Legislature(2001 - 2002)

04/22/2002 01:43 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 22, 2002                                                                                         
                           1:43 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Norman Rokeberg, Chair                                                                                           
Representative Jeannette James                                                                                                  
Representative John Coghill                                                                                                     
Representative Kevin Meyer                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Scott Ogan, Vice Chair                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 489                                                                                                              
"An Act relating to cruelty to animals."                                                                                        
                                                                                                                                
     - MOVED CSHB 489(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 180                                                                                                              
"An  Act requiring  child services  providers to  obtain criminal                                                               
background checks for child services workers."                                                                                  
                                                                                                                                
     - MOVED CSHB 180(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 510                                                                                                              
"An Act relating  to the regulation of  commercial motor vehicles                                                               
to avoid  loss or  withholding of federal  highway money,  and to                                                               
out-of-service  orders  concerning   commercial  motor  vehicles;                                                               
amending  Rule   43.1,  Alaska   Rules  of   Administration;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HB 510 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 246                                                                                                              
"An Act relating  to confidentiality of records and  to cease and                                                               
desist orders of the division  of insurance, to insurance company                                                               
investments,   to  unauthorized   insurers,   to  surplus   lines                                                               
insurance,  to health  insurance, to  life insurance,  to annuity                                                               
insurance, to consumer credit insurance,  to title insurance, and                                                               
to hospital and medical service corporations; and providing for                                                                 
an effective date."                                                                                                             
                                                                                                                                
     - MOVED CSHB 246(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 460                                                                                                              
"An Act relating to actions for monopolies and restraint of                                                                     
trade, including proof of damages; amending Rule 82, Alaska                                                                     
Rules of Civil Procedure; and providing for an effective date."                                                                 
                                                                                                                                
     - MOVED HB 460 OUT OF COMMITTEE                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 222(FIN)                                                                                                 
"An Act relating to certain motor vehicles that are required to                                                                 
yield to following traffic."                                                                                                    
                                                                                                                                
     - BILL HEARING POSTPONED TO 4/24/02                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 489                                                                                                                  
SHORT TITLE:CRUELTY TO ANIMALS                                                                                                  
SPONSOR(S): REPRESENTATIVE(S)CHENAULT                                                                                           
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/02     2319       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/19/02     2319       (H)        JUD                                                                                          
02/22/02     2370       (H)        COSPONSOR(S): KOTT                                                                           
03/01/02     2450       (H)        COSPONSOR(S): CROFT                                                                          
03/06/02     2497       (H)        COSPONSOR(S): JAMES, FOSTER                                                                  
03/15/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
03/15/02                (H)        Heard & Held                                                                                 
03/15/02                (H)        MINUTE(JUD)                                                                                  
03/15/02     2564       (H)        COSPONSOR(S): LANCASTER                                                                      
03/20/02     2628       (H)        COSPONSOR(S) REMOVED: JAMES                                                                  
04/19/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
04/19/02                (H)        Heard & Held -- Time Change                                                                  
                                   MINUTE(JUD)                                                                                  
04/22/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 180                                                                                                                  
SHORT TITLE:BACKGROUND CHECK OF YOUTH WORKER                                                                                    
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE                                                                                            
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/13/01     0560       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/13/01     0560       (H)        HES, JUD                                                                                     
03/16/01     0636       (H)        COSPONSOR(S): DYSON                                                                          
04/10/01                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
04/10/01                (H)        <Bill Postponed to 4/19>                                                                     
04/19/01                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
04/19/01                (H)        Heard & Held                                                                                 
04/19/01                (H)        MINUTE(HES)                                                                                  
02/04/02     2152       (H)        COSPONSOR(S): CROFT                                                                          
04/18/02                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
04/18/02                (H)        Moved CSHB 180(HES) Out of                                                                   
                                   Committee                                                                                    
                                   MINUTE(HES)                                                                                  
04/19/02     3048       (H)        COSPONSOR(S): STEVENS                                                                        
04/22/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 510                                                                                                                  
SHORT TITLE:COMMERCIAL MOTOR VEHICLES:REGULATIONS                                                                               
SPONSOR(S): TRANSPORTATION                                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/22/02     2644       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/22/02     2644       (H)        TRA, JUD                                                                                     
03/28/02                (H)        TRA AT 1:00 PM CAPITOL 17                                                                    
03/28/02                (H)        -- Meeting Canceled --                                                                       
04/02/02                (H)        TRA AT 1:00 PM CAPITOL 17                                                                    
04/02/02                (H)        Moved Out of Committee                                                                       
04/02/02                (H)        MINUTE(TRA)                                                                                  
04/03/02     2777       (H)        TRA RPT 4DP                                                                                  
04/03/02     2777       (H)        DP: MASEK, SCALZI, WILSON,                                                                   
                                   KOHRING                                                                                      
04/03/02     2777       (H)        FN1: ZERO(DOT)                                                                               
04/22/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 246                                                                                                                  
SHORT TITLE:OMNIBUS INSURANCE BILL                                                                                              
SPONSOR(S): LABOR & COMMERCE BY REQUEST                                                                                         
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
04/17/01     1015       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
04/17/01     1015       (H)        L&C, JUD                                                                                     
04/15/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/15/02                (H)        Moved CSHB 246(L&C) Out of                                                                   
                                   Committee                                                                                    
                                   MINUTE(L&C)                                                                                  
04/17/02     2967       (H)        L&C RPT CS(L&C) NT 5DP 1NR                                                                   
04/17/02     2967       (H)        DP: ROKEBERG, HAYES,                                                                         
                                   CRAWFORD, KOTT,                                                                              
04/17/02     2967       (H)        MURKOWSKI; NR: MEYER                                                                         
04/17/02     2968       (H)        FN1: ZERO(CED)                                                                               
04/22/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 460                                                                                                                  
SHORT TITLE:ANTITRUST CIVIL COURT ACTIONS                                                                                       
SPONSOR(S): REPRESENTATIVE(S)CROFT                                                                                              
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/02     2312       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/19/02     2312       (H)        L&C, JUD                                                                                     
04/17/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/17/02                (H)        Moved Out of Committee                                                                       
                                   MINUTE(L&C)                                                                                  
04/18/02     3001       (H)        L&C RPT 3DP 3NR                                                                              
04/18/02     3001       (H)        DP: CRAWFORD, HAYES,                                                                         
                                   MURKOWSKI;                                                                                   
04/18/02     3001       (H)        NR: ROKEBERG, MEYER, HALCRO                                                                  
04/18/02     3001       (H)        FN1: INDETERMINATE(LAW)                                                                      
04/18/02     3019       (H)        FIN REFERRAL ADDED AFTER JUD                                                                 
04/22/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
HEATHER M. NOBREGA, Staff                                                                                                       
to Representative Norman Rokeberg                                                                                               
House Judiciary Standing Committee                                                                                              
Alaska State Legislature                                                                                                        
Capitol Building, Room 118                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Explained the changes made in the proposed                                                                 
committee substitute (CS) to HB 489.                                                                                            
                                                                                                                                
REPRESENTATIVE LESIL McGUIRE                                                                                                    
Alaska State Legislature                                                                                                        
Capitol Building, Room 418                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of HB 180.                                                                                         
                                                                                                                                
JOANNE GIBBENS, Program Administrator                                                                                           
Central Office                                                                                                                  
Division of Family & Youth Services (DFYS)                                                                                      
Department of Health & Social Services (DHSS)                                                                                   
PO Box 110630                                                                                                                   
Juneau, Alaska  99811-0630                                                                                                      
POSITION STATEMENT:  Responded to questions during discussion of                                                                
HB 180.                                                                                                                         
                                                                                                                                
JACK F. BOWEN, Alaska Fast Pitch Softball Association (ph)                                                                      
11224 Via Balboa                                                                                                                
Anchorage, Alaska  99515-2909                                                                                                   
POSITION STATEMENT:  Testified in support of HB 180.                                                                            
                                                                                                                                
MIKE KRIEBER, Staff                                                                                                             
to Representative Vic Kohring                                                                                                   
House Transportation Standing Committee                                                                                         
Alaska State Legislature                                                                                                        
Capitol Building, Room 24                                                                                                       
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 510 on behalf of the sponsor,                                                                 
the House Transportation Standing Committee.                                                                                    
                                                                                                                                
AVES D. THOMPSON, Director                                                                                                      
Anchorage Office                                                                                                                
Division of Measurement Standards & Commercial Vehicle                                                                          
Enforcement                                                                                                                     
Department of Transportation & Public Facilities (DOT&PF)                                                                       
12050 Industry Way                                                                                                              
Anchorage, Alaska  99515                                                                                                        
POSITION STATEMENT:  Assisted with the presentation of HB 510                                                                   
and responded to questions.                                                                                                     
                                                                                                                                
FRANK DILLON; Executive Vice President                                                                                          
Alaska Trucking Association, Inc.                                                                                               
3443 Minnesota Drive                                                                                                            
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Testified in support of HB 510.                                                                            
                                                                                                                                
AMY ERICKSON, Staff                                                                                                             
to Representative Lisa Murkowski                                                                                                
House Labor and Commerce Standing Committee                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 408                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 246 on behalf of the sponsor,                                                                 
the House Labor and Commerce Standing Committee.                                                                                
                                                                                                                                
KATIE CAMPBELL, Actuary L/H                                                                                                     
Central Office, Division of Insurance                                                                                           
Department of Community & Economic Development (DCED)                                                                           
PO Box 110805                                                                                                                   
Juneau, Alaska  99811-0805                                                                                                      
POSITION STATEMENT:   Assisted  with the  presentation of  HB 246                                                               
and responded to questions.                                                                                                     
                                                                                                                                
BRUCE GALE, Employee Benefit Consultant                                                                                         
Willis of Alaska, Inc.                                                                                                          
4220 B Street                                                                                                                   
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:   Provided comments  during discussion  of HB
246.                                                                                                                            
                                                                                                                                
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General                                                                             
Fair Business Practices Section                                                                                                 
Civil Division (Anchorage)                                                                                                      
Department of Law (DOL)                                                                                                         
1031 West 4th Avenue, Suite 200                                                                                                 
Anchorage, Alaska  99501-1994                                                                                                   
POSITION STATEMENT:  Presented HB 460.                                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-53, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  NORMAN  ROKEBERG  called   the  House  Judiciary  Standing                                                               
Committee  meeting  to  order  at   1:43  p.m.    Representatives                                                               
Rokeberg, Coghill, Meyer, and Berkowitz  were present at the call                                                               
to  order.   Representatives  James and  Kookesh  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
HB 489 - CRUELTY TO ANIMALS                                                                                                   
                                                                                                                                
Number 0050                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the first order  of business would                                                               
be HOUSE BILL  NO. 489, "An Act relating to  cruelty to animals."                                                               
[Before the committee was the  proposed committee substitute (CS)                                                               
for HB  489, version 22-LS1580\O, Luckhaupt,  4/18/02, adopted as                                                               
a work draft on 4/19/02.]                                                                                                       
                                                                                                                                
Number 0060                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER  moved  to  adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB 489,  version  22-LS1580\S,  Luckhaupt,                                                               
4/22/02, as  a work draft.   There being no objection,  Version S                                                               
was before the committee.                                                                                                       
                                                                                                                                
Number 0130                                                                                                                     
                                                                                                                                
HEATHER  M. NOBREGA,  Staff  to  Representative Norman  Rokeberg,                                                               
House  Judiciary Standing  Committee,  Alaska State  Legislature,                                                               
explained that in Version S,  the "minimal standard" language was                                                               
removed as  requested; the  provision making  a second  offense a                                                               
felony was  removed, thus  cruelty to animals  remains a  class A                                                               
misdemeanor; and, as suggested by  the Department of Law (DOL), a                                                               
provision was added stating that  each instance of a violation is                                                               
a  separate violation,  thus  a single  situation  can result  in                                                               
multiple counts.  She noted  that members have been provided with                                                               
a memo from the drafter  detailing why he rejected the suggestion                                                               
to move the special sentencing provisions to AS 12.55.                                                                          
                                                                                                                                
Number 0235                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER  moved  to report  the  proposed  committee                                                               
substitute  (CS)  for  HB 489,  version  22-LS1580\S,  Luckhaupt,                                                               
4/22/02,  out of  committee with  individual recommendations  and                                                               
the accompanying  fiscal notes.   There being no  objection, CSHB
489(JUD)  was   reported  from   the  House   Judiciary  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 1:49 p.m. to 1:50 p.m.                                                                    
                                                                                                                                
HB 180 - BACKGROUND CHECK OF YOUTH WORKER                                                                                     
                                                                                                                                
Number 0281                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  HOUSE  BILL  NO.  180,   "An  Act  requiring  child  services                                                               
providers  to   obtain  criminal  background  checks   for  child                                                               
services workers."  [Before the committee was CSHB 180(HES).]                                                                   
                                                                                                                                
Number 0289                                                                                                                     
                                                                                                                                
REPRESENTATIVE LESIL McGUIRE,  Alaska State Legislature, sponsor,                                                               
explained  that HB  180 will  update the  statutes pertaining  to                                                               
licensing  of foster  homes, residential  child care  facilities,                                                               
semi-secure   residential    child   care    facilities,   secure                                                               
residential  psychiatric   treatment  centers,   child  placement                                                               
agencies, and maternity homes, all  of which are currently listed                                                               
in AS 47.35.010.   She observed that the  legislature has already                                                               
established a  policy of protecting  children through the  use of                                                               
background checks.   She mentioned that this  update will conform                                                               
Alaska's statutes to  the "Adoption & Safe  Families Act" (ASFA),                                                               
which was  passed by  Congress and signed  into law  by President                                                               
Clinton in  1997.   She noted that  the goal of  the ASFA  was to                                                               
promote  safety  for  the nation's  children;  Congress  and  the                                                               
administration  became  concerned   after  hearing  reports  that                                                               
children were being left in, or returned to, unsafe situations.                                                                 
                                                                                                                                
REPRESENTATIVE McGUIRE explained  that the second part  of HB 180                                                               
creates a  task force  that will research  the topic  of criminal                                                               
background checks for other entities  that provide services to or                                                               
that have  direct or immediate  contact with children  in Alaska.                                                               
She said  that she  has been researching  ways to  better protect                                                               
children  who   participate  in  various  children's   clubs  and                                                               
activities.   She relayed that  the concept of HB  180 originated                                                               
when  she learned  that an  individual with  a history  of sexual                                                               
predation had  molested a  constituent's child.   The  task force                                                               
created  by HB  180  will analyze  whether more  can  be done  to                                                               
protect  children   in  areas   other  than   the  aforementioned                                                               
institutions,  and  will  be  composed of  five  members  of  the                                                               
legislature, four  members of  the public  who are  child service                                                               
providers,  and possibly  commissioners or  designees of  certain                                                               
administrative departments.  Because  of concerns about budgetary                                                               
constraints, she  added, rather than simply  requiring background                                                               
checks for  all groups  that perform  services for  children, the                                                               
task force created by HB 180  will research the issue and provide                                                               
a report to the legislature.                                                                                                    
                                                                                                                                
REPRESENTATIVE McGUIRE  noted that a sectional  analysis has been                                                               
provided,  adding that  with the  exception of  a provision  that                                                               
will allow  for the discretionary  denial of licenses,  there are                                                               
no  major policy  changes in  HB 180.   Currently,  a license  is                                                               
automatically  denied  if an  individual  has  been convicted  of                                                               
certain  crimes;  this aforementioned  provision  -  Section 4  -                                                               
lists  other  crimes  for  which the  department  will  have  the                                                               
discretion to  deny a license.   Section 4 allows  the department                                                               
to  analyze whether  a  person  should be  issued  a license  if,                                                               
within the preceding  five years, that person  has been convicted                                                               
of  the crimes  listed therein.    She mentioned  that Section  1                                                               
allows  the  department  to  accept   licenses  issued  by  other                                                               
entities  that have  state of  federal  licensing authority,  and                                                               
that this provision will facilitate placement.                                                                                  
                                                                                                                                
Number 0801                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG asked Representative  McGuire how "wedded" she was                                                               
to the creation of the task  force, and how the fiscal note could                                                               
be zero.                                                                                                                        
                                                                                                                                
REPRESENTATIVE McGUIRE said that fiscal  note is zero because the                                                               
plan  is to  use  existing  resources.   In  response to  another                                                               
question,  she said  that with  HB  180, the  Joint Committee  on                                                               
Administrative  Regulation  Review  (JARR) is  not  creating  new                                                               
regulations;  rather,   the  JARR   will  simply  "look   at  the                                                               
possibility  that solving  the problem  may be  addressed through                                                               
regulations,  ...  through  laws,  or  perhaps  ...  through  ...                                                               
something  called   the  'safe  seal  program'   ...  [which]  is                                                               
patterned after the Better Business Bureau."                                                                                    
                                                                                                                                
REPRESENTATIVE MEYER said he supports HB 180.                                                                                   
                                                                                                                                
Number 0966                                                                                                                     
                                                                                                                                
JOANNE GIBBENS,  Program Administrator, Central  Office, Division                                                               
of Family & Youth Services  (DFYS), Department of Health & Social                                                               
Services (DHSS), in  response to a question, said  that Section 3                                                               
outlines  the   federal  requirements  in  terms   of  denial  of                                                               
licensure.   There  are two  parts to  Section 3,  she explained:                                                               
one part - subsection (a) -  provides for the mandatory denial of                                                               
a license  if one  has been  convicted of  any the  crimes listed                                                               
therein, and the  other part - subsection (b) -  provides for the                                                               
mandatory denial  of a license  if one has been  convicted within                                                               
the previous  five years of any  the crimes listed therein.   She                                                               
noted  that  the  federal  law   refers  to  felony  convictions;                                                               
therefore, to  conform with the  federal law, if there  have been                                                               
any  felony convictions,  the state  is  not allowed  to issue  a                                                               
license.                                                                                                                        
                                                                                                                                
CHAIR ROKEBERG noted that Sections 3  and 4 refer to the issuance                                                               
of an  initial license.   He asked, "What  if you already  have a                                                               
license?"                                                                                                                       
                                                                                                                                
MS.  GIBBENS explained  that that  circumstance  is addressed  in                                                               
Sections 7, 8,  and 10.  For  the first year, the  state issues a                                                               
provisional license,  and at the  end of that year,  the division                                                               
can authorize  a biennial  license, which  must be  renewed every                                                               
two years.   During  the renewal process,  a background  check is                                                               
performed  again to  ensure that  none of  the prohibited  crimes                                                               
have  been committed.   Also,  if  a provider  discovers that  an                                                               
employee  has  committed  one  of   the  prohibited  crimes,  the                                                               
provider must notify the department and take appropriate action.                                                                
                                                                                                                                
REPRESENTATIVE  McGUIRE referred  to  Section  13, and  mentioned                                                               
that it "comports with the  federal-level effort at trying to get                                                               
kids in  safe places."  Section  13, she offered, says  that "you                                                               
don't automatically have to shut  down, putting those kids out of                                                               
a place  to stay:   if you're  currently operating  [a facility],                                                               
and an employee  discloses that serious offense and  ... you take                                                               
action to remove that employee, you can continue operating."                                                                    
                                                                                                                                
REPRESENTATIVE JAMES asked what  other licensure requirements are                                                               
there that specifically  relate to a person's ability  to "do the                                                               
job."  Are there any other  criteria other than simply being free                                                               
of criminal charges?                                                                                                            
                                                                                                                                
MS. GIBBENS  said that there are  extensive licensing regulations                                                               
already in existence,  both for foster homes  and for residential                                                               
care facilities,  that specifically  address other  safety issues                                                               
related to  children, such as the  type of facility, the  size of                                                               
the rooms, the type of treatment, and the type of discipline.                                                                   
                                                                                                                                
Number 1230                                                                                                                     
                                                                                                                                
REPRESENTATIVE  McGUIRE  noted  that AS  47.35.017  contains  the                                                               
statutory   requirements   for   licensure   of   foster   homes,                                                               
residential child care  facilities, semi-secure residential child                                                               
care   facilities,  secure   residential  psychiatric   treatment                                                               
centers,  child placement  agencies,  and maternity  homes.   She                                                               
also noted  that the department has  promulgated regulations that                                                               
dovetail with these statutory requirements.                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  remarked that  her concern centers  on what                                                               
is required of the employees in those types of facilities.                                                                      
                                                                                                                                
MS. GIBBENS said that there  are regulations governing employees'                                                               
qualifications.   There  are certain  requirements for  training;                                                               
the division  prefers individuals to  have at least  a bachelor's                                                               
degree, but  that may be  waived, since grantees are  required to                                                               
provide a certain level of training to staff.                                                                                   
                                                                                                                                
REPRESENTATIVE   JAMES   said   she  is   concerned   about   the                                                               
requirements for  people who work  in child care  centers, adding                                                               
that it  is unlikely  that those  employees will  have bachelor's                                                               
degrees.   Aside from checking  an individual's  criminal record,                                                               
she asked,  what other protections  are there with regard  to how                                                               
much those employees are required to know.                                                                                      
                                                                                                                                
MS. GIBBENS  asked to  defer that question  to the  Department of                                                               
Education  and   Early  Development,   which  is   the  licensing                                                               
authority for daycare  programs.  She noted that HB  180 does not                                                               
have anything to do with child care workers in daycare centers.                                                                 
                                                                                                                                
REPRESENTATIVE  COGHILL   remarked  that  Section  2   refers  to                                                               
domiciliary services,  and that  this is another  situation where                                                               
"they've  already done  it  and  now we're  going  to  put it  in                                                               
statute."  He  opined that the emergence of  boarding schools and                                                               
charter schools  that provide boarding  services has  created the                                                               
need for Section 2.                                                                                                             
                                                                                                                                
Number 1418                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES opined  that there  ought to  be a  broader                                                               
application of the protections offered  in [HB 180], so that they                                                               
also  pertain to  child care  facilities offering  daycare.   She                                                               
reiterated that  she wants to  know "what kind of  training these                                                               
people have."                                                                                                                   
                                                                                                                                
REPRESENTATIVE  McGUIRE  offered  that   she  does  have  another                                                               
proposal  for a  bill that  would  address the  issues raised  by                                                               
Representative James.                                                                                                           
                                                                                                                                
REPRESENTATIVE  BERKOWITZ opined  that the  proposed language  in                                                               
Section  5  appears  to  be   somewhat  of  a  retreat  from  the                                                               
protections   that  children   currently  enjoy,   because  under                                                               
existing statute, licenses  can be pulled if  someone is arrested                                                               
for, charged  with, or  convicted of  a serious  offense, whereas                                                               
the  proposed language  stipulates  that a  license  can only  be                                                               
pulled if someone  is convicted of a crime listed  in proposed AS                                                               
47.35.19(a).  So even if there  is probable cause to believe that                                                               
someone has committed  any of these crimes,  the protections that                                                               
currently exist  would be taken  away.  He offered  that although                                                               
the  language proposed  in Section  5 refers  to a  more discrete                                                               
list and is  preferable to simply saying "a  serious offense", he                                                               
would also  like to see  the insertion  of "been indicted  for or                                                               
convicted of" after "has" on page  4, line 25.  He indicated that                                                               
he  does not  mind if  the  new language  does not  refer to  the                                                               
arrest stage, since arrests are  sometimes "charged high or there                                                               
might not be proof to bear  it out."  Whereas with an indictment,                                                               
he  noted, at  least  it's  gone through  a  modicum of  process:                                                               
"it's  a felony,  a  grand  jury's heard  it,  there's been  some                                                               
vetting."                                                                                                                       
                                                                                                                                
REPRESENTATIVE  McGUIRE said  she  would consider  Representative                                                               
Berkowitz's suggestion  to be a  friendly amendment,  adding that                                                               
it would make the bill stronger.                                                                                                
                                                                                                                                
Number 1597                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  made a motion  to adopt Amendment  1 on                                                               
page 4,  line 25:   After  "has" delete  "a conviction  for", and                                                               
insert  "been indicted  for or  convicted  of".   There being  no                                                               
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
REPRESENTATIVE BERKOWITZ  then noted  that the  task force  to be                                                               
established  by  HB  180  appears  to be  focusing  on  a  fairly                                                               
discrete question.   He said:   "I  was wondering if  there's any                                                               
other research  on whether sufficient criminal  background checks                                                               
exist, and have we  done any budget audits?  Are  there a rash of                                                               
complaints?  I was sort  of wondering what the empirical evidence                                                               
is, that we're starting with today."                                                                                            
                                                                                                                                
REPRESENTATIVE McGUIRE replied that  her staff has done extensive                                                               
research regarding  what other states  have done, and  that there                                                               
have  not been  any budget  and audit  reports done  because this                                                               
isn't currently  an area  that requires  licensure.   She offered                                                               
that establishing  the task force  involves making  a fundamental                                                               
policy  change  regarding  whether  to step  into  an  area  that                                                               
doesn't currently require licensure, such  as when a parent takes                                                               
a  child and  puts him/her  under  the direct  supervision of  an                                                               
adult in a volunteer situation.  She  said that there is a lot of                                                               
evidence  showing that  there are  problems  in this  area.   She                                                               
offered  that such  evidence "comes  from the  community," adding                                                               
that  she  has received  over  100  e-mails  from people  in  the                                                               
community  whose  children  have been  victimized,  sometimes  by                                                               
people who  are prior  offenders.   At issue,  she said,  is that                                                               
sexual predators tend  to seek out opportunities  where they have                                                               
direct contact and control over children.                                                                                       
                                                                                                                                
REPRESENTATIVE BERKOWITZ noted  that [the task force]  has a zero                                                               
fiscal note,  adding that to  "make things go away,"  it requires                                                               
an act  of legislative legerdemain.   He  asked how that  came to                                                               
pass.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  McGUIRE  reiterated  that she,  in  collaboration                                                               
with the department, has decided to use existing resources.                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ said  he  has a  concern regarding  the                                                               
constitutionality  of the  first  sentence in  subsection (b)  of                                                               
Section 14,  located on page  9, lines 2  and 3.   He elaborated:                                                               
"In essence,  we are passing  an act of specific  legislation for                                                               
an individual -  that would be the chair of  the [Joint Committee                                                               
on Administrative Regulation Review]."                                                                                          
                                                                                                                                
REPRESENTATIVE McGUIRE  offered that instead, the  language could                                                               
simply say, "the task force shall  be appointed by the Speaker of                                                               
the House [of Representatives]."                                                                                                
                                                                                                                                
Number 1785                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment [3]:                                                                  
                                                                                                                                
     To delete  the line beginning "The"  and ending "force"                                                                    
     on   page  9   [lines  2   and  3].     And   then  the                                                                    
     [commensurate] change would  be on line 4:   instead of                                                                    
     "two additional members", it  would read "three members                                                                    
     of the House".                                                                                                             
                                                                                                                                
REPRESENTATIVE  McGUIRE offered  an amendment  to Amendment  [3]:                                                               
"one of which who will chair".                                                                                                  
                                                                                                                                
REPRESENTATIVE JAMES asked  [of the report], "Is it  going to get                                                               
done this summer?"                                                                                                              
                                                                                                                                
REPRESENTATIVE  McGUIRE said  that  [lines 18  and 19]  stipulate                                                               
that the recommendations will be  presented to the legislature in                                                               
a written report  by January 21, 2003.  She  said she would agree                                                               
to an amendment changing the date to February 21, 2003.                                                                         
                                                                                                                                
Number 1862                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER made a motion  to adopt Amendment 2, on page                                                               
9, line 19:  Delete "January" and insert "February".                                                                            
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked:   "What  happens to  legislative                                                               
members  who  are  on  the   [task  force]  once  there's  a  new                                                               
legislature?"                                                                                                                   
                                                                                                                                
CHAIR ROKEBERG noted that the  change being discussed pertains to                                                               
when the report is due.                                                                                                         
                                                                                                                                
REPRESENTATIVE  JAMES suggested  that  perhaps those  legislators                                                               
would become public members.                                                                                                    
                                                                                                                                
REPRESENTATIVE BERKOWITZ questioned that possibility.                                                                           
                                                                                                                                
REPRESENTATIVE McGUIRE  noted that  HB 180 does  not specifically                                                               
require a  legislator to present the  report.  She said  that she                                                               
envisions that the task force will  be doing the bulk of its work                                                               
during the interim.                                                                                                             
                                                                                                                                
Number 1910                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG noted  that there were no  objections to Amendment                                                               
2.  Therefore, Amendment 2 was adopted.                                                                                         
                                                                                                                                
Number 1946                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  restated his motion to  adopt Amendment                                                               
3:   After deleting all of  the first sentence in  subsection (b)                                                               
on  page  9, it  should  read:   "The  speaker  of  the House  of                                                               
Representatives  shall  appoint three  members  of  the House  as                                                               
voting members, one of whom shall serve as chair".                                                                              
                                                                                                                                
REPRESENTATIVE  JAMES said  she has  concern with  that amendment                                                               
because  there  will  be  three   Representatives  and  only  two                                                               
Senators, which doesn't seem balanced.                                                                                          
                                                                                                                                
REPRESENTATIVE BERKOWITZ  indicated that the language  also ought                                                               
to stipulate that a member of the minority be on the task force.                                                                
                                                                                                                                
CHAIR ROKEBERG noted that that is typically the case.                                                                           
                                                                                                                                
REPRESENTATIVE McGUIRE added that that is her intention as well.                                                                
                                                                                                                                
Number 2025                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  restated Amendment 3,  and noted that  there were                                                               
no  objections  to  the  adoption  of  Amendment  3.    Therefore                                                               
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
Number 2040                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES made a motion  to adopt Amendment 4, to have                                                               
only two members of the House appointed to the task force.                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ objected.                                                                                              
                                                                                                                                
REPRESENTATIVE McGUIRE explained that  originally, the task force                                                               
was set up  to have an even number of  voting members; because of                                                               
concerns expressed  in another  committee, however,  the language                                                               
was changed to  allow for an odd number of  voting members - five                                                               
legislative members and four public members.                                                                                    
                                                                                                                                
Number 2118                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES, after  some discussion  regarding possible                                                               
membership makeup, made a motion  to adopt Amendment 4, which she                                                               
restated  as  providing  that  the Speaker  of  the  House  shall                                                               
appoint two  members from  the House, that  the President  of the                                                               
Senate  shall appoint  two members  from the  Senate, that  there                                                               
shall  be five  public members,  and  that the  task force  shall                                                               
appoint its own chair.                                                                                                          
                                                                                                                                
Number 2144                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG made a motion to  amend Amendment 4 such that each                                                               
body  of the  legislature  appoint [a  member  from the  majority                                                               
caucus and  a member  from the  minority caucus]  for a  total of                                                               
four  members.    There  being no  objection,  the  amendment  to                                                               
Amendment 4 was adopted.                                                                                                        
                                                                                                                                
REPRESENTATIVE  JAMES,  for  clarification,  indicated  that  the                                                               
Speaker  of the  House and  the  President of  the Senate  shall,                                                               
together, appoint the public members.                                                                                           
                                                                                                                                
Number 2193                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG noted  that there were no  objections to Amendment                                                               
4, as amended.  Therefore, Amendment 4, as amended, was adopted.                                                                
                                                                                                                                
[For the benefit of the reader,  the end result is that Amendment                                                               
3 merely deletes the first sentence  of subsection (b) on page 9,                                                               
and Amendment  4, as  amended, addresses  the appointment  to and                                                               
the composition of the task force.]                                                                                             
                                                                                                                                
CHAIR ROKEBERG asked whether HB  180 only applies to licensure of                                                               
new facilities.                                                                                                                 
                                                                                                                                
MS.  GIBBENS  indicated  that  HB   180  addresses  licensure  of                                                               
existing facilities,  noting that currently such  facilities have                                                               
to go  through a licensure  procedure.   The only thing  new, she                                                               
remarked,  is the  addition of  boarding schools,  which are  not                                                               
currently explicitly addressed in statute.                                                                                      
                                                                                                                                
Number 2223                                                                                                                     
                                                                                                                                
JACK  F.  BOWEN, Alaska  Fast  Pitch  Softball Association  (ph),                                                               
testified  via teleconference.    He said  that his  organization                                                               
requires that a  background check be run on  individuals prior to                                                               
their being  allowed to work with  youth.  He opined  that HB 180                                                               
is  a step  in the  right  direction, and  that one  of the  best                                                               
things about  it is the formation  of the task force,  which will                                                               
be  able  to present  information  to  the legislature  regarding                                                               
other areas  that need to be  looked at with regard  to licensing                                                               
and background checks.                                                                                                          
                                                                                                                                
REPRESENTATIVE  JAMES commented  that someday,  background checks                                                               
may have  to be performed  on everyone  who works with  or around                                                               
children, although  such a requirement  may not  necessarily need                                                               
to be legislated.                                                                                                               
                                                                                                                                
CHAIR ROKEBERG closed the public hearing on HB 180.                                                                             
                                                                                                                                
REPRESENTATIVE MEYER  said he  agrees with  Representative James:                                                               
everyone  who  works  in  the  field of  daycare  should  have  a                                                               
background check.                                                                                                               
                                                                                                                                
REPRESENTATIVE JAMES said that it is  not so much that a person's                                                               
criminal  history would  preclude  him/her from  working in  this                                                               
field,  as it  is that  people should  be made  aware of  what an                                                               
individual's history is.                                                                                                        
                                                                                                                                
MS. GIBBENS,  in response to a  question, noted that HB  180 does                                                               
not apply to private daycare  centers, although the Department of                                                               
Education and Early Development  has extensive, existing statutes                                                               
that address background checks for licensed child care centers.                                                                 
                                                                                                                                
REPRESENTATIVE McGUIRE, in response to  a question, said that she                                                               
is not familiar with those  particular statutes, but posited that                                                               
they  are probably  similar to  DHSS's statutes  regarding crimes                                                               
that  disqualify a  person from  working in  a given  field.   To                                                               
clarify, she  reiterated that via HB  180:  "We are  updating the                                                               
licensing requirements  for foster homes, residential  child care                                                               
facilities,  semi-secure   residential  child   care  facilities,                                                               
secure   residential   psychiatric   treatment   centers,   child                                                               
placement agencies, [and] maternity homes."                                                                                     
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 2:34 p.m. to 2:35 p.m.                                                                    
                                                                                                                                
Number 2372                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER  moved to report CSHB  180(HES), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying zero  fiscal note.   There being no  objection, CSHB
180(JUD)  was  reported  out  of  the  House  Judiciary  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 2:36 p.m. to 2:37 p.m.                                                                    
                                                                                                                                
HB 510 - COMMERCIAL MOTOR VEHICLES:REGULATIONS                                                                                
                                                                                                                                
TAPE 02-53, SIDE B                                                                                                              
Number 2380                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  BILL NO.  510, "An  Act relating  to the  regulation of                                                               
commercial  motor  vehicles  to  avoid  loss  or  withholding  of                                                               
federal highway  money, and  to out-of-service  orders concerning                                                               
commercial motor  vehicles; amending  Rule 43.1, Alaska  Rules of                                                               
Administration; and providing for an effective date."                                                                           
                                                                                                                                
Number 2375                                                                                                                     
                                                                                                                                
MIKE  KRIEBER,   Staff  to  Representative  Vic   Kohring,  House                                                               
Transportation  Standing  Committee,  Alaska  State  Legislature,                                                               
said,  on  behalf  of  the   sponsor,  the  House  Transportation                                                               
Standing Committee (HTRA), that  the Department of Transportation                                                               
&  Public Facilities  (DOT&PF) requested  the introduction  of HB
510.  He indicated that HB  510 is intended to complete Executive                                                               
Order 98  by transferring  from the  Department of  Public Safety                                                               
(DPS)  to [the  DOT&PF] the  authority to  promulgate regulations                                                               
pertaining to the transportation of hazardous materials.                                                                        
                                                                                                                                
Number 2324                                                                                                                     
                                                                                                                                
AVES  D.  THOMPSON,  Director,   Anchorage  Office,  Division  of                                                               
Measurement   Standards   &   Commercial   Vehicle   Enforcement,                                                               
Department  of  Transportation   &  Public  Facilities  (DOT&PF),                                                               
testified via teleconference.  He said:                                                                                         
                                                                                                                                
     We're the folks that  operate the weigh stations, issue                                                                    
     permits, conduct driver/vehicle  safety inspections, et                                                                    
     cetera.    As  Mr.  Krieber  mentioned,  [HB  510],  as                                                                    
     proposed,  completes the  consolidation of  truck size,                                                                    
     weight, ... safety,  and permitting regulatory programs                                                                    
     that  was  started  with  Executive  Order  98  at  the                                                                    
     beginning  of  fiscal  year  [FY]  98.    Most  of  the                                                                    
     authority  to  effectively  operate  the  truck,  size,                                                                    
     weight, ...  safety, and permitting programs  was given                                                                    
     at  the  time to  the  department.   The  authority  to                                                                    
     promulgate   regulations   for  driver/vehicle   safety                                                                    
     requirements and hazardous  materials transport was not                                                                    
     transferred and currently resides  in the Department of                                                                    
     Public  Safety.     House   Bill  510   transfers  that                                                                    
     authority to the [DOT&PF]....                                                                                              
                                                                                                                                
     The  hazardous  materials  transport  regulations  deal                                                                    
     with    notification,     movement,    labeling,    and                                                                    
     documentation  of hazardous  materials loads.   Federal                                                                    
     law requires  that the  state commercial  motor vehicle                                                                    
     safety regulations  be no  less stringent  than federal                                                                    
     law  or  regulations;  under  49  U.S.C.  31141,  state                                                                    
     commercial motor  vehicle regulations are  preempted if                                                                    
     the  Secretary  of   Transportation  finds  that  state                                                                    
     commercial   motor   vehicle   regulations   are   less                                                                    
     stringent.    In  the past,  Alaska  has  avoided  that                                                                    
     result  by  incorporating,  by reference,  the  federal                                                                    
     motor   carrier  safety   regulations,  which   provide                                                                    
     equipment  standards, working  conditions for  drivers,                                                                    
     and  vehicle inspection  standards.   Federal law  also                                                                    
     requires    that    hazardous    materials    transport                                                                    
     regulations  be compatible  with federal  law.   Again,                                                                    
     Alaska  has  avoided  preemption by  incorporating,  by                                                                    
     reference,   the   federal  motor   carrier   hazardous                                                                    
     materials transport regulations.                                                                                           
                                                                                                                                
Number 2235                                                                                                                     
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     Alaska has  not received any formal  sanctions from the                                                                    
     Federal Motor Carrier  Safety Administration [FMCSA] on                                                                    
     our  currently  outdated driver/vehicle  and  hazardous                                                                    
     materials transport regulations.   At the present time,                                                                    
     Alaska's regulations  in this area ...  incorporate, by                                                                    
     reference, the  federal regulations as they  existed in                                                                    
     1995.    We have  new  regulation  drafts prepared  and                                                                    
     ready to  go through  the adoption  process as  soon as                                                                    
     this legislative change is effective.                                                                                      
                                                                                                                                
     In  summary  ..., passage  of  [HB  510] completes  the                                                                    
     transfer  of the  regulatory authority  over commercial                                                                    
     ...  motor vehicles  to  DOT&PF.   It  is  in the  best                                                                    
     interest of  the state, and the  trucking industry, for                                                                    
     this transfer to occur,  because the people responsible                                                                    
     for  the  adoption  of  the  commercial  motor  vehicle                                                                    
     safety  and hazardous  materials transport  regulations                                                                    
     will  also  be  enforcing  the  standards.    With  the                                                                    
     changes made  through [HB  510], the  trucking industry                                                                    
     can  realize the  objective of  "one-stop shopping"  in                                                                    
     terms of commercial vehicle operations.                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL asked if, in  adopting HB 510, the federal                                                               
laws would still be adopted by reference.                                                                                       
                                                                                                                                
MR. THOMPSON said yes.                                                                                                          
                                                                                                                                
REPRESENTATIVE  COGHILL asked  whether, via  adoption of  HB 510,                                                               
the state's regulations  will become too rigid  to accept changes                                                               
in the federal regulations.                                                                                                     
                                                                                                                                
MR. THOMPSON replied:                                                                                                           
                                                                                                                                
     The problem  here is  that the  [DOT&PF] does  not have                                                                    
     the authority to promulgate  these regulations, and the                                                                    
     [DPS]  had  promulgated  the   set  that  is  currently                                                                    
     enforced.   And when ...  we assumed that  in Executive                                                                    
     Order 98  that that authority  had come along  with it,                                                                    
     when we went to adopt  the later version of the federal                                                                    
     motor carrier  safety regulations,  we learned  that we                                                                    
     in fact  did not have  the authority.  What  this piece                                                                    
     of legislation does is to correct that deficiency.                                                                         
                                                                                                                                
REPRESENTATIVE COGHILL  surmised, then, that currently  there are                                                               
federal  regulations  and  the   state  will  be  adopting  those                                                               
regulations into state statute.                                                                                                 
                                                                                                                                
MR.  THOMPSON  said that  is  correct,  with some  modifications,                                                               
though.                                                                                                                         
                                                                                                                                
Number 2133                                                                                                                     
                                                                                                                                
FRANK   DILLON,  Executive   Vice   President,  Alaska   Trucking                                                               
Association, Inc., testified via  teleconference in support of HB
510.  He  said that HB 510 is truly  a housekeeping mechanism; it                                                               
is truly something  that should have been done  with the exercise                                                               
of Executive Order  98, and it only affects a  very small portion                                                               
of  trucks in  Alaska.    The nature  of  the freight  determines                                                               
whether  a  truck  is  involved in  interstate  commerce.    Most                                                               
trucking  activity  involves  freight  that arrives  by  ship  or                                                               
barge,  or comes  up  the highway;  this  freight, therefore,  is                                                               
already covered  by the federal  regulations as  revised October,                                                               
2001.   Thus most trucking  companies are already  complying with                                                               
regulations that  are as stringent  as state regulations  will be                                                               
once  they  are  adopted.    He  noted,  however,  that  a  small                                                               
percentage of  drivers might make  the argument that  the federal                                                               
regulations that  are more stringent,  in particular  those found                                                               
on  page 2  of HB  510 regarding  the consumption  of alcohol  or                                                               
other  substances, have  never been  adopted  by the  state.   He                                                               
urged members to move quickly on this issue.                                                                                    
                                                                                                                                
MR. DILLON, in response to  a question, noted that the provisions                                                               
regarding alcohol and other substances,  found in Section 2 of HB
510, have changed  substantially in the federal  code since 1995,                                                               
and although many provisions have  been adopted via reference, HB
510 will  allow for the  adoption of state regulations  that will                                                               
be  more  in tune  with  federal  regulations, particularly  with                                                               
regard to  hazardous materials  issues.   In response  to another                                                               
question,  he  indicated  his belief  that  provisions  regarding                                                               
commercial  motor vehicle  impairment  are  currently located  in                                                               
Title  28.   He added  that while  it is  an offense  to drive  a                                                               
commercial vehicle  with a breath alcohol  concentration (BAC) of                                                               
.04, the  actual dispatch of a  driver is prohibited if  there is                                                               
even a hint of alcohol on the driver's breath.                                                                                  
                                                                                                                                
REPRESENTATIVE JAMES  asked Mr. Dillon whether  he is comfortable                                                               
with  the  regulations  that  will be  promulgated  once  HB  510                                                               
becomes law.                                                                                                                    
                                                                                                                                
MR. DILLON said he is  comfortable with what will be promulgated,                                                               
and  confident in  the public  process should  there be  anything                                                               
that still needs  to be addressed once the  regulations are ready                                                               
for public  comment.  He added  that his organization has  a very                                                               
close  working relationship  with  the [DOT&PF],  and has  pushed                                                               
very strongly  for the  tightest safety  regulations that  can be                                                               
provided for under  the law, and those currently  are the federal                                                               
standards.                                                                                                                      
                                                                                                                                
Number 1943                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES moved  to report  HB 510  out of  committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
note.                                                                                                                           
                                                                                                                                
REPRESENTATIVE BERKOWITZ commented:   "I've been sitting in these                                                               
chambers  for  a  long  time,  and it  always  befuddles  me  how                                                               
Representative Kohring  can move to adopt  federal regulations; I                                                               
thought  that was  incompatible with  his ten-point  plan of  the                                                               
universe."                                                                                                                      
                                                                                                                                
Number 1906                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  noted  that  there were  no  objections  to  the                                                               
motion.  Therefore, HB 510  was reported from the House Judiciary                                                               
Standing Committee.                                                                                                             
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 2:47 p.m. to 2:50 p.m.                                                                    
                                                                                                                                
HB 246 - OMNIBUS INSURANCE BILL                                                                                               
                                                                                                                                
Number 1900                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  BILL NO.  246, "An Act  relating to  confidentiality of                                                               
records  and  to cease  and  desist  orders  of the  division  of                                                               
insurance,  to  insurance  company investments,  to  unauthorized                                                               
insurers,  to surplus  lines insurance,  to health  insurance, to                                                               
life  insurance,   to  annuity  insurance,  to   consumer  credit                                                               
insurance,  to  title  insurance,  and to  hospital  and  medical                                                               
service  corporations;  and  providing for  an  effective  date."                                                               
[Before the committee was CSHB 246(L&C).]                                                                                       
                                                                                                                                
Number 1889                                                                                                                     
                                                                                                                                
AMY  ERICKSON,  Staff  to Representative  Lisa  Murkowski,  House                                                               
Labor and Commerce Standing  Committee, Alaska State Legislature,                                                               
said,  on behalf  of the  sponsor, the  House Labor  and Commerce                                                               
Standing   Committee,  that   HB   246   makes  corrections   and                                                               
clarifications to the insurance statutes.  She elaborated:                                                                      
                                                                                                                                
     The main areas addressed  are:  regulatory structure of                                                                    
     multiple   [employer]  welfare   arrangements  [MEWAs];                                                                    
     confidentiality of  records; late payments  for premium                                                                    
     taxes;   annual  fees   to   operate  joint   insurance                                                                    
     arrangements;  revisions to  property-casualty guaranty                                                                    
     fund  assessments; and  stop-loss insurance  standards.                                                                    
     This is  non-controversial; we've had no  opposition in                                                                    
     the process, and the Division  of Insurance can testify                                                                    
     to that as well.                                                                                                           
                                                                                                                                
CHAIR  ROKEBERG  noted  that  there   is  a  proposed  amendment,                                                               
hereafter known as Amendment 1,  which read [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     Page 9, Line 6:                                                                                                            
     Insert a new bill section to read:                                                                                         
          *SEC. 23. AS 21.27.330(b) is amended to read:                                                                       
               (b) If a licensee that is a firm transacts                                                                       
     business at more  than one place of  business, [IN THIS                                                                    
     STATE], the  licensee shall pay  a license fee  or each                                                                    
     place  of  business  that transacts  business  in  this                                                                
     state or relative to a  subject resident, located or to                                                                
     be performed in this state.                                                                                            
                                                                                                                                
Number 1849                                                                                                                     
                                                                                                                                
KATIE  CAMPBELL,   Actuary  L/H,  Central  Office,   Division  of                                                               
Insurance,  Department   of  Community  &   Economic  Development                                                               
(DCED),  said that  [Amendment 1]  corrects a  drafting error  in                                                               
legislation passed  last year, clarifying that  any branch office                                                               
that  is actually  transacting  business in  Alaska  shall pay  a                                                               
licensing fee.                                                                                                                  
                                                                                                                                
CHAIR ROKEBERG noted  that [Amendment 1] will  affect the statute                                                               
related to the Gramm-Leach-Bliley Act (GLBA).                                                                                   
                                                                                                                                
MS.  CAMPBELL  confirmed  this,  adding  that  last  year's  bill                                                               
changed  the provision  so that  instead of  every single  branch                                                               
location being  licensed, it would  just be the main  office that                                                               
receives a license, and then the  branch offices would pay a fee.                                                               
The intent  was to not  change the  fee structure, but  the words                                                               
"in  this state"  were mistakenly  added, and  this created  some                                                               
interpretation problems; [Amendment 1] removes that language.                                                                   
                                                                                                                                
CHAIR ROKEBERG  asked Ms.  Campbell to  explain to  the committee                                                               
what a MEWA  is and why there is  substantial language pertaining                                                               
to MEWAs.                                                                                                                       
                                                                                                                                
MS. CAMPBELL said:                                                                                                              
                                                                                                                                
     A multiple  employer welfare arrangement [MEWA]  is ...                                                                    
     defined  under ...  federal ERISA  [Employee Retirement                                                                    
     and  Income  Security  Act  of  1974]  laws,  and  it's                                                                    
     basically  [when]   two  or  more  employers   can  get                                                                    
     together and  form a  pool for  purposes of  issuing or                                                                    
     offering health insurance  coverage to their employees.                                                                    
     And  under  our  current  regulatory  structure,  those                                                                    
     [MEWAs]  would   have  to  be  licensed   as  insurance                                                                    
     companies, and  there's quite onerous  standards there:                                                                    
     they'd have to have $2  million in capital and surplus,                                                                    
     which  is  quite   high;  there's  financial  reporting                                                                    
     requirements; reserving  requirements; and  things that                                                                    
     just don't  make sense  for that entity.   And  so what                                                                    
     this bill does is it  sets up an appropriate regulatory                                                                    
     structure  for them,  to encourage  them to  operate in                                                                    
     the state and  provide a little bit  of competition and                                                                    
     ability for the employers to pool for health insurance                                                                     
     purposes.                                                                                                                  
                                                                                                                                
Number 1729                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  asked Ms.  Campbell if  she is  saying that                                                               
these employers come together and become the insurer.                                                                           
                                                                                                                                
MS. CAMPBELL  said that if  [employers] self fund, that  is true;                                                               
they form  these arrangements  and they become  an insurer.   She                                                               
noted  that  some  employers  actually go  out  and  purchase  an                                                               
insurance policy to cover the plan.                                                                                             
                                                                                                                                
REPRESENTATIVE  JAMES  opined that  being  an  insurer is  a  lot                                                               
different  than purchasing  something  from  a licensed  insurer.                                                               
She asked why  these employers that become insurers  don't need a                                                               
license, since [regular] insurers must be licensed.                                                                             
                                                                                                                                
MS. CAMPBELL said:   "They would need a license,  and that's what                                                               
this is setting up; it's a  separate chapter that deals with that                                                               
specific type of business that they're engaging in."                                                                            
                                                                                                                                
CHAIR ROKEBERG  mentioned that  there is a  MEWA being  formed in                                                               
Fairbanks now.  What this is,  he added, is a group of businesses                                                               
getting  together and  becoming, basically,  an underwriter,  and                                                               
"we  would  like  to  be  able to  encourage  that";  thus  these                                                               
provisions  have been  included in  HB 246.   Unfortunately,  the                                                               
division currently  has to  look at  this group as  if it  were a                                                               
full-blown  insurance underwriter,  which  requires meeting  very                                                               
high  solvency  standards.   He  asked  whether the  Division  of                                                               
Insurance is going  to be promulgating regulations, or  if HB 246                                                               
contains the standards.                                                                                                         
                                                                                                                                
MS. CAMPBELL said that the standards would be in the bill.                                                                      
                                                                                                                                
CHAIR  ROKEBERG  mentioned that  the  solvency  standard will  be                                                               
lowered to $200,000, which is  a huge difference, with the intent                                                               
of encouraging  MEWAs to  form and  essentially become  their own                                                               
underwriters.                                                                                                                   
                                                                                                                                
REPRESENTATIVE JAMES  mentioned that she would  like to encourage                                                               
that  as well;  "we have  a real  struggle with  people not  even                                                               
being insured at  all."  However, she remarked,  she doesn't know                                                               
where  the  controls  are for  the  financial  requirements  that                                                               
determine whether  a group can  function as  a MEWA.   She opined                                                               
that there ought to be some  requirement that a group show it can                                                               
follow through with the plan it engages in.                                                                                     
                                                                                                                                
Number 1618                                                                                                                     
                                                                                                                                
MS. CAMPBELL said  that the provisions in proposed  AS 21.85 will                                                               
create  a  new chapter  in  statute  for  MEWAs.   This  proposed                                                               
chapter lays out very  specific requirements regarding licensing,                                                               
financing, certification by an  actuary, stop-loss insurance, and                                                               
financial reporting.                                                                                                            
                                                                                                                                
REPRESENTATIVE  COGHILL  asked   about  the  provision  regarding                                                               
membership  for  MEWAs  in  the  Comprehensive  Health  Insurance                                                               
Association.                                                                                                                    
                                                                                                                                
MS. CAMPBELL  said that that  provision was added because  "if we                                                               
have a separate license for  [MEWAs], they wouldn't be considered                                                               
a member as an insurer, so  we have to mention them separately as                                                               
a member."   Thus MEWAs  would be assessed for  the Comprehensive                                                               
Health Insurance Association as well, she added.                                                                                
                                                                                                                                
CHAIR  ROKEBERG referred  to the  stop-loss insurance  provisions                                                               
[Section  35] located  on page  13.   He asked  why the  entities                                                               
listed therein may  not issue a stop-loss  insurance policy "that                                                               
has  an  annual attachment  point  of  claims incurred  for  each                                                               
individual that is lower than $10,000".                                                                                         
                                                                                                                                
MS. CAMPBELL replied:                                                                                                           
                                                                                                                                
     If you  have a self-funded or  a self-insured employer,                                                                    
     and  they're  taking the  risk  and  paying for  health                                                                    
     claims directly, they  will go out and  buy a stop-loss                                                                    
     insurance  policy  to  cover  excess  losses.    So  if                                                                    
     there's  excessively large  claims,  or [an]  excessive                                                                    
     number  of   claims,  they  have  insurance   to  cover                                                                    
     themselves....   This  is  saying,  for any  particular                                                                    
     individual,  if  they have  a  loss  over $10,000,  the                                                                    
     insurance  would  kick  in   to  protect  the  employer                                                                    
     because  they don't  want to  take as  much risk.   And                                                                    
     when  that drops  down too  low,  you end  up having  a                                                                    
     situation   where  it's   basically  health   insurance                                                                    
     they're purchasing instead of excess loss insurance.                                                                       
                                                                                                                                
Number 1476                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  said:  "But  you could have  a plan ...  that ...                                                               
didn't kick in until [$5,000] or  $10,000, if you offered that as                                                               
part of your menu selection  to employees, for example, where you                                                               
had  a deductible  that was  [$5,000  or $10,000],  to lower  the                                                               
cost."                                                                                                                          
                                                                                                                                
MS. CAMPBELL  indicated that situation  would not be  affected by                                                               
the provision in Section 35.                                                                                                    
                                                                                                                                
CHAIR  ROKEBERG  remarked that  about  the  only way  people  can                                                               
afford to have insurance anymore is to have high deductibles.                                                                   
                                                                                                                                
REPRESENTATIVE JAMES,  referring to lines  18 and 19 of  page 13,                                                               
asked  whether there  are  any  health maintenance  organizations                                                               
licensed under AS 21.86.                                                                                                        
                                                                                                                                
MS. CAMPBELL said  that currently there are none,  but noted that                                                               
the statutory  language is in place  should any ever form  in the                                                               
future.                                                                                                                         
                                                                                                                                
CHAIR  ROKEBERG  remarked  that  so  much  legislation  has  been                                                               
adopted regarding HMOs (health  maintenance organizations), it is                                                               
unlikely that  any ever will form  in Alaska.  He  added, "I wish                                                               
we had an  HMO as another alternate form of  health care services                                                               
in the state."                                                                                                                  
                                                                                                                                
REPRESENTATIVE JAMES indicated  that she is not in  favor of HMOs                                                               
because of their behavior.                                                                                                      
                                                                                                                                
CHAIR ROKEBERG said:                                                                                                            
                                                                                                                                
     They're ...  not all  bad guys.   Let's blame  the U.S.                                                                    
     Congress  for our  health  care  problem, because  they                                                                    
     won't reimburse  Medicare and Medicaid to  a reasonable                                                                    
     point, and that's what's called  the phantom health tax                                                                    
     in  this  country,  and  that's  the  problem  in  this                                                                    
     country; it's not  so much the HMOs or  the health care                                                                    
     providers - it's our politicians.                                                                                          
                                                                                                                                
Number 1352                                                                                                                     
                                                                                                                                
BRUCE GALE, Employee Benefit Consultant,  Willis of Alaska, Inc.,                                                               
testified via teleconference.  He said:                                                                                         
                                                                                                                                
     I would  like to  talk to  the committee  about, first,                                                                    
     the provisions concerning  stop-loss insurance, on page                                                                    
     13.    And I  believe  the  aggregate attachment  point                                                                    
     requirements  in  today's  hard  stop-loss  market  are                                                                    
     somewhat unrealistic.   For the past two  years, it has                                                                    
     been almost impossible to  find an aggregate attachment                                                                    
     point  of 120  percent, for  any large  employer.   The                                                                    
     lowest we have  been able to obtain  in the marketplace                                                                    
     is 120 percent.  And  I notice that [paragraph (3)] for                                                                    
     a large employer is lower  than 110 percent of expected                                                                    
     claims.   We have not  been able to obtain  those kinds                                                                    
     of  aggregate  attachment  points for  the  last  three                                                                    
     years in the stop-loss market.                                                                                             
                                                                                                                                
     The  number of  carriers  that  are offering  stop-loss                                                                    
     insurance,  both specific  and aggregate  - nationwide,                                                                    
     not  just in  the state  of  Alaska -  to employers  of                                                                    
     under  1,000 lives,  has  shrunk  considerably.   Those                                                                    
     insurance   carriers   that  are   offering   stop-loss                                                                    
     insurance to these types of  MEWA arrangements are very                                                                    
     few.   Right now I  believe we have two  alternatives -                                                                    
     ...  possibly three  -  in the  state,  where we  could                                                                    
     approach  them   for  such   insurance  coverage.     I                                                                    
     appreciate that  the legislature  or the  [Division] of                                                                    
     Insurance is  trying correct  some deficiencies  ... in                                                                    
     earlier drafted legislation.                                                                                               
                                                                                                                                
     I  would like  to remind  the committee  that there  is                                                                    
     current Alaskan  insurance law that allows  for banding                                                                    
     together of  various groups  or employers  strictly for                                                                    
     the purpose  of insurance  to be  outside the  law, ...                                                                    
     [but]  there must  be some  other commonality  in those                                                                    
     groups  - an  association, a  professional association,                                                                    
     et cetera.  I would also  like to state that in most of                                                                    
     the  MEWA arrangements  that I  have been  involved in,                                                                    
     these  arrangements are  operated  through a  501(c)(9)                                                                    
     trust,  which  is  a tax-exempt  trust  under  the  IRS                                                                    
     [Internal Revenue  Service] regulations.   These trusts                                                                    
     are governed by a board of  trustees that are held to a                                                                    
     fiduciary requirement -  or standard - by  ERISA.  They                                                                    
     purchase ERISA-required bonding.   They are required to                                                                    
     provide an annual statement -  certified statement - by                                                                    
     an auditor.  They hire, as  a matter of course, a trust                                                                    
     auditor, a trust attorney, and a trust consultant.                                                                         
                                                                                                                                
Number 1190                                                                                                                     
                                                                                                                                
MR. GALE referred to proposed SEC. 21.85.060 found on page 30,                                                                  
line 29, which read in part:                                                                                                    
                                                                                                                                
     Investments.   A multiple employer  welfare arrangement                                                                    
     shall maintain an  amount at least equal  to 85 percent                                                                    
     of  net unpaid  claim  liability in  ...  cash and  ...                                                                    
     equivalents;  ...  fully  insured  portion  of  a  bank                                                                    
     deposit  when the  insurance is  provided by  a solvent                                                                    
     agency  of the  United  States government  ...; a  bank                                                                    
     certificate of deposit ...; ... savings account...."                                                                       
                                                                                                                                
MR. GALE said,  "I believe what we're talking about  here is what                                                               
in  the industry  is known  as 'incurred  but no  reported claims                                                               
liability (IBNR),'"  defined as  those claims that  were incurred                                                               
prior to the termination date  of the coverage, but presented for                                                               
payment  afterwards;  those  claims  would  be  covered  by  this                                                               
reserving.   Referring to  line 27  of page  30, which  says, "30                                                               
percent of unpaid claim liability", he stated:                                                                                  
                                                                                                                                
     I don't quite understand what  that means.  I believe a                                                                    
     sufficient IBNR  reserve should  be in  the area  of 25                                                                    
     percent of  annual health  claims.   And even  that, in                                                                    
     today's   market,   would   be  considered   a   rather                                                                    
     conservative reserving amount, as  today claims tend to                                                                    
     turn much  quicker than they have  in the past.   But I                                                                    
     would  like   some  clarification  of  the   amount  of                                                                    
     reserves  to be  established  and the  85  percent.   I                                                                    
     assume  what  the  [division] would  like  to  have  is                                                                    
     confirmation that,  in fact, these cash  reserves exist                                                                    
     and are available to the trust.                                                                                            
                                                                                                                                
CHAIR ROKEBERG referred back to  the stop-loss provisions on page                                                               
13.   He asked Mr.  Gale if the 120  percent and the  110 percent                                                               
were the  only figures that he  took issue with, and  if he could                                                               
recommend any other percentages instead.                                                                                        
                                                                                                                                
MR. GALE said:  "I would  change those numbers to '125 percent of                                                               
expected claims', for both line 27 and line 31."                                                                                
                                                                                                                                
CHAIR ROKEBERG  requested confirmation that this  suggestion "has                                                               
to  do  with  attainability  and you're  having  difficulty  even                                                               
getting those numbers."                                                                                                         
                                                                                                                                
MR.  GALE  said yes;  "I  would  state  that  that is  almost  an                                                               
impossibility  in   today's  marketplace   as  opposed   to  just                                                               
difficult," he added.                                                                                                           
                                                                                                                                
CHAIR ROKEBERG  asked Mr. Gale  whether he had any  problems with                                                               
the other provisions regarding the "attachment point numbers."                                                                  
                                                                                                                                
Number 1003                                                                                                                     
                                                                                                                                
MR. GALE said:                                                                                                                  
                                                                                                                                
     I would have to work  those out.  Four thousand dollars                                                                    
     seems, just  as a gut  reaction, to be  relatively low.                                                                    
     In  Alaska, our  costs  tend to  run  higher than  most                                                                    
     states in the Lower 48.   The $20,000, of course, would                                                                    
     depend upon the number of  people covered by the trust,                                                                    
     and I would venture to  say that a $20,000 figure might                                                                    
     be adequate  for three  or four people.   And  the cost                                                                    
     associated with  establishing and maintaining a  MEWA -                                                                    
     that's a totally unrealistic figure, in my opinion.                                                                        
                                                                                                                                
CHAIR ROKEBERG asked Mr. Gale to clarify which figure he is                                                                     
referring to regarding MEWAs.                                                                                                   
                                                                                                                                
MR. GALE said:                                                                                                                  
                                                                                                                                
     The figure  on line 29 [of  page 13], the   $20,000 for                                                                    
     [an]  expected claim  figure, which  I  assume is  what                                                                    
     that number refers to.   Mr. Chairman, it appears to me                                                                    
     ... the regulations for the  proposed bill [are] trying                                                                    
     to say  ... that  the aggregate attachment  point would                                                                    
     be $4,000  times the  number of  individuals -  my copy                                                                    
     has a  typo; I assume  that's "of", not "if"  - covered                                                                    
     under  the health  benefit plan.   In  other words,  we                                                                    
     would have a hard-dollar  figure for the maximum claims                                                                    
     paid  per individual  per year  under  the policy,  and                                                                    
     that  number would  depend entirely  upon the  benefits                                                                    
     that are actually covered by the aggregate insurance.                                                                      
                                                                                                                                
     Some self-funded  clients elect  to cover  only medical                                                                    
     and  prescription  drugs,  while others  would  include                                                                    
     medical, prescription drugs,  dental and vision claims,                                                                    
     so that number would be  suspect.  And I believe, since                                                                    
     that would  result to  less than some  $350 -  $375 per                                                                    
     employee  per  month, that  appears  low  to me.    The                                                                    
     number  shown  under  [subparagraph]  (C)  in  line  29                                                                    
     appears  to   be  an   alternative,  saying   that  the                                                                    
     aggregate  stop-loss attachment  point,  overall for  a                                                                    
     year for  a group,  would be $20,000.   This  again, to                                                                    
     me,  would be  an  extremely low  number, and  probably                                                                    
     there should not  be a reference to  an overall minimum                                                                    
     or maximum because this would  depend entirely upon the                                                                    
     number of people covered by that policy.                                                                                   
                                                                                                                                
Number 0877                                                                                                                     
                                                                                                                                
MS. CAMPBELL, in response, said:                                                                                                
                                                                                                                                
     These are actually minimums, so  if the availability in                                                                    
     the market  is that  you can't  get anything  under 125                                                                    
     [percent], this  is not  saying that  you have  to have                                                                    
     these.   This is  just saying, if  you could  get that,                                                                    
     you can't get any lower  than what is here; it's trying                                                                    
     to  prevent something  from becoming  health insurance.                                                                    
     The other  point is  that these  figures ...  and these                                                                    
     provisions are  based off of a  National Association of                                                                    
     Insurance  Commissioners'  model   law,  and  that  was                                                                    
     highly debated on the national  level, and there was an                                                                    
     actuarial firm  that they  had hired  to look  at these                                                                    
     limitations  to make  sure that  they were  reasonable.                                                                    
     And when you have, in  the first part, a small employer                                                                    
     - ... someone  with 2 to 50 employees -  you could have                                                                    
     a small group  out there with 2 employees.   And that's                                                                    
     why  there's a  $20,000  minimum,  because it  wouldn't                                                                    
     make any sense to say $4,000  times 2 and say you could                                                                    
     have [an]  $8,000 aggregate stop-loss  limit.   So, ...                                                                    
     it's the [lower] of the greater of all of those.                                                                           
                                                                                                                                
CHAIR ROKEBERG asked Ms. Campbell to comment on Mr. Gale's                                                                      
remarks regarding pages 30 and 31.                                                                                              
                                                                                                                                
MS. CAMPBELL said:                                                                                                              
                                                                                                                                
     In  [regard]   to  the  30  percent   of  unpaid  claim                                                                    
     liability in the minimum reserving  section on page 30,                                                                    
     line  27, there's  ... an  "or"  there to  allow for  a                                                                    
     different amount  if it's certified by  an actuary that                                                                    
     that's the appropriate reserve level.   So we felt like                                                                    
     we've covered that; that 30  percent may be ... perhaps                                                                    
     more  conservative  than  25  [percent],  but  if  it's                                                                    
     certified  by an  actuary that  you can  have something                                                                    
     less than  that and  that's appropriate, then  it would                                                                    
     be okay.   The investment  section is  basically saying                                                                    
     what types  of securities  you have  to put  your money                                                                    
     in,  so that  you can  feel safe  that you're  actually                                                                    
     going to have the money if ... and when you need it.                                                                       
                                                                                                                                
Number 0731                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ,  referring   to  the  minimum  reserve                                                               
provision, noted that  reserves must equal the  greater of either                                                               
30  percent  of   the  unpaid  claim  liability   or  the  amount                                                               
recommended and certified by a qualified actuary.                                                                               
                                                                                                                                
MS.  CAMPBELL indicated  that  she stands  corrected;  it is  the                                                               
greater of those two amounts, rather than the lower.                                                                            
                                                                                                                                
CHAIR ROKEBERG suggested changing the  amount [on line 27 of page                                                               
30] to  25 percent,  as recommended  by Mr. Gale.   He  asked Ms.                                                               
Campbell to comment.                                                                                                            
                                                                                                                                
REPRESENTATIVE  BERKOWITZ noted  that  this recommendation  comes                                                               
from only one person.                                                                                                           
                                                                                                                                
MS.  CAMPBELL said  that  according to  her  understanding, on  a                                                               
nationwide basis, a lot of  MEWAs have struggled financially, and                                                               
that  is why  the states  have been  given specific  authority to                                                               
regulate them; it's because they  have gone under and left people                                                               
without health  insurance and with  unpaid claims.   The reserves                                                               
are intended as a safety valve,  she explained, to make sure that                                                               
MEWAs have the money necessary to pay claims.                                                                                   
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  noted,  "It  seems to  me  [that]  the                                                               
consequence ... of not having ...  [reserves] at all, is that ...                                                               
then you run the risk of ... not having any insurance at all."                                                                  
                                                                                                                                
CHAIR ROKEBERG  asked:   "Why not  allow for  a small  section of                                                               
equity investments in their whole portfolio?"                                                                                   
                                                                                                                                
MS.  CAMPBELL  pointed  out that  proposed  Sec.  21.85.060  only                                                               
specifies  how  85  percent  of net  unpaid  claim  liability  is                                                               
invested;  the  other  15  percent of  that  liability  could  be                                                               
invested in other ways.                                                                                                         
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked why is  it 85 percent?  Where does                                                               
this [number] come from?                                                                                                        
                                                                                                                                
MS. CAMPBELL said,  "Much of this is based off  of existing state                                                               
laws that have  MEWA laws on the books, and  that provision - ...                                                               
that percentage -  came from Montana; ... they've  had ... [MEWA]                                                               
laws on  their books  for some  time and  haven't had  any issues                                                               
with it."                                                                                                                       
                                                                                                                                
CHAIR ROKEBERG  asked if the  division stipulates  the percentage                                                               
of investment  and the method  of investment for  other regulated                                                               
insurers.                                                                                                                       
                                                                                                                                
Number 0557                                                                                                                     
                                                                                                                                
MS.  CAMPBELL said,  "Yes,  we do;  in fact,  ...  last year  the                                                               
legislature  passed HB  184, and  then  regulations were  adopted                                                               
specifically  to  insurance  company  investments,  telling  them                                                               
where they can put their money."                                                                                                
                                                                                                                                
REPRESENTATIVE  BERKOWITZ said  that  it seem  to  him that  "the                                                               
lower you  go, the more people  get insured; ... the  lower these                                                               
numbers are, the more MEWAs could exist."                                                                                       
                                                                                                                                
MS.  CAMPBELL asked  Representative  Berkowitz if  he is  talking                                                               
about the reserving levels.                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ said yes.                                                                                              
                                                                                                                                
MS. CAMPBELL replied:  "It's just  the lower amount of money they                                                               
actually have to have sitting there  to pay claims when they need                                                               
it.  I  don't know that that means that  more people could afford                                                               
it."                                                                                                                            
                                                                                                                                
CHAIR ROKEBERG said:   "This is the degree [of]  risk you want to                                                               
have on ... the retained capital base."                                                                                         
                                                                                                                                
REPRESENTATIVE  BERKOWITZ offered  that he  did not  know whether                                                               
"this is  as low [or  as high] as you  can prudently go,  for the                                                               
degree of risk."                                                                                                                
                                                                                                                                
CHAIR ROKEBERG indicated that he  is surmising from the testimony                                                               
that the  department is taking  a conservative stance  because of                                                               
the failure rate of the MEWAs.   On the other hand, he added, "we                                                               
want to try to encourage them too."                                                                                             
                                                                                                                                
Number 0420                                                                                                                     
                                                                                                                                
REPRESENTATIVES  BERKOWITZ  and  JAMES  made a  motion  to  adopt                                                               
Amendment 1.  There being no objection, Amendment 1 was adopted.                                                                
                                                                                                                                
Number 0413                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  moved to report CSHB  246(L&C), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying zero  fiscal note.   There being no  objection, CSHB
246(JUD)  was   reported  from   the  House   Judiciary  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
HB 460 - ANTITRUST CIVIL COURT ACTIONS                                                                                        
                                                                                                                                
Number 0375                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  last order of  business would                                                               
be  HOUSE  BILL  NO.  460,   "An  Act  relating  to  actions  for                                                               
monopolies and  restraint of trade,  including proof  of damages;                                                               
amending Rule 82, Alaska Rules  of Civil Procedure; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
CHAIR ROKEBERG offered  that HB 460 "allows us  to participate in                                                               
large  ...  'interstate  antitrust  cases' such  as  the  tobacco                                                               
settlement, which we are now prohibited from so doing."                                                                         
                                                                                                                                
Number 0330                                                                                                                     
                                                                                                                                
CLYDE  (ED)  SNIFFEN,  JR.,   Assistant  Attorney  General,  Fair                                                               
Business   Practices   Section,   Civil   Division   (Anchorage),                                                               
Department of Law (DOL), testified via teleconference and said:                                                                 
                                                                                                                                
     This  bill will  allow  the attorney  general to  bring                                                                    
     claims on  behalf of consumers who  make these indirect                                                                    
     purchases.   We've  been directly  involved in  several                                                                    
     lawsuits  where the  inability to  have this  authority                                                                    
     has resulted in the loss  of significant sums of money.                                                                    
     Last year  we lost about $700,000  in a case we  felt -                                                                    
     I'm  involved   with  three   other  cases   right  now                                                                    
     involving  drug  manufacturers -  that  if  we had  the                                                                    
     ability  to   bring  these   types  of   claims,  would                                                                    
     certainly  increase   the  likelihood  that   we  would                                                                    
     recover more money.   So it's something  that's in line                                                                    
     with what other states have  been doing, it's not going                                                                    
     to  increase  the  cost  of  doing  business  from  our                                                                    
     office, and it's something [that]  I think would result                                                                    
     in significant resources for consumers.                                                                                    
                                                                                                                                
Number 0235                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES moved  to report  HB 460  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 460 was reported  from the                                                               
House Judiciary Standing Committee.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 0206                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Judiciary Standing Committee meeting was adjourned at 3:23 p.m.                                                                 

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