Legislature(2003 - 2004)

05/08/2003 01:36 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                          May 8, 2003                                                                                           
                           1:36 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Gary Stevens                                                                                                            
Senator Bettye Davis                                                                                                            
Senator Hollis French                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 242(L&C)                                                                                                  
"An Act  relating to licensing  of certified  public accountants;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     MOVED CSHB 242(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 120(RLS) am                                                                                               
"An   Act  excluding   service  contracts   from  regulation   as                                                               
insurance;  relating to  insurance  licensing  for motor  vehicle                                                               
service  contracts  and home  warranties;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     MOVED CSHB 120(RLS) am OUT OF COMMITTEE                                                                                    
                                                                                                                                
SENATE CS FOR CS FOR HOUSE BILL NO. 151(L&C)                                                                                    
"An Act relating  to claims and court actions for  defects in the                                                               
design,  construction,  and   remodeling  of  certain  dwellings;                                                               
limiting when certain court actions  may be brought; and amending                                                               
Rules 79 and 82, Alaska Rules of Civil Procedure."                                                                              
     MOVED SCSCSHB 151(L&C) OUT OF COMMITTEE                                                                                    
                                                                                                                                
SENATE CS FOR CS FOR HOUSE BILL NO. 135(HES)                                                                                    
"An Act relating to marital and family therapists."                                                                             
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 209                                                                                                             
"An Act relating to pilotage of certain foreign pleasure craft."                                                                
                                                                                                                                
     MOVED CSSB 209(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 194(L&C)                                                                                                  
"An Act creating a tax credit under the Alaska Net Income Tax                                                                   
Act for contributions to regional development organizations; and                                                                
providing for an effective date."                                                                                               
                                                                                                                                
     MOVED SCS CSHB 194(L&C) OUT OF COMMITTEE                                                                                   
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
HB 242 - No previous action to consider.                                                                                        
                                                                                                                                
HB 120 - No previous action to consider.                                                                                        
                                                                                                                                
HB 151 - No previous action to consider.                                                                                        
                                                                                                                                
HB 135 - See HESS minutes dated 4/23/03.                                                                                        
                                                                                                                                
SB 209 - No previous action to consider.                                                                                        
                                                                                                                                
HB 194 - See CRA minutes dated 5/5/03.                                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Representative Kevin Meyer                                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 151.                                                                                        
                                                                                                                                
Mr. Mike Milligan                                                                                                               
12056 Gara Dr.                                                                                                                  
Kodiak, AK 99615                                                                                                                
POSITION STATEMENT: Supported HB 151.                                                                                         
                                                                                                                                
Mr. Richard Tilly, President                                                                                                    
Interior Alaska Building Association                                                                                            
PO Box 72080                                                                                                                    
Fairbanks, AK 99707                                                                                                             
POSITION STATEMENT: Supported HB 151.                                                                                         
                                                                                                                                
Ms. Robin Ward                                                                                                                  
No address provided                                                                                                             
POSITION STATEMENT: Supported HB 151.                                                                                         
                                                                                                                                
Mr. Steve Orr                                                                                                                   
PO Box 871277                                                                                                                   
Wasilla AK                                                                                                                      
POSITION STATEMENT: Supported HB 151.                                                                                         
                                                                                                                                
Mr. Alan Wilson                                                                                                                 
Alaska Home Builders Association                                                                                                
6014 Lund St.                                                                                                                   
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported HB 151.                                                                                         
                                                                                                                                
Mr. John Bitney                                                                                                                 
Alaska State Home Builders                                                                                                      
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Commented on HB 151.                                                                                      
                                                                                                                                
Ms. Sarah Wright                                                                                                                
Staff to Representative Mike Hawker                                                                                             
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 242 for the sponsor.                                                                      
                                                                                                                                
Representative John Coghill                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 120.                                                                                        
                                                                                                                                
Ms. Linda Hall, Director                                                                                                        
Division of Insurance                                                                                                           
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Commented on HB 120.                                                                                      
                                                                                                                                
Mr. Chuck Spinelli                                                                                                              
Alaska Home Builders Association                                                                                                
9200 Vanguard No. 102                                                                                                           
Anchorage AK 99507                                                                                                              
POSITION STATEMENT: Supported HB 151.                                                                                         
                                                                                                                                
Representative Peggy Wilson                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 135.                                                                                        
                                                                                                                                
Ms. Susan Arenth                                                                                                                
No address provided                                                                                                             
POSITION STATEMENT: Commented on HB 135.                                                                                      
                                                                                                                                
Ms. Caren Robinson                                                                                                              
Marriage and Family Therapist Association                                                                                       
No address provided                                                                                                             
POSITION STATEMENT: Commented on HB 135.                                                                                      
                                                                                                                                
Representative Tom Anderson                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 194.                                                                                        
                                                                                                                                
Mr. Larry Crawford, President                                                                                                   
Anchorage Economic Development Corporation                                                                                      
900 W 5th Street, Ste 300                                                                                                       
Anchorage AK 99501                                                                                                              
POSITION STATEMENT: Supported HB 194.                                                                                         
                                                                                                                                
Mr. Phelan Straube                                                                                                              
Staff to Senator Ben Stevens                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 209 for the sponsor.                                                                      
                                                                                                                                
Captain Bob Winter                                                                                                              
Southeast Alaska Pilots Association                                                                                             
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported SB 209.                                                                                         
                                                                                                                                
Ms. Kate Tesar                                                                                                                  
Alaska Yacht Services                                                                                                           
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 209.                                                                                         
                                                                                                                                
Ms. Heather Beaty                                                                                                               
Staff to Representative Anderson                                                                                                
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 194.                                                                                      
                                                                                                                                
Mr. Mark Graber, Audit Manager                                                                                                  
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT: Commented on HB 194.                                                                                      
                                                                                                                                
Mr. James Armstrong                                                                                                             
Municipality of Anchorage                                                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 194.                                                                                         
                                                                                                                                
Mr. Edward Lamb, CEO                                                                                                            
Alaska Regional Hospital                                                                                                        
Anchorage AK                                                                                                                    
POSITION STATEMENT: Commented on HB 194.                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-31, SIDE A                                                                                                            
                                                                                                                                
      CSHB 151(JUD)am-DWELLING DESIGN/CONSTRUCTION CLAIMS                                                                   
                                                                                                                                
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting  to order  at 1:36  p.m. Present  were SENATORS                                                               
STEVENS and  SEEKINS. The  Chair announced  HB 151  to be  up for                                                               
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KEVIN MEYER,  sponsor of HB 151,  said it provides                                                               
homeowners  and  construction  professionals with  a  process  to                                                               
solve construction  issues on new  homes or homes that  are being                                                               
remodeled.  He stated,  "HB 151  requires  homeowners to  provide                                                               
written notice  to the construction professionals  of any defects                                                               
at  least 90  days prior  to taking  a civil  action against  the                                                               
builder."                                                                                                                       
                                                                                                                                
He explained that  most of the time, this  action isn't necessary                                                               
because  most owners  have a  relationship with  the builder  and                                                               
could simply  call the  builder with a  concern. However,  if the                                                               
builder is too busy to take  care of those concerns, this process                                                               
is  in  place.  If  the  homeowner's  complaints  have  not  been                                                               
resolved within a  90-day period, the homeowner  can proceed with                                                               
litigation. Under this bill, the  homeowner has one year from the                                                               
time he or she detects the  problem, but it cannot exceed the 10-                                                               
year statute of limitation for  civil suits. Once the process has                                                               
begun, the statute  of limitation is stopped  until the homeowner                                                               
becomes  aware that  a  settlement using  this  process will  not                                                               
succeed.                                                                                                                        
                                                                                                                                
REPRESENTATIVE MEYER  said this litigation is  important for many                                                               
of reasons.  In Alaska,  contractors and builders are required to                                                               
carry general  liability insurance  and many  liability insurance                                                               
providers  have stopped  providing insurance  or will  provide it                                                               
only at  a very expensive  rate. The rise in  insurance coverage,                                                               
sometimes $3,000 to $5,000, is often passed on to the homebuyer.                                                                
                                                                                                                                
He said three  conforming amendments need to be made  as a result                                                               
of  amendments  adopted  on  the   House  floor  and  those  were                                                               
incorporated into a proposed committee substitute.                                                                              
                                                                                                                                
SENATOR FRENCH arrived at 1:40 p.m.                                                                                             
                                                                                                                                
SENATOR STEVENS moved  to adopt SCS CSHB 151(L&C)  as the working                                                               
document. There were no objections and it was so ordered.                                                                       
                                                                                                                                
CHAIR BUNDE asked if there has been any opposition.                                                                             
                                                                                                                                
REPRESENTATIVE  MEYER replied  that  he has  heard no  opposition                                                               
from the public or the construction community.                                                                                  
                                                                                                                                
SENATOR  STEVENS asked  him to  explain the  language on  page 2,                                                               
line 18, about how the written notice takes place.                                                                              
                                                                                                                                
REPRESENTATIVE MEYER indicated that  serving of notice is defined                                                               
on  page  8, line  7,  as  delivery  by  personal service  or  by                                                               
certified mail.                                                                                                                 
                                                                                                                                
MR.  MIKE  MILLIGAN,  Kodiak  resident,  said  he  works  in  the                                                               
construction  industry  and  supports  this  bill.  He  generally                                                               
supports local control and consensus  and favors legislation that                                                               
doesn't require a winner or a loser.                                                                                            
                                                                                                                                
MR.   RICHARD   TILLY,   President,  Interior   Alaska   Building                                                               
Association,  supports  HB 151.  He  thought  it would  show  the                                                               
building  industry  and  insurance  industry  that  builders  are                                                               
trying  to deal  with  a resolution  process  for minor  building                                                               
issues.                                                                                                                         
                                                                                                                                
SENATOR DAVIS arrived at 1:45 p.m.                                                                                              
                                                                                                                                
MS. ROBIN WARD  said she was recently in  Washington D.C. working                                                               
on this  issue with 50  other state representatives in  an effort                                                               
to make the  industry more attractive to  the insurance industry.                                                               
Although Alaska does  not have many of the problems  the Lower 48                                                               
has,  Alaskans have  to pay  the same  premiums because  insurers                                                               
operate  nationwide.  She said  that  insurance  premiums on  her                                                               
homes will go up $2,000 per home next year.                                                                                     
                                                                                                                                
MR.  STEVE  ORR,  Mat-Su  builder, supported  HB  151,  not  only                                                               
because his  insurance went  up 1,500%  this year  (adding $2,000                                                               
per house  for a total of  $3,300), but because a  bill like this                                                               
will end a two-year senseless battle that he has been in.                                                                       
                                                                                                                                
MR.  ALAN  WILSON, Alaska  Home  Builders  Association -  Juneau,                                                               
supported HB 151 and said his comments had been covered.                                                                        
                                                                                                                                
SENATOR FRENCH  said his  concern is that  the two  parties might                                                               
get into  some kind of  a stalling process  and a huge  amount of                                                               
time  could go  by, which  isn't a  good way  to do  business. He                                                               
wanted to know if the 21-day  clock is ticking during the initial                                                               
exchange  while the  construction professional  awaits videos  or                                                               
something like that from the homeowner.                                                                                         
                                                                                                                                
REPRESENTATIVE MEYER  replied that  he thought the  clock stopped                                                               
during talks.                                                                                                                   
                                                                                                                                
MR.   JOHN  BITTNEY,   Alaska  State   Homebuilders  Association,                                                               
referred him to page 2, line 4, to answer that question.                                                                        
                                                                                                                                
SENATOR  FRENCH asked  if  that  means the  21-day  clock is  not                                                               
ticking  or that  the  right to  eventually file  a  suit is  not                                                               
ticking. He  said he has two  clocks in mind. One  is the general                                                               
right to sue in  court. The bill says a person  does not have the                                                               
right to  go to court and  sue until they have  been through this                                                               
process. He pointed out:                                                                                                        
                                                                                                                                
     That's  giving   up  something.  That's  giving   up  a                                                                    
     person's right  to go  to court and  file suit.  If you                                                                    
     only have to  give that up for 21 days,  I think that's                                                                    
     pretty  reasonable. You  can see  the end  of the  time                                                                    
     period coming up pretty quickly,  but what I don't want                                                                    
     to see is  have the builder say, well, you  can't go to                                                                    
     court until  you give me  the evidence to back  up your                                                                    
     claim.  So, then  you  could get  into  a standoff  and                                                                    
     you'd never get anywhere....                                                                                               
                                                                                                                                
CHAIR BUNDE said  he would hold this bill  temporarily until that                                                               
question gets resolved.                                                                                                         
                                                                                                                                
                  CSHB 242(L&C)-EXAM FOR CPA'S                                                                              
                                                                                                                                
CHAIR BUNDE announced CSHB 242(L&C) to be up for consideration.                                                                 
                                                                                                                                
MS. SARAH  WRIGHT, staff to Representative  Mike Hawker, sponsor,                                                               
said HB  242 updates Alaska  statute to recognize changes  in the                                                               
standardized testing procedures  for Certified Public Accountants                                                               
adopted   by  the   American   Institute   of  Certified   Public                                                               
Accountants (AICPA).  The Alaska Board of  Public Accountancy has                                                               
been  administering this  nationally  used test  since the  1960s                                                               
that CPAs are required to  pass. The examination will change from                                                               
a paper  and pencil format  to a computerized examination  in May                                                               
2004. Current  Alaska statute requires a  written examination. HB                                                               
242 makes  the test acceptable  in any  form. It also  allows the                                                               
Board  to  establish by  regulation  what  constitutes a  passing                                                               
grade using  AICPA prepared exam regulations.  The AICPA provides                                                               
national   uniformity   of   scheduling   credits   and   passing                                                               
requirements.  Several  sections  of   Alaska  statute  would  be                                                               
repealed   for  consistency   with   a   computerized  exam   and                                                               
transitional language is  provided for people who  have begun the                                                               
CPA exam  process and are  now moving into the  computerized exam                                                               
arena.  She noted  that the  Division  of Occupational  Licensing                                                               
helped to draft the bill.                                                                                                       
                                                                                                                                
SENATOR STEVENS  assumed the  paper and pencil  test is  taken in                                                               
front  of an  examiner and  asked  if that  will be  true of  the                                                               
computer tests.                                                                                                                 
                                                                                                                                
MS. WRIGHT replied yes.                                                                                                         
                                                                                                                                
CHAIR  BUNDE   asked  if  they  have   questions  about  security                                                               
concerns.                                                                                                                       
                                                                                                                                
MS. WRIGHT replied none that she was aware of.                                                                                  
                                                                                                                                
SENATOR  STEVENS  moved to  pass  CSHB  242(L&C) with  individual                                                               
recommendations  and  its  zero   fiscal  note.  SENATORS  DAVIS,                                                               
FRENCH,  STEVENS,  and BUNDE  voted  yea  and  it passed  out  of                                                               
committee.                                                                                                                      
                                                                                                                                
               CSHB 120(RLS)am-SERVICE CONTRACTS                                                                            
                                                                                                                                
CHAIR   BUNDE   announced   CSHB   120(RLS)am  to   be   up   for                                                               
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE JOHN  COGHILL, sponsor of  HB 120, said  this bill                                                               
speaks to  a gray area  in law  about service contracts.  He said                                                               
the past administration  made a ruling that a  company like Sears                                                               
can  provide  a  service  contract  through  a  direct  retailing                                                               
outfit. However,  if service is  provided under  other contracts,                                                               
it must be  provided as insurance rather than as  a contract. The                                                               
present administration wants this  issue clarified. The bill will                                                               
take service contracts out of  the insurance statute. He noted he                                                               
has  made  sure  the  service  contracts  in  the  motor  vehicle                                                               
industry are very clearly not a part of this discussion.                                                                        
                                                                                                                                
CHAIR  BUNDE noted  a letter  from  Linda Hall,  Director of  the                                                               
Division  of  Insurance, in  which  she  states  that HB  120  is                                                               
beneficial to both  the division and those  entities that provide                                                               
service  contracts. He  asked  if it  will  benefit consumers  as                                                               
well.                                                                                                                           
                                                                                                                                
MS.  LINDA HALL,  Director, Division  of Insurance,  replied that                                                               
she thought  so. The issue  of what is  and is not  insurance has                                                               
been problematic for a number  of years. This bill clarifies that                                                               
issue, which should benefit all involved.                                                                                       
                                                                                                                                
SENATOR  STEVENS asked  if  a service  contract  and an  extended                                                               
warranty are the same thing.                                                                                                    
                                                                                                                                
MS. HALL  replied that  they are technically  the same  thing. An                                                               
extended  warranty  is  normally  offered by  a  manufacturer;  a                                                               
service contract  does similar  things, but  is from  a different                                                               
entity  and  is  purchased.  This   bill  addresses  the  service                                                               
contracts.                                                                                                                      
                                                                                                                                
CHAIR BUNDE  said he thought  a service contract would  take care                                                               
of routine maintenance that wouldn't be part of a warranty.                                                                     
                                                                                                                                
MS. HALL elaborated that service  contracts cover things that are                                                               
generally operational.                                                                                                          
                                                                                                                                
SENATOR  FRENCH said  he  was interested  in  the exemption  that                                                               
takes service  contracts out  of the purview  of the  Division of                                                               
Insurance  and that  service contracts  include servicing  things                                                               
made by other people. He asked if  once they are taken out of the                                                               
division's  purview,  another entity  will  police  how they  are                                                               
administered and regulated. He asked  who he would complain to if                                                               
Best Buy  conned him into  buying a  $30 service contract  on his                                                               
new television but wouldn't come out and fix it.                                                                                
                                                                                                                                
MS. HALL  replied that court would  be an option, but  there is a                                                               
consumer protection agency somewhere.                                                                                           
                                                                                                                                
SENATOR STEVENS  moved to pass  CSHB 120 (RLS) am  from committee                                                               
with  its  zero  fiscal   note  and  individual  recommendations.                                                               
SENATORS FRENCH, DAVIS, STEVENS and  BUNDE voted yea and it moved                                                               
on to its next committee of referral.                                                                                           
                                                                                                                                
      CSHB 151(JUD)am-DWELLING DESIGN/CONSTRUCTION CLAIMS                                                                   
                                                                                                                                
CHAIR   BUNDE  announced   that  CSHB   151(JUD)am  was   up  for                                                               
consideration again  and that Representative Meyer  would address                                                               
the earlier question.                                                                                                           
                                                                                                                                
REPRESENTATIVE  MEYER said  that Representative  Gara's amendment                                                               
had to do  with the concept of tolling and  didn't pertain to the                                                               
21-day clock, but instead to the 10-year statute of limitations.                                                                
                                                                                                                                
He  said  the concern  about  the  builder requiring  substantial                                                               
evidence  and  how  that  would  impact  the  21-day  time  frame                                                               
wouldn't be  an issue because  the builder knows the  problem has                                                               
to  be  resolved in  21  days.  As  soon  as a  builder  received                                                               
notification, he would make his own inspection.                                                                                 
                                                                                                                                
SENATOR FRENCH  wanted to clarify  that time won't be  tolled and                                                               
the pressure is on the builder to get back to look at the house.                                                                
                                                                                                                                
REPRESENTATIVE MEYER agreed.                                                                                                    
                                                                                                                                
SENATOR FRENCH  expressed concerned that all  houses aren't built                                                               
on the  road network and  if a dispute  came up, a  builder might                                                               
not want to invest the money to  fly back out to a rural area. He                                                               
didn't  want the  homeowner stuck  in  some kind  of a  discovery                                                               
dispute and  be in a standoff  because he can't get  to court and                                                               
can't  get the  builder to  drop his  demand for  photographs and                                                               
video tape documentation, etcetera of the home defect.                                                                          
                                                                                                                                
REPRESENTATIVE  MEYER responded  that he  shares his  concern but                                                               
felt  that all  builders  statewide would  know  the process  and                                                               
understand if they  built in a remote area they  would have to do                                                               
it right.                                                                                                                       
                                                                                                                                
SENATOR STEVENS  asked if builders  will no longer have  to carry                                                               
general liability insurance if this bill passes.                                                                                
                                                                                                                                
REPRESENTATIVE MEYER replied that  builders are required to carry                                                               
general liability  insurance, but  currently insurance  rates are                                                               
extremely high  because so many  cases are either  being resolved                                                               
in  court  or  builders  are resolving  them  outside  of  court.                                                               
Nevertheless, insurance  companies are  having to pay  claims and                                                               
rates are going up as a result.                                                                                                 
                                                                                                                                
CHAIR BUNDE inserted  that he has never known  insurance rates to                                                               
go down, but this bill might slow the rate of increase.                                                                         
                                                                                                                                
REPRESENTATIVE  MEYER  added that  it's  getting  out of  control                                                               
nationwide.                                                                                                                     
                                                                                                                                
MR. CHUCK  SPINELLI, Alaska Home Builders  Association, supported                                                               
HB 151  and said the  problem came from  condominium construction                                                               
in  the  Lower 48  states  where  teams  of attorneys  sue  condo                                                               
associations who in turn sue  builders and do discovery for years                                                               
without ever  fixing anything. The project  then gets traumatized                                                               
because of the  pending litigation and bankrupts  the builder and                                                               
the condo  association. He said  his general  liability insurance                                                               
is increasing from $55,000 last year  to a quote of $435,000 this                                                               
year.  A lot  of people  who  are building  condominiums are  not                                                               
getting insurance. He  thought this bill is a good  first step to                                                               
having a healthy building industry.                                                                                             
                                                                                                                                
CHAIR BUNDE closed public testimony.                                                                                            
                                                                                                                                
SENATOR STEVENS  moved to pass  SCS CSHB 151(L&C)  from committee                                                               
with  individual  recommendations  and   its  zero  fiscal  note.                                                               
SENATORS STEVENS,  DAVIS, FRENCH and  BUNDE voted yea and  it was                                                               
moved from committee.                                                                                                           
                                                                                                                                
               HB 135-MARITAL & FAMILY THERAPISTS                                                                           
                                                                                                                                
CHAIR BUNDE announced HB 135 to be up for consideration.                                                                        
                                                                                                                                
REPRESENTATIVE PEGGY WILSON, sponsor, said  that HB 135 is just a                                                               
simple bill.  The law that  established the Board of  Marital and                                                               
Family Therapists  has been in place  for 10 years and  it's time                                                               
to update the  language within the statute. This  bill will bring                                                               
state  statutes up  to  the same  standards  as other  counseling                                                               
services in  the state  and to the  national marriage  and family                                                               
therapy statutes. She explained:                                                                                                
                                                                                                                                
     Section  1  adds  the  Board   of  Marital  and  Family                                                                    
     Therapists to the  list of boards that  may request the                                                                    
     Division of Occupational Licensing  to contract out for                                                                    
     substance   abuse   and    treatment   under   licensed                                                                    
     therapists. It just gives more options for treatment.                                                                      
                                                                                                                                
         Section 2 gives the board authority to order a                                                                         
      licensed marital and family therapist to submit to a                                                                      
     reasonable physical or mental  examination if the board                                                                    
     has  gotten word  somewhere that  there was  sufficient                                                                    
     evidence to  conclude that the therapist's  physical or                                                                    
     mental capacity to practice safely is at issue.                                                                            
                                                                                                                                
     Section 3  allows for individual client  contacts to be                                                                    
     used as hours toward licensing.                                                                                            
                                                                                                                                
     Section 4  requires the therapist  to communicate  to a                                                                    
     potential victim  or law  enforcement officer  if there                                                                    
     is a  threat of  imminent serious  physical harm  to an                                                                    
     identified victim  that had been  made by one  of their                                                                    
     clients.                                                                                                                   
                                                                                                                                
     Section 5  imposes disciplinary sanctions in  regard to                                                                    
     a  therapist's  sexual  misconduct.  Sexual  misconduct                                                                    
     between client  and therapist  is probably  the biggest                                                                    
     problem  in any  kind of  therapy type  situation. This                                                                    
     just makes sure the client is protected.                                                                                   
                                                                                                                                
     Section 7  is just disclosure information  and consumer                                                                    
     protection.                                                                                                                
                                                                                                                                
CHAIR   BUNDE   referred   to   the   provision   that   requires                                                               
communication  about  danger to  a  potential  victim or  to  law                                                               
enforcement and suggested saying  "and law enforcement." He asked                                                               
if that had been considered.                                                                                                    
                                                                                                                                
SENATOR FRENCH guessed that about 90%  of the reports would be to                                                               
a domestic partner  and that victims might not take  any steps to                                                               
protect themselves for all sorts  of reasons. He thought it would                                                               
be a good idea to let law  enforcement know if the threat is that                                                               
serious and imminent.                                                                                                           
                                                                                                                                
REPRESENTATIVE WILSON  said that section allows  the therapist to                                                               
break the confidentiality agreement.                                                                                            
                                                                                                                                
TAPE 03-31, SIDE B                                                                                                            
                                                                                                                                
SENATOR FRENCH asked how  other board-controlled occupations deal                                                               
with confidentiality  between the  doctor and patient  and threat                                                               
disclosures.                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON  said she thought  they do so in  a similar                                                               
manner.                                                                                                                         
                                                                                                                                
MS. SUSAN  ARENTH commented that  this issue was talked  about in                                                               
another committee. She  said even if a threat  isn't imminent but                                                               
seems likely, she believes any  therapist would inform the victim                                                               
and she didn't see any reason not to inform law enforcement.                                                                    
                                                                                                                                
CHAIR BUNDE  guessed that  would require  law enforcement  to use                                                               
professional judgment too.                                                                                                      
                                                                                                                                
MS. CAREN  ROBINSON, Marriage  and Family  Therapist Association,                                                               
said  that   therapists  are  required,   just  like   all  other                                                               
professional counselors,  to report  child sexual abuse  and this                                                               
bill would  not change that  at all.  She explained that  in some                                                               
situations, a victim who was  notified may become so fearful that                                                               
she may pull out  a gun and kill the person who  is coming to her                                                               
house, thereby  becoming the  perpetrator. She  felt it's  in the                                                               
best  interest of  the  therapist in  the  counseling session  to                                                               
determine which  is the  right place to  call. In  other hearings                                                               
most therapists have said generally  speaking they would call the                                                               
law enforcement agency  first if they really  felt someone's life                                                               
was in danger.                                                                                                                  
                                                                                                                                
CHAIR BUNDE asked  Ms. Robinson if she had input  from people who                                                               
prosecute domestic  violence cases.  He added  that he  wanted to                                                               
give her an opportunity to investigate this question.                                                                           
                                                                                                                                
MS.  ROBINSON  responded that  the  legal  professionals she  has                                                               
spoken  with  said  that  right now  therapists  don't  have  the                                                               
ability  to  notify  either  and  are  quite  thrilled  that  the                                                               
marriage and family therapists have brought this issue forward.                                                                 
                                                                                                                                
CHAIR BUNDE  agreed and said he  didn't want to destroy  the good                                                               
in  search of  the  perfect  but wanted  her  to  talk with  some                                                               
prosecutors.                                                                                                                    
                                                                                                                                
SENATOR STEVENS  asked her to also  address Section 3 on  page 3,                                                               
line  7,  that  removes  the timeframe  of  three-years  after  a                                                               
master's  degree and  another  "and or"  question  where it  says                                                               
"practice marital and family therapy  including frequent hours of                                                               
direct contact with couples, individuals  and families." He asked                                                               
if a  person has  to work  with individuals to  get a  license or                                                               
work with all three types.                                                                                                      
                                                                                                                                
REPRESENTATIVE  WILSON commented  that sometimes  three years  is                                                               
not enough  time to  get the  necessary hours.  Previously, hours                                                               
couldn't  be counted  when  individuals  were counseled  separate                                                               
from  other family  members  if they  were  also being  counseled                                                               
together.                                                                                                                       
                                                                                                                                
CHAIR  BUNDE said  the committee  would bring  the bill  up again                                                               
next Tuesday.                                                                                                                   
                                                                                                                                
       CSHB 194(L&C)-REGIONAL DEVELOPMENT ORG TAX CREDIT                                                                    
                                                                                                                                
CHAIR BUNDE announced CSHB 194(L&C) to be up for consideration.                                                                 
                                                                                                                                
REPRESENTATIVE TOM ANDERSON,  sponsor, said HB 194  is the result                                                               
of a  partnership between the business  development community and                                                               
corporate Alaska and  creates a tax credit of up  to $10,000 to a                                                               
corporation  that  donates  to  an  Alaska  regional  development                                                               
organization  (ARDOR). This  credit, when  combined with  various                                                               
existing tax credits,  may not exceed $150,000 and  that will not                                                               
change. This bill provides  alternative recipients for donations.                                                               
There are 13  ARDORs throughout the state, the  biggest being the                                                               
Anchorage Economic Development Corporation (AEDC).                                                                              
                                                                                                                                
REPRESENTATIVE  ANDERSON said  a  (committee  substitute) CS  was                                                               
requested by the  Division of Tax to clarify the  definition of a                                                               
regional  development  organization  to  definitively  limit  the                                                               
credit to ARDORS. Another CS  was introduced to remove the sunset                                                               
provision.                                                                                                                      
                                                                                                                                
MR.  LARRY CRAWFORD,  President,  Anchorage Economic  Development                                                               
Corporation, supported  CSHB 194(L&C).  He thought it  would help                                                               
AEDC  build a  stronger  relationship with  local businesses.  He                                                               
noted the AEDC board passed  a resolution supporting this bill as                                                               
well.                                                                                                                           
                                                                                                                                
CHAIR  BUNDE said  he  would set  the bill  aside  until the  new                                                               
information could be copied.                                                                                                    
                                                                                                                                
        SB 109-MEDICAID COST CONTAINMENT & PRIORITY LIST                                                                    
                                                                                                                                
MR. PHELAN STRAUBE,  staff to Senator Ben  Stevens, prime sponsor                                                               
of SB  109, said  this bill authorizes  an exemption  from marine                                                               
pilotage  in  Alaskan  waters   for  certain  foreign  registered                                                               
pleasure craft. Vessels  of 60 ft. or less will  be exempted from                                                               
all pilotage laws.  Yachts greater than 60 ft. and  less than 173                                                               
ft.  may  be  granted  a  waiver  from  pilotage  laws  after  an                                                               
application process and  review by the Board of  Marine Pilots or                                                               
its  designee. A  fee based  on the  size of  the vessel  will be                                                               
charged  for each  waiver granted.  A waiver  for a  60 ft.  boat                                                               
would  cost $1,500;  every additional  foot up  to 173  ft. would                                                               
cost $50. If a waiver  is granted, upon entering pilotage waters,                                                               
a yacht  would need to employ  a marine pilot at  the first pilot                                                               
station into the  initial port of entry in  each pilotage region.                                                               
The same procedure would also  be followed when the vessel leaves                                                               
Alaskan  waters. These  vessels would  also be  required to  work                                                               
with an  agent licensed in  Alaska. The legislation  authorizes a                                                               
civil penalty of $10,000 vessel for non-compliance.                                                                             
                                                                                                                                
He  told  members  this  change  was in  part  recommended  in  a                                                               
legislative budget and audit report  for the renewal of the Board                                                               
of  Marine   Pilots.  This  legislation   is  supported   by  the                                                               
communities of  Sitka, Ketchikan,  Whittier, Juneau,  Haines, and                                                               
many  other   chambers  of  commerce  and   economic  development                                                               
organizations.                                                                                                                  
                                                                                                                                
He  concluded saying  that this  legislation would  encourage the                                                               
growth of  this small but  growing industry, which brings  in new                                                               
cash  from out  of state  to local  coastal communities.  It also                                                               
adds revenue  to the general  fund by  charging the fees  to come                                                               
into  our  waters.  The  pilotage  requirements  promote  safety,                                                               
protect the marine environment and  provide a penalty for failure                                                               
to comply.                                                                                                                      
                                                                                                                                
SENATOR STEVENS moved  to adopt CSSB 201(L&C), version  D, as the                                                               
committee's  working document.  There were  no objections  and it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
CAPTAIN   BOB  WINTER,   Southeast   Alaska  Pilot   Association,                                                               
supported  SB  209 and  said  the  Association looks  forward  to                                                               
working with the sponsor and staff  to produce a bill that serves                                                               
the interests of all parties, including the State of Alaska.                                                                    
                                                                                                                                
MS.  KATE TESAR,  Alaska Yacht  Services, said  her client  books                                                               
services for  yachts that are  traveling to Alaska.  Her client's                                                               
problems served  as the  impetus for  this legislation.  She said                                                               
the new fees would bring in around $100,000.                                                                                    
                                                                                                                                
SENATOR  SEEKINS moved  to pass  CSSB 209(L&C),  version D,  with                                                               
attached   fiscal   notes    from   committee   with   individual                                                               
recommendations.  SENATORS DAVIS,  FRENCH,  SEEKINS, STEVENS  and                                                               
BUNDE voted yea and SB 209 passed from committee.                                                                               
                                                                                                                                
       CSHB 194(L&C)-REGIONAL DEVELOPMENT ORG TAX CREDIT                                                                    
                                                                                                                                
CHAIR  BUNDE  announced  CSHB  194(L&C) to  be  back  before  the                                                               
committee and that the committee was considering version Q.                                                                     
                                                                                                                                
MS.  HEATHER  BEATY,  staff   to  Representative  Anderson,  said                                                               
Representative Anderson would be available soon.                                                                                
                                                                                                                                
MR. MARK GRABER, Audit Manager,  Tax Division, said the amendment                                                               
adds confusion for the following reason:                                                                                        
                                                                                                                                
     The  contributions contemplated  under this  statute do                                                                    
     not cover  memberships and sponsorships; they  would be                                                                    
     contributions  that  would  provide a  direct  business                                                                    
     benefit   to  the   corporation.  Alaska   adopted  the                                                                    
     Internal Revenue Code  and in that is  section 170 that                                                                    
     allows  the  deduction  to a  charitable  organization.                                                                    
     ARDORS are  not charitable organizations,  therefore we                                                                    
     don't need a  reference to section 170  and a deduction                                                                    
     in any  event would not  be allowed for  a contribution                                                                    
     because  the  contribution   would  provide  no  direct                                                                    
     benefit to  the corporation and therefore  would not be                                                                    
     an ordinary and necessary business expense.                                                                                
                                                                                                                                
CHAIR BUNDE said  he was confused and that he  thought Mr. Graber                                                               
asked for the amendment.                                                                                                        
                                                                                                                                
MR. GRABER  said that was  correct and that the  division doesn't                                                               
need  the current  section (b)(2)  in the  previous version.  The                                                               
amendment is to delete lines 28 and 29.                                                                                         
                                                                                                                                
SENATOR  DAVIS  moved  to  adopt   amendment  1.  There  were  no                                                               
objections and it was adopted.                                                                                                  
                                                                                                                                
MR.  JAMES ARMSTRONG,  Municipality  of  Anchorage, supported  HB                                                               
194.                                                                                                                            
                                                                                                                                
SENATOR SEEKINS  said he  thought the state  is funding  an ARDOR                                                               
when  a person  decides  to  contribute to  an  ARDOR instead  of                                                               
paying a $10,000 tax bill, because  that person gets a credit for                                                               
it.                                                                                                                             
                                                                                                                                
CHAIR  BUNDE said  he thought  a zero  fiscal note  was submitted                                                               
because existing  legislation allows  that to  occur. Any  time a                                                               
tax credit is allowed, it costs the state something.                                                                            
                                                                                                                                
SENATOR  SEEKINS   said  he  wanted  to   clarify  that  regional                                                               
development corporations  are state funded organizations  with no                                                               
state control.                                                                                                                  
                                                                                                                                
MR. ARMSTRONG said he could see his point.                                                                                      
                                                                                                                                
MR. EDWARD  LAMB, CEO, Alaska  Regional Hospital, said  the state                                                               
needs  to do  everything  it can  to  encourage organizations  to                                                               
contribute  to the  ARDORS  whose  efforts go  out  to bring  new                                                               
businesses into the state.                                                                                                      
                                                                                                                                
SENATOR SEEKINS moved to pass  SCS CSHB 194(L&C), version Q, from                                                               
committee   with    attached   fiscal   notes    and   individual                                                               
recommendations.  SENATORS DAVIS,  STEVENS,  SEEKINS, FRENCH  and                                                               
BUNDE voted yea and the motion carried.                                                                                         
                                                                                                                                
CHAIR BUNDE adjourned the meeting at 3:10 p.m.                                                                                  

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