SENATE LABOR AND COMMERCE COMMITTEE February 11, 1999 1:35 p.m. MEMBERS PRESENT Senator Jerry Mackie, Chairman Senator Dave Donley Senator Loren Leman MEMBERS ABSENT Senator Tim Kelly, Vice Chairman Senator Lyman Hoffman COMMITTEE CALENDAR SENATE BILL NO. 29 "An Act relating to licensure of physicians; and providing for an effective date." -HEARD AND HELD SENATE BILL NO. 54 "An Act relating to an exemption from and deferral of payment on municipal taxes on deteriorated property; and providing for an effective date." -HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION SB 29 - No previous Senate action. SB 54 - No previous Senate action. WITNESS REGISTER Mark Hodgins, Legislative Aide Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified for the sponsor of SB 29 Catherine Reardon, Director Division of Occupational Licensing Dept. of Commerce & Economic Development PO Box 110806 Juneau, AK 99811-0806 POSITION STATEMENT: Supports SB 29 Harold Johnston, M.D. 3546 Latouche Anchorage, AK 99508 POSITION STATEMENT: Commented on SB 29 Don Hudson 6625 Cimarron Anchorage, AK 99504 POSITION STATEMENT: Opposed to SB 29 Steve Van Sant Division of Municipal & Regional Assistance Dept. of Community & Regional Affairs 333 W 4th Ave, Ste 220 Anchorage, AK 99501-2341 POSITION STATEMENT: Commented on SB 54 Pat Carlson Kodiak Island Borough Assessor 710 Mill Bay Rd Kodiak, AK 99615 POSITION STATEMENT: Commented on SB 54 ACTION NARRATIVE TAPE 99-2, SIDE A Number 001 CHAIRMAN MACKIE called the Senate Labor and Commerce Committee meeting to order at 1:35 p.m. Present were Senators Leman, Donley, and Chair Mackie. The first order of business to come before the committee was SB 29. SB 29-REQUIREMENTS FOR PHYSICIAN'S LICENSE MARK HODGINS, legislative aide to Senator Jerry Ward, sponsor of SB 29, made the following comments about the measure. SB 29 will increase the time limits from one to three years for an applicant to satisfactorily perform the duties of resident physician or intern at a recognized hospital. SB 29 will amend current Alaska statute to read, "...lawfully residing in the United States," to comply with the 1996 federal immigration law. That law proposes a new class of VISA called an H1B; currently most foreign doctors train in the United States under a J1 VISA. The Alaska medical board would prefer SB 29 to be more comprehensive, however Senator Ward chose to keep the focus of CSSB 29 narrow to enhance its chance of passing both houses. The Alaska medical board is very interested in getting SB 29 enacted. He asked committee members to adopt the committee substitute as the working document of the committee. SENATOR DONLEY moved to adopt CSSB 29(L&C). There being no objection, the motion carried. Number 050 SENATOR LEMAN asked Mr. Hodgins to provide the sections of the '96 federal act that require changes to Alaska statute. MR. HODGINS offered to do so at a later date. He explained CSSB 29(L&C) will require foreign-trained doctors, who want to work in the United States, to train in Alaska for a longer period than domestic medical students, so that they can be monitored for adequate training. The Alaska medical board is concerned about training received abroad, and it also wants to recognize the fact that two years of training is sufficient for American and Canadian trained interns. SENATOR LEMAN asked if the changes in CSSB 29(L&C) go beyond the 1996 immigration act changes. MR. HODGINS said they do not. SENATOR LEMAN noted the Alaska Medical Board's position on SB 29 is not obvious from Dr. Isto's letter. MR. HODGINS responded the Alaska medical board wanted the bill to contain a one year of training period for physicians trained prior to 1988, however Senator Ward felt that requirement could be put into regulation at the direction of the medical board. Number 110 SENATOR LEMAN asked Mr. Hodgins to respond to the letter from Dr. Byron Perkins. MR. HODGINS replied the Alaska medical board members are not 100 percent behind any one given plan regarding adequate training periods, i.e. bush doctors on the medical board are concerned about creating too big of a hurdle for doctors seeking to practice in the bush. The board as a whole felt this legislation addresses some of its concerns regarding training requirements. Senator Miller plans to introduce legislation to help solve some of the board's other concerns. SENATOR LEMAN asked if the '96 immigration act provisions apply to other professionals and whether the committee should be looking at a fix for those professions as well. MR. HODGINS stated he believes the act does affect other professions, however he repeated Senator Ward chose to keep the scope of SB 29 narrow. CHAIRMAN MACKIE clarified that the committee substitute adopted by the committee is the "G" version. He also noted Dr. Byron's and Dr. Anschuetz's letters would be kept on record in the committee file. MR. HODGINS stated Dr. Anscheutz appears to be concerned with opening the floodgates to immigrants into Alaska which Senator Ward does not see as a problem at this time. CHAIRMAN MACKIE asked if the committee substitute addresses Dr. Byron's concern about the adverse effects on the Alaska Family Practice Residency at Providence Hospital. MR. HODGINS thought Dr. Byron's letter was directed to SB 29, and noted the committee substitute does not make substantial changes from the original bill; it further defines the training requirements and steps to physician licensure. Number 187 SENATOR LEMAN pointed out that Mr. Hodgins stated the committee substitute contains only those provisions required for Alaska compliance with the 1996 immigration act. He questioned whether this bill affects domestic as well as foreign applicants since Section 2, relating to qualifications for osteopath applicants, increases the time of internship from one to two years for non- foreign graduates. MR. HODGINS agreed that domestic graduates will be affected. That provision is in line with licensure requirements in other states as Alaska has one of the shortest training requirements in the United States. That change will place Alaska in the top third regarding the length of training required. Number 214 SENATOR LEMAN asked about the inclusion of a "grandfather" provision, and how physicians, who have been licensed in states that require shorter training periods, would be affected. MR. HODGINS replied the guidelines for increasing the training period for certification came from the medical board, which is not in total agreement on the issue. SENATOR LEMAN stated he is reticent to change the amount of training time required of applicants until a better consensus is reached by the medical community. Number 262 CATHERINE REARDON, Director of the Division of Occupational Licensing, Department of Commerce and Economic Development, gave the following testimony via teleconference. Dr. Isto, Chair of the Alaska medical board, has explained the board's goals in a letter submitted to committee members. SB 29 addresses three separate issues, the first being the citizenship requirement for licensure. Current law requires individuals who get medical licenses in Alaska to be permanent residents with green cards. That requirement is problematic because some qualified individuals do not have green cards, but have other types of VISA status that permit them to work here. The medical board prefers to be silent on the issue of citizenship and residency but the committee substitute is acceptable to the board. Many licensing programs do not have citizenship or residency requirements based on the premise that the Immigration and Naturalization Service oversees that aspect. CHAIRMAN MACKIE asked Ms. Reardon to provide the committee with position papers from the department and the medical board, as well as a sectional analysis of the bill and comments on Dr. Perkins' concerns. Number 325 DR. HAROLD JOHNSTON, Director of the Alaska Family Practice Residency Program, stated his concern was with the three year training period required in the original bill. The change in the committee substitute to two years ranks Alaska as 7th in length of postgraduate training requirements for U.S. graduates. He agrees with the concept that foreign medical graduates should have a longer training period prior to licensure. He believes there is merit to the argument that physicians practicing in bush areas should be required to undergo two years of training because those areas offer very little in the way of support services for practicing physicians. Currently residents are licensed at the start of their second year. The issue of whether residents could bill for their services when they are in rural locations outside of the residency program during their second year could be worked out with the state medical board and other state agencies, such as the Medicaid office. DR. JOHNSTON agreed that a three year training period prior to licensure is desirable for foreign medical school graduates because it is not possible to adequately assess the quality of the medical education those graduates receive. Number 389 DON HUDSON, a practicing physician and President of the Alaska Chapter of the American Medical Association, stated both the state and national associations believe that one year of training is adequate for practice of medicine in Alaska, and that a one year rotating internship does give a broad base of knowledge to physicians. CSSB 29 addresses the additional one to three year residency. Both associations are opposed to the increased training period. MR. HODGINS asked Dr. Hudson if his concern was with the domestic requirement of two years, and not the foreign requirement of three years. DR. HUDSON said that is correct and he would like to see the domestic requirement decreased to one year. MR. HODGINS noted from the testimony received today, the conflict appears to center around the change to the domestic requirement, and not to the foreign requirement. He added he will speak to the sponsor about removing the change to the domestic requirement. CHAIRMAN MACKIE stated CSSB 29 would be held in committee while some of the concerns expressed are resolved. He asked Mr. Hodgins to provide the committee with a sectional analysis of the bill. SB 54-MUNICIPAL TAXES ON DETERIORATED PROPERTY DOUG SALIK, legislative aide to Senator Kelly, sponsor of SB 54, explained the measure as follows. SB 54 clarifies existing language in Alaska statute. It allows a total exemption from property tax, defines the time when the exemptions begin and end, and insures that both an exemption and deferral cannot occur simultaneously. He explained SB 54 addresses questions raised by the Municipality of Anchorage (MOA) regarding the legislative intent of a similar version of this bill that passed the Legislature last year. Number 443 SENATOR LEMAN agreed that SB 54 clarifies some confusion surrounding the bill that passed last year to prevent any abuse of the application of that law. MR. SALIK explained the words "or totally" were removed from last year's bill and are being reinserted. CHAIRMAN MACKIE noted the committee received testimony from Charles Wohlforth, Margaret Rowitz (ph), and the Anchorage Assembly. Number 505 STEVE VAN SANT, state assessor, gave the following testimony. SB 54 offers both a tax exemption and deferral but the bill is silent as to whether interest is to be paid on the deferred taxes. In addition, he asked how language on page 1, lines 13 and 14, would apply to a condominium or property owned by a partnership. MR. SALIK stated he understood this legislation is not to apply to condominiums as they are individually owned. Regarding interest on deferred taxes, he stated if a property was exempted for five years, and then deferred for four and one-half years, the owner could be held liable for taxes on the deferred amount upon sale of the property. He was unsure as to the percentage rate of the tax, however. SENATOR LEMAN asked whether the MOA charges interest on deferred taxes. MR. SALIK did not know. MR. VAN SANT indicated at present, the only tax deferment program in the state is the farm use deferment program, and interest is collected on that deferment. He thought the MOA ordinance may not include interest because the exemption is given first, and the MOA assumed the law would be clarified before the deferments were available. CHAIRMAN MACKIE asked Mr. Van Sant if the interest on the deferment issue needs further clarification in the legislation. MR. VAN SANT said that it appears from the discussion that the intent is to include interest and AS 29.45.250 does require that unpaid taxes will be subject to interest so it might not be necessary to include it in the bill. He asked for further clarification on the ownership issue. CHAIRMAN MACKIE asked Mr. Salik to further explore the issue Mr. Van Sant raised with Senator Kelly. Number 529 PAT CARLSON, Kodiak Island Borough Assessor, expressed the following concerns via teleconference. He does not like the idea of exempting specific pieces of property within a classification and feels all parties should be treated alike. He agrees the deferral concept is good as it allows municipalities to work with the business sector to improve on certain types of properties. He understood last year that the exemption would be limited to the core value, if any, of the deteriorated structure and its underlying land value, although improvements were made after the exemption was granted. The bill totally exempts the property for five years and then defers the taxes for five years which he thinks will be difficult to administer. The Court has disallowed municipalities the ability to apportion taxes based on time. Also, apportioning value between partial owners could also be difficult to administer. CHAIRMAN MACKIE asked Mr. Salik to contact Mr. Carlson about his concerns. Number 566 SENATOR DONLEY said he likes the idea of giving local governments more options to deal with urban renewal problems, but he is concerned that this bill might have unintended benefits for a few individuals. TAPE 99-2, SIDE B Number 000 SENATOR DONLEY suggested including language discounting the tax benefit for persons making an extraordinary benefit from the change in the law. He discussed the McKay building situation in Anchorage and noted he tried to establish, 12 years ago, an incentive to allow owners to tear down a building. There being no further business to come before the committee, CHAIRMAN MACKIE adjourned the meeting at 2:25 p.m.