Legislature(2001 - 2002)

02/14/2002 01:37 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                SENATE LABOR & COMMERCE COMMITTEE                                                                             
                        February 14, 2002                                                                                       
                            1:37 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Ben Stevens, Chair                                                                                                      
Senator Alan Austerman                                                                                                          
Senator John Torgerson                                                                                                          
Senator Bettye Davis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Loren Leman                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 252                                                                                                             
"An Act renaming  the Alaska Human Resource Investment  Council as                                                              
the  Alaska  Workforce  Investment   Board  and  relating  to  its                                                              
membership; repealing  the termination date of the  state training                                                              
and  employment  program;  relating  to  employment  and  training                                                              
activities; and providing for an effective date."                                                                               
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 266                                                                                                             
"An Act  authorizing the  commissioner of  community and  economic                                                              
development  to  refinance  and  extend  the  term  of  a  fishery                                                              
enhancement loan."                                                                                                              
                                                                                                                                
     MOVED CSSB 266 (L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE BILL NO. 270                                                                                                             
"An Act extending the termination  date of the Board of Dispensing                                                              
Opticians;  relating to  the regulation  of dispensing  opticians;                                                              
and providing for an effective date."                                                                                           
                                                                                                                                
     MOVED CSSB 270 (L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
SB 252 - No previous action to record.                                                                                          
                                                                                                                                
SB 266 - No previous action to record.                                                                                          
                                                                                                                                
SB 270 - No previous action to record.                                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Rebecca Gamez, Deputy Commissioner                                                                                          
Department of Labor & Workforce                                                                                                 
  Development                                                                                                                   
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT:  Supported SB 252.                                                                                        
                                                                                                                                
Mr. Jim Sanders, Executive Director                                                                                             
Alaska Human Resources Investment Council                                                                                       
Department of Labor & Workforce                                                                                                 
  Development                                                                                                                   
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Supported on SB 252.                                                                                      
                                                                                                                                
Mr. Greg Winegar, Director                                                                                                      
Division of Investments                                                                                                         
Department of Community and Economic Development                                                                                
P.O. Box 34159                                                                                                                  
Juneau AK 99803                                                                                                                 
POSITION STATEMENT: Neutral position on SB 266.                                                                               
                                                                                                                                
Mr. John Carter, Executive Director                                                                                             
Douglas Island Pink and Chum (DIPAC)                                                                                            
POSITION STATEMENT: Supported SB 266.                                                                                         
                                                                                                                                
Mr. Jerry McCune                                                                                                                
United Fishermen of Alaska                                                                                                      
211 4th Street #110                                                                                                             
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported SB 266.                                                                                         
                                                                                                                                
Mr. Larry Hancock, Manager                                                                                                      
City of Cordova                                                                                                                 
P.O. Box 1060                                                                                                                   
Cordova AK 99574                                                                                                                
POSITION STATEMENT: Supported SB 266.                                                                                         
                                                                                                                                
Ms. Lisa Vonbargen                                                                                                              
City of Valdez                                                                                                                  
P.O. Box 307                                                                                                                    
Valdez AK 99686                                                                                                                 
POSITION STATEMENT: Supported SB 266.                                                                                         
                                                                                                                                
Ms. Pat Davidson                                                                                                                
Legislative Audit                                                                                                               
P.O. Box 113300                                                                                                                 
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on SB 270.                                                                                      
                                                                                                                                
Mr. Larry Harper                                                                                                                
Opticians Association of Alaska                                                                                                 
National Contact Lens Examiners                                                                                                 
State Board of Dispensing Opticians                                                                                             
534 W 2nd                                                                                                                       
Anchorage AK 99501                                                                                                              
POSITION STATEMENT: Commented on SB 270.                                                                                      
                                                                                                                                
Ms. Catherine Reardon, Director                                                                                                 
Division of Occupational Licensing                                                                                              
Department of Community and Economic Development                                                                                
P.O. Box 110806                                                                                                                 
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on SB 270.                                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-5, SIDE A                                                                                                             
Number 001                                                                                                                      
          SB 252-EMPLOYMENT AND TRAINING PROGRAM/BOARD                                                                      
                                                                                                                                
CHAIRMAN BEN STEVENS called the Senate  Labor & Commerce Committee                                                            
meeting to  order at 1:37 p.m. and  announced SB 252 to  be up for                                                              
consideration.                                                                                                                  
                                                                                                                                
MS. REBECCA  GAMEZ, Deputy Commissioner,  Department of  Labor and                                                              
Workforce Development,  said she  would give  an overview  of STEP                                                              
and  changes  to  the Alaska  Human  Resource  Investment  Council                                                              
(AHIRC) that are in SB 252 after Mr. Sanders' testimony.                                                                        
                                                                                                                                
MR.  JIM  SANDERS,  Executive  Director,  Alaska  Human  Resources                                                              
Investment Council,  said there are  five issues in this  bill and                                                              
the first  one is  the name  change. Currently,  it is called  the                                                              
Alaska  Human Resource  Investment  Council  and this  legislation                                                              
proposes  to change  it to  the State  Workforce Investment  Board                                                              
(WIB).  This  would   bring  them  in  line  with   the  Workforce                                                              
Investment Act  and more clearly  aligns them with the  two Alaska                                                              
Workforce Investment  Boards - the  Alaska Mat-Su  and the Balance                                                              
of State WIB.                                                                                                                   
                                                                                                                                
Secondly,  the AHRIC  doesn't clearly  convey the  purpose of  the                                                              
Council.  Their  mission  says  that they  are  a  private  public                                                              
leadership board  that sets policy  framework for  the development                                                              
of  Alaska's workforce.  The proposed  title is  shorter and  more                                                              
succinctly identifies the organization's purpose.                                                                               
                                                                                                                                
There are a number of housekeeping  issues. Throughout the text of                                                              
the bill they  would change the reference of "Council"  to "Board"                                                              
and change references to the "Private  Industry Council" to "Local                                                              
Workforce Investment Board".                                                                                                    
                                                                                                                                
The third issue is adding the Commissioner  of Administration as a                                                              
non-voting  member of the  Board. He  said that  Juneau is  one of                                                              
Alaska's major  employers and  the Commissioner of  Administration                                                              
has a  comprehensive knowledge  of current  and future  employment                                                              
needs for  the state  employment  system. He would  be a  valuable                                                              
asset to  the Board in its  deliberation and discussion  of policy                                                              
issues.  In  addition,  the  Commissioner  would  benefit  from  a                                                              
greater exposure to  the full spectrum of employment  and training                                                              
issues that  confront the  state and  are frequently discussed  by                                                              
AHRIC.                                                                                                                          
                                                                                                                                
The  fourth  issue is  one  of flexibility.  Currently,  AHRIC  is                                                              
restricted  to meeting  three times  a year and  this would  allow                                                              
them one more meeting per year [but  not make it mandatory] giving                                                              
them the flexibility to address unexpected issues.                                                                              
                                                                                                                                
The fifth issue  is in Section 9. The AHRIC  advises the governor,                                                              
state  and  local  agencies  and   the  University  of  Alaska  on                                                              
workforce  issues   and  they   propose  adding  "other   training                                                              
entities". This  reflects what they  currently do with  the Alaska                                                              
Vocational  Technical  Training  Center, Charter  College  or  the                                                              
Southwest Vocational Training Center.                                                                                           
                                                                                                                                
The other  change in  section 9  is that  the Board shall  develop                                                              
standards  that encourage  agencies to contract  for programs  and                                                              
says, "meets  local demands and  maximizes the use  of resources."                                                              
This is  something that  they already do.  They want  training and                                                              
employment to reflect  regional needs and funds that  are used are                                                              
used most effectively.                                                                                                          
                                                                                                                                
MS.  GAMEZ  said  since  1989,  STEP   has  trained  thousands  of                                                              
Alaskans. This is  good because when people are  working, they are                                                              
not drawing unemployment insurance  benefits and it keeps wages in                                                              
the   state.  The   collaboration  with   employers,  unions   and                                                              
industries adds  value to the  economic development,  training and                                                              
apprentice  programs  throughout the  state.  She  used the  Hyder                                                              
Waterworks  Project as  an example  of how STEP  works in  Alaskan                                                              
communities  and it  has an  adult working-age  population of  82.                                                              
Adult as defined by the U.S. census  is 16 and above. So the Hyder                                                              
Waterworks Project employs about half of its population.                                                                        
                                                                                                                                
The U.S. Department  of Commerce, through an  Economic Development                                                              
and Administration  Grant (EDA),  paid 60 percent  of the  cost of                                                              
the facility; forty  percent was raised locally.  They applied for                                                              
a STEP  grant for  training and  were award  a $32,000 grant.  The                                                              
University of  Alaska Ketchikan provided  onsite training  for the                                                              
workers. She  said that  the federal funding  programs are  not as                                                              
flexible  as this  program  is. Currently,  the  Hyder project  is                                                              
capable of producing 140,000 bottles  daily, although they produce                                                              
only 40,000  bottles. They are  negotiating a contract  with Sam's                                                              
Club right now.  If that happens, they will want  to train another                                                              
shift of workers.                                                                                                               
                                                                                                                                
MS. GAMEZ said  the STEP delivery strategy is  two-fold delivering                                                              
service  through  competitive  grants   into  business  needs  and                                                              
through  individual  services  largely delivered  through  the  22                                                              
Alaska  job centers.  A good  example of  the individual  training                                                              
model is  Kathleen Basinger  of Fairbanks.  She has supported  two                                                              
kids  by herself  on a  low paying  job.  She knew  she needed  to                                                              
improve her  skill level. After she  graduated, she took  her kids                                                              
to Disneyland showing them that hard  work pays off and that self-                                                              
sufficiency and success is a good thing.                                                                                        
                                                                                                                                
Another example is Mr. Glen Shortsmith  from Sterling. He had been                                                              
on and off unemployment insurance.  He needed and wanted full-time                                                              
work. Through the  Kenai Peninsula job center, he  was able to get                                                              
an  individual  grant for  $550,  which  allowed  him to  get  his                                                              
commercial driver's  license. He is now a full-time  driver and he                                                              
feels secure with the job that he has.                                                                                          
                                                                                                                                
The  competitive grant  process  is delivered  through  non-profit                                                              
businesses,  for-profit  businesses, apprenticeship  programs  and                                                              
education  institutions, wherever  the need  is identified.  Right                                                              
now 300  Alaskans out of  the 1,100 in  training are  training for                                                              
high  paying union  jobs thanks  to  the STEP  program. They  also                                                              
deliver  services through  competitive grants  to large and  small                                                              
businesses for local workforces at communities around the state.                                                                
                                                                                                                                
Bulk fuel  tanks are  now being  replaced in  Alaska. These  tanks                                                              
used  to be  imported from  outside  businesses and  now they  are                                                              
being manufactured  in  Nome. These  are a couple  of examples  of                                                              
success stories  of STEP in Alaska.  She showed them a  map of the                                                              
communities that are impacted by STEP training.                                                                                 
                                                                                                                                
She said  that STEP has been  a pilot program since  its inception                                                              
in 1989 and this temporary nature  has been an on-going challenge.                                                              
It needs to be predictable and stable for future generations.                                                                   
                                                                                                                                
SENATOR  AUSTERMAN asked  if there  was  a report  that lists  the                                                              
total number of people who are served through the program.                                                                      
                                                                                                                                
MS. GAMEZ  said they had the  data compiled and pending  the audit                                                              
they  were  planning  on  getting  this  information  out  to  the                                                              
committee members.  She offered  to get  that information  to them                                                              
sooner.                                                                                                                         
                                                                                                                                
CHAIRMAN STEVENS  asked her to  provide them the  information. She                                                              
said absolutely.                                                                                                                
                                                                                                                                
SENATOR  TORGERSON asked  if she eliminated  the sunset  entirely.                                                              
She replied  that there  was no automatic  review of  the program,                                                              
but it  would be  done through  the annual  audits the  department                                                              
goes through or any special audits that may be raised.                                                                          
                                                                                                                                
SENATOR AUSTERMAN  asked if the  Local Workforce  Investment Board                                                              
was separate from the main board.                                                                                               
                                                                                                                                
MS. GAMEZ  replied that  the way the  Workforce Investment  Act is                                                              
set  up  there  is  a  state  board,  the  Alaska  Human  Resource                                                              
Investment Council; there are two  local board, the Anchorage Mat-                                                              
Su area and  the other is the  Balance of State area.  In addition                                                              
to those boards, there are local  advisory councils in many of the                                                              
communities throughout  the states for  the job centers.  She said                                                              
the  language replacing  the  Private  Industry  Council with  the                                                              
Local Workforce Investment Board  mirrors the Workforce Investment                                                              
Act. Private industry councils don't technically exist any more.                                                                
                                                                                                                                
SB 252 was held for further work.                                                                                               
                                                                                                                                
1:50 - 1:52 - AT EASE                                                                                                           
                                                                                                                                
                SB 266-FISHERY ENHANCEMENT LOANS                                                                            
                                                                                                                                
                                                                                                                                
CHAIRMAN STEVENS announced SB 266 to be up for consideration.                                                                   
                                                                                                                                
MS.  DEBORAH GRUNDMANN,  Aide to  Senator Stevens,  sponsor or  SB
266,  said  it  authorizes  the   commissioner  of  Community  and                                                              
Economic  Development  to  refinance  and  extend the  term  of  a                                                              
fishery  enhancement loan  made  through the  revolving  Fisheries                                                              
Enhancement  Revolving Loan  Fund.  The funding  provided by  this                                                              
program  has helped to  create an  extremely successful  statewide                                                              
salmon   rehabilitation   program.   The   hatchery   system   was                                                              
established  in 1974 to  enhance and  stabilize Alaska's  regional                                                              
salmon stocks. Now  approximately 40 percent of  the entire salmon                                                              
harvest in Alaska  is enhanced fish. A majority of  the loans made                                                              
under this  program carry the  maximum allowable interest  rate of                                                              
9.5  percent.  Alaska  statutes  allow  for interest  rates  of  1                                                              
percent  over prime,  not  to exceed  9.5  percent.  New loans  if                                                              
received today  would be  at 6 percent.  Hatcheries would  like to                                                              
take advantage  of the  lower interest rates  to bring  down their                                                              
debt service just  as other business and homeowners  are currently                                                              
doing in Alaska and the nation.                                                                                                 
                                                                                                                                
The  last  legislative  audit  of  private  non-profit  hatcheries                                                              
published in 1997 recommended that  the Division of Investments in                                                              
the  Department of  Community and  Economic  Development seek  the                                                              
authority  to restructure  hatchery  loans  and  that's what  this                                                              
legislation  does.  The  department  is  sufficiently  staffed  to                                                              
accommodate  the few  applications  necessary  to refinance  these                                                              
loans. There  is no forgiveness  of principal or  interest allowed                                                              
under this legislation  and all payments are made  directly to the                                                              
loan fund.                                                                                                                      
                                                                                                                                
She said that  SB 266 recognizes the public trust  nature of these                                                              
non-profit entities.  It protects  the state's financial  interest                                                              
by  guaranteeing  the  sustained  production  of  salmon  for  the                                                              
commercial,  sport   and  personal  use  fisheries   and  assuring                                                              
continued payments  of outstanding  debts to  the state.  She said                                                              
there was a committee substitute before them.                                                                                   
                                                                                                                                
SENATOR TORGERSON  moved to adopt  the committee substitute  to SB
266. There were no objections and it was so ordered.                                                                            
                                                                                                                                
CHAIRMAN  STEVENS  asked that  the  provision  be limited  to  the                                                              
refinancing of existing loans.                                                                                                  
                                                                                                                                
MR. GREG WINEGAR,  Director, Division of Investments,  said SB 266                                                              
would  allow  existing  borrowers  to  refinance  their  fisheries                                                              
enhancement  loans. Interest rates  for this  program are  tied to                                                              
the prime rate and are fixed at the  time the loan is made. In the                                                              
last year or so interest rates have  come down a tremendous amount                                                              
and are less than  what most of the loans were  made at. They want                                                              
to let the  non-profit aquaculture associations  take advantage of                                                              
the  lower   interest  rates.  He   pointed  out  that   the  same                                                              
legislation was  passed for the Commercial Fishing  Revolving Loan                                                              
Fund  in 1993.  This  would  affect the  income  of  the fund  and                                                              
therefore there is a fiscal note to reflect those differences.                                                                  
                                                                                                                                
It's important to note, he said,  that this bill is going to allow                                                              
these associations  to  lower their interest  expense, which  will                                                              
help  their  financial  picture  and  increase  their  ability  to                                                              
service  existing  debt.  This  would  not  adversely  impact  the                                                              
integrity of this loan fund. They  have a very streamlined process                                                              
in place  to take care of  refinancing requests so they  don't see                                                              
this as being a burden administratively.                                                                                        
                                                                                                                                
SENATOR TORGERSON asked if he supported the bill.                                                                               
                                                                                                                                
MR. WINEGAR  replied that their  official position is  neutral and                                                              
explained  that  basically  it's  because  it  will  result  in  a                                                              
reduction of  funds to  the loan  fund, but on  the other  hand it                                                              
will help the existing associations.                                                                                            
                                                                                                                                
SENATOR TORGERSON  agreed that they should refinance  the existing                                                              
loans as  long as it  doesn't adversely  affect the portfolio  and                                                              
Mr. Winegar said  that was not an issue. "But I  always shudder at                                                              
giving  a  commissioner   this  kind  of  authority   without  the                                                              
legislature knowing what is happening within that portfolio."                                                                   
                                                                                                                                
He was also  concerned that the language  on page 2 was  such that                                                              
they would never turn down an extension.                                                                                        
                                                                                                                                
MR. WINEGAR  replied that they have  the same authority  under the                                                              
Revolving Commercial  Fishing Loan Program and that  was passed in                                                              
1993.                                                                                                                           
                                                                                                                                
SENATOR TORGERSON asked what the difference in dollars was.                                                                     
                                                                                                                                
MR. WINEGAR  replied  that the loan  funds are  fairly similar  in                                                              
size.                                                                                                                           
                                                                                                                                
SENATOR TORGERSON said if the chairman  liked, they could move the                                                              
bill out today,  but he wanted to  see the numbers when  it was in                                                              
the next committee.                                                                                                             
                                                                                                                                
MR. JOHN CARTER, Executive Director,  Douglas Island Pink and Chum                                                              
(DIPAC), said he  wanted to support SB 266 on behalf  of the Board                                                              
of  Directors  and  the  many supporters  of  DIPAC.  He  is  also                                                              
spokesman for many of the hatcheries  around the state rather than                                                              
flying someone.                                                                                                                 
                                                                                                                                
     The private  non-profit hatchery program was  created by                                                                   
     the  legislature   to  replace   the  hatchery   program                                                                   
     operated  by the state's  fish and  game FRED  division.                                                                   
     The  FRED  hatcheries  are operated  through  an  annual                                                                   
     appropriation to the state Department  of Fish and Game.                                                                   
     The  PNP hatchery  program  was created  as  a user  pay                                                                   
     entity.  To get the  program started,  the state  gifted                                                                   
     some existing  hatcheries to regional corporations,  but                                                                   
     primarily  created  the  Fishery  Enhancement  Revolving                                                                   
     Loan Fund.  This fund,  along with  a tax on  commercial                                                                   
     fishermen,   was  to   provide   for  construction   and                                                                   
     operational funds as the enhancement  program developed.                                                                   
     Twenty-five plus years later,  the PNP hatchery programs                                                                   
     are described  even by some of their detractors  as some                                                                   
     of the  best in North  America. They have  made dramatic                                                                   
     financial contribution to many  areas of the state. When                                                                   
     asked  by  those who  don't  understand the  concept  of                                                                   
     private non-profit,  I usually  fall back on  the phrase                                                                   
     "public trust"  as Debbie read today. I think  this best                                                                   
     describes the  way most of us  view the job we  do. That                                                                   
     being  said,  we  are  still   a  business  and  we  are                                                                   
     responsible  for  budgets and  payroll  and, of  course,                                                                   
     debt  service.  What  we  are asking  for  here  is  the                                                                   
     ability to  refinance debt at  the lower interest  rate.                                                                   
     This  is obviously  going on in  many businesses  across                                                                   
     the  country.  Taking  advantage   of  the  current  low                                                                   
     interest  environment just  makes  good business  sense.                                                                   
     Simply  put, refinancing will  strengthen our  financial                                                                   
     position, make  us better able to pay our  debt and more                                                                   
     able to  continue doing  the job  of providing fish  for                                                                   
     commercial  and sport  fishers  across  the state.  This                                                                   
     would mean the principle and  interest as you just heard                                                                   
     are  paid into  the  fund at  a  slower rate,  but  loan                                                                   
     demand of the fund has slowed  dramatically, so the fund                                                                   
     will  still be  financially sound.  Again, I  appreciate                                                                   
     your support and am available for questions.                                                                               
                                                                                                                                
SENATOR AUSTERMAN  asked if  lowering the  cost of doing  business                                                              
meant a higher number of fish for the fishermen.                                                                                
                                                                                                                                
MR.  CARTER  replied in  many  cases  he  thought that's  who  the                                                              
benefit would transfer to.                                                                                                      
                                                                                                                                
     "Your question  if we are paying less interest  into the                                                                   
     fund  - it means  that our  annual budget  - less of  it                                                                   
     would go to  interest and therefore we could  reduce our                                                                   
     annual  budget accordingly  and  therefore require  less                                                                   
     cost recovery."                                                                                                            
                                                                                                                                
SENATOR AUSTERMAN asked about DIPAC specifically.                                                                               
                                                                                                                                
MR.  CARTER  replied  that  they  are  currently  encouraging  the                                                              
department at each opportunity to  give the fishermen more time on                                                              
their  fish.  The  amount  of fish  caught  by  the  fishermen  is                                                              
directly related to how much time they have.                                                                                    
                                                                                                                                
SENATOR AUSTERMAN  said he was raising these questions  because he                                                              
was concerned  about cost recovery  and the percentage  that takes                                                              
place  in  the hatcheries.  It  says  in  the  law that  they  are                                                              
supposed to  provide a "significant  contribution." He  asked what                                                              
percentage of  cost recovery  it takes for  them to operate  their                                                              
hatchery.                                                                                                                       
                                                                                                                                
MR. CARTER  answered that  last year it  was about 51  percent for                                                              
the  hatchery  and  49 percent  for  cost  recovery,  all  species                                                              
combined. Their stated  goal is 60 percent to  the common property                                                              
and 40  percent to  the hatchery.  For the regional  corporations,                                                              
it's 70/30.  He explained  that when  they started their  hatchery                                                              
they did  not get any of  the 3 percent  money and all of  their 3                                                              
percent money now goes to the regionals.  One percent was given to                                                              
the "mom and pops" as far as a goal was concerned.                                                                              
                                                                                                                                
SENATOR  AUSTERMAN  asked if  he  could  project a  percentage  of                                                              
savings using this bill.                                                                                                        
                                                                                                                                
MR. CARTER  replied that  he had  to give him  the same  answer he                                                              
gave before.                                                                                                                    
                                                                                                                                
     This  past year, if  the fishermen  had additional  time                                                                   
     and would have caught a higher  percentage of the fish -                                                                   
     it  was  unrelated to  what  we  were  going to  pay  to                                                                   
     Commerce.  It would  have affected  our reserve, but  we                                                                   
     had no  control over that. Again,  I'm not trying  to be                                                                   
     evasive. That's  just absolutely  the way it is.  If the                                                                   
     department  had allowed them  more days of fishing  time                                                                   
     this year or  the year before, they would  have caught a                                                                   
     higher percentage  of the fish. We get whatever  is left                                                                   
     over. It's absolutely that simple.                                                                                         
                                                                                                                                
2:10 p.m.                                                                                                                       
                                                                                                                                
MR. JERRY MCCUNE, United Fishermen of Alaska, supported SB 266.                                                                 
                                                                                                                                
     In  the   areas  where   we  have  regional   hatcheries                                                                   
     fishermen pay  an assessment. We have a  huge investment                                                                   
     in  the   hatcheries  and  hopefully  by   lowering  the                                                                   
     interest  rate at this  time, we'll  be able to  sustain                                                                   
     these runs. A lot of these hatcheries  are based on pink                                                                   
     salmon,   so Senator Austerman's  question -  it depends                                                                   
     on  the price  of the  salmon  - on  the cost  recovery.                                                                   
     Because we're  all suffering  from the price  problem as                                                                   
     you all know….                                                                                                             
                                                                                                                                
He said in  theory most hatcheries  would be able to put  out more                                                              
fish  for the  common property  and that  is the  goal along  with                                                              
paying the hatcheries off eventually.                                                                                           
                                                                                                                                
SENATOR  AUSTERMAN  asked  if it  was  correct  that some  of  the                                                              
hatcheries had 80 percent cost recovery.                                                                                        
                                                                                                                                
MR. MCCUNE said  he couldn't speak for every hatchery.  He knew of                                                              
one that had 60 percent.                                                                                                        
                                                                                                                                
MR. LARRY  HANCOCK, City  Manager of  Cordova, said he  represents                                                              
the City of Cordova and the Economic  Development Council. He read                                                              
a letter  of support for SB  266 from Mayor Margie  Johnson, which                                                              
would   help   strengthen   Prince   William   Sound   Aquaculture                                                              
Corporation by allowing  them to refinance their  term loan, lower                                                              
their debt burden  and decrease payment time. SB  266 would have a                                                              
positive impact  on a large segment  of their community  and other                                                              
areas of  the state  that depend on  hatchery produced  salmon for                                                              
their livelihood.                                                                                                               
                                                                                                                                
MS. LISA VONBARGEN,  City of Valdez, said that  commercial fishing                                                              
is one  of the  top four  industries in  Valdez and contributes  a                                                              
quarter of million annually in raw  fish tax. The Valdez Fisheries                                                              
Development Association  (VFDA) also supports and  runs the silver                                                              
salmon sports  fish program  in Valdez, which  creates one  the of                                                              
the largest  and most successful  silver salmon runs in  the state                                                              
and encourages  thousands of people  to visit Valdez  every summer                                                              
providing amazing  economic benefits  to the community  during the                                                              
late season.  In addition  to the commercial  benefit of  the pink                                                              
salmon run, it  also creates an additional sports  fish draw. VFDA                                                              
has  100  percent  local  hire  rate  for  the  11  full-time  and                                                              
approximately  35 -  40 summer  employees equating  to a  $600,000                                                              
payroll annually.  They are also  creating a roe  processing plant                                                              
which could  mean potentially an additional  10 - 15 new  jobs and                                                              
will  create a  new  locally produced  Alaskan  caviar product,  a                                                              
value  added  option  for  the  fish   taken  out  of  the  Sound.                                                              
"Obviously,  making this  refinancing  possible for  VFDA is  only                                                              
going to allow them to be able to  put more of their finances back                                                              
into  the  community  and  back into  the  local  economy  through                                                              
further enhanced fishery programs."                                                                                             
                                                                                                                                
SENATOR  STEVENS said  the reason  he introduced  the bill  was to                                                              
allow  the  existing  loan  borrowers  to take  advantage  of  low                                                              
interest rates just like all the  other businesses and individuals                                                              
in Alaska  are doing.  "If there  are positive  effects that  come                                                              
back to the  fishing industry as  a result of that, then  it makes                                                              
it more of a reason why we should adopt this language."                                                                         
                                                                                                                                
SENATOR  TORGERSON  moved  to  pass SB  266  from  committee  with                                                              
individual  recommendations  and  the  accompanying  fiscal  note.                                                              
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
              SB 270-BOARD OF DISPENSING OPTICIANS                                                                          
                                                                                                                                
CHAIRMAN STEVENS announced SB 270 to be up for consideration.                                                                   
                                                                                                                                
MS. HEATHER  BRAKES, Staff  to Senator  Therriault, sponsor  of SB
270, said that there was a committee substitute.                                                                                
                                                                                                                                
SENATOR AUSTERMAN moved  to adopt the CS to SB 270.  There were no                                                              
objections and it was so ordered.                                                                                               
                                                                                                                                
MS. BRAKES  said that SB  270 was based  on an audit  conducted by                                                              
the Legislative Audit  Division and it had several  concerns about                                                              
the Board  of Dispensing Opticians.  One of them was  addressed in                                                              
recommendation #1 on page 7 of the audit.                                                                                       
                                                                                                                                
     The auditors  felt the disparity  between the  number of                                                                   
     people  who become  licensed  and the  number of  people                                                                   
     registering to be apprentices  suggests that 6,000 hours                                                                   
     of  required apprenticeship  may  be unduly  prohibiting                                                                   
     people from  being licensed. The auditor  suggested that                                                                   
     the  board   reconsider  the  necessity  of   the  6,000                                                                   
     requirement.                                                                                                               
                                                                                                                                
The  board's response  agrees with  the auditor's  recommendation,                                                              
but they  want to  add an additional  $800 correspondence  course.                                                              
The course  is not  included in  the legislation.  The feeling  is                                                              
that it would  be a hardship to  the employee and the  expense may                                                              
be shifted to the employer.                                                                                                     
                                                                                                                                
     Recommendation #2 addresses  the board's state exam. The                                                                   
     95 sunset review recommended  that the board improve the                                                                   
     objectivity and  consistency of the state's  exam. After                                                                   
     finding,  again,  that  the  board's  exam  process  was                                                                   
     flawed in  several of the  cases selected for  review by                                                                   
     the auditors,  the auditor suggests that the  board give                                                                   
     serious  consideration  to discontinuing  the  practical                                                                   
     exam and require applicants  only to pass the nationally                                                                   
     recognized  exams  offered.  Those  national  exams  are                                                                   
     incorporated  in SB  270. The  auditor  continues to  be                                                                   
     concerned  about the  apparent  subjectivity and  error-                                                                   
     prone nature of the exam.                                                                                                  
                                                                                                                                
MS. BRAKES  said the  section 1  extends the  Board of  Dispensing                                                              
Opticians for three  years to June 30, 2005 as  recommended by the                                                              
audit  report released  on January  24. Sections  2,3,4,6,8 and  9                                                              
remove  the  board's  state examination.  Section  5  reduces  the                                                              
number of apprenticeship hours to  3,000 hours. It also allows for                                                              
an applicant who has earned an associate  degree from a recognized                                                              
school  or  college  of  dispensing  opticians  to  use  it  as  a                                                              
substituted in lieu of any apprenticeship hours.                                                                                
                                                                                                                                
TAPE 02-5, SIDE B                                                                                                             
                                                                                                                                
MS. PAT DAVIDSON,  Legislative Auditor, said that  she recommended                                                              
only a  three-year extension  until 2005  rather than the  typical                                                              
four-year extension.  Her reasoning is discussed  in the Auditor's                                                              
Comments where they  looked at alternative methods  to achieve the                                                              
purpose of  the program. This looked  like one where  making those                                                              
changes - moving  to a national exam, reducing  the apprenticeship                                                              
hours  -  could  be  handled  by   the  Division  of  Occupational                                                              
Licensing  under   the  registration  process  rather   than  full                                                              
licensing under a board process.  They wanted to see how the board                                                              
dealt with  the recommendations  in  the report  and come back  in                                                              
three years  and see  if it appeared  to still  be a good  idea to                                                              
take it to a registration process.                                                                                              
                                                                                                                                
SENATOR AUSTERMAN asked how many states have boards.                                                                            
                                                                                                                                
MS.  DAVIDSON replied  she  thought  22 states  currently  license                                                              
dispensing opticians. The other states  either have a registration                                                              
process  or no  registration or  licensing. In  looking at  those,                                                              
scope of practice seemed to be one of the key things.                                                                           
                                                                                                                                
     In  other  states, these  type  of activities  may  have                                                                   
     required  supervision  by either  an  optometrist or  an                                                                   
     ophthalmologist.  In  this state  having  a license  for                                                                   
     dispensing optician allows them  to establish a practice                                                                   
     without  supervision  of  either   of  those  two  other                                                                   
     professions.                                                                                                               
                                                                                                                                
SENATOR TORGERSON asked if the bill  covered her concerns as shown                                                              
in the audit.                                                                                                                   
                                                                                                                                
MS. DAVIDSON replied that it does.                                                                                              
                                                                                                                                
SENATOR  AUSTERMAN  asked  if  the  legislature  was  supposed  to                                                              
discuss  about whether  they need  the licensing  board or  not in                                                              
2005.                                                                                                                           
                                                                                                                                
MS. DAVIDSON  replied that there  are automatic sunset  audits for                                                              
these boards.  They would come back  in three years and  the focus                                                              
of the  audit at  that time would  be an  evaluation of  whether a                                                              
licensing board is  still required or whether it  can simply go to                                                              
a registration process.                                                                                                         
                                                                                                                                
SENATOR  AUSTERMAN  asked  if  the   number  of  states  having  a                                                              
licensing board was  increasing. He wanted to know  what the trend                                                              
was.                                                                                                                            
                                                                                                                                
MS. DAVIDSON  said she  didn't have that  information. There  is a                                                              
national professional  organization with a website  which is where                                                              
they can get that kind of information.  She reiterated that, "Part                                                              
of the interplay  with this profession has to do  with those other                                                              
professions  that  are  closely   associated  with  this  type  of                                                              
practice. Those being the opticians and the ophthalmologists."                                                                  
                                                                                                                                
CHAIRMAN STEVENS asked if the substitution  of an associate degree                                                              
was  acceptable for  the auditors  in  place of  the actual  hours                                                              
training.                                                                                                                       
                                                                                                                                
MS. DAVIDSON  said currently  if  a person has  no more  education                                                              
beyond high  school, 6,000  hours of  apprenticeship is  required.                                                              
That is  reduced to 2,000  hours if one  has an associate  degree.                                                              
The recommendation says if you're  only relying on your experience                                                              
for qualification to reduce the hours  from 6,000 to 3,000; but if                                                              
you have a degree, your apprenticeship is waived.                                                                               
                                                                                                                                
SENATOR TORGERSON  pointed out that  it is odd  to say one  of the                                                              
qualifications is to  have attended a high school  for four years.                                                              
He thought they would want a person to have graduated.                                                                          
                                                                                                                                
MS. DAVIDSON responded that was an excellent point.                                                                             
                                                                                                                                
2:35 p.m.                                                                                                                       
                                                                                                                                
MR. LARRY HARPER,  a dispensing optician, said  he represented the                                                              
State  Board  of  Dispensing  Opticians,   National  Contact  Lens                                                              
Examiners and the  Opticians Association of Alaska.  He noted that                                                              
he had just received their working draft. He said:                                                                              
                                                                                                                                
     One of the  reasons that the audit was so  damning to us                                                                   
     in regards  to the testing  procedures was when  we look                                                                   
     back at  our past  fail rate,  and that's important  not                                                                   
     only here in  the state, but on a national  basis, we're                                                                   
     finding that people who are  coming to take this exam at                                                                   
     the end of  their 6,000 hours are doing a  miserable job                                                                   
     of passing  this national written  exam. The  reason for                                                                   
     asking  for the  home  study  course was  to  put in  an                                                                   
     educational component. The way  this course works is two                                                                   
     fold.   It   really   develops   and   cleans   up   the                                                                   
     apprenticeship  program, of  which  the guidelines  have                                                                   
     been incredibly lax, and puts  the apprentice himself in                                                                   
     contact with  a sponsor in the  Lower 48 who is  also in                                                                   
     touch with  their sponsor on  the job. So they  learn in                                                                   
     an  sequential manner.  This  program  has been  trouble                                                                   
     shot over the past 20 years  and reducing the hours from                                                                   
     6,000 to 3,000  makes no sense. If we can't  bring these                                                                   
     people to the  test table and have them prepared  at the                                                                   
     end of 6,000  hours, how are we possibly going  to do it                                                                   
     in  3,000 if  we don't  clean up  the training  program:                                                                   
     It's imperative  that the  training program be  included                                                                   
     in this  scenario in order  to prepare these  people for                                                                   
     success.                                                                                                                   
                                                                                                                                
MR. HARPER said the Board has found  a source for a professionally                                                              
written  practical examination.  His  experience  on the  National                                                              
Contact Lens  Examiners Board and  the Board of  Optitionery shows                                                              
that the  national written  test  was never designed  as a  stand-                                                              
alone  competency  exam for  optitionery.  It  is an  entry  level                                                              
certification exam  so someone entering  the field has an  idea of                                                              
what it's all  about. He concluded that the  educational component                                                              
was necessary if the hours were reduced to 3,000.                                                                               
                                                                                                                                
The   other  concerns   of  the   legislative   audit  are   being                                                              
aggressively pursued, he said.                                                                                                  
                                                                                                                                
SENATOR TORGESRON asked  if he was in favor of  dropping the hours                                                              
to 3,000.                                                                                                                       
                                                                                                                                
MR.  HARPER replied  that he  is  not in  favor of  it unless  the                                                              
educational  component becomes a  part of  the equation.  "We just                                                              
are not seeing the success at the  testing table that we should be                                                              
seeing."                                                                                                                        
                                                                                                                                
SENATOR TORGERSON asked if the education  component was on-the-job                                                              
training.                                                                                                                       
                                                                                                                                
MR. HARPER replied,  "As with all on-the-job training,  it depends                                                              
greatly  on the instructor  as to  how successful  the trainee  is                                                              
going to be…."                                                                                                                  
                                                                                                                                
SENATOR  AUSTERMAN  said  he  has  some  concerns  with  exempting                                                              
employees that isn't dealt with in the bill.                                                                                    
                                                                                                                                
MS.  CATHERINE   REARDON,  Director,   Division  of   Occupational                                                              
Licensing, said her  division staffs both the  Board of Dispensing                                                              
Opticians  and  the  Optometry  Board.  She said  that  there  are                                                              
ophthalmologists  who  are MD  physicians  who specialize  in  eye                                                              
care; then there's optometrists and opticians.                                                                                  
                                                                                                                                
     In the past, there has been  a difference in perspective                                                                   
     between  the  Board  of  Dispensing  Opticians  and  the                                                                   
     Optometry   Board   over  whether   the   employees   of                                                                   
     optometrists  who  do dispensing  optician  work  should                                                                   
     have to be licensed as dispensing  opticians or optician                                                                   
     apprentices.  This  came up  at  the  time of  the  last                                                                   
     extensions  for both boards  four or  six years ago.  It                                                                   
     has been  an issue of  contention for longer  than that.                                                                   
     My  summary   is  I  have   the  impression   that  some                                                                   
     optometrists have  raised this issue in the  last day or                                                                   
     so  - expressing  the  desire  to have  their  employees                                                                   
     exempted from the dispensing optician statute.                                                                             
                                                                                                                                
     My  brief  summary of  what  I  think the  arguments  on                                                                   
     either  side  are is  that  the optometrists  feel  like                                                                   
     since  they are  supervising their  employees work  that                                                                   
     they can provide the necessary  public health and safety                                                                   
     protection  insuring  that  their  employees  are  doing                                                                   
     adequate  dispensing optician work.  So they don't  need                                                                   
     to be licensed. Mr. Harper is  here, so he could correct                                                                   
     me, but my  impression is that the Dispensing  Opticians                                                                   
     Board   has  felt   that  it   is   necessary  to   have                                                                   
     demonstrated  the  skills and  knowledge  of  dispensing                                                                   
     optitionery,  which  are proven  through  the  licensing                                                                   
     process in order to safely provide those skills to the                                                                     
     public.                                                                                                                    
                                                                                                                                
CHAIRMAN  STEVENS  asked  how  long   is  a  typically  dispensing                                                              
optician apprenticeship before they decide to sit for a license.                                                                
                                                                                                                                
MS. REARDON replied  that some of the apprentices  choose never to                                                              
sit for the exam.  They come to the end of the  six years and move                                                              
on to a different occupation. A dispensing  optician apprentice is                                                              
not highly paid;  so some people are not going into  those jobs as                                                              
a career. They are apprentices for training.                                                                                    
                                                                                                                                
CHAIRMAN  STEVENS calculated  that  it would  take  a little  over                                                              
three years  to hit 6,000  (5,076) hours  given a 240  day working                                                              
year at  eight hours  a day; 2,000  hours would  be less  than one                                                              
year. So  he thought it  would take a little  less than one  and a                                                              
half years to meet the 3,000-hour obligation.                                                                                   
                                                                                                                                
He asked  Mr. Harper why  they wanted  to require the  home school                                                              
course when  it seems like  the individuals  would get a  lot more                                                              
hands-on  instruction with  the 3,000 hours  under a  professional                                                              
instead of an instructor. He didn't  understand the justification,                                                              
because  the  person  in  the  apprenticeship   gets  a  lot  more                                                              
instruction.                                                                                                                    
                                                                                                                                
MR. HARPER replied that in almost  every situation when someone is                                                              
in  an  apprenticeship  program,   they  are  doing  other  things                                                              
throughout the course of an 8-hour  day that doesn't fall anywhere                                                              
close  to  the  realm  of  training. That  is  why  time  for  the                                                              
educational component  is so important. An AA degree  has the work                                                              
component  within it, because  they all  have dispensaries  within                                                              
the schools. Plus they are getting  8 hours of instruction without                                                              
interruptions  for  doing  other  unassociated  things.  A  degree                                                              
program is  much more intensive course  work and covers  a broader                                                              
curriculum than the apprenticeship program.                                                                                     
                                                                                                                                
CHAIRMAN  STEVENS  asked if  he  was  speaking  for the  Board  or                                                              
individually. He asked  what the Board's position  was on removing                                                              
the state requirement for examination.                                                                                          
                                                                                                                                
He replied  that he  is speaking  individually.  The Board  is not                                                              
interested  at   all  in  removing   the  state   requirement  for                                                              
examination.  "That's  coming from  Budget  and  Audit. The  State                                                              
Board's position as  reflected in the minutes of  our last meeting                                                              
are very very specific."                                                                                                        
                                                                                                                                
CHAIRMAN STEVENS said that the correspondence  curriculum would be                                                              
geared towards a national test not for a state test.                                                                            
                                                                                                                                
MR. HARPER replied  that wasn't correct. He said  the program they                                                              
found is as good as anyone could  find in a home study program. It                                                              
goes far  beyond the  national competency exam,  which is  not for                                                              
licensing.                                                                                                                      
                                                                                                                                
CHAIRMAN  STEVENS asked  if the  National Board  of Opticians  has                                                              
national standards.                                                                                                             
                                                                                                                                
MR.  HARPER  said  he  is  a  past   president  of  the  Opticians                                                              
Association  of America  and  that  there is  a  lot of  different                                                              
components to what  they do, but how to apply that  on the day-to-                                                              
day work station  and deliver the best in optics  to the public is                                                              
what the second component focuses on.                                                                                           
                                                                                                                                
     We want  these people prepared  for success and  we want                                                                   
     the  very  best for  the  population  for the  State  of                                                                   
     Alaska. This  is a very  good public health  program and                                                                   
     we  need more of  them. This  doesn't cost  the state  a                                                                   
     dime…"                                                                                                                     
                                                                                                                                
CHAIRMAN  STEVENS  asked  how many  people  begin  as  apprentices                                                              
actually sit for a license.                                                                                                     
                                                                                                                                
MS. REARDON replied eight.                                                                                                      
                                                                                                                                
MR. HARPER said  they have reviewed the results and  are not happy                                                              
with them. "There  has been a 10-year lapse and we  feel that this                                                              
board has a lot of work to do."                                                                                                 
                                                                                                                                
MS. DAVIDSON  said on page  13 of the  Audit Report  they identify                                                              
the number  of apprenticeships by  fiscal year for the  last three                                                              
years as  well as  the number  of licenses  issued for  dispensing                                                              
opticians.                                                                                                                      
                                                                                                                                
     You'll see a significant difference  in those numbers. I                                                                   
     would  add  that  it  does   appear,  just  given  those                                                                   
     numbers,  that as  Ms. Reardon  spoke  to, not  everyone                                                                   
     working for a  dispensing optician has the  goal of that                                                                   
     as their profession  in mind. When there's  a discussion                                                                   
     about  apprentices  taking   that  course,  the  concern                                                                   
     becomes is it reasonable for  people who are not looking                                                                   
     for  licensure as  a dispensing optician  to go  through                                                                   
     that expense.  If you are  trying to raise  your passage                                                                   
     rate  and it's a  good idea,  then it's  a good idea.  I                                                                   
     don't know that  the state wants to create  that type of                                                                   
     requirement.  If  they are  not  prepared to  pass  that                                                                   
     national test, then they won't.                                                                                            
                                                                                                                                
     Our  concern with  the audit  is the  problems with  the                                                                   
     practical exam. It was a problem  six years ago and it's                                                                   
     a  continuing  problem.  Being  a  problem  when  you're                                                                   
     dealing  with  a  licensing   function  is  that  you're                                                                   
     putting barriers  of entry into the profession  in front                                                                   
     of  individuals and  that's  what we  see  as the  major                                                                   
     problem  and those  have to  go away.  I understand  the                                                                   
     Board  may want to  set those  standards high enough  to                                                                   
     protect the public, but they  cannot be as subjective as                                                                   
     they are right now, because it causes more problems.                                                                       
                                                                                                                                
CHAIRMAN   STEVENS  asked   if  a   prior  audit   had  the   same                                                              
recommendations.                                                                                                                
                                                                                                                                
MS. DAVIDSON  replied that  their prior audit  six years  ago also                                                              
identified problems with the practical  exam given by the Board in                                                              
terms of  its error-prone  nature and its  lack of real  objective                                                              
criteria.                                                                                                                       
                                                                                                                                
MR. HARPER  said he  couldn't agree with  Ms. Davidson  more. "The                                                              
strange truth of the matter is that  opticians are not necessarily                                                              
qualified to be professional test  writers. Therefore, they did an                                                              
RFP  and have  found a  good test  and would  like to  give it  in                                                              
April. There  is no cost to  the state; there's no  increased cost                                                              
to the test takers.                                                                                                             
                                                                                                                                
     All  it does  is give  them  a professionally  qualified                                                                   
     exam…. Both the  chairman and I have taken  the exam. It                                                                   
     is absolutely straight-forward.  There is no guess work;                                                                   
     there is no subjectivity - just  yes or no. There's only                                                                   
     one answer.                                                                                                                
                                                                                                                                
CHAIRMAN STEVENS asked  if he had a position on  exempting certain                                                              
employees from statute.                                                                                                         
                                                                                                                                
MR. HARPER replied that has been  an on-going topic of discussion.                                                              
The position  of the Optician's Board  is this, "If you  are going                                                              
to make independent  optician decisions having to  do with patient                                                              
care,  then you  need  to be  a  licensed dispensing  optician  or                                                              
working under someone's direct supervision."                                                                                    
                                                                                                                                
If someone  wants to be  a frame stylist  or whatever,  they don't                                                              
have  a  problem  with  that.  He   said  that  there  are  a  few                                                              
optometrists who don't like the fact  that their people have to be                                                              
trained.                                                                                                                        
                                                                                                                                
SENATOR TORGERSON  noted a letter  from the Board to  Ms. Davidson                                                              
in which they approve  the 3,000 hours and moved  to pass CSSB 270                                                              
(L&C)  from  committee  with individual  recommendations  and  the                                                              
accompanying fiscal  note. There were no objections and  it was so                                                              
ordered.                                                                                                                        
                                                                                                                                
CHAIRMAN  STEVENS   thanked  everyone  for  their   testimony  and                                                              
adjourned the meeting at 2:55 p.m.                                                                                              
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects