Legislature(2013 - 2014)HOUSE FINANCE 519
03/24/2014 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB134 | |
| HB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 278 | TELECONFERENCED | |
| + | HB 177 | TELECONFERENCED | |
| + | HB 134 | TELECONFERENCED | |
| + | HB 210 | TELECONFERENCED | |
| + | HB 202 | TELECONFERENCED | |
| + | HCR 15 | TELECONFERENCED | |
| += | HB 21 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 75 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 24, 2014
8:38 a.m.
8:38:06 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:38 a.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative David Guttenberg
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
Representative Lindsey Holmes
Representative Les Gara
Representative Mark Neuman, Vice-Chair
ALSO PRESENT
Representative Costello, Sponsor; Charles Guinchard, Staff,
Representative Costello; Daniel George, Staff,
Representative Bill Stoltze; Dan DeBartolo, Director,
Permanent Fund Dividend, Department of Revenue.
PRESENT VIA TELECONFERENCE
Margaret Brodie, Director, Healthcare Services, Department
of Health And Social Services, Anchorage; Barry
Christensen, Alaska Pharmacists Association, Ketchikan;
Patricia Senner, Alaska Nurses Association, Anchorage; Mike
Coons, Self, Palmer; Jeff Jessee, Chief Executive Officer,
Alaska Mental Health Trust Authority; Jordan Marshall,
Rasmuson Foundation, Anchorage.
SUMMARY
HB 21 FOUR-DAY SCHOOL WEEK
HB 21 was SCHEDULED but not HEARD.
HB 75 CONTRIBUTION FROM PFD: AUDITS; UNIVERSITY
CSHB 75 (FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new
indeterminate fiscal note from the Department of
Revenue and one new fiscal note from the
University.
HB 134 MEDICAID PAYMENT FOR MEDISET PRESCRIPTION
HB 134 was HEARD and HELD in committee for
further consideration.
HB 177 COMMERCIAL FISHING LOANS
HB 177 was SCHEDULED but not HEARD.
HB 202 BISON DRAWING PERMIT FEES
HB 202 was SCHEDULED but not HEARD.
HB 210 STUDENT RESTRAINT, SECLUSION, PSYC DRUGS
HB 210 was SCHEDULED but not HEARD.
HB 278 EDUCATION: FUNDING/TAX CREDITS/PROGRAMS
HB 278 was SCHEDULED but not HEARD.
HCR 15 TASK FORCE ON UNMANNED AIRCRAFT SYSTEMS
HCR 15 was SCHEDULED but not HEARD.
HOUSE BILL NO. 134
"An Act requiring Medicaid payment for scheduled unit
dose prescription drug packaging and dispensing
services for specified recipients."
8:38:47 AM
REPRESENTATIVE COSTELLO, SPONSOR, introduced the
legislation. She offered that the senior citizen population
in Alaska was the fastest growing in the country. She
explained that Mediset [medication management service] was
an enhanced pharmacy service for a patient on multiple
medications available by prescription. The pharmacist
packaged the medications in order to aid the patient with
proper dosing requirements. She elaborated that seniors
were often "overwhelmed" when faced with multiple
medication dosing requirements and that "medication issues"
was a major cause of senior emergency room visits. The
Department of Health and Social Services (DHSS) was
currently administering the program via regulation and the
goal of HB 134 was to establish Mediset in statute. She
introduced the legislation in order to facilitate seniors
to remain living at home rather than moving to high cost
institutions due to medication mismanagement. She
reiterated that the bill provided the department statutory
oversight for the program. The state was on the "cutting
edge" of offering the program to "vulnerable" populations
and stressed the importance of the program to be driven by
statute and not by regulation.
CHARLES GUINCHARD, STAFF, REPRESENTATIVE COSTELLO, showed a
video about the Mediset program.
8:41:48 AM
Video
8:45:56 AM
End of video
Co-Chair Stoltze wondered why the fiscal note, FN1 (DHS)
was zero when the bill originally had "serious" fiscal
implications.
Mr. Guinchard referred to a document: "Explanation of
Changes" (copy on file). He explained that the original
version of the bill had the same intent but was structured
differently. After discussions with DHSS parts of the bill
were "reorganized" to eliminate any unintended costs for
the department.
Mr. Guinchard provided a sectional analysis. He cited
Section 1, paragraph (a) which established the fee for the
program:
Sec. 47.07.031. Scheduled units of use prescription
drug dispensing services. (a) In addition to the
services provided for under AS 47.07.030, the
department shall establish a fee to be added to a
dispensing fee to pay a qualified pharmacy for
dispensing services for a prescription that requires
scheduled units of use in medication compliance
packaging for the purpose of assisting a qualified
medical assistance recipient under (c) of this section
to adhere to a specific dosing regimen.
Mr. Guinchard noted a number of qualifiers in the
paragraph. He cited line 8, "…to pay a qualified
pharmacy…." He reported that a definition of Mediset and
qualified pharmacy was included later in the bill. He moved
to lines 9 through 10, and explained that the words, "that
requires scheduled units of use" mandated the need for a
doctor's prescription for a Mediset.
Co-Chair Stoltze asked for clarification about the need.
Mr. Guinchard explained that in order to qualify for a
Mediset, the physician must prescribe its use.
Mr. Guinchard continued with paragraph (b):
(b) A pharmacy is qualified to dispense a prescription
in medication compliance packaging for payment under
this section if the pharmacy is a provider of services
under the medical assistance program established under
this chapter and provides dispensing services to a
qualified medical assistance recipient as follows: (1)
consolidating prescriptions for purposes of reporting
to the prescriber on prescription compliance; (2)
creating medication compliance packaging for the
interval specified on the prescription, using trained
personnel; (3) offering quarterly review with a
recipient or the recipient's representative of a
recipient's complete medication profile and medication
administration record, including review of compliance;
(4) reporting to the prescriber patient compliance,
polypharmacy, or other issues related to the
recipient's medication at least quarterly; and (5)
delivering prescriptions using the most cost-effective
method.
Mr. Guinchard pointed out that the paragraph specified
pharmacy qualification or the criteria for qualification.
The paragraph included the five criteria for qualification
beginning on page 3, line 2. The qualifiers were the cost
drivers for a Mediset. He noted that qualification (1)
consolidated the patient's prescriptions, (2) created
medication compliance packaging, (3) required quarterly
review with the patient or representative to "ensure
compliance," (4) mandated that the pharmacist report
compliance adherence to prescriber, and (5) required
delivery to recipient.
Mr. Guinchard continued with paragraph (c):
(c) A medical assistance recipient is qualified to
receive a prescription in medication compliance
packaging under (a) of this section if the recipient
is a person who is eligible for medical assistance
under AS 47.07 and is (1) residing in a congregate
living home, as defined by the department; (2)
receiving community-based waiver services;(3) disabled
or blind; (4) an adult with a serious mental illness,
as defined by the department; or (5) a child
experiencing a severe emotional disturbance, as
defined by the department.
Mr. Guinchard observed that the language was added under
guidance by the department which ensured that individuals
currently covered by Mediset would maintain coverage under
the legislation.
8:50:29 AM
Mr. Guinchard turned to paragraph (d) that included
definitions beginning on page 2, line 24:
(d) In this section,
(1) "medication compliance packaging" means a package
containing a specified quantity of one or more
prescription medications that have been divided by a
provider into units of use to be taken over a
specified period according to a prescription issued
by an authorized health care provider and that
requires specialized dispensing services;(2) "units of
use" means a prescription medication packaged in a way
that is designed to simplify a medication regimen to
improve adherence to a daily therapeutic schedule.
Mr. Guinchard noted that "medication compliance packaging"
defined the type of packaging the pharmacist must use. He
commented that "units of use" referred to each individual
pill separated in parts of the packaging.
Mr. Guinchard continued with page 3, Section 2 and Section
3 regarding the effective date. He detailed that Section 2
specified that any change to the state Medicaid program was
contingent upon federal approval. Section 3 provided that
the effective date was contingent upon federal approval.
Representative Costello requested that Mr. Guinchard
explain the reason why the fiscal note was significantly
reduced from the previous committee.
Mr. Guinchard complied and cited one specific change on
page 2, beginning on line 3 regarding the five cost
drivers. He offered that in the previous version of the
bill, [HB 134] DHSS discerned that the language in the
legislation required that a fee must be established for
each of the cost drivers. The language was changed in the
current version [CSHB 134 HSS] on page 2. The current
version of the bill established one fee in paragraph (a).
He continued that another "significant" change that reduced
the fiscal note was the deletion of the paragraph that
required DHSS to provide transportation for delivery of the
Mediset prescriptions if the pharmacy did not deliver.
Co-Chair Austerman asked for more basic information. He
asked if Mediset was a current state program.
Representative Costello replied in the affirmative. She
shared that upon regulatory review; the department was
considering eliminating the program. She was asked by the
department to address the issue, "as a policy decision," in
statute. She felt that the Mediset program was important
enough to adopt as statute to enable independent seniors
and lower cost senior care.
Co-Chair Austerman asked if Medicaid had paid the costs in
the past.
Representative Costello deferred to the department to
answer the question.
Co-Chair Austerman asked what criteria qualified a
prescription for Mediset.
Representative Costello responded that the Mediset
packaging required a doctor's prescription. A doctor would
prescribe Mediset due to the "complexity of medication" and
vulnerability of the patient.
Co-Chair Austerman thought that the benefits were obvious
but that the program might be abused without more
definitive prescribing regulations.
Co-Chair Stoltze relayed that he was told at a senior
center that the [Mediset] "process helped triage the level
of care for efficiency" and reduced the number of seniors
in required care.
Representative Costello commented that the concern for
abuse was warranted. The opportunity for abuse was also
lessened because multiple medications with month's long
prescriptions would otherwise sit in a person's home. The
Mediset pharmacist can stop prescriptions due to
contraindications or adverse reactions. Without Mediset the
medications required disposal. In some instances, it wasn't
safe to have the medications sitting at home on a shelf,
creating opportunities for theft and abuse. She thought
that Mediset prevented more situations for abuse as opposed
to creating situations for abuse.
Representative Wilson referred to paragraph (c) on page 2.
She interpreted the legislation to mean that only seniors
who were disabled or blind or receiving waiver services
qualified for the program. She wondered whether persons
covered under the state's retirement system qualified for
Mediset.
Co-Chair Stoltze wanted to defer the questions to the
department for answers.
Representative Thompson asked about the elimination of
transportation costs. He wondered how the medications would
be delivered in rural areas without a cost.
Mr. Guinchard noted that the ability to be reimbursed for
transportation remained in regulation. The transportation
mandate was eliminated from the legislation.
Representative Thompson wondered whether a problem might
arise in the future over transportation cost. He wanted the
service to be available in remote areas.
Mr. Guinchard deferred to the department to answer the
question.
9:01:53 AM
Co-Chair Stoltze requested that Ms. Brodie state the
departments position on the bill and incorporate the
member's previous questions in her statement.
MARGARET BRODIE, DIRECTOR, HEALTHCARE SERVICES, DEPARTMENT
OF HEALTH AND SOCIAL SERVICES, ANCHORAGE (via
teleconference), stated that the department supported the
Mediset program as a beneficial service. The pharmacy
monitored the potential for adverse reactions from the
medications interactions and consulted with the prescriber
on behalf of the patient. The transportation costs were
included in the cost of dispensing the Mediset
prescription. Every two years the department considered all
of the costs of the program, including mailing to rural
areas. She informed the committee that anyone who was
prescribed Mediset was eligible, not only individuals on
waivers. The majority of senior's medications were covered
under Medicare part D rather than Medicaid.
Representative Thompson asked about page 2, line 10 of the
legislation and cited the word, "polypharmacy." He wondered
how medications were coordinated between prescribers.
Ms. Brodie replied that the coordination occurred through a
database. The data base was updated once a month and not in
real time. The individual was also expected to notify the
pharmacist of their use of other medications.
Representative Wilson asked where the bill stated that
anyone who was prescribed Mediset was eligible for the
program.
Ms. Brodie replied that medical necessity was the standard
for Mediset eligibility. The criteria listed in the bill
defined the medically necessity conditions to qualify for
Mediset.
Representative Wilson wondered whether a person in the
state's retirement health insurance plan was eligible for
Mediset.
Ms. Brodie noted that she did not know what the state's
plan covered.
Co-Chair Stoltze stated that the legislation dealt with
Medicaid and Medicare recipients and asked for further
clarification.
Ms. Brodie stated that she was speaking in regards to
Medicaid.
Representative Wilson asked whether a person on Medicaid
living at home that did not fall into the criteria listed
in the bill qualified.
Ms. Brodie stated that if the physician or pharmacist found
it medically necessary outside of the listed criteria a
person would qualify.
Representative Guttenberg, in response to Representative
Wilson's questions, surmised that "if the doctor prescribed
something and it's covered under your plan" the person was
eligible.
Representative Edgmon asked whether the bill was "tailored"
for the developmentally disabled.
Representative Costello replied that HB 134 was not
specifically tailored to anyone. The legislation covered
anyone who would benefit from medication management for
multiple medications.
Representative Edgmon deduced that the bill was all
inclusive but that a subset of beneficiaries would be
disabled individuals.
Co-Chair Austerman asked whether a single prescription
prescribed for Mediset would be eligible.
Ms. Brodie replied that Mediset addressed only multiple
prescriptions.
Co-Chair Austerman wondered whether two medications would
qualify.
Ms. Brodie answered in the affirmative.
Representative Munoz asked whether Mediset was currently
offered through the department.
Ms. Brodie replied that the Mediset program was not
eliminated. A regulation change altered the dispensing fee
distribution to once monthly. The Mediset program was
currently in place.
Representative Munoz asked how the fee worked and if
monthly payment would continue.
Ms. Brodie replied that the legislation would change how
the payment was distributed. The legislation would disburse
the dispensing fee more often, but decreased the fee by the
amount of the Mediset fee. The department paid the same
amount as under regulation through a dispensing fee and a
Mediset fee and reimbursement would be paid more than once
a month.
Representative Munoz questioned what the estimated cost of
adding the Mediset fee was.
Ms. Brodie replied that there were no additional costs
because the dispensing fee was reduced by the amount of the
Mediset fee.
Co-Chair Austerman noted that the fiscal note was zero, FN1
(DHS). He requested a copy of the original fiscal note.
Representative Guttenberg asked whether the program
included reductions in pharmaceutical fees. He wondered
whether the program was fiscally neutral.
Ms. Brodie replied that no other fees existed. She
explained that with passage of the bill, the state paid $8
for dispensing fees and $2 for a Mediset totaling $10.
Representative Guttenberg asked whether the program was
revenue neutral.
Ms. Brodie answered in the affirmative.
9:14:38 AM
Co-Chair Stoltze OPENED public testimony.
BARRY CHRISTENSEN, ALASKA PHARMACISTS ASSOCIATION,
KETCHIKAN (via teleconference), testified in support of the
legislation. He appreciated the sponsor's efforts. He noted
past concerns about the department not recognizing certain
pharmacies, mainly in the rural areas and recognized their
inclusion in the legislation. He referenced page 2 of the
bill that provided that if one or more prescriptions were
divided [prescribed multiple times per day] the
prescription qualified for Mediset. He emphasized that the
number of the prescriptions was less important than the
number of times per day the medication was prescribed. He
felt that having a Mediset to help the patient organize the
prescription was important. He remarked that he was
confused about the department's explanation of the fee
disbursement.
Co-Chair Austerman asked whether the pharmacy only provided
Mediset in Ketchikan or included rural areas.
Mr. Christensen replied that his pharmacy only serviced
Ketchikan.
Representative Guttenberg asked whether the quarterly
review of patients' prescriptions was adequate.
Mr. Christensen replied that in his pharmacy every time a
Mediset prescription was filled a review took place. He
thought that the quarterly review provision ensured that
every pharmacy was performing a minimal level of review.
Representative Guttenberg asked how many pharmacies were
located in Ketchikan.
Mr. Christensen replied that there were four pharmacies in
Ketchikan. One pharmacy was operated by tribal health, and
his pharmacy was the only independent pharmacy and also the
only one that filled Mediset prescriptions.
Representative Guttenberg wondered how his pharmacy handled
polypharmacy.
Mr. Christensen detailed that all of the prescriptions were
processed as "point of sale" which is in real time. The
prescription was entered into a data base and the data base
revealed any other prescriptions from any other provider.
Representative Guttenberg had heard that the data base was
not updated as timely as necessary.
Representative Munoz asked Mr. Christensen's about his
concern over the department's fee payment.
Mr. Christensen replied that Mediset services were more
costly than regular prescriptions. He was concerned whether
the fees would adequately cover the additional costs. He
addressed Representative Guttenberg's concern over the data
base. He elaborated that pharmacist had access to the
Alaska Medicaid Prescription Drug data base and the
Prescription Drug Monitoring Program, which only addressed
narcotics. The Alaska Medicaid Prescription Drug data base
was done in real time but the monitoring program was not.
Representative Wilson queried whether he filled Mediset
prescriptions for other insurance patients.
Mr. Christensen replied that most other insurances did not
cover the cost of Mediset and that the cost was paid by the
patient.
PATRICIA SENNER, ALASKA NURSES ASSOCIATION, ANCHORAGE (via
teleconference), testified in favor of the legislation. She
announced that she was a home health nurse for many years,
which made her aware of the importance of patient
compliance packaging to help keep seniors living at home.
She believed that Mediset was equally as valuable in
assisted living facilities. She elaborated that the program
benefitted the patient by allowing families or other
caregivers to monitor the patient's compliance which
identified problems earlier. Medisets were dispensed on a
weekly basis as opposed to one month or longer. Mediset
saved money for the Medicaid program; if a prescription was
changed the prescription was paid for each week as opposed
to a once a month or more for typically prescribed larger
quantities. She noted the safety of only having a one week
supply of narcotic medications available in a home. Current
regulations restricted Medisets to pharmacies already
supplying large volumes of Medisets which did not apply to
small communities. The legislation expanded coverage to all
pharmacies in the state. She asked the committee to support
the legislation.
9:24:34 AM
MIKE COONS, SELF, PALMER (via teleconference), was confused
about the legislation. He wondered if the bill pertained to
Medicare or Medicaid. He spoke to the packaging of Mediset
medications for one week. He thought that the bill would
reduce the number of patients that had multiple doctors and
multiple prescriptions. He favored the monitoring aspect of
the program. He wondered why nursing staff could not
accomplish the same service. He felt that the program was
not cost-effective. He spoke from his perspective as a
paramedic. The bill would help from the standpoint of a
medical care provider; a provider or emergency responder
could easily determine what medications the patient was
taking. He asked for more information about the Mediset
program.
Representative Costello replied that the bill pertained to
both Medicare and Medicaid recipients. She pointed out that
a recipient's medication was packaged as a Mediset if
prescribed by a physician. She related that fiscal notes
did not provide information on overall savings from
programs if applicable but believed the program saved the
state money. The Mediset packaging prevented patients from
moving into more costly assisted or institutionalized care.
She offered that the value of the program was the enhanced
quality of life for the patients and their families.
Representative Costello wondered whether the Mediset
packaging indicated the prescriptions included in the
Mediset.
Co-Chair Stoltze related personal experience. He believed
that the prescriptions could be easily included in the
Mediset packaging to assist emergency responders.
Representative Guttenberg asked if the daily portions of
Medisets were labeled for contents.
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY (via teleconference), testified in support
of the bill. He stated that the bill benefited seniors or
others requiring a complicated medical pharmaceutical
regimen. He stated that not all individuals lived in an
environment providing nursing care nor did they need to be.
Many trust beneficiaries needed the Mediset service.
Mediset was essential for beneficiaries attempting to
maintain an independent lifestyle. Mediset's were organized
by dose and combination making it easier for the emergency
responder or healthcare provider to determine the patient's
prescription information and protocol. He believed the
legislation was important for many trust beneficiaries in
order to avoid more costly nursing oversight in their
living environments. He reiterated his support of the
legislation.
Co-Chair Austerman asked about the basis for the
legislation. He understood that currently Mediset was
available through the department administered by regulatory
oversight. The department changed the payment schedule and
planned to continue the program. He wondered why the
legislation was necessary.
Mr. Jesse replied that the bill's advantage placed the
program in statute which established a clear and
predictable set of criteria for implementation. He was not
aware of any substantive differences between the policies
of the department and the bill, but felt the legislation
was valuable.
Co-Chair Stoltze believed that the sponsor would not have
introduced the bill if the program was not in jeopardy of
being eliminated. He thought the department's positon on
the program "evolved."
9:37:23 AM
Mr. Christensen addressed Representative Guttenberg's
question regarding labeling. He related that Medisets were
governed by pharmacy regulation. The packaging included
information about the medications and the dosing schedule
and was clearly labeled. He reminded the committee that the
legislation authorized that any pharmacy billing Medicaid
can fill Mediset prescriptions. Current regulations
restricted Mediset to pharmacies that fill a high volume
(greater than 75 percent of total business) of Mediset
prescriptions.
Representative Guttenberg asked for a description of the
packaging.
Mr. Christensen referred to the packaging as a "bubble
pack." The medication had to be "pushed out" of the
packaging that was separated by dose.
Co-Chair Stoltze CLOSED public testimony.
Representative Guttenberg asked about the previous
unpublished fiscal note from DHSS (copy on file)
distributed in the prior committee. He referenced the
analysis on page 2, which assumed that the program would
increase by approximately 20 percent. The calculation for
postage costs for 522 new recipients was $457 thousand
which assumed that all of the Medisets would be mailed from
outside the recipients' community.
Representative Costello appreciated the committee's
scrutiny of the previous fiscal note. She expressed
surprise at the expensive fiscal note for a state program
that was already in existence. She reported that she met
with the commissioner to examine the costs. She explained
that under the previous version of the bill the department
assumed that the transportation charges applied to each
Mediset. The current version of the bill did not contain a
separate component for transportation. The department
assumed that the program would expand to other areas. The
bill required that all pharmacies were eligible for Mediset
reimbursement. The inclusion drastically reduced the need
for much of the shipping costs. She declared that she never
agreed with the assumptions of the previous fiscal note.
She felt that the program benefitted the state and that in
2012 Mediset served 2,611 individuals. She discovered that
many people who need the service had never heard of the
program.
Co-Chair Austerman pointed out that the original fiscal
note depicted a 50 percent match between the state and the
federal government. He wondered why the general fund
appropriation was not contained in the current zero fiscal
note. He questioned the issue and noted that general fund
matches were common in Medicaid programs. He wanted to
understand the changes made from the previous version and
how that affected the fiscal note.
Representative Wilson wished to hear from the Department of
Administration (DOA) to determine why the state's insurance
plans were not covering Mediset since it was medically
necessary.
HB 134 was HEARD and HELD in committee for further
consideration.
9:52:21 AM
AT EASE
9:54:37 AM
RECONVENED
HOUSE BILL NO. 75
"An Act repealing certain audit requirements for
entities receiving contributions from permanent fund
dividends; requiring each campus of the University of
Alaska to apply to be included on the contribution
list for contributions from permanent fund dividends;
and requiring a university to pay an application fee
for each campus separately listed on the contribution
list for contributions from permanent fund dividends."
9:54:46 AM
Representative Costello MOVED to ADOPT the proposed
committee substitute for HB 75 (FIN), 28-LS0323\O, Work
Draft (Martin 3/17/14).
Co-Chair Stoltze OBJECTED for discussion.
DANIEL GEORGE, STAFF, REPRESENTATIVE BILL STOLTZE,
explained the changes in the legislation. He stated that on
page 1, line 2 the title was changed to "requiring the
three main campuses of the university" instead of the
previous language, "requiring each campus of the university
to apply for contribution lists." He cited page 1, line 4
that previously read, "and requiring a university to pay an
application fee" that was changed to "and requiring the
university to pay an application fee." He stated that page
1, section 1 was new. He cited Section one language, "each
university campus that applied under (m) of this section…"
and explained that each university campus may apply for the
Pick, Click, and Give program rather than requiring each
campus to do so. He noted that page 2, Section 2 was new.
Previously the bill repealed the provision on page 2, line
29. The current bill amended the audit requirements in
Section 2, item (8) to read:
…this paragraph applies only to an organization that
is required by the federal government to complete a
financial audit by an independent certified public
accountant…
Mr. George indicated that the audit requirements only
applied to organizations that were required to have
financial audits by federal law. He offered that Section 3
was formerly Section 1 and was amended to require that each
campus that applied for the Pick, Click, and Give program
was charged the $250 fee. He added that Section 4 was
formerly Section 2 and specified that each campus of the
University of Alaska "shall" apply instead of "must." He
read the new additional language on page 3, lines 22
through 24,
…The University of Alaska may apply for each campus
other than the three main campuses to be listed on the
contribution list for the current dividend year in the
manner prescribed by the department.
Mr. George turned to page 3, subsection (n), lines 25
through page 4, line 5. He stated that the language was new
and read:
In addition to the application fee in (f) of this
section, the department shall withhold a coordination
fee from each organization, foundation, or university
campus that receives contributions under this section
in the immediately preceding dividend year. The
coordination fee for an organization, foundation, or
university campus that receives contributions under
this section shall be seven percent of the amount of
contributions reported by the department under (j) of
this section for the organization, foundation, or
university campus for the immediately preceding
dividend year. The coordination fee shall be
separately accounted for under AS 37.05.142 and shall
be accounted for separately from the application fee
collected under (f) of this section. The annual
estimated balance in the account maintained under AS
37.05.142 for coordination fees collected under this
subsection may be appropriated for costs of
administering this section.
DAN DEBARTOLO, DIRECTOR, PERMANENT FUND DIVIDEND,
DEPARTMENT OF REVENUE, explained that the operational cost
for the division's work was handled by the $250 fee. The
work carried out under the 7 percent coordination fee would
be contracted out to an eligible entity. The division could
not provide the services for 7 percent.
Co-Chair Austerman wondered why the repealer in Section 3
was unnecessary. He asked whether the reason was because
the provision was amended.
Mr. George answered in the affirmative. He explained that
rather than repealing the audit requirement altogether the
new provision in Section 2, item (8) required that if the
organization was required to provide an audit under federal
law the same audit could be submitted as part of its Pick,
Click, and Give program application.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered. The committee substitute (CS)
was adopted.
JORDAN MARSHALL, RASMUSON FOUNDATION, ANCHORAGE (via
teleconference), testified in favor of the changes in the
CS. He believed the CS made the program stronger and more
sustainable. He relayed that the program was in its 6th
year and funneled approximately $8 million to charitable
organizations. The program began as a three year pilot
program. He reported that the program had no fiscal impact
to the state. He felt that the CS would propel the
charitable program "toward long-term self-sufficiency." He
noted that the coordination fee ensured that participating
organizations sustained the program well into the future.
Co-Chair Stoltze noted the intent of the audit requirement
change was designed to "catch the large ones and not
overregulate the small ones."
Mr. DeBartolo replied that the previous requirements were
burdensome to the small organizations and demonstrated a
positive change.
Representative Costello reported that the bill had one new
zero fiscal note from the University of Alaska and one new
indeterminate fiscal note from the Department of Revenue.
10:05:19 AM
Representative Munoz MOVED to REPORT CSHB 75 (FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 75 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new indeterminate fiscal
note from the Department of Revenue and one new fiscal note
from the University.
Co-Chair Stoltze
ADJOURNMENT
10:06:57 AM
The meeting was adjourned at 10:06 a.m.