MINUTES SENATE FINANCE COMMITTEE March 7, 1996 9:15 a.m. TAPES SFC-96, #33, Side 1 and 2 SFC-96, #34, Side 1 (000-316) CALL TO ORDER Senator Rick Halford, Co-chairman, convened the meeting at approximately 9:15 a.m. PRESENT In addition to Co-chairmen Halford and Frank, Senators Donley, Phillips, Rieger, and Zharoff were present. Senator Sharp arrived as the meeting was in progress. ALSO ATTENDING: Senator Torgerson; Representative Ogan; Tom Garrett, Director, Division of Tourism, Dept. of Commerce and Economic Development; Wendy Wolf, Programs Manager, Division of Tourism, Dept. of Commerce and Economic Development; Catherine Reardon, Director, Division of Occupational Licensing, Dept. of Commerce and Economic Development; Bob Stalnaker, Director, Division of Retirement and Benefits, Dept. of Administration; Ken Taylor, Deputy Director, Division of Wildlife Conservation, Dept. of Fish and Game; Barbara Gabier, Program Coordinator, Division of Occupational Licensing, Dept. of Commerce and Economic Development; Nancy Weller, Medical Assistance Administrator, Division of Medical Assistance, Dept. of Health and Social Services; Gordon Evans, representing the Health Insurance Association of America; Harlan Knudson, Alaska State Hospital & Nursing Home Association; Mike Greany, Director, Legislative Finance Division; Bruce Richards, aide to Senator Salo; and aides to committee members and other members of the legislature. ALSO PARTICIPATING VIA TELECONFERENCE FROM KODIAK: Joe D'Amico, Commander, Commercial Crimes Bureau, Division of Fish and Wildlife Protection, Dept. of Public Safety; and Dick Rottrer. SUMMARY INFORMATION SB 86 - COMMEMORATIVE GOLD RUSH LICENSE PLATES Testimony was presented by Tom Garrett and Wendy Wolf of the Dept. of Commerce and Economic Development. The bill was then held in committee for comments by the sponsor and an updated fiscal note (showing revenue projections) from the Dept. of Public Safety. SB 193 - MANDATORY INSURANCE FOR COSTS OF BIRTH Testimony was presented by Bob Stalnaker, Nancy Weller, Gordon Evans, Harlan Knudson, and Bruce Richards. The bill was subsequently held in committee for further discussion. SB 241 - STUDDED TIRES ON STERLING HIGHWAY Testimony was presented by the sponsor, Senator Torgerson. The bill was then REPORTED OUT of committee with a unanimous "do pass" recommendation and zero fiscal notes from the Dept. of Public Safety and the Dept. of Transportation and Public Facilities. HB 335 - BIG GAME COMMERCIAL SERVICES BOARD Discussion was had with Representative Ogan, Ken Taylor, and Catherine Reardon. Commander Joe D'Amico and Dick Rottrer listened via teleconference from Kodiak. SCSCSHB 335 (Fin) (version W, 3/7/96) was ADOPTED with a technical amendment on page 8. In response to concerns cited by the Director of Occupational Licensing, she was asked to provide proposed amendments relating to (a) differentiation of fees between resident and non-resident guides, (b) definition of "biologist," and (c) revised language eliminating "a written and oral" from statutory language pertaining to the examination for a registered guide license. The bill was then held in committee for further review. SENATE BILL NO. 241 An Act relating to the use of studded tires on the Sterling Highway. Co-chairman Halford directed that SB 241 be brought on for discussion. SENATOR JOHN TORGERSON, sponsor of the legislation, came before committee. He explained that the bill would cure a problem on the Sterling Highway. Because current law establishes a different time frame for use of studded tires on the southern peninsula portion of the highway between Ninilchik and Homer, those driving from Anchorage to Homer are legally required to change tires in Ninilchik in order to complete the journey to Homer, and reverse the process when returning to Anchorage. The law is presently being ignored, but the statutes should be corrected. Senator Torgerson referenced an earlier fiscal note by the Dept. of Transportation and Public Facilities indicating fiscal impact. The department has since changed the fiscal note to zero. Senator Donley MOVED that SB 241 pass from committee with accompanying zero fiscal notes. No objection having been raised, SB 241 was REPORTED OUT of committee with a unanimous "do pass" recommendation and zero notes from the Dept. of Transportation and Public Facilities and the Dept. of Public Safety. SENATE BILL NO. 86 An Act relating to issuance of special request commemorative gold rush motor vehicle license plates. Co-chairman Halford directed that SB 86 be brought on for discussion. TOM GARRETT, Director, Division of Tourism, Dept. of Commerce and Economic Development; and WENDY WOLF, Programs Manager, Division of Tourism, Dept. of Commerce and Economic Development, and Co-chair, Alaska Gold Rush Centennial Task Force; came before committee. Ms. Wolf attested to a close working relationship between the division and the Yukon as a result of the successful highway anniversary promotion. She also advised of a cooperative agreement with Yukon and British Columbia Tourism North to build upon the gold rush anniversary as another means of creating tourism opportunities, increasing highway travel, and providing Alaskans an opportunity to learn about state history. The task force began to form in 1992. It has involved over a hundred individuals, statewide, via teleconference. The effort is conducted within existing funding for the division's office of history and archaeology. In 1994 the legislature, by resolution, recognized the gold rush centennial and the role of the task force to coordinate statewide activities. Ms. Wolf referenced distribution of an annual newsletter and report and a series of community grants as evidence of ongoing efforts. She further advised of design of a logo and development of a press kit in conjunction with the Alaska Tourism Marketing Council and the state library. She then distributed a press kit for members' review. The public relations program grew as communities offered funding in support of state efforts. That enabled the division to go on line and share a page with the Yukon Territory, establish a recognition program for pioneers and historic properties, provide for coordination of museum and symposium planning, etc. Interest in the centennial is high. The license plate made available through SB 89 is a cost effective marketing tool. After sale of the first 260 plates (at $30 a set), the state will break even. Those purchasing subsequent plates will pay for the cost of the program. Ms. Wolf urged support for the bill. Senator Donley commented on lack of estimated revenue on 1995 fiscal notes. Co-chairman Halford concurred. He further noted analysis language saying that "A revised fiscal note will be submitted to reflect new general fund revenue." He then observed that since there is no subsequent note, the status of the Dept. of Public Safety fiscal note is unknown. The Co-chairman estimated that sale of $30 sets of plates which cost $2.60 to produce would result in a positive fiscal note of $15.0 to $18.0. A fiscal note must be provided before the bill can move from committee. Co-chairman Frank referenced previously proposed legislation requiring vehicles to have only one license plate and suggested that perhaps that provision could be incorporated within the present bill. He expressed need to discuss that possibility with the sponsor. As an alternative, he subsequently recommended that the centennial gold rush license plate become standard issue. Mr. Garrett voiced appreciation for that approach, characterizing it as "our ultimate marketing dream." In response to a question from Senator Zharoff, Ms. Wolf said that the decade of gold rush plates would extend to 2004. Discussion followed between Ms. Wolf and Senator Randy Phillips regarding division efforts during the Alaska Highway celebration. She advised that perceived problems stemmed from the fact that the Yukon expended considerably more on the effort than did Alaska. Co-chairman Halford directed that SB 86 be held in committee pending receipt of an updated fiscal note and attendance by the sponsor, Senator Sharp. SENATE BILL NO. 193 An Act requiring insurance coverage for certain costs of birth; and providing for an effective date. Co-chairman Halford directed that SB 193 be brought on for discussion. BRUCE RICHARDS, aide to Senator Judy Salo, came before committee. He explained that the bill would require 48-hour mandatory coverage of postpartum hospitalization and medical care for a mother and new-born baby for regular vaginal delivery and 96 hours for a Cesarean section. The legislation was introduced in response to a call from a constituent who was not authorized to remain in the hospital after 24 hours and did not believe she was ready to be discharged. Review of the situation indicates this is becoming a nationwide issue. Six states have passed similar legislation, and it is under consideration in 16 others. Mr. Richards referenced subsection (c), commencing at page 1, line 13, and stressed that the bill does not require mothers and infants to remain in the hospital for 48 or 96 hours. If the mother and physician are in agreement, discharge may occur prior to stated time frames. Senator Donley expressed concern over "to what great lengths insurance companies go to avoid providing coverage" and noted that statutory language has previously been twisted in dramatic ways. GORDON EVANS, Health Insurance Association of America, came before committee voicing opposition to the bill. He said the association opposes all legislation which mandates coverage since it tends to raise costs. The instant bill would merely add another law to cure a non-existent problem in Alaska. Mr. Evans pointed to great strides made by the health care industry in providing and delivering quality care at reduced costs. One means of achieving the reduction was to lower the number of in-patient hospital stays for a variety of illnesses, including the length of maternity stay. The average stay for maternity is not the result of a change in policy by insurance companies but the result of a long trend of steady decline. The average stay for vaginal delivery was 4 days in 1970, 2.2 days in 1988, and 2 days in 1993. That decline is consistent with the decline for other services, due to increased medical knowledge and advances in patient care. Mr. Evans acknowledged that the health care industry has not gotten across some key points in "this mostly emotional issue." The issue does not involve debate about "covering medically necessary care." If hospital care is necessary, insurers will cover it for as long as needed. The real issue is whether, and how, insurers and policy holders should cover care that is not medically necessary or which does not need to be provided in an unduly expensive setting such as a hospital versus a home or hotel. Critics of early discharge fail to understand that not paying for unnecessary care or care in unnecessary settings is what enables insurers to offer numerous other services managed care programs provide. Mr. Evans cited "well-baby," dental, and vision coverage as examples. He stressed that "nobody wants a discharge program that jeopardizes the health of a mother or child." The industry would not be utilizing early discharge programs if they were not medically safe. There is a lack of data indicating that early discharge before 48 hours after vaginal and before 96 after a Cesarean section is harmful or unsafe for the mother or baby. Advocates of proposed new mandates within CSSB 193 (L&C) have provided no evidence that insurance companies doing business in Alaska are systematically requiring mothers and infants to be discharged before they are medically ready. There is no empirical evidence to suggest how long a hospital maternity stay should be. The American College of Obstetricians and Gynecologists suggests that: There is relatively little scientific data on the ideal length of hospital stay for delivery. The American Medical Association has taken a similar position. The Health Insurance Association of America believes that services and length of hospital stay for mothers and infants should be determined on a case-by-case basis and on medical necessity for both mother and child as determined jointly by a mother and her doctor. Co-chairman Frank voiced his understanding that if a doctor now determines that a woman should remain hospitalized for longer than 48 hours following a regular birth, no insurance company now doing business in Alaska would refuse to cover that care. Mr. Evans concurred in that understanding. Discussion followed concerning the situation which gave rise to introduction of the legislation. Mr. Evans advised that one of Senator Salo's constituents indicated she was forced to leave the hospital before 24 hours. He acknowledged that an isolated case of early discharge might have occurred, but he said he had no knowledge of such a case. No complaint was filed with the Division of Insurance. NANCY WELLER, Medical Assistance Administrator, Division of Medical Assistance, Dept. of Health and Social Services, came before committee in response to a question from Senator Rieger asking if the proposed bill would impact Medicaid. She explained that while it is unclear whether or not there will be impact, and the sponsor has requested a legal opinion, impact is not anticipated because the legislation does not require hospitalization. The bill speaks to hospitalization or medical care for a certain number of hours following delivery. The Medicaid program provides 24 hours of in-patient care for vaginal delivery and 72 hours for a Cesarean section without a request for prior authorization for extended stay. If the physician feels the mother needs to remain hospitalized for a longer period, the professional review organization is called, medical information is shared, approval is obtained, and Medicaid pays for the care. Medicaid also provides for "any medically necessary services for the pregnant woman and the child following delivery." If the mother is only Medicaid eligible because she is pregnant, she "gets two months of all health care services covered by the program following discharge from the hospital." Senator Rieger voiced his understanding that should Medicaid be impacted by the proposed bill, current program procedures would remain unchanged. Mrs. Weller concurred, advising of her understanding that the bill does not require 48 hours of hospitalization. In response to a question from the Senator, Mrs. Weller said that children born to women on Medicaid receive "an automatic one-year coverage of Medicaid without reapplying for coverage." In response to questions from Co-chairman Frank, Mrs. Weller explained that Medicaid policies are similar to those of insurance companies in terms of provision of 24 hours of care for vaginal delivery in a hospital. If the mother requires additional care, the physician calls and requests permission for an extended stay. The Co-chairman advised of his understanding that the legislation would require that the mother remain in the hospital for 48 hours unless she and the physician agree on earlier discharge. Since that appears to differ from present Medicaid policy in terms of length of stay and pre-approval for an extended stay, it is difficult to understand why no cost would be involved. Mrs. Weller reiterated that the bill does not mandate an in- patient setting. It is thus questionable whether there will be impact on the program. Co-chairman Frank referenced the sponsor's intent that the patient remain in the hospital rather than merely under a doctor's care. Bruce Richards returned before committee to explain that the term "medical care" would cover home visits and return visits to the doctor. Co-chairman Frank again questioned the fact that the bill appears to mandate 48 hours while Medicaid specifies 24 hours, with prior approval for exceptional cases. He suggested that should the proposed bill pass, there would be an inconsistency between what private health care providers are required to cover and what Medicaid provides. At the present time, private insurance and Medicaid appear to be comparable. Should the proposed bill pass, Medicaid would become substandard relative to the new mandate. Mr. Richards voiced his belief that the proposed bill would cover Medicaid. He suggested there would be no increase in costs because Medicaid is living up to the spirit of the law at the present time. Authorization after 24 hours is forthcoming under Medicaid. Medicaid also pays for medical care once the patient is discharged. In response to additional questions from Co-chairman Frank, Mr. Richards explained that the proposed legislation responds to "a small problem in Alaska." It is more prevalent in the "Lower Forty-eight" due to health maintenance organizations. The intention is to "nip this problem in the bud." Some places in California are discussing discharge as soon as six hours after delivery. While no evidence indicates 48 hours is the "magic number," there is also no evidence to suggest that early discharge is safe. The American Academy of Pediatrics has asked for a moratorium on the issue. Co-chairman Frank advised of difficulty envisioning a situation in which a doctor recommends continued hospitalization but the hospital nevertheless discharges the patient. Mr. Richards said that the question is not whether the individual will be discharged but "Who is going to pay for the coverage if they stayed longer." People pay for medical insurance to cover situations such as that. Amendments contained within the proposed bill relate to the insurance title rather than health codes. Senator Rieger asked if reference to "insurer" would cover HMOs. Mr. Richards responded affirmatively. In response to a further question from Senator Rieger, Mr. Richards stressed that the proposed bill does not require a patient to remain in the hospital for 48 hours. Under bill language, the decision to leave earlier would be made by the patient and her doctor. Language commencing at page 1, line 14, and carrying over to page 2, lines 1 and 2, reflects the sponsor's intent that the decision be made by both the patient and doctor in consultation with one another. Senator Rieger referenced correspondence from a pediatrician who indicated that the best way to ensure a baby gets off to a healthy start is follow-up visits, especially in the first week. That is what is most commonly not covered by insurance. Mr. Richards explained that lack of bill provisions relating to follow-up care reflects Alaska's geography and the manner in which health care is provided across the state. Co-chairman Frank voiced reluctance to place arbitrary time periods in statute. He then questioned why the decision on length of stay should not be left to the doctor to decide. END: SFC-96, #33, Side 1 BEGIN: SFC-96, #33, Side 2 The Co-chairman next asked how a stay beyond 48 hours would be covered. Mr. Richards responded that most insurance companies would cover medically necessary costs. Co-chairman Frank suggested that the focus of the bill is "this feeling that the mother may not be ready to leave" rather than reliance on a medical professional's opinion. Mr. Richards explained that the physician would consult with the patient prior to making a decision. That is why bill language relates to a decision by the mother and the "health care provider" rather than the doctor alone. Co-chairman Frank suggested that a specific time frame might not be necessary if the decision is left to the doctor. That appears to be more logical than placing an arbitrary limit in statute. Mr. Richards reiterated that the bill deals only with who is going to pay for the initial 48 hours. Co- chairman Frank again voiced concern over legislative mandate of a specific time frame, saying that it moves away from the professional judgment aspect of individual cases. Individuals want insurance to cover costs, and costs should be medically reasonable and necessary. Senator Sharp inquired regarding the frequently of incidences in which a physician has recommended a stay longer than 24 hours for which an insurance company has refused to pay. Mr. Richards described that occurrence in Alaska as "very small." The problem is growing outside of Alaska and only starting to show here. BOB STALNAKER, Director, Division of Retirement and Benefits, Dept. of Administration, next came before committee. Co-chairman Halford referenced fiscal note information estimating a monthly per-employee charge of $1.78. Mr. Stalnaker explained that the $104.0 note (dated 2/21/96) stemmed from analysis of potential impact of increased hospital stays. Numbers were predicated on what the department thinks experience will be. State plans are experience rated. In such situations, it is common for the department to show costs in the analysis section. Mr. Stalnaker directed attention to an updated zero fiscal note and referenced amounts set forth within analysis language. The current plan pre-certifies pregnant women for one day for a vaginal delivery. If complications arise, coverage is not denied, regardless of the length of stay, if there is medical necessity. Experience shows that most women who go to the hospital for delivery want to leave as quickly as possible. Mr. Stalnaker said he was unaware of individuals or physicians disagreeing with the present approach. He subsequently noted that he knew of one case where the individual was upset because she was not pre-certified for two days. Mr. Stalnaker acknowledged attempts in California to bring the time down to six hours. With increased managed care there is a "tendency to try to squeeze it as much as possible." What is happening nationally is a reaction to that. There is a reasonable point somewhere. That is why the department is neutral on the proposed bill. Mr. Stalnaker advised that he was not aware of any cases where the state disagreed with a doctor on what was prescribed for a particular patient. Co-chairman Frank said he was more comfortable leaving the decision on length of stay to the doctor's discretion rather than mandating a minimum. Senator Rieger inquired concerning the co-payment for an extended stay. Mr. Stalnaker advised of an 80% co-payment per the state health plan. A state employee can purchase an addition 10% coverage. The co-payment applies to any services, including delivery. Senator Rieger suggested that at a market cost of $600 a day for hospitalization, mothers would not frivolously remain if the extended stay would cost them $120. Mr. Stalnaker concurred, saying that the foregoing was considered when the department analyzed the bill. While experience might raise costs, the department does not know what those costs might be. It is not reasonable to assume that a mother would want to incur additional, unnecessary costs. He acknowledged that the legislation might not measurably impact the plan. However, it could increase stays. That will not be known until the department has some experience with the issue. Senator Rieger voiced his understanding that under the status quo, which is policy rather than law, the stay is 24 hours. It is then up to the discretion of the doctor, only, for the patient to remain beyond that time. Should the proposed bill become law, remaining for the next 24 hours would be up to the discretion of the doctor and the patient. Hospitalization beyond 48 hours would, again, be up to the discretion of the doctor. Mr. Stalnaker concurred. Senator Rieger then voiced his belief that, in light of the co- payment, it is unlikely there will be great impact from the bill. Brief discussion of co-payments for insurance plans followed between Co-chairman Frank and Mr. Stalnaker. HARLAN KNUDSON, Alaska Hospital and Nursing Home Association, next came before committee, voicing support for the bill. He acknowledged pressure on both insurers and health care providers to lower costs. He questioned the qualifications of both himself and committee members to deal with an issue involving women and infants. He further attested to a lack of understanding of conditions in Alaska by out-of-state insurance companies when a physician calls to request authorization for extended hospitalization. He urged that members discuss the legislation with their wives, mothers, and sisters prior to a vote. When Senator Rieger asked about the actual cost of an extra hospital day, Mr. Knudson noted that, in delivery of care, hospitals tend to bunch charges into the first day. Subsequent days are generally less costly. Co-chairman Halford referenced the updated fiscal note reflecting impact of $125.0 to $250.0 in the analysis portion and questioned whether figures should be presented in that fashion or spread across cost columns. He said he was not convinced that notation in the analysis portion meets the letter of fiscal note law. He acknowledged, however, that that policy issue is not unique to the proposed bill. Discussion followed between Co-chairman Frank and Mr. Stalnaker regarding the impact of health care cost increases on the state plan. In the course of his comments, Mr. Stalnaker described deductibles and caps as methods of cost control. Further discussion followed concerning insurance provisions of state agreements with five employee labor unions and the commissioner's plan which covers non-union employees. Mr. Stalnaker noted that the state has experienced three years of no cost increases. The dynamics of health insurance increases "are starting to hit the plan again." The proposed bill will not "matter in the big scheme of things." It will not have material impact on the plan as a whole. Co-chairman Halford directed that the bill be held for further review. CS FOR HOUSE BILL NO. 335(RES)(title am) An Act extending the termination date of the Big Game Commercial Services Board; eliminating the requirement for a commercial use permit and for payment of commercial use permit fees; amending the membership of the Big Game Commercial Services Board; relating to the qualifications for an assistant guide-outfitter license; eliminating the requirement for testing of assistant guide-outfitters; providing for additional licensing requirements for transporters; eliminating the requirement for prior approval to enter or remain on state and federal land; eliminating the requirement to register base camps; amending the definition of 'big game commercial services'; and providing for an effective date. Co-chairman Halford directed that CSHB 335 (Res)(title am) be brought on for discussion and referenced a draft SCS CSHB 335 (Fin) (9-LS1156\W, Utermohle, 3/7/96). REPRESENTATIVE SCOTT OGAN, sponsor of the legislation, came before committee and explained that under the proposed draft: 1. Authority to license guides is given to the Dept. of Commerce and Economic Development. 2. Basic statutory definitions for guides remain. New language says that a person who has been convicted of a felony in the last ten years cannot qualify for a guide license. 3. Assistant guides may be hired without a test, upon recommendation of a guide. That is a significant, positive change. 4. Provisions for class-A guides will encourage rural employment. A class-A guide is someone who has lived or hunted in the area for ten years and lives in the local area. 5. Game biologists are precluded from becoming a guide for twelve months after employment by the Dept. of Fish and Game in areas in which they worked and studied. An individual employed by the state to study animals in an area has an unfair advantage to subsequently exploit the wildlife. Existing law prohibiting a fish and wildlife enforcement officer from becoming a guide prior to three months after concluding employment is retained. 6. The level of accountability for transporters, in terms of violations, is raised to the same level as guides. 7. Language within insurance provisions is changed to require proof of financial responsibility. 8. The time that an individual may operate an airplane incidental to guide activities is increased from 250 to 500 hours. 9. Authority is given to the Dept. of Commerce and Economic Development to discipline guides convicted of violations. 10. Guide-use areas are retained. However, guides will not have to report to the department or get a permit from the department for a guide-use area. Guides will have to be in three use areas. They will simply have to notify protection when they wish to change, and they may change once every calendar year. 11. Statutory language regarding what a guide may do and what a transporter may not do is expanded so that there is no cross-over between the two. 12. Retroactive authority is provided to those who were licensed since the old board was sunset. 13. Wage and hour provisions exempt assistant guides from overtime--similar to provisions for fishermen, agriculture, and various other occupations. 14. The commercial-use permit is eliminated. The industry has complained for many years that it is difficult to get assistant guides because of testing requirements. A guide is legally responsible for action in the field as if he were committing each act himself. He is thus responsible for not only the actions of his assistant guides but those of his clients. With that level of responsibility, guides should be able to hire whomever they wish. Representative Ogan directed attention to a needed change at page 8, line 11, and recommended removal of "at all times." He explained that it is impractical for a registered or class-A assistant guide to be physically present with the assistant guide "at all times." Supervision by a registered guide or class-A assistant is acceptable. Co-chairman Halford noted that after the recommended deletion language would remain as it is in current law. Senator Sharp voiced his understanding that mandated insurance requirements had expired. He then asked if current provisions for insurance or proof of financial responsibility were the only insurance provisions. Representative Ogan responded affirmatively. Senator Sharp attested to several guides who conducted two or three hunts a year who had to go out of business because they could not afford the mandated insurance. Senator Randy Phillips MOVED for adoption of SCS CSHB 335(Fin) (Version W, dated 3/7/96) with the technical change recommended by Representative Ogan at page 8, line 11. No objection having been raised, SCS CSHB 335 (Fin) was ADOPTED. In response to a question from Senator Zharoff, asking why deleted language was included in the draft, Co-chairman Halford explained that the intent is that the level of supervision for assistant guides be higher than supervision required for class-A assistant guides. Original language adopting class-A assistant guide provisions was intended to encourage the hire of long-time residents in game management units. The attempt was to keep local people in local hunting areas involved. The Co-chairman reiterated that the level of supervision for a class-A assistant guide should be less than supervision required for an assistant guide. That provides an advantage to hiring and keeping class-A assistant guides. Senator Zharoff asked if the forgoing would allow a guide to supervise from "a penthouse in San Francisco." Co-chairman Halford acknowledged that the board discussed the issue of supervision for many years. The rule in the old system was that a class-A assistant guide could be running a camp as long as the contracting, registered, or master guide had contracted the hunt and was actively involved in the hunt at some point. An assistant guide had to have contact on a regular basis with the contracting guide or a class-A assistant guide. Representative Ogan noted that during his term as a public member on the guide board, the standard was that the registered guide had to be in the camp at least once during each hunt. Under the proposed bill, a class-A assistant guide may supervise an assistant guide in the field. Senator Rieger asked if others associated with the camp (the cook and packers) would have to be licensed. Representative Ogan responded negatively. Only those who help pursue, stalk, take or actively engage in hunting must be licensed. Referencing language at page 17, subsections (A) through (G), Representative Ogan explained that he lifted language from existing regulations and placed it in statute. Established practices needed statutory classification. KEN TAYLOR, Deputy Director, Division of Wildlife Conservation, Dept. of Fish and Game, came before committee. He said that while he had only recently received a copy of the draft committee substitute, initial review indicates that it is "a lot cleaner than existing law." Requirements removed from existing law (the operations plan was cited) will not significantly impact management. The Dept. of Public Safety and division of fish and wildlife enforcement would have to address impact as well. Senator Zharoff referenced the license fee structure on page 16 and asked if it differentiates between residents and non- residents. Co-chairman Halford answered negatively. He acknowledged discussion of a differential. For many years, a registered guide or master guide had to be an Alaska resident. That was lost in a constitutional question because guiding is a commercial activity. He then suggested that there could be a ratio of fees between resident and non-resident guides and transporters. END: SFC-96, #33, Side 2 BEGIN: SFC-96, #34, Side 1 The Co-chairman advised that language could specify that non-resident fees in each category are four times the fee for a resident. Senator Zharoff suggested that the committee review that possibility and make provisions consistent with other areas where non-resident fees are different from those paid by residents. CATHERINE REARDON, Director, Division of Occupational Licensing, Dept. of Commerce and Economic Development, next came before committee. She said the department had not yet had an opportunity to examine the details of the draft bill, take an official position, or prepare fiscal notes. She acknowledged that the legislation would have fiscal impact on the Dept. of Commerce and Economic Development as well as the Dept. of Public Safety (due to elimination of commercial use permits that previously generated enforcement funds). Ms. Reardon next noted areas within the draft giving rise to questions and cited provisions requiring "fine tuning:" Page 3, Line 4, language relating to "written or oral" examinations would be more manageable if it simply said "an examination." Oral exams are difficult to administer to larger groups or in rural areas. Co-chairman Halford asked that the department prepare an amendment reflecting the change. He acknowledged that cited language was designed for administration by a peer review board and was more cumbersome than it needed to be. Page 8, Line 10, language relating to supervision of assistant guides is of concern. There is need for clarification. The department would prepare regulations defining what supervision means. At the present time, class-A and assistant guides both have the same supervision requirements. The guide has to show up once during the hunt. Ms. Reardon advised of her understanding of foregoing discussion to be that class-A guides should require less supervision than assistant guides. Language at Page 7, Line 22, says that class-A guides may take charge of a camp and conduct guide activities without the registered guide being present in the area, as long as the registered guide is supervising. If it is the intention that assistant guides not be able to do so, it would be helpful if bill language at page 8 says that an assistant guide cannot take charge of a camp. Otherwise, supervision could be construed as supervision from a distance. If the goal is to make class-A guides more appealing to the employer, it would be helpful if lack of independent authority for an assistant guide was clarified. Page 7 licensing requirements for class-A guides. Ms. Reardon noted two methods of attaining a class-A license under current law: 1. Employment one season as an assistant guide plus ten years of hunting experience in the game management unit, or 2. Physical residency in the game management unit and fifteen years of hunting experience in the unit. If the legislature wishes to place a premium on those who reside in the game management unit, option number two should be the only method of attaining that license. Page 8 language relating to game biologists needs a definition of "game biologist." Co-chairman Halford asked that Ms. Reardon provide appropriate language. He explained that the provision is simply intended to prohibit an individual employed by the state to gather information from immediately using that information in a private business venture. Page 10, Line 25-26, insurance requirements speak to proof of financial responsibility of $100.0. Ms. Reardon questioned what type of proof the individual would have to submit to the department (a list of assets, something from an accountant, etc.). Should the department check to determine if the assets are available every two years? There are some administrative logistics that need to be worked out. Page 12, Line 10, subsection (e) relating to inability of the department to discipline a transporter for violations committed by his or her employee. Co-chairman Halford subsequently voiced intent that both registered guides and transporters be treated equally in terms of responsibility for their employees. In response to a question from Senator Zharoff, the Co-chairman advised that transporters are responsible for reporting violations of which they are aware. They are, however, not actively involved in the field. A transporter would be in violation if he or she knowingly transports an illegal animal and does not report the violation. Language pinpointed by Ms. Reardon appears to be a drafting error. It was intended that the responsibility levels be comparable and commensurate with ability to both report violations and "know what was going on." Page 14, Line 30, language says that "guides" are responsible for assistant guides. Page 19 reference to wage and hour law should be discussed with staff from the Dept. of Labor. Co-chairman Halford noted that the industry has had problems with the issue in the past. The proposed bill includes a limitation of 60 days a year. The existing exemption for fishery processing workers and other exemptions are "wide open." The language applies only to licensed personnel, in the employ of licensed personnel, and "only for a maximum of 60 days . . . ." It thus relates to limited, seasonal employees in a very specific area. Cooks and other unlicensed personnel would not be covered by the exemption. Ms. Reardon referenced earlier discussion of resident and non-resident fees and advised that it would be helpful if the differential was placed in statute, or the department will establish one, across-the-board, consistent fee. Ms. Reardon referenced a program with language saying that out- of-state collection agency fees are twice as high as in state. Co-chairman Halford again asked that the department prepare amending language and a position paper concerning whether the department would support the differential between residents and non-residents. Senator Sharp suggested that definition of a non-resident track with one-year residency requirements for purchasing a hunting license. Co-chairman Halford responded that the effort could be tried. He acknowledged a possible constitutional question because a hunting license is a privilege, not a right. A commercial activity is usually more suspect when residents are preferred over non- residents. Senator Rieger referenced old law relating to guides and guide-outfitters and asked what changes are proposed in the instant bill. Co-chairman Halford explained that in the late 1980s, the law was changed to include the term "outfitter" with the term "guide" because the term "outfitter" is used outside of Alaska to denote one who provides both outfitting and guiding services. The proposed bill reverts to original definitions and original language. He suggested, however, that the members might wish to include a prohibition on use of the term "outfitter" by someone who is not a registered or master guide, as it applies to big game hunting. Senator Rieger cited an example of an individual who does not actually guide the hunt (stalk the animal) but flies a hunter to a location and provides a camp and asked if the provider would be regulated as a guide under the proposed bill. Co-chairman Halford voiced intent that the provider be treated the same. If the transporter is operating in air commerce, the transporter would have to have an air taxi license. If one provides services in the field in actual pursuit of game, a guide license is required. Senator Rieger asked if that includes setting up the camp. Co- chairman Halford responded negatively, advising that a section within the proposed legislation deals specifically with that activity. Senator Rieger directed attention to Page 17, Line 18, and referenced the definition of "outfit." He also referenced language at Page 5, Line 27, which says a registered guide may contract to guide or outfit hunts. He then noted that language appears to indicate that outfitting is guiding and asked if that is a change from the status quo. Co-chairman Halford advised that it is the intent to maintain the status quo in those three areas. He said he would further review the draft to ensure that is the case. Catherine Reardon remarked that brief review of the draft indicates that the current situation is unchanged. She clarified that under current law, one who flies hunters in and drops them off must have a transporter license. One who flies hunters into a camp set up and established by the transporter must also have a guide license. That would continue to be required under the proposed draft. Co-chairman Halford acknowledged the participation of JOE D'AMICO, Commander, Commercial Crimes Bureau, Division of Fish and Wildlife Protection, Dept. of Public Safety, via teleconference from Kodiak. The Co-chairman then advised that the bill would be held for further review. ADJOURNMENT The meeting was adjourned at approximately