Legislature(2001 - 2002)

04/26/2002 03:25 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 26, 2002                                                                                         
                           3:25 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Lisa Murkowski, Chair                                                                                            
Representative Kevin Meyer                                                                                                      
Representative Norman Rokeberg                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Joe Hayes                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Andrew Halcro, Vice Chair                                                                                        
Representative Pete Kott                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 354                                                                                                             
"An Act relating to the prices paid by milk processing plants to                                                                
suppliers of fluid milk."                                                                                                       
                                                                                                                                
     - MOVED SB 354 OUT OF COMMITTEE                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 274(L&C)                                                                                                 
"An Act relating to issuance of a locum tenens permit for a                                                                     
physician or osteopath; and providing for an effective date."                                                                   
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 512                                                                                                              
"An Act relating to cigarette sales; and providing for an                                                                       
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
CONFIRMATION HEARINGS                                                                                                           
                                                                                                                                
     Boards and Commissions                                                                                                   
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: SB 354                                                                                                                  
SHORT TITLE:PRICES PAID BY MILK PROCESSING PLANTS                                                                               
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES                                                                                 
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/27/02     2541       (S)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/27/02     2541       (S)        RES                                                                                          
04/03/02                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
04/03/02                (S)        Moved Out of Committee                                                                       
04/03/02                (S)        MINUTE(RES)                                                                                  
04/03/02                (S)        MINUTE(RES)                                                                                  
04/04/02     2631       (S)        RES RPT 3DP 1NR                                                                              
04/04/02     2631       (S)        DP: TORGERSON, HALFORD,                                                                      
                                   STEVENS;                                                                                     
04/04/02     2631       (S)        NR: WILKEN                                                                                   
04/04/02     2631       (S)        FN1: ZERO(DNR)                                                                               
04/11/02                (S)        RLS AT 10:30 AM FAHRENKAMP                                                                   
                                   203                                                                                          
04/11/02                (S)        MINUTE(RLS)                                                                                  
04/12/02     2751       (S)        RULES TO CALENDAR 2OR 4/12/02                                                                
04/12/02     2752       (S)        READ THE SECOND TIME                                                                         
04/12/02     2752       (S)        ADVANCED TO THIRD READING                                                                    
                                   4/15 CALENDAR                                                                                
04/15/02     2776       (S)        READ THE THIRD TIME SB 354                                                                   
04/15/02     2776       (S)        PASSED Y14 N4 E1 A1                                                                          
04/15/02     2776       (S)        ELLIS NOTICE OF                                                                              
                                   RECONSIDERATION                                                                              
04/16/02     2794       (S)        RECONSIDERATION NOT TAKEN UP                                                                 
04/16/02     2795       (S)        TRANSMITTED TO (H)                                                                           
04/16/02     2795       (S)        VERSION: SB 354                                                                              
04/17/02     2965       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
04/17/02     2965       (H)        L&C                                                                                          
04/26/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
                                                                                                                                
BILL: SB 274                                                                                                                  
SHORT TITLE:PHYSICIANS' LOCUM TENENS PERMITS                                                                                    
SPONSOR(S): SENATOR(S) OLSON                                                                                                    
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/01/02     2090       (S)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/01/02     2090       (S)        L&C                                                                                          
02/12/02                (S)        L&C AT 1:30 PM BELTZ 211                                                                     
02/12/02                (S)        Heard & Held                                                                                 
02/12/02                (S)        MINUTE(L&C)                                                                                  
02/28/02                (S)        L&C AT 1:30 PM BELTZ 211                                                                     
02/28/02                (S)        Moved CS(L&C) Out of                                                                         
                                   Committee                                                                                    
02/28/02                (S)        MINUTE(L&C)                                                                                  
03/01/02     2338       (S)        L&C RPT CS 5DP SAME TITLE                                                                    
03/01/02     2338       (S)        DP: STEVENS, AUSTERMAN,                                                                      
                                   DAVIS, LEMAN,                                                                                
03/01/02     2338       (S)        TORGERSON                                                                                    
03/01/02     2338       (S)        FN1: ZERO(CED)                                                                               
04/10/02     2710       (S)        RULES TO CALENDAR 4/10/02                                                                    
04/10/02     2712       (S)        READ THE SECOND TIME                                                                         
04/10/02     2712       (S)        L&C CS ADOPTED UNAN CONSENT                                                                  
04/10/02     2712       (S)        ADVANCED TO THIRD READING                                                                    
                                   UNAN CONSENT                                                                                 
04/10/02     2712       (S)        READ THE THIRD TIME CSSB
                                   274(L&C)                                                                                     
04/10/02     2713       (S)        PASSED Y19 N- E1                                                                             
04/10/02     2713       (S)        EFFECTIVE DATE(S) SAME AS                                                                    
                                   PASSAGE                                                                                      
04/10/02     2718       (S)        TRANSMITTED TO (H)                                                                           
04/10/02     2718       (S)        VERSION: CSSB 274(L&C)                                                                       
04/10/02                (S)        RLS AT 10:30 AM FAHRENKAMP                                                                   
                                   203                                                                                          
04/10/02                (S)        MINUTE(RLS)                                                                                  
04/11/02     2877       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
04/11/02     2877       (H)        L&C                                                                                          
04/26/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
                                                                                                                                
BILL: HB 512                                                                                                                  
SHORT TITLE:UNFAIR CIGARETTE SALES                                                                                              
SPONSOR(S): FINANCE                                                                                                             
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/26/02     2684       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/26/02     2684       (H)        L&C, JUD, FIN                                                                                
03/26/02     2684       (H)        REFERRED TO LABOR & COMMERCE                                                                 
04/26/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JANEY WINEINGER, Staff                                                                                                          
to Senator Lyda Green                                                                                                           
Alaska State Legislature                                                                                                        
Capitol Building, Room 125                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   Testified  on behalf of  the sponsor  of SB
354, Senator Green.                                                                                                             
                                                                                                                                
PETE FELLMAN, Staff                                                                                                             
to Representative John Harris                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 513                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Answered questions relating to SB 354.                                                                     
                                                                                                                                
DONALD LINTELMAN                                                                                                                
Northern Lights Dairy                                                                                                           
HC 60 Box 3300                                                                                                                  
Delta Junction, Alaska 99737                                                                                                    
POSITION  STATEMENT:   Testified,  during discussion  on SB  354,                                                               
that he  doesn't necessarily support  that a dairy  farmer should                                                               
be compensated for the product that's higher in butterfat.                                                                      
                                                                                                                                
ROBERT WELLS, Director                                                                                                          
Division of Agriculture                                                                                                         
Department of Natural Resources                                                                                                 
1800 Glenn Highway, Suite 12                                                                                                    
Palmer, Alaska 99645-6736                                                                                                       
POSITION STATEMENT:   Indicated that Matanuska Maid  was aware of                                                               
SB 354.                                                                                                                         
                                                                                                                                
DAVE GRAHAM, Staff                                                                                                              
to Senator Donald Olson                                                                                                         
Alaska State Legislature                                                                                                        
Capitol Building, Room 510                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   Presented  CSSB 274(L&C)  on behalf  of the                                                               
sponsor, Senator Olson.                                                                                                         
                                                                                                                                
CATHERINE REARDON, Director                                                                                                     
Division of Occupational Licensing                                                                                              
Department of Commerce & Economic Development                                                                                   
PO Box 110806                                                                                                                   
Juneau, Alaska  99811-0806                                                                                                      
POSITION  STATEMENT:   Related the  Alaska State  Medical Board's                                                               
concerns with CSSB 274(L&C) and answered questions.                                                                             
                                                                                                                                
ANNE HENRY, Special Projects Coordinator                                                                                        
Division   of   Mental   Health  &   Developmental   Disabilities                                                               
Department of Health & Social Services                                                                                          
PO Box 110620                                                                                                                   
Juneau, Alaska 99811-0620                                                                                                       
POSITION STATEMENT:   Urged the  committee to maintain  Section 3                                                               
of CSSB 274(L&C).                                                                                                               
                                                                                                                                
DR. HEAD, Chief of Staff                                                                                                        
Norton Sound Health Corporation;                                                                                                
Alaska State Medical Board                                                                                                      
550 West Seventh Ave., Suite 1500                                                                                               
Anchorage, AK 99501                                                                                                             
POSITION  STATEMENT:   Related the  Alaska State  Medical Board's                                                               
thoughts on CSSB 274(L&C).                                                                                                      
                                                                                                                                
JIM JORDAN, Executive Director                                                                                                  
Alaska State Medical Association                                                                                                
4107 Laurel Street                                                                                                              
Anchorage, Alaska 99508                                                                                                         
POSITION STATEMENT:  During discussion  of CSSB 274(L&C), related                                                               
ASMA's position.                                                                                                                
                                                                                                                                
DALE ANDERSON, Legislative Assistant                                                                                            
to the House Finance Committee                                                                                                  
Alaska State Legislature                                                                                                        
Capitol Building, Room                                                                                                          
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 512 on behalf of the sponsor.                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-66, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  LISA  MURKOWSKI  called   the  House  Labor  and  Commerce                                                               
Standing   Committee    meeting   to    order   at    3:25   p.m.                                                               
Representatives  Murkowski, Meyer,  Rokeberg,  and Crawford  were                                                               
present at  the call to  order.  Representative Hayes  arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
SB 354-PRICES PAID BY MILK PROCESSING PLANTS                                                                                  
                                                                                                                                
CHAR MURKOWSKI announced  that the first order  of business would                                                               
be SENATE  BILL NO. 354, "An  Act relating to the  prices paid by                                                               
milk processing plants to suppliers of fluid milk."                                                                             
                                                                                                                                
Number 0079                                                                                                                     
                                                                                                                                
JANEY  WINEINGER,  Staff  to Senator  Lyda  Green,  Alaska  State                                                               
Legislature, explained  the current  situation for  dairy farmers                                                               
in Alaska.   If the  fat content  of a particular  dairy farmer's                                                               
milk  drops  below the  specified  butterfat  content, the  dairy                                                               
farmer is penalized  in the dairy's payment.  If  the fat content                                                               
of a  particular dairy  farmer's milk  rises above  the specified                                                               
butter  fat  content, the  dairy  farmer  is  not paid  for  that                                                               
increased  butterfat.   She informed  the committee  that in  the                                                               
Lower 48,  federal and state laws  have devised a system  of milk                                                               
marketing orders  which guarantee  the farmer  gets a  fair price                                                               
for the milk produced.  Senate  Bill 354 merely injects that same                                                               
fairness into the marketplace in  Alaska by stipulating that if a                                                               
milk  processor opts  to  penalize  a dairy  farmer  for low  fat                                                               
content,  it also  must  reward  those farmers  with  a high  fat                                                               
content.  Ms. Wineinger deferred any questions to Pete Fellman.                                                                 
                                                                                                                                
Number 0187                                                                                                                     
                                                                                                                                
PETE FELLMAN,  Staff to Representative John  Harris, Alaska State                                                               
Legislature, added  that this [proposed] statute  isn't mandatory                                                               
and  would  only  come  into  play if  [the  processor  chose  to                                                               
implement] a deduction.                                                                                                         
                                                                                                                                
CHAIR  MURKOWSKI  related  her   understanding  that  if  a  milk                                                               
processing plant pays a reduced price  for low fat milk, then the                                                               
milk  processing plant  must pay  a proportionately  higher price                                                               
for the  higher fat milk.   However,  if a milk  processing plant                                                               
doesn't differentiate [in their prices]  between high fat and low                                                               
fat milk, then  the plant wouldn't be required  to compensate for                                                               
milk with the higher fat content.                                                                                               
                                                                                                                                
MR. FELLMAN agreed.                                                                                                             
                                                                                                                                
CHAIR MURKOWSKI pointed  out that information in  the bill packet                                                               
specifies that  currently Matanuska Maid Dairy  penalizes milk by                                                               
one-tenth of  one percent [for  each one-tenth of one  percent in                                                               
butterfat content  below 3.2 percent].   Therefore, under  SB 354                                                               
Matanuska Maid Dairy  would have to pay one-tenth  of one percent                                                               
additional compensation over  the set fee [for  milk containing a                                                               
butter fat higher than 3.2].                                                                                                    
                                                                                                                                
MR. FELLMAN said that was correct.   In further response to Chair                                                               
Murkowski, Mr. Fellman  explained that in the Lower  48 there are                                                               
milk  marketing   orders  and  federal  standards.     Individual                                                               
producers come together  and set the standard  according to their                                                               
area.  Therefore,  the producers negotiate with  the processor in                                                               
developing a standard and thus  the standard can vary from region                                                               
to region.  Since the  federal government has recognized value in                                                               
protein, fat, and  high quality milk, the  federal government has                                                               
seen fit to  reward the dairy farmers with  milk marketing orders                                                               
that recognize  the dairy farmers'  efforts to manage  their milk                                                               
in a better  fashion.  Mr. Fellman, in further  response to Chair                                                               
Murkowski, confirmed that the milk  marketing orders do allow for                                                               
additional compensation for milk with high butterfat content.                                                                   
                                                                                                                                
CHAIR MURKOWSKI pointed out that  Matanuska Maid's butterfat plan                                                               
has  been  in effect  since  October  1,  1985.   Therefore,  she                                                               
questioned  why,  after  17  years,  this  legislation  is  being                                                               
offered now.                                                                                                                    
                                                                                                                                
MR.  FELLMAN related  that some  dairy  farmers received  letters                                                               
from Matanuska  Maid saying  that their prices  were going  to be                                                               
reduced  if  their  butterfat didn't  increase.    Although  this                                                               
butterfat plan  has been in effect,  he said he wasn't  sure that                                                               
the issue has come up in the past.                                                                                              
                                                                                                                                
CHAIR  MURKOWSKI   surmised  then  that  Matanuska   Maid  hasn't                                                               
necessarily been  penalizing the  milk producers,  although there                                                               
is a butterfat plan in effect.                                                                                                  
                                                                                                                                
MR. FELLMAN said  that he didn't know, although he  did know that                                                               
the processor has penalized dairy  farmers for quality milk, milk                                                               
with  high bacteria  counts.   However,  the  processor pays  for                                                               
higher quality  milk.   Such a situation  is acceptable  to dairy                                                               
farmers.    The  butterfat  count is  a  similar  situation,  and                                                               
therefore if  there are going  to be penalties for  low butterfat                                                               
counts,  then  there  should  be   some  compensation  when  high                                                               
butterfat counts are produced.                                                                                                  
                                                                                                                                
Number 0681                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG  inquired  as  to the  number  of  dairy                                                               
farmers and processors in Alaska.                                                                                               
                                                                                                                                
MR. FELLMAN  answered that  there are  two processors:   Northern                                                               
Lights Dairy and Matanuska Maid.   There are three dairies in the                                                               
north  and about  five to  six dairies  in the  Palmer area.   In                                                               
further response  to Representative Rokeberg, Mr.  Fellman stated                                                               
that  Matanuska  Maid  hasn't   testified  on  SB  354,  although                                                               
Matanuska Maid is aware of this legislation.                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG turned to  the standard used at Matanuska                                                               
Maid and inquired  as to why the 3.25 butterfat  threshold in the                                                               
legislation was chosen.                                                                                                         
                                                                                                                                
MR.  FELLMAN  replied that  the  3.25  butterfat content  is  the                                                               
federal standard.  In the Lower  48 the milk marketing order sets                                                               
the standard.   However,  the processors in  the State  of Alaska                                                               
[currently] set the standard.                                                                                                   
                                                                                                                                
REPRESENTATIVE  ROKEBERG inquired  as to  how often  the milk  is                                                               
tested.                                                                                                                         
                                                                                                                                
MR. FELLMAN responded that every tank  of milk picked up from the                                                               
farm is  tested for butterfat  and bacteria content.   In further                                                               
response to Representative Rokeberg,  Mr. Fellman emphasized that                                                               
the tests,  which look  at butterfat,  protein, water,  and solid                                                               
non-fat, are very accurate.                                                                                                     
                                                                                                                                
CHAIR  MURKOWSKI pointed  out that  failing to  comply with  this                                                               
legislation  falls under  Title  45, the  Unfair Trade  Practices                                                               
Act.    She highlighted  that  failing  to  comply results  in  a                                                               
penalty of not more than  $25,000 per violation, which she viewed                                                               
as high.  There is also a civil penalty of not more than $5,000.                                                                
                                                                                                                                
Number 1062                                                                                                                     
                                                                                                                                
DONALD   LINTELMAN,   Northern   Lights  Dairy,   testified   via                                                               
teleconference.    Mr.  Lintelman  explained that  so  much  [low                                                               
butterfat  milk  was produced]  that  the  Northern Lights  Dairy                                                               
couldn't  produce   whole  milk  due   to  the  lack   of  cream.                                                               
Therefore,  the dairy  began  to penalize  the  farmers for  [low                                                               
butterfat contents].  The [low  butterfat contents] continued for                                                               
a  number  of months,  which  resulted  in the  dairy  purchasing                                                               
Jersey cows  in order  [to produce  whole milk].   He  noted that                                                               
this year [the  butterfat content] is higher  because the farmers                                                               
are  feeding  the  cows  more  hay than  grain.    Mr.  Lintelman                                                               
informed  the  committee  that  the dairy  is  paying  "$19.00  a                                                               
hundred" for  this test.  He  explained that when there  is extra                                                               
cream, it has  to be pasteurized, boxed, and  frozen before being                                                               
shipped to  Matanuska Maid.   The  Northern Lights  Dairy doesn't                                                               
need  milk with  a butterfat  higher  than 3.25.   If  SB 354  is                                                               
passed and pressure increases on  the Northern Lights Dairy, then                                                               
it  may  stop picking  up  milk  from  [farms that  produce  high                                                               
butterfat] and thus their milk will  have to be sent to Matanuska                                                               
Maid.                                                                                                                           
                                                                                                                                
CHAIR MURKOWSKI  surmised that Mr. Lintelman  doesn't necessarily                                                               
support  that  a  dairy  farmer should  be  compensated  for  the                                                               
product that's high in butterfat.                                                                                               
                                                                                                                                
MR. LINTELMAN  replied, "That is  true."  In further  response to                                                               
Chair Murkowski,  Mr. Lintelman  specified that  in the  past the                                                               
Northern  Lights   Dairy  has  penalized  farmers   for  a  lower                                                               
butterfat content.  However, penalties  haven't been issued since                                                               
the tests  have shown the  [butterfat content to be  high enough]                                                               
for the dairy to make whole milk.                                                                                               
                                                                                                                                
CHAIR MURKOWSKI explained  that under SB 354 so long  as the milk                                                               
processing  plant  isn't penalizing  the  dairy  farmers for  the                                                               
lower  butterfat content,  the plant  doesn't have  to compensate                                                               
the dairy farmers for the higher butterfat content.                                                                             
                                                                                                                                
MR. LINTELMAN stressed, "If we  were going to penalize them, we'd                                                               
have to go less  than $19 a hundred.  We're  paying $19 a hundred                                                               
for 3.25  [percent butterfat]."   He said that the  plant doesn't                                                               
pay  for butterfat  contents higher  than 3.25  because the  milk                                                               
samples  vary from  day to  day.   Mr. Lintelman  stated that  he                                                               
didn't want to get into a  hassle with this.  Therefore, it might                                                               
be better for  Northern Lights Dairy to drop the  two dairy farms                                                               
and merely  deal with its own  milk.  He related  that he doesn't                                                               
have the time or labor to deal with this.                                                                                       
                                                                                                                                
MR. LINTELMAN, in further response  to Chair Murkowski, specified                                                               
that the milk  at the Northern Lights Dairy is  tested on average                                                               
about twice a week.                                                                                                             
                                                                                                                                
Number 1338                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER related  his  understanding that  different                                                               
types of cows produce different quality milk.                                                                                   
                                                                                                                                
MR.  LINTELMAN  agreed  that  the Jerseys  and  Brown  Swiss  may                                                               
produce more  cream than  the Holstein.   In further  response to                                                               
Representative Meyer,  Mr. Lintelman informed the  committee that                                                               
in  the  Delta  Junction  area  the  dairy  farmers  mainly  have                                                               
Holstein cows.                                                                                                                  
                                                                                                                                
Number 1366                                                                                                                     
                                                                                                                                
ROBERT WELLS,  Director, Division  of Agriculture,  Department of                                                               
Natural Resources,  testifing via teleconference,  announced that                                                               
he  was available  to answer  questions.   In  response to  Chair                                                               
Murkowski,  Mr. Wells  explained that  he doesn't  have a  direct                                                               
connection with Matanuska Maid,  which has a creamery corporation                                                               
board  of  seven members  that  are  appointed  by the  Board  of                                                               
Agriculture.   However,  Mr.  Wells  said he  was  sure that  the                                                               
chairman of [the  creamery corporation] is aware of SB  354.  Mr.                                                               
Wells related that  he had spoken with the  chairman this morning                                                               
and the  chairman had said  he had forwarded  some correspondence                                                               
[to the committee].                                                                                                             
                                                                                                                                
CHAIR MURKOWSKI remarked  that she understood that  Mr. Wells was                                                               
affiliated with Matanuska Maid.                                                                                                 
                                                                                                                                
MR. WELLS explained  that although Matanuska Maid is  an asset of                                                               
the Agricultural  Revolving Loan  Fund, the  day-to-day decisions                                                               
are made by  Matanuska Maid's manager in Anchorage.   The manager                                                               
is responsible to the creamery corporation board.                                                                               
                                                                                                                                
CHAIR MURKOWSKI noted that the  committee did receive information                                                               
from  Matanuska Maid  regarding  how the  quality bonus  programs                                                               
work.                                                                                                                           
                                                                                                                                
Number 1469                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD inquired  as to how the  milk industry is                                                               
fairing in Alaska.   He also inquired as to  whether SB 354 would                                                               
endanger what's left of the milk industry.                                                                                      
                                                                                                                                
MR. WELLS informed  the committee that there has  actually been a                                                               
rebound in the milk industry in  the last 12-18 months because of                                                               
the disposals at Point McKenzie.   The largest dairy is currently                                                               
milking 300 cows and will soon  be milking 350 cows.  The average                                                               
of the  other dairies is between  60-140 cows.  In  the Matanuska                                                               
Susitna Valley there are now  eight operating dairies.  Mr. Wells                                                               
commented that  it's a  challenge for  both the  producers, dairy                                                               
farmers, and  processors because of the  vertical integration and                                                               
current  marketplace   as  well   as  the   competitive  pricing.                                                               
However, Alaskans  do support Alaskan  grown products  because of                                                               
the freshness and quality.                                                                                                      
                                                                                                                                
REPRESENTATIVE CRAWFORD  expressed concern  that if  Alaska loses                                                               
its milk industry, milk prices would  increase due to the lack of                                                               
competition.   Therefore,  Representative Crawford  said that  he                                                               
didn't want to do anything to jeopardize Alaska's milk industry.                                                                
                                                                                                                                
MR.  WELLS  remarked  that Representative  Crawford  has  a  very                                                               
legitimate  concern, especially  after  the  September 11,  2002,                                                               
tragedy which  illustrated how supply  lines can  be interrupted.                                                               
He pointed  out that  at any  given moment, there  is only  a few                                                               
weeks worth  of groceries  in the state.   Mr.  Wells highlighted                                                               
the unique  situation of the  Division of Agriculture in  that it                                                               
supports the dairy farmers while  being involved in the ownership                                                               
of Matanuska Maid.  He expressed  the need to be careful with any                                                               
legislation  that  would  impact   pricing  and  place  [Alaska's                                                               
dairies] in a noncompetitive position.                                                                                          
                                                                                                                                
Number 1630                                                                                                                     
                                                                                                                                
CHAIR  MURKOWSKI  reiterated  her  understanding  that  Matanuska                                                               
Maid's  penalty with  regard  to milk  with  a butterfat  content                                                               
lower than 3.2 percent hasn't been  enforced.  She inquired as to                                                               
Mr. Wells' knowledge of the situation.                                                                                          
                                                                                                                                
MR.  WELLS  said  that  was   his  understanding  as  well.    He                                                               
characterized the letters sent to  the dairy farmers as a warning                                                               
that if  the plant  continued to receive  milk [with  a butterfat                                                               
content less than 3.2 percent], action would have to be taken.                                                                  
                                                                                                                                
CHAIR  MURKOWSKI turned  to Mr.  Lintelman's testimony  regarding                                                               
the  fact  that certain  cows  produce  milk with  low  butterfat                                                               
content.                                                                                                                        
                                                                                                                                
MR. WELLS said that the  predominant dairy breed is the Holstein,                                                               
which  doesn't  produce as  high  a  butterfat content  as  other                                                               
breeds.   However,  with good  feed  rations and  good care,  the                                                               
Holstein breed is able to  provide the minimal butterfat content.                                                               
Still, Mr.  Wells recognized the  situation in which the  lack of                                                               
butterfat can lead to a dairy's inability to produce whole milk.                                                                
                                                                                                                                
MR. FELLMAN interjected  that a Holstein is able  to produce over                                                               
4 percent butterfat  content.  He informed the  committee that as                                                               
a cow goes into lactation,  it generally produces a higher volume                                                               
of milk  with a  lower volume  of butterfat.   As the  cow's milk                                                               
production  decreases and  lactation  progresses,  the volume  of                                                               
milk decreases  while the butterfat content  generally increases.                                                               
He explained  that dairy farmers in  the Lower 48 under  the milk                                                               
marketing  orders understand  that they  will receive  less money                                                               
for their milk by the hundred  weight, but they will produce more                                                               
milk per cow.   Therefore, as the milk  production decreases, the                                                               
butterfat increases as does the  milk price and thus balances out                                                               
those  cows  that  aren't  producing during  the  peak  of  their                                                               
lactation.   At  this point,  the issue  of pricing  and fairness                                                               
comes into play.                                                                                                                
                                                                                                                                
Number 1880                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER related his  understanding that the Holstein                                                               
breed  produces higher  volumes of  milk, although  there may  be                                                               
lower butterfat contents.   He recalled the  testimony that grain                                                               
versus hay impacts  the butterfat content of the  milk.  However,                                                               
the cost  of the food  has to be factored  in the equation.   The                                                               
additional cost  of the  food producing  higher fat  contents may                                                               
result  in the  higher milk  price, he  suspected.   He asked  if                                                               
there are some federal subsidies to dairy farmers.                                                                              
                                                                                                                                
MR. FELLMAN addressed the issue  of subsidies.  He explained that                                                               
in the  Lower 48  there is the  CCC tax, which  is money  that is                                                               
taken out of the  milk check and placed into a  fund that is used                                                               
for subsidies  during feed shortages.   He pointed out  that most                                                               
subsidies  revolve around  grain  production.   In  the State  of                                                               
Alaska there is no subsidy for any milk.                                                                                        
                                                                                                                                
REPRESENTATIVE MEYER  inquired as to  why there are  no subsidies                                                               
for milk in Alaska.  He  recalled hearing that some dairy farmers                                                               
were being paid to not produce as much milk as normal.                                                                          
                                                                                                                                
MR. FELLMAN  explained that  although the  State of  Alaska isn't                                                               
involved  in any  dairy subsidies,  one can  apply for  insurance                                                               
during  a  feed  shortage.    The  aforementioned  is  a  federal                                                               
program.  In  order to qualify for that insurance,  one must make                                                               
a payment to the [Farm Service Agency]                                                                                          
FSA.   In further response  to Representative Meyer,  Mr. Fellman                                                               
reiterated that the  level of fat can be impacted  by the type of                                                               
grain or  hay a  cow is fed.   However, at  certain times  of the                                                               
year, a cow  will produce higher or lower fat  depending upon the                                                               
cycle of lactation.                                                                                                             
                                                                                                                                
REPRESENTATIVE  MEYER asked  whether a  bill  such as  SB 354  is                                                               
necessary or will the market take care of it.                                                                                   
                                                                                                                                
MR. FELLMAN  noted that in  most cases  it costs more  to produce                                                               
higher fat milk, although there  is currently no compensation for                                                               
that higher  fat milk.   Mr. Fellman  related his belief  that if                                                               
one can  be penalized  for low  fat milk, one  should be  able to                                                               
receive similar compensation for [high fat milk].                                                                               
                                                                                                                                
Number 2258                                                                                                                     
                                                                                                                                
CHAIR MURKOWSKI, determining there was  no one else who wished to                                                               
testify, closed public testimony on SB 354.                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER remarked  that with as few  dairy farmers as                                                               
Alaska  has  he didn't  foresee  too  much impact  regardless  of                                                               
whether SB 354 passes or not.                                                                                                   
                                                                                                                                
REPRESENTATIVE    ROKEBERG    expressed    concern    with    the                                                               
"proportionately higher  price" definition.  He  pointed out that                                                               
there isn't  a cap on  [the butterfat  content] when it's  on the                                                               
high side and asked if there should be a cap.                                                                                   
                                                                                                                                
TAPE 02-66, SIDE B                                                                                                              
                                                                                                                                
CHAIR MURKOWSKI  agreed that  the definition  was odd.   However,                                                               
she expressed the  need to keep in mind that  this provision goes                                                               
into effect  only if the  processing plant charges a  penalty for                                                               
the lower  fat.  Chair  Murkowski pointed out that  the testimony                                                               
doesn't sound as if anyone is being assessed the penalties.                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD  related   his  understanding  that  the                                                               
testimony sounded  like these penalties  were assessed  18 months                                                               
ago [at  the Northern Lights  Dairy], and these  penalties seemed                                                               
to be  a good  incentive for  the dairy  farmers to  increase the                                                               
butterfat content.  [Mr. Lintelman]  says that he doesn't use the                                                               
excess butterfat when  the content is higher and  thus he doesn't                                                               
have any way  in which to market that  butterfat.  Representative                                                               
Crawford said he  wished that Matanuska Maid  would've weighed in                                                               
on this  matter so  that the  committee would  know what  it does                                                               
with the excess butterfat milk.                                                                                                 
                                                                                                                                
MS.  WINEINGER related  her belief  that Matanuska  Maid operates                                                               
completely  differently  than the  Northern  Lights  Dairy.   She                                                               
explained  that Matanuska  Maid  implements a  penalty for  [low]                                                               
butterfat  content and  pays extra  for [high]  butterfat content                                                               
because  she believes  that Matanuska  Maid  fully utilizes  that                                                               
butterfat whereas the  Northern Lights Dairy doesn't  have a need                                                               
for that [high butterfat] cream.                                                                                                
                                                                                                                                
CHAIR MURKOWSKI surmised that Ms.  Wineinger was saying that were                                                               
SB 354  adopted, it wouldn't  have much impact on  Matanuska Maid                                                               
because this is already the current practice.                                                                                   
                                                                                                                                
MS. WINEINGER deferred to Mr. Fellman.                                                                                          
                                                                                                                                
MR.  FELLMAN disagreed  with [Ms.  Wineinger's] statements.   Mr.                                                               
Fellman   specified  that   although   Matanuska  Maid   assesses                                                               
penalties,  to  his knowledge  Matanuska  Maid  hasn't taken  any                                                               
money from  milk checks.   However, Matanuska Maid  has indicated                                                               
the intention  to deduct money from  the milk checks if  the milk                                                               
fat  doesn't  increase.    Mr.  Fellman  further  specified  that                                                               
Matanuska Maid does not pay for the additional fat.                                                                             
                                                                                                                                
REPRESENTATIVE ROKEBERG  noted his  concern with  Mr. Lintelman's                                                               
comments  that he  would  stop  picking up  milk  from the  local                                                               
dairies if  he is forced to  pay for the high  butterfat content.                                                               
However, Representative Rokeberg said  he understood the bill not                                                               
to  make  Mr. Lintelman  have  to  [pay  for the  high  butterfat                                                               
content].                                                                                                                       
                                                                                                                                
MR.  FELLMAN reiterated  that if  there is  no penalty  assessed,                                                               
then there is no requirement to pay extra.                                                                                      
                                                                                                                                
Number 2081                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER moved  to report  SB 354  out of  committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
note.   There being no  objection, SB  354 was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
SB 274-PHYSICIANS' LOCUM TENENS PERMITS                                                                                       
                                                                                                                                
CHAIR MURKOWSKI announced  that the next order  of business would                                                               
be CS FOR SENATE BILL NO.  274(L&C), "An Act relating to issuance                                                               
of  a locum  tenens  permit  for a  physician  or osteopath;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 2022                                                                                                                     
                                                                                                                                
DAVE  GRAHAM,  Staff  to  Senator   Donald  Olson,  Alaska  State                                                               
Legislature, presented  CSSB 274(L&C)  on behalf of  the sponsor,                                                               
Senator Olson.   Mr. Graham  informed the committee  that Senator                                                               
Olson  introduced SB  274  at  the request  of  the Alaska  State                                                               
Medical Association  (ASMA) in order  to expand the  locum tenens                                                               
permit  to  allow  [state  licensed] physicians  to  bring  in  a                                                               
physician  to  take over  a  practice  while the  state  licensed                                                               
physician is out.   The ASMA would like to  expand the definition                                                               
such that  physicians could  be invited  to observe  and practice                                                               
for  short periods  of time  in  order to  determine whether  the                                                               
physician  wanted to  employ the  invited  physician.   Testimony                                                               
during the  Senate Labor &  Commerce Standing  Committee revealed                                                               
that hospitals would [like this  expansion as well], particularly                                                               
from   state  mental   health   institutions   that  are   having                                                               
difficulties filling  slots with licensed physicians.   The locum                                                               
tenens  is viewed  as  a way  in  which to  be  more flexible  in                                                               
staffing and attracting physicians  to permanent employment.  Mr.                                                               
Graham  pointed  out  that  the  main  reason  ASMA  brings  this                                                               
legislation forward  is because the  physicians in the  state are                                                               
getting older and thus will ultimately  need to be replaced.  The                                                               
average  age of  an Alaskan  physician is  51.   He related  that                                                               
Senator Olson  views this legislation as  benefiting the delivery                                                               
of health services.                                                                                                             
                                                                                                                                
Number 1872                                                                                                                     
                                                                                                                                
CATHERINE REARDON, Director,  Division of Occupational Licensing,                                                               
Department  of Commerce  & Economic  Development (DCED),  related                                                               
that although the  Alaska State Medical Board was  able to obtain                                                               
75  percent  consensus  on  SB  274, the  board  still  has  some                                                               
concerns with  the legislation.   She indicated that  two members                                                               
of the board  are on-line and can speak to  the board's concerns.                                                               
She informed the  committee that the board would  prefer that the                                                               
legislation refer to  180 calendar days rather  than 240 calendar                                                               
days during which an individual  could hold a locum tenens permit                                                               
during any consecutive 24 months.   Under CSSB 274(L&C) the locum                                                               
tenens  permits are  initially valid  for 90  days and  under one                                                               
circumstance  can  be  extended  another  60  days.    Therefore,                                                               
allowing one  to hold a  locum tenens  permit for 180  days would                                                               
allow one to  hold two locum tenens permits or  one with a 60-day                                                               
extension.  However, the current  language of the bill allows two                                                               
90-day locum  tenens permits of which  one can be extended  by 60                                                               
days.  Ms.  Reardon pointed out that the  condition for extension                                                               
is  when   one  has  submitted   an  application   for  permanent                                                               
licensure; the  board would  like to  encourage people  to obtain                                                               
the permanent licenses.                                                                                                         
                                                                                                                                
MS. REARDON informed  the committee that the  board also requests                                                               
that  Section 3  of CSSB  274(L&C) be  deleted because  the board                                                               
doesn't believe  there should  be any  situations in  which locum                                                               
tenens  permits  should  be extended  indefinitely  or  pass  the                                                               
limitations  established in  Section  2.   Section  3 allows  the                                                               
board to extend  a locum tenens permit beyond  the specified time                                                               
limits if  it's determined  that the  extension is  necessary "to                                                               
provide essential  medical services for the  protection of public                                                               
health and safety."                                                                                                             
                                                                                                                                
MS. REARDON directed  attention to page 2, line 9,  and noted the                                                               
preference for the  term "packet" rather than  "form" because the                                                           
board  wants  to  ensure  that all  the  necessary  paperwork  is                                                               
completed.    The  board  felt  that the  word  "form"  could  be                                                           
construed to  mean the first ten  pages of the packet.   However,                                                               
there is  no intention  to require  a completed  application, she                                                               
said.   She  noted  that the  board is  also  concerned with  the                                                               
protection of public  health and safety and thus  wants to ensure                                                               
that  all physicians  practicing  in the  state  have been  fully                                                               
investigated.  Hospitals and the  [Department] of Health & Social                                                               
Services are  concerned with  the public  health and  safety risk                                                               
created by a vacancy in a needed area of service.                                                                               
                                                                                                                                
Number 1589                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD inquired  as to  who these  locum tenens                                                               
physicians would be and their general qualifications.                                                                           
                                                                                                                                
MS. REARDON  answered that  some of  the locum  tenens physicians                                                               
may be newer physicians while  others may be long-time physicians                                                               
who  choose to  move around  the country  serving in  a temporary                                                               
capacity.   She related her  belief that there  are organizations                                                               
that match physicians with positions that need to be filled.                                                                    
                                                                                                                                
Number 1589                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD inquired  as to how the pay  of the locum                                                               
tenens physicians compares to that of local physicians.                                                                         
                                                                                                                                
MS. REARDON  said that she didn't  have an answer.   However, she                                                               
related   that  hospitals   and  facilities   have  expressed   a                                                               
preference  for  permanent  full-time  physicians  over  juggling                                                               
locum tenens.   She further related that  locum tenens physicians                                                               
are usually more expensive  [than permanent full-time physicians]                                                               
because of the  expense of getting the locum  tenens physician to                                                               
the area and housing him/her.                                                                                                   
                                                                                                                                
CHAIR  MURKOWSKI  directed  attention  to page  2,  line  6,  and                                                               
related her belief that a permit  "shall" be extended for 60 days                                                               
with completion of the packet.   She asked whether there would be                                                               
any other reason that would  result in not granting an extension.                                                               
If there  are grounds  for the  board not  to extend  the permit,                                                               
Chair Murkowski  wanted the  board to have  the authority  not to                                                               
extend the permit.                                                                                                              
                                                                                                                                
MS. REARDON  agreed that the  language reads as if  the extension                                                               
is automatic.   Therefore, she surmised that the  permit would be                                                               
extended and any  problems would be addressed with  the person as                                                               
a  licensee.    She  suspected  that  the  board  could  probably                                                               
[impose]  a summary  suspension  if the  risk  [the locum  tenens                                                               
physician] posed  to public health  and safety was  sufficient to                                                               
do so.     For clear  and immediate danger  to public  health and                                                               
safety,  statute   specifies  that  licenses  can   be  summarily                                                               
suspended  and the  person must  receive a  hearing within  seven                                                               
days.                                                                                                                           
                                                                                                                                
CHAIR MURKOWSKI  related that changing the  language from "shall"                                                               
to  "may"  appears   to  provide  the  option   of  rejecting  an                                                               
applicant.    However,  she questioned  whether  the  application                                                               
process for a  locum tenens physician is different  than that for                                                               
a licensee.                                                                                                                     
                                                                                                                                
MS.  REARDON   asked  to  review  the   statute  while  testimony                                                               
continued.                                                                                                                      
                                                                                                                                
Number 1321                                                                                                                     
                                                                                                                                
ANNE  HENRY, Special  Projects  Coordinator,  Division of  Mental                                                               
Health  &  Developmental  Disabilities, Department  of  Health  &                                                               
Social  Services   (DHSS),  informed   the  committee   that  the                                                               
department worked with [the interested  parties] in order to find                                                               
some comfort  with this  legislation.   However, the  board still                                                               
isn't  comfortable  with  the  legislation.     Ms.  Henry  noted                                                               
appreciation for the clarification in  Section 1, which speaks to                                                               
temporarily  employed folks.   Areas  throughout  the state  have                                                               
difficulties   obtaining   psychiatrists   to  come   and   work.                                                               
Furthermore,  there is  great difficulty  with recruiting  in the                                                               
Alaska  Psychiatric Institute  (API).   Because of  the turnover,                                                               
the ability  to [grant  extensions] is a  critical piece  for the                                                               
department.   If there  is a  language change  in Section  2, Ms.                                                               
Henry expressed the need for the 60-day extension to continue.                                                                  
                                                                                                                                
CHAIR MURKOWSKI  turned to Ms.  Reardon's suggestion  of reducing                                                               
the validity of permits and extensions to 180 [calendar] days.                                                                  
                                                                                                                                
MS. HENRY related her belief  that [the department] would be very                                                               
upset with such a change.   Ms. Henry then urged the committee to                                                               
maintain Section 3 in the bill  because the business of health is                                                               
so unpredictable that  [the department] would like  for the board                                                               
to have the discretion provided in Section 3.                                                                                   
                                                                                                                                
Number 1154                                                                                                                     
                                                                                                                                
DR.  HEAD,  Chief  of Staff,  Norton  Sound  Health  Corporation;                                                               
Alaska  State Medical  Board, testified  via teleconference.   He                                                               
related that the state medical  board has discussed this proposed                                                               
law  at length.   He  said  he thought  [CSSB 274(L&C)]  embodies                                                               
necessary  modifications in  the current  locum tenens  language.                                                               
Furthermore, he  liked that the  legislation allows  locum tenens                                                               
for  various  reasons.       Since  the  board  is  charged  with                                                               
protecting the  public and the  patients, that's why some  of the                                                               
modifications were  [desired].  Dr.  Head said he  understood Ms.                                                               
Henry's concern with  regard to the requested  change for permits                                                               
and extensions for  locum tenens physicians to only  be valid 180                                                               
calendar days rather  than 240 calendar days because  of her wish                                                               
to have coverage for facilities across  the state.   However, Dr.                                                               
Head  charged  that the  coverage  can  be maintained  under  the                                                               
legislation while  also protecting  the public.   He  pointed out                                                               
that if  a locum tenens  physician is in  a location for  90 days                                                               
and there is the need for  the locum tenens physician to fill the                                                               
position for  a longer  period, then  the physician  would merely                                                               
have  to complete  a full  application  for permanent  licensure.                                                               
Therefore,  another 60-day  extension  could be  granted and  the                                                               
locum  tenens physician  could go  through the  same scrutiny  as                                                               
every active  full-time license  holder in the  state.   Dr. Head                                                               
said that the board believes  that [coverage] can be accomplished                                                               
by encouraging  an active  full-time license.   The  Norton Sound                                                               
Health   Corporation  hires   locum   tenens  physicians   fairly                                                               
frequently and each  one of them has elected to  obtain an active                                                               
full license.  Dr. Head  expressed concern that if physicians are                                                               
allowed to  work indefinitely under  locum tenens  licenses, then                                                               
the state  may become  a magnet  attracting physicians  seeking a                                                               
lax  system in  which  their past  isn't completely  scrutinized.                                                               
Alaska  doesn't  want  to  become  a  location  for  questionable                                                               
practitioners,  he said.    Dr. Head  remarked  that [the  board]                                                               
wants  to maintain  control in  an effort  to protect  the public                                                               
while being able to fulfill the needs of the state.                                                                             
                                                                                                                                
Number 0967                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG related  that he read Section  2 to allow                                                               
an extension  of up  to 240  days.  The  new language  would only                                                               
seem  to   apply  when  one  applies   for  permanent  licensure.                                                               
Therefore, he surmised  that there must currently be  a method to                                                               
obtain an extension beyond the 60 days.                                                                                         
                                                                                                                                
DR. HEAD  agreed that  the current  law does  allow for  [a locum                                                               
tenens  permit to  be held  for up  to] 240  days.   However, the                                                               
[board] is  requesting that be  changed to  180 days within  a 24                                                               
consecutive month  period, which  allows for two  90-day periods.                                                               
The  language specified  180 days  because [the  board] was  told                                                               
that many  locum tenens physicians  do come up and  cover clinics                                                               
for three  months each summer, and  therefore 180 days in  a two-                                                               
year period allow that to continue under a locum tenens permit.                                                                 
                                                                                                                                
Number 0882                                                                                                                     
                                                                                                                                
CHAIR MURKOWSKI  turned to the  existing statutes,  which specify                                                               
that  a  permit   is  valid  for  60  consecutive   days  and  if                                                               
circumstances warrant an extension  may be granted and extensions                                                               
can't exceed 240 days.  Therefore,  she understood Dr. Head to be                                                               
proposing a  reduction in the  extension to  180 days as  well as                                                               
not  allowing for  any extenuating  circumstances beyond  the 180                                                               
days.   Such tightening  moves in the  opposite direction  of the                                                               
bill sponsor's [intent].                                                                                                        
                                                                                                                                
DR. HEAD agreed.   Dr. Head pointed out that  the current statute                                                               
reads  such  that [locum  tenens  permits  and extensions]  could                                                               
continue indefinitely if, as specified  under Section 3, there is                                                               
a determination  [that the extension] is  necessary for essential                                                               
services  for the  protection of  public health  and safety.   He                                                               
emphasized  that  [the board]  does  want  to take  into  account                                                               
public health  and safety, which  is why  there is the  desire to                                                               
maintain as  much scrutiny as  possible.  Therefore,  [the board]                                                               
is saying  that in order  for a person  to work longer  than [180                                                               
days],  the person  should  have to  obtain  an active  full-time                                                               
license  and go  through a  background check.   Therefore,  those                                                               
physicians  that  are  afraid  of   the  background  check  won't                                                               
maintain a  license in the  state and  will go elsewhere.   Under                                                               
the  current  statute, a  physician  practicing  in an  essential                                                               
health care shortage area could  practice indefinitely on a locum                                                               
tenens  physician license  and never  subject  themselves to  the                                                               
scrutiny of their past practices.                                                                                               
                                                                                                                                
REPRESENTATIVE ROKEBERG  asked whether [in such  a situation] the                                                               
board would intercede.                                                                                                          
                                                                                                                                
DR. HEAD  said that  the board  has no way  of interceding.   The                                                               
board isn't  given the right  to investigate, to the  degree such                                                               
is   done  for   active  full-time   licenses,  a   locum  tenens                                                               
physician's past  unless he/she has  applied for an  active full-                                                               
time license.                                                                                                                   
                                                                                                                                
Number 0693                                                                                                                     
                                                                                                                                
CHAIR  MURKOWSKI inquired  as  to  how long  it  takes to  become                                                               
licensed, the cost, and the  difference between background checks                                                               
for locum tenens versus [an active full-time physician].                                                                        
                                                                                                                                
MS.  REARDON said  that generally  it takes  about two  months to                                                               
submit all of  the information for a complete  application.  Once                                                               
everything is received and the  applicant's answers and documents                                                               
don't   create    cause   for   investigation,    the   executive                                                               
administrator  can   issue  a  temporary  license   allowing  the                                                               
applicant to practice  until the board meets and  makes the final                                                               
decision.   However, the  amount of time  [to achieve  a complete                                                               
application] is  dependent upon third  parties, such  as hospital                                                               
verification, that the division nor the applicant can control.                                                                  
                                                                                                                                
CHAIR  MURKOWSKI   posed  a  situation   in  which   a  physician                                                               
practicing  under a  locum  tenens permit  reaches  240 days  and                                                               
decides  to stay.   That  locum  tenens physician  would need  to                                                               
submit an application  for full licensure.  In  such a situation,                                                               
she  asked whether  the locum  tenens physician  could receive  a                                                               
permit to  stay and  practice until licensure  is obtained  or is                                                               
there a window when this physician would be "out of luck."                                                                      
                                                                                                                                
MS.  REARDON answered  that  there  could be  a  window when  the                                                               
physician would be out of luck;  it's dependent upon how long the                                                               
locum tenens  physician waited to  start the  permanent licensure                                                               
process.   The temporary licenses can  only be issued if  all the                                                               
documents from  the outside organizations  are in;  without those                                                               
documents the locum tenens physician  with 240 days would have to                                                               
stop practicing until the documents come in.                                                                                    
                                                                                                                                
CHAIR MURKOWSKI  specified that she  is trying to  understand the                                                               
reason  for  Section  3.    She  surmised  that  a  locum  tenens                                                               
physician that  is a  general practitioner  would have  an avenue                                                               
allowing practice between the extensions  granted and her ability                                                               
to obtain full licensure.                                                                                                       
                                                                                                                                
MS.  REARDON replied  no.   In  response to  an earlier  question                                                               
regarding the fees,  Ms. Reardon informed the  committee that the                                                               
locum tenens  fee and  application form  is a  $150 nonrefundable                                                               
application fee and  $200 permit fee.  The  permanent license has                                                               
a fee  of $250 nonrefundable  application fee and a  $590 license                                                               
fee for a two-year license.                                                                                                     
                                                                                                                                
MS. REARDON  then returned to  an earlier question  regarding the                                                               
"shall" language  on page  2, line  6.   Ms. Reardon  opined that                                                               
changing "shall"  to "may" would  allow denial of  the extension.                                                               
The  specific denial  authority  can be  found  in AS  08.64.240.                                                               
References  to license  are treated  as including  permits.   The                                                               
aforementioned  statute  specifies  the   reasons  for  which  an                                                               
extension could be  denied.  Ms. Reardon surmised  that the board                                                               
would specify that under certain  circumstances, the permit would                                                               
be extended  while under  other circumstances  the full  board or                                                               
individual board member  would make the decision.   She suggested                                                               
that  the language  could read  as follows:   "shall  be extended                                                               
unless it is denied for one of the reasons in AS 08.64.240."                                                                    
                                                                                                                                
TAPE 02-67, SIDE A                                                                                                              
                                                                                                                                
Number 0001                                                                                                                     
                                                                                                                                
JIM   JORDAN,   Executive    Director,   Alaska   State   Medical                                                               
Association,  testified  via  teleconference.   He  informed  the                                                               
committee that ASMA's main interest in  SB 274 lies in Section 1,                                                               
which expands  the uses of  locum tenens permits for  the purpose                                                               
of  evaluation of  a physician  for full-time  employment.   This                                                               
legislation  takes care  of an  unfair  situation that  currently                                                               
exists.   Currently, on  a de facto  basis large  group practices                                                               
are able  to use locum  tenens permittees as substitutes  for one                                                               
of  the  many  physicians  in   the  practice  and  review  those                                                               
physicians  for   potential  employment.     That   option  isn't                                                               
available to the sole practitioner of a small practice.                                                                         
                                                                                                                                
CHAIR  MURKOWSKI inquired  as to  ASMA's position  on Section  3,                                                               
which allows  an indefinite extension  when the  board determines                                                               
that  it's  medically  necessary  to protect  public  health  and                                                               
safety.                                                                                                                         
                                                                                                                                
MR. JORDAN  indicated that ASMA hasn't  specifically reviewed [or                                                               
taken a position on] Section 3.   However, the obvious concern is                                                               
that there are certain medical  specialties that are difficult to                                                               
find,  such as  pathologists and  radiologists.   He related  his                                                               
belief that it might be  important to have continuity, especially                                                               
in a situation in  which it takes longer than 180  days to find a                                                               
specialist,  such   as  a   pathologist,  to   hire  permanently.                                                               
Therefore, it  may be more  advantageous to have  the consistency                                                               
of the  [locum tenens pathologist]  while hiring for  a permanent                                                               
pathologist.                                                                                                                    
                                                                                                                                
Number 0242                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  pointed out  that Section 1  deletes the                                                               
60-day validity.  He said he  wasn't sure that there shouldn't be                                                               
a cap on the timeframe, and  therefore he asked if Mr. Jordan had                                                               
a suggestion.                                                                                                                   
                                                                                                                                
MR.   JORDAN  related   his  understanding   that  Representative                                                               
Rokeberg was  asking whether  the 60-day  period should  apply to                                                               
the  locum tenens  employees that  are  present for  the sake  of                                                               
being scrutinized for  employment.  Mr. Jordan said  that 60 days                                                               
should  be  a  sufficient  timeframe in  which  to  evaluate  for                                                               
employment  purposes.    Mr.  Jordan  explained  that  under  the                                                               
current construction of  SB 274 the locum  tenens permit, whether                                                               
for the  purpose of substituting  for an absent physician  or for                                                               
scrutinizing the  physician for future employment,  would last 90                                                               
days along with the other extensions specified.                                                                                 
                                                                                                                                
REPRESENTATIVE ROKEBERG  said that seems reasonable,  although he                                                               
said  he   wasn't  sure   the  statute   would  read   that  way.                                                               
Representative  Rokeberg pointed  out that  the committee  packet                                                               
includes  a letter  from  ASMA specifying  that  ASMA supports  a                                                               
locum  tenens  permit being  extended  beyond  240 days  for  the                                                               
purpose of substituting  for a physician or  a specific specialty                                                               
that's otherwise unavailable in that location.                                                                                  
                                                                                                                                
MR. JORDAN said, "I stand corrected."                                                                                           
                                                                                                                                
REPRESENTATIVE ROKEBERG  asked if the  level of review  should be                                                               
raised [for an extension beyond 240 days].                                                                                      
                                                                                                                                
MR.  JORDAN responded  that  such would  seem fair  to  him.   In                                                               
further   response  to   Representative   Rokeberg,  Mr.   Jordan                                                               
confirmed that ASMA  supports permits and extensions  of 240 days                                                               
rather than the board's suggested 180 days.                                                                                     
                                                                                                                                
Number 0492                                                                                                                     
                                                                                                                                
MS.  REARDON  returned  to the  earlier  question  regarding  the                                                               
difference  between the  application documents  for locum  tenens                                                               
permittees  and those  seeking permanent  licensure.   The  locum                                                               
tenens  application doesn't  require the  verification privileges                                                               
from  all  the   hospitals  in  which  the   applicant  has  held                                                               
privileges  in  the  five  years  preceding  the  application  in                                                               
Alaska.  The  American Medical Association (AMA)  profile and the                                                               
National  Practitioner Database  Report aren't  required for  the                                                               
locum tenens  application.  However, the  locum tenens applicants                                                               
must  have  a  clearance  report from  the  Federation  of  State                                                               
Medical  Boards  databank.    The  aforementioned  are  the  most                                                               
significant  differences  in  the   application.    The  type  of                                                               
verification of post graduate training is also different.                                                                       
                                                                                                                                
MS. REARDON noted that one must  submit quite a few items for the                                                               
locum tenens  permit, such as  verifications from all  the states                                                               
in  which the  individual  was  ever licensed.    However, if  an                                                               
applicant  didn't inform  the division  of one  of the  states in                                                               
which the applicant  was licensed, the division might  be able to                                                               
find out  from the AMA  profile.  Furthermore, the  Federation of                                                               
State   Medical   Boards   Disciplinary  Database   should   show                                                               
disciplinary action in other states.                                                                                            
                                                                                                                                
CHAIR MURKOWSKI  asked if any  consideration had been  given with                                                               
regard to  the possibility of doing  additional background checks                                                               
in order to accommodate the indefinite extensions.                                                                              
                                                                                                                                
MS.  REARDON replied  no and  explained that  it probably  wasn't                                                               
considered  because  one  is  fairly close  [to  having  all  the                                                               
documents for a permanent position]  when the locum tenens permit                                                               
is obtained.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ROKEBERG inquired  as  to how  the databanks  are                                                               
used.                                                                                                                           
                                                                                                                                
MS. REARDON  explained that [an applicant]  completes and submits                                                               
a request  for physician profile  form, which is  ultimately sent                                                               
to  the   division.    In  further   response  to  Representative                                                               
Rokeberg, Ms.  Reardon specified that  filing the form  costs $20                                                               
and  is  paid  directly  to  ASMA.    The  National  Practitioner                                                               
Databank Report is requested by the division on-line.                                                                           
                                                                                                                                
REPRESENTATIVE  ROKEBERG  asked  if  [the  National  Practitioner                                                               
Databank Report]  could be added  to Section  3.  With  regard to                                                               
"the   board  or   its  designee"   determining  the   extension,                                                               
Representative Rokeberg asked who its designee would be.                                                                        
                                                                                                                                
MS.   REARDON  clarified   that  the   board  has   an  executive                                                               
administrator,  an  employee  of  the  Division  of  Occupational                                                               
Licensing,  who it  generally  designates.   In  some cases,  the                                                               
board  has  designated  that  an   individual  board  member  has                                                               
designated an individual to do things.                                                                                          
                                                                                                                                
REPRESENTATIVE ROKEBERG pointed out  that Section 1(a) specifies,                                                               
"A member  of the board  or its  executive secretary may  grant a                                                               
temporary permit".                                                                                                              
                                                                                                                                
MS.  REARDON said  that the  board has  never designated  someone                                                               
beyond an  individual board member  or a division employee.   Ms.                                                               
Reardon  confirmed that  there is  personnel in  place to  do the                                                               
verifications.                                                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG  surmised that any adjustment  to the fee                                                               
schedule could be done by regulation.                                                                                           
                                                                                                                                
MS.  REARDON related  that the  concerns of  the division  aren't                                                               
related to the fee schedules.                                                                                                   
                                                                                                                                
Number 0918                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG  directed  attention to  Section  1  and                                                               
inquired as to why the 60-day  language was deleted.  He inquired                                                               
as to the default.                                                                                                              
                                                                                                                                
MS. REARDON  answered that the  locum tenens permit is  valid for                                                               
90 days.   She explained  that this  was a reorganization  of the                                                               
language so that the purposes  and the length could be separated.                                                               
In further response to Representative  Rokeberg, Ms. Reardon said                                                               
that the 240-day timeframe is  in current statute.  She explained                                                               
that when there  is a request for an extension,  the extension is                                                               
for the requested time up to 60 days.                                                                                           
                                                                                                                                
REPRESENTATIVE  ROKEBERG inquired  as  to the  term  of art  that                                                               
would be  used were the committee  to amend Section 3  to include                                                               
the two other databanks.                                                                                                        
                                                                                                                                
MS.  REARDON  National  Practitioner Databank  and  the  American                                                               
Medical Association of Osteopathic Association.                                                                                 
                                                                                                                                
CHAIR  MURKOWSKI  expressed  the  desire to  review  the  "shall"                                                               
language  in Section  2.   Therefore,  Chair Murkowski  announced                                                               
that CSSB 274(L&C) would be held.                                                                                               
                                                                                                                                
REPRESENTATIVE  ROKEBERG asked  if Senator  Olson would  have any                                                               
difficulties  with  the committee  adding  the  two databanks  in                                                               
Section 3.                                                                                                                      
                                                                                                                                
MR. GRAHAM  answered that he  didn't believe Senator  Olson would                                                               
have a problem.                                                                                                                 
                                                                                                                                
[CSSB 274(L&C) was held over.]                                                                                                  
                                                                                                                                
HB 512-UNFAIR CIGARETTE SALES                                                                                                 
                                                                                                                                
CHAIR MURKOWSKI announced that the  final order of business would                                                               
be HOUSE BILL  NO. 512, "An Act relating to  cigarette sales; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 1206                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG moved  to  adopt CSHB  512, Version  22-                                                               
LS1646\F, Ford,  4/26/02, as the  working document.   There being                                                               
no objection, Version F was before the committee.                                                                               
                                                                                                                                
DALE  ANDERSON,  Legislative  Assistant   to  the  House  Finance                                                               
Committee, Alaska  State Legislature, testified on  behalf of the                                                               
sponsor of  HB 512,  the House Finance  Committee.   Mr. Anderson                                                               
provided the following testimony:                                                                                               
                                                                                                                                
     This  CS   came  as  a  collaborative   effort  between                                                                    
     industry  and the  Department of  Revenue  and ...  our                                                                    
     drafters.   House Bill  512 was  introduced to  start a                                                                    
     discussion on  the effects on business  practices that,                                                                    
     to  some,   have  been  looked   upon  as   unfair  and                                                                    
     predatory.   House Bill 512 encourages  fair and honest                                                                    
     competition and  safeguards the public  against unfair,                                                                    
     dishonest, and  fraudulent business  practices existing                                                                    
     in  transactions involving  the sale  of cigarettes  in                                                                    
     the  wholesale and  retail trades  in the  state.   The                                                                    
     bill  creates  a   general  trade  practice  regulation                                                                    
     prohibiting sales  below cost.   The law  considers the                                                                    
     practice of selling below cost  to attract patronage in                                                                    
     the  form  of   deceptive  advertising,  which  diverts                                                                    
     businesses  from dealers  who maintain  a fair  pricing                                                                    
     policy   [and]   ultimately   [results]   in   lessened                                                                    
     competition and  market disruption.  The  basic purpose                                                                    
     of [HB] 512 is to  prevent predatory pricing and ensure                                                                    
     that  fair  competition  among   both  the  retail  and                                                                    
     wholesale distributors of cigarettes  in the state.  It                                                                    
     is difficult for us to  sort out the intricacies of the                                                                    
     tobacco  business so  we've asked  several people  that                                                                    
     are on-line now to help us with the discussion.                                                                            
                                                                                                                                
Number 1309                                                                                                                     
                                                                                                                                
CHAIR MURKOWSKI  inquired as  to what has  brought about  HB 512.                                                               
Does Alaska have a problem  with predatory pricing and cigarettes                                                               
being used as a loss leader, she asked.                                                                                         
                                                                                                                                
MR. ANDERSON said  that is what has been told.   The CS clarifies                                                               
the intent  of the statute.   Furthermore, Section 1  [of Version                                                               
F] broadens  the language to  refer to all sales  [of cigarettes]                                                               
by  licensed sellers  in  the  state.   [The  CS] also  addresses                                                               
enforcement issues that  were of concern to the  department.  Mr.                                                               
Anderson pointed out  that [Version F] changes  the percentage of                                                               
sales from two percent to four  percent.  One of the large issues                                                               
that is addressed  by the fiscal note is the  cost survey issues.                                                               
With the changes  encompassed in Version F, Mr.  Anderson said he                                                               
believes there will be significant changes in the fiscal note.                                                                  
                                                                                                                                
MR.  ANDERSON, in  response to  Chair  Murkowski, specified  that                                                               
Title 43 deals with business practices.                                                                                         
                                                                                                                                
REPRESENTATIVE MEYER  recalled that  at one point  retailers were                                                               
paid to place [cigarettes] on  prime shelf space.  Representative                                                               
Meyer asked if that is still the case and what this legislation                                                                 
attempts to balance.                                                                                                            
                                                                                                                                
MR. ANDERSON said he didn't know the answer and would defer to                                                                  
those on-line.                                                                                                                  
                                                                                                                                
CHAIR MURKOWSKI announced that HB 512 would be held over.                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
5:25 p.m.                                                                                                                       

Document Name Date/Time Subjects