Legislature(2011 - 2012)SENATE FINANCE 532
04/08/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB15 | |
| SB5 | |
| SB27 | |
| SB101 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 15 | TELECONFERENCED | |
| + | SB 5 | TELECONFERENCED | |
| + | SB 27 | TELECONFERENCED | |
| + | SB 96 | TELECONFERENCED | |
| + | SB 101 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 8, 2011
9:12 a.m.
9:12:23 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:12 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Senator Kathy Giessel; Senator Kevin Meyer, Sponsor; Thomas
Obermeyer, Staff, Senator Bettye Davis; Gus Marx, Grants
Coordinator, Alaska Association of Homes for Children; Joy
Lyon, Executive Director, Association for the Education of
Young Children; Nancy C. Davis, President, Alaska Nurses
Association; Senator Bettye Davis, Sponsor; Senator Bill
Wielechowski, Sponsor; Carla Hart, Staff, Senator Bill
Wielechowski; Dr. Lauren Heine, Environmental Engineer;
Senator Joe Paskvan, Sponsor; Don Habeger, Director,
Division of Corporations, Business and Professional
Licensing, Department of Commerce, Community and Economic
Development.
PRESENT VIA TELECONFERENCE
Pat Luby, Advocacy Director, American Association for
Retired Persons (AARP); Elizabeth Ripley, Executive
Director, Mat-Su Health Foundation; Stephanie Berglund,
Chief Executive Officer, THREAD; Dr. Sarah Janson, Natural
Resources Defense Council; Dr. Andre Feliz, Medical
Researcher, Doctor, University of California Davis,
Department of Comparative Pathology; Pete Errigo, Self,
Bird Creek; Pattie Saunders, The Arc of Anchorage.
SUMMARY
SB 5 MEDICAL ASSISTANCE ELIGIBILITY
SB 5 was HEARD and HELD in committee for further
consideration.
SB 15 SEX OFFENDER/UNDERAGE ALCOHOL OFFENSE
CSSB 15(JUD) was REPORTED out of committee with a
"do pass" recommendation and with a new
indeterminate fiscal note by the Senate Finance
Committee for the Department of Corrections and
previously published fiscal note: FN2 (DOL).
SB 27 FLAME RETARDANTS AND TOXIC CHEMICALS
SB 27 was HEARD and HELD in Committee for further
consideration.
SB 101 ENTITY TRANSACTIONS ACT
SB 101 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 15
"An Act relating to penalties for certain alcohol
offenses involving persons under 21 years of age
committed by a sex offender or child kidnapper."
9:14:08 AM
SENATOR KEVIN MEYER, SPONSOR, explained that under SB 15,
the penalty for providing alcohol to minors would be
increased for sex offenders and child kidnappers.
Co-Chair Hoffman MOVED to report CSSB 15(JUD) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION it was
so ordered.
CSSB 15(JUD) was REPORTED out of committee with a "do pass"
recommendation and with a new indeterminate fiscal note by
the Senate Finance Committee for the Department of
Corrections and previously published fiscal note: FN2
(DOL).
SENATE BILL NO. 5
"An Act relating to eligibility requirements for
medical assistance for certain children and pregnant
women; and providing for an effective date."
9:15:30 AM
THOMAS OBERMEYER, STAFF, SENATOR BETTYE DAVIS, read the
bill title and referred to SB 5 as the "Denali KidCare
bill." He quoted the sponsor statement:
Senate Bill 5 increases and restores to original
levels established 14 years ago the qualifying income
eligibility standard to 200 percent of the Federal
Poverty Level (FPL) for the State Children's Health
Insurance Program (SCHIP) called Denali KidCare (DKC)
in Alaska. Alaska as one of the nation's wealthiest
states is only one of four states which fund their
SCHIP program below the 200 percent FPL. This bill
makes health insurance accessible to an estimated 1277
more uninsured children and 224 pregnant women Alaska.
Denali KidCare is an enhanced Medicaid reimbursement
program receiving up to 70 percent federal matching
funds.
Mr. Obermeyer noted that Denali KidCare currently received
approximately 65 percent in federal matching funds. He
continued to read from the sponsor statement:
Denali KidCare serves and estimated 7900 Alaska
children and remains one of the least costly medical
assistance programs in the state at about $1,700 per
child with full coverage, including dental care, which
is about 20 percent of the cost of adult senior
coverage. Early intervention and preventative care
will greatly increase Alaska children's health and
yield substantial savings to the state and public and
private sector hospital emergency rooms which must
admit indigent and uninsured patients for non-
emergency treatment. It is estimated per the Kaiser
Foundation the 24,000 uninsured children in Alaska
with a medical need are five times as likely not to
have a regular doctor as insured children and four
times more likely to use emergency rooms at a much
higher cost.
A similar bill was overwhelmingly passed with
bipartisan support by the legislature in 2010.
Governor Parnell subsequently vetoed the bill over
concern that increased eligibility to Denali KidCare
would require an increase in state-funded induced
termination of pregnancies. Medicaid funds 51 percent
of all births in Alaska. In order to continue to
receive federal funding for the state Medicaid program
of which Denali KidCare is part, and in order to
comply with state law, constitutional provisions, and
Alaska Supreme Court rulings, the state must provide
medical services for pregnant women including
medically necessary terminations, as well as prenatal
and postpartum care.
The Alaska Department of Health and Social Services
(DHSS) estimated that no more than 10 percent or 22
more induced terminations would result with minimal
expense from the increase in eligibility for Denali
KidCare to 200 percent FPL. Induced terminations under
Denali KidCare cost about $384,000 annually or less
than 0.18 percent of one-fifth of the 1 percent of the
$217 million of the DKC budget.
While the Governor understandably is concerned about
the mushrooming cost of the state Medicaid program,
Denali KidCare which is about 18 percent of the $1.2
billion total state Medicaid budget should not be
among his first cuts and expense of Alaska's most
vulnerable children and pregnant women. Increasing
eligibility for DKC to 200 percent FPL under Senate
Bill 5 is uncomplicated, manageable, and could take
effect immediately with prompt implementation by DHSS.
9:19:29 AM
Co-Chair Stedman pointed to the three fiscal notes from the
Department of Health and Social Services. The first note in
the amount of $221,800 ($77,600 in general funds and
$144,200 in federal receipts) from the Division of Public
Assistance funded two full-time positions to manage the
increased eligibility workload. The second note from the
Division of Health Care Services, totaled $567,000
($183,400 in general funds and $183,600 in federal
receipts) and would cover the additional Medicaid costs.
The third note in the amount of $2,718,200 ($820,400 in
general funds and $1,897,800 in federal receipts) from the
Division of Health Care Services funded increased Medicaid
costs.
9:21:01 AM
PAT LUBY, ADVOCACY DIRECTOR, AMERICAN ASSOCIATION FOR
RETIRED PERSONS (AARP) (via teleconference), spoke in
support of SB 5. The agency believed that every child in
Alaska should have access to insurance coverage. The
agency's members over the age of 65 enjoyed the security of
Medicare that covered prevention and acute care; the agency
felt that the state's children should enjoy the same
coverage. He stressed the importance of Medicare coverage
for newborns and their mothers. He urged the committee to
pass the legislation.
9:22:25 AM
ELIZABETH RIPLEY, EXECUTIVE DIRECTOR, MAT-SU HEALTH
FOUNDATION (via teleconference), voiced support for SB 5.
The foundation owned part of the Mat-Su Regional Medical
Center and used revenues from the local hospital to make
grants to improve the health of Mat-Su residents. The
foundation worked to reduce health care barriers that
included lack of insurance. Access to primary, dental, and
preventative health services was important for overall
health. In 2007 approximately 1,499 of the 22,991 children
in Mat-Su were uninsured and 650 of the children fell below
200 percent of the Federal Poverty Level (FPL). The overall
rate of uninsured children was 6.5 percent; however, the
rate for children at or below 200 percent of the FPL was
20.4 percent and had begun to increase between 1 percent
and 2 percent annually due to the decrease in eligibility
for Alaska KidCare. Alaska had seen a 31 percent decline in
the number of children covered by private health insurance
in the past decade. She explained that the cost of care was
passed on and raised premiums and out of pocket expenses
for other Alaskans and businesses. She stated that
uninsured children were not as healthy as insured children
and were nine times less likely to have a regular doctor,
four times more likely to be taken to the emergency room,
and 25 percent more likely to miss school. In order to get
a handle on the increased Medicaid costs in the state, it
was important to address chronic disease and other drivers
at the primary care level; uninsured children did not have
access to the necessary preventative care, which increased
system costs. She provided an example about a mother who
had taken her asthmatic child to the emergency room 12
times one year, but only 3 times the following year, as a
result of access to primary care and preventative
treatment. She emphasized that increasing Denali KidCare
eligibility levels to a minimum of 200 percent of the FPL
would increase health care access for children and families
in need and would improve public health throughout Alaska.
She relayed that currently Alaska was one of four states
with the lowest eligibility levels.
9:25:28 AM
STEPHANIE BERGLUND, CHIEF EXECUTIVE OFFICER, THREAD (via
teleconference), testified in support of SB 5. She stated
that the bill would increase access to health care for more
women, children, and families. The organization worked with
over 7,500 families annually and was aware of the
importance of health care resources for healthy development
in children. According to research, the support of children
during their early years was the most critical and families
with access to care were more likely to obtain early
intervention to support their child.
9:26:32 AM
GUS MARX, GRANTS COORDINATOR, ALASKA ASSOCIATION OF HOMES
FOR CHILDREN, spoke in support of SB 5. The association was
made up of 19 behavioral and mental health providers
throughout the state that served children primarily through
Denali KidCare. He explained that the bill would increase
Denali KidCare service and would provide children with
service who had not previously had access.
9:27:44 AM
JOY LYON, EXECUTIVE DIRECTOR, ASSOCIATION FOR THE EDUCATION
OF YOUNG CHILDREN, vocalized support for SB 5. She thought
that the $600 annual cost to the state represented the best
financial deal to help children to become strong citizens
in the future. The bill was a priority for the coalition of
early childhood associations throughout the state,
including the Alaska Association for the Education of Young
Children, Best Beginnings, Alaska Head Start Association,
Alaska Infant Learning, and THREAD. She stressed the
importance of providing at risk families with a connection
to a medical home and doctor. At times a doctor was the
only individual who saw a family; therefore, their role was
necessary to ensure that a child was able to grow and
thrive. She relayed that other states including
Mississippi, Tennessee, and Alabama had higher support for
young children in spite of tougher state financial
conditions. She urged the committee to pass the
legislation.
Senator Olson wondered what help the program offered to
community health aides that saw children in rural villages.
Ms. Lyon replied that she was not very familiar with the
health systems in Alaska's rural communities.
9:30:50 AM
NANCY DAVIS, PRESIDENT, ALASKA NURSES ASSOCIATION,
testified in support of SB 5 that would expand health care
coverage to more children. She had participated in a Yukon-
Kuskokwim training for community health aides that taught
them how to perform early preventative screenings. She
believed that under Denali KidCare, health aides could
perform initial screenings and make referrals. She
communicated that it was important to invest in healthy
children and to make it possible for parents to take good
care of their children. Denali KidCare covered pregnant
women to support the health of babies and to prevent pre-
term deliveries. She had led the enrollment effort when
Denali KidCare had first been offered in Alaska; the state
had led the nation in enrollment numbers. She believed the
need for the program was great in Alaska.
9:32:55 AM
Senator Stedman CLOSED public testimony.
Senator McGuire spoke in support of SB 5. She stressed the
importance of providing all children with access to health
care. She wondered what communications had occurred with
the governor and his staff in order to ensure that the bill
would not be vetoed as it had been in the past.
SENATOR BETTYE DAVIS, SPONSOR, replied that the
administration had worked on a solution to ensure the
governor would not veto the bill. She believed that there
were many options available that did not include cutting
Denali KidCare. She expressed interest in introducing other
legislation that would possibly reduce the number of
abortions that would be added to the program. Additional
options included adoption services and other. She felt that
the bill should be passed as written in order to provide
coverage to women and children who were in need of the
services. She was open to other suggestions by the
administration that would appease the governor.
Senator Davis discussed that the bill would increase and
restore original Denali KidCare levels established 14 years
earlier to the qualifying income eligibility standard to
200 percent of the FPL. The bill had passed the House and
Senate the prior year, but had been vetoed by the governor.
She had met with the governor who had indicated there was
flexibility on some items but not on others; she had
agreed. She believed that the governor did not have to veto
the bill. She discussed the separation of powers between
the legislative and executive branches of government and
that the legislature needed to act not based on what the
governor may do. She recounted that Governor Parnell had
supported the bill the prior session, but he had received
information prior to signing it into law that had caused
him to change his mind. She believed the program was needed
and efficient. Alaska was one of three states with an
eligibility standard of 200 percent or less of the FPL. She
emphasized that there was no need for the state to be at
such a low number when it had the finances to fund the
program.
9:37:16 AM
Senator McGuire reiterated her support of the legislation.
She discussed that the Alaska Supreme Court had decided
that abortion services should be covered if Denali KidCare
offered services to pregnant women. She explained that the
governor was upset about the court's decision, which was
beyond the control of the legislature. She encouraged
Senator Davis to consider talking with the governor before
the end of the current session; she had heard that the
governor had been considering a definition of medical
necessity related to abortions or other. She understood the
philosophical concern, but believed it would be unfortunate
if the bill was vetoed again over the item.
Senator Davis stressed that there was a medical necessity
definition that could be utilized. She believed there were
other options. She discussed that the governor's office had
the information. She stressed that the governor's statement
that he would veto the bill if he received it, was not
helpful.
SB 5 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 27
"An Act relating to flame retardants and to the
manufacture, sale, and distribution of products
containing flame retardants; relating to
bioaccumulative toxic chemicals; and providing for an
effective date."
9:40:26 AM
SENATOR BILL WIELECHOWSKI, SPONSOR, explained that SB 27
focused on healthy families and safer homes. He explained
that polybrominated diphenyl ethers (PBDEs) were flame
retardant chemicals found in televisions, computers,
furniture, mattresses, carpets, cell phones, microwaves,
etc. He stressed that Alaskan's were at risk from PBDE
exposure for three reasons: (1) Alaskans spent a
significant amount of time indoors, which increased their
exposure PBDE household dust; (2) Toxins including PBDEs,
were concentrated in cold climates and carried in global
air currents; and (3) Alaskans ate wild foods that
concentrated PBDEs, such as marine mammals and some fish
species. He informed the committee that U.S. companies had
voluntarily agreed to stop manufacturing PBDEs beginning in
2012; however, foreign companies had not. He urged the
support of the committee and emphasized that Alaskans
needed the legislation to help protect their health and
homes.
9:41:46 AM
CARLA HART, STAFF, SENATOR WIELECHOWSKI, presented the
highlights of the bill. She discussed that PBDEs were
pervasive, could be released from products in the form of
microscopic dust, and could be easily ingested, inhaled,
and absorbed. The chemicals remained in the environment for
extended periods of time, built up in fatty tissue, and
became more concentrated as they moved up the food chain.
She explained that PBDEs were neurotoxins, which impacted
hormones that regulate how the human body functions. She
relayed that couches manufactured prior to 2004 frequently
contained at least one pound of the toxic chemicals. The
chemicals could be ingested when a person ate food with
their fingers. She stressed that the neurotoxins were
transferred from mother to child during pregnancy and
nursing and that small children often put items from the
floor in their mouths. Exposure to small concentrations of
PBDEs at critical stages of development could have
permanent effects on development, and could potentially
trigger cancers and other health problems decades later.
Ms. Hart remarked that Senator Donny Olson had hosted a
session on Fetal Alcohol Spectrum Disorder (FASD) earlier
in the session; the similarity of the impacts of FASD and
PBDE exposure were notable; however, a pregnant woman could
protect a child from FASD by avoiding alcohol. The
Environmental Protection Agency (EPA) did not have the
authority under current law to impose a ban of the toxic
chemicals; therefore, individual states had begun to take
action. The bill would not compromise fire safety, given
that changes in product design had reduced the need for
chemical flame retardants. She relayed that a safer
chemical alternative had passed the scrutiny of the fire
marshal for State of Washington and other alternatives were
under consideration throughout the country. Supporters of
the bill included the Alaska Fire Chiefs Association,
Alaska Association of Professional Fire Fighters,
Association of Village Council Presidents, Arc of
Anchorage, Nome Eskimo Community, Alaska Inter-Tribal
Council, Alaska Nurses Association, and the Native Village
of Savoonga.
Ms. Hart noted that the Division of Environmental Health
under the Department of Environmental Conservation (DEC)
did not have a toxicologist despite the prevalence of
household and industrial toxins. She discussed that the DEC
fiscal note included funding for one toxicologist. The
fiscal notes from the Departments of Health and Social
Services (DHSS) and Public Safety (DPS) were zero. She
detailed that the annual financial impact equated to
approximately $139,000 or $0.20 per Alaskan.
9:45:33 AM
Co-Chair Stedman delineated that there were three fiscal
notes for SB 27, including two zero notes from DHSS and DPS
and one fiscal note in the amount of $139,000 in general
funds from DEC for the funding of one new full-time
environmental program specialist position.
9:46:51 AM
DR. SARAH JANSON, NATURAL RESOURCES DEFENSE COUNCIL (via
teleconference), spoke in support of SB 27. She was a
physician who specialized in occupational and environmental
medicine and was a reproductive biologist with expertise in
chemicals that mimicked hormones. She explained that flame
retardant chemicals such as PBDEs were hormone disrupting
chemicals that interfered with the body's natural hormones
including those critical in brain and reproductive system
development. Flame retardants like PBDEs were common
components in household items and had become incorporated
into human bodies. Humans were among the most highly
exposed; exposure came from multiple places, but was
particularly prevalent in dust that leached from consumer
products in households. Pregnant and nursing mothers passed
chemicals to developing fetuses and infants during critical
windows of brain and reproductive system development. Small
children had been found to have exposure of up to three
times more than their mothers due to their propensity to
put items from the floor in their mouths.
Ms. Janson explained that the chemicals had been found to
disrupt the thyroid hormone and sex hormones such as
estrogen and testosterone. Health outcomes associated with
harm in lab animals included damage to brain development
that resulted in hyperactivity and memory problems,
reproductive harm such as low sperm counts and small
testicles, and cancer. She was troubled that many of the
outcomes, which had once only been found in animal studies,
had been found in human populations. A recent study of U.S.
children had found that those with high PBDE exposure in
the womb performed worse on learning, memory, attention,
and physical development. The use of PBDEs would continue
to add to the negative impact on the environment and human
bodies. She relayed that continued exposure put future
generations at risk for chronic disease and irreparable
harm.
Senator Olson asked how the dangers of PBDEs compared to
other neurotoxins, such as cadmium, mercury, and other.
Ms. Janson replied that it was difficult to separate the
contribution of PBDEs from other heavy metals, mercury,
lead, cadmium, and PCBs [polychlorinated biphenyls] that
were historically used as flame retardant chemicals. The
chemicals could all cause greater harm when combined
together. She did not know a specific percentage that
caused conditions such as attention deficit hyperactivity
disorder; however, she opined that the elimination of
exposure to the chemicals would have a significant impact
on public and reproductive health.
Senator Olson queried the specific neoplasias that existed
as a result of PBDEs. Ms. Janson responded that there was
animal research data related to Deca PBDEs, which were
listed by the EPA as a probable human carcinogens based on
thyroid tumors and liver abnormalities.
Senator Olson asked what negative effects had been seen in
Europe that had caused the European Union to ban PBDEs.
Ms. Janson answered that PBDE levels in breast milk in some
European countries had declined subsequent to their removal
from consumer products. She did not know whether a follow-
up study on health impacts had been conducted; the body
took a long time to metabolize the chemicals; therefore, it
would take considerable time before health impacts could be
measured as a result of the removal of PBDEs from products.
9:53:10 AM
DR. ANDRE FELIZ, MEDICAL RESEARCHER, DOCTOR, UNIVERSITY OF
CALIFORNIA DAVIS, DEPARTMENT OF COMPARATIVE PATHOLOGY,
CALIFORNIA CITIZENS FOR FIRE SAFETY (via teleconference),
testified against SB 27. His expertise was in air
particulate pollution and he explained that science had
been unable to directly link health problems to PBDEs.
There had been no reported literature about any adverse
health impacts in humans resulting from exposure to Deca or
other polybrominated fire retardants. His research focused
on air particulate matter and how humans received toxins
from dust and inhaled chemicals. He had found that the dust
constituted a higher environmental danger than some of the
toxic chemicals that people believed were in the dust. He
stressed that the danger of fire was greater than the
danger of PBDE exposure. He emphasized that 3,500 children
had died as a result of fire in the prior year and 90
percent of the cases were at home. He stressed the
importance of fire retardants in the prevention of fires.
He had worked with burn victims and relayed that scars
could last a lifetime. He believed that before banning
PBDEs that it was important to consider their roll in
saving lives. He addressed the danger of replacing PBDEs,
which had been studied for over 30 years, with newer
alternatives that had only been studied for a few years.
9:57:13 AM
PETE ERRIGO, SELF, BIRD CREEK (via teleconference),
testified against SB 27. He expressed concern that the
removal of fire retardants would expose people to
unnecessary risk. He believed there was legislation in
place that would phase in new fire retardants and
recommended allowing time for the bill to take effect.
9:58:30 AM
PATTIE SAUNDERS, THE ARC OF ANCHORAGE (via teleconference),
testified in support of SB 27. She discussed that the
organization served Alaskans with developmental
disabilities and mental health issues. She emphasized that
preventing a single occurrence of developmental disability
would save between $1 million and $3 million over a child's
lifetime according to national experts and the Governor's
Council on Special Education and Disabilities. One out of
six families was impacted by developmental disability and
the savings represented by preventable disabilities were
"staggering." She highlighted that the bill would work to
remove PBDEs from the environment and would help to protect
brain development in children. The bill would create a
registry of safe fire retardants that would protect
children, families, and firefighters. She detailed that
monetary savings provided by the bill would be substantial;
the prevention of 10 disabilities per year would save
between $10 million and $30 million over the next ten
years. She was perplexed by testimony that stated concern
about burn victims but downplayed the impacts of chemicals
that could cause disabilities in children, which could be
replaced by equally effective safer alternatives. She
queried the relationship between the testifier and chemical
manufacturers or industry representatives. She reiterated
that $139,000 per year was a small amount to pay and
wondered whether committee members could face the parents
of babies born with preventable diseases. She opined that
critics of the bill were unwilling to take modest steps to
protect children and other.
10:02:48 AM
DR. LAUREN HEINE, ENVIRONMENTAL ENGINEER, was present to
discuss alternatives to PBDEs. She worked with businesses
such as Hewlett-Packard, Apple, and Walmart that were
interested in developing products that were beneficial for
human health and the environment. She pointed out that a
fire retardant must meet required fire safety performance
to be considered an alternative; therefore, banning PBDEs
would not restrict fire safety. She stressed that although
fire safety had saved lives there was no evidence that
PDBEs had done so. United States manufacturers had agreed
to phase out PBDEs; however, the chemicals were still
imported into the country in products. She informed the
committee that Walmart had recently banned products that
contained the chemicals. Mattress manufacturers did not
need PBDEs and used a flame retardant barrier instead.
Plastic manufacturers such as DSM, Apple, Seagate, Hewlett-
Packard, and other did not use any brominated flame
retardants. She thought it was odd that related bans were
normally seen negatively. She believed the state would be
sending an important signal that: (1) People needed to know
the contents in products that they were making and selling;
and (2) Manufacturers needed to make safer alternatives
that were consistent with what people valued. She pointed
out that DOW Chemical had just offered an alternative to a
brominated flame retardant that had health benefits and
would be used with EPA partnerships. She stressed that
bills like SB 27 sent important signals through the supply
chain and drove innovation for new products and processes
in the U.S. She thought there was an opportunity to move
towards safer and healthier products.
10:07:36 AM
Senator Olson asked how the cost increase due to the use of
alternative flame retardant chemicals would impact young
parents and other consumers.
Senator Wielechowski responded that both fire safety and
health safety could be accomplished. He did not believe
there was any evidence that the ban on PBDEs in Europe and
up to 13 other states had caused an increase in fire
related burns. He represented lower income areas in
Anchorage and he was sympathetic to their needs. Bans had
caused companies to become more innovative and to provide
safer alternatives. He did not believe a cost increase
would result from a ban on the chemicals because safer
options were available and were currently used in 12 other
states and throughout Europe. The ban on PBDEs by large
companies such as Walmart, Apple, and Hewlett-Packard, was
significant and would help to keep costs down. He
emphasized that Alaska was particularly affected by the
risks posed by the chemicals; studies showed large amounts
of PBDEs in the breast milk of Yup'ik mothers due to their
subsistence lifestyle.
SB 27 was HEARD and HELD in Committee for further
consideration.
SENATE BILL NO. 101
"An Act adopting the Alaska Entity Transactions Act;
relating to changing the form of entities, including
corporations, partnerships, limited liability
companies, business trusts, and other organizations;
amending Rule 79, Alaska Rules of Civil Procedure, and
Rules 602(b)(2), 602(c), and 605.5, Alaska Rules of
Appellate Procedure; and providing for an effective
date."
10:11:47 AM
SENATOR JOE PASKVAN, SPONSOR, provided a synopsis of the
legislation. He discussed that during the past 20 years
many new types of business entities, including limited
liability companies and limited liability partnerships, had
been recognized under state law. Consequently, many
businesses used various types of entities in their
organizational structures. He detailed that the relaxation
of federal tax rules that governed entity classification
had led to an increase in the volume of restructuring and
acquisition transactions throughout the various entity
forms. The companies were required to initiate transactions
out-of-state and multiple indirect steps were required
because of the lack of clear statutory structure in Alaska.
The legislation conformed to the Uniform Law Commissioners'
Model Entity Transaction Act (META) and would help to
facilitate transactions between more than one form of
business entity, improve the existing business climate, and
help reduce unnecessary administrative and legal burdens
that were currently imposed. The bill would provide
businesses in Alaska with the opportunity to engage in
cross-entity transactions in-state. The legislation was
initially introduced during the prior session; due to the
complexity of the bill the Departments of Commerce,
Community and Economic Development (DCCED) and Law (DOL)
had worked to fine tune it during the interim.
Senator Paskvan discussed the contents of members'
committee packets and pointed out the zero fiscal note from
DCCED. The packet included a memo drafted by an attorney
that advocated for the update of the Alaska business
statutes and depicted the necessary steps an Alaska
corporation had to take to merge with a limited liability
company: (1) A business was required to form an out of
state or "foreign" limited liability company; (2) The
business's Alaska limited liability company was required to
merge with the foreign company; (3) The surviving entity of
the merger was converted into a foreign corporation
pursuant to the provisions of the other state; and (4) The
corporation would then be merged with the Alaskan
corporation. The intent was to establish a business-
friendly statutory structure that would allow a single
transaction to take place. He quoted from a META summary
that had been prepared by the Uniform Law Commission, which
provided "non-partisan, well-conceived, and well drafted
legislation that brings clarity and stability to critical
areas of state statutory law." He communicated that the
bill had been vetted by the commission, which provided
services that most states could not otherwise afford or
duplicate. Member packets also contained the 2011 suggested
state legislation by the Council of State Governments
(CSG); the council "alerts state elected and appointed
officials to emerging social, economic, and political
trends; offers innovative state policy responses to rapidly
changing conditions; and advocates multi-state problem
solving to maximize resource and competitiveness." He
quoted from a letter from the President and Chief Executive
Officer of Doyon: "As Doyon has grown, its corporate
structure has grown more complex. The passage of this
legislation will help to make some unnecessary complexity
out of transactions and will avoid the need to incorporate
in other jurisdictions where laws are better defined for
complex transactions." He summarized that the bill would
help bring Alaska into mainstream statutory business law.
Co-Chair Stedman referred to the zero fiscal note by DCCED.
10:18:37 AM
DON HABEGER, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, relayed that the
division had spent a significant amount of time comparing
the bill from the prior session with existing statute. The
division and DOL and had worked through their concerns and
were comfortable with the current legislation. He added
that the division would be able to absorb the legislation
with no additional costs.
Senator Stedman asked whether DCCED supported the
legislation. Mr. Habeger replied that the department was
comfortable with the bill.
Senator Olson queried whether there was opposition to the
bill.
Senator Paskvan was not aware of any opposition to the
legislation. He noted that a significant amount of work had
gone into the bill to make it acceptable to all parties.
10:21:14 AM
Senator McGuire wondered whether there were any small
entities that would be negatively impacted by the
legislation. She recalled that the Senate Judiciary
Committee had focused on the requirement that transactions
had to be approved by all interest holders to prevent items
such as hostile takeovers.
Senator Paskvan detailed that no creditors, secured
interests, or consumers would be harmed. The bill worked to
protect the interest of all parties through a business-
friendly, single transaction.
SB 101 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:23:18 AM
The meeting was adjourned at 10:23 AM.