Legislature(1995 - 1996)
04/18/1996 02:20 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 April 18, 1996 2:20 P.M. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator John Torgerson, Vice Chairman Senator Mike Miller Senator Jim Duncan Senator Judy Salo MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 284(FIN) "An Act relating to the Alaska Commercial Fishing and Agriculture Bank." CS FOR HOUSE BILL NO. 405(STA) am "An Act relating to the Board of Examiners in Optometry; relating to licensure of dispensing opticians; and providing for an effective date." HOUSE BILL NO. 432 "An Act relating to the practice of veterinary medicine." HOUSE BILL NO. 497 "An Act relating to chiropractic peer review; and providing for an effective date." CS FOR HOUSE BILL NO. 457(STA) "An Act relating to the unlicensed practice of certain occupations for which licenses are required." CS FOR HOUSE BILL NO. 428(FIN) am "An Act relating to the authority of the Department of Corrections to contract for facilities for the confinement and care of prisoners, and annulling a regulation of the Department of Corrections that limits the purposes for which an agreement with a private agency may be entered into; and giving notice of and approving a lease-purchase agreement for the design, construction, and operation of a correctional facility, and setting conditions and limitations on the facility's design, construction, and operation." PREVIOUS SENATE COMMITTEE ACTION HB 284 - See Labor and Commerce minutes dated 4/11/96. HB 405 - No previous action to consider. HB 432 - No pervious action to consider. HB 497 - No previous action to consider. HB 457 - No previous action to consider. HB 428 - No previous action to consider. WITNESS REGISTER Ed Crane, CEO Commercial Fishing and Agriculture BankCFAB 2550 Denali Anchorage, AK POSITION STATEMENT: Supported HB 284. Roger Poppe, Staff Representative Pete Kott State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Staff to sponsor of HB 405. Catherine Reardon, Director Division of Occupational Licensing Department of Commerce and Economic Development P.O. Box 110806 Juneau, AK 99811-0806 POSITION STATEMENT: Supported HB 405 and HB 457. Randy Welker, Legislative Auditor P.O. Box 113300 Juneau, AK 99811-3300 POSITION STATEMENT: Supported HB 405 and HB 457. Larry Harper 534 W 2nd Anchorage, AK 99501 POSITION STATEMENT: Opposed HB 405. Tim Sullivan, Staff Representative Eldon Mulder State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Staff to sponsor of HB 497. Dennis Dewitt, Staff Representative Eldon Mulder State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Staff to sponsor of HB 428. Bob Cole, Director Division of Administrative Services Department of Corrections P.O. Box 112000 Juneau, AK 99811-2000 POSITION STATEMENT: Opposed HB 428. Chuck O'Connell, Business Manager Alaska State Employee's Association AFSVME Local 52 3510 Spenard Rd., #201 Anchorage, AK 99503 POSITION STATEMENT: Opposed HB 428. ACTION NARRATIVE TAPE 96-28, SIDE A Number 001 HB 284 AK COMMERCIAL FISHING & AGRICULTURE BANK CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 2:20 p.m. and announced HB 284 to be up for consideration. ED CRANE, CEO, Commercial Fishing and Agriculture Bank, said that HB 284 recognizes changes which have taken place in the economics of fishing since CFAB was created 18 years ago. It also deals with some voids and inconsistencies in the original statute as it relates to laws relating to creditors. It deals with an anomaly that appears in existing statute which provides for CFAB's liquidation should CFAB not retire all the State's capital, but on the other hand in another part of an existing statute it says that when CFAB does retire all of the State's capital the statute lapses which means there is no more CFAB. MR. CRANE stressed that the reason for the 18 pages is because the statute spells out in extreme detail how CFAB should operate so there is very specific language. SENATOR KELLY said Division of Banking and Securities had some concerns with this bill, but no real problems. They will continue to audit CFAB on an annual basis. SENATOR TORGERSON moved to pass CSHB 284 from committee with individual recommendations. There were no objections and it was so ordered. HB 405 BD OF OPTOMETRISTS; OPTICIANS SENATOR KELLY announced HB 405 to be up for consideration. ROGER POPPE, Staff to Representative Kott, sponsor, said HB 405 extended the Board to 2002, clears up a conflict between optometrists and opticians, both of whom have assistants who assist them in dispensing glasses and contact lenses. It's been the opticians position that any dispensing would have to come under their jurisdiction. So optician apprentices would have to be qualified to this and that would include all assistants who are working for optometrists and ophthalmologists. After much debate a decision was made in favor of the optometrists. So people who work for opthomologist or optometrists do not have to have their assistants be licensed as optical assistants or optician apprentices. He explained that section 4 was a housekeeping provision. Section 5 eliminates statutory references one of which is the requirement to have branch offices for the Board - no longer necessary in Alaska. In addition there are some requirements that opticians have to meet certain visual and health requirements. They are the only Board that had this requirement so there was some concern that this wasn't constitutional and might involve litigation under the Americans With Disabilities Act. So the advice of Legislative Budget and Audit was to eliminate the reference. CATHERINE REARDON, Division of Occupational Licensing, supported HB 405. RANDY WELKER, Legislative Auditor, said HB 405 addressed all their audit's concerns. LARRY HARPER, licensed optician, said he is currently serving on the Board of Directors of the National Contact Lens Examiners which is the nationally certified testing agency for contact lens fitters. He said in the 1980 sunset review the legislature intentionally removed the exemption that existed at that time for optometrists and their employees. The reason then, as now, is if opticians are licensed, they should be licensed regardless of where they are employed. People in the State of Alaska have a right to expect that opticians are licensed regardless of where the purchase is made. They have been licensed for 23 years and there is no reasonable way to determine whether a person is qualified to perform their duties except by licensure. Giving optometry this exemption effectively creates a two tier level of competence within the field adding to consumer confusion. There is no way for an optometrist or a physician to adequately supervise all that goes on in their office. In addition it would create an unfair competitive advantage for optometrists and shows a blatant disregard for the Alaskan public. SENATOR KELLY said they would set HB 405 aside while the connection with Fairbanks was reestablished. HB 432 VETERINARY LICENSING SENATOR KELLY announced HB 432 to be up for consideration. MR. POPPE, Staff of Representative Kott, sponsor, explained that this bill was introduced at the request of some veterinarians. The Board of Veterinary Medicine supports it. It changes the name of the Board to the National Board of Examination Committee. Section 2 also makes it an unclassified misdemeanor to falsely claim to have a veterinary license and to practice without a license. Currently there are no penalties in place for doing this. An unclassified misdemeanor would be up to one year in jail and a $10,000 fine. So this would plug a loophole. Section 7 slightly modified the definition of the practice of veterinary medicine to include false presentation of being a veterinarian. Section 1 allows veterinary technicians to practice and section 5 sets up a procedure for them to be licensed by the Board. Currently they are only registered, not licensed. MS. REARDON said they support the bill as does the Board of Veterinarians. SENATOR MILLER said he wanted to make sure this bill was not aimed at someone who wanted to take care of his dog. MS. REARDON directed their attention to page 3 which says practicing "for compensation." SENATOR TORGERSON asked what was the impact of licensing technicians and what is their job. MS. REARDON replied that they have already been licensing veterinary technicians. This would basically give them the title of licensed veterinary technicians. This isn't a new intrusion into unregulated activities. SENATOR TORGERSON asked if there were fees associated with licensing and registration. MS. REARDON answered that she believed so. She added that often professions preferred to be able to be called "licensed." SENATOR TORGERSON asked how many there were. MS. REARDON said she was sorry, but she didn't know the answer. SENATOR TORGERSON moved to pass HB 432 from committee with individual recommendations. There were no objections and it was so ordered. HB 497 CHIROPRACTIC PEER REVIEW SENATOR KELLY announced HB 497 to be up for consideration. TIM SULLIVAN, Staff to sponsor, Representative Eldon Mulder, testified that the Chiropractic Peer Review Committee consists of three chiropractors and one lay person. Under current statute only the chiropractors on the committee have immunity for decisions they make as committee members, not the lay person. This bill gives all members immunity. Section two of the bill provides that patient records are confidential to the peer review process if they were confidential before being submitted to the committee. SENATOR TORGERSON moved to pass HB 497 from committee with individual recommendations. There were no objections and it was so ordered. HB 457 UNLICENSED PRACTICE OF OCCUPATION SENATOR KELLY announced HB 457 to be up for consideration. MR. WELKER explained that this bill gives the Division of Occupational Licensing the authority to assess civil fines for practicing an occupation without a license. Presently, only the Board of Architects, Engineers, and Land Surveyors has that authority. The only recourse for others is through the courts. This would be an efficient tool for the investigative section of the Division, although they don't anticipate having to use it often. MS. REARDON said she supported the bill. SENATOR TORGERSON moved to pass HB 457 from committee with individual recommendations. There were no objections and it was so ordered. SENATOR KELLY announced HB 405 to be up for consideration once more. MR. HARPER, testifying from Fairbanks, said the two people who were going to testify from Fairbanks, James Rothmeyer and Pam Gajdos, are associates of his and were going to testify along the same lines as he did. SENATOR TORGERSON moved to pass HB 405 from committee with individual recommendations. There were no objections and it was so ordered. HB 428 LEASE-PURCHASE CORRECTIONAL FACILITY SENATOR KELLY announced HB 428 to be up for consideration, but sai they would take a break at 2:45 p.m. SENATOR KELLY called the meeting back to order at 3:12 p.m. DENNIS DEWITT, Staff to Representative Eldon Mulder, said HB 428 allows the Department of Corrections to pursue the use of private facilities. The first portion of the bill clarifies the ability to contract for private services. The second portion of the bill allows the Department to enter into a lease purchase agreement with a private contractor for a private facility in Alaska. There are some parameters like it can't be larger than 1,000 beds, should be designed for expansion, should include housing for female prisoners which is one of the critical needs we have in Alaska and that construction costs should not exceed $100 million. It should be constructed with a project labor agreement. There's language in the bill that encourages the Department of General Services to develop incentives in the bid process for bidders who promise to employ Alaskans in the operation of the facility. The bill requires that correctional officers in this facility be trained at the same level as correctional officers in the facilities operated by the State of Alaska. MR. DEWITT said that we do need additional capacity in Alaska. Today we're at about 107 percent of capacity in our facilities. We also have 206 prisoners in Arizona and we're spending nearly $6 million providing jobs for Arizonans. Improving facilities for female offenders is one of the things that's outlined in the Cleary final settlement agreement and it's an issue that it has been agreed to by almost everyone involved in the prison system. Number 400 The Subcommittee on Corrections held interim hearings on the topic of privatization and found that the ability to move quickly is enhanced using private sector facilities and the record of private facilities is as good as public facilities in terms of safety and quality of the product that they offer. The cost in Arizona per inmate day is $59 with additional costs bringing it up to $73 per day. In Alaska we pay $109 per day. He believes that a facility built in Alaska by a private contractor would substantially reduce the per diem cost in Alaska facilities. Bringing competition into the market place will help bring the cost of their other facilities down as well. He believes HB 428 addresses the problem of prison capacity, brings construction and operation jobs to Alaska, brings Alaska money back to Alaska, provides innovative opportunity to address Alaska's needs and assures safe and secure prisons. BOB COLE, Director, Division of Administrative Services, thanked Representative Mulder for attacking the problem of over-capacity prisons in Alaska. He said the number of offenders being held on civil law matters has risen about 6% - 8% per year for the last several years, the number of man days served has been rising proportionately. MR. COLE said that the Governor has an alternative proposal which envisions regionalized facilities that meet different requirements of communities around the State. This is particularly important since the biggest portion of the rise in traffic is in misdemeanors and pretrial populations which are localized kinds of offenders who aren't sentenced yet, for the most part. They don't think that a huge centralized facility like the one proposed in HB 428 in a single location in the State is going to solve problems in places like Barrow, Nome, Palmer, and Juneau. MR. COLE said they have concerns about the propriety of issuing RFP's to private contractors to propose to build a facility of up to 1,000 beds at $100 million instead of the design build mode. They have some concerns about the propriety of doing that in the sense that it would lock the State into an agreement for a 20 year period of time. The Governor's approach envisions issuing GO bonds in the amount $148,500,000 for slightly over 1,000 beds dispersed across the State. HB 428 offers no real opportunity for voter input. They think when they are asking the State for $100 million with a payback potential of $200 million over a 20 year period of time that the voters probably should have something to say about it. The Governor's bill would put the entire matter on the ballot in November of 1996. The Department recognizes the need for beds in Southcentral Alaska. The Governor's proposal has an 600 bed proposal for the area in and near Anchorage. MR. COLE also pointed out that the Governor's proposal is cast in the context of a long range financial plan which has been submitted to the legislature; HB 428 was not. Number 475 SENATOR SALO asked if there was an accreditation process that would require certain things of the correctional officers. MR. COLE replied there is a provision in HB 428 that would require comparability of training for correctional officers working in the private sector. This was put in in recognition of the fact that the State Department of Corrections has an excellent record when it comes to deaths, fights, assaults, and that sort of thing. There is a very rigorous process in place now for State correctional officers. SENATOR TORGERSON asked if this bill passed the full body, if they looked at it as a mandate to go forward with private prisons or as an option to lay alongside the table with the GO bond proposal? MR. COLE answered if there is some agreement reached during the session including both in a single piece of legislation, he didn't know what the answer would be. SENATOR TORGERSON said he didn't think this mandated building a private prison since the wording was "shall" look into it and "may" come forward with a proposal. MR. COLE replied that the bill was written permissively. Number 505 SENATOR KELLY asked for a spreadsheet analysis (capitalization costs, finance costs, operational costs) of the Governor's proposal over 20 or 30 years and the proposal in HB 428 for the same time period. MR. DEWITT replied that there are no sheet like that and part of the problem in developing that, especially with the operational side, is that they have left it to the Department to define the operational needs that the facility ought to fill. He said he had done a very "quick and dirty spreadsheet" in terms of the capital costs on both proposals. The Governor's proposal is about $135,000 capital costs per bed and HB 428 is a little more than $100,000 per bed. In terms of operation, they have no reason to believe they would change the approximate $100 per day cost of operation in the system through the Governor's proposal. They would expect a private facility on the average to come in substantially below that. SENATOR KELLY asked him to bring him a side by side comparison of the two proposals, construction costs and as near as he could with the operational costs. SENATOR TORGERSON said one of the concerns he had with both options is that they are not considering the option of lease purchase that the City of Seward has done and the City of Kenai said they would do. He wanted to see the numbers on the lease purchase agreements that the city would sell revenue bonds for and then lease it back to the State as another part of that side by side. Number 540 MR. COLE said setting aside the matter of what's the right way to provide correctional services, there are a number of financial pros and cons to the lease purchase, private purchase, private capitalization, and general obligation bonding. One of the reasons they decided to go the general obligation bond route, in addition to giving full disclosure and participation to the public, is because they are told it is financially advantageous to the State to do that for a number of different reasons, both in terms of initial capital cost and the payback. CHUCK O'CONNELL opposed HB 428. It does not resolve the problems of overcrowding in Juneau, Fairbanks, Nome, and Bethel. It puts a large monolith somewhere in central Alaska which could ultimately result in some problems requiring them to house inmates where they can have access to their attorney, families, etc. He wanted the committee to consider regarding the prisoners in Arizona that you have additional medical costs, probation costs, program and other divisional costs. A private contractor would not have those costs, but the State would still have to bear them. So if you're going to build a prison in Anchorage, the fair way to compare that cost is to compare it to the cost of running a facility nearby. For example, the Department has published a cost of care institution by institution, presently at Palmer Correctional Center. The cost is $62.51 per day while Mr. DeWitt testified that the total cost in Arizona is $73 per day. MR. O'CONNELL said he thought we would be extremely competitive if we compared the right figures. He said that HB 428 is a whole new approach. Prisoners do not spend all their time in jail. They are on the road to the doctor, to the dentist, to court. They are in and out of jail all the time. This is a public safety concern that has had no study. They are talking about spending $200 million without a fiscal plan or analysis of whether or not this is a prudent way to spend state dollars. MR. O'CONNELL reiterated that ASEA completely opposed this bill. He said we have never had a correction officer killed in the State of Alaska and we are the only State that can say that. And we have never had an inmate killed. TAPE 96-28, SIDE B He said we have an efficient, safe, correctional system and although the costs are high, when you compare the costs of the institution itself to the cost of an institution in Arizona, they are very competitive. SENATOR KELLY interrupted Mr. O'Connell and apologized to him and everyone else for the little amount of time they could spend on this issue today because of the end of session. He said they would come back on Tuesday and see what the Department of Revenue would say. SENATOR KELLY adjourned the meeting at 3:37 p.m.