HOUSE LABOR AND COMMERCE STANDING COMMITTEE April 22, 1996 3:08 p.m. MEMBERS PRESENT Representative Pete Kott, Chairman Representative Norman Rokeberg, Vice Chairman Representative Jerry Sanders Representative Kim Elton Representative Gene Kubina MEMBERS ABSENT Representative Beverly Masek Representative Brian Porter COMMITTEE CALENDAR HOUSE BILL NO. 416 "An Act relating to fees or assessment of costs for certain services provided by state government, including hearing costs related to the real estate surety fund; fees for authorization to operate a postsecondary educational institution or for an agent's permit to perform services for a postsecondary educational institution; administrative fees for self-insurers in workers' compensation; business license fees; fees for activities related to coastal zone management, training relating to emergency management response, regulation of pesticides and broadcast chemicals, and subdivision plans for sewage waste disposal or treatment; and providing for an effective date." - MOVED CSHB 416(L&C) OUT OF COMMITTEE CS FOR SENATE BILL NO. 186(L&C) "An Act relating to partnerships; and providing for an effective date." - MOVED CSSB 186(L&C) OUT OF COMMITTEE SENATE BILL NO. 316(title am) "An Act changing the term `disability' to `health' in the context of insurance coverage." - MOVED CSHB 186(L&C) OUT OF COMMITTEE HOUSE BILL NO. 345 "An Act relating to the procurement of investment and brokerage services by the Alaska State Pension Investment Board." - FAILED TO MOVE HB 345 HOUSE BILL NO. 549 "An Act relating to partnerships; and providing for an effective date." - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 363 "An Act requiring banks to pay interest on money in reserve accounts held in connection with mortgage loans." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 416 SHORT TITLE: OMNIBUS STATE FEES & COST ASSESSMENTS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 01/12/96 2432 (H) READ THE FIRST TIME - REFERRAL(S) 01/12/96 2432 (H) STATE AFFAIRS, L&C, RESOURCES, FINANCE 01/12/96 2432 (H) 7 FNS (DCED, 2-DEC, 2-GOV, LABOR, DMVA) 01/12/96 2432 (H) FISCAL NOTE (REV) 01/12/96 2433 (H) GOVERNOR'S TRANSMITTAL LETTER 04/09/96 (H) STA AT 8:00 AM CAPITOL 102 04/09/96 (H) MINUTE(STA) 04/11/96 (H) STA AT 8:00 AM CAPITOL 102 04/11/96 (H) MINUTE(STA) 04/15/96 3738 (H) STA RPT CS(STA) NT 1DP 1DNP 4NR 04/15/96 3739 (H) DP: ROBINSON 04/15/96 3739 (H) DNP: OGAN 04/15/96 3739 (H) NR: JAMES, PORTER, GREEN, IVAN 04/15/96 3740 (H) 5 FNS (2-GOV, 2-DEC, DCED) 1/12/96 04/15/96 3740 (H) 3 FNS (LABOR, DMVA, REV) 1/12/96 04/17/96 (H) L&C AT 3:00 PM CAPITOL 17 04/18/96 (H) L&C AT 2:00 PM CAPITOL 17 04/19/96 (H) L&C AT 3:00 PM CAPITOL 17 04/22/96 (H) L&C AT 3:00 PM CAPITOL 17 BILL: SB 186 SHORT TITLE: LIMITED LIABILITY PARTNERSHIPS SPONSOR(S): LABOR & COMMERCE BY REQUEST JRN-DATE JRN-PG ACTION 05/16/95 1899 (S) READ THE FIRST TIME - REFERRAL(S) 05/16/95 1899 (S) L&C, JUD 02/01/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 02/08/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 02/08/96 (S) MINUTE(L&C) 02/13/96 2409 (S) FIN REFERRAL ADDED 02/29/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 02/29/96 (S) MINUTE(L&C) 03/07/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 03/07/96 (S) MINUTE(L&C) 03/12/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 03/12/96 (S) MINUTE(L&C) 03/18/96 2772 (S) L&C RPT CS 2DP 2NR NEW TITLE 03/18/96 2773 (S) FISCAL NOTE TO SB & CS (DCED) 03/29/96 (S) JUD AT 1:30 PM BELTZ ROOM 211 03/29/96 (S) MINUTE(JUD) 04/01/96 2991 (S) JUD RPT 3DP (L&C)CS 04/01/96 2991 (S) PREVIOUS FN (DCED) 04/10/96 3136 (S) FIN REFERRAL WAIVED 04/12/96 3193 (S) RULES TO CALENDAR 4/12/96 04/12/96 3195 (S) READ THE SECOND TIME 04/12/96 3195 (S) L&C CS ADOPTED UNAN CONSENT 04/12/96 3195 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/12/96 3195 (S) READ THE THIRD TIME CSSB 186(L&C) 04/12/96 3195 (S) PASSED Y18 N2 04/12/96 3196 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 04/12/96 3196 (S) KELLY NOTICE OF RECONSIDERATION 04/15/96 3250 (S) RECONSIDERATION NOT TAKEN UP 04/15/96 3250 (S) TRANSMITTED TO (H) 04/16/96 3793 (H) READ THE FIRST TIME - REFERRAL(S) 04/16/96 3793 (H) L&C, FINANCE 04/22/96 (H) L&C AT 3:00 PM CAPITOL 17 BILL: SB 316 SHORT TITLE: HEALTH INSURANCE NOMENCLATURE SPONSOR(S): LABOR & COMMERCE BY REQUEST JRN-DATE JRN-PG ACTION 03/22/96 2837 (S) READ THE FIRST TIME - REFERRAL(S) 03/22/96 2837 (S) LABOR & COMMERCE 04/09/96 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 04/09/96 (S) MINUTE(L&C) 04/10/96 3110 (S) L&C RPT 3DP 04/10/96 3110 (S) ZERO FISCAL NOTE (DCED) 04/11/96 (S) RLS AT 2:35 PM FAHRENKAMP RM 203 04/12/96 3193 (S) RULES TO CALENDAR 4/12/96 04/12/96 3197 (S) READ THE SECOND TIME 04/12/96 3197 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/12/96 3197 (S) READ THE THIRD TIME SB 316 04/12/96 3197 (S) AM NO 1 ADOPTED UNAN CONSENT TITLE AM 04/12/96 3198 (S) PASSED Y17 N- E1 A2 04/12/96 3220 (S) TRANSMITTED TO (H) 04/15/96 3734 (H) READ THE FIRST TIME - REFERRAL(S) 04/15/96 3734 (H) LABOR & COMMERCE 04/19/96 (H) JUD AT 1:00 PM CAPITOL 120 04/19/96 (H) MINUTE(JUD) 04/22/96 (H) L&C AT 3:00 PM CAPITOL 17 BILL: HB 345 SHORT TITLE: PENSION INVESTMENT BOARD PROCUREMENTS SPONSOR(S): REPRESENTATIVE(S) FOSTER, Ivan JRN-DATE JRN-PG ACTION 05/10/95 2088 (H) READ THE FIRST TIME - REFERRAL(S) 05/10/95 2088 (H) STATE AFFAIRS, L&C, FINANCE 03/21/96 (H) STA AT 8:00 AM CAPITOL 102 03/21/96 (H) MINUTE(STA) 03/21/96 3259 (H) COSPONSOR(S): IVAN 03/26/96 (H) STA AT 8:00 AM CAPITOL 102 03/26/96 (H) MINUTE(STA) 03/27/96 3390 (H) STA RPT CS(STA) 2DNP 4NR 03/27/96 3391 (H) DNP: ROBINSON, WILLIS 03/27/96 3391 (H) NR: JAMES, PORTER, GREEN, OGAN 03/27/96 3391 (H) FISCAL NOTE (REV) 04/03/96 (H) L&C AT 3:00 PM CAPITOL 17 04/17/96 (H) L&C AT 3:00 PM CAPITOL 17 04/18/96 (H) L&C AT 2:00 PM CAPITOL 17 04/19/96 (H) L&C AT 3:00 PM CAPITOL 17 04/22/96 (H) L&C AT 3:00 PM CAPITOL 17 WITNESS REGISTER NANCY SLAGLE, Director Division of Budget Review Office of Management and Budget Office of the Governor P.O. Box 110020 Juneau, Alaska 99811-0200 Telephone: (907) 465-4681 POSITION STATEMENT: Answered questions on HB 416. SHERMAN ERNOUF, Legislative Assistant to Senator Tim Kelly Capitol Building, Room 101 Juneau, Alaska 99801 Telephone: (907) 465-3822 POSITION STATEMENT: Gave sponsor statement for CSSB 186(L&C) ACTION NARRATIVE TAPE 96-39, SIDE A Number 001 The House Labor and Commerce Standing Committee was called to order by Chairman Pete Kott at 3:08 p.m. Members present at the call to order were Representatives Sanders, Elton, Rokeberg and Kott. Representative Kubina arrived at 3:11 p.m. HB 416 - OMNIBUS STATE FEES & COST ASSESSMENTS Number 075 CHAIRMAN PETE KOTT announced the first order of business would be HB 416, "An Act relating to fees or assessment of costs for certain services provided by state government, including hearing costs related to the real estate surety fund; fees for authorization to operate a postsecondary educational institution or for an agent's permit to perform services for a postsecondary educational institution; administrative fees for self-insurers in workers' compensation; business license fees; fees for activities related to coastal zone management, training relating to emergency management response, regulation of pesticides and broadcast chemicals, and subdivision plans for sewage waste disposal or treatment; and providing for an effective date." Number 102 REPRESENTATIVE KIM ELTON made a motion to CSHB 416, Version F, with the attached fiscal notes out of the House Labor and Commerce Committee. REPRESENTATIVE NORMAN ROKEBERG objected for the purpose of another amendment. He said he would offer an amendment to delete the section which relates to the surety bonds. He said the reason is offering the amendment is because of testimony given the previous Friday by Ms. Reardon where she had already calculated the cost of the hearing, support fees and licenses. CHAIRMAN KOTT asked Representative Rokeberg to identify the lines. He noted the committee is working from the committee substitute dated 4/19/96, Version F, Cook. Number 216 REPRESENTATIVE ROKEBERG indicated it is page 2, lines 9 through 17, which is shown as Section 2. CHAIRMAN KOTT objected for the purpose of discussion. Number 269 REPRESENTATIVE ELTON pointed out that there is a motion on the floor. He indicated he would withdraw it at the Chair's request. CHAIRMAN KOTT asked Representative Elton to withdraw his motion. REPRESENTATIVE ROKEBERG moved that Section 2 be deleted on page 2, lines 9 through 17. CHAIRMAN KOTT explained there is conceptual Amendment 3 to delete Section 2 of the committee substitute. He said he would object for the purpose of discussion. REPRESENTATIVE ROKEBERG said he proposed the amendment because of the testimony he heard from Catherine Reardon the Division of Occupational Licensing. She testified that the adjustment in the biannual license fee for real estate brokers, agents and associate brokers was such that it included the costs of carrying out the hearings. If the committee approves this particular provision, the department would be double dipping those costs as they would be drawing monies from the surety fund to pay for hearings that are already going to be paid for presumably out of the operating income generated by the license fees. Number 388 REPRESENTATIVE ELTON indicated the testimony he recalls is that this section allows the division to draw on the surety fund for those cases as the expenses were incurred rather than waiting until the end of it and drawing down on the fund. He said he thought he had a further understanding that one of the concerns that they had is that once that fund gets up to $500,000, any additional money spills back over into the general fund. This was a way of protecting the surety fund. Representative Elton said he further understood that the testimony indicated that the commission, itself, had recommended this change. CHAIRMAN KOTT indicated that was his recollection. REPRESENTATIVE ROKEBERG said he doesn't disagree with what Representative Elton said, but she also testified that she was double dipping. In other words, she recovered the costs and the estimates from the licensure fees. CHAIRMAN KOTT said he seems to recall that testimony, but also that it couldn't be helped based on how the two systems worked (indisc.) to one another in that if in fact there was more in the fund.... REPRESENTATIVE ROKEBERG said if there are surplus funds in the surety fund, it goes into the general fund. The licensure fees are adjusted biannually to make contribution if there is a shortfall in the surety fund. Number 532 NANCY SLAGLE, Director, Division of Budget Review, Office of Management and Budget, Office of the Governor, came forward to address the committee. She said the committee is correct in what has been stated. However, when it comes to the setting of occupational licensing fees, Ms. Reardon stated that there is difficulty in trying to cut back in the amount you're charging without having this particular legislation in place first. You then can go back and adjust those license fees based on HB 416 so that there wouldn't be that double charging. The money would be expended from the surety fund in the future, not from the program receipts. You then can adjust those license fees in the future to bring them back down in line to what your actual expenses are. The statutes covering occupational licensing requires that what your charge covers you're expenses for the program. CHAIRMAN KOTT questioned where the Senate version of this bill is. MS. SLAGLE indicated it is in the Senate Finance Committee. Number 652 CHAIRMAN KOTT stated he would still maintain his objection. REPRESENTATIVE GENE KUBINA said it sounds like Ms. Slagle is saying that if this section is left in the bill, the fees would actually go down. Number 673 REPRESENTATIVE ROKEBERG withdrew his amendment. He said if his suspicions are correct, he would bring up his concern on the floor. Number 697 REPRESENTATIVE ELTON made a motion to move CSHB 416, Version F, with the attached fiscal notes, out of committee with individual recommendations. CHAIRMAN KOTT asked if there was an objection. REPRESENTATIVE ROKEBERG asked for a brief at ease. CHAIRMAN KOTT called the committee back to order and asked if there was an objection to moving the bill. Hearing none, CSHB 416(L&C) was moved out of the House Labor and Commerce Committee. SB 186 - LIMITED LIABILITY PARTNERSHIPS Number 787 CHAIRMAN KOTT announced the committee would hear CSSB 186(L&C), "An Act relating to partnerships; and providing for an effective date." He noted the committee has heard the House bill relating to this issue. Number 801 SHERMAN ERNOUF, Legislative Assistant to Senator Tim Kelly, explained CSSB 186. He said the Senate bill and the House bill are identical except for the definition of "partnership" on page 8 of both bills. Mr. Ernouf said in SB 186, they deleted the language on line 14, "unless the context indicates otherwise." That was a technical change requested by the Board of Accountancy. He stated that is the only change between the two bills. CHAIRMAN KOTT asked if there were any witnesses to testify on the measure. There being none, Chairman Kott closed the public hearing. Number 854 REPRESENTATIVE ELTON moved that CSHB 186(L&C) be moved out of committee with the attached zero fiscal note and individual recommendations. CHAIRMAN KOTT asked if there was an objection. Hearing none, CSHB 186(L&C) was moved out of the House Labor and Commerce Committee. SB 316 - HEALTH INSURANCE NOMENCLATURE Number 884 CHAIRMAN KOTT said the committee would hear SB 316(title am), "An Act changing the term `disability' to `health' in the context of insurance coverage." He noted the committee has heard the companion bill which is currently in the House Rules Committee. Chairman Kott said the word "disability" was removed and the word "health" was inserted. There was some confusion indicated by the providers. In order to alleviate some of that confusion the wording was changed. He noted there is disability within the health insurance arena, but it doesn't stand alone. Number 946 REPRESENTATIVE ROKEBERG made a motion to move SB 316(title am), with individual recommendations and the attached zero fiscal note. CHAIRMAN KOTT asked if there was an objection. Hearing none, SB 316(title am) was moved out of the House Labor and Commerce Committee. HB 345 - PENSION INVESTMENT BOARD PROCUREMENTS Number 972 CHAIRMAN KOTT announced the last order of business would be HB 345, "An Act relating to the procurement of investment and brokerage services by the Alaska State Pension Investment Board." He said the bill has been heard on two separate occasions where there was conflicting testimony both in support or in opposition to the bill. Chairman Kott indicated there is a proposed committee substitute, Version K, Bannister, 4/10/96, which has been adopted. Number 1000 REPRESENTATIVE ROKEBERG made a motion to move conceptual Amendment 1. Delete on page 2, line 31, and on page 3, lines 1 through 6. Renumber the following section accordingly. CHAIRMAN KOTT said there is a motion to delete subsection (10) in Section 2. He said he would object for the purpose of discussion. REPRESENTATIVE ROKEBERG said, "There were some questions about the whole broad scope of what (indisc.). Then there is judicial language about -- for example, `Without materially sacrificing competency or performance.' There was a question about defining what that meant. And also, without materially -- and the question being materially increasing the cost to the board, which we had testimony - really was the difference between retail and wholesale purchase of large blocks of securities and the like. Additionally, Mr. Chairman, I think the intent of the bill is meritorious and that language is set forth somewhat differently in subsection (11) of the CS which is allegedly language from the Permanent Fund Dividend Program, recommending in-state investments and use of in- state investment vehicles as much as possible, insofar as they're consistent with investment policies established by the board. So the thrust of the bill is maintained in subsection (11), but the ambiguities of the language as contained in subsection (10) can be deleted, and then we can without bad conscience move this bill along if that's (indisc.) - or we could take this under further consideration." Number 1139 CHAIRMAN KOTT said if subsection 10 is removed, we would be left with the status quo. This is what the board is operating under currently as far as their authority. Chairman Kott then withdrew his objection to the amendment. He stated he had some problems with the language "materially." Increasing it causes some concern. Chairman Kott said he doesn't know if there is anything else to substitute that with. Chairman Kott asked if there were further objections. REPRESENTATIVE ELTON said he really doesn't have an objection. He stated he thinks he'll probably vote for the amendment because it does remove some language that can create a problem. He said his feeing about the bill, in total, whether the language is removed or not is that he doesn't think it does anything at all. By removing Section 10, we've made sure it does nothing at all. He said he kind of objects to a bill that doesn't do anything. CHAIRMAN KOTT asked if there was an objection to the amendment. Hearing none, Amendment 1 was adopted. Number 1249 REPRESENTATIVE ROKEBERG made a motion to move CSHB 345(L&C), as amended, with individual recommendations and the accompanying fiscal note revisions. CHAIRMAN KOTT said there is a motion to move CSHB 345(L&C), as amended, with individual recommendations and the accompanying fiscal note. Number 1286 REPRESENTATIVE ELTON objected. He said, "This committee substitute, when we got it, without the mandated level is -- essentially does nothing. That's the way I read the bill, but lets say that it does do something that I'm missing. I mean I almost prefer having a 7 percent back in because if this does actually mean something, I don't want them doing 50 percent. So I guess I'm going to vote `No' on moving this until somebody can tell us what we're accomplishing by doing this. I mean that's the big problem I've got with this. I think now it does nothing, but if we're moving this along because it does do something, I don't want them doing it at the 50 percent level rather than the 7 percent level." CHAIRMAN KOTT said he thinks it makes a legislative statement that we would like the board, in their investment strategies, to consider in-state investments to the extent that they're available and have the same or higher expected yield with the same level of risk. REPRESENTATIVE ROKEBERG said there is "Findings and Purpose" language in the bill. Number 1398 REPRESENTATIVE KUBINA pointed out that he doesn't think the title is appropriate any longer with the amendment that passed. REPRESENTATIVE ROKEBERG said he thinks the title is O.K. the way it is. CHAIRMAN KOTT said they could check with the drafter of the bill. REPRESENTATIVE ELTON said he would maintain his objection. CHAIRMAN KOTT asked the secretary to please call the roll. Representatives Sanders and Elton were against the motion. Representatives Kubina, Rokeberg and Kott voted in favor of the motion. CHAIRMAN KOTT announced the bill didn't move. He stated you need four affirmative votes to move the bill. ADJOURNMENT Number 1640 CHAIRMAN KOTT adjourned the House Labor and Commerce Committee meeting at 3:33 p.m.