Legislature(2003 - 2004)

02/11/2004 03:20 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       February 11, 2004                                                                                        
                           3:20 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Tom Anderson, Chair                                                                                              
Representative Carl Gatto, Vice Chair                                                                                           
Representative Nancy Dahlstrom                                                                                                  
Representative Bob Lynn                                                                                                         
Representative Harry Crawford                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Norman Rokeberg                                                                                                  
Representative David Guttenberg                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 403                                                                                                              
"An Act  relating to the  Alaska Insurance  Guaranty Association;                                                               
relating to  joint insurance arrangements and  assessments to the                                                               
association;  relating to  the powers  of  the Alaska  Industrial                                                               
Development and Export Authority  concerning the association; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 386                                                                                                              
"An   Act  exempting   contracts  of   the  Alaska   Natural  Gas                                                               
Development  Authority  from  the  State  Procurement  Code;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HB 386 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 213                                                                                                              
"An  Act  relating  to  a provisional  driver's  license  and  to                                                               
issuance of  a driver's license;  and providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED CSHB 213(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 80                                                                                                               
"An  Act  prohibiting sales  of  certain  soft drinks  in  public                                                               
schools."                                                                                                                       
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 450                                                                                                              
                                                                                                                                
"An   Act  providing   for  a   special   deposit  for   workers'                                                               
compensation insurers; relating to the  board of governors of the                                                               
Alaska  Insurance  Guaranty   Association;  relating  to  covered                                                               
workers'  compensation  claims  paid   by  the  Alaska  Insurance                                                               
Guaranty Association; stating the  intent of the legislature, and                                                               
setting   out   limitations,   concerning   the   interpretation,                                                               
construction, and  implementation of workers'  compensation laws;                                                               
relating  to  restructuring   the  Alaska  workers'  compensation                                                               
system;  eliminating  the  Alaska  Workers'  Compensation  Board;                                                               
establishing a proposed Division  of Workers' Compensation within                                                               
the Department  of Labor and Workforce  Development and assigning                                                               
certain  Alaska  Workers'  Compensation Board  functions  to  the                                                               
division and  the Department of Labor  and Workforce Development;                                                               
establishing   a   Workers'  Compensation   Appeals   Commission;                                                               
assigning certain  functions of the Alaska  Workers' Compensation                                                               
Board to  the Workers' Compensation Appeals  Commission; relating                                                               
to  agreements that  discharge  workers' compensation  liability;                                                               
providing   for  hearing   officers   in  workers'   compensation                                                               
proceedings; relating  to workers' compensation  awards; relating                                                               
to an  employer's failure to  insure and keep insured  or provide                                                               
security;  providing   for  appeals  from   compensation  orders;                                                               
relating  to  workers'  compensation proceedings;  providing  for                                                               
supreme  court   jurisdiction  of   appeals  from   the  Workers'                                                               
Compensation Appeals  Commission; providing for a  maximum amount                                                               
for  the cost-of-  living  adjustment  for workers'  compensation                                                               
benefits;  providing for  administrative penalties  for employers                                                               
uninsured   or    without   adequate   security    for   workers'                                                               
compensation; relating  to assigned risk pools  and insurers; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 403                                                                                                                  
SHORT TITLE: ALASKA INSURANCE GUARANTY ASSOCIATION                                                                              
SPONSOR(S):  RLS BY REQUEST OF THE GOVERNOR                                                                                     
                                                                                                                                
01/28/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/28/04       (H)       L&C, JUD, FIN                                                                                          
02/09/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
02/09/04       (H)       Heard & Held                                                                                           
02/09/04       (H)       MINUTE(L&C)                                                                                            
02/11/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB 386                                                                                                                  
SHORT TITLE: NATURAL GAS DEVELOPMENT AUTH. CONTRACT                                                                             
SPONSOR(S):  REPRESENTATIVE(S) CROFT                                                                                            
                                                                                                                                
01/20/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/20/04       (H)       L&C, O&G, RES                                                                                          
02/11/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB 213                                                                                                                  
SHORT TITLE: PROVISIONAL DRIVER'S LICENSE                                                                                       
SPONSOR(S):  REPRESENTATIVE(S) WEYHRAUCH                                                                                        
                                                                                                                                
03/26/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/26/03       (H)       TRA, L&C                                                                                               
04/01/03       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
04/01/03       (H)       Heard & Held                                                                                           
04/01/03       (H)       MINUTE(TRA)                                                                                            
04/03/03       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
04/03/03       (H)       Heard & Held                                                                                           
04/03/03       (H)       MINUTE(TRA)                                                                                            
04/15/03       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
04/15/03       (H)       Heard & Held/Subcommittee assigned                                                                     
04/15/03       (H)       MINUTE(TRA)                                                                                            
01/22/04       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
01/22/04       (H)       -- Meeting Postponed to 1/27/04 --                                                                     
01/27/04       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
01/27/04       (H)       Heard & Held                                                                                           
01/27/04       (H)       MINUTE(TRA)                                                                                            
02/03/04       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
02/03/04       (H)       Moved CSHB 213(TRA) Out of Committee                                                                   
02/03/04       (H)       MINUTE(TRA)                                                                                            
02/09/04       (H)       TRA RPT CS(TRA) 6NR 1AM                                                                                
02/09/04       (H)       NR: KAPSNER, KOOKESH, MASEK, OGG,                                                                      
02/09/04       (H)       STEPOVICH, HOLM; AM: KOHRING                                                                           
02/09/04       (H)       FIN REFERRAL ADDED AFTER L&C                                                                           
02/11/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB  80                                                                                                                  
SHORT TITLE: PROHIBIT SOFT DRINKS IN SCHOOL                                                                                     
SPONSOR(S):  REPRESENTATIVE(S) KAPSNER                                                                                          
                                                                                                                                
02/05/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/05/03       (H)       L&C, HES                                                                                               
02/11/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB 450                                                                                                                  
SHORT TITLE: INSURANCE & WORKERS' COMPENSATION SYSTEM                                                                           
SPONSOR(S):  RLS BY REQUEST OF THE GOVERNOR                                                                                     
                                                                                                                                
02/09/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/09/04       (H)       L&C, FIN                                                                                               
02/11/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SARAH McNAIR-GROVE, Property Casualty Actuary                                                                                   
Division of Insurance                                                                                                           
Department of Community and Economic Development                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 403.                                                                                       
                                                                                                                                
MARK GNADT, Staff                                                                                                               
to Representative Eric Croft                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HB 386 on behalf of                                                                             
Representative Croft, sponsor.                                                                                                  
                                                                                                                                
HAROLD HEINZE, Chief Executive Officer                                                                                          
Alaska Natural Gas Development Authority (ANGDA)                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 386.                                                                            
                                                                                                                                
LEONARD HERZOG, Assistant Attorney General                                                                                      
Oil, Gas & Mining Section                                                                                                       
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 386.                                                                                       
                                                                                                                                
LINDA SYLVESTER, Staff                                                                                                          
to Representative Bruce Weyhrauch                                                                                               
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As staff to Representative Weyhrauch,                                                                      
sponsor of HB 213, explained the bill.                                                                                          
                                                                                                                                
KEVIN E. QUINLAN, Chief                                                                                                         
Safety Advocacy Division                                                                                                        
National Transportation Safety Board                                                                                            
Washington, D.C.                                                                                                                
POSITION STATEMENT:  Testified in support of HB 213 and shared                                                                  
information about graduated driver's licensing from a nationwide                                                                
perspective.                                                                                                                    
                                                                                                                                
CINDY CASHEN, Executive Director                                                                                                
MADD [Mothers Against Drunk Driving] Juneau Chapter                                                                             
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as a representative for statewide                                                                
MADD chapters in support of HB 213.                                                                                             
                                                                                                                                
MARTHA MOORE, Coordinator                                                                                                       
Alaska Trauma Registry                                                                                                          
Department of Health and Social Services                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 213.                                                                            
                                                                                                                                
DUANE BANNOCK, Director                                                                                                         
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 213.                                                                            
                                                                                                                                
REPRESENTATIVE MARY KAPSNER                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HB 80.                                                                             
                                                                                                                                
STEVE CLEARY, Executive Director                                                                                                
Alaska Public Interest Research Group (AkPIRG)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 80.                                                                             
                                                                                                                                
MARIE LAVIGNE, Executive Director                                                                                               
Alaska Public Health Association                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 80.                                                                             
                                                                                                                                
JULIAN NAYLOR, M.D., Alaskan Diabetes Consultant                                                                                
Alaska Native Medical Center                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 80.                                                                             
                                                                                                                                
JENNIFER APP, Alaska Advocacy Director                                                                                          
American Heart Association                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 80.                                                                             
                                                                                                                                
SHELLEY McLAUGHLIN-TRUE, Dental Hygienist                                                                                       
Haines, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 80.                                                                             
                                                                                                                                
PAUL LISANKIE, Director                                                                                                         
Division of Workers' Compensation                                                                                               
Department of Labor and Workforce Development                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 450.                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-11, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR TOM ANDERSON  called the House Labor  and Commerce Standing                                                             
Committee  meeting  to  order  at   3:20  p.m.    Representatives                                                               
Anderson, Gatto, Lynn,  and Crawford were present at  the call to                                                               
order.   Representative Dahlstrom arrived  as the meeting  was in                                                               
progress.                                                                                                                       
                                                                                                                                
HB 403-ALASKA INSURANCE GUARANTY ASSOCIATION                                                                                  
                                                                                                                                
CHAIR ANDERSON announced  that the first order  of business would                                                               
be HOUSE BILL  NO. 403, "An Act relating to  the Alaska Insurance                                                               
Guaranty  Association; relating  to joint  insurance arrangements                                                               
and assessments  to the  association; relating  to the  powers of                                                               
the   Alaska   Industrial   Development  and   Export   Authority                                                               
concerning  the  association;  and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
Number 0135                                                                                                                     
                                                                                                                                
REPRESENTATIVE CARL  GATTO moved to adopt  the proposed committee                                                               
substitute  (CS),   Version  D,  labeled   23-GH2105\D,  Bullock,                                                               
2/11/04, as a work draft.                                                                                                       
                                                                                                                                
CHAIR ANDERSON objected for discussion purposes.                                                                                
                                                                                                                                
Number 0154                                                                                                                     
                                                                                                                                
SARAH  McNAIR-GROVE,  Property   Casualty  Actuary,  Division  of                                                               
Insurance,  Department  of  Community and  Economic  Development,                                                               
said  she hadn't  actually reviewed  Version D,  but thought  she                                                               
knew its intent.                                                                                                                
                                                                                                                                
CHAIR ANDERSON  asked what sections  had been removed  because of                                                               
the recommendations from the Association  of Alaska School Boards                                                               
and the  joint insurance associations  (JIAs).  He  recalled that                                                               
the self-insured  groups had requested  that certain  sections of                                                               
HB 403 be deleted.                                                                                                              
                                                                                                                                
MS. McNAIR-GROVE  said she believed  Sections 1,  3, 5, 6,  and 8                                                               
had been deleted.  If Version D  passes, then 2 JIAs and 24 or 25                                                               
self-insured  employers  wouldn't  be  subject  to  the  guaranty                                                               
association assessment.                                                                                                         
                                                                                                                                
REPRESENTATIVE  CRAWFORD related  his understanding  that if  the                                                               
self-insured  employers and  JIAs weren't  included in  the bill,                                                               
there wouldn't  be enough money  collected to solve  the problem.                                                               
He asked, "What's changed?"                                                                                                     
                                                                                                                                
MS. McNAIR-GROVE answered  that the division was  willing to take                                                               
those sections  out, since  those groups  wouldn't be  covered by                                                               
the guaranty association.  She  said the funds [from that portion                                                               
of the assessment] weren't significant,  and this action wouldn't                                                               
significantly impact the bill.                                                                                                  
                                                                                                                                
Number 0385                                                                                                                     
                                                                                                                                
CHAIR ANDERSON  announced that he  would hold HB 403  for further                                                               
discussion, with [the pending motion  to adopt] Version D and the                                                               
objection maintained.                                                                                                           
                                                                                                                                
HB 386-NATURAL GAS DEVELOPMENT AUTH. CONTRACT                                                                                 
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be HOUSE BILL NO. 386, "An  Act exempting contracts of the Alaska                                                               
Natural  Gas Development  Authority  from  the State  Procurement                                                               
Code; and providing for an effective date."                                                                                     
                                                                                                                                
Number 0460                                                                                                                     
                                                                                                                                
MARK  GNADT, Staff  to Representative  Eric  Croft, Alaska  State                                                               
Legislature,  introduced  HB  386  on  behalf  of  Representative                                                               
Croft, sponsor.  He stated:                                                                                                     
                                                                                                                                
     We  feel  this  is  a necessary  bill  because  of  the                                                                    
     dynamics of the  Alaska natural gas or  the natural gas                                                                    
     industry  worldwide.   There already  have  been a  few                                                                    
     contracts  that have  come and  gone, where  the Alaska                                                                    
     Natural Gas  Development Authority  has been  trying to                                                                    
      meet the demands of a rapidly moving industry.  And                                                                       
     the requirements to the procurement code inhibit them                                                                      
     in certain ways that we feel are unnecessary.                                                                              
                                                                                                                                
MR.  GNADT  said  certain state  organizations  or  entities  are                                                               
exempt from  the procurement code  already.  Some,  including the                                                               
Alaska   Railroad  Corporation   (ARRC),  the   Alaska  Aerospace                                                               
Development  Corporation,  and a  few  others,  [are exempt]  for                                                               
similar  purposes   of  being  able   to  move   within  contract                                                               
negotiations  without  some of  the  obstacles  that the  state's                                                               
procurement code  puts forward.   Those  obstacles are  great for                                                               
other things  in the  state, and  necessary, but  not necessarily                                                               
for organizations dealing in "the  natural gas industry and other                                                               
things," he added.                                                                                                              
                                                                                                                                
Number 0550                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO  asked Mr. Gnadt  to clarify what  the state                                                               
procurement code means to him.                                                                                                  
                                                                                                                                
MR. GNADT  replied, "To me,  it's a  set of regulations  ... that                                                               
guide state entities  in their forming of  contracts with outside                                                               
sources, and  things along that line."   He pointed out  that the                                                               
state's procurement code isn't his area of expertise.                                                                           
                                                                                                                                
Number 0607                                                                                                                     
                                                                                                                                
HAROLD  HEINZE,  Chief  Executive  Officer,  Alaska  Natural  Gas                                                               
Development Authority  (ANGDA), reminded members that  ANGDA is a                                                               
product of the initiative process,  during which little pieces of                                                               
language and  subtleties of law  get may get  left out.   He said                                                               
he'd  make  the  "me  too"  argument,  that  every  other  public                                                               
corporation  of  the State  of  Alaska,  and  most of  its  other                                                               
agencies, "have been  opted out" of the procurement  code as part                                                               
of their creation.                                                                                                              
                                                                                                                                
MR. HEINZE  responded to Representative Gatto's  question, noting                                                               
that  the  state  procurement  code   basically  provides  for  a                                                               
centralized  contracting  authority  within  the  administration.                                                               
This  code is  broadly applied  to everybody  in the  state.   He                                                               
explained that  the legislature  and the  courts are  "opted out"                                                               
and they have  their own set of procurement procedures.   He said                                                               
there  is  a  group  and  an  individual  in  the  Department  of                                                               
Administration responsible for all  the procurement of the state.                                                               
He described  the process as  a series of  procedures, timelines,                                                               
and requirements  which basically assure that  no undue political                                                               
influence will  result in  the awarding  of contracts  to certain                                                               
people.   The goal of this  process is to keep  the playing field                                                               
fair and level.                                                                                                                 
                                                                                                                                
MR. HEINZE  explained that while the  code accomplishes fairness,                                                               
it  also sets  up situations  that aren't  necessarily useful  to                                                               
major contractors  or major entities  that have their  own boards                                                               
or  other  leadership,  separate  from the  executive  branch  of                                                               
government.   He said  ANGDA, as a  public corporation,  looks to                                                               
models such as the Alaska  Housing Finance Corporation (AHFC) and                                                               
ARRC  as   organizations  that  have  evolved   and  faced  major                                                               
decisions similar to ones he anticipates for ANGDA.                                                                             
                                                                                                                                
MR.  HEINZE  contrasted  contracts  under  $100,000,  which  have                                                               
flexibility within  the current system, with  contracts involving                                                               
hundreds of  millions or billions  of dollars, such as  those for                                                               
the purchase  or sale of gas.   These major contracts  don't fare                                                               
as well  in the current  system because  of issues with  time and                                                               
other considerations.                                                                                                           
                                                                                                                                
Number 0833                                                                                                                     
                                                                                                                                
MR.  HEINZE  proposed   that  the  ANGDA  board   adopt  its  own                                                               
procurement  code  so it  maintains  control  over any  contracts                                                               
awarded in the future.   He said he felt ANGDA  would do a better                                                               
job in terms  of "Alaska hire" and use of  Alaskan contractors if                                                               
it could control  the process.  He informed the  committee that a                                                               
large  number of  agencies aren't  covered by  the code;  over 43                                                               
different types of  contracts, some major, are  delineated in the                                                               
law itself.                                                                                                                     
                                                                                                                                
Number 0873                                                                                                                     
                                                                                                                                
CHAIR  ANDERSON  requested  clarification   on  models  in  state                                                               
government that are exempt from the procurement code.                                                                           
                                                                                                                                
MR. HEINZE referred to a  handout listing the following agencies:                                                               
ARRC,  Alaska  Aerospace  Development Corporation,  AHFC,  Alaska                                                               
State Pension Investment Board,  Alaska Marine Highway System and                                                               
new  vessels,  Alaska  Seafood Marketing  Institute  (ASMI),  and                                                               
University  of  Alaska.    These  entities  all  have  their  own                                                               
specific,   individualized   procurement  approaches   that   are                                                               
tailored to meet  their needs, he explained,  rather than falling                                                               
under the more general procurement code.                                                                                        
                                                                                                                                
Number 0957                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO  asked if there  was a common thread  in the                                                               
procurement  codes of  those organizations  that Mr.  Heinz could                                                               
use to formulate a code.                                                                                                        
                                                                                                                                
MR.  HEINZE replied  that all  have boards  that are  responsible                                                               
for, and  have authority  over, what the  organization does.   He                                                               
proposed using AHFC's procurement code as  a model for ANGDA.  He                                                               
said  AHFC's code  is of  interest,  since it  deals with  large-                                                               
dollar contracts and has a small staff.                                                                                         
                                                                                                                                
REPRESENTATIVE GATTO  asked if  Mr. Heinze  would be  involved in                                                               
the development of a procurement code for ANGDA.                                                                                
                                                                                                                                
MR. HEINZE  explained that he'd  be involved and could  draw upon                                                               
his specific project  management experience from 27  years in the                                                               
oil  industry.   He  explained  that  it's  necessary to  have  a                                                               
procurement  process that  is  flexible,  effective, and  heavily                                                               
weighted  toward  ensuring  that  the  state  and  the  authority                                                               
receive full value  for the contract in terms  of performance, as                                                               
well as for the amount of dollars spent.                                                                                        
                                                                                                                                
Number 1110                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO inquired,  "The  bill,  as written,  simply                                                               
exempts you  from the state procurement  code without authorizing                                                               
entrance into,  or creating  of, any  additional codes;  was that                                                               
the intent?"                                                                                                                    
                                                                                                                                
MR.  HEINZE  explained  that  the  enabling  statute  of  [ANGDA]                                                               
invests  in the  board  of directors  with  broad authorities  to                                                               
conduct business; by being exempt,  the board becomes responsible                                                               
to ensure that  a procurement procedure is followed.   He assured                                                               
the committee  that until the  board can adopt a  new procurement                                                               
code,  "I would  just  continue to  operate  under the  [present]                                                               
procurement code, and move as quickly  as we could, to the Alaska                                                               
Housing Finance Corporation model."                                                                                             
                                                                                                                                
Number 1180                                                                                                                     
                                                                                                                                
LEONARD  HERZOG, Assistant  Attorney General;  Oil, Gas  & Mining                                                               
Section; Civil Division (Anchorage);  Department of Law, said Mr.                                                               
Heinze  had  done a  good  job  of  explaining  the bill,  as  he                                                               
understands  it.    Mr.  Herzog said  he  attends  all  [ANGDA's]                                                               
meetings and  remarked, "We would  proceed under  the procurement                                                               
code until such  time as the authority adopted,  and published to                                                               
the public, its own procurement code."                                                                                          
                                                                                                                                
REPRESENTATIVE  GATTO  reiterated  his  concern,  saying,  "About                                                               
letting somebody  not have any  codes that  they have to  run by,                                                               
according to  the bill,  ... what an  opportunity that  would be.                                                               
But,  indeed, if  that's the  goal and  intent, I  can live  with                                                               
that."                                                                                                                          
                                                                                                                                
Number 1269                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD moved  to report HB 386  out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 386 was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
HB 213-PROVISIONAL DRIVER'S LICENSE                                                                                           
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be  HOUSE  BILL  NO.  213,  "An Act  relating  to  a  provisional                                                               
driver's  license and  to  issuance of  a  driver's license;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 1325                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO  moved  to  adopt  the  proposed  committee                                                               
substitute (CS),  Version 23-LSO786\X,  Luckhaupt, 1/29/04,  as a                                                               
work draft.   There being no objection, Version X  was before the                                                               
committee.                                                                                                                      
                                                                                                                                
[Note:  Version X was the  same version adopted and reported from                                                               
the House Transportation Standing Committee as CSHB 213(TRA).]                                                                  
                                                                                                                                
Number 1339                                                                                                                     
                                                                                                                                
LINDA  SYLVESTER,   Staff  to  Representative   Bruce  Weyhrauch,                                                               
introduced  HB   213  on  behalf  of   Representative  Weyhrauch,                                                               
sponsor, and  talked about CSHB  213(TRA) [and  the corresponding                                                               
Version X]:                                                                                                                     
                                                                                                                                
     This  bill  deals  with  the  process  by  which  young                                                                    
     drivers get their Alaska  driver's license.  Currently,                                                                    
     the system  is two-tiered.   There's  a permit  that is                                                                    
     required.   You are eligible  to get a permit  when you                                                                    
     are 14  years old.   Alaska law requires that  you hold                                                                    
     the  permit  for six  months  before  testing for  your                                                                    
     driver's license  at age 16.  ... If you are  under 18,                                                                    
     regardless of  when you  got your  permit, you  have to                                                                    
     hold your  permit for  six months  before you  can test                                                                    
     for your license. ...                                                                                                      
                                                                                                                                
     We're  adding  another   tier.    We  look   at  it  as                                                                    
     protections.   They  are very  simple protections,  and                                                                    
     what they do  is basically ... restrict  a young person                                                                    
     from driving around  in their car in the  middle of the                                                                    
     night with  their friends. ...  This period of  time is                                                                    
     only for six months. ...                                                                                                   
                                                                                                                                
     The  idea is  that a  young driver  who is  learning to                                                                    
     drive is highly susceptible  to distractions, which are                                                                    
     very dangerous ... and fatal.   In the state of Alaska,                                                                    
     if  you are  a young  person and  you're going  to die,                                                                    
     you're  going  to die  from  one  or  two things.    It                                                                    
     toggles from year to year.   You're either going to die                                                                    
     from  a  car  accident  or you're  going  to  die  from                                                                    
     suicide.   We  can't do  much about  suicide, but  this                                                                    
     bill will likely save lives.                                                                                               
                                                                                                                                
Number 1410                                                                                                                     
                                                                                                                                
MS.  SYLVESTER  reported  that other  states  that  have  adopted                                                               
graduated   driver's  licensing   systems  [GDLs]   with  full-on                                                               
protections have  seen dramatic reductions in  accident rates and                                                               
deaths.  The standard is 20 percent, she said.  She continued:                                                                  
                                                                                                                                
     So  we're  looking  at  protecting  the  kids  who  are                                                                    
     driving,  and  we're  also  looking  to  protect  other                                                                    
     Alaskans who  are driving around  on the roads  who are                                                                    
     being  hit and  injured  and  suffering property  loss,                                                                    
     loss of life,  loss of time from work. ...  It's a good                                                                    
     idea.                                                                                                                      
                                                                                                                                
MS. SYLVESTER noted that the bill spent a lot of time in the                                                                    
House Transportation Standing Committee.  She said:                                                                             
                                                                                                                                
     We started  off with the mother  of all GDL bills.   We                                                                    
     had  it  at  a  year,  and we  thought  that  was  very                                                                    
     draconian.    We've  dropped it  down  to  six  months.                                                                    
     We've  put exemptions;  we want  to make  sure this  is                                                                    
     tailored to Alaska.  ... If you're in  your GDL period,                                                                    
     your provisional-license  period, you can  drive around                                                                    
     with your  siblings.  So this  way, if you live  out in                                                                    
     the  rural  area,  if you're  out  in  the  [Matanuska-                                                                    
     Susitna area]  and your parents  rely on the  ... young                                                                    
     driver to take the kids to school, that's allowed.                                                                         
                                                                                                                                
     We've also got an exemption ...  for working.  If a kid                                                                    
     is working,  needs to be  driving in the middle  of the                                                                    
     night ...  to work in a  fish camp, you can  get a work                                                                    
     permit ...  to work in  the scope of your  business, or                                                                    
     driving to and from work. ...                                                                                              
                                                                                                                                
     If  you're  in your  provisional  period  and you're  a                                                                    
     careless driver  and you're speeding  and you've  got a                                                                    
     ticket and  you've been convicted of  your ticket, then                                                                    
     that's going to  put you back, and you're  not going to                                                                    
     advance.  So  that's a neat idea for the  police.  It's                                                                    
     the carrot that  will keep the drivers safe  ... on the                                                                    
     road.                                                                                                                      
                                                                                                                                
Number 1500                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO asked  if  the bill  limits  the number  of                                                               
siblings a young driver could have in the car.                                                                                  
                                                                                                                                
MS.  SYLVESTER   read  from  the   bill,  page  2,   lines  20-22                                                               
[Section 3, paragraph (1)],  which says for the  first six months                                                               
after receiving  a provisional driver's  license [the  person may                                                               
not]  operate a  motor vehicle  that is  carrying any  passengers                                                               
except a parent,  legal guardian, sibling, or person  at least 21                                                               
years of  age.  In further  reply, she said statistics  show that                                                               
buddies provide fatal distractions for  these kids.  "So they get                                                               
six months  of handling all of  the nuances of driving,  and then                                                               
they've got some... experience under  their belt ... and can deal                                                               
with what the buddies are doing," she added.                                                                                    
                                                                                                                                
Number 1606                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD asked what  "proof satisfactory" meant in                                                               
the context of HB 213.                                                                                                          
                                                                                                                                
MS. SYLVESTER replied:                                                                                                          
                                                                                                                                
     What you're referring to is  a certification before you                                                                    
     get your  provisional license; ... a  parent, guardian,                                                                    
     or  employer is  certifying that  while the  kid had  a                                                                    
     permit, they've  got lots of  time driving.   And we're                                                                    
     saying 40  hours.  So  when you  ... bring your  kid to                                                                    
     [the  Division of  Motor Vehicles]  you're signing  the                                                                    
     statement  that you're  accepting  legal liability  for                                                                    
     your child driving.  And  on that statement you're just                                                                    
     saying that  ... they've got  [the 40 hours  of driving                                                                    
     experience].  We wanted to  leave it open-ended for the                                                                    
     Division of  Motor Vehicles.   It's a form;  there's no                                                                    
     ... enforcement  of it.   It ...  is a  very open-ended                                                                    
     item  that serves  to  heighten  people's awareness  of                                                                    
     what ... standard ... is necessary.                                                                                        
                                                                                                                                
REPRESENTATIVE  CRAWFORD  restated,  "So,  what  you're  actually                                                               
asking for is that I've driven that much time with my kids."                                                                    
                                                                                                                                
MS. SYLVESTER responded, "Don't  forget the nighttime ... driving                                                               
and driving  in inclement weather.   A lot of people  don't think                                                               
those things  through, so it's  an educational tool."   She added                                                               
that   it's  simple   and   innocuous,   but  highly   effective,                                                               
statistically speaking.                                                                                                         
                                                                                                                                
Number 1690                                                                                                                     
                                                                                                                                
KEVIN  E.  QUINLAN,  Chief, Safety  Advocacy  Division,  National                                                               
Transportation Safety  Board (NTSB),  Washington, D.C.,  spoke in                                                               
support  of  HB  213,  noting that  members  had  two  documents:                                                               
written   testimony  he'd   highlight  and   a  list   of  safety                                                               
recommendations  entitled  "NTSB:    Most  Wanted  Transportation                                                               
Safety  Improvements 2004."   He  said  NTSB is  an   independent                                                               
federal accident-investigation agency.   Although it investigates                                                               
airplane   accidents  and   so  forth,   it  also   does  highway                                                               
investigations.    Emphasizing  that   NTSB  isn't  a  regulating                                                               
agency, he explained:                                                                                                           
                                                                                                                                
     We  don't  tell you  or  the  states  what to  do.  ...                                                                    
     Rather, we ask you to do  the right thing, based on our                                                                    
     investigations, and it's really up  to you to adapt the                                                                    
     recommendations  to fit  your  state.   That said,  the                                                                    
     safety  board is  known for  its  scientific rigor  and                                                                    
     objectivity.                                                                                                               
                                                                                                                                
MR. QUINLAN  said 90 percent  of transportation  fatalities every                                                               
year happen on  the highway, and 40 percent of  teen deaths occur                                                               
in  traffic  crashes  -  it's  the leading  cause  of  death  for                                                               
teenagers.  In Alaska, teens  constitute 7 percent of the driving                                                               
population, but are  17 percent of the drivers  in fatal crashes;                                                               
26 percent of the fatalities in  Alaska involve teen drivers.  In                                                               
terms  of teen  passengers,  two-thirds  of teen  vehicle-related                                                               
deaths occur in vehicles driven by other teens.  He continued:                                                                  
                                                                                                                                
     One of the  things that's not in the  testimony is that                                                                    
     the  nation as  a whole  - and  probably Alaska,  but I                                                                    
     haven't   checked  your   statistics  on   this  -   is                                                                    
     experiencing  an  increase  in   the  number  of  young                                                                    
     drivers.   It's  called  the "baby  boomlet," and  that                                                                    
     increase is 25  percent.  That means ...  you have more                                                                    
     in  that age  group,  so you  have  more drivers,  more                                                                    
     crashes,  more fatalities.   That's  the  way it  would                                                                    
     normally work.                                                                                                             
                                                                                                                                
     Teen drivers also do about  20 percent of their driving                                                                    
     at  night, but  50  percent of  the  fatalities are  at                                                                    
     night.  So  there's another issue.  What  we've seen is                                                                    
     that  the system's  broken.   The system  doesn't teach                                                                    
     our  young people  to drive.   It  teaches them  how to                                                                    
     pass a test, and the fix  for that is to give them more                                                                    
     experience in a  supervised, safe setting.   GDL is the                                                                    
     answer;  it's  not  new,  and it  works  in  the  other                                                                    
     states.                                                                                                                    
                                                                                                                                
Number 1850                                                                                                                     
                                                                                                                                
MR. QUINLAN continued:                                                                                                          
                                                                                                                                
     You've  heard some  discussion  of  what a  three-phase                                                                    
     system is.   Now, Alaska has the  learner's permit with                                                                    
     the  six-month mandatory  holding  period.   Supervised                                                                    
     training  is very  important.   Most  states select  50                                                                    
     hours.   And crash- and violation-free  driving is very                                                                    
     important.   So you can identify  the high-risk drivers                                                                    
     early and remediate.                                                                                                       
                                                                                                                                
     The new phase is an  intermediate phase.  Six months is                                                                    
     the minimum because  most of the effect  is achieved in                                                                    
     the  first six  months, but  it does  continue up  to a                                                                    
     year.   We recommend  a year, but  six months  is fine.                                                                    
     In that  phase, there  are three restrictions  that the                                                                    
     safety board recommends.                                                                                                   
                                                                                                                                
     One is a nighttime  driving restriction, and the reason                                                                    
     is   that   the   cues    are   different   at   night.                                                                    
     Unfortunately, the people that  have the best reflexes,                                                                    
     that is,  teenagers, have the worst  driving record and                                                                    
     the worst crash  record.  I know  Alaska conditions are                                                                    
     different:  you  could have nighttime driving  at 4 ...                                                                    
     p.m.   That's fine.   The real  message is, we  need to                                                                    
     give  them lots  of  nighttime  driving experience  and                                                                    
     lots of driving experience that's supervised.                                                                              
                                                                                                                                
     We also recommended a passenger  restriction of zero or                                                                    
     one, to last  at least six months,  again, preferably a                                                                    
     year.   The  reason we  picked one  [passenger] is  for                                                                    
     security:  ...  in  some areas  you  need  to  consider                                                                    
     security issues  unless they're  supervised.   And then                                                                    
     they can  have as many people  as they want.   You need                                                                    
     an adult supervising driver.                                                                                               
                                                                                                                                
     The  last one  is a  cell-phone restriction.   This  is                                                                    
     just for the provisional phase.   Now, some states have                                                                    
     banned  handheld  cell   phones.    We've  investigated                                                                    
     crashes  involving  teen  drivers where,  clearly,  the                                                                    
     distraction was  the cell  phone.  ...  I have  to tell                                                                    
     you,  I was  unconvinced  when I  looked  at the  first                                                                    
     investigations  on this,  but then  I came  to realize,                                                                    
     with the data  that we had, that the  distraction for a                                                                    
     teenager  in the  learning phase  and the  intermediate                                                                    
     phase  is very  analogous  to that  of having  multiple                                                                    
     teen  passengers,  again,   crash-  and  violation-free                                                                    
     driving.                                                                                                                   
                                                                                                                                
Number 1941                                                                                                                     
                                                                                                                                
MR. QUINLAN continued:                                                                                                          
                                                                                                                                
     We  have  39  states  with  a  three-phase  system;  36                                                                    
     states,  including Alaska,  have some  elements, and  I                                                                    
     mentioned that one of a  graduated licensing system; 37                                                                    
     have  nighttime restrictions;  and the  newer one  that                                                                    
     almost  didn't exist  three years  ago,  26 states  now                                                                    
     have passenger restrictions. ...                                                                                           
                                                                                                                                
     You  have   in  the   testimony  a  summary   sheet  of                                                                    
     effectiveness in other  states.  And I'd  like to point                                                                    
     out  a couple  to  you really  quickly:   Michigan,  25                                                                    
     percent  overall  reduction   in  crash  rates;  that's                                                                    
     normalized data,  so that's good,  hard data,  and it's                                                                    
     done  by  a  highly-esteemed,  scientific  institution.                                                                    
     The  same thing  in  North Carolina,  but  look at  the                                                                    
     57 percent reduction in fatal crashes.                                                                                     
                                                                                                                                
     There is one thing that's  not in there, on California.                                                                    
     There's  a   recent  report  from  California   on  the                                                                    
     reduction  in teen  alcohol-related fatal  crashes from                                                                    
     GDL, a  totally unexpected consequence of  ... enacting                                                                    
     GDL.   It's done by  the [Automobile] Club  of Southern                                                                    
     California.                                                                                                                
                                                                                                                                
MR. QUINLAN also pointed out that  in Pennsylvania there was a 58                                                               
percent reduction  in fatalities.   Turning to the  "most wanted"                                                               
list, he  noted that  GDLs are  right up  there with  measures to                                                               
keep aircraft  from exploding  in mid-air  and running  into each                                                               
other  on  the  ground.    "We  take  this  very  seriously,"  he                                                               
remarked.  "It will actually save more lives."                                                                                  
                                                                                                                                
Number 2042                                                                                                                     
                                                                                                                                
MR. QUINLAN continued:                                                                                                          
                                                                                                                                
     Let me just wrap up by  saying ... I like to read state                                                                    
     constitutions,  and most  states in  the United  States                                                                    
     have the word  "safety" in Article I.   Alaska doesn't,                                                                    
     but it  does say that you  have the right to  life, and                                                                    
     in Article VII it talks  about public health and public                                                                    
     welfare.  ...  That's what we are  really talking about                                                                    
     here.                                                                                                                      
                                                                                                                                
     We  strongly support  HB  213.   We  know this  measure                                                                    
     works; it's one of the  most effective actions that you                                                                    
     can  take to  prevent  teen deaths  and  the deaths  of                                                                    
     others in  teen crashes.   And the  best part  is, it's                                                                    
     not just this year, it's  every year. ... It passes all                                                                    
     of the tests,  and the one that's most  important to me                                                                    
     is  that it  passes the  commonsense test  because teen                                                                    
     drivers  just need  experience driving.   We  cannot do                                                                    
     what  Germany  does and  require  270  hours of  driver                                                                    
     education.   That's not  going to happen.   But  we can                                                                    
     give them  lots of  driving experience.   And  I think,                                                                    
     finally, it's just the right thing to do.                                                                                  
                                                                                                                                
REPRESENTATIVE GATTO  asked if "teens"  refers to  anyone younger                                                               
than 20 years of age.                                                                                                           
                                                                                                                                
MR. QUINLAN said  that's how the data is "cut."   The states make                                                               
the age  what they want:   14 in  some, 15  or 16 in  others, for                                                               
example, or [18] in New York.                                                                                                   
                                                                                                                                
REPRESENTATIVE   GATTO   remarked,   "If  we're   talking   about                                                               
statistics that  affect everybody  from 'a  minute under  20' all                                                               
the way down,  there has to be  some portion of this  that has no                                                               
effect.  ... It  only  applies to  six  months of  'teenagehood,'                                                               
while the rest of it is wild."                                                                                                  
                                                                                                                                
MR. QUINLAN replied:                                                                                                            
                                                                                                                                
     Let's hypothetically  say it's  16.   You have  to hold                                                                    
     the learner's permit for six  months.  You have to hold                                                                    
     the  other permit  for at  least six  - we  recommend a                                                                    
     year.   It's actually best  to carry it through  to 18,                                                                    
     as New  York does, because  then you get them  over the                                                                    
     hump of the inexperience, the -  I hesitate to say it -                                                                    
     ... testosterone.                                                                                                          
                                                                                                                                
Number 2188                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO  told  of   his  experience  with  his  two                                                               
daughters and the  two wrecked cars they produced  in their first                                                               
six months of driving.                                                                                                          
                                                                                                                                
MR. QUINLAN  referred to  a television  news program  that showed                                                               
teen drivers in  a car with camera surveillance in  the car.  The                                                               
three  girls "still  blew a  stop sign"  because there  were teen                                                               
passengers in  the car.  He  explained that the first  six months                                                               
of driving  is a critical  time, an intermediate phase  when it's                                                               
important to restrict teen passengers.                                                                                          
                                                                                                                                
Number 2230                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN noted  that Alaskan  weather can  be severe,                                                               
and said cell  phones are a safety feature for  drivers.  He also                                                               
commented that  if a car  breaks down  and the temperature  is 20                                                               
degrees below  zero, or if a  drunk driver is observed,  a person                                                               
needs to be able to call authorities.                                                                                           
                                                                                                                                
MR. QUINLAN replied:                                                                                                            
                                                                                                                                
     Every state that has  that [cell-phone restriction] has                                                                    
     an emergency exemption,  911 or whatever.   And it only                                                                    
     makes sense.  If you're  in an emergency, are you going                                                                    
     to be holding both hands  on the wheel and checking ...                                                                    
     the whiteout as  it comes to you?  Or  are you going to                                                                    
     be on  the phone, or  are you  going to stop  and call?                                                                    
     You're probably going to stop  and call, and that's the                                                                    
     safest. ... Of  course you'd want to have  a cell phone                                                                    
     in the car,  and of course you would want  the ... teen                                                                    
     driver to be able to call somebody to help them.                                                                           
                                                                                                                                
Number 2340                                                                                                                     
                                                                                                                                
CINDY  CASHEN, Executive  Director, MADD  [Mothers Against  Drunk                                                               
Driving],  Juneau  Chapter, testified  in  support  of HB 213  on                                                               
behalf of four of the MADD Alaska chapters:  Anchorage,                                                                         
Fairbanks, Juneau, and Mat-Su.  She said this is the MADD Alaska                                                                
chapters' number-one priority.                                                                                                  
                                                                                                                                
TAPE 04-11, SIDE B                                                                                                            
Number 2350                                                                                                                     
                                                                                                                                
MS. CASHEN said:                                                                                                                
                                                                                                                                
     We  feel   that  early  driving  experiences   must  be                                                                    
     required in  a lower-risk environment  through extended                                                                    
     restriction   of   no   alcohol   use,   primary   belt                                                                    
     enforcement,  limitations  on   nighttime  driving  and                                                                    
     teenage  passengers.   Appropriate restrictions  should                                                                    
     be lifted in stages, based on clean driving records.                                                                       
                                                                                                                                
     According to  the Alaska Highway Safety  Office, in the                                                                    
     year  2000  in Alaska  there  were  over 3,800  crashes                                                                    
     involving 16-  to 20-year-old  Alaskan teenagers.   The                                                                    
     next year,  2001, it went up  ... by over 400.   In the                                                                    
     year 2000,  every two  and one-half  hours there  was a                                                                    
     teenager in Alaska being involved  in a crash.  In 1995                                                                    
     to the year 2000, that  five-year period, there were 64                                                                    
     Mat-Su  teen drivers  in motor  vehicle crashes  on the                                                                    
     highway  who  were  injured   seriously  enough  to  be                                                                    
     hospitalized.                                                                                                              
                                                                                                                                
Number 2299                                                                                                                     
                                                                                                                                
MS. CASHEN continued:                                                                                                           
                                                                                                                                
     I looked  up three  places, through the  Alaska Highway                                                                    
     Safety Office,  three Alaskan towns,  villages, cities,                                                                    
     to ... give  you a representation how it's  not just in                                                                    
     urban  areas.   It's all  over  Alaska.   In Kodiak  34                                                                    
     percent  of  their  crashes involve  teen  drivers;  in                                                                    
     Anchorage it's  28 percent; in Barrow  it's 26 percent.                                                                    
     The  evening crashes,  that would  be between  midnight                                                                    
     and  5 a.m.:   in  Kodiak, it's  22 percent  of evening                                                                    
     crashes involve  teenage drivers;  in Anchorage  and in                                                                    
     Barrow, they're  both 25  percent -  pretty substantial                                                                    
     numbers, and  these numbers can  be brought down  if we                                                                    
     have the GDL program.  The studies prove it.                                                                               
                                                                                                                                
REPRESENTATIVE CRAWFORD commented that he had personal                                                                          
experience with his children and hoped this bill would help them                                                                
"make it through these harrowing years."                                                                                        
                                                                                                                                
Number 2257                                                                                                                     
                                                                                                                                
MARTHA MOORE, Coordinator, Alaska Trauma Registry, Department of                                                                
Health and Social Services, testified that the department                                                                       
supports HB 213.  She explained:                                                                                                
                                                                                                                                
     My  job is  to ...  maintain  and work  with an  injury                                                                    
     surveillance  system.    And   I  ...  look  at  injury                                                                    
     statistics in Alaska,  as well as do  research on them.                                                                    
     It's common  knowledge that teens are  at greatest risk                                                                    
     for traffic crashes and have  the highest motor vehicle                                                                    
     fatality rates.                                                                                                            
                                                                                                                                
     Several years  ago, the  Associated Press  published an                                                                    
     article  with a  report  from a  20-year  study by  the                                                                    
     Insurance  Institute  for  Highway  Safety.    And  the                                                                    
     report  said ...  two important  and impressive  facts.                                                                    
     One  is  that  even  though the  death  rates  ...  for                                                                    
     crashes  were  declining,  [for] those  16  years  old,                                                                    
     their death rates had doubled  in the 20 years ... from                                                                    
     1975 to  1996.  And the  second thing it said  was that                                                                    
     the death  rate of  the 17-  to 19-year-olds  was twice                                                                    
     that of older drivers, but  the death rate for 16-year-                                                                    
     olds  was half  again as  much.   So,  it was  actually                                                                    
     three times that of the older drivers.                                                                                     
                                                                                                                                
     The  reasons the  16-year-olds are  at  such high  risk                                                                    
     are, first and foremost,  youth, just sheer immaturity;                                                                    
     ...   secondly,    inexperience;   third,   risk-taking                                                                    
     behavior,  which is  common among  young people  and is                                                                    
     certainly  exacerbated  by   peer  pressure;  and  then                                                                    
     lastly,   distractions  while   driving,  which   would                                                                    
     certainly increase when other teens are in the car.                                                                        
                                                                                                                                
Number 2175                                                                                                                     
                                                                                                                                
MS. MOORE continued:                                                                                                            
                                                                                                                                
     The  good  news is  that  since  1996, 39  states  have                                                                    
     adopted  graduated   licensing  programs.     This  has                                                                    
     drastically  lowered  the  death rates  and  the  crash                                                                    
     rates for 16-year-olds.                                                                                                    
                                                                                                                                
     The  legislation   before  you  does   three  important                                                                    
     things.   And  it helps  youth to  gain the  experience                                                                    
     [they  need],  driving  under  the  supervision  of  an                                                                    
     adult.   It  puts off  full licensure  for six  months,                                                                    
     which from  the statistics evidently is  ... a critical                                                                    
     time -  that sixteenth year,  even six months  into the                                                                    
     sixteenth year -  for them to attain  the maturity they                                                                    
     need  to  be a  better  driver.    It removes  ...  the                                                                    
     highest   risk   factors   for  ...   six   months   of                                                                    
     unsupervised  driving  by   restricting  the  nighttime                                                                    
     driving and having teen passengers in the car.                                                                             
                                                                                                                                
     I have  done research  on teen  driving in  Alaska, and                                                                    
     I've published a paper ["Comparison  of Young and Adult                                                                    
     Driver  Crashes in  Alaska Using  Linked Traffic  Crash                                                                    
     and  Hospital Data"]  in the  Alaska Medicine  Journal.                                                                  
     I'd be happy  to leave that with you.   Essentially, in                                                                    
     summary,  ... what  happens with  Alaskan teens  is not                                                                    
     unlike  the  rest  of the  country.  ...  The  economic                                                                    
     burden on the state is lopsided for teens as well.                                                                         
                                                                                                                                
Number 2086                                                                                                                     
                                                                                                                                
DUANE BANNOCK,  Director, Division of Motor  Vehicles, Department                                                               
of Administration, said the division is supportive of the bill.                                                                 
                                                                                                                                
CHAIR ANDERSON, upon  determining no one else  wished to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
Number 2061                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN  moved  to  report  CSHB  213,  Version  23-                                                               
LS0786\X, Luckhaupt,  1/29/04, out  of committee  with individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no  objection, CSHB 213(L&C)  was reported  from the  House Labor                                                               
and Commerce Standing Committee.                                                                                                
                                                                                                                                
HB  80-PROHIBIT SOFT DRINKS IN SCHOOL                                                                                         
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be HOUSE BILL  NO. 80, "An Act prohibiting sales  of certain soft                                                               
drinks in public schools."                                                                                                      
                                                                                                                                
Number 1990                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MARY KAPSNER,  Alaska State  Legislature, sponsor                                                               
of HB  80, explained that  she prefers to characterize  this bill                                                               
as  requiring   schools  to   substitute  sodas   and  carbonated                                                               
beverages with more healthful drinks.   Noting that she'd come up                                                               
with  the idea  herself,  she expressed  concern  for the  rising                                                               
epidemic of obesity across the  nation, particularly pediatric or                                                               
childhood obesity.  Emphasizing the  desire to refocus the system                                                               
so it  is a health care  system and not a  "disease care" system,                                                               
she remarked, "I  feel that school should be a  place of learning                                                               
and habit  formation.  And  especially while kids are  in school,                                                               
we should be promoting healthy habits and healthy nutrition."                                                                   
                                                                                                                                
REPRESENTATIVE KAPSNER reported that  she'd attended a conference                                                               
in Portland this past summer.   She mentioned a call to action by                                                               
the surgeon general on overweight  and obesity, saying two-thirds                                                               
of women are overweight or obese in the nation.  She said:                                                                      
                                                                                                                                
     That overweight  and obesity is  not just a  concern of                                                                    
     those  struggling to  lose a  few  pounds or  a lot  of                                                                    
     pounds;  it is  really ...  the next  burgeoning, major                                                                    
     public  health  concern.     For  adults,  obesity  has                                                                    
     doubled in  the last  20 years.   And  for adolescents,                                                                    
     it's  tripled in  the last  20 years.   Again,  this is                                                                    
     across all ethnic groups and ages.                                                                                         
                                                                                                                                
REPRESENTATIVE KAPSNER  said it  was pointed  out that  for obese                                                               
kids, their quality of life is  equivalent to the quality of life                                                               
kids  face  who  are  fighting  cancer  and  under  chemotherapy.                                                               
Furthermore,  in the  last year  $117  billion was  spent by  the                                                               
federal  government   for  obesity-related   diseases,  including                                                               
indirect costs  such as loss  of wages and future  earnings lost.                                                               
Representative Kapsner asked,  "When you compare that  to the $87                                                               
billion that  people were  outraged that we  are spending  on the                                                               
war in  Iraq, and the  outcry that  that brought forth,  where is                                                               
the corresponding outcry for the  cost of obesity and overweight-                                                               
related diseases?"                                                                                                              
                                                                                                                                
Number 1840                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KAPSNER acknowledged  that  soda  isn't the  only                                                               
factor in obesity.  She told members:                                                                                           
                                                                                                                                
     My hope  is that  this will  just be  one segment  of a                                                                    
     host  of  bills that  we  can  put forward  that  would                                                                    
     address  health  issues.  ...   A  lot  of  people  are                                                                    
     concerned,  not only  about soda  in vending  machines,                                                                    
     but also  unhealthy snack food in  vending machines and                                                                    
     also school  districts having a rotating  menu of fast-                                                                    
     food carriers  coming in throughout  the week.   That's                                                                    
     one  of the  examples that  Juneau-Douglas High  School                                                                    
     has:   every  day of  the  week they  have a  different                                                                    
     fast-food industry preparing their meal.                                                                                   
                                                                                                                                
     I  understand  that  this is  primarily  a  family  and                                                                    
     parent and  community responsibility, but I  think that                                                                    
     it's important  that we get  the discussion  going, and                                                                    
     this was a good starting point for me.                                                                                     
                                                                                                                                
REPRESENTATIVE  KAPSNER   addressed  concern   about  eliminating                                                               
revenue from vending machines.   Noting that Oakland, California,                                                               
has  mandated that  schools substitute  more  healthful foods  in                                                               
vending  machines, she  remarked, "They  have actually  made more                                                               
money  for their  school's discretionary  funding."   She pointed                                                               
out that soda industries also [bottle] water and juices.                                                                        
                                                                                                                                
Number 1733                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO asked:                                                                                                     
                                                                                                                                
     If a  family doesn't  want to take  on the  job, aren't                                                                    
     they just transferring  it to the school?   Number two,                                                                    
     we have drugs  in schools, alcohol in  schools, we have                                                                    
     guns  on  school  property, and  we  have  bullying  in                                                                    
     schools, and all kinds of rules.   It seems like we are                                                                    
     overwhelmed with things  that we have to  do in schools                                                                    
     to protect the kids.                                                                                                       
                                                                                                                                
     This seems  like just  one more  way for  government to                                                                    
     have a control in schools that  I would just as soon be                                                                    
     up to  the principal  and the  parents in  that school,                                                                    
     rather than  people that are  sitting in Juneau.   Am I                                                                    
     wrong?                                                                                                                     
                                                                                                                                
Number 1686                                                                                                                     
                                                                                                                                
REPRESENTATIVE   KAPSNER   agreed   those   are   valid   points.                                                               
Highlighting  $177 billion,  however,  she  remarked, "As  public                                                               
policymakers we're not  engaged in the prevention  aspect as much                                                               
as I  think we  could be.   I am  a ...  federal taxpayer,  and I                                                               
shudder  at the  thought that  we are  losing $117  billion every                                                               
year, and  it's going  to get  worse."  She  cited an  example of                                                               
going to a  fourth- and fifth-grade classroom  where the children                                                               
were very large.  Speaking of  the teacher of that classroom, she                                                               
remarked:                                                                                                                       
                                                                                                                                
     She said  that the kids  are getting bigger  and bigger                                                                    
     every  year.    She  said  that  she  promotes  healthy                                                                    
     choices.  She talks a  blue streak about making healthy                                                                    
     choices, but  ... a lot  of times it's the  parents who                                                                    
     are not  hearing that.   I think  that, in the  vein of                                                                    
     prevention, we should have the discussion.                                                                                 
                                                                                                                                
REPRESENTATIVE GATTO noted that HB  80 prohibits the sale of soft                                                               
drinks, but  not the  consumption; thus  students can  bring soft                                                               
drinks to school.                                                                                                               
                                                                                                                                
REPRESENTATIVE KAPSNER said:                                                                                                    
                                                                                                                                
     I  wasn't interested  in  making  soda pop  contraband.                                                                    
     Like you say, we have guns  and drugs and alcohol and a                                                                    
     lot of other  things that are contraband.   I just felt                                                                    
     that for  schools to  be generating  a lot  of revenue,                                                                    
     and in some cases ... --  the other thing that I wanted                                                                    
     to prevent,  ... in some  states, school  districts are                                                                    
     so  hard  up  for  money  that  they  are  engaging  in                                                                    
     contracts  with fast-food  industries, and  ... at  one                                                                    
     point in Colorado, teachers were  issued a mandate from                                                                    
     their administrator saying, "You  cannot let kids bring                                                                    
     in  sodas from  home, and  you have  to let  them drink                                                                    
     sodas in class,  because we have to make  our quota, we                                                                    
     have to  meet our  ... contractual obligations  to sell                                                                    
     'x' amount  of whatever."   So this was  a preventative                                                                    
     step in that regard, too.   ... I didn't want Alaska to                                                                    
     get to that point.                                                                                                         
                                                                                                                                
Number 1571                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD, cosponsor,  expressed strong support for                                                               
the  bill.    He  shared personal  experiences  from  his  foster                                                               
parenting  of dealing  with dental  issues because  of the  sugar                                                               
content of sodas.                                                                                                               
                                                                                                                                
REPRESENTATIVE  KAPSNER  talked  about  the cost  to  Alaska  for                                                               
dental problems of school-aged children caused by soda pop.                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN, cosponsor,  said he  thinks mixed  messages                                                               
are being sent to school  children when health classes teach good                                                               
nutrition but  schools don't support  this teaching  because they                                                               
have vending  machines.   He said when  children come  to school,                                                               
the  school is  acting "in  loco parentis"  and needs  to support                                                               
health.   He added that  he doesn't think sports  programs should                                                               
be  funded by  bringing in  unhealthful  food and  drinks to  the                                                               
schools.                                                                                                                        
                                                                                                                                
Number 1381                                                                                                                     
                                                                                                                                
STEVE   CLEARY,  Executive   Director,  Alaska   Public  Interest                                                               
Research Group (AkPIRG), testified:                                                                                             
                                                                                                                                
     I was following  this bill last year,  when, I believe,                                                                    
     it didn't  get a committee hearing.   So when I  saw it                                                                    
     come  back up  again this  year, I  was excited  to see                                                                    
     that there  are bipartisan cosponsors and  an effort to                                                                    
     get it  going in the  House.  I'm really  excited about                                                                    
     it.                                                                                                                        
                                                                                                                                
     I did see a couple  of good additions in there, talking                                                                    
     about food  items that derive  more than 35  percent of                                                                    
     their calories  from fat  - so  addressing some  of the                                                                    
     concerns about  having other things than  soda that are                                                                    
     unhealthy as well, ... encompassed in this bill.                                                                           
                                                                                                                                
     I think  what Representative  Lynn was just  getting to                                                                    
     was exactly  the point that I  was going to make.   ...                                                                    
     You learn in  class how to eat healthy,  how to consume                                                                    
     healthy products, and then ...  kids are bombarded with                                                                    
     advertisements with  soda machines,  some of  whom are,                                                                    
     pretty  soon, going  to start  talking  to us,  playing                                                                    
     music and  enticing them to  be unhealthy.  We  need to                                                                    
     give them as  much of a leg  up as we can  in the early                                                                    
     parts  of  their  lives when  they  are  forming  their                                                                    
     habits.  So,  I'm excited to see this  bill moving, and                                                                    
     I urge your support for it.                                                                                                
                                                                                                                                
Number 1282                                                                                                                     
                                                                                                                                
MARIE   LAVIGNE,  Executive   Director,   Alaska  Public   Health                                                               
Association, said  she represents over 200  members across Alaska                                                               
who  are  committed to  sound  health  policy and  improving  the                                                               
public's health.  She said  the bill requests an important public                                                               
health strategy  that uses both  policy and  environmental change                                                               
to improve health outcomes for  children.  It directs schools and                                                               
their  vendors to  offer healthful  and nutritious  beverages and                                                               
food selections  in lieu  of sugar-  or caffeine-filled  soda and                                                               
junk  food.   These  are important  components  in public  health                                                               
strategies underway  to address  childhood obesity,  oral health,                                                               
and sound nutrition.                                                                                                            
                                                                                                                                
MS.  LAVIGNE noted  that also  of concern  is that  teenagers are                                                               
consuming a large  portion of their daily  calories and nutrition                                                               
from  soda and  junk  foods.   She  reported, "Our  pediatricians                                                               
report many  teens experience calcium  and iron  deficiencies, as                                                               
well as  concerns with excessive  calories and weight gain.   Our                                                               
dentists show  concerns for the  oral health of children,  one of                                                               
the  largest consumers  of soda  in recent  history."   She asked                                                               
that children  be allowed to  make the healthiest  choices, while                                                               
allowing  schools to  continue to  generate  revenue from  vendor                                                               
sales.   She  remarked,  "We applaud  Representative Kapsner  for                                                               
bringing this bill forth and  for continuing the public dialog on                                                               
this issue."                                                                                                                    
                                                                                                                                
MS. LAVIGNE  pointed out  that schools are  often used  by sports                                                               
teams,  especially in  rural communities,  later in  the evenings                                                               
than 5 p.m.   Removing  the time  of day  would allow  vendors to                                                               
stock healthier  products for  all of  its sales,  she suggested.                                                               
She closed by saying:                                                                                                           
                                                                                                                                
     Please keep in mind that  our schools provide the total                                                                    
     learning  environment  for  developing  and  practicing                                                                    
     lifelong behaviors.  Healthy  schools, defined as those                                                                    
     that support good nutrition  and physical activity, are                                                                    
     part  of the  total learning  environment that  produce                                                                    
     healthy  students.   Ensuring that  healthy snacks  and                                                                    
     foods  are  provided  in vending  machines,  in  school                                                                    
     stores, and  other venues  within the  school's control                                                                    
     helps to reach this goal.                                                                                                  
                                                                                                                                
     Schools nationwide  that have made these  changes offer                                                                    
     very  exciting  success   stories,  demonstrating  that                                                                    
     students will  buy and will  consume healthy  foods and                                                                    
     beverages   when  those   options  are   tasty,  easily                                                                    
     accessible, and priced right.   House Bill 80 is a step                                                                    
     in the right direction.                                                                                                    
                                                                                                                                
Number 1153                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO asked  Ms.  Lavigne whether  she has  spent                                                               
much time in  the schools and, if so, had  noticed if any vending                                                               
machines there sold fruit juice and water.                                                                                      
                                                                                                                                
MS. LAVIGNE replied  that there were some  fruit-juice blends and                                                               
water,  and that  the machines  were generating  a lot  of money.                                                               
She also said some schools have  chosen, on their own, to look at                                                               
making policy  changes.  She remarked,  "Certainly, school boards                                                               
may choose  to make  policy decisions.   Every  time they  make a                                                               
contract  with their  vendor,  they can  activate  some of  those                                                               
choices  already.   What this  does is  looks at  a comprehensive                                                               
change across all schools in Alaska."                                                                                           
                                                                                                                                
Number 1085                                                                                                                     
                                                                                                                                
JULIAN NAYLOR, M.D., Alaskan Diabetes Consultant, Alaska Native                                                                 
Medical Center, testified:                                                                                                      
                                                                                                                                
     I  travel  around the  state  of  Alaska helping  treat                                                                    
     Alaska Native  people who are suffering  from diabetes,                                                                    
     who are  at risk for  diabetes and also  suffering from                                                                    
     obesity.   I  would like  to lend  my support  to House                                                                    
     Bill 80.   As  somebody who  is on  ... the  front line                                                                    
     with Alaska  Native people, helping with  these chronic                                                                    
     disease  problems, I  see the  effects  of the  growing                                                                    
     problem   with  obesity   in  our   children  and   our                                                                    
     adolescents.    I am  frequently  asked  to consult  on                                                                    
     young  people who  are battling  health problems  [that                                                                    
     have] ... to do with obesity.                                                                                              
                                                                                                                                
     One of  the first  questions I ask  them is,  "How much                                                                    
     soda pop  are you drinking?"   Especially in  the rural                                                                    
     areas of Alaska,  it is amazing how much  soda kids can                                                                    
     take  in one  day.   This  is a  huge  source of  empty                                                                    
     calories,  and it's  driving, I  believe, in  part, the                                                                    
     obesity  epidemic  that  we are  seeing  in  our  young                                                                    
     children and our teenagers.                                                                                                
                                                                                                                                
     In  Alaskan Native  people, the  rates of  diabetes are                                                                    
     going  up   tremendously.    We  actually,   in  Indian                                                                    
     country, have the highest rate  of increase of diabetes                                                                    
     of any  of the Indian  nations around the  country, and                                                                    
     it's of great concern to  us.  And there's no question,                                                                    
     it links  into obesity,  and when  obesity starts  at a                                                                    
     young  age,  it  leads  to  obesity  as  an  adult  and                                                                    
     increases the incidence of diabetes.   I really believe                                                                    
     ...  [in] decreasing  the soda  pop  consumption.   ...                                                                    
     Several studies  ... have shown that  this does impact,                                                                    
     positively, weight gain in young people.                                                                                   
                                                                                                                                
     Within our  rural communities, there have  been several                                                                    
     schools that  have taken the  initiative to  remove the                                                                    
     soda from the  school.  I am presently  in Kotzebue ...                                                                    
     doing an  annual diabetes clinic.   Kotzebue is  one of                                                                    
     the towns that have made  their high school a soda pop-                                                                    
     free environment.   Their machines here  now have milk,                                                                    
     juice, and water as the  beverage choices.  I can't say                                                                    
     this for  sure, but I  know from what I've  heard since                                                                    
     I've  been in  town  that  there's not  been  a lot  of                                                                    
     grumbling from  the kids,  and they  are very  eager to                                                                    
     pick other choices out of the machine instead.                                                                             
                                                                                                                                
     I  would  very  heartily  encourage  the  committee  to                                                                    
     consider [HB] 80.  I think  we need to pay attention to                                                                    
     the health of  our young people in Alaska,  and this is                                                                    
     one  very  positive step  forward  ...  in this  battle                                                                    
     against obesity.                                                                                                           
                                                                                                                                
Number 0939                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER  added, "This really isn't  just an Alaska                                                               
Native  issue or  an Indian  country issue.   The  school that  I                                                               
visited  was actually  in Juneau.   And  there weren't  very many                                                               
Native kids in the class.  This is a national epidemic."                                                                        
                                                                                                                                
Number 0913                                                                                                                     
                                                                                                                                
JENNIFER APP, Alaska Advocacy Director, American Heart                                                                          
Association, noted that much of her planned testimony had                                                                       
already been given by others.  She stated:                                                                                      
                                                                                                                                
     We  know that  our children  are getting  heavier.   We                                                                    
     know that  in Alaska  our children are  getting heavier                                                                    
     quicker than  the national average, unfortunately.   We                                                                    
     also know that  there are a multitude  of causes behind                                                                    
     this.  A  decrease in physical education is  a big one,                                                                    
     but a  corresponding one is an  increase in consumption                                                                    
     of fatty  and sugary  foods, and higher  calories every                                                                    
     day.  The statistics are really pretty amazing.                                                                            
                                                                                                                                
     Young Americans have  increased their annual soft-drink                                                                    
     consumption from 27 to 44  gallons between the '70s and                                                                    
     the '90s.  And further,  they are eating about 400 more                                                                    
     calories  a day  than they  did just  in the  mid-'80s.                                                                    
     And  they   don't  make  up  for   it  with  additional                                                                    
     exercise.   The combination of these  two things really                                                                    
     has an  impact.   There's a direct  correlation between                                                                    
     what we put in our bodies and how heavy we weigh.                                                                          
                                                                                                                                
Number 0809                                                                                                                     
                                                                                                                                
MS. APP continued:                                                                                                              
                                                                                                                                
     This  also  corresponds  with, from  the  '70s  to  the                                                                    
     present, the placement of  vending machines in schools.                                                                    
     I don't think that there's  probably a person among us,                                                                    
     either testifying or listening  to the testimony today,                                                                    
     that can  recall that, as  a young kid, we  had vending                                                                    
     machines.   I'm 32,  and I know  I didn't  have vending                                                                    
     machines as  a child.  This  is a new phenomenon.   You                                                                    
     can track  vending machine placement  with the  rise in                                                                    
     obesity.  We have,  in essence, surrounded our children                                                                    
     with bad choices  and unhealthy choices.   I think that                                                                    
     this bill  is a good  step forward in terms  of looking                                                                    
     at what  very simple  choices we  can make  in offering                                                                    
     healthier choices.                                                                                                         
                                                                                                                                
     There's  one other  statistic I'd  like  to share  with                                                                    
     you.  About  60 percent of overweight  children have at                                                                    
     least  one high-risk  factor for  heart disease  by age                                                                    
     10.  This  is high cholesterol or  high blood pressure.                                                                    
     This is  amazing. ...  We have children  at age  10 who                                                                    
     are  obese who  are  demonstrating that  they are  good                                                                    
     candidates to  have heart  disease.   I can't  tell you                                                                    
     how   disturbing  this   is  to   the  American   Heart                                                                    
     Association, and to see that  this trend nationwide and                                                                    
     in Alaska is  getting worse and worse.  This  bill is a                                                                    
     good step in the right direction.                                                                                          
                                                                                                                                
Number 0769                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO asked if Ms. App would have any objection                                                                  
to diet pop.                                                                                                                    
                                                                                                                                
MS. APP  responded that her  interpretation of the bill  was that                                                               
it  would allow  diet pop,  which isn't  necessarily a  healthful                                                               
option but does  have a lower calorie content.   She said it does                                                               
contain  aspartame  and  other   carcinogens  with  serious  side                                                               
effects.                                                                                                                        
                                                                                                                                
Number 0536                                                                                                                     
                                                                                                                                
SHELLEY McLAUGHLIN-TRUE, Dental Hygienist, Haines, testified:                                                                   
                                                                                                                                
     I work in private practice  here, one week a month, and                                                                    
     work for Indian Health Services  in Haines for the rest                                                                    
     of the  month, year-round.   I just  wanted to  lend my                                                                    
     support to  this bill.   I  hear a  lot about  diet and                                                                    
     obesity and  the diabetes  problem.   I'm here  to tell                                                                    
     you  that  the  dental  aspect   of  this  is  just  as                                                                    
     important.                                                                                                                 
                                                                                                                                
     Not  a  week  goes  by  that I  don't  see  one  child,                                                                    
     probably  more,  totally  "blown  out."   It's  a  very                                                                    
     distinctive decay,  right at the  gum line.   They come                                                                    
     in and it's  ... neglect, it's lack of  education.  The                                                                    
     place for education is in the  school.  And I really do                                                                    
     believe that these  machines don't have a  place in the                                                                    
     school.  We should be  consistent with the message that                                                                    
     we are  giving.  I don't  think that this is  a problem                                                                    
     that  is in  one socioeconomic  group only.   I  see it                                                                    
     with very  wealthy kids and  I see it in  the villages,                                                                    
     all over the place.                                                                                                        
                                                                                                                                
     It's a  very important  issue.  Dental  hygienists have                                                                    
     been fighting  this in the  schools, ... trying  to get                                                                    
     these machines  out of the  schools.  And  unless there                                                                    
     is something  that says  they can't  be there,  we lose                                                                    
     because  those  machines  make lots  of  money.    They                                                                    
     support  sports;  they   support  drama  classes;  they                                                                    
     support trips out of town,  and those trips out of town                                                                    
     are very important  to the schools.  I  think they need                                                                    
     to find another way to do it.                                                                                              
                                                                                                                                
     I want  to lend my  support for this  bill.  I  wish it                                                                    
     were a  lot stricter than  what it is. ...  One million                                                                    
     dollars in Alaska  that is spent on Medicare  is a drop                                                                    
     in the bucket.  That  does not count the charity dental                                                                    
     work  that is  given away,  and  it does  not count,  I                                                                    
     don't  think, the  Indian Health  Services.   You can't                                                                    
     believe  the   amount  of  money   that  is   put  into                                                                    
     children's mouths in this state.                                                                                           
                                                                                                                                
Number 0380                                                                                                                     
                                                                                                                                
CHAIR  ANDERSON announced  that  public testimony  would be  kept                                                               
open and that HB 80 would be held over.                                                                                         
                                                                                                                                
HB 450-INSURANCE & WORKERS' COMPENSATION SYSTEM                                                                               
                                                                                                                                
CHAIR ANDERSON announced  that the final order  of business would                                                               
be HOUSE  BILL NO. 450, "An  Act providing for a  special deposit                                                               
for  workers' compensation  insurers;  relating to  the board  of                                                               
governors of the Alaska  Insurance Guaranty Association; relating                                                               
to  covered  workers'  compensation  claims paid  by  the  Alaska                                                               
Insurance  Guaranty  Association;  stating   the  intent  of  the                                                               
legislature,   and  setting   out  limitations,   concerning  the                                                               
interpretation,  construction,  and  implementation  of  workers'                                                               
compensation laws; relating to  restructuring the Alaska workers'                                                               
compensation    system;   eliminating    the   Alaska    Workers'                                                               
Compensation Board; establishing a  proposed Division of Workers'                                                               
Compensation  within  the  Department   of  Labor  and  Workforce                                                               
Development  and assigning  certain Alaska  Workers' Compensation                                                               
Board functions to  the division and the Department  of Labor and                                                               
Workforce  Development;  establishing   a  Workers'  Compensation                                                               
Appeals  Commission; assigning  certain functions  of the  Alaska                                                               
Workers' Compensation Board to  the Workers' Compensation Appeals                                                               
Commission;  relating  to   agreements  that  discharge  workers'                                                               
compensation  liability;   providing  for  hearing   officers  in                                                               
workers'   compensation   proceedings;   relating   to   workers'                                                               
compensation awards; relating to  an employer's failure to insure                                                               
and keep insured or provide  security; providing for appeals from                                                               
compensation   orders;   relating    to   workers'   compensation                                                               
proceedings; providing for supreme  court jurisdiction of appeals                                                               
from the Workers' Compensation  Appeals Commission; providing for                                                               
a maximum amount for the  cost-of- living adjustment for workers'                                                               
compensation  benefits;  providing for  administrative  penalties                                                               
for  employers   uninsured  or  without  adequate   security  for                                                               
workers'  compensation;  relating  to  assigned  risk  pools  and                                                               
insurers; and providing for an effective date."                                                                                 
                                                                                                                                
Number 0271                                                                                                                     
                                                                                                                                
PAUL  LISANKIE,  Director,  Division  of  Workers'  Compensation,                                                               
Department  of Labor  and  Workforce  Development, presented  the                                                               
bill, noting  that he would  focus on  the areas that  impact the                                                               
Alaska Workers'  Compensation Act and  would defer to  Linda Hall                                                               
[director of  the Division of Insurance,  Department of Community                                                               
&  Economic  Development]  on  portions  that  address  insurance                                                               
issues.  He said he'd focus on three primary goals.                                                                             
                                                                                                                                
MR. LISANKIE  pointed out that  although he'd  previously advised                                                               
the committee that  there wouldn't be any change  in benefits now                                                               
payable  under the  Alaska Workers'  Compensation  Act, he  would                                                               
clarify  one  minor  change  to   this  statement  later  in  his                                                               
testimony.                                                                                                                      
                                                                                                                                
Number  0172                                                                                                                    
                                                                                                                                
MR. LISANKIE said,  second, this bill would  formally establish a                                                               
Division of Workers'  Compensation and a position  of director of                                                               
workers'  compensation.    He  holds  this  position,  he  noted,                                                               
although  no authority  in the  Alaska Workers'  Compensation Act                                                               
established  this  position  or   gave  it  particular  oversight                                                               
authorities for  the workers' compensation  program.   He related                                                               
that most responsibilities of the  program aren't in the hands of                                                               
the Alaska  Workers' Compensation  Board; there  are a  number of                                                               
things the  division director  and the  division do  to implement                                                               
the  board's powers.    This bill  would  formally establish  the                                                               
position and  give the director  responsibility over a  number of                                                               
areas that  are, right now, formally  in the hands of  the Alaska                                                               
Workers' Compensation Board.                                                                                                    
                                                                                                                                
MR.  LISANKIE  informed  the committee  that,  third,  this  bill                                                               
attempts to  reorganize and streamline  the process  of resolving                                                               
disputed  benefit claims,  and  to  do the  same  to the  initial                                                               
appeal  process for  those  disputes.   This  would  result in  a                                                               
speedier  decision-making   process,  and  more   consistent  and                                                               
predictable  decisions.   The  overall  goal is  to  have a  more                                                               
stable insurance  environment in  terms of the  insurance market.                                                               
This  bill  would  help  do  that  by  invoking  a  new  Workers'                                                               
Compensation Appeals Commission, which  would replace the current                                                               
Alaska Workers' Compensation Board.                                                                                             
                                                                                                                                
TAPE 04-12, SIDE A                                                                                                            
Number 0032                                                                                                                     
                                                                                                                                
MR. LISANKIE  explained that most  changes in the  bill implement                                                               
provisions that  would replace  the Alaska  Workers' Compensation                                                               
Board with this new commission  and with new hearing officers and                                                               
a new formalized division and  director of workers' compensation.                                                               
He pointed out  that the sectional analysis  shows a reassignment                                                               
of  functions   that  already  exist   in  the   Alaska  Workers'                                                               
Compensation Act.   Because there  are a multitude  of references                                                               
to the board in the  current Act, changing the board necessitates                                                               
a lengthy bill.                                                                                                                 
                                                                                                                                
MR.  LISANKIE referred  to  the  change in  the  bill that  would                                                               
impact   benefits.     He  explained   that,  currently,   weekly                                                               
compensation  benefits are  paid at  a  certain basic  rate.   If                                                               
someone  moves to  a different  locality outside  of Alaska,  the                                                               
division "is tasked  with having a company  that calculates cost-                                                               
of-living differences  between Alaska -  I believe it's  keyed to                                                               
Anchorage  - and  to wherever  the  residency of  this person  is                                                               
now."                                                                                                                           
                                                                                                                                
Number 0190                                                                                                                     
                                                                                                                                
MR. LISANKIE  referred to  Section 86,  which proposes  putting a                                                               
cap on any cost-of-living adjustments that  go up.  The cap would                                                               
be based  on the in-state rate.   There would be  a comparison of                                                               
the cost of living in the new  area of residence with the cost of                                                               
living in Alaska.   The result would  be that no one  would get a                                                               
compensation  rate  exceeding  what  is paid  to  a  resident  of                                                               
Alaska.  He informed the committee  that this was the only change                                                               
to the benefit package in any of the 58 pages of the bill.                                                                      
                                                                                                                                
MR. LISANKIE explained that Section  10 establishes a director of                                                               
the   Division  of   Workers'  Compensation   and  outlines   the                                                               
director's responsibilities.   The director would  be responsible                                                               
to  the commissioner  of the  Department of  Labor and  Workforce                                                               
Development  for   the  overall  execution  of   the  duties  and                                                               
responsibilities  of the  Alaska  Workers'  Compensation Act  and                                                               
also would  be responsible for adopting  regulations to implement                                                               
the Act.                                                                                                                        
                                                                                                                                
Number 0491                                                                                                                     
                                                                                                                                
MR. LISANKIE pointed  out his division's ongoing  efforts to stop                                                               
uninsured   employers  from   operating   without  the   required                                                               
insurance.     Currently,  a  statute  in   the  Alaska  Workers'                                                               
Compensation Act  requires that all employers  either self-insure                                                               
or,  more commonly,  get insurance  coverage  through an  insurer                                                               
that's  approved  for  writing  workers'  compensation  liability                                                               
insurance  in Alaska.   There  is  an issue  when employers  fail                                                               
their responsibilities to keep insured.                                                                                         
                                                                                                                                
MR.  LISANKIE reported  that,  at present,  there  is a  criminal                                                               
provision that is  rarely invoked because of  its requirements to                                                               
get  a criminal  prosecution.    There is  also  a more  commonly                                                               
invoked provision  whereby the  investigator locates  an employer                                                               
that  is  knowingly  operating without  the  required  insurance,                                                               
gives  an accusation,  and calls  the  employer in  front of  the                                                               
Alaska Workers' Compensation  Board to answer.   He described two                                                               
common  outcomes.    The  employer  admits  to  being  previously                                                               
uninsured and  having employees, but  no longer is  in operation.                                                               
This circumvents a stop-work penalty  from being effective.  More                                                               
commonly, the employer admits to  being previously uninsured, but                                                               
is currently  insured.   Again, there  is no  reason to  invoke a                                                               
stop-work order, since the employer is now properly insured.                                                                    
                                                                                                                                
Number 0544                                                                                                                     
                                                                                                                                
MR.  LISANKIE  surmised  that  the new  provision  would  give  a                                                               
powerful new tool  to the division to  pursue uninsured employers                                                               
by  imposing a  fine  of up  to  $100 a  day  for each  uninsured                                                               
employee.    He  found  180  employers that  were  proven  to  be                                                               
operating without insurance listed in  the last annual report, he                                                               
said.  The total number of  employees that received coverage as a                                                               
result was 2,000.  He projected  that if this penalty were put in                                                               
place, it  could result  in substantial revenue.   He  noted that                                                               
the primary  goal would  be to  support a  zero-tolerance policy.                                                               
He continued:                                                                                                                   
                                                                                                                                
     We're very  concerned because the absence  of insurance                                                                    
     means that  the employer is putting  their employees at                                                                    
     ...  physical risk  that they  may not  be able  to get                                                                    
     medical benefits  if they are hurt,  and financial risk                                                                    
     if they don't get the  time-loss benefits that they are                                                                    
     entitled to  if they get  hurt.  And the  employer that                                                                    
     goes uninsured  is also  gaining an  unfair competitive                                                                    
     advantage over  ... other law-abiding employers  in the                                                                    
     state.                                                                                                                     
                                                                                                                                
Number 0654                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  asked Mr.  Lisankie if  he was  aware of                                                               
the committee bill in process  that would require owner-operators                                                               
to  provide  workers'  compensation  insurance.    He  explained,                                                               
"Because of  the fact that  many times an  owner-operator becomes                                                               
injured,  and then  it goes  back  on the  general contractor  to                                                               
provide  insurance for  that sub[contractor],  wouldn't  it be  a                                                               
good place  to insert that into  this bill, rather than  take our                                                               
whole bill through  the process, so that more  people get covered                                                               
by workers' compensation insurance?"                                                                                            
                                                                                                                                
MR. LISANKIE  noted that he  was aware of  that bill and  that it                                                               
was  possible it  could  be  combined.   He  reiterated that  the                                                               
current Alaska  Workers' Compensation Board would  be replaced by                                                               
a Workers'  Compensation Appeals  Commission.  After  the current                                                               
board hears disputed  claims, they are initially  appealed to the                                                               
superior court.   He  said the new  commission would  replace the                                                               
superior court  as the  site of  that initial  appeal.   It would                                                               
also employ  hearing officers to  do the initial  decision making                                                               
that is currently  done by the board hearing panel.   He gave the                                                               
reasoning,  saying  the  Alaska  Workers'  Compensation  Act  was                                                               
amended at least twice, in 1988 and 2001.  He explained:                                                                        
                                                                                                                                
     The    statutory    intent    language    called    for                                                                    
     interpretation of  the Act to ensure  quick, efficient,                                                                    
     fair, and  predictable delivery of benefits  to injured                                                                    
     workers,  at reasonable  cost to  employers.   This  is                                                                    
     designed  to address  those  concerns  of fairness  and                                                                    
     predictability.                                                                                                            
                                                                                                                                
     The problem, very  quickly, is that there  are ... many                                                                    
     hearing panels, because they are  consisting of two lay                                                                    
     board  members and  a hearing  officer.   Currently, we                                                                    
     have  eight authorized  hearing officers,  but we  only                                                                    
     have six [positions] that are  actually filled. ... [If                                                                    
     HB 450 passes  into law] the commission  would hear the                                                                    
     appeal and  instead of the  board hearing  panel, there                                                                    
     would  just be  a hearing  officer that  would do  that                                                                    
     initial   claim.     It  would   go  to   the  appeal's                                                                    
     commission,   which  would   be   made   up  of   three                                                                    
     commissioners  who  are   appointed  by  the  governor,                                                                    
     confirmed   by   the   legislature,  based   on   their                                                                    
     experience and expertise  in workers' compensation law.                                                                    
     ... The  final stage  would continue  to be  the Alaska                                                                    
     Supreme Court, as it is now.                                                                                               
                                                                                                                                
Number 0904                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD asked who would pay the bill for an                                                                     
injured worker who wanted to take a claim through the appeals                                                                   
process all the way to the supreme court.                                                                                       
                                                                                                                                
MR. LISANKIE replied  that the employee, the  injured worker, has                                                               
the primary responsibility to pay  throughout the appeal process;                                                               
if the employee wins and has  an attorney, then the attorney fees                                                               
and costs are paid typically by the insurer.                                                                                    
                                                                                                                                
REPRESENTATIVE CRAWFORD asked for clarification:                                                                                
                                                                                                                                
     So  rather than  going  through this  board, where  you                                                                    
     have  multiple voices,  you would  just have  one voice                                                                    
     that could be slanted either  way.  And then, from that                                                                    
     point  forward, you  have to  pay your  own bills.   So                                                                    
     that  would preclude  any injured  worker  that I  know                                                                    
     from being  able to "take it  home" past that.   I know                                                                    
     ... when I  was injured, on workers' comp, I  had to go                                                                    
     back  to  work  way  before  I  was  healed  because  I                                                                    
     couldn't afford to  live on the $259 a week  that I was                                                                    
     getting.  I  couldn't even walk right when  I went back                                                                    
     out on a construction site.   So how in the world would                                                                    
     I be able to pay for a lawyer to appeal it?                                                                                
                                                                                                                                
Number 1000                                                                                                                     
                                                                                                                                
CHAIR ANDERSON asked what the current scenario is when a worker                                                                 
is injured in terms of payment of fees.                                                                                         
                                                                                                                                
MR. LISANKIE replied:                                                                                                           
                                                                                                                                
     Right now there ... is a  provision that ... if you get                                                                    
     an attorney, your attorney works  on a contingency [fee                                                                    
     basis], and  if you prevail,  then your insurer  is ...                                                                    
     ordered to  pay. ...  Under this new  bill, if  the ...                                                                    
     injured worker  is not represented by  counsel and they                                                                    
     are  dissatisfied with  the decision  from the  hearing                                                                    
     officer,  the director  of the  division  ... would  be                                                                    
     empowered to  file an appeal  on their behalf.  ... So,                                                                    
     that would  actually be an  improvement as far  as that                                                                    
     goes.   That  is  going somewhat  in  the direction  of                                                                    
     getting representation without having to pay for it.                                                                       
                                                                                                                                
REPRESENTATIVE GATTO commented that "empowered is not required."                                                                
He asked whether that is correct.                                                                                               
                                                                                                                                
MR. LISANKIE replied that he didn't want to comment in case he                                                                  
would mislead the committee.                                                                                                    
                                                                                                                                
Number 1113                                                                                                                     
                                                                                                                                
CHAIR ANDERSON announced that public testimony would remain open                                                                
and that HB 450 would be held over.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
5:15 p.m.                                                                                                                       

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