Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/04/2017 09:00 AM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Governor's Appointees to State Boards and TELECONFERENCED
Commissions
Alcoholic Beverage Control Board
-- Public Testimony --
+= SB 51 EXTEND BOARD OF VETERINARY EXAMINERS TELECONFERENCED
Moved CSSB 51(L&C) Out of Committee
-- Public Testimony --
+= SB 93 CREDIT REPORT SECURITY FREEZE TELECONFERENCED
Moved SB 93 Out of Committee
+= SB 98 INSURER'S USE OF CREDIT HISTORY/SCORES TELECONFERENCED
Moved SB 98 Out of Committee
+= SB 37 PHARMA BD & EMPLOYEES;DRUG DIST/MANUFAC TELECONFERENCED
Heard & Held
+= SB 79 OPIOIDS;PRESCRIPTIONS;DATABASE;LICENSES TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 4, 2017                                                                                          
                           8:59 a.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mia Costello, Chair                                                                                                     
Senator Shelley Hughes, Vice Chair                                                                                              
Senator Kevin Meyer                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Berta Gardner                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARINGS                                                                                                           
                                                                                                                                
Alcoholic Beverage Control Board                                                                                                
     Rex Leath - Wasilla                                                                                                        
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
SENATE BILL NO. 51                                                                                                              
"An Act extending the termination date of the Board of                                                                          
Veterinary Examiners; and providing for an effective date."                                                                     
                                                                                                                                
     - MOVED CSSB 51(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE BILL NO. 93                                                                                                              
"An Act relating to security freezes on the credit reports or                                                                   
records of incapacitated persons and certain minors."                                                                           
                                                                                                                                
     - MOVED SB 93 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 98                                                                                                              
"An Act relating  to insurer actions based on  credit history and                                                               
insurance scores  at insurance policy renewal;  and providing for                                                               
insurer  consideration of  consumer  requests  for exceptions  of                                                               
credit history or insurance scores."                                                                                            
                                                                                                                                
     - MOVED SB 98 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 37                                                                                                              
"An  Act relating  to  the  Board of  Pharmacy;  relating to  the                                                               
licensing and  inspection of  certain facilities  located outside                                                               
the state; relating  to drug supply chain  security; and creating                                                               
a  position   of  executive  administrator   for  the   Board  of                                                               
Pharmacy."                                                                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 79                                                                                                              
"An  Act relating  to the  prescription of  opioids; establishing                                                               
the   Voluntary  Nonopioid   Directive  Act;   relating  to   the                                                               
controlled  substance  prescription  database;  relating  to  the                                                               
practice  of dentistry;  relating  to the  practice of  medicine;                                                               
relating to  the practice of  podiatry; relating to  the practice                                                               
of osteopathy; relating  to the practice of  nursing; relating to                                                               
the  practice   of  optometry;  relating   to  the   practice  of                                                               
veterinary  medicine;  related to  the  duties  of the  Board  of                                                               
Pharmacy; and providing for an effective date."                                                                                 
                                                                                                                                
     -BILL HEARING CANCELED                                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  51                                                                                                                  
SHORT TITLE: EXTEND BOARD OF VETERINARY EXAMINERS                                                                               
SPONSOR(s): SENATOR(s) VON IMHOF                                                                                                
                                                                                                                                
02/08/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/08/17       (S)       L&C, FIN                                                                                               
03/02/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/02/17       (S)       Heard & Held                                                                                           
03/02/17       (S)       MINUTE(L&C)                                                                                            
03/28/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Bill Postponed to 1:30 p.m. 3/28/17                                                                    
03/28/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Scheduled but Not Heard                                                                                
04/04/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB  93                                                                                                                  
SHORT TITLE: CREDIT REPORT SECURITY FREEZE                                                                                      
SPONSOR(s): SENATOR(s) COGHILL                                                                                                  
                                                                                                                                
03/13/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/17       (S)       L&C                                                                                                    
03/28/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Bill Postponed to 1:30 p.m. 3/28/17                                                                    
03/28/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Heard & Held                                                                                           
03/28/17       (S)       MINUTE(L&C)                                                                                            
04/04/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB  98                                                                                                                  
SHORT TITLE: INSURER'S USE OF CREDIT HISTORY/SCORES                                                                             
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/23/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/23/17       (S)       L&C, FIN                                                                                               
03/28/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Heard & Held                                                                                           
03/28/17       (S)       MINUTE(L&C)                                                                                            
04/04/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB  37                                                                                                                  
SHORT TITLE: PHARMA BD & EMPLOYEES;DRUG DIST/MANUFAC                                                                            
SPONSOR(s): GIESSEL BY REQUEST                                                                                                  
                                                                                                                                
01/25/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/25/17       (S)       L&C, FIN                                                                                               
03/14/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/14/17       (S)       Heard & Held                                                                                           
03/14/17       (S)       MINUTE(L&C)                                                                                            
04/04/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REX LEATH, Appointee                                                                                                            
Alcoholic Beverage Control Board                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified as appointee to the Alcoholic                                                                   
Beverage Control Board.                                                                                                         
                                                                                                                                
WESTON EILER, Staff                                                                                                             
Senate Labor and Commerce Committee                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Explained the changes in the CS for SB 51                                                                 
and the CS for SB 37.                                                                                                           
                                                                                                                                
RYNNIEVA MOSS, Staff                                                                                                            
Senator John Coghill                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided information related to SB 93.                                                                    
                                                                                                                                
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions related to SB 98.                                                                      
                                                                                                                                
SARA CHAMBERS, Division Operations Manager                                                                                      
Division of  Corporations, Businesses and  Professional Licensing                                                               
Department of Commerce, Community and Economic Development                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions related to SB 37.                                                                      
                                                                                                                                
LEIF HOLM, Chair                                                                                                                
Board of Pharmacy                                                                                                               
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Provided supporting information for SB 37.                                                                
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:59:01 AM                                                                                                                    
CHAIR MIA COSTELLO called the  Senate Labor and Commerce Standing                                                             
Committee meeting  to order at 8:59  a.m. Present at the  call to                                                               
order  were  Senators  Stevens,   Gardner,  and  Chair  Costello.                                                               
Senators Hughes and Meyer arrived soon thereafter.                                                                              
                                                                                                                                
^Confirmation Hearings                                                                                                          
                     CONFIRMATION HEARINGS                                                                                  
                                                                                                                                
                Alcoholic Beverage Control Board                                                                              
                                                                                                                                
8:59:39 AM                                                                                                                    
CHAIR COSTELLO announced  the first order of business  would be a                                                               
confirmation  hearing  for a  governor  appointee  to the  public                                                               
safety seat of the Alcoholic Beverage Control Board.                                                                            
                                                                                                                                
She asked Rex Leath of Anchorage  to tell the committee about his                                                               
interest in serving  on the Alcoholic Beverage  Control Board and                                                               
to address any challenges the board might address in the future.                                                                
                                                                                                                                
8:59:59 AM                                                                                                                    
REX   LEATH,  Appointee,   Alcoholic   Beverage  Control   Board,                                                               
Anchorage, Alaska,  said he has  been employed by  the Department                                                               
of  Public Safety  for over  18 years.  He currently  manages the                                                               
northern  half of  the state  for the  Alaska Wildlife  Troopers.                                                               
During his career  in public safety he has  worked throughout the                                                               
state with  both the  state and wildlife  troopers. For  the past                                                               
two years  he has been stationed  in western Alaska and  in urban                                                               
areas.  Part of  his  career he  spent in  the  Alaska Bureau  of                                                               
Alcohol and  Drug Enforcement working  on Title  4 investigations                                                               
in local  communities and local packaging  stores and businesses.                                                               
He said  he grew  up in Kodiak  and commercial  fished throughout                                                               
the  state which  gave  him  a public  perspective  of legal  and                                                               
illegal movement of alcohol in the state.                                                                                       
                                                                                                                                
He said that  in his job he has seen  the devastation that occurs                                                               
when  alcohol is  abused or  illegally transported  either at  an                                                               
establishment or  in the community. He  said he has a  passion to                                                               
see the state overcome the  challenge of alcohol abuse. He opined                                                               
that he  has a unique  background to address  what he views  as a                                                               
long-term fix  to a long-term  problem. Increasing  education for                                                               
both the offender  and the younger generation that  will be faced                                                               
with  the  challenge   of  drug  and  alcohol  abuse   is  a  key                                                               
motivation.                                                                                                                     
                                                                                                                                
MR.  LEATH said  the challenges  the board  faces are  the fiscal                                                               
situation  and   meeting  the  desires   of  each   local  option                                                               
community, supporting them with  proactive enforcement of Title 4                                                               
along  with   a  unique  educational  component   that  fits  the                                                               
community's  standards  and  desires.  He  highlighted  that  law                                                               
enforcement  sometimes is  chasing a  problem-of-the-day and  not                                                               
dealing with the ramifications of a  decade ant the effect on the                                                               
next generation.                                                                                                                
                                                                                                                                
9:03:00 AM                                                                                                                    
SENATOR HUGHES joined the committee.                                                                                            
                                                                                                                                
CHAIR COSTELLO expressed support for  his comments on focusing on                                                               
future generations.  "It sounds like  you will bring a  wealth of                                                               
experience to the board."                                                                                                       
                                                                                                                                
9:04:59 AM                                                                                                                    
SENATOR GARDNER thanked Mr. Leath  for being willing to serve and                                                               
seconded the chair's comments on  his qualifications. She read an                                                               
excerpt from  his cover letter and  asked him to talk  about some                                                               
successful community models.                                                                                                    
                                                                                                                                
MR.  LEATH said  Kotzebue  is  a prime  example  of a  successful                                                               
model. Years ago,  that community voted to transition  from a wet                                                               
community  to one  that  managed  the flow  of  alcohol into  the                                                               
community through  the local airports and  package carriers. That                                                               
gave  law   enforcement  and  package   stores  the   ability  to                                                               
accurately monitor the influx of  alcohol. This greatly decreased                                                               
costs for  law enforcement  and helped  packaging stores  to work                                                               
together more  effectively. Other successful models  can be found                                                               
in western Alaska where a dry  community has voted to become damp                                                               
or wet. That  change can be successful if it  is coupled with the                                                               
proper education that removes the  negative stigma and focuses on                                                               
the individuals that  have the alcohol challenge. The  idea is to                                                               
provide  help  rather  than   strict  criminal  consequences.  He                                                               
emphasized   that  one   model   is  not   appropriate  for   all                                                               
communities.                                                                                                                    
                                                                                                                                
SENATOR  GARDNER summarized  that criminalizing  the behavior  is                                                               
not effective and has other adverse consequences.                                                                               
                                                                                                                                
MR.  LEATH said  he has  seen  that at  times. He  has seen  that                                                               
making someone a  criminal because of an addiction  creates a new                                                               
dynamic  in   the  community  where  the   people  are  sometimes                                                               
ostracized. That doesn't  fix the problem; rather,  it can create                                                               
a long  legal situation that  is a  burden on family  and friends                                                               
and can further ostracize the person from help.                                                                                 
                                                                                                                                
9:09:57 AM                                                                                                                    
SENATOR STEVENS  asked if he  agrees that some progress  has been                                                               
made in educating young people about  alcohol but now there is an                                                               
even more serious problem with drug addiction.                                                                                  
                                                                                                                                
MR. LEATH said that's what he  has seen. He discussed the problem                                                               
of criminals  becoming martyrs  in the eyes  of youth  and opined                                                               
that if  we're going  to educate  ourselves out  of a  problem we                                                               
need  to use  people  who  have worked  their  way  out of  their                                                               
addiction.                                                                                                                      
                                                                                                                                
9:12:30 AM                                                                                                                    
CHAIR COSTELLO found  no further questions and  thanked Mr. Leath                                                               
for being  willing to serve. She  advised that his name  would be                                                               
moved forward  along with  all the  other nominees  the committee                                                               
has heard.                                                                                                                      
                                                                                                                                
9:13:18 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
          SB  51-EXTEND BOARD OF VETERINARY EXAMINERS                                                                       
                                                                                                                                
9:14:10 AM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration of the  second hearing of SB 51.  She closed public                                                               
testimony  and   noted  that  there   is  a   proposed  committee                                                               
substitute (CS).                                                                                                                
                                                                                                                                
9:14:59 AM                                                                                                                    
SENATOR  HUGHES moved  to  adopt the  work draft  CS  for SB  51,                                                               
labeled 30-LS0465\O, as the working document.                                                                                   
                                                                                                                                
CHAIR COSTELLO objected for an explanation of the changes.                                                                      
                                                                                                                                
9:15:19 AM                                                                                                                    
WESTON  EILER,  Staff,  Senate   Labor  and  Commerce  Committee,                                                               
explained  that  the CS  for  SB  51  reflects the  comments  the                                                               
committee heard during public  testimony regarding the challenges                                                               
facing Alaska's  veterinarian community  and the  availability of                                                               
services.  The CS  adds new  sections 2-4.  Section 2  designates                                                               
that one member  of the board shall reside in  a community with a                                                               
population  of less  than 7,500  people. Section  3 requires  the                                                               
Board of Veterinary  Examiners to submit an  electronic report to                                                               
the legislature  on the standards and  availability of veterinary                                                               
services in  the state, including rural  areas, before 1/31/2020.                                                               
The language is  taken from the board's  authorizing statute that                                                               
requires the  board to make such  a report at the  request of the                                                               
department. Section 4  transitions the new seat to  the next time                                                               
a seat comes up for appointment.                                                                                                
                                                                                                                                
9:18:32 AM                                                                                                                    
SENATOR STEVENS reviewed  the list of licenses in  the packet and                                                               
noted there is a weak  relationship between number of licenses in                                                               
a community and its population.                                                                                                 
                                                                                                                                
MR. EILER agreed.                                                                                                               
                                                                                                                                
SENATOR  GARDNER commented  that she  is interested  to see  JBER                                                               
listed as  a community.  She asked  if there  is reason  to think                                                               
that one  of the limited  number of veterinarians who  are living                                                               
in a community of  7,500 or less will be willing  to serve on the                                                               
board, and what happens if one can't be found.                                                                                  
                                                                                                                                
MR.  EILER said  the sponsor  and chair  of the  committee gained                                                               
confidence as they heard the  overwhelming public testimony about                                                               
veterinary issues, especially in rural areas.                                                                                   
                                                                                                                                
9:20:42 AM                                                                                                                    
SENATOR GARDNER  said there ought to  be a plan B  if a qualified                                                               
applicant can't be found.                                                                                                       
                                                                                                                                
CHAIR COSTELLO said if that  becomes the reality, we could always                                                               
return to the current composition  of the board. However, judging                                                               
from  the  public  testimony  she imagines  that  there  will  be                                                               
qualified candidates  willing to  serve and fill  that designated                                                               
seat.                                                                                                                           
                                                                                                                                
9:21:54 AM                                                                                                                    
SENATOR MEYER joined the committee.                                                                                             
                                                                                                                                
SENATOR HUGHES  commented that  she is sure  the board  heard the                                                               
message  in public  testimony loud  and clear  and will  be doing                                                               
what it  can to address that.  "Having someone from one  of these                                                               
smaller communities  will be important  to help them  realize the                                                               
need."                                                                                                                          
                                                                                                                                
CHAIR  COSTELLO said  that during  a previous  administration she                                                               
served as the  deputy director of Boards and  Commissions and the                                                               
requirements for  this board  tend to  be less  prescriptive than                                                               
for others.  She said, "I  don't share the concern  about finding                                                               
somebody, but  if that does  happen we'll cross that  bridge when                                                               
we come to it."                                                                                                                 
                                                                                                                                
9:23:55 AM                                                                                                                    
CHAIR COSTELLO removed  her objection and version  O was adopted.                                                               
She listed the individuals available to answer questions.                                                                       
                                                                                                                                
9:24:21 AM                                                                                                                    
SENATOR HUGHES  moved to  report the  CS for  SB 51,  labeled 30-                                                               
LS0465\O,  from  committee  with individual  recommendations  and                                                               
attached fiscal note(s).                                                                                                        
                                                                                                                                
CHAIR  COSTELLO announced  that without  objection, CSSB  51(L&C)                                                               
moved from the Senate Labor and Commerce Standing Committee.                                                                    
                                                                                                                                
9:24:41 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
              SB  93-CREDIT REPORT SECURITY FREEZE                                                                          
                                                                                                                                
9:27:29 AM                                                                                                                    
CHAIR COSTELLO announced  the consideration of SB  93. She stated                                                               
that  this is  the  second hearing,  and the  intent  is to  take                                                               
questions and look to the will of the committee.                                                                                
                                                                                                                                
9:28:17 AM                                                                                                                    
SENATOR MEYER  said his initial concern  was that the age  was 16                                                               
rather than 18. He asked if there had been a change.                                                                            
                                                                                                                                
9:28:27 AM                                                                                                                    
RYNNIEVA MOSS,  Staff, Senator  John Coghill,  sponsor of  SB 93,                                                               
said the bill says 16 years of age.                                                                                             
                                                                                                                                
SENATOR MEYER said he had a  conversation with the sponsor and is                                                               
"okay" with age 16 that's in the bill.                                                                                          
                                                                                                                                
MS. MOSS  said the sponsor  did some  research and found  that 27                                                               
states have [minor] security freezes at age 16.                                                                                 
                                                                                                                                
SENATOR MEYER reiterated his acceptance of age 16.                                                                              
                                                                                                                                
9:29:23 AM                                                                                                                    
SENATOR  HUGHES  moved  to  report  SB  93  from  committee  with                                                               
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
CHAIR  COSTELLO announced  that  without objection,  SB 93  moved                                                               
from the Senate Labor and Commerce Standing Committee.                                                                          
                                                                                                                                
9:29:36 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
         SB  98-INSURER'S USE OF CREDIT HISTORY/SCORES                                                                      
                                                                                                                                
9:31:28 AM                                                                                                                    
CHAIR COSTELLO announced  the consideration of SB  98. She stated                                                               
that  this is  the  second hearing,  and the  intent  is to  take                                                               
questions and look  to the will of the committee.  She noted that                                                               
Ms. Wing-Heier was available to answer questions.                                                                               
                                                                                                                                
9:31:58 AM                                                                                                                    
SENATOR STEVENS asked  why the governor vetoed a  similar bill in                                                               
the past  and how this  bill differs, so  it would not  be vetoed                                                               
again.                                                                                                                          
                                                                                                                                
9:32:13 AM                                                                                                                    
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community  and Economic Development  (DCCED), explained                                                               
that  the governor  was concerned  about provisions  in what  was                                                               
Senate  Bill  127. Specifically,  a  consumer  that appealed  for                                                               
extraordinary  life  circumstances  would  be  appealing  to  the                                                               
insurance  company   that  declared   that  they  did   not  meet                                                               
extraordinary  life circumstances.  The  insurance company  would                                                               
also  make  the  final  decision  about  the  qualification.  The                                                               
governor did not feel that  was appropriate. SB 98 designates the                                                               
director of  the Division of  Insurance as the  final adjudicator                                                               
of the  process. The bill  also has the consumer  protection that                                                               
the  consumer must  receive written  notice from  the insurer  if                                                               
there  is an  adverse action,  and it  must include  instructions                                                               
about the appeal process.                                                                                                       
                                                                                                                                
SENATOR STEVENS asked  if there has been  pushback from insurance                                                               
companies.                                                                                                                      
                                                                                                                                
MS. WING-HEIER  said insurers are  not concerned about  having to                                                               
give the  notice, the appeal  process, or having the  director be                                                               
the final adjudicator.                                                                                                          
                                                                                                                                
CHAIR  COSTELLO  found  no  further  questions  and  solicited  a                                                               
motion.                                                                                                                         
                                                                                                                                
9:33:57 AM                                                                                                                    
SENATOR  HUGHES  moved  to  report  SB  98  from  committee  with                                                               
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
CHAIR  COSTELLO announced  that  without objection,  SB 98  moved                                                               
from the Senate Labor and Commerce Standing Committee.                                                                          
                                                                                                                                
9:34:12 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
         SB  37-PHARMA BD & EMPLOYEES;DRUG DIST/MANUFAC                                                                     
                                                                                                                                
9:36:07 AM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration  of SB  37. She  advised  that this  is the  second                                                               
hearing,  public  testimony is  open,  and  there is  a  proposed                                                               
committee substitute (CS).                                                                                                      
                                                                                                                                
9:36:23 AM                                                                                                                    
SENATOR  MEYER moved  to  adopt  the work  draft  CS  for SB  51,                                                               
labeled 30-LS0191\J, as the working document.                                                                                   
                                                                                                                                
CHAIR COSTELLO objected for an explanation of the changes.                                                                      
                                                                                                                                
9:36:43 AM                                                                                                                    
WESTON EILER, Staff, Senate Labor  and Commerce Committee, Alaska                                                               
State Legislature, said the changes in  the CS for SB 37, version                                                               
J,  primarily  removes  references  to establishing  a  range  23                                                               
executive   position   that   would  serve   as   a   legislative                                                               
liaison/administrator  position  for  the board.  He  listed  the                                                               
three places where the reference is deleted.                                                                                    
                                                                                                                                
9:38:32 AM                                                                                                                    
SENATOR GARDNER  questioned how the record-keeping  and follow-up                                                               
for  inspection  of facilities  outside  the  state would  happen                                                               
without that position.                                                                                                          
                                                                                                                                
MR. EILER said this likely would  not be a position that would do                                                               
those  site  visits. The  policy  call  to remove  this  position                                                               
reflects DCCED's  budgetary constraints and could  be reviewed at                                                               
a later date.                                                                                                                   
                                                                                                                                
SENATOR GARDNER asked  who is expected to  do this administrative                                                               
work and where the funding is if the work is done by contract.                                                                  
                                                                                                                                
MR.  EILER  said licensing  fees  and  inspections of  facilities                                                               
outside  the  state  will  bring   in  additional  revenues.  The                                                               
department can speak to the  structure, but the inspections don't                                                               
necessarily fall to the staff of the Board of Pharmacy.                                                                         
                                                                                                                                
SENATOR GARDNER  asked if  the board has  the flexibility  to set                                                               
the licensing fees at the  appropriate level to cover contractual                                                               
work.                                                                                                                           
                                                                                                                                
MR. EILER  said his understanding  is that the bill  provides for                                                               
that.                                                                                                                           
                                                                                                                                
9:41:39 AM                                                                                                                    
SARA   CHAMBERS,  Division   Operations   Manager,  Division   of                                                               
Corporations, Businesses  and Professional  Licensing, Department                                                               
of Commerce,  Community and Economic Development  (DCCED), stated                                                               
that the  need for executive  staff to handle the  federal policy                                                               
changes  has pushed  the need  for  higher level  staff over  the                                                               
tipping point.  SB 37 reflects  an additional need the  board has                                                               
expressed  to  comply  with  federal  changes.  Right  now,  this                                                               
program has  one staff member  who is the licensing  examiner and                                                               
has  fractions  of  management  that is  shared  among  42  other                                                               
licensing programs.  Thus, there  is no  policy position  that is                                                               
assigned to  this program,  which puts  Alaska at  a disadvantage                                                               
among  states  that  do  have  an  executive  administrator.  The                                                               
position would be paid through  receipt-supported services, so it                                                               
is not supported  by UGF in any way. There  is a growing interest                                                               
in managing opioids and the  PDMP and this position would oversee                                                               
all  those  responsibilities  as  well. It  would  fill  quite  a                                                               
variety of needs  beyond a liaison to the legislature  and it's a                                                               
position that is desperately needed, she said.                                                                                  
                                                                                                                                
SENATOR GARDNER  summarized that the  board has the  authority to                                                               
raise the licensing fees to cover  the cost of complying with the                                                               
federal  requirements of  licensing facilities  and dealing  with                                                               
the requirements of PDMP and the opioid crisis.                                                                                 
                                                                                                                                
MS. CHAMBERS clarified that the  division works with the board to                                                               
set  fees. She  said  the fiscal  note includes  the  cost of  an                                                               
executive  administrator,   but  it  does  not   contemplate  the                                                               
additional receipt authority needed for a contract position.                                                                    
                                                                                                                                
CHAIR COSTELLO noted that the  original bill says the duties will                                                               
be  established. She  asked Ms.  Chambers how  she already  knows                                                               
what the position would entail.                                                                                                 
                                                                                                                                
MS. CHAMBERS said  that knowledge is based  on the administrative                                                               
functions  that   existing  boards   such  as   medicine,  public                                                               
accountancy,  nursing,  and  marine   pilots  perform,  and  this                                                               
position proposes to do. "We know  the existing needs and we know                                                               
what  the bill  will  entail to  implement."  The division  would                                                               
employ the  executive administrator  and work  with the  board to                                                               
make  certain   that  all  its   priorities  and   the  statutory                                                               
administrative priorities are met.                                                                                              
                                                                                                                                
9:47:03 AM                                                                                                                    
SENATOR  MEYER asked  if pharmacy  receipt  increases are  passed                                                               
along  to the  consumer. "Is  this kind  of a  hidden tax  on our                                                               
prescriptions?"                                                                                                                 
                                                                                                                                
MS. CHAMBERS  explained that all  43 licensing programs  are paid                                                               
for by receipts.  "Whether you're getting your  hair cut, whether                                                               
you're vising the  doctor, whether you're getting  a house built,                                                               
that's a business  decision that those professionals  make on how                                                               
they recoup their  licensing costs. But it is not  unusual in how                                                               
statute mandates these programs be paid for."                                                                                   
                                                                                                                                
SENATOR  MEYER asked  if  this legislation  is  modeled on  other                                                               
states.                                                                                                                         
                                                                                                                                
MS. CHAMBERS  said yes, it's an  outgrowth of a need  the federal                                                               
government expressed  after 2012  and compounded by  the pharmacy                                                               
crisis. All but six states have adopted similar legislation.                                                                    
                                                                                                                                
SENATOR  MEYER  asked  if  out  of  state  distributors  will  be                                                               
assessed a licensing fee should the bill pass.                                                                                  
                                                                                                                                
MS.  CHAMBERS  said  only   instate  wholesale  distributors  are                                                               
licensed so  there is currently  a disparity between  instate and                                                               
out-of-state. Should the  bill pass, the division  will develop a                                                               
licensing process and  an associated fee to help  offset the cost                                                               
of running the program.                                                                                                         
                                                                                                                                
CHAIR  COSTELLO  listed  the   individuals  available  to  answer                                                               
questions.                                                                                                                      
                                                                                                                                
SENATOR STEVENS  questioned the need  for the bill if  these out-                                                               
of-state  facilities  are  already   licensed  and  inspected  by                                                               
another state or the  federal government. Concerning reciprocity,                                                               
he  asked  if  the  intention is  to  automatically  license  any                                                               
facility that already  has an inspection by another  state or the                                                               
federal government.                                                                                                             
                                                                                                                                
9:50:02 AM                                                                                                                    
MS. CHAMBERS deferred the question to Leif Holm or Richard Holt.                                                                
                                                                                                                                
9:50:13 AM                                                                                                                    
LEIF  HOLM, Chair,  Board of  Pharmacy,  Fairbanks, Alaska,  said                                                               
this  bill is  needed to  protect consumers  from counterfeit  or                                                               
increased costs  due to diverted  medications. He said  Alaska is                                                               
one of four states that  does not license outside wholesalers and                                                               
that  presents  a  problem.  A wholesaler  that  is  licensed  in                                                               
another  state and  doing business  in Alaska  would follow  that                                                               
other   state's  laws,   but  not   necessarily  the   rules  and                                                               
regulations that  Alaska has established.  This could  provide an                                                               
opportunity for  diverters and counterfeiters to  exploit Alaska.                                                               
"We  don't have  requirements  for transaction  data history;  we                                                               
don't  have  requirements  for inspections;  we  don't  have  any                                                               
accountability  or oversight  and it's  basically decreasing  the                                                               
confidence in our drug supply."                                                                                                 
                                                                                                                                
SENATOR STEVENS  asked for confirmation  that a  drug distributor                                                               
or outsourcing facility  that is licensed in  another state would                                                               
not automatically receive a license to operate in Alaska.                                                                       
                                                                                                                                
MR.   HOLM  said   that's  correct;   a   wholesaler  would   not                                                               
automatically be granted a license  to operate in Alaska based on                                                               
licensure  in  another  state.  Rather,  the  board  would  write                                                               
regulations for  wholesalers to follow  based on  FDA guidelines.                                                               
The intent is to require  inspections, but the board would accept                                                               
outside third-party inspections upon review.                                                                                    
                                                                                                                                
SENATOR STEVENS  asked how  many facilities  will be  licensed in                                                               
Alaska.                                                                                                                         
                                                                                                                                
MR.  HOLM  said  a  recent  National  Association  of  Boards  of                                                               
Pharmacy (NABP)  presentation stated  that about  1,163 wholesale                                                               
distributers are licensed in other  states. and could potentially                                                               
be licensed  in Alaska. If each  of those paid $500  to apply for                                                               
licensure in Alaska, that would generate just under $600,000.                                                                   
                                                                                                                                
9:54:43 AM                                                                                                                    
SENATOR GARDNER  asked, should the  original bill pass: 1)  if he                                                               
anticipates   that   Alaska   would  establish   some   sort   of                                                               
reciprocity;  and 2)  the number  of  licensed distributers  that                                                               
would want to participate in Alaska's licensing process.                                                                        
                                                                                                                                
MR.  HOLM said  most  facilities  accept that  they  must have  a                                                               
license  from any  state  in which  they  operate. The  executive                                                               
administer position would  help make the process  more fluid, but                                                               
he didn't  have an estimate  for the number of  distributors that                                                               
would apply  for licensure.  He reiterated  that 46  other states                                                               
have passed similar legislation with no reported issues.                                                                        
                                                                                                                                
SENATOR GARDNER  asked how it  would be possible to  move forward                                                               
if the  committee substitute  were to  pass with  the requirement                                                               
but no funding for the position to handle the licensing.                                                                        
                                                                                                                                
MR.  HOLM  said  it  would  be difficult  for  the  one  existing                                                               
licensing examiner to handle 1,100 additional licenses.                                                                         
                                                                                                                                
CHAIR COSTELLO  asked what impact  the increased fees  would have                                                               
on licensed pharmacists.                                                                                                        
                                                                                                                                
MR. HOLM  replied there probably  would not be any  licensing fee                                                               
increase for  pharmacists. Should  wholesalers be  licenses, that                                                               
would be more than enough to cover any extra costs.                                                                             
                                                                                                                                
9:58:35 AM                                                                                                                    
CHAIR COSTELLO  stated that,  based on  the testimony  today, she                                                               
would hold SB 37 and continue to work with the sponsor.                                                                         
                                                                                                                                
9:58:53 AM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Costello  adjourned the Senate Labor  and Commerce Standing                                                               
Committee meeting at 9:58 a.m.                                                                                                  

Document Name Date/Time Subjects
CS SB 37 (L&C) - Ver. J.pdf SL&C 4/4/2017 9:00:00 AM
SB 37
SB 51 - Support Letter - State Veterinarian Dr Gerlach.pdf SL&C 4/4/2017 9:00:00 AM
SB 51
CS SB 51 (L&C) - Ver. O.pdf SL&C 4/4/2017 9:00:00 AM
SB 51