Legislature(1999 - 2000)

04/28/1999 03:26 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
    HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                                 
                   April 28, 1999                                                                                               
                     3:26 p.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Norman Rokeberg, Chairman                                                                                        
Representative Andrew Halcro, Vice Chairman                                                                                     
Representative Lisa Murkowski                                                                                                   
Representative John Harris                                                                                                      
Representative Tom Brice                                                                                                        
Representative Sharon Cissna                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Jerry Sanders                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
CS FOR SENATE BILL NO. 141(L&C)                                                                                                 
"An Act relating to construction contracts and subcontractors;                                                                  
relating to design-build construction contracts; and providing for                                                              
an effective date."                                                                                                             
                                                                                                                                
     - MOVED HCS CSSB(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 110                                                                                                              
"An Act relating to the sale, offer to sell, and labeling of fluid                                                              
milk, meat, and meat products."                                                                                                 
                                                                                                                                
     - MOVED CSHB 110(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
* HOUSE BILL NO. 208                                                                                                            
"An Act relating to professional counselors; and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - MOVED HB 208 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 183                                                                                                              
"An Act relating to the powers and duties of the chair of the                                                                   
Alaska Public Utilities Commission; relating to membership on the                                                               
Alaska Public Utilities Commission; and relating to the annual                                                                  
report of the Alaska Public Utilities Commission."                                                                              
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: SB 141                                                                                                                    
SHORT TITLE: PROCUREMENT: CONTRACTS/SUBCONTRACTS                                                                                
SPONSOR(S): SENATOR(S) LEMAN BY REQUEST                                                                                         
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 4/12/99       879     (S)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 4/12/99       879     (S)  L&C                                                                                                 
 4/20/99               (S)  L&C AT  1:30 PM BELTZ 211                                                                           
 4/20/99               (S)  MOVED CS (L&C) OUT OF COMMITTEE                                                                     
 4/20/99               (S)  MINUTE(L&C)                                                                                         
 4/21/99       985     (S)  L&C RPT  CS  4DP  SAME TITLE                                                                        
 4/21/99       985     (S)  DP: MACKIE, LEMAN, HOFFMAN, TIM KELLY                                                               
 4/21/99       985     (S)  ZERO FISCAL NOTE (DOT)                                                                              
 4/22/99               (S)  RLS AT 12:05 PM FAHRENKAMP 203                                                                      
 4/22/99               (S)  MINUTE(RLS)                                                                                         
 4/23/99      1064     (S)  RULES TO CALENDAR  AND 1 OR 4/23/99                                                                 
 4/23/99      1064     (S)  READ THE SECOND TIME                                                                                
 4/23/99      1064     (S)  L&C  CS ADOPTED UNAN CONSENT                                                                        
 4/23/99      1064     (S)  ADVANCED TO THIRD READING                                                                           
 4/23/99      1064     (S)  UNAN CONSENT                                                                                        
 4/23/99      1065     (S)  READ THE THIRD TIME  CSSB 141(L&C)                                                                  
 4/23/99      1065     (S)  PASSED Y20 N-                                                                                       
 4/23/99      1065     (S)  EFFECTIVE DATE(S) SAME AS PASSAGE                                                                   
 4/23/99      1071     (S)  TRANSMITTED TO (H)                                                                                  
 4/27/99      1020     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 4/27/99      1020     (H)  L&C                                                                                                 
 4/28/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
BILL: HB 110                                                                                                                    
SHORT TITLE: SALE/LABELING OF MEAT/MILK PRODUCTS                                                                                
SPONSOR(S): REPRESENTATIVES(S) HARRIS, Dyson                                                                                    
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/24/99       300     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 2/24/99       300     (H)  L&C, JUD                                                                                            
 3/10/99       418     (H)  COSPONSOR(S): DYSON                                                                                 
 3/15/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 3/15/99               (H)  HEARD AND HELD                                                                                      
 3/15/99               (H)  MINUTE(L&C)                                                                                         
 4/19/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/19/99               (H)  HEARD AND HELD                                                                                      
 4/19/99               (H)  MINUTE(L&C)                                                                                         
 4/23/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/23/99               (H)  <BILL POSTPONED TO 4/26>                                                                            
 4/26/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/26/99               (H)  HEARD AND HELD                                                                                      
 4/26/99               (H)  MINUTE(L&C)                                                                                         
 4/28/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
BILL: HB 208                                                                                                                    
SHORT TITLE: PROFESSIONAL COUNSELORS                                                                                            
SPONSOR(S): REPRESENTATIVES(S) MURKOWSKI                                                                                        
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 4/21/99       900     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 4/21/99       900     (H)  HES, L&C                                                                                            
 4/27/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 4/27/99               (H)  WAIVED OUT OF COMMITTEE                                                                             
 4/27/99      1036     (H)  HES REFERRAL WAIVED                                                                                 
 4/28/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
BILL: HB 183                                                                                                                    
SHORT TITLE: ALASKA PUBLIC UTILITIES COMMISSION                                                                                 
SPONSOR(S): SPECIAL COMMITTEE ON UTIL RESTRUCTURING                                                                             
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 4/09/99       702     (H)  URS, L&C                                                                                            
 4/14/99               (H)  URS AT  8:00 AM BUTROVICH ROOM 205                                                                  
 4/14/99               (H)  SCHEDULED BUT NOT HEARD                                                                             
 4/16/99               (H)  URS AT  2:00 PM CAPITOL 120                                                                         
 4/16/99               (H)  MOVED CSHB 183(URS) OUT OF COMMITTEE                                                                
 4/16/99               (H)  MINUTE(URS)                                                                                         
 4/20/99       880     (H)  URS RPT  CS(URS) NT 6DP                                                                             
 4/20/99       880     (H)  DP: PORTER, KOTT, COWDERY, HUDSON,                                                                  
 4/20/99       880     (H)  GREEN, ROKEBERG                                                                                     
 4/20/99       880     (H)  ZERO FISCAL NOTE (DCED)                                                                             
 4/20/99       880     (H)  REFERRED TO L&C                                                                                     
 4/09/99       702     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 4/23/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/23/99               (H)  HEARD AND HELD                                                                                      
 4/23/99               (H)  MINUTE(L&C)                                                                                         
 4/26/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/26/99               (H)  HEARD AND HELD                                                                                      
 4/26/99               (H)  MINUTE(L&C)                                                                                         
 4/28/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
JEREMY KERR, Student Intern                                                                                                     
   to Senator Loren Leman                                                                                                       
Alaska State Legislature                                                                                                        
Capitol Building, Room 115                                                                                                      
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 465-2095                                                                                                      
POSITION STATEMENT:  Presented Sections 1 through 6 of SB 141 on                                                                
behalf of the bill sponsor.                                                                                                     
                                                                                                                                
DAVID ROGERS, Lobbyist/Attorney                                                                                                 
   for the City of Delta Junction                                                                                               
P.O. Box 33932                                                                                                                  
Juneau, Alaska 99803                                                                                                            
Telephone:  (907) 586-1107                                                                                                      
POSITION STATEMENT:  Testified on Section 7 of the Version House                                                                
committee substitute for CSSB 141(L&C).                                                                                         
                                                                                                                                
ROY GILBERTSON, Mayor                                                                                                           
City of Delta Junction                                                                                                          
P.O. Box 229                                                                                                                    
Delta Junction, Alaska 99737                                                                                                    
Telephone:  (907) 895-4656                                                                                                      
POSITION STATEMENT:  Testified on SB 141.                                                                                       
                                                                                                                                
SUSAN KEMP, City Council Member                                                                                                 
City of Delta Junction                                                                                                          
P.O. Box 229                                                                                                                    
Delta Junction, Alaska 99737                                                                                                    
Telephone:  (907) 895-4656                                                                                                      
POSITION STATEMENT:  Read statement in support of Section 7 of the                                                              
Version H House committee substitute for CSSB 141(L&C).                                                                         
                                                                                                                                
RICK JOHNSON, City Council Member                                                                                               
City of Delta Junction                                                                                                          
P.O. Box 229                                                                                                                    
Delta Junction, Alaska 99737                                                                                                    
Telephone:  (907) 895-4656                                                                                                      
POSITION STATEMENT:  Commented regarding Councilwoman Kemp's                                                                    
statement on SB 141.                                                                                                            
                                                                                                                                
BRIAN ROGERS, Chief Financial Officer                                                                                           
Information Insights, Incorporated                                                                                              
751 Old Richardson Highway, Suite 235                                                                                           
Fairbanks, Alaska 99701                                                                                                         
Telephone:  (907) 452-2461                                                                                                      
POSITION STATEMENT:  Answered questions regarding Section 7 of                                                                  
Version H House committee substitute for CSSB 141(L&C).                                                                         
                                                                                                                                
MARK O'BRIEN, Chief Contracts Officer                                                                                           
Office of the Commissioner                                                                                                      
Department of Transportation and Public Facilities                                                                              
3132 Channel Drive                                                                                                              
Juneau, Alaska 99801-7898                                                                                                       
Telephone:  (907) 465-6990                                                                                                      
POSITION STATEMENT:  Available to answer the committee's questions                                                              
regarding Sections 1 through 6 of the Version H House committee                                                                 
substitute for CSSB 141(L&C).                                                                                                   
                                                                                                                                
ANNETTE KREITZER, Legislative Assistant                                                                                         
   to Senator Loren Leman                                                                                                       
Alaska State Legislature                                                                                                        
Capitol Building, Room 115                                                                                                      
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 465-5149                                                                                                      
POSITION STATEMENT:  Testified on SB 141 on behalf of the bill                                                                  
sponsor.                                                                                                                        
                                                                                                                                
PETE FELLMAN, Researcher                                                                                                        
   for Representative John Harris                                                                                               
Alaska State Legislature                                                                                                        
Capitol Building, Room 110                                                                                                      
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 465-4859                                                                                                      
POSITION STATEMENT:  Explained change in Version K committee                                                                    
substitute for HB 110.                                                                                                          
                                                                                                                                
ART GRISWOLD                                                                                                                    
Sleepy Hollow Farm                                                                                                              
HC60 Box 4493                                                                                                                   
Delta Junction, Alaska 99737                                                                                                    
Telephone:  (907) 895-6248                                                                                                      
POSITION STATEMENT:  Expressed his disappointment with the Version                                                              
K committee substitute for HB 110.                                                                                              
                                                                                                                                
JANICE ADAIR, Director                                                                                                          
Division of Environmental Health                                                                                                
Department of Environmental Conservation                                                                                        
555 Cordova Street                                                                                                              
Anchorage, Alaska 99501                                                                                                         
Telephone:  (907) 269-7644                                                                                                      
POSITION STATEMENT:  Testified that the department has no                                                                       
objections to the Version K committee substitute for HB 110.                                                                    
                                                                                                                                
ANNE GORE, Researcher                                                                                                           
   for Representative Lisa Murkowski                                                                                            
Alaska State Legislature                                                                                                        
Capitol Building, Room 406                                                                                                      
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 465-3783                                                                                                      
POSITION STATEMENT:  Presented HB 208 on behalf of the bill                                                                     
sponsor.                                                                                                                        
                                                                                                                                
ANNE HENRY, Chair                                                                                                               
Board of Licensed Professional Counselors                                                                                       
Division of Occupational Licensing                                                                                              
Department of Commerce and Economic Development                                                                                 
P.O. Box 110806                                                                                                                 
Juneau, Alaska 99811                                                                                                            
Telephone:  (907) 465-2538                                                                                                      
POSITION STATEMENT:  Testified on HB 208.                                                                                       
                                                                                                                                
CATHERINE REARDON, Director                                                                                                     
Division of Occupational Licensing                                                                                              
Department of Commerce and Economic Development                                                                                 
P.O. Box 110806                                                                                                                 
Juneau, Alaska 99811-0806                                                                                                       
Telephone:  (907) 465-2534                                                                                                      
POSITION STATEMENT:  Testified on HB 208.                                                                                       
                                                                                                                                
JANET SEITZ, Legislative Assistant                                                                                              
   to Representative Norman Rokeberg                                                                                            
Alaska State Legislature                                                                                                        
Capitol Building, Room 24                                                                                                       
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 465-4968                                                                                                      
POSITION STATEMENT:  As aide to the House Labor and Commerce                                                                    
Standing Committee, offered information on HB 208; conceptually                                                                 
explained proposed amendments to proposed Version I committee                                                                   
substitute for HB 183.                                                                                                          
                                                                                                                                
SHARON DANIEL                                                                                                                   
Copper Basin Sanitation Service Company                                                                                         
P.O. Box 88                                                                                                                     
Glennallen, Alaska  99588                                                                                                       
Telephone:  (907) 822-3600                                                                                                      
POSITION STATEMENT:  Testified in support of Version I of HB 183                                                                
but had not seen proposed amendments, testified against                                                                         
deregulation of garbage service.                                                                                                
                                                                                                                                
RON ZOBEL, Assistant Attorney General                                                                                           
Fair Business Practices Section                                                                                                 
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
1031 West Fourth Avenue, Suite 200                                                                                              
Anchorage, Alaska 99501-1994                                                                                                    
Telephone:  (907) 269-5100                                                                                                      
POSITION STATEMENT:  Answered questions about amendments to HB 183.                                                             
                                                                                                                                
ERIC YOULD, Executive Director                                                                                                  
Alaska Rural Electric Cooperative Association, Incorporated                                                                     
211 Fourth Avenue                                                                                                               
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 463-3636                                                                                                      
POSITION STATEMENT:  Explained proposed and previously adopted                                                                  
amendments to HB 183.                                                                                                           
                                                                                                                                
ROBERT LOHR, Executive Director                                                                                                 
Alaska Public Utilities Commission                                                                                              
Department of Commerce and Economic Development                                                                                 
1016 West Sixth Avenue                                                                                                          
Anchorage, Alaska 99501                                                                                                         
Telephone:  (907) 276-6222                                                                                                      
POSITION STATEMENT: Testified on HB 183.                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-48, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce                                                                    
Standing Committee meeting to order at 3:26 p.m.  Members present                                                               
at the call to order were Representatives Rokeberg, Halcro, Harris                                                              
and Brice.  Representative Cissna arrived less than a minute after                                                              
the call to order.  Representative Murkowski arrived at 3:30 p.m.                                                               
                                                                                                                                
CHAIRMAN ROKEBERG announced the day's calendar is SB 141, HB 110,                                                               
HB 208 sponsored by Representative Murkowski, and then HB 183.  The                                                             
chairman noted it is not his intention to move HB 183 today; some                                                               
additional amendments keep filtering in.                                                                                        
                                                                                                                                
REPRESENTATIVE BRICE indicated he would be offering a couple                                                                    
amendments to HB 183.                                                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG noted it was his intention to adjourn the meeting                                                             
by 5:00 p.m., due to members' attendance at another committee                                                                   
meeting.                                                                                                                        
                                                                                                                                
CSSB 141(L&C) - PROCUREMENT: CONTRACTS/SUBCONTRACTS                                                                             
                                                                                                                                
Number 0124                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's first order of business                                                             
is CSSB 141(L&C), "An Act relating to construction contracts and                                                                
subcontractors; relating to design-build construction contracts;                                                                
and providing for an effective date."                                                                                           
                                                                                                                                
Number 0137                                                                                                                     
                                                                                                                                
JEREMY KERR, Student Intern to Senator Loren Leman, Alaska State                                                                
Legislature, came forward to present CSSB 141(L&C) on behalf of the                                                             
bill sponsor.  He indicated he is a student at the University of                                                                
Alaska Southeast and conveyed Senator Leman's regrets that he was                                                               
unable to testify in person due to a recent injury.  Mr. Kerr                                                                   
stated he is present to speak about Sections 1 through 6 of SB 141.                                                             
Senate Bill 141 was introduced at the request of the Department of                                                              
Transportation and Public Facilities (DOT/PF) to give the                                                                       
department greater flexibility in contracts known as design-build.                                                              
A design-build contract is one where the owner, in this case the                                                                
state, chooses a contractor that will be building as well as                                                                    
designing a project.  A couple of examples of this from the state                                                               
of Alaska are the M/V Kennicott ferry and the Whittier tunnel.  A                                                               
more typical contract is one where the owner picks a design and the                                                             
contractors then begin building according to that design.  This                                                                 
bill allows decisions that are made to be in the best interest of                                                               
the state in regard to building projects and will only affect state                                                             
contracts.                                                                                                                      
                                                                                                                                
MR. KERR explained current law specifies that construction                                                                      
contractors must list the subcontractors they plan on using within                                                              
five days of contract award.  Because of the nature of design-build                                                             
contracts, it is not always possible for the contractor to have                                                                 
identified the necessary subcontractors.  For example, during the                                                               
middle of a ferry building project the primary contractor learns                                                                
that the propulsion system needs to be different and it is not                                                                  
something the current subcontractor can perform.  Therefore, the                                                                
primary contractor needs to hire a different subcontractor.  The                                                                
primary contractor cannot do this under current statute; under                                                                  
statute he cannot get rid of the first subcontractor.  This                                                                     
legislation gives DOT/PF the flexibility to allow design-build                                                                  
contractors to provide subcontractor information past that five-day                                                             
notification period.  The legislation also contains protections in                                                              
that requested subcontractor changes must be in writing.  Mr. Kerr                                                              
noted Senator Leman has reviewed the new Section 7 of the proposed                                                              
committee substitute (CS) and has found no objection.  In addition,                                                             
they have also spoken to the design and construction communities                                                                
regarding Sections 1 through 6 and have found no objection from                                                                 
them either.                                                                                                                    
                                                                                                                                
Number 0404                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG commented there is a proposed CS; he would                                                                    
entertain a motion to adopt Version H.                                                                                          
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to adopt the proposed Version                                                               
H House CS for CSSB 141(L&C), labeled 1-LS0827\H, Bannister,                                                                    
4/27/99.  There being no objection, it was so ordered.                                                                          
                                                                                                                                
Number 0465                                                                                                                     
                                                                                                                                
DAVID ROGERS, Lobbyist/Attorney for the City of Delta Junction,                                                                 
came forward in Juneau.  Mr. David Rogers indicated he is joined                                                                
online in Delta Junction by Mayor Gilbertson of Delta Junction and                                                              
the Delta Junction City Council, and by Brian Rogers in Fairbanks,                                                              
a key consultant to the Delta prison project.  They are all here                                                                
today to testify in support of Section 7 [added by Version H, the                                                               
proposed House CS].  This amendment basically means that the public                                                             
procurement process undertaken by the City of Delta Junction over                                                               
the last several months meets the requirements of HB 53 [HB 53,                                                                 
LEASE-PURCHASE CORRECTIONAL FACILITIES, Twentieth Legislature].                                                                 
This process resulted in an ordinance authorizing a sole source                                                                 
contract for that purpose.  House Bill 53, among other things,                                                                  
authorized the state to enter into an agreement with Delta Junction                                                             
to lease prison facilities as long as the prison is operated by a                                                               
private third party vendor selected by the city through a process                                                               
similar to the procedures set out in the state procurement code, AS                                                             
36.30.  Some people have raised concerns about Delta Junction's                                                                 
process, but the city thinks it has done it correctly and has                                                                   
arrived at a decision that is best for Delta Junction and its                                                                   
citizens.  This amendment [Section 7] would resolve any ambiguities                                                             
about Delta Junction's process and would allow them to begin as                                                                 
soon as possible.  Mr. David Rogers indicated he would like to turn                                                             
the testimony over to Mayor Gilbertson and the Delta Junction City                                                              
Council for a statement.  [Section 7 of the proposed House CS for                                                               
CSSB 141(L&C) read:                                                                                                             
                                                                                                                                
     * Sec. 7.  Section 4, ch. 15, SLA 1998, is amended by                                                                      
     adding a new subsection to read:                                                                                           
          (d) The adoption by a municipality, when exercising                                                                   
     its powers under AS 29.35.020(a), of an ordinance for                                                                      
     procurement of a facility or operation on a design-build                                                                   
     construction contract basis satisfies the procurement                                                                      
     requirements under (b) of this section.]                                                                                   
                                                                                                                                
Number 0607                                                                                                                     
                                                                                                                                
ROY GILBERTSON, Mayor, City of Delta Junction, testified next                                                                   
off-network via teleconference from Delta Junction.  He noted city                                                              
council members Susan Kemp, Mary Dowling (ph) and Rick Johnson were                                                             
present.  Mayor Gilbertson thanked the committee for its time and                                                               
turned the testimony over to Councilwoman Susan Kemp.                                                                           
                                                                                                                                
Number 0643                                                                                                                     
                                                                                                                                
SUSAN KEMP, City Council Member, City of Delta Junction, testified                                                              
next off-network via teleconference from Delta Junction.  She read                                                              
the committee a statement on the Delta Junction City Council's                                                                  
position:                                                                                                                       
                                                                                                                                
     "This winter, we brought the question of the private                                                                       
     prison project to the Delta Junction voters.  They said                                                                    
     we should proceed, and that's what we are trying to do.                                                                    
                                                                                                                                
     "Delta Junction is going to be in a world of hurt when                                                                     
     Fort Greely closes unless the base is reused.  Our best                                                                    
     shot for economic reuse of the base is the prison                                                                          
     project.  The prison is controversial in our community,                                                                    
     and there is a vocal opposition, but they've been in the                                                                   
     minority both times we've voted.                                                                                           
                                                                                                                                
     "Those [the proposed] changes in Section 7 of this bill                                                                    
     are designed to help the City with the goals set out in                                                                    
     House Bill 53 last year, and I quote:                                                                                      
     '1. To take advantage of the unique opportunity to use                                                                     
     surplus military facilities on the road system that are                                                                    
     becoming available through the United States Army's                                                                        
     realignment of Fort Greely's mission,                                                                                      
     2. To prevent and ameliorate economic hardship in the                                                                      
     Delta region occasioned by that realignment, and                                                                           
     3. To relieve overcrowding of existing facilities within                                                                   
     the state and the extensive use of out-of-state                                                                            
     correctional facilities to house Alaska inmates.'                                                                          
                                                                                                                                
     "The legislature's intent was to provide economic                                                                          
     redevelopment relief to Delta Junction by seizing the                                                                      
     unique opportunity of using the abandoned buildings left                                                                   
     after the realignment of Fort Greely.  At the same time,                                                                   
     it applies to a matter of statewide concern because                                                                        
     capitalizing on this unique opportunity will have a                                                                        
     positive impact on the State by returning prisoners to                                                                     
     custody in Alaska.                                                                                                         
                                                                                                                                
     "The City is under tremendous time pressure to move this                                                                   
     project forward for timely completion, to even have a                                                                      
     chance of aligning the prison project with the closure of                                                                  
     Fort Greely.  These pressures include the need to begin                                                                    
     the landfill construction and permitting this summer, to                                                                   
     handle the demolition that will be needed for a major                                                                      
     conversion project.  Survey work has to be done to begin                                                                   
     the process of land transfers.                                                                                             
                                                                                                                                
     "Most importantly, we have to demonstrate to the Army                                                                      
     that they have a viable plan to proceed.  If the Reuse                                                                     
     Plan is not in acceptable form by January 2000, then the                                                                   
     opportunity to seek an economic development transfer for                                                                   
     this project will be gone.  If the prison is not ready to                                                                  
     operate by July 2001, the jobs in Delta Junction will be                                                                   
     gone and families will suffer.  To meet this schedule,                                                                     
     Delta must select our design-build and initial operations                                                                  
     contractor now.                                                                                                            
                                                                                                                                
     "This amendment will keep the project on track.  For the                                                                   
     state, that means the goals of economic redevelopment and                                                                  
     in-state ... prisoner housing can be met.  For Delta                                                                       
     Junction, that means our community can survive the base                                                                    
     closure.  Thank you for helping us meet this challenge."                                                                   
                                                                                                                                
Number 0842                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested that Ms. Kemp fax her written statement                                                             
to the committee.  He confirmed no one else wished to testify from                                                              
Delta Junction.  The chairman asked if that concluded Mayor                                                                     
Gilbertson's presentation.                                                                                                      
                                                                                                                                
MAYOR GILBERTSON commented he didn't really have anything to add.                                                               
                                                                                                                                
RICK JOHNSON, City Council Member, City of Delta Junction,                                                                      
commented off-network via teleconference from Delta Junction that                                                               
Councilwoman Kemp had done a good job of representing the majority                                                              
of the council.                                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG asked the committee members if there were any                                                                 
questions for Ms. Kemp or Mayor Gilbertson.                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO noted there was a lawsuit filed over this                                                                 
issue about adhering to state procurement code.  He asked Mayor                                                                 
Gilbertson if Section 7 would provide the city some relief.                                                                     
                                                                                                                                
MAYOR GILBERTSON answered he was not too sure on that and deferred                                                              
the question to Brian Rogers.                                                                                                   
                                                                                                                                
Number 0921                                                                                                                     
                                                                                                                                
MR. DAVID ROGERS in Juneau offered a response.  He noted the Delta                                                              
Junction's city attorney is out of town, emphasizing he is not the                                                              
city attorney.  Mr. Rogers said his sense is that it [Section 7]                                                                
will resolve much of the issues presented in the lawsuit; he                                                                    
doesn't know if it will resolve every one of them, but it will                                                                  
certainly do a big job of clearing the path for the city to                                                                     
proceed.                                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG asked who the parties to the lawsuit are.                                                                     
                                                                                                                                
MR. DAVID ROGERS answered that the plaintiffs are:  Wayne Mark                                                                  
Carpenter (ph), Dean Willard Cummings (ph), Dean William Cummings                                                               
(ph), William Johnson (ph), Ray Patterson (ph), Russell Bowdry (ph)                                                             
and Ray Bowdry (ph) v. the City of Delta Junction, the "Delta                                                                   
Corrections Group, LLC," and "Cornell Corrections of Alaska, Inc."                                                              
Mr. Rogers noted Cornell will be the city's contractor.                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG questioned that this was filed on the complaints                                                              
about procurement code violations.                                                                                              
                                                                                                                                
MR. DAVID ROGERS answered in the affirmative, indicating that the                                                               
plaintiffs were objecting to the city's process.                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG asked if that was what generated the need for                                                                 
this remedial statute.                                                                                                          
                                                                                                                                
MR. DAVID ROGERS answered in the affirmative, indicating it is,                                                                 
however, for the same reason - time delay - that the competitive                                                                
RFP [request for proposal] process did not work for them.  He said                                                              
this would create another potential substantial delay in launching                                                              
the project, which could ultimately jeopardize the project and                                                                  
place the community at risk.  It is one of the factors that brings                                                              
the city before the committee today.                                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG confirmed Brian Rogers in Fairbanks was available                                                             
on teleconference and had been following the testimony.  The                                                                    
chairman asked if he had anything to add to clarify the situation.                                                              
                                                                                                                                
Number 1049                                                                                                                     
                                                                                                                                
BRIAN ROGERS, Chief Financial Officer, Information Insights,                                                                    
Incorporated, testified next off-network via teleconference from                                                                
Fairbanks.  Mr. Rogers noted litigation is not his area.  He                                                                    
indicated he thinks the city has pretty well described what the                                                                 
need is for this amendment.  He indicated he could answer technical                                                             
questions, commenting he has been working with the city attempting                                                              
to bring the project to fruition.                                                                                               
                                                                                                                                
CHAIRMAN ROKEBERG requested that Brian Rogers provide the committee                                                             
with something on the order of a one-page critical time line of the                                                             
timing, rationale, and very brief outline, which could be added to                                                              
the bill packet for the House floor.  The chairman indicated this                                                               
might help the members understand the situation a bit better.                                                                   
                                                                                                                                
Number 1093                                                                                                                     
                                                                                                                                
MR. BRIAN ROGERS answered in the affirmative, noting he could                                                                   
provide a brief verbal walk-through as well.  Mr. Rogers commented                                                              
the city [Delta Junction] needs a prison that is ready to operate                                                               
by July 13, 2001.  This is the date Fort Greely is realigned and                                                                
all the remaining jobs will be eliminated.  Mr. Rogers indicated                                                                
their continual focus has been to ensure a seamless transition from                                                             
the use of Fort Greely as a military base to use as a private                                                                   
prison.  In order to reach that July 2001 time frame, the city                                                                  
needs to begin construction during the 2000 construction season.                                                                
This requires demolition to be done over the course of this winter                                                              
and next spring.  Unfortunately, the Delta Junction landfill is                                                                 
close to capacity and a new landfill is needed to allow the                                                                     
demolition.  The city needs to do the landfill work by September or                                                             
October of this year and begin the permitting process well in                                                                   
advance of that.  Over the course of the last nine months Mr. Brian                                                             
Rogers has been working on the project, they have worked through                                                                
sort of understanding all of the issues and were headed toward                                                                  
issuance of a competitive RFP.  In February the city authorized the                                                             
issuance of an RFP and the services of Mr. Richard Crane (ph) were                                                              
retained.  Mr. Crane (ph) is the national expert in RFPs for                                                                    
private prison services.                                                                                                        
                                                                                                                                
MR. BRIAN ROGERS continued, "He [Mr. Crane (ph)] has written a                                                                  
number [of RFPS] for a number of states, and he came back with a                                                                
time line that said, basically, we could ... be ready to make an                                                                
award under a time line beginning in February, that would be the                                                                
end of October of this year, and with [the] state's procurement                                                                 
10-day, et cetera, mid-November before an award can be made."  Mr.                                                              
Rogers said at that point they realized going forward with an RFP                                                               
process would not allow them to make that July 2001 time table.                                                                 
Because of the time needs, the city attorney examined the issue of                                                              
justification for a sole source based on the unique circumstances                                                               
of the military base's availability, the fairly complex process of                                                              
working with the military, the time table of preparing the landfill                                                             
for demolition, for construction.  The city attorney concluded this                                                             
does meet the state standards for a sole source procurement.  Mr.                                                               
Rogers noted this assumes the city does not have other extraneous                                                               
items like litigation which further delay the process.  He                                                                      
commented this is a difficult process to get completed, but the                                                                 
city's best shot at ensuring it does not lose the job, and that                                                                 
families are not left without sources of income, is to proceed by                                                               
this sole source.  That was the city's decision.                                                                                
                                                                                                                                
Number 1258                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked if the January 2000 date is the point at                                                                
which they, in essence, have title from the military to begin                                                                   
construction.                                                                                                                   
                                                                                                                                
MR. BRIAN ROGERS replied the January 2000 date is for an effective                                                              
reuse plan.  The "Delta Coalition" filed a reuse plan with the                                                                  
military.  Basically, reuse of Fort Greely requires some form of                                                                
what, in a shopping mall, would be called an "anchor tenant."  In                                                               
this case the primary tenant would be the prison.  If they are not                                                              
able to show the military that they have an economic reuse of the                                                               
base with an anchor tenant - someone that is committed and makes                                                                
the base operate as an economic entity as the prison would - then                                                               
the whole process of land transfer cannot start.  They may not need                                                             
all the transfers by January because the military can execute                                                                   
leases and furtherance of conveyance, "LIFC (ph)," in the interim                                                               
period, but the military needs to know by January of 2000 whether                                                               
this is a go or no go.                                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG noted, then, they could begin the demolition                                                                  
under the leases and further conveyance if the military felt                                                                    
progress was being made on the total reuse issue.  The chairman                                                                 
asked if that was correct.                                                                                                      
                                                                                                                                
MR. BRIAN ROGERS agreed.  The city will need an inter-governmental                                                              
agreement with the state and final contract with the sole source                                                                
contractor, in that order.  The next step would be the                                                                          
inter-governmental agreement with the state which sets out all the                                                              
terms so the military knows that this is the real deal.                                                                         
                                                                                                                                
Number 1359                                                                                                                     
                                                                                                                                
MR. DAVID ROGERS in Juneau said he would like to add one general                                                                
comment about the process.  This decision did not come easily;                                                                  
there was a substantial public process undertaken that ultimately                                                               
led to the sole source decision as the best shot for the seamless                                                               
transition.  It was a long, involved process with a lot of                                                                      
discussion between community members and a vote on an ordinance to                                                              
sanctify the decision.                                                                                                          
                                                                                                                                
REPRESENTATIVE HARRIS directed a question to either of the Mr.                                                                  
Rogers.  He asked, regarding the litigation or injunction filed to                                                              
stop the progress of this project, if it was their understanding                                                                
that this legislation, especially Section 7, would be retroactive                                                               
to before this injunction was filed in order to give the city of                                                                
"Delta" some relief.                                                                                                            
                                                                                                                                
MR. DAVID ROGERS answered the intent is to provide that remedy.  He                                                             
noted there is some discussion amongst the lawyers about whether or                                                             
not a specific retroactive clause is needed in the bill.  Mr.                                                                   
Rogers indicated he is comfortable with the current drafting.                                                                   
                                                                                                                                
CHAIRMAN ROKEBERG questioned, on that point, if adopting a                                                                      
retroactive effective date for Section 7 would be appropriate.                                                                  
                                                                                                                                
MR. DAVID ROGERS replied it would not hurt.  In response to the                                                                 
chairman's further comment, Mr. Rogers noted the date of the                                                                    
ordinance is March 30.  He indicated a March 29 retroactive date                                                                
would make very clear.                                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG suggested possibly March 15.                                                                                  
                                                                                                                                
MR. DAVID ROGERS indicated it is the committee's choice.                                                                        
                                                                                                                                
REPRESENTATIVE HALCRO suggested March 17.                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG confirmed there were no further questions for                                                                 
either of the Mr. Rogers and informed the committee there was one                                                               
more witness.                                                                                                                   
                                                                                                                                
Number 1474                                                                                                                     
                                                                                                                                
MARK O'BRIEN, Chief Contracts Officer, Office of the Commissioner,                                                              
Department of Transportation and Public Facilities, came forward.                                                               
Mr. O'Brien indicated he thought Mr. Kerr had done an excellent job                                                             
describing the department's situation which brought about the                                                                   
legislation's introduction.  He is available to answer any                                                                      
questions the committee might have regarding Sections 1 through 6.                                                              
                                                                                                                                
CHAIRMAN ROKEBERG noted the unfortunate example of the M/V                                                                      
Kennicott state ferry had been used earlier.  The chairman                                                                      
questioned whether this legislation could in any way have helped                                                                
the specifications and the avoidance of the Y2K [year 2000] problem                                                             
for that vessel.                                                                                                                
                                                                                                                                
MR. O'BRIEN answered in the negative, indicating he didn't think                                                                
the legislation would have done that for the department.  Mr.                                                                   
O'Brien provided another example.  If the department is erecting a                                                              
simple shed building by design-build and is ready to award to the                                                               
firm that has scored the highest number of points, within five days                                                             
of that [award] period according to the statute, this firm would be                                                             
required to name its construction contractors.  However,  that                                                                  
design has not been done, it has not been approved by the state.                                                                
Perhaps there was the option of piling or concrete perimeter                                                                    
foundation.  Mr. O'Brien commented, "There's no way to select a                                                                 
foundations contractor at the point in which you're entering into                                                               
the design-build portion of the contract."  He noted that would be                                                              
an example.                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked, "With the exception, is that the primary                                                               
thing, the time-frame, or is there other aspects ... you'd like to                                                              
bring to the committee's attention ...?"  The chairman commented                                                                
the five-day selection is ludicrous, noting he has been in the                                                                  
commercial real estate business for 25 years in Alaska and has been                                                             
involved in this type of thing.  It just doesn't make sense.                                                                    
                                                                                                                                
Number 1564                                                                                                                     
                                                                                                                                
MR. O'BRIEN indicated he had additional comments.  He explained the                                                             
second provision in the legislation is to allow for the                                                                         
substitution of a contractor when it is in the best interests of                                                                
the state.  For example, the department enters into a building                                                                  
contract not believing there is an asbestos problem, but upon                                                                   
opening up the structure for a remodel, asbestos is found and an                                                                
asbestos abatement subcontractor needs to be hired.  Technically                                                                
the way the law is currently written, the department could not do                                                               
that.  Mr. O'Brien indicated this legislation would permit, when                                                                
the contractor requests and when the state concurs, a best interest                                                             
finding (BIF) to be done that allows the addition of that                                                                       
subcontractor.                                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG noted, then, the department would have to do a                                                                
BIF to get change of contract (indisc.).  He asked if that is in                                                                
the existing code.                                                                                                              
                                                                                                                                
MR. O'BRIEN answered no, it is not.                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG questioned, then, why the department would have                                                               
to do a best interest finding.                                                                                                  
                                                                                                                                
MR. O'BRIEN indicated the department felt that in order to address                                                              
some of the contractors' concerns, allowing substitutions of                                                                    
subcontractors for any reason might promote the idea of                                                                         
bid-shopping down the road.  The idea was, then, that there had to                                                              
be a compelling reason.  Therefore, it ought to be documented to                                                                
the file as to why the state is allowing the contractor to either                                                               
add or replace a subcontractor.                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG mentioned the language that the request must be                                                               
in writing, specifically detailing the basis for the request.  He                                                               
asked who the request is in writing to.                                                                                         
                                                                                                                                
MR. O'BRIEN answered it would be to the file by the contracting                                                                 
officer.                                                                                                                        
                                                                                                                                
Number 1635                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned, then, if there would be an                                                                 
opportunity for appeal of that decision by the contractor who had                                                               
been initially selected and who it has been determined it is not in                                                             
the state's best interest to continue with.                                                                                     
                                                                                                                                
MR. O'BRIEN answered no, under this provision there would not be.                                                               
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned the identity of the entity                                                                  
making the final determination.                                                                                                 
                                                                                                                                
MR. O'BRIEN answered it would be DOT/PF if it was one of the                                                                    
department's projects.                                                                                                          
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned, then, it would be the                                                                      
procurement office.                                                                                                             
                                                                                                                                
MR. O'BRIEN agreed.                                                                                                             
                                                                                                                                
REPRESENTATIVE MURKOWSKI confirmed that "best interest of the                                                                   
state" is term of art.  She noted it seems somewhat problematic.                                                                
                                                                                                                                
CHAIRMAN ROKEBERG mentioned BIFs, best interest findings.  The                                                                  
chairman indicated the committee members were mainly or completely                                                              
from the private sector.  He questioned whether Representative                                                                  
Murkowski is satisfied with the answers she has received,                                                                       
indicating the point that there is no appeal is valid.                                                                          
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked if the legislation has further                                                                   
committees of referral.                                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG indicated the legislation would proceed directly                                                              
to the House floor.                                                                                                             
                                                                                                                                
REPRESENTATIVE MURKOWSKI commented she was sure this would come up                                                              
as a question from the very adequately versed lawyers.                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. O'Brien if there were other provisions                                                              
in the code to replace the contractor, or if there are other                                                                    
policies or regulations within the department to do so.                                                                         
                                                                                                                                
Number 1710                                                                                                                     
                                                                                                                                
MR. O'BRIEN answered in the negative.  Technically, under the                                                                   
example of the asbestos abatement [sub]contractor, if this was not                                                              
allowed, the department would probably have to agree to allow the                                                               
addition of that subcontractor where none existed before and, the                                                               
way it is currently written, technically decide whether to assess                                                               
the contractor a penalty.  He noted this is ludicrous.                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG agreed, stating, "If you had to add the                                                                       
contractor?  So there's no flexibility in it before?"                                                                           
                                                                                                                                
MR. O'BRIEN noted that is correct.                                                                                              
                                                                                                                                
CHAIRMAN ROKEBERG commented that is ludicrous on its face, but he                                                               
asked about replacing one, noting that is a different case.                                                                     
                                                                                                                                
MR. O'BRIEN answered there was only a limited number of reasons why                                                             
a subcontractor can be replaced:  generally for bankruptcy and                                                                  
those kinds of issues, not when circumstances arise due to the                                                                  
contract itself.                                                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG said that is not in this bill, though.  The                                                                   
chairman asked if it is in regulations, questioning what those                                                                  
circumstances are and if they are codified or stipulated anywhere.                                                              
                                                                                                                                
MR. O'BRIEN answered in the negative.  Up to this point there were                                                              
no provisions that allowed for those kinds of substitutions.  He                                                                
expressed some unsurety.                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG noted, right, the department was providing for                                                                
substitution but the department just has to make a best interest                                                                
finding.  He commented, "In other words, if you are a good creative                                                             
writer, you can have a lame excuse - there's no statutory grounds                                                               
... or rationale for it here, though.  Is that correct?"                                                                        
                                                                                                                                
MR. O'BRIEN answered that is correct.  He indicated the department                                                              
has discussed this with the "Associated General Contractors (AGC)"                                                              
who had some initial concerns.  Mr. O'Brien said this organization                                                              
is now satisfied with this and a letter of non-objection is part of                                                             
the bill packet.  In response to the chairman's lack of enthusiasm,                                                             
Mr. O'Brien indicated it was the department's attempt obtain some                                                               
consensus on the issue with the contractors.                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG questioned if the letter was on that issue.                                                                   
                                                                                                                                
MR. O'BRIEN answered in the affirmative; the AGC reviewed this                                                                  
legislation in its very early stages.                                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG questioned if there were comments from the bill                                                               
sponsor regarding this.                                                                                                         
                                                                                                                                
Number 1801                                                                                                                     
                                                                                                                                
ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman,                                                                 
Alaska State Legislature, came forward as the bill sponsor's                                                                    
representative.  She stated that they have gone back to AGC several                                                             
times and AGC has reviewed the legislation.  Additionally, Senator                                                              
Leman has been having conversations over the past couple of days                                                                
with AGC and the design-build community:  they have no objection to                                                             
the legislation as written.                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked if this provision is only in the                                                                        
design-build section, questioning if there is a general                                                                         
applicability to the entire operation of DOT/PF.                                                                                
                                                                                                                                
MR. O'BRIEN responded that the second portion is applicable to all                                                              
contracts.  There are two issues:  1) To relieve the state from the                                                             
five-day notification for design-build.  2) To allow the                                                                        
replacement or substitution of subcontractors under all DOT/PF                                                                  
contracts, not only design-build.  Mr. O'Brien indicated the                                                                    
chairman is correct in that this does have universal application.                                                               
Referring to the issue raised about whether a subcontractor would                                                               
have some avenue to object, Mr. O'Brien noted the contract                                                                      
controversy provisions under the existing statute would allow a                                                                 
contractor to bring an action against the department for a contract                                                             
issue.  There is an avenue under the formal dispute resolution                                                                  
process, not as a part of this section of the statute.  He agreed                                                               
with the chairman and Representative Murkowski that the alternative                                                             
would be a court action.                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG indicated this would be for breach.                                                                           
                                                                                                                                
Number 1872                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated that is her thought:  By                                                                     
including this, are they not just opening up the door for some                                                                  
major lawsuits against the state by contractors?                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG noted that is where the BIF comes in - that is                                                                
the supporting document, but it is to the file.                                                                                 
                                                                                                                                
REPRESENTATIVE MURKOWSKI agreed it is to the file.  She questioned                                                              
where it goes and the process.  She expressed some concern,                                                                     
although the fact that the AGC has signed off on it gives her a bit                                                             
more comfort.  However, she guesses a non-opposition is not exactly                                                             
a wholehearted endorsement.  Representative Murkowski  reiterated                                                               
that she has some concerns.  She admitted she had not caught this                                                               
during her earlier review; if she had, she would have given it more                                                             
thought before this meeting.  It seems problematic that there isn't                                                             
an appeal process in place.  Perhaps the contract controversy is                                                                
the avenue one does pursue, if in fact one has been ousted from the                                                             
contract; it certainly gives one grounds to contest.  However, she                                                              
is not familiar with what that process is.                                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG suggested that Representative Murkowski and staff                                                             
look into this; if there is a problem, it can be brought to the                                                                 
attention of the House Rules Standing Committee.                                                                                
                                                                                                                                
REPRESENTATIVE MURKOWSKI said she is happy to do that.                                                                          
                                                                                                                                
Number 1959                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO moved that the committee adopt a conceptual                                                               
amendment to the effect of making Section 7 retroactive to March                                                                
17, 1999.  There being no objection, the conceptual amendment was                                                               
adopted.                                                                                                                        
                                                                                                                                
Number 1989                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS made a motion to move House CS for CSSB
141(L&C) [Version H], as amended, out of committee with individual                                                              
recommendations and the attached [zero] fiscal note.  There being                                                               
no objections, HCS CSSB(L&C) moved out of the House Labor and                                                                   
Commerce Standing Committee.                                                                                                    
                                                                                                                                
Number 2019                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called a brief at-ease at 4:01 p.m.  The                                                                      
committee came back to order at 4:02 p.m.                                                                                       
                                                                                                                                
HB 110 - SALE/LABELING OF MEAT/MILK PRODUCTS                                                                                    
                                                                                                                                
Number 2026                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 110, "An Act relating to the sale, offer to sell, and                                                                     
labeling of fluid milk, meat, and meat products."                                                                               
                                                                                                                                
Number 2031                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS, sponsor of HB 110, noted it is his intention                                                             
to move the legislation.  He drew the committee's attention to the                                                              
proposed Version K committee substitute (CS).  The difference                                                                   
between Version K and most previous CS [Version I] is the addition                                                              
of the language, "and may also state "No significant difference has                                                             
been shown between milk derived from rBST treated and non-rBST                                                                  
treated cows."",  after "or "farmer certified rBST-free,"", in                                                                  
Section 2 of the legislation on page 2, lines 2 and 3.                                                                          
                                                                                                                                
Number 2095                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to adopt the proposed Version                                                               
K CS for HB 110, labeled 1-LS0408\K, Bannister, 4/27/99.  There                                                                 
being no objection, it was so ordered.                                                                                          
                                                                                                                                
Number 2109                                                                                                                     
                                                                                                                                
PETE FELLMAN, Researcher for Representative John Harris, Alaska                                                                 
State Legislature, came forward as the bill sponsor's                                                                           
representative.  In response to the chairman's request for an                                                                   
explanation of the difference, Mr. Fellman agreed it is as was                                                                  
stated by Representative Harris.  The disclaimer requested by the                                                               
Department of Environmental Conservation (DEC) was added to the                                                                 
legislation; this is also the same wording in the "Interim Federal                                                              
Guidelines [Food and Drug Administration (FDA)]" regarding the                                                                  
labeling of milk for bST and rGBH.  In response to the chairman's                                                               
question regarding the location of the change, Mr. Fellman directed                                                             
the committee's attention again to page 3, lines 2 and 3.                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG noted the language is "may also state" and                                                                    
therefore is not mandatory.  The chairman asked Mr. Fellman if that                                                             
is correct.                                                                                                                     
                                                                                                                                
MR. FELLMAN indicated he thinks it is.  Mr. Fellman indicated he                                                                
asked the bill drafter to take the language word-for-word out of                                                                
the FDA guidelines.  He noted the use of "may" in a previous                                                                    
sentence and commented it might be a matter of grammar.                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG indicated "may" is not used as a matter of                                                                    
grammar in legislation; it is a dictum or discretion.                                                                           
                                                                                                                                
Number 2180                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated she feels this satisfies the                                                                 
concern she had raised at the previous hearing [April 26, 1999].                                                                
If a dairy farmer wishes to sell his/her milk to the [military]                                                                 
bases or the school lunch program, he/she can use this entire                                                                   
labeling to meet the FDA requirements.  However, if a farmer                                                                    
chooses not to sell his/her milk to one of these outlets, he/she                                                                
would be allowed to omit the language, ""No significant difference                                                              
has been shown between milk derived from rBSt treated and non-rBST                                                              
treated cows."".                                                                                                                
                                                                                                                                
MR. FELLMAN commented that is probably a benefit he did not                                                                     
recognize when the "may" was included.                                                                                          
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted she read the added language and                                                                  
thought that solved the problem; she looked at "may" as a good                                                                  
thing.                                                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG informed the committee there was one witness                                                                  
online who wished to testify.                                                                                                   
                                                                                                                                
Number 2244                                                                                                                     
                                                                                                                                
ART GRISWOLD, Sleepy Hollow Farm, testified via teleconference from                                                             
Delta Junction.  He commented he raises some milk animals, mainly                                                               
goats, and some beef cattle.  Mr. Griswold indicated he has been                                                                
following the legislation's progress; he thought it was a pretty                                                                
good bill to start with. However, Mr. Griswold expressed that he is                                                             
very unhappy with the current version because all the power has                                                                 
been removed from the legislation, the requirements for hormone                                                                 
reporting on beef have been reduced completely, and more (indisc.)                                                              
is just being added to the existing dairy operation in the future                                                               
for the creamery.  He questioned what the legislation is going to                                                               
accomplish really; they have taken all the meat out of the bill and                                                             
destroyed it up to now.  Mr. Griswold noted he would like to see                                                                
the legislation to its original form:  including the term limit for                                                             
dating [of milk], including the coverage of beef animals, and                                                                   
including the milk as far as the hormone additive.  He stated, "And                                                             
that's all I've got to say gentlemen, I think your big money got to                                                             
you someplace."                                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG responded he appreciated Mr. Griswold's testimony                                                             
but not his last comments.  The chairman asked if there were any                                                                
questions for Mr. Griswold.                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS noted, as the bill sponsor, that he would                                                                 
just like to say he doesn't think big money got to them; he thinks                                                              
a matter of trying to get this through as legislation which                                                                     
accomplishes something causes one to work with other people.                                                                    
Representative Harris hoped the department would come forward as                                                                
well; he indicated they have been trying to work with the                                                                       
department to allow some form of milk labeling which supports                                                                   
various special interests and other people's concerns regarding                                                                 
knowledge of what is in some of the food they eat.  This is why the                                                             
legislation is in its present form.                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG noted he appreciated Representative Harris'                                                                   
comments and hopes Mr. Griswold takes them to heart.  The chairman                                                              
stated this a land of reality and that is why it is called                                                                      
politics.  Given the limited resources of this state and what they                                                              
can do, they can't ideally accomplish everything they may want to                                                               
do, and therefore they try to take small steps to reach the desired                                                             
goal.  He invited Ms. Adair forward.                                                                                            
                                                                                                                                
Number 2342                                                                                                                     
                                                                                                                                
JANICE ADAIR, Director, Division of Environmental Health,                                                                       
Department of Environmental Conservation, came forward.  Ms. Adair                                                              
commented the department does not have any objections to the                                                                    
Version K CS; she would like to thank Representative Harris' office                                                             
for working with the department to address its concerns.                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG closed the public hearing on HB 110 after                                                                     
confirming there were no further witnesses.                                                                                     
                                                                                                                                
Number 2374                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to move CSHB 110 [Version K]                                                                
out of committee with individual recommendations and the attached                                                               
zero fiscal note.  Representative Halcro amended his motion to                                                                  
included the two attached fiscal notes.  There being no objection,                                                              
CSHB 110(L&C) moved out of the House Labor and Commerce Standing                                                                
Committee.                                                                                                                      
                                                                                                                                
Number 2393                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called an at-ease at 4:11 p.m.  The committee                                                                 
came back to order at 4:14 p.m. [MANUAL TAPE CHANGE DURING AT-EASE]                                                             
                                                                                                                                
TAPE 99-48, SIDE B                                                                                                              
                                                                                                                                
HB 208 - PROFESSIONAL COUNSELORS                                                                                                
                                                                                                                                
Number 0001                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 208, "An Act relating to professional counselors; and                                                                     
providing for an effective date."                                                                                               
                                                                                                                                
REPRESENTATIVE MURKOWSKI, sponsor of HB 208, thanked the chairman                                                               
for hearing the legislation on such expedited notice.  She                                                                      
commented that HB 208 is a housekeeping measure; it is a title                                                                  
restriction bill, not a practice restriction bill.  She requested                                                               
that her staff, Anne Gore, present HB 208.                                                                                      
                                                                                                                                
Number 0038                                                                                                                     
                                                                                                                                
ANNE GORE, Researcher for Representative Lisa Murkowski, Alaska                                                                 
State Legislature, came forward.  Ms. Gore provided the following                                                               
testimony based on the sponsor statement:                                                                                       
                                                                                                                                
     "Last year the legislature created statutes ... which                                                                      
     established a board and license for professional                                                                           
     counselors in Alaska.  The intent of the statutes was                                                                      
     essentially twofold.  The first was to create a board                                                                      
     which would oversee activities relating to professional                                                                    
     counselors; and second, was to create requirements of                                                                      
     appropriate, quality education and experience for                                                                          
     professional counselors seeking licensure.  However, in                                                                    
     those original statutes there is some key language that                                                                    
     was left out, primarily that which defined the authority                                                                   
     of the board and the language which defined 'appropriate,                                                                  
     quality education and experience.'  This bill seeks to                                                                     
     address those omissions and also allows for three other                                                                    
     small housekeeping provisions.                                                                                             
                                                                                                                                
     "Specifically, it adds to the list of health                                                                               
     professionals allowed to supervise professional                                                                            
     counselors; it adds professional counselors to the                                                                         
     Centralized Licensing Statutes section regarding the use                                                                   
     of the letters 'LPC' after a licensed professional's                                                                       
     name; and it extends the deadline by six months for                                                                        
     current, eligible professional counselors to be                                                                            
     'grandfathered' in without having to undergo supervisory                                                                   
     and testing requirements that will be required of new                                                                      
     entrants into the profession.                                                                                              
                                                                                                                                
     "... This bill strengthens those original statutes laid                                                                    
     out last year for both the public and the profession."                                                                     
                                                                                                                                
MS. GORE stated she would be happy to answer any questions the                                                                  
committee might have.                                                                                                           
                                                                                                                                
Number 0091                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI requested that Ms. Gore explain why the                                                                
additional six month extension is being addressed.                                                                              
                                                                                                                                
MS. GORE explained that under the current provisions, the time for                                                              
current counselors working in Alaska to gather their educational                                                                
materials specifying their educational background and work history                                                              
would expire December 31, 1999.  This information allows current                                                                
counselors to become licensed professional counselors without                                                                   
having to undergo the 3,000 supervised hours and taking the test                                                                
which would be required of new entrants to the profession.  The                                                                 
board, established under the previous years statutes, had been slow                                                             
in becoming established and gathering the information required to                                                               
send out to current, working counselors.  Because those materials                                                               
may not go out until as late as August, the board was concerned                                                                 
that without an extension, working counselors within Alaska who                                                                 
wished to become licensed professional counselors might miss that                                                               
deadline.                                                                                                                       
                                                                                                                                
Number 0150                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG indicated the previous legislation establishing                                                               
the board had come through the committee the previous year.  The                                                                
chairman referred to page 3, lines 7-8 and 11-12.  He asked if                                                                  
those were the housekeeping measures to which Ms. Gore had                                                                      
referred.                                                                                                                       
                                                                                                                                
MS. GORE replied yes, exactly.  She said that it simply seeks to                                                                
define both the authority of the board, and the education and                                                                   
experience for new entrants to the profession.                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG referred to Section 4 of HB 208.  He commented                                                                
that HB 208 is a technical bill.                                                                                                
                                                                                                                                
Number 0208                                                                                                                     
                                                                                                                                
ANNE HENRY, Chair, Board of Licensed Professional Counselors,                                                                   
Division of Occupational Licensing, Department of Commerce and                                                                  
Economic Development, came forward.  She informed the committee                                                                 
that the board was not appointed until December 1998.  The original                                                             
date to send applications to potential professional counselors was                                                              
January 1, 1999.  Therefore, the board is backed up by many months                                                              
in terms of getting the applications to people.  The six-month                                                                  
extension would assist the board in getting the information out to                                                              
those in remote areas and in providing those people enough time to                                                              
gather their documentation to send in for the application process.                                                              
Ms. Henry indicated she had been very involved in the drafting of                                                               
the previous year's legislation, and she acknowledged that there                                                                
had been some omissions in that legislation.  She thinks HB 208                                                                 
cleans up a lot of different things that will assist the board in                                                               
the writing of regulations and enforcement of the statutes, as                                                                  
intended by both the drafters and, hopefully, the legislature.  Ms.                                                             
Henry noted she is basically here for the committee's questions.                                                                
                                                                                                                                
CHAIRMAN ROKEBERG pointed out that on page 2 there are provisions                                                               
for adopting a code of ethics by regulation, but not the balance of                                                             
the regulations.  He asked if that was the omission.                                                                            
                                                                                                                                
MS. HENRY indicated agreement.                                                                                                  
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked how many professional counselors                                                                 
there are in Alaska.                                                                                                            
                                                                                                                                
MS. HENRY said that she does not know; they are hoping that                                                                     
approximately 250 people will apply for this license.  Ms. Henry                                                                
agreed with Representative Murkowski that the actual number of                                                                  
professional counselors is unknown because no information has been                                                              
sent out.  Ms. Henry identified that as another reason for                                                                      
extending the deadline.  More licensees would decrease the amount                                                               
of the individual licensing fee.                                                                                                
                                                                                                                                
Number 0320                                                                                                                     
                                                                                                                                
CATHERINE REARDON, Director, Division of Occupational Licensing,                                                                
Department of Commerce and Economic Development, came forward.  She                                                             
informed the committee that the division provides the staff support                                                             
to the Board of Professional Counselors.  Ms. Reardon said that HB
208 is a good bill from the department's perspective.  When the                                                                 
board began fleshing out regulations, the need for the technical                                                                
clean-ups were discovered.  She commented that HB 208 has a zero                                                                
fiscal note.                                                                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI understands one of the reasons for                                                                     
requesting these technical changes is to allow this six-month                                                                   
extension.  She questioned if the legislature is being unreasonable                                                             
with these deadlines when it sets them and if should that be                                                                    
reviewed in order to ensure that is not the case again.                                                                         
                                                                                                                                
MS. REARDON pointed out that with a new board, the members must                                                                 
first be appointed before any actions establishing policies and                                                                 
regulations can occur.  Those policies and regulations then allow                                                               
applications to be sent out.  Therefore, applications cannot be                                                                 
sent out until the board is appointed and meets.  The appointment                                                               
process takes awhile because the bills pass at the same time the                                                                
budget and other items come before the Governor.  Therefore,                                                                    
appointments of new board members take lower priority.  Ms. Reardon                                                             
indicated this situation should be recognized regarding time                                                                    
deadlines.  She also noted that sometimes a bill introduced the                                                                 
first session might not pass until the first session.  Although the                                                             
dates could be much closer then, Ms. Reardon indicated that                                                                     
amending the bill at that point might impede the legislation's                                                                  
progress.  Additionally, she thinks both the department, and                                                                    
perhaps the legislature, need consider how long it really takes to                                                              
write thoughtful regulations and inform the public.  Ms. Reardon                                                                
emphasized that she did not see much harm in having extended                                                                    
grandfather clauses.                                                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG asked if anything in HB 208 added to the                                                                      
nondiscrimination clause of the insurance statute.                                                                              
                                                                                                                                
MS. REARDON replied no and said that would be a separate issue                                                                  
probably will be brought to the legislature at some time.  She                                                                  
mentioned that would be somewhat more controversial.                                                                            
                                                                                                                                
REPRESENTATIVE HALCRO noted that the bill packet only included an                                                               
unnumbered draft bill.                                                                                                          
                                                                                                                                
Number 0493                                                                                                                     
                                                                                                                                
JANET SEITZ, Legislative Assistant to Representative Norman                                                                     
Rokeberg, Alaska State Legislature, as aide to the House Labor and                                                              
Commerce Standing Committee, clarified for the record that the                                                                  
version before the committee is version 1-LS0828\A, which is the                                                                
same as the unnumbered draft bill.                                                                                              
                                                                                                                                
CHAIRMAN ROKEBERG asked how the licensing fee had been established                                                              
for the board.                                                                                                                  
                                                                                                                                
MS. REARDON explained that the fiscal note accompanying the                                                                     
previous year's legislation included a proposed amount based on the                                                             
number of people who might get licenses.  That amount was publicly                                                              
noticed and adopted.  She said that three years from now, the fee                                                               
would be more accurate.                                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG asked if another reason for the extension was to                                                              
attempt to meet the proposed number of applicants in order to have                                                              
enough money to pay for the program.                                                                                            
                                                                                                                                
Number 0537                                                                                                                     
                                                                                                                                
MS. REARDON stated that there are enough licensees in the division                                                              
so that would not be a concern of the division.  However, more                                                                  
licensees result in lower fees.                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG asked if Ms. Reardon was suggesting that other                                                                
licensees fund this license.                                                                                                    
                                                                                                                                
MS. REARDON explained that if the program costs more than the fee                                                               
brings in revenue, the division would deficit spend on that program                                                             
which would mean that technically the money spent may be from                                                                   
another program.  However, the profession would have to pay back                                                                
the deficit and the money returns to those from which it came.                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG asked if anyone else wished to testify on HB 208.                                                             
There being no one, the public hearing on HB 208 was closed.  The                                                               
chairman asked the will of the committee.                                                                                       
                                                                                                                                
REPRESENTATIVE CISSNA noted a conflict of interest because she is                                                               
a potential applicant for a professional counselor license.                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG indicated that Representative Cissna would be                                                                 
required to vote.                                                                                                               
                                                                                                                                
Number 0623                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to move HB 208 out of committee                                                             
with individual recommendations and the attached zero fiscal note.                                                              
There being no objection, HB 208 moved out of the House Labor and                                                               
Commerce Standing Committee.                                                                                                    
                                                                                                                                
Number 0633                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called an at-ease at 4:30 p.m.  The committee                                                                 
came back to order at 4:39 p.m.                                                                                                 
                                                                                                                                
HB 183 - ALASKA PUBLIC UTILITIES COMMISSION                                                                                     
                                                                                                                                
[Contains discussion relevant to SB 133.]                                                                                       
                                                                                                                                
Number 0638                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 183, "An Act relating to the powers and duties of the chair                                                               
of the Alaska Public Utilities Commission; relating to membership                                                               
on the Alaska Public Utilities Commission; and relating to the                                                                  
annual report of the Alaska Public Utilities Commission."  The                                                                  
chairman informed the committee there are some suggested amendments                                                             
patterned after provisions of SB 133.  It is the intention to try                                                               
to mirror some of the provisions placed in SB 133 that the industry                                                             
as a whole can agree on that would be a betterment to the                                                                       
commission.  The chairman mentioned amendments I.1 and I.2 [there                                                               
is also I.3].                                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned if the committee needed to                                                                  
adopt the committee substitute (CS) [Version I].                                                                                
                                                                                                                                
There was some discussion among the committee regarding                                                                         
distribution of the three amendments.                                                                                           
                                                                                                                                
Number 0697                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called a brief at-ease at 4:40 p.m.  The                                                                      
committee came back to order at 4:41 p.m.  The chairman announced                                                               
that before taking up the amendments, the committee would hear                                                                  
public testimony.                                                                                                               
                                                                                                                                
Number 0719                                                                                                                     
                                                                                                                                
SHARON DANIEL, Copper Basin Sanitation Service Company, testified                                                               
via teleconference from Glennallen.  Ms. Daniel commented that she                                                              
does not have any of the amendments, but she does support the                                                                   
original Version I work draft.  However, if the three amendments                                                                
change the legislation much, she may withdraw her support.                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG confirmed Ms. Daniels was concerned about subject                                                             
of refuse regulation.  He stated there is nothing in this                                                                       
legislation and it is not the sponsor's intention to add that to                                                                
this legislation.                                                                                                               
                                                                                                                                
MS. DANIELS stated her concern is the deregulation of garbage                                                                   
service.  She does not support that; if garbage service is left out                                                             
of HB 183, the legislation has her support.                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG reiterated that it is not in the legislation nor                                                              
is it the chairman's intention.                                                                                                 
                                                                                                                                
REPRESENTATIVE HALCRO informed Ms. Daniels as co-chair of the House                                                             
Community and Regional Affairs Standing Committee that HB 178,                                                                  
which he believes Ms. Daniels is referencing, would possibly be                                                                 
heard by that committee the following Tuesday [May 4].                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG added that he believes Senator Pearce's                                                                       
legislation, SB 133, does include the garbage or refuse provisions.                                                             
He indicated HB 183 and SB 133 are along the same lines, but HB 183                                                             
does not have those specific provisions.  The chairman indicated he                                                             
would suggest that Ms. Daniel should track both HB 178 and SB 133.                                                              
He questioned whether Mr. Zobel in Anchorage wished to testify.                                                                 
                                                                                                                                
Number 0805                                                                                                                     
                                                                                                                                
RON ZOBEL, Assistant Attorney General, Fair Business Practices                                                                  
Section, Civil Division (Anchorage), Department of Law, spoke via                                                               
teleconference from Anchorage.  Mr. Zobel told members he was                                                                   
available for questions that had arisen at the last hearing [April                                                              
26] concerning amendments on arbitration, the 60-day limit on                                                                   
issuing decisions and the consumer complaint amendment [Amendment                                                               
2 to Version H].  Mr. Zobel indicated Mr. Baldwin [Jim Baldwin,                                                                 
Assistant Attorney General, Governmental Affairs Section, Civil                                                                 
Division (Juneau), Department of Law] had thought it would be                                                                   
better to have an attorney who worked day-to-day with the Alaska                                                                
Public Utilities Commission (APUC) present for these questions.                                                                 
Mr. Zobel is one of the two assistant attorney generals assigned to                                                             
the commission.                                                                                                                 
                                                                                                                                
Number 0838                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to adopt the Version I CS for                                                               
HB 183, labeled 1-LS0764\I, Cramer, 4/28/99.  There was no                                                                      
objection to the motion.                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG questioned if Mr. Zobel and Mr. Lohr [Robert                                                                  
Lohr, Executive Director, Alaska Public Utilities Commission] had                                                               
Version I.                                                                                                                      
                                                                                                                                
MR. ZOBEL responded that he believed he had that version.                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG requested that Ms. Seitz conceptually explain the                                                             
amendments to the committee and then Mr. Yould could discuss the                                                                
amendments' substance.  The chairman indicated the amendments would                                                             
be marked I.1 as Amendment 1, I.2 as Amendment 2, and I.3 as                                                                    
Amendment 3.                                                                                                                    
                                                                                                                                
Number 0895                                                                                                                     
                                                                                                                                
JANET SEITZ, Legislative Assistant to Representative Norman                                                                     
Rokeberg, Alaska State Legislature, came forward as aide to the                                                                 
House Labor and Commerce Standing Committee.  Ms. Seitz explained                                                               
that Amendment 1 is in the same area as the amendment passed at the                                                             
last meeting [April 26] "dealing with the chair of the commission                                                               
shall promptly fix a date."  The committee adopted 60 days at the                                                               
last hearing; this amendment would reinsert the 30-day provision.                                                               
Ms. Seitz indicated the last portion of the amendment is new                                                                    
language regarding timely closure of dockets.  Amendment 1, labeled                                                             
1-LS0764\I.1, Cramer, 4/28/99, read:                                                                                            
                                                                                                                                
     Page 1, line 5, following ";":                                                                                             
          Insert "relating to timely action by the Alaska                                                                       
     Public Utilities Commission;"                                                                                              
                                                                                                                                
     Page 3, line 26:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 3, lines 28 - 30:                                                                                                     
          Delete ", the chair of the commission shall promptly                                                                  
     fix a date for hearing when a hearing is appropriate.                                                                      
     The hearing shall be without undue delay.  The"                                                                            
          Insert "for which a hearing is clearly warranted,                                                                     
     the chair of the commission shall assign a priority                                                                        
     rating to the issue and promptly fix a date for hearing.                                                                   
     The hearing shall be expedited in accordance with the                                                                      
     priority rating.  Regardless of the priority rating, a"                                                                    
                                                                                                                                
     Page 4, line 2:                                                                                                            
          Delete "60"                                                                                                           
          Insert "30"                                                                                                           
                                                                                                                                
     Page 4, following line 2:                                                                                                  
          Insert a new subsection to read:                                                                                      
               "(c) Unless to do so would violate the due                                                                       
          process rights of a party, the commission shall                                                                       
          ensure that its dockets are closed in a timely                                                                        
          fashion and not delayed due to inaction, complexity                                                                   
          of issues, or another reason.  Failure of a                                                                           
          commission member to comply with this subsection                                                                      
          constitutes grounds for removal from the commission                                                                   
          under AS 42.05.035.  The chair of the commission                                                                      
          may dismiss a commission employee for failure to                                                                      
          comply with this subsection."                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG questioned whether Mr. Zobel had the I.1                                                                      
amendment.                                                                                                                      
                                                                                                                                
MR. ZOBEL answered they did not have that in Anchorage.                                                                         
                                                                                                                                
MS. SEITZ informed the chairman the amendments had been received                                                                
just prior to the hearing.  The amendments are being faxed to the                                                               
Anchorage Legislative Information Office (Anchorage LIO).                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG indicated he wished to hear Mr. Zobel's comment                                                               
on Amendment 1 after his (Mr. Zobel's) review.  The chairman                                                                    
invited Mr. Yould and Walt Wilcox [aide to the House Special                                                                    
Committee on Utility Restructuring, sponsor of HB 183] forward.                                                                 
Chairman Rokeberg questioned Mr. Yould regarding the nature of                                                                  
Amendment 1.                                                                                                                    
                                                                                                                                
Number 1013                                                                                                                     
                                                                                                                                
ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative                                                               
Association, Incorporated (ARECA), came forward.  He noted ARECA is                                                             
a trade association for the electric utility industry.  Mr. Yould                                                               
commented there had been an amendment before the committee at the                                                               
previous hearing which attempted to put some "teeth" into the time                                                              
in which it takes to get dockets through APUC.  An amendment was                                                                
adopted that required, among other things, a certain prioritization                                                             
on dockets when they come in.  There was also a requirement that                                                                
the commission enter its order within 60 days after conclusion [of                                                              
a docket].  The timeliness of dockets is the major issue relating                                                               
to the APUC that ARECA sees coming before its body, from the                                                                    
electric utilities' standpoint.  There were many comments the other                                                             
day that that completed section was still loosely worded and could                                                              
be tightened up; ARECA agreed with that.  Mr. Yould indicated that                                                              
ARECA also privately felt that perhaps there could be even more                                                                 
teeth put into getting dockets out in a timely fashion.                                                                         
                                                                                                                                
                                                                                                                                
MR. YOULD commented this is what he has attempted to do.  Amendment                                                             
1 to Version I ["Version T" misstated on tape] is a derivative of                                                               
what he put together; it was reworded by the legislative drafters.                                                              
The amendment suggests that the question of how soon decisions                                                                  
shall be made should be revisited.  ARECA suggests 30 days is                                                                   
better than the 60 days passed previously.  ARECA is also saying                                                                
that the chairman should examine and prioritize an incoming docket                                                              
by importance, place it into a management tracking system, and get                                                              
to it as soon as possible.  Mr. Yould noted the last portion of the                                                             
amendment, subsection (c), tries to ensure that the commission and                                                              
its staff understand the importance of getting dockets out in a                                                                 
timely fashion.  If there is a continual history of slowness or                                                                 
inattention to dockets, this would serve as grounds for dismissal.                                                              
ARECA is not looking for dismissal, nor does it believe that would                                                              
happen.  However, Mr. Yould indicated ARECA would certainly like to                                                             
know that dismissal could be had if timeliness of dockets continues                                                             
to be an issue.                                                                                                                 
                                                                                                                                
Number 1165                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO referred to the language, "assign a priority                                                              
rating" in paragraph 3 of Amendment 1, relating to page 3, lines 28                                                             
through 30 of Version I.  He questioned the intent with the                                                                     
priority rating, wondering if would be as simple as "one through                                                                
five."                                                                                                                          
                                                                                                                                
MR. YOULD answered it could very well be; that is up to the                                                                     
commission to decide by regulation.  He added, "It's just trying to                                                             
say one docket is more important than another, and just because you                                                             
have a full slate, it doesn't mean that if you don't get an                                                                     
important one in, it shouldn't get bumped to the top.  And,                                                                     
frankly, there's been some dockets that have come in - at least                                                                 
with the electric utility industry, having to do with the takeover                                                              
of one utility by another - that I wish APUC had taken on and made                                                              
a decision on, and we wouldn't be still trying to figure out what's                                                             
going on."                                                                                                                      
                                                                                                                                
Number 1206                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated, however, that if they are to                                                                
enact language that says nothing can be done which would cause                                                                  
undue delay, a prioritization schedule, by nature, would delay some                                                             
items in favor of others.  A prioritization schedule with "hot"                                                                 
items relating to electric utility dockets would delay the garbage                                                              
dockets, for example, making it difficult to keep to the time                                                                   
management schedule. Representative Murkowski expressed that she                                                                
likes the idea of prioritization and thinks it may need to be                                                                   
examined, but she questioned this delaying effect on the less                                                                   
urgent items.                                                                                                                   
                                                                                                                                
MR. YOULD said he fully agreed with Representative Murkowski's                                                                  
comments; it is necessary to ensure that some of those less                                                                     
important dockets ultimately get heard.  He proposed using some new                                                             
hearing techniques that perhaps the commission has not used enough                                                              
of in the past, such as having some dockets heard by a hearing                                                                  
officer or arbiter, or using other tools the commission has                                                                     
available to it.  He stated, "We want to see a little bit more                                                                  
action over there, frankly. ... Some of the dockets are very                                                                    
important, and they should be put on an expedited basis.  I'd have                                                              
to say that there's been a couple of recent dockets that have cost                                                              
... members in utilities a lot of money, because the utilities have                                                             
come to APUC and said, 'Give us a decision.'  Still, today, no                                                                  
decision ... is there and hence people are spending money, throwing                                                             
grenades back and forth with newspaper ads and that sort of thing,                                                              
that in some respects, perhaps, could have been settled through a                                                               
timely adjudication by APUC."  Mr. Yould continued, "Now, I'm not                                                               
even going to pretend to say that there wasn't a due process that                                                               
didn't slow it down because I agree with that and I've even tried                                                               
to acknowledge the fact that due process does need to take its                                                                  
place.  It absolutely does.  But I just think a sense of urgency                                                                
and prioritization is very necessary over there.  And, yes, some                                                                
dockets would get bumped down, but at the same time I think that                                                                
good managers will find ways to deal with that."                                                                                
                                                                                                                                
Number 1339                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Zobel if he had received a copy of                                                                  
Amendment 1.                                                                                                                    
                                                                                                                                
MR. ZOBEL replied they had not received it yet.                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG noted that Amendment 1 replaces the 60 days in                                                                
Version I with 30 days, and puts a lot more "fangs" into it.  The                                                               
chairman questioned whether Mr. Zobel wished to comment.                                                                        
                                                                                                                                
MR. ZOBEL asked if Amendment 1 refers to the closing of a docket.                                                               
                                                                                                                                
CHAIRMAN ROKEBERG indicated the 30 days or 60 days relates to the                                                               
order afterwards, found on page 4, line 2, of Version I.                                                                        
                                                                                                                                
Number 1383                                                                                                                     
                                                                                                                                
MR. ZOBEL pointed out that there is an important distinction                                                                    
between the issuance of an order after a hearing and the closing of                                                             
a docket.  The closing of a docket is a fairly routine thing when                                                               
the entire docket is completed.                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG noted that Version I, page 4, lines 1 and 2,                                                                  
says, "After the conclusion of the hearing, the commission shall                                                                
enter its order within 60 days."  He asked how Mr. Zobel would                                                                  
interpret that, and whether he was distinguishing between a docket                                                              
hearing and another hearing.                                                                                                    
                                                                                                                                
Number 1421                                                                                                                     
                                                                                                                                
MR. ZOBEL explained that there can be a hearing or a series of                                                                  
hearings leading to various orders being issued in a particular                                                                 
docket.  The closing of the docket comes later, after virtually                                                                 
everything has been finished, and is a rather routine, bureaucratic                                                             
chore of simply closing the file.  He suggested that the problem                                                                
they are getting at is that once a matter has been heard in a                                                                   
hearing and submitted to the APUC for decision, that is when the                                                                
time clock would start to run.  He pointed out, however, that what                                                              
is reasonable varies with the complexity or nature of the docket,                                                               
and 30 days is a very short time for many items.  Mr. Zobel said                                                                
he doesn't think that there is necessarily a legal problem with                                                                 
directing the commission to do this, but, obviously, they want the                                                              
right number of days to be in there so that it is a practical                                                                   
provision.  He noted that the bill he was looking at didn't specify                                                             
a remedy for a violation of that directive.                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG suggested the legislature could cut the funding.                                                              
                                                                                                                                
MR. ZOBEL said that it is always an option.  He noted that a                                                                    
directory statement like that is a standard against which the APUC                                                              
can be measured.  He paused to look at Amendment 1, which had just                                                              
been handed to him.                                                                                                             
                                                                                                                                
Number 1560                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked whether Mr. Zobel would counsel the                                                                     
committee to leave the time as 60 days.                                                                                         
                                                                                                                                
MR. ZOBEL said he believes 60 days is a much more reasonable period                                                             
of time for many dockets.                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Yould to respond.                                                                                   
                                                                                                                                
Number 1613                                                                                                                     
                                                                                                                                
MR. YOULD replied, "Everything's subjective.  If I have an attorney                                                             
that works for me, and I say that I want something tomorrow, I'm                                                                
going to pay for it, and I'm going to get it tomorrow.  And it                                                                  
would seem to me that if something is important enough and it needs                                                             
to be done, it can be done.  And I think that APUC has the                                                                      
resources, either through the attorney general's office or, as                                                                  
amended, through outside legal resources, that they should be able                                                              
to get the job done.  I certainly wouldn't want to see them                                                                     
expending undue funds on trying to get dockets out that are of a                                                                
relatively low priority, but it would seem to me that you should                                                                
have the resources within this commission to act in a timely                                                                    
fashion."                                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG responded that it depends on the scope of the                                                                 
work, which he believes is Mr. Zobel's point.                                                                                   
                                                                                                                                
Number 1667                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked whether there has been testimony                                                                 
from the other utilities involved in APUC hearings, in terms of                                                                 
what they might consider reasonable.                                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG said no.                                                                                                      
                                                                                                                                
REPRESENTATIVE MURKOWSKI added that it may be easier for electric                                                               
utility cases, as opposed to pipeline rate cases, for example,                                                                  
where even 60 days might be unreasonable.                                                                                       
                                                                                                                                
MR. YOULD answered that everybody has learned to expect something                                                               
longer rather than shorter, which he believes is unfortunate.                                                                   
                                                                                                                                
CHAIRMAN ROKEBERG proposed going back to 30 days, with extensions                                                               
requiring justification, as discussed in the previous meeting.                                                                  
                                                                                                                                
MR. YOULD said he has no problem with that.                                                                                     
                                                                                                                                
Number 1729                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO asked if the expectation of delays isn't                                                                  
simply because there hasn't been any time line in force.                                                                        
                                                                                                                                
MR. YOULD said that is a good point, adding that perhaps some other                                                             
management techniques put in place would obviate the need for this                                                              
sort of thing.                                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG suggested that could be a compromise.  He asked                                                               
Mr. Zobel and Mr. Lohr if they had heard the discussions, and if                                                                
they believe it is more reasonable to revert to 30 days, with                                                                   
extensions for good cause.                                                                                                      
                                                                                                                                
Number 1776                                                                                                                     
                                                                                                                                
MR. ZOBEL answered that certainly some latitude would be more                                                                   
reasonable.  He cautioned against distracting the commission from                                                               
the issue at hand, however, by the process of getting extensions                                                                
and findings of good cause.  There are going to be a large number                                                               
of cases where good cause would be necessary to get some extra                                                                  
time, he said.  To him, having 30 days and then another extension                                                               
adds a procedure to jump through, which could be a little                                                                       
cumbersome, although it would keep everybody on track.  He proposed                                                             
that the chairman should always have a system to determine what                                                                 
remains in a particular matter at any given time, because sometimes                                                             
it isn't readily apparent what is still out there to be decided.                                                                
Mr. Zobel believes that would be the best thing to help in meeting                                                              
deadlines.                                                                                                                      
                                                                                                                                
Number 1910                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG made a motion to adopt Amendment 1, and to amend                                                              
it by deleting lines 12 through 14 [of the printed amendment,                                                                   
relating to page 4, line 2, of Version I].  This would leave the 60                                                             
days in, with no extension.  He asked if there was any objection to                                                             
the amendment to Amendment 1.  The language to be deleted from                                                                  
Amendment 1 by the amendment to the amendment read:                                                                             
                                                                                                                                
     Page 4, line 2:                                                                                                            
          Delete "60"                                                                                                           
          Insert "30"                                                                                                           
                                                                                                                                
REPRESENTATIVE HALCRO objected for purposes of discussion.  He                                                                  
asked if the reason is fear of the 30 days.                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG referred to testimony and expressed concern that                                                              
30 days isn't enough time to write a report.  "We can tune this up                                                              
later," he added.  The chairman said he accepts Mr. Zobel's counsel                                                             
that adding another "cause" issue creates paperwork, which he                                                                   
himself doesn't want.                                                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG asked if there was any objection to the amendment                                                             
to Amendment 1.  There being none, the amendment to the amendment                                                               
was adopted.  The chairman asked if there was any objection to                                                                  
Amendment 1 [as amended].                                                                                                       
                                                                                                                                
Number 2000                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI referred to the last section of the                                                                    
amendment and the language, "... the commission shall ensure that                                                               
its dockets are closed in a timely fashion and not delayed due to                                                               
inaction,".  She indicated this language is acceptable to her, but                                                              
she noted the following language, "complexity of issues".  She                                                                  
specifically referred to line 19 of the printed amendment which                                                                 
read, "delayed due to inaction, complexity of issues, or another                                                                
reason.  Failure of a"  Representative Murkowski believes                                                                       
"complexity of issues" is a valid reason to take 45 days instead of                                                             
30 days, for example.  Therefore, she expressed discomfort with                                                                 
inclusion of that language.  Although it could be used as an excuse                                                             
for delay, she believes there is a need to allow the APUC to wade                                                               
through incredibly complex issues.  She suggested urging the                                                                    
commission to deal with it in a timely manner, however.                                                                         
                                                                                                                                
REPRESENTATIVE HALCRO noted that if they are retaining the 60 days                                                              
because of the worry that 30 days is not enough time to respond                                                                 
because of complex dockets, then on line 19, "delayed due to                                                                    
inaction, complexity of issues, or another reason. ...", they are                                                               
punishing for something which has already been addressed in lines                                                               
12 through 14.  Representative Halcro commented they have said                                                                  
there are complex issues out there; 30 days is not enough, 60 will                                                              
be provided, but then again on line 19, they say that that is not                                                               
a reason to delay.  He said this is his concern.                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG replied that he had not thought of complexity of                                                              
issues as a reason to extend the 60 days, indicating his thought                                                                
had been toward bureaucratic inertia and failure to get things                                                                  
done.                                                                                                                           
                                                                                                                                
Number 2154                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA also referred to line 19 of Amendment 1,                                                                  
"delayed due to inaction, complexity of issues, or another reason.                                                              
..."  She asked whether "or another reason" doesn't essentially say                                                             
that there is no reason to do it.                                                                                               
                                                                                                                                
REPRESENTATIVE MURKOWSKI agreed.                                                                                                
                                                                                                                                
Number 2208                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked if there were any objections to Amendment                                                               
1 [as amended].                                                                                                                 
                                                                                                                                
REPRESENTATIVE MURKOWSKI and REPRESENTATIVE HALCRO objected.                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI suggested it might be all right if that                                                                
first sentence was deleted.                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested that Representative Murkowski fix the                                                               
amendment and bring it back on Friday [April 30].  The chairman                                                                 
requested that Ms. Seitz to comment on Amendment 3.                                                                             
                                                                                                                                
Number 2259                                                                                                                     
                                                                                                                                
MS. SEITZ noted that Amendment 3, labeled 1-LS0764\I.3, Cramer,                                                                 
4/28/99, read:                                                                                                                  
                                                                                                                                
     Page 4, line 29, following ".":                                                                                            
          Insert "A decision of an arbiter is not final until                                                                   
     approved by the commission."                                                                                               
                                                                                                                                
CHAIRMAN ROKEBERG reminded members that arbitration had been added                                                              
to the commission's tools, but it is necessary to ensure that the                                                               
commission approves the arbitration decision.  The chairman asked                                                               
if there was any objection to Amendment 3.  There being none,                                                                   
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG noted Amendment 2 is a bit more complex.                                                                      
Amendment 2, labeled 1-LS0764\I.2, Cramer, 4/28/99, read:                                                                       
                                                                                                                                
     Page 1, line 8, following "Commission;":                                                                                   
          Insert "relating to regulatory cost charges;"                                                                         
                                                                                                                                
     Page 5, following line 13:                                                                                                 
          Insert new bill sections to read:                                                                                     
          "* Sec. 12. AS 42.05.254(a) is amended to read:                                                                       
               (a) A regulated public utility operating in                                                                      
          the state shall pay to the commission an annual                                                                       
          regulatory cost charge in an amount not to exceed                                                                     
          the maximum percentage of adjusted gross revenue                                                                      
          that applies to the utility sector of which the                                                                       
          utility is a part.  The total regulatory cost                                                                         
          charges that the commission expects to collect from                                                                   
          all regulated public utilities and regulated                                                                          
          pipeline carriers may not exceed .8 percent of the                                                                    
          total adjusted gross revenue of all regulated                                                                         
          public utilities and the total gross revenue of all                                                                   
          regulated pipeline carriers [DERIVED FROM                                                                             
          OPERATIONS IN THE STATE, AS MODIFIED UNDER (c) OF                                                                     
          THIS SECTION IF APPROPRIATE].  An exempt utility                                                                      
          shall pay the actual cost of services provided to                                                                     
          it by the commission.                                                                                                 
                                                                                                                                
          * Sec. 13.  AS 42.05.254(b) is amended to read:                                                                       
               (b) The commission shall by regulation                                                                           
          establish a method to determine annually the amount                                                                   
          of the regulatory cost charge for a public utility.                                                                   
          If the amount the commission expects to collect                                                                       
          under (a) of this section and under AS 42.06.286(a)                                                                   
          exceeds the authorized budget of the commission,                                                                      
          the commission shall, by order, reduce the                                                                            
          percentages determined under (i) [SET OUT IN (a)]                                                                     
          of this section so that the total amount of the                                                                       
          fees collected approximately equals the authorized                                                                    
          budget of the commission for the fiscal year.                                                                         
                                                                                                                                
          * Sec. 14.  AS 42.05.254(h) is amended by adding a                                                                    
     new paragraph to read:                                                                                                     
               (5) "adjusted gross revenue" means the gross                                                                     
          revenue of a utility as modified under (c) of this                                                                    
          section, if appropriate.                                                                                              
                                                                                                                                
          * Sec. 15.  AS 42.05.254 is amended by adding a new                                                                   
     subsection to read:                                                                                                        
               (i) The commission shall by regulation                                                                           
          establish a method to determine annually the                                                                          
          maximum percentage of adjusted gross revenue that                                                                     
          will apply to each regulated public utility sector                                                                    
          and the maximum percentage of gross revenue that                                                                      
          will apply to each regulated pipeline carrier                                                                         
          sector.  The method established shall allocate the                                                                    
          commission's costs, other than the cost of services                                                                   
          provided to exempt utilities, among the regulated                                                                     
          public utility sectors and the regulated pipeline                                                                     
          carrier sector based on the relative amount of the                                                                    
          commission's annual costs that is attributable to                                                                     
          regulating each sector.                                                                                               
                                                                                                                                
          * Sec. 16.  AS 42.06.286(a) is amended to read:                                                                       
               (a)  A pipeline carrier operating in the state                                                                   
          shall pay to the commission an annual regulatory                                                                      
          cost charge in an amount not to exceed the maximum                                                                    
          percentage of gross revenue that applies to                                                                           
          regulated pipeline carriers.  The total regulatory                                                                    
          cost charges that the commission expects to collect                                                                   
          from all regulated pipeline carriers and regulated                                                                    
          public utilities may not exceed .8 percent of the                                                                     
          total gross revenue of all regulated pipeline                                                                         
          carriers and the total gross revenue of all                                                                           
          regulated public utilities [DERIVED FROM OPERATIONS                                                                   
          IN THE STATE].  A regulatory cost charge may not be                                                                   
          assessed on pipeline carrier operations unless the                                                                    
          operations are within the jurisdiction of the                                                                         
          commission.                                                                                                           
                                                                                                                                
          * Sec. 17.  AS 42.06.286(b) is amended to read:                                                                       
               (b) The commission shall by regulation                                                                           
          establish a method to determine annually the amount                                                                   
          of the regulatory cost charge.  If the amount the                                                                     
          commission expects to collect under (a) of this                                                                       
          section and under AS 42.05.254(a) exceeds the                                                                         
          authorized budget of the commission, the commission                                                                   
          shall, by order, reduce the percentage determined                                                                     
          under (1) [SET OUT IN (a)] of this section so that                                                                    
          the total amount of the fees collected                                                                                
          approximately equals the authorized budget of the                                                                     
          commission for the fiscal year.                                                                                       
                                                                                                                                
          * Sec. 18.  AS 42.06.286 is amended by adding a new                                                                   
     subsection to read:                                                                                                        
               (f) The commission shall by regulation                                                                           
          establish a method to determine annually the                                                                          
          maximum percentage of gross revenue that will apply                                                                   
          to each regulated pipeline carrier sector and the                                                                     
          maximum percentage of gross revenue that will apply                                                                   
          to the regulated public utility sector in                                                                             
          accordance with AS 42.05.254(i)."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
[Note: amendment copy quality very poor - unable to determine                                                                   
subsection specified in Section 17.]                                                                                            
                                                                                                                                
MS. SEITZ noted that Amendment 2 addresses concerns raised about                                                                
disparity between what telephone companies and electric utilities                                                               
pay, based on the amount of work done for them.  She deferred to                                                                
Mr. Yould.                                                                                                                      
                                                                                                                                
Number 2331                                                                                                                     
                                                                                                                                
MR. YOULD explained, "Presently, the commission computes the RCC                                                                
[regulatory cost charge] by equally apportioning the RCC to be                                                                  
collected, by dividing the total commission budget to be collected                                                              
from the utilities by the total gross utility receipts.  And it                                                                 
basically puts a cap on how much ... of those gross receipts ...                                                                
could go toward the commission; and I think the percentage is .8                                                                
percent of gross receipts.  What that means is that [regardless] of                                                             
the service, and the number of issues that you have before the                                                                  
commission, you're going to be paying a flat amount - no matter                                                                 
what - by your industry sector.  And as a 'for instance,' under the                                                             
present formula, last year the commission needed to recover ...                                                                 
$4,122,000 from the regulated utilities, of which ... a little over                                                             
a million was to be recovered from the electric utility industries.                                                             
That's roughly 25 percent."                                                                                                     
                                                                                                                                
MR. YOULD continued, "However, if you look at the level of effort                                                               
that is put in by the commission on electric utility dockets, you                                                               
will probably find that we are not getting 25 percent of their                                                                  
effort.  For instance, ... in 1996, there were 110 new dockets                                                                  
filed with the commission; that was a year before deregulation of                                                               
the telecommunications industry took place.  That's probably a                                                                  
period of time when we would say that we probably got equal                                                                     
representation within APUC.  In 1997, however..." [TESTIMONY                                                                    
INTERRUPTED BY TAPE CHANGE]                                                                                                     
                                                                                                                                
TAPE 99-49, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
MR. YOULD continued, "I can tell you ... that the preponderance of                                                              
the increase in dockets was not a result of the electric utility                                                                
industry, but simply because of the increased re-regulation                                                                     
associated with the deregulation of the telecommunications                                                                      
industry.  We believe that we are probably getting significantly                                                                
less than the 25 percent that we are paying into the commission                                                                 
through the RCC.   What we are recommending is an amendment, which                                                              
is some three pages long, which basically changes the formula so                                                                
that each individual industry will be allocated its charge based on                                                             
the anticipated level of effort needed for that industry within the                                                             
commission.  And that's what this amendment does."                                                                              
                                                                                                                                
Number 0090                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested that Mr. Lohr comment on this                                                                       
allocation-to-workload concept.                                                                                                 
                                                                                                                                
Number 0104                                                                                                                     
                                                                                                                                
ROBERT LOHR, Executive Director, Alaska Public Utilities                                                                        
Commission, testified next via teleconference from Anchorage.  He                                                               
told members that the regulatory cost charge was established in                                                                 
1992, based on recommendations of the legislative auditor and                                                                   
others who felt that it would be a more equitable way than using                                                                
unrestricted general funds to finance the APUC's operations.  Since                                                             
that date, the APUC has operated on a RCC and the APUC fund is a                                                                
separate fund in state accounting.  Mr. Lohr stated, "The approach                                                              
of the commission, following the statutes, has been to try to keep                                                              
the program simple, to keep the allocation to all utilities - all                                                               
regulated utilities - the same, to the extent possible.  That's                                                                 
been a very successful approach.  It's kept the program simple.  It                                                             
has avoided creating a kind of 'Internal Revenue Service of the                                                                 
North,' if you will, to have exclusions, deductions, exemptions and                                                             
so forth, or special treatment."                                                                                                
                                                                                                                                
MR. LOHR continued, "The legislature, in 1995, the last sunset                                                                  
review, did authorize a reduction in the electric regulatory cost                                                               
charge to exclude the cost of power from the calculation.  That had                                                             
the effect of reducing regulatory costs allocated to the electric                                                               
industry by 43 percent. ...  It's true, as Mr. Yould has indicated,                                                             
that the number of dockets has increased substantially ... in                                                                   
recent years, and that the primary increase has been in the area of                                                             
telecommunications.  However, the choice of formal dockets as the                                                               
measure of a commission activity misses some significant activity                                                               
by the commission.  For example, the electric restructuring                                                                     
contract with CH2M Hill and the work that the commission has done                                                               
with the legislature in that area is not reflected in the expenses                                                              
of any docket.  It's a regulatory docket; so, it would not show as                                                              
one that is allocated to electricity."                                                                                          
                                                                                                                                
MR. LOHR commented, "And yet, I think the primary benefit of that                                                               
contract is clearly to the electric industry.  Other things, such                                                               
as the number of tariff filings handled, reflect a much more                                                                    
general balance, with electricity having a far higher percentage                                                                
than the 10 percent indicated in the formal docket.  At this point,                                                             
the RCC has worked extremely well. ... In the last two full fiscal                                                              
years we have received more formal dockets than in the previous                                                                 
four fiscal years.  We'd like to focus on speeding things up,                                                                   
responding to the increased volume of activity, and not having to                                                               
do more detailed allocations of costs by industry, and having to                                                                
balance at the sub-level."                                                                                                      
                                                                                                                                
Number 0329                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Yould if he has consulted with the main                                                             
long-distance carriers in Alaska and the ATA [Alaska Telephone                                                                  
Association] about Amendment 2.                                                                                                 
                                                                                                                                
MR. YOULD replied that although he would not speak for them, he had                                                             
talked to ATA and would characterize its feeling as positive.  He                                                               
suggested the need to ask ATA that question directly.                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG agreed that the ATA should be asked before taking                                                             
up Amendment 2.                                                                                                                 
                                                                                                                                
REPRESENTATIVE HALCRO referred to Mr. Yould's earlier testimony                                                                 
about the percentage of the workload of APUC compared to the                                                                    
percentage that ARECA contributes.  He asked Mr. Yould to restate                                                               
those figures.                                                                                                                  
                                                                                                                                
MR. YOULD replied that he didn't have the numbers before him, and                                                               
those he had provided were probably more hypothetical than not.  He                                                             
said one reason, as Mr. Lohr had noted, is that the APUC doesn't                                                                
have a time accounting system, despite the fact that two "sunset                                                                
commissions" have told them that they should have one.  Hence, he                                                               
doesn't believe the APUC can provide those numbers either.                                                                      
                                                                                                                                
Number 0419                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG suggested that is another problem they should                                                                 
look at.  With that, he announced his intention to hold the                                                                     
legislation over and take it up again on Friday [April 30].  Noting                                                             
that only Amendment 3 had been adopted that day, Chairman Rokeberg                                                              
requested that Mr. Lohr bring Version I to Chairman Cotten's [Sam                                                               
Cotten, APUC Chairman] attention and then provide comments. [HB 183                                                             
WAS HELD]                                                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Number 0491                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing                                                               
Committee meeting at 5:17 p.m.                                                                                                  

Document Name Date/Time Subjects