HOUSE LABOR AND COMMERCE STANDING COMMITTEE April 1, 1998 3:22 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative John Cowdery, Vice Chairman Representative Bill Hudson Representative Jerry Sanders Representative Joe Ryan Representative Gene Kubina MEMBERS ABSENT Representative Tom Brice COMMITTEE CALENDAR * HOUSE JOINT RESOLUTION NO. 65 Requesting that Alaska wild salmon be included as an organic food under federal law. - MOVED CSHJR 65(L&C) OUT OF COMMITTEE CS FOR SENATE BILL NO. 158(L&C) "An Act relating to motor vehicle liability insurance covering a person who has had the person's driver's license revoked for possession or consumption of alcohol while under 21 years of age." - HEARD AND HELD CONFIRMATION HEARINGS: Alaska State Board of Public Accountancy Marjorie J. Kaiser - Anchorage Steven R. Tarola - Barrow Sandra R. Wilson - Fairbanks - CONFIRMATIONS ADVANCED State Board of Registration for Architects, Engineers, and Land Surveyors Donald J. Iverson - Anchorage Scott McLane - Soldotna Patricia Peirsol - Fairbanks Patrick Kalen - Fairbanks - CONFIRMATIONS ADVANCED Board of Barbers and Hairdressers Lawrence R. Krupa - North Pole - CONFIRMATION ADVANCED Board of Chiropractic Examiners Trevor V. Ireland - Anchorage - CONFIRMATION ADVANCED Alaska Labor Relations Agency Alfred L. Tamagni, Sr. - Anchorage - CONFIRMATION ADVANCED Board of Marine Pilots Peter S. Garay - Homer Michael N. White - Anchorage - CONFIRMATIONS ADVANCED Board of Marital and Family Therapy Dixie A. Hood - Juneau Elaine L. Williams - Juneau - CONFIRMATIONS ADVANCED State Medical Board Martha T. Cotten - Eagle River Constance E. Livsey - Anchorage - CONFIRMATIONS ADVANCED Board of Certified Direct-Entry Midwives Martha J. Linden - Anchorage - CONFIRMATION ADVANCED Occupational Safety and Health Review Board Dennis Davidson - Anchorage Carla Meek - Juneau - CONFIRMATIONS ADVANCED Board of Pharmacy Paul Joseph Gionet - Anchorage - CONFIRMATION ADVANCED State Physical Therapy and Occupational Therapy Board Sundi M. Hondl - Wasilla Ann P. Mattson - Juneau - CONFIRMATIONS ADVANCED Board of Psychologist and Psychological Associate Examiners Carey S. Edney - Anchorage David J. Sperbeck - Anchorage - CONFIRMATIONS ADVANCED Board of Certified Real Estate Appraisers Judy Kemplen - Anchorage - CONFIRMATION ADVANCED Real Estate Commission Audrey J. Foldoe - Fairbanks - CONFIRMATION ADVANCED Board of Veterinary Examiners Deanna J. Thornell - Fairbanks - CONFIRMATION ADVANCED Alaska Workers' Compensation Board John A. Abshire - Anchorage Valerie K. Baffone - Anchorage Shawn Pierre - Chugiak Florence S. Rooney - Anchorage James G. Williams - Douglas Marc D. Stemp - Bethel - CONFIRMATIONS ADVANCED Board of Dental Examiners Raymond L. Lang - Nome - CONFIRMATION ADVANCED Board of Dispensing Opticians Cynde M. Oleck - Fairbanks - CONFIRMATION ADVANCED (* First public hearing) PREVIOUS ACTION BILL: HJR 65 SHORT TITLE: CLASSIFY WILD SALMON AS ORGANIC FOOD SPONSOR(S): RESOURCES Jrn-Date Jrn-Page Action 03/20/98 2682 (H) READ THE FIRST TIME - REFERRAL(S) 03/20/98 2682 (H) L&C 04/01/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: SB 158 SHORT TITLE: INSURANCE CHANGES FOR DR. LIC REVOC. SPONSOR(S): JUDICIARY BY REQUEST Jrn-Date Jrn-Page Action 04/02/97 935 (S) READ THE FIRST TIME - REFERRAL(S) 04/02/97 935 (S) L&C, JUD 02/05/98 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 02/05/98 (S) MINUTE(L&C) 02/19/98 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 02/19/98 (S) MINUTE(L&C) 02/20/98 2591 (S) L&C RPT CS 1DP 4NR NEW TITLE 02/20/98 2591 (S) DP: KELLY 02/20/98 2591 (S) NR: MACKIE, HOFFMAN, MILLER, LEMAN 02/20/98 2591 (S) ZERO FNS TO SB & CS (ADM, DCED) 03/02/98 (S) JUD AT 1:30 PM BELTZ ROOM 211 03/02/98 (S) MINUTE(JUD) 03/03/98 (S) RLS AT 11:35 AM FAHRENKAMP RM 203 03/03/98 (S) MINUTE(RLS) 03/03/98 2715 (S) JUD RPT 2DP 1NR (L&C)CS 03/02/98 2715 (S) DP: TAYLOR, MILLER NR: PARNELL 03/02/98 2715 (S) PREVIOUS ZERO FNS (DCED, ADM) 03/05/98 2749 (S) RULES TO CALENDAR 3/5/98 03/05/98 2750 (S) READ THE SECOND TIME 03/05/98 2751 (S) L&C CS ADOPTED UNAN CONSENT 03/05/98 2751 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/05/98 2751 (S) READ THE THIRD TIME CSSB 158(L&C) 03/05/98 2751 (S) PASSED Y14 N6 03/05/98 2759 (S) TRANSMITTED TO (H) 03/06/98 2533 (H) READ THE FIRST TIME - REFERRAL(S) 03/06/98 2533 (H) L&C, JUDICIARY 04/01/98 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER JEFF BAILEY, President Prime Select Seafoods, Incorporated; commercial fisherman P.O. Box 846 Cordova, Alaska 99574 Telephone: (907) 424-7750 POSITION STATEMENT: Testified in support of HJR 65. KATE TROLL, Fisheries Development Specialist Division of Trade and Development Department of Commerce and Economic Development P.O. Box 110804 Juneau, Alaska 99811-0804 Telephone: (907) 465-5464 POSITION STATEMENT: Testified on HJR 65. BARBARA BELKNAPP, Executive Director Alaska Seafood Marketing Institute 1111 West Eighth Street, Suite 100 Juneau, Alaska 99801-1895 Telephone: (907) 465-5560 POSITION STATEMENT: Testified in support of HJR 65. CHERI SHAW, Executive Director Cordova District Fishermen United P.O. Box 939 Cordova, Alaska 99574 Telephone: (907) 424-3447 POSITION STATEMENT: Testified in support of HJR 65. ED WOJAK 2642 40th Avenue West Seattle, Washington 98199 Telephone: (206) 282-0782 POSITION STATEMENT: Testified in support of HJR 65. RALPH BENNETT, Legislative Administrative Assistant to Senator Robin Taylor Alaska State Legislature Capitol Building, Room 30 Juneau, Alaska 99801 Telephone: (907) 465-3717 POSITION STATEMENT: Presented SB 158. JOHN GEORGE, Lobbyist for National Association of Independent Insurers 3328 Fritz Cove Road Juneau, Alaska 99801 Telephone: (907) 789-0172 POSITION STATEMENT: Testified on SB 158. MICHAEL LESSMEIER, Lobbyist for State Farm Insurance Company 124 West Fifth Street Juneau, Alaska 99801 Telephone: (907) 586-5912 POSITION STATEMENT: Testified on SB 158. JUANITA HENSLEY, Chief Driver Services Division of Motor Vehicles Department of Administration P.O. Box 110200 Juneau, Alaska 9811-0200 Telephone: (907) 465-5648 POSITION STATEMENT: Testified on SB 158. MARIANNE BURKE, Director Division of Insurance Department of Commerce and Economic Development P.O. Box 110805 Juneau, Alaska 99811-0805 Telephone: (907) 465-2515 POSITION STATEMENT: Testified on SB 158. SHIRLEY ARMSTRONG, Legislative Assistant to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 Telephone: (907) 465-4968 POSITION STATEMENT: Provided information on Confirmation Hearings. ACTION NARRATIVE TAPE 98-42, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:22 p.m. Members present at the call to order were Representatives Rokeberg, Hudson, Sanders, Ryan and Kubina. Representative Cowdery arrived at 3:24 p.m. HJR 65 - CLASSIFY WILD SALMON AS ORGANIC FOOD Number 0080 CHAIRMAN ROKEBERG announced the committee's first order of business was HJR 65, Requesting that Alaska wild salmon be included as an organic food under federal law. Number 0090 REPRESENTATIVE BILL HUDSON presented HJR 65. He stated Alaska's wild salmon had long been recognized as a heart-healthy food by the medical community and indicated this resolution asked the United States Department of Agriculture (USDA), Alaska's congressional delegation, and Congress in general, to allow Alaska's wild salmon an opportunity to be classified as an organic food. He noted the organic food market, encompassing many different types of foods, was approximately $3.5 billion in 1996 and was growing at a rate of about 20 percent per year. Representative Hudson indicated the salmon farming industry was working to have farmed salmon classified as an organic food and that Alaska had to appeal for that classification for far healthier wild salmon. He indicated farmed salmon were raised in closed systems and were fed antibiotics, steroids and things of that nature, while Alaska salmon was out in the pristine, cold Alaska waters. Representative Hudson stated it was very important that this effort was made. He commented he did not know if they would be successful, but indicated this resolution simply asked that the USDA and Congress allow Alaska wild salmon the opportunity to be classified as an organic product. He noted there were witnesses to testify about the marketing assets of this effort. The sponsor statement read: The organic-foods market is a growing market (annual growth rate of 20%) with total sales of $3.5 billion in 1996. Alaska's wild salmon, long recognized by the medical community as a heart healthy food, and reared in pristine Alaskan waters should be a strong candidate for this growing market. Unfortunately, farmed salmon producers, both domestic and foreign, are ahead of Alaska in striving to convince the U.S. Department of Agriculture that farmed salmon should qualify for Organic certification under federal law. House Joint Resolution 65 requests that Alaska wild salmon be fairly considered by objective scientific criteria as an organic food. The United States Department of Agriculture, via the Agricultural Marketing Service (AMS), is seeking the establishment of national standards for the organic production and handling of agricultural products. The deadline for public and official input is May 30th, 1998. The global salmon industry is fiercely competitive. Organic certification is a valuable market niche because a rapidly growing base of consumers has demonstrated willingness to consistently pay top dollar for products of choice. HJR 65 is but one step in pursuing this significant market. It puts the United States Department of Agriculture on notice that Alaskans are watching the pending debate over organic qualification, and it asks our delegation in Congress to assist in this matter, to insure the huge agri-business doesn't simply dominate the agenda from the start. Number 0290 CHAIRMAN ROKEBERG referred to page 1, line 5, of the resolution, asking about the wording "environmentally clean waters" [lines 4 and 5 read, "WHEREAS the ocean waters off the coast of Alaska are among the most environmentally clean waters on the globe; and"]. Chairman Rokeberg indicated he agreed with the concept of Alaska's clean waters but was not sure he understood the meaning of "environmentally clean". Number 0320 REPRESENTATIVE HUDSON brought forward the word "pristine". CHAIRMAN ROKEBERG stated the committee would take testimony and indicated the committee might want to consider alternate language for "environmentally". Number 0370 JEFF BAILEY, President, Prime Select Seafoods, Incorporated; commercial fisherman, testified via teleconference from Anchorage. He stated Prime Select Seafoods, Incorporated, was a fishermen- owned seafood marketing company located in Cordova. He thanked the committee for considering this important resolution encouraging inclusion of Alaska's wild salmon in the USDA's National Organic Program. He stated, "My interest in this issue began in December when I heard on National Public Radio that USDA was seeking public comment on the (indisc.--whistling) to regulate (indisc.) organic label. I did some research and discovered in my dismay that wild salmon ... Alaska wild salmon in particular, was not included in the proposed rules. My first reaction was to contact USDA to see if wild salmon was simply overlooked. They informed me that wild salmon was not on the list because USDA ... had no way to monitor what wild fish eat in their ... open ocean environment. My outrage came later when I learned that (indisc.--coughing)-raised salmon was being considered for inclusion ["exclusion" stated on tape] because USDA could monitor what they consumed. We began a campaign to reverse Alaskan salmon's exclusion. It is essential that Alaska present an unified front ... to strongly promote inclusion of Alaska wild salmon in the National Organic Program. The farmed salmon industry has already recognized the value of a USDA certified organic label and has been working closely with USDA for over seven years. Alaska is woefully behind on the issue and is very close to having its salmon excluded from the organic program." Number 0510 MR. BAILEY continued, "This exclusion will prohibit Alaskan fishermen from being able to participate in an organic industry which last year was worth $3.5 billion in the US [United States] alone. We can do something about it and need this resolution to provide the political clout needed for USDA's reconsideration. Alaska salmon is sold in an extremely competitive market. We have lost significant market share to the farm-raised fish and consumers lack awareness of the inherent and important differences between farm-raised and wild fish products. The organic label could help us provide a critical distinction and add substantially to the overall value of Alaska's salmon resource. This added value translates into money; money for fishermen, processors, support industries and the state of Alaska. It is time for Alaska to stand up and say enough is enough with regards to the ever increasing displacement of our wild salmon resource by farm-raised salmon and trout in the world marketplace. Recognition of Alaska wild salmon as a certifiably organic product has the potential to turn the entire Alaska salmon industry back to ... its historical place as a dominant power in the world salmon industry." Number 0590 REPRESENTATIVE JOE RYAN indicated he was ready to move the resolution. CHAIRMAN ROKEBERG said he appreciated Representative Ryan's anxiousness. Number 0602 REPRESENTATIVE GENE KUBINA thanked Mr. Bailey for his work and indicated he hoped that if HJR 65 passed through the legislature Mr. Bailey would continue his efforts. Number 0615 CHAIRMAN ROKEBERG asked Mr. Bailey why farmed salmon producers were ahead of Alaskans in getting the USDA to adopt that standard, noting they were speaking of overseas, foreign salmon here. Number 0639 REPRESENTATIVE KUBINA responded he thought that was part of the point, stating, "While we're cutting our ASMI [Alaska Seafood Marketing Institute] budget, our marketing budgets here in Alaska, they're doubling theirs. They're out there doing everything they can to find market for theirs. ... These people recognize how to sell something ...." Representative Kubina said the organic foods market was exploding in the United States. He commented on farmed salmon being raised in closed pens, stating "You can't call that clean, environmentally or not, clean water." Representative Kubina also noted the use of antibiotics and coloring agents in the production of farmed salmon, and he said these groups were saying to the United States government, or the United States regulators, "Hey, we should be ... organic ...." Representative Kubina indicated he felt this was the opportunity for Alaska to say, "Whoa, wait a minute, here's the real organic," because, he stated, "Our fish are organic, purely natural, we're not feeding them anything, the world feeds them." AN UNIDENTIFIED SPEAKER stated, "The oceans are feeding 'em." Number 0719 CHAIRMAN ROKEBERG said he couldn't agree with Representative Kubina more. He asked if Mr. Bailey had anything to add. Number 0725 MR. BAILEY added that the USDA has never regulated seafood in the past in any manner, it was strictly agricultural products, and he indicated the agency was more comfortable with what the farmed salmon producers could show the USDA because of the definition of farming. He said he thought Alaskans found themselves outside a regulated authority that had never really recognized them anyway, indicating this was why he thought Alaska had been caught off-guard and was behind. Mr. Bailey stated he felt very strongly that this resolution and position would "turn their heads around." He indicated the USDA program had received over 25,000 comments and an extension of the comment period was being discussed. He noted he did think the program had potential, but indicated the program was going to be rewritten and this was where Alaska needed to be included. Number 0787 CHAIRMAN ROKEBERG noted, "We need to get the word out to all Alaskans to make sure they're commenting to the right people." Number 0812 KATE TROLL, Fisheries Development Specialist, Division of Trade and Development, Department of Commerce and Economic Development (DCED), came forward to testify. She stated the department had been working on and reviewing these proposed regulations, developing official comments. Ms. Troll said the legislature's resolution was "in sync" with those official statements as they were currently drafted. She explained farmed salmon was ahead of Alaska salmon here because USDA decided to include fish in its definition of livestock. She noted these regulations were written from a terrestrial farm perspective and apparently the farmed salmon industry was able to get the USDA to insert "fish" in this definition of livestock. Ms. Troll indicated that while Alaska salmon was not specifically excluded, it clearly was not included at that point. She stated, "Our focus has been to say, 'Wait a minute ... ocean-farmed environments as well wild seafood is dramatically different than ... livestock. You need to have a separate section which addresses seafood.'" She indicated that, while wild salmon certainly is the impetus behind their involvement in commenting on these regulations, all Alaska seafood products would be affected. She commented that there was no notion of crops coming from the sea under the USDA's definition of wild crop harvesting. Ms. Troll stated it was very clear through reading that anything pertaining to seafood was an afterthought, commenting, "So that's why ... we're pushing to say, 'Hey, back off. Start over again with seafood.'" She indicated the department had been working with the Governor's office in Washington, D.C., which had been in contact with Senator Stevens' office. She said Senator Stevens made an inquiry which basically told the USDA there would be changes, and she said they were very glad to have that message delivered from the Senator's office. Additionally, Ms. Troll noted the proposed rules would prohibit the use of any word sounding like organic, directly or indirectly. She commented Alaska's whole marketing campaign was based on "wild" and "natural," stating, "These rules go into place, we'd be prohibited from using 'wild' and 'natural,' when clearly if anything is intrinsically organic, it is our salmon." She noted it was a fight full of irony, but one she believed would have major positive market impacts, not only for the salmon industry but for the entire seafood industry. Number 1005 REPRESENTATIVE KUBINA indicated he was glad the Administration was addressing this, noting it did go far beyond salmon "in all the things that we have out there." He stated, "And we do have farmers .... We have shellfish farmers all over the state. And so, while I want this to go forward, the more you think about it, the more I think we need to make sure that we protect our place and I'm glad you're there." Number 1035 REPRESENTATIVE HUDSON asked Ms. Troll her views on the use of "pristine" instead of "environmentally" on page 1, line 5, of the resolution. MS. TROLL said she thinks "pristine" fit, noting the term was used in the draft she had been working on. REPRESENTATIVE HUDSON commented that "pristine" means "remaining in a pure, unspoiled state," and it struck him that might even have more power. Number 1080 CHAIRMAN ROKEBERG stated his preference for "pristine," indicating he felt, after thought, that "environmentally clean" also was appropriate because of the presence of plankton, et cetera, in water which is absolutely pristine and environmentally sound but not necessarily clean in the sense of being transparent. Referring to Representative Kubina's statement, Chairman Rokeberg said it seemed appropriate to cover all Alaskan naturally-harvested seafood. He asked Ms. Troll if she thought this resolution should be expanded, or if there were any recommendations from the Administration or herself as a specialist in this area. Number 1143 REPRESENTATIVE KUBINA indicated he would like to see the resolution go forward in its current form because of it was a response to the fish farm, and he would agree to work with people on another resolution dealing with the whole industry, rather than holding up anything. Number 1175 CHAIRMAN ROKEBERG indicated Ms. Troll had said that possibly the USDA regulations currently being drafted might have negative ramifications on advertising, even other species, and some of those other things, if they were not granted organic status. He asked if that was correct. Number 1182 MS. TROLL answered in the affirmative. She said the proposed rules, as currently written, would make it extremely difficult for any Alaska seafood product to say it qualified because fish was not in the USDA's thinking as a wild crop. She indicated Alaska's seafood would fall under this wild crop category since it was not livestock, referring again to the success of the farmed salmon industry in getting "fish" inserted into the definition of livestock which would give that industry an advantage in saying its products were organic and Alaska's were not. She noted salmon was currently the "hot button" concern, where the state saw the farmed salmon industry taking a lot of its marketing advantages away. She commented Alaska needed to stop this and HJR 65 addressed this primary concern. Ms. Troll noted the resolution was not in conflict at all with the comment being drafted by the Administration; she stated, "We just realize ... that, strategically, we thought it would be best, rather than try to insert a word and change a word here, is to say, 'Wait a minute, don't treat seafood as an afterthought - it merits its own section and here's elements we'd like to see in that section.'" Number 1266 BARBARA BELKNAPP, Executive Director, Alaska Seafood Marketing Institute (ASMI), came forward to testify next. She stated ASMI supported HJR 65; it believed HJR 65 would be beneficial to ASMI in its marketing efforts as well as to the industry. She said Ms. Troll had been doing a tremendous amount of work on the technical aspects of this and ASMI had been assisting. She indicated an organic designation would be particularly helpful in the Japanese market, where Alaska's market share was eroding rapidly, and where the consumers were currently very label and health conscious with the recent E. coli (Escherichia coli bacteria) problems. Ms. Belknapp said the organic designation is even more important in Europe, with mad cow disease (bovine spongiform encephalopathy) and some of the other things there. In the United States, she said it was not as broad, but her feeling was that any niche market or added consumers through organic labeling would be beneficial to the industry. Number 1334 CHAIRMAN ROKEBERG asked why they couldn't put on an "Alaska wild salmon" label. MS. BELKNAPP replied they did, but she said they didn't say "organic." Ms. Belknapp explained it became a little complicated because "wild" was used in some markets and "natural" in others. "Natural" was mainly used in the United States to avoid confusion with endangered salmon, and "wild" was used in Japan and Europe. She noted "pristine waters" was used all the time as part of their advertising. Number 1370 REPRESENTATIVE JOHN COWDERY asked if Alaskan red (sockeye) salmon wasn't very popular in Japan and commanded a higher price. He noted he hadn't been there in a few years. MS. BELKNAPP replied that unfortunately Alaska's market share had eroded in the last two years from more than 50 percent down to almost 20 to 30 percent. She stated Alaska had lost 70 percent of its market share in Japan to farmed salmon. REPRESENTATIVE COWDERY asked if the costs of the two types of salmon were the same. Number 1399 MS. BELKNAPP replied in the negative, stating Alaska sockeye salmon was more expensive. She commented farmed salmon was priced below all United States product in the United States and outside the country. That was a real disadvantage for Alaska, but she said it had been proven that most people would pay more for products labeled organic. Ms. Belknapp reiterated that Alaska's Japanese market share was eroding quickly and anything that could help stop that was valuable. Number 1440 CHERI SHAW, Executive Director, Cordova District Fishermen United (CDFU), testified next via teleconference from Cordova. She noted she was speaking behalf of CDFU and herself, and read from a prepared statement: CDFU supports HJR 65 and the effort it will create to allow wild Alaska salmon to be federally labeled as organic. While the market for wild salmon has been eroding due to the increasing production of farmed salmon, the organic market has been growing dramatically. As noted in HJR 65, in 1996 alone sales were worth $3.5 billion. Organic food sales have increased 20 to 25 percent in each of the last 6 years. Overseas, organic foods are even more popular. The commercial fishing industry has often been called the first permanent fund. With the high quality of management we find here in Alaska, the salmon fishing industry will pump millions, if not billions, of dollars into the state's economy into perpetuity. Anything the legislature can do to help increase Alaska's salmon share in the global market will benefit all Alaskans. In conjunction with a passage of HJR 65 in the legislature, a letter-writing campaign by all Senators, Representatives and the constituents they represent should be organized requesting the federal government allow wild-harvested Alaska salmon to be labeled organic under the Organic Foods Production Act. This step forward will give the state and its salmon industry a valuable marketing edge they've both been searching for in this increasingly competitive global market. The organic label will increase demand for Alaska wild salmon and should increase exvessel value, thereby adding growth to the state's revenue in shared raw fish taxes. This is a win - win situation. Number 1528 CHAIRMAN ROKEBERG asked where and to whom would they write. MS. SHAW replied to the USDA, to Dan Glickman, she believed. Number 1541 CHAIRMAN ROKEBERG noted he asked for the record and the committee would obtain that information from Representative Hudson. He noted the Secretary of Agriculture was Daniel R. Glickman. Number 1564 ED WOJAK testified next via teleconference from Seattle. He testified as an individual, commenting he worked as a Bristol Bay fisher and a business lobbyist with predominantly Western Alaska Community Development Quota (CDQ) groups in Norton Sound and on the Yukon Delta as clients. He indicated he heard of this USDA rule- making the previous fall, and had questioned why fish wasn't included when the USDA was considering standards for organic beef and poultry. He said he found that fish as food was listed as livestock in this Act, and livestock was considered to be an agricultural product which would qualify for organic certification, yet it didn't appear Alaska's fish would qualify. Mr. Wojak indicated he testified at the Seattle USDA hearing, which was one of four hearings held country-wide. He commented on the irony of the situation and indicated the information he received from the USDA panel was that his ocean-harvested wild product would not qualify for organic certification but a pen or pond-raised product would. He said he further commented to the USDA, "We, as harvesters of wild salmon, we have never lost those standards of purity and wholesomeness that you're striving to achieve with your organic program ...." He noted the previous testimony had spoken to the rest of his comments and he thanked the committee on behalf of Alaska's fishermen for considering this issue. Number 1669 CHAIRMAN ROKEBERG asked if there was anyone else who wished to testify on HJR 65. Hearing none, he commented to Representative Hudson that while he thought resolutions should be written in a positive form as a matter of tone, there was nothing indicating farm-raised fish shouldn't be considered organic. Chairman Rokeberg asked if they were advocating for two separate standards. Number 1705 REPRESENTATIVE HUDSON answered in the affirmative, indicating they wanted to make sure pristine-watered, Alaska wild salmon were organic. Number 1725 REPRESENTATIVE KUBINA stated he agreed with Ms. Shaw's suggestion of a letter-writing campaign once this was adopted, indicating they should make that whole issue very clear to Alaska's congressional delegation and the Secretary of Agriculture in those letters. Number 1736 CHAIRMAN ROKEBERG alternately suggested another resolution covering all seafood, noting that was an important point. He referred to a letter from ASMI being distributed to the committee. Number 1753 REPRESENTATIVE KUBINA made a motion to change the word "environmentally" on page 1, line 5, to "pristine". Number 1762 CHAIRMAN ROKEBERG asked if there were any objections. Hearing none, the amendment was adopted. Page 1, line 5 now read, "pristine clean waters on the globe; and". REPRESENTATIVE JERRY SANDERS asked if "pristine clean" was redundant. REPRESENTATIVE KUBINA asked if the chairman wished to delete the word "clean". CHAIRMAN ROKEBERG asked for the definition of "pristine". REPRESENTATIVE HUDSON replied he thought it meant natural, noting he had just had that definition. Number 1773 CHAIRMAN ROKEBERG called a brief at ease at 3:53 p.m. The committee came back to order at 3:54 p.m. Number 1805 CHAIRMAN ROKEBERG said the chair would entertain another amendment to delete the word "clean" which occurred on page 1, line 5. REPRESENTATIVE KUBINA made a motion to adopt the amendment. CHAIRMAN ROKEBERG noted the amendment before the committee was to delete the word "clean", stating the sentence would read "... among the most pristine waters on the globe". He asked if there were any objections. Hearing none, the amendment was adopted. Number 1805 REPRESENTATIVE RYAN made a motion to move HJR 65 as amended, with individual recommendations and the accompanying zero fiscal note. Number 1814 CHAIRMAN ROKEBERG asked if there were any objections. There being none, CSHJR 65(L&C) was moved out of the House Labor and Commerce Standing Committee. Number 1829 CHAIRMAN ROKEBERG called a brief at ease at 3:54 p.m. The committee came back to order at 3:57 p.m. CSSB 158(L&C) - INSURANCE CHANGES FOR DR. LIC REVOC. Number 1855 CHAIRMAN ROKEBERG announced the committee's next order of business was CSSB 158(L&C), "An Act relating to motor vehicle liability insurance covering a person who has had the person's driver's license revoked for possession or consumption of alcohol while under 21 years of age." RALPH BENNETT, Legislative Administrative Assistant to Senator Robin Taylor, came forward to present SB 158. Mr. Bennett read the sponsor statement: The "use it or lose it" provisions of current statute have had an unintended consequence. Minors who lose their drivers licenses for minor consuming offenses often find themselves and their families with increased insurance premiums and occasionally a (policy) cancellation. Senate Bill 158 would correct this situation by prohibiting an insurer from raising rates and/or cancelling existing policies solely for suspension of a minor's drivers license as a result of minor consuming where not involving driving. This narrowly focused version of SB 158 does not address other offenses such as DWI, using false ID, or possession of controlled substances. MR. BENNETT read the January 1, 1998, sectional analysis prepared by Joe Ambrose, Legislative Assistant to Senator Taylor. This sectional analysis read: Section 1 adds language to the existing statute stating that AS 21.36.210(a)(2) does not apply to an administrative revocation as described in AS 21.89.027, the new section which begins on page 2 of the bill. AS 21.36.210(a) specifies why an insurer may cancel a policy: nonpayment of premium or suspension or revocation of a drivers license. Section 2 is the operative section of the bill and adds a new provision to state law. (a) says an insurer may not refuse to issue or renew motor vehicle liability insurance, cancel an existing policy, deny a covered claim, or increase the premium only because of an administrative or court ordered suspension for minor consuming. (b) says that (a) does not prevent an insurer from underwriting or rating a loss in the same manner as it would have had the suspension not occurred. Section 3 says the bill would apply to policies issued or renewed on or after the effective date. This would mean that policies currently being charged a higher rate would have to be adjusted at the next renewal. MR. BENNETT stated the bill corrected unintended consequences of the "use or lose it" provision in current law. It prohibited an increase or cancellation of insurance solely because of license suspension for minor consuming and did not include offenses involving operation of a motor vehicle or other offenses such as driving while intoxicated (DWI), use of false identification (ID), or possession of controlled substances. The legislation only covered revocation or suspension by either administrative or court action for minor consuming. Mr. Bennett stated, "Rate increases often affect parents' insurance, choice of dropping a kid from the policy, permanent revocation, or paying a higher premium." He indicated representatives from the Division of Motor Vehicles, Department of Administration, and the Division of Insurance, Department of Commerce and Economic Development, were present to answer questions. Number 1995 CHAIRMAN ROKEBERG said he had been given a possible committee substitute and asked Mr. Bennett to explain. Chairman Rokeberg indicated CSSB 158(L&C), Version L, labeled 0-LS0839\L, engrossed, was before the committee [the possible committee substitute was work draft Version P, labeled 0-LS0839\P, Ford, dated 4/1/98]. Number 2010 MR. BENNETT stated the new possible committee substitute was based on negotiations with the insurance industry [copies of Version P were distributed to the committee]. He said it was Senator Taylor's belief they could come to an accommodation in the next day or two. Mr. Bennet stated, "The industry is concerned about the situation that would arise where a person's license has been revoked, either administratively or through a court proceeding, but they're driving anyway illegally." Mr. Bennett indicated the industry had legitimate concerns and he thought a "simple wording fix" would address that, but Senator Taylor did not wish to make this change until he had a chance to discuss it with the industry and the departments together. Mr. Bennett said they would like to have the bill held over. Number 2050 CHAIRMAN ROKEBERG indicated he had brought up Version P so the committee would be aware during the testimony. Number 2060 MR. BENNETT said the possible committee substitute had been developed that morning and was not necessarily finalized; he indicated it might be changed with further negotiations the following day. Number 2084 REPRESENTATIVE RYAN asked if SB 158 had another House committee referral. Number 2088 MR. BENNETT replied the House Judiciary Standing Committee. Number 2096 JOHN GEORGE, Lobbyist for National Association of Independent Insurers (NAII), came forward to testify. He stated he represented Allstate Insurance Company, GEICO, USAA (United Service Automobile Association) and other companies. He reiterated the prior testimony, commenting, "We're working, we're doing some fine tuning, we're pretty close. I think we all agree conceptually on what needs to be done, we're just not quite there yet. So if it'd be your intent to hold it, I think we'll testify when we get something that we actually ... can all agree on." Number 2015 CHAIRMAN ROKEBERG noted the committee might not take a lot of testimony if the bill was brought up again. Number 2124 MR. GEORGE said NAII was concerned about people who actually drove while they did not have licenses. He said the statutory cites in the bill included some things he believed were violations while driving and he noted he thought the sponsor's intent was to only cover "while not driving." Mr. George indicated a minor language change might be necessary and he thought his organization would be in support of the bill when the agreed-upon proposed committee substitute was brought forward. Number 2148 CHAIRMAN ROKEBERG referred to Section 2, subsection (b) of CSSB 158(L&C) [Version L]. He stated, "Notwithstanding the fact, you can't cancel the insurance or deny coverage or anything else. You could still rate the insurance and increase the premium, is that correct?" Section 2 of CSSB 158(L&C) read: *Sec. 2. AS 21.89 is amended by adding a new section to read: Sec. 21.89.027. Motor vehicle insurance following driver's license revocation. (a) Notwithstanding AS 21.36.210, an insurer offering insurance in this state may not (1) refuse to issue or renew motor vehicle liability insurance coverage; (2) cancel an existing policy of motor vehicle liability insurance; (3) deny a covered claim; or (4) increase the premium on a motor vehicle liability insurance policy if the refusal, cancellation, denial, or increase results only from the fact that the person's driver's license was revoked under AS 28.15.183 or 28.15.185 for possession or consumption of alcohol in violation of AS 04.16.050 or a municipal ordinance with substantially similar elements. (b) The provisions of (a) of this section may not prevent an insurer from underwriting or rating for a loss experience in the same manner as it would for a person who has not had the person's driver's license revoked under AS 28.15.183 or 28.15.185. Number 2162 MR. GEORGE indicated he did not have a copy of Version L in front of him, but said, "It's my understanding ... that you could not increase the premium on the policy, cancel it, fail to renew, or deny a covered claim if the revocation was for -- the intent was non-driving related incident. If you're at a party, the kid gets caught with a beer in his hand, his license is revoked, and they chose that because that's something [that's] really important to a kid, but it's not a driving incident, and ... we're willing to buy off on the fact that it's not driving so you don't rate their insurance for that. Except if he's driving after that, then we think ... we ought to be able to rate for that, and the way it was originally drafted, we think we might be precluded from canceling the policy if they've got this unlicensed kid driving the car while he's got an administrative revocation." He commented that was NAII's intent. He noted they were finding these very small flaws that they were working on and he thought they would come up with a solution. Number 2204 REPRESENTATIVE COWDERY gave the situation of four or five vehicles owned in a family and one member receiving a speeding citation. He asked if the whole policy would be penalized for that. Number 2225 MR. GEORGE said he was not an insurance agent; he had a lot of experience with regulating insurance. He stated it was his understanding they would be rated on one vehicle but could not swear to that. Number 2235 REPRESENTATIVE COWDERY said he did not believe that was the case. MR. GEORGE said he was willing to accept he was wrong. Number 2244 REPRESENTATIVE COWDERY indicated someone might own several vehicles for different uses, noting he and his wife had four vehicles, and if his wife received a ticket driving her car, the premiums on all four vehicles would increase. He stated he did not think that was fair or equitable, noting he didn't know if they could work something out with this bill. Number 2266 MR. GEORGE stated there was legislation passed into law the previous year which required an insurance company to exclude a named driver upon request by the insured. He indicated this could be used to avoid paying the premium for a "wayward" child still living at home by excluding the child from the policy by name. He indicated the child would not be covered if he or she drove the vehicle, and he thought Representative Cowdery could exclude his wife this way from three of the vehicles, noting Representative Cowdery would probably not want to do that. Number 2295 CHAIRMAN ROKEBERG confirmed both the vehicle and the person were insured. He confirmed a vehicle, a person, and the two together could be rated. MR. GEORGE replied the coverage applied a number of different ways. If a person owned a vehicle, there was coverage for an accident with that vehicle no matter who was driving it if that person had the owner's permission. If the owner of an insured vehicle was driving a car owned by someone without insurance, the owner of the insured vehicle would be covered while driving that non-insured vehicle. He stated, "It covers you as a named person no matter whose car you're driving, and it covers your car no matter who is driving it." He indicated there were other policies which worked differently, but this was the norm. He stated, "You can buy a policy that only covers you while driving the specified vehicle ...." Number 2333 REPRESENTATIVE RYAN asked if someone could exclude his wife even if she had not had a ticket. MR. GEORGE said he believed so, but only theoretically. Number 2345 MICHAEL LESSMEIER, Lobbyist for State Farm Insurance Company, came forward to testify. He said their primary concern was that the legislation, as written, included driving situations and Senator Taylor's focus had to do with non-driving situations. Mr. Lessmeier said the bill specifically referred to AS 28.15.183 and AS 28.15.185, noting AS 28.15.183 included someone who operated a vehicle after consuming alcohol in violation of AS 28.35.280. He added that AS 28.15.185 would include someone who refused to take a breathalyser test after he or she was suspected of driving while under the influence. Mr. Lessmeier said one of the difficulties, which he thought Senator Rick Halford had brought up on the floor, was insurance was not that complicated. Mr. Lessmeier indicated insurers rated for risk and State Farm Insurance Company wanted to be able to do so. He indicated they had been discussing language to narrow the bill so that what the insurers would be prevented from doing was rating for the person who had consumed alcohol in a non-driving offense. Mr. Lessmeier indicated this was for a minor consuming in a non-driving situation, so the family would not be penalized and the minor would not be penalized later. He mentioned they did have a concern that sometimes non-driving related behavior carried over into driving behavior. Number 2429 CHAIRMAN ROKEBERG asked if this was embodied in Version P, or if they were "still tuning on it." MR. LESSMEIER replied they were still tuning, noting he had seen Version P only shortly before the hearing. He stated, "Basically it would involve inserting language saying, quote, "in a non- driving related incident" in 'paragraph' 1 and I think that would take care of it. We would insert that language after line 10, "consumption of alcohol" and then we would insert the words, "in a non-driving related incident" ...." Mr. Lessmeier confirmed he was referring to Version P, the work draft, stating, "It would be page 2, line 10 ..." [TESTIMONY INTERRUPTED BY TAPE CHANGE] Page 2, line 10, in subsection (a), Version P, read: "consumption of alcohol in violation of AS 04.16.050 or a municipal ordinance with". With Mr. Lessmeier's suggested change the language would read: "consumption of alcohol in a non-driving related incident in violation of AS 04.16.050 or a municipal ordinance with". Section 2 in work draft Version P read: *Sec. 2. AS 21.89 is amended by adding a new section to read: Sec. 21.89.027. Motor vehicle insurance following driver's license revocation. (a) Notwithstanding AS 21.36.210, an insurer offering insurance in this state may not (1) refuse to issue or renew motor vehicle liability insurance coverage; (2) cancel an existing policy of motor vehicle liability insurance; (3) deny a covered claim; or (4) increase the premium on a motor vehicle liability insurance policy if the refusal, cancellation, denial, or increase results only from the fact that the person's driver's license was revoked under AS 28.15.183 or 28.15.185 for possession or consumption of alcohol in violation of AS 04.16.050 or a municipal ordinance with substantially similar elements. (b) The provisions of (a) of this section (1) may not prevent an insurer from underwriting or rating for a loss experience in the same manner as it would for a person who has not had the person's driver's licensed revoked under AS 28.15.183 or 28.15.185; and (2) do not apply to a liability insurance policy covering a motor vehicle if the motor vehicle is operated by a person during a period of driver's license revocation imposed on the person under AS 28.15.183 or 28.15.185 for possession or consumption of alcohol in violation of AS 04.16.050 or a municipal ordinance with substantially similar elements. [Note: subsection (a) of Section 2 was identical in both Version L and Version P, with identical line numbering.] TAPE 98-42, SIDE B Number 0001 MR. LESSMEIER continued, "... Juanita Hensley has some concerns with 'paragraph' 2, but that would address most of our concerns." Number 0040 JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles (DMV), Department of Administration, came forward to testify. She questioned whether they were discussing Version P or Version L. Number 0058 CHAIRMAN ROKEBERG stated Version L, CSSB 158(L&C), was before the committee. He indicated discussion of Version P would be allowed. MS. HENSLEY noted she had worked with the legislative bodies when the "use it, lose it" law was passed in 1994 and amendments were made in 1996. She stated the testimony through the process and the legislative intent at that time had been to make a license revocation for "use it, lose it" a remedial action, not to penalize. She stated, "It was discussed that we would not require SR-22, high risk insurance, or place these individuals in a high risk bracket and we put it even into Title AS 28.15 at the time of a license reinstatement we would not require the SR-22 because ... a lot of these were non-driving violations and why (indisc.) SR-22 certificate of insurance high risk if they were non-driving violations? The problem was is that it did not get transferred into Title 21 dealing with the Division of Insurance requirements, and that's basically what this bill does. [It] comes back and restates what was stated ... under the 'use it, lose it' law in 1994 and 1996, to place it in the Division of Insurance statutes. It's already in Title 28, the motor vehicle laws, that we would not require it. We've had several parents over the last few years call and complain about the high risk insurance that their insurance companies are charging them because their minor was picked up, as Mr. Lessmeier said, out behind the ... barn ... and they weren't driving." Number 0235 MS. HENSLEY continued, "They could be at a party in possession of alcohol or something and have their license revoked if they were cited for minor consuming or minor in possession of alcohol." She said it had become somewhat punitive in nature as opposed to being remedial. She noted it was punitive to the parents, not necessarily to the minor. Ms. Hensley mentioned an individual in Petersburg, whose name she could research in her records, who experienced an increase in insurance premiums from $900 every six months to $3,600 every six months when the person's 16 1/2 year old teenager was charged with minor consuming in a non-driving situation. She commented that was an example of some of the complaints she had been receiving and indicated she had also heard from legislators calling on behalf of constituents with complaints of that nature. Ms. Hensley said this bill had been introduced to try to remedy that situation. She stated a parent had to give consent for a driver's license for someone under 18 and when parents signed that consent the parents were also signing consent to be financially responsible, to have insurance or have a means of paying for damages that child incurred. Number 0386 CHAIRMAN ROKEBERG asked Ms. Hensley for the Title 28 provisions she had referred to which had not been put in Title 21 regarding SR-22, et cetera. He commented he would ask Ms. Burke about Title 21. Number 0457 MS. HENSLEY stated it was under AS 28.15.183(e), which read, "(e) Notwithstanding the provisions of AS 28.20.240 and 28.20.250, the department may not require proof of financial responsibility before restoring a driver's license, permit, or privilege that is revoked under this section.". She said AS 28.15.185(d) contained the same language; it read, "(d) Notwithstanding the provisions of AS 28.20.240 and 28.20.250, upon conviction of an offense specified in (a) of this section, the department may not require proof of financial responsibility before restoring or issuing the person's driver's license.". Ms. Hensley said that change had been made in 1995. Number 0522 CHAIRMAN ROKEBERG asked whether that was merely the proof of having insurance or if it was more than that. Number 0527 MS. HENSLEY replied, "It's proof of financial responsibility for the future which is ... certificate of SR-22." CHAIRMAN ROKEBERG asked what made an SR-22, questioning if that was in the statute as citing. MS. HENSLEY responded that AS 28.20.240 or AS 28.20.250 was certificate of insurance and she indicated it required the insurance industry to notify the DMV within ten days of cancellation, and the DMV had to take action on the driver's license if the person canceled that insurance policy during the three-year period the person was required to carry SR-22. AS 28.20.240 and AS 28.20. 250 read: Sec. 28.20.240. Proof required when driving privilege is restricted. Whenever under a law of this state the license of a person is suspended, revoked, limited under AS 28.15.201, or canceled for any reason, the department may not issue to that person a new or renewal of license until permitted to do so under the motor vehicle laws of this state. A period of suspension, revocation, or cancellation continues until proof of financial responsibility for the future is provided. Upon expiration of a period of limitation, the license remains revoked until proof of financial responsibility for the future is provided. Sec. 28.20.250. Action in respect to unlicensed person. (a) If a person does not have a license, but by final order or judgement is convicted of, or forfeits bail or collateral deposited to secure an appearance for trial for an offense requiring the suspension or revocation of license, or for driving a motor vehicle upon the highways without being licensed to do so, or for driving an unregistered vehicle upon the highways, a license may not be issued to the person unless the person gives and thereafter maintains proof of financial responsibility for the future. (b) Whenever the department suspends or revokes a nonresident's operating privilege for conviction or forfeiture of bail, the privilege remains suspended or revoked unless the person has previously given or immediately give proof of financial responsibility for the future. CHAIRMAN ROKEBERG stated, "So the certificate of insurance under those particular statutory provisions is the SR-22?" He confirmed AS 28.20.240 and AS 28.20.250 were the SR-22. MS. HENSLEY said that was correct. Number 0597 REPRESENTATIVE HUDSON confirmed Ms. Hensley had a copy of Version P and asked if Mr. Lessmeier's conceptual amendment on page 2, line 10, created problems for her. MS. HENSLEY replied she would have no problem with that for non- driving violations. She said her objection to Version P was subsection (2), under subsection (b), on page 2, lines 16 through 20. Version P, lines 16 through 20, read: (2) do not apply to a liability insurance policy covering a motor vehicle if the motor vehicle is operated by a person during a period of driver's license revocation imposed on the person under AS 28.15.183 or 28.15.185 for possession or consumption of alcohol in violation of AS 04.16.050 or a municipal ordinance with substantially similar elements. MS. HENSLEY said if the insurance company denied a claim because the minor's license had been revoked under AS 28.15.183 or AS 28.15.185, indicating she believed this subsection allowed that, then, whoever had signed consent for that driver's license would be financially responsible to the victim if that minor was involved in an automobile accident. She commented, "That's a real concern that I have. It - it kind of creates an area ... where I look it as being ... it's going to encourage more parents to - to fall victim under - under this provisions than what I think was intended several years ago under the legislation." REPRESENTATIVE HUDSON asked if it would be possible to have the prime sponsor's representative speak to that. Number 0788 MR. BENNET indicated they would conceptually return to Version L and delete lines 16 through 20 which was subsection (2) under (b) of Version P. He said on page 2, line 10, the words "in a non- driving situation", would be inserted after "alcohol". Mr. Bennett said their discussion would begin from that point. He noted he did not believe subsection (2) under (b) would be required after that change and thought he was in agreement with Ms. Hensley on that. Number 0854 CHAIRMAN ROKEBERG asked Ms. Henley if her department supported the legislation with that exception. MS. HENSLEY indicated the changes Mr. Bennet mentioned would put the legislation almost back to Version L and her department would have no problem. She said she believed the Division of Insurance had one more language change to Version L. On page 2, line 13, after "rating", deleting the words "for a" and inserting "based upon". Subsection (b) of Section 2 would then read, "(b) The provisions of (a) of this section may not prevent an insurer from underwriting or rating based upon loss experience in the same manner as it would for a person who has not had the person's driver's license revoked under AS 28.15.183 or 28.15.185.". Number 0934 MARIANNE BURKE, Director, Division of Insurance, Department of Commerce and Economic Development, came forward to testify. She indicated the minor "wordsmithing" Ms. Henley had addressed would clarify an earlier question as to whether or not an insurance company could rate on bases other than license cancellation for non-driving related incidence. She said, for example, if the teenager who had lost his or her driver's license had also been in a number of accidents, that would be legitimate rating basis, and it would have nothing to do with the fact that the teenager's license had been canceled for the non-driving incidence. Ms. Burke stated, "By adding the 'based upon' it clarifies that you can use those legitimate bases you had before, and you can't hide behind the fact that it was non-driving related violation. I'd like to just add to the earlier testimony that this is a very important fix that is needed." She said the division had received numerous complaints about nonrenewal of the policy. She noted there had not been any complaints about increased premiums. Miss Burke informed the committee there were only two reasons an insurance company could "nonrenew" a personal automobile policy: nonpayment of premiums or cancellation of driver's license. She said the insurance companies were canceling or nonrenewing policies because of the provisions of the "use it and lose it," and so the division felt it was important to correct this. Ms. Burke noted the Division of Insurance was in agreement with the proposed changes to Version L discussed earlier, and felt they would make for a stronger, clearer bill. Number 1079 REPRESENTATIVE RYAN stated, "A lot has been said about how to cure a problem, but I haven't heard much said about the opportunism of these insurance companies taking advantage of a little crack to reap huge amounts of money. Why is always that people have a tendency not to discuss those things? I think some criticism is due. If a young person has a revocation for drinking behind the barn and four cars' premiums are knocked up by $3,600, I think it's highway robbery, and I think perhaps we should consider a windfall profit tax on that kind of activity. (Indisc.) put it back into maintaining the roads perhaps. ... A buck's a buck, but when you take advantage (indisc.) situation like that, it leaves a bad taste in people's mouth." CHAIRMAN ROKEBERG stated he appreciated Representative Ryan's comments and understood his level of frustration, recommending he file legislation if he had a possible solution. Number 1145 REPRESENTATIVE HUDSON asked if the chairman wished to entertain an amendment. Number 1148 CHAIRMAN ROKEBERG indicated the committee would wait for another proposed committee substitute from the sponsor. He confirmed with Ms. Burke that under current state law, an insurer could only cancel a policy for nonpayment or revocation of license. MS. BURKE said that was correct. CHAIRMAN ROKEBERG stated, "So they ... can't get out but they can rate you up and charge you highway robbery, to quote some other members of this committee." MS. BURKE replied that was only if it was approved. She suggested the person whose premium increased to $3,600 should file a complaint with the Division of Insurance, noting the division would certainly like to know. She said, "The complaints we have received is they refuse to renew and use as a basis the fact that the license has been revoked." CHAIRMAN ROKEBERG indicated he would like Ms. Burke to speak to the rating and the division's grievance procedure. MS. BURKE responded the division would encourage the person to obtain the one-page form, if he or she had that premium notice or letter, and send the division a copy. Ms. Burke said the division would investigate it; it was their job and they did it all the time. CHAIRMAN ROKEBERG asked what the statutory authority would be for the division's investigation. MS. BURKE replied, "Unfair business practices and the fact that they were using a rate that was not approved." CHAIRMAN ROKEBERG asked her to explain the meaning of "a rate that was not approved." Number 1255 MS. BURKE said the rates used by insurance companies had to go through an approval process by the division. She stated, "There are, however, underwriting criteria that they can apply. So, if they used a rate that was approved by us -- first of all, it wouldn't go from 900 [dollars] to 3,600 [dollars] every six months, we would not approve such a rate. However, if they ... had something that had been approved and it was more reasonable, but used unfair underwriting practices, we would be able to get them under ... provisions in [AS] 21.36, which are the unfair trade practices. We encourage people to let us know anytime something like this happens. That's our job and ... I take it very seriously." Number 1311 REPRESENTATIVE COWDERY noted the division approved all rates and asked if all the rates from various companies were similar or if there was a large fluctuation in prices for the same coverage. Number 1327 MS. BURKE said they were basically the same, noting it was very difficult to find two policies that were exactly the same. She commented everyone had their own marketing "bells and whistles." She noted, however, the division kept and closely monitored the statistics on the different portions of the auto insurance. She commented there were medical, liability, comprehensive, "UM (ph) UIM (ph)" portions. Number 1375 REPRESENTATIVE SANDERS complimented Ms. Burke for her courage on saying she approved the outrageous rates the insurance companies charged for insurance. Number 1393 MS. HENSLEY of the DMV noted she had one additional comment. She stated, "If a minor ... is caught driving a motor vehicle with any alcohol level ... Alaska's a zero tolerance state for anyone under the age of 21. They are cited for drunk driving, and so that would go on their driving record as a drunk driving offense. And that's under [AS] 28.35.280 and 28.35.285 and 28.35.290. ... So it will be noted on the driving record if they were actually driving [as] an offense, and that is something that could be rated that's separate from the revocation of the ... driver's license." CHAIRMAN ROKEBERG said, "Just the consumption of alcohol ... they don't have to reach the one point zero, is that correct?" Number 1435 MS. HENSLEY repeated that Alaska had a zero tolerance for anyone under the age of 21, so any level or odor of alcohol was considered drunk driving for someone under 21 years of age. CHAIRMAN ROKEBERG added, "And subject to all the ... penalties for a DWI." MS. HENSLEY noted a person in this situation would be subject to a lesser penalty; it was an infraction as opposed to a class A misdemeanor. She said the offense was punishable with a $1,000 fine, mandatory treatment and community work service. CHAIRMAN ROKEBERG asked if that had been part of the "lose it or use it" legislation. MS. HENSLEY replied it was separate. She indicated it had been passed in 1996 because the federal ISTEA [Intermodal Surface Transportation Efficiency Act] legislation required the state to have a zero tolerance law for anyone under the age of 21. Number 1500 MR. BENNETT returned to the witness stand and assured the committee he would not come back before it without a bill in final form for the committee's consideration. He stated he thought Senator Taylor would give that same guarantee if he were present. He thanked the departments and industry for their assistance. Number 1518 CHAIRMAN ROKEBERG commented the bill would have the support of the Administration and the industry, indicating this met with the committee's approval. He stated SB 158 would be held. Number 1579 CHAIRMAN ROKEBERG called an at ease at 4:39 p.m. The committee came back to order at 4:44 p.m. CONFIRMATION HEARING Number 1580 CHAIRMAN ROKEBERG announced the committee would address confirmations for the Governor's appointments to various boards and commissions. He stated the House Labor and Commerce Standing Committee, in accordance with AS 39.05.080, had reviewed the qualifications in the following areas and recommended the appointment of various members of boards and commissions be forwarded to the joint session for consideration. He indicated the signing of transmittal letters by individual members did not reflect an intent by any member to vote for or against an individual during any further sessions for the purpose of confirmation. Alaska State Board of Public Accountancy Number 1627 CHAIRMAN ROKEBERG announced the committee would first address the confirmations of Marjorie J. Kaiser, CPA, Anchorage; Steven R. Tarola, CPA, Barrow; and Sandra R. Wilson, CPA, Fairbanks, to the Alaska State Board of Public Accountancy. He asked if there were any objections. There being no objections, the names of Marjorie J. Kaiser, Steven R. Tarola and Sandra R. Wilson advanced forward. State Board of Registration for Architects, Engineers, and Land Surveyors Number 1650 CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Donald J. Iverson, Anchorage; Scott McLane, PLS, Soldotna; and Patricia Peirsol, Fairbanks, to the State Board of Registration for Architects, Engineers, and Land Surveyors. Chairman Rokeberg noted these confirmations were in the original set of appointees. He asked if there were any objections. There being no objections, the names of Donald J. Iverson, Scott McLane and Patricia Peirsol advanced forward. Board of Barbers and Hairdressers Number 1679 CHAIRMAN ROKEBERG announced the committee would next address the confirmation of Lawrence R. Krupa, North Pole, to the Board of Barbers and Hairdressers. He asked if there were any objections. There being no objection, Lawrence R. Krupa's name advanced forward. Board of Chiropractic Examiners Number 1688 CHAIRMAN ROKEBERG announced the committee would next address the confirmation of Trevor V. Ireland, DC, Anchorage, to the Board of Chiropractic Examiners. He asked if there were any objections. There being no objections, Trevor V. Ireland's name advanced forward. Alaska Labor Relations Agency Number 1699 CHAIRMAN ROKEBERG indicated the committee would address the confirmation of Karen J. Mahurin, Kenai, to the Alaska Labor Relations Agency. Number 1704 CHAIRMAN ROKEBERG called a brief at ease at 4:46 p.m. The committee came back to order at 4:49 p.m. Number 1705 CHAIRMAN ROKEBERG announced the committee had before it the confirmations to the Alaska Labor Relations Agency, stating the committee would hold the name of Karen J. Mahurin, Kenai. He stated the committee would transmit the name of Alfred L. Tamagni, Sr., Anchorage. He asked if there were any objections to the advancement of Mr. Tamagni's name. REPRESENTATIVE SANDERS commented that Mr. Tamagni was a "real good guy." Number 1735 CHAIRMAN ROKEBERG noted, there being no objections, Alfred L. Tamagni's name advanced forward. Board of Marine Pilots Number 1744 CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Peter S. Garay, Homer, and Michael N. White, Anchorage, to the Board of Marine Pilots. He asked if there were any objections. There being no objections, the names of Peter S. Garay and Michael N. White advanced forward. Board of Marital and Family Therapy Number 1750 CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Dixie A. Hood, Juneau, and Elaine L. Williams, Juneau, to the Board of Marital and Family Therapy. He asked if there were any objections. There being no objections, the names of Dixie A. Hood and Elaine L. Williams advanced forward. State Medical Board CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Martha T. Cotten, MD, Eagle River and Constance E. Livsey, Anchorage, to the State Medical Board. He asked if there were any objections. Number 1767 REPRESENTATIVE RYAN stated he had no objection, but he noted Dr. Cotten was the wife of a former Speaker. CHAIRMAN ROKEBERG indicated Dr. Cotten was the spouse of Sam Cotten, the commissioner and chairman of the Alaska Public Utilities Commission. REPRESENTATIVE RYAN said it was his understanding Dr. Cotten was well-thought of in her profession. REPRESENTATIVE HUDSON stated he knew Dr. Cotten, commenting she was a very good doctor and an ethical person. CHAIRMAN ROKEBERG stated that was his understanding. He asked if there were any objections to either name. There being no objections, the names of Martha T. Cotten and Constance E. Livsey advanced forward. Board of Certified Direct-Entry Midwives Number 1800 CHAIRMAN ROKEBERG announced the committee would next address the confirmation of Martha J. Linden, CNM, Anchorage, to the Board of Certified Direct-Entry Midwives. He asked if there were any objections. There being no objections, Martha J. Linden's name advanced forward. Occupational Safety and Health Review Board Number 1810 CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Dennis Davidson, Anchorage, and Carla Meek, Juneau, to the Occupational Safety and Health Review Board. Chairman Rokeberg wondered if Mr. Davidson was the former famous basketball player from the early 1950s. He asked if there were any objections to either name. There being no objections, the names of Dennis Davidson and Carla Meek advanced forward. Board of Pharmacy Number 1830 CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Paul Joseph Gionet, R.Ph., Anchorage, and Martin Krull, R.Ph., Anchorage, to the Board of Pharmacy. REPRESENTATIVE COWDERY objected to the advancement of Mr. Krull's name. CHAIRMAN ROKEBERG asked if Representative Cowdery wished to speak to his objection. REPRESENTATIVE COWDERY indicated there were letters stating five of the six members, including the public member, of the Board of Pharmacy were from the Anchorage area, although Alaska Statutes required the board to include at least one member from each judicial district whenever possible [AS 08.80.010]. Number 1870 CHAIRMAN ROKEBERG noted Representative Hudson was from Southeast Alaska and the first judicial district. He asked Representative Hudson if he had any knowledge of this particular situation, indicating the language was "when available or appropriate." REPRESENTATIVE COWDERY stated, "The board shall include at least one member from each -- whenever possible -- from each judicial district." CHAIRMAN ROKEBERG noted the language "whenever possible" and confirmed with Ms. Armstrong that the committee had received correspondence from Mr. Krull or some other people in regard to this matter. Number 1895 SHIRLEY ARMSTRONG, Legislative Assistant to Representative Norman Rokeberg, answered in affirmative. She stated the committee had received two or three letters and an inquiry from Representative Gene Therriault's office about Mr. Krull. She said nothing had been about Mr. Krull's ability as a pharmacist; the controversy surrounding his appointment had only to do with the feeling Anchorage was over-represented and the preference would be for one person from each judicial district as the statute stated. However, Ms. Armstrong noted, as the chairman had said, the statute was permissive, and not mandatory. Number 1925 CHAIRMAN ROKEBERG confirmed with Ms. Armstrong that the committee had also had testimony from or spoken with Ms. Reardon [Catherine Reardon, Director, Division of Occupational Licensing, Department of Commerce and Economic Development] about this matter. He indicated Ms. Reardon had spoken about Mr. Krull's position as director of pharmacy for Carr-Gottstein Foods Company and Mr. Krull's therefore unique position to understand the needs of the Alaska pharmacy industry because he traveled throughout the state. He asked Ms. Armstrong if the committee had heard that as formal testimony. Number 1944 MS. ARMSTRONG replied that Ms. Reardon, director of the Division of Occupational Licensing, had spoken with Chairman Rokeberg and herself after a committee meeting, explaining something of the controversy. Ms. Armstrong indicated the explanation had been given because Ms. Armstrong and Chairman Rokeberg had inquired if the controversy had anything to do with qualifications. Ms. Armstrong said Ms. Reardon had noted the dispute was of a regional nature and said Mr. Krull was very well-qualified to sit on the board, giving the reason the chairman related. Number 1970 REPRESENTATIVE HUDSON indicated he had been called upon by pharmacists from Petersburg as well as Juneau, asking for regional representation for Southeast Alaska on the board. Representative Hudson noted he had not yet received any recommendations. CHAIRMAN ROKEBERG asked if Representative Hudson would like the committee to hold the confirmation, on Representative Cowdery's advice, to allow him some more time. REPRESENTATIVE HUDSON said he would like to do that. Number 2008 CHAIRMAN ROKEBERG confirmed it was the sense of the committee to hold Mr. Krull's name until Representative Hudson could give the committee a report from the Governor's office about any success (indisc.). He noted this was with no reflection on Mr. Krull's ability. Chairman Rokeberg commented the committee would keep in mind that Mr. Krull was from Anchorage, and if another name was not brought forward shortly, the committee would continue with the Anchorage person. REPRESENTATIVE HUDSON indicated the Governor would have to make that nomination. CHAIRMAN ROKEBERG briefly conferred with Ms. Armstrong about a deadline date for the special action names. He noted Representative Hudson had the charge of the committee to report on the matter relating to Mr. Krull's name and the Board of Pharmacy by April 15. Chairman Rokeberg stated he would take on responsibility for Ms. Mahurin's name. MS. ARMSTRONG informed the committee it had stopped on the confirmation of Paul Joseph Gionet to the Board of Pharmacy. There being no objections, Paul Joseph Gionet's name advanced forward. State Physical Therapy and Occupational Therapy Board CHAIRMAN ROKEBERG announced the committee would next address the confirmations of Sundi M. Hondl, LPT, Wasilla, and Ann P. Mattson, Juneau, to the State Physical Therapy and Occupational Therapy Board. He asked if there were any objections. There being no objections, the names of Sundi M. Hondl and Ann P. Mattson advanced forward. Board of Psychologist and Psychological Associate Examiners Number 2081 CHAIRMAN ROKEBERG announced the committee would address the confirmations of Carey S. Edney, Ph.D., Anchorage, and David J. Sperbeck, Ph.D., Anchorage, to the Board of Psychologist and Psychological Associate Examiners. He asked if there were any comments from the committee. REPRESENTATIVE RYAN stated he believed Dr. Sperbeck was extremely well-published and had coauthored a couple of publications with a friend of Representative Ryan's, served on the staffs of Charter North Hospital and Columbia Alaska Regional Hospital, and Representative Ryan indicated Dr. Sperbeck might have some involvement with the Department of Corrections. Representative Ryan commented Dr. Sperbeck was well-received and well-qualified. CHAIRMAN ROKEBERG asked if there were any objections to either name. There being no objections, the names of Carey S. Edney and David J. Sperbeck advanced forward. Board of Certified Real Estate Appraisers Number 2122 CHAIRMAN ROKEBERG announced the committee would next address the confirmation of Judy Kemplen, Anchorage, to the Board of Certified Real Estate Appraisers. He noted he believed Ms. Kemplen was the spouse of Representative Allen Kemplen. Chairman Rokeberg commented he was not familiar with Ms. Kemplen's work as a real estate appraiser, although he said that did not surprise him as he was no longer active on a day-to-day basis in the Anchorage real estate market. He asked if there were any objections. There being no objections, Judy Kemplen's name advanced forward. Real Estate Commission Number 2149 CHAIRMAN ROKEBERG announced the committee would next address the confirmation of Audrey J. Foldoe, Fairbanks, to the Real Estate Commission. Chairman Rokeberg stated he had heard nothing negative or any problems in that regard about Ms. Foldoe. He stated she seemed to be a very interested and conscientious worker. He asked if there were any objections. REPRESENTATIVE RYAN stated he had no objections, noting he had known Ms. Foldoe for perhaps 20 years. He commented they didn't always agree on everything but he indicated he thought Ms. Foldoe was competent in her profession. CHAIRMAN ROKEBERG noted, there being no objections, Audrey J. Foldoe's name advanced forward. Board of Veterinary Examiners Number 2174 CHAIRMAN ROKEBERG announced the committee would next address the confirmation of Deanna J. Thornell, DVM, Fairbanks, to the Board of Veterinary Examiners. REPRESENTATIVE RYAN stated Dr. Thornell was a wonderful and nice human being who volunteered often for the Yukon Quest. He said she really liked animals, did an unpaid radio show to tell people about how to treat animals, et cetera. Representative Ryan stated she was a delightful person and very competent veterinarian. CHAIRMAN ROKEBERG noted, there being no objections, Deanna J. Thornell's name advanced forward. Alaska Workers' Compensation Board Number 2201 CHAIRMAN ROKEBERG announced the committee would next address the confirmations of John A. Abshire, Anchorage; Valerie K. Baffone, Anchorage; Shawn Pierre, Chugiak; Florence S. Rooney, Anchorage; and James G. Williams, Douglas, to the Alaska Workers' Compensation Board. Chairman Rokeberg indicated Ms. Baffone, S. Pierre, Ms. Rooney and Mr. Williams were being considered for reappointment to the board. He asked if there were any comments or objections. Chairman Rokeberg asked Ms. Armstrong if she had had any comments with "Spallins (ph)" about any of these people. MS. ARMSTRONG replied the committee had received no correspondence, public opinion messages (POMs), telephone calls or any other communication. CHAIRMAN ROKEBERG stated, that being the case, and there being no objections, the names of John A. Abshire, Valerie K. Baffone, Shawn Pierre, Florence S. Rooney and James G. Williams advanced forward. Number 2231 CHAIRMAN ROKEBERG called a very brief at ease at 5:02 p.m. The committee came back to order at 5:02 p.m. State Board of Registration for Architects, Engineers, and Land Surveyors Number 2237 CHAIRMAN ROKEBERG announced the committee address the confirmation of Patrick Kalen, Fairbanks, to the State Board of Registration for Architects, Engineers, and Land Surveyors. He asked Representative Ryan if he knew Mr. Kalen. REPRESENTATIVE RYAN responded he had known Mr. Kalen for a number of years. CHAIRMAN ROKEBERG questioned whether Mr. Kalen had been previously rejected for the board or had withdrawn his name. Chairman Rokeberg noted there had been some controversy a couple of years previously. Number 2250 REPRESENTATIVE RYAN said, "Pat plays politics. (Indisc.) may have been something there ...." Representative Ryan indicated he had never heard anyone complain about Mr. Kalen's surveying ability. CHAIRMAN ROKEBERG asked if Representative Ryan had any problem with Mr. Kalen's name. REPRESENTATIVE RYAN answered in the negative. CHAIRMAN ROKEBERG noted, there being no objections, Patrick Kalen's name advanced forward. Board of Dental Examiners Number 2262 CHAIRMAN ROKEBERG announced the committee would address the confirmation of Raymond L. Lang, DDS, Nome, to the Board of Dental Examiners. There being no objections, Raymond L. Lang's name advanced forward. Board of Dispensing Opticians CHAIRMAN ROKEBERG announced the committee would address the confirmation of Cynde M. Oleck, Fairbanks, to the Board of Dispensing Opticians. He asked if there were any objections. There being no objections, Cynde M. Oleck's name advanced forward. Alaska Workers' Compensation Board Number 2280 CHAIRMAN ROKEBERG announced the committee would address the additional confirmation of Marc D. Stemp, Bethel, to the Alaska Workers' Compensation Board. He asked if there were any objections. There being none, Marc D. Stemp's name advanced forward. ADJOURNMENT Number 2320 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee meeting at 5:05 p.m.