee.
Representative Fate noted that the amendment would not
prevent the Dental Board to elect a dentist under
regulations in the State of Alaska. He added that it was
approved by the Administration and emphasized that it does
not preclude a dentist from being elected to that seat.
Dr. Gregorin disagreed, indicating that only a dentist
should be holding that position. Representative Fate agreed
and stated that the members of the board could choose to
elect a person that is a dentist. Dr. Gregorin asked if it
was possible that a non-dentist be elected to that seat.
Representative Fate agreed that it was possible but was not
probable. Dr. Gregorin commented that the Alaska Dental
Society wanted to be on record indicating that the position
only be held by a dentist.
DR. GEORGE SCHAFFER, (TESTIFIED VIA TELECONFERENCE),
ANCHORAGE, spoke to the amendment. He recommended that the
Lines 19-21 remain. Representative Davies explained that
language already exists in present statute.
Dr. Schaffer voiced concern that a responsibility of the
President of that Board is about communicating with other
agencies outside of the State. He mentioned that he had
concerns with anyone other than a dentist doing that work.
He insisted that the requirement for communication must be
held high and recommended that only a licensed dentist hold
that position.
Representative Croft noted that there would not be a non-
dentist elected to the Board without the full support of all
of the Board.
Vice-Chair Bunde asked if the same requirements exist for
the Board of Physicians.
CATHERINE REARDON, DIRECTOR, DIVISION OF OCCUPATIONAL
LICENSING, DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT,
advised that there is no requirement that specifies that any
particular member be the Chair for any of the occupational
licensing boards.
DAVID LOGAN, DENTIST, PRESIDENT, ALASKA BOARD OF DENTAL
EXAMINERS, JUNEAU, noted that the Board is in support of the
version before the Committee and the recommended change.
TAPE HFC 01 - 61, Side A
Dr. Logan noted his support in preserving the current
statute and the bill as before the Committee.
Co-Chair Mulder referenced Section 7 and 8 and asked if
there is "abuse" with dental assistants providing hygienists
work. Dr. Logan responded that there isn't abuse, however,
there is some misunderstanding of what is allowed under
current statutes and confusion with use of the word
"prophylactic". The Board is attempting to clear up any
misinformation regarding the wording in the statutes.
Co-Chair Mulder inquired if there exists a problem with the
licensure issue. Dr. Logan reiterated that the Board is
attempting to clean up the language and that the changes are
small.
Co-Chair Mulder noted the fiscal note.
Representative Foster MOVED to report CS HB 81 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 81 (FIN) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by Department of
Community & Economic Development.
HOUSE BILL NO. 149
An Act relating to correctional facility space and to
authorizing the Department of Corrections to enter into
an agreement to lease facilities for the confinement
and care of prisoners within the Kenai Peninsula
Borough.
REPRESENTATIVE MIKE CHENAULT explained that HB 149 was
introduced to transfer the authority to construct a private
prison from Ft. Greely/Glennallen area to the Kenai
Peninsula Borough.
The construction project would provide the Kenai/Nikiski
area with an additional stable economic base. In addition,
the State of Alaska has been supplementing the economy of
Florence, Arizona around $20 million dollars per year. He
emphasized that it makes sense to bring money back to the
State of Alaska.
MARGOT KNUTH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
CORRECTIONS, provided information on the legislation. She
read from a letter written by Governor Tony Knowles. [Copy
on File].
Ms. Knuth noted that the prison expansion is based on five
principles:
•Protecting the public's safety;
•Addressing statewide and regional needs;
•Consistency with best correctional practices;
•Community participation through government-to
-government transactions; and
•Cost-effectiveness.
The Kenai private prison idea could meet these important
objectives. She noted that it is clear that the
Legislature's intent in House Bill 53 was to develop a
private prison at the Fort Greely site. The State has been
attempting to do that since. She added that there is no
doubt any change of focus or development of a new private
prison plan would involve legislative action.
Ms. Knuth discussed the Governor's plan indicating that the
most important criteria was the addressing of statewide and
regional needs. She observed that the statewide needs do
not always meet the needs of the inmates to be near their
hometowns. Ms. Knuth emphasized the obligation to look at
pretrial needs existing in Bethel and Fairbanks as well as
the relocation of the Arizona prisoners.
Ms. Knuth addressed the fiscal impact. She could not
determine if the proposal would be cost effective. Ms.
Knuth pointed out the lack of a capital cost proposal or
indication of cost limitations and scope. She referred to
experiences currently existing with the Anchorage jail.
Co-Chair Williams noted that the bill would be placed in a
Subcommittee, Chaired by Representative Mulder and with
members Representative Bunde and Representative Moses.
HB 149 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:45 P.M.
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