Legislature(2017 - 2018)BARNES 124

02/05/2018 03:15 PM LABOR & COMMERCE

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Audio Topic
03:15:47 PM Start
03:16:58 PM HB323
03:43:02 PM SB64
04:33:31 PM Presentation: State Residential Building Codes
05:08:07 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 323 EXTEND: BOARD OF PHARMACY TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 64 ADOPT UNIFORM ENVIRONMENTAL COVENANTS ACT TELECONFERENCED
Moved HCS SB 64(L&C) Out of Committee
-- Public Testimony --
+ Presentation: State Residential Building Codes TELECONFERENCED
by Jim Dunlap, President, AK Home Building Assoc.
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 278 EXTEND:CERT. REAL ESTATE APPRAISERS BOARD TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+= HB 279 EXTEND: REAL ESTATE COMMISSION TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+= HB 280 EXTEND: BOARD OF MARITAL & FAMILY THERAPY TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                        February 5, 2018                                                                                        
                           3:15 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 323                                                                                                              
"An Act extending the termination date of the Board of Pharmacy;                                                                
and providing for an effective date."                                                                                           
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 64                                                                                                              
"An  Act  adopting  the   Uniform  Environmental  Covenants  Act;                                                               
relating to environmental real property  covenants and notices of                                                               
activity and use  limitation at contaminated sites  to ensure the                                                               
protection  of  human  health,   safety,  and  welfare,  and  the                                                               
environment; and providing for an effective date."                                                                              
                                                                                                                                
     - MOVED HCS SB 64(L&C) OUT OF COMMITTEE                                                                                    
                                                                                                                                
PRESENTATION: STATE RESIDENTIAL BUILDING CODES                                                                                  
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 278                                                                                                              
"An Act extending the termination date of the Board of Certified                                                                
Real Estate Appraisers; and providing for an effective date."                                                                   
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 279                                                                                                              
"An Act extending the termination date of the Real Estate                                                                       
Commission; and providing for an effective date."                                                                               
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 280                                                                                                              
"An Act extending the termination date of the Board of Marital                                                                  
and Family Therapy; and providing for an effective date."                                                                       
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 323                                                                                                                  
SHORT TITLE: EXTEND: BOARD OF PHARMACY                                                                                          
SPONSOR(s): REPRESENTATIVE(s) SULLIVAN-LEONARD                                                                                  
                                                                                                                                
02/02/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/18       (H)       L&C, FIN                                                                                               
02/05/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB  64                                                                                                                  
SHORT TITLE: UNIFORM ENVIROMENTAL COVENANTS ACT                                                                                 
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
02/17/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/17/17       (S)       CRA, L&C                                                                                               
02/28/17       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
02/28/17       (S)       Heard & Held                                                                                           
02/28/17       (S)       MINUTE(CRA)                                                                                            
03/07/17       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
03/07/17       (S)       Moved  SB 64 Out of Committee                                                                          
03/07/17       (S)       MINUTE(CRA)                                                                                            
03/08/17       (S)       CRA RPT  2DP 2NR                                                                                       
03/08/17       (S)       DP: BISHOP, HOFFMAN                                                                                    
03/08/17       (S)       NR: MACKINNON, STEDMAN                                                                                 
03/14/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/14/17       (S)       Heard & Held                                                                                           
03/14/17       (S)       MINUTE(L&C)                                                                                            
03/16/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/16/17       (S)       Moved  SB 64 Out of Committee                                                                          
03/16/17       (S)       MINUTE(L&C)                                                                                            
03/20/17       (S)       L&C RPT  1DP 3NR                                                                                       
03/20/17       (S)       NR: COSTELLO, HUGHES, GARDNER                                                                          
03/20/17       (S)       DP: STEVENS                                                                                            
03/27/17       (S)       TRANSMITTED TO (H)                                                                                     
03/27/17       (S)       VERSION: SB  64                                                                                        
03/29/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/17       (H)       CRA, L&C                                                                                               
04/11/17       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/11/17       (H)       Heard & Held                                                                                           
04/11/17       (H)       MINUTE(CRA)                                                                                            
04/13/17       (H)       CRA RPT 4DP 1NR                                                                                        
04/13/17       (H)       DP: WESTLAKE, TALERICO, FANSLER, PARISH                                                                
04/13/17       (H)       NR: RAUSCHER                                                                                           
04/13/17       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/13/17       (H)       Moved SB 64 Out of Committee                                                                           
04/13/17       (H)       MINUTE(CRA)                                                                                            
04/17/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/17/17       (H)       Heard & Held                                                                                           
04/17/17       (H)       MINUTE(L&C)                                                                                            
02/05/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE COLLEEN SULLIVAN-LEONARD                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 323 as prime sponsor.                                                                       
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION    STATEMENT:       Presented    audit   findings    and                                                             
recommendations and answered questions during the discussion of                                                                 
HB 323.                                                                                                                         
                                                                                                                                
LEIF HOLM, Chair                                                                                                                
Board of Pharmacy                                                                                                               
Division of Corporations, Business and Professional Licensing                                                                   
(DCBPL)                                                                                                                         
Department of Commerce, Community, and Economic Development                                                                     
(DCCED)                                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 323.                                                                          
                                                                                                                                
RICHARD HOLT, Vice Chair                                                                                                        
Board of Pharmacy                                                                                                               
Division of Corporations, Business and Professional Licensing                                                                   
(DCBPL)                                                                                                                         
Department  of  Commerce,  Community,  and  Economic  Development                                                               
(DCCED)                                                                                                                         
Eagle River, Alaska                                                                                                             
POSITION STATEMENT:  Testified in support of HB 323.                                                                          
                                                                                                                                
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB 64 as prime sponsor.                                                                        
                                                                                                                                
KRISTEN RYAN, Director                                                                                                          
Spill Prevention and Response                                                                                                   
Department of Environmental Conservation (DEC)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the hearing on SB                                                             
64.                                                                                                                             
                                                                                                                                
JENNIFER CURRIE, Senior Assistant Attorney General                                                                              
Environmental Section                                                                                                           
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on SB 64.                                                                                      
                                                                                                                                
JIM DUNLAP, President                                                                                                           
Alaska State Home Building Association (ASHBA)                                                                                  
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Introduced   the  presentation  on  State                                                             
Residential Building Codes.                                                                                                     
                                                                                                                                
JESS HALL, Vice President                                                                                                       
Alaska State Home Building Association (ASHBA)                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented State Residential Building Codes.                                                              
                                                                                                                              
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:15:47 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee  meeting   to  order   at  3:15   p.m.  Representatives                                                               
Josephson, Wool,  Birch, Knopp,  Sullivan-Leonard, and  Kito were                                                               
present at the  call to order.  Representative  Stutes arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
                HB 323-EXTEND: BOARD OF PHARMACY                                                                            
                 [Contains discussion of SB 37]                                                                                 
                 [Contains discussion of HB 9]                                                                                  
                                                                                                                                
                                                                                                                              
3:16:58 PM                                                                                                                    
                                                                                                                                
CHAIR KITO announced that the first order of business would be                                                                  
HOUSE BILL NO. 323, "An Act extending the termination date of                                                                   
the Board of Pharmacy; and providing for an effective date."                                                                    
                                                                                                                                
3:17:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    COLLEEN    SULLIVAN-LEONARD,    Alaska    State                                                               
Legislature, presented HB 323 as  prime sponsor.  She paraphrased                                                               
the  sponsor   statement,  which   reads  as   follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     House  Bill 323  extends the  termination date  for the                                                                    
     Board  of  Pharmacy  to  June  30,  2022.  Pursuant  to                                                                    
     A.S.?08.03.010(  c)(16),  this  Board is  scheduled  to                                                                    
     sunset on June  30th, 2018 if the  legislature does not                                                                    
     pass legislation extending it.                                                                                             
                                                                                                                                
     Legislative Audit  reviewed the Board's  operations and                                                                    
     determined  that it  is  in the  best  interest of  the                                                                    
     state   to  extend   this   Board  considering   recent                                                                    
     statutory    changes    that   expand    the    Board's                                                                    
     responsibilities   in   relation  to   the   controlled                                                                    
     substance     prescription     database.     Therefore,                                                                    
     recommendation  is  made to  extend  this  Board for  4                                                                    
     years or through June 30, 2022.                                                                                            
                                                                                                                                
     The  Board of  Pharmacy  is composed  of  7 members;  5                                                                    
     licensed pharmacists  actively engaged in  the practice                                                                    
     of  pharmacy in  the  State  for a  period  of 3  years                                                                    
     immediately preceding their  appointments and 2 members                                                                    
     of the public.                                                                                                             
     The Board  also regulates  admission into  the practice                                                                    
     of pharmacy,  establishes and enforces  compliance with                                                                    
     professional  standards  and  adopts regulations.    It                                                                    
     also establishes  and maintains a  controlled substance                                                                    
     prescription  database  and establishes  standards  for                                                                    
     the  independent  administration  by  a  pharmacist  of                                                                    
     vaccines,  related  emergency  medications  and  opioid                                                                    
     overdose drugs.                                                                                                            
                                                                                                                                
     The  Board  also  oversees licensing  for  pharmacists,                                                                    
     pharmacy  interns,  pharmacy  technicians,  pharmacies,                                                                    
     wholesale drug  distributors located inside  the state,                                                                    
     licenses  drug   rooms  located   inside  institutional                                                                    
     facilities  and   also  registers   pharmacies  located                                                                    
     outside  of the  State if  a pharmacy  ships, mails  or                                                                    
     delivers  prescription  drugs   to  consumers  of  that                                                                    
     state.                                                                                                                     
                                                                                                                                
     These  regulations  control   various  aspects  of  the                                                                    
     field, including but not limited to controlling and                                                                        
     regulating   the  practice   of  pharmacy   in  Alaska.                                                                    
     A.S.?08.80.005  mandates  that  effective  control  and                                                                    
     regulation  is  necessary   to  promote,  preserve  and                                                                    
     protect the public's health, safety and                                                                                    
     welfare.                                                                                                                   
                                                                                                                                
3:21:08 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Legislative  Agencies and  Offices, reported  August 2017  sunset                                                               
audit  findings related  to HB  323.   She stated  the board  was                                                               
licensing  effectively   and  was  conducting  its   meetings  in                                                               
accordance  with the  laws.   She underlined  the board  was also                                                               
amending regulations to  improve the industry.   She informed the                                                               
board had  3,747 active licenses in  March 2017 for a  33 percent                                                               
increase  in licensees  since the  previous audit  in 2009.   The                                                               
board had a  surplus of just over [$]275  thousand and management                                                               
within DCBPL had  communicated that it would be  performing a fee                                                               
analysis  at  the  end  of  2017.   She  explained  the  division                                                               
recommended  only a  4-year extension  in  recognition of  recent                                                               
statutory  changes that  expand the  board's responsibilities  in                                                               
relation  to  the   controlled  substance  prescription  database                                                               
(CSPD).                                                                                                                         
                                                                                                                                
MS.   CURTIS  described   the  2008   bill   [Senate  Bill   196]                                                               
establishing the  database.  She paraphrased  the audit document,                                                               
entitled  "A  Sunset  Review  of   the  Department  of  Commerce,                                                               
Community, and  Economic Development, Board of  Pharmacy (board)"                                                               
[included in committee packet],  which reads as follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     The  statute  requires  each dispenser  submit  to  the                                                                    
     board, by electronic  means, information regarding each                                                                    
     prescription dispensed for  a controlled substance. The                                                                    
     database electronically  collects information  from in-                                                                    
       state and out-of-state pharmacies as well as other                                                                       
     dispensers of controlled substance prescriptions.                                                                          
     The  database allows  pharmacists and  practitioners to                                                                    
     review  prescription history  prior  to prescribing  or                                                                    
     dispensing  a  controlled  substance. The  database  is                                                                    
     also to be used to:                                                                                                        
        • monitor prescribing practices and patterns of                                                                         
          prescribing or dispensing;                                                                                            
        • identify practitioners who prescribe controlled                                                                       
          substances in an unprofessional or unlawful                                                                           
          manner;                                                                                                               
        • identify individuals   who    may   be   abusing                                                                      
          controlled substances; and                                                                                            
        • identify individuals who present forgeries or                                                                         
          otherwise false or altered prescriptions to a                                                                         
          pharmacy.                                                                                                             
                                                                                                                                
3:23:40 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS identified  that there  were many  problems with  the                                                               
2008 statute,  including that it  did not provide the  ability to                                                               
identify  all dispensers  that must  submit information  so DCBPL                                                               
staff could  not monitor completeness or  identify which specific                                                               
dispensers  were not  submitting the  required information.   She                                                               
added   that   regulations    required   monthly   reporting   of                                                               
information;  however, monthly  reporting was  not effective  for                                                               
monitoring prescription practices.                                                                                              
                                                                                                                                
MS.  CURTIS  presented  that  the  second  issue  with  the  2008                                                               
legislation was  that there was  no requirement that  a dispenser                                                               
or  practitioner   check  the   database  prior   to  dispensing,                                                               
prescribing,  or  administering  medication.     She  added  that                                                               
according to  DCBPL staff,  information in  the database  was not                                                               
analyzed  by   the  board  and  forwarded   to  practitioners  or                                                               
pharmacists because  the Department of  Law advised that  the law                                                               
did  not  allow  the  agency  or  board  to  provide  unsolicited                                                               
reports.                                                                                                                        
                                                                                                                                
MS.  CURTIS  described how  the  law  had  been changed  so  that                                                               
currently   pharmacists  who   dispense  and   practitioners  who                                                               
prescribe,  administer,  or  dispense controlled  substances  are                                                               
required to register with the  database and the board must notify                                                               
the  applicable occupational  boards when  practitioners register                                                               
with the database, thereby allowing  a check for completeness and                                                               
the ability  to identify noncompliance.   She  underlined failure                                                               
to  register is  grounds for  disciplinary action  and dispensers                                                               
are  required   to  report  weekly   and  this   requirement  was                                                               
subsequently changed to report daily.                                                                                           
                                                                                                                                
MS. CURTIS  stated that  access to the  database was  expanded to                                                               
include  dispensers, dispenser  delegates, and  other persons  or                                                               
entities with a valid business  need and the board was authorized                                                               
to   provide  unsolicited   notification  to   a  pharmacist   or                                                               
practitioner if a patient has  received one or more prescriptions                                                               
for controlled substances  inconsistent with generally recognized                                                               
standards of  safe practice.   She added unsolicited  reports may                                                               
also  be  issued to  a  practitioner's  licensing board  and  new                                                               
performance  measures   must  be  reported  to   the  legislature                                                               
annually  including   measures  regarding   the  impact   of  the                                                               
database.    She  stated dispensers  and  practitioners  are  now                                                               
required to check the database  prior to dispensing, prescribing,                                                               
or administering medication, with specific exclusions.                                                                          
                                                                                                                                
MS.  CURTIS said  the audit  states  that with  the changes,  the                                                               
board was empowered to serve  the public interest; however, DCBPL                                                               
does not believe  this board should be  proactively analyzing the                                                               
database as it  is not traditionally the role  of an occupational                                                               
board.   She  added that  DCCED had  stated additional  resources                                                               
would  be needed  if the  legislature  intends for  the board  to                                                               
analyze the data.                                                                                                               
                                                                                                                                
3:26:30 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS presented  the  two recommendations.    She said  the                                                               
first recommendation  was that DCBPL's chief  investigator should                                                               
work   with   the  director   to   improve   the  timeliness   of                                                               
investigations, and  the second was that  DCBPL's director should                                                               
improve procedures to ensure  required licensure documentation is                                                               
appropriately obtained and retained.                                                                                            
                                                                                                                                
MS. CURTIS  informed the Office  of the Governor agreed  with the                                                               
4-year extension but had not  commented on the database concerns;                                                               
the  department   agreed  with   both  recommendations   and  had                                                               
indicated it had implemented new  procedures to ensure timeliness                                                               
of investigations  and did state that  additional resources would                                                               
be  required;   and  the  board   chair  had  agreed   with  both                                                               
recommendations.                                                                                                                
                                                                                                                                
3:29:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP  asked when  the  previous  audit had  been                                                               
carried out.                                                                                                                    
                                                                                                                                
MS. CURTIS  answered the previous  audit had been carried  out in                                                               
2009.   She pointed  to a  timeline in the  audit document.   She                                                               
added there are  new reporting requirements on the  status of the                                                               
database.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KNOPP surmised  it would be four  years before the                                                               
next report on the database.                                                                                                    
                                                                                                                                
MS. CURTIS answered it would probably be in 2021.                                                                               
                                                                                                                                
3:30:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH remarked pharmacies do  not have a way to be                                                               
compensated  for their  expertise  and said  he  thought that  in                                                               
other places pharmacies  could be paid for some  level of medical                                                               
support services.   He asked  whether it would be  appropriate to                                                               
solicit  the board  for recommendations  for  advancement of  the                                                               
pharmacy profession.                                                                                                            
                                                                                                                                
MS. CURTIS answered  the type of audit was unique  in that the 11                                                               
criteria used  were set out in  statute.  She added  unless there                                                               
are  specific  complaints  heard  at  a  board  meeting  or  news                                                               
article, other issues would not be addressed in the audit.                                                                      
                                                                                                                                
3:33:53 PM                                                                                                                    
                                                                                                                                
LEIF HOLM,  Chair, Board of  Pharmacy, Division  of Corporations,                                                               
Business  and  Professional   Licensing  (DCBPL),  Department  of                                                               
Commerce, Community, and  Economic Development (DCCED), testified                                                               
in support of HB 323.   He testified the board concurred with the                                                               
4-year  board extension  as it  was understood  that the  board's                                                               
duties were expanding further.                                                                                                  
                                                                                                                                
REPRESENTATIVE BIRCH said he supported  the bill proposal but had                                                               
concerns regarding  pharmacists receiving compensation  for their                                                               
expertise.   He  asked where  the  board chairman  would turn  to                                                               
remedy the situation for pharmacists in the state.                                                                              
                                                                                                                                
MR. HOLM  answered it was  a complicated question  and underlined                                                               
the board tries to stay  away from matters of financial interest.                                                               
He emphasized he  does not speak as a board  member when speaking                                                               
to PBMs  and auditing practices.   He said  he knows there  is an                                                               
active push for pharmacies to  get provider status at the federal                                                               
level  to receive  payment for  their  services.   He stated  the                                                               
interest of the board is patient safety.                                                                                        
                                                                                                                                
3:37:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    KNOPP   spoke    to   the    board's   database                                                               
responsibilities  and  asked how  the  board  could maintain  the                                                               
database with no part- or full-time employees.                                                                                  
                                                                                                                                
MR. HOLM  answered it had  not been  working well, and  the board                                                               
has not had  the time or manpower.   He added the  board had been                                                               
actively pursuing  a bill to license  out-of-state wholesalers in                                                               
the state  and had attached  an executive  administrator position                                                               
but had  not been  able to get  the bill passed.   He  added that                                                               
with  Senate  Bill   74,  the  board  was  allowed   to  hire  an                                                               
administrator  for  the   Prescription  Drug  Monitoring  Program                                                               
(PDMP) as  well as a  board assistant,  but he surmised  that the                                                               
position would be solely focused on the PDMP.                                                                                   
                                                                                                                                
3:39:10 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO spoke  to concerns  about implementing  the PDMP  and                                                               
asked  for  Mr. Holm's  thoughts  regarding  how the  legislature                                                               
could assist the board.                                                                                                         
                                                                                                                                
MR. HOLM testified that since the  board hired someone to work on                                                               
the PDMP progress was being made.                                                                                               
                                                                                                                                
3:41:05 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 323.                                                                                   
                                                                                                                                
3:41:18 PM                                                                                                                    
                                                                                                                                
RICHARD  HOLT,  Vice  Chair,  Board   of  Pharmacy,  Division  of                                                               
Corporations,  Business   and  Professional   Licensing  (DCBPL),                                                               
Department  of  Commerce,  Community,  and  Economic  Development                                                               
(DCCED), testified  in support of HB  323.  He said  he concurred                                                               
with  what Mr.  Holm had  stated in  his testimony  regarding the                                                               
legislative audit.  He mentioned  other legislation would aid the                                                               
board in its duties, such as SB 37 and HB 9.                                                                                    
                                                                                                                                
CHAIR KITO held over HB 323.                                                                                                    
                                                                                                                                
                                                                                                                                
            SB 64-UNIFORM ENVIROMENTAL COVENANTS ACT                                                                        
                                                                                                                              
3:43:02 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
SENATE BILL  NO. 64, "An  Act adopting the  Uniform Environmental                                                               
Covenants Act; relating to  environmental real property covenants                                                               
and notices of activity and  use limitation at contaminated sites                                                               
to ensure  the protection of  human health, safety,  and welfare,                                                               
and the environment; and providing for an effective date."                                                                      
                                                                                                                                
3:43:05 PM                                                                                                                    
                                                                                                                                
SENATOR PETER  MICCICHE, Alaska  State Legislature,  presented SB                                                               
64  as prime  sponsor.   He  paraphrased  the sponsor  statement,                                                               
which reads as follows [original punctuation provided]:                                                                         
                                                                                                                                
     A primary interest of this  office is to streamline and                                                                    
     remove  obstacles that  inhibit  business, commerce  or                                                                    
     the transfer of  property without reducing expectations                                                                    
     for public  health, safety  and a  healthy environment.                                                                    
     SB 64 achieves that.                                                                                                       
                                                                                                                                
     In  2003,  the  Uniform  Law  Commissioners  created  a                                                                    
     Uniform   Environmental  Covenants   Act  to   overcome                                                                    
     inadequate common law  rules. An environmental covenant                                                                    
     allows for  the sale  of property with  use limitations                                                                    
     to mitigate  risk. Alaska is  one of only  seven states                                                                    
     that does not have an environmental covenant law.                                                                          
                                                                                                                                
     SB  64 protects  the buyer  and seller  of contaminated                                                                    
     property  while allowing  the fullest  and best  use of                                                                    
     the  property  until  the  contamination  reaches  safe                                                                    
     levels. The  bill creates a  legal mechanism  to safely                                                                    
     transfer     contaminated    property     through    an                                                                    
     environmental covenant.                                                                                                    
                                                                                                                                
SENATOR  MICCICHE  gave  an  example  of  a  family  in  his                                                                    
district who had struggled with the  issue for 20 years.  He                                                                    
mentioned  the  historic case  of  Love  Canal in  New  York                                                                    
State.   He continued  to read  from the  sponsor statement,                                                                    
which reads as follows [original punctuation provided]:                                                                         
                                                                                                                                
     A  covenant provides  transparency throughout  the life                                                                    
     of the  property and provides assurances  to buyers and                                                                    
     sellers  that  risks  will  be  safely  managed.  Other                                                                    
     states  have  found  that  covenants  help  communities                                                                    
     transform blighted property into marketable assets.                                                                        
                                                                                                                                
     A simple process for amending  or removing covenants is                                                                    
     included  in  the  legislation. A  covenant  would  not                                                                    
     supplant  or   impose  current   contamination  removal                                                                    
     standards, which  will continue  to be managed  as they                                                                    
     are currently.  The act would not  affect the liability                                                                    
     of  the  principally-responsible   parties,  but  would                                                                    
     provide  a  method  for minimizing  exposure  to  third                                                                    
     parties.                                                                                                                   
                                                                                                                                
3:46:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON quoted the  covenants "would exist until                                                               
the  contamination   reaches  safe  levels"  and   asked  whether                                                               
remediation would  continue through the duration  of the covenant                                                               
or would be discontinued.                                                                                                       
                                                                                                                                
SENATOR MICCICHE answered  it depends on the  contamination.  The                                                               
proposed  bill  would  allow property  to  be  transferred  while                                                               
highlighting  that  contamination  exists  and  would  allow  for                                                               
amending  and   removing  covenants  when  there   is  no  longer                                                               
contamination on the site.                                                                                                      
                                                                                                                                
REPRESENTATIVE JOSEPHSON said Senator  Micciche had indicated the                                                               
covenant was voluntary  and read from page 4, lines  8 through 11                                                               
of SB 64, as follows:                                                                                                           
                                                                                                                                
     (c)   In  addition   to   other   conditions  for   the                                                                    
     department's  approval  of an  environmental  covenant,                                                                    
     the department  may require a specified  person who has                                                                    
     an interest  in the real  property that is  the subject                                                                    
     of   the    environmental   covenant   to    sign   the                                                                    
     environmental covenant.                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSPEHSON asked,  "What if  they won't,  and they                                                               
have an interest in the real property?"                                                                                         
                                                                                                                                
3:48:48 PM                                                                                                                    
                                                                                                                                
SENATOR MICCICHE deferred to Kristen  Ryan from the Department of                                                               
Environmental Conservation (DEC) for an answer.                                                                                 
                                                                                                                                
CHAIR KITO announced the department  would be brought forward for                                                               
invited testimony.                                                                                                              
                                                                                                                                
REPRESENTATIVE  JOSEPHSON mentioned  Love  Canal and  he said  it                                                               
struck him  that would  be an  example of  public notice  of harm                                                               
being caused.   He said  there was a lot  of notice at  the time,                                                               
but he  did not see a  lot of notice for  the next-door neighbor.                                                               
He asked whether  the sponsor was amenable to adding  that to the                                                               
proposed bill.                                                                                                                  
                                                                                                                                
SENATOR MICCICHE  answered he  was looking  for the  best outcome                                                               
for Alaskans and would be amenable to improvements.                                                                             
                                                                                                                                
3:50:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP referenced  the site  in Soldotna,  Alaska,                                                               
and  asked   whether  "a  little   bit  of  contamination   is  a                                                               
prohibition to sell any or all" of a property.                                                                                  
                                                                                                                                
SENATOR MICCICHE  answered that currently the  landowners can use                                                               
institutional controls through DEC  because there is knowledge of                                                               
contamination on that site, but  the law does not currently allow                                                               
for the protection  of the buyer and the seller.   He stated that                                                               
currently   a  scenario   in  which   a  buyer   is  unaware   of                                                               
contamination on  a site is  possible, whereas the  proposed bill                                                               
would prevent that.                                                                                                             
                                                                                                                                
REPRESENTATIVE KNOPP  asked whether there  was anything in  SB 64                                                               
that would require  the environmental covenant to  "go away" once                                                               
the land is deemed to be clean.                                                                                                 
                                                                                                                                
SENATOR MICCICHE answered the proposed  bill would not change how                                                               
the DEC does business but would  help future buyers to know about                                                               
contaminated property before purchase.                                                                                          
                                                                                                                                
3:53:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  asked  about  the sale  of  commercial  and                                                               
industrial sites  such as those on  the North Slope in  the event                                                               
of a costly clean-up.                                                                                                           
                                                                                                                                
SENATOR MICCICHE  answered it  had been  considered and  the only                                                               
opposition to the  proposed bill was from  the federal government                                                               
which happens  to control 51  percent of the  active contaminated                                                               
sites in Alaska.  The proposed  bill would allow the state to put                                                               
land use restrictions on federal property.                                                                                      
                                                                                                                                
REPRESENTATIVE WOOL asked  what would happen to  a depleted field                                                               
during the transfer with regard to the clean-up responsibility.                                                                 
                                                                                                                                
SENATOR  MICCICHE answered  that would  be part  of an  agreement                                                               
between buyer  and seller and  added the proposed bill  would not                                                               
displace  responsibility.   He  mentioned  the Soldotna,  Alaska,                                                               
land and stated the clean-up  would be something the owners could                                                               
not afford,  but he opined it  was a great location  for a resort                                                               
and  the cost  of clean-up  would be  a minor  proportion of  the                                                               
planned investment for  the entire site.  He  said clean-up could                                                               
be part of a side agreement in the sale.                                                                                        
                                                                                                                                
3:57:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  referenced   language  in   the  bill                                                               
stating, "The  department may maintain  a registry  that contains                                                               
all  environmental covenants."  He said  he assumed  the covenant                                                               
would  run with  the deed,  but he  thought a  website containing                                                               
information on those properties could be required.                                                                              
                                                                                                                                
SENATOR MICCICHE deferred to Kristen Ryan, Division Director.                                                                   
                                                                                                                                
3:58:14 PM                                                                                                                    
                                                                                                                                
KRISTEN   RYAN,   Director,   Spill  Prevention   and   Response,                                                               
Department  of Environmental  Conservation  (DEC),  gave a  brief                                                               
overview  of the  proposed bill.   She  described the  process of                                                               
managing  contaminated sites.   She  gave the  example of  a site                                                               
which  was currently  a Subway  restaurant, but  which previously                                                               
had been  a gas station.   When the gas station  was removed, the                                                               
gas had leaked, and the contamination  was deemed to be safe with                                                               
institutional controls, meaning the  information was entered into                                                               
a database  containing the restrictions  placed on  the property.                                                               
She said  the buyer was  not aware  of the contamination  as they                                                               
were  unaware   of  the  existence   of  the  database   and  the                                                               
information was not included in  the deed, which created a larger                                                               
problem  of  spreading  contamination.    She  gave  examples  of                                                               
situations in  which the department would  allow contamination to                                                               
stay on properties  with institutional controls.   She stated any                                                               
neighbors  would  have  to be  informed  of  contaminated  areas;                                                               
however, the  department did  not have a  mandate.   She remarked                                                               
the legislation  had been proposed  over 10 years  previously for                                                               
the   transfer   of    industrial   properties   with   potential                                                               
contamination.                                                                                                                  
                                                                                                                                
4:03:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked about  the industrial  application and                                                               
where the responsibilities lie for a depleted site.                                                                             
                                                                                                                                
MS. RYAN answered  currently industrial sites on  the North Slope                                                               
have a lease agreement which states  the land will be returned to                                                               
its  original  state  as  part  of  the  lease  arrangement  with                                                               
Department of Natural Resources (DNR).                                                                                          
                                                                                                                                
REPRESENTATIVE WOOL asked  whether, if a seller  could not afford                                                               
to   remediate  the   contamination  but   a  buyer   could,  the                                                               
responsibility would transfer.                                                                                                  
                                                                                                                                
MS.  RYAN answered  SB  64  would not  change  the current  legal                                                               
process,  and   the  person  who  caused   the  contamination  is                                                               
responsible.                                                                                                                    
                                                                                                                                
4:06:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON stated  his concern  that the  proposed                                                               
bill would  stop the  current process  for remediation  and would                                                               
simply   ease  the   transfer  of   property,   with  notice   of                                                               
contamination, from  one person to  another.  He said  he thought                                                               
regulators would "just throw in the towel."                                                                                     
                                                                                                                                
4:07:28 PM                                                                                                                    
                                                                                                                                
MS. RYAN answered the proposed  bill would not change the current                                                               
environmental  regulation  paradigm,   just  provide  a  thorough                                                               
communication tool for future owners.                                                                                           
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for  an explanation of the "Notice                                                             
of activity  and use limitation."  [page 9,  line 25, of  SB 64].                                                             
He  said it  links  itself to  the  environment response  project                                                               
which   is   part   of  Comprehensive   Environmental   Response,                                                               
Compensation and Liability Act (CERCLA)  but "allows the owner to                                                               
move from one to the other."                                                                                                    
                                                                                                                                
MS.  RYAN  answered the  entire  section  is to  accommodate  the                                                               
federal government.  She added the  state is not allowed to put a                                                               
covenant  on federal  property.   She  indicated  over the  years                                                               
states  have inherited  a lot  of contaminated  federal land  and                                                               
some had developed  the specific tool of putting a  notice of use                                                               
restriction, which  is the equivalent  of a covenant,  on federal                                                               
property.    She added  native  corporations  in particular  have                                                               
inherited a lot of contaminated  federal lands through trades and                                                               
that   language  is   important   to   ensure  communication   of                                                               
contamination was clear.                                                                                                        
                                                                                                                                
4:10:51 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked  Ms. Ryan to speak to the  letters received from                                                               
the Department  of Defense (DoD)  and whether DoD  is comfortable                                                               
with the language assuaging their concerns.                                                                                     
                                                                                                                                
MS. RYAN  answered it had  been an ongoing conversation  with DoD                                                               
and  they are  uncomfortable with  the state  giving the  federal                                                               
government  restrictions.   She  stated  DoD  was compliant  with                                                               
similar language  in the state  of Colorado.   She added  DoD was                                                               
nervous about  the state having enforcement  authority on federal                                                               
property, but they do recognize the need for it.                                                                                
                                                                                                                                
4:12:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked about the current  monetary threshold                                                               
for a Superfund site.                                                                                                           
                                                                                                                                
MS. RYAN answered that getting a  site listed as a Superfund site                                                               
is a  process, and there  is no  dollar amount restriction.   She                                                               
added there were  only two listed in state history  and it is not                                                               
something the  state feels is a  good process as it  has negative                                                               
connotations.  She stated the  state has robust contaminated site                                                               
lands regulations,  so historically the  Environmental Protection                                                               
Agency (EPA)  has let the  state take lead  on those sites.   She                                                               
remarked the problem with getting a  site listed is that it takes                                                               
the state  out of  the driver's  seat and  puts EPA  in it.   She                                                               
underlined  that  a Superfund  listing  would  still require  the                                                               
state to contribute financially.                                                                                                
                                                                                                                                
4:14:46 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  said he thought it  would require an Act  of Congress                                                               
to list a Superfund site.                                                                                                       
                                                                                                                                
4:15:06 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened  public testimony on SB 64.   Upon ascertaining                                                               
there  was  no  one  available   to  testify,  he  closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
4:15:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether the chair  would consider                                                               
an amendment.                                                                                                                   
                                                                                                                                
CHAIR KITO replied an amendment could be offered.                                                                               
                                                                                                                                
4:16:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved Amendment  1, adding  language as                                                               
follows:                                                                                                                        
                                                                                                                                
     "Public  Comment.   Before  the  commissioner signs  an                                                                    
     environmental  covenant, the  department shall  provide                                                                    
     an opportunity for public  comment on the environmental                                                                    
     covenant."                                                                                                                 
                                                                                                                                
SENATOR  MICCICHE   asked  for  the   page  and  line   in  which                                                               
Representative   Josephson   thought   the  language   would   be                                                               
appropriate.                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered  Legislative Legal and Research                                                               
Services  recommended  page 3,  following  line  4, and  said  he                                                               
thought the amendment would become new section 46.04.303.                                                                       
                                                                                                                                
SENATOR  MICCICHE  answered  the  covenant would  be  a  property                                                               
owner's  voluntary decision  on whether  to place  a covenant  on                                                               
their own property and he was not  sure of the value of placing a                                                               
requirement of public comment on the decision.                                                                                  
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   replied  that  the  bill   says  that                                                               
registry is  optionally required at the  department's discretion.                                                               
He said that in Anchorage he  gets public notice for buildings or                                                               
widened  sidewalks being  built around  his home.   He  mentioned                                                               
that those whom  he had invited to comment on  the proposed bill,                                                               
such as Alaska  Community Action on Toxics  (ACAT), had expressed                                                               
concerns  with notice  and had  recommended ecology  law journals                                                               
such as Ecology Law Quarterly and a Boston College article.                                                                   
                                                                                                                                
4:19:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON read  from  "The Uniform  Environmental                                                               
Covenants  ActAn   Environmental   Justice  Perspective,"  Andrea                                                               
Ruiz-Esquide, Ecology  Law Quarterly, Volume 31,  page 1025, 2004                                                               
edition, which read as follows:                                                                                                 
                                                                                                                                
     Early, ongoing, and  meaningful public participation is                                                                    
     the  hallmark  of  sound  public  policy  and  decision                                                                    
     making.   The  community  most directly  impacted by  a                                                                    
     problem   or  project   is   inherently  qualified   to                                                                    
     participate    in    the    decision-making    process.                                                                    
     Mechanisms  must be  established to  ensure their  full                                                                    
     participation,  including  training   and  support  for                                                                    
     community   groups,    technical   assistance   grants,                                                                    
     community advisory groups, and others.                                                                                     
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  said it  struck  him  that "these  are                                                               
significant covenants  that interrupt the normal  common law" and                                                               
he thought notice is reasonable.                                                                                                
                                                                                                                                
4:20:44 PM                                                                                                                    
                                                                                                                                
SENATOR MICCICHE pointed out page 5  of SB64, starting at line 8,                                                               
and read from Section 46.04.315, which reads as follows:                                                                        
                                                                                                                                
     Notice  of environmental  covenant. (a)  A copy  of the                                                                  
     environmental  covenant   shall  be  provided   by  the                                                                    
     persons and  in the  manner required by  the department                                                                    
     to                                                                                                                         
          (1)  each  person  that signed  the  environmental                                                                    
          covenant;                                                                                                             
          (2)  each person  holding a  recorded interest  in                                                                    
          the  real property  subject  to the  environmental                                                                    
          covenant;                                                                                                             
          (3)  each   person  in  possession  of   the  real                                                                    
          property subject to the environmental covenant;                                                                       
          (4)  each  municipality  or other  unit  of  local                                                                    
          government in  which real property subject  to the                                                                    
          environmental covenant is located; and                                                                                
          (5) any other person the department requires.                                                                         
                                                                                                                                
SENATOR MICCICHE said  he wondered if "may" should  be changed to                                                               
"shall"   and   "be   included  in   the   database,"   to   meet                                                               
Representative Josephson's objective.                                                                                           
                                                                                                                                
4:22:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated he thought Senator  Micciche was                                                               
referring  to  page  11,  line   29,  in  the  section  entitled,                                                               
"Registry."   He deferred to  the director for  confirmation that                                                               
the proposed language would make some improvement.                                                                              
                                                                                                                                
MS. RYAN  answered the  department had  every intent  to maintain                                                               
that  database  and underlined  the  database  was well  used  by                                                               
everyone in the  state who was researching  contamination, so the                                                               
department had  no issue with  changing it  into a mandate.   She                                                               
remarked  the other  changes  that  Representative Josephson  was                                                               
recommending were  more problematic.   She said she  believed the                                                               
material  Representative  Josephson   was  reading  pertained  to                                                               
Superfunds and  she did  not know whether  the proposed  bill was                                                               
the right vehicle for that concern.                                                                                             
                                                                                                                                
4:24:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON withdrew Amendment 1.                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved to adopt Conceptual  Amendment 2,                                                               
turning "may" to "shall" on line 29 of page 11."                                                                                
                                                                                                                                
CHAIR KITO objected for the purpose of discussion.                                                                              
                                                                                                                                
4:25:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked Ms.  Ryan about the effects                                                               
of the mandate.                                                                                                                 
                                                                                                                                
MS.  RYAN  answered  the department  continued  to  maintain  the                                                               
database and  that what the  bill corrects is that  it references                                                               
that database  from the deeds  so an individual who  doesn't know                                                               
of the database would get  notified.  She emphasized changing the                                                               
language to "shall" would not change how the division operates.                                                                 
                                                                                                                                
REPRESENTATIVE   SULLIVAN-LEONARD    surmised   that   Conceptual                                                               
Amendment 2 was not necessary.                                                                                                  
                                                                                                                                
MS.  RYAN  reiterated  the  mandate would  not  change  what  the                                                               
department does.                                                                                                                
                                                                                                                                
CHAIR  KITO asked  Jennifer Currie  of the  Department of  Law to                                                               
speak to the Conceptual Amendment.                                                                                              
                                                                                                                                
4:27:09 PM                                                                                                                    
                                                                                                                                
JENNIFER    CURRIE,    Senior   Assistant    Attorney    General,                                                               
Environmental Section, Department of  Law, testified there was no                                                               
change except  that it  requires the  department to  maintain the                                                               
registry.                                                                                                                       
                                                                                                                                
CHAIR  KITO   stated  at  present   the  statute  did   not  have                                                               
environmental covenants identified  so they would not  have to be                                                               
registered.  He read from page 11, line 11, of SB 64 as follows:                                                                
                                                                                                                                
     Registry. (a)  The department  may maintain  a registry                                                                  
     that contains  all environmental covenants  and notices                                                                    
     of  activity and  use limitation  and any  amendment or                                                                    
     termination of those instruments.                                                                                          
                                                                                                                                
CHAIR KITO  asked whether, if  "may" was changed to  "shall", the                                                               
department  would  be  required   to  include  all  environmental                                                               
covenants in the database.                                                                                                      
                                                                                                                                
MS.  CURRIE  answered that  with  "shall"  they are  required  to                                                               
include environmental  covenants, and  with "may"  the department                                                               
can include them.                                                                                                               
                                                                                                                                
CHAIR  KITO stated  he saw  the  benefit of  changing "may"  into                                                               
"shall", at least as regards the environmental covenant piece.                                                                  
                                                                                                                                
4:29:05 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  withdrew his  objection.    There being  no  further                                                               
objection, Conceptual Amendment 2 was adopted.                                                                                  
                                                                                                                                
4:29:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL moved  to report  SB  64 as  amended out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no  objection, HCS  SB 64(L&C)  was                                                               
moved from the House Labor and Commerce Standing Committee.                                                                     
                                                                                                                                
4:30:13 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:30 p.m. to 4:33 p.m.                                                                       
                                                                                                                                
^Presentation: State Residential Building Codes                                                                                 
         Presentation: State Residential Building Codes                                                                     
                                                                                                                              
4:33:31 PM                                                                                                                    
                                                                                                                              
CHAIR KITO announced that the next order of business would be a                                                                 
presentation entitled, "State Residential Building Codes" by Mr.                                                                
Jim Dunlap of the Alaska Home Building Association.                                                                             
                                                                                                                                
CHAIR  KITO stated  there had  been a  presentation the  previous                                                               
year regarding state  residential building codes and  that he had                                                               
requested the  presentation with  the aim of  determining whether                                                               
the committee had an interest in drafting related legislation.                                                                  
                                                                                                                                
4:34:31 PM                                                                                                                    
                                                                                                                                
JIM  DUNLAP, President,  Alaska State  Home Building  Association                                                               
(ASHBA),  said he  and his  association would  like to  introduce                                                               
legislation for  a state  residential building  code.   He turned                                                               
the presentation over to Jess Hall.                                                                                             
                                                                                                                                
4:35:40 PM                                                                                                                    
                                                                                                                                
JESS HALL, Vice President, Alaska State Home Building                                                                           
Association (ASHBA), read from prepared testimony, which reads                                                                  
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     We want  to be transparent  in our efforts  to advocate                                                                    
     for  the  introduction  of legislation  that  adopts  a                                                                    
     state  residential  building  code.   Alaska  currently                                                                    
     does not have  a state residential code,  but the state                                                                    
     does have  a variety  of building codes  adopted across                                                                    
     multiple   state  agencies   for  different   kinds  of                                                                    
     construction.                                                                                                              
                                                                                                                                
     Here's  what we're  asking you  today: Please  consider                                                                    
     introducing a  bill this session that  will establish a                                                                    
     state  residential  building  code. We  have  had  many                                                                    
     internal conversations  amongst ourselves on  what this                                                                    
     bill should  [look] like, and  we have  appreciated the                                                                    
     chance to  share those thoughts with  Chairman Kito and                                                                    
     his office.                                                                                                                
                                                                                                                                
     Now we  want to expand the  conversation to legislators                                                                    
     and the public.  A bill is a good way  to put something                                                                    
     on the table  and let the discussion  and the questions                                                                    
     begin.                                                                                                                     
                                                                                                                                
     We expect that  there will be questions  from you, from                                                                    
     your  constituents, from  municipal governments,  state                                                                    
     agencies, and certainly industry stakeholders.                                                                             
                                                                                                                                
     While we  are not  an industry  that advocates  for the                                                                    
     growth  of government  and more  regulations, we  are a                                                                    
     trade  association  that  promotes  best  practices  in                                                                    
     residential construction and consumer protection.                                                                          
                                                                                                                                
     We sincerely  believe a  residential building  code can                                                                    
     be adopted  in a  manner that  improves the  quality of                                                                    
     housing  for   consumers  without  being   onerous  and                                                                    
     creating burdensome costs.                                                                                                 
                                                                                                                                
     A  state residential  building  code  will improve  the                                                                    
     quality of  construction and  housing stock  across the                                                                    
     entire state.                                                                                                              
                                                                                                                                
     On  January 23rd  -  just  a couple  weeks  ago -  AHFC                                                                    
     released   the  2018   State  Housing   Assessment.  It                                                                    
     includes a  lot of good  information about the  need to                                                                    
     improve  the   quality  of  construction   of  housing,                                                                    
     especially  in the  way of  energy  efficiency and  the                                                                    
     benefits that result.                                                                                                      
                                                                                                                                
     Here is what we would like the initial bill to say:                                                                        
        1. We want to identify the residential code within                                                                      
          the Alaska  Housing Finance Corporation.  AHFC has                                                                    
          been  a fantastic  partner with  our industry  for                                                                    
          many  years,  and we  have  [a]  good working  and                                                                    
          trusting   relationship.  AHFC   already  requires                                                                    
          inspections  and  code  compliance  for  homes  to                                                                    
          qualify  for   financing,  so  they   are  already                                                                    
          familiar  with codes  and how  they  can work  and                                                                    
          benefit everyone.                                                                                                     
        2. We [do] NOT want to see enforcement measures and                                                                     
          penalties  at this  time. Alaska  isn't ready  for                                                                    
          mandatory  code compliance  in  every village  and                                                                    
          town.  We simply  want to  see  a code  identified                                                                    
          that  can  be  a   uniform  template  for  housing                                                                    
          construction.                                                                                                         
        3. We believe the International Residential Code, or                                                                    
          IRC,  is   the  code  that  is   most  universally                                                                    
          understood  and applicable  for  our industry  and                                                                    
          for housing in Alaska.                                                                                                
                                                                                                                                
     We believe a bill with these  basic items is a good way                                                                    
     to start the conversation.                                                                                                 
                                                                                                                                
     I don't want to take more  of your time, but I am happy                                                                    
     to  try and  answer questions.  Please know  that there                                                                    
     are people here  in the room from  our organization who                                                                    
     are experts in  building codes, and we will  be here in                                                                    
     the  Capital all  day tomorrow  to talk  to legislators                                                                    
     individually and try to answer any questions you have.                                                                     
                                                                                                                                
4:39:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked  why the bill was being  sought and to                                                               
whom  it  would apply.    He  remarked other  municipalities  and                                                               
organized boroughs had adopted codes.                                                                                           
                                                                                                                                
MR. HALL  mentioned Palmer was  the one city  with a code  in the                                                               
Matanuska-Susitna (Mat-Su) Valley.  He  said most building in the                                                               
Mat-Su Valley did  not have a code to follow,  with the exception                                                               
of those  financed by Alaska Housing  Finance Corporation (AHFC).                                                               
He highlighted  that most traditional  financers such  as Federal                                                               
National  Mortgage Association  and  Federal  Home Loan  Mortgage                                                               
Corporation do  not require building  to code.   He said it  is a                                                               
consumer problem involving, for  example, owner-builders who want                                                               
to build their own home but don't  follow code.  He pointed out a                                                               
person who buys the house later  would assume the house was built                                                               
to  code.   He  said  he  felt  building  should be  carried  out                                                               
according to a code consistent  across the state and Alaska State                                                               
Homebuilding  Association (ASHBA)  wants  a  consistent code  all                                                               
builders can use for safety and energy efficiency.                                                                              
                                                                                                                                
4:43:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  said she did  not understand how  the code                                                               
would improve the stock or number of houses.                                                                                    
                                                                                                                                
MR. DUNLAP answered that any  building that AHFC finances follows                                                               
the International  Residential Code (IRC)  already and it  is the                                                               
minimum  code in  residential construction.   He  reiterated that                                                               
the  state of  Alaska does  not have  a residential  construction                                                               
code.    He pointed  out  there  are  14 municipalities  and  the                                                               
proposed code would not impact them.   AHFC is financing about 95                                                               
percent of rural  Alaska.  He spoke to loopholes  that arise when                                                               
there  are  variable codes,  wherein  workers  travel around  the                                                               
state and  work with different  codes, creating a problem  in the                                                               
workmanship.  He underlined the  proposed law would simply create                                                               
uniform  residential  code  requirements, adding  that  37  other                                                               
states already have statewide codes.                                                                                            
                                                                                                                                
4:46:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  asked  whether  a  certain  certification                                                               
would be required to comply with the codes.                                                                                     
                                                                                                                                
MR. DUNLAP  answered that  in certain  municipal areas  a builder                                                               
must  have a  residential endorsement,  but that  was a  separate                                                               
standard.  He added AHFC  requirements are already a standard for                                                               
the state and  the code would simply stipulate it  statewide.  He                                                               
added that with the uniformity  everyone in the state would learn                                                               
to build in the same way.                                                                                                       
                                                                                                                                
REPRESENTATIVE STUTES said she thought  it did not sound like the                                                               
proposed bill would  put any particular hardship  on rural Alaska                                                               
where certain items are not accessible.                                                                                         
                                                                                                                                
MR.  HALL answered  a lot  of the  housing built  in the  bush is                                                               
financed by  AFHC and many  of the housing agencies  work through                                                               
AFHC, so about  90 percent of housing is built  to IRC standards.                                                               
He reiterated  the code  would give  home buyers  more confidence                                                               
that the house they buy is safe.                                                                                                
                                                                                                                                
4:48:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH stated his concern  about putting a law into                                                               
place without enforcement or penalties.                                                                                         
                                                                                                                                
MR.  HALL answered  the organization  is aware  of the  budgetary                                                               
constraints the state is under  and therefore wants to start with                                                               
a code and then address  enforcement issues.  He illustrated that                                                               
most  places hire  certified IRC  inspectors but  in very  remote                                                               
areas  it costs  much more.   He  suggested some  other technique                                                               
such  as  photography  or  video could  be  employed  during  the                                                               
building process  and signed off  by the inspector to  bring down                                                               
costs.  He said those details need  to be worked out by AFHC, but                                                               
the code is the first step.                                                                                                     
                                                                                                                                
4:53:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether  uncodified  law  would                                                               
suffice  or whether  IRC would  be adopted  for a  template as  a                                                               
starting point.                                                                                                                 
                                                                                                                                
MR.  HALL  answered  in the  affirmative  and  noted  enforcement                                                               
policies would  be added later.   He reiterated AFHC  already has                                                               
the  code in  place, but  it  was not  statewide.   He added  the                                                               
Federal  Housing   Administration  (FHA)  or   rural  development                                                               
financing require the  IRC inspection as well.   He restated that                                                               
conventional financing  or people  who build  their own  house do                                                               
not have inspections.                                                                                                           
                                                                                                                                
4:54:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  different codes  between city                                                               
governments would  be in conflict  if IRC were introduced  as the                                                               
standard.                                                                                                                       
                                                                                                                                
MR.  DUNLAP  answered  that  when  there  is  an  existing  code,                                                               
amendments  to the  code  are required  to make  it  equal to  or                                                               
greater  than the  existing code.    He opined  a statewide  code                                                               
would  be  cost  effective  and   would  ensure  safety  for  the                                                               
consumer.                                                                                                                       
                                                                                                                                
CHAIR  KITO asked  the committee  whether there  was interest  in                                                               
drafting a bill.                                                                                                                
                                                                                                                                
5:00:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP stated he would  like to know more about the                                                               
mandate for  city governments that have  not adopted a code.   He                                                               
expressed  a  desire  for  more  detailed  information  from  the                                                               
organization regarding what the legislation should contain.                                                                     
                                                                                                                                
5:02:41 PM                                                                                                                    
                                                                                                                                
CHAIR KITO replied  that without a bill before  the committee the                                                               
committee was not building a record on the issue.                                                                               
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated he  would support  a draft.   He                                                               
surmised that  "nothing would pass  this year" but a  draft would                                                               
be a building block  for the next year.  He  said he also thought                                                               
the committee  had a  member who  was an  expert and  should take                                                               
advantage of that.                                                                                                              
                                                                                                                                
REPRESENTATIVE KNOPP  suggested whatever the committee  worked on                                                               
"would die at the end of the session."                                                                                          
                                                                                                                                
REPRESENTATIVE BIRCH said  he would like to learn  more and would                                                               
like to  see the  housing authority put  forward a  proposal from                                                               
which  to work,  but he  was not  prepared to  move forward  as a                                                               
committee member.                                                                                                               
                                                                                                                                
CHAIR KITO  commented that a  draft must  exist in order  to move                                                               
forward.                                                                                                                        
                                                                                                                                
5:05:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  asked  whether  a  subcommittee                                                               
could be called to work on the issue.                                                                                           
                                                                                                                                
CHAIR  KITO answered  that  without  a document  to  submit to  a                                                               
subcommittee he did not see how that was possible.                                                                              
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  suggested the  committee  could                                                               
use a draft mirroring what Anchorage uses.                                                                                      
                                                                                                                                
CHAIR KITO  reiterated that  he did  not think  an idea  could be                                                               
submitted to a subcommittee without a draft.                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES declared she was  not opposed to a draft as                                                               
a working  document and  supported working  on the  document with                                                               
the  understanding "it  was very  unlikely anything  would happen                                                               
this year."                                                                                                                     
                                                                                                                                
5:07:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  moved that  the  House  Labor and  Commerce                                                               
Committee  authorize the  chair to  draft a  bill establishing  a                                                               
statewide residential building code.                                                                                            
                                                                                                                                
5:07:41 PM                                                                                                                    
                                                                                                                                
CHAIR KITO objected for the  purpose of discussion.  He clarified                                                               
that the vote on the motion  did not give consent to the building                                                               
code, only to the drafting of the bill.                                                                                         
                                                                                                                                
CHAIR  KITO  removed  his  objection.   There  being  no  further                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
5:08:07 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
5:08 p.m.                                                                                                                       

Document Name Date/Time Subjects
SB064 Fiscal Note DNR-MLW 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Sectional Analysis ver. J 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Sponsor Statement 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - DEC Response to DoD 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - DEC Response to DoD Supplemental 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Opposition Letter - DoD 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - DoL Uniform Law Conference Report 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - Fact Sheet 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Opposition Letter - DoD Supplemental 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - Uniform Law Commission Fact Sheet 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Letters 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Ver. J 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Fiscal Note DEC-SPAR 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
ASHBA Letter to HLAC 1.29.18.pdf HL&C 2/5/2018 3:15:00 PM
Building Codes
HB323 Sectional Analysis 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Version D.PDF HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Legislative Audit 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Fiscal Note DCCED-CBPL 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323.SponsorStatement.verD.2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Support Letter 2.5.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323