Legislature(2011 - 2012)SENATE FINANCE 532
04/13/2012 09:00 AM Senate FINANCE
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 217 | TELECONFERENCED | |
| + | HB 286 | TELECONFERENCED | |
| + | HB 282 | TELECONFERENCED | |
| + | HB 301 | TELECONFERENCED | |
| + | HB 204 | TELECONFERENCED | |
| + | HB 205 | TELECONFERENCED | |
| + | HB 252 | TELECONFERENCED | |
| + | HB 276 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 21 | TELECONFERENCED | |
| += | HB 60 | TELECONFERENCED | |
| += | HB 78 | TELECONFERENCED | |
| += | HB 115 | TELECONFERENCED | |
| += | HB 131 | TELECONFERENCED | |
| += | HB 246 | TELECONFERENCED | |
| += | HB 258 | TELECONFERENCED | |
| += | HB 298 | TELECONFERENCED | |
| += | HB 302 | TELECONFERENCED | |
| += | HB 360 | TELECONFERENCED | |
| += | HB 366 | TELECONFERENCED | |
| += | HCR 23 | TELECONFERENCED | |
| = | SB 121 | ||
SENATE FINANCE COMMITTEE
April 13, 2012
9:08 a.m.
9:08:49 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:08 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
Representative Bob Herron; Representative Paul Seaton;
Representative Anna Fairclough; Representative Mia
Costello; Yasmine Habash, Staff, Representative Craig
Johnson; Darwin Peterson, Staff, Senator Bert Stedman;
Terry Harvey, Staff, Representative Cathy Munoz; Rachel
Kallander, Staff, Representative Bill Thomas; Brodie
Anderson, Staff, Representative Reggie Joule; Nancy Manly,
Staff, Representative Bob Lynn; Michael Paschall, Staff,
Representative Eric Feige; Dana Owen, Staff, Senator Dennis
Egan; Jim Puckett, Director, Division of Retirement and
Benefits, Department of Administration; Weston Eiler,
Staff, Senator Bert Stedman; Aaron Schroeder, Staff,
Representative Bill Thomas; Astrid Lievano, Staff,
Representative Alan Austerman.
PRESENT VIA TELECONFERENCE
Mark San-Souci, Regional State Liaison Office, U.S.
Department of Defense, Washington; Tyler Arnold, CEO,
Simply Social, Anchorage.
SUMMARY
CSSB 121 TEACHERS & PUB EMPLOYEE RETIREMENT PLANS
CSSB 121(STA) was REPORTED out of committee with
a "do pass" recommendation and with a previously
published fiscal impact note: FN2(DOR), a new
fiscal impact note from the Department of
Administration, and a new indeterminate fiscal
note from the Department of Administration.
SB 217 PHARMACY AUDITS
SB 217 was HEARD and HELD in committee for
further consideration.
CSHB 21(FIN)
SUICIDE PREVENTION COUNCIL MEMBERS
CSHB 21(FIN) was REPORTED out of committee with a
"do pass" recommendation and with a new fiscal
impact note from the Department of Health and
Social Services.
CSHCR 23(FIN)
ALASKA ARCTIC POLICY COMMISSION
CSHCR 23(FIN) was SCHEDULED but not HEARD.
HB 60 GEODUCK AQUATIC FARMING/SEED TRANSFER
HB 60 was REPORTED out of committee with a "do
pass" recommendation and with two previously
published zero fiscal notes: FN3(DNR) and
FN4(DFG).
CSHB 78(FIN)
INCENTIVES FOR CERTAIN MEDICAL PROVIDERS
CSHB 78(FIN) was REPORTED out of committee with a
"do pass" recommendation and with a previously
published fiscal impact note: FN4(DHSS), and a
previously published zero fiscal note: FN3(DEED).
CSHB 115(TRA)
NAMING WALTER J. HICKEL EXPRESSWAY
CSHB 115(TRA) was REPORTED out of committee with
a "do pass" recommendation and with previously
published fiscal impact note: FN2(DOT).
CSHB 131(TRA) am
COMMUNITY AND TRANSPORTATION ADV. BOARD
CSHB 131(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a previously
published fiscal impact note: FN3(DOT).
HB 204 STATE PROCUREMENT CODE
HB 204 was HEARD and HELD in committee for
further consideration.
HB 205 PUBLIC PROCUREMENT
HB 205 was HEARD and HELD in committee for
further consideration.
CSHB 246(FIN)
NAMING CERTAIN BRIDGES & AIRPORTS
CSHB 246(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a previously
published fiscal impact note: FN3(DOT), and a
previously published fiscal impact note FN4(DOT).
CSHB 252(FIN)
SMALL BUSINESS INCOME TAX EXEMPTION
CSHB 252(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 258(FIN)
NATURALLY OCCURRING ASBESTOS
SCS CSHB 258 was REPORTED out of committee with a
"do pass" recommendation and with a previously
published zero fiscal note: FN1(DLWD), a
previously published fiscal impact note
FN3(DHSS), a previously published zero fiscal
note: FN4(DOL), a previously published zero
fiscal note: FN5 (DNR), a previously published
fiscal impact note: FN6(DEC), and a previously
published fiscal impact note: FN7(DOT).
CSHB 276(FIN)
OIL/GAS PROD. TAX CREDITS/RATES/VALUE
CSHB 276(FIN) was SCHEDULED but not HEARD.
CSHB 282(FIN)
MILITARY TRAINING CREDIT/TEMP. LICENSE
CSHB 282(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 286(FIN)
G.O. BONDS: TRANSPORTATION PROJECTS
CSHB 286(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 298(FIN)
EXEMPTIONS FROM MINING TAX
CSHB 298(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a previously
published zero fiscal note: FN1(DNR), and a
previously published fiscal impact note:
FN3(DOR).
CSHB 301(FIN)
BOATING REGULATION: SUNSET/ENFORCEMENT
CSHB 301(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 302(FIN)am
CONTRIBUTIONS FROM PFD: UNIV/AUDITS
CSHB 302(FIN)am was REPORTED out of committee
with a "do pass" recommendation and with a
previously published zero fiscal note: FN1(DOR).
HB 360 INTERSTATE MINING COMPACT & COMMISSION
HB 360 was REPORTED out of committee with a "do
pass" recommendation and with a previously
published fiscal impact note: FN2(HFIN/DNR).
HB 366 DISASTER PLANNING AND SERVICES
HB 366 was REPORTED out of committee with a "do
pass" recommendation and with a previously
published zero fiscal note: FN1(DMVA).
CS FOR HOUSE BILL NO. 78(FIN)
"An Act establishing a loan repayment program and
employment incentive program for certain health care
professionals employed in the state; and providing for
an effective date."
9:11:01 AM
REPRESENTATIVE BOB HERRON, explained that HB 78 would
provide financial incentives for certain health care
providers that Alaska needed, in 10 different occupations.
Co-Chair Stedman discussed the fiscal notes in the packet.
He noted that public testimony had been previously held.
Co-Chair Hoffman MOVED to report CSHB 78(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 78(FIN) was REPORTED out of committee with a "do pass"
recommendation and with a previously published fiscal
impact note: FN4(DHSS), and a previously published zero
fiscal note: FN3(DEED).
CS FOR HOUSE BILL NO. 115(TRA)
"An Act designating a portion of Minnesota Drive and a
portion of O'Malley Road in Anchorage the Walter J.
Hickel Expressway."
9:12:36 AM
YASMINE HABASH, STAFF, REPRESENTATIVE CRAIG JOHNSON,
explained that HB 115 would concurrently name a 7.5 mile
portion of Minnesota Drive and O'Malley Road the "Walter J.
Hickel Expressway."
9:13:01 AM
Co-Chair Stedman discussed the fiscal note in the packet.
He noted that public testimony had been previously heard.
Co-Chair Hoffman MOVED to report CSHB 115(TRA) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 115(TRA) was REPORTED out of committee with a "do
pass" recommendation and with previously published fiscal
impact note: FN2 (DOT&PF).
CS FOR HOUSE BILL NO. 131(TRA) am
"An Act establishing the Alaska Community and Public
Transportation Advisory Board and relating to a long-
range community and public transportation plan; and
providing for an effective date."
9:13:56 AM
Co-Chair Hoffman MOVED to ADOPT the proposed committee
substitute for HB 131, Work Draft 27-LS0418\I (Martin,
4/10/12).
Co-Chair Stedman OBJECTED for the purpose of discussion.
9:14:20 AM
DARWIN PETERSON, STAFF, SENATOR BERT STEDMAN, explained
that the only change in the bill was located on Page 4,
lines 17 through 20:
(f) The board shall analyze the use of
alternative fuels, including compresses natural gas,
propane, and biodiesel in community and public
transportation vehicle fleets and make recommendations
for the use of alternative fuel vehicles where cost
effective.
Mr. Peterson shared that at a previous hearing Senator
McGuire had requested that the language be included in the
bill.
Co-Chair Stedman REMOVED his OBJECTION. There being NO
FURTHER OBJECTION, Work Draft 27-LS0418\I was ADOPTED.
Co-Chair Stedman discussed the fiscal notes in the packet.
9:15:31 AM
TERRY HARVEY, STAFF, REPRESENTATIVE CATHY MUNOZ, explained
that the bill would establish the Alaska Community and
Public Transportation Advisory Board, which would bring a
group of Alaskans together in order to coordinate
transportation in the state.
9:15:55 AM
Co-Chair Hoffman MOVED to report CSHB 131(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 131(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a previously published fiscal
impact note: FN3(DOT).
CS FOR HOUSE BILL NO. 246(FIN)
"An Act naming certain bridges and airports."
9:16:39 AM
Co-Chair Hoffman MOVED to ADOPT the proposed committee
substitute for HB 246, Work Draft 27-LS0921\E (Wayne,
4/10/12).
9:16:46 AM
Co-Chair Stedman OBJECTED for the purpose of discussion.
9:16:51 AM
RACHEL KALLANDER, STAFF, REPRESENTATIVE BILL THOMAS,
explained that the change in the bill would re-establish
the Klawock Airport as the Frank Petratrovich Airport.
9:17:25 AM
Co-Chair Stedman REMOVED his OBJECTION. There being NO
OBJECTION, Work Draft 27-LS0921\E was ADOPTED.
9:17:35 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
9:17:48 AM
Co-Chair Hoffman MOVED to report CSHB 246(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 246(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a previously published fiscal
impact note: FN3(DOT), and a previously published fiscal
impact note FN4(DOT).
CS FOR HOUSE BILL NO. 258(FIN)
"An Act directing the Department of Transportation and
Public Facilities to develop and implement standards
and operating procedures, to evaluate site-specific
use plans, and to designate project areas concerning
gravel or other aggregate material containing
naturally occurring asbestos; authorizing use on an
interim basis of gravel or other aggregate material
containing naturally occurring asbestos for certain
transportation projects and public facilities;
providing immunity for the state and for landowners,
extractors, suppliers, transporters, and contractors
for certain actions or claims arising in connection
with the use of gravel or aggregate material
containing naturally occurring asbestos in certain
areas; requiring contractors to report certain
asbestos- related data to the Department of
Transportation and Public Facilities; and providing
for an effective date."
9:18:20 AM
AT EASE
9:19:26 AM
RECONVENED
9:19:41 AM
Co-Chair Hoffman MOVED to ADOPT the proposed committee
substitute for HB 258, Work Draft 27-LS0400\Q (Nauman,
4/9/12).
Co-Chair Stedman OBJECTED for the purpose of discussion.
9:20:01 AM
DARWIN PETERSON, STAFF, SENATOR BERT STEDMAN, explained the
changes in the new committee substitute. He stated that the
legislative findings language had been removed from the
bill; a letter of legislative findings and purposes would
be drafted by the committee by request of the sponsor. He
relayed that Page 7, lines 21 through 24 had been changed
to state:
(2) the completed project will not use gravel or other
aggregate material containing naturally occurring
asbestos for a surface application except if the
material to be used for the surface application is
treated or bound with a surface compound, including
chip seal or asphalt, approved by the department.
Mr. Peterson stated that dust was not created when
naturally occurring asbestos was included in a chip seal.
9:21:35 AM
Co-Chair Stedman REMOVED. There being NO FURTHER OBJECTION,
Work Draft 27-LS0400\Q was ADOPTED.
9:21:43 AM
BRODIE ANDERSON, STAFF, REPRESENTATIVE REGGIE JOULE,
explained that the bill would allow communities to move
forward using naturally occurring asbestos gravel when the
aggregate material proved to be the only option. He stated
that communities could request that certain land could be
designated a naturally occurring delineation zone, and
within that zone aggregate material that contained more
than .25 by mass volume naturally occurring asbestos would
be allowed to be used a construction material. He added
that in communities where no one could step forward to make
the request, the state could create a zone in order to
complete projects. He furthered that within the delineation
zone contractors would be required to submit a site-
specific plan that described how the material would be used
and how public safety would be ensured. He added that the
bill would define an analytical threshold where naturally
occurring asbestos began in gravel; .25 by mass volume,
material below that level would be considered aggregate.
9:23:47 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
He noted that public testimony had previously been heard.
9:24:27 AM
Co-Chair Hoffman MOVED to report SCS CSHB 258(FIN) out of
committee with individual recommendations, the accompanying
fiscal notes, and with a legislative findings Letter of
Intent from the Senate Finance Committee. There being NO
OBJECTION, it was so ordered.
9:24:55 AM
SCS CSHB 258 was REPORTED out of committee with a "do pass"
recommendation and with a previously published zero fiscal
note: FN1(DLWD), a previously published fiscal impact note
FN3(DHSS), a previously published zero fiscal note:
FN4(DOL), a previously published zero fiscal note: FN5
(DNR), a previously published fiscal impact note: FN6(DEC),
and a previously published fiscal impact note: FN7(DOT).
CS FOR HOUSE BILL NO. 298(FIN)
"An Act exempting quarry rock, sand and gravel, and
marketable earth mining operations from the mining
license tax; and providing for an effective date."
9:25:21 AM
REPRESENTATIVE PAUL SEATON, explained that the bill would
exempt the mining license tax from sand and gravel
operations.
9:25:35 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
9:25:45 AM
Co-Chair Hoffman MOVED to report CSHB 298(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
9:25:54 AM
CSHB 298(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a previously published zero
fiscal note: FN1(DNR), and a previously published fiscal
impact note: FN3(DOR).
CS FOR HOUSE BILL NO. 302(FIN) am
"An Act requiring each campus of the University of
Alaska to apply to be included on the contribution
list for contributions from permanent fund dividends;
requiring a university to pay an application fee for
each campus separately listed on the contribution list
for contributions from permanent fund dividends; and
repealing certain audit requirements for entities
receiving contributions from permanent fund
dividends."
9:26:13 AM
REPRESENTATIVE PAUL SEATON, explained that the bill would
eliminate the audit provision from the Pick, Click, Give
program for Permanent Fund Dividend contributions.
9:26:47 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
9:26:55 AM
Co-Chair Hoffman MOVED to report CSHB 302(FIN) am out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 302(FIN) am was REPORTED out of committee with a "do
pass" recommendation and with a previously published zero
fiscal note: FN1(DOR).
HOUSE BILL NO. 60
"An Act relating to aquatic farm permitting involving
geoducks and to geoduck seed transfers between
certified hatcheries and aquatic farms."
9:27:38 AM
REPRESENTATIVE PAUL SEATON, explained that the legislation
would allow for geoduck farming in and around the Gulf of
Alaska.
9:27:56 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
9:28:10 AM
Co-Chair Hoffman MOVED to report HB 60 out of committee
with individual recommendations and the accompanying fiscal
notes. There being NO OBJECTION, it was so ordered.
HB 60 was REPORTED out of committee with a "do pass"
recommendation and with two previously published zero
fiscal notes: FN3(DNR) and FN4(DFG).
HOUSE BILL NO. 360
"An Act enacting the Interstate Mining Compact and
relating to the compact; relating to the Interstate
Mining Commission; and providing for an effective
date."
9:29:06 AM
NANCY MANLY, STAFF, REPRESENTATIVE BOB LYNN, explained that
HB 360 would authorize the state to join and participate in
the Interstate Mining Compact Commission. She added that
the commission was a coalition of 24 mining states.
9:29:43 AM
Co-Chair Stedman discussed the fiscal note in the packet.
He noted that public testimony had been previously taken.
9:29:56 AM
Co-Chair Hoffman MOVED to report HB 360 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
9:30:10 AM
HB 360 was REPORTED out of committee with a "do pass"
recommendation and with a previously published fiscal
impact note: FN2 (HFIN/DNR).
HOUSE BILL NO. 366
"An Act establishing an Alaska intrastate mutual aid
system and relating to the duties of the Alaska
division of homeland security and emergency management
and the duties of the Alaska State Emergency Response
Commission."
9:30:50 AM
MICHAEL PASCHALL, STAFF, REPRESENTATIVE ERIC FEIGE, renewed
the ethics disclosures that he had established during the
first hearing of the bill [April 12, 2012]. He explained
that the legislation would establish an intrastate mutual
aid compact between political subdivisions within the
state.
9:31:10 AM
Co-Chair Hoffman MOVED to report HB 366 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
9:31:22 AM
HB 366 was REPORTED out of committee with a "do pass"
recommendation and with a previously published zero fiscal
note: FN1(DMVA)
CS FOR HOUSE BILL NO. 21(FIN)
"An Act relating to the membership of the Statewide
Suicide Prevention Council."
9:32:13 AM
REPRESENTATIVE ANNA FAIRCLOUGH, explained that the
legislation would add one member as well as a military
presence on the Alaska Suicide Prevention Council. She
furthered that the bill provided the flexibility for a
youth member to serve until the age of 24.
Co-Chair Stedman discussed the fiscal note in the packet.
Co-Chair Hoffman MOVED to report CSHB 21(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 21(FIN) was REPORTED out of committee with a "do pass"
recommendation and with a new fiscal impact note from the
Department of Health and Social Services.
SENATE BILL NO. 217
"An Act establishing procedures and guidelines for
auditing pharmacy records; and providing for an
effective date."
9:33:50 AM
Co-Chair Hoffman MOVED to ADOPT the proposed committee
substitute for SB 217, Work Draft 27-LS1411\I (Martin,
4/10/12).
9:33:59 AM
Co-Chair Stedman OBJECTED for the purpose of discussion.
9:34:05 AM
SENATOR DENNIS EGAN, explained that SB 217 would establish
procedures and guidelines for auditing pharmacy records and
holding all pharmacies to equal standards. He stated that
the legislation had been introduced by the request of the
Alaska Pharmacists Association.
9:34:53 AM
DANA OWEN, STAFF, SENATOR DENNIS EGAN, detailed the changes
in version I of the legislation.
9:35:28 AM
Mr. Owen. explained that on Page 1, line 8, the word "such"
had been added in replacement of the word "those". A new
paragraph had been added to Page 2, line 6:
(3) an insurer, managed care company, hospital or
medical service corporation, third-party payor, or
pharmacy benefits manager may not conduct an audit
within 90 days after an audit in which no errors were
found; in this paragraph, "error" does not mean a
clerical error, record keeping error, or typographical
error unless the auditor finds proof of intent to
commit fraud;
Mr. Owen continued with the changes. Page 2, line 24 had
been changed to the following to clarify the intent of the
original bill:
(9) calculations of overpayment by an auditor may not
include dispensing fees unless a prescription was not
dispensed, a physician denied authorization to
dispense the prescription, or the dispensing violated
a term of a contract;
Mr. Owen explained that Page 2, lines 31 through Page 3,
line 4 replaced a paragraph from the original bill:
(11) to the extent that an audit finds clerical or
record keeping errors in a required document or
record, the pharmacy may not be subject to recoupment
unless there is proof of intent to commit fraud or the
clerical or record keeping error results in actual
financial harm to an insurer, managed care company,
hospital or medical services corporation, third-party
payor, pharmacy benefits manager, or a customer;
Mr. Owen stated that Page 3, line 7 reflected the addition
of the words, "from the date of completion of the audit to
the delivery date of the preliminary audit report, unless
an auditor finds proof of intent to commit fraud"; the
language applied to the interest that accrued during the
time an audit was being carried out. Paragraph 19 of the
same page was a new paragraph that stated that patient
information accessed in the course of an audit was
confidential and could not be used for marketing purposes.
He stated that the effective date of the legislation had
been changed to January 1, 2013.
9:38:16 AM
Co-Chair Stedman REMOVED his OBJECTION. There being NO
FURTHER OBJECTION, Work Draft 27-LS1411\I was ADOPTED.
9:38:46 AM
Mr. Owen remarked that SB 217 sought to achieve fair audit
standards that allowed for adequate auditing of pharmacies;
while reigning in unfair, and often abusive, audit
practices. He stated that it was important to understand
that Alaska's pharmacies were presented "take it or leave
it" contracts by pharmacy benefit managers (PBM).
Pharmacies must take the contracts if they wanted to be
paid by their customer's medical plans for the prescription
drugs that the pharmacies dispensed. He furthered that
contract terms could, and often were, changed unilaterally
by the PBM arbitrarily. He stated that it was not possible
for small independent pharmacies to negotiate better audit
terms. Among the most abusive practices was the use of
extrapolation to determine how much a PBM may have overpaid
a pharmacy; meaning that if an audit found that the
prescription of a certain drug was overbilled, the PBM
could assert that every similar prescription was likewise
overbilled, and then calculate without examining actual
dispensing records how many such prescriptions the
Pharmacist was likely to have filled and use that
calculated number to determine the amount that was
recoverable. Mr. Owen relayed that auditors could, and did,
take typographical errors as errors of fact and proof of
fraud. Dispensing fees (amounts paid over and above
reimbursement costs of drugs) could and were taken back,
even in cases where a prescription was legitimate, the drug
dispensed as prescribed, and only the amount of the
reimbursed cost was at issue.
Mr. Owen explained that the bill would also place limits on
when an audit could be performed, the frequency of audits,
the length of time an audit could look back, the time that
elapsed between audit completion and a preliminary report
was given to the pharmacy and the length of time to deliver
a final report. None of the standards were yet written in
statute. Finally, the bill would keep patient records
required during an audit confidential. This would ensure
that PBM knowledge of individual patient prescription drug
usage could not be shared with the arm of the corporation
that retailed the drugs, and prevented the retail arm from
contacting individuals with offers that undercut local
pharmacies. He noted that the bill was based on model
legislation that had been adopted in 18 states, 3 of which
had enacted the laws during the time-period of the current
the legislative session: Utah, Kentucky, and Indiana.
9:42:16 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
Co-Chair Stedman OPENED public testimony.
9:42:31 AM
JIM PUCKETT, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS,
DEPARTMENT OF ADMINISTRATION, expressed concern in
recognition of the department's fiduciary responsibilities.
He pointed out to the committee Page 2, line 6. He
expressed that the department had reservations concerning
the responsibility of the burden of proof to show that
there had been intent to commit fraud. He stated that the
language was thought by the department to be overly broad,
and that the responsibility should lie with law
enforcement. He furthered that the department did not agree
that the legislation should limit the timeframe specified
in an existing agreement with two business parties, as
written on Page 2, line 4. He suggested adding: "Unless a
longer time period is specified in a contract between the
pharmacist and the insurer, manager company, hospital or
medical service corporation, third-party payor, or pharmacy
benefit manager." He directed attention to Page 2, line 31,
and expressed departmental concerns that the language was,
again, overly broad. He said that the proof of intent to
commit fraud was an unreasonable burden for an audit. He
continued to Page 3 line 7. He said that the department
believed that there was a time value of money that was
universally understood; that removing interest would
unnecessarily reduce a normal consequence for errors,
overcharging, stealing, or committing fraud. He stated that
the department believed that the language on Page 3, line
10 was too broad because it required the department to
accept any record, documented phone calls, or other written
electronic record as proof that the prescription was
delivered as ordered by the prescriber. He shared that
computers and phone logs could be altered, or
counterfeited, and did not believe it was unreasonable for
the department to require specific business practices. He
relayed that the department wished to add a phrase to Page
3, line 29 that would state, "or any contractor of a
governmental agency." He suggested that the effective date
be changed in the interest of the time it would take to
review contracts.
9:47:26 AM
Co-Chair Stedman asked if Department of Administration had
participated in the drafting of the bill.
9:47:50 AM
Mr. Puckett responded that the administration wanted
language added to the bill in order to address the
aforementioned concerns.
9:48:01 AM
AT EASE
9:48:50 AM
RECONVENED
9:48:52 AM
Senator Egan queried why the administration was proposing
changes so late in the process. Mr. Puckett replied that
many of the changes had been recommended during prior
hearings on the bill. Senator Egan furthered that some
changes had been discussed in committee, but that the ideas
offered presently had not been discussed. He wondered why
the department had suddenly taken issue with the effective
date of the bill.
9:49:37 AM
Senator Egan queried why it took the administration so long
to figure out a course of action.
9:49:56 AM
Mr. Puckett replied that the recommended changes would be
better for the pharmacies and the administrators of the
health plans. He said that the administration appreciated
the changes that were made to the effective date, but that
more changes were needed to meet recommendations of the
department.
9:50:14 AM
Senator Egan commented that major and minor pharmacies
throughout the state had provided testimony and ideas to
improve the legislation. He was disappointed that the
administration had taken so long to present the suggested
changes.
9:50:45 AM
Senator McGuire wondered if the language in the bill was
similar to legislation that had come out of other states.
Senator Egan replied that similar legislation from other
states had been studied while crafting the bill. He noted
that the legislation had been curtailed to needs that were
unique to Alaska.
9:51:31 AM
Senator McGuire thought that the bill required further
changes. She understood that audits could be taxing to the
smaller pharmacies. She noted that the hearing was late in
the legislative process, but hoped that the bill could be
held for further review.
Co-Chair Stedman assured the committee that, this being the
first hearing of the bill, it was unlikely that it would be
moved out of committee at this time.
9:52:11 AM
AT EASE
9:53:23 AM
RECONVENED
Co-Chair Stedman stated that that Senator Egan would work
with the administration on its concerns regarding SB 217.
SB 217 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 286(FIN)
"An Act providing for and relating to the issuance of
general obligation bonds for the purpose of paying the
cost of state transportation projects; and providing
for an effective date."
9:56:35 AM
Co-Chair Hoffman MOVED to ADOPT the proposed committee
substitute for HB 286, Work Draft 27-GH2769\D (Kirsch,
4/12/12)
9:56:44 AM
Co-Chair Stedman OBJECTED for the purpose of discussion.
9:56:50 AM
WESTON EILER, STAFF, SENATOR BERT STEDMAN, explained that
the new committee substitute reflected grammatical and
formatting changes. He directed attention to Page 2, line
8, which listed the projects reordered in alphabetical
order and made conforming changes to the project titles.
The projects and the amounts remained the same. The second
change was found on Page 3, line 5; again the projects were
reordered for formatting, but no changes were made in the
projects or the project amounts.
Co-Chair Stedman REMOVED his OBJECTION. There being NO
FURTHER OBJECTION, Work Draft 27-GH2769\D was ADOPTED.
9:58:05 AM
Co-Chair Stedman explained that the legislation had been
worked on by both bodies and had been originally
recommended by the administration. He furthered that the
committee, in conjunction with the administration, was
working to move the bill forward.
Co-Chair Stedman discussed the fiscal note in the packet.
CSHB 286(FIN) was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 282(FIN)
"An Act relating to applying military education,
training, and service credit to occupational licensing
and certain postsecondary education and employment
training requirements; providing for a temporary
occupational license for qualified military service
members; and providing for an effective date."
9:59:07 AM
AARON SCHROEDER, STAFF, REPRESENTATIVE BILL THOMAS, shared
that the goal of the legislation was to make separating
service member transitions quick and effective. He relayed
that Alaska had seen approximately 1200 separating service
members in the past two years, many of which had already
received quality training through the military that could
transfer to licensed civilian professions. He explained
that the bill requested the Division of Professional
Licensing, University of Alaska, and the Department of
Labor to evaluate military training and education, and
assign credit where credit was appropriate without
compromising current standards.
10:00:10 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
Co-Chair Stedman OPENED public testimony.
10:00:44 AM
MARK SAN-SOUCI, REGIONAL STATE LIAISON OFFICE, U.S.
DEPARTMENT OF DEFENSE, WASHINGTON (via teleconference),
testified in support of HB 282. He noted that the
legislation was the companion to SB 150, which the senate
had passed on February 1, 2012. He stated that 1286 service
members retired and came back to the state in FY11, and the
department believed that 1 million service members would
separate and go back to the states within the next 5 years.
10:01:54 AM
Co-Chair Stedman CLOSED public testimony.
CSHB 282(FIN) was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 301(FIN)
"An Act relating to enforcement of boating safety
statutes; amending the termination date of certain
statutes relating to the use, operation, and
regulation of boats, a uniform state waterway marking
system, and civil liability for boat owners; providing
for an effective date by amending the effective date
of secs. 3, 5, 7, 9, 11, 14, 16, 18, 20, 23, 26, and
27, ch. 28, SLA 2000, as amended; and providing for an
effective date."
ASTRID LIEVANO, STAFF, REPRESENTATIVE ALAN AUSTERMAN,
explained that the legislation would repeal the sunset date
on the Alaska Boating Safety Program. She stated that the
program currently had 2 sunset dates; the first repealed
the Boating Safety Act in the event that the state did not
receive anticipated federal funds, the second repealed the
program on July 1, 2013. She relayed that the Kids Don't
Float loaner lifejacket program was part of the program.
10:03:10 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
CSHB 301(FIN) was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 204
"An Act relating to the State Procurement Code,
including the use of small procurement provisions for
certain amounts of leased space, the requirement of
Alaska business license proof for Alaska bidder and
other procurement preferences, the registration of
construction contract bidders and offerors, the
establishment and maintenance of lists of persons who
want to provide supplies or services to the state,
state agencies, and state instrumentalities,
electronic bids and proposals, small procurements, and
writings; and providing for an effective date."
REPRESENTATIVE ANNA FAIRCLOUGH, explained that HB 204 would
clarify the Alaska business license requirement for Alaska
bidder's preferences for competitive sealed bids and
proposals. It would increase the dollar threshold for small
procurements for supply services and professional services
from $50 thousand to $100 thousand, for construction; $100
thousand to $200 thousand, and for square lease space; 3000
to 7000 square feet. She furthered that the bill allowed
for electronic bids and signatures and eliminated an
outdated vendors list. She stated that he changes were
necessary in order to prevent failures in the procurement
process and to assist Alaskan bidders, particularly in
rural areas.
10:04:43 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
HB 204 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 205
"An Act relating to state and public entity
procurement, including the State Procurement Code,
procurement preferences, and contract awards; relating
to the meaning of 'Alaska bidder'; and providing for
an effective date."
10:05:19 AM
Representative Fairclough explained that HB 205 would
streamline the procurement process, would eliminate seldom
used employers with disabilities preference, consolidate
all procurement preferences under one statute, and clarify
which preferences were cumulative and those that may not be
combined.
10:05:55 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
HB 205 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 252(FIN)
"An Act exempting certain small businesses from
the corporate income tax; and providing for an
effective date."
10:06:31 AM
REPRESENTATIVE MIA COSTELLO, testified that the legislation
would exempt certain small qualifying businesses from the
states corporate income tax until the business reached $50
million in gross aggregate assets, or after 10 years. She
explained that the definition of a small qualifying
business could found in federal law. She stated that the
hope was to attract businesses that did not currently exist
in the state. The businesses would eventually become
corporate tax payers.
10:07:32 AM
Co-Chair Stedman asked for a clarification about who
qualified for the exemption.
Representative Costello responded that qualifying
industries included:
· Software development
· Bio-tech
· Pharmaceuticals
· Tele-communications
· Super-conductors
· Business technologies and solutions
· Media storage servers
· Video games
Co-Chair Stedman understood that the legislation was aimed
at a targeted group.
Representative Costello replied in the affirmative.
10:08:09 AM
Co-Chair Stedman discussed the fiscal notes in the packet.
Co-Chair Stedman OPENED public testimony.
10:08:39 AM
TYLER ARNOLD, CEO, SIMPLY SOCIAL, Anchorage (via
teleconference), testified in support of HB 252. He shared
that he was a 19 year-old entrepreneur raised in Anchorage.
He opined that the state had one of the highest corporate
tax rates in the country. He felt that the legislation
would help to strengthen his business's global
competitiveness.
Co-Chair Stedman CLOSED public testimony.
CSHB 252(FIN) was HEARD and HELD in committee for further
consideration.
10:10:58 AM
AT EASE
10:12:15 AM
RECONVENED
CS FOR SENATE BILL NO. 121(STA)
"An Act relating to new defined benefit tiers in the
public employees' retirement system and the teachers'
retirement system; providing certain employees an
opportunity to choose between the defined benefit and
defined contribution plans of the public employees'
retirement system and the teachers' retirement system;
and providing for an effective date."
Co-Chair Hoffman MOVED to report SB 121(STA) out of
committee with individual recommendations and the
accompanying fiscal notes.
Co-Chair Stedman read the fiscal notes in the packet.
There being NO OBJECTION, CSSB 121(STA) was REPORTED out of
committee with a "do pass" recommendation and with a
previously published fiscal impact note: FN2(DOR), a new
fiscal impact note from the Department of Administration,
and a new indeterminate fiscal note from the Department of
Administration.
10:13:23 AM
AT EASE
10:13:56 AM
RECONVENED
CS FOR HOUSE CONCURRENT RESOLUTION NO. 23(FIN)
Establishing and relating to the Alaska Arctic Policy
Commission.
CSHCR 23(FIN) was SCHEDULED but not HEARD.
CS FOR HOUSE BILL NO. 276(FIN)
"An Act providing for a credit against the oil and gas
production tax for costs incurred for conducting
seismic exploration and drilling certain oil or
natural gas exploration wells in certain basins;
relating to the determination of the production tax
value of oil and gas production; and relating to a
special tax rate for new oil or gas production south
of 68 degrees North latitude."
CSHB 276(FIN) was SCHEDULED but not HEARD.
ADJOURNMENT
10:14:20 AM
The meeting was adjourned at 10:14 AM.