Legislature(1993 - 1994)

04/28/1994 08:45 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         April 28, 1994                                        
                            8:45 a.m.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-94, #83, Side 1 (150-end)                                                
  SFC-94, #83, Side 2 (end-000)                                                
  SFC-94, #85, Side 1 (000-050)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Drue  Pearce,  Co-chair,  convened the  meeting  at                 
  approximately 8:45 a.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  In addition  to Co-chair Pearce, Senators  Rieger, Kerttula,                 
  Kelly, Jacko and Sharp were  present.  Co-chair Frank joined                 
  the meeting after it was in progress.                                        
                                                                               
  ALSO  ATTENDING:     Senator  Loren   Leman;  Representative                 
  Jeannette James,  sponsor of  HB 222;  Representative Harley                 
  Olberg, sponsor of HB 397; Representative Joe Green, sponsor                 
  of HB 400;  Melinda Gruening, aide to  Representative Green;                 
  Thomas  C.  Williams,   Director,  Permanent  Fund  Dividend                 
  Division,  Department  of  Revenue;  Deborah Vogt,  Contract                 
  Attorney, Department  of Law; Larry Meyers, Director, Income                 
  and  Excise  Audit  Division,  Department  of Revenue;  Reed                 
  Stoops,  lobbyist, Aetna  Life &  Casualty; Jerry  Reinwand,                 
  lobbyist, Blue Cross  of Washington  & Alaska; Mike  Greany,                 
  Director, Legislative Finance  Division; representatives  of                 
  the media, aides to  committee members and other  members of                 
  the legislature.                                                             
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  CSHB 222(FIN):      An Act relating to landlords and tenants                 
                      and to the applicability  of the Uniform                 
                      Residential Landlord and Tenant  Act, to                 
                      termination of tenancies and recovery of                 
                      rental      premises,      to     tenant                 
                      responsibilities,  and   to  the   civil                 
                      remedies of forcible entry  and detainer                 
                      and  nuisance  abatement;  and  amending                 
                      Rule 62(a) of the  Alaska Rules of Civil                 
                      Procedure and  Rule 24(a) of  the Alaska                 
                      District Court Rules of Civil Procedure.                 
                                                                               
                      Representative Jeannette  James, sponsor                 
                      of HB  222, testified  in support  of HB
                      222.    Senator  Loren   Leman  proposed                 
                      amendment 1.  CSHB  222(FIN) was HELD in                 
                                                                               
                                                                               
                      committee.                                               
                                                                               
  SCSCSSSHB 397(JUD): An  Act relating  to the  power to  levy                 
                      property taxes in second class cities.                   
                                                                               
                      Representative Harley Olberg, sponsor of                 
                      HB  397,  testified  in  support of  the                 
                      bill.  SCSCSSSHB  397(JUD) was  REPORTED                 
                      out of committee with a "do pass," and a                 
                      zero fiscal note  for the Department  of                 
                      Commerce & Regional Affairs.                             
                                                                               
  HB 400:             An   Act   relating   to  administrative                 
                      proceedings involving a determination of                 
                      eligibility   for   a   permanent   fund                 
                      dividend   or   authority  to   claim  a                 
                      dividend on behalf of another.                           
                                                                               
                      Representative Joe Green, sponsor  of HB
                      400,  and  Melinda  Gruening,   aide  to                 
                      Representative   Green,   testified   in                 
                      support of  HB 222.  Thomas C. Williams,                 
                      Director,   Permanent    Fund   Dividend                 
                      Division,  Department  of  Revenue,  was                 
                      available to speak to the  bill.  HB 400                 
                      was REPORTED out of committee with a "do                 
                      pass"   and  a   fiscal  note   for  the                 
                      Department of Revenue for $7.5 showing a                 
                      revenue of $121.8.                                       
                                                                               
  CSHB 442(FIN):      An  Act  relating  to  criminal  justice                 
                      information;     providing    procedural                 
                      requirements   for   obtaining   certain                 
                      criminal   justice   information;    and                 
                      providing for an effective date.                         
                                                                               
                      SCSCSHB   442(FIN)   version   "K"   was                 
                      ADOPTED.  SCSCSHB 442(FIN)  was REPORTED                 
                      out of committee with a "do pass,"  zero                 
                      fiscal  notes  for  the   Department  of                 
                      Public  Safety,  the Department  of Law,                 
                      the  Department  of   Health  &   Social                 
                      Services,  and  a  fiscal  note for  the                 
                      Department of Corrections for $150.0.                    
                                                                               
  CSSB 161(JUD):      An Act  relating to  interest rates  and                 
                      calculation  of  interest  under certain                 
                      judgments and decrees  and on refunds of                 
                      certain taxes, royalties, or  net profit                 
                      shares; and providing  for an  effective                 
                      date.                                                    
                                                                               
                      CSSB   161(FIN)   work  draft   "I"  was                 
                      ADOPTED.      Deborah   Vogt,   Contract                 
                                                                               
                                                                               
                      Attorney, Department of  Law, and  Larry                 
                      Meyers,  Director,  Income   and  Excise                 
                      Audit Division,  Department of  Revenue,                 
                      spoke  to  the  bill.    Senator  Rieger                 
                      offered conceptual amendment 2.  Senator                 
                      Sharp  amended  amendment  2.    Senator                 
                      Rieger  withdrew  amendment 2.   Senator                 
                      Kelly  then  resubmitted amendment  2 as                 
                      amended.  Amendment 2 was ADOPTED.  CSSB
                      161(FIN) as amended was  REPORTED out of                 
                      committee         with        individual                 
                      recommendations, zero  fiscal notes  for                 
                      the  Department  of  Law, Department  of                 
                      Transportation   &  Public   Facilities,                 
                      Department  of  Administration  - #59  &                 
                      #71,  and a fiscal  note for  the Alaska                 
                      Court System for $27.6.                                  
                                                                               
  CSSB 367(JUD):      An Act prohibiting a  civil action based                 
                      on  professional  negligence  against  a                 
                      health care provider by a  person who on                 
                      the  date  of   the  negligent  act   or                 
                      omission is less than two years  of age,                 
                      unless the action  is brought before the                 
                      person's  eighth  birthday; establishing                 
                      an advisory  committee on a  health care                 
                      plan  and  an   advisory  committee   on                 
                      medical practice; and  providing for  an                 
                      effective date.                                          
                                                                               
                      CSSB   367(FIN)   work  draft   "X"  was                 
                      ADOPTED.  Reed  Stoops, lobbyist,  Aetna                 
                      Life  &  Casualty,  and Jerry  Reinwand,                 
                      lobbyist,  Blue  Cross  of Washington  &                 
                      Alaska, spoke to  SB 367.   Amendment  1                 
                      was withdrawn.   Amendments 2 and 3 were                 
                      ADOPTED.   The bill  was HELD  until the                 
                      meeting could  reconvene in the  p.m. at                 
                      the call of  the chair (after conference                 
                      committee).    The  meeting  reconvened.                 
                      Senator  Rieger  offered   amendment  4.                 
                      Amendment 4 was  ADOPTED.  CSSB 367(FIN)                 
                      as amended was REPORTED out of committee                 
                      with  individual   recommendations,  and                 
                      fiscal  notes  for  the   Department  of                 
                      Commerce  &  Economic   Development  for                 
                      $322.6, and  Office of the  Governor for                 
                      672.7.                                                   
                                                                               
  HOUSE BILL NO. 400:                                                          
                                                                               
       An Act relating to administrative proceedings involving                 
       a  determination of  eligibility  for a  permanent fund                 
       dividend  or authority to claim a dividend on behalf of                 
                                                                               
                                                                               
       another.                                                                
                                                                               
  CO-CHAIR  DRUE PEARCE announced  that HB 400  was before the                 
  committee and  invited Representative Green,  sponsor of the                 
  bill, and Melinda Gruening, aide to Representative Green, to                 
  come to the table.  She  also noted that Thomas C. Williams,                 
  Director, Permanent  Fund Dividend  Division, Department  of                 
  Revenue, was available to answer questions.                                  
                                                                               
  REPRESENTATIVE JOE GREEN  said that  it had become  apparent                 
  that there were nearly 10,000 applicants for reconsideration                 
  of a denial  of their  permanent fund dividend  check.   The                 
  waiting period to  process such appeals  was up to about  20                 
  months and lengthening.  He felt the majority of the appeals                 
  were  frivolous but  the  department was  forced  to do  the                 
  necessary work in order  to evaluate those appeals.   HB 400                 
  was  an  attempt  to  establish  a  filing  fee  of  $25  to                 
  discourage unqualified appeals.                                              
                                                                               
  MELINDA GRUENING reiterated  that HB 400 came  about because                 
  of  complaints from  constituents  regarding the  inordinate                 
  length of time  the appeal process  was taking.   Processing                 
  the huge amount of appeals was costly.  Currently there were                 
  10 employees in the Permanent Fund Division and three appeal                 
  officers in  the commissioners office  working on processing                 
  the  appeals.    Still, approximately  10,000  appeals  were                 
  pending with no end  in sight.  Over  the past three  years,                 
  the division had  become more efficient but sighted the fact                 
  that it only took a 29 cent stamp to file an appeal as a big                 
  part of the problem.  This year's denial rate was 64 percent                 
  and in previous years it had been even higher.  HB 400 would                 
  implement a $25 filing  fee.  The department would  allow an                 
  indigent individual to be  exempt from the fee.   The filing                 
  fee  would  be  refundable  if  the applicant's  appeal  was                 
  successful  and  non-refundable   if  the  denial  was   not                 
  overturned.  It was  felt that the $25 fee  would discourage                 
  clearly  unqualified  individuals  from   appealing  thereby                 
  reducing  costs to  the division.   Since  these costs  were                 
  taken directly  from  the Permanent  Fund, it  would mean  a                 
  little larger check for each eligible Alaskan.                               
                                                                               
  Senator Rieger  MOVED for passage  of HB 400  from committee                 
  with individual  recommendations.  No objection being heard,                 
  HB 400 was REPORTED out of committee with a "do pass," and a                 
  fiscal note for the Department of Revenue for $7.5 showing a                 
  revenue of  $121.8.   Co-chairs Pearce  and Frank,  Senators                 
  Sharp, Jacko,  Kelly and Rieger  signed "do pass."   Senator                 
  Kerttula signed "no recommendation."                                         
                                                                               
  CS FOR HOUSE BILL NO. 442(FIN):                                              
                                                                               
       An  Act  relating  to   criminal  justice  information;                 
       providing procedural requirements for obtaining certain                 
       criminal  justice  information;  and providing  for  an                 
                                                                               
                                                                               
       effective date.                                                         
                                                                               
  Co-chair Pearce said  that SCSCSHB 442(FIN) version  "K" was                 
  before the committee.   She said it was the same  bill as SB
  276 that had passed out of Senate Finance.                                   
                                                                               
  Senator Jacko MOVED for adoption of SCSCSHB 442(FIN) version                 
  "K".  No objection being heard, it was ADOPTED.                              
                                                                               
  Senator Jacko  MOVED for  passage of  SCSCSHB 442(FIN)  from                 
  committee  with individual  recommendations.   No  objection                 
  being heard, it  was REPORTED  out of committee  with a  "do                 
  pass," zero fiscal notes for the Departments of Law,  Health                 
  & Social Services, and Public Safety,  and a fiscal note for                 
  the Department of Corrections in the  amount of $150.0.  Co-                 
  chair Pearce,  Senators Jacko,  Kelly and  Sharp signed  "do                 
  pass."      Senator   Rieger   and   Kerttula   signed   "no                 
  recommendation."                                                             
                                                                               
  SENATE CS FOR CS FOR SS FOR HOUSE BILL NO. 397(JUD):                         
                                                                               
       An Act relating to the power  to levy property taxes in                 
       second class cities.                                                    
                                                                               
  Co-chair  Pearce  announced  that  HB  397  was  before  the                 
  committee and invited Representative  Olberg, sponsor of the                 
  bill, to the table.                                                          
                                                                               
  REPRESENTATIVE OLBERG  said that SCSCSSSHB  397(JUD) changed                 
  the cap  on property  taxes in  second class  cities from  5                 
  mills  to 20 mills.   He said the  Senate Substitute was the                 
  same as  the original sponsor  substitute.  Any  increase or                 
  imposition of property tax in second class cities would take                 
  a referendum within the city.                                                
                                                                               
  In answer  to Senator  Kerttula, Representative Olberg  said                 
  there  was only one second  class city astride the pipeline,                 
  Delta Junction, and it had  managed to resist the temptation                 
  to pillage  the pipeline.   He said  the bill was  a request                 
  from Whittier  as a  response  to the  decline in  municipal                 
  assistance, revenue sharing and  grant money.  He also  said                 
  he did not  object to  Delta Junction paying  for their  own                 
  schools.                                                                     
                                                                               
  Co-chair Pearce announced that Senator  Jacko had asked that                 
  SCSCSSSHB 397(JUD) be HELD until the end of the meeting.                     
                                                                               
  Senator Jacko MOVED  for passage of SCSCSSSHB  397(JUD) from                 
  committee  with  individual recommendations.    No objection                 
  being heard, it  was REPORTED  out of committee  with a  "do                 
  pass," and a zero fiscal note for the Department of Commerce                 
  & Regional Affairs.   Co-chairs  Pearce and Frank,  Senators                 
  Jacko  and Kelly  signed  "do pass."    Senators Rieger  and                 
  Kerttula signed "no recommendation."                                         
                                                                               
                                                                               
  CS FOR HOUSE BILL NO. 222(FIN):                                              
                                                                               
       An  Act relating  to landlords and  tenants and  to the                 
       applicability of  the Uniform Residential  Landlord and                 
       Tenant Act, to termination of tenancies and recovery of                 
       rental premises, to tenant responsibilities, and to the                 
       civil  remedies of  forcible  entry  and  detainer  and                 
       nuisance abatement;  and  amending Rule  62(a)  of  the                 
       Alaska  Rules of Civil Procedure  and Rule 24(a) of the                 
       Alaska District Court Rules of Civil Procedure.                         
                                                                               
  Co-chair  Pearce  announced  that  HB  222  was  before  the                 
  committee  and  invited  Representative  James to  join  the                 
  members  at the  table.   Co-chair  Pearce  asked if  Senate                 
  Finance was the only committee  of referral.  Representative                 
  James agreed that it was.                                                    
                                                                               
  REPRESENTATIVE JAMES said that a comparison of HB 222 and SB
  155 had been provided to the committee members.  She went on                 
  to say that this bill was  drafted to try to establish  some                 
  balance  in the  landlord/tenant regulations  that  over the                 
  past 20 years had acted in favor of tenants.  It allowed for                 
  an expedited eviction  of a tenant who  deliberately damaged                 
  the premises, clarified  the legal  obligations of both  the                 
  tenant and the landlord, allowed a premises inventory signed                 
  by  both  parties to  be used  as  legal evidence,  made the                 
  state's  nuisance  abatement  process   more  accessible  to                 
  tenant/landlord proceedings, and simplified cross references                 
  between Title 9, civil procedure and Title 34, property, and                 
  provided  much needed  protection from  abusive tenants  for                 
  both law abiding tenants  and landlords.  She said  the bill                 
  received a great deal of work  in subcommittees and was such                 
  a  fair  and  balanced   bill  that  it  passed   the  House                 
  unanimously 37-0.  It had the  support of both landlords and                 
  tenants   and  would   greatly  simplify   landlord/  tenant                 
  proceedings.  She  said it  was a much  different bill  than                 
  introduced because of the extensive rewritten language as it                 
  went through subcommittees.                                                  
                                                                               
  Co-chair Frank said he had the  companion bill in the Senate                 
  and  appreciated  all  the  work  Representative  James  had                 
  undertaken.  He requested the bill be held so he could study                 
  HB 222 at more length.                                                       
                                                                               
  Co-chair Pearce announced that Senator  Leman had a proposed                 
  amendment for HB 222.                                                        
                                                                               
  SENATOR LEMAN said that amendment 1 was the result of a case                 
  in Anchorage where a  landlord chose not to rent  to couples                 
  who were cohabiting outside  of marriage.  He said  the case                 
  had  gone  to  the Supreme  Court  and  ended  with a  split                 
  decision.  Amendment 1 allowed that a landlord, if he passed                 
  a three-part test, could refuse to rent to couples living in                 
                                                                               
                                                                               
  cohabitation.  On the side of right to housing, he said that                 
  housing would remain available to  those couples because few                 
  landlords would choose this option.                                          
                                                                               
  Senator  Rieger  asked what  would  prevent a  landlord from                 
  using this language to discriminate  against a tenant beyond                 
  the  purposes  stated.    He  quoted the  words  "reasonably                 
  believed"  and  proposed  those  words  could be  used  more                 
  broadly.  Senator Leman said that national origin, looks, or                 
  sex, could not be used as  a reason because of the  "sincere                 
  religious belief" test that the landlord would have to pass.                 
                                                                               
  In answer to Senator Kelly, no committee member was  willing                 
  to offer amendment 1.  Co-chair  Pearce said she would offer                 
  it if she could but being the chairman she was not  able to.                 
  Again, Co-chair Frank asked that HB 222 be HELD.                             
                                                                               
  Co-chair Pearce  announced  that HB  222  would be  HELD  in                 
  committee.                                                                   
                                                                               
  At this point  in the  meeting, the committee  moved HB  397                 
  (see portion of the minutes pertaining to HB 397).                           
                                                                               
                          Recess 9:15am                                        
                        Reconvene 9:55am                                       
                                                                               
  CS FOR SENATE BILL NO. 161(JUD):                                             
                                                                               
       An Act relating  to interest  rates and calculation  of                 
       interest under  certain  judgments and  decrees and  on                 
       refunds  of certain  taxes,  royalties,  or net  profit                 
       shares; and providing for an effective date.                            
                                                                               
  Co-chair  Pearce  said  that CSSB  161(JUD)  was  before the                 
  committee.   Senator  Rieger  spoke to  the bill  section by                 
  section.  The first  section had to  do with civil cases  in                 
  general.  The  philosophy reflected was  that the amount  of                 
  damages   payable  should   be   essentially  adjusted   for                 
  inflation.  The proxy that was used for inflation adjustment                 
  for civil damages was the one  year treasury bill rate which                 
  might exceed inflation  but not  by any substantial  amount.                 
  In regard to Section 2, he said that earlier versions of the                 
  bill  referred   to  municipalities  having  to  pay  refund                 
  overpayments at  a rate that  was essentially equal  to what                 
  they were earning on their money.   That seemed difficult to                 
  administer, since each municipality had to calculate its own                 
  rate of return  for its investments and  then recalculate it                 
  depending on which  three month period  immediately preceded                 
  the date of  the refund.   This CS said that  at the end  of                 
  each calendar  quarter, the treasury bill rate would be used                 
  as the  rate for the next quarter.   He felt it was a simple                 
  solution.                                                                    
                                                                               
  Section 3,  4, 5, and 6 had to  do with taxes and royalties.                 
                                                                               
                                                                               
  He felt  the  department  would want  to  testify  on  these                 
  sections.  The CS, as drafted, retained the 11 percent floor                 
  for underpayments by a taxpayer.   One oversight he  pointed                 
  out was that the department had asked  to have the rate be a                 
  differential where  underpayments would  be at  the discount                 
  rate  plus  5 percent,  and  overpayments  would be  at  the                 
  discount  rate plus 2.   In closing his  review, he said the                 
  rest  of  the  bill referred  to  transition  and conforming                 
  provisions.                                                                  
                                                                               
  Senator Kerttula asked  Senator Rieger if he  was asking for                 
  an  amendment  to  the  oversight  on the  underpayment  and                 
  overpayment provisions.   Senator Rieger said that  it was a                 
  policy call and the committee could vote on it.                              
                                                                               
  Discussion was  had by  Co-chair Frank,  Senators Kelly  and                 
  Kerttula regarding the underpayment and overpayment indexes.                 
                                                                               
  Senator  Rieger  MOVED for  adoption  of CSSB  161(FIN) work                 
  draft "I".   Hearing no objection, CSSB  161(FIN) work draft                 
  "I" was ADOPTED.                                                             
                                                                               
  DEBORAH VOGT,  Contract  Attorney, Department  of Law,  said                 
  that  Senator  Rieger   had  expressed  the  views   of  the                 
  administration accurately and the department was very  happy                 
  with the  current structure  for underpayments  which was  5                 
  points above the  federal discount rate or 11  percent which                 
  ever  was  higher  and would  rather  not  change  it.   The                 
  proposed  legislation  would  give  a  differential  between                 
  underpayments and overpayments.                                              
                                                                               
  Senator  Sharp asked  if  the department  would  accept a  5                 
  percent differential and remove the 11 percent floor.                        
                                                                               
  LARRY MEYERS, Director,  Income and  Excise Audit  Division,                 
  Department  of  Revenue,  said  the  11  percent  floor  was                 
  implemented in October 1991, specifically as an incentive to                 
  settle outstanding taxes.   It had proven  an effective tool                 
  especially in the current rate  of economy.  He  recommended                 
  that the 11 percent  floor remain.  Ms. Vogt  commented that                 
  it would be a substantial reduction  in the interest rate if                 
  the floor was taken out today.                                               
                                                                               
  Senator Sharp differed with the opinion that the  11 percent                 
  had been an antagonistic feature for settlement and may have                 
  even impeded settlement.                                                     
                                                                               
  Senator Kelly said that he  would not be offering  amendment                 
  1.                                                                           
                                                                               
  Senator Rieger MOVED conceptual amendment  2, page 3, line 2                 
  and page 3, line  15, which changed "underpayments  to index                 
  plus 5" and in sections 4 and 6, "overpayments to index plus                 
  2".   Senator Sharp  MOVED an  amendment to  amendment 2  by                 
                                                                               
                                                                               
  deleting the  words  "at  the annual  rate  of  11  percent,                 
  whichever is greater", on page 3, line 4-5 and  page 3, line                 
  17.                                                                          
                                                                               
  End SFC-93 #83, Side 1                                                       
  Begin SFC-93 #83, Side 2                                                     
                                                                               
  Discussion was had by Co-chair Frank, Senators Sharp, Kelly,                 
  and Kerttula regarding the amendment, removing the floor and                 
  penalty rates.  Ms.  Vogt said the title of  the legislation                 
  dealt  with  interest  on  judgments  and also  interest  on                 
  refunds, royalties, etc. She said Senator Rieger's amendment                 
  would restore the law on underpayments to current status and                 
  she  did not  believe that  any change to  underpayments was                 
  within the title of the legislation.  Senator Rieger and Co-                 
  chair Pearce said that since it was a Senate bill that would                 
  not be a concern.                                                            
                                                                               
  Co-chair Pearce called for a show  of hands on the amendment                 
  by Senator Sharp to amend amendment 2 and the motion carried                 
  on a vote of 5-2.  Co-chair Frank then changed his  vote and                 
  it  still  carried on  a  vote  of 4-3.    (Co-chair Pearce,                 
  Senator Sharp,  Kelly, and  Jacko voted  in favor.  Co-chair                 
  Frank, Senators Kerttula and Rieger were opposed.)                           
                                                                               
  Senator Rieger WITHDREW  amendment 2.   Senator Kelly  MOVED                 
  amendment 2 as amended.   Co-chair Pearce called for  a show                 
  of hands on amendment 2 and it was ADOPTED on a vote of 4 to                 
  3.  (Co-chair Pearce, Senator  Sharp, Kelly, and Jacko voted                 
  in favor. Co-chair Frank, Senators  Kerttula and Rieger were                 
  opposed.)                                                                    
                                                                               
  Senator Sharp MOVED for passage  of CSSB 161(FIN) as amended                 
  from  committee  with individual  recommendations.   Senator                 
  Kerttula OBJECTED.   Co-chair Pearce  called for  a show  of                 
  hands on the  motion and  it carried on  a vote of  5 to  2.                 
  (Co-chairs Pearce and Frank, Senator Sharp, Kelly, and Jacko                 
  voted in favor.  Senators Kerttula and Rieger were opposed.)                 
  CSSB  161  was REPORTED  out  of committee  with "individual                 
  recommendations," and  zero fiscal notes for  the Department                 
  of  Law, Department  of Transportation &  Public Facilities,                 
  Department of Administration - #59 &  #71, and a fiscal note                 
  for the Alaska Court System for $27.6.  Co-chairs Pearce and                 
  Frank,  Senators Kelly and Sharp signed  "do pass."  Senator                 
  Kerttula  signed "do not  pass."  Senator  Rieger signed "no                 
  recommendation."                                                             
                                                                               
  CS FOR SENATE BILL NO. 367(JUD):                                             
                                                                               
       An Act prohibiting a civil action based on professional                 
       negligence against a  health care provider by  a person                 
       who on the  date of  the negligent act  or omission  is                 
       less than  two  years  of  age, unless  the  action  is                 
       brought   before   the   person's    eighth   birthday;                 
                                                                               
                                                                               
       establishing  an advisory  committee on  a  health care                 
       plan and an advisory committee on medical practice; and                 
       providing for an effective date.                                        
                                                                               
  Co-chair  Pearce  said that  CSSB  367(FIN) version  "X" was                 
  before  the  committee.   She  voiced her  concern regarding                 
  language on page 3, beginning on line 8.                                     
                                                                               
  Senator Rieger went through the bill section by section.  In                 
  answer to Co-chair  Frank, Senator Rieger said he would mark                 
  up the old sectional so it  fit the new CS.  Senator  Rieger                 
  concluded that  there  was a  large interest  in the  public                 
  health aspect of health  care and the CS proposed  an unpaid                 
  Public Health  Commission to  follow up  on ideas  regarding                 
  public health.  He said one of his amendments was to tighten                 
  the title as requested by the Senate Judiciary Committee.                    
                                                                               
  Reed  Stoops,  lobbyist, Aetna  Life  & Casualty,  and Jerry                 
  Reinwand,  lobbyist,  Blue  Cross of  Washington  &  Alaska,                 
  joined the committee at the table.                                           
                                                                               
  REED STOOPS said that Aetna was generally in support of CSSB
  367(FIN).  He said there were some concerns with Sections 2,                 
  5, and 7, which  dealt with insurance rate regulations.   He                 
  said  there  were  6  or  7  states that  did  not  regulate                 
  insurance  rates, about  32  states used  the "file  and use                 
  system"  requiring  insurance companies  to  file rates  and                 
  methodologies,  and  the "prior  approval system"  which was                 
  contained in the  proposed bill.   In effect, he said,  with                 
  this bill Alaska would go from  the least regulated state to                 
  one  of the most regulated.  He did not support this section                 
  because 90-95 percent of insurance  rates were simply passed                 
  through  to  the provider  community.   Studies  showed that                 
  states  with   the  greatest   regulation   had  the   least                 
  competition  among  insurers  and  where rates  were  highly                 
  regulated, some  insurers  drop  out  of  the  market.    He                 
  encouraged the committee  to consider  that the Health  Care                 
  Provider Commission study this issue, or adopt the "file and                 
  use system" as found in HB 414.                                              
                                                                               
  Mr. Stoops went on to discuss Section 9.  He  questioned why                 
  Alaska  should  change  from  the NAIC  model  used  by  the                 
  Division of Insurance.   He  would like to  see an  analysis                 
  that described the  proposed changes.   He felt it would  be                 
  difficult  to coordinate  benefits with  these changes  when                 
  members of a family were living in different states.                         
                                                                               
  JERRY  REINWAND,  said  that  Blue Cross  did  not  have any                 
  problems  with  health care  reform  but he  thought  it was                 
  appropriate to throw the insurance regulation piece into the                 
  Public Health  Commission and  let them  look at  that along                 
  with the other insurance related issues in the bill.  He did                 
  not support rate regulation at this point.                                   
                                                                               
                                                                               
  In answer to Co-chair Frank, Mr. Stoops said that there were                 
  about a  dozen or more  companies that competed  with Aetna.                 
  Again,  in answer to  Co-chair Frank,  Mr. Stoops  said that                 
  companies  had  to fill  out  an application  and  provide a                 
  certificate of insurance before  it could be licensed to  do                 
  business in Alaska.   There were general  rules that applied                 
  and it was highly regulated.   He said that companies needed                 
  to be sufficiently capitalized so insurers did not  bear the                 
  risk  of  default.     There  was  an   Insurance  Guarantee                 
  Association to prevent losses.  Coordination of benefits had                 
  extensive  sets  of regulations  and  policies needed  to be                 
  reviewed by the  Insurance Division  to insure language  was                 
  consistent with regulations.                                                 
                                                                               
  Mr. Reinwand added that  under Director Walsh's  leadership,                 
  the division had improved substantially.                                     
                                                                               
  Senator Kelly MOVED for adoption of CSSB 367(FIN) work draft                 
  "X".                                                                         
                                                                               
  Senator Kelly voiced his support to  amend the work draft to                 
  a  file  and use  system.    He  MOVED  for amendment  1  to                 
  conceptual  adopt a  file  and use  system.   Senator  Kelly                 
  WITHDREW amendment 1.                                                        
                                                                               
  Senator  Kelly MOVED amendment 2.   Senator Rieger said that                 
  earlier   discussion  had   suggested  that   all  insurance                 
  companies should  be under  regulations by  the Division  of                 
  Insurance.    He  admitted  that  insurance  companies  were                 
  opposed to  that section of the CS.   Co-chair Frank said he                 
  supported more competition rather than  more regulation.  No                 
  further objection being heard, amendment 2 was ADOPTED.                      
                                                                               
  Senator Rieger MOVED amendment 3  which tightened the title.                 
  No objection being heard, amendment 3 was ADOPTED.                           
                                                                               
  Co-chair Pearce asked the committee to  turn to page 3, line                 
  8.  She said that she had no problem with a data system that                 
  included health  care expenditures or  demographic data  but                 
  she  opposed   parts  of  (3).    She   felt  revealing  the                 
  "diagnosis",  and "result  of the  care" was an  invasion of                 
  privacy.    She  referred  to   page  3,  lines  23-25,  and                 
  questioned  what  would  become part  of  the  public health                 
  record.  Senator  Rieger said that the intent was  to have a                 
  presumption  of  confidentiality  and fully  supported  that                 
  confidentiality.  He said an individual's identity would not                 
  be  divulged in  the collecting  of data.   Co-chair  Pearce                 
  asked that  she  and Senator  Rieger  work on  new  language                 
  regarding this issue.                                                        
                                                                               
  End SFC-93 #83, Side 2                                                       
  Begin SFC-93 #85, Side 1                                                     
                                                                               
  Co-chair  Pearce said that CSSB 367(FIN) as amended would be                 
                                                                               
                                                                               
  HELD in committee.                                                           
                                                                               
                         Recess 11:10am                                        
                        Reconvene 6:30 pm                                      
                                                                               
  (The following part of the meeting is not on tape.)                          
                                                                               
  Co-chair Frank MOVED amendment 4  which changed the language                 
  on  page 3, lines  8-31, making data  voluntary and ensuring                 
  the reporting format would not identify individual patients.                 
  No objection being heard, Amendment 4 was ADOPTED.                           
                                                                               
  Senator Rieger MOVED for passage of CSSB 367(FIN) as amended                 
  from  committee   with  individual   recommendations.     No                 
  objection being  heard, CSSB  367(FIN) was  REPORTED OUT  of                 
  committee with "individual  recommendations," a fiscal  note                 
  for the Officer  of the  Governor for $672.7,  and a  fiscal                 
  note for the  Department of Commerce &  Economic Development                 
  for  $322.6.    Co-chair Pearce,  Senator  Rieger  and Kelly                 
  signed "do pass."   Co-chair Frank and  Senator Sharp signed                 
  "no recommendation."                                                         
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was recessed at approximately 6:45 p.m.                          

Document Name Date/Time Subjects