Legislature(1995 - 1996)
04/26/1995 03:22 PM House L&C
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR & COMMERCE STANDING COMMITTEE
April 26, 1995
3:22 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Norman Rokeberg, Vice Chairman
Representative Jerry Sanders
Representative Kim Elton
Representative Gene Kubina
Representative Brian Porter
MEMBERS ABSENT
Representative Beverly Masek
COMMITTEE CALENDAR
HB 266: "An Act relating to preferred provider agreements
offered by hospital or medical service corporations."
HEARD AND HELD
HB 251: "An Act relating to Native corporations."
PASSED OUT OF COMMITTEE
HB 243: "An Act relating to licensure of landscape architects."
HEARD AND HELD
HB 260: "An Act relating to marine pilots and the Board of
Marine Pilots; extending the termination date of the
Board of Marine Pilots; and providing for an effective
date."
HB 217: "An Act relating to employment of teachers."
SCHEDULED BUT NOT HELD
HB 232: "An Act establishing an economic development tax credit;
and providing for an effective date."
SCHEDULED BUT NOT HEARD
WITNESS REGISTER
LARRY CARROLL, Senior Securities Examiner
Division of Banking, Securities and Corporations
Department of Commerce and Economic Development
P.O. Box 110807
Juneau, AK 99811-0807
Telephone: (907) 465-2521
POSITION STATEMENT: Answered questions on HB 251
TIM BENINTENDI, Legislative Assistant
to Representative Carl Moses
Alaska State Legislature
State Capitol Building, Room 204
Juneau, AK 99801
Telephone: (907) 465-3764
POSITION STATEMENT: Answered questions on HB 251
ROBERTA COUGHNOUR
Employee Relations
Municipality of Anchorage
632 West Sixth Avenue, Number 610
Anchorage, AK 99501
Telephone: (907) 343-4517
POSITION STATEMENT: Testified on HB 266
CHARLIE MILLER, Lobbyist
Alaska Regional Hospital
P.O. Box 102286
Anchorage, AK 99510
Telephone: (907) 561-4773
POSITION STATEMENT: Testified in support of HB 266
DOUGLAS BRUCE, Chief Executive Officer
Providence Health System in Alaska
P.O. Box 196604
Anchorage, AK 99519-6604
Telephone: (907) 261-3055
POSITION STATEMENT: Testified against HB 266
MARIANNE K. BURKE, Director
Division of Insurance
Department of Commerce and
Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
Telephone: (907) 465-2515
POSITION STATEMENT: Answered questions regarding HB 266
GEORGE DOZIER, Legislative Assistant
to Representative Pete Kott
Alaska State Legislature
Capitol Building, Room 432
Juneau, AK 99801
Telephone: (907) 465-3777
POSITION STATEMENT: Gave sponsor statement for HB 243
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Commerce and
Economic Development
P.O. Box 110806
Juneau, AK 99811-0806
Telephone: (907) 465-2538
POSITION STATEMENT: Testified against HB 243
DWAYNE ADAMS
13311 Cover Circle
Anchorage, AK 99515
Telephone: (907) 345-6958
POSITION STATEMENT: Testified in support of HB 243
LINDA CYRA-KORSGGARD, Landscape Architect
1509 "P" Street
Anchorage, AK 99501
Telephone: (907) 279-9467
POSITION STATEMENT: Testified in support of HB 243
LEE WYATT
P.O. Box 873768
Wasilla, AK 99687
POSITION STATEMENT: Testified in support of HB 243
BURDETT LENT, Landscape Architect
374 Sarah's Way
Wasilla, AK 99654
POSITION STATEMENT: Testified in support of HB 243
PREVIOUS ACTION
BILL: HB 266
SHORT TITLE: HEALTH CARE PREFERRED PROVIDER PROGRAMS
SPONSOR(S): LABOR & COMMERCE BY REQUEST
JRN-DATE JRN-PG ACTION
03/17/95 778 (H) READ THE FIRST TIME - REFERRAL(S)
03/17/95 779 (H) LABOR & COMMERCE, HES, JUDICIARY
04/12/95 (H) L&C AT 03:00 PM CAPITOL 17
04/24/95 (H) L&C AT 03:00 PM CAPITOL 17
04/24/95 (H) MINUTE(L&C)
04/26/95 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 251
SHORT TITLE: NATIVE CORPORATIONS
SPONSOR(S): REPRESENTATIVE(S) MOSES, MacLean, Williams, Kott
JRN-DATE JRN-PG ACTION
03/15/95 741 (H) READ THE FIRST TIME - REFERRAL(S)
03/15/95 741 (H) LABOR & COMMERCE
03/27/95 (H) L&C AT 03:00 PM CAPITOL 17
03/27/95 (H) MINUTE(L&C)
03/29/95 (H) L&C AT 03:00 PM CAPITOL 17
03/29/95 (H) MINUTE(L&C)
04/05/95 (H) L&C AT 03:00 PM CAPITOL 17
04/10/95 (H) L&C AT 03:00 PM CAPITOL 17
04/12/95 (H) L&C AT 03:00 PM CAPITOL 17
04/21/95 (H) L&C AT 03:00 PM CAPITOL 17
04/24/95 (H) L&C AT 03:00 PM CAPITOL 17
04/24/95 (H) MINUTE(L&C)
BILL: HB 243
SHORT TITLE: LICENSING OF LANDSCAPE ARCHITECTS
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
03/08/95 644 (H) READ THE FIRST TIME - REFERRAL(S)
03/08/95 644 (H) STATE AFFAIRS, LABOR & COMMERCE
03/23/95 (H) STA AT 08:00 AM CAPITOL 102
03/23/95 (H) MINUTE(STA)
03/24/95 893 (H) STA RPT 1DP 5NR
03/24/95 893 (H) DP: ROBINSON
03/24/95 893 (H) NR: JAMES, WILLIS, IVAN, GREEN,
PORTER
03/24/95 894 (H) FISCAL NOTE (DCED)
04/12/95 (H) L&C AT 03:00 PM CAPITOL 17
04/26/95 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 260
SHORT TITLE: MARINE PILOTS
SPONSOR(S): TRANSPORTATION
JRN-DATE JRN-PG ACTION
03/15/95 745 (H) READ THE FIRST TIME - REFERRAL(S)
03/15/95 745 (H) TRANSPORTATION, LABOR & COMMERCE
03/22/95 (H) TRA AT 01:00 PM CAPITOL 17
03/24/95 (H) TRA AT 01:00 PM CAPITOL 17
04/05/95 (H) TRA AT 01:00 PM CAPITOL 17
04/05/95 (H) MINUTE(TRA)
04/07/95 1170 (H) TRA RPT CS(TRA) 2DP 2NR 2AM
04/07/95 1171 (H) DP: BRICE, WILLIAMS
04/07/95 1171 (H) NR: MACLEAN, SANDERS
04/07/95 1171 (H) AM: JAMES, G.DAVIS
04/07/95 1171 (H) FISCAL NOTE (DCED)
04/12/95 (H) L&C AT 03:00 PM CAPITOL 17
04/18/95 1356 (H) FIN REFERRAL ADDED
04/19/95 (H) L&C AT 03:00 PM CAPITOL 17
04/21/95 (H) L&C AT 03:00 PM CAPITOL 17
04/26/95 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 217
SHORT TITLE: TEACHER EMPLOYMENT RIGHTS & RETIREMENT
SPONSOR(S): REPRESENTATIVE(S) IVAN
JRN-DATE JRN-PG ACTION
03/29/94 (H) HES AT 03:00 PM CAPITOL 106
03/01/95 531 (H) READ THE FIRST TIME - REFERRAL(S)
03/01/95 531 (H) HES, JUDICIARY
03/07/95 (H) HES AT 03:00 PM CAPITOL 106
03/07/95 (H) MINUTE(HES)
03/29/95 (H) HES AT 03:00 PM CAPITOL 106
04/11/95 (H) HES AT 02:00 PM CAPITOL 106
04/13/95 (H) HES AT 02:00 PM CAPITOL 106
04/13/95 (H) MINUTE(HES)
04/18/95 1344 (H) HES RPT CS(HES) NT 2DP 1NR 1AM
04/18/95 1344 (H) DP: BUNDE, TOOHEY
04/18/95 1345 (H) NR: G.DAVIS
04/18/95 1345 (H) AM: ROBINSON
04/18/95 1345 (H) FISCAL NOTE (DOE)
04/19/95 (H) JUD AT 01:00 PM CAPITOL 120
04/20/95 1408 (H) L&C REFERRAL ADDED
04/21/95 (H) JUD AT 01:00 PM CAPITOL 120
04/21/95 (H) MINUTE(JUD)
04/22/95 1446 (H) JUD RPT CS(JUD) NT 5DP 1DNP
04/22/95 1446 (H) DP: VEZEY, PORTER, GREEN, BUNDE,
TOOHEY
04/22/95 1446 (H) DNP: FINKELSTEIN
04/22/95 1446 (H) ZERO FISCAL NOTE (DOE)
04/26/95 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 232
SHORT TITLE: ECONOMIC DEVELOPMENT TAX CREDIT
SPONSOR(S): REPRESENTATIVE(S) KOTT
JRN-DATE JRN-PG ACTION
03/06/95 590 (H) READ THE FIRST TIME - REFERRAL(S)
03/06/95 590 (H) ECD, STA, L&C, FINANCE
03/21/95 (H) ECD AT 09:00 AM CAPITOL 17
03/21/95 (H) MINUTE(ECD)
03/22/95 850 (H) ECD RPT CS(ECD) 6DP
03/22/95 850 (H) DP: KELLY, MOSES, MACLEAN, KOHRING
03/22/95 850 (H) DP: SANDERS, ROKEBERG
03/22/95 850 (H) INDETERMINATE FISCAL NOTE (REV)
03/22/95 850 (H) FISCAL NOTE (DCED)
04/04/95 (H) STA AT 08:00 AM CAPITOL 102
04/04/95 (H) MINUTE(STA)
04/06/95 (H) STA AT 08:00 AM CAPITOL 102
04/06/95 (H) MINUTE(STA)
04/11/95 (H) STA AT 08:00 AM CAPITOL 102
04/11/95 (H) MINUTE(STA)
04/18/95 1345 (H) STA RPT CS(STA) 4DP 2NR
04/18/95 1346 (H) DP: GREEN, PORTER, JAMES, OGAN
04/18/95 1346 (H) NR: WILLIS, ROBINSON
04/18/95 1346 (H) INDETERMINATE FISCAL NOTE (REV)
04/18/95 1346 (H) ZERO FISCAL NOTE (DCED)
04/21/95 (H) L&C AT 03:00 PM CAPITOL 17
04/24/95 (H) L&C AT 03:00 PM CAPITOL 17
04/24/95 (H) MINUTE(L&C)
04/26/95 (H) L&C AT 03:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 95-45, SIDE A
Number 000
The House Labor and Commerce Standing Committee meeting was
called to order by Chairman Pete Kott at 3:22 p.m. He informed
the committee the teleconference printer, which prints who is on
line, isn't working. He said he would poll the Legislative
Information Offices (LIO) to see who was on line to testify on
scheduled legislation. Members present at the call to order were
Representatives Sanders, Elton, Kubina, Rokeberg and Kott.
Members absent were Representatives Masek and Porter.
CHAIRMAN PETE KOTT announced the order of business would be HB
266, HB 260, HB 232, HB 243 and if time is available, HB 217. He
polled the LIOs so see who was on line.
HB 266 - HEALTH CARE PREFERRED PROVIDER PROGRAMS
Number 099
CHAIRMAN KOTT announced the first order of business would be the
continuation of HB 266, "An Act relating to preferred provider
agreements offered by hospital or medical service corporations."
He said testimony had been given on the bill the previous Monday.
REPRESENTATIVE NORMAN ROKEBERG interrupted to make a motion to
bring another bill, previously heard, before the committee.
HB 251 - NATIVE CORPORATIONS
Number 116
REPRESENTATIVE ROKEBERG moved to rescind the committee's action
on tabling HB 251.
CHAIRMAN KOTT said there is a motion to rescind the committee's
action in tabling HB 251.
REPRESENTATIVE ROKEBERG said it is rescinding the tabling. He
said he would move to take it off the table.
CHAIRMAN KOTT said probably the appropriate motion would be to
move to untable. He explained there is a question as to which
motion Representative Rokeberg wants. He said the motion to
untable is not debatable. To rescind the committee's action is
debatable.
REPRESENTATIVE ROKEBERG said he wishes to rescind the committee's
action in tabling.
REPRESENTATIVE KIM ELTON said he isn't interested in debating it.
He stated it doesn't matter which motion is made. However, he
noted he had a question of Representatative Rokeberg. He asked
why the motion is being made now. He said it seems to him that a
message has been sent. The bill was put aside for awhile and now
the bill is being brought up in a point in time when those who
are most interested in the bill aren't in the room.
Representative Elton said it seems sudden to him.
REPRESENTATIVE ROKEBERG said he believes the committee was at a
point, at the last meeting when the bill was under consideration,
to take a vote when the committee lost a quorum. He said as he
recalls that was the reason the committee didn't vote at that
time. However, there is a question as to the nature of the exact
document that the committee would vote on.
CHAIRMAN KOTT said he doesn't believe there was a question as to
which document the committee would have moved had they had the
quorum to move it. He referred to Representative Elton's
question of "why now," and said, "Why not now?" He said the
issue was debated. He noted public testimony wasn't taken during
the last two hearings on the measure. There is nothing that the
public could have offered. Chairman Kott noted there is a
representative from the Division of Banking, Securities and
Corporations, Department of Commerce and Economic Development, in
attendance if there are any questions. He asked Representative
Rokeberg which motion he desires to make.
Number 168
REPRESENTATIVE ROKEBERG moved to untable HB 251.
CHAIRMAN KOTT said there is a motion to untable, bring it off the
table, HB 251. He said that motion is not debatable. He asked
if there was an objection.
REPRESENTATIVE ELTON objected.
Number 182
A roll call vote was taken. Representatives Kott, Rokeberg,
Kubina and Sanders voted in favor of the motion. Representative
Elton voted against the motion. So HB 251 was before the
committee.
REPRESENTATIVE GENE KUBINA asked for a copy of the bill that was
before the committee.
A brief at ease was taken at 3:32 p.m. CHAIRMAN KOTT called the
meeting back to order at 3:34 p.m.
CHAIRMAN KOTT announced the committee has been provided with a
copy of the latest committee substitute (CS) for HB 251, Version
O, dated 4/24/95. He said the CS increases the petition numbers.
He said 15 percent of the shareholders must sign a petition if
the corporation has 500 or more shareholders. If there are less
than 500, then the number is 25 percent. There is a provision in
the bill that extends the time from the previous CS of 90 days to
180 days after filing. He explained on line 21, the years were
increased from one to two years. Chairman Kott said all the
civil and legal penalties were removed.
Number 204
REPRESENTATIVE ROKEBERG moved Amendment 1, a conceptual
amendment. He explained that would be on page 2, line 15, after
the word "corporation" insert a "." and delete "within 180 days
after the filing." Representative Rokeberg referred to line 21,
after the word "preceding" change "two" to "one". Then change
the word "years" to "year". He moved his amendment.
CHAIRMAN KOTT asked Representative Rokeberg to divide the
question and to deal each of the changes separately.
CHAIRMAN KOTT recapped Amendment 1. On page 2, line 15, after
the word "corporation" insert a "." and delete "within 180 days
after the filing." REPRESENTATIVE ROKEBERG said that is correct.
CHAIRMAN KOTT said Amendment 1 has been moved and he would object
for the purpose of discussion.
Number 254
REPRESENTATIVE ELTON said he would prefer that the "two" to "one"
year was the first amendment, because that will affect the way he
will vote on the 180 day period. For example, if the two year
period is maintained, he may prefer leaving the 180 days in. He
said if chair and maker of the amendment doesn't object, maybe
the two amendments can be flipped.
REPRESENTATIVE ROKEBERG and CHAIRMAN KOTT stated they didn't
object.
CHAIRMAN KOTT said Amendment 2 would be first. He asked
Representative Rokeberg to withdraw his motion.
REPRESENTATIVE ROKEBERG withdrew his motion on Amendment 1. He
then moved Amendment 2, line 21, after the word "preceding"
change "two" to "one". Then change "years" to "year".
CHAIRMAN KOTT said there is a motion to move Amendment 2. He
asked if there was an objection. Chairman Kott said he would
object for the purpose of discussion. He asked why the number of
years is being reduced from "two" to "one."
REPRESENTATIVE ROKEBERG said in the interest of only modifying
the existing corporate regulations (indisc.) corporations, it is
the sponsor's belief that this would be more readily acceptable
to all parties in order to move the bill along. He asked for the
committee member's support.
CHAIRMAN KOTT said he will maintain his objection.
Number 254
REPRESENTATIVE ELTON said he believes the committee has done a
very good job reaching a middle ground, something that everybody
is starting to feel more comfortable with. The committee has
heard a lot of testimony. He said he believes the people in his
district feels very strongly about one year rather than two
years. The issue that we are trying to get to is repetitive
petitions or repetitive votes. He believes this is acceptable to
both sides. Representative Elton said he sees this as an attempt
to make it less onerous and, hopefully, smooth passage down the
road.
Number 263
CHAIRMAN KOTT referred to his objection and said he thinks that
when you start reducing the amount of time, such as from two
years to one year, you provide a mechanism that would cause some
disruption within the corporation and interfere with their
ability to enhance the position of the shareholders. Every year
the shareholders can come back if they acquire the number of
signatures and cause disruption within the corporation.
Therefore, probably cause some concern among the board members
and their ability to do their assigned task.
REPRESENTATIVE ELTON said he believes the chairman has identified
a significant problem. He said a majority of that problem comes
about when there is an annual meeting and things don't go the way
a shareholder would expect. So the day after the annual meeting,
when a vote has been taken, they're on the street with a
petition. He said he thinks that is where most of the problem
occurs. This provides for a one year cooling off period. It is
his guess it would substantially meet the purposes to the
repetitive petition.
There being no further discussion on Amendment 2, a roll call
vote was taken. Representatives Rokeberg, Elton, Sanders and
Kubina voted in favor of the motion. Chairman Kott voted against
the motion. So Amendment 2 was adopted.
Number 291
REPRESENTATIVE ROKEBERG moved Amendment 1. CHAIRMAN KOTT
objected for the purpose of discussion.
REPRESENTATIVE ROKEBERG said by removing this requirement, we
would take away one of the most divisive issues that the
committee heard in public testimony. That was to set up a
limiting time frame as to how long the petitions could be
circulated. He said it would return the petitioning process to
the existing statutory language. He asked for the committee's
support.
CHAIRMAN KOTT said what he believes was done by changing two
years to one year, and now taking away the time certain that the
shareholders have to collect the signatures, will place a great
degree of disruption within the corporation. Now they would be
battling the petition and collection of those signatures for an
indefinite amount of time. The committee has already, by
adoption of the previous amendment, placed another problem in
front of them. He said he believes the committee is going in the
wrong direction.
Number 313
REPRESENTATIVE ELTON said he believes the amendment is more of a
problematic amendment then the others. There is the one year
cooling off period. He said he guesses that if the language is
kept in the bill, it would be guaranteeing that a divisive issue
will be back perhaps within a year and a half. If you take that
away, that divisive issue may not be back on the table for two
years. What is being done is the amount of time is being
extended between the divisive votes.
CHAIRMAN KOTT said the divisive issue may never go away based on
having unlimited amount of time to collet signatures. He said he
would maintain his objection.
REPRESENTATIVE KUBINA said he has had communication from numerous
Native corporations and people involved with them. What a lot of
them have realized is that they just have to have better
communications. A lot of them have solved this problem.
Number 336
CHAIRMAN KOTT said one of the provisions was agreed to by one of
the members on the panel, it was one of the shareholders who said
this would be acceptable. Obviously, there has been a change of
heart and it is no longer acceptable by some of the members in
the shareholder community.
A roll call vote was taken. Representative Elton voted in favor
of the amendment. Representatives Kott, Sanders, Kubina and
Rokeberg voted against the amendment. So Amendment 1 failed to
be adopted.
Number 355
REPRESENTATIVE KUBINA said he has a problem he would like to
discuss. He referred to page 2, line 8, and read, "The notice
must state in detail the purpose of the special meeting and
include a copy of the petition or request and all materials to be
used in connection with the solicitation." Representative Kubina
said his problem is with the wording "and include a copy of the
petition or request and all materials to be used in connection
with the solicitation." He said he understands that one of the
biggest problems was that they are trying to get some kind of
mechanism so that what gets put out is factual. This sounds like
they have to do this all at the beginning. He said it seems this
is like a campaign and when you have a campaign, you may not have
everything at the beginning. He said he was wondering if
technically, could the corporation then use this to stymie their
free speech.
CHAIRMAN KOTT asked Larry Carroll to come forward.
Number 375
LARRY CARROLL, Senior Securities Examiner, Division of Banking,
Securities and Corporations, Department of Commerce and Economic
Development, referred to Representative Kubina's concerns and
said the point he raised is appropriate. He explained it seems
to him that filing must be at the time that the petition is filed
and should include all materials which would then handicap people
if the course of the campaign needed to change and new materials
needed to be developed. If materials weren't filed initially,
theoretically an objection could be raised. Mr. Carroll referred
to material the department sent over and said it was suggested
that the notice be in detail for the purpose of a special meeting
and include a copy of the petition or request and stop right
there so that they had some latitude of with what they would use.
Number 389
REPRESENTATIVE SANDERS said he agrees with those statements. He
said things do develop like a campaign and change as you go
along. However, the things that come along later would still
need to be submitted.
MR. CARROLL said they have to file anything they use with his
division.
REPRESENTATIVE SANDERS asked if it isn't in the bill, would they
still have to file with the division.
MR. CARROLL indicated they still would have to file with the
division.
REPRESENTATIVE KUBINA referred to the last sentence and said if
they don't comply, the petition is invalid. He said what he
fears is we will see these people in court. He said he thinks it
would be appropriate for him to move that on page 2, line 8, put
a "." after the word "request" and delete the rest of the
sentence.
CHAIRMAN KOTT said it would then read, "The notice must state in
detail the purpose of the special meeting and include a copy of
the petition or request." Delete the remaining portion of that
sentence which reads, "and all materials to be used in connection
with the solicitation."
Number 410
REPRESENTATIVE ROKEBERG objected to the motion for the purpose of
discussion. He said as the division has said it is necessary
that the material be filed. He said he thinks that is currently
the case.
REPRESENTATIVE KUBINA said his problem is it appears that once
they submit it, they can't use any other material because it says
that all materials to be used in connection with this campaign
has to be submitted at the beginning. If they used a different
flyer and sent it out to everybody, according to the last
sentence the corporation could argue that the whole thing should
be thrown out.
REPRESENTATIVE ROKEBERG said it is his understanding that by
providing all those materials, at least there is public
disclosure. There is no question about what they're using.
CHAIRMAN KOTT asked Mr. Carroll if we're talking about providing
this to the corporation.
MR. CARROLL said that is correct. He said the division's
requirement is that they be filed with them, and they (indisc.)
to our false and misleading standards and all the provisions of
the Securities Act, notwithstanding anything that is said in the
bill. What they bill is saying is the corporation wants it in
its hands at the onset. The division is saying that it has to be
filed with the division concurrent with distribution to
shareholders. That is what the Securities Act states.
REPRESENTATIVE KUBINA asked if the documents would then be
available to the corporations at that point as they are public
documents.
MR. CARROLL stated that is correct.
CHAIRMAN KOTT asked if the bill sponsor's staff want to make a
comment.
Number 435
TIM BENINTENDI, Legislative Assistant to Representative Carl
Moses, said the provisions (indisc.) originally knowing that
material was automatically submitted to the division, it was put
in to help blunt or maybe to help (indisc.) groups to do a little
self policing on the so called "false or misleading statements"
or anything that later might become fuzzy. In the third hearing
(indisc.) bill, this topic was discussed and, except for a couple
of the large corporations, it was pretty much agreed that we
could do without this since the material is submitted
automatically and anybody can get it from the division. The
sponsor was happy to (indisc.). He said Representative Moses
would support that direction.
REPRESENTATIVE ELTON asked Mr. Carroll if all Alaska Native
Claims Settlement Act (ANCSA) corporations file with the Division
of Banking, Securities and Corporations. He asked if the small
ones don't need to file. Representative Elton asked if we would
only be talking about the larger corporations with a certain
number assets.
MR. CARROLL said Representative Elton is correct. The threshold
is corporations having $1 million in assets and the number of
shareholders amounts to 500 or above.
REPRESENTATIVE ELTON said what we're talking about is only for
certain (indisc.)
Number 456
REPRESENTATIVE KUBINA said the other side of that coin is that
the problem doesn't seem to be with the small corporations, it
seems to be with the larger ones that are asking for the changes.
He said what he is hearing from the smaller corporations is that
they don't want any change.
REPRESENTATIVE ROKEBERG said it should probably be left in there
because there is no other disclosure material from the smaller
corporations. This is the only means for disclosure.
Number 465
MR. BENINTENDI said he doesn't remember it being specifically
being discussed with Representative Moses, but suspected that he
would support the removal of that as well as it ties so closely
to the other.
REPRESENTATIVE KUBINA said the last sentence could be removed and
it would say, "any subsequent material produced."
MR. CARROLL said the committee could possibly adopt language that
says, "concurrent with distribution."
REPRESENTATIVE KUBINA said leave that (indisc.) in all materials
and all subsequent... He asked Mr. Carroll to restate his
language.
MR. CARROLL said, "The notice must state in detail the purpose of
the special meeting and include a copy of the petition or request
and all materials to be use in connection with the solicitation,
concurrent with their distribution to shareholders."
Number 485
CHAIRMAN KOTT said Representative Kubina's new Amendment 3 would
remove the "." after solicitation and insert the words
"concurrent with their distribution to shareholders."
REPRESENTATIVE KUBINA indicated that is correct.
CHAIRMAN KOTT said there is a motion to move Amendment 3. He
asked if there was objection.
REPRESENTATIVE ELTON said he almost prefers the way it was the
first time round. What the committee is doing is creating
another bureaucratic hoop that the shareholders, the circulators
of the petitions, need to go through. Currently, they are only
required to file those materials with the division. The
amendment would require another hoop for them to go through and
create another bureaucratic step upon which they could stumble.
He explained that is his observation and noted he doesn't feel
strongly about it.
CHAIRMAN KOTT asked Representative Elton if he is removing his
objection. REPRESENTATIVE ELTON said he is removing his
objection.
There being no objection, Amendment 3 was adopted.
Number 499
REPRESENTATIVE KUBINA asked who makes the determination as to
whether the information is valid or not. Somebody has to be a
rule maker. He asked if the department would be doing that.
MR. CARROLL said not for any corporations. He said the petition
(indisc.) requests and materials for corporations less than 500
shareholders are not going to pass through the division's hands.
They are not going to be in a position to adjudicate whether
those things were filed timely with the corporation or whether
they were not. With respect to the larger corporations, it would
seem to him that the moving party will be the corporation that is
going to make the allegation that these things didn't occur. So
it would be their water to carry. Mr. Carroll said the statutory
language is very clear in that the petitioner request is invalid,
on its face. He said he doesn't know who does make that
determination.
Number 512
REPRESENTATIVE ROKEBERG suggested that it would be the courts.
REPRESENTATIVE KUBINA said he thinks that Representative Rokeberg
is right which is what bothers him. REPRESENTATIVE ROKEBERG said
that is what they are for.
REPRESENTATIVE ELTON said it probably would be the court. The
180 day provision was left in the bill. There is no provision
that the 180 day clock stops ticking while somebody goes to
court. He said it seems to him that what the committee is doing
is not just giving a corporation a hammer, it is giving them an
ax.
Number 521
REPRESENTATIVE ELTON moved that the last sentence in paragraph
(m) on page 2, line 11, beginning with "If a petition..." through
line 13, be deleted.
CHAIRMAN KOTT asked if there was an objection to Representative
Elton's motion.
REPRESENTATIVE ROKEBERG objected for the purpose of discussion.
He said his concern is without the last sentence, the entirety of
subsection (m) is not enforceable. He said he would like the
sponsors opinion.
MR. BENINTENDI said he thinks that the sponsor would support that
motion.
REPRESENTATIVE KUBINA said he doesn't think that this would stop
them from going to court if the corporation still thinks that
something was done illegally and the laws were (indisc.) He said
the court still (indisc.) enforce the law. What it does do is
say the whole thing is invalid. The court may say, "Well, this
minor little fragment (indisc.) but that doesn't (indisc.) the
whole thing."
REPRESENTATIVE ROKEBERG withdrew his objection.
CHAIRMAN KOTT asked if there was further objection in deleting
the language. Hearing none, it was so ordered.
Number 542
REPRESENTATIVE ROKEBERG moved that CSHB 251(L&C), Version O, as
amended, be adopted with any accompanying fiscal notes, and
individual recommendations, be passed out of the House Labor and
Commerce Committee. Hearing no objection, it was so ordered.
HB 266 - HEALTH CARE PREFERRED PROVIDER PROGRAMS
Number 564
The next order of business was HB 266, "An Act relating to
preferred provider agreements offered by hospital or medical
service corporations."
CHAIRMAN KOTT said the bill had been heard the previous Monday
and there was quite a bit of testimony both for and against the
bill. He noted there are a couple of people who have signed up
to testify.
ROBERTA COUGHNOUR, Employee Relations, Municipality of Anchorage,
testified via teleconference from Anchorage. Ms. Coughnour
explained that they have approximately 2,500 employees and about
250 retirees and their families who are covered under a group
insurance plan. About 1,500 are covered by collective bargaining
agreements. Under the group insurance plan for the municipality,
they use preferred provider organizations (PPO) as a way to
control costs rather than eliminating benefits. They use
hospital PPOs and managemental health PPOs.
MS. COUGHNOUR said in 1994, their PPO savings exceeded $1
million. Since the Municipality of Anchorage has a (indisc.)
premium plan, that money stays with the municipality and doesn't
go to the insurance company. Employees who have a co-pay, pay on
the reduced amount and not on the full amount that they would
normally pay (indisc.) PPO.
MS. COUGHNOUR explained that during 1995, the municipality will
be negotiating with their four bargaining units. A major part is
that they are trying to negotiate PPO provisions into their plan.
One represented group has approved a new agreement. It contains
a PPO agreement and projections for future premiums which were
based on the PPO provisions remaining in the plan. Savings from
implementation of the PPOs were used in determining the amount of
funds that would be available to fund increases in wages over the
term of the contract. Similar strategies are being used with
their other three bargaining units.
MS. COUGHNOUR informed the committee if PPO requirements included
any willing or (indisc.) provider provision, it would eliminate
the ability of insurance (indisc.) to negotiate a passive
discounts and allow (indisc.) by the municipality to control
claims costs without (indisc.) benefits. She said she would be
happy to answer any questions the committee may have.
Number 601
CHARLIE MILLER, Lobbyist, Alaska Regional Hospital, said his
clients position on the PPOs is that the mechanism is very
effective at helping contain costs in certain markets, but they
contend that the market requirements don't really fit in
Anchorage or in Alaska. The basis is a small population both of
providers and patients. Mr. Miller explained that most
successful manage care markets contain large numbers of patient's
insurance and large numbers of providers. So a healthy
competitive atmosphere exists that if you were to lose one
competitive bid, you could tighten your belt, sharpen your pencil
on the next bid and still survive. Therefore, the competitive
efficiencies would come into play.
MR. MILLER explained that in a market where we have very few
patients and providers, conditions exist that don't exactly
enhance the competition, but (indisc.) adverse conditions for
competition. Mr. Miller said in their particular area of the
market, hospital care, there is only two in Anchorage and there
is a negotiation between the parties involved and they're not
invited to bid. What significance that could bring about as far
as more reduced costs, they don't know. If it were a competitive
bid, perhaps the rates would even be lower. That is not the case
and hasn't been the case. The Alaska Regional Hospital has tried
to address that and have never been invited to the table.
MR. MILLER said if you take the relatively small population and
involve the patients, subtract Indian health care, federal
CHAMPUS(Sp?) military programs, etc., the population becomes even
smaller than it appears at first. Then we look at having a
limited number of providers and if the providers aren't allowed
to bid, then your fighting competition and you are not enhancing
it. The possibility exists that you'll even have less providers
in the future and there is absolutely no incentive to discount
when you get to the point where there aren't enough providers to
participate in active bidding if that were to occur later.
MR. MILLER referred to volume discount and said it is a very
valid argument, but once again in a large market it comes into
play. In a smaller market where there hasn't been competitive
bid to date, it does really seem to fit. The significance of any
cost increases is in question because there hasn't been bids or
competition. The speculation is that it would be a large
increase in costs. He said Alaska Regional Hospital doesn't feel
that is the case any more then they could say for sure that the
price would go down if there were competitive bids.
MR. MILLER said previous testimony seems to imply that if any
willing provider was passed in this market, that it would be an
all or nothing situation as far as cost containment. He said the
Alaska Regional Hospital doesn't believe that would be the case.
To say there was a PPO negotiated, it saved $1 million, and if
any (indisc.) came in, there would be no savings... END OF TAPE
TAPE 95-45, SIDE B
Number 000
MR. MILLER continued ...and negotiation were to expand to include
more providers, there would definitely be discounts. To say that
there is all kinds of cost savings involved without this and
there will be no cost savings involved if it passes, the Alaska
Regional Hospital doesn't believe that to be true. Mr. Miller
referred to his facility paying over $1 million a year in
property taxes to the Municipality of Anchorage and they aren't
allowed to sit at the table and bid the job to pay for the health
care that their taxes help to provide. It seems awkward to have
to come here and ask to be allowed to participate in something
when they pay taxes and can't bid the jobs the municipality
provides
MR. MILLER explained another issue brought up was the control of
quality providers. Alaska Regional Hospital decided that they
needed to address that and when they went through their last
accreditation, they made a sincere effort to show the quality of
the facility. They received the highest qualification you can
get from the accreditation people. Mr. Miller said there are
other tools available to payers to keep out bad providers. He
said he thinks mechanisms already exist to control (indisc.) bad
positions in facilities if need be.
MR. MILLER referred to the other cost containment measures and
said all of those would stay in place. Utilization review is
very well established in the industry. Preauthorization for
surgical treatments for hospitals stays, utilization review to
prevent self referral by patients to a higher level of care than
necessary, etc., will still remain in place. It is always a
dynamic situation. Sometimes people contest not being allowed to
self refer, but these mechanisms are well established and will
stay in place also. So there still will be cost containment.
MR. MILLER said in previous testimony on mental health, it was
mentioned that what could happen if the bill passed is that a
patient could self refer him or her self to a psychiatrist. With
utilization review, that just wouldn't happen. The patient
wouldn't be reimbursed at full schedule because they would call
and talk to the payer, the payer would inform them that they
would have to go through perhaps a mental health counselor for
assessment.
MR. MILLER explained another aspect is whether or not there is a
place for the legislature or for the law to get involved in this
market. Actually, the government is very well involved in this
market. Certificate of Need prevents facilities from (indisc.)
capital expenses that would allow a facility, physicians clinic
or a particular provider to provide services that the department
feels are already provided and it would be unnecessary equipment.
If you have certain programs, other people that want to just
spend money to get into the market and compete with you, it is
very difficult to achieve the approval to get these things. That
is definitely government involvement. There is a tax exempt
status for certain payers and facilities that others don't enjoy,
regardless of their own charity care provision in the community.
He said his facility provides a considerable amount of charity
care and they also pay a considerable amount of taxes. If that
isn't government intervention, he isn't sure how else it could be
defined.
MR. MILLER said his organization doesn't believe it is
inappropriate for the legislature to address this. We have to
keep focused on the real issue which is, "What market are we
dealing with here?" We're not dealing with Southern California,
Puget Sound, or some of the really large markets that these
things work in. We're working in Alaska's market and Mr.
Miller's client feels very strongly that this measure is
appropriate for this market. He urged to the committee to
consider the bill and move it through the process.
Number 104
REPRESENTATIVE ROKEBERG referred to a proposed amendment that had
been drafted and asked Mr. Miller if he has had the chance to
review the amendment.
MR. MILLER said he has reviewed the amendment. He said
unfortunately he has been rather confused as far as last year
when we tried to address the issue and a legislative attorney had
the opinion that (indisc.) Aetna disability group plans were
already under restrictions that didn't allow PPOs. There was
further discussion this year in the Senate Labor and Commerce
Committee on a related matter. There was a memorandum
distributed in reference to that testimony that the Division of
Insurance, at that time, felt that PPOs were allowed under 21.87,
the medical and hospital service corporations, but not under the
other types of health plans. He said before the Monday hearing,
he was given a copy of the Attorney General's (AG) opinion which
goes the other way. He said it would appear that the AG's
opinion says that the bill, if it is going to have the effect
intended, should address both major payers which is the medical
and hospital service corporations and the other insurers.
REPRESENTATIVE ROKEBERG said that is the intent of the amendment.
He indicated he has concern. He said HB 266 is a very important
piece of legislation that deserves a full review by all parties
involved. Representative Rokeberg said he would prefer HB 266 go
to a subcommittee to be reviewed.
Number 143
REPRESENTATIVE ELTON asked Mr. Miller if he is saying that he
doesn't expect that the savings will disappear under HB 266. He
said Mr. Miller seems to be saying that savings within the health
care system may be expanded because you're expanding the savings
that are there for the preferred providers to other providers.
MR. MILLER said what he was trying to say was in the hospital
area of the market, if there was a competitive bid process, there
could be savings that haven't yet been realized because no one
knows what discounts are available if there isn't a competitive
bid. If more facilities or providers are enfranchised into the
system, he doesn't feel that it is an all or nothing savings as
far as the savings from the PPOs. He said he doesn't anticipate
prices going down or up significantly if both of those things
come into play. He noted there are very limited major payers in
the state and perhaps negotiations would lead to good discounts
that were available to both facilities. That is a possibility.
It is hard to say. If you don't have a competitive bid, you're
not sure you have the best price. Mr. Miller said that is what
he is trying to say. He said he doesn't mean to say that if any
willing provider happens, you're going to see immediate
expansions in the discount.
Number 181
REPRESENTATIVE ELTON said he is interested in what the current
process is when somebody goes out for a PPO agreement. He said
he is trying to figure out what room full of animals could ever
design a bid process in something as complex as the medical
field. He said he doesn't see how you write a bid.
MR. MILLER explained in most managed care markets that have PPO
networks, and these sort of arrangements, they do bid. He said
he'd be glad to tell Representative Elton he knows how that
works, but his organization has never sat at the table to
negotiate on or have been given a bid package. He said he
doesn't know exactly how that would work.
REPRESENTATIVE ELTON asked Mr. Miller if he is saying that he
doesn't know the shape of the table because he has never been in
the room. MR. MILLER said they have attempted, at different
times, to speak with the major payers, but they haven't been
allowed to negotiate at least a portion of the contracts. He
said his client has been frustrated in those efforts.
Number 206
CHAIRMAN KOTT said the bottom line is that Mr. Miller is
suggesting that if the bill were to pass, it would instill
greater competition and probably have an affect at lowering the
prices.
MR. MILLER said with out a doubt in the long run, that would be
the case. In a small market, if you manipulate the market so
that only certain players are allowed to play, soon you'll have a
smaller number of players.
Number 227
DOUGLAS BRUCE, Chief Executive Officer, Providence Health System
in Alaska, was next to come before the committee to give his
testimony. He explained his organization operates Providence
Alaska Medical Center, formally Providence Hospital; and
Providence Extended Care Center, formally Our Lady of Compassion.
He noted they are in the development of Providence Horizon House
which will be the first assisted living facility for Alaskans.
MR. BRUCE said his organization is very concerned about the
proposed bill. Approving the "any willing provider" legislation
would have a very detrimental affect on the cost of health care
in the state. Preferred provider contracting, that is an
agreement between a provider of health care, a purchaser and
individual company or insurance company has been the key tool to
reduce or at least slow the spiraling cost of health care in
Alaska. The provider in their case, Providence Alaska Medical
Center, agrees to provide a discount in return for volume. Both
insurance companies and employers came to them and asked, "If we
send you all our Anchorage employees who need hospital care, will
you provide us a discount in return for the volume?" Mr. Bruce
said they have responded to those requests and he believes that
the committee will find that it has benefitted all parties and
has kept the cost of health reasonable, as evidenced by previous
testimony. If any willing provider is allowed to come into the
picture offering the same discounts, volume is disbursed.
Without offsetting volume, those discounts are impossible to
sustain. Nobody would offer the same price for a service if the
volume is expected to be able to be disbursed to competitors.
Therefore, instead of being competitive, it is an anticompetitive
legislative move.
MR. BRUCE said there have been questions about the ability of
employers being able to choose their health care providers. In
Alaska, the choice of hospital providers used to work where
employers purchase insurance at the going rate for their
employees, paying all or most of the premiums. There were no
incentives for using a particular hospital. Now a number of
employers, either through a select insurance plan or by direct
contract in the case of self funded programs, are making these
preferred provider arrangements to better manage their
organizations health care costs. If these purchasers of health
care desired and believed that it was in their interest to
include Alaska Regional in their bidding processes, they would.
They do not believe it is in their interest. Mr. Bruce noted he
would explain why later.
MR. BRUCE explained the employers usually pay all or a majority
of the premium costs for the employee. As the purchasers feel
they have the right to define the parameters of the benefit
package, the employee subscriber still has a choice of which
hospital to use but, of course, they have to be willing to pay
the difference in deductibles to honor the plan. These PPO
arrangements have not historically, in the state of Alaska,
involved physicians. They have been strictly arrangements with
hospitals.
MR. BRUCE said several issues have been raised by the initiators
of the bill say they are unable to compete on a level playing
field because as a for profit organization, they have to pay
taxes in Providence and a not for profit hospital does not have
to pay taxes. He said to that, they have responded. They have
the option of being a not for profit organization. (Indisc.)
there is a very good reason they have decided not to be. They
are in the business and they do. In contrast, the Sisters of
Providence see the provision of health care as a ministry and not
as a revenue generator. All earnings are kept in the state in
the further development of services to Alaskans. Certainly,
Providence must make sure their annual net revenue exceeds
expenses and are to remain viable. All revenue goes either to
provide charity care, community health care needs or to support
capital needs.
MR. BRUCE said we've also heard that this legislation is an
attempt to even the playing field between the large and small
hospitals. In response, he would like to remind the committee
that their competitor, Columbia, is the largest health care
corporation in the world. It is also the most profitable health
corporation in the world. HB 266 has been introduced because
Alaska Regional, which has earnings of about $4.5 million a year,
has not been willing to reduce its non competitive rates to
purchasers. Specifically, in the 1993 cost report, Alaska
Regional's average charge per adjusted discharge was $14,241.
That is the charge to the purchaser.
MR. BRUCE said, "Providence was $11,838 with costs to Alaska
Regional, do to having a lesser case mix index, and when I say
lesser case mix index Providence does more difficult cases like
open heart surgery and other things which raises the cost up, of
more than $15,000 per average discharge less than Providence."
Mr. Bruce said insurance companies look at statistics and if your
average charge, per discharge, to an insurance company is
$14,000, a competitors is $11,000, one of the factors is why
would you invite that person to negotiate with you if it is not
in your interest. Mr. Bruce said insurance companies, as do
businesses, do what is in their interest, in the public interest
and in the interest of what is going to further the fulfillment
of their business needs.
MR. BRUCE said Providence feels this issue is one which should be
worked out in the market place and not in the legislature. He
said they are not crazy about the way the health system works in
this country. They would much prefer collaboration rather than
confrontation in delivery of health care, but because they must
respond to the proposed legislation, they ask the legislators to
not interfere with one of the few tools to make health care
affordable in this state. Both hospitals have been very
successful serving Alaskans.
Number 343
REPRESENTATIVE KUBINA referred to Mr. Bruce saying all his
organization's earnings are kept in the state. He said he has
heard otherwise. He has heard that where they don't have
profits, the extra funds they do have over and above operating
costs, are shipped out.
MR. BRUCE said that is very inaccurate. All earnings and net
income is plowed back into local services and expansion of their
facilities. He noted the Sisters of Providence keep that
commitment in every state and community that they're in because
it is what they are all about. They don't personally gain from
this endeavor.
Number 353
REPRESENTATIVE ELTON said he thinks the most compelling part of
Mr. Bruce's testimony was the discharge cost and the comparisons
between Columbia and Sisters of Providence. He said there has
been a suggestion that perhaps a part of the difference in
discharge cost may be overhead. He asked how much of the
difference in discharge costs could be attributed to difference
in overhead because of taxation and other differences between a
nonprofit and a for profit corporation. MR. BRUCE said it is a
very small amount, it is in the 4 percent range for that specific
item when you're talking about total revenues. However, as a not
for profit, Providence Health System in Alaska is community
benefit services way in excess of what we would pay in property
taxes.
REPRESENTATIVE ELTON asked if that was charity work. MR. BRUCE
said it is charity work and the range is usually $6 million to $8
million a year. One of the services that is a service to the
state of Alaska is their thermal unit for burn patients. They
are the only ones who provide that service. It is a loser but it
does contribute overall. That loss is in lieu of paying taxes.
Number 392
REPRESENTATIVE SANDERS said when he first saw the bill he was
under the impression that this contract had been bid and that the
other hospital had lost the bid and now they were coming back
trying to get in on it. Then he understood this was not bided
but was negotiated. He asked why it wasn't bid. He asked Mr.
Bruce if he would mind if it was bid. He asked how it could be
bid.
MR. BRUCE referred to previous testimony that bid prices would
automatically lower the cost that is (indisc.) itself,
particularly for the reason that he stated. In a small confined
market, as in all businesses, if you're in the trucking business
and two trucking companies each have a price for five units of
trucking and one of the shippers says, "By the way, if I could
give you seven of the units instead of five and the other one
would get three of my shipping cartons, could you give me a
better price?" Mr. Bruce said you could do it because it is
units, unit cost and units equals the price where you are able to
do it.
REPRESENTATIVE SANDERS asked why it is not bid. He said he
missed that part. MR. BRUCE said it is not necessary. If the
insurance companies, Carrs, BP Exploration, etc., can right now
through Aetna and Blue Cross say we choose to have it bid. They
can do that but they don't because in their judgement, the costs
would be greater if it was bid than if it wasn't bid.
Number 440
REPRESENTATIVE ROKEBERG indicated he had a letter from the Alaska
State Medical Association that he had received today and said he
would give a copy to Mr. Bruce. The letter was from Doctor
Donald R. Layman(Sp.?). It said the State Medical Association is
in favor of this particular bill. He said in prior testimony,
many physicians support the bill because they are concerned about
the relationship between the doctor and the patient, and also the
matter of choice among patients. He asked Mr. Bruce cares to
comment.
MR. BRUCE said under any willing provider, it is a different
aspect for physicians than it is for the institutions. Mr. Bruce
stated the most expensive thing in health care is a thing called
choice. If you have ultimate choice in purchase, you will pay
more than if you have restricted choice, adequate choice of
physicians, adequate choice of hospitals. Any time you can
choose whoever you want to go to in the case of doctors, you will
not necessarily get the best quality or the best choice. In any
of deliver of health care there is what is called "outcome
variance." For the exact same kidney operation, open heart,
etc., you have what is called the "outcome variance." What you
want is a very narrow variance of what occurs to you and at what
price. The more you don't have managed care and the more you
have of the individual's choice, you have larger variances which
is more costly. He said that doesn't make it good or bad. You
do have to give up a little freedom for a lot of cost
differences.
REPRESENTATIVE ROKEBERG asked that it be put on the record that
he is a long time supporter of Providence Hospital. He had his
tonsils out in 1953, at Ninth and "L" street.
Number 475
REPRESENTATIVE PORTER referred to having spent a short period of
time in business in the private sector and he has spent a long
time in the public sector and said he knows the difference
between bidding in the public and private sectors. He said you
have all sorts of options in the private sector for constructing
the type of bid you want to put out. He asked Mr. Bruce what, in
his mind, is the reason that an insurance company is not
structuring a bid so as to say, "Please give me a quote in these
areas with these confined restrictions," and then allowing the
winner of that bid to sit down and negotiate a final contract.
MR. BRUCE said they make judgements on what is the average cost
and what is the out come. They do consumer referral pattern
studies. In other words, they find out who would be the provider
of your choice. They go to their customers and say, "If I'm
going to be signing up and answered your question around the
table," one of the factors is they say, "Which provider in this
community, consumer, would you like us to have a relationship
with?" In Anchorage, more people choose Providence.
Number 530
REPRESENTATIVE KUBINA referred to Mr. Bruce saying that his
organization provides open heart surgery but the other
institution doesn't. He asked if there are things that the other
institution provides that Mr. Bruce's organization doesn't.
MR. BRUCE said the answer is no. He noted the other organization
is active in trying to get into doing open heart surgery. Mr.
Bruce said he is strongly opposed to. He said they are the only
open heart program in Alaska and they do about 300 hearts a year.
Anytime that you get less than 175 hearts in any program, the
quality, due to the need for the frequency of the numbers and the
training of the nurses and physicians, is reduced. He indicated
Alaska Regional Hospital has just announced that they are going
to start up a competing open heart program, but the number of
hearts in this state are not sufficient to have two programs.
MR. BRUCE discussed how Alaska Regional Hospital got the contract
for the Veterans Administration (VA). He noted that his
organization was slightly under them on the bidding, however, the
VA built the facility on their campus. They were given the
contract based on other criteria other than cost.
MR. MILLER said his organization recently announced that they are
going to start a heart unit.
Number 543
REPRESENTATIVE ELTON said he wants to make sure he understands
the essence of the argument. He said Mr. Bruce is saying that
under any willing provider system, if it is open to a completely
free and competitive bid, there is no real incentive to do a low
bid. He said, "Simply because so what if the competition gets
it, if you're allowed to match it..."
MR. BRUCE interjected, "...or lose money."
REPRESENTATIVE ELTON said there is no real incentive under that
kind of a system for somebody to come in with a low bid. MR.
BRUCE indicated that is correct.
REPRESENTATIVE ELTON referred to the competitive situation with
hospitals and said he has recently received some phone calls from
Human Affairs. He referred to the argument of why come in with a
low bid if you can just match later on, and asked if that works
in the Human Affairs agreement that they have with the state or
is the logic somewhat different.
MR. BRUCE referred to Human Affairs and said he assumes
Representative Elton is talking about he mental health portion.
He said Human Affairs is a form of "gatekeeper" or "certification
program," so that patients in mental health don't self refer to
physicians and have bills. That program is attachable to any PPO
or any non PPO. It is an independent thing.
REPRESENTATIVE ELTON said there would be no reason that anybody
could be a provider at that point as long as that person had the
appropriate professional certification.
MR. BRUCE said no matter who is going to be providing the
service, the first gatekeeper will ask is, "Do you need the
service." If you get by that, whatever negotiated price you have
negotiated - that is what happens. Where Human Affairs makes the
savings for its purchasers, it prevents unnecessary usage of at
whatever rate you've negotiated.
Number 583
MS. COUGHNOUR said they contracted with Human Affairs for their
employees. This is a managemental health program. They do have
a select group of providers and that is how they get volume
discounts for their referrals. In a sense, they are a PPO of
mental health professionals. She said she also wanted to make it
clear that municipality does spread their insurance program and
their PPO is contracted through their insurance carrier. If
Alaska Regional or any other hospital wanted to bid on the
municipality's business and they were partners with an insurance
carrier, they would have the opportunity to bid. She said as far
as the municipality is concerned, they have not eliminated
anybody from bidding on their business.
Number 614
CHAIRMAN KOTT said he has a proposed CS for HB 266. He said it
is language that was suggested to him by the Division of
Insurance. It is CS "F," dated 4-26-95.
Number 635
MARIANNE K. BURKE, Director, Division of Insurance, Department of
Commerce and Economic Development, said she was provided a copy
of the amendment. She said on Monday, Don Koch did provide some
suggested language which was included in the amendment.
CHAIRMAN KOTT informed Ms. Burke that the committee was dealing
with the CS and not the amendment.
TAPE 95-46, SIDE A
Number 000
CHAIRMAN KOTT said page 1 is the same as the original bill, but
subparagraphs 1, 2 and 3 have been added.
MS. BURKE said the CS does agree with her division's
recommendations on some proposed compromised language.
CHAIRMAN KOTT asked MS. BURKE to explain the affect of the new
language.
MS. BURKE said the affect is to say that if a provider is willing
to meet the terms and conditions of a preferred provider
agreement, and the terms cannot be denied to a willing provider.
She referred to testimony that has already been given that the
contractual relationship that is entered into by the provider
includes not only the discount for volume but it also imposes on
that provider as part of the contractual relationship. The
financial responsibility that is in lieu of the solvency of a
regulator (indisc.). She continued to give an example.
REPRESENTATIVE KUBINA asked if the state of Alaska goes out to
bid with Aetna, Blue Cross, etc. MS. BURKE said the placement of
the state of Alaska insurance is done through the Division of
Retirement and Benefits, Department of Administration and she
isn't familiar with their process. She noted it is her
understanding that it does go out to bid.
Number 078
REPRESENTATIVE PORTER asked if she is saying, "If hospital A bids
or is awarded a PPO and hospital B agrees to meet the prices and
specifications of that contract, then hospital B may receive
patients from the provider or from the group. But that if it
does, it must main -- it must -- hospital B must maintain that
services regardless of whether they are making money or not on it
or hospital A."
MS. BURKE said, "If the contractual arrangement, lets say that --
choose the state of Alaska because I can't imagine it running out
of money. Lets just say employer A has entered into a PPO
arrangement with hospital A. This language would then say `If
hospital B is willing to meet the terms and conditions of this
contract then they would not be denied the ability to receive
patients.' And what I am suggesting, it is important to keep in
mind, it is not only the upside of this contract which means the
volume that you're going to get in exchange for the discount, it
is also the potential downside. If employer A does not have
sufficient funds or for some reason this contractual arrangement
does not have the sufficient funds to provide that level of
payment, then hospital B has agreed to provide this service even
if the cost is higher at that -- on the agreed upon rate.
Hospital C also agrees to the same terms and conditions of the
contract."
REPRESENTATIVE PORTER asked who is running out of money.
MS. BURKE said, "Lets say hospital B's cost of doing this
procedure increases 45 percent. They're still stuck with
providing the procedure at the same price. They are a party to
the contract. They can't back out of it."
Number 140
REPRESENTATIVE ELTON said he would like to know whether Ms. Burke
thinks that the approach taken in HB 266 will affect the cost of
health care delivered in the state of Alaska. He also asked
whether that cost would go up or down if the bill is passed.
MS. BURKE said in the lower 48 where preferred provider
arrangements have been put into place, there have been decreases
in cost. The testimony offered at the meeting today is quite
valid. She said we are not Southern California. We do not have
a unlimited number of providers. We do not have the same
competitive environment that is enjoyed in other areas. Ms.
Burke said from a economic point of view, it would appear that if
you can take it to the free market and bid on providing a
service, you are also on the hook for providing that service
whether you can make money on it or not. It would seem to her
that the free market would very carefully evaluate and come in at
a price that they felt they could make a profit. Ms. Burke said
she believes that the PPO concept will save money.
REPRESENTATIVE ELTON asked if the adoption of HB 266 would mean
that we would no longer have a PPO environment in the state of
Alaska. MS. BURKE said she doesn't think so.
Number 188
REPRESENTATIVE ROKEBERG referred to the amendment that was
brought forward and asked Ms. Burke to comment in terms of the
intent to cover the insurance companies and not just the other
portion of the insurance sector
MS. BURKE said she isn't sure she understands the question.
REPRESENTATIVE ROKEBERG said because of the AG's opinion, the
intent was to bring in premium paying companies, stock and mutual
companies.
MS. BURKE said the AG's opinion did state that although there is
no enabling legislation currently on the books. A stock company
or other indemnity companies can form PPOs.
REPRESENTATIVE ROKEBERG asked if that was the intent of the
amendment and if that is what has caused confusion.
MS. BURKE said the legislation that is currently in place permits
PPOs. What the amendment does is it says that if a provider is
willing to meet the terms and conditions, then it is open. She
noted she is referring to the CS. Ms. Burke said she would like
to point out that this is in AS 87, which is specific to the
hospital and medical service corporations. She said as she has
mentioned, the AG's opinion does state that any provider can
enter into a preferred provider arrangement.
Number 223
REPRESENTATIVE ROKEBERG made a motion to adopt CSHB 266(L&C),
Ford, 3-26-95. Hearing no objection, it was so ordered.
REPRESENTATIVE ROKEBERG said he has given the committee a
proposed amendment which clearly causes confusion. He said he
hasn't seen the AG's opinion and, therefore, he would recommend
that the bill be moved to a subcommittee which he would be
willing to chair.
CHAIRMAN KOTT said he believes the recommendation by
Representative Rokeberg is appropriate. He said the amendment
Representative Rokeberg is offering goes beyond the far reaches
of the original intent of the bill. Chairman Kott said it would
be his recommendation that the CS and the proposed amendment be
forwarded to a subcommittee of three consisting of
Representatives Rokeberg, Elton and Masek.
REPRESENTATIVE ELTON OBJECTED for the purpose of a comment. He
referred to the provision of the Human Affairs contract and said
he may need the mental health services afterwards.
REPRESENTATIVE KOTT said the bill would be referred to a
subcommittee.
HB 243 - LICENSING OF LANDSCAPE ARCHITECTS
Number 271
The last order of business was HB 243, "An Act relating to
licensure of landscape architects." CHAIRMAN KOTT asked Mr.
Dozier to come before the committee to explain the bill.
Number 286
GEORGE DOZIER, Legislative Assistant to Representative Pete Kott,
said currently, under state law architects, land surveyors and
engineers are regulated by the State Board of Registration for
Architects, Engineers and Land Surveyors. That means that this
board is in charge of admitting individuals to practice those
professions. The board is responsible for setting standards for
the safe practice of those professions. It disciplines
individuals that violates regulations and those who are not
safely practicing those professions, thereby, serves the public
safety.
MR. DOZIER said currently there is no board, including this
board, that regulates landscape architects. He said it is the
chairman's position that landscape architecture is a separate and
distinct profession. It calls for specialized knowledge in
scientific, engineering, and biological principles. He referred
to individuals that practice this profession and said if it isn't
done in a safe manner it could harm public safety. HB 243 does
just that. It brings, within the scope of coverage of the state
board, the practice of landscape architecture. Mr. Dozier said
the bill is a large bill containing concept which is that
landscape architecture should be regulated by the state. The
remainder of the bill, 99 percent of it, consists of conforming
amendments to existing statutes.
Number 316
CHAIRMAN KOTT informed the committee members that there is a
proposed CS.
REPRESENTATIVE ELTON moved that CSHB 243(L&C), 9-LS0858C,
Lauterbach, dated 4-12-95. Hearing no objection, CSHB 243(L&C)
was adopted.
CHAIRMAN KOTT asked Mr. Dozier to explain the CS.
MR. DOZIER said the principle change is in Section 29 which adds
subsections 10 and 11, which are not included in the original
bill. He said Section 11 was added for the purpose of making it
clear that individuals who have small business, and quite often
teenagers that do lawn and yard work, aren't included in the
coverage of the bill. He referred to Section 10 and said people
from the profession are available to testify and he would defer
it to them.
REPRESENTATIVE ELTON said he just got "beat up" by a person from
the Alliance for all the unnecessary regulations that get into
the way of Alaska businesses. He said he wanted the record to
reflect that here are Alaska businesses coming to the legislature
asking for regulation, and he is going to throw it back into
their face the next time the Alliance comes down here because
every piece of legislation is not being generated by a bunch of
legislators saying, "O.K., how can we over regulate." He said
every statute that leads to regulation that he has seen is
(indisc.) business. He said he wanted the record to reflect very
very clearly that he is going to be business friendly by passing
this business request out of committee, but he going to throw it
back at them the next time they come down here and tell him that
he is over regulating them.
Number 465
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development, said the
department doesn't support the legislation because of the danger
to public health and safety posed by poor quality landscape
architecture seems low to the department. She said it is
possible that more testimony on the bill will clarify and
convince the department that there is danger. At this point, the
department doesn't see danger that merits limitation of Alaskan's
opportunity to perform the work of their choice. Ms. Reardon
explained construction contractors who do the actual moving of
earth and plant material are currently licensed by the division.
It is a specialty contractor license that would not involve the
design of landscaping which the bill deals with. All the
landscape architects and architecture firms must currently have
business licenses. She said that is how they regulate, only with
business licenses or through construction contractor licenses for
the actual landscape work. Ms. Reardon said she agrees with Mr.
Dozier that landscape architecture is a separate and distinct
profession from architecture and engineering which the department
currently licenses. The question is a policy question as to
whether the regulation is necessary to protect the public. She
said the bill would certify people has having certain
qualifications in landscape architecture so that it may benefit
consumers that the person they hire has some training in that
area. However, the restriction of the practice of landscape
architecture for folks that don't have a license seems
unnecessary or excessive at this time. If supporters of the bill
do demonstrate that public health and safety concerns are
involved, she would suggest that the licensing program be
modified and made a bit more modest so that anyone who has passed
the national landscape architecture course could submit proof of
that and the division would license them. Ms. Reardon said
perhaps the use of the term "landscape architect" would be
limited to those folks, but perhaps people who did not call
themselves licensed landscape architects could do the same work
without going through the licensing.
MS. REARDON said the bill adds a nonvoting landscape architect to
the board. She said she believes this was an effort to hold down
costs as the sponsors may have felt that having the member be
nonvoting would somehow make the costs less. She said she
doesn't really think that will turn out to be the case because
the nonvoting member will still need to travel or participate in
meetings, although she supposes the nonvoting member could choose
to only participate by teleconference. She said her suggestion
is to go a head and give that landscape architect the power to
vote as it would be a smoother way of operating the board since
everyone else who participates in meetings would be voting.
MS. REARDON said if the committee does decide that there is
public interest in restricting this profession to people with
certain qualifications, she would suggest that Section 25 and 32
be clarified so that the definition of the practice of landscape
architecture does not overlap with engineering. Those two
sections point out that the definition of landscape architecture
does include some things which engineers do which landscape
architects shouldn't be permitted to do. Section 25 says, "This
chapter does not prohibit the practice of landscape architecture
by an engineer." It also says that even if you are a landscape
and the definition of landscape architecture covers a certain
procedure, if that procedure is really an engineering activity
you can't do it. She said it seems that there needs to be more
thought put into exactly where the boarder is between engineering
and landscape architecture to eliminate some of the overlapping.
She stated Section 25 needs clarification and work on the
definitions.
MS. REARDON said there needs to be a technical amendment needed
in Section 24. It appears a subsection "A" needs to be added at
the beginning of Section 24 because Section 25 says,
"Notwithstanding A of this section."
REPRESENTATIVE ELTON referred to making the nonvoting member a
voting member and said we would then end up with a board that has
ten members. He said most boards have odd numbers. He asked Ms.
Reardon if she recommends that two be added or replace one of the
others.
MS. REARDON said she would not recommend removing one of the
engineers or architects without having discussed that with those
boards. She said adding another public member would increase the
overall number of people and would increase the cost of the
board.
REPRESENTATIVE PORTER said Section 5 seems to say that the
nonvoting member wouldn't be entitled to per diem and travel
expenses. MS. REARDON said that is true, but it seems that for
the person to participate on the board, they would need to
participate in the meetings. Therefore, she assumes there would
be teleconference costs. She noted the meetings seem to be two
day meetings. It will not necessarily be a savings over just
flying to Anchorage or Juneau and participating.
CHAIRMAN KOTT said he would take testimony from Anchorage.
Number 492
DWAYNE ADAMS testified from Anchorage. He said he is (indisc.)
in a landscape architecture firm of many people. Mr. Adams
referred to the items Ms. Reardon brought up and said most of
them were worked out with the Occupational Licensing Division
about a year ago. It came to his attention about three weeks ago
that were some concerns in the department. Mr. Adams referred to
the public health and safety issues and said, for example, there
is nobody licensed for the design of playground equipment. He
said there are liability and safety issues involving the design
of playground equipment. He pointed out playground equipment
structures, the height a child could fall, the type of equipment,
etc., are unlicensed in the state of Alaska, but are licensed in
45 other states.
MR. ADAMS said the universal design standards for accessibility
is one of the things that landscape architects deal with on a
daily basis. It is in the public heath and the safety concerns
that landscape architects be licensed and the people designing
walkways and the facilities should be knowledgeable of these. It
is important that landscape architects be licensed for the design
of (indisc.) structures, simple walls and foundations that go
into landscape architectural designs. He said the relationship
of civil engineers is (indisc.) of architects and structural
engineers.
MR. ADAMS said landscape architects need to be licensed. As the
owner of an eight person firm, he finds that he loses a
significant amounts of (indisc.) to landscape architects.
Approximately 50 percent of the work in the state in the realm of
landscape architect is done by out of state landscape architects.
The Alaska Native Hospital their (indisc.) designs all by out of
state landscape architects. He continued to give more examples
of organizations using out of state landscape architectures.
MR. ADAMS explained that people who do this work should
understand the Arctic conditions, the fundamentals of snow
removal, salt, sand, plant materials, walking surfaces. Those
are the fundamentals that landscape architects need to know. A
component of the licensing requirement still should require that
arctic engineering be a fundamental part of the training of
landscape architects licensed in this state. He thanked the
committee for listening to him.
Number 524
LINDA CYRA-KORSGGARD, Landscape Architect, testified from
Anchorage. She said she is licensed as a landscape architect
both in Washington and Maine. The contribution of this
profession to the health, safety and welfare of Alaskans warrants
registration of the practice. The SOA(?) members are currently
employed in Alaska's private landscape architectural offices and
are publicly employed by federal offices of the Forest Service,
the National Park Service, Fish and Wildlife Service and the
Bureau of Land Management. In addition, they are employed in
state offices of the Department of Natural Resources and the
Department of Environmental Conservation. Municipalities employ
landscape architects in park and recreation departments.
Professional qualifications for landscape architects include a
professional four or five year degree from one of over 40
accredited colleges or university programs. Landscape
architecture is a profession licensed in 45 out of 50 states.
Ms. Cyra-Korsggard explained the Alaska Professional Design
Council, which is made up of (indisc.) land surveyors has taken a
vote and has agreed to support them in their efforts to become a
licensed profession. The AELS has also made that same
determination.
MS. CYRA-KORSGGARD said some the areas of expertise that
(indisc.) are laws and regulations protecting the environment are
signage and scenic road and trail pull out designs, official
analysis of impacts of roadway and utility corridors, trail
alignment, geometry and user conflicts, erosion control
principals, relationship of recreational activities, fertilizers,
insecticides, etc. Ms. Cyra-Korsggard continued to inform the
committee of laws and regulations protecting the environment.
She thanked the committee for listening to her.
Number 559
LEE WYATT testified from the Mat-Su teleconference site. He said
he is a 21 year resident of Alaska. When he first came to
Alaska, it was to work on the pipeline and he came as a landscape
architect. He said Aleyska called him a visual impact engineer.
MR. WYATT explained he earned a five year professional degree in
landscape architecture from the University of Washington in 1968.
In 1972, he took a four day 36 hour exam to receive a national
(indisc.) which allowed him to become a registered certified
landscape architect in the state of Washington. He has been
registered and has practiced in the states of Oregon, Montana,
Colorado and Nebraska. He is currently licensed in the state of
Idaho.
MR. WYATT said he personally believes that in one form or
another, the basic principles and (indisc.) of the practice of
Alaska architecture, on a daily basis, are utilized in his
position as the City Administrator/Public Works Director for the
City of Wasilla. Landscape architects are normally trained and
educated to be knowledgeable in almost all the professional
design disciplines, as we know them, that are addressed in the
other portions of this particular statute. Licensing would test
knowledge and capability and would ensure competence in the
market place. It would also allow people who are in the current
practice to compete against those people who come from out of
state to practice in this state, not knowing about the special
considerations of Alaska. Some of the considerations relate to
arctic engineering, climate, plant materials, frost, etc.
Landscape architecture is an honorable profession. HB 243 is not
over regulation. It would protect the citizens rights and all
those who visit. He urged passage of HB 243.
Number 584
BURDETT LENT, Landscape Architect, was next to testify from the
Mat-Su teleconference site. He said he has been a landscape
architect for about 34 years. He informed the committee that the
types of projects he has been involved in since he has been in
Alaska include residential planed unit development, site
planning, planning and zoning, commercial and office building
landscaping, highway landscaping, health care facilities, local
parks, etc. He said these were done for a variety of clients
from small residents up to projects involving land use.
MR. LENT said to hire people from out of state to do some of the
projects is not in the state's best interest. He said he has
worked on projects where there are large amounts of funds being
invested in infrastructure for health care facilities. He said a
lot has already been mentioned about health, safety and welfare
issues. He noted a landscape sprinkler system that is not
properly designed can poison a domestic water system. Mr. Lent
said 45 of 50 states have registered landscape architects, and
therefore, provides a source of income for those landscape
architects. In Alaska, we have an unequal footing with other
professions where they are asked to do work of equal statute, but
they are not protected from people coming in from out of state to
do that same type of work. It is inconsistent. Another
inconsistency in state law is the fact that landscape contractors
are licensed and are controlled with insurance requirements.
They carry far less responsibility than landscape architects do.
MR. LENT said by licensing landscape architects, it will help
familiarize the profession to other Alaskans who do not
understand the profession. Local communities will adopt
landscape standards as the large cities in Alaska have done. Mr.
Lent said the benefits will accrue to all residents of Alaska in
the proper planning of the development of our natural resources.
Number 635
CHAIRMAN KOTT announced the committee would recess until further
notice as the committee members have been summoned to the House
Chambers.
TAPE 95-46, SIDE B
HB 260 - MARINE PILOTS
Number 000
CHAIRMAN KOTT reconvened the meeting. He said the committee
would address HB 260, "An Act relating to marine pilots and the
Board of Marine Pilots; extending the termination date of the
Board of Marine Pilots; and providing for an effective date."
Chairman Kott referred to the last meeting on the bill and said
Representative Kubina was going to offer an amendment.
REPRESENTATIVE KUBINA said he had asked all the groups involved
to try to come to an agreement amongst themselves. He said he
isn't comfortable in moving any amendment to which they can't
come to an agreement on. He said he doesn't believe they have
done so. Representative Kubina asked if the committee had
adopted a CS at the previous meeting.
An unidentified speaker said the committee had adopted two
amendments at the previous meeting.
ADJOURNMENT
There being a call on the House floor, CHAIRMAN KOTT promptly
adjourned the House Labor and Commerce Committee meeting.
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