HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 1, 2000 3:34 p.m MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Andrew Halcro, Vice Chairman Representative Lisa Murkowski Representative John Harris Representative Tom Brice Representative Sharon Cissna Representative Jerry Sanders MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 380 "An Act relating to contributions to the Alaska Fire Standards Council and to an insurer tax credit for those contributions; and providing for an effective date." - MOVED CSHB 380(L&C) OUT OF COMMITTEE HOUSE BILL NO. 382 "An Act relating to the licensing of social workers and to the use of the title 'social worker' without a license; and providing for an effective date." - MOVED CSHB 382(L&C) OUT OF COMMITTEE HOUSE BILL NO. 369 "An Act relating to property exemptions under the Alaska Exemptions Act; and providing for an effective date." - MOVED HB 369 OUT OF COMMITTEE PREVIOUS ACTION BILL: HB 380 SHORT TITLE: INSURER TAX CREDIT: FIRE STANDARDS COUNCIL Jrn-Date Jrn-Page Action 2/16/00 2213 (H) READ THE FIRST TIME - REFERRALS 2/16/00 2213 (H) STA, L&C, FIN 2/22/00 (H) STA AT 8:00 AM CAPITOL 102 2/22/00 (H) Moved CSHB 380(STA) Out of Committee 2/22/00 (H) MINUTE(STA) 2/23/00 2274 (H) STA RPT CS(STA) 6DP 2/23/00 2275 (H) DP: JAMES, SMALLEY, GREEN, WHITAKER, 2/23/00 2275 (H) OGAN, HUDSON 2/23/00 2275 (H) ZERO FISCAL NOTE (DPS) 2/25/00 2315 (H) COSPONSOR(S): SMALLEY 3/01/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 382 SHORT TITLE: SOCIAL WORKER LICENSING Jrn-Date Jrn-Page Action 2/16/00 2214 (H) READ THE FIRST TIME - REFERRALS 2/16/00 2214 (H) L&C, FIN 3/01/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 369 SHORT TITLE: PROPERTY EXEMPTIONS Jrn-Date Jrn-Page Action 2/11/00 2183 (H) READ THE FIRST TIME - REFERRALS 2/11/00 2184 (H) L&C, JUD 3/01/00 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER JOE BALASH, Staff to Representative Gene Therriault Alaska State Legislature Capitol Building, Room 511 Juneau, Alaska 99801 POSITION STATEMENT: Introduced HB 380 on behalf of sponsor. MICHAEL McGOWAN, Coordinator Fire Science Program University of Alaska - Fairbanks University Park Building 510 Second Avenue Fairbanks, Alaska 99701 POSITION STATEMENT: Testified in favor of HB 380. GARY POWELL, State Fire Marshall and Director Division of Fire Prevention Department of Public Safety 5700 East Tudor Road Anchorage, Alaska 99507-1225 POSITION STATEMENT: Testified in favor of HB 380. JIM WHITE, Chief of Fire Service Training Anchorage Fire Department 5700 East Tudor Road Anchorage, Alaska 99507-1225 POSITION STATEMENT: Testified in favor of HB 380. MIKE DOLPH, President Alaska Fire Chiefs Association 811 Willow Street Kodiak, Alaska 99615 POSITION STATEMENT: Testified in favor of HB 380. BOB LOHR, Director Division of Insurance Department of Community and Economic Development P.O. Box 110805 Juneau, Alaska 99811 POSITION STATEMENT: Testified on HB 380. JOHN GEORGE, Lobbyist for the National Association of Independent Insurers 3328 Fritz Cove Road Juneau, Alaska 99801 POSITION STATEMENT: Testified in favor of HB 380. MYRNA McGHIE, Staff to Representative Jeannette James Alaska State Legislature Capitol Building, Room 102 Juneau, Alaska 99801 POSITION STATEMENT: Introduced HB 382 on behalf of sponsor. COLLEEN PATRICK-RILEY, Chair Board of Clinical Social Work Examiners 3400 Illiamna Avenue Anchorage, Alaska 99517 POSITION STATEMENT: Testified on HB 382. CATHERINE REARDON, Director Division of Occupational Licensing Department of Community and Economic Development P.O. Box 110806 Juneau, Alaska 99811-0806 POSITION STATEMENT: Testified on HB 382. JOHN MANLY, Staff to Representative John Harris Alaska State Legislature Capitol Building, Room 511 Juneau, Alaska 99801 POSITION STATEMENT: Introduced HB 369 on behalf of sponsor. STEPHEN GREER, Attorney 4041 B Street, Suite 205 Anchorage, Alaska 99503 POSITION STATEMENT: Testified on HB 369. CHRIS MILLER, Chief Research Section Division of Administrative Services Department of Labor and Workforce Development P.O. Box 21149 Juneau, Alaska 99802-1149 POSITION STATEMENT: Testified on HB 369. ACTION NARRATIVE TAPE 00-23, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:34 p.m. Members present at the call to order were Representatives Rokeberg, Halcro, Harris and Cissna. Representatives Murkowski, Sanders and Brice arrived as the meeting was in progress. An at-ease was declared at 3:37 p.m. The committee was called back to order at 3:40 p.m. HB 380 - INSURER TAX CREDIT: FIRE STANDARDS COUNCIL Number 0148 CHAIRMAN ROKEBERG announced that the first order of business would be HOUSE BILL NO. 380, "An Act relating to contributions to the Alaska Fire Standards Council and to an insurer tax credit for those contributions; and providing for an effective date." [Before the committee was CSHB 380(STA).] Number 0145 JOE BALASH, Staff to Representative Gene Therriault, Alaska State Legislature, introduced HB 380 by reading briefly from the sponsor statement. He said HB 380 creates an insurance tax credit for contributions to the Alaska Fire Standards Council for fire services training programs. Created by the 20th legislature, the Fire Standards Council will meet for the first time on July 1, 2000, and HB 380 creates a funding source for the council's operations. The council will adopt minimum standards for employment, as well as curriculum requirements for fire fighters and fire instructors around the state. The certification [of fire fighters] is not mandatory. The council will allow the state to adopt fire standards appropriate to Alaska's unique climate. Number 0258 REPRESENTATIVE HALCRO asked about the difference between the original bill and CSHB 380(STA). He noted that the committee substitute (CS) deletes the word "training" and asked why. MR. BALASH said the intent was to open up the language a little to cover the cost of operations in this initial year, as standards are being developed. [JASON ELSON, Fire Chief, City of Kenai, and a member of the Alaska Fire Chiefs Association, told members via teleconference that he and Chief Len Malmquist, also on teleconference from Kenai, would defer to colleagues from Anchorage and Fairbanks.] Number 0390 MICHAEL McGOWAN, Coordinator, Fire Science Program, University of Alaska - Fairbanks, testified by teleconference from Fairbanks. He identified himself as past president of the Alaska Fire Chiefs Association and coordinator of the University of Alaska Fire Science Program at Fairbanks. He said Alaska has the worst fire loss and fatality record in the United States. Alaska's police and Emergency Medical Services (EMS) personnel have had training standards for about 20-25 years. The Police Standards Council is funded by $10 per [traffic citation], and the EMS Standards Council is funded through the state Department of Health, Education and Social Services. MR. McGOWAN said the only fire training standards in Alaska recognized by the federal Occupational Safety and Health Administration are those established by the National Fire Protection Association. Alaska has about 25 urban fire departments that cover about 90 percent of the population and about 225 rural fire departments that cover about 10 percent of the population. It is very difficult for the urban departments to achieve those training standards and "totally unrealistic for the rural departments to even begin to meet them." MR. McGOWAN said the Alaska Fire Chiefs Association supports HB 380 and establishment of an Alaska Fire Council to adopt minimum training standards for both fire fighters and instructors. The funding mechanism provided by HB 380 will allow the insurance industry to support the fire training. Hopefully, the result will be an increase in fire fighter safety and reduction of fire losses and fatalities. Number 0573 GARY POWELL, State Fire Marshall and Director, Division of Fire Prevention, Department of Public Safety, testified by teleconference from Anchorage. He said the Division of Fire Prevention supports HB 380. Number 0602 JIM WHITE, Chief of Fire Service Training, Anchorage Fire Department, testified by teleconference from Anchorage. He expressed support for HB 380 on behalf of the Anchorage Fire Department. He also relayed a verbal commitment of support from the Anchorage Fire Fighters Union, Local 1264, and said the union's endorsement is expected to be ratified by a vote on March 9. CHAIRMAN ROKEBERG asked where Anchorage training would take place. MR. WHITE answered that Anchorage trains its own fire fighters using facilities in Kenai and Fairbanks. As the largest fire department in the state, Anchorage also supplies instructors to Kenai, Fairbanks and outlying villages. Number 0752 MIKE DOLPH, President, Alaska Fire Chiefs Association, testified by teleconference from Kodiak. He identified himself as retired fire chief of the City of Kodiak as well as the current president of the Alaska Fire Chiefs Association. He reaffirmed the association's support for HB 380, commenting on its "fiscally responsible and accountable method of funding the Fire Standards Council." BOB LOHR, Director, Division of Insurance, Department of Community and Economic Development, informed members that he was available to answer questions. Number 0882 JOHN GEORGE, Lobbyist for the National Association of Independent Insurers, told committee members that the insurance industry had been silent on this issue, and so had been asked to lend its support to HB 380. He said member companies have indicated that they would consider donating to this type of thing [a state Fire Standards Council]. Most insurance companies have a foundation or committee that reviews applications for donations each year. "These are the kinds of things that we do consider," he said. MR. GEORGE said member agencies appreciate that contributions are not mandatory, but that the insurance industry is being given an opportunity to donate money to this, which is certainly needed in the state. He voiced support for HB 380 on behalf of the National Association of Independent Insurers. In closing, he urged legislators not to close themselves to thinking about other funding sources. The Fire Standards Council has an important mission, is very worthy of financing, and should not have to rely 100 percent on insurance company donations for its financing. Number 0992 CHAIRMAN ROKEBERG clarified that HB 380 will allow members to make donations in exchange for a tax credit to the organization not to exceed $150,000 a year. MR. GEORGE said it would be a partial tax credit, not one-for- one. If an insurance company gives $50,000, it can take a $25,000 credit on its premium taxes derived from insurance premiums that relate to fire. The company still gives some of its money, but the donation would reduce the company's tax obligation. This program is very similar to one that the University of Alaska has, also dealing with premium taxes. Number 1031 REPRESENTATIVE HALCRO asked if there was any similar program in any other state. MR. GEORGE said he was not aware of any similar programs in other states, but that insurance companies give money to various charities and causes throughout the country. Number 1070 REPRESENTATIVE MURKOWSKI noted that HB 380 refers to cash contributions. She asked whether any other kind of contributions could be made. MR. GEORGE said insurance companies have many ways in which they might contribute. Whether HB 380 allows it is another matter. For example, insurance companies have print shops where they print policies and riders, and they might be willing to print brochures, pamphlets, training manuals, and that kind of thing as an in-kind donation. They might provide access to their mailing list or put a flyer in with their billings to Alaskan residents, but he thinks HB 380 does not address that. REPRESENTATIVE MURKOWSKI said HB 380 specifically refers to "cash contributions," and she wonders if it is purposefully specific. MR. BALASH explained that the language in HB 380 was based on that which is already in place for the University of Alaska. There was not a particular intent to restrict contributions to cash only. REPRESENTATIVE HALCRO asked Mr. Balash if it would be acceptable to eliminate the word "cash" in the bill. What if one wished to donate a building or vehicles, or make in-kind contributions such as printing or legal assistance?. He wondered if there would be a benefit to deleting the specific reference to cash and allowing all kinds of contributions. MR. BALASH said he didn't think that would be a problem, but said he would prefer to let the Fire Council speak for itself on the matter [of in-kind and other possible non-cash contributions]. He wondered how those other types of contributions would be accounted for under the Division of Insurance statutes and regulations. CHAIRMAN ROKEBERG said he thought it would cause a severe accounting problem, and evaluation [of such donations] would add to the cost. He favors the relatively simple, straightforward program capped at $150,000. CHAIRMAN ROKEBERG then asked Mr. Balash why HB 380 includes a reference to title insurance premium taxes. MR. BALASH said he thought that was an oversight, inadvertently left in from earlier drafts of the bill. [CHAIRMAN ROKEBERG addressed Mr. Lohr, and there was discussion concerning the fiscal note.] CHAIRMAN ROKEBERG requested confirmation that the bill will save the state money. MR. LOHR explained that it would result in a net increase in revenues to the state because the contributions are in excess of the tax credits allowable. That was the intended outcome. Number 1594 REPRESENTATIVE MURKOWSKI asked Mr. Lohr to comment on the earlier discussion about the applicability of tax credits for non-cash contributions. MR. LOHR said the associated evaluation issues get quite "thorny," and that he thought the cash contribution would be a much cleaner approach. REPRESENTATIVE HALCRO asked about a donation of assets that already have an established value, such as land that has an assessed valuation that can be documented. MR. LOHR said that might be possible. Number 1711 CHAIRMAN ROKEBERG moved to adopt Amendment 1, a conceptual amendment to page 1, line 11, deleting the reference to title insurance premium tax. There being no objection, it was so ordered. Number 1747 REPRESENTATIVE HALCRO made a motion to move out of committee CSHB 380(STA), as amended, with individual recommendations and the two accompanying fiscal notes. There being no objection, CSHB 380(L&C) was moved out of the House Labor and Commerce Standing Committee. HB 382-SOCIAL WORKER LICENSING CHAIRMAN ROKEBERG announced that the next item of business would be HOUSE BILL NO. 382, "An Act relating to the licensing of social workers and to the use of the title 'social worker' without a license; and providing for an effective date." Number 1830 MYRNA McGHIE, Staff to Representative Jeannette James, Alaska State Legislature, presented HB 382 on behalf of the sponsor, Representative James, who was out of town. Ms. McGhie explained that HB 382 is related to legislation passed in 1988 establishing minimum qualifications and licensure for social workers. Since then, the Division of Family and Youth Services has found the original legislation to be too restrictive, creating hiring problems. House Bill 382 will amend the current laws to allow temporary licensing for up to one year for newly hired social workers who have met all requirements other than the licensing exam. The bill also extends by one year the provision in statute relating to the criminal penalty for using the title of social worker without a license. CHAIRMAN ROKEBERG asked whether Representative James supports the amendment before the committee. [Provided by Catherine Reardon and later adopted as Amendment 1, it read: "Delete page 1 line 10 through page 2, line 1. Renumber subsections. Make conforming amendments to page 2, lines 15 and 19. This amendment will eliminate temporary licenses at the clinical level."] MS. MCGHIE said yes. Number 1973 COLLEEN PATRICK-RILEY, Chair, Board of Clinical Social Work Examiners, informed the committee via teleconference that she was available to answer questions. Number 2011 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community and Economic Development, reported that her division staffs the Board of Social Work Examiners. She said both the department and the board support HB 382 and urge adoption of the amendment eliminating temporary licensure at the clinical level; that is the highest level of social work, which permits diagnosis. MS. REARDON explained that the reason for temporary licensure is that there is a large vacancy rate, and providing the required notarized references delays by a month or more the time when a person is available to start work. There is a difference of opinion. The board would like to have the professional references at the time of temporary licensure, but the departments would like that requirement to wait for permanent licensure. This has been discussed with Representative James, who recognizes the urgency and is comfortable with deferring the reference requirement to the time of permanent licensure. Number 2298 REPRESENTATIVE MURKOWSKI asked about the proposed change to Section 4 [of the existing statute], relating to "good professional standing." MS. REARDON said that the current wording is "fit to practice as determined by the board," and that HB 382 would permit staff to issue the temporary licenses. REPRESENTATIVE MURKOWSKI asked how many temporary social workers might need to be hired. MS. REARDON said the board expects about 80 applications a year. Number 2452 REPRESENTATIVE MURKOWSKI expressed concern about granting temporary licensure to applicants against whom there might be unresolved complaints or disciplinary actions. Number 2478 MS. REARDON assured her those applicants could simply be ruled out [for temporary licensure]. TAPE 00-23, SIDE B [Tape numbers decline] MS. REARDON suggested that HB 382 might be reworded so that staff could approve temporary licensure of the applicant who appears to satisfy requirements for fitness to practice, leaving it for the board to make the final determination. REPRESENTATIVE HALCRO asked how the board determines "of good moral character." MS. REARDON said there are no regulations defining that at this time, and the question might be addressed to Ms. Patrick-Riley. There is, however, a regulation that lists some of the reasons why someone could be denied a license, and refers to certain criminal convictions. Number 0124 REPRESENTATIVE MURKOWSKI asked Ms. Patrick-Riley to briefly explain how the board determines good moral character. Number 0134 MS. PATRICK-RILEY said the application now includes a series of questions that both the applicant and that person's references need to answer. These specifically address the applicant's character, fitness to practice, history of prior substance abuse, impairment that might affect the applicant's ability to practice, and information about prior criminal convictions. "That constellation of questions and answers" provides the board the information needed to determine both competency and character. REPRESENTATIVE MURKOWSKI asked whether the application requests references?" MS. PATRICK-RILEY said absolutely, and that the board relies upon those individuals' personal knowledge of the applicant's experience and fitness to practice. MS. REARDON further explained that references are requested on the current application form, but that they would not be required for the temporary license. Number 0289 CHAIRMAN ROKEBERG asked if [the board and professional associates] agree on eliminating temporary certification at the clinical level. MS. PATRICK-RILEY said the board fully supports that. The board also supports temporary licensure at the lower levels, and would prefer, but does not insist, that the requirements [for temporary licensure] include references. Number 0431 REPRESENTATIVE MURKOWSKI asked if there will be a distinction on the certificates of those who hold the temporary license. MS. REARDON said such certificates generally say "holds a temporary license to practice." As an alternative, the temporary document might be called a "permit to practice" instead of a "temporary license." Number 0432 REPRESENTATIVE HALCRO moved to adopt Amendment 1 [text provided earlier], eliminating temporary licensure at the clinical level. There being no objection, it was so ordered. Number 0451 REPRESENTATIVE HALCRO made a motion to move HB 382, as amended, out of committee with individual recommendations and the accompanying fiscal note. There being no objection, CSHB 382(L&C) was moved out of the House Labor and Commerce Standing Committee. CHAIRMAN ROKEBERG declared an at-ease at 4:41 p.m. The committee was called back to order at 4:45 p.m. HB 369 - PROPERTY EXEMPTIONS CHAIRMAN ROKEBERG announced that the next item of business would be HOUSE BILL NO. 369, "An Act relating to property exemptions under the Alaska Exemptions Act; and providing for an effective date." Number 0508 JOHN MANLY, Staff to Representative John Harris, Alaska State Legislature, introduced HB 369 on behalf of the sponsor. He explained that HB 369 makes changes to Title 9, Chapter 38, commonly called the Alaska Exemptions Statute. The bill increases the dollar amounts of specified assets that are currently in the statute and provides some new protection to assets that currently are not covered. The current statute specifies what assets are protected from creditors when a person loses a lawsuit and has a judgment entered against him. It also applies in those cases of bankruptcy in which the person going bankrupt chooses to take the state rather than the federal exemptions. MR. MANLY said HB 369 will increase the homestead exemption to $250,000 per individual. It would also increase to $250,000 the exemption for the cash value of a life insurance policy or annuity contract which is owed to the individual seeking the exemption. It provides an unlimited exemption on the proceeds or a life insurance contract or annuity paid to a beneficiary. It also increases from six months to two years the time allowed to trace assets. MR. MANLY described the new provisions that HB 369 is proposing. One is to protect the reserves that are kept by condominium associations, such as dues that have been paid and are designated for upkeep of the property. The bill also protects deferred compensation plans, provides a very limited cash and liquid asset exemption of up to $8,075, and changes how some revocable trusts are treated. It also makes some changes to how indexing of the exemption would be figured over each year in relation to the Consumer Price Index (CPI). Number 0675 REPRESENTATIVE BRICE asked when the $5,400 number was established. MR. MANLY said he thinks it was in 1982, and that it has been updated two or three times since. CHAIRMAN ROKEBERG asked who brought this bill forward. MR. MANLY said some trust attorneys asked Representative Harris to introduce it. Number 0732 STEPHEN GREER, Attorney, said HB 369 originated about two years ago, following a fire that caused a devastating financial loss to a complex that has hundreds of units. Some tenants who were renting units sued the condominium association. Fortunately, the judgment was less than the amount of the association's insurance coverage. Had it not been less, all of the condominium association's reserves could have been depleted, and hundreds of people could have been dispossessed of their units because there would have been no money to pay utility bills and to pay for future maintenance and repairs. MR. GREER said an exemption signifies that there is a public policy decision behind an individual's right to keep a particular asset. For example, in the condominium case, there would be a public policy decision behind letting dues be used for the purposes for which they were intended. HB 369 also includes exemptions not presently contemplated by the current statute, such as deferred compensation plans for government employees, plans which are not now exempted despite the fact that they are comparable to a 401K plan in the private sector, which is exempt. Number 0893 CHRIS MILLER, Chief, Research Section, Division of Administrative Services, Department of Labor and Workforce Development (DOLWD), concurred with reservations expressed by Chairman Rokeberg. He recommended using the United States all-city CPI instead of the Anchorage CPI, as specified by HB 369. The United States all-city average is calculated monthly rather than just semi-annually, he noted; it includes more data points and is less volatile. Number 1090 REPRESENTATIVE BRICE asked if the DOLWD had any other concerns about HB 369. MR. MILLER said DOLWD has technical concerns regarding the inflation index. One is that there is no January CPI index for Anchorage, as is specified in the bill. Second, DOLWD recommends using the full inflation factor throughout the calculations and rounding it only at the end. Number 1169 REPRESENTATIVE MURKOWSKI asked Mr. Greer whether most of the exemptions in HB 369 mirror federal ones. MR. GREER said some do. The insurance exemption is more than what the federal government would allow. The homestead exemption matches the one in a bill now before the federal House of Representatives. REPRESENTATIVE MURKOWSKI asked how much of a life insurance exemption the federal government currently allows. MR. GREER said the federal government allows a life insurance cash value of $8,625, so Alaska's present statute is generally in line with federal bankruptcy exemptions. He went on to explain that there is nothing in Alaska's current law to protect life insurance beneficiaries from the policy owner's creditors. Most states offer that protection. Number 1352 REPRESENTATIVE MURKOWSKI expressed concern about the unlimited protection proposed for a condominium homeowners association. She wondered if a homeowners association might contrive to take advantage of that. MR. GREER said he doesn't think there is any potential for that happening. CHAIRMAN ROKEBERG asked Mr. Greer if he had talked with someone who represents the condominium community associations. MR. GREER said the associations wonder how they can collect dues from a member protected by the $8,075 cash exemption. CHAIRMAN ROKEBERG said that is a separate issue. [There was concurrence by committee members.] [CHAIRMAN ROKEBERG and Mr. Greer then discussed whether the exemptions included in HB 369 might affect alimony claims, child support, or divorce settlements.] MR. GREER said none of those would be affected because the exemptions protect the joint interest from a third-party creditor. CHAIRMAN ROKEBERG asked Representative Harris to work with DOLWD on the department's suggested technical changes, and to bring those recommendations to the next committee of purview, the House Judiciary Committee. Number 1654 REPRESENTATIVE HALCRO made a motion to move HB 369 out of committee with individual recommendations and the attached zero fiscal note. There being no objection, HB 369 was moved out of the House Labor and Commerce Standing Committee. ADJOURNMENT Number 1674 There being no further business before the committee, the House Labor and Commerce Standing Committee meeting was adjourned at 5:05 p.m.