Legislature(1993 - 1994)
03/23/1993 01:40 PM Senate L&C
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SENATE LABOR AND COMMERCE COMMITTEE
March 23, 1993
1:40 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chairman
Senator Steve Rieger, Vice Chairman
Senator Bert Sharp
Senator Judy Salo
MEMBERS ABSENT
Senator Georgianna Lincoln
COMMITTEE CALENDAR
SENATE BILL NO. 171
"An Act relating to the contracting and financing authority
of the Alaska Industrial Development and Export Authority,
giving approval of the issuance of the authority's revenue
bonds, and delaying the termination date of the authority's
business assistance program; and providing for an effective
date."
SENATE BILL NO. 162
"An Act relating to the implementation of the federal
emergency unemployment compensation program; making changes
relating to unemployment compensation under the extended
benefits program and the supplemental state benefits
program; and providing for an effective date."
HOUSE BILL NO. 101
"An Act relating to the adoption of the National Electrical
Code and the National Electrical Safety Code."
CS FOR HOUSE BILL NO. 102(FIN)
"An Act relating to the Alaska Labor Relations Agency; and
providing for an effective date."
SENATE BILL NO. 40
"An Act relating to health insurance for small employers;
and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 171 - No previous action to record.
SB 162 - No previous action to record.
HB 101 - No previous action to record.
HB 102 - No previous action to record.
SB 40 - See Labor & Commerce minutes dated 3/23/93.
WITNESS REGISTER
John Olson
Alaska Industrial Development and Export Authority
480 Tudor Rd.
Anchorage, Alaska 99503-6690
POSITION STATEMENT: Supported SB 171.
Ashley Reed
3201 C Street #300
Anchorage, Alaska 99503
POSITION STATEMENT: Commented on SB 171.
Judy Knight, Director
Employment Security Division
Department of Labor
P.O. Box 25509
Juneau, Alaska 99802-1149
POSITION STATEMENT: Supported SB 162.
Lynda Giguere, Legislative Aide
% Representative Hudson
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Commented on HB 101.
Jan DeYoung, Administrator
Alaska Labor Relations Agency
P.O. Box 107026
Anchorage, Alaska 99510-7026
POSITION STATEMENT: Commented on HB 102.
Ken Erickson, Legislative Aide
Senator Pearce
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Commented on SB 40.
Jan Meisels
Health Insurance Association of America
22144 Clarendon Street, Suite 220
Woodland Hills, Ca. 91367
POSITION STATEMENT: Supported SB 40.
Jay Frank
State Farm Insurance
Allstate Inusrance
431 N. Franklin Street
Juneau, Alaska 99801
POSITION STATEMENT: Supported SB 40.
Joe Poor, Executive Director
Juneau Chamber of Commerce
124 W 5th
Juneau, Alaska 99801
POSITION STATEMENT: Supported SB 40.
Reed Stoops
AETNA Insurance
P.O. Box 21211
Juneau, Alaska 99801
POSITION STATEMENT: Supported SB 40.
ACTION NARRATIVE
TAPE 93-22, SIDE A
Number 001
SENATOR KELLY called the Senate Labor and Commerce meeting
to order at 1:40 p.m. and announced SB 171 AIDEA BONDS;
BUSINESS ASSISTANCE PROG. to be up for consideration.
SENATOR PEARCE said if enacted, SB 171 would accomplish two
key objectives for the Alaska Industrial Development
Authority (AIDA). Section 1 gives legislative approval to
AIDA to authorize the issuance of bonds up to $40 million to
finance the acquisition, design, and construction of public
use aircraft fueling facilities at the Anchorage
International Airport.
Section 2 of the bill extends the sunset date of AIDA's
business assistance fund to July 1, 1996.
SENATOR PEARCE noted there were two proposed amendments.
The first tightens the Title and the other deletes the word
"revenue."
JOHN OLSON, Deputy Director of Development, AIDA, supported
SB 171 although it originated through the legislature and
not the Governor's office as is usual.
SENATOR RIEGER asked if these bonds are payable by statute
solely out of the revenue proceeds of the owner of the
project. MR. OLSON explained they would use the general
obligation of the Authority as credit for the bonds. Under
this program the project would have to cost less than $10
million. The only way they can issue revenue bonds greater
than $10 million is if AIDA owns the project.
Number 176
SENATOR RIEGER said he wanted to be sure the legislature
could issue, if they choose, revenue bonds instead of
authorizing general obligation bonds. MR. OLSON said the
legislature can authorize revenue bonds, but AIDA still
wants the option to use the g.o. capacity of the Authority,
should it be necessary, to finance projects.
SENATOR KELLY asked if he was implying AIDEA might not be
able to sell revenue bonds based on these two projects? MR.
OLSON replied they do not know, yet, about the depth of
credit of either entity they are dealing with.
SENATOR KELLY asked what was the contribution of MIDREX to
the Point McKenzie project. MR. OLSON explained the portion
of the project AIDA would finance is the dock and load-off
system. The infra-structure to the port might need some
improvements, but that is to be done by the borough.
ASHLEY REED, representing the Mat-Su Borough, said the roads
and utility extensions are already in place.
SENATOR SHARP asked if Tesoro presently utilized the Port of
Anchorage for supplying fuel? MR. OLSON said he thought
Tesoro supplied fuel by pipeline, although fuel will
eventually get to the new system through the Port of
Anchorage.
Number 249
MR. REED explained that all the refiners have the same
ability to use the Anchorage Port facilities and do so now.
The fuel is off-loaded there and is piped to the airport.
SENATOR SHARP said he saw an advantage being given to Tesoro
if they have a direct line from their refinery right into
the tank farm partially financed by AIDA.
MR. OLSON said this project is supported by MAPCO, but he
would find out more about the operations of the pipeline.
MR. OLSON said the $40 million was to be used at the airport
on the west side of the north-south runway.
SENATOR RIEGER wanted to know what statute covered AIDA's
bonding authority and SENATOR KELLY wanted the Nikiski
Pipeline question answered. SENATOR SALO said she would
like to see the questions answered before the bill was moved
to Finance.
SENATOR RIEGER stated he had strong reservations on adding
to the state's ownership of projects.
SENATOR PEARCE said she doubted if there were any airlines
who would cooperate in owning the facility at the airport.
She noted that the expansion at the Anchorage Airport can
not continue until the fuel tanks are moved and the
environmental clean-up happens.
SENATOR RIEGER moved to pass SB 171 from committee with
individual recommendations. There were no objections and it
was so ordered.
Number 368
SENATOR KELLY announced SB 162 EMERGENCY UNEMPLOYMENT COMP
PROGRAM to be up for consideration.
JUDY KNIGHT, Director, Employment Security Division,
explained SB 162 allowed the state to continue to
participate in the Emergency Unemployment Compensation
Program passed by Congress in 1991. She reviewed the
provisions in the bill and explained that Extended Benefits
is financed half from Alaska's UI trust fund and half from
federal receipts. She said they did not anticipate any
additional cost associated with the program if you consider
the total bill. In fact, there would be approximately $18
million in savings to the UI Trust Fund. The federal
government covers 100% of the Emergency Unemployment
Compensation. The State chose to participate in that
program and not pay extended benefits.
SENATOR KELLY asked what happens if they don't pass this
bill. MS. KNIGHT explained that the State would not receive
the administrative dollars that go with the program for
Unemployment Insurance, as well as all the other employment
and training provisions. This program does significantly
save state funds.
SENATOR KELLY expressed his dissatisfaction with the
administration introducing this bill so late in session.
Number 515
SENATOR RIEGER wanted a response sometime from the
administration on what the benefit might be of putting in
repealers so it wouldn't be a permanent law.
SENATOR SHARP said he wanted this program to sunset the same
time as the federal program sunsets.
SENATOR KELLY asked if unemployment benefits would stay the
same if this bill was enacted. MS. KNIGHT said no they
wouldn't. She didn't think it would have any effect on the
unemployment rates that employers pay as long as we continue
participation in the Emergency Unemployment Compensation.
Number 581
SENATOR SALO moved to pass SB 162 from committee with
individual recommendations. There were no objections and it
was so ordered.
TAPE 93-22, SIDE B
Number 580
SENATOR KELLY announced HB 101 NATIONAL ELECTRICAL CODE to
be up for consideration.
LYNDA GIGUERE, Legislative Aide for Representative Hudson,
said HB 101 would allow the Department of Labor to adopt the
National Electrical Safety Code. The State has been
adopting these Codes since 1969 and they thought allowing
the Department to do it would be more efficient. There is
an amendment to correct a possible constitutional problem.
MS. GIGUERE explained that using "shall mandate the adoption
of future additions..." could be construed as creating an
unconstitutional delegation of legislative authority to a
non-governmental agency.
SENATOR KELLY said they would have Legal Services look at
this particular issue and come back to the bill at a later
time and announced HB 102 PANEL MEMBERS ON AK LABOR REL.
AGENCY to be up for consideration
Number 554
JAN DEYOUNG, Alaska Labor Relations Agency, supported HB
102, because it would assist them in managing their work
load. She said in 1990 an Executive Order created the
Alaska Labor Relations Agency from three other agencies.
She said their caseload had increased by 50% from the
previous year.
Number 525
SENATOR RIEGER asked why the Chairman was designated by the
Governor rather than elected by the membership. MS. DEYOUNG
said the reasoning behind that wasn't explained to her, but
she thought the appearance of neutrality would be enhanced
if a public member would serve as the Chairman. There was
further discussion on the makeup of the Agency members.
SENATOR KELLY directed his staff to prepare an amendment on
this issue.
SENATOR KELLY announced a recess from 2:40 - 2:45 p.m.
SENATOR KELLY announced SB 40 GROUP HEALTH INS. FOR SMALL
EMPLOYERS to be up for consideration.
KEN ERICKSON, Aide to Senator Pearce, said SB 40 promotes
availability of health insurance coverage for small
employers and reforms the small employer health insurance
market. It provides guaranteed availability of health
insurance regardless of health risk and without added
expense to the state.
Number 458
JAN MEISELS, Health Insurance Association of America, said
the reason this bill focuses on small employers is because
they have some unique problems. One of them is the high turn
over rate of employees; 90% of Alaskan are employed by a
small employer with 2 - 25 employees. She said this bill
does not mandate anything, but allows an employer who wishes
to provide insurance to be able to get that insurance.
Insurance companies will no longer "cherry pick." Groups
will be guaranteed renewed coverage, even with high risk and
high health claims. The pre-existing 12-month exclusion
period goes with the employee if he changes jobs or
companies.
Number 396
There are also premium pricing limits, which doesn't mean
the state is setting insurance company rates. It means
there is a limit for every carrier who sets their premiums
on what they can charge from their best group to their worst
group.
She then did a sectional analysis of the bill. She said
there are provisions for reinsurance of high risk
individuals. The insurance company has to pay the first
$5,000 claim before the reinsurance board goes into it.
There is a premium for the reinsurance that the insurance
company pays. They are constrained within the premium
pricing limits in how much they recoup from the policy
holders.
MS. MEISELS explained SB 40 established a Health Benefit
Committee that would recommend to the Reinsurance Board what
benefits should be included in the basic and standard plan.
This bill sets up a fair marketing standard by preventing
"gaming" by insurance companies who may want to drop a high
risk group for a year. It also prevents agents from being
rewarded for not bringing in a "bad group."
Number 232
MS. MEISELS reviewed the proposed amendments which were pro-
consumer and technical (see attachment). She said they were
from the National Association of Insurance Carriers (NAIC)
model.
She explained that "capitation" means per-head. So an HMO
would pay a physician a certain amount a month whether you
see the physician or not.
SENATOR SALO asked her to further explain the 12 month pre-
existing clause. MS. MEISELS said this meant that an
insurance company could exclude coverage for a pre-existing
condition for up to 12 months, but would have to cover
everything else and would have to cover the pre-existing
condition after the 12 months and this exclusion is portable
to another job and another insurance company.
TAPE 93-23, SIDE A
Number 001
JAY FRANK, representing State Farm and Allstate Insurance
Companies, supported SB 40 wholeheartedly.
SENATOR KELLY noted that John George, representing the
American Council of Life Insurers, supported SB 40.
JOE POOR, Executive Director, Juneau Chamber of Commerce,
supported SB 40 and encouraged it's passage.
Number 62
REED STOOPS, representing AETNA Insurance Company, supported
SB 40.
SENATOR SALO asked what you could anticipate as a premium
for some sort of basic coverage.
MS. MEISELS said she didn't have a specific figure, but
referred her to the "Market Test Report" which lead her to
believe the cost was not going to be as high as assumed.
SENATOR KELLY said it was 3:30 p.m., thanked everyone for
coming and adjourned.
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