Legislature(1999 - 2000)
04/19/2000 09:21 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE April 19, 2000 9:21 A.M. TAPES SFC-00 # 99, Side A and Side B CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 9:21 A.M. PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell, Senator Al Adams, Senator Loren Leman, Senator Gary Wilken, Senator Leman, Senator Donley, Senator Phillips, Senator Green. Also Attending: SENATOR HALFORD; REPRESENTATIVE CON BUNDE; REPRESENATIVE NORMAN ROKEBERG; PATTI SWENSON, Staff, Representative Bunde; DAN EASTON, Director, Division of Facility Construction & Operation, Department of Environmental Conservation. Attending via Teleconference: OCIE ADAMS, Matsu; VALEN BAIR, Matsu; BILL GREEN, Anchorage; ANDY WARWICK, Clean Water Fund/Drinking Water Fund, Department of Environmental Conservation, Fairbanks; MIKE BURNS, Program Manager, Municipal Matching Grants, Division of Facility Construction & Operation, Department of Environmental Conservation, Anchorage. SUMMARY INFORMATION SB 308-MARINE PASSENGER VESSELS SB 308 was SCHEDULED but not HEARD. HB 133-SERVICE AREAS: VOTER APPROVAL/TAX ZONES SCS CS HB 133 (CRA) was reported out of Committee with a "do pass" recommendation and with fiscal notes by Department of Community and Regional Affairs dated 3/31/00 and Department of Community & Economic Development dated 3/7/00. HB 211-HEALTH CARE INSURANCE: MANAGED CARE PLANS SCS CS HB 211 (FIN) was reported out of Committee with a "no recommendation" and with a fiscal note by the Department of Community & Economic Development dated 3/07/00. HB 304-CLEAN WATER FUND/DRINKING WATER FUND SCS CS HB 304 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by Department of Environmental Conservation dated 4/10/00 and Department of Revenue dated 12/22/99. SENATE CS FOR CS FOR HOUSE BILL NO. 133(CRA) am S "An Act relating to municipal service areas and providing for voter approval of the formation, alteration, or abolishment of certain service areas." REPRESENTATIVE CON BUNDE stated that Alaska's Constitution provides for maximum local self-government and for the creation, alteration, or abolishment of service areas subject to the provisions of law. He pointed out that at present time, Alaska has approximately 200 service areas. In those areas, the local residents are responsible to assess themselves to pay for particular services, such as snow plowing and road maintenance. HB 133 would amend AS.29.35.450 to support local control by clearly identifying who should vote on the abolishment and alteration of a service area under three scenarios: · Abolishment of a service area and subject to approval by the majority of the voters residing in that service area. · Abolishment and replacement of a service area. That action must be approved by a majority of voters inside an existing service area and by a majority of the voters residing in the proposed service area but outside the existing service area. · Alteration of a service area or combining it with another service area. That action must be approved, separately, by a majority of the voters who vote on the question and who reside in each of the service areas or in a proposed service area affected by the proposal. Representative Bunde advised that the proposed legislation would determine a long time debate about who is entitled to vote during the creation, alteration or abolishment of a service area. Senator Phillips asked the changes which were made in the Senate Community and Regional Affairs (CRA) version. Representative Bunde replied that the changes were to fire service concerns. PATTI SWENSON, Staff, Representative Bunde, pointed out that version "G" was the one submitted by the CRA Committee. Co-Chair Torgerson referenced Page 2, Subsection (d) and asked who it would affect. Ms. Swenson responded that both the Kenai and Mat-Su Boroughs would be affected. st Co-Chair Torgerson asked why 1 Class city populations were nd included, when the reference was given to 2 Class cities. Ms. Swenson explained that the population numbers were indicated on the web and are the numbers that the legislation was based upon in working with Tamara Cook, Legislative Legal Counsel. st Co-Chair Torgerson asked if it was the intent to include 1 Class cities in the population trigger. Ms. Swenson advised that only the Kenai Borough had been included, not all of the greater Kenai area. She mentioned that there had been discussion with Tam Cook regarding special and mobile legislation. She believed that the nd populations in the 2 Class Boroughs would fit. Co-Chair Torgerson noted his concern with service areas "gobbling up" any land that they want, as long as they do not increase their area by more than 10%. He stressed such an action could occur without a vote. Representative Bunde replied that could apply only to a fire service area. Following a brief at-ease, Co-Chair Torgerson admitted his confusion with the language on Page 2, Lines 19-22. He advised that it had been explained to his satisfaction. OCIE ADAMS, (Testified via Teleconference), Matsu, spoke in support of the legislation. He voiced his appreciation for the thought and energy that went into it. VALEN BAIR, (Testified via Teleconference), Matsu, noted support for the proposed legislation. BILL GREEN, (Testified via Teleconference), Anchorage, testified that the Anchorage Charter provides that no changes can be made to service areas without voter approval. HB 133 reduces the maximum local self government dictated by the Constitution and repeals significant portions of the Anchorage voter approved charter in the process. He noted that it would restrict the "home rule" nd and in the process and would make exceptions for 2 Class Boroughs. That would make it inconsistent with the State Constitution. The proposed legislation would take away the voters ability in Anchorage to govern themselves. He noted that the bill was not limited to road service areas which are unique to Anchorage. The charter would prohibit the development of new subdivisions where an owner might want to join. He emphasized that the bill was submitted at the request of the Fairbanks Borough and could substantially disadvantage nd Anchorage's economy while at the same time exempting 2 Class Boroughs. Representative Bunde responded that there are fifty-three limitations to the "home rule" power at this point. He commented that the legislation would guarantee that the local residents maintain their rights. Co-Chair Parnell MOVED to report SCS CS HB 133(CRA) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. SCS CS HB 133 (CRA) was reported out of Committee with a "do pass" recommendation and with fiscal notes by Department of Community and Regional Affairs dated 3/31/00 and Department of Community & Economic Development dated 3/7/00. COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 211(FIN) am "An Act relating to regulation of managed care insurance plans; amending Rule 602, Alaska Rules of Appellate Procedure; and providing for an effective date." REPRESENTATIVE ROKEBERG stated that patients need assurance that the quality of their health care will not be compromised as managed care expands. He noted that the legislation would provide a reasonable standard of health care. It would establish requirements for contracts between managed care entitles and their health care providers, patients and their group managed care plans, health care insurers and their insured and would provide patients with the following: · Access to emergency room services; · Availability of medical services or adequate referral options; · Full disclosure of treatment options; · Choice of health care providers, including specialists; · Clear descriptions of covered items and services, benefits, procedures, compensation methods, availability (and exclusions) of prescription medications and the availability of translation or interpreter services; · A point of service plan option; · Follow-through of pre-approved payment; · Quick utilization review decisions; · Opportunity for appeals of utilization review decisions; · Added protection from denial, reduction; or termination of payment for health care services. In addition, the legislation will give health care providers the freedom to share all testing and treatment options with their patients, and would let them advocate for their patients without the risk of being penalized or terminated by the managed care entity they contract with. The bill would prohibit contracts between managed care entities and health care providers from financial incentives for providers to withhold medically necessary services. Representative Rokeberg stressed that HB 211 was necessary to ensure continued quality health care in the face of a growing managed care industry. He urged the Committee's support of the legislation. Co-Chair Torgerson commented that Representative Rokeberg had requested that Amendment #1, 1-LS0472/X.1, Ford, 4/15/00, not be offered at this time. [Copy on File]. Co-Chair Parnell MOVED to adopt Amendment #2. [Copy on File]. Representative Rokeberg explained the amendment. He noted that the first portion of the amendment was technical. Subsection © clarifies concerns voiced by Legislative Legal and would make the language more understandable to the average person. Co-Chair Parnell noted an important limitation allowing persons to communicate privately for the purpose of health care services. There being NO OBJECTION, Amendment #2 was adopted. Senator Green indicated a "conflict of interest" with the legislation because she has associations with the insurance industry. She referenced the definition of medical necessity and asked if there was a distingushment between medical necessity and medical treatment. Representative Rokeberg acknowledged that concern has been debated. He stated, sometimes it is better to "not" define something for matters of flexibility. The bill will let common law define medical necessity. Senator Green asked if there was any language in the legislation which might rewrite the tort reform bill. Representative Rokeberg replied the liability section was different, creating a "new cause of action". He noted the concern had been substantially worked, keeping in mind the State Constitution private situation. Senator Adams MOVED to report SCS COMMITTEE SUBSTITUTE HB 211 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SCS COMMITTEE SUBSTITUTE HB 211 (FIN) was reported out of Committee with a "no recommendation" and with a fiscal note by the Department of Community & Economic Development dated 3/07/00. SENATE CS FOR CS FOR HOUSE BILL NO. 304(RES) "An Act relating to issuance and sale of revenue bonds to fund drinking water projects, to the Alaska clean water fund, to creation of an Alaska clean water administrative fund and an Alaska drinking water administrative fund, to fees to be charged in connection with loans made from the Alaska clean water fund and the Alaska drinking water fund, and to clarification of the character and permissible uses of the Alaska drinking water fund; amending Rule 3, Alaska Rules of Civil Procedure; and providing for an effective date." DAN EASTON, Director, Division of Facility Construction & Operation, Department of Environmental Conservation, explained that HB 304 addresses the low interest loan program. Low interest State loans from the Alaska Drinking Water Fund and the Alaska Clean Water Fund offer municipalities the means to build drinking water and sewage facility projects. The bill would allow the State to use revenue bonds to capitalize the Alaska Drinking Water Fund. He continued, both the Drinking Water and Clean Water funds are capitalized by annual federal grants that require a 20% State match. Bond revenues will help provide the State match for federal drinking water project money. However, the State is only authorized to sell bonds for the Clean Water Fund. It would make sense to extend the leveraging power to the Drinking Water Fund. As with existing law, the bill would require the State Bond Committee to conduct its activities in the best interests of the State, in a manner that would accomplish the most advantageous sale of the bonds. The legislation would provide for a new, self-supporting structure to pay for the costs of operating these important loan programs. Mr. Easton advised that the bill had been amended in the Senate Resources Committee to stipulate how to charge interest to private and public utilities. Co-Chair Torgerson asked if the Department was supportive of the amendment adopted in the Senate Resources Committee. Mr. Easton replied that the Department could administer the bill either way. It becomes a question of whether the State wants to "level the playing field" between a privately owned utility and the public owned utilities. The amendment does not address that concern. He noted that the agency does not have a position on the amendment. Senator P. Kelly suggested that the private utility owners would have to pay the higher costs, which would need to be passed on to the customer. He recommended deleting the previous adopted amendment. Senator Adams asked if that language was the only difference between the two versions. He recommended adopting the previous version of the bill. Mr. Easton stated that was the only change from the House version. Tape: SFC - 00 #99, Side B 10:24 am Senator Green questioned if there would be an advantage to privately owned, publicly regulated utilities. Senator P. Kelly noted that the Senate Resources Committee version was attempting to address information proposed by the State Bond Council. Whether private or public, there would be no accrual; costs can not accrue to the utility owner. The costs will be passed on. The only people affected would be the ratepayers. He agreed that the playing field would not be leveled between utility owners. Senator Leman commented that if the State allows private utilities to borrow at similar rates as the municipalities, they could make less money available for others needs. He asked if that would be a danger. Mr. Easton replied that the funds have done well. It is expected that they will continue to grow and that "sharing the pie" would not be a problem. Senator Green addressed the investment, borrowing and funding choices and how that would affect the whole. Senator P. Kelly mentioned that the party with the advantage or disadvantage would be the ratepayer. It has been clarified that the utility owner does not receive either the advantage or the disadvantage accrued. Senator Leman stated that any utility would want an "advantage" in order to keep their customers satisfied. It would be to their advantage to finance less costly money. He reiterated that the utilities should have a level playing field in the State of Alaska. Senator P. Kelly MOVED a conceptual Amendment #1 to the "M" version of the legislation, Page 7, Lines 21-22. The language would delete the underlined words and insert "interest rates for each class of borrowers shall be established as the same percentage of market rate index as appropriate to that class of borrowers". He noted that language would need to be changed on Page 11, Lines 10-11, following "fund". Senator Green OBJECTED. Senator Phillips asked the concern. Senator P. Kelly replied that the issue is that language would provide higher rates of interest to private regulating utilities. All those rates would be passed on to customers. He believed that the revised language would level the playing field. Senator Phillips asked if the loan program was available to both the private and the public utility companies. Senator P. Kelly replied it was. SENATOR HALFORD explained that the language would open a new program to private utilities. He noted that the concern is that private utilities reduce the total amount money available for the public utilities. Opening to a new class would not be a beneficial action. Private utilities save under the version of the bill before the Committee, whereas, the amendment could jeopardize that fund. Senator P. Kelly pointed out that Mr. Easton had indicated that would not be an issue. Senator Wilken declared a conflict of interest and requested to abstain from voting. Senator Leman OBJECTED. Co-Chair Torgerson noted that Senator Wilken's conflict would be indicated in the record. A roll call vote was taken on the motion to adopt Amendment #1. IN FAVOR: Wilken, P. Kelly, Leman, Adams, Torgerson OPPOSED: Green, Phillips Senator Donley abstained from voting. Senator Parnell was not present for the vote. The MOTION PASSED (5-2). Senator Leman referenced Page 8, noting that on Line 8, "waste water" should instead be "wastewater". ANDY WARWICK, (Testified via Teleconference), Clean Water Fund/Drinking Water Fund, Department of Environmental Conservation, Fairbanks, offered to answer questions of the Committee. MIKE BURNS, (Testified via Teleconference), Program Manager, Municipal Matching Grants, Division of Facility Construction & Operation, Department of Environmental Conservation, Anchorage, voiced appreciation for actions that the Committee had taken. He offered to answer any questions of the Committee. Senator Leman MOVED to report SCS CS HB 304 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. SCS CS HB 304 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by Department of Environmental Conservation dated 4/10/00 and Department of Revenue dated 12/22/99. SENATE BILL NO. 308 "An Act relating to certain passenger vessels operating in the marine waters of the state." Co-Chair advised that SB 308 had been SCHEDULED but would not be HEARD. The bill was rescheduled. ADJOURNED Senator Torgerson adjourned the meeting at 10:42 am.