Legislature(1999 - 2000)
04/18/2000 05:45 PM Senate RLS
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* first hearing in first committee of referral
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SENATE RULES COMMITTEE
April 18, 2000
5:45 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chair
Senator Loren Leman, Vice Chair
Senator Mike Miller
Senator Drue Pearce
Senator Johnny Ellis
MEMBERS ABSENT
None
COMMITTEE CALENDAR
HOUSE BILL NO. 331
"An Act relating to payment, allowances, and benefits of members of
the Alaska National Guard and Alaska Naval Militia in active
service; relating to computation of certain benefits for members of
the Alaska State Militia; and providing for an effective date."
-MOVED CSHB 331(RLS) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 191(FIN)
"An Act relating to charter schools."
-MOVED CSHB 191(FIN) OUT OF COMMITTEE
HOUSE BILL NO. 272
"An Act relating to the tax assessment by a home rule or general
law municipality of housing that qualifies for the low-income
housing credit under the Internal Revenue Code; and providing for
an effective date."
-MOVED HB 272 OUT OF COMMITTEE
SENATE BILL NO. 256
"An Act relating to regulation of managed health care and allowing
physicians to collectively negotiate with a health care insurer
that has substantial market power."
-MOVED ALL VERSIONS OF SB 256 OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
HB 331 - See Finance Report dated 4/18/00.
HB 191 - See HESS minutes dated 3/27/00, 4/05/00 and 4/10/00 and
Finance Report dated 4/15/00.
HB 272 - See CRA minutes dated 3/1/00, Finance Report dated 4/16/00
and Rules minutes dated 4/16/00.
SB 256 - See HESS minutes dated 2/21/00 and 2/23/00, Finance
Report dated 4/7/00 and Rules minutes dated 4/17/00.
WITNESS REGISTER
Carol Carroll
Administrative Services Division
Department of Military and Veterans Affairs
400 Willoughby Ave., Ste. 500
Juneau, AK 99811
POSITION STATEMENT: Answered questions about HB 331
Representative Fred Dyson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 191
Kathi Gillespie
Anchorage School Board
Municipality of Anchorage
PO Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Explained a proposed amendment to HB 191
Jonathon Lack
Legislative Aide to Representative Halcro
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified for the sponsor of HB 272
Julia Coster
Assistant Attorney General
Department of Law
1031 W 4th Ave., Suite 200
Anchorage, AK 99501-1994
POSITION STATEMENT: Explained a proposed amendment to SB 256
Senator Pete Kelly
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 256
Mike Ford
Division of Legal Services
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on a proposed amendment to SB 256
ACTION NARRATIVE
TAPE 00-12, SIDE A
CHAIRMAN KELLY called the Senate Rules Committee meeting to order
at 5:45 p.m. All members were present. The first order of
business to come before the committee was CSHB 331(MLV).
HB 331-AK NATL GUARD/NAVAL MILITIA/DEFENSE FORCE
CHAIRMAN KELLY noted that a technical amendment had been proposed.
That amendment reads as follows.
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR LEMAN
TO: CSHB 331(MLV)
Page 3, Lines 15-27:
DELETE ALL MATERIAL
INSERT:
(B) Members of the Alaska National Guard and Alaska Naval
Militia are entitled to receive, for each day of active
service under AS 26.05.070, pay [AND ALLOWANCES] equal to 200
percent of the minimum daily basic pay [THOSE] provided by
federal laws and regulations for members of equivalent grades
of the United States armed forces. However, a member may not
receive less that $105 [$65] per day for active service
performed during the fiscal year ending June 30, 2000 [1982].
For fiscal years beginning after June 30, 2000 [1982], the
minimum payment of [$65] $105 shall be increased one percent
for each percent increase in the consumer price index for [of]
Anchorage, Alaska, as determined by the United States
Department of Labor, Bureau of Labor Statistics, not to exceed
an annual increase of 4 [10] percent. The increase, if any,
takes effect not more than 30 days after the release of the
consumer price index. The consumer price index that is
published immediately after July 1, 1999 [1981], is the
reference base index.
CHAIRMAN KELLY asked a DMVA representative to explain Senator
Leman's amendment.
MS. CAROL CARROLL, Administrative Services Division, Department of
Military and Veterans Affairs (DMVA), explained Senator Leman's
proposed amendment to HB 331 as follows. The amendment changes the
existing statute provision that sets the minimum basic pay for
Alaska National Guardsmen at $65 per day to $105 per day. It also
changes the base year from June 30, 1982 to June 30, 2000. In
addition, it lowers the ceiling for the amount of the consumer
price index (CPI) that the daily pay rate can be adjusted on from
10 to 4 percent. Since 1960, the CPI has risen over 4 percent only
13 times.
SENATOR LEMAN moved to adopt the amendment.
CHAIRMAN KELLY objected and asked for further explanation.
SENATOR LEMAN commented that some of the provisions in the
amendment were proposed by DMVA but he suggested updating the
provisions that were 20 years old. He also suggested that the
ceiling be set at 4 percent the inflationary period that we was
occuring when that provision first took effect in the early 1980's
no longer exists. Since 1985, there have only been two years in
which the CPI increase was more than 4 percent. This will only
affect the pay rates of guardsmen at the very bottom of the scale
where the minimum amount kicks in. Right now it is set at two
times the federal pay or the minimum, whichever is more.
CHAIRMAN KELLY asked if the reason for this section is that
calculating pay and allowances is a difficult computation that
usually equals 200 percent.
MS. CARROLL said that is correct and explained that, essentially,
this bill attempts to eliminate a lot of complicated calculations.
CHAIRMAN KELLY asked for examples of the types of allowances that
are paid.
MS. CARROLL stated the guardsmen are given a housing allowance,
food allowance, and a cost of living allowance which is changed by
the federal government about every two weeks. This bill attempts
to get rid of that administrative burden while maintaining the same
amount the soldiers are making now, which equals about 200 percent.
A new calculation will be used that does not include any
allowances. The new system will allow DMVA to process pay checks
faster.
MS. CARROLL replied that HB 331 is a streamlining bill. DMVA is
trying to get rid of some administrative overhead caused by the
burdensome calculations.
CHAIRMAN KELLY asked Ms. Carroll to explain the last line of the
amendment.
MS. CARROLL replied that since 1981, DMVA has been using the dollar
amount that was set in statute at that time to calculate what the
pay would be with the CPI. As of July 1, 1999, that amount was
$105 which is what DMVA uses now, so that amount was included in
the amendment to be used as the new base amount.
CHAIRMAN KELLY asked whether the July 1, 2000 CPI will contain an
increase requiring the base amount to be increased beginning July
1, 2000.
MS. CARROLL said yes, and when the CPI comes out in July, DMVA will
do another calculation depending upon the CPI for Anchorage.
CHAIRMAN KELLY asked if the increases should begin the next year
because the 200 percent is a little bit more than the basic pay and
allowances.
MS. CARROLL stated that the 200 percent is a little bit less.
SENATOR LEMAN noted that for three of the grades it is a little bit
more but for most of the grades it is less.
CHAIRMAN KELLY asked if there was objection to adopting the
amendment. There being none, the amendment was adopted.
SENATOR LEMAN moved to calendar, at the Chairman's discretion, all
Senate versions of HB 331 with accompanying fiscal notes and
individual recommendations. There being no objection, the motion
carried.
HB 191-CHARTER SCHOOLS
CHAIRMAN KELLY informed Representative Dyson that the Anchorage
School District has prepared an amendment to SCS CSHB 191(FIN).
REPRESENTATIVE FRED DYSON, sponsor of HB 191, said that the charter
school law in Alaska is one of the weakest in the nation. When it
was enacted in 1995, proponents believed it would have to be
revisited. This bill does four relatively uncontroversial things.
It extends the contract periods; it doubles the cap and removes the
geographic requirements; it removes the sunset provision; and it
allows for a waiver by the fire marshall of public school safety
requirements. His original intent was to also open up the
accounting process so that charter school negotiators could see
where the money they get or do not get comes from. That provision
was problematic because a number of school districts said they are
unable to provide that information. The remaining noncontroversial
parts of the bill must pass this session to enable some charter
schools to continue. The Department of Education and Early
Development and the State Board of Education recommended the
version before the committee [SCS CSHB 191(FIN)] but there is a
strong case to remove a portion of the bill.
SENATOR LEMAN asked Representative Dyson what his recommendation
is.
REPRESENTATIVE DYSON responded that he would "stand pat" but he
admitted the Anchorage School District has a good argument.
CHAIRMAN KELLY asked if Representative Dyson would prefer to stand
pat on this bill and look at the argument at a future time.
REPRESENTATIVE DYSON replied, "I would, but they make a good case,
they may be right."
Number 181
KATHI GILLESPIE, Co-Chair of the Legislative Subcommittee of the
Anchorage School District, expressed the school district's concerns
with SCS CSHB 191(FIN). The school district recommends the
deletion of Section 4(e) on page 3, lines 6-11. Section 4(e)
reads:
(e) In addition to the amount provided to an approved charter
school in the annual program budget under (a) of this section,
a charter school budget must include an allocation equal to
the amount determined by dividing the amount of local revenues
contributed under AS 14.17.410(c) by the average daily
membership of the district and multiplying that number by the
average daily membership of the charter school.
The school district's concern with Section 4(e) is that it sets a
precedent for funding charter school students in a different manner
than funding for all other school district students. This section
basically says that charter school students will not be held
accountable for contributing to districtwide operations and
services. Currently, local funding is distributed in the following
manner: the local funding is received and the four mills is
contributed for all students, including charter school students, in
order to access foundation formula monies. The school district has
some discretion with the remainder of those monies to address the
needs of students in specific schools. It is true that an equal
amount is not spent on each student in the Anchorage School
District. The amount spent depends on the location, whether the
student is at risk, the income level of the family and other
factors. It does cost the district more to educate some students
than others. The district is concerned that this bill will set a
precedent so that some students can say they get their portion
first and that they do not have to contribute to the discretionary
amount that is distributed according to need. That precedent will
allow neighborhood schools to demand the same treatment. The
district has never funded public education this way; it has always
had the discretion to spend the money to bring all students up to
a particular standard. The district fears that if Section 4(e) is
left in the bill, it will negate the school district's ability to
do that.
MS. GILLESPIE asked committee members to delete Section 4(e) and
noted the district has offered to work with Representative Dyson
over the summer on the issue of funding for charter school
students. She noted that the four charter schools in the Anchorage
School District are still functioning; three are thriving. The one
school that is having significant problems is Walden, located in
the Dimond Mall. That school's problems are rooted in the fact
that it has not met the 200 student limit required for the
foundation formula. The Anchorage School District supports charter
schools and will continue to do so.
SENATOR ELLIS moved the amendment to delete Section 4 on page 3,
lines 6 through 11. The motion failed with Senators Leman, Pearce
and Kelly voting "nay," and Senators Ellis and Miller voting "yea."
SENATOR LEMAN moved to calendar all Senate versions of HB 191 for
calendaring at the Chairman's discretion. Without objection, the
motion carried.
HB 272-MUNICIPAL TAX: LOW INCOME HOUSING
CHAIRMAN KELLY announced that a proposed Senate Rules Committee
substitute had been drafted labeled "Version T."
MR. JONATHAN LACK, legislative aide to Representative Halcro,
sponsor of the measure, explained Version T as follows. Version T
is Representative Halcro's preferred version. It says that for
IRS-qualified low income housing, the municipal assessment shall be
based on the actual income derived from the property recognizing
the deed restrictions on that property. The second change says
that the governing body of the local municipality shall determine
by ordinance whether the properties that qualify for the low income
housing tax credits after the date of the act shall be exempt from
the requirements of the assessment procedure in the first section.
For properties that have been exempted by ordinance, the governing
body may determine by parcel which method of assessment will be
used and may not change the manner of assessment if there is
outstanding original debt on that property.
CHAIRMAN KELLY asked if "by parcel," Mr. Lack meant by project.
MR. LACK said yes.
CHAIRMAN KELLY stated that all of the old projects are grand
fathered in and any new projects are local option - project by
project.
MR. LACK agreed.
SENATOR LEMAN clarified, for the record, that the term "actual
income derived" pertains to that market. It does not mean that
someone can, through bad management, actually cause a depression of
the market value of that property. It is actual income derived at
market and that the assessor assumed some type of vacancy factor
for income property that is applied for that particular unit.
MR. LACK agreed that is correct and noted that he spoke with the
state assessor, Steve VanZant. The term "actual income derived
from the property" means at market so if a property has a 60
percent occupancy but the market provides for an 80 percent
occupancy, it will be assessed at 80 percent. That will provide no
incentive for an owner to underfill a unit to get a break on
property taxes. The amendment that came out of the Senate Finance
Committee added "at full occupancy." The intent was to address a
situation in which someone might intentionally underfill a unit.
That amendment was problemative because "at full occupancy" ends up
meaning that if there is a significant downturn in the rental
market, for example if Elmendorf Airforce Base closed, ten percent
would be the market occupancy rate and the unit would still have to
pay taxes on 100 percent occupancy. Version T clears that problem
up.
SENATOR ELLIS moved to adopt Version T as the Senate Rules
Committee substitute. There being no objection, the motion
carried.
SENATOR LEMAN moved to calendar all Senate versions of HB 272 for
calendaring at the Chairman's discretion. There being no
objection, the motion carried.
CHAIRMAN KELLY announced an at-ease.
SB 256-PHYSICIAN NEGOTIATIONS WITH HEALTH INSURER
CHAIRMAN KELLY announced that two proposed amendments are before
the committee; one sponsored by Senator Pete Kelly and the other by
the Department of Law (DOL).
SENATOR MILLER moved to adopt the amendment proposed by Senator
Pete Kelly. That amendment reads as follows.
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR PETE KELLY
TO: CSSB 256(FIN)
Page 4, lines 10 - 11:
Delete ", or a particular physician type or specialty"
Page 4, line 15:
Delete "and"
Insert a new paragraph to read:
"(7) the attorney general may limit the percentage
of practicing physicians represented by an authorized third
party; however, the limitation may not be less than 30 percent
of the market of practicing physicians in the geographic
service area or proposed geographic service area; when
determining whether to impose a limitation described under
this paragraph, the attorney general shall consider the
provisions described under (h), (i), and (j) of this section;
this paragraph does not apply if the market of practicing
physicians in the geographic service area or proposed
geographic service area consists of 40 or fewer individuals;
and"
Renumber the following paragraph accordingly.
SENATOR ELLIS objected to the adoption of the amendment.
CHAIRMAN KELLY noted that unless the DOL amendment to Senator
Kelly's amendment is offered at this time, the vote will only
pertain to Senator Kelly's amendment.
SENATOR ELLIS moved to adopt the DOL amendment which reads as
follows.
A M E N D M E N T - VERSION 2
OFFERED IN THE SENATE BY DEPARTMENT OF LAW
TO: CSSB 256(FIN)
[Page 4, lines 10-11:
Delete ", or a particular physician type or specialty"]
Page 4, line 15:
Delete "and"
Insert a new paragraph to read:
"(7) the attorney general may limit the percentage of
practicing physicians or a particular physician type or
specialty represented by an authorized third party;
[however, the limitation may not be less than 30 percent
of the market of practicing physicians in the geographic
service area or proposed geographic service area;] when
determining whether to impose a limitation described
under this paragraph, the attorney general shall consider
the provisions described under (h), [(i), and (j)] of
this section; [this paragraph does not apply if the
market of practicing physicians in the geographic service
area or proposed geographic service area consists of 40
or fewer individuals;] and"
Renumber the following paragraph accordingly."
SENATOR MILLER objected to the adoption of DOL's amendment.
SENATOR PEARCE asked for an explanation of the amendment.
SENATOR PETE KELLY, sponsor of SB 256, explained that the problem
with DOL's amendment is that it essentially guts the bill. It
turns policy decisions over to DOL. The wording of the amendment
will allow DOL to declare that no one is eligible to participate in
the negotiations. DOL's amendment gives DOL way too much authority
over the negotiations.
MS. JULIA COSTER, Assistant Attorney General, Department of Law,
responded that the first part of DOL's amendment actually returns
the bill to what it was originally. On page 4, subsection (6), the
bill originally allowed the number of physicians to be limited to
30 percent, both in the general and specialty markets. The second
part of the DOL amendment allows the physician group to be limited
not only on the entire market but also with the specialty market
which was in subsection (6) also. She thought that Senator Pete
Kelly was referring to the deletion of the limit in DOL's
amendment. She did not agree that it guts the bill; it allows the
Attorney General to have the percentage of physicians be less than
30 percent if it meets the criteria under subsection (h), which
means the Attorney General would determine whether or not the anti-
competitive effects of a larger group of people outweigh the
benefit. It would allow the Attorney General to engage in a
balancing test. That same provision is required under the Texas
legislation.
Number 357
SENATOR PETE KELLY asked that Mike Ford, the legal drafter of SB
256, address DOL's amendment. He noted that Mr. Ford provided
committee members with his analysis of DOL's objections to the
bill.
MR. MIKE FORD, Division of Legal Services, Legislative Affairs
Agency, stated that after reading DOL's amendment, he cannot see
how one can maintain that it does not allow the Attorney General to
go to a zero percentage. It does not set up a mechanism that would
limit the Attorney General's authority. It removes the bottom cap
that prevents the limitation from being less than 30 percent. He
agreed that it leaves in the consideration of subsection (h) but
that does not preclude the Attorney General from determining that
a percentage may be one or two percent.
SENATOR MILLER continued to object to DOL's amendment. The motion
to adopt DOL's amendment failed with Senators Leman, Miller and
Pearce voting "nay," and Senators Ellis and Kelly voting "yea."
SENATOR LEMAN moved to adopt Senator Pete Kelly's amendment. There
being no objection, the motion carried.
SENATOR LEMAN moved to calendar all Senate versions of SB 276 at
the Chairman's discretion. SENATOR ELLIS objected.
The motion to calendar all versions of SB 276 carried with Senators
Miller, Pearce, Leman and Kelly voting "yea," and Senator Ellis
voting "nay."
There being no further business to come before the committee,
CHAIRMAN KELLY adjourned the meeting at 6:18 p.m.
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