Legislature(2003 - 2004)
04/22/2003 03:27 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 25-TEACHERS' HOUSING/AHFC LOANS CHAIR WILSON announced that the first order of business would be CS FOR SENATE BILL NO. 25(FIN), "An Act relating to the acquisition of teachers' housing by regional educational attendance areas and to teachers' housing loan programs in the Alaska Housing Finance Corporation; and providing for an effective date." Number 0126 REPRESENTATIVE GATTO moved to adopt HCS CSSB 25, Version 23- LS0080\U, Cook, 4/17/03, as the working document. There being no objection, Version U was before the committee. CHAIR WILSON said the only difference between Version U and CSSB 25(FIN) is that [Version U] adds registered nurses (RNs). She pointed out that the shortage of RNs is worse than the shortage of teachers. Currently, the state has 5,200 RNs, with an 11.5 vacancy rate. Moreover, the 24 percent turnover rate in nursing indicates difficulty in retention. She noted that 110 nurses a year are produced in the state. In the next four years, growth in the [health] industry will result in the need [in Alaska] for another 4,100 nurses. She said the nursing shortage is nationwide and thus adding nurses to this legislation makes sense. Number 0349 LARAINE DERR, President, Alaska State Hospital and Nursing Home Association (ASHNHA), agreed with Chair Wilson's statistics. She said recently ASHNHA reviewed how much money is going outside each year that hospitals pay for "travelers" to fill vacant positions. Eleven of the twenty-nine programs that use nurses throughout the state spend $16.3 million each year bringing in nurses to fill vacant positions. A small facility such as Mount Edgecumbe Hospital spends $273,000 for this; Ketchikan spends $750,000 a year; Bartlett Regional Hospital in Juneau spends over $370,000 a year; and Providence Health System, the largest hospital in the state, spends $10.2 million to bring in nurses, and thus most of that money goes outside. Ms. Derr opined that [a nurse] who purchases a house is likely to stay in the area. Thus anything that can be done to keep nurses in the state is [great]. Number 0492 REPRESENTATIVE GATTO related his belief that many nurses being brought in from out-of-state probably like the ability to travel to various states for work. MS. DERR agreed it's a lifestyle choice for some. She noted that the [traveling] nurses make a lot more money than those living in the area. CHAIR WILSON estimated that the standard rate is over $50 an hour [for the traveling nurses]. If the nurses used were in- state, the costs for the hospitals would drop dramatically, she said. Number 0588 REPRESENTATIVE COGHILL asked if the greatest need is for RNs. If someone is a specialized nurse, would that nurse be at this level or greater? CHAIR WILSON answered that many nurses are specialized in an area. Someone can be an RN and obtain specialized [certification] in several different areas. Although RNs cover several different kinds of nurses, it does not include a nurse's aide or a licensed practical nurse (LPN). REPRESENTATIVE SEATON asked if [the legislation includes language] that makes nurses who purchase a house not considered traveling nurses. CHAIR WILSON explained that [in order to receive the loan] the nurse would have to be employed by the hospital, which is the same for the teachers. REPRESENTATIVE SEATON said it sounds as though some nurses make the circuit and travel repeatedly to the same location. He asked if there could be a situation in which a traveling nurse could purchase a house at 100 percent financing and still remain a traveling nurse. CHAIR WILSON specified that in order to obtain the pay of a traveling nurse, the nurse is not a resident of the state. Number 0737 MS. DERR said anyone who has worked 80 hours in a facility would be eligible to purchase a house. However, a traveling nurse is paid as a special category, and thus the facility would not provide the benefit of buying a house. This legislation only applies to permanent employees. REPRESENTATIVE SEATON said he'd read the legislation to allow a permanent traveling nurse to qualify for 100 percent financing. MS. DERR pointed out that the legislation requires having a state license, which should address the concern. REPRESENTATIVE SEATON asked if a nurse from Southeast Alaska can be employed as a traveling nurse at Providence Health Care System in Anchorage, for example, or whether having a license from Alaska prevents someone from being a traveling nurse [in the state]. MS. DERR answered that a nurse from one part of the state can travel to another facility and be considered a traveling nurse. REPRESENTATIVE SEATON expressed the need to close the aforementioned loophole. CHAIR WILSON suggested inserting the language "who is a permanent resident of the state" could eliminate the loophole. REPRESENTATIVE CISSNA said she believes a traveling nurse has a certain type of contract, which is distinct from the normal contract. Therefore, the contract should be different. CHAIR WILSON asked if this could be addressed through the criteria of the loan when it actually take place. Number 0970 SHEILA PETERSON, Staff to Senator Gary Wilken, Alaska State Legislature, responded on behalf of Senator Wilken, sponsor. Ms. Peterson said she believes the legislation includes language allowing the Alaska Housing Finance Corporation (AHFC) the ability to write regulations to implement the loan. However, she said she wasn't sure whether AHFC would have the authority to restrict it to exempt traveling nurses. Therefore, if the committee wished to do so, it should probably be placed in statute, she suggested. CHAIR WILSON asked if AHFC will give loans to residents of the state. If someone is a resident, she said at least that individual [is likely] to stay in the state. Number 1024 PAUL KAPANSKY, Mortgage Operations Director, Alaska Housing Finance Corporation (AHFC), Department of Revenue, explained that when AHFC reviews a loan for a borrower who is new to the state, [approval for a loan] would be based on the extent to which the borrower has shown the intent to establish residency. CHAIR WILSON asked if a nurse living in Wrangell, where there was no vacancy, would be able to purchase a house in Wrangell with no down payment and still go to Providence Health Care Systems [in Anchorage] and receive traveler's pay. MR. KAPANSKY answered that [the home purchased with no down payment] would have to be the nurse's primary residence. He agreed [AHFC] would take care of that [during the loan process]. CHAIR WILSON wondered whether the language "to be employed and not under contract" could be added for clarification. Number 1146 DANIEL R. FAUSKE, Chief Executive Officer/Executive Director, Alaska Housing Finance Corporation (AHFC), Department of Revenue, related his belief that it isn't the intent of the committee to restrict the fact that there may a nurse that lives in Anchorage but works in the Bush. CHAIR WILSON replied no. MR. FAUSKE said he imagined there would be quite a few situations such as the foregoing. MR. KAPANSKY pointed out that Version U [on page 2, lines 3-4] specifies that a loan "may be made under this program only for owner-occupied, single-family housing." CHAIR WILSON agreed that would take care of it. REPRESENTATIVE GATTO posed a situation in which a nurse in Anchorage works in Fairbanks and her sister, who lives in Fairbanks, goes to work in Anchorage. In such a situation, each would be a traveling nurse and still possibly qualify for this loan, he suggested. MR. KAPANSKY highlighted that at the time of application, the nurses would have to indicate to AHFC that the home under the loan would be the primary residence. What happens after the loan closes isn't something over which AHFC has control. REPRESENTATIVE CISSNA inquired as to the criteria AHFC requests when establishing residency. Is there any requirement as to the status of the individual's employment? Number 1273 LAURIE HOLTE, Residential Loan Officer, Chief Underwriting Supervisor, Alaska Housing Finance Corporation (AHFC), Department of Revenue, explained that when underwriting an owner-occupied loan in order to establish that a home is an individual's primary residence, AHFC reviews whether the applicant's employment does not take that person away from their primary residency for more than six months of the year; reviews whether housing is readily available in the location where the individual is employed; and reviews the address of residence for voting privileges, driver's license, and so forth. CHAIR WILSON directed attention to page 2, lines 15-16, and said the purpose is to retain teachers and nurses in Alaska. She reiterated her earlier suggestion that the language "not under a traveling contract" could be added as one of the criteria. REPRESENTATIVE CISSNA suggested that the language "not under a traveling contract outside the state" could be inserted. CHAIR WILSON offered her belief that the language "outside the state" isn't necessary. REPRESENTATIVE SEATON clarified that he didn't want to ensure another benefit for an individual under a long-term traveling nurse contract. The idea is to provide an incentive for long- term traveling nurses to convert to registered nurses in the state. Therefore, Representative Seaton said he believes the legislation should include language specifying that someone qualifying for the loan may not maintain employment as a traveling nurse. Number 1413 CHAIR WILSON pointed out that there could be a situation in which there would be the desire to keep a nurse inside the state, although there may not be enough employment in the area where the individual resides and thus he/she would have to go to Anchorage for a job. The desire is for that individual to stay in Alaska, although he/she might be a traveler. REPRESENTATIVE CISSNA noted that there are no other medical personnel who travel and work fairly consistently in rural areas and go back and forth [between their work and primary residence]. Representative Cissna said she assumed that the problem isn't with people working in the state, but with people coming into the state for a short time [and abusing this]. CHAIR WILSON asked if AHFC gives loans to people outside of the state. MR. KAPANSKY said no. CHAIR WILSON said that takes care of it. Number 1552 REPRESENTATIVE SEATON related that [there is no intention] to prevent people from going to rural communities and taking a contract while living in another area of the state. However, the problem is related to those traveling nurses who are on an extended stay; they receive higher pay under contract, and giving them an additional incentive, through the 100 percent loan, he did not believe was the intention. However, he said he didn't know how to distinguish the two in this legislation. CHAIR WILSON highlighted that AHFC doesn't give loans to nonresidents. She related her belief that the majority of traveling nurses never take residency. [Ms. Derr nodded in agreement.] REPRESENTATIVE GATTO asked what would happen if the eligibility for [this 100 percent loan were tied] to eligibility for the permanent fund dividend (PFD), which has rather stringent requirements and penalties for not being truthful. Since it would take too long for PFD eligibility, he proposed having the same requirements, but without the waiting period. He asked if that would satisfy most of the concerns. MS. PETERSON answered that tying it to the PFD eligibility might make it more complex than it is currently. For a teacher to obtain a housing loan, that person merely needs to be a teacher in a public school. There is no limit with regard to how long such a person needs to stay before applying for the loan, which is what she said [the sponsor] wants to encourage. REPRESENTATIVE GATTO emphasized that the PFD language makes it clear that the individual has to want and intend to stay in the state. REPRESENTATIVE SEATON recalled that such was AHFC's criteria for obtaining the loan. MR. KAPANSKY reiterated that on page 2 the legislation states that the program is only for "owner-occupied, single-family housing". Therefore, applicants would have to demonstrate that they are actually going to be living in the home and be residents of the state. REPRESENTATIVE SEATON said although he saw that as a potential problem "on the traveling nurse," he wasn't going to insist it be corrected. Number 1734 REPRESENTATIVE GATTO moved to report HCS CSSB 25, Version 23- LS0080\U, Cook, 4/17/03, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HCS CSSB 25(HES) was reported from the House Health, Education and Social Services Standing Committee. CHAIR WILSON informed the committee that she would have a resolution drafted because of the need to suspend the rules to allow for the change in title.
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