Legislature(1999 - 2000)
04/19/2000 09:21 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 19, 2000
9:21 A.M.
TAPES
SFC-00 # 99, Side A and Side B
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:21 A.M.
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,
Senator Al Adams, Senator Loren Leman, Senator Gary Wilken,
Senator Leman, Senator Donley, Senator Phillips, Senator
Green.
Also Attending: SENATOR HALFORD; REPRESENTATIVE CON BUNDE;
REPRESENATIVE NORMAN ROKEBERG; PATTI SWENSON, Staff,
Representative Bunde; DAN EASTON, Director, Division of
Facility Construction & Operation, Department of
Environmental Conservation.
Attending via Teleconference: OCIE ADAMS, Matsu; VALEN
BAIR, Matsu; BILL GREEN, Anchorage; ANDY WARWICK, Clean
Water Fund/Drinking Water Fund, Department of Environmental
Conservation, Fairbanks; MIKE BURNS, Program Manager,
Municipal Matching Grants, Division of Facility
Construction & Operation, Department of Environmental
Conservation, Anchorage.
SUMMARY INFORMATION
SB 308-MARINE PASSENGER VESSELS
SB 308 was SCHEDULED but not HEARD.
HB 133-SERVICE AREAS: VOTER APPROVAL/TAX ZONES
SCS CS HB 133 (CRA) was reported out of Committee with a
"do pass" recommendation and with fiscal notes by
Department of Community and Regional Affairs dated 3/31/00
and Department of Community & Economic Development dated
3/7/00.
HB 211-HEALTH CARE INSURANCE: MANAGED CARE PLANS
SCS CS HB 211 (FIN) was reported out of Committee with a
"no recommendation" and with a fiscal note by the
Department of Community & Economic Development dated
3/07/00.
HB 304-CLEAN WATER FUND/DRINKING WATER FUND
SCS CS HB 304 (FIN) was reported out of Committee with
"individual recommendations" and with fiscal notes by
Department of Environmental Conservation dated 4/10/00 and
Department of Revenue dated 12/22/99.
SENATE CS FOR CS FOR HOUSE BILL NO. 133(CRA) am S
"An Act relating to municipal service areas and
providing for voter approval of the formation,
alteration, or abolishment of certain service areas."
REPRESENTATIVE CON BUNDE stated that Alaska's Constitution
provides for maximum local self-government and for the
creation, alteration, or abolishment of service areas
subject to the provisions of law. He pointed out that at
present time, Alaska has approximately 200 service areas.
In those areas, the local residents are responsible to
assess themselves to pay for particular services, such as
snow plowing and road maintenance.
HB 133 would amend AS.29.35.450 to support local control by
clearly identifying who should vote on the abolishment and
alteration of a service area under three scenarios:
· Abolishment of a service area and subject to
approval by the majority of the voters residing
in that service area.
· Abolishment and replacement of a service area.
That action must be approved by a majority of
voters inside an existing service area and by a
majority of the voters residing in the proposed
service area but outside the existing service
area.
· Alteration of a service area or combining it with
another service area. That action must be
approved, separately, by a majority of the voters
who vote on the question and who reside in each
of the service areas or in a proposed service
area affected by the proposal.
Representative Bunde advised that the proposed legislation
would determine a long time debate about who is entitled to
vote during the creation, alteration or abolishment of a
service area.
Senator Phillips asked the changes which were made in the
Senate Community and Regional Affairs (CRA) version.
Representative Bunde replied that the changes were to fire
service concerns.
PATTI SWENSON, Staff, Representative Bunde, pointed out
that version "G" was the one submitted by the CRA
Committee.
Co-Chair Torgerson referenced Page 2, Subsection (d) and
asked who it would affect.
Ms. Swenson responded that both the Kenai and Mat-Su
Boroughs would be affected.
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Co-Chair Torgerson asked why 1 Class city populations were
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included, when the reference was given to 2 Class cities.
Ms. Swenson explained that the population numbers were
indicated on the web and are the numbers that the
legislation was based upon in working with Tamara Cook,
Legislative Legal Counsel.
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Co-Chair Torgerson asked if it was the intent to include 1
Class cities in the population trigger.
Ms. Swenson advised that only the Kenai Borough had been
included, not all of the greater Kenai area. She mentioned
that there had been discussion with Tam Cook regarding
special and mobile legislation. She believed that the
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populations in the 2 Class Boroughs would fit.
Co-Chair Torgerson noted his concern with service areas
"gobbling up" any land that they want, as long as they do
not increase their area by more than 10%. He stressed such
an action could occur without a vote.
Representative Bunde replied that could apply only to a
fire service area.
Following a brief at-ease, Co-Chair Torgerson admitted his
confusion with the language on Page 2, Lines 19-22. He
advised that it had been explained to his satisfaction.
OCIE ADAMS, (Testified via Teleconference), Matsu, spoke in
support of the legislation. He voiced his appreciation for
the thought and energy that went into it.
VALEN BAIR, (Testified via Teleconference), Matsu, noted
support for the proposed legislation.
BILL GREEN, (Testified via Teleconference), Anchorage,
testified that the Anchorage Charter provides that no
changes can be made to service areas without voter
approval. HB 133 reduces the maximum local self government
dictated by the Constitution and repeals significant
portions of the Anchorage voter approved charter in the
process. He noted that it would restrict the "home rule"
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and in the process and would make exceptions for 2 Class
Boroughs. That would make it inconsistent with the State
Constitution.
The proposed legislation would take away the voters ability
in Anchorage to govern themselves. He noted that the bill
was not limited to road service areas which are unique to
Anchorage. The charter would prohibit the development of
new subdivisions where an owner might want to join. He
emphasized that the bill was submitted at the request of
the Fairbanks Borough and could substantially disadvantage
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Anchorage's economy while at the same time exempting 2
Class Boroughs.
Representative Bunde responded that there are fifty-three
limitations to the "home rule" power at this point. He
commented that the legislation would guarantee that the
local residents maintain their rights.
Co-Chair Parnell MOVED to report SCS CS HB 133(CRA) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
SCS CS HB 133 (CRA) was reported out of Committee with a
"do pass" recommendation and with fiscal notes by
Department of Community and Regional Affairs dated 3/31/00
and Department of Community & Economic Development dated
3/7/00.
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 211(FIN) am
"An Act relating to regulation of managed care
insurance plans; amending Rule 602, Alaska Rules of
Appellate Procedure; and providing for an effective
date."
REPRESENTATIVE ROKEBERG stated that patients need assurance
that the quality of their health care will not be
compromised as managed care expands. He noted that the
legislation would provide a reasonable standard of health
care. It would establish requirements for contracts
between managed care entitles and their health care
providers, patients and their group managed care plans,
health care insurers and their insured and would provide
patients with the following:
· Access to emergency room services;
· Availability of medical services or adequate
referral options;
· Full disclosure of treatment options;
· Choice of health care providers, including
specialists;
· Clear descriptions of covered items and services,
benefits, procedures, compensation methods,
availability (and exclusions) of prescription
medications and the availability of translation
or interpreter services;
· A point of service plan option;
· Follow-through of pre-approved payment;
· Quick utilization review decisions;
· Opportunity for appeals of utilization review
decisions;
· Added protection from denial, reduction; or
termination of payment for health care services.
In addition, the legislation will give health care
providers the freedom to share all testing and treatment
options with their patients, and would let them advocate
for their patients without the risk of being penalized or
terminated by the managed care entity they contract with.
The bill would prohibit contracts between managed care
entities and health care providers from financial
incentives for providers to withhold medically necessary
services.
Representative Rokeberg stressed that HB 211 was necessary
to ensure continued quality health care in the face of a
growing managed care industry. He urged the Committee's
support of the legislation.
Co-Chair Torgerson commented that Representative Rokeberg
had requested that Amendment #1, 1-LS0472/X.1, Ford,
4/15/00, not be offered at this time. [Copy on File].
Co-Chair Parnell MOVED to adopt Amendment #2. [Copy on
File].
Representative Rokeberg explained the amendment. He noted
that the first portion of the amendment was technical.
Subsection © clarifies concerns voiced by Legislative Legal
and would make the language more understandable to the
average person.
Co-Chair Parnell noted an important limitation allowing
persons to communicate privately for the purpose of health
care services.
There being NO OBJECTION, Amendment #2 was adopted.
Senator Green indicated a "conflict of interest" with the
legislation because she has associations with the insurance
industry. She referenced the definition of medical
necessity and asked if there was a distingushment between
medical necessity and medical treatment.
Representative Rokeberg acknowledged that concern has been
debated. He stated, sometimes it is better to "not" define
something for matters of flexibility. The bill will let
common law define medical necessity.
Senator Green asked if there was any language in the
legislation which might rewrite the tort reform bill.
Representative Rokeberg replied the liability section was
different, creating a "new cause of action". He noted the
concern had been substantially worked, keeping in mind the
State Constitution private situation.
Senator Adams MOVED to report SCS COMMITTEE SUBSTITUTE HB
211 (FIN) out of Committee with individual recommendations
and with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
SCS COMMITTEE SUBSTITUTE HB 211 (FIN) was reported out of
Committee with a "no recommendation" and with a fiscal note
by the Department of Community & Economic Development dated
3/07/00.
SENATE CS FOR CS FOR HOUSE BILL NO. 304(RES)
"An Act relating to issuance and sale of revenue bonds
to fund drinking water projects, to the Alaska clean
water fund, to creation of an Alaska clean water
administrative fund and an Alaska drinking water
administrative fund, to fees to be charged in
connection with loans made from the Alaska clean water
fund and the Alaska drinking water fund, and to
clarification of the character and permissible uses of
the Alaska drinking water fund; amending Rule 3,
Alaska Rules of Civil Procedure; and providing for an
effective date."
DAN EASTON, Director, Division of Facility Construction &
Operation, Department of Environmental Conservation,
explained that HB 304 addresses the low interest loan
program. Low interest State loans from the Alaska Drinking
Water Fund and the Alaska Clean Water Fund offer
municipalities the means to build drinking water and sewage
facility projects. The bill would allow the State to use
revenue bonds to capitalize the Alaska Drinking Water Fund.
He continued, both the Drinking Water and Clean Water funds
are capitalized by annual federal grants that require a 20%
State match. Bond revenues will help provide the State
match for federal drinking water project money. However,
the State is only authorized to sell bonds for the Clean
Water Fund. It would make sense to extend the leveraging
power to the Drinking Water Fund.
As with existing law, the bill would require the State Bond
Committee to conduct its activities in the best interests
of the State, in a manner that would accomplish the most
advantageous sale of the bonds. The legislation would
provide for a new, self-supporting structure to pay for the
costs of operating these important loan programs.
Mr. Easton advised that the bill had been amended in the
Senate Resources Committee to stipulate how to charge
interest to private and public utilities.
Co-Chair Torgerson asked if the Department was supportive
of the amendment adopted in the Senate Resources Committee.
Mr. Easton replied that the Department could administer the
bill either way. It becomes a question of whether the
State wants to "level the playing field" between a
privately owned utility and the public owned utilities.
The amendment does not address that concern. He noted that
the agency does not have a position on the amendment.
Senator P. Kelly suggested that the private utility owners
would have to pay the higher costs, which would need to be
passed on to the customer. He recommended deleting the
previous adopted amendment.
Senator Adams asked if that language was the only
difference between the two versions. He recommended
adopting the previous version of the bill.
Mr. Easton stated that was the only change from the House
version.
Tape: SFC - 00 #99, Side B 10:24 am
Senator Green questioned if there would be an advantage to
privately owned, publicly regulated utilities.
Senator P. Kelly noted that the Senate Resources Committee
version was attempting to address information proposed by
the State Bond Council. Whether private or public, there
would be no accrual; costs can not accrue to the utility
owner. The costs will be passed on. The only people
affected would be the ratepayers. He agreed that the
playing field would not be leveled between utility owners.
Senator Leman commented that if the State allows private
utilities to borrow at similar rates as the municipalities,
they could make less money available for others needs. He
asked if that would be a danger.
Mr. Easton replied that the funds have done well. It is
expected that they will continue to grow and that "sharing
the pie" would not be a problem.
Senator Green addressed the investment, borrowing and
funding choices and how that would affect the whole.
Senator P. Kelly mentioned that the party with the
advantage or disadvantage would be the ratepayer. It has
been clarified that the utility owner does not receive
either the advantage or the disadvantage accrued.
Senator Leman stated that any utility would want an
"advantage" in order to keep their customers satisfied. It
would be to their advantage to finance less costly money.
He reiterated that the utilities should have a level
playing field in the State of Alaska.
Senator P. Kelly MOVED a conceptual Amendment #1 to the "M"
version of the legislation, Page 7, Lines 21-22. The
language would delete the underlined words and insert
"interest rates for each class of borrowers shall be
established as the same percentage of market rate index as
appropriate to that class of borrowers". He noted that
language would need to be changed on Page 11, Lines 10-11,
following "fund".
Senator Green OBJECTED.
Senator Phillips asked the concern.
Senator P. Kelly replied that the issue is that language
would provide higher rates of interest to private
regulating utilities. All those rates would be passed on
to customers. He believed that the revised language would
level the playing field.
Senator Phillips asked if the loan program was available to
both the private and the public utility companies.
Senator P. Kelly replied it was.
SENATOR HALFORD explained that the language would open a
new program to private utilities. He noted that the
concern is that private utilities reduce the total amount
money available for the public utilities. Opening to a new
class would not be a beneficial action. Private utilities
save under the version of the bill before the Committee,
whereas, the amendment could jeopardize that fund.
Senator P. Kelly pointed out that Mr. Easton had indicated
that would not be an issue.
Senator Wilken declared a conflict of interest and
requested to abstain from voting.
Senator Leman OBJECTED.
Co-Chair Torgerson noted that Senator Wilken's conflict
would be indicated in the record.
A roll call vote was taken on the motion to adopt Amendment
#1.
IN FAVOR: Wilken, P. Kelly, Leman, Adams, Torgerson
OPPOSED: Green, Phillips
Senator Donley abstained from voting.
Senator Parnell was not present for the vote.
The MOTION PASSED (5-2).
Senator Leman referenced Page 8, noting that on Line 8,
"waste water" should instead be "wastewater".
ANDY WARWICK, (Testified via Teleconference), Clean Water
Fund/Drinking Water Fund, Department of Environmental
Conservation, Fairbanks, offered to answer questions of the
Committee.
MIKE BURNS, (Testified via Teleconference), Program
Manager, Municipal Matching Grants, Division of Facility
Construction & Operation, Department of Environmental
Conservation, Anchorage, voiced appreciation for actions
that the Committee had taken. He offered to answer any
questions of the Committee.
Senator Leman MOVED to report SCS CS HB 304 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
SCS CS HB 304 (FIN) was reported out of Committee with
"individual recommendations" and with fiscal notes by
Department of Environmental Conservation dated 4/10/00 and
Department of Revenue dated 12/22/99.
SENATE BILL NO. 308
"An Act relating to certain passenger vessels
operating in the marine waters of the state."
Co-Chair advised that SB 308 had been SCHEDULED but would
not be HEARD. The bill was rescheduled.
ADJOURNED
Senator Torgerson adjourned the meeting at 10:42 am.
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