Legislature(2003 - 2004)
03/24/2004 03:28 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 24, 2004
3:28 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Jim Holm
COMMITTEE CALENDAR
HOUSE BILL NO. 434
"An Act relating to the practice of naturopathic medicine; and
providing for an effective date."
- MOVED CSHB 434(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 421
"An Act relating to reconveyances of deeds of trust."
- MOVED CSHB 421(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 490
"An Act relating to the release of employment security records,
to the admissibility of determinations and decisions regarding
unemployment compensation benefits, and to contributions,
interest, penalties, and payments under the Alaska Employment
Security Act; providing that property under the Alaska
Employment Security Act is not subject to the Uniform Unclaimed
Property Act; and providing for an effective date."
- MOVED HB 490 OUT OF COMMITTEE
HOUSE BILL NO. 330
"An Act shortening the time periods after which certain
unclaimed property is presumed to be abandoned; and providing
for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 391
"An Act relating to employers and to victims of crime."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 434
SHORT TITLE: NATUROPATHIC MEDICINE
SPONSOR(S): REPRESENTATIVE(S) HOLM
02/04/04 (H) READ THE FIRST TIME - REFERRALS
02/04/04 (H) L&C, JUD
02/04/04 (H) HES REFERRAL ADDED AFTER L&C
02/18/04 (H) L&C AT 3:15 PM CAPITOL 17
02/18/04 (H) Heard & Held <Assigned to Subcmte>
02/18/04 (H) MINUTE(L&C)
03/03/04 (H) L&C AT 3:15 PM CAPITOL 17
03/03/04 (H) <Bill Hearing Postponed>
03/24/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 421
SHORT TITLE: DEED OF TRUST RECONVEYANCE
SPONSOR(S): REPRESENTATIVE(S) ANDERSON
02/02/04 (H) READ THE FIRST TIME - REFERRALS
02/02/04 (H) L&C, JUD
03/19/04 (H) L&C AT 3:15 PM CAPITOL 17
03/19/04 (H) Scheduled But Not Heard
03/24/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 490
SHORT TITLE: EMPLOYMENT SECURITY ACT AMENDMENTS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) L&C, JUD
03/22/04 (H) L&C AT 3:15 PM CAPITOL 17
03/22/04 (H) Scheduled But Not Heard
03/24/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
CLYDE B. JENSEN, Ph.D.
Oregon Health and Science University
Portland, Oregon
POSITION STATEMENT: Testified in support of HB 434.
DANIEL JAMES YOUNG, N.D.
Eagle River, Alaska
POSITION STATEMENT: Testified as a naturopathic physician in
support of HB 434.
JASON HARMON, N.D
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 434.
MICHAEL PRICE, Owner
Mat-Su Title Insurance Agency, Inc. (Wasilla)
and Fidelity Title (Anchorage);
Member, Board of Directors
Alaska Land Title Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 421 and answered
questions.
JEFF BLAKE
Stewart Title of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 421.
TERRY BRYAN, President
First American Title of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 421.
JOHN BITNEY, Lobbyist
for Alaska Land Title Association
Palmer, Alaska
POSITION STATEMENT: Explained Amendment 1 to HB 421.
TOM NELSON, Director
Employment Security Division
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Testified on sections of HB 490 and
answered questions.
TOBY NANCY STEINBERGER, Assistant Attorney General
Labor and State Affairs Section
Civil Division (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Presented information about portions of
HB 490 and answered questions.
BILL KRAMER, Chief of Unemployment Insurance
Division of Employment Security
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Answered questions about HB 490.
LEONARD M. LINTON, JR., District Attorney
3rd Judicial District (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 490,
specifically Section 2.
ACTION NARRATIVE
TAPE 04-32, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:28 p.m. Representatives
Anderson, Gatto, Dahlstrom, Lynn, Crawford, and Guttenberg were
present at the call to order. Representative Rokeberg arrived
as the meeting was in progress. Representative Holm was also
present.
HB 434-NATUROPATHIC MEDICINE
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 434, "An Act relating to the practice of
naturopathic medicine; and providing for an effective date."
Number 0136
CLYDE B. JENSEN, Ph.D., Oregon Health and Science University,
noted that he'd traveled to Juneau at his own expense from his
home in Portland. He testified:
I'm particularly interested in rural care and the
impact that naturopathic medicine can have upon rural
health care. I've been introduced earlier as a Ph.D.
in pharmacology and a medical educator. I'm best
known, though, as an administrator of medical
colleges. I've been responsible for the executive
administration of colleges of allopathic or M.D.
[medical doctor] medicine, osteopathic or D.O. [doctor
of osteopathy] medicine, naturopathic or N.D.
[naturopathic doctor] medicine, and oriental medicine,
so I'm frequently called upon to speak before
policymaking groups on issues pertaining to the
"curative" educational programs of those several
different professions. ...
Number 0212
DR. JENSEN continued:
The three bullet points that I will share with you are
naturopaths versus naturopathic physicians; a second
will be comparative medical education; a third will be
continuing medical education and prescription
authority. ...
One of the things that I have learned as I have met
with some members of the legislature today is that
there is not an awareness of the fact that the term
"naturopath" is an unregulated term. It can be owned
by anyone who chooses to use it. A naturopath - or a
person can call himself a naturopath - in those states
in which naturopathic physicians are not licensed -
and there are no regulations in those states that
would prevent that person from referring to himself
and holding himself out as a naturopath.
I've seen correspondence from the Alaska State Medical
Association that suggests that there may not be an
awareness among members of the M.D. profession in the
state that not all people who call themselves
naturopaths are trained in the way that naturopathic
physicians, of the type who are seated behind me, are
trained.
That, then, takes me to my next bullet, which is
comparative education. Naturopathic physicians are
trained in four colleges in the United States. Two
additional colleges either exist or are developing in
Canada, and in each case it is necessary for them to
receive a bachelor's degree before being admitted into
those colleges. In each case the course of study in
those colleges is four years in duration. The content
of those four years of study would be very similar,
and in many cases identical, to the training that is
received in M.D. and D.O. colleges; particularly, the
first two years of that training is identical to that
which is received in M.D. and D.O. colleges.
The second two years, as many of you know, is spent
training in clinics and in hospitals and, because the
nature of naturopathic medicine and the practice of it
is different from that of M.D. and D.O. medicine,
naturopathic physicians receive clinical training in
outpatient clinics and largely under the supervision
of naturopathic physicians.
Number 0433
DR. JENSEN continued:
That, then, brings me to the third and final bullet
that I will share with you, that is, continuing
medical education and prescription authority. What
I've learned as I have visited with a few members of
the legislature today is that there are those who are
concerned about expanding the scope of practice of
naturopaths in Alaska to include the authority to
write prescriptions for drugs. And the question is
asked, "What kind of training do they have in the use
of pharmaceutical products in their practices?" It's
an excellent question.
In the two years of training at the beginning of the
four-year naturopathic medical education program,
naturopathic medical students are taught pharmacology;
that is the classroom basic training in the use of
drugs. We teach them in that coursework how drugs act
upon the body, how the body acts upon the drugs. I
can tell you, as both a pharmacologist and as a former
leader of those colleges, that that classroom training
is the same whether you are studying to be an M.D., a
D.O., or an N.D.
In the latter two years of training, M.D.s will go to
hospitals and multi-specialty group practices, where
they will see a lot of drugs prescribed. Naturopathic
medical students will go to outpatient clinics, where
they will see fewer drugs prescribed because, once
again, they are studying under the supervision of
naturopathic physicians who typically use few drugs.
Number 0544
DR. JENSEN continued:
Continuing medical education is the process that other
states that have allowed prescription-writing
authority to naturopathic physicians to use, in order
to ramp up their ability to utilize pharmaceutical
products that they may have had somewhat limited
experience in using while they were going to medical
school.
In my judgment, those states in which naturopathic
physicians are permitted to prescribe drugs are
sufficiently well trained to utilize the drugs that
they prescribe. I will also tell you that, in my
experience, naturopathic physicians are very reticent
to prescribe drugs, because they became naturopathic
physicians for the purpose of being able to use other
types of therapies - and they simply do that very,
very well.
My promise was that I would be brief. I've touched
upon three bullets, and there are a number of other
topics that might be of interest to you. I'll read a
menu of things that I can discuss if you're
interested. Naturopathic medicine is an emerging
profession; I can speak with you about what that
means. I'm presently writing a book on medical
(indisc.) versus the medical continuum. ...
Naturopathic medicine and rural health, I think, may
have some particular importance to this state because
of the primary-care shortage in areas. Primary care
and naturopathic medicine is a topic that I'm quite
interested in; those are subjects that I'd be happy to
address as well.
Number 0659
REPRESENTATIVE GUTTENBERG said it is interesting to note the
reference to the fact that if "we don't do anything" and there's
no licensing requirements and no statutes relating to
naturopathic medicine, that anybody can call himself or herself
a naturopath.
DR. JENSEN replied that in Alaska a license is required. He
said that in other states healthcare consumers may go to a
person whose business card says naturopath, but they will not
know the nature of their training. Some people in the state
medical association are not aware of this, he noted.
Number 0720
REPRESENTATIVE GATTO said you used the term "naturopathic
physician" several times.
DR. JENSEN agreed.
REPRESENTATIVE GATTO said that in statute it says, "A person who
practices naturopathy shall clearly disclose that the person's
training and practices in naturopathy. ... A person who
practices naturopathy may not use the word physician in the
person's title." Alaska excludes that possibility, he added.
DR. JENSEN said that varies from jurisdiction to jurisdiction.
REPRESENTATIVE GATTO asked Dr. Jensen how he feels about that.
DR. JENSEN replied, "Those who are trained in four-year colleges
of medicine, should be, deserve to be, recognized as physicians
and their patients are already referring to them as such."
REPRESENTATIVE GATTO said he believes that the people who are
using the word "physicians" would object to that.
DR. JENSEN said you could expect that those from the
conventional health care professions whose responsibilities
includes protecting the public, would want to be certain that
those who call themselves physicians have been appropriately
trained. Dr. Jensen opined that they have been trained
appropriately.
REPRESENTATIVE GATTO asked about the four colleges and whether
Dr. Jensen has an association with any of them.
DR. JENSEN replied that he was at one time the president of the
oldest of the four colleges in Portland, Oregon. He said he
served in that capacity for five years and completed that
service about two years ago.
REPRESENTATIVE GATTO asked if naturopaths frequently sell
products within their own offices and if they had prescription
drug rights, if they would be a dispensing pharmacy.
Number 0829
DR. JENSEN replied that in many cases it is necessary for
naturopaths to both compound and dispense products from their
own offices because [the products] are not available from other
retail sources. Naturopathic physicians have been taught to
blend mixtures of herbs and nutrients in ways that are not
commercially available, he noted.
REPRESENTATIVE GATTO asked if they do that now.
DR. JENSEN said yes.
REPRESENTATIVE GATTO pointed out that the prescription drug
rights [in the bill] go beyond that and extend their ability to
compound prescription drugs in addition to the existing stock
that they have. He asked Dr. Jensen for his opinion on that.
DR. JENSEN said that, personally, he feels that would be
inappropriate. He said he does not believe that that is the
intent of this legislation.
REPRESENTATIVE GATTO said, "But it would allow it."
DR. JENSEN said he has not read the legislation so he cannot
respond to that.
REPRESENTATIVE GATTO said that the legislation does call for
prescription drug rights to be given to individuals who now only
compound natural ingredients for dispensing or selling from
their own offices.
Number 0946
DR. JENSEN replied that Representative Gatto has asked a very
incisive question, one that Dr. Jensen has not thought of. He
said there are two reasons why M.D.s and D.O.s do not sell
products from their offices. One is that both of those
professions have codes of ethics that for purposes of conflict
of interest preclude physicians from selling products that they
prescribe. The second reason is that most of those physicians
also receive Medicare and Medicaid reimbursements and cannot
sell products for private gain. Naturopathic physicians are not
compelled by either of those two reasons, he pointed out. He
said that his personal opinion is that dispensing for private
gain from any practice is a dubious activity. He noted that the
exception to that is when a naturopathic physician must compound
products that are not available from other retail sources, they
may have no choice but to dispense. He restated that he does
not believe it is the intent of this legislation to permit the
dispensing and sale of pharmaceutical products.
Number 1038
REPRESENTATIVE CRAWFORD said that the way that the bill is
written now, it would give unlimited ability to prescribe drugs.
He asked if Dr. Jensen recommends that [naturopathic physicians]
be able to prescribe addictive and psychotropic drugs.
DR. JENSEN said that he has some apprehensions about that. The
scope of practice that is needed by most primary care physicians
is the scope of practice that can probably function quite well
without scheduled substances or at least [Schedule II]
substances where there is a high abuse potential, he opined. He
related that he thinks it is a valid concern.
REPRESENTATIVE GATTO stated that it does not matter which doctor
he speaks with, they all have the same opinion, that naturopaths
should not be allowed to dispense prescription medication. He
said that he has heard the naturopaths say that they have all
the business they can handle, and they are not going to make any
additional income from dispensing drugs. He asked what argument
could be made in favor of allowing naturopaths to prescribe
prescription drugs.
Number 1138
DR. JENSEN said he may not be the best person to answer the
question because he is not a naturopath. He pointed out that a
naturopath is a very comprehensively trained physician and
Alaska is one of the most ubiquitous, health personnel shortaged
states in the country because of the large land mass and the
sparse population. Naturopathic physicians can play a very
positive and powerful role in meeting the needs, particularly of
rural Alaskans, who may not have access to healthcare otherwise,
he opined.
DR. JENSEN continued:
If they are restricted in their scope of practice, so
that naturopathic physicians are unable to do the
things that they are really capable of doing, the
people who [will] suffer are not the physicians.
They'll continue to make a decent living. The people
who will suffer are the patients that would like to
have access to adequate and appropriate health care
and whose physicians are limited in performing the
services that they should perform. Now, if I were a
naturopathic physician and I had devoted four or more
years of my life being trained, and I practiced in a
jurisdiction that didn't value my training, I'd
probably would be disappointed with the jurisdiction
and I may not practice there long. I suspect that
part of the rationale behind this legislation has to
do with appropriate recognition for some very high
quality training.
REPRESENTATIVE GATTO gave an example of earaches and
antibiotics, which are not given any more. He asked if
naturopaths would keep up on that information as well as any
physician.
DR. JENSEN replied that continuing education is the way that any
physician is supposed to keep up. "Speaking to that specific
example that you have given, off all of the health care
professionals with which I have worked, the naturopath would be
the least likely to venture into the prescription of drugs for
purposes that they may not be warranted," he pointed out.
REPRESENTATIVE GATTO asked if it is Dr. Jensen's opinion that
the regular physicians are simply in a "turf protection".
DR. JENSEN said he is very reluctant to say that a state medical
association or an individual would oppose legislation for
purposes of economics, but agreed that there is an economic
impact that can be expected by M.D.s, D.O.s, and mid-level
providers in the state, should the scope of naturopathic
physicians be expanded. He pointed out that naturopaths are
taught to do something that a lot of conventional providers
don't have a lot of time to do, and that's to touch, talk, and
work with their patients and get to know them. There will be
health care consumers who will choose to receive more of their
care from naturopathic physicians as the scope of practice
enables them to provide the care that they desire, he added.
"These are physicians who can compete, and the time will come
when they will," he concluded.
CHAIR ANDERSON pointed out that there is a fear of devaluation
of the medical license of a medical doctor, scientific
uncertainty in physicians' minds of the verifiability of some of
the practices, the fear of misdiagnosis, and the question of the
quality of the education. He asked Dr. Jensen if those are the
arguments he has heard in other states.
Number 1483
DR. JENSEN said they are. He related that he left the
University of Oklahoma in 1996 to meet his first naturopathic
physician in Oregon, and until that time, that was also his
opinion. He related that during the five years he became
somewhat of an expert on the subject, he found that his concerns
were unwarranted.
CHAIR ANDERSON, reporting on refutes to the three aforementioned
concerns, said that the education [of naturopaths] surpasses
that of nurse practitioners, midwives and physician assistants.
In terms of the Western/Eastern medicine debate, Chair Anderson
said that issue is not so easily decided. In terms of the
devaluation of the medical license, it has been stated that the
naturopath's patients aren't being taken from traditional
practices, and both have more than enough patients. He asked if
Dr. Jensen agrees.
DR. JENSEN agreed. He added that as for the economic issue,
naturopathic physicians are not receiving entitlement
reimbursement, so there is no competition for that dollar. In
most cases, naturopathic physicians are also not receiving third
party reimbursement. Most people are willing to pay out of
pocket for those services.
Number 1603
REPRESENTATIVE LYNN pointed out that there is probably not
scientific certainty for anything. He asked how the typical
person chooses from the variety of medical treatments available.
He wondered how a person knows where to go for their medical
problem. He said he will probably vote no recommendation on
this bill.
DR. JENSEN replied that the average person probably does not
have enough information to know where to go today. The average
person is probably going to gather information from other health
care professionals, and as the professionals become more and
more knowledgeable, they will be able to make referrals to one
another more frequently and more confidently, he related.
DR. JENSEN explained:
In the world of health care, we used to refer to
conventional and alternative medicine and then we
discovered that there were things about alternative
medicine that were more compatible with conventional
medicine than we thought, and so we started referring
to conventional medicine and alternative medicine as
complimentary medicine because they could work
together. Today, there's a new buzzword within the
field and it's called integrative medicine. That's
where M.D.s and D.O.s and N.D.s and D.C.s and other
types of health care professionals can actually work
as a team. I predict that the day will come, and it
will come only as a consequence of legislation that
permits each of the groups to practice the things that
they have been taught to practice, but I predict that
the day will come when there will be health care
managers in individual offices or in groups of offices
that will help patients navigate through this very
complex assortment of health care options. And, the
day will come when M.D.s will be referring to N.D.s
and N.D.s to D.C.s - we're simply not there yet. But,
you've raised a very difficult question for health
care consumers in the year 2004. How are they going
to know? They never will know, though, if we don't
allow health care professionals to practice that scope
of practice that they've been trained to deliver.
REPRESENTATIVE LYNN opined that it is a very dangerous thing for
the consumer because he or she is at the mercy of health care
providers.
DR. JENSEN related that there is a protective mechanism in all
jurisdictions for the consumer. Among those protective
mechanisms are the board of examiners or the licensing board.
Whenever a consumer is confronted by a situation that he or she
thinks may be dubious, he or she can report that to the board,
which is required by law to review it.
Number 1801
REPRESENTATIVE GUTTENBERG asked, "Are we licensing here above
the education level, or does this match the authority that we're
giving naturopaths?"
DR. JENSEN replied that the current license in Alaska is below
the level of education of a naturopath. The proposed
legislation would come closer to, but not exceed the level to
which they are trained, he opined. He noted that the mention of
controlled substances earlier is one example of what he
considers the high end of a primary care practice. That is
where there is some risk to which patients would be exposed, he
said.
CHAIR ANDERSON wondered if this legislation is setting a
precedent and is beyond the scope of what naturopaths are
allowed to do in other states.
DR. JENSEN said, "No, there are other states in which the scope
and practice already exceeds that which is recommended by this
legislature."
Number 1888
REPRESENTATIVE DAHLSTROM asked if his appropriate title is
doctor.
CHAIR ANDERSON said, "Ph.D."
DR. JENSEN replied that his daughter says he is the kind of
doctor who never helps anyone.
REPRESENTATIVE DAHLSTROM thanked Dr. Jensen for coming and
testifying at his own expense. She asked for clarification
about the four-year degree and wondered if English and math are
part of the course requirements.
DR. JENSEN replied that the English and math classes are taken
before a person enters the four-year naturopathic program.
REPRESENTATIVE DAHLSTROM said, "So, I have a four-year degree
already, and this is a second four-year degree on top of it."
DR. JENSEN said yes, and thanks for asking that question.
REPRESENTATIVE DAHLSTROM asked for Dr. Jensen's opinion about a
naturopathic physician having to team up with a traditional
physician in the same office in order to practice.
DR. JENSEN said the teaming up part is happening more and more
often for the convenience of the patient, but for supervision
purposes there may be a precedent set in California where their
statute does call for some association between naturopathic
physicians and conventional physicians.
CHAIR ANDERSON asked if that devaluates the naturopathic license
and is very expensive because of the need to relocate to a
doctor's office.
DR. JENSEN said if he were a naturopathic physician he would
avoid that type of relationship for the reasons Chair Anderson
described.
Number 2037
REPRESENTATIVE DAHLSTROM asked if the state of California offers
full prescription rights to their naturopathic physicians.
DR. JENSEN said he does not believe so. He noted that it was a
bill recently passed in the last legislative session and has not
yet been implemented.
REPRESENTATIVE DAHLSTROM wondered if Dr. Jensen would consider
it to be a friendly amendment to the bill to change it to allow
just Schedule I drugs, a section that deals with the compounding
of drugs, and whether they could or could not be sold out of the
office.
DR. JENSEN replied that he understands the intent of the
question but that he has to change the terminology because a
Schedule I substance is the most dangerous of all the drugs.
The friendly amendment would allow prescription authority up to
a certain level of scheduled substances such as Schedule II, he
suggested. He said he would encourage the discussion of that.
CHAIR ANDERSON noted the arrival of Representative Holm and
brought him up to date, explaining that Representative Dahlstrom
is looking into limitation on prescriptions and on dispensing
from a [naturopath's] office of things like antibiotics.
REPRESENTATIVE DAHLSTROM clarified that she is not thinking of
antibiotics, but of compounds such as acne medicine.
Number 2147
CHAIR ANDERSON closed public testimony. He asked Representative
Gatto to report on the subcommittee's findings.
REPRESENTATIVE GATTO said he did not submit a letter signed by
all three members of the subcommittee, partly because he could
not decide on the issue. With regard to question number one,
which asked for a compromise with the Alaska Medical
Association, there was none to be had, he reported. With regard
to question two, discussion of Section 6, regarding minor
surgery, most of the [subcommittee] agreed that they did not
know what minor surgery is. In California minor surgery is to
repair a laceration without sutures, he reported.
Representative Dahlstrom brought up the fact that laser surgery
does not use sutures, he said. There was discussion of whether
floating a catheter through a tiny opening is surgery or a
procedure, and so the group decided they were not clear on the
definition of minor surgery. With regard to question three, the
discussion of Section 15, the repeal of AS 08.45.040, which
refers to the disclosure that naturopaths are required to
disclose to each patient that their training is in naturopathy,
and whether or not they have malpractice insurance, he said he
is not sure that Section 15 is even in the bill.
Number 2251
CHAIR ANDERSON reported that Section 15, page 7, line 19,
repeals AS 08.45.040, which Representative Gatto as chair of the
subcommittee referred to, states:
Disclosures required by person who practices
naturopathy. Subsection (a) ... shall clearly
disclose that the person's training and practices in
naturopathy (1) to each patient and (2) on all
material used in the practice of naturopathy and made
available to patients or to the public. (b) A person
who practices naturopathy without being covered by
malpractice insurance shall disclose to each patient
that the person does not have the insurance.
CHAIR ANDERSON said he is unclear why that should be repealed.
He asked Representative Holm why that is.
REPRESENTATIVE HOLM said he is unsure why that section is
repealed.
CHAIR ANDERSON restated the unresolved questions that are still
before the committee. One is the reconciliation with the Alaska
Medical Association, which does not support the bill. The
parameters dealing with prescriptions still need to be resolved,
the definition of minor surgery still needs to be defined, and
there is a repeal of a disclosure section to figure out, he
related. The issue about prescribing of drugs would also need
to be resolved, he added.
Number 2354
REPRESENTATIVE DAHLSTROM requested that Representative Gatto, as
chair of the subcommittee, discuss those issues with the maker
of the bill before the committee votes on the bill.
TAPE 04-32, SIDE B
Number 2365
CHAIR ANDERSON replied that he is committed to moving the bill
out without objection from the committee. He said he agrees
with the general intent of the bill.
REPRESENTATIVE ROKEBERG suggested that the members of the
committee offer amendments if they wish to.
Number 2345
DANIEL JAMES YOUNG, N.D., a naturopathic physician and a
licensed acupuncturist, addressing the repealing of [Section
15], reported that 17 years ago there was not a license for
naturopathic physicians in Alaska. He said this section is
antiquated and refers to the practice of naturopathy, which Dr.
Jensen explained is different from the practice of a
naturopathic physician. He said that patients know clearly that
they are dealing with a naturopathic physician. It is now
common practice for naturopathic physicians to carry malpractice
insurance, and it didn't used to be available, he added.
REPRESENTATIVE GATTO asked if malpractice is required.
DR. YOUNG replied that he is not sure if it is required, but
everyone has it.
REPRESENTATIVE GATTO said, "The ones you know of." He suggested
keeping the disclosure in the bill.
DR. YOUNG said it is his understanding that naturopathic
physicians have malpractice insurance and the patients know it.
Number 2236
CHAIR ANDERSON suggested that if a naturopathic physician is
going to perform minor surgery and prescribe medication, the
bill should mandate malpractice insurance.
REPRESENTATIVE ROKEBERG said there is no mandated insurance
requirement in any of the licensing procedures in the state. He
asked if [Section 15] is not repealed would there be parity or
would M.D.s then have to make the same disclosure.
Number 2184
REPRESENTATIVE DAHLSTROM offered Conceptual Amendment 1, on page
2, line 27, with the intent of adding the definition of minor
surgery.
CHAIR ANDERSON objected. He stated that the amendment is too
broad.
REPRESENTATIVE ROKEBERG pointed out that there already is a
definition of minor surgery in the bill on page 6, line 19. He
said he thinks it adequately describes the issue.
CHAIR ANDERSON clarified that page 6, lines 20-30, describe
minor surgery.
REPRESENTATIVE DAHLSTROM said to disregard that, and then she
prepared to offer Conceptual Amendment 1 dealing with the
prescriptive rights, but said she did not know which section to
add it to.
Number 2116
REPRESENTATIVE ROKEBERG suggested page 5, line 16. He asked if
Representative Dahlstrom is thinking about adding a level [of
drug].
REPRESENTATIVE DAHLSTROM said correct.
REPRESENTATIVE ROKEBERG asked the witness for his opinion on
what levels would be appropriate.
Number 2094
DR. YOUNG replied that his understanding is that the intent in
this area was to allow naturopathic physicians to be able to
access the prescription-type medications that they need to
practice naturopathic medicine safely. [This section] was based
on state laws from other states that license naturopathic
physicians. Schedule II drugs allow for use of narcotic
substances for the relief of pain, he explained. Schedules III
and IV [drugs] lessen the extent of potential for psychological
or physiologic dependence, he said. "We haven't outlined it
here because we thought that that would be in the regulations
and that it also implies that not all naturopathic physicians
were going to apply for a DEA [Drug Enforcement Administration]
license, it was only those that had specific training and a
specialization, as such, and would cover additional pharmacal
therapeutics ...."
Number 2017
CHAIR ANDERSON asked Representative Dahlstrom to consider
withholding Conceptual Amendment 1 because of the fact that
there are two more committees of referral and [the amendment]
could not be finished today. He suggested passing the bill on
to House Health, Education, and Social Services Standing
Committee to address all of this issues. He also opined that
scheduling HB 434 with House Judiciary Standing Committee is
unnecessary and could be waived.
REPRESENTATIVE CRAWFORD said he does not feel comfortable
letting the bill move on without addressing the concerns. He
suggesting limiting the amount of the ability to prescribe drugs
to level III and IV. He said he does not want psychotropic and
anti-psychotic drugs to be included.
CHAIR ANDERSON asked how long the bill has been held for the
subcommittee. It has been thirty days and the subcommittee came
back with nothing, he opined. He said now he is being told by
the whole subcommittee that there is no agreement on any of
these concerns and he is being asked to hold the bill.
REPRESENTATIVE ROKEBERG said he would like to move an amendment.
REPRESENTATIVE DAHLSTROM noted that she would be more
comfortable with the amendment about the prescriptive level
being handled in this committee.
Number 1865
REPRESENTATIVE ROKEBERG moved to adopt Amendment 1, to delete
[paragraph 4] on page 5, lines 16 and 17.
REPRESENTATIVE ROKEBERG explained that this is a point of
contention and the bill has two more committees to go to.
REPRESENTATIVE CRAWFORD objected. He said that deleting
[paragraph 4] is the correct thing to do but it does not go far
enough.
REPRESENTATIVE ROKEBERG asked if Schedule III and IV drugs are
controlled substances.
Number 1733
DR. YOUNG suggested dropping it down to Schedule II drugs. The
dangerous psychotropic drugs are in Schedule I, he said.
REPRESENTATIVE ROKEBERG asked if Schedule I - IV drugs are DEA
controlled substances.
DR. YOUNG replied yes. The schedules are set up by the Drug
Enforcement Agency. Schedule I are drugs that are usually
research only and very dangerous, he explained.
REPRESENTATIVE ROKEBERG repeated his question.
DR. YOUNG said yes.
REPRESENTATIVE ROKEBERG pointed out that Amendment 1 deletes all
controlled substances.
CHAIR ANDERSON asked if abortion is minor surgery.
DR. YOUNG said no.
Number 1621
REPRESENTATIVE CRAWFORD asked if Prozac and Zoloft are
controlled substances.
JASON HARMON, N.D., explained that Schedule II drugs are
medicines that have a high potential for abuse. An example of a
Schedule III drug is cough syrup and other codeine-based
medicines. Valium is an example of a Schedule IV drug, he
added.
REPRESENTATIVE ROKEBERG said he would include psychotropic and
psychotherapeutic drugs as a friendly amendment to Conceptual
Amendment 1.
Number 1491
REPRESENTATIVE LYNN asked what schedule RU486 would be under.
DR. HARMON said he does not know. He asked for clarification of
the amendment, and whether the DEA license for naturopathic
physicians would be deleted.
REPRESENTATIVE ROKEBERG said that is correct and there would be
two other committees to put it back in.
CHAIR ANDERSON asked if there were any further objections to
Conceptual Amendment 1.
REPRESENTATIVE GUTTENBERG objected.
A roll call vote was taken. Representatives Gatto, Dahlstrom,
Lynn, Rokeberg, Crawford, and Anderson voted in favor of
Conceptual Amendment 1. Representative Guttenberg voted against
it. Therefore, Conceptual Amendment 1 was adopted by a vote of
6-1.
Number 1396
REPRESENTATIVE DAHLSTROM said that everyone in the room could
see what just happened in the last ten minutes. She related:
The subcommittee met and discussed this and had
meeting after meeting after meeting, talked with
professionals from every aspect. You can see what
happened here in the last ten minutes. We had
paperwork that was ready to be presented; we got
information to change those facts. I personally have
been working on this since June, and so I don't take
real kindly to someone telling me that they're
embarrassed by what my actions were in the
subcommittee and I state that for you to consider. I
mean I think that there certainly have been things
that have happened in this legislature that maybe
people could and should be embarrassed about. I am
not embarrassed by what our subcommittee did and the
intent that we had from the very first time we met
until talking just right before we got here have been
the concerns that are still on all of our minds. And,
I feel it necessary to put that on the record.
CHAIR ANDERSON replied that his statement about embarrassment
was simply that "a lot of folks came in and I feel that we
didn't conclude or even come to any consensus." He noted that
his comments were not directed at Representative Dahlstrom or
toward any individual person.
REPRESENTATIVE LYNN said that debate and voting is necessary
based on the perceived merits and demerits of the bill, whether
anyone flew in to testify or not.
Number 1279
REPRESENTATIVE GATTO said a person does not have to be present
to make sure that the bill passes out. He noted that the
subcommittee did have agreements and the agreements were that
prescription drug privileges were not in the best interest. He
said Representative Dahlstrom is correct in that the committee
did spent a lot of time on this bill. He said that there was
concern because it appears that the naturopathic physicians
already seem to be taking privileges that are addressed in this
bill.
DR. HARMON said he does not represent himself as a doctor of
naturopathic medicine even though it states that on his card.
CHAIR ANDERSON said that the next subcommittee should come up
with some level of recommendation in order to be more concise.
He said he does appreciate the subcommittee's work.
REPRESENTATIVE GATTO said that he did not have a chance to
address question number four, but the committee eventually got
to it.
Number 1183
REPRESENTATIVE ROKEBERG moved to report HB 434 out of committee,
as amended, with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 434(L&C) was
reported from the House Labor and Commerce Standing Committee.
HB 421-DEED OF TRUST RECONVEYANCE
Number 1123
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 421, "An Act relating to reconveyances of
deeds of trust."
CHAIR ANDERSON, sponsor, explained that HB 421 was introduced at
the request of the Alaska Land Title Association (ALTA). The
intent is to provide a process in state law whereby a
reconveyance of deeds of trust can be recorded within a
reasonable timeframe. Noting the presence of people from the
title insurance industry to answer technical questions, he said
the bill's language may appear complex, but the concept and
purpose are intended to be simple.
CHAIR ANDERSON offered details, saying in a home purchase
through a standard mortgage there is a deed of trust. Once the
homeowner pays off the mortgage, the mortgage-servicing company
isn't required by law to record the reconveyance of the mortgage
with the State Recorder's Office, under the Department of
Natural Resources (DNR), within any timeframe; it could take
years to get the reconveyance recorded. These mortgage-
servicing companies often are out of state, a practice likely to
continue, and often find it difficult to take care of the
reconveyances with the recorder's office in Alaska. Problems
arise when the homes or properties are resold and additional
time and complications impede the new sale.
CHAIR ANDERSON reported that since introduction of this
legislation, Representative Berkowitz and Senator Stedman have
identified this issue in recent property purchases. Pointing
out that deeds of trust covered under HB 421 are only those held
by a title insurance company, he said the heart of the bill is
on page 1, lines 9-10, relating to the title insurance company's
receipt of satisfactory evidence of the payment in full before
beginning the reconveyance. Much of the bill focuses on
ensuring a full and proper notification process, and standards
are established for the notification forms in order to help
ensure quality control. He noted that these sections were taken
from Idaho's law on this matter.
Number 1000
MICHAEL PRICE, Owner, Mat-Su Title Insurance Agency, Inc.
(Wasilla), and Fidelity Title (Anchorage); Member, Board of
Directors, Alaska Land Title Association, offered to be the main
person to answer technical questions. Stating support for
HB 421, he said 20 years ago perhaps 99 percent of deeds of
trust in Alaska were done by in-state lenders; when mortgages
were paid off, there was no significant problem with timely
recording of releases. Increasingly, however, those are done by
out-of-state companies that may even sell the mortgages to other
companies. Whereas few deeds of trust experienced reconveyance
problems previously, Mr. Price said he has been told several
thousands now are known to have been satisfied and yet the
reconveyance has become seemingly impossible. He agreed this
situation isn't unique to Alaska.
MR. PRICE explained that with this bill, upon satisfactory proof
of evidence of payment - which companies like his will have
because they'll have a negotiated check or wire transfer of
funds - there will be a vehicle and method to provide the
release. This will benefit the stream of commerce and all
Alaskans, he predicted. He requested favorable consideration of
this much-needed bill.
Number 0801
REPRESENTATIVE LYNN disclosed that he is a licensed associate
real estate broker with a major company that gets peripherally
involved with reconveyances.
CHAIR ANDERSON told members he'd been advised that members
didn't need to disclose conflicts unless they were on the House
floor voting.
REPRESENTATIVE ROKEBERG said that's not necessarily true. He
noted there is an advisory opinion before the Select Committee
on Legislative Ethics [which he's a member of] on that very
question.
CHAIR ANDERSON thanked Representative Lynn for the disclosure
and requested that he vote on the bill if there is a vote.
Number 0766
REPRESENTATIVE ROKEBERG asked Mr. Price why it was decided to
put the form itself in statute and whether there is a way to
avoid that.
MR. PRICE said he presumes and believes the form was generated
as a result of having a specific amount of information to be
provided and to make sure the notification is uniform, no matter
where in the state it occurs. He surmised that members of the
industry won't find it objectionable because they deal with
statutory forms such as the general power of attorney on a
regular basis.
Number 0684
REPRESENTATIVE ROKEBERG mentioned, "Receipt of satisfactory
payment" and asked whether the canceled check, if that was all
the company had, would be adequate for the record.
MR. PRICE answered affirmatively, saying 9 times out of 10 it
will be a combination of the payoff information received from
the outside lender and evidence that a check or wire transfer
was sent to [that lender]. He added, "On some occasions, we
will accept the evidence of the payoff amount ... and evidence
that, let's say, a local bank did the closing ... as a result of
a construction loan and that they sent the money." Thus he said
he could foresee taking the representation of a reputable
Alaskan business, principally a bank, that the payment was made.
"But most of the time, I would say, it's going to be ourselves
making the payment," he concluded.
Number 0615
REPRESENTATIVE ROKEBERG asked how it works, expressed concern
about what the current law is regarding this issue, and asked
whether the lender has to formally acknowledge receipt of the
payoff of the note in order for [the title insurance agency] to
issue the reconveyance.
MR. PRICE replied:
We receive a ... request for reconveyance executed by
the lender, saying that it was ... paid off in full
and to release the deed of trust or mortgage. ...
However, there is no state statute, at least that I am
aware of, that requires the lender to do that. Now,
local lenders have always done it because ... it
serves our stream of commerce. ...
Where we're having problems ... are those outside
lenders ... who know ... they have refinanced ...
200,000 loans in the last year, and maybe in the next
two or three years they'll get around to doing the
request for reconveyance, but they're certainly in no
hurry to add to their staff to do so. So there's
currently no law that I'm aware of ... that requires
them to provide us evidence that the loan has been
paid ... and to release it.
Number 0486
REPRESENTATIVE ROKEBERG pointed out that Mr. Price is a long-
practicing attorney in this area, and suggested if he doesn't
know about a law, there isn't one. He requested confirmation
that there's no statutory mandate for notification or delivery
of the request for reconveyance.
MR. PRICE answered:
Believe it or not, ... we do not. It is a matter of
contract. And, of course, those companies that wish
to do business in Alaska are more inclined to do so.
However, as I indicated earlier and as you are aware,
a lot of these deeds of trust go through three or four
different assignments that we have to chase down to
get the payoff, and those people are not licensed to
do business in the state - they're not required to be,
by the way - and ... they really have very little, if
any, nexus to the state. ... Therefore, our ability to
force them to do what is right is somewhat limited.
This puts the burden on the title industry. But, on
the other hand, it is our burden to clear title and
therefore it is ... the most responsible group to sort
of require the release of these deeds of trust upon.
... And we are, by the way, ... an industry that is
regulated heavily by ... the Division of Insurance.
... We are required to have fiduciary bonds. ... We
are used to dealing with people's monies, and ... I
think, are a trustworthy group to release deeds of
trust when they've been paid.
Number 0300
REPRESENTATIVE CRAWFORD asked whether this bill would change the
process of sending the owner a deed of trust to record after a
property was paid off. He cited an example of his own rental
properties [in Louisiana].
MR. PRICE said no. What happens to perhaps 95 percent of all
deeds of trust won't change. When one is paid off, the request
for reconveyance and the note are sent to the title company,
which releases and reconveys it almost immediately. Once the
mortgage is paid off, the collection agent would send it
automatically to the title company, or would send it to the
owner with advice to send it to the title company. He said this
bill would only affect the approximately 4 to 5 percent of deeds
of trust that "we cannot get the lending institution to release,
though we know they have received their payment."
Number 0205
REPRESENTATIVE CRAWFORD said he didn't recall ever sending a
deed to a title company.
REPRESENTATIVE ROKEBERG explained that the title company holds
the deed until it's satisfied; the request for reconveyance is
the request "to send you the deed when you paid it off." He
said that's it in a nutshell: these outside lenders aren't
sending the verification or the request for reconveyance to
allow the title company, which holds the deed, to provide it to
[the owner].
REPRESENTATIVE CRAWFORD noted that Louisiana doesn't have title
companies.
REPRESENTATIVE ROKEBERG said Louisiana has French codified law
and contract real estate. However, Alaska is a "deed of trust
state" where a trustee holds the deed until it is paid off.
MR. PRICE affirmed the last statement and said in most instances
the local title company is named the trustee. In order to
release the mortgage, [the title company] executes a document
called a "deed of reconveyance." He remarked, "It's somewhat
fictional in the sense that we're not deeding back the property,
we're simply releasing the mortgage."
Number 0051
JEFF BLAKE, Stewart Title of Alaska, noted that he has been in
the title insurance business since 1960 and in Alaska since
1975. Agreeing this problem has only appeared in the last
decade because of dealing with outside lenders, Mr. Blake
thanked Chair Anderson for sponsoring the bill and requested the
committee's support. He said this speaks to the consumer who
doesn't quite understand "how come we spent their money and
documents still show there's an encumbrance on their property
and, at this point, we can't effectively get that cleared for
him." He said he'd like to be able to resolve this problem.
TAPE 04-33, SIDE A
Number 0006
TERRY BRYAN, President, First American Title of Alaska, noted
that his company operates in 10 Alaskan communities and does
business in 20 recording districts. Concurring with Mr. Price's
testimony, he said liability for ensuring the transaction moves
forward with this new reconveyance process "stays with a heavily
regulated industry." Agreeing with Mr. Blake that this is
consumer-oriented, Mr. Bryan described having to sit across the
table from a single mother or an elderly couple and apologize
that the house cannot be refinanced or sold because the title is
clouded, since on the last transaction the lender hadn't
provided what was needed, despite proof that the obligation had
been satisfied. Mentioning one Anchorage company with 1,485
transactions [pending] from 1993 from outside lenders, he
surmised that at least 6,000 consumers now have this problem of
transactions where lenders haven't given the instructions to
reconvey after [the terms] have been satisfied.
Number 0160
CHAIR ANDERSON called attention to Amendment 1, labeled 23-
LS1315\D.1, Bannister, 3/18/04, which read:
Page 4, line 12:
Delete "title insurer's"
Insert "title insurance company's"
Page 4, line 27, following "section,":
Insert
"(1)"
Page 4, line 28, following "under the trust deed":
Insert ";
(2) "title insurance company" means a title
insurance company or a title insurance limited
producer; in this paragraph, "title insurance company"
and "title insurance limited producer" have the
meanings given in AS 21.66.480"
CHAIR ANDERSON asked Mr. Bitney to explain it.
Number 0178
JOHN BITNEY, Lobbyist for Alaska Land Title Association,
explained that Amendment 1 was put forth at the association's
request to clarify those locations within the bill where it says
"title insurance company". He said in other states, insurance
industries are brokers, agents, and carriers. However, Alaska
doesn't have carriers; all companies here have an underwriter or
a carrier outside the state. Thus this amendment clarifies that
this law applies to Alaskan companies.
CHAIR ANDERSON asked whether it is title insurance companies and
only changes lines 12, 27, and 28 [of page 4] to be uniform in
the bill.
MR. BITNEY affirmed that.
CHAIR ANDERSON closed public testimony.
Number 0297
CHAIR ANDERSON [moved to adopt] Amendment 1 [text provided
previously]. There being no objection, it was so ordered.
REPRESENTATIVE LYNN remarked that he was shocked to hear there
were 6,000 of these [pending cases related to this bill].
Number 0315
REPRESENTATIVE LYNN moved to report HB 421, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
REPRESENTATIVE GUTTENBERG commented that as someone who isn't in
the business but has bought and sold real estate, he'd always
had the impression that one reason for using a title insurance
company is to ensure that transactions are handled
"instantaneously." He said it amazes him to discover one aspect
of the industry hasn't been playing at the same table, and if
this helps, he'll certainly support.
CHAIR ANDERSON announced that Representative Guttenberg had
removed his objection.
Number 0415
CHAIR ANDERSON asked whether there was any further objection.
There being no objection, CSHB 421(L&C) was reported from the
House Labor and Commerce Standing Committee.
HB 490-EMPLOYMENT SECURITY ACT AMENDMENTS
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 490, "An Act relating to the release of
employment security records, to the admissibility of
determinations and decisions regarding unemployment compensation
benefits, and to contributions, interest, penalties, and
payments under the Alaska Employment Security Act; providing
that property under the Alaska Employment Security Act is not
subject to the Uniform Unclaimed Property Act; and providing for
an effective date."
Number 0466
TOM NELSON, Director, Employment Security Division, Department
of Labor & Workforce Development, noted that he'd speak
primarily to Sections 4-7, 9, and 11-13. He characterized the
proposed changes as largely "housekeeping" and clarification of
existing statute. The changes align Alaska's statutory language
with federal law, and will bring Alaska into compliance with the
unemployment insurance overpayment arrangement that Alaska has
with other states.
MR. NELSON said Section 4 authorizes the department to adopt
regulations providing for the distribution of unclaimed excess
contributions, while Sections 5, 6, and 9 clarify statute by
adding the terms "manager" and "limited liability company" to
existing definitions. Section 7 brings Alaska into conformity
with the interstate reciprocal overpayment-recovery arrangement
that would allow Alaska to collect unemployment insurance
overpayments on behalf of other states for reasons other than
fraud. He explained that other states participating in this
agreement already provide this service to Alaska.
MR. NELSON further explained that Section 11 aligns state
statute with federal law by clarifying which health care
professionals are excluded from the definition of employment.
Section 12 clarifies language that provides exclusion from the
definition of wages, of payments or benefits provided by an
employer, for the purposes of educational assistance to its
employees. He noted that federal law already excludes this type
of educational assistance from the definition of wages.
Section 13 removes reference to provisions of the Department of
Revenue law regarding disposal of abandoned property. This
would allow for unclaimed excess contributions to be deposited
back into the unemployment insurance (UI) trust fund, as is the
case with federal law.
Number 0629
MR. NELSON, in response to Representative Guttenberg, explained
that excess contributions relate to overpayments for fraud and
nonfraud purposes such as mistakes on behalf of a claimant or
mistakes that the department might make. An example would be
the department's mistakenly writing a check in excess of a
claimant's eligibility. In further response, he said "excess
contributions" refers to the benefit-payment portion of the UI
system; he gave the example of an employer who overpays into the
UI system and said this would result in the department's
providing a refund or credit to that employer.
REPRESENTATIVE ROKEBERG said he dislikes this type of bill and
explained, "You never know if there's a ringer in here."
Number 0743
REPRESENTATIVE GUTTENBERG referred to Section 7, page 3, and
asked whether there is a national standard for entitlement.
MR. NELSON explained that the interstate reciprocal overpayment
arrangement with other states was written in 1955, was amended
in 1977, and isn't currently in alignment with that federal
agreement. He added, "Currently we only are providing the
fraudulent pieces with the other states. Other states do
provide recovery of those payments back to Alaska, but we
currently, because of our statute definition, do not provide the
other to the other states."
REPRESENTATIVE GUTTENBERG asked whether Alaska was facing any
sanctions for not being in alignment.
MR. NELSON said not currently, but the department wants to
emphasize recovery of overpayments through its regulatory
processes with the federal government. The annual audit of the
federal program had mentioned that the department needs to
review and update the applicable statute.
REPRESENTATIVE GUTTENBERG asked who pays into the UI fund and
how often the excess in the fund is examined to recalibrate the
contributions.
MR. NELSON explained that the employer contributes 80 percent,
and 20 percent is contributed by employees. The fund is
examined annually, and there is a trust fund solvency factor
examined yearly that is based on several years' worth of
contributions and payments into and out of the trust fund. If
payments into the fund exceed outgoing payments, a reduction in
taxes could result, and visa versa.
Number 0948
TOBY NANCY STEINBERGER, Assistant Attorney General, Labor and
State Affairs Section, Civil Division (Anchorage), Department of
Law, noted that she'd address Sections 1-3, which deal with
allowing the release of employment security records for criminal
investigation and prosecution purposes, and Section 8, which
deals with the binding effects of unemployment compensation
decisions. She told members:
Sections 1 through 3 of the bill will help criminal
prosecutors - state, federal and municipal prosecutors
- to investigate and prosecute criminal cases because
it will help them locate suspects, witnesses, victims,
and persons who are on parole or probation. As way of
background, employers provide payroll information
quarterly to the Unemployment Security Division, along
with their employment security taxes. ...
The division also provides unemployment benefits to
qualifying persons, and the division is substantially
federally funded. ... The United States Department of
Labor has required that employment security records
are confidential, but has allowed for a number of
exceptions within Alaska Statute 23.20.110. But none
of these exceptions allows for the release of
information for criminal prosecution other than in
prosecuting cases against claimants who have
fraudulently obtained unemployment compensation
benefits.
The Criminal Division in the U.S. Attorney's Office
has frequently wanted employment security records to
find suspects, witnesses, and even victims, since this
information is updated so frequently. However,
because the statute does not allow for an exception
for these criminal purposes, the division has denied
the request.
We have had the U.S. Department of Labor review this
amendment, and ... [it] has approved it. And, in
fact, the U.S. Department of Labor has permitted other
states to allow the release of employment security
information for ... criminal investigations and
prosecutions, and these states include Washington,
Iowa, Arkansas, Georgia, Utah, and Oklahoma. ...
Section 8 would amend Alaska Statute 23.20.497.
Currently, that statute provides that unemployment
compensation decisions are not admissible in a
subsequent action or proceeding in another forum.
This is because in unemployment cases, employers, ...
because they have little incentive to participate ...
in an unemployment case where someone's seeking
unemployment benefits, ... because employers have
little financial interest, because they don't pay
unless they are self-insured, they don't have a
financial interest in the outcome.
This amendment would clarify that ... subsequent
action would also include an arbitration proceeding.
So it wouldn't just be court proceedings or other
administrative proceedings, but also would include
arbitration proceedings.
Number 1152
REPRESENTATIVE ROKEBERG asked Ms. Steinberger to comment on
Section 4.
MS. STEINBERGER deferred to Tom Nelson, but offered her
understanding that this section refers to excess contributions
paid by employers when the department hasn't been able to locate
those persons.
REPRESENTATIVE GUTTENBERG asked Ms. Steinberger if she is saying
there is an arbitration process built into the bill.
MS. STEINBERGER replied no. She clarified that a person who
terminates and files for unemployment compensation is entitled
to benefits immediately if the termination was for good cause.
If it was without good cause or because of misconduct connected
with the job, benefits are delayed for six weeks.
MS. STEINBERGER provided the example that sometimes an
individual will claim at the employment security hearing that he
or she was terminated due to discrimination, while the employer
isn't able to attend the hearing but maintains the termination
was because of poor work habits. She said it is possible that
the employee would prevail at the hearing and later bring a
lawsuit against the employer; in this case, the evidence
submitted at the initial proceeding and the decision wouldn't be
admissible in a court proceeding or a Human Rights Commission
proceeding. She pointed out that this bill would add that it is
also not admissible in an arbitration proceeding.
Number 1297
REPRESENTATIVE ROKEBERG requested clarification on Section 4;
particularly the part indicating that the bill deletes the
sentence that says the regulations must be substantially similar
to the provisions of the statute. He remarked:
That just scares ... me. ... Then I looked over at the
sectional analysis, and then it told me ... what your
motives were here. That's why I wanted to verify
this. Under the sectional it says that the ESD
[Employment Security Division] may have excess
contributions from employers. Currently, they are
disposed of under the Uniform Unclaimed Property Act.
... So it would appear that ... the intent of this
section is to allow the department to write new
regulations that will allow you to dispose of these
unclaimed funds, as your new regulations see fit,
without having to go through the Uniform Unclaimed
Property Act. Would that be a correct assertion?
Number 1403
BILL KRAMER, Chief of Unemployment Insurance, Division of
Employment Security, Department of Labor & Workforce
Development, responded:
Section 4 authorized the department to adopt
regulations providing for the distribution of
unclaimed, excess contributions, taxes. The change
removes reference to the provisions of the Department
of Revenue law regarding disposal of abandoned
property. ... Unemployment insurance federal law
requires that unclaimed excess contributions be
deposited back into the federally administered UI
trust fund, and that's the reason that this section is
here.
REPRESENTATIVE ROKEBERG asked if the intent of the legislature
had to be subverted because of federal law and the supremacy
clause in the U.S. Constitution. He asked if the department had
tried to refund excess payments to employers.
MR. KRAMER affirmed that the department refunds excess
contributions directly to the employer and said that wasn't
being challenged in Section 4. He said under the Department of
Revenue's laws, unclaimed or abandoned property is to be swept
back into the general fund. The federal unemployment insurance
tax Act stipulates that these dollars be returned to the trust
fund.
Number 1506
LEONARD M. LINTON, Jr., District Attorney, 3rd Judicial District
(Anchorage), Department of Law, testified regarding Section 2.
He said this provision allows his department to stay in contact
with victims of crime and witnesses through sometimes-lengthy
court proceedings. When people relocate, the department often
doesn't have current contact information. He said this bill
helps locate out-of-state witnesses and victims of crime and
also aids in the investigation of sophisticated fraud cases, for
example, a doctor who is cheating Medicaid or an insurance
broker by not forwarding premium payments to the insurance
company. The district attorney can locate and investigate
former employees through their UI records.
CHAIR ANDERSON, upon determining no one else wished to testify,
closed public testimony.
Number 1627
REPRESENTATIVE DAHLSTROM moved to report HB 490 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 490 was reported from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:30 p.m.
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