SENATE LABOR AND COMMERCE COMMITTEE April 27, 1999 1:40 P.M. MEMBERS PRESENT Senator Jerry Mackie, Chairman Senator Tim Kelly, Vice Chairman Senator Dave Donley Senator Lyman Hoffman MEMBERS ABSENT Senator Loren Leman COMMITTEE CALENDAR HOUSE BILL NO. 61 "An Act relating to an exemption from the requirement for payment for overtime under a voluntary written agreement for certain employees in the airline industry; and providing for an effective date." -MOVED HB 61 OUT OF COMMITTEE CS FOR HOUSE BILL NO. 101(L&C) "An Act relating to the mailing requirements that must be followed by the commissioner of commerce and economic development to involuntarily dissolve certain organized entities; relating to the reinstatement of corporations that are public utilities and that have been involuntarily dissolved; and providing for an effective date." -MOVED HB 101 OUT OF COMMITTEE CS FOR SENATE BILL NO. 71(HES) "An Act relating to licensure by the State Medical Board." -HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION HB 61 - No previous action to consider. HB 101 - No previous action to consider. SB 71 - See HESS minutes dated 4/7/99 and 4/12/99. WITNESS REGISTER Representative Andrew Halcro State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Sponsor of HB 61. Mr. Dwight Perkins, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, AK 99802-1149 POSITION STATEMENT: Supported HB 61. Representative Carl Morgan State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Sponsor of HB 101. Mr. Ashley Reed 360 W Benson #200 Anchorage, AK 99503 POSITION STATEMENT: Commented on HB 101. Ms. Dawn William Division of Banking, Securities and Corporations Department of Commerce P.O. Box 110807 Juneau, AK 99811-0907 POSITION STATEMENT: Supported HB 101. Dr. Sarah Isto, Chairperson State Medical Board 1718 Willow Dr. Juneau, AK 99801 POSITION STATEMENT: Supported SB 71. ACTION NARRATIVE TAPE 99-18, SIDE A Number 001 HB 61-OVERTIME WAGE EXEMPTION AIRLINE EMPLOYEES CHAIRMAN MACKIE called the Senate Labor and Commerce Committee meeting to order at 1:43 p.m. and announced HB 61 to be up for consideration. REPRESENTATIVE HALCRO, sponsor, said that HB 61 allows exemption of overtime for airline employees. It has the support of the unions and industry. SENATOR KELLY asked if it was limited to airlines. REPRESENTATIVE HALCRO answered yes. SENATOR KELLY asked if it applied to airline pilots. REPRESENTATIVE HALCRO answered no. SENATOR KELLY commented that pilots are regulated by the FAA. CHAIRMAN MACKIE asked if there was any opposition to this bill. REPRESENTATIVE HALCRO answered there was no opposition MR. DWIGHT PERKINS, Department of Labor, said the Department has a policy to oppose any changes to wage and hour overtime law, but during the interim they talked to employee groups and individuals and found that they don't oppose this bill. SENATOR KELLY moved to pass HB 61 with individual recommendations. There were no objections and it was so ordered. HB 101-CORPORATE PUBLIC UTILITY REINSTATEMENT CHAIRMAN MACKIE announced HB 101 to be up for consideration. REPRESENTATIVE MORGAN, sponsor, said this legislation is a vehicle to allow the Alaska Department of Commerce and Economic Development the discretion to reinstate, as a corporation, a local exchange (telecommunications) company that serves several communities in western Alaska. This legislation also clearly outlines departmental procedure for corporate notification that should prevent further involuntary dissolutions. Bush-Tell is a small, rural local exchange telephone company located in Aniak, Alaska. It provides local exchange telephone service to ten small villages in Western Alaska. Bush-Tell was incorporated on November 10, 1969 and has been providing telecommunications service since 1970. The President and sole shareholder of Bush-Tell recently contacted the Alaska Division of Banking, Securities & Corporations to find out about registering a "dba" and was informed that Bush-Tell was no longer registered as a corporation with the Division. Bush-Tell had been involuntarily dissolved in 1993 for failing to file its biennial report and/or failing to pay its biennial corporate tax for the period ending December 31, 1992. Upon investigation, it was discovered that Bush-Tell's registered agent had failed to follow the proper statutory procedures for resigning as a registered agent and that his omissions resulted in the involuntary dissolution of Bush-Tell. Bush-Tell's designated agent was a sole practitioner in Anchorage who also served as Bush-Tell's general counsel. In the early 1980's, Bush-Tell hired another law firm to do its legal work, but continued to retain the sole practitioner as its registered agent. The forms for Bush-Tell's biennial reports were sent to the registered agent and were filed by the registered agent up to and including the period ending December 31, 1990. In 1991, the registered agent left the private practice of law, closed his office and left a forwarding address for his mail with the U.S. Postal Service. The registered agent did not inform the Alaska Division of Banking, Securities & Corporations that his address was changing or that he was resigning as Bush-Tells' registered agent. Alaska Statute requires that, if a registered agent resigns, they first file a written notice with the commissioner setting out the latest address of the principal office of the corporation and the names, addresses and titles of the most recent officers of the corporation. The commission must then immediately mail a copy of the notice to the corporation at its principal office. On July 12, 1993, the Alaska Division of Banking, Securities & Corporations sent a notice by certified mail to Bush-Tell, in care of the registered agent, informing Bush-Tell it had not filed its biennial report and/or tax for the period ending December 31, 1992 and, if the biennial report and/or tax are not mailed by September 19, 1993, the Certificate of Involuntary Dissolution will be issued and the corporation will cease to exist as of September 20, 1993. This notice was returned to the Alaska Division of Banking, Securities & Corporations because the registered agent's forwarding notice had expired. On September 20, 1993, Bush-Tell was involuntarily dissolved. Since the time of dissolution, and even after discovering the involuntary dissolution, Bush-Tell has observed all of the corporate procedures required by its Bylaws and Alaska law including holding regular board of directors meetings and paying corporate income tax. This legislation corrects an involuntary dissolution and statutorily establishes corporate notification procedures used by the Department of Commerce and Economic Development to prevent similar situations from happening in the future. Procedures would require mail be sent certified to a corporation's registered office. If returned, it would be sent first class to the president of the corporation or to another officer. The requirements would apply to for-profit, electric and telephone cooperatives, religious corporations, limited liability corporations, cooperatives, nonprofit cemetery corporations, and professional corporations. These requirements would not apply to business and industrial development corporations (BIDCO), as they do not have provisions for dissolution. These requirements do apply to revocation of certificates of authority for out-of-state organized entities. MR. ASHLEY REED testified on HB 61, but due to a taping malfunction, his testimony did not record. SENATOR HOFFMAN asked how this legislation would work. REPRESENTATIVE MORGAN answered that this is putting policy into statute. SENATOR DONLEY asked where Section 10 of the bill went into statute, because it didn't say where it goes. He asked if it goes in the temporary section of the statute. MS. DAWN WILLIAMS, Department of Commerce, explained a temporary section in the bill has happened with native corporations in the past. They have a certain time limit in which to reinstate, and after that time, the language is deleted. CHAIRMAN MACKIE said they would check with the drafters to make sure nothing was left out and asked if the Department supported the bill. MS. WILLIAMS said yes. CHAIRMAN MACKIE asked her to explain how this was able to happen and if they have a new policy in the meantime for notifications. MS. WILLIAMS responded that she didn't know what happened in this case as she wasn't here in 1993. She thought the certified notice was sent to the registered agent and returned. She didn't know if they then sent it then to a principle officer or not. Sections 3 and 8 will require them to do the policy and more. SENATOR KELLY moved to pass CSHB 101(L&C) with individual recommendations. There were no objections and it was so ordered. SB 71-PHYSICIAN LICENSURE CHANGES CHAIRMAN MACKIE announced SB 71 to be up for consideration. DR. SARAH ISTO, Chair of the State Medical Board, explained that SB 72 resolves licensure problems for the Board, updates Alaska statutes in relation to other states, and corrects unintended problems within the current law. DR. ISTO said the State Medical Board supports the bill. DR. ISTO explained there have been several difficulties over the past few years that this bill is intended to remedy. There are seven specific problems SB 71 deals with. First, the Board is not currently able to consider the fact that an applicant is a convicted felon, unless the felony was committed during the practice of medicine. The Board would like to be able to consider felony and misdemeanor offenses when they relate to an applicant's fitness to practice. Second, DR. ISTO said this bill will prevent delays and interruptions in the delivery of patient care. Currently, if a person is short of continuing education credits, they are supposed to stop work immediately. SB 71 will allow a person to continue practicing while a minor deficiency is corrected. Next, DR. ISTO explained SB 71 will fix a problem for residents being trained as doctors. Currently, only one-year permits and licences are awarded, though this is a three-year program in Anchorage. This bill will allow residents to be licenced after two years. Also, Section 5 removes a prohibition on considering anything short of a suspension or revocation in another state. DR. ISTO said the Board needs to be able to consider other disciplinary actions and this section of the bill simply "extends the language into modern day discipline uses." Section 6 deals with citizenship. Alaska is the only state that requires this, and DR. ISTO remarked she does not think this is pertinent to a doctor's competence. There are people who are legally in the U.S. that are not able to see patients in Alaska, and DR. ISTO said she would like to see this requirement deleted. Section 7 deals with foreign medical graduates who come from medical schools that are not accredited by the U.S. or Canada. Currently, a person is required to have completed one year of post graduate training in an accredited school. Forty-seven other states require a person to have completed three years of post graduate training in an accredited school of medicine. She would like to see Alaska adopt the three year standard. Additionally, people who graduate from accredited schools after 1995 would be required to have two years of post-graduate training. SENATOR KELLY expressed concern about language on page 4, line 28 of the bill which gives the Board too much latitude and discretion to consider misdemeanor offenses. DR. ISTO replied the language of the bill requires the misdemeanor to be "substantially related to the qualifications, functions or duties of the licensee" in order to be considered by the Board. SENATOR KELLY agreed that is the initial language, but the bill goes on to say "or a misdemeanor in this or any other jurisdiction." SENATOR KELLY stated, "That's any misdemeanor . . . I don't want to give the Board that kind of discretion." DR. ISTO said she still reads the bill to allow consideration of a misdemeanor only as it relates to fitness to practice. SENATOR KELLY maintained that even if the consideration is tied to fitness to practice, "That's just a lot of discretion to give to a group of people who control their own profession." He asked why it is necessary to give the Board discretion to reject an application by a person who has committed a misdemeanor. DR. ISTO stated it is not the intention of the Board to "lightly decline applicants because they had some misdemeanor." She said she believes the Board would be willing to modify this, if they were still given the discretion to consider felonies. SENATOR MACKIE asked if this section deals with the Board imposing sanctions on licensees who have been convicted. He said his concern is that a person who has committed a misdemeanor may be denied the opportunity to practice medicine. DR. ISTO said she had only intended the Board be able to consider these things, not necessarily act on them or "sanction somebody or refuse a new applicant." She repeated it was not the intent of the Board to include language that would allow denial of a license or sanction for a misdemeanor "of no consequence to the practice of medicine." Again, she said she would agree to softening of the language if the Board retained the right to consider felonies. SENATOR MACKIE thought that was the current law. MS. ISTO explained felonies could be considered only if they occur as part of a person's duties as a physician. SENATOR MACKIE asked who wanted the misdemeanor language. He thought an example of a misdemeanor the Board might want to consider would help the committee understand the motivation behind the proposed amendments. DR. ISTO suggested the Board may wish to consider a recent DWI. SENATOR DONLEY suggested the committee was going back over the same ground and "somebody should either propose something or we should hold the bill over." SENATOR KELLY reiterated he is uncomfortable with the idea of tying a misdemeanor to the fitness to practice. He said this could be a subjective judgement of whomever happens to be on the Medical Board at the time. It is an expansion of the Board's power that makes him nervous. SENATOR DONLEY agreed. SENATOR MACKIE proposed he would hold the bill over while they worked on this issue. Number 532 MS. CATHERINE REARDON, Director of the Division of Occupational Licencing, testified that the Department strongly supports the bill. She noted that the Medical Board is interested in licencing people quickly and does not attempt to block applications unnecessarily. She suggested the Board may wish to consider misdemeanors involving recent substance abuse, and said there is a need to consider felonies unrelated to the practice of medicine. She mentioned there is always a right to a due process hearing, which checks irresponsible application of a person's history by the Board. She stated the bill has a zero fiscal note and the Department supports it. CHAIRMAN MACKIE thanked everyone for their testimony and said they would hold SB 71 and adjourned the meeting at 2:28 p.m.