Legislature(1995 - 1996)

03/07/1996 02:05 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE LABOR AND COMMERCE COMMITTEE                              
                          March 7, 1996                                        
                           2:05 p.m.                                           
 MEMBERS PRESENT                                                               
 Senator Tim Kelly, Chairman                                                   
 Senator John Torgerson, Vice Chairman                                         
 Senator Mike Miller                                                           
  MEMBERS ABSENT                                                               
 Senator Jim Duncan                                                            
 Senator Judy Salo                                                             
  COMMITTEE CALENDAR                                                           
 CS FOR HOUSE BILL NO. 382(STA)                                                
 "An Act relating to the Board of Dispensing Opticians; and                    
 providing for an effective date."                                             
 SENATE BILL NO. 261                                                           
 "An Act relating to the release of employment security records;               
 relating to an injunction or an employer's security for delinquent            
 unemployment insurance contributions; extending time periods for              
 redeterminations and appeals for unemployment insurance; relating             
 to the overpayment or the redetermination of unemployment insurance           
 benefits; relating to availability for work, seeking work, and the            
 calculation of wages for unemployment insurance purposes; relating            
 to voluntary federal tax withholding from unemployment insurance              
 benefits; relating to the binding effect of unemployment                      
 compensation decisions; relating to the definition of `waiting                
 week' for employment security purposes; and providing for an                  
 effective date."                                                              
 SENATE BILL NO. 186                                                           
 "An Act relating to partnerships; amending Alaska Rules of Civil              
 Procedure 20 and 24; and providing for an effective date."                    
 SENATE BILL NO. 253                                                           
 "An Act relating to insurance coverage for costs of prostate cancer           
  PREVIOUS   SENATE COMMITTEE   ACTION                                         
 HB 382 - See Labor and Commerce minutes dated 2/29/96.                        
 SB 261 - See Labor and Commerce minutes dated 2/13/96 and 2/22/96.            
 SB 186 - See Labor and Commerce minutes dated 2/8/96 and 2/29/96.             
 SB 253 - No previous senate committee minutes.                                
    WITNESS REGISTER                                                           
 Dwight Perkins, Special Assistant to the Commissioner                         
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau, AK 99811-1149¶                                                        
  POSITION STATEMENT:  Representing governor-prime sponsor of SB 261.          
 Kristine Pellet, Student Intern                                               
 Senator Jim Duncan                                                            
 State Capitol                                                                 
 Juneau, AK 99801-1182¶                                                        
  POSITION STATEMENT:  Prime sponsor of SB 253.                                
 Gordon Evans, Lobbyist                                                        
 Health Insurance Association of America                                       
 318 4th St.                                                                   
 Juneau, AK 99801¶                                                             
  POSITION STATEMENT:  Opposed to SB 253.                                      
 Carol Edwards, RN                                                             
 3998 Diane                                                                    
 Juneau, AK 99801¶                                                             
  POSITION STATEMENT:  Supported SB 253.                                       
 Bill Chisholm                                                                 
 Division of Insurance                                                         
 Dept. of Commerce & Economic Development                                      
 P.O. Box 110800                                                               
 Juneau, AK 99801 ¶                                                            
  POSITION STATEMENT:  Supported SB 253.                                       
  ACTION NARRATIVE                                                             
 TAPE 96-17, SIDE A                                                            
 Number 001                                                                    
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 2:05 p.m. and noted that it was Ted Kelly's               
 first birthday.                                                               
             HB 382 BOARD OF DISPENSING OPTICIANS                            
 CHAIRMAN KELLY brought up HB 382 as the first order of business               
 before the Senate Labor & Commerce Committee.  He stated he knew of           
 no opposition to the bill.                                                    
 SENATOR MILLER moved to discharge HB 382 from the Senate Labor &              
 Commerce Committee with individual recommendations.  There were no            
 objections and it was so ordered.                                             
               SB 261 UNEMPLOYMENT COMPENSATION                              
 CHAIRMAN KELLY brought up SB 261 as the next order of business                
 before the Senate Labor & Commerce Committee.  He said that SB 261            
 is basically a housekeeping bill.                                             
 DWIGHT PERKINS, Special Assistant to the Commissioner, Department             
 of Labor, stated there was a question regarding Section 13 of the             
 bill which has to do with the "equity and good conscience" standard           
 was and there was no fault of the claimant that these were to                 
 happen.  The language on page 8,line 3, helps in determining that             
 this is good conscience on behalf of the claimant.                            
 CHAIRMAN KELLY asked if this is mainly trying to recover money that           
 is a mistake of the division.                                                 
 MR. PERKINS replied that is correct, when there is no fault on                
 behalf of the claimant.                                                       
 CHAIRMAN KELLY asked what would happen if it was the claimant's               
 MR. PERKINS responded the division would go after it.  They have a            
 track record of recovering 90% percent of the funds that are not              
 fraudulent claims.                                                            
 Number 086                                                                    
 SENATOR MILLER made a motion to discharge SB 261 from the Senate              
 Labor & Commerce Committee with individual recommendations.  There            
 were no objections and it was so ordered.                                     
            SB 186 LIMITED LIABILITY PARTNERSHIPS                            
 CHAIRMAN KELLY stated SB 186 would be held so that members could              
 review the recently drafted committee substitute.                             
         SB 253 INSURANCE FOR PROSTATE CANCER TESTING                        
 CHAIRMAN KELLY brought up SB 253 as the next order of business                
 before the Senate Labor & Commerce Committee.                                 
 KRISTINE PELLET, Student Intern for Senator Duncan, prime sponsor             
 of SB 253, read the sponsor's statement, which contained                      
 information on prostate cancer and how one is tested for the                  
 disease.  Currently, insurance companies are not required by Alaska           
 Law to cover prostate cancer tests; SB 253 would require coverage             
 for testing on annual physical examinations, when appropriate.                
 SENATOR DUNCAN said it was unfair for an individual to have to pay            
 for a simple test that could alter his life with serious medical              
 and personal ramifications.  Four states already require insurance            
 companies to cover these tests.  She urged support for insurance              
 coverage in Alaska of the PSA (prostate specific antigen) test, if            
 deemed necessary by a physician.                                              
 SENATOR DUNCAN offered an amendment for regarding discussions with            
 the American Cancer Society.  They felt SB 253, as it stands, is              
 too broad.                                                                    
 CHAIRMAN KELLY asked if the American Cancer Society has data that             
 shows that African-Americans are at higher risk for prostate                  
 MS. PELLET responded that was correct.                                        
 CHAIRMAN KELLY thought "a family history of prostate cancer" is               
 pretty broad.  He thinks "family history" should be clarified to be           
 "immediate family history".  He asked if there are further                    
 questions.  Hearing none, he asked Ms. Pellet to remain in                    
 attendance.  The chairman called Mr. Evans to testify.                        
 Number 175                                                                    
 GORDON EVANS, Lobbyist for the Health Insurance Association of                
 America, stated that HIAA opposes any mandated benefits; a mandated           
 offering would be a different thing.  He stated that since he is a            
 male, he has nothing else to say.                                             
 CHAIRMAN KELLY asked what the difference is between mandated                  
 benefits and mandated offerings.                                              
 MR. EVANS responded that mandated benefits are when an insurance              
 company must cover something.  Mandated offering is when an                   
 insurance company gives a person buying an insurance policy the               
 option of paying a little extra to have that coverage in the                  
 SENATOR MILLER asked how SB 253 would affect premium charges.                 
 MR. EVANS replied it would be considered in the underwriting                  
 process.  Any mandated benefit usually leads to some sort of an               
 increase in premiums.  He noted that he is covered by state health            
 insurance through his wife, and they have always paid for PSA tests           
 for him.  So he does not know why they say some companies aren't              
 covering it now.                                                              
 CHAIRMAN KELLY asked if there is anyone who disagrees that the                
 state health insurance policy pays mandated benefits.                         
 Number 207                                                                    
 CAROL EDWARDS, RN and nationally certified oncology nurse, stated             
 her husband was turned down for his PSA screening.  She believes              
 that men deserve the same rights in PSA testing that women receive            
 in mammogram testing.  Mandating insurance companies to pay for               
 mammogram screening is now common throughout the United States.               
 She believes that mandating payment by insurance companies for PSA            
 screening will follow.  Prostate cancer is the most commonly                  
 occurring cancer in men in the United States: 41% of all cancers in           
 men are prostate cancers.  A lot of men die with prostate cancer,           
 and not of it.  If a man lives to be 90 years old, he will probably         
 have prostate cancer, although it will probably not be the cause of           
 Number 244                                                                    
 Ms. Edwards stated that the younger a man is, the more aggressive             
 prostate cancer will be, and the more likely that it will be the              
 cause of death.  Early detection of prostate cancer is the best               
 chance for a cure.  Ms. Edwards stated that unfortunately, she                
 mostly sees patients with cancer in more advanced stages.  Ms.                
 Edwards stated that Aetna refused to pay for a PSA test for her               
 husband, even though his father died of prostate cancer.  He has a            
 State of Alaska health insurance policy, and he carries the rider             
 for the annual physical.  In a letter, Aetna stated they would not            
 pay for the PSA test, even though he was considered high risk,                
 because it was a questionable test.  Ms. Edwards stated it is a               
 debatable test.                                                               
 CHAIRMAN KELLY asked if that test that will be mandated by SB 253.            
 MS. EDWARDS responded it is.                                                  
 CHAIRMAN KELLY asked if the state will, at this time, pay for                 
 prostate examinations.                                                        
 MS. EDWARDS replied they will pay for a digital rectal examination.           
 They will pay for a cardiac risk profile: her husband has no risk             
 of cardiac disease, but they will pay for that test.  He does have            
 a risk of prostate cancer, but they will not pay for a PSA test.              
 They won't pay for this one particular test, which at Bartlett                
 Memorial Hospital costs between $60.00 - $70.00.  She stated that             
 her family is personally willing to pay for that, because they are            
 capable of doing so.  But it is the individual who is less                    
 knowledgeable and would not know the value of the test who might              
 not be so likely to pay out of pocket.  Ms. Edwards stated that in            
 the oncology world there is a phrase called "oncology family                  
 syndrome".  This phrase means that if there are three generations             
 of cancer in your family, and it does not have to be the same type            
 of cancer, then you are considered to be at high risk for having              
 CHAIRMAN KELLY asked how family is defined.                                   
 MS. EDWARDS thinks it goes back through generations.  She knows               
 that mother, grandmother, and great-grandmother are considered to             
 be in those studies.                                                          
 CHAIRMAN KELLY asked Ms. Edwards what word is used to describe                
 family relationship and degrees of family relationships.                      
 MS. EDWARDS stated she would be willing to find that information              
 for the committee.                                                            
 CHAIRMAN KELLY stated the committee would appreciate that.  He                
 asked if there were any questions.  Hearing none, he asked if                 
 anyone knew the word used to define that whole phrase.                        
 MS. EDWARDS asked if the chairman was thinking of "immediate                  
 CHAIRMAN KELLY responded that is not the word.  He came across it             
 when he was working for the Nevada Legislature.  He called Mr.                
 Chisholm to testify.                                                          
 Number 299                                                                    
 BILL CHISHOLM stated he works in the claims field for the State of            
 Alaska, and is covered by Aetna for almost everything.  He stated             
 he spends a great deal of time reviewing insurance provisions and             
 supports SB 253.  Mr. Chisholm stated that in 1991 during his                 
 annual physical, his physician recommended he take the exam.  He              
 did, and Aetna paid for it.  Aetna also paid for the PSA exam for             
 his 1992 physical.  In 1993, Aetna would not pay for the test, and            
 they have not paid for it since then.  When he called Aetna to                
 inquire why they did not pay for the test, he was told that the               
 test was not an acceptable diagnostic tool.  He believes that a               
 test of this type is probably more accurate than the examination              
 which involves a physician facing a somewhat squirming subject and            
 trying to determine size and hardness or softness of a particular             
 part of the body.  In looking at the 1994 denial, it states that,             
 "Services must be broadly accepted, professionally as effective,              
 appropriate and essential treatment of disease or injury.  Based on           
 that, this is not covered."  Mr. Chisholm pointed out that whether            
 it's a PSA screening or a digital rectal exam, they are both for              
 detection, not for treatment.  He believes that men should be                 
 entitled to have the best screening possible for a potential                  
 disease of this type.                                                         
 CHAIRMAN KELLY asked Dr. Palmer to testify.                                   
 Number 348                                                                    
 DR. PALMER, a Juneau physician, explained family genetics are such            
 that certain problems can skip generations in people who are                  
 genetically interconnected (not family members by marriage).  The             
 fact that a first degree relative (a parent or sibling) does not              
 have a specific disease does not dilute the fact that family                  
 relationships where other members of the bloodline have had the               
 disease predisposes one to the disease.  He believes the best                 
 medical procedures are preventive, especially to help patients stop           
 smoking.  Regarding the PSA, it will detect malignancy and is more            
 specific than mammography.  The positive predictive value of                  
 mammography is 20 percent, and around 35 to 50 percent with PSA.              
 SENATOR KELLY asked Janet Parker from the Division of Retirement              
 and Benefits why a zero fiscal note was submitted.                            
 MS. PARKER replied the state's major medical plan only pays for the           
 PSA test if objective evidence exists throughout patient history              
 and after a digital rectal exam.  The PSA test is not automatically           
 paid for as part of a routine physical exam.  The state's plan does           
 not cover a routine physical exam unless employees select SBS                 
 Option 1.  The employee pays the premium for that option, and                 
 although there will be an increase in the cost to the state, most             
 of the cost will be paid by the employee.  The premium for Option             
 1 is expected to increase in future years.                                    
 SENATOR KELLY questioned whether Option 1 coverage includes a PSA             
 test.  MS. PARKER answered it will if SB 253 passes, it does not              
 SENATOR KELLY asked if employees who do not choose Option 1 are               
 entitled to a full physical exam every year.  MS. PARKER stated               
 they are not, but a male employee would still be able to go in and            
 have a PSA test without a full physical exam.                                 
 SENATOR KELLY asked what the added cost to the state is.  MS.                 
 PARKER assumed most people will not have the test done.  SENATOR              
 KELLY asked why she would make that assumption if the test was                
 free.  MS. PARKER responded the current plan pays for a pap smear             
 test for a woman, but does not cover the office visit, therefore              
 the employee still has to pay some cost.                                      
 SENATOR KELLY commented he is surprised by the zero fiscal note.              
 PHILLIP GRAY, a Juneau resident, stated he was diagnosed with                 
 prostate cancer in 1992, through a PSA test paid by Aetna.  He is             
 not required to have a PSA blood test every three months which is             
 important to his treatment.  He expressed his support for SB 253.             
 He discussed his treatment for prostate cancer since 1992.  Aetna             
 has refused to pay for any of the treatment including blood tests,            
 x-rays, bone scans, a second opinion or prescribed medicines, even            
 though these things are covered in the manual.  He noted Washington           
 State has recently passed a law requiring insurance payment to any            
 licensed practitioner.  His last concern was that Juneau has no               
 cancer registry which could be computerized and analyzed to                   
 pinpoint correlations.                                                        
 SENATOR KELLY asked Ms. Parker if she could comment on Mr. Gray's             
 lack of coverage.  MS. PARKER could not do so without looking at              
 the specifics of his case, but offered to review his file.  She               
 noted that naturopathic services are generally not covered by                 
 insurance companies.                                                          
 SENATOR KELLY repeated his concern with the zero fiscal note, as it           
 is unlikely the state could mandate another medical test without              
 associated costs.  He announced SB 253 would be held in committee             
 until next week.                                                              
         SB 216 OMNIBUS STATE FEES & COST ASSESSMENTS                         
 NANCY SLAGLE, Director of the Division of Budget Review, reported             
 SB 216 reflects a recommendation made by the Long Range Financial             
 Planning (LRFP) Commission to generate revenue by increasing user             
 fees.  The LRFP projected the increase in fees would generate                 
 approximately $3 million for FY 97.  The Governor's goal was to               
 generate $8 million to close the fiscal gap.  Some of the user fee            
 increases, which did not require statutory revision, are included             
 in the Governor's budget submission, however SB 216 contains those            
 fees that do require statutory revision.  She offered to provide              
 committee members with a spread sheet that identifies the agencies            
 involved and dollar amounts.  She gave the following sectional                
 analysis of the bill.                                                         
 Section 1 relates to the Real Estate Surety Fund in the Department            
 of Commerce and Economic Development.  It allows the Department to            
 charge for hearing costs associated with real estate surety cases.            
 The estimated revenue is $3,000.                                              
 Section 2 deals with the Postsecondary Education Commission.                  
 SENATOR KELLY asked if that was dealt with in a bill that passed              
 previously.  MS. SLAGLE did not believe so, and explained the                 
 change would allow the Commission to establish fees for                       
 applications to operate or for agents' permits related to the                 
 operation of postsecondary institutions.  The estimated revenue is            
 SENATOR KELLY presumed that section is liable to be incorporated              
 into Senator Green's bill.                                                    
 Section 3 would allow the Human Rights Commission to charge fees              
 for education and training services and materials, and information            
 provided to the public, specifically in the area of training for              
 the prevention of discrimination and sexual harassment and                    
 disability issues.                                                            
 Section 4 provides fees to cover costs for self-insured companies             
 to pay for workers' compensation claims processed in the Department           
 of Labor.                                                                     
 SENATOR KELLY asked for more information.  PAUL GRASSE, Director of           
 the Division of Workers' Compensation, explained the state does not           
 process claims per se, for workers' compensation, except for its              
 own, but keeps a database of all workers' compensation cases,                 
 administers the program, and provides resolution for disputes.                
 Additionally it administers the second injury fund and the self               
 insurance program.                                                            
 SENATOR KELLY questioned how the Division calculated four percent             
 as an equitable figure, and whether the amount is four percent of             
 gross salary.  MR. GRASSE answered it is 4 percent of all workers'            
 compensation costs.  The amount closely approximates the premium              
 tax that is charged to employers who buy workers' compensation                
 policies.  If a company is not large enough to be able to pay                 
 claims itself, it is required to purchase workers' compensation and           
 an insurance policy.  There is a premium tax assessed to that at              
 2.7 percent.  The 4 percent is based on just the workers                      
 compensation costs paid; medical costs, time-loss  benefits;                  
 permanent partial impairment, etc.                                            
 SENATOR KELLY asked what that total would be for Carr-Gottstein's.            
 MR. GRASSE replied the amount changes annually.                               
 SENATOR KELLY questioned the figure of $671,000.  MR. GRASSE                  
 answered that figure is based on the 1994 cost, and is 4 percent of           
 what self insured companies paid.                                             
 SENATOR KELLY asked if Mr. Grasse's position is that the 4 percent            
 replaces the premium tax that all non-self insured's pay.  MR.                
 GRASSE stated that amount is actually a little less than the                  
 premium tax.                                                                  
 SENATOR KELLY inquired how that could be so if it is based on 4               
 percent rather than 2.7 percent.  MR. GRASSE explained the premium            
 covers the entire cost of the policy plus the insurance company's             
 profit which is a larger sum than that which it paid out on claims.           
 Number 572                                                                    
 SENATOR TORGERSON asked if municipalities would be covered by this            
 section.  MR. GRASSE noted they would, if self-insured.  SENATOR              
 TORGERSON asked for the breakdown between private and public                  
 corporations and whether the increase in revenue will cover program           
 operating costs.  MR. GRASSE referred to a breakdown he provided to           
 committee members.                                                            
 SENATOR KELLY referred to the University of Alaska, listed in the             
 breakdown.  It is a self insured workers' compensation carrier who            
 paid out $955,000 in costs.  He asked if the 4 percent would be               
 based on those payments.  MR. GRASSE agreed, and noted the amount             
 would be $38,217.                                                             
 SENATOR KELLY asked whether the University of Alaska would deposit            
 the money in the general fund.  MR. GRASSE explained the money                
 would come to his division, and then be deposited into the state              
 SENATOR KELLY asked if the division does $671,000 worth of work for           
 the 28 self insured entities.  MR. GRASSE replied affirmatively and           
 added the system is very efficient.  He reminded members that                 
 workers compensation is a form of tort reform and keeps cases out             
 of the courts, is based on a no-fault philosophy, is predictable,             
 and benefits both employees and employers.  He added self-insured             
 entities save money because they do not have to buy an insurance              
 SENATOR KELLY asked if anyone else was concerned that this policy             
 transfers pots of money, and will entail more paperwork.  SENATOR             
 TORGERSON agreed.                                                             
 SENATOR KELLY stated one position the committee might take is to              
 review outfits that self insure and do not pay a premium tax, but             
 to extend that to the University of Alaska is different.  SENATOR             
 TORGERSON commented the seven municipalities, University, and                 
 school districts will contribute $200,000.                                    
 MR. GRASSE clarified that the amount of paperwork would not                   
 increase because self insurers already have to provide the required           
 MS. SLAGLE continued with the sectional analysis.                             
 Section 5 increases business license fees in the Department of                
 Commerce and Economic Development.  The increase would be from $25            
 per year to $75 every two years and would generate an additional              
 $841,300 to the unrestricted general fund.                                    
 SENATOR KELLY asked about the Buy Alaska program.  SHERMAN ERNOUF,            
 committee staff, answered Buy Alaska approached the committee and             
 wanted to direct an increase in business license fees.  SENATOR               
 KELLY clarified they wanted a surcharge on business licenses of $3            
 to be appropriated to the Buy Alaska program.                                 
 CATHERINE REARDON, Director of the Division of Occupational                   
 Licensing in the Department of Commerce, commented the business               
 license fee has not increased since Statehood.  For efficiency                
 purposes, business licenses are sold for a two-year time period,              
 and cost $50.  There will be no administrative costs associated               
 with this increase, as the same number of checks will be processed.           
 SENATOR KELLY asked if this section will take effect in January,              
 1997.  MS. REARDON replied that is correct, and although she would            
 prefer the increase begin at the start of the fiscal year, business           
 licenses expire December 31.                                                  
 SENATOR TORGERSON asked if the Department could save on                       
 administrative costs by going to a four year license.  MS. REARDON            
 stated it would, but new business owners might not want to pay for            
 four years, and other businesses might not plan to operate for that           
 MS. SLAGLE continued with the sectional analysis.  Section 6 allows           
 the Division of Governmental Coordination to charge fees for                  
 federal consistency determinations.                                           
 SENATOR KELLY asked what the Division of Governmental Coordination            
 does.  MS. SLAGLE explained it is a division within the Office of             
 Management and Budget that deals with the Coastal Zone Management             
 Program and other consistency review areas.                                   
 DIANE MAYER, Director of the Division of Governmental Coordination,           
 stated the Division administers the state's coastal management                
 program, oversees the state's involvement in the implementation of            
 ANILCA, and coordinates state agency reviews of environmental                 
 impact statements put out by federal agencies.  Its main function             
 is to act as a coordinator between the state's resource agencies              
 when development projects are proposed that require action or                 
 review by more than one state resource agency.  This allows for a             
 unified state position on development projects, and provides for              
 the development of permit stipulations that allow for a consistent            
 project across the board.  Section 6 does not mandate that fees be            
 charged, but gives the division the authority to write regulations            
 to accept fees for services rendered.  The intent is not to charge            
 for one-time services, but for ongoing projects.                              
 SENATOR KELLY asked if the new fees would be in addition to what              
 developers are already required to pay.  MS. MAYER responded                  
 Section 6 would enable the division to write regulations, and the             
 industry is better off with more up-front involvement in project              
 design to comply with permit regulations, rather than after the               
 fact review.  This would allow the division to work with the                  
 industry to accept fees to get people scheduled early on in the               
 larger projects, and to get agency personnel involved in                      
 preliminary designs and environmental impact statements to                    
 streamline the process.  If an industry was interested in getting             
 those services, the division would have the ability to enter an               
 agreement to direct staff time to that project.                               
 SENATOR KELLY asked if they would be buying their way to the front            
 of the line.  MS. MAYER stated it would enable the division to give           
 priority treatment, but more so to provide the type of services               
 that would help the project evolve in an efficient way.  It would             
 save industry the cost of having to redesign to fit permit                    
 SENATOR TORGERSON questioned whether the division charges any fees            
 now.  MS. MAYER said the division is unable to accept money for               
 anything.  She added that Section 6 would also allow the division             
 to charge for copies.                                                         
 SENATOR TORGERSON asked what the $32,000 figure is based on.  MS.             
 MAYER responded the division has discussed this concept with                  
 industry people.  It takes into account a time period to work with            
 industry to draft regulations, and then in the next couple of years           
 one or two applicants might be willing to try it.                             
 MS. SLAGLE explained Section 7 broadens the ability of the                    
 Department of Military and Veteran Affairs to charge fees for                 
 providing training.  Currently, it is only able to charge for                 
 training in relation to emergency situations dealing with hazardous           
 substances.  Section 7 would allow the Department to charge for all           
 types of training for emergency responses.                                    
 SENATOR KELLY asked who the Department currently charges.  MS.                
 SLAGLE responded local governments, and maybe some private                    
 companies.  SENATOR KELLY questioned whether those costs are                  
 already being paid for out of the spill fund.  MS. SLAGLE noted               
 that training is specific to oil spills.  Other emergency response            
 training covers earthquakes, floods and a wide variety of disasters           
 the department may be involved in.                                            
 SENATOR KELLY believed that making this change to generate $4000 to           
 be questionable.  MS. SLAGLE answered the Department of Military              
 and Veterans Affairs estimated that amount based on costs specific            
 to that training, such as room rentals and transportation.                    
 SENATOR KELLY asked if the money would go directly to the                     
 Department.  MS. SLAGLE stated it would.                                      
 MS. SLAGLE commented the last section allows the Department of                
 Environmental Conservation to establish fees by regulation for the            
 use of pesticides and broadcast chemicals, and for reviewing                  
 subdivision plans for sewage waste disposal and treatment                     
 JANICE ADAIR, Department of Environmental Conservation, explained             
 the authority for pesticide registration would include chemicals or           
 biological substances used to control pests, such as rodents,                 
 mosquitos, or weeds.  Through registration, DEC would be able to              
 monitor what pesticides are being sold in the state.  This would              
 assist DEC with granting monitoring waivers for public drinking               
 water systems.  So far those waivers have saved the public water              
 systems, collectively, over $2 million per year.  DEC would like to           
 issue more waivers.  DEC would also like to work with OSHA when it            
 does safety inspections and needs information on a pesticide that             
 might be used in a workplace.  Alaska is the only state that does             
 not charge a registration fee.  In other states this fee pays for             
 the costs of the pesticide program.  The fee would be paid by the             
 pesticide manufacturer.                                                       
 SENATOR MILLER noted initially it may be paid by the manufacturer,            
 but the consumer will pay for it in the end in increased prices.              
 SENATOR KELLY asked how much will be generated from the pesticide             
 registration program.  MS. ADAIR estimated $100,000 and $220,000              
 from subdivision review plans.                                                
 SENATOR KELLY questioned who currently does subdivision plan                  
 review.  MS. ADAIR replied DEC does, but is unable to charge.                 
 SENATOR KELLY asked if review is necessary for projects in boroughs           
 without planning and zoning powers.  MS. ADAIR answered yes, and              
 believed Anchorage and Valdez are the only two municipalities that            
 do their own reviews.                                                         
 SENATOR TORGERSON noted an engineer usually designs the project and           
 then it is rubber stamped by DEC.  Some argue that if an engineer             
 does the design, state review is unnecessary.  He added that any              
 septic system being installed goes through the same process.                  
 MS. ADAIR advised that DEC has been established as the health                 
 authority for the State of Alaska, except in those areas where the            
 local government has adopted health powers.  The reason for DEC's             
 review of subdivision plans or a sewage disposal system on the lot            
 (as opposed to a community system), is to ensure that the system              
 will work and not contaminate drinking water supplies.  She noted             
 the controversy surrounding this particular program within DEC,               
 however reported that at one time DEC stopped doing on-lot reviews,           
 and within the first day, banks stopped granting loans in the Mat-            
 Su Borough.  The Bankers' Association informed DEC it needed a                
 health authority to assure the system will work, because it does              
 not want to be stuck with a piece of property with inadequate                 
 sewage treatment or a contaminated drinking water source.                     
 SENATOR KELLY did not feel this section is necessary for DEC to               
 continue to do reviews.  MS. ADAIR agreed, but stated the ability             
 to charge fees would offset the general funds that go into it.                
 SENATOR KELLY asked if the developer of the lot would pay for the             
 plan review.  MS. ADAIR answered yes.  SENATOR KELLY questioned               
 whether fees would be charged on individual homesites.  MS. ADAIR             
 explained DEC already has the authority to charge fees for                    
 individual homesite plan review, but not for subdivisions.                    
 SENATOR KELLY asked how that happened.  MS. ADAIR believed the                
 ability of DEC to charge for subdivision plan review was pulled out           
 of a bill several years ago, but did not remember why.                        
 SENATOR KELLY questioned whether individual homesites can be                  
 considered within a subdivision.  MS. ADAIR clarified subdivision             
 plans are reviewed to determine whether the sewage treatment design           
 is suited to each lot, considering soil type and lot size.  When an           
 individual lot owner needs a plan review it is because a bank is              
 requiring the review.  The bank wants a health authority to ensure            
 that the sewer system works.                                                  
 SENATOR TORGERSON commented DEC does not do the tests, they are               
 done by an engineer.  DEC merely rubber stamps those tests.  He               
 added there are not very many subdivision sewage projects.  MS.               
 ADAIR stated the Hillside area in Anchorage is an excellent example           
 of a failed subdivision.  At the time it was designed, the MOA was            
 not a health authority, and that project was the impetus to                   
 establish a health authority within the municipality.                         
 SENATOR TORGERSON questioned whether any of the designs approved by           
 DEC have ever failed.  MS. ADAIR stated they have.  SENATOR                   
 TORGERSON repeated these types of projects must be engineered by a            
 licensed professional, by law.  MS. ADAIR replied DEC does not                
 merely rubber stamp designs, it reviews all documentation to                  
 fulfill health authority requirements for lending institutions.               
 SENATOR KELLY did not believe the subdivision review fee would get            
 through the legislative process.                                              
 SENATOR KELLY adjourned the meeting at 3:22 p.m.                              

Document Name Date/Time Subjects