Legislature(1993 - 1994)
04/28/1994 08:45 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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.
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