Legislature(1995 - 1996)

04/18/1996 02:20 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SENATE LABOR AND COMMERCE COMMITTEE                             
                         April 18, 1996                                        
                           2:20 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Tim Kelly, Chairman                                                   
 Senator John Torgerson, Vice Chairman                                         
 Senator Mike Miller                                                           
 Senator Jim Duncan                                                            
 Senator Judy Salo                                                             
  MEMBERS ABSENT                                                               
 All members present                                                           
  COMMITTEE CALENDAR                                                           
 CS FOR HOUSE BILL NO.  284(FIN)                                               
 "An Act relating to the Alaska Commercial Fishing and Agriculture             
 CS FOR HOUSE BILL NO. 405(STA) am                                             
 "An Act relating to the Board of Examiners in Optometry; relating             
 to licensure of dispensing opticians; and providing for an                    
 effective date."                                                              
 HOUSE BILL NO. 432                                                            
 "An Act relating to the practice of veterinary medicine."                     
 HOUSE BILL NO. 497                                                            
 "An Act relating to chiropractic peer review; and providing for an            
 effective date."                                                              
 CS FOR HOUSE BILL NO. 457(STA)                                                
 "An Act relating to the unlicensed practice of certain occupations            
 for which licenses are required."                                             
 CS FOR HOUSE BILL NO. 428(FIN) am                                             
 "An Act relating to the authority of the Department of Corrections            
 to contract for facilities for the confinement and care of                    
 prisoners, and annulling a regulation of the Department of                    
 Corrections that limits the purposes for which an agreement with a            
 private agency may be entered into; and giving notice of and                  
 approving a lease-purchase agreement for the design, construction,            
 and operation of a correctional facility, and setting conditions              
 and limitations on the facility's design, construction, and                   
  PREVIOUS SENATE COMMITTEE ACTION                                             
 HB 284 - See Labor and Commerce minutes dated 4/11/96.                        
 HB 405 - No previous action to consider.                                      
 HB 432 - No pervious action to consider.                                      
 HB 497 - No previous action to consider.                                      
 HB 457 - No previous action to consider.                                      
 HB 428 - No previous action to consider.                                      
  WITNESS REGISTER                                                             
 Ed Crane, CEO                                                                 
 Commercial Fishing and Agriculture BankCFAB                                   
 2550 Denali                                                                   
 Anchorage, AK                                                                 
  POSITION STATEMENT:   Supported HB 284.                                      
 Roger Poppe, Staff                                                            
 Representative Pete Kott                                                      
 State Capitol Bldg.                                                           
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Staff to sponsor of HB 405.                            
 Catherine Reardon, Director                                                   
 Division of Occupational Licensing                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110806                                                               
 Juneau, AK 99811-0806                                                         
  POSITION STATEMENT:   Supported HB 405 and HB 457.                           
 Randy Welker, Legislative Auditor                                             
 P.O. Box 113300                                                               
 Juneau, AK 99811-3300                                                         
  POSITION STATEMENT:   Supported HB 405 and HB 457.                           
 Larry Harper                                                                  
 534 W 2nd                                                                     
 Anchorage, AK 99501                                                           
  POSITION STATEMENT:   Opposed HB 405.                                        
 Tim Sullivan, Staff                                                           
 Representative Eldon Mulder                                                   
 State Capitol Bldg.                                                           
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Staff to sponsor of HB 497.                            
 Dennis Dewitt, Staff                                                          
 Representative Eldon Mulder                                                   
 State Capitol Bldg.                                                           
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Staff to sponsor of HB 428.                            
 Bob Cole, Director                                                            
 Division of Administrative Services                                           
 Department of Corrections                                                     
 P.O. Box 112000                                                               
 Juneau, AK 99811-2000                                                         
  POSITION STATEMENT:   Opposed HB 428.                                        
 Chuck O'Connell, Business Manager                                             
 Alaska State Employee's Association                                           
 AFSVME Local 52                                                               
 3510 Spenard Rd., #201                                                        
 Anchorage, AK 99503                                                           
  POSITION STATEMENT:   Opposed HB 428.                                        
  ACTION NARRATIVE                                                             
  TAPE 96-28, SIDE A                                                           
 Number 001                                                                    
        HB 284 AK COMMERCIAL FISHING & AGRICULTURE BANK                       
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 2:20 p.m. and announced  HB 284  to be up for             
 ED CRANE, CEO, Commercial Fishing and Agriculture Bank, said that             
 HB 284 recognizes changes which have taken place in the economics             
 of fishing since CFAB was created 18 years ago.  It also deals with           
 some voids and inconsistencies in the original statute as it                  
 relates to laws relating to creditors.  It deals with an anomaly              
 that appears in existing statute which provides for CFAB's                    
 liquidation should CFAB not retire all the State's capital, but on            
 the other hand in another part of an existing statute it says that            
 when CFAB does retire all of the State's capital the statute lapses           
 which means there is no more CFAB.                                            
 MR. CRANE stressed that the reason for the 18 pages is because the            
 statute spells out in extreme detail how CFAB should operate so               
 there is very specific language.                                              
 SENATOR KELLY said Division of Banking and Securities had some                
 concerns with this bill, but no real problems.  They will continue            
 to audit CFAB on an annual basis.                                             
 SENATOR TORGERSON moved to pass CSHB 284 from committee with                  
 individual recommendations.  There were no objections and it was so           
              HB 405 BD OF OPTOMETRISTS; OPTICIANS                            
  SENATOR KELLY announced  HB 405  to be up for consideration.                
 ROGER POPPE, Staff to Representative Kott, sponsor,   said HB 405             
 extended the Board to 2002, clears up a conflict between                      
 optometrists and opticians, both of whom have assistants who assist           
 them in dispensing glasses and contact lenses.  It's been the                 
 opticians position that any dispensing would have to come under               
 their jurisdiction.  So optician apprentices would have to be                 
 qualified to this and that would include all assistants who are               
 working for optometrists and ophthalmologists.  After much debate             
 a decision was made in favor of the optometrists.  So people who              
 work for opthomologist or optometrists do not have to have their              
 assistants be licensed as optical assistants or optician                      
 He explained that section 4 was a housekeeping provision.  Section            
 5 eliminates statutory references one of which is the requirement             
 to have branch offices for the Board - no longer necessary in                 
 Alaska.  In addition there are some requirements that opticians               
 have to meet certain visual and health requirements.  They are the            
 only Board that had this requirement so there was some concern that           
 this wasn't constitutional and might involve litigation under the             
 Americans With Disabilities Act.  So the advice of Legislative                
 Budget and Audit was to eliminate the reference.                              
 CATHERINE REARDON, Division of Occupational Licensing, supported HB
 RANDY WELKER, Legislative Auditor, said HB 405 addressed all their            
 audit's concerns.                                                             
 LARRY HARPER, licensed optician, said he is currently serving on              
 the Board of Directors of the National Contact Lens Examiners which           
 is the nationally certified testing agency for contact lens                   
 fitters. He said in the 1980 sunset review the legislature                    
 intentionally removed the exemption that existed at that time for             
 optometrists and their employees.  The reason then, as now, is if             
 opticians are licensed, they should be licensed regardless of where           
 they are employed.                                                            
 People in the State of Alaska have a right to expect that opticians           
 are licensed regardless of where the purchase is made.  They have             
 been licensed for 23 years and there is no reasonable way to                  
 determine whether a person is qualified to perform their duties               
 except by licensure.  Giving optometry this exemption effectively             
 creates a two tier level of competence within the field adding to             
 consumer confusion.                                                           
 There is no way for an optometrist or a physician to adequately               
 supervise all that goes on in their office.  In addition it would             
 create an unfair competitive advantage for optometrists and shows             
 a blatant disregard for the Alaskan public.                                   
 SENATOR KELLY said they would set HB 405 aside while the connection           
 with Fairbanks was reestablished.                                             
                  HB 432 VETERINARY LICENSING                                  
 SENATOR KELLY announced  HB 432  to be up for consideration.                  
 MR. POPPE, Staff of Representative Kott, sponsor, explained that              
 this bill was introduced at the request of some veterinarians.  The           
 Board of Veterinary Medicine supports it.  It changes the name of             
 the Board to the National Board of Examination Committee.  Section            
 2 also makes it an unclassified misdemeanor to falsely claim to               
 have a veterinary license and to practice without a license.                  
 Currently there are no penalties in place for doing this.  An                 
 unclassified misdemeanor would be up to one year in jail and a                
 $10,000 fine.  So this would plug a loophole.                                 
 Section 7 slightly modified the definition of the practice of                 
 veterinary medicine to include false presentation of being a                  
 Section 1 allows veterinary technicians to practice and section 5             
 sets up a procedure for them to be licensed by the Board.                     
 Currently they are only registered, not licensed.                             
 MS. REARDON said they support the bill as does the Board of                   
 SENATOR MILLER said he wanted to make sure this bill was not aimed            
 at someone who wanted to take care of his dog.  MS. REARDON                   
 directed their attention to page 3 which says practicing "for                 
 SENATOR TORGERSON asked what was the impact of licensing                      
 technicians and what is their job.  MS. REARDON replied that they             
 have already been licensing veterinary technicians.  This would               
 basically give them the title of licensed veterinary technicians.             
 This isn't a new intrusion into unregulated activities.                       
 SENATOR TORGERSON asked if there were fees associated with                    
 licensing and registration.  MS. REARDON answered that she believed           
 so.  She added that often professions preferred to be able to be              
 called "licensed."                                                            
 SENATOR TORGERSON asked how many there were.  MS. REARDON said she            
 was sorry, but she didn't know the answer.                                    
 SENATOR TORGERSON moved to pass HB 432 from committee with                    
 individual recommendations.  There were no objections and it was so           
                HB 497 CHIROPRACTIC PEER REVIEW                               
 SENATOR KELLY announced HB 497 to be up for consideration.                    
 TIM SULLIVAN, Staff to sponsor, Representative Eldon Mulder,                  
 testified that the Chiropractic Peer Review Committee consists of             
 three chiropractors and one lay person.  Under current statute only           
 the chiropractors on the committee have immunity for decisions they           
 make as committee members, not the lay person.  This bill gives all           
 members immunity.                                                             
 Section two of the bill provides that patient records are                     
 confidential to the peer review process if they were confidential             
 before being submitted to the committee.                                      
 SENATOR TORGERSON moved to pass HB 497 from committee with                    
 individual recommendations.  There were no objections and it was so           
            HB 457 UNLICENSED PRACTICE OF OCCUPATION                          
  SENATOR KELLY announced  HB 457  to be up for consideration.                
 MR. WELKER explained that this bill gives the Division of                     
 Occupational Licensing the authority to assess civil fines for                
 practicing an occupation without a license. Presently, only the               
 Board of Architects, Engineers, and Land Surveyors has that                   
 authority.  The only recourse for others is through the courts.               
 This would be an efficient tool for the investigative section of              
 the Division, although they don't anticipate having to use it                 
 MS. REARDON said she supported the bill.                                      
 SENATOR TORGERSON moved to pass HB 457 from committee with                    
 individual recommendations.  There were no objections and it was so           
 SENATOR KELLY announced  HB 405  to be up for consideration once              
 MR. HARPER, testifying from Fairbanks, said the two people who were           
 going to testify from Fairbanks, James Rothmeyer and Pam Gajdos,              
 are associates of his and were going to testify along the same                
 lines as he did.                                                              
 SENATOR TORGERSON moved to pass HB 405 from committee with                    
 individual recommendations.  There were no objections and it was so           
          HB 428 LEASE-PURCHASE CORRECTIONAL FACILITY                         
  SENATOR KELLY announced  HB 428  to be up for consideration, but sai        
 they would take a break at 2:45 p.m.                                          
 SENATOR KELLY called the meeting back to order at 3:12 p.m.                   
 DENNIS DEWITT, Staff to Representative Eldon Mulder, said HB 428              
 allows the Department of Corrections to pursue the use of private             
 facilities.  The first portion of the bill clarifies the ability to           
 contract for private services.  The second portion of the bill                
 allows the Department to enter into a lease purchase agreement with           
 a private contractor for a private facility in Alaska.                        
 There are some parameters like it can't be larger than 1,000 beds,            
 should be designed for expansion, should include housing for female           
 prisoners which is one of the critical needs we have in Alaska and            
 that construction costs should not exceed $100 million.  It should            
 be constructed with a project labor agreement.  There's language in           
 the bill that encourages the Department of General Services to                
 develop incentives in the bid process for bidders who promise to              
 employ Alaskans in the operation of the facility.                             
 The bill requires that correctional officers in this facility be              
 trained at the same level as correctional officers in the                     
 facilities operated by the State of Alaska.                                   
 MR. DEWITT said that we do need additional capacity in Alaska.                
 Today we're at about 107 percent of capacity in our facilities.  We           
 also have 206 prisoners in Arizona and we're spending nearly $6               
 million providing jobs for Arizonans.                                         
 Improving facilities for female offenders is one of the things                
 that's outlined in the Cleary final settlement agreement and it's             
 an issue that it has been agreed to by almost everyone involved in            
 the prison system.                                                            
 Number 400                                                                    
 The Subcommittee on Corrections held interim hearings on the topic            
 of privatization and found that the ability to move quickly is                
 enhanced using private sector facilities and the record of private            
 facilities is as good as public facilities in terms of safety and             
 quality of the product that they offer.                                       
 The cost in Arizona per inmate day is $59 with additional costs               
 bringing it up to $73 per day.  In Alaska we pay $109 per day.  He            
 believes that a facility built in Alaska by a private contractor              
 would substantially reduce the per diem cost in Alaska facilities.            
 Bringing competition into the market place will help bring the cost           
 of their other facilities down as well.                                       
 He believes HB 428 addresses the problem of prison capacity, brings           
 construction and operation jobs to Alaska, brings Alaska money back           
 to Alaska, provides innovative opportunity to address Alaska's                
 needs and assures safe and secure prisons.                                    
 BOB COLE, Director, Division of Administrative Services, thanked              
 Representative Mulder for attacking the problem of over-capacity              
 prisons in Alaska.  He said the number of offenders being held on             
 civil law matters has risen about 6% - 8% per year for the last               
 several years, the number of man days served has been rising                  
 MR. COLE said that the Governor has an alternative proposal which             
 envisions regionalized facilities that meet different requirements            
 of communities around the State.  This is particularly important              
 since the biggest portion of the rise in traffic is in misdemeanors           
 and pretrial populations which are localized kinds of offenders who           
 aren't sentenced yet, for the most part.  They don't think that a             
 huge centralized facility like the one proposed in HB 428 in a                
 single location in the State is going to solve problems in places             
 like Barrow, Nome, Palmer, and Juneau.                                        
 MR. COLE said they have concerns about the propriety of issuing               
 RFP's to private contractors to propose to build a facility of up             
 to 1,000 beds at $100 million instead of the design build mode.               
 They have some concerns about the propriety of doing that in the              
 sense that it would lock the State into an agreement for a 20 year            
 period of time.  The Governor's approach envisions issuing GO bonds           
 in the amount $148,500,000 for slightly over 1,000 beds dispersed             
 across the State.                                                             
 HB 428 offers no real opportunity for voter input.  They think when           
 they are asking the State for $100 million with a payback potential           
 of $200 million over a 20 year period of time that the voters                 
 probably should have something to say about it.  The Governor's               
 bill would put the entire matter on the ballot in November of 1996.           
 The Department recognizes the need for beds in Southcentral Alaska.           
 The Governor's proposal has an 600 bed proposal for the area in and           
 near Anchorage.                                                               
 MR. COLE also pointed out that the Governor's proposal is cast in             
 the context of a long range financial plan which has been submitted           
 to the legislature; HB 428 was not.                                           
 Number 475                                                                    
 SENATOR SALO asked if there was an accreditation process that would           
 require certain things of the correctional officers.  MR. COLE                
 replied there is a provision in HB 428 that would require                     
 comparability of training for correctional officers working in the            
 private sector.  This was put in in recognition of the fact that              
 the State Department of Corrections has an excellent record when it           
 comes to deaths, fights, assaults, and that sort of thing.  There             
 is a very rigorous process in place now for State correctional                
 SENATOR TORGERSON asked if this bill passed the full body, if they            
 looked at it as a mandate to go forward with private prisons or as            
 an option to lay alongside the table with the GO bond proposal?               
 MR. COLE answered if there is some agreement reached during the               
 session including both in a single piece of legislation, he didn't            
 know what the answer would be.                                                
 SENATOR TORGERSON said he didn't think this mandated building a               
 private prison since the wording was "shall" look into it and "may"           
 come forward with a proposal.  MR. COLE replied that the bill was             
 written permissively.                                                         
 Number 505                                                                    
 SENATOR KELLY asked for a spreadsheet analysis (capitalization                
 costs, finance costs, operational costs) of the Governor's proposal           
 over 20 or 30 years and the proposal in HB 428 for the same time              
 period.  MR. DEWITT replied that there are no sheet like that and             
 part of the problem in developing that, especially with the                   
 operational side, is that they have left it to the Department to              
 define the operational needs that the facility ought to fill.  He             
 said he had done a very "quick and dirty spreadsheet" in terms of             
 the capital costs on both proposals.  The Governor's proposal is              
 about $135,000 capital costs per bed and HB 428 is a little more              
 than $100,000 per bed.                                                        
 In terms of operation, they have no reason to believe they would              
 change the approximate $100 per day cost of operation in the system           
 through the Governor's proposal.  They would expect a private                 
 facility on the average to come in substantially below that.                  
 SENATOR KELLY asked him to bring him a side by side comparison of             
 the two proposals, construction costs and as near as he could with            
 the operational costs.                                                        
 SENATOR TORGERSON said one of the concerns he had with both options           
 is that they are not considering the option of lease purchase that            
 the City of Seward has done and the City of Kenai said they would             
 do.  He wanted to see the numbers on the lease purchase agreements            
 that the city would sell revenue bonds for and then lease it back             
 to the State as another part of that side by side.                            
 Number 540                                                                    
 MR. COLE said setting aside the matter of what's the right way to             
 provide correctional services, there are a number of financial pros           
 and cons to the lease purchase, private purchase, private                     
 capitalization, and general obligation bonding.  One of the reasons           
 they decided to go the general obligation bond route, in addition             
 to giving full disclosure and participation to the public, is                 
 because they are told it is financially advantageous to the State             
 to do that for a number of different reasons, both in terms of                
 initial capital cost and the payback.                                         
 CHUCK O'CONNELL opposed HB 428. It does not resolve the problems of           
 overcrowding in Juneau, Fairbanks, Nome, and Bethel.  It puts a               
 large monolith somewhere in central Alaska which could ultimately             
 result in some problems requiring them to house inmates where they            
 can have access to their attorney, families, etc.                             
 He wanted the committee to consider regarding the prisoners in                
 Arizona that you have additional medical costs, probation costs,              
 program and other divisional costs.  A private contractor would not           
 have those costs, but the State would still have to bear them.  So            
 if you're going to build a prison in Anchorage, the fair way to               
 compare that cost is to compare it to the cost of running a                   
 facility nearby.  For example, the Department has published a cost            
 of care institution by institution, presently at Palmer                       
 Correctional Center.  The cost is $62.51 per day while Mr. DeWitt             
 testified that the total cost in Arizona is $73 per day.                      
 MR. O'CONNELL said he thought we would be extremely competitive if            
 we compared the right figures.  He said that HB 428 is a whole new            
 approach.  Prisoners do not spend all their time in jail.  They are           
 on the road to the doctor, to the dentist, to court.  They are in             
 and out of jail all the time.  This is a public safety concern that           
 has had no study.  They are talking about spending $200 million               
 without a fiscal plan or analysis of whether or not this is a                 
 prudent way to spend state dollars.                                           
 MR. O'CONNELL reiterated that ASEA completely opposed this bill.              
 He said we have never had a correction officer killed in the State            
 of Alaska and we are the only State that can say that.  And we have           
 never had an inmate killed.                                                   
 TAPE 96-28, SIDE B                                                            
 He said we have an efficient, safe, correctional system and                   
 although the costs are high, when you compare the costs of the                
 institution itself to the cost of an institution in Arizona, they             
 are very competitive.                                                         
 SENATOR KELLY interrupted Mr. O'Connell and apologized to him and             
 everyone else for the little amount of time they could spend on               
 this issue today because of the end of session.  He said they would           
 come back on Tuesday and see what the Department of Revenue would             
 SENATOR KELLY adjourned the meeting at 3:37 p.m.                              

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