Legislature(2005 - 2006)SENATE FINANCE 532
05/06/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB381 | |
| HB240 | |
| HB381 | |
| HB240 | |
| HB381 | |
| HB266 | |
| HB403 | |
| HB304 | |
| HB409 | |
| HB150 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 381 | TELECONFERENCED | |
| + | HB 266 | TELECONFERENCED | |
| + | HB 403 | TELECONFERENCED | |
| + | HB 304 | TELECONFERENCED | |
| + | HB 409 | TELECONFERENCED | |
| + | HB 240 | TELECONFERENCED | |
| + | HB 150 | TELECONFERENCED | |
| + | TELECONFERENCED |
MINUTES
SENATE FINANCE COMMITTEE
May 6, 2006
9:04 a.m.
CALL TO ORDER
Co-Chair Lyda Green convened the meeting at approximately
9:04:57 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: REPRESENTATIVE JOHN COGHILL; REPRESENTATIVE BOB
LYNN; BRYAN BUTCHER, Director, Governmental Affairs & Public
Relations, Alaska Housing Finance Corporation, Department of
Revenue; CRAIG JOHNSON, Staff to Representative Lesil McGuire;
JENNIFER BAXTER, Staff to Representative Jim Elkins; AVES
THOMPSON, Director, Division of Measurement Standards &
Commercial Vehicle Enforcement, Department of Transportation and
Public Facilities; IAN FISK, Staff to Representative Bill
Thomas; GREG WINEGAR, Director, Division of Investments,
Department of Commerce, Community and Economic Development;
PEGGY ANN MCCONNOCHIE, Licensed Real Estate Broker and
Representative, Alaska Association of Realtors; PAUL LISANKIE,
Director, Division of Workers' Compensation, Department of Labor
and Workforce Development; HEATH HILYARD, Staff to
Representative Tom Anderson
Attending via Teleconference: From Anchorage: MATT JONES,
representing Moose's Tooth Pub and Pizzeria; ROBERT MCCORMICK,
representing Glacier BrewHouse; CLYDE PEARCE, Chief,
Radiological Health, Department of Health and Social Services;
from offnet locations: MICHAEL BELL, Director, Alaska Trucking
Association; DONNA RUFSHOLM, Chair, Legislative Committee,
Alaska Society of Radiological Technologist
SUMMARY INFORMATION
HB 381-TOBACCO REV. FOR CAPITAL PROJECTS
This bill was addressed twice during this hearing. First, a
committee substitute was adopted and reported from Committee.
That action was later rescinded, and the committee substitute
was amended and reported from Committee.
HB 240-BREWERY & BREWPUB LICENSEE/SALES BY WINERY
The Committee heard from the bill's sponsor and the industry. A
committee substitute was adopted. An amendment to the committee
substitute failed adoption, and the bill reported from
Committee.
HB 266-VEHICLE WEIGHTS AND INSURANCE
The Committee heard from the bill's sponsor, the Department of
Transportation and Public Facilities, and the industry. The bill
reported from Committee.
HB 403-NEIGHBORHOOD ELECTRIC VEHICLES
The Committee heard from the bill's sponsor and reported the
bill from Committee.
HB 304-COMMERCIAL FISHING LOAN PROGRAM
The Committee heard from the bill's sponsor and the Department
of Commerce, Community and Economic Development. The bill was
reported from Committee.
HB 409-NO WORKERS' COMP. FOR REAL EST. LICENSEE
The Committee heard from the bill's sponsor, the industry, and
the Department of Labor and Workforce Development. The bill was
reported from Committee.
HB 150-LICENSING RADIOLOGIC TECHNICIANS
The Committee heard from the bill's sponsor, the Department of
Health and Social Services, and the medical profession. The bill
was held in committee.
[NOTE: Due to technical difficulties, Committee action occurring
between 9:04:57 AM and 9:18:11 AM was not recorded. The minutes
for that portion of the hearing are based on Committee Secretary
notes.]
CS FOR HOUSE BILL NO. 381(FIN)
"An Act relating to the financing of construction, major
maintenance, and renovation of certain capital projects;
authorizing the commissioner of revenue to sell the right
to receive a portion of the anticipated revenue from a
tobacco litigation settlement to the Northern Tobacco
Securitization Corporation, and relating to that sale and
the use of the revenue; authorizing the Northern Tobacco
Securitization Corporation to issue bonds and use the
proceeds to acquire the right to receive a portion of
anticipated revenue from a tobacco litigation settlement
and for other purposes, and relating to those bonds; and
providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken moved to adopt Senate Finance committee
substitute Version 24-GH2071\L as the working document.
There being no objection, the Version "L" committee substitute
was ADOPTED.
Co-Chair Green stated Version "L" would clarify that the
proceeds from the bonds secured by the Tobacco Master Settlement
Agreement revenue would be utilized to finance construction,
major maintenance and renovation projects at the University of
Alaska; to construct a new correctional facility; and to fund
other capital projects such as facility replacement and sewage
projects.
9:06:29 AM
Senator Bunde understood that 20 percent of the revenue
generated from the Tobacco Master Settlement Agreement would
continue to support preventive health care and smoking
cessation.
9:07:05 AM
BRYAN BUTCHER, Director, Governmental Affairs & Public
Relations, Alaska Housing Finance Corporation, Department of
Revenue affirmed Senator Bunde's remark.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, SCS CS HB 381(FIN) was REPORTED from
Committee with previous zero fiscal note #1 dated December 23,
2005 from the Department of Administration.
[NOTE: This bill was readdressed later in the meeting. See Time
Stamp 9:35:11 AM.]
CS FOR HOUSE BILL NO. 240(RLS) am
"An Act relating to brewery and brewpub licensing and
relating to sales of wine by a winery licensee."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Green moved to adopt committee substitute Version 24-
LS0734\W as the working document. She objected for explanation.
AT EASE 9:08:48 AM / 9:18:11 AM
[NOTE: The FTR Recording issues were resolved and the meeting
from this point forward was recorded.]
CRAIG JOHNSON, Staff to Representative Lesil McGuire, the bill's
sponsor, informed the Committee this bill was developed in
conjunction with the Brewers Guild which represents six
breweries and five brewpubs in the State. Brewpubs are currently
restricted to selling their product for consumption on their
premise and must contract with a distributor for off-premise
sales. Breweries are currently limited to selling their product
off-premise and can only provide free samples to brewery
visitors.
Mr. Johnson stressed that the bill, which is the result of
compromises between the breweries and the brewpubs, would "level
the playing field between" them in that brewpubs would be
allowed to increase the amount of product they produce and would
be allowed to self-distribute a limited amount of product. The
increased production would assist in growing the industry as the
small quantity currently produced by brewpubs was unattractive
to distributors. In addition, the bill would allow breweries to
charge for their on-premise samples, thereby allowing them to
recoup some of their costs.
Mr. Johnson stressed that both breweries and brewpubs support
the bill. He pointed out that the provisions of the bill would
be limited to the Anchorage and Fairbanks areas, as the
determination was that breweries and brewpubs in less populated
areas of the State would be better served by limited
competition.
9:20:16 AM
Senator Dyson asked the amount of product that could be sold for
consumption on a premise.
Mr. Johnson stated Version "W" would increase the amount of
product a brewery could sell to a consumer "for consumption on
premises" from 24 to 36 ounces.
Senator Dyson asked whether the product would be sold by the
bottle or by draft.
Mr. Johnson stated that the distribution method would be at the
discretion of the brewer. Typically, the product is sold in
draft form as a matter of economics.
Senator Dyson understood numerous discussions had occurred
regarding the consumption limit during the bill's committee
hearing process.
Mr. Johnson affirmed.
Senator Dyson asked for further information about the
consumption limit discussions.
Mr. Johnson reiterated the bill "represents a compromise".
Brewpubs, being licensed premises, are obligated not to serve an
intoxicated person. Thus, there is no limitation on the amount
of product they could sell for on-site consumption. Breweries
are currently prohibited from selling onsite samples. The bill
is "a compromise between what a brewpub can do and what a
brewery cannot do now. So this limitation of being able to sell
basically three beers, allows the breweries to recoup some of
their money". The bill is "a give and take" compromise between
the two competing entities.
9:22:38 AM
Senator Dyson ascertained therefore that the 36-ounce limit on
on-site consumption was based on "commercial aspects" rather
than public safety issues.
Mr. Johnson concurred.
9:23:15 AM
Senator Dyson asked whether Version "W" included the provisions
pertaining to wineries that had been included in CS HB
240(RLS)am, Version 24-LS30734\B.A.
Mr. Johnson explained that prior to HB 240 being transmitted to
the Senate, the House of Representatives adopted an amendment
which incorporated a separate bill pertaining to wineries. Those
provisions would have allowed "an in-State winery to ship and
distribute wine inside the State of Alaska". Those provisions
were not included in the Version "W" committee substitute.
Senator Dyson understood that the bill's sponsor was amiable to
incorporating the winery language into the bill.
Mr. Johnson communicated that the bill's sponsor was respectful
of the committee process. Thus, the will of a committee or
action taken during a floor session would be respected. The
bill's sponsor has "particular respect" for this Committee in
that regard.
9:25:27 AM
Co-Chair Green affirmed that the winery language included in
Version "B.A" had been incorporated from a separate bill.
9:26:20 AM
MATT JONES, Representative, Moose's Tooth Pub and Pizzeria,
testified via teleconference from Anchorage in support of the
bill.
9:26:50 AM
ROBERT MCCORMICK, Glacier BrewHouse, testified via
teleconference from Anchorage in support of the bill.
Co-Chair Wilken asked whether Glenn Brady, a representative of
the Alaska Cabaret, Hotel, Restaurant & Retailers Association
(CHARR) would be testifying, as he had recently spoken with him
about this legislation.
Co-Chair Green noted that only Mr. Jones and Mr. McCormick had
signed up to testify.
Co-Chair Wilken asked whether Mr. Brady had presented a position
on the bill.
Mr. Johnson understood Mr. Brady was in support of the bill.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
Senator Dyson objected. He supported Version "B.A" rather than
Version "W".
Co-Chair Green pointed out that Version "W" had been ADOPTED as
the working document.
Co-Chair Wilken moved and asked unanimous consent his motion to
report the committee substitute from Committee be withdrawn.
There being no objection, the motion to report the bill from
Committee was WITHDRAWN.
Conceptual Amendment #1: This amendment inserts the following
language into Sec. 6(b)(1) page 4 following line 13 of the
committee substitute.
(A) to an individual who is present on the
licensed premises; or
(B) by shipping to an individual if the shipment
is not to an area that has prohibited the importation
or possession of alcoholic beverages under this
chapter or to an area that has limited the importation
or possession of alcoholic beverages unless the sales
complies with the limitation;
Senator Dyson moved the amendment.
Senator Bunde and Co-Chair Green objected.
Senator Olson asked the purpose of the language being proposed.
Senator Dyson stated that this amendment would restore the
language adopted on the House floor that would allow Alaskan
wineries to ship to markets within the State. Currently, Alaska
wineries are limited to exporting their products.
Co-Chair Green shared she had a "different understanding of
sponsor's desire" in this regard in that the sponsor was
"delighted" that Version "W" did not include the language being
proposed in the amendment.
9:31:20 AM
A roll call was taken on the motion.
IN FAVOR: Senator Dyson, Co-Chair Wilken and Senator Olson
OPPOSED: Senator Stedman, Senator Bunde and Co-Chair Green
ABSENT: Senator Hoffman
The motion FAILED (3-3-1)
Amendment #1 FAILED to be adopted.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, SCS CS HB 240(FIN) was REPORTED from
Committee with previous zero fiscal note #1 dated March 21, 2006
from the Department of Public Safety.
AT EASE 9:32:16 AM / 9:35:11 AM
CS FOR HOUSE BILL NO. 381(FIN)
"An Act relating to the financing of construction, major
maintenance, and renovation of certain capital projects;
authorizing the commissioner of revenue to sell the right
to receive a portion of the anticipated revenue from a
tobacco litigation settlement to the Northern Tobacco
Securitization Corporation, and relating to that sale and
the use of the revenue; authorizing the Northern Tobacco
Securitization Corporation to issue bonds and use the
proceeds to acquire the right to receive a portion of
anticipated revenue from a tobacco litigation settlement
and for other purposes, and relating to those bonds; and
providing for an effective date."
The bill was brought back before the Committee for further
consideration.
Co-Chair Wilken moved to rescind the Committee's earlier action
of reporting the bill from Committee.
There being no objection, the action was RESCINDED.
Committee substitute, Version 24-GH2071\L, was again before the
Committee.
Amendment #1: This amendment deletes "$2,000,000" in Section 1,
page 4 line 18 and replaces it with "$4,000,000".
In addition, line 19 on page 4 of Section 1 is deleted in its
entirety.
Co-Chair Wilken moved to adopt Amendment #1.
Co-Chair Green communicated the amendment was offered at the
request of the [unspecified] Legislator who originally requested
the affected projects.
Amendment #1 was ADOPTED without objection.
Co-Chair Wilken moved to report the bill, as amended, from
Committee with individual recommendations and accompanying
fiscal notes.
Without objection, SCS CS HB 381(FIN) was REPORTED from
Committee with previous zero fiscal note #1 dated December 23,
2005 from the Department of Administration.
9:36:49 AM
CS FOR HOUSE BILL NO. 266(FIN)
"An Act relating to penalties for violation of vehicle
weight limitations; prohibiting the use of a violation of a
vehicle weight limitation for certain personal automobile
insurance actions; amending Rule 43.6, Alaska Rules of
Administration; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
JENNIFER BAXTER, Staff to Representative Jim Elkins, Chair,
House Transportation Committee, which sponsors this bill,
explained the bill would modify existing laws pertaining to the
penalty structure for overweight vehicle violations. These
penalties have not increased since their establishment in the
1970s.
Ms. Baxter professed current penalties do not deter commercial
shipping companies and others from violating vehicle weight
limitations. In addition, the bill would protect drivers cited
for overweight vehicle violations from insurance companies,
which might otherwise penalize those drivers' private automobile
insurance coverage. Oftentimes, drivers of commercial vehicles
have little control of the weight loaded on the commercial
vehicles they are assigned to drive. Thus, the bill would
protect drivers who are unknowingly in violation of weight
limits on the State's road system.
9:37:54 AM
Senator Dyson asked whether both the owner of an overweight
truck and its non-owner driver could be cited for an offense.
Ms. Baxter affirmed.
Senator Dyson understood therefore that the aforementioned
insurance coverage provision would serve to protect the driver
by prohibiting his or her private vehicle coverage insurer from
taking punitive action. In other words, the driver of an
overweight vehicle would not be excused from operating a safe
and legal vehicle.
Ms. Baxter stated that was correct.
9:39:06 AM
Co-Chair Wilken recognized Aves Thompson, Director, Division of
Measurement Standards & Commercial Vehicle Enforcement,
Department of Transportation and Public Facilities as being in
attendance. Mr. Thompson consistently acted in a fair and
responsible manner during the numerous occasions Co-Chair Wilken
met with him about private business matters.
Co-Chair Wilken stated that under Mr. Thompson's tenure, the
Division has used federal transportation funds to upgrade its
weights and measures equipment. Commercial trucks are no longer
required to pull into weigh stations as scales imbedded in
roadways could now transmit weight information to a scale as
trucks travel along at 55 miles per hour. The readings are
accurate and are furthering the effort to prevent overweight
vehicles from damaging State roads.
9:40:56 AM
AVES THOMPSON, Director, Division of Measurement Standards &
Commercial Vehicle Enforcement, Department of Transportation and
Public Facilities, affirmed Ms. Baxter's testimony on the bill.
The Division worked with the bill's sponsor, the Alaska Trucking
Association, the Alaska Teamsters, and numerous other entities
to develop a bill with "reasonable ground" that would recognize
the Division's role in trying to protect the State road
infrastructure and deter the operation of overweight vehicles.
This would be the first increase in associated penalties since
the early 1970s. At that time, the penalties were amongst the
highest in the nation; now they are some of the nation's lowest.
The proposed penalties "are a reasonable increase" and would
position the State at the mid-range level. The bill would
protect drivers from unfair insurance increases, would generate
a "fair increase" in penalty revenue, and would deter overweight
vehicles' operation.
9:42:46 AM
Senator Stedman communicated the ease at which a truck could
experience an overweight axel, particularly a front axel in the
case of a dump truck. Thus, he asked how such a situation would
be accommodated, specifically with the onset of imbedded scales.
In addition, he asked whether weight offenses in the range of
5,000 or 10,000 pounds were common.
Mr. Thompson stated that the Division would attempt to address
these concerns in a couple of ways. First would be the graduated
penalty structure proposed in this bill. A truck marginally
overweight would not receive a hefty fine; however a severely
overweight truck would be fined "pretty heavy". Overweight
vehicles with a "low-end" violation of between zero and 2,000
pounds overweight could avoid a citation were they able to shift
the load weight to the legal limits before leaving the weight
station. The Division provides some leeway as it does recognize
that loading trucks is not "an exact science" and "sometimes
honest mistakes are made".
Mr. Thompson stated that the imbedded scales were a work in
progress. They would assist in speeding up the flow of traffic,
and they would allow the focus to be on unsafe and illegal
trucks rather than those that are safe and legal.
9:45:06 AM
Senator Dyson appreciated the Division's "enlightened position",
as from personal experience he found that not to have been their
position in the past.
Senator Dyson ascertained that the majority of the bill
addressed penalty levels. The insurance coverage provisions must
have been included to address the insurance methodology that
counts the number of citations a driver accumulates against
their insurance record; the fact that these citations were not
traffic or safety related is not recognized. To that point, he
asked whether this issue has been a "widespread problem" in
Alaska.
Mr. Thompson responded that the Division has received reports of
this occurring. The Alaska Trucking Association could better
respond to the question.
Co-Chair Green understood that the insurance industry does not
object to the inclusion of the provision in the bill.
Mr. Thompson appreciated the Committee's efforts in regards to
the bill, as it is important to the Division.
Co-Chair Green acknowledged.
9:47:04 AM
MICHAEL BELL, Director, Alaska Trucking Association, testified
via teleconference from an offnet location in support of the
bill. The provision in the bill that would prohibit overweight
citations from affecting a driver's personal automobile
insurance is important as drivers are seldom "responsible for
loading their vehicles and have very little opportunity to
adjust a load if they are overweight on an axel or gross"
weight. Roadways would also benefit from the bill, as it would
discourage continual overweight violations. It would encourage
the proper loading of a truck before it arrived at a scale.
Senator Stedman disclosed having a commercial driver's license
(CDL).
Co-Chair Green acknowledged there being a need for such a bill.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS HB 266(FIN) was REPORTED from
Committee with three previous fiscal notes: zero fiscal note #4
dated January 23, 2006 from the Department of Commerce,
Community and Economic Development; zero fiscal note #5 dated
January 20, 2006 from the Department of Transportation and
Public Facilities; and zero fiscal note #6 dated January 25,
2006 from the Department of Law.
9:49:07 AM
SENATE CS FOR CS FOR HOUSE BILL NO. 403(TRA)
"An Act relating to registration and operation of low-speed
vehicles."
This was the first hearing for this bill in the Senate Finance
Committee.
9:49:13 AM
IAN FISK, Staff to Representative Bill Thomas, the bill's
sponsor, explained the bill would pertain to vehicles classified
by federal statutes as "low speed vehicles". Rather than being
such things as golf carts, the vehicles in question are "a class
of vehicles" that are required to have "headlights, taillights,
brake lights, seat belts, bumpers, automotive quality
windshields, and emergency brakes" and other features required
on a traditional car. These vehicles are also required to meet
federal test standards, and the maximum speed these vehicles
could obtain is 25 miles per hour (MPH). In order not to impede
traffic, their use is limited to roadways with a maximum speed
of 35 MPH. Low speed vehicles are currently legal in 36 states.
Their advantages would include zero emissions and low fuel
expense. They are particularly popular in gated communities and
retirement communities.
Mr. Fisk informed the Committee this bill would provide the
Division of Motor Vehicles (DMV), Department of Administration,
the authority to register and license such vehicles.
Co-Chair Green noted that a picture of the vehicle [copy on
file] was included in members' bill packets.
Co-Chair Green understood that the bill would allow owners of
these vehicles to register them.
Senator Olson countered that, rather than "allowing" them to be
registered, the legislation would "require" them to be licensed.
Mr. Fisk responded that DMV would be required to register such a
vehicle were someone to visit a DMV office with one.
Co-Chair Green stated that currently DMV could "refuse to
register" such a vehicle.
Mr. Fisk clarified that DMV does not currently have the
statutory authority to register them. This legislation mirrors
the approach other states have taken regarding this new class of
vehicles.
Senator Olson asked for examples of violations such a vehicle
might incur.
Mr. Fisk noted that language in Sec. 4 page 2 line 30 through
page 3 line 9 would clarify the operational guidelines for these
vehicles. For example, they must adhere to traffic laws and
carry liability insurance.
Co-Chair Green reiterated that these vehicles could not operate
on roadways with a posted speed limit above 35 MPH.
9:53:36 AM
Co-Chair Green noted that members' packets contain a letter
[copy on file] addressed to the Committee from Duane Bannock,
Director, Alaska Division of Motor Vehicles, Department of
Administration. The letter explains that DMV could not currently
license or register this class of vehicle. This legislation
would allow DMV to do so for any customers seeking such action.
The letter also substantiates that these vehicles could not
traverse roadways with speed limits exceeding 35 MPH.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, SCS CS HB 403(TRA) was REPORTED from
Committee with previous zero fiscal note #1 dated February 22,
2006 from the Department of Public Safety and $10,500 fiscal
note #2 dated February 21, 2006 from the Department of
Administration.
9:54:24 AM
CS FOR HOUSE BILL NO. 304(FIN) am
"An Act relating to the commercial fishing loan program;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE JOHN COGHILL, the bill's sponsor, stated this
bill would revise the Commercial Fishing Revolving Loan Fund
(CFRLF) program administered by the Division of Investments in
the Department of Commerce, Community and Economic Development.
His "philosophical" belief that government should not compete
with private enterprise has influenced his actions in the
Legislature and thus, prompted his interest in the CFRLF
program.
9:55:03 AM
Representative Coghill shared that he began his "journey of
understanding" the Division's loan-lending activity with the
commercial fishing industry, as allowed by Alaska Statute (AS)
16.10.300-370 enacted in 1972, several years ago. Overtime, he
became convinced the program was beneficial; particularly as
some of the State's commercial fishing permits are designed in a
manner which has served to reduce the entities lending on
permits to only the Commercial Fishing and Agricultural Bank
(CFAB) and the CFRLF program. Thus, "it is probably not wise to
take it off the books".
Representative Coghill specified that his goal was to make the
CFRLF program "the lender of last resort as much as possible so
that those who are fishing in the fishing fleet who are
servicing their loan through commercial lenders don't have to
compete with people who are getting probably a much better deal
from the State". To that point, this legislation "would tighten
up some of the provisions" and would codify law so that, in
order to qualify for the program, a person must have first
attempted "to apply for a loan with another federally chartered
institution or CFAB". He reiterated that the Division and CFAB
are "the only two" entities providing loans for fishing permits
in the State. Provisions pertaining to other loan programs, such
as the Community Quota Shares program, are also addressed in the
bill.
9:57:08 AM
Representative Coghill informed the Committee that commercial
fishermen also utilize CFRLF to refinance their commercial bank
loans. The Sponsor Statement addressed this and other proposed
provisions as follows.
HB 304 reduces the amount of loans for refinancing a debt
to $200,000 per person, down from $300,000. It increases
the loan limit for past due federal tax obligations from
$30,000 to $35,000. And it limits all loans, including
purchase of entry permits and gear, vessel purchases,
repair of existing vessels, and federal tax debt for one
person to $400,000. That limit now totals $930,000. The
bill reduces security of a loan from 90% to 80% of the
appraised value of the collateral. HB 304 changes the
interest rate to prime rate plus two percentage points and
keeps the cap at 10 1/2%.
Representative Coghill pointed out that this legislation would
also repeal a State Statute, which required the Division "to set
aside ten percent of the funds" to support loans of less than
$35,000. This directive was deemed unnecessary; this has not
been an issue since the Division has sufficient cash available.
Representative Coghill specified one of the major components of
the bill as the lowering of "the aggregate loan" limit a
commercial fisherman could obtain for their boat, license, and
equipment from $930,000 to $400,000. The exception to that
provision would be the Community Quota Shares program, which is
a community loan issue.
9:58:41 AM
Representative Coghill pointed out that another key component of
the bill would establish the interest rate at prime plus two
percent with a limit of 10.5 percent. The 10.5 percent is a
"compromised" rate, resulting from a "reasonable attempt to
tighten up the Division of Investments". He worked with the
Division as well as former State Senator Alan Austerman, whose
current capacity is Fisheries Policy Advisor, Office of the
Governor. Greg Winegar, Director of the Division of Investments,
has agreed to the changes proposed in the bill.
Representative Coghill informed the Committee that, even though
he had preferred establishing a limit other than the proposed
10.5 percent, he was "content" to see how it would function.
Representative Coghill characterized the legislation as "a work
in progress". This was the fifth year he had addressed the
issue. It was "a reasonable effort" and would benefit those
fishermen who must compete "in the same waters for the same fish
and have to go to a variety of different banks". The CFRLF would
continue to provide "flexibilities that are still very generous"
even with the 10.5 percent limit.
10:00:39 AM
Co-Chair Green asked for further information about the $930,000
limit.
Representative Coghill identified $930,000 as being the current
aggregate limit.
Co-Chair Green surmised that, rather than being specifically
identified in the bill, $930,000 was the sum of a variety of
different things.
Representative Coghill affirmed.
Senator Dyson understood that the provision that required a
fisherman applying for a CFRLF loan to have participated in a
commercial fishery had been omitted from the bill. The language
deleted is depicted in Section 1(a)(1)(D)(i), page 3 lines 5
through 10.
Representative Coghill pointed out that language in Section
1(a)(1)(A) on page 1 lines 7 through 13 specifies to whom a loan
could be made. Among the requirements is that the loan recipient
must hold a commercial fishing license and be a resident of the
State.
10:02:29 AM
Senator Dyson ascertained therefore that Section 1(a)(1)(D)(i)
was eliminated because it was redundant language.
Senator Bunde concurred.
Co-Chair Green affirmed that the language had simply been moved
to a different location in the bill.
10:02:50 AM
Representative Coghill stated that other qualifiers and
disqualifiers are included in Section 1(a)(1)(B) on page 2 lines
2 through 29.
GREG WINEGAR, Director, Division of Investments, Department of
Commerce, Community and Economic Development communicated the
bill would revise the qualifiers for tax obligation loans, which
are a type of loan offered to commercial fishermen by CFRLF. The
bill would retain the lack of training or economic dependence on
fishing for livelihood qualifiers. In addition, the bill would
limit federal tax obligation loans to people meeting Section
1(a)(1)(B) eligibility specifications rather than allowing
people meeting either Section (a)(1)(A) or (B) criteria to
qualify. Section 1(a)(1)(B) qualifiers would include people who
did not qualify for loans elsewhere; those who were economically
dependent on fishing; and those residing in rural areas of the
State.
10:04:41 AM
Senator Dyson asked for further information about federal tax
obligation loans. He understood that a qualifying fisherman
could his utilize such a loan to pay off their federal taxes.
Mr. Winegar affirmed. This program was created several years ago
when there was "an awful lot of non-compliance problems, mainly
out in rural Alaska". The program has not been utilized much in
recent years. Only three such loans have been provided in the
last four years. The State worked with the federal Internal
Revenue Service (IRS) to develop a program through which people
could become compliant without losing their limited entry
permits through IRS seizures action.
10:05:48 AM
Senator Dyson ascertained that the term "compliant" meant they
were paying their tax in a timely manner.
Mr. Winegar replied "yes".
10:06:01 AM
Senator Olson asked the number of individuals who would be
affected by the proposed changes.
10:06:11 AM
Mr. Winegar stated that, as specified in the May 1, 2006
Department of Commerce, Community and Economic Development
fiscal note #3, the bill might lower the number of loans by two
per year. Currently, only one borrower exceeds the proposed
$400,000 loan limit. That borrower would be grandfathered into
the $930,000 aggregate limit.
Senator Olson shared the concern that out-of-state people were
acquiring limited entry fishing permits. They are attractive as
the price being offered for fish is making the permits "fairly
valuable". Noting that the bill would require borrowers to
reside in the State for two years, he asked how residency status
would be verified.
Mr. Winegar expressed that the two-year residency requirement is
carefully evaluated. Such things as an applicant's tax return
filing, the location of their car registration, where their bank
account is located or whether they had received a Permanent Fund
Dividend are analyzed.
Representative Coghill remarked that, while he had "pressured"
the Division of Investments "to not hang onto these licenses",
the "direction" sent by the Legislature was that limited entry
permits should be kept in the State. His position is that the
Division has held onto permits "a little longer" than they
should have.
No further testifiers or Committee concerns were presented.
10:08:05 AM
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS HB 304(FIN)am was REPORTED from
Committee with previous zero fiscal note #3 dated May 1, 2006
from the Department of Commerce, Community and Economic
Development.
10:08:54 AM
CS FOR HOUSE BILL NO. 409(L&C)
"An Act relating to excluding qualified real estate
licensees from workers' compensation coverage."
This was the first hearing for this bill in the Senate Finance
Committee.
10:09:12 AM
REPRESENTATIVE BOB LYNN, the bill's sponsor, disclosed being a
licensed real estate agent in the State. "Workers Compensation
is the means through which injured workers are compensated for
injury sustained on the job or as a result of their job." State
and federal laws require "most companies to purchase workers
compensation insurance for their employees". To that point, he
noted that 99 percent of real estate licensees in the State are
considered independent contractors rather than employees.
Representative Lynn communicated that in Alaska, real estate
licensees "typically sign an independent contractor agreement"
with their real estate broker and "pay for their own services".
The broker does not pay them a wage/salary or benefits. Any
payment they receive is "tied directly to the sales" or service
they provide rather than hours worked. The real estate licensees
themselves are required to pay quarterly federal income taxes
and the social security tax that an employer would normally pay
for an employee. In addition, they are responsible for their
business expenses, including their licensing fees, continuing
education expenses, advertising, office equipment, websites and
long distance phone calls. They could be likened to "a business
within a business". The real estate broker has no control over
how the real estate licensee under contract with them conducts
their business, provided it is within the boundaries of the law.
The federal Internal Revenue Service (IRS) also recognizes them
as independent contractors. This bill would affirm there to be a
written contract between the broker and the real estate licensee
which states that the licensee would not be treated as an
employee for IRS or workers' compensation purposes. It would
also clarify that the real estate licensee would be paid only
for what they produced rather than for the number of hours they
might work.
Representative Lynn asked the Committee to favorably consider
the legislation.
10:12:05 AM
PEGGY ANN MCCONNOCHIE, Licensed Real Estate Broker and
Representative, Alaska Association of Realtors, spoke in support
of the bill. She appreciated the work that Representative Lynn
had conducted in its regard. The bill would provide "clear
direction" to a question that has plagued the industry for quite
some time.
10:13:01 AM
Co-Chair Wilken asked regarding Governor Frank Murkowski
Administration's position on the bill.
Ms. McConnochie responded that the bill is supported by both the
Division of Insurance in the Department of Commerce, Community
and Economic Development and the Division of Workers'
Compensation in the Department of Labor and Workforce
Development.
10:13:32 AM
To that point, Co-Chair Green noted members' bill packets
contain a copy of a letter [copy on file] dated February 7, 2006
from Department of Labor and Workforce Development Commissioner
Greg O'Claray addressed to Representative Tom Anderson, Chair,
House Labor and Commerce Committee.
Co-Chair Wilken asked whether the Department of Labor and
Workforce Development "was neutral, for, or against the
Legislation".
10:14:01 AM
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development, communicated that
the letter conveyed Commissioner Greg O'Claray's support of the
bill.
10:14:32 AM
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS HB 409 (L&C) was REPORTED from
Committee with two previous zero fiscal notes: fiscal note #1
dated February 24, 2006 from the Department of Commerce,
Community and Economic Development and fiscal note #2 dated
February 23, 2006 from the Department of Labor and Workforce
Development.
10:14:54 AM
SENATE CS FOR CS FOR HOUSE BILL NO. 150(L&C)
"An Act requiring licensure of occupations relating to
radiological technology, radiation therapy, and nuclear
medicine technology; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
HEATH HILYARD, Staff to Representative Tom Anderson, the bill's
sponsor, remarked this bill would establish licensure
regulations for radiographers and radiological technologists in
the State. While some Statutes currently address the
administering of x-ray technology for medical diagnoses, no
express licensure exists. This has been an oversight for several
years.
Mr. Hilyard noted that members' packets included a list of
states that have adopted licensure or certification laws [copy
on file] similar to the provisions proposed in this bill. New
York and California adopted their radiological licensure laws as
early as the 1960s. More than a proposal to implement an
occupational licensure, this bill would address a legitimate
public health issue.
Mr. Hilyard read excerpts from a University of California,
Berkeley news release dated November 16, 1999 [copy on file] as
follows.
"This is a serious public health problem," Gofman [John W.
Gofman, professor emeritus of molecular and cell biology at
the University of California Berkeley] said. "We're talking
about the two biggest causes of death in this country -
cancer and heart disease - which together amount to 45
percent of all deaths. Medical X-rays are a major cause of
these deaths."
"There is the assumption that, at these doses, radiation
doesn't make a significant contribution," he said. "But X-
rays are very potent mutagens, even at low doses. It's a
disaster that people still believe the 'safe dose myth,'
that low doses are harmless."
Mr. Hilyard communicated that the second excerpt would address
the common misperception that low dosage X-rays are harmless.
10:17:20 AM
Mr. Hilyard concluded that the health and administrative
benefits the bill would provide are reason to support it.
Co-Chair Green asked whether the legislation would create a
board.
Mr. Hilyard responded in the negative.
Co-Chair Green asked whether a board pertinent to this subject
currently existed.
Mr. Hilyard stated no.
Co-Chair Green responded positively to the fact that no board
existed or would be created by the legislation.
Co-Chair Wilken asked what specific problem would be addressed
by this legislation.
Mr. Hilyard communicated that during the bill's House Finance
Committee hearing, a question was asked about the number of
complaints filed in this regard. While the Director of the
Division of Occupational Licensing, Department of Commerce,
Community and Economic Development expressed that none had been
filed, the reality is that the Division would not have received
any complaints because this is currently an unlicensed
occupation. Medical malpractice lawsuits have been filed against
radiologists and other medical professionals. However, without a
more thorough review of the cases, a definitive number could not
be provided. Nonetheless, "anecdotal evidence" would support
there being "a problem with overexposure, radiation burns, and,
more difficult to identify, is the problem of misdiagnoses, or
missed diagnoses as a result of improper procedures".
Mr. Hilyard reiterated there is a "significant problem but it's
very difficult to quantify".
Co-Chair Wilken remarked that the certification requirements for
large hospitals dictate they employ certified radiologists.
However, smaller facilities such as clinics, particularly those
in outlying areas, "would struggle with some of these
requirements". Thus, the question is whether the extent of the
problem would justify "putting them through the hoops to be
certified and the costs of that and the confusion" that would
accompany the licensure process.
Mr. Hilyard stated that during the bill's committee hearing
process, changes were made to address the "unique practice
elements in Rural Alaska". He affirmed larger facilities were
required to employ fully credentialed radiographers. The true
focus of the bill is "limited imagers, those are people that
have no sort of certification that we can look at to say yes, we
are confident that you have a firm understanding of the
practice" you are conducting. However, addressing that situation
must be done without diminishing the care available in Rural
Alaska. One example of that consideration is that, in the
education component, limited imagers receiving "any training
provided in a medical facility by a licensed practitioner or
radiographer is acceptable and they are eligible to take an
examination."
Mr. Hilyard stated that an amendment adopted by the Senate Labor
& Commerce Committee allowed "the definition of direct
supervision to be more open and lenient". This language is
depicted in Sec. 2, Article 3. General Provisions. Sec.
08.89.990(5) on page 11, lines 11 through 14 as follows.
(5) "direct supervision" means supervision that is on-site
or available by telephonic or electronic means; in this
paragraph, "supervision" includes demonstrations, record
review, evaluation of clinical examinations, or
communications;
Mr. Hilyard stressed there were efforts taken "to make this as
easy for Rural Alaska and the clinics out there to meet the
requirements".
10:21:57 AM
Co-Chair Green asked whether there had been any opposition to
the bill.
Mr. Hilyard noted that, while some groups have expressed
concern, none are on record in open opposition to the bill. Ed
Hall with the Physicians Assistants' Association has continued
to voice "qualified opposition to the bill". The understanding
is this resistance is based on implementation concerns, as
expressed earlier by Co-Chair Wilken. The bill's sponsor had
endeavored to work with any group having reservations about the
bill. Some of the concerns were successfully addressed and
others were not. Thus, there continues to be some qualified
opposition to the bill.
Senator Bunde, who knew both Ed Hall and a nurse practitioner in
his district, affirmed that "concerns about the financial impact
of the bill" continue to exist. Nonetheless, he would defer to
the will of the Committee.
In response to a question from Co-Chair Green, Senator Bunde
understood the financial concern was that the bill would require
a clinic to hire a certified person rather than being able to
hire and train an individual in-house.
10:24:10 AM
Mr. Hilyard clarified that the bill was amended to redefine what
would be recognized as an approved training program. This would
assist in addressing the "frequently reported extraordinary
training costs". Thus, "a clinic with a physician's assistant
who is providing the training" would meet the training
requirements.
Co-Chair Green asked whether individuals would be required to
take a test.
Mr. Hilyard stated individuals would be required to take an
examination.
10:25:00 AM
Co-Chair Wilken asked whether the Division of Occupational
Licensing had, during the bill's committee hearing process,
shared any concerns it is aware of about this issue.
Mr. Hilyard affirmed that the Division had testified on the
bill. Specific policy concerns were addressed; however, more
recent objections appear to be "philosophical" in nature. For
example, the Division testified that, "I don't believe that we
need this licensure because there's not a demonstrated need".
Mr. Hilyard stated that even though quantifying the need is
difficult, the communications received from physicians in the
State support the understanding that the problem exists and
should be addressed.
10:26:05 AM
Senator Dyson stated that in a recent conversation he had with
Dr. Richard Mandsager, Director, Division of Public Health,
Department of Health and Social Services, Dr. Mandsager conveyed
support for the bill even though the radiology field has
experienced vast equipment improvements during the past 25
years. Older equipment was known to overexpose people to
radiation. "The long term damage to folks has resulted in
greatly reduced dosages in modern equipment that certainly
limits the area of exposure and makes it far more effective."
Dr. Mandsager believed more cancers and leukemia would become
apparent in the future as the result of overexposure.
Senator Dyson voiced being "wary of licensing that seems …to be
the establishment protecting their turf against anybody else,
and guaranteeing their income stream"; however, he is respectful
of Dr. Mandsager's position in support of the legislation.
Co-Chair Green communicated the Department of Health and Social
Services' support of the bill. The Division of Occupation
Licensing was neutral on the bill.
Co-Chair Green asked whether the licensing requirement would
also apply to chiropractic office radiologists.
Mr. Hilyard affirmed it would.
10:28:28 AM
CLYDE PEARCE, Chief, Radiological Health, Department of Health
and Social Services, testified via teleconference from
Anchorage, and communicated that since he is the only person who
conducts radiation safety compliance inspections in the State,
he would be the person most likely to receive complaints.
Mr. Pearce had received "complaints from consumers about the
conduct of their procedures". The two most recent procedural
complaints pertained to two major hospitals: one in Juneau and
the other in Anchorage. He did not view this as a rural verses
urban issue, as he has witnessed "significant problems" in large
facilities in major cities.
Mr. Pearce stated negative biological affects have been found
"at much lower levels of exposure than previously believed to be
a matter of concern". Several research studies indicate that as
much as one percent of all cancers are the result of diagnostic
X-rays nationwide. Since the State does not currently require
formal operator training, "it could reasonably be expected" that
Alaska's percentages would be higher. These affects are not
obvious because the negative affects take time to manifest.
There are definite concerns, as radiological exposure has
increased. There is recognition that the level of radiation
overdosing is lower than historically thought. The State "does
not really require people to know what they are doing when they
apply this carcinogen to patients". The dangers of radiation are
not limited to patients; operators are also exposed. "Alaska
allows five times as much exposure to the general public than
the federal government or other states do. We have some serious
issues that need to be resolved there."
Mr. Pearce concurred with the expenses depicted on fiscal note
#2 from the Department of Commerce, Community and Economic
Development.
In conclusion, Mr. Pearce, on behalf of the Department of Health
and Social Services, encouraged the Committee to support the
bill.
10:31:05 AM
Co-Chair Wilken surmised that the bill would not address the two
aforementioned complaints pertaining to the two major hospitals,
as he understood radiologists working in major hospitals must be
trained and certified.
Mr. Pearce clarified that radiologists are medical doctors (MDs)
who specialize in this area of medicine. Radiological
technicians or operators are a different category of workers.
Typically, major hospitals "only hire registered technologists
or operators, separate from the MDs," due to the constraint of
credentialing regulations of the Joint Commission on
Accreditation of Hospitals. However, not all major hospitals are
accredited and therefore would not be required to hire certified
individuals. One of the two aforementioned major hospitals is
not accredited and thus would be subject to the provisions of
this bill.
Senator Olson voiced concern that the provisions of this bill
would not be uniformly applied to all medical facilities,
regardless of size. Continuing, he, a medical doctor, addressed
the sponsor's remarks regarding the dangers of heat radiation
burns, by noting there are two different types of X-ray
applications. To that point, he had never witnessed a heat
radiation burn resulting from a chest X-ray.
Senator Olson also understood that rather than having "qualified
opposition" to the bill, Ed Hall with the Physicians Assistant
Association was opposed to the bill.
Senator Olson asked the bill's sponsor to disclose the number of
documented complaints of overexposure.
Mr. Hilyard deferred to Mr. Pearce who had provided the
"evidence and information" pertaining to the bill.
Senator Olson asked Mr. Pearce to also provide the dates of the
overexposure cases.
Mr. Pearce concurred that a radiation burn would be an
occurrence more likely associated with "a major facility because
of the kind of procedure" that would be involved. This bill
would address "lower level kinds of injuries which include
cancer …" Current studies indicate that radiation has "a
negative affect on intellectual development". A Swedish study of
approximately 3,000 individuals concluded there to be a
measurable reduction in intellectual ability as a result of
diagnostic level X-ray exposures when the subject was between
one and one and a half years old. Other studies support this
concern. The problem with radiation is the "latent period" or
delay in the time in which the affects become "evident".
Examples of "really severe, gross burns" of the type being
referred to in this bill could be viewed at the Federal Drug
Administration's website at www.FDA.gov. Rather than the issue
being radiation burns, the "real issue" is that, due to the
"latent effects" of radiology, "even the practitioner, licensed
medical physicians, did not recognize the patient had been
injured at the time of the study". The effects could take years
to manifest themselves.
Mr. Pearce pointed out that even low levels, particularly in
regard to cancer, are a concern. The National Institutes of
Health (NIH) had "reaffirmed that radiation is a potent
carcinogen". Their studies indicate that one percent of all
cancers are the result of diagnostic X-rays. The conclusion of
researchers who have studied a variety of people, including
survivors of Hiroshima, is the Linear Non-Threshold (LNT)
Theory, which is that "the only safe dose is no dose at all".
"There is no fully safe dose of exposure to radiation," Mr.
Pearce stated. Any effort to keep exposures to a minimum is a
good idea. He was not recommending that people avoid getting an
examination that's done properly and ordered for clinical
reasons by practitioners. However, "we don't need to expose them
to 50 or 60 times the amount of radiation needed in order to get
that diagnostic information". He had witnessed exposures at
those levels occurring in the State.
Senator Olson pointed out that the X-ray spectrum addressed in
this bill is different than that of the Hiroshima atomic bomb.
Today's equipment has more safeguards than older machines. This
legislation is opposed by small rural clinics, as it would
further increase the difficulty they historically experience in
recruiting employees, particularly X-ray technicians. "X-rays
are one of those necessary elements of the practice of medicine
to go ahead and make a proper diagnosis." People must be able
"to have an X-ray at their disposal" in order to make a
diagnosis.
Senator Olson share never having seen a malpractice suit
"dealing with any kind of over-radiation exposure" during his
eight years on the State medical board.
10:38:51 AM
DONNA RUFSHOLM, Chair, Legislative Committee, Alaska Society of
Radiological Technologists, testified via teleconference from an
offnet location and informed the Committee that the Society was
involved in the development of this bill. One of the questions
addressed during the bill's development was "why do we need this
regulation in the State of Alaska?" The answer is "safety to the
patients, safety to the" equipment operators, "and the necessity
to establish standards" to ensure that Alaskans receive "quality
care" when undergoing X-ray examinations.
Ms. Rufsholm, a professional radiology technologist, stated,
"there is no safe dose of radiation". Low-level radiation could
be as harmful as high levels of radiation. However, patients are
unaware of these facts and do not know how to evaluate the
safety of the procedure being administered. "They place all
their confidence in the health care worker who's performing the
procedure…" They assume "that any one that is providing care in
a health care setting knows what they're doing and that they
received the proper education to perform their job."
Unfortunately this is not true in Alaska. Absent a licensure
policy, anyone, even those hired for another position, could
take an X-ray without training or with minimum training. This
scenario is occurring in numerous small facilities in the State.
Ms. Rufsholm stated that the passage of this bill "would
establish standards for individuals" conducting X-ray
procedures. The State's Radiological Health Program had
developed a listing of "documented misuse of radiation". That
list [copy not provided] included a small clinic in Anchorage
"whose staff exposed a patient to at least 64 times the amount
of radiation required to obtain a diagnostic image". The Society
"cannot blame those operators for the errors they've made", as
they are not required to receive training "to conduct their job
correctly nor have they been given the opportunity".
Ms. Rufsholm addressed the concern that this bill would create a
financial burden. The expense to a facility to license one
individual would "equate to the cost of performing one extra
procedure". This is "a small amount to pay to ensure patient
safety". Any training program "sponsored by a medical facility
supervised and instructed by a licensed practitioner or fully
licensed radiographer" would qualify as education. Additional
criteria would be established in regulation. This bill would not
alter the manner in which small rural clinics operate. The bill
was developed in recognition of the fact that rural areas of the
State have different needs than urban areas. The ability to
provide radiological services in rural areas is of paramount
importance.
Ms. Rufsholm stated major provisions were included in the bill
to ensure that individuals who were currently performing these
procedures would be able to continue to do so. Clinic services
would not be interrupted while staff received training. There
would be no loss of service or patient access to services in
rural areas. Internet training courses would also be available
for a cost of $229, which was approximately the cost of one
chest X-ray procedure.
10:43:34 AM
Ms. Rufsholm shared that studies conducted in other states
indicate the education requirement would not impact salaries and
force clinics to close. "We need to be advocates and establish
standards for persons performing radiology procedures." We
should be spokesmen for the patient. Passage of this bill would
ensure quality care and safety for individuals.
Senator Olson asked whether the dentistry profession had weighed
in on this legislation.
Mr. Hilyard replied that dentists consider themselves covered
under the Dentist Practices Act.
There being no further discussion, Co-Chair Green stated that
additional work on this legislation would be necessary.
Co-Chair Green ordered the bill HELD in Committee.
RECESS TO CALL OF CHAIR 10:44:59 AM / 4:34:02 PM
ADJOURNMENT
Co-Chair Lyda Green adjourned the meeting at 4:34:02 PM.
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