03/12/2012 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB275 | |
| HB337 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 275 | TELECONFERENCED | |
| *+ | HB 337 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 12, 2012
3:20 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Craig Johnson, Vice Chair
Representative Dan Saddler
Representative Steve Thompson
Representative Lindsey Holmes
Representative Bob Miller
MEMBERS ABSENT
Representative Mike Chenault
COMMITTEE CALENDAR
HOUSE BILL NO. 275
"An Act requiring that a policy of group health insurance
offered by the state and certain local governments include
coverage for colorectal screening, allow retirees to choose
between brand-name and generic drug products, and limit certain
prescription drug benefit payments to an amount based on the
cost of the generic drug product."
- HEARD & HELD
HOUSE BILL NO. 337
"An Act relating to the Board of Registration for Architects,
Engineers, and Land Surveyors and to the Department of Commerce,
Community, and Economic Development."
- MOVED HB 337 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 275
SHORT TITLE: RETIREE BENEFITS:COLORECTAL/DRUG BENEFITS
SPONSOR(s): REPRESENTATIVE(s) LYNN
01/17/12 (H) PREFILE RELEASED 1/13/12
01/17/12 (H) READ THE FIRST TIME - REFERRALS
01/17/12 (H) L&C, FIN
03/12/12 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 337
SHORT TITLE: BD OF ARCHITECTS, ENGINEERS, SURVEYORS
SPONSOR(s): REPRESENTATIVE(s) THOMPSON BY REQUEST
02/22/12 (H) READ THE FIRST TIME - REFERRALS
02/22/12 (H) L&C, FIN
03/12/12 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE BOB LYNN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as prime sponsor of HB 275.
MIKE SICA, Staff
Representative Bob Lynn
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 275 on behalf of the prime
sponsor, Representative Bob Lynn.
GARY MILLER, Vice President, Southeast Region
Retired Public Employees Alaska (RPEA)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 275.
PAUL DAVIS, MD, FAAFP
Medical Director
Colorectal Cancer Screening Program
Alaska Native Medical Center (ANMC)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 275.
MOLLY MCCAMMON
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 275.
PATRICK LUBY, Advocacy Director
AARP Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 275.
EMILY NENON, Alaska Government Relations Director
American Cancer Society Action Network
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 275.
RICHARD BENEVIEDES
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 275.
DAVID OLEWILER
Palmer, Alaska
POSITION STATEMENT: Testified during the discussion of HB 275.
LYNETTE BERGH, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 337 on behalf of the sponsor,
Representative Steve Thompson.
DON HABEGER, Director
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community, & Economic Development(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions on HB 337.
ERIC ERICKSEN, P.E.- Electrical Engineer; Board Member
Board of Architects, Engineers, and Land Surveyors (AELS Board)
Department of Commerce, Community, & Economic Development(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 337.
COLIN MAYNARD, P.E. - Structural Engineer; Member
Alaska Professional Design Council, LLC (APDC)
Anchorage, Alaska.
POSITION STATEMENT: Testified during the discussion of HB 337.
BRIAN HANSON, P.E. - Civil and Mining Engineer; Board Member
Board of Architects, Engineers, and Land Surveyors (AELS Board)
Department of Commerce, Community, & Economic Development(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 337.
DALE NELSON, P.E. - Civil Engineer
Alaska Professional Design Council, LLC (APDC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 337.
BOYD BROWNFIELD, P.E. - Civil Engineer; Board Member
Board of Architects, Engineers, and Land Surveyors (AELS Board)
Department of Commerce, Community, & Economic Development(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 337.
HARLEY HIGHTOWER, Architect; Chair
Board of Architects, Engineers, and Land Surveyors (AELS Board)
Department of Commerce, Community, & Economic Development(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 337.
RICHARD HEIEREN, Land Surveyor; Board Member
Board of Architects, Engineers, and Land Surveyors (AELS Board)
Department of Commerce, Community, & Economic Development(DCCED)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 337.
BURT LENT, Landscape Architect; Board Member
Board of Architects, Engineers, and Land Surveyors (AELS Board)
Department of Commerce, Community, & Economic Development(DCCED)
Wasilla, Alaska
POSITION STATEMENT: Testified in support of Board of Architects,
Engineers, and Land Surveyors (AELS Board)
ACTION NARRATIVE
3:20:29 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:20 p.m. Representatives Miller,
Saddler, Thompson, Holmes, and Olson were present at the call to
order. Representative Johnson arrived as the meeting was in
progress.
HB 275-RETIREE BENEFITS:COLORECTAL/DRUG BENEFITS
3:20:40 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 275, "An Act requiring that a policy of group
health insurance offered by the state and certain local
governments include coverage for colorectal screening, allow
retirees to choose between brand-name and generic drug products,
and limit certain prescription drug benefit payments to an
amount based on the cost of the generic drug product."
3:21:03 PM
REPRESENTATIVE BOB LYNN, Alaska State Legislature stated that
this bill is about saving money and saving lives. He related a
scenario in which in which he filled a prescription at a Fred
Meyer pharmacy. The pharmacist talked to him about the cost of
brand name prescription drugs.
3:22:36 PM
MIKE SICA, Staff, Representative Bob Lynn, Alaska State
Legislature, on behalf of the sponsor, Representative Bob Lynn,
stated that this bill would affect about 14,000 public retirees
that are pre-Medicare age or under the age of 65.
3:22:48 PM
REPRESENTATIVE LYNN stated that the cost difference between
using brand name and generic drugs is staggering. He passed out
a list of drugs his pharmacist gave him. Everyone probably
takes one or more of these drugs, he said. He compared the cost
of brand name drugs to the generic drug for several drugs, as
follows: Zofran, $3,204 for brand name drug as compared to
$10.35 for generic; Effuxor, $1,375 for brand name drug as
compared to $23.40 for generic; Prilosec, $714.24 for brand name
drug versus $20.85 for generic; Glucophage, $91.68 for brand
name drug versus $1.32 for a 90-day prescription of the generic
drug. He characterized the price difference as amazing. Thus
the potential for savings is great. This bill proposes that
retired state employees must use the generic drug, although if
the retiree wanted to use the brand name the retiree could pay
the difference. He pointed out that the only exception would be
if a doctor or pharmacist designates the drug must be a brand
name or if a [generic] drug is not available. He turned to the
second portion of the bill, which relates to colorectal
screening and is a life-saving measure. Currently, retired
state employees under the ages of 65 are not eligible for
insurance coverage for colorectal screenings; however, Alaskans
who are incarcerated do receive the benefit of screening. He
concluded that HB 275 will save money and save lives.
3:25:46 PM
MR. SICA referred to page 1, which would add a new paragraph to
extend colorectal screening as a preventive measure and is
similar to a measure the committee considered last year. He
stated that this would extend health care coverage of colorectal
screening for cancer to a group of retirees, including public
retirees, the judicial system, the Teachers' Retirement System
(TRS), the public employees. About 14,000 people, not including
dependents would be affected by the bill, and this group
comprises the only major group in Alaska without this important
coverage. He stressed this as a lifesaving technique. He
pointed out that the Department of Corrections advises that
inmates also have colorectal screening using American Cancer
Society guidelines and inmates have coverage.
He turned to paragraph (14) of the bill, which would offset the
cost of colorectal screening by requiring the same group to use
generic rather than brand name drugs unless their doctor or
pharmacist recommends a brand name since some drugs, such as
cardiac or psychiatric medicines differ from the generic brand
or may not be available. If the retiree beneficiary wants to
use the brand name the individual must pay the difference.
3:28:15 PM
MR. SICA recalled the sponsor's earlier testimony. He
emphasized that the sponsor thought it would be useful to use
the savings to cover colorectal screening, which is a high
priority for many people. He pointed out that the sponsor has
worked with the American Cancer Society, the Retired Public
Employees' Association (RPEA), the AARP, and the administration,
including the Division of Retirement and Benefits. He hopes the
fiscal impact reductions will fund the cost of colorectal
screening.
MR. SICA referred to the three fiscal notes. He related that
the Division of Insurance submitted a zero fiscal note. He
referred to the 2012 Buck Consultants study dated January 18,
2012, which shows the cost of colorectal screening would be
$3.19 million and the savings resulting from using generic drugs
would be $3.23 million. The sponsor estimated the possible
costs savings at $40,000 in the first year. The Division of
Retirement and Benefits submitted a one-time cost of $26,000 to
change brochures. He referred to the Department of Health and
Social Services fiscal note just received, which is a little
complicated, but discussed Medicaid benefits for brand name
prescription drugs. He pointed out that in 2010 a Medicaid task
force recommends the state move more toward generic drugs.
3:30:19 PM
REPRESENTATIVE SADDLER asked for the cost for the colorectal
screening.
MR. SICA answered that individual cost for colonoscopy would
range from $1,800 to $6,000 depending on what the doctor
discovers. He suggested that the Division of Retirement and
Benefits used a cost of $3,000-4,000, but he was not certain.
3:31:43 PM
REPRESENTATIVE HOLMES answered whether the sponsor considered
applying generic drugs to current public employees.
MR. SICA answered that the sponsor was trying to take advantage
of the savings by using generic drugs and use it to cover the
colorectal screening. In 2010, the Division of Retirement and
Benefits' newsletter explained substantial savings by using the
voluntary use of generic drugs. The active state employees
saved about $414,000, whereas the retirees saved $7.6 million.
He surmised that the higher the copay the higher the generic
drug usage. He related his understanding that the retiree plan
has a difference of $8-4 dollars between using the brand name or
the generic drug.
CHAIR OLSON remarked that the contract negotiation for state
employees may prevent mandating it.
3:33:44 PM
MR. SICA provided a brief sectional analysis of the bill.
Section 1 paragraph (13) would extends the coverage to cover
colorectal screening to municipal and state employees and
officers who retire under the Public Employees' Retirement
System (PERS), the Judicial Retirement System, the Teachers'
Retirement System, or the former Elected Public Officers
Retirement System health coverage would include colorectal
screening, which is the one group not covered in Alaska.
MR. SICA related that Section 1, paragraph (14) would increase
the use of generic drugs by allowing the beneficiary to choose
between generic and brand name drugs unless the doctor or the
pharmacist indicates a brand name must be used or that it is not
available. He explained that Section 2 amends the definition of
generic drug as in AS 08.80.480. He read:
An equivalent drug product means a drug product that
has the same established name, active ingredients,
strength or concentration, dosage form and route of
administration. It is formulated to contain the same
amount of active ingredients in the same compendia or
other applicable standards for strength, quality,
purity, and identity, but may differ in
characteristics such as shape, scoring configuration,
packaging, excipients including colors, flavors,
preservatives, and expiration time;
3:35:25 PM
MR. SICA added that generic drugs are a lot cheaper. He
referred to handout in the members' packet that indicates
generic medicine is 70 to 90 percent less expensive.
3:35:42 PM
GARY MILLER, Vice President, Southeast Region, Retired Public
Employees of Alaska (RPEA) read a letter from Bob Doll, as
follows [original punctuation provided]:
The Retired Public Employees of Alaska (RPEA) is
gratified to offer its support for your draft bill, HB
275, to require that retiree medical insurance
coverage include colorectal screening and
colonoscopies. In fact, providing this coverage has
been a major objective of RPEA for several years. We
hope that the Alaska legislature will seize this
opportunity to offer coverage for both retirees and
the state. The bill will also include use of generic
prescription drugs, a goal that RPEA has pursued among
its members for many years in our continuing efforts
to increase the cost of health care.
Some of our members are concerned with the mechanism
to trade-off the cost of colonoscopies against the
savings from increased use of generic drugs. While we
applaud the effort to increase both health concepts,
the dollar values resulting will have an uncertain
impact on our members. Accordingly, we hope that the
final version of HB 275 will incorporate a sunset
provision of five years in order to ensure a future
review of the results it has produced. Buck
Consultants in their letter of November 29, 2007,
reported on their efforts to estimate return-on-
investment (ROI) for adding colonoscopy coverage to
the retiree plan. That letter concluded, in part,
"...we believe an explicit colon screening diagnostic
provision in the retiree plan will prove financially
positive over time (p.4)."
As long ago as August 29, 2005, the American Cancer
Society, Alaska Office, wrote to then Commissioner of
Administration ray Matiashowski reporting the results
of a study by the Lewin Group, a nationally recognized
health policy consulting firm located in Washington
D.C.
3:38:19 PM
MR. MILLER continued to read, as follows:
Based on the results of that study the Society
reported, "Our final conclusion is that there is no
economic reason for insurance plans not to cover the
full range of colorectal cancer screenings and there
are tremendous life-saving benefits for doing so."
The Congress has included in the Affordable Care Act
of 2010 coverage for colorectal cancer screenings.
For state retirees covered by Medicare, such
screenings are a major step forward in the effort to
combat this disease. Retirees under 65 years of age,
covered only by the state medical plan, are left to
combat this threat at their own expenses, an
inconsistency that we find difficult to understand.
While the Buck analysis is useful in supporting the
goals of HB 275, it is merely a statistical and
financial document. It does not include any
consideration for the number of fellow retirees -
among who will eventually be included all current
members of the Alaska State legislature - who will
contract colorectal cancer and whose prospects for
survival will be vastly enhanced if that cancer can be
detected early. While the financial rational for HB
275 should be enough to draw the support for the bill,
I hope that the legislature will not overlook the
important humanitarian dimension of a condition which
all of us may face at some time.
RPEA is proud to have the opportunity to endorse HB
375.
3:41:07 PM
PAUL W. DAVIS, MD, FAAFP, Medical Director, Colorectal Cancer
Screening Program, Alaska Native Medical Center (ANMC), said
that he is the medical director, Alaska Native Medical Center
Colorectal Cancer Screening Program, and works in the screening
program for the Yukon Kuskokwim Health Corporation. He has
worked in Dillingham, Seward, and many parts of the state
providing colonoscopies and colorectal cancer screening for
Alaska Native and other Alaskans. He stated that colon cancer
is a major killer, and the second highest cancer killer of
Americans, in particular, this cancer hits the Alaska Native
population hard. He said 1 of 19 Americans will be diagnosed
with colon cancer before they die, but the rate of 1 of 8-9
indicates twice the risk for the Alaska Native population. This
cancer is preventable, unlike lung cancer which cannot be
screened. This cancer can be found in a stage, similar to
cervical cancer or pap spears, but the test is even more cost
effective than pap smears. In 1960, cervical cancer killed more
women than any other cancer, but with screening women no longer
need to die of cervical cancer. He also said that colon cancer
is similar since people start to grow precancerous polyps in
their 40s and for the average population are at risk by age 50.
He said colorectal screening is lifesaving. The medical
community has known for some time that removing polyps helped
prevent colon cancer. However, two weeks ago in the New England
Journal of Medicine, Dr. Sidney Winawer, a gastroenterologist,
and his colleagues in Boston published a study in Boston
indicates more than a 50 percent decrease in death rate from
cancer is achieved by having a single colonoscopy to remove
polyps between the ages of 50-65. In 2007, former Governor
Frank Murkowski signed into law that any insurance company doing
business in Alaska is required to offer colon cancer screening.
Yet our own retirees between the ages of 50-65 are not given
that benefit, which is required by law. He recalled in 2007
saying, "Finally our Alaska State Governor was paying attention
to the Alaska gas pipeline that really needs to be scoped out."
3:44:59 PM
DR. DAVIS characterized the second part of the bill, which
addresses brand name drugs versus generic drugs as trading
something that has no benefit to retirees. He explained that
generic prescription drugs are as good and are equivalent to the
brand name prescription drugs. He offered his belief that
ordering brand name medicines drives up health care costs. He
stated that since health care dollars are limited these dollars
need to be spent wisely. He emphasized that colorectal cancer
screening is a wise use of health care dollars and spending them
on brand name drugs that have no proven benefit over generic
drugs is not a wise use of health care dollars. Even if the
tradeoff did not exist, colorectal cancer screening not only
saves lives and prevents colon cancer, but in the long run saves
the state a huge amount of money. He pointed out that it is far
less expensive to screen people and prevent diseases than it is
to take care of colon cancer when it develops. He said, "It is
an extremely expensive disease to take care of and patients
always suffer and die."
3:46:31 PM
MOLLY MCCAMMON stated that in 1997 she was a 45-year-old state
employee, when she was diagnosed with stage one colorectal
cancer following a colonoscopy paid for by her State of Alaska
health insurance coverage. She stated that she knew her
grandfather had died of colon cancer at the age of 45. A
grandfather is a second-degree relative and while that alone is
not significant in terms of colon cancer her doctor recommended
a colonoscopy due to some very minor symptoms. She expressed
her belief that she would have ignored the symptoms completely
if her insurance had not covered the procedure. She had the
procedure and the doctor discovered the tumor and surgically
removed it. Her colon cancer was discovered early enough to
surgically remove it and she did not even need radiation or
chemotherapy. However, now that she is 60 and a state retiree,
she discovered that screening colonoscopies are not covered by
her health insurance. She offered her belief that this is
absurd since preventing colorectal cancer and not just early
diagnosis should be a major reason for supporting routine
colorectal cancer screening. She emphasized that colorectal
cancer screening is the only effective test and early detection
is very treatable. She related as humans our tendency is to
postpone or even avoid expensive procedures like a colonoscopy
until either a tumor is too large to ignore or the cancer has
spread to other parts of the body. Treatment for colorectal
cancer has improved significantly over the past few years, which
has resulted in more than a million colorectal cancer survivors
in the U.S. She said, "I really consider myself fortunate to be
one of them and I know it's because I was able to have my
colonoscopy covered by health insurance. I urge you to support
this legislation so that there will be more survivors like me.
Thank you very much."
3:48:47 PM
PATRICK LUBY, Advocacy Director, AARP Alaska, said that AARP is
in strong support of HB 275. Medicare now covers all colorectal
cancer screening without any copay or deductibles. Through
research the federal government has discovered that colorectal
cancer screening saves lives and money. Early detection and
treatment make good economic sense and good health preventive
policy. Our active public employees and inmates in the
correctional system can have colorectal cancer screening
coverage. He stated that AARP thinks it makes sense for PERS
and TRS retirees too young for Medicare to also have health care
coverage. He concluded by saying that AARP urges members to
support HB 275.
3:50:04 PM
EMILY NENON, Alaska Government Relations Director, American
Cancer Society Action Network, stated that she has worked on
this issue for some time and wrote her first letter on this
issue on behalf of the American Cancer Society in 2005. She
said she hopes this issue will get resolved before she is ready
to retire. In 2006, the legislature passed House Bill 393,
which required all state-regulated insurance plans to cover
colon cancer screening according to the American Cancer Society
guidelines. At the time, the society found a number of other
plans not covered by the state added colorectal cancer screening
coverage, such as Providence Health System, which is self-
insured. In 2011, Medicare changed rules its rules to cover 100
percent of the colorectal cancer screening without any copay.
She highlighted that remaining are those retirees ages 50-64.
She recalled previous testimony that colonoscopies are
expensive, which is true. However, colonoscopies are
recommended once every ten years and if averaged out become
cheaper than mammography screening. She highlighted that
colorectal cancer is the second leading cause of cancer deaths
in Alaska and across the nation. She emphasized that it is true
that Alaska Natives have the highest incidence of colorectal
cancer of any population group in the nation. She pointed out
that with early detection, the five-year survival rate from
colon cancer is over 90 percent, but if colorectal cancer is not
caught until it reaches organs, when symptoms are most likely to
occur, the five-year survival rated drops to 11 percent. She
estimated that with regular screening half of colorectal cancer
deaths could be prevented. She urged support for HB 275.
3:53:05 PM
RICHARD BENEVIEDES stated that most of the points he raised at
the hearing last April are applicable points. He offered the
reason he is not currently in Juneau is since he had a
colonoscopy as part of routine physical in 2008. The
colonoscopy revealed that he had stage four colon cancer that
had spread to his liver. His doctor told him that a person with
stage four colon cancer has a life expectancy of two years. He
offered his belief if he had not had the colorectal cancer
screening in 2008 that he probably would not have survived
without this detection. He has had two surgeries and radiation,
plus five months of IV chemotherapy and three months of oral
chemotherapy as part of his treatment. He continues to work to
rebuild his core strength. He characterized this bill as an
incredibly important bill. He said once he becomes a retiree he
would like to have another colonoscopy. He said he thinks that
it is important for retirees over 50 to get this coverage. He
also said that this bill makes sense and will save thousands of
dollars by detecting colon cancer before it becomes more
serious. He said, "Even though I have this great insurance, I
pay at least $10,000 out of pocket every year for my
percentage...for treatments and drugs. He implored members to
pass this bill. He pointed out that somewhere right now a
retiree has colon cancer, but has no idea they have colon
cancer. He stated that he would like to help that person.
3:56:29 PM
DAVID OLEWILER stated that he is a 56-year-old PERS retiree. He
worked for the Municipality of Anchorage for 31 years. He
related that five years ago he received his first colonoscopy
and a noncancerous polyp was removed. This year his doctor
recommended a follow-up colonoscopy; however, Alaska Care
excluded this retiree health care benefit in 2010. The cost of
his colonoscopy was also estimated between $1,800 and $6,000,
depending on the results of the procedure; however, he is not
able to budget 100 percent of the costs out of pocket. Without
insurance benefits he must delay the colonoscopy from one to two
years to budget for it. Additionally, most colon cancers do not
exhibit symptoms until latter stages of the disease, which makes
him extremely uneasy about delaying the test. He stressed that
with every passing month he feels as though he is rolling the
dice with his own health. He pointed out that he has nine more
years before Medicare will pay for his colonoscopy. All of the
information provided in members' packets documents the life-
saving benefits of colorectal cancer screening and others have
testified to that end. Each medical document he has read urges
Americans over the age of 50 to have a colorectal cancer
screening prior on a scheduled basis. Every article urges
screenings before any symptoms arise. He listed his sources as
the American Cancer Society, the American College of Physicians,
FightColorectalCancer.org, and Colon Cancer Alliance. He
characterized HB 275 as an important piece of legislation. This
bill would restore a component for a life-saving procedure along
with a mechanism to recover the costs of the test. He
emphasized that this bill is a win-win for the state and for
retirees. He concluded by saying, "It's also the right thing to
do." He thanked Representative Lynn and Gara, and Mr. Sica.
3:59:53 PM
CHAIR OLSON left public testimony open.
[HB 275 was held over.]
HB 337-BD OF ARCHITECTS, ENGINEERS, SURVEYORS
4:00:05 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 337, "An Act relating to the Board of
Registration for Architects, Engineers, and Land Surveyors and
to the Department of Commerce, Community, and Economic
Development."
4:00:39 PM
REPRESENTATIVE THOMPSON stated that this bill would add a full-
time investigator assigned to the Board of Architects,
Engineers, and Land Surveyors (AELS).
4:01:22 PM
LYNETTE BERGH, Staff, Representative Steve Thompson, Alaska
State Legislature, Alaska State Legislature, stated that HB 337
will revise the statutes to increase the part-time investigator
to a full-time investigator position. Currently, the AELS
shares one part-time investigator with five other boards,
including construction contractors, home inspectors, electrical
administrators, mechanical administrators, and storage tank
workers. The investigator's oversight covers 20,000 licensees,
of which 5,600 licensees relate the AELS board. Further, a new
regulation will take effect in the next 30 days, which will add
10 additional engineering disciplines will be added to the AELS
Board. The branches of engineering the AELS board will oversee
will increase from 6 to 16 branches, including structural,
environmental, nuclear, and industrial engineering. This will
add to the already heavy work load the department's investigator
covers. She stressed the necessity of expanding the engineering
disciplines for the safety of Alaskans, but it will add to an
already heavy workload of the board's part-time investigator.
Additionally, each of the six boards the investigator oversees
has as an increasing number of licensees.
4:03:58 PM
MS. BERGH said the part-time investigator continually faces
pressure to spend less time on the AELS board and more time on
the other boards under his purview. Further, this sole
investigator must maintain knowledge of statutes and regulations
for all six boards. Clearly, the lack of a full-time
investigator for the board could potentially reduce its
effectiveness in carrying out charges required by the state
statutes and regulations. One unintended consequence of
overloading the investigator could result in a failure to
fulfill to the fullest extent the state and regulatory charges.
She concluded that this will put the state at risk and may
inadvertently create a hazard to public health, safety, and
welfare. She highlighted that HB 337 will ensure that the AELS
board can continue the proper oversight of the AELS board's
licensees, while remaining in compliance with all state
regulations and statutes. She predicted that hiring a full-time
investigator will help the AELS board maintain its reputation
and integrity with respect to the professions it oversees.
4:05:37 PM
REPRESENTATIVE SADDLER questioned the need to expand engineering
specialties.
MS. BERGH answered that specific engineering branches need to
have some guidance to ensure public health, safety, and welfare.
She explained that at the last board meeting the AELS approved
added professions and branches; 10 different professions.
REPRESENTATIVE SADDLER asked whether one investigator will be
sufficient to cover the additional licensees.
4:06:50 PM
MS. BERGH answered that one investigator would be amenable. She
pointed out that the AELS board could revisit the matter at
future board meetings.
4:07:26 PM
REPRESENTATIVE SADDLER asked whether the current investigator
would resign from the other boards.
MS. BERGH offered to her knowledge that the investigator would
do so. She deferred to the department to elaborate.
4:08:00 PM
DON HABEGER, Director, Division of Corporations, Business, and
Professional Licensing, Department of Commerce, Community, &
Economic Development (DCCED), introduced himself.
4:08:48 PM
REPRESENTATIVE SADDLER asked the current investigator serves
five other boards and HB 337 passes if this investigator would
be assigned as the full-time investigator. He further asked if
someone else would be hired to cover the additional five boards.
MR. HABEGER responded that the division would decide if current
investigator is the appropriate choice for this board, and if
so, he would be transferred to the new position control number
(PCN). The division would have a vacant position and would do
so through the job announcement network typically used.
4:09:34 PM
REPRESENTATIVE SADDLER asked if the division has any indication
of whether the current investigator is interested in serving.
MR. HABEGER said the division would encourage the investigator
to consider the full-time position.
4:10:00 PM
REPRESENTATIVE SADDLER asked if the division anticipates an
increase in the number of investigations due to the engineering
branch expansion.
MR. HABEGER offered his belief that investigations would
increases since the workload has increased over time. He
explained that recent legislative audits discussed investigative
timeliness. He reported that the 1,100 complaints arose in FY
11, and the investigators indicate a good case load is 35-40
cases. He anticipated that expanding this position to a full-
time position would allow the board and division to address the
issue more cases rather than raising the bar on investigations,
such as only addressing the cases with the highest health and
safety issues.
4:11:16 PM
REPRESENTATIVE SADDLER questioned whether one investigator is
sufficient and if licensees will agree to bear the cost.
MR. HABEGER recalled the AELS Board underwent a fee increase in
fall and the division picked a price point and experienced
significant kickback. He pointed out the difficulty in
predicting an investigation's outcome, whether it will result in
a consent agreement and voluntary compliance or due to
unresolved legitimate issues will require a hearing process or
be resolved by the courts. Thus investigative outcomes are
unpredictable. He acknowledged that at some point licensees
resist any cost increases. He described this process as
reaching a balance and he was not certain.
4:12:40 PM
ERIC ERICKSEN, P.E., Electrical Engineer; Member, Board of
Architects, Engineers, and Land Surveyors (AELS Board) testified
in support of HB 337. He stated that he is an Alaska resident,
an electrical engineer, and has served on the AELS board for
three years. During this time, he said he has had the
opportunity gain knowledge on the investigative process and the
growing concern over increases in investigations and the
investigator's ability to conduct them. He reiterated that when
an investigator cannot get through all the cases, that cases are
prioritized. This results in cases that do not get reviewed.
He referred to position papers in members' packets, in
particular, from the Chair of the AELS board. He agreed with
his recommendations. He concluded with his support for HB 337
and the health and safety of the public.
4:14:21 PM
REPRESENTATIVE SADDLER related his understanding that the
licensing fees will be adjusted upward to cover the additional
fees for the additional half-time position. He inquired as to
whether the engineering profession was willing to cover the
cost.
MR. ERICKSEN answered that the fees will be evaluated. He was
unsure of whether the fees would change, but if they do he would
personally support the change. He offered his belief that the
professional license fees are typically lower than many other
states. He predicted an increase in fees would be supported.
4:15:16 PM
MR. HABEGER stated that state law requires the division to
analyze the program to determine if the revenue stream meets the
board's expenses. If the revenue does not meet the next
biennial license cycle, which is a two-year cycle, the division
must adjust the fees and pass the cost on to the professions,
which in this instance are architects, engineers, land
surveyors, and landscape architects. He offered his belief that
the fees would likely have to adjust upward to cover the
investigator position.
4:16:24 PM
REPRESENTATIVE JOHNSON recalled complaints about the Real Estate
Licensing Board since their fees doubled when the board expanded
its powers. He questioned whether any checks and balances exist
since government will grow to fill the void. He expressed
concern that there do not seem to be controls on the boards. He
noted he was making a general statement. He pointed again to
the real estate licensing fees which increased considerably. He
said he has talked to real estate agents that indicate the board
is doing things the agents do not really want them to do, but
they must pay for it. He reiterated his question about the
current checks and balances to ensure that the boards do not get
out of control and pass through to their membership.
MR. HABEGER responded that the law requires him to pass through
the costs. He thinks the check and balance is the public
comment process, which worked relatively effectively with
respect to the real estate fee.
4:18:40 PM
REPRESENTATIVE JOHNSON asked whether the statute should be
changed and deposit license fees into the general fund, but to
figure a better way to handle this process.
MR. HABEGER responded with a comment. One of the things he has
heard given Real Estate Commission fee issues is how to nab
perpetrators, or those that do not want to abide by statutes and
regulations. He said he does not see a great mechanism to do
this, but he views this as a great discussion point. He
recapped that the short answer is the discussion needs to
continue.
4:20:15 PM
REPRESENTATIVE JOHNSON offered his view that professionals are
doing their jobs and it is tough enough to do business in the
state. He said he wants to protect entrepreneurs and he would
like to hold that discussion. He commented that government will
expand to fill the void and if ten investigators were hired they
would find work to accomplish. He related that he would like to
be cautious about pass through of costs to membership without
checks and balances. He wanted to be sure that the legislature
is not saddling businesses with more state bureaucracy.
4:21:48 PM
CHAIR OLSON related his understanding with respect to real
estate issues that two large ongoing investigations expended a
substantial amount. He thought one investigation went off in
different direction and is still ongoing.
MR. HABEGER offered his belief that the case in question is
currently in Superior Court.
CHAIR OLSON offered that the attorney fees were substantial.
MR. HABEGER answered yes, noting the expenses are charged back
to licensees.
4:23:07 PM
REPRESENTATIVE SADDLER referred to page 2, lines 1-2, which
read, "(2) shall, at the request of the board, conduct
investigations...." He asked whether an investigator can
conduct investigations in opposition to the will of the board.
MR. HABEGER responded that the division's centralized statutes
allow the division to also do some work, such as conduct
investigations. He offered his belief that this works in tandem
with the board. He said the board can direct the investigator,
but the department would have a duty to investigate a complaint
in violation to the AELS statutes and regulations.
4:24:32 PM
REPRESENTATIVE SADDLER asked for clarification that the board or
department can direct an investigation. He questioned whether
the board could block an investigation.
MR. HABEGER answered that it has not happened.
4:24:52 PM
COLIN MAYNARD, Structural Engineer; Member, Alaska Professional
Design Council (APDC) stated he has served several terms on the
board of the APDC, an organization that represents architects,
engineers, landscape architects, interior designers, and land
surveyors. He highlighted one of his roles as a board member
was chair of the AELS task force to assess industry on board
actions. He pointed out that one thing the APDC task force
found the AELS board did not conduct enough investigations, that
it was taking too long to conduct the investigation, and some
activity was ignored since it fell out of the most important
level or the attorney general's office declined prosecution. He
reiterated that the industry supports the additional
investigator and will pay additional fees so long as the
investigations happen. He commented that AELS license renewal
fees have gone from $125 to $175 and back to $125. He offered
his belief that the fewer investigations will happen during the
biennial timeframe and more are conducted in the next. Thus the
fluctuations in the investigations affect license fees.
Additionally the division has suffered budget cuts even though
the licensure fees pay for the costs of the division. He said,
"We're willing to pay what it takes to get the job done."
4:27:07 PM
REPRESENTATIVE JOHNSON responded that is a dangerous statement.
He asked for clarification on whether the AELS board is willing
to pay anything to get the job done.
MR. MAYNARD said, "Within reason." He also said he has found
the AELS board is comprised of licensees and one public member,
who have worked with the APDC to ensure public safety.
4:27:41 PM
REPRESENTATIVE JOHNSON remarked that his concerns are bigger
than this one board.
MR. MAYNARD suggested that the legislature could increase the
fines. He pointed out that the attorney general's office has
larger cases to prosecute so the AELS cases languish. Thus a
larger civil penalty could help.
CHAIR OLSON offered to work on the larger issue during the
interim.
4:28:28 PM
BRIAN HANSON, Civil and Mining Engineer; Member, Board of
Architects, Engineers, and Land Surveyors (AELS Board),
testified in support of HB 337. He said the investigator has a
significant backlog of cases, noting the sheer number of cases
the investigator currently has plus the one awaiting review.
The investigator has approximately 50 open cases, with about
double the amount for review that is a significant backlog. He
covers five other boards so the investigator's travel is
limited. Current the investigator focuses time on cases in the
Anchorage and Matanuska-Susitna area, with an occasional trip to
the Kenai Peninsula Borough and Fairbanks. He surmised that
half the state receives coverage with a half-time investigator.
He pointed out that lots more engineering and other design work
is happening throughout the state. Additionally, the board
investigator cannot use training opportunities offered
nationally as well as network, due to time and travel
constraints. He offered his belief that adding this half-time
position will help AELS meet its responsibilities by protecting
the public's health, safety, and welfare. He was not willing to
say the registrants are willing to pay whatever it costs but the
additional cost would result in a fee increase of $10 per
registrant per year, and not $200 per registrant biennial
license fee. He stated that he is in support of HB 337.
4:31:42 PM
DALE NELSON, Civil Engineer; Legislative Liaison Committee,
Alaska Professional Design Council, LLC (APDC), stated he is a
professional civil engineer and has been registered in the state
since 1973. He serves as the chair of the legislative liaison
committee for the Alaska Professional Design Council, LLC
(APDC). He related that Mr. Maynard is also an active member of
APDC, which is a professional organization comprised of member
societies including The Alaska Society of Professional Engineers
(ASPE), the Alaska Society of Professional Land Surveyors, the
American Congress of Surveying and Mapping - Alaska Section, the
American Institute of Architects - Alaska Chapter, the American
Society of Civil Engineers - Alaska Section, the American
Society of Landscape Architects - Alaska Chapter, the American
Council of Engineering Companies of Alaska, and the American
Society of Interior Designers, and the Structural Engineer
Association. This organization has a membership of over 1,500
members representing over 5,000 licensed professionals in the
state. The APDC LLC in very much in favor of this bill and
views it as a move in right direction as it will increase the
investigator of the design professionals to a fulltime position.
4:34:08 PM
BOYD BROWNFIELD, Civil Engineer; Member, Board of Architects,
Engineers, and Land Surveyors (AELS Board) stated that he has
been a registered civil engineer in Alaska since 1975. He has
most recently served on the AELS Board for eight years. He
supports the bill. He has served as the AELS Board chair for
two years and as vice chair for four years. When he began
service in 2004, the board had two fulltime investigators, but
due to workload the investigator was increased to two and one-
half investigator positions. Although the workload has
increased, the investigator position has been reduced to one
part-time investigator position. The investigator position has
effectively been reduced to 15 percent of one investigator since
the position's responsibility is spread over five boards. He
offered his belief that the AELS's investigator is one of the
most dedicated and efficient investigators in the division. The
investigator serves the third largest board, with the Board of
Nursing, Barbers & Hairdressers as larger boards, but the AELS
Board is larger than the Medical Board, yet the medical board
has a designated investigator. He emphasized that the AELS
Board needs the investigator position since the board serves
four distinct professions and the six engineering branches will
soon to expand to 15 branches. He further emphasized the need
to have an investigator solely assigned to the AELS Board. He
urged members to support the bill. He referred to a letter from
Mr. Harley Hightower, AELS Board chair in members' packets.
This letter covers the important issues surrounding the need for
a full-time investigator. He offered his support for HB 337.
4:37:44 PM
HARLEY HIGHTOWER, Architect; Chair, Board of Architects,
Engineers and Land Surveyor (AELS Board) stated that he has been
registered as an architect in the state since 1964. He has
served as a principal architect since 1974. He currently serves
as AELS Board chair. He agreed with the prior testimony. He
spoke in support of HB 337 for numerous reasons. He related
that it is difficult for an inspector to stay current on
statutes for one board, but very difficult to cover five boards.
He pointed out that the AELS Board serves 5,600 registrants and
580 corporations. In 2008 and 2009 the AELS Board added 220 new
licenses each year. In 2010 and 2011, the board increased by
350 new licensees each year. He anticipated the licensees to
grow due to expansion of engineering disciplines. He
acknowledged that Alaska is a small population state and the
investigator likely covers about 15 percent of the state. The
AELS Board cannot adequately ensure public health, safety and
welfare without investigator support. He highlighted that this
translates into liability exposure to the state. The costs will
be covered by registration fees. He has been registered in
other states and finds the licensure reasonable fees in Alaska,
probably falling in the low average of the fee structure.
4:40:49 PM
RICHARD HEIEREN, Land Surveyor; Member, Board of Architects,
Engineers, and Land Surveyors (AELS Board), stated that he is
speaking in support of HB 337. He has served as an AELS Board
member since 2005 and also endorses previous comments. He added
that a perception of lack of enforcement exists within the
professions. He noted that in vehicle enforcement writing one
speeding violation may impact the number of speeders. He
suggested that HB 337 will go long way in alleviating the
perception of a lack of enforcement. He offered his belief that
the cost is minimal, about $8-10 per licensee per year. He did
not think that was too much money to protect the professions,
but public health, safety, and welfare. He asked members to
please support HB 337.
4:43:25 PM
REPRESENTATIVE THOMPSON said that the committee heard from Mr.
Hightower that the lack of a full-time investigator has limited
the cases. He asked whether any instances of this have happened
in Fairbanks.
MR. HEIEREN said he has heard through the grapevine from some
who were cited that enforcement was laughable. He did not want
to disparage the enforcement; however, the perception is a low
level of enforcement occurs.
4:44:44 PM
BURT LENT, Landscape Architect Member, Board of Architects,
Engineers, and Land Surveyors (AELS Board), stated that he is
the sole landscape architect member. He has been serving on the
board for 6.5 years and has been practicing landscape
architecture since 1975. The profession was initially licensed
in the state in 2000. The landscape architects now have 12
years as registrants and more people are coming along. He
pointed out that licensure requires examination in arctic
engineering or Northern Design, which is unique and excellent
way to introduce people to problems in Alaska. He explained
that Alaska has lots of major land and environmental issues in
the design work. He emphasized the importance for landscape
architect's licensure. He highlighted that the number of
licensees is small in number, but they cover a lot of territory.
He related that it is important to have good licensure. He has
had concerns about enforcement since the investigator is being
spread so thin. He expressed concern that some work is not
done. He further expressed concern in terms of enforcement for
all building professions. He pointed out that the state needs
to ensure that the professions are not subject to those
practicing without a license, false advertising construction and
other issues that investigators are familiar with so it is
important to fully staff the position. He offered his support
for HB 337 and urged members to approve the bill.
4:48:42 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 337.
CHAIR OLSON commented that it's tough to argue with professions
who want to pay more for licensing fees to self-police.
4:49:16 PM
REPRESENTATIVE JOHNSON moved to report HB 337 out of committee
with individual recommendations and the accompanying fiscal
note. There being no objection, HB 337 was reported out of the
House Labor and Commerce Standing Committee.
4:49:46 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:49 p.m.