MINUTES  SENATE FINANCE COMMITTEE  March 21, 2000  9:01 AM TAPES SFC-00 # 55, Side A & B SFC-00 # 56, Side A CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 9:01 AM PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell, Senator Al Adams, Senator Pete Kelly, Senator Randy Phillips, Senator Gary Wilken, Senator Green, Senator Leman, Senator Donley. Also Attending: WAYNE REGELIN, Director, Division of Wildlife Conservation, Department of Fish and Game; SENATOR JOHNNY ELLIS; KATHERINE REARDON, Director, Occupational Licensing, Department of Community & Economic Development; JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation; VERN JONES, Chief Procurement Officer, Division of General Services, Department of Administration; ELMER LINDSTROM, Special Assistant to the Commissioner, Department of Health and Social Services; AL ZANGRI, Chief, Vital Statistics, Division of Public Health, Department of Health and Social Services; SHARI PAUL, Staff, Alaska Children's Trust. Attending via Teleconference: From Anchorage: KENDALL THOMAS, Board President, Alaska Hepatitis C Coalition; LARRY ALLEN UNGERECH, owner, Anchorage Tattoo Studio; DAVE LLOYD; MONICA MORTERUD; JIM STRATTON, Director, Division of Parks & Outdoor Recreation, Department of Natural Resources. SUMMARY INFORMATION SB 267-SAME DAY AIRBORNE HUNTING The sponsor testified, along with the Department of Fish & Game. A committee substitute was adopted. The bill was moved from committee. SB 34-BD OF BARBERS ETC/TATOOS; BODY PIERCING The sponsor testified, along with the Department of Environmental Conservation, the Department of Community and Economic Development and the general public. A committee substitute was adopted. The bill was held in committee. SB 220-PROCUREMENT PREFS:PARTNERSHP/LTD LIAB CO The Department of Administration testified. The bill was held in committee. SB 249-DEPT NAT RES & AK HARD ROCK LAND EXCHANGE The Department of Natural Resources testified. The bill was moved from committee. SB 254-HEIRLOOM MARRIAGE CERTIFICATES The Department of Health and Social Services testified. The bill was held in committee. CS FOR SENATE BILL NO. 267(RES) "An Act relating to management of game." Senator P. Kelly made a motion to move SB 267, version 1- LS1430\K for consideration by the Senate Finance Committee. Hearing no objection, it was so moved. Senator P. Kelly, as sponsor to this committee substitute, explained some concerns with the previous version of this legislation, more specifically with Section 1. He reported that this section had asked the Department of Fish and Game to prioritize their activities around intensive management issues. He noted that the department had some concerns with the language, as well as related fiscal concerns and this section was removed. Senator Wilken stated that he had a couple of concerns as well. He noted that he would not object to moving the bill from committee, but he was concerned about how this legislation flew in the face of the referendum that was composed a few years ago and the related public perception. He felt as though there were other ways to control wolf populations that do not carry the burden of public perception. Senator P. Kelly responded that the referendum for predator control was initiated four years ago. He added that the public wanted predator control as a management tool in whatever form possible. He referred to a poll taken to substantiate this sentiment. He stated that this present administration refuses to implement wolf control practices based on the separation of powers. He added that the administration is willing to use sterilization and relocation practices, but noted that this was extremely expensive and not that effective. He declared that the community of McGrath needs help with their wolf problem. He reported that this legislation puts the power to institute a program for wolf control into the hands of the Board of Game. Senator Wilken asked why they could not recognize the program of "fair chase" and proper trapping principles. Senator P. Kelly responded that there was a problem with "fair chase" as a means of predator control, since the problem has become bigger than these efforts could rectify. He then gave examples of how the wolf problem has escalated in McGrath. Senator Phillips stated that the moose population in McGrath was at 1200 rather than 2500, a more optimum level. He continued that the Board of Game has made a decision to allow for trapping and shooting of these wolves to cull the population to a sustained yield, which should be around 20. He referred to language in this new version that allows taking a wolf, same-day, as a hunter is airborne and felt as though the public would have a problem with this allowance. He stated that he could not support this legislation. Senator P. Kelly responded that the absolute minimum to bring the moose population back is 2500, but he did not think this low number was acceptable. He continued that this process could take 10 years without instituting more severe management practices. He referenced money raised by environmental groups for media purposes, efforts that are most times misleading and inaccurate. Senator Phillips asked what the sustained yield for moose population was in the McGrath area. WAYNE REGELIN, Director, Division of Wildlife Conservation, Department of Fish and Game responded that in early 80's, there was probably any where from 4,000 to 5,000 moose in the area. He continued that presently there is about 1,400 of these moose now. He added that the board agreed to build this population to a minimum number of 2500. Senator P. Kelly made a motion to move SB 267 from Committee with individual recommendations and a zero, Department of Fish and Game fiscal note. Senator Phillips objected. A roll call vote was taken on the motion. IN FAVOR: Senator P. Kelly, Senator Green, Senator Donley, Senator Leman, Senator Adams, Senator Wilken, Co-Chair Parnell, Co-Chair Torgerson. OPPOSED: Senator Phillips. The MOTION PASSED: (8-1) CS FOR SENATE BILL NO. 34(L&C) "An Act relating to tattooing and body piercing; relating to fees charged by the Board of Barbers and Hairdressers; and providing for an effective date." Senator Ellis as sponsor, gave a synopsis of this legislation. He noted that this legislation would protect Alaskan consumers by increasing the safety and health standards of tattoo and body piercing artists by licensing these practitioners through the Division of Occupational licensing. He explained that these activities are not currently licensed in Alaska and added that the impetus of this legislation came about because of an Anchorage practitioner and a constituent, which resulted in infections. He continued that the fiscal note is negligible with costs fully covered by the licensure fees. He added that the committee substitute before the committee simply conforms language due to a change in statute with no substantive change regarding intent. Senator Green asked if there was a figure of how many people have their body pierced or tattooed on a yearly basis. She wondered about the necessity for this legislation due to the numbers of individuals affected, especially by placing one of the associated practitioners on the Board of Barbers and Hairdressers. Senator Ellis responded that there are 10 legitimate practitioners in the State of Alaska. He gathered that there are thousands of people in Alaska per year that receive tattoos and body art. He stressed the public health concerns as versus the raw number of people affected by this legislation. He stressed the associated disease factor through these activities. Senator Leman asked if enough investigation had been conducted to ascertain whether barbers or hairdressers take offense with the assimilation of tattoo artists and body piercers under their jurisdiction. Senator Ellis responded that the barbers and hairdressers are not opposed to this legislation, but they are not excited about taking on other classifications. He noted that these same individuals understand the public safety issues involved. Senator Green asked what the increase of liability would be to this board. Senator Ellis responded that the department could speak to this possible increased liability. He pointed out that there were enough legitimate operators that feel as though this legislation is long past due. Senator Green stated that there was nothing to prevent this particular mother, whose daughters were harmed through body piercing, to sue this unlicensed practitioner. She also wondered if medical doctors do body piercing, mainly, ear piercing. If so, she wondered if medical doctors needed an exemption from this legislation. Senator Ellis answered affirmatively to this latter concern. Senator Green expressed that she thought this legislation legitimized the act of body piercing and tattooing. KATHERINE REARDON, Director, Occupational Licensing, Department of Community & Economic Development stated that the Board of Barbers and Hairdressers supports this legislation. She added that there was a drafting error on page two, line 20. She noted that the number of Barbers and Hairdressers board members should be six instead of five. She pointed out that the number of representatives comprising this board should be two barbers, one tattooist or body piercer, two hairdressers and one public member. Senator Adams made a motion to adopt SB 34, version 1- LS0279\K as the committee substitute. Hearing no objection, it was so adopted. Ms. Reardon gave her reasoning why an even number of board members outlined in this legislation would be effective. She explained that since none of the present board members has experience with tattooing or body piercing, they thought it would be helpful to have someone with experience join their ranks. Co-Chair Torgerson referred to page 7, line 25, the following language: If the licensee is nonpracticing, the licensee shall inform the board. He wondered if this was standard procedure. Ms. Reardon responded that this section was unique to the field of tattooing and body piercing. She explained that if a questionable shop exists, the division should have knowledge of who is the licensee in charge of this establishment. She felt as though this language would go a long way in determining whether someone is practicing without a license. She referred to language on page 8, line 4 and again on line 9 as follows: (11) "body piercing" means puncturing the body of a person for a fee by aid of needles or other instruments designed to be used to puncture the body for the purpose of inserting jewelry or other objects in or through the human body, except the, for purposes of this chapter, "body piercing" does not include puncturing the external part of the human ear for a fee; (12) "tattooing" means the process by which, for a fee, the skin is marked or colored by insertion of nontoxic dyes or pigments under the epidermis portion of the skin into the top quarter of the dermis so as to form indelible marks for cosmetic or figurative purposes. She continued to note that the medical profession does not allow someone to conduct medical procedures on an individual for free. She remarked that this body piercing and tattooing legislation covers those individuals engaged in these activities if they charge a fee. Co-Chair Torgerson referred to page nine, Section 25, specifically line 16 - 18, where it is required for the practitioner to keep records for five years. For specifically it states: (3) a practitioner in the establishment may use only tattooing and body-piercing instruments that have been sterilized in accordance with methods approved by the department. He felt as though this was a bit excessive. Senator P. Kelly asked if a provision was included in this legislation to require the signature of a parent for a minor. Co-Chair Torgerson noted that the powers given to Department of Environmental Conservation under this legislation is more than other oversight powers given the department, including food service. JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation, responded to a concern lodged by Co-Chair Torgerson about the word "supervised" on page 7, line 10. She outlined how the department treats the barbers and hairdresser establishments. She remarked that sanitary standards have been developed in statute and the department will conduct a review of each establishment once they commence their businesses. She explained that after this initial supervision, the department will respond to complaints if any. Co-Chair Torgerson referred to page five, line six, which states: Sec. 08.13.150. Grounds for refusal, suspension, or revocation of a license or permit. The board may refuse, suspend, or revoke a license, student permit, temporary license, or temporary permit for failure to comply with this chapter, with a regulation adopted under this chapter. He asked if this was standard authority to give to the department regarding other permitting activities. Ms. Adair responded that to the extent the department permits facilities, they certainly have the power to withdraw this permit. Ms. Reardon explained that the board can revoke a permit if the practitioner violates a Department of Environmental Conservation regulation. There was further discussion between Co-Chair Torgerson and Ms. Reardon regarding the procedure for reporting such violations. She noted that this revocation would be true for all licenses issued by the Board of Barbers and Hairdressers. Co-Chair Torgerson asked what current actions could be taken against barbers and hairdressers who practice in unsanitary conditions. Ms. Reardon responded that the board could take action against the licensee related to how they practice, not to whether or not they do so safely or competently. Tape: SFC - 00 #55, Side B, 9:47 AM Co-Chair Torgerson voiced his concern about the Department of Environmental Conservation adopting a regulation that the board has no control over. He understood the need for sanitary operations, but noted several arguments about one agency adopting regulations that could potentially affect another, with boards in the middle of potential frays. Ms. Reardon referred to language on page 8, line 30, which states: Sec. 44.46.020. Duties of department. The Department of Environmental Conservation shall (5) adopt regulations for (B) the regulation of sanitation and sanitary practices in the interest of public health; She noted that because of this language, the Department of Environmental Conservation's authority is not being greatly expanded. Senator Green asked what procedures were currently in place to respond to a complaint about a shop being unsanitary. Ms. Reardon responded that if it were a tattoo or body piercer nothing could be done. She continued that for a hairdresser, the Department of Environmental Conservation could tell the board about this situation. She added though, that it does not appear the board could follow through on this complaint because the only authority the board has right now is to revoke licenses, if someone fails to comply with a hairdressing statute. She continued that these particular statutes do not include sanitary language. Ms. Adair clarified that the Department of Environmental Conservation considers cosmetology a low risk, while tattooing and body piercing has a higher risk attached to it. If the department received a complaint about a cosmetology facility, the department would work with this entity to fix the problem. She suggested that language be drafted with the effective industry concerns included. Co-Chair Torgerson referred to his previous concern regarding records be kept for five years. Ms. Adair referred to information about hepatitis C, a disease that should be considered when drafting this legislation. She felt as though this was why five years of records were required for documentation of transmission. She stated that she would research this issue further. KENDALL THOMAS, Board President, Alaska Hepatitis C Coalition stated that the transmission of Hepatitis C is strongly associated with the practice of unclean body piercing and tattooing. She stated that the association believes that licensing and inspection of sites will reduce the risk of individuals becoming infected by Hepatitis C and other blood borne pathogens. She explained that at least 11,000 Alaskans are infected with Hepatitis C, although it is not known how many of these contract this condition through unclean techniques used through tattooing and body piercing. She then gave a history of her background as a Registered Nurse and the regulation this profession comes under for any invasive procedure. LARRY ALLEN UNGERECH, Owner, Anchorage Tattoo Studio testified via teleconference from Anchorage. He stated that he advocated the licensing of this industry. He was skeptical that this requirement should come under the auspices of barbers and hairdressers though. He noted that all other states are licensed through the health department except for Idaho and Alaska. He added that his studio tattoos 8,000 individuals per year. He referred to page five, Section 13 - 20, language that exempts licensing individuals in small communities. He pointed out that in these areas there is a high rate of problems with people who have no training. Senator Ellis responded that this exemption for small communities only applies to barbers, hairdressers and estheticians. Mr. Ungerech continued to note that his business keeps business records for three years, in case a client has a particular color that eventually fades. He added that this way, they know what color not to use again. He asserted that he did not quite understand the reason for keeping records for a period of five years, although he said he would not oppose this requirement. He added that he could provide documentation showing that there have been no cases of HIV transmission related to tattooing in the United States. He revealed that his establishment does not administer tattoos to anyone under the age of 18, parental permission or not. DAVE LLOYD testified via teleconference from Anchorage. He described how he is a union carpenter and a reformed drug user. He explained that after being tested for Hepatitis C, it was determined that he carries the antibodies for it and attributes his exposure to having been tattooed earlier in his life. He then read a fact sheet to the committee regarding this disease. MONICA MORTERUD testified via teleconference from Anchorage. She stated that she was the mother of twins violated by an unlicensed body piercer. She gave the details of how this man made contact with her daughters. She noted that because presently, there is no oversight regarding these activities, she has no recourse. She responded to earlier comments made about the possibility of suing this individual, a person who has no viable assets. She gave details about the injuries inflicted on her daughters as a result of these body piercing and experiences of other establishments piercing her daughter's ears without parental consent. Senator Leman asked if Ms. Morterud would support the inclusion of language requiring parental permission for children under 18 years old for any body piercing, including those for earrings, as well as tattooing. Ms. Morterud responded that she would appreciate these efforts. Co-Chair Torgerson referred to page two of the related fiscal note regarding $3,000 for the development of a written exam. Ms. Reardon responded that test takers will pay the division and this money will be applied to purchase copies of these written exams. She noted that this $3,000 would be a one-time expense. Senator P. Kelly suggested that a system for penalties be included in this legislation for perpetrators who inflict injuries related to health considerations. Senator Ellis responded that this legislation takes into account a complaint driven system, but the related statutes do not have a lot of enforcement ability. He felt as though a penalty system outlined in this legislation would be justified. Co-Chair Torgerson ordered the bill HELD in committee. SENATE BILL NO. 220 "An Act clarifying the requirements for limited liability companies and partnerships to qualify for the Alaska bidder's and disability preferences under the State Procurement Code; and providing for an effective date." VERN JONES, Chief Procurement Officer, Division of General Services, Department of Administration stated that SB 220 clarifies the Alaska bidder and disability preferences related to state procurement statutes regarding limited liability partnerships and limited liability corporations (LLP and LLC). He noted that the department's procurement code was written in 1987 before the exceptions of an LLC and an LLP. He explained that these entities were allowed to organize in the mid-1990s, so the preference section in their procurement code does not reference these. He continued that this legislation inserts specific language referencing these types of businesses in the preference sections of the code, as well as stipulating the qualifying factors required for receipt of preferences. He added that this language would clarify the existing statute and enhance the objective that Alaska businesses receive these preferences. Co-Chair Torgerson clarified that limited liability partnerships do not have to be Alaskan residents. Mr. Jones responded that there is a new class of businesses that should be given a preference, but the existing statute does not allow for these types of businesses. He continued that the department has no vehicle to give the Alaska bidder preference and other residency based references to these Alaskan businesses. Mr. Jones clarified that this legislation is a technical amendment to the department's procurement code. He noted that the department has been giving these entities the Alaska bidder preference by policy, but they feel as though they are on shaky ground doing this, so hence the codification. Co-Chair Torgerson asked about the residency requirements regarding managing directors of an LLC or an LLP. He wondered about awarding LLC or LLP status to a business with only one managing director in Alaska. Mr. Jones responded that if one managing director is or all managing directors are Alaskan residents, then this would be considered an Alaskan business. Senator Green asked if the title of managing director was unique to these types of companies. She asked why these entities fall outside the current statute. Mr. Jones responded affirmatively to the first question posed by Senator Green and explained that the legal definition of a LLP is different than that of either a partnership or corporation by virtue of the enabling legislation that deals with these entities. Co-Chair Torgerson asked if an LLC could have as many board of directors as stipulated in their bylaws. Mr. Jones responded that he assumed so, yes. Co-Chair Torgerson pointed out that, if this were so, then their bylaws could designate just one managing director as being an Alaskan resident and qualify for the bidding preference. Mr. Jones responded that he could not confirm this absolutely. Co-Chair Torgerson asked what this legislation allowed for as a definition of "resident." Mr. Jones responded that this definition was contained in AS 36.3170. He continued that a company, as defined under this section, must hold a current business license, submit a bid or a proposal under this license and maintain a business in the state six months prior to a particular procurement. Co-Chair Torgerson referred to page two, line 20 regarding the following language: (2) partnership under AS 32.05 or AS 32.11 if each of the partners is a person with a disability; Co-Chair Torgerson wondered what individuals this legislation was attempting to include. Mr. Jones responded that in order to qualify for the disability preference, the company must also qualify for the Alaska Bidder Preference. He added that these individuals would all have to be residents of the state. Co-Chair Torgerson stated that the language dealing with managing director should be clarified to either "one" or "all" managing directors and ordered the bill HELD in committee. SENATE BILL NO. 249 "An Act authorizing a land exchange between the Department of Natural Resources and Alaska Hard Rock, Inc.; and providing for an effective date." JIM STRATTON, Director, Division of Parks & Outdoor Recreation, Department of Natural Resources testified via teleconference from Anchorage. He stated that the Independence Mine State Historical Park is located about 90 miles from Anchorage, past Palmer. He continued that this is an historic mining operation closed down during WWII. He noted that this area receives 250,000 visitors each year. He declared that maintaining this park's facilities is expensive and it was decided that an adaptive reuse was the only way to ensure that these buildings remained standing. He explained that this would entail the reuse of structures as visitor destination facilities that could include such things as overnight lodging, food service, gift shop and tours. Mr. Stratton divulged that there is not enough cash flow in lodging and food service alone to support the investments needed to adapting and reusing these facilities. He pointed out that another attraction was necessary, such as underground mine tours, but the state does not own beyond 200 feet of the tunnel. He informed that committee that this tunnel is owned by Alaska Hard Rock Incorporated. He concluded that both the state and this entity was interested in exchanging land, more specifically, Alaska Hard Rock was interested in pursuing an exchange for property the state owns on the Willow Creek side of Hatcher Pass for the underground tunnel property. He went into specific detail about how this land exchange was initiated and the terms of the associated agreement, which included unequal land values of the parcels involved, requiring legislative approval. Senator Phillips noted some complaints earlier in the process regarding this exchange and wondered if there had been anymore since. Mr. Statton said that there had been no more complaints, other than two during the public comment process. He reported that these were vastly outweighed by the support. Senator Green made a motion to move SB 249, version 1- GS2071.A from the Senate Finance Committee with individual recommendations and an attached zero, Natural Resources fiscal note. Hearing no objection, it was so MOVED. CS FOR SENATE BILL NO. 254(HES) "An Act relating to heirloom certificates of marriage." ELMER LINDSTROM, Special Assistant to the Commissioner, Department of Health and Social Services stated that this bill was in addition to legislation, which passed several years ago creating the heirloom birth certificate program. He added that at an extra charge an individual is able to purchase a birth certificate that is basically a work of art, suitable for framing. He added that this program has generated over $50,000 for the children's trust so far. He pointed out that this present legislation allows for marriage heirloom certificates, following the same model as the birth certificate program, with a surcharge added to the cost of obtaining a certificate. He informed the committee that the funds from this program would also go into the Children's trust. Senator Phillips objected to adding more employees to the state budget, something this legislation proposes to do. He stated that he did not think the state could afford this program presently. Mr. Lindstrom responded that this was a self-supporting program, as well as generating significant revenue for the Children's Trust. Co-Chair Torgerson asked what the new employee would do in the capacity of carrying out their duties. AL ZANGRI, Chief, Vital Statistics, Division of Public Health, Department of Health and Social Services stated that this additional employee would conduct computer research and generate the actual certificates, including making sure the individuals who apply, are eligible to receive a certificate. He noted that the employee who generates the birth certificates, as mentioned previously, is a three-quarter-time position. Senator Phillips said he would not support this legislation if it created another position. Mr. Zangri stated that a volunteer could not conduct these tasks as a paid employee would, since the information they would deal with is confidential. Senator Green asked if the listing of grants generated from the fund since 1998, at the inception of this program, was included in a list provided to the committee. SHARI PAUL, Staff, Alaska Children's Trust noted that this grant list is for the current year. She added that she could provide a list for the fiscal year 2000 grantees and the annual report for the trust is forthcoming. Co-Chair Torgerson ordered the bill HELD in committee. ADJOURNED Senator Torgerson adjourned the meeting at 10:45 A.M.