Legislature(1993 - 1994)
03/23/1993 01:40 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE March 23, 1993 1:40 p.m. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator Steve Rieger, Vice Chairman Senator Bert Sharp Senator Judy Salo MEMBERS ABSENT Senator Georgianna Lincoln COMMITTEE CALENDAR SENATE BILL NO. 171 "An Act relating to the contracting and financing authority of the Alaska Industrial Development and Export Authority, giving approval of the issuance of the authority's revenue bonds, and delaying the termination date of the authority's business assistance program; and providing for an effective date." SENATE BILL NO. 162 "An Act relating to the implementation of the federal emergency unemployment compensation program; making changes relating to unemployment compensation under the extended benefits program and the supplemental state benefits program; and providing for an effective date." HOUSE BILL NO. 101 "An Act relating to the adoption of the National Electrical Code and the National Electrical Safety Code." CS FOR HOUSE BILL NO. 102(FIN) "An Act relating to the Alaska Labor Relations Agency; and providing for an effective date." SENATE BILL NO. 40 "An Act relating to health insurance for small employers; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 171 - No previous action to record. SB 162 - No previous action to record. HB 101 - No previous action to record. HB 102 - No previous action to record. SB 40 - See Labor & Commerce minutes dated 3/23/93. WITNESS REGISTER John Olson Alaska Industrial Development and Export Authority 480 Tudor Rd. Anchorage, Alaska 99503-6690 POSITION STATEMENT: Supported SB 171. Ashley Reed 3201 C Street #300 Anchorage, Alaska 99503 POSITION STATEMENT: Commented on SB 171. Judy Knight, Director Employment Security Division Department of Labor P.O. Box 25509 Juneau, Alaska 99802-1149 POSITION STATEMENT: Supported SB 162. Lynda Giguere, Legislative Aide % Representative Hudson State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Commented on HB 101. Jan DeYoung, Administrator Alaska Labor Relations Agency P.O. Box 107026 Anchorage, Alaska 99510-7026 POSITION STATEMENT: Commented on HB 102. Ken Erickson, Legislative Aide Senator Pearce State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Commented on SB 40. Jan Meisels Health Insurance Association of America 22144 Clarendon Street, Suite 220 Woodland Hills, Ca. 91367 POSITION STATEMENT: Supported SB 40. Jay Frank State Farm Insurance Allstate Inusrance 431 N. Franklin Street Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 40. Joe Poor, Executive Director Juneau Chamber of Commerce 124 W 5th Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 40. Reed Stoops AETNA Insurance P.O. Box 21211 Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 40. ACTION NARRATIVE TAPE 93-22, SIDE A Number 001 SENATOR KELLY called the Senate Labor and Commerce meeting to order at 1:40 p.m. and announced SB 171 AIDEA BONDS; BUSINESS ASSISTANCE PROG. to be up for consideration. SENATOR PEARCE said if enacted, SB 171 would accomplish two key objectives for the Alaska Industrial Development Authority (AIDA). Section 1 gives legislative approval to AIDA to authorize the issuance of bonds up to $40 million to finance the acquisition, design, and construction of public use aircraft fueling facilities at the Anchorage International Airport. Section 2 of the bill extends the sunset date of AIDA's business assistance fund to July 1, 1996. SENATOR PEARCE noted there were two proposed amendments. The first tightens the Title and the other deletes the word "revenue." JOHN OLSON, Deputy Director of Development, AIDA, supported SB 171 although it originated through the legislature and not the Governor's office as is usual. SENATOR RIEGER asked if these bonds are payable by statute solely out of the revenue proceeds of the owner of the project. MR. OLSON explained they would use the general obligation of the Authority as credit for the bonds. Under this program the project would have to cost less than $10 million. The only way they can issue revenue bonds greater than $10 million is if AIDA owns the project. Number 176 SENATOR RIEGER said he wanted to be sure the legislature could issue, if they choose, revenue bonds instead of authorizing general obligation bonds. MR. OLSON said the legislature can authorize revenue bonds, but AIDA still wants the option to use the g.o. capacity of the Authority, should it be necessary, to finance projects. SENATOR KELLY asked if he was implying AIDEA might not be able to sell revenue bonds based on these two projects? MR. OLSON replied they do not know, yet, about the depth of credit of either entity they are dealing with. SENATOR KELLY asked what was the contribution of MIDREX to the Point McKenzie project. MR. OLSON explained the portion of the project AIDA would finance is the dock and load-off system. The infra-structure to the port might need some improvements, but that is to be done by the borough. ASHLEY REED, representing the Mat-Su Borough, said the roads and utility extensions are already in place. SENATOR SHARP asked if Tesoro presently utilized the Port of Anchorage for supplying fuel? MR. OLSON said he thought Tesoro supplied fuel by pipeline, although fuel will eventually get to the new system through the Port of Anchorage. Number 249 MR. REED explained that all the refiners have the same ability to use the Anchorage Port facilities and do so now. The fuel is off-loaded there and is piped to the airport. SENATOR SHARP said he saw an advantage being given to Tesoro if they have a direct line from their refinery right into the tank farm partially financed by AIDA. MR. OLSON said this project is supported by MAPCO, but he would find out more about the operations of the pipeline. MR. OLSON said the $40 million was to be used at the airport on the west side of the north-south runway. SENATOR RIEGER wanted to know what statute covered AIDA's bonding authority and SENATOR KELLY wanted the Nikiski Pipeline question answered. SENATOR SALO said she would like to see the questions answered before the bill was moved to Finance. SENATOR RIEGER stated he had strong reservations on adding to the state's ownership of projects. SENATOR PEARCE said she doubted if there were any airlines who would cooperate in owning the facility at the airport. She noted that the expansion at the Anchorage Airport can not continue until the fuel tanks are moved and the environmental clean-up happens. SENATOR RIEGER moved to pass SB 171 from committee with individual recommendations. There were no objections and it was so ordered. Number 368 SENATOR KELLY announced SB 162 EMERGENCY UNEMPLOYMENT COMP PROGRAM to be up for consideration. JUDY KNIGHT, Director, Employment Security Division, explained SB 162 allowed the state to continue to participate in the Emergency Unemployment Compensation Program passed by Congress in 1991. She reviewed the provisions in the bill and explained that Extended Benefits is financed half from Alaska's UI trust fund and half from federal receipts. She said they did not anticipate any additional cost associated with the program if you consider the total bill. In fact, there would be approximately $18 million in savings to the UI Trust Fund. The federal government covers 100% of the Emergency Unemployment Compensation. The State chose to participate in that program and not pay extended benefits. SENATOR KELLY asked what happens if they don't pass this bill. MS. KNIGHT explained that the State would not receive the administrative dollars that go with the program for Unemployment Insurance, as well as all the other employment and training provisions. This program does significantly save state funds. SENATOR KELLY expressed his dissatisfaction with the administration introducing this bill so late in session. Number 515 SENATOR RIEGER wanted a response sometime from the administration on what the benefit might be of putting in repealers so it wouldn't be a permanent law. SENATOR SHARP said he wanted this program to sunset the same time as the federal program sunsets. SENATOR KELLY asked if unemployment benefits would stay the same if this bill was enacted. MS. KNIGHT said no they wouldn't. She didn't think it would have any effect on the unemployment rates that employers pay as long as we continue participation in the Emergency Unemployment Compensation. Number 581 SENATOR SALO moved to pass SB 162 from committee with individual recommendations. There were no objections and it was so ordered. TAPE 93-22, SIDE B Number 580 SENATOR KELLY announced HB 101 NATIONAL ELECTRICAL CODE to be up for consideration. LYNDA GIGUERE, Legislative Aide for Representative Hudson, said HB 101 would allow the Department of Labor to adopt the National Electrical Safety Code. The State has been adopting these Codes since 1969 and they thought allowing the Department to do it would be more efficient. There is an amendment to correct a possible constitutional problem. MS. GIGUERE explained that using "shall mandate the adoption of future additions..." could be construed as creating an unconstitutional delegation of legislative authority to a non-governmental agency. SENATOR KELLY said they would have Legal Services look at this particular issue and come back to the bill at a later time and announced HB 102 PANEL MEMBERS ON AK LABOR REL. AGENCY to be up for consideration Number 554 JAN DEYOUNG, Alaska Labor Relations Agency, supported HB 102, because it would assist them in managing their work load. She said in 1990 an Executive Order created the Alaska Labor Relations Agency from three other agencies. She said their caseload had increased by 50% from the previous year. Number 525 SENATOR RIEGER asked why the Chairman was designated by the Governor rather than elected by the membership. MS. DEYOUNG said the reasoning behind that wasn't explained to her, but she thought the appearance of neutrality would be enhanced if a public member would serve as the Chairman. There was further discussion on the makeup of the Agency members. SENATOR KELLY directed his staff to prepare an amendment on this issue. SENATOR KELLY announced a recess from 2:40 - 2:45 p.m. SENATOR KELLY announced SB 40 GROUP HEALTH INS. FOR SMALL EMPLOYERS to be up for consideration. KEN ERICKSON, Aide to Senator Pearce, said SB 40 promotes availability of health insurance coverage for small employers and reforms the small employer health insurance market. It provides guaranteed availability of health insurance regardless of health risk and without added expense to the state. Number 458 JAN MEISELS, Health Insurance Association of America, said the reason this bill focuses on small employers is because they have some unique problems. One of them is the high turn over rate of employees; 90% of Alaskan are employed by a small employer with 2 - 25 employees. She said this bill does not mandate anything, but allows an employer who wishes to provide insurance to be able to get that insurance. Insurance companies will no longer "cherry pick." Groups will be guaranteed renewed coverage, even with high risk and high health claims. The pre-existing 12-month exclusion period goes with the employee if he changes jobs or companies. Number 396 There are also premium pricing limits, which doesn't mean the state is setting insurance company rates. It means there is a limit for every carrier who sets their premiums on what they can charge from their best group to their worst group. She then did a sectional analysis of the bill. She said there are provisions for reinsurance of high risk individuals. The insurance company has to pay the first $5,000 claim before the reinsurance board goes into it. There is a premium for the reinsurance that the insurance company pays. They are constrained within the premium pricing limits in how much they recoup from the policy holders. MS. MEISELS explained SB 40 established a Health Benefit Committee that would recommend to the Reinsurance Board what benefits should be included in the basic and standard plan. This bill sets up a fair marketing standard by preventing "gaming" by insurance companies who may want to drop a high risk group for a year. It also prevents agents from being rewarded for not bringing in a "bad group." Number 232 MS. MEISELS reviewed the proposed amendments which were pro- consumer and technical (see attachment). She said they were from the National Association of Insurance Carriers (NAIC) model. She explained that "capitation" means per-head. So an HMO would pay a physician a certain amount a month whether you see the physician or not. SENATOR SALO asked her to further explain the 12 month pre- existing clause. MS. MEISELS said this meant that an insurance company could exclude coverage for a pre-existing condition for up to 12 months, but would have to cover everything else and would have to cover the pre-existing condition after the 12 months and this exclusion is portable to another job and another insurance company. TAPE 93-23, SIDE A Number 001 JAY FRANK, representing State Farm and Allstate Insurance Companies, supported SB 40 wholeheartedly. SENATOR KELLY noted that John George, representing the American Council of Life Insurers, supported SB 40. JOE POOR, Executive Director, Juneau Chamber of Commerce, supported SB 40 and encouraged it's passage. Number 62 REED STOOPS, representing AETNA Insurance Company, supported SB 40. SENATOR SALO asked what you could anticipate as a premium for some sort of basic coverage. MS. MEISELS said she didn't have a specific figure, but referred her to the "Market Test Report" which lead her to believe the cost was not going to be as high as assumed. SENATOR KELLY said it was 3:30 p.m., thanked everyone for coming and adjourned.