Legislature(2003 - 2004)
04/23/2003 01:36 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 23, 2003
1:36 PM
TAPE HFC 03 - 61, Side A
TAPE HFC 03 - 61, Side B
TAPE HFC 03 - 62, Side A
TAPE HFC 03 - 62, Side B
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:36 PM.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Carl Moses
Representative Kevin Meyer, Vice-Chair
Representative Bill Stoltze
Representative Jim Whitaker
MEMBERS ABSENT
Representative Reggie Joule
ALSO PRESENT
Representative Cheryll Heinze; Representative Lesil McGuire;
David Brewster, Staff, Representative Mike Hawker; John A.
Barnes, Alaska Business Unit Manager, Marathon Oil Company;
Chuck Logsdon, Chief Petroleum Economist, Department of
Revenue; Mark Meyers, Director, Division of Oil and Gas,
Department of Natural Resources; Jill Geering, O.D., Juneau;
David Katzeek, ANB, Juneau; Eddy Jeans, Manger, School
Finance and Facilities Section, Department of Education and
Early Development.
PRESENT VIA TELECONFERENCE
Sarah Fisher-Goad, Alaska Industrial Development and Export
Authority; Valerie Walker, Deputy-Director, Finance, Alaska
Industrial Development and Export Authority; Erik
Christianson, O.D., Ketchikan; Bob Palmer, Academy of
Ophthalmology, D.C.; Carl Buznego, M.D., Academy of
Ophthalmology, Florida; Cheryl Lentfer, O.D. Anchorage; Dr.
Carl Rosen, M.D.; Gary Jackson, Patient; Douglas Griffin,
Director, Alcoholic Beverage Control Board; Bob Klein,
Alcoholic Beverage Control Board; Mike Gordon, Alcoholic
Beverage Control Board; Matt Larry Jones, Executive
Director, Parole Board, Department of Corrections, Moose's
Tooth, Anchorage.
SUMMARY
HB 61 "An Act establishing an exploration and
development incentive tax credit for persons
engaged in the exploration for and development of
less than 150 barrels of oil or of gas for sale
and delivery without reference to volume from a
lease or property in the state; and providing for
an effective date."
HB 61 was HEARD and HELD for further
consideration.
HB 142 "An Act relating to provider responsibility for
ocular postoperative care; and providing for an
effective date."
HB 142 was heard and HELD in Committee for further
consideration.
HB 165 "An Act relating to community schools; and
providing for an effective date."
CSHB 165 (HES) was REPORTED out of Committee with
"no recommendation" and a new zero fiscal note
from the Department of Education and Early
Development.
HB 203 "An Act relating to the definitions of 'net
income' and 'unrestricted net income' for purposes
of calculating the dividends to be paid to the
state by the Alaska Industrial Development and
Export Authority; and providing for an effective
date."
HB 203 was REPORTED out of Committee with a "do
pass" recommendation and one previously published
zero fiscal note from the Department of Community
and Economic Development.
HB 234 "An Act relating to brewpubs, and continuing the
existence of the Alcoholic Beverage Control Board;
and providing for an effective date."
CSHB 234 (FIN) was REPORTED out of Committee with
individual recommendations, a previously published
zero fiscal note from the Department of Revenue
(#1) and a new fiscal impact note from the
Department of Public Safety.
HOUSE BILL NO. 203
"An Act relating to the definitions of 'net income' and
'unrestricted net income' for purposes of calculating
the dividends to be paid to the state by the Alaska
Industrial Development and Export Authority; and
providing for an effective date."
Representative Hawker MOVED to report HB203 out of Committee
with individual recommendations and the accompanying fiscal
note.
There being NO OBJECTION it was so ordered.
HB 203 was REPORTED out of Committee with a "do pass"
recommendation and one previously published zero fiscal note
from the Department of Community and Economic Development.
HOUSE BILL NO. 61
"An Act establishing an exploration and development
incentive tax credit for persons engaged in the
exploration for and development of less than 150
barrels of oil or of gas for sale and delivery without
reference to volume from a lease or property in the
state; and providing for an effective date."
Representative Chenault MOVED to ADOPT Committee Substitute,
Work Draft 23-LS0270\Q (4/15). There being NO OBJECTION it
was so ordered.
REPRESENTATIVE MIKE CHENAULT, SPONSOR, provided information
about the bill. He read from a shortened Sponsor Statement
as follows:
HR 61 creates a new income tax credit to encourage
increased exploration and development of natural gas
reserves south of the Brook Range. To qualify for
the credit, operators must successfully drill and
develop reserves that produce natural gas for sale
and delivery. This is a successful efforts bill,
which means that no credits will be given for dry
holes or for exploration that is not developed.
Currently, the Cook Inlet continues to have great
potential for additional natural gas development
Other Alaska basins outside of the North Slope have
similar potential. However, the combination of
exploration risk, high development costs and
historic low natural gas prices has created a
disincentive to drill for new reserves as compared
to other areas of the world. By providing a credit
for successful efforts, more exploration will occur
in Southern Alaska leading to much needed new
natural gas reserves. This will benefit all
residents and businesses at no direct cost to the
state.
In addition to the benefit of developing new gas
reserves, increased Cook Inlet drilling will also
aid the general economic status on the Kenai
Peninsula and in Anchorage as well as other areas of
Alaska. Moreover, increased tax revenue from
additional hydrocarbon production will more than
offset any fiscal impact from the proposed credit.
JOHN A. BARNES, ALASKA BUSINESS UNIT MANAGER, MARATHON OIL
Discussed slides from a power point presentation as follows:
HB 61 - What does it Do?
•Draws more E&P Investments to Alaska
•Creates income tax credit to encourage exploration and
development of gas reserves south of Brooks Range
•Primary focus is on Cook Inlet, but applies to other
Alaska basins
•Focus is on natural gas.
•Levels the playing field somewhat with other
exploration opportunities around the world.
HB 61 - How Does it Work?
•Applies to 10% of Qualified Capital Investment
•Applies to 10% of Qualified Expense
•May offset no more than 50% of corporate income tax in
any one year (up to five additional years)
•Only applies to successful efforts.
•Incentive can be factored into project economics.
HB 61 - Why is it needed?
•Currently there is not enough Alaska E&P Activity
•Natural Gas Reserves have been and are continuing to
decline in the Cook Inlet.
-Current Cook Inlet proven natural gas reserves are
estimated at 2 TCF
•(Based on DNR DOG 2002 report, less 2002 production)
•Despite recent increase in Cook Inlet exploration
activity, reserves are not being replaced on an annual
basis
•Cook Inlet deliverability has declined over last
several years.
Mr. Barnes referred to a graph illustrating the relationship
between Cook Inlet supply and demand (copy on file).
•Supply and demand rationalization is occurring.
-Not enough gas to feed low price consumer.
-Gas price increasing
•Enstar average gas cost (WACOG) $2.55/mcf
•Most recent Enstar contract gas price $2.75 to Henry
Hub
•Henry Hub recently over $9.00/mcf
Cook Inlet Reserves & Resources
•Current proven reserves - 2000 BCF
-Approximately 10 year production life, assuming no
decline.
•Potential Gas Committee Resource Estimates
-Probable Reserves - 1050 BCF
-Possible Reserves - 2100 BCF
Impacts to the State of Alaska
•Stimulates Cook Inlet, and potentially other basin
exploration.
•Aids in maintaining Cook Inlet 200+ BCF/year
production.
th
-Equivalent to a 13 month of North Slope Production.
•Provides gas for Cook Inlet utilities, industrials,
jobs, royalties, taxes.
Fiscal Impact to the state of Alaska
•Incentive will be clearly positive to State of Alaska,
factors are...
-How many developments will be incentivized?
-How much gas will be discovered?
-What will be the gas sales price (royalty value)?
-How much will be spent for exploration and
development?
-Successful efforts driven - no incentives for dry
holes
•Conceptual Estimate of Impact, assumptions:
-Varied field size from 0 to 500 BCF
-Development Cost $0.50/mcf
-Royalty - 12.5%
-Severance Tax - 7.5%
-Ad valorem - 2.7%
-Gas sales price - $2.50/mcf
Mr. Barnes referred to a table on page 13 (copy on file),
which illustrates the relationship between field size (BCF),
tax credit, gross revenue, royalties, and severance tax.
The table gives total tax per field size.
Conclusions
•Based on conceptual model, State of Alaska receives
from $3 to $10 additional revenue for each $1 of tax
credit.
•Credit is needed now!
-Not enough exploration in Cook Inlet to meet demand.
-Other areas of state need exploration and development.
-New discoveries will take a minimum of 3 years to
bring to first gas
-
Success Measures
•Increased Lease Activity
•Increased Drilling Rig Activity
•Increased Construction Activity
•Increased Production and Deliverability
•Credits Applied to Income Tax
-For every dollar of credit approximately ten dollars
were spent successfully developing new reserves, and
ultimately paying new taxes!
Representative Croft referred to the sponsor statement that
noted "historic low natural gas prices". He then compared
this with page 8 of the presentation, which noted "gas price
increases". He asked why the increased prices would not
create a natural incentive for exploration.
Mr. Barnes acknowledged that price increases provided some
incentive. He noted that exploration was a risky business,
and offered no guarantees of success. He pointed out that
the time lag between price shifts and discovery of new
supplies could cause potential damage to local industry. He
drew the analogy that stores run sales to encourage
activity.
Representative Croft acknowledged the potential benefit of
the bill if it created activity that would not occur without
it. He observed that it was difficult to determine whether
the company would have increased exploration without the
incentive, but conceded that if only one out of ten new
reserves were developed due to the bill, the state would
"break even".
Representative Stoltze asked if a "double dip" was possible
if a company took a reduction for royalties and also for
Agrium [Company].
Representative Chenault maintained that the bill did not
allow for multiple incentives.
Representative Croft asked for clarification, and observed
that a producer might qualify for the tax credit, and then
not have to pay the royalty that they would have passed on
to Agrium.
Representative Whitaker suggested that any double credit
would be very minimal.
Co-Chair Harris referred to sub section (g) "A taxpayer who
obtains a credit under this section may not claim a tax
credit or royalty modification provided for under any other
title." He observed that the bill pertained to corporate
income tax, no more than 50 percent of the tax owed to the
State in any year, and that to qualify a project must be
producing gas or oil for the state of Alaska. He speculated
that the potential risk for the State might be a portion of
corporate income tax, but that this would be offset by a
greater amount of royalties and severance. He asked whether
the risk was minimal compared to the potential gain.
Mr. Barnes concluded that successful exploration would
reward the producer with corporate tax credit, and the
higher production level would reward with additional
revenue.
Co-Chair Harris noted that the bill provided incentive for
producers to invest into Alaska as opposed to other areas or
countries.
Representative Hawker referred to the successful efforts
restriction in the bill and asked whether the proposed
investment tax credit would apply to expenditures that were
for an existing reserve, rather than a new reserve.
Mr. Barnes commented that the intent was to qualify
expenditures for bringing to production new reservoirs. He
defined those new reservoirs as those in which no sales had
previously occurred, whether a new or existing reserve.
In response to a question by Representative Hawker, Mr.
Barnes confirmed that if a producer found product in an
existing well, those development expenditures would qualify.
Representative Hawker referred to the qualifying
expenditures language. He asked if the bill accommodated a
situation when money was expended in a particular year and
the reserve produced after the end of that tax year. He
suggested that an accounting problem might exist in the
language.
Mr. Barnes observed that this accounting question had not
been previously addressed. He assumed that, in such a
progressive project, expenditures were held in aggregate and
accounted for when product was sold.
Representative Hawker referred to page 2, line 7, stating
that qualifying expenditures must be "made for assets first
placed in service in the state during the tax year in which
the credit is claimed". He speculated that if a credit
could not be claimed until a reserve was proven, it would
exclude any expenditures made in the exploration process
prior to the year in which the reserve was proven.
In response to a question by Representative Whitaker, Mr.
Barnes reiterated that the credit would apply to production
from either an existing well or a new reserve that produced
new gas sales.
Representative Whitaker referred to page 2, line 7, and
asked if Mr. Barnes was satisfied with the existing
language.
CHUCK LOGSDON, CHIEF PETROLEUM ECONOMIST, DEPARTMENT OF
REVENUE testified via teleconference. He was not able to
comment on the language. He stated that he assumed the
credit could be taken after an asset was placed in service,
but noted that this may not be the correct interpretation.
MARK MEYERS, DIRECTOR, DIVISION OF OIL AND GAS, DEPARTMENT
OF NATURAL RESOURCES concurred with Mr. Logsdon's
interpretation of the credits being transportable.
Representative Croft noted that the language made a
distinction between qualified capital investments and
qualified services. He maintained that qualified capital
investment could be carried over, whereas qualified services
(such as labor) were in question. He noted that a
distinction was made between expenditures for capital
investment, and for the services that could apply only to
the specific tax year.
HB 61 was HEARD and HELD for further consideration.
HOUSE BILL NO. 165
"An Act relating to community schools; and providing
for an effective date."
Co-Chair Williams stated that public testimony on this bill
had concluded at its previous hearing. He noted that the
bill would repeal the Community Schools grant program, and
observed that currently 80 percent of schools in the program
received grants of roughly $5 thousand annually. He stated
that the Administration viewed the grant program as having
been intended only to provide support to initiate community
schools programs, and that this goal had already been
achieved.
EDDY JEANS, MANAGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT provided
clarification on the bill. He responded to questions raised
in previous testimony about the spreadsheet prepared by the
Department of Education and Early Development ("Community
Schools Expenditures and Grants, Prepared 3/12/03", copy on
file).
Mr. Jeans noted that the spreadsheet had reflected
expenditures for community services. He provided a
departmental regulation definition of community services:
activities provided by the school or district for the
purpose of relating to the community as a whole, or some
segment of the community, not directly related to providing
education for students. He listed examples such as
recreation, public libraries, civic activities, public radio
programs, community welfare activities and childcare in
residential day schools. He quoted the Community Schools
statute, under purpose and intent: Community Schools
promotes more efficient use of school facilities through the
extension of buildings and equipment beyond the normal
schools day. He explained that the Department aggregated
expenditures for activities that occurred "outside the
normal school day" in preparing the figures in the
spreadsheet. He pointed out that there is a separate fund
called "community schools", where districts deposit the
grant and matching funds for the specific purpose of
Community Schools programs. The spreadsheet had included
expenditures for all community services and not just for
community schools.
Representative Croft asked if the total of $500 thousand
reflected all community services or just community schools.
Mr. Jeans confirmed that this amount represented the total
grants provided to schools. He noted that the previous
column (Community Schools FY02 Expenditures) reflected all
community services, and not just functions of the grant
program.
Co-Chair Harris observed that the areas most affected by the
legislation were rural areas. Mr. Jeans clarified that
these areas reflected 100 percent funding of programs by the
grant funds. He maintained that these schools were
accounting for some of their operating costs elsewhere in
their budgets.
Co-Chair Harris noted that in rural communities, the schools
were the center of community activity, whereas larger cities
had other options for activities. He asked if any means
existed to lessen the effect on rural communities of the
resulting decrease in availability of facilities.
Mr. Jeans speculated that the facilities would remain open.
He submitted that a grant of $1,500 would not keep a school
open for a significant period. He suggested that other
resources were already being used to support activities.
Co-Chair Harris asked that the fiscal note which reflects a
savings of $500 thousand be zero since it was already zeroed
out of the budget.
Mr. Jeans stated that the Department had previously
acknowledged that the program was zeroed out in the budget,
but agreed to prepare a new fiscal note.
Representative Hawker observed that the State recognizes and
encourages the continuation of community schools programs.
He pointed out, however, that by repealing sections of the
statute it takes away the State's authority to fund the
program in the future, even though the funding had already
been taken out of the State's budget for FY 04.
Mr. Jeans acknowledged concern that the bill would diminish
districts' ability to continue their community schools
programs. He maintained that districts would continue to
offer community schools programs. He acknowledged that user
fees might be slightly increased to accommodate grant cuts.
Co-Chair Harris MOVED to report HB165 out of Committee with
individual recommendations and the accompanying zero fiscal
note. Representative Croft OBJECTED.
Representative Hawker also OBJECTED. He acknowledged that
the funding was already zeroed out, but stated that he would
be more comfortable supporting communities who rely on this
program by retaining the option to consider possible future
funding. He would like to see the statute maintained.
Representative Croft pointed out that there was no funding
saved by passing the legislation, since the action of
eliminating funding had already been taken in the operating
budget. He took exception to the sponsor statement that the
statute was intended merely to start the program and not to
maintain it. He noted programs like the school lunch
program, which would be damaged if funding diminished after
the program had been established. He also gave examples of
reading and tutorial programs in Anchorage and maintained
that the small amount of [community schools] funding was
doing a great deal of good. He noted that the statute
reflected support of the program, and that it was
appropriate for the legislature to provide a small amount of
financial incentive for these valuable programs.
TAPE HFC 03 - 61, Side B
Representative Whitaker questioned the purpose of passing
the legislation, since funding had already been cut. He
maintained that the action would serve no purpose.
Co-Chair Williams concurred with the Administration that to
repeal the legislation was a housekeeping measure. He
suggested that future legislatures could enact other
legislation if the ability and need to fund the programs
arose.
Vice-Chair Meyer asked for further explanation of the
Administration's support of the bill.
Mr. Jeans relayed the funding history of the bill, and the
statutory entitlement of the program. He noted full
funding- of the program would entail $3.2 million. He
stated that the program had been funded at under $800
thousand since 1988. He observed that the intent of the
statute was to implement programs that would later become
self-sufficient. He submitted that the Administration
ceased to provide operational funding to the program in the
mid 1980's. Funding levels had been prorated down to a
level as low as $1,500. He suggested that unless the
legislature was willing to fund the program, the
Administration felt it was time to take the statute off the
books.
A roll call vote was taken on the motion.
IN FAVOR: Meyer, Moses, Whitaker, Chenault, Foster,
Williams, Harris
OPPOSED: Stoltze, Croft, Hawker
The MOTION PASSED 7-3.
CSHB 165 (HES) was REPORTED out of Committee with "no
recommendation" and a new zero fiscal note from the
Department of Education and Early Development.
HOUSE BILL NO. 142
"An Act relating to provider responsibility for ocular
postoperative care; and providing for an effective
date."
REPRESENTATIVE CHERYLL HEINZE, SPONSOR provided information
about the bill. She explained that the legislation focused
on patient care, and noted that a number of her constituents
were of an age when their eyesight was deteriorating and
they were in need of surgical procedures. She stated that
the bill ensures post-operative care following ocular
surgery. She maintained that care by an ophthalmologist
following surgery was imperative for good patient care.
Today's technology makes surgical procedures appear to be
routine. She maintained that although most often the
surgeries are successful, serious complications might occur.
HB 142 provides appropriate ocular postoperative care by an
appropriate professional. She noted that the legislation
required the surgeon to be physically available to a patient
in the community where the surgery is performed for 120
hours following surgery. She added that, after that period,
the surgeon may delegate post operative care to another
person that the surgeon determines qualified to treat the
patient.
Representative Heinze noted the changes proposed by
Amendment #1, which reduces the number of hours from 120 to
72 hours, or three days.
ERIK CHRISTIANSON, OD, KETCHIKAN, testified via
teleconference in opposition to the bill. He noted that in
Ketchikan, the population was not large enough to employ a
full time ophthalmologist. He read from prepared testimony
as follows:
HB142 is a good example of poorly thought out
legislation. I am opposed to the spirit of this
bill. By that I mean that entire premise on which it
is founded is wrong. The premise is that post-
operative care after eye surgery or co-management
needs to be regulated. Co-management of surgical
patients by optometrists is already regulated under
federal law. No other state has this type of law. If
you are regulating co-management between
ophthalmologists and optometrists then why not other
types of surgical specialties arid the local doctors
who will follow their patients. This is not the job
of the legislature!!!
It questions the clinical competence of optometrists
to co-manage patients. Optometrists have been
performing this to a high level for more than 20
years. I have been a member of the Board of Optometry
for 5+ years and we have never had a case brought us
where an optometrist caused a patient harm.
It is an attempt to legislate clinical decision
making on the part of ophthalmic surgeons. If a
surgeon is performing "bad surgery" federal law,
malpractice, referring providers, and the PATIENTS
themselves will cause this surgeon to stop.
It is bad for rural Alaska in that it limits the
potential choices available to these patients.
Currently certain eye surgical procedures are
performed at Ketchikan General Hospital (KGH) and the
ophthalmologists who perform them would have a hard
time managing the 5-day time limit. I do not manage
with these doctors except when their patients develop
problems after they leave. In the 13 years I have
been in Ketchikan I have had to only help out a
handful of times. FIB 142 would not allow me as an
optometrist to help out within the critical first 5
days. Even though only 35 surgeries per year are done
at KGH it offers a choice for those persons who have
difficulty traveling or are cover by Medicaid or
Medicare and cannot afford travel.
Optometrists live where the patient lives. We are the
eye care experts in rural Alaska limiting our ability
to care for our patients is bad for these patients
and the communities we serve.
HB 142 is an attempt to limit patient access to care
it is obviously special interest legislation, and is
both anti-consumer and anti-patient.
Representative Croft asked about the typical surgical
schedule. Mr. Christianson stated that surgeons who came to
Ketchikan, typically from Juneau, generally performed
procedures on Mondays and stayed in Ketchikan until
Thursday, whereas a surgeon from Anchorage might leave the
day after a procedure was performed. He noted that there
was a local optometrist who specialized in early
postoperative care for patients of ocular surgery. He
responded to sentiments by Anchorage ophthalmologists that
don't want to deal with patients treated by an outside
surgeon. He noted that the follow-up optometrist
specializes in the area of postoperative care.
Representative Croft asked if a three-day vs. five-day
period made a difference. Mr. Christianson maintained that
the crux of the problem was that the legislation in the
guise of being helpful affected an entire profession. He
noted that different surgeries had various complication
rates and recovery times, depending on the surgeon and the
procedure.
Representative Stoltze noted that in his community of 35
thousand, there was no practicing ophthalmologist. He asked
about the demographics of practitioners per capita. Mr.
Christianson noted that generally a population of 8 thousand
could sustain an optometrist, whereas an ophthalmologist
with a more extensive education background generally
required a community of at least 100 thousand to sustain a
practice.
Co-Chair Harris cited an oracular surgical procedure
performed on a family member by an outside physician. He
noted that the initial post-operative care was completed the
same day by the surgeon, with subsequent care being the
responsibility of the patient and the clinic that provided
facilities for the surgeon. He asked if this was a typical
schedule.
Mr. Christianson confirmed that this was a standard
procedure. He added that occasionally patients would
sometimes choose to have a procedure performed elsewhere due
to lower costs. He noted that this kind of procedures
worked if Dr. Christianson retained control over making
referrals and was able to do continuous follow-up. He noted
that certain complications would require a further visit to
the surgeon, but stated that these complications were rare
if a patient went to a quality surgeon.
Co-Chair Harris asked how the bill, with the change from 120
to 72 hours, affected the procedure. Mr. Christianson
referenced page 2, and maintained that the bill did not
allow an optometrist to be involved within the set time
period. He stated that only an ophthalmologist or a
physician would be allowed to do immediate follow-up.
HELEN BEDDER, STAFF, REPRESENTATIVE HEINZE referred to line
25 of page 2, and quoted that a co-management agreement
could be agreed to "only if the surgeon confirms that the
person to whom the care is delegated is qualified to treat
the patient during the postoperative period". She pointed
out that they must be "licensed or certified to provide the
care if license or certification is required by law." She
maintained that the language was specifically to allow care
in remote areas where optometrists may not be available.
She noted that following the five (or three) day period, the
surgeon could delegate anyone who is available.
Mr. Christianson questioned the need for the legislation and
asserted that the clinical decision-making of a surgeon was
not within legislative purview. He maintained that the bill
opened this issue for other types of referrals and
questioned why this regulation was required.
Ms. Bedder stated that ophthalmologists had raised the
concern about patient care with Representative Heinze's
office. She noted out that in other surgical areas,
surgeons were responsible for patient care following
surgery. She stated that problems had occurred in Anchorage
with a surgeon who comes to town and leaves without
communicating with an ophthalmologist for follow-up care.
She pointed out that many times the patients were elderly
and it was a burden for them to be treated by a physician
with whom they were unfamiliar.
CARLOS BUZNEGO, M.D., ACADEMY OF OPTHAMOLOGY, D.C. testified
via teleconference in support of the bill. He explained
that this organization represent 27 thousand
ophthalmologists throughout the nation. He explained that
whereas federal regulations address patient protection,
state legislatures were the forum for health policy merits
to be debated and acted upon. He noted that he serves on the
Academy's Governing Committee for State Affairs, as well as
practicing ophthalmology with a focus on cataract treatment.
He maintained that the bill addressed an abuse of surgical
trust between a patient and surgeon. He noted that ocular
care was a rare area when non-physicians may inappropriately
perform postoperative care following surgery.
Dr. Buznego explained that co management was the sharing of
postoperative responsibilities between the operating surgeon
and another health care provider. He stated that an
arrangement might be entered into only if it was in the best
interest of a patient, as in cases where the patient cannot
travel. He maintained that unethical behavior occurred when
a surgeon enters into a co management arrangement with an
allied health provider to economic considerations, as for an
inducement for surgical referrals. He asserted that the
bill would eliminate this unethical behavior by carefully
regulating surgical referrals. He noted that under the
bill, referral would occur only when in the best interest of
the patient and by the judgment of the surgeon to determine
appropriate postoperative care. He stressed that they key
issue was not a commercial considerations, but the ethical
treatment of surgical eye patients.
Dr. Buznego pointed out that cataract surgery or Lasik
surgery often involved complications. He gave the example
of an early postoperative infection. He maintained that
there was no such thing as a specialist in postoperative
cataract surgery. He noted that if a wound was not properly
closed, it required a surgeon to complete the surgery. He
stressed that optometrists were not trained or licensed to
perform such procedures, or to determine postoperative
infections or other surgical complications. He suggested
that surgeons should not be free to leave the state and
leave someone who is not properly trained or licensed to
resolve potential problems.
CHERYL LENTFER, O.D., ANCHORAGE, testified via
teleconference in opposition to the legislation. She
refuted the statement that optometrists were not trained or
licensed in postoperative surgical care, but acknowledged
that they could not close sutures. She also maintained that
many patients in Alaska had been seeing their optometrists
for 30 years, and that it was the optometrists who referred
the patient to a surgeon. She pointed out that she had been
seeing postoperative patients for many years.
Dr. Lentfer referenced her written testimony provided in
member's packets. She pointed out that co-management was an
aspect of health care that had already existed successfully
for many years, and questioned the need to regulate it at
this time. She maintained that such regulation would
ultimately apply to all fields of health care, including
cardiology, oral surgery, etc. She stated that surgeons
suspected of unethical practices should be brought before
the Medical Board, and not regulated by the legislature.
She also pointed out that the bill regulated the amount of
time a surgeon was required to be present in a given
location, which was unrealistic given the variety of follow-
up needed for different procedures.
Representative Stoltze referenced earlier testimony
regarding nurses handling post-operative care. He asked if
in any situation that would be appropriate. Dr. Lentfer
replied that this would only be appropriate in unique
situations, such as if the nurse had specific oracular
expertise.
DR. CARL ROSEN, M.D., ANCHORAGE, testified via
teleconference in support of the bill. He stated that he
was a surgeon specializing in oracular procedures, and noted
that he often performed eyelid reconstruction following
trauma. He commented that, although co-management
originally carried good intentions, a patient protection
bill is currently needed to address abuse of the practice.
He explained that the legislation was needed to support the
patient's best interest, and suggested that in the case of
co-managed care, an equally trained surgeon, preferably an
ophthalmologist, be responsible for the patient's
postoperative care. He maintained that optometrists did not
fill this need, not being trained in the nuances of oracular
surgery.
He noted that the current situation in Anchorage involved
organizations that perform oracular surgery, and then leave
the patients to the care of optometrists. He maintained
that this sometimes resulted in delayed care, and noted that
he saw patients with potentially serious post-operative
complications that resulted from such care. He also pointed
out that occasionally patients were "dumped" on the
emergency room, forcing a local ophthalmologist who is
uninformed to assume the care and liability.
DR. JILL GEERING, O.D., JUNEAU, testified in opposition to
the bill. She read from written testimony as follows:
TAPE HFC 03 - 62, Side A
Arguments Against Alaska Co-Management
1. Co-management of surgical patients by optometrists
is already adequately regulated under Federal law.
In 1980, Congress amended the Medicare statute to
allow payment to doctors of optometry for cataract
post-operative care. The report from the then
Department of Health, Education, and Welfare upon
which this legislation was based concluded, "The
services appear to be effective in patient
management, including the management of aphakic
and cataract patients. They are reasonable, non-
experimental, safe and generally acceptable to the
vision/eye care community and the public." The
Federal law is quite extensive in providing
patient protections and should not be tampered
with. States are avoiding doing this, and the
Alaska bill would be an unwise change.
2. Federal law is premised on protecting patients from
financial exploitation in co-management
arrangements. Neither Federal law nor any state law
has ever questioned the clinical competence of
optometrists to co-manage patients, and
optometrists have been doing so successfully for
over twenty years. There is no public health
justification for the Alaska co-management bill.
3. The Alaska co-management bill effectively
eliminates optometrists from the co-management of
patients by preventing them from being involved in
patient care for 5 days following surgery. This is
harmful to patients.
4. The Alaska bill forces patients to seek out less
available and more expensive ophthalmologic care
for no legitimate health care reason. Again, the co
management regulation adopted by the Federal laws
was not premised on patients being in any health
care danger, but was premised on protecting
patients from being taken advantage of financially.
Both an optometrist's and an ophthalmologist's
ordinary obligations not to commit medical
malpractice would work to prevent any harmful
clinical co-management decisions within the first
five days of surgery. This bill adds nothing to
those protections, and Is a step backwards from
Federal law in that it limits patient access to
care and makes it more likely that patients will
unnecessarily pay more for care (from
ophthalmologists) - exactly what the Federal law
was aimed at preventing.
5. Even if I believed that co-management should be
limited, I would argue against this bill. It is
full of technical flaws and ambiguities.
a) While this doesn't specifically prohibit
optometrists from performing post op care
after the 5-day period, it is a harrier. It
eliminates patient's freedom of choice, and
creates fear. According to the bill
(section C, number 5, and letter g), the
patient is to be made aware of special
risks that may happen to them if they enter
into a co-management agreement. Since there
are no special risks (as Determined by
Congress over 20 years ago), I would like
to see what such a description would say,
because optometrists and other
ophthalmologists, are licensed and
qualified to perform such care,
b) There seems to be a double standard in
regards to many of the exceptions. The
Alaska bill shifts the determination of
patient travel hardship onto the shoulders
of the patient, which is an unworkable
legal standard. The exemption for the
surgeon's travel that says, if the surgeon
will not be available for postoperative
care. ..as a result of the surgeon's
personal travel, illness, etc " is
obviously self serving on the surgeons
part. If the true intent of this bill is to
protect the public, why is it unsafe and
not good medicine for other well trained
eye care professionals to co-manage in
normal circumstances, but if a surgeon is
going on vacation, then it is Ok for others
to co-manage safely?
c) The agreement can only be entered into if
the surgeon confirms that the co-manager is
qualified to treat the patient. This is not
the surgeon's job, this is the licensing
department's job. Does this mean that the
surgeon must contact occupational licensing
before entering into a co-management
agreement?
d) The co-managing doctor cannot further
delegate care to another. What if the co-
managing doctor is sick, ill, or called out
of town on an emergency and the surgeon is
off on vacation? Any referral to a third
doctor would violate this law, but the co-
managing doctor is ethically bound to
arrange care for that patient.
e) An exception is made to US Public Health
Service doctors or US Armed Forces doctors
who are volunteering without pay or other
remuneration. This implies that patients
are safe for co-managing if follow up care
is free, but not safe if it isn't free? Or
does this just mean that the
ophthalmologists shouldn't have to provide
free follow up care...but they are the only
one who should provide follow up care if it
is paid for?
f) Midwives are exempt. This bill would pass
into law a provision that allows midwives
to perform follow up care for someone who
had cataract surgery.
As some of you may know, there is an unfortunate duel
between ophthalmologists and optometrists in this
state. Most of which is professional jealousy.
Optometrists seek to move forward by way of improving
on and learning new techniques to better serve the
citizens of Alaska, Including adding oral medications
to our licensure. Ophthalmologists have opposed that
1
this bill is another attempt at limiting our scope of
care and superseding the Alaska Board of Optometry.
This bill would not only limit us, but it would move
our profession back to the 1960's. I encourage you to
vote no.
DAVID KATZEEK, ALASKA NATIVE BROTHERHOOD, JUNEAU, is a
member of the Tlingit tribe, from the Chilkat tribes in
Haines. He testified in Tlingit and English in support of
the bill. He gave information about the history of his
people's migration to different areas. He maintained that
the bill was supportive of patient's needs. He expressed
his opinion that the bill closes loopholes that allow
professionals from other states to perform services in
Alaska without responsibility to Alaskans. He referenced
the limited entry legislation in regard to salmon fishing.
He maintained that the legislation provided higher quality
care for people not only in rural communities but for all
Alaskans. He observed the contention between professional
groups and emphasized that the eyesight of Alaskans were of
utmost importance and value. He encouraged members to take
the safety of the people into consideration.
Mr. Katzeek stated that, according to the Department of
Health and Social Services, over 50 percent of Native
Americans suffer from type two diabetes, which causes
problems with eyesight.
HB 142 was heard and HELD in Committee for further
consideration.
Co-Chair Williams began a brief at ease at 3:30 pm. The
meeting reconvened at 3:45 p.m.
HOUSE BILL NO. 234
"An Act relating to brewpubs, and continuing the
existence of the Alcoholic Beverage Control Board; and
providing for an effective date."
REPRESENTATIVE LISEL MCGUIRE, SPONSOR, testified in support
of the legislation. She explained that Section 1 of the
bill allows for the sale of "growlers" of up to five gallons
per day, as stated in current statute, but eliminates a
technical provision that required a brewery must be on the
premises in order to sell a "growler" to customers. She
explained that this provision prevented the Moose's Tooth
Brewery [Anchorage] from being in the marketplace, since
their brewery was in Ship Creek. She also noted that an
earlier version of the bill pertained to gallonage, which
was removed from the bill based on testimony in the [House]
Labor and Commerce Committee that indicated that it was a
fundamental policy decision better suited to a separate
vehicle. In response to a question by Co-Chair Williams,
Representative McGuire confirmed that this change would be
implemented by amendment.
Representative McGuire also noted that Section 3 extends the
Alcoholic Beverage Control Board to June 30 2007. She
referred to a Legislative Budget and Audit (LB&A) report
commending the Board's success. She pointed out that
suggested changes from the Department of Public Safety were
forthcoming, one of them stemming from the LB&A audit. She
stated that her office did not have objections to the
Administration's amendments.
In response to a question by Representative Stoltze,
Representative McGuire defined a "growler" as being a micro
brewery that distributes an amount under five gallons. She
stressed that the bill did not change this amount
requirement.
PAT DAVIDSON, DIRECTOR, DIVISION OF LEGISLATIVE AUDIT
provided information on the department's audit of the board.
She stated that the audit had recommended a three-year
extension, due to some operational deficiencies discovered
during the audit. She noted that overall they believed the
continuation of the Alcoholic Beverage Control Board was in
the best public interest.
DOUGLAS GRIFFIN, DIRECTOR, ALCOHOLIC CONTROL BOARD testified
via teleconference in support of the legislation. He stated
that they would prefer a four-year, rather than a three-year
extension of the board. He commended the audit procedure
and noted that the Board was making recommended changes and
acknowledged that the Board was experiencing funding
shortfalls.
MATT JONES, MOOSE'S TOOTH, ANCHORAGE testified via
teleconference in support of the bill.
DAN COFFEE, ATTORNEY, ANCHORAGE testified via teleconference
in support of the legislation. He noted he had served on
the board of fisheries as well. He commended the Alcoholic
Beverage Control Board for its excellent work. He observed
that their only problems were funding shortfalls. He
supported the extension of the board and expressed industry
support for the amendment pertaining to brewpubs. He asked
for information regarding forthcoming amendments from the
Administration and how to comment on these changes.
Representative Stoltze referred to the provision of the bill
that provided for free samples, and asked whether this
practice was new. Mr. Coffee stated that this was a
standard procedure for brewpubs, allowing them to provide
small samples for potential customers.
Representative Croft MOVED amendment #1.
Section 1 -
Pg. 2, Lines 6-8
(5) sell beer manufactured on the premises licensed
under the beverage dispensary license to a person
licensed as a wholesaler under AS 04.11.160; sales
under this paragraph may not exceed 15,000 gallons
[OR THE AMOUNT SOLD UNDER THIS PARAGRAPH IN CALENDAR
YEAR 2001, PLUS 10 PERCENT, WHICHEVER AMOUNT IS
GREATER].
Should be amended to read:
(5) sell beer manufactured on the premises licensed
under the beverage dispensary license to a person
licensed as a wholesaler under AS 04.11.160; sales
under this paragraph may not exceed 15,000 gallons
OR THE AMOUNT SOLD UNDER THIS PARAGRAPH IN CALENDAR
YEAR 2001, PLUS 10 PERCENT, WHICHEVER AMOUNT IS
GREATER.
Section 2 -
Pg. 2, Lines 24-27
(B) to a wholesaler licensed under AS 04.11.160;
sales under this subparagraph may not exceed 15,000
gallons [OR THE AMOUNT SOLD UNDER THIS SUBPARAGRAPH
IN CALENDAR YEAR 2001, PLUS 10 PERCENT, WHICHEVER
AMOUNT IS GREATER];
Should be amended to read:
(B) to a wholesaler licensed under AS 04.11.160;
sales under this subparagraph may not exceed 15,000
gallons OR THE AMOUNT SOLD UNDER THIS SUBPARAGRAPH IN
CALENDAR YEAR 2001, PLUS 10 PERCENT, WHICHEVER
AMOUNT IS GREATER;
Co-Chair Williams OBJECTED.
Representative McGuire stated that the intent of the
amendment was to preserve the existing statute as written in
relation to gallonage and percentage. She explained that
when the Committee Substitute from the House Labor and
Commerce Committee had been written, it had inadvertently
excluded a portion of the existing statute.
Co-Chair Williams REMOVED his OBJECTION. There being NO
OBJECTION, the amendment was Adopted.
Representative Stoltze MOVED Amendment #2.
Amendment No. 2
*Section . AS 04.06.010 is amended to read:
Sec. 04.06.010. Establishment of board. There is
established in the Department of Public Safety the
[THE] Alcoholic Beverage Control Board [IS ESTABLISHED]
as a regulatory and quasi-judicial agency. [THE BOARD
IS IN THE DEPARTMENT OF REVENUE, BUT FOR ADMINISTRATIVE
PURPOSES ONLY.]
Co-Chair Harris OBJECTED.
WILLIAM TANDESKE, COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY,
provided information about Amendment #2, that effectively
transfers the Alcoholic Beverage Control Board from the
Department of Revenue to the Department of Public Safety.
He noted the language change was to remove "for
administrative purposes only". He explained that the
purpose of the change was not to change function of the
Board, but rather to recognize that the nine employees of
the Board were employed by the state of Alaska, such as with
other boards within the Department of Public Safety, such as
the Council on Domestic Violence and Sexual Assault. He
stressed that this change was directed at the licensing and
review function of the Alcoholic Beverage Control Board.
Co-Chair Harris asked whether officers of the Alcoholic
Beverage Control Board would carry weapons in order to
respond to dangerous situations. Mr. Tandeske stated he did
not support Board investigators carrying weapons. He gave
the example of Division of Family and Youth Services, when
officers entered into volatile situations, and maintained
that weapons were not necessary for ABC investigators and
would only escalate such situations. He also noted that
this would create additional issues of recruiting and
training. In response to another question by Co-Chair
Harris, Mr. Tandeske confirmed that local police officers
would support the efforts of the Alcoholic Beverage Control
Board officers.
Representative Croft asked about the practical effect of
moving the Alcoholic Beverage Control Board to the
Department of Public Safety. Mr. Tandeske explained that
this was a portion of the process of realigning functions
within all departments, and that the Department of Revenue
expressed that the Board was more properly placed in the
Department of Public Safety, given that they are a quasi-
judicial, investigative and enforcement agency. He added
that if other parts of the state required officers, their
becoming official State employees he noted that their
function was autonomous within the Department.
Representative Croft asked why the Board was not indicated
as being "only administrative" within the Department of
Public Safety. Mr. Tandeske reiterated that the officers
were employees of the state of Alaska. He differentiated
this from the Alcoholic Beverage Control Board, but referred
to enforcement officers and administrative staff. He
stressed that the Board will still be separate in order to
consider licensing and other quasi-judicial issues.
Co-Chair Harris REMOVED his OBJECTION. There being NO
OBJECTION, amendment #2 was adopted.
Representative Stoltze MOVED Amendment #3,
*Sec. . AS 04.06.020 is amended to read:
Sec. 04.06.020. Appointment and qualifications. The
board consists of seven [FIVE] members: the
commissioner of public safety, the commissioner of
revenue, and five members appointed by the governor and
confirmed by a majority of the members of the
legislature in joint session. A member of the board may
not hold any other state or federal office, either
elective or appointive. Two members of the board shall
be persons actively engaged in the alcoholic beverage
industry, except that no member may hold a wholesale
license or be an officer, agent, or employee of a
wholesale alcoholic beverage enterprise. No three
members of the board may be engaged in the same
business, occupation, or profession. At least three
members of the board shall represent the general
public. A board member representing the general public
or an immediate family member of a board member
representing the general public may not have any
financial interest in the alcoholic beverage industry.
In this section, "immediate family member" means a
spouse, child, or parent.
*Sec. . AS 04.06.030 is amended to read:
Sec. 04.06.030. Terms of office; chair. (a) The
commissioners of public safety and revenue shall serve
as members during their tenure as commissioner. The
other m[M]embers of the board shall be appointed for
overlapping terms of three years.
(b) Except for the commissioners of public safety and
revenue, a [A] vacancy occurring in the membership of
the board shall be filled within 30 days by appointment
of the governor for the unexpired portion of the
vacated term.
(c) The board shall select a chairman from among its
members.
*Sec. . AS 04.06.060 is amended to read:
Sec. 04.06.060. Quorum and majority. Four [THREE]
members of the board constitute a quorum for the
conduct of business, except that a majority of the
whole membership of the board must approve all
applications for new licenses, and all renewals,
transfers, suspensions, and revocations of existing
licenses. If a majority of the board is present and
voting, the director, with the consent of the members
present, may cast a tie-breaking vote.
Representative Stolze MOVED to AMEND the amendment to
include other designees for the two Commissioners.
Co-Chair Harris OBJECTED. Representative Croft OBJECTED.
Commissioner Tandeske explained the proposed changes of the
amendment. He noted that when the proposal was originally
made to move the ABC Board to the Department of Public
Safety, the Department took a closer look at Title 4
enforcement that specified procedures. He cited a finding
in the LB&A audit that recommended that the Board be
expanded from five to seven members. He referred to the
Administration's concern regarding alcohol related issues.
He maintained that the Department of Public Safety brought
to the Board resources and skills that address the
consequences involved in these issues. He acknowledged that
the Department of Revenue had contributed other skills to
the Board over the past ten years. He stated that the
Department viewed this change as an opportunity to readdress
language in statutes that were 25 years old.
Representative Croft referred to page 22 of the audit, and
its reference to the possibility of disproportionate
influence by alcohol members, but maintained that the
intent of the recommendation was to add two more public
members.
Commissioner Tandeske clarified that the suggestion was for
two other members, specifying that one might be from the
medical community and one from law enforcement.
Representative Croft asked why there was a change from an
audit recommendation of a public health/medical community
and law enforcement member to two commissioners.
Commissioner Tandeske reiterated that alcohol issues were
the focal point. He expressed his commitment to personally
participate on the Board if the bill was passed into law,
and suggested that he would fulfill the law enforcement
member recommendation. He noted that from an administrative
standpoint, it seemed unusual for a Commissioner not to be
part of a Board within their own Department.
Representative Stoltze referenced the language that stated,
"a member of the board may not hold any other state or
federal office" and asked if the Commissioner was exempt
from this requirement. Co-Chair Harris recommended that a
technical change be made.
Representative Stoltze MOVED to AMEND amendment #3 to
include "except appointed Commissioners or their designees"
after "a member of the board".
Representative Foster stressed that given the controversial
issues that typically come before the Alcoholic Beverage
Control Board, continuity of representation was necessary.
Commissioner Tandeske stated his support of the language
change, and expressed his commitment to maintaining
continuity on the board. In response to a question by Co-
Chair Harris, Commissioner Tandeske confirmed that he
thoroughly briefed any designees on board issues.
Representative Croft concurred with Representative Foster,
and highlighted the distinction between the Council on
Domestic Violence or other organizations, in that the
Alcoholic Beverage Control Board was a semi judicial body.
He questioned whether a commissioner ought to be included in
such a body. He asked why the Board was being moved out of
the Department of Revenue to the Department of Public Safety
and again referred to the audit recommendation to add public
members to the Board from health and law enforcement, rather
than the two commissioners. He suggested that the language
be re-drafted to take that recommendation into
consideration.
TAPE HFC 03 - 62, Side B
Representative Stoltze WITHDREW amendment #3.
In response to a question by Representative Foster,
Commissioner Tandeske responded that he also sat on the
Western States Information Network Policy Board, and the
Executive [Committee] of the Land Mobile Radio Project
[Board].
Representative Foster stressed that the Alcoholic Beverage
Control Board required extensive executive sessions that
could last for a period of days, and pointed out that this
would add another burden to the Commissioner's level of
commitment. He asked if the Commissioner would by necessity
send representatives to these important meetings.
Representative Stoltze MOVED amendment #4. Co-Chair Harris
OBJECTED.
*Sec. . AS 04.06.110 is amended to read:
Sec. 04.06.110. Peace officer powers. The director and
the persons employed for the administration and
enforcement of this title may, with the concurrence of
the commissioner of public safety, exercise the powers
of peace officers when those powers are specifically
granted by the board. Powers granted by the board under
this section may be exercised only when necessary for
the enforcement of the [CRIMINALLY PUNISHABLE
PROVISIONS OF THIS TITLE,] regulations of the board[,
AND OTHER CRIMINALLY PUNISHABLE LAWS AND REGULATIONS,
INCLUDING INVESTIGATION OF VIOLATIONS OF LAWS AGAINST
PROSTITUTION AND PROMOTING PROSTITUTION DESCRIBED IN AS
11.66.100 - 11.66.130 AND LAWS AGAINST GAMBLING,
PROMOTING GAMBLING, AND RELATED OFFENSES DESCRIBED IN
AS 11.66.200 - 11.66.280].
Commissioner Tandeske emphasized that the Alcoholic Beverage
Control Board officers were most properly equipped to handle
alcohol related issues, and not issues of prostitution and
gambling. He noted the limited personnel resources, and the
need to properly align personnel for tasks.
Representative Croft recalled initial discussions in 1999,
when it was reasoned that Alcoholic Beverage Control Board
officers often viewed these related issues, and could
expeditiously handle them in the line of their duties.
Commissioner Tandeske stated that he was not part of those
discussions. He referenced his experience in law
enforcement, and noted that employees' authority should
align with their responsibilities.
Representative Hawker referred to the LB&A audit and noted
the divergence of opinions on whether investigators ought to
function as peace officers or administrative investigators.
He asked if this was a move toward the duties of a peace
officer.
Commissioner Tandeske emphasized the value of the Alcoholic
Beverage Control Board officers to the State. He
emphasized, however, that they were not law enforcement
officers.
Representative Hawker asked if the Department of Public
Safety would show any preference for an ABC officer wished
to enter law enforcement.
Commissioner Tandeske noted that all applicants for law
enforcement were treated equitably.
Representative Stoltze expressed his hope that this
amendment might prevent ABC officers from "clamping down" on
cribbage players at recreational halls.
Co-Chair Harris REMOVED his OBJECTION. Amendment #4 was
ADOPTED.
Representative Stoltze renewed his motion to MOVED Amendment
#3.
DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, DEPARTMENT
OF LAW, testified regarding potential changes to the
amendment. He stated that the current statute (AS
04.06.020) would not prevent a commissioner from being a
member of the Board. He maintained that the language
restricted them from holding any "other" office, other than
that which they currently hold. He suggested that courts
would view the statute as a whole, and not consider
membership on the ABC Board a conflict. He did not believe
any other statutes existed that would prevent the
Commissioner from being on the board.
Representative Croft maintained that the language "other"
referred to the Board position, and restricted the members
from holding positions apart from the Board.
Mr. Guaneli reiterated his belief that the courts would take
into consideration the legislative intent that the
commissioners of Revenue and Public Safety hold Board
positions. He suggested that it would be simple to insert
more language, such as "other than the commissioners of
Public Safety and Revenue".
Co-Chair Harris asked if this type of language was common
and necessary, and whether it could simply be omitted. Mr.
Guaneli noted that he hesitated to suggest that change,
since it was part of the original intent of the statute.
Representative Foster stressed that he did not support the
amendment. He recalled the regulations that prevented the
sale of Class III licenses for fifteen years in the state of
Alaska. He observed that a commissioner sitting on the
Board would have a disproportionate amount of influence
compared to other members. He stated his uneasiness about
granting a regulatory agency undue power over a board and
then allowing the commissioner to sit on that board and
grant licenses.
Commissioner Tandeske responded that it had not occurred to
him that he would be more influential than any other party
on the Board. He acknowledged the concern over the issue
with Class III licenses.
Representative Foster gave examples of potential conflicts
of interest for board members. He maintained that in small
villages, many public officials might have an interest in a
bar or other business that presented a conflict of interest.
He observed that the commissioner of Public Safety might
have an inherent conflict of interest sitting on the
Alcoholic Beverage Control Board.
Representative Stoltze WITHDREW Amendment #3.
Mr. Coffee commented on the amendments. He questioned the
reason behind moving the Alcoholic Beverage Control Board to
the Department of Public Safety. He noted the
Administration's desire to address alcohol related issues,
but pointed out that the agency was currently functioning
well. He observed that the bill would effectively make this
quasi-judicial and regulatory agency a part of the
Department of Public Safety, which is in the criminal
enforcement business. He asked what was to be gained by
making employees a part of the Department, and pointed out
that board and commissions must remain independent. He
commended the withdrawal of the amendment that allowed the
Commissioner to be on the board, for purposes of continuity.
He acknowledged that enforcement officers did stumble upon
gambling and prostitution activities in the course of
duties. He observed that the Alcoholic Beverage Control
Board had four executive directors during his tenure, and
noted that each one had worked to ensure compliance with
liquor laws, and did not focus on criminal enforcement. He
again asked about the benefit of making such changes to an
agency that has existed since statehood.
Representative Foster MOVED to report HB 234 out of
Committee with the accompanying fiscal note. Representative
Stoltze OBJECTED.
Representative Stoltze suggested that a conforming title
change must be made to accommodate amendments.
Representative Foster WITHDREW his MOTION.
Representative Stoltze MOVED a conforming title amendment.
There being NO OBJECTION it was so ordered.
Representative Croft expressed the intent to follow the
recommendation of the auditors by adding board members from
health care and law enforcement.
Co-Chair Harris addressed the fiscal note. He suggested
that it should include the cost of operating the agency.
LANDA BAILY, SPECIAL ASSISTANT, DEPARTMENT OF REVENUE,
explained that the movement of the Alcoholic Beverage
Control Board from the Department of Revenue to the
Department of Public Safety resulted in a zero fiscal note
by the Department of Revenue.
Co-Chair Harris asked why there was no fiscal note from the
Department of Public Safety. Commissioner Tandeske noted
that the fiscal note was attached to the Executive Order
when it was submitted and added that operational funding was
reflected in the Department's FY 04 budget plan. Co-Chair
Harris requested that a fiscal note reflecting the cost of
operations from the Department of Public Safety accompany
the bill the floor.
Representative Croft asked how this differed from the zero
budget line item related to community schools. Co-Chair
Harris maintained that the cost of eliminating the Community
Schools program in statute was zero. He maintained that the
cost of having the Alcoholic Beverage Control Board operated
by Department of Public Safety should be reflected in a
fiscal note.
Commissioner Tandeske reiterated that the suggestion
[amendment] of adding Board members was withdrawn. Co-Chair
Harris maintained that he wished to see a fiscal note.
Representative Foster MOVED to report HB 234 out of
Committee with the accompanying fiscal note. There being NO
OBJECTION it was so ordered.
CSHB 234 (FIN) was REPORTED out of Committee with individual
recommendations, a previously published zero fiscal note
from the Department of Revenue (#1) and a new fiscal impact
note from the Department of Public Safety.
ADJOURNMENT
The meeting was adjourned at 4:50 PM
| Document Name | Date/Time | Subjects |
|---|