Legislature(2001 - 2002)

04/10/2001 01:32 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                 SENATE LABOR & COMMERCE COMMITTEE                                                                            
                          April 10, 2001                                                                                        
                             1:32 p.m.                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Randy Phillips, Chair                                                                                                   
Senator Alan Austerman                                                                                                          
Senator Loren  Leman                                                                                                            
Senator John Torgerson                                                                                                          
Senator Bettye Davis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All Members  Present                                                                                                            
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
SENATE BILL  NO. 138                                                                                                            
"An Act relating to the  business of insurance, including changes to                                                            
the insurance  code to implement federal financial  services reforms                                                            
for the  business  of insurance  and to  authorize  the director  of                                                            
insurance to  review criminal backgrounds  for individuals  applying                                                            
to engage in  the business of insurance;  amending Rule 402,  Alaska                                                            
Rules of Evidence; and providing for an effective date."                                                                        
                                                                                                                              
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 30                                                                                                              
"An Act  relating  to the calculation  and payment  of unemployment                                                             
compensation benefits; and providing for an effective date."                                                                    
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 81(FIN)                                                                                                   
"An  Act extending  the  termination  date of  the Board  of  Dental                                                            
Examiners; relating to  the Board of Dental Examiners and regulation                                                            
of the practice of dentistry;  and relating to dental hygienists and                                                            
dental assistants."                                                                                                             
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
SB 138 - See Labor and Commerce minutes dated 3/20/01.                                                                          
                                                                                                                                
SB 30 - No previous action to record.                                                                                           
                                                                                                                                
HB 81 - No previous action to record.                                                                                           
                                                                                                                              
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Bob Lohr, Director                                                                                                          
Division of Insurance                                                                                                           
Department of Community and Economic Development                                                                                
3601 C Street, Ste. 1324                                                                                                        
Anchorage AK 99503                                                                                                              
POSITION STATEMENT: Commented on SB 138.                                                                                      
                                                                                                                                
Mr. John George                                                                                                                 
American Council of Life Insurers                                                                                               
National Association of Independent Insurers                                                                                    
3328 Fritz Cove Rd.                                                                                                             
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported CSSB 138.                                                                                       
                                                                                                                                
Mr. David Hale                                                                                                                  
Alaska Independent Insurance Agents and Brokers                                                                                 
P.O. Box 73840                                                                                                                  
Fairbanks AK 99707                                                                                                              
POSITION STATEMENT:  Supported CSSB 138.                                                                                      
                                                                                                                                
Ms. Rebecca Nance-Gamez, Deputy Commissioner                                                                                    
Department of Labor & Workforce Development                                                                                     
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Supported SB 30.                                                                                          
                                                                                                                                
Mr. Joe Thomas, State Actuary                                                                                                   
Division of Finance                                                                                                             
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT: Commented on SB 30.                                                                                       
                                                                                                                                
Mr. Chuck Blankenship, Manager                                                                                                  
Unemployment Insurance Program                                                                                                  
Department of Labor & Workforce Development                                                                                     
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Commented on SB 30.                                                                                       
                                                                                                                                
Ms. Pam LaBolle, President                                                                                                      
Alaska State Chamber of Commerce                                                                                                
217 Second St., #201                                                                                                            
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: No position on SB 30.                                                                                     
                                                                                                                                
Ms. Brenda Balash                                                                                                               
Staff to Representative Fate                                                                                                    
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on HB 81 for the sponsor.                                                                       
                                                                                                                                
Ms. Pat Davidson, Legislative Auditor                                                                                           
Division of Legislative Audit                                                                                                   
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT: Commented on HB 81.                                                                                       
                                                                                                                                
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 HB 81.                                                                                       
                                                                                                                                
Mr. George Shaffer, Dentist                                                                                                     
306 Main, Ste 202                                                                                                               
Ketchikan AK 99901                                                                                                              
POSITION STATEMENT: Supported HB 81.                                                                                          
                                                                                                                                
Ms. Elizabeth Woolley                                                                                                           
P.O. Box 73704                                                                                                                  
Fairbanks AK 99707                                                                                                              
POSITION STATEMENT: Supported HB 81.                                                                                          
                                                                                                                                
Representative Hugh Fate                                                                                                        
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Sponsor of HB 81.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-16, SIDE A                                                                                                            
Number 001                                                                                                                      
                 SB 138-INSURANCE CODE AMENDMENTS                                                                           
                                                                                                                                
CHAIRMAN RANDY PHILLIPS called the Senate Labor & Commerce                                                                    
Committee meeting to order at 1:32 p.m. and announced SB 138 to be                                                              
up for consideration.                                                                                                           
                                                                                                                                
MR. BOB LOHR, Director, Division of Insurance, explained that the                                                               
Division had worked closely with every interest group that has                                                                  
expressed interest  about any portion  of the bill and has  achieved                                                            
agreement on  each point. The committee  substitute reflects  all of                                                            
those changes.  He said that SB 138 focuses on implementing  changes                                                            
at the federal  level that are contained  in the Gramm-Leach-Bliley                                                             
Act (GLBA),  which largely  eliminated the  barriers among  banking,                                                            
securities and insurance industries.                                                                                            
                                                                                                                                
     It allowed  mergers and take-overs  among those. There  is                                                                 
     very  recent evidence  that that  is happening.  The  bill                                                                 
     also reforms  the way insurance  regulation will occur  in                                                                 
     this country  and requires states to consider  a number of                                                                 
     different  changes  in  their  regulatory  structures  for                                                                 
     insurance  and this bill reflects  those changes in  three                                                                 
     basic  areas. It includes  producer licensing  to make  it                                                                 
     much more  straight forward and  faster for non-residents                                                                  
     to obtain a license in all 51 jurisdictions.                                                                               
                                                                                                                                
     Secondly,  it deals with consumer  privacy provisions  and                                                                 
     authority  for  states  to  adopt  privacy  provisions  by                                                                 
     regulation  that  at least  equal  the  federally adopted                                                                  
     regulations  on privacy;  and, if states  go beyond  those                                                                 
     privacy provisions to be  more protective of privacy, they                                                                 
     will be upheld under the GLBA.                                                                                             
                                                                                                                                
     The  third area of emphasis  in the  bill is the consumer                                                                  
     protection  provision, which  deals especially with  banks                                                                 
     selling insurance.                                                                                                         
                                                                                                                                
MR.  JOHN GEORGE,  American  Council  of  Life  Insurance,  National                                                            
Association of Independent  Insurers and AFLAC, said they negotiated                                                            
with  the Division  of Insurance  who  graciously  accepted many  of                                                            
their  proposals and  they support  the committee  substitute  to SB
138.                                                                                                                            
                                                                                                                                
SENATOR DAVIS moved to  adopt version F CS to SB 138 with individual                                                            
recommendations. There were no objections and it was so ordered.                                                                
                                                                                                                                
MR. DAVE  HALE, Alaska  Independent  Insurance  Agents and  Brokers,                                                            
supported CSSB 138.                                                                                                             
                                                                                                                                
CHAIRMAN PHILLIPS  asked if they had  ever resolved the third  party                                                            
liability issue with worker's compensation.                                                                                     
                                                                                                                                
MR.  LOHR  responded  that concern  had  been  addressed  under  the                                                            
revised language in the privacy section.                                                                                        
                                                                                                                                
MR. GEORGE concurred with that statement.                                                                                       
                                                                                                                                
CHAIRMAN  PHILLIPS said  he would  hold  SB 138  until Thursday  for                                                            
further work.                                                                                                                   
                                                                                                                                
             SB  30-UNEMPLOYMENT COMPENSATION BENEFITS                                                                      
                                                                                                                                
CHAIRMAN PHILLIPS announced SB 30 to be up for consideration.                                                                   
                                                                                                                                
MS. REBECCA  NANCE-GAMEZ, Deputy Commissioner,  Department  of Labor                                                            
and  Workforce   Development,  said  that  SB  30   relates  to  the                                                            
effectiveness  of Alaska's unemployment insurance  program. She told                                                            
members:                                                                                                                        
                                                                                                                                
     The national  unemployment system  was originally created                                                                  
     in 1935 as  one of the programs under the Social  Security                                                                 
     Act. Congress  chose, at that  time, to create a national                                                                  
     system for compensation  of unemployed workers composed of                                                                 
     programs  administered  by each state  and territory  with                                                                 
     broad federal  oversight. The decision was made  to create                                                                 
     the  system  on  an  insurance  model  rather  than  as  a                                                                 
     straight-forward entitlement  program. The insurance model                                                                 
     has worked  well for over 65 years. As with any  insurance                                                                 
     program,  the  object  is  to  underwrite  an  identified                                                                  
     potential  loss  incurred  by a  small percentage  of  the                                                                 
     insured  through accumulation  of funds  collected from  a                                                                 
     group as a whole. The loss  insured by this program is the                                                                 
     loss  of  wages   by  unemployed  workers.  The  premiums                                                                  
     required to  cover this potential loss are in  most states                                                                 
     paid solely by the employer;  although in Alaska, the cost                                                                 
     is shared  between the employer and the worker,  employers                                                                 
     carrying 80 percent of the  direct cost and workers paying                                                                 
     20 percent of these costs through payroll taxes.                                                                           
                                                                                                                                
     As  with any program  that compensates  individuals  while                                                                 
     they are not  working, there's always been a concern  that                                                                 
     the goal of  providing temporary partial wage  replacement                                                                 
     not be a disincentive  for returning to work.  In striving                                                                 
     to provide sufficient temporary  income to enable a worker                                                                 
     to  bridge  the  gap  between  jobs  while  meeting   non-                                                                 
     deferrable   expenses,   such   as  housing,   food,   and                                                                 
     utilities,  the target of 50  percent wage replacement  is                                                                 
     most  widely used. According  to figures  provided by  the                                                                 
     U.S. Department of Labor,  Alaska ranks not only below all                                                                 
     other states in the adequacy  of wage replacement provided                                                                 
     by its unemployment insurance  program, but also below the                                                                 
     District of Columbia and  Puerto Rico. Benefit amounts are                                                                 
     based  on the  amount of  wages a  worker earns  during  a                                                                 
     prescribed  base  period.  Workers  with  higher earnings                                                                  
     whose  loss   of  work  has  a  higher  financial  impact                                                                  
     generally   receive  a  higher   weekly  benefit  amount.                                                                  
     Naturally,  higher  levels  of  contributions   have  been                                                                 
     collected on these higher wage amounts.                                                                                    
                                                                                                                                
     Under current statutes,  the maximum benefit amount can be                                                                 
     paid  to workers  who  have earned  over $26,750  a  year,                                                                 
     which is $248  per week regardless of whether  the loss of                                                                 
     wages the  worker has incurred was $26,750 or  $50,000 per                                                                 
     year.  The maximum  amount currently  represents about  38                                                                 
     percent of the average weekly wage in our state.                                                                           
                                                                                                                                
     The  proposed  legislation  seeks  to  raise  the maximum                                                                  
     weekly benefit amount in  Alaska in two steps to an amount                                                                 
     roughly equally to one half  of the average weekly wage in                                                                 
     the  state of  $320  maximum weekly  benefit  amount.  The                                                                 
     first  increase, to  be effective  January  1, 2002  would                                                                 
     raise  the   amount  to  $284  with  a  second  increment                                                                  
     effective  January  1, 2003.  The  second intent  of  this                                                                 
     proposal is to then tie  the maximum weekly benefit amount                                                                 
     to a percentage  of the average weekly wage as  is done in                                                                 
     most other  states. This would allow the wage  replacement                                                                 
     offered  by  the  program  to  rise or  fall  based  on  a                                                                 
     relationship to the loss being replaced.                                                                                   
                                                                                                                                
     Clearly,  there's  a cost associated  with  both of  these                                                                 
     goals.  The initial goal  of closing  the gap between  our                                                                 
     current  maximum  benefit  amount  and the  target  of  50                                                                 
     percent  of  the  average  weekly   wage  is the  largest                                                                  
     financial  hurdle. The total  additional cost to the  fund                                                                 
     is anticipated  to be  just under $10  million. This  will                                                                 
     result in an increase of  taxes to the average employer of                                                                 
     9.6 percent. However, the  costs used as the foundation of                                                                 
     determining tax rates are  derived from the average of the                                                                 
     benefit  outlays  from  the previous  three  state fiscal                                                                  
     years. The  increase resulting from this legislation  will                                                                 
     not impact  taxes until 2003  and then the increases  will                                                                 
     be  phased in  during the  following years  with the  full                                                                 
     impact  being included in the  tax calculations for  2007.                                                                 
                                                                                                                                
     From  2003  forward, the  maximum  weekly  benefit amount                                                                  
     would be calculated  each year based on 50 percent  of the                                                                 
     average weekly wage in the  state. This economic indicator                                                                 
     is  relatively stable.  Using  it in the  long-term  would                                                                 
     result in less dramatic  changes to employer taxes than we                                                                 
     have experienced  in the past as a maximum weekly  benefit                                                                 
     amount  remains  static and  then  becomes less  and  less                                                                 
     adequate.  During the 90s, two  separate law changes  were                                                                 
     necessary  to raise the maximum benefit amount  a total of                                                                 
     $60. Had  our maximum benefit  amount been tied to the  50                                                                 
     percent  of  the  average  weekly   wage,  it  would  have                                                                 
     increased   less  than  $40  in  very  small  incremental                                                                  
     changes.  It would  have,  in fact,  decreased  in one  of                                                                 
     those years. I appreciate  your consideration and am ready                                                                 
     and available to answer any questions you may have.                                                                        
                                                                                                                                
Number 1000                                                                                                                     
                                                                                                                                
SENATOR AUSTERMAN  asked why  there were two  fiscal notes  from the                                                            
Department of Administration (DOA).                                                                                             
                                                                                                                                
MR. JOE THOMAS, Division of Finance, DOA, explained:                                                                            
                                                                                                                                
     The  first fiscal note  was drafted  by the director  with                                                                 
     the understanding  that we were going to have  100 percent                                                                 
     increase  in costs to the working  reserve account,  which                                                                 
     is  used to  fund  the unemployment  insurance;  but  upon                                                                 
     receiving  the  information  from  Department  of Labor's                                                                  
     Actuary, we revisited the  fiscal note and have revised it                                                                 
     downwards  accordingly to take into account, for  example,                                                                 
     the University of Alaska  is no longer in our numbers, nor                                                                 
     is AHFC  nor the Railroad. The  fiscal note is to address                                                                  
     the  increased   cost  to  state   agencies  for  funding                                                                  
     unemployment insurance.                                                                                                    
                                                                                                                                
SENATOR AUSTERMAN  asked if  AHFC, the University  and the  Railroad                                                            
would have their own fiscal notes.                                                                                              
                                                                                                                                
MR. THOMAS answered  that he hoped they would, if  this would impact                                                            
their organization.                                                                                                             
                                                                                                                                
CHAIRMAN PHILLIPS  said the University's was there,  but not AHFC or                                                            
the Railroad.                                                                                                                   
                                                                                                                                
SENATOR TORGERSON asked how healthy the trust is.                                                                               
                                                                                                                                
MS. GAMEZ answered  that it remains  solvent and is healthy  at this                                                            
time. It has between $200 to $220 million in the fund right now.                                                                
                                                                                                                                
SENATOR TORGERSON asked  if the employers' contribution would be $10                                                            
million.                                                                                                                        
                                                                                                                                
MS. GAMEZ said  that figure was right. She explained  that right now                                                            
the maximum  earning someone  can have to  get $248 is $26,750.  The                                                            
schedule  takes  that up  to about  $31,000  and  it goes  up in  $2                                                            
increments.                                                                                                                     
                                                                                                                                
SENATOR TORGERSON asked if this was inflation proofed each year.                                                                
                                                                                                                                
MS.  GAMEZ  answered   that  it's  not  inflation   proofed  as  she                                                            
understood  it. It is tied into the  average weekly wage.  So if the                                                            
wages  go down,  the benefit  amount  could  go down.  "In terms  of                                                            
employer contributions,  it just keeps  [indisc.] the trust  fund in                                                            
order to  reach the  payment amount  of the maximum.  So it  kind of                                                            
self-adjusts, if you will."                                                                                                     
                                                                                                                                
SENATOR TORGERSON asked if it self-adjusts now.                                                                                 
                                                                                                                                
MS.  GAMEZ replied  that  if  the trust  fund  amount  dips below  a                                                            
certain level,  tax rates will go up, "but right now,  benefit rates                                                            
don't go up just because the tax rates might go up."                                                                            
                                                                                                                                
SENATOR TORGERSON  said, "This bill  gives you all those  tools." He                                                            
asked why jump  from where we are  now to something that  floats and                                                            
raises rates.                                                                                                                   
                                                                                                                                
MS. GAMEZ explained that  at this point in time, "We only replace an                                                            
average of about 38 percent  of someone's income temporarily and the                                                            
U.S. DOL  recommends that  we hit 50 percent  wage replacement.  The                                                            
$320 this legislation  would get us  to in 2002 is still  well below                                                            
the poverty  level of  $410 per week.  So it  really does cover  the                                                            
bare essentials  for people. The reason  we wanted to tie  it to the                                                            
average weekly wage is  because 50 percent wage replacement for most                                                            
workers (it wouldn't cover  all workers) is in the best interest for                                                            
economic   stabilization  to   communities   and  for  the   workers                                                            
themselves.                                                                                                                     
                                                                                                                                
SENATOR TORGERSON  said the estimated collection from  employers was                                                            
$10 million  and asked, "Is it equal  to the $10 million  or are you                                                            
building the trust a little bit with this?"                                                                                     
                                                                                                                                
MR.  CHUCK  BLANKENSHIP,  Program  Manager, Unemployment   Insurance                                                            
Program, explained that  the costs to the employer are linked to the                                                            
additional benefits paid.                                                                                                       
                                                                                                                                
SENATOR TORGERSON asked  what rate they target to keep in the trust.                                                            
                                                                                                                                
MR. BLANKENSHIP replied  that the target balance for solvency in the                                                            
trust  is in  relationship  to total  wages  paid in  the state.  We                                                            
target  3 -  3.3  percent  of total  wage  in  order to  maintain  a                                                            
solvency that reacts to a recessionary economy.                                                                                 
                                                                                                                                
SENATOR TORGERSON asked if they are low now.                                                                                    
                                                                                                                                
MR. BLANKENSHIP replied that it is pretty healthy now.                                                                          
                                                                                                                                
SENATOR TORGERSON said  the wages in the state are about $11 billion                                                            
and 3 percent of that $330 million.                                                                                             
                                                                                                                                
MR. BLANKENSHIP said he  wasn't sure what the total wages are in the                                                            
state, but their economists would know.                                                                                         
                                                                                                                                
SENATOR TORGERSON  asked if the poverty level of $410  was tax-free.                                                            
                                                                                                                                
MR.  BLANKENSHIP  replied  that the  amount  is subject  to  federal                                                            
income tax.                                                                                                                     
                                                                                                                                
SENATOR TORGERSON  noted that they are adding a category  of $31,000                                                            
at the high end and asked what percent that was.                                                                                
                                                                                                                                
MR. BLANKENSHIP replied 45 - 50 percent.                                                                                        
                                                                                                                                
SENATOR TOGERSON  said that 50 percent  of the $10 million  is a new                                                            
category completely.                                                                                                            
                                                                                                                                
MR. BLANKENSHIP  explained  that it brings  the maximum amount  from                                                            
$248 to $284, which is the half-way-point.                                                                                      
                                                                                                                                
SENATOR TORGERSON asked how much money the new category costs.                                                                  
                                                                                                                                
MS.  GAMEZ  answered,  "Based   on  the  new  schedule,  we  have  a                                                            
collection  of about $10 million over  three years. We're  extending                                                            
the schedule.  It really helps out the middle class  workers. That's                                                            
the people on the lower economic end of things."                                                                                
                                                                                                                                
MS. PAM LABOLLE,  President, Alaska State Chamber  of Commerce, said                                                            
they do not  have an official position  on this issue at  this time,                                                            
but from  an informal  poll  she did, members  would  like to  see a                                                            
justification  for an  increase and  if there is  an increase,  they                                                            
want  it  to  be  in  the  lesser  amount.   They  also  wanted  the                                                            
legislature to  retain the ability to make the decision  about where                                                            
the  benefit   level   rests.  She   said  there   wasn't  a   clear                                                            
understanding  of  what  would  happen  to  the  $24  per  week  for                                                            
dependents that the unemployed get above the 50 percent.                                                                        
                                                                                                                                
SENATOR TORGERSON asked how many people responded to her poll.                                                                  
                                                                                                                                
MS. LABOLLE answered about 12 percent of the 600 members.                                                                       
                                                                                                                                
SENATOR DAVIS  asked if you are drawing  unemployment, are  you able                                                            
to hold another job at the same time.                                                                                           
                                                                                                                                
SENATOR  TORGERSON  asked what  affect this  bill  has on  dependent                                                            
allocations.                                                                                                                    
                                                                                                                                
MS. GAMEZ  answered  that it  would do  nothing  to the dependent's                                                             
allowance. The maximum  number of dependents would stay at three and                                                            
the amount would remain at $24.                                                                                                 
                                                                                                                                
SENATOR TORGERSON asked  if the national number included dependents.                                                            
                                                                                                                                
MR. BLANKENSHIP  answered  that the dependent  number was not  used,                                                            
because  it's  not   something  that's  available   to  all  of  the                                                            
claimants. About 40 percent draw the dependent's allowance.                                                                     
                                                                                                                                
SENATOR DAVIS asked him to repeat that.                                                                                         
                                                                                                                                
MR. BLANKENSHIP  reiterated that currently  about 40 percent  of the                                                            
unemployment  insurance claimants  receiving dependent's  allowance,                                                            
which is an additional  amount up to a maximum of three and it's $24                                                            
for each of those children.                                                                                                     
                                                                                                                                
SENATOR DAVIS  asked how they determined who is eligible  for it and                                                            
who isn't.                                                                                                                      
                                                                                                                                
MR.  BLANKENSHIP  answered  that not  everyone  claims  children  as                                                            
dependents.                                                                                                                     
                                                                                                                                
SENATOR DAVIS  asked if anyone who claimed dependent  children would                                                            
get the money.                                                                                                                  
                                                                                                                                
MR. BLANKENSHIP  answered if they  establish they have children  who                                                            
are dependent upon them for support, yes.                                                                                       
                                                                                                                                
SENATOR  TORGERSON  asked  how many  other  states have  a  floating                                                            
average set yearly.                                                                                                             
                                                                                                                                
MS. GAMEZ  answered  35 states.  Six states  tie it  to the  average                                                            
weekly wage  and the other  states tie it  to the CPI. "Tying  it to                                                            
the CPI, it always  goes up and with the average weekly  age, it can                                                            
go up or down."                                                                                                                 
                                                                                                                                
CHAIRMAN  PHILLIPS   said  he  would  hold  the  bill   for  further                                                            
consideration.                                                                                                                  
                                                                                                                                
          HB  81-DENTISTS/DENTAL HYGIENISTS & ASSISTANTS                                                                    
                                                                                                                              
CHAIRMAN PHILLIPS announced HB 81 to be up for consideration.                                                                   
                                                                                                                                
MS. BRENDA BALASH,  staff to Representative Fate,  said the Board of                                                            
Dental  Examiners  is  due  to  terminate   on  June  30,  2001  and                                                            
Legislative  Budget and  Audit recommended  that  it be extended  to                                                            
June 30, 2005. She explained:                                                                                                   
                                                                                                                                
     The  regulation and  licensing of qualified  dentists  and                                                                 
     hygienists  benefits the  public safety  and welfare.  The                                                                 
     Board contributes  to safeguarding the public  interest by                                                                 
     insuring competence  and integrity of dentists  and dental                                                                 
     hygienists.  Initially,  this is why  we brought the  bill                                                                 
     forward.  There  were also  some  concerns by  the Dental                                                                  
     Board  of Examiners and the Alaska  Dental Society and  HB
     81  attempts to  clear  up these  issues. It  attempts  to                                                                 
     clear  up some duplicate  and confusing  language, reduce                                                                  
     paper  work, expand the definition  of dentistry, address                                                                  
     dental  testing equivalency  options,  board appointments                                                                  
     and  increase the allowable  civil fine  penalty that  the                                                                 
     board can impose.                                                                                                          
                                                                                                                                
Number 2300                                                                                                                     
                                                                                                                                
SENATOR LEMAN  asked what  was the significance  of the deletion  of                                                            
the words  "or prophylactic"  after  "preventative".  He thought  it                                                            
would be restrictive.                                                                                                           
                                                                                                                                
MS. BALASH answered that it's duplicate language.                                                                               
                                                                                                                                
MS. PAT DAVIDSON, Legislative  Auditor, said they conducted a sunset                                                            
review   of  the   Board  of   Dental  Examiners   and  recommended                                                             
continuation of the Board until 2005.                                                                                           
                                                                                                                                
CHAIRMAN PHILLIPS  asked what she  thought of the rest of  the bill.                                                            
                                                                                                                                
MS.  DAVIDSON  answered that  it  hadn't  been proposed  during  the                                                            
audit, so they didn't have a studied opinion.                                                                                   
                                                                                                                                
SENATOR AUSTERMAN  asked where language came from  on page 2 talking                                                            
about authorizing inspectors of radiology equipment.                                                                            
                                                                                                                                
MS. BALASH  answered the Alaska Dental  Society proposed  it and the                                                            
Board supported it.                                                                                                             
                                                                                                                                
SENATOR LEMAN  asked the significance  of the last sentence  on page                                                            
6, which  says, "requires  a person  licensed under  AS 08.64  to be                                                            
licensed under this chapter."                                                                                                   
                                                                                                                                
MS. CATHERINE  REARDON, Director,  Occupational Licensing,  said her                                                            
division  staffs the Board  of Dental Examiners.  She said  AS 08.64                                                            
contains medical  licensing statutes, which apply  to physicians and                                                            
other   people  like   physician   assistance   or  intensive   care                                                            
paramedics. Podiatrists  are also licensed under this statute. "This                                                            
dental statute  doesn't mean you have  to have a dental license.  It                                                            
doesn't say the  scopes of practice for an intensive  care paramedic                                                            
have now been expanded to include them."                                                                                        
                                                                                                                                
SENATOR  LEMAN commented  that  in the  professions  he is  familiar                                                            
with, there  are overlapping  areas  and he thought  there would  be                                                            
overlapping areas for physicians and dentists.                                                                                  
                                                                                                                                
MS. REARDON explained that  the definition came from American Dental                                                            
Association (ADA) model  definition of dentistry and was added on to                                                            
the current definition  rather than rewriting the entire definition.                                                            
                                                                                                                              
TAPE 01-16, SIDE B                                                                                                            
                                                                                                                              
SENATOR  LEMAN asked what  is the  current limit  on the civil  fine                                                            
authority mentioned on page 5.                                                                                                  
                                                                                                                                
MS. REARDON answered $5,000.  The $25,000 maximum would match a bill                                                            
that increased the amount  the medical board can fine. This would do                                                            
the same thing for the dental board.                                                                                            
                                                                                                                                
SENATOR TORGERSON  asked if inspection  of radiology was  recognized                                                            
in the fiscal note as costing more money.                                                                                       
                                                                                                                                
MS. REARDON  responded that  they didn't  indicate that anything  in                                                            
the  bill would  cost  more  money.  It's a  positive  fiscal  note,                                                            
because  that  is  the way  they  are  supposed  to  prepare  sunset                                                            
extensions. There is no  additional expenditures in that fiscal note                                                            
over this  year. This was  a request of the  Dental Society  and not                                                            
the Dental Board, although they like it.                                                                                        
                                                                                                                                
SENATOR TORGERSON asked  what happens to the money that is collected                                                            
by the inspector.                                                                                                               
                                                                                                                                
MS. REARDON explained:                                                                                                          
                                                                                                                                
     In statute right now the  department is permitted to set a                                                                 
     fee and charge a fee for  issuing the inspection seals. We                                                                 
     don't do so.  We haven't set a fee charging for  that, but                                                                 
     if  we were  to  set a  fee  charging  for that,  then  my                                                                 
     understanding  of  this  language is  that  the inspector                                                                  
     could  collect that and  pass it along  to the board.  The                                                                 
     way  the  current  law  works  for  the  x-ray  equipment                                                                  
     registration  inspection  is  that  every five  years  the                                                                 
     owner  of the dental x-ray equipment,  which is usually  a                                                                 
     dentist,  but could be  some one other  than the dentist,                                                                  
     has  to have it  inspected to  make sure  it's safe by  an                                                                 
     inspector. The owner sends  in a piece of paper that shows                                                                 
     it got inspected and if  there was a fee, they'd mail us a                                                                 
     fee  and we'd mail  them the  sticker. They'd  slap it  on                                                                 
     their  machine. This  would allow  the inspector  who's  a                                                                 
     private  citizen approved  by the board  to go around  and                                                                 
     inspect.  When he inspects  and says  it meets standards,                                                                  
     he'll  slap a sticker  on it  and if there  were any  fee,                                                                 
     he'd collect it and send  it to us. I think the department                                                                 
     is unlikely  to establish a fee  under that circumstance.                                                                  
     It's awkward to have the  money go through some one else's                                                                 
     hands.  What  if  some  one  says,   "I've  paid  and  the                                                                 
     inspector says, "No, they didn't."                                                                                         
                                                                                                                                
MR. GEORGE  SHAFFER, Ketchikan  Dentist, clarified  that there  is a                                                            
fee established  for the dentist to have his radiological  equipment                                                            
inspected.                                                                                                                      
                                                                                                                                
     In the past,  the state used to do the inspecting  through                                                                 
     the Division of Radiology  and charge us a fee. The change                                                                 
     now is that  we have a private inspector that's  certified                                                                 
     by the state that does the  testing, but at the moment the                                                                 
     seal   has  to  be  issued  by   the  board  through   the                                                                 
     department.  The  change in  this  language simply  is  to                                                                 
     simplify  the  process so  that the  person  who does  the                                                                 
     inspecting  can issue the certification without  us having                                                                 
     to wait  until paper  work goes to Juneau  and then  comes                                                                 
     back to  us. It can be done on-site.  The fact is that  we                                                                 
     do pay a fee straight to  the inspector rather than to the                                                                 
     state, the way it used to be.                                                                                              
                                                                                                                                
MR. SHAFFER  also said there  was a change  in the civil  penalties.                                                            
The Dental Society and  the Board has been concerned for a number of                                                            
years that the  fees that are charged for the investigations  aren't                                                            
actually covering the cost  to the state of doing the investigations                                                            
when a  license is disciplined.  This bill  raises fee commensurate                                                             
with the cost to the state. He said he endorses the bill.                                                                       
                                                                                                                                
SENATOR LEMAN said when  the upper limit was changed for physicians,                                                            
the committee  sent  along a  letter of  intent  saying that  should                                                            
apply only to the most egregious offenses.                                                                                      
                                                                                                                                
MS. REARDON  said she remembered  the letter  of intent, but  didn't                                                            
have it with her. The concern  was that they didn't want the Medical                                                            
Board  to take  the  message  that you  should  take each  fine  you                                                            
normally  give and  double it,  but instead,  you  should leave  the                                                            
continuing education violations low.                                                                                            
                                                                                                                                
SENATOR LEMAN  asked the  sponsor if it was  acceptable to  increase                                                            
the upper limit  to get to some of  the bad offenses, but  not minor                                                            
ones.                                                                                                                           
                                                                                                                                
SENATOR AUSTERMAN  asked where the  money from the civil  fine went.                                                            
                                                                                                                                
MS. REARDON responded  that the division considers  it part of their                                                            
program  receipts and,  therefore, credit  the money  to the  dental                                                            
program, just  like they credit the  costs of the investigation  and                                                            
prosecution  to the dental program.  She assumed it was part  of the                                                            
general fund since  it was state money. She explained  that there is                                                            
a self-sufficiency  mandate  for each program  in statute that  they                                                            
cover their own costs.                                                                                                          
                                                                                                                                
SENATOR AUSTERMAN  asked if currently  the fines are not  paying for                                                            
the investigations.                                                                                                             
                                                                                                                                
MS. REARDON  answered that's true.  She said one of the reasons  for                                                            
increasing  the  fine is  to have  the  wrong-doer help  offset  the                                                            
investigation more fully.                                                                                                       
                                                                                                                                
SENATOR  AUSTERMAN asked  for backup showing  costs associated  with                                                            
investigations.                                                                                                                 
                                                                                                                                
MS. REARDON responded that  she would get that information and added                                                            
that  the   other  reason  the  Dental   Board  strongly   supported                                                            
increasing  the maximum is  they felt like  larger figures  would be                                                            
better deterrents.                                                                                                              
                                                                                                                                
REPRESENTATIVE  FATE said that the Dental Society  brought the issue                                                            
forward  and he didn't  object to  using language  in the letter  of                                                            
intent from the Medical Board regarding raising the fine amount.                                                                
                                                                                                                                
MS. BETSY WOOLLEY, Fairbanks  Dental Assistant, supported HB 81, but                                                            
has concerns with  Section 5. She said the Minnesota  State Board of                                                            
Dentistry  last  year elected  a  certified  dental assistant  as  a                                                            
president  of the  Board  of Dentistry  and  she is  concerned  that                                                            
dental hygienists  and assistants  are being eliminated to  possibly                                                            
be president of the board.                                                                                                      
                                                                                                                                
REPRESENTATIVE  FATE responded that was the previous  version, which                                                            
was amended out in the House.                                                                                                   
                                                                                                                                
MR.  SHAFFER inserted  that  he favored  a letter  of  intent to  be                                                            
attached with the change in civil penalties.                                                                                    
                                                                                                                                
CHAIRMAN  PHILLIPS  thanked  everyone for  their  participation  and                                                            
adjourned the meeting at 3:37 p.m.                                                                                              

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