Legislature(1995 - 1996)
04/27/1996 01:20 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
APRIL 27, 1996
1:20 P.M.
TAPE HFC 96 - 144, Side 1, #000 - end.
TAPE HFC 96 - 144, Side 2, #000 - end.
TAPE HFC 96 - 145, Side 1, #000 - end.
TAPE HFC 96 - 145, Side 2, #000 - #523.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:20 P.M.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Navarre
Representative Grussendorf Representative Parnell
Representative Kelly Representative Therriault
Representative Kohring
ALSO PRESENT
Representative Con Bunde; Annalee McConnell, Director,
Office of Management & Budget, Office of the Governor; Tom
Williams, Staff, Senator Steve Frank; Terry Otness, Staff,
Senator Robin Taylor; James Dieringer III, Staff, Senator
Steve Frank; Sheila Peterson, Staff, Senator Steve Rieger;
Mark Boyer, Commissioner, Department of Administration;
James Baldwin, Assistant Attorney General, Department of
Law; Wendy Redman, Vice President, University Relations,
University of Alaska; Mary Rubadeau, Alaska Council of
School Administrators, Superintendent, Juneau School
District, Juneau; Jim Stratton, Director, Division of Parks
and Outdoor Recreation, Department of Revenue; Diane
Barrans, Executive Director, Postsecondary Education
Commission, Department of Education; Judy Murphy, (Testified
via teleconference), Barrow; Bill Donaldson, (Testified via
teleconference), Kodiak; Mike Laundry, (Testified via
teleconference), Sgt. Kodiak Police Department, Kodiak;
Dennis Oakland, (Testified via teleconference), City of
Homer, Homer; Nick Dudiak, (Testified via teleconference),
State Employee, Homer; Greg MacDonald, (Testified via
teleconference), Alaska Public Safety Employee Association,
Alaska State Fire Fighters Association, Anchorage; Keith
Perin, (Testified via teleconference), Board of Directors,
Paternal Order of State Troopers, Anchorage; Lucy Hope,
(Testified via teleconference), President, Mat-Su Education
Association, Anchorage; Bill Bjork, (Testified via
1
teleconference), President, Fairbanks Education Association,
Fairbanks; Don Davis, (Testified via teleconference),
Fairbanks.
SUMMARY
SB 89 An Act relating to the members of the board and
staff of the Alaska Permanent Fund Corporation.
SB 89 was HELD in Committee for further
discussion.
SB 148 An Act relating to a defined contribution
retirement plan for state employees.
SB 148 was HELD in Committee for further
discussion.
SB 278 An Act relating to the authority of the Department
of Natural Resources to allow credits against fees
at state historical parks.
SB 278 was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Natural Resources dated 2/21/96.
SB 301 An Act relating to postsecondary education.
CS SB 301 (FIN)am was reported out of Committee
with "no recommendation" and with fiscal notes by
the Department of Revenue dated 4/19/96, (2) by
the Alaska Post Secondary Commission dated 4/2/97
and 4/19/96, by the Department of Education dated
4/19/96 and a zero fiscal note by the Alaska Post
Secondary Commission.
SB 303 An Act relating to management of the budget
reserve fund; and providing for an effective date.
CS SB 303 (FIN) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by the Department of Revenue dated 4/23/96.
SB 307 An Act authorizing the Department of Natural
Resources to exchange with the federal government
state land within, and adjoining, Dude Creek
Critical Habitat Area for federal land adjacent to
Fall Creek; and providing for an effective date.
CS SB 307 (FIN) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by the Department of Revenue dated 4/23/96.
2
SENATE BILL 303
"An Act relating to management of the budget reserve
fund; and providing for an effective date."
TOM WILLIAMS, STAFF, SENATOR STEVE FRANK, provided a
sectional analysis of SB 303, noting that the legislation
would allow the Governor authority to transfer management of
the Constitutional Budget Reserve Fund (CBRF) to the
Permanent Fund Corporation.
Representative Grussendorf asked if the plan considered
current investment concepts used by the Department of
Revenue (DOR). Mr. Williams explained that CBRF currently
is invested by DOR's Treasury Division. The bill would
provide the governor latitude to transfer all or a portion
of that amount over to the general fund.
Co-Chair Foster MOVED to report CS SB 303 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS SB 303 (FIN) was reported out of Committee with a "do
pass" recommendation" and with a zero fiscal note by the
Department of Revenue dated 4/23/96.
SENATE BILL 307
"An Act authorizing the Department of Natural Resources
to exchange with the federal government state land
within, and adjoining, Dude Creek Critical Habitat Area
for federal land adjacent to Fall Creek; and providing
for an effective date."
JAMES DIERINGER III, STAFF, SENATOR STEVE FRANK, spoke in
support of SB 307 noting that it would authorize the State
of Alaska to exchange a 960 acre parcel near Gustavus with
the federal government in order to construct a mini-
hydroelectric power plant. Under the legislation, the
federal government would receive a parcel which lies
adjacent to Glacier Bay National Park--land that is already
dedicated as a critical habitat area for sand hill cranes
and other wetland wildlife. The State would receive a
parcel that is situated near both the existing diesel power
generation plant and Fall Creek. The parcel does have
sufficient water flow to generate hydro-electric power.
Co-Chair Foster MOVED to report CS SB 307 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
3
so ordered.
CS SB 307 (FIN) was reported out of Committee with a "do
pass" recommendations and with a fiscal note by the
Department of Natural Resources dated 4/23/96.
SENATE BILL 278
"An Act relating to the authority of the Department of
Natural Resources to allow credits against fees at
state historical parks."
TERRY OTNESS, STAFF, SENATOR ROBIN TAYLOR, testified in
support of SB 278. He stated that the legislation was
introduced to address concerns raised by the Ketchikan area
State Parks Advisory Board and the Ketchikan Gateway Borough
Assembly. SB 278 would provide a mechanism by which the
Division of Parks and Outdoor Recreation could acquire two
small parcels of land adjacent to Totem Bight State
Historical Park.
SB 278 would allow DNR to offer credits against fees paid by
commercial tour operators for payments made to the
municipality for projects which would assist in mitigating
or alleviating access, congestion and parking problems at
historical parks.
In response to Representative Brown's question, Mr. Otness
capsulized how the money would be spent. In the first year
funds generated would be utilized as partial payment to the
Ketchikan Borough for the land.
JIM STRATTON, DIRECTOR, DIVISION OF PARKS AND OUTDOOR
RECREATION, DEPARTMENT OF NATURAL RESOURCES (DNR), added,
the base amount received in 1995 would not be "dropped
income terms" made to the State.
Co-Chair Foster MOVED to report SB 278 out of Committee with
individual recommendations and with the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SB 278 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Natural Resources dated 2/21/96.
SENATE BILL 89
"An Act relating to the members of the board and staff
of the Alaska Permanent Fund Corporation."
SHEILA PETERSON, STAFF, SENATOR STEVE RIEGER, spoke in
support of SB 89. She pointed out in the past two years,
4
there has been a 100% turnover in top management of the
Alaska Permanent Fund Corporation. SB 89 would provide
greater continuity in the management of the fund, creating a
more careful, deliberate financial decision-making tool.
The legislation clarifies that removal of a trustee must be
for cause. The number of public members would be increased
from four to five, with staggered terms. SB 89 would
clarify that investment policies and staffing decisions must
be made in the best interest of the fund.
JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, spoke to an amendment made in the House State Affairs
Committee, addressing the concerns of keeping commissioners
on the Board of Trustees. He requested that portion of the
bill not be changed.
Mr. Baldwin spoke to concerns from the Department of Law.
He advised that the legislation would make dramatic changes
to the make-up of the board. The Department's most
significant concern would be increasing public membership
with removal of board members only for cause. Mr. Baldwin
reminded members that to remove a board members for cause is
a difficult and expensive exercise. He urged that the bill
be changed before passage.
Mr. Baldwin referenced Page 1, Lines 13-14, Section (2),
".....public members of the board must have recognized
competence and wide experience in finance, investments or
other....". He advised that there are only a couple of
people in the State who could meet proposed qualifications.
Mr. Baldwin added, Page 3, Section 6, suggests that the
corporation staff, serve at the "pleasure" of the board of
directors. The language is too broad. He suggested
including language "with investment responsibilities".
He pointed out that language on Page 3, Section 7(b), would
not permit removal of the executive director if a conflict
of personality arose. That position would be unreplaceable
regardless of fund performance.
Representative Mulder believed that Sections 6 and 7 were in
opposition. Mr. Baldwin agreed that the language could be
conflicting. Representative Parnell asked if there was a
"different" meaning of cause established in case opinions.
Mr. Baldwin responded that the conviction of a crime could
result from something involving moral turpitude and or
dishonesty, citing AS 16.05.100.
Representative Brown referenced Section 2, and suggested
deletion of "and broad experience"; inserting "recognized
competence". She thought that language would broaden the
5
pool. Representative Brown referenced Section 4, asking if
the Administration had objected, wanting to select their
"own" appointees. Mr. Baldwin replied that existing law
provides that the board must be responsive to the governor
and that the governor must be responsive to the voters of
the State. In existing law, the governor can appoint and
fire appointees, which guarantees that the board act in
accordance with the wishes of the governor. Governor
Knowles feels strongly that the board should be answerable
to someone.
Co-Chair Hanley commented that language changes could be
more consistent. The board members could either be
"accountable" to the governor or "influenced" by the
governor. Representative Grussendorf pointed out that the
Permanent Fund has never been affected by the transition of
various governors elected since inception and there has been
no fluctuation in the earnings of the fund. He noted that
he did not support the legislation.
Representative Brown questioned how the language would be
incorporated. Representative Mulder stated that he viewed
the Permanent Fund similar to other state resources and that
board should be treated the same as other state boards.
Members are appointed and their terms should "roll over"
into the term of the next Governor. He suggested that
action would provide continuity to each board.
SB 89 was HELD in Committee for further consideration.
SENATE BILL 148
"An Act relating to a defined contribution retirement
plan for state employees."
MARY RUBADEAU, SUPERINTENDENT, JUNEAU SCHOOL DISTRICT,
ALASKA COUNCIL OF SCHOOL ADMINISTRATORS, JUNEAU, stated that
the Alaska Council of School Administrators strongly opposes
SB 148. She believed that the legislation would place the
State of Alaska and the students of the State at risk
because they would no long be able to attract the brightest
and best educators to work in Alaska.
Of the sixty-nine retirement systems compared, 53 plans
allow for some combination of a Teacher Retirement System
(TRS) and Social Security (SS) coverage.
(Tape Change, HFC 96-144, Side 2).
Ms. Rubadeau continued, SB 148 would reduce the current
multiplier of 2% or 2.5% to 1.5%. Of the 69 retirement
programs studied, thirty-one pension plans use an accrual
6
rate equal to or greater than 2% percent; twenty-four plans
use an accrual rate between 1.79% and 1.99%. Only 7 plans
use 1.5% or less as the multiplier for computation of
retirement benefits. If Alaska were to adopt 1.5%
multiplier, Alaska will be at the "bottom of the list" for
attractive retirement system plans.
She continued, the third tier retains the highest paid
teachers in the system longer, at a time when districts are
looking for means to reduce expenses, suggesting that the
biggest budget area which could show a savings would be
staff salaries.
She asserted that the benefits for retaining the current
retirement system out weigh the reasons for the proposed
language. SB 148 would place Alaska at the bottom of
quality and value when compared with other states. Ms.
Rubadeau thought that Alaska teacher salaries are becoming
more in line with those of other states. Alaska is now
having difficulty in some districts retaining quality
educators under the present system. Adoption of SB 148
would create more reasons not to come to Alaska to teach.
She urged that the Committee not pass SB 148.
Representative Therriault inquired if the Alaska Council had
voiced blanket opposition to the legislation. Ms. Rubadeau
noted that the TRS system works and is a good system. She
believed it would make more sense to amend the current
system as opposed to adopting the third tier system. Ms.
Rubadeau commented on the opposition to the concept of the
Tier III. Representative Therriault pointed out that the
legislation could be amended in order to better work for the
groups involved.
In response to Representative Therriault's comment, Ms.
Rubadeau explained that the number of people applying for
jobs within the Alaska school districts has decreased by
one-quarter in the past year. Recruitment considerations
are a critical factor for the school system in Alaska. She
added, teaching is a taxing profession; new people with
energy and vision need to be given the opportunity to work
to keep up the challenging concerns. Specifically why
school districts supported the early retirement incentive
program.
Representative Parnell asked if there was a waiting list of
qualified teaching positions in Juneau. Ms. Rubadeau
responded that there have been qualified applicants who have
not been able to obtain employment because there have been
no new hires in the past few years.
Representative Mulder suggested that the decision be based
7
on "financial reality" rather than trying to modify social
behavior in terms for employment practices. He suggested
that teachers be held to the same level as other professions
in determining when they should leave their post. Ms.
Rubadeau spoke to the realities which face school districts;
once teachers are tenured, they stay in the teaching system,
and that many of their choices evolve around financial
issues regarding the retirement system.
JUDY MURPHY, (TESTIFIED VIA TELECONFERENCE), BARROW, stated
that new retirement proposals would not encourage teachers
to stay in the system nor would it encourage new students to
pursue degrees in education. She emphasized that the
proposed changes would be too drastic and urged members to
vote against the proposed legislation.
BILL DONALDSON, (TESTIFIED VIA TELECONFERENCE), KODIAK,
spoke in favor of the legislation, specifically the portion
which addressed the Early Retirement Incentive Program (RIP)
for state employees. He agreed that it was fiscally
responsible to reduce state government.
MIKE LAUNDRY, (TESTIFIED VIA TELECONFERENCE), KODIAK POLICE
DEPARTMENT, KODIAK, spoke in support of the legislation. He
thought that the bill would be of benefit to the Kodiak
Police Department, pointing out that people would be
eligible for early retirement through passage of the
legislation. He thought that could create more options for
entry level employees.
DENNIS OAKLAND, (TESTIFIED VIA TELECONFERENCE), CITY OF
HOMER, HOMER, commented that the City of Homer is facing
declining city revenues, forcing down-sizing and
restructuring of the city work force. SB 148, RIP portion
of the bill would allow the city to reduce the work force
and bring on new employees at lower costs, creating
substantial savings. He concluded, the City of Homer
supports SB 148 and urges the Committee's approval and
passage.
NICK DUDIAK, (TESTIFIED VIA TELECONFERENCE), SELF, STATE
EMPLOYEE, HOMER, testified in favor of SB 148, echoing that
savings would be provided to the State through passage of
the legislation. He pointed out that without passage of the
bill, many lower paid recruitment positions would be laid
off resulting from the proposed budget plan.
GREG MACDONALD, (TESTIFIED VIA TELECONFERENCE), PUBLIC
SAFETY EMPLOYEE ASSOCIATION, ALASKA STATE FIRE FIGHTERS
ASSOCIATION, ANCHORAGE, stated that members of the
associations which he represents strongly urge the Committee
to separate the RIP and Tier III sections of the proposed
8
legislation. Each should stand on their own merit. He
pointed out that there was broad support for the RIP portion
of the bill, although, citizens felt strongly about the
"Tier III" portion and would not support the legislation
with that included.
He pointed out that SB 148 would cut spouse and dependent
health care for the police and fire workers. Mr. MacDonald
stressed that these employees have stressful work lives. If
they have to remain in service longer, that increases family
stress and will make it "tough" to recruit quality people.
KEITH PERIN, (TESTIFIED VIA TELECONFERENCE), BOARD OF
DIRECTORS, PATERNAL ORDER OF STATE TROOPERS, ANCHORAGE,
advised that the Tier III retirement portion of the bill
would be detrimental to all State troopers. In order to
maintain the quality work force in the State, changes as
proposed in Tier III would not be advisable. The current
plan in Alaska is considered to be in the "middle of the
road" compared to other states. Mr Perin commented that
Tier III will put Alaska at the "bottom of the barrel".
California and Delaware have superior plans. He urged that
the two portions of the bill be separated.
LUCY HOPE, (TESTIFIED VIA TELECONFERENCE), PRESIDENT, MAT-SU
EDUCATION ASSOCIATION, ANCHORAGE, spoke in opposition to SB
148. She pointed out that the Mat-Su School District has a
difficult time recruiting specialty teachers; the proposed
legislation would make it more difficult.
Representative Therriault commented on the actuarial
soundness referenced by Ms. Hope, suggesting that fear was
ungrounded. Representative Therriault noted that the
different tiers are individually funded and by adding a Tier
III would not jeopardize other employees retirement.
BILL BJORK, (TESTIFIED VIA TELECONFERENCE), PRESIDENT,
FAIRBANKS EDUCATION ASSOCIATION, FAIRBANKS, spoke in
opposition to SB 148 because it will negatively impact
Alaska's ability to retain teachers and to attract new
teachers throughout the State. He added that the
association is concerned about the bills negative influence
on TRS participants. Teacher shortages still exist in rural
Alaska. If SB 148 becomes law, teachers will be forced to
moon-light after school and during the summers to qualify
for a modest social security annuity.
Representative Martin noted that he did not favor the RIP or
the Tier III program. He thought that neither would provide
a cost savings.
Representative Kelly inquired if University of Alaska was
9
able to supply the number of needed replacement teachers.
Mr. Bjork replied that the University can not supply the
number of graduates necessary especially in the "special
needs" area.
DON DAVIS, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS, spoke
against SB 148. He stated that it was an additional step
made by the Legislature to punish the working class
individual. Without a retirement incentive, one would
assume that a stable work force would be less available for
state employment. He pointed out, the Legislature had voted
an additional raise for themselves while funds were depleted
taken from the working class. Co-Chair Foster indicated
that the proposed legislation was the Governor's bill.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, commented that the proposal
prepared last year by the Governor differs in many respects
from current retirement incentive suggestion.
(Tape Change, HFC 96-145, Side 1).
Ms. McConnell reported that the legislation would not
provide an automatic age in which to be able to retire, but
rather it would be used at the Administration's discretion
to determine which work units could achieve savings to allow
employees to retire early. The program would calculate how
much savings would occur by either eliminating the position
or by replacing the employee at a lower pay range. The
other calculated portion would be the employers contribution
toward retirement, an amount paid by the Department over a
three year period.
Representative Martin voiced concern with the fiscal impact.
He maintained that the retirement program would be at the
expense of new employees, who would need to provide personal
savings three times greater than current employees.
Ms. McConnell explained that the initial bill submitted by
the Administration was a "straight-forward" retirement and
separation incentive. It did not include any adjustments to
retirement. In the Senate, that bill was combined with a
bill prepared by Senator Rieger addressing retirement
benefits. The Administration stated that this was not the
preferred approach and then suggested alternatives.
MARK BOYER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION,
commented that the assumption is that wages which drive
retirement will continue to rise with the consumer price
index (CPI). These will have increased benefits added so
that the future retiree should have a base which has kept
10
pace with retirement costs. Commissioner Boyer pointed out
that a 4% gross factor was used to determine the retirement
reduction from the employee.
Representative Martin asked if that was determined by the
1.5% contribution added per year. Commissioner Boyer
replied that the 1.5% is a broad base private industry
standard. Base adjustments are still assumed at the 4% per
year increase. He agreed that the 1.5% was low and will
result in a lower retirement piece.
Representative Martin asked if the fiscal note submitted had
been calculated at the 1.5%. Commissioner Boyer explained
that Tier III savings was built upon blending the Tier I and
Tier II employees, eventually being replaced by the Tier III
employee.
Representative Therriault asked if going to a Tier III would
jeopardize the benefit paid to the Tier I and Tier II
employees. Commissioner Boyer advised that the tiers are
distinctively different and the contributions paid are
separate pools of retirement resources. The actuarial
assumptions which provide the contribution is based on the
individual employees placement. There will be no reduction
to the Tier I or Tier II level employee benefits from
implementing an additional tier.
Representative Therriault asked how the money would be saved
from the RIP program. He understood that it was the intent
of the Administration to use RIP savings to address
department budget reductions. Ms. McConnell offered to
provide the Committee with a handout explaining the plan and
the impact. Representative Therriault reiterated that the
budget reductions should not effect an employee who had
already RIP'ed out.
Representative Brown referenced the outdated fiscal notes.
She asked if they reflected savings expected through the
Tier III proposal. Commissioner Boyer explained that the
Department would provide a new fiscal note based on
Committee action. The budget anticipates a $30 thousand
dollar savings in FY97 associated with the implementation of
Tier III, based on turnover assumptions. Tier III savings
will accrue at a small rate over a period of time.
Representative Brown asked if there was any part of the Tier
III which the Administration supported and considered good
policy. Commissioner Boyer advised that the Administration
does not support the Tier III portion of the bill. He
suggested that the defined contribution needs to be
substituted with the defined benefit approach.
11
In response to Representative Brown's query, Commissioner
Boyer replied that the Administration would support an
element of the Tier III system, seeking changes to the
health benefit provision and the multiplier. Representative
Brown asked if those two items were changed, would the
remainder of the bill be acceptable. Commissioner Boyer
stated that the Administration did not have a final
consensus regarding SB 148. Representative Brown emphasized
that there is "high" interest understanding the "range of
changes" proposed by the Administration. She asked access
to the information currently available.
Representative Parnell asked if the Administration had
calculated the savings. Commissioner Boyer replied that
health benefits had been cost-out for a twenty-five year
period, and those numbers were available. He added, the
system needs to be able to attract and retain good public
employees. The goal is to decrease employer contribution to
6% range.
Representative Therriault interjected that the effected
groups would of course want to continue the status quo; he
intended to a change that system. Commissioner Boyer
reminded members that savings accrue over time and are
incremental; for administrational ease, the blended number
would be 13.8% employer contribution.
Representative Therriault pointed out that the social
security contribution was 6.2%. He stressed that the PERS
contribution was too "rich". Commissioner Boyer disagreed
with that characterization. He stated that the private
sector often had other retirement plans available to their
employees.
Representative Therriault asked the Administration's
objection to a defined contribution plan. Commissioner
Boyer replied that plan tends to be of less benefit to large
public employers than it is for the private sector
employers. He agreed that it was attractive, although, felt
that the defined benefits arrangement would provide more
certainty to public employees. People are awarded for their
longevity as opposed to a defined contribution plan.
Representative Therriault agreed that the bill needed
adjustments, although recognized the need for change to our
current situation. He stressed that it would always be
opposed by the private sector.
(Tape Change, HFC 96-145, Side 2).
Discussion followed between Representative Martin and
Commissioner Boyer regarding the information requested from
the Administration highlighting options and cost analysis.
12
Representative Therriault asked how the Administration felt
about including Tier III and RIP in the same bill.
Commissioner Boyer clarified that language was inconsistent,
encouraging employees to "leave early" while and on the
other hand developing a system to encourage them to stay
longer. Representative Therriault pointed out that the time
scenarios differed. He stressed that employees have a
personal obligation for providing for their own future
outside of the retirement accrued through their jobs.
Representative Martin agreed.
SB 148 was HELD in Committee for further discussion.
SENATE BILL 301
"An Act relating to postsecondary education."
DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
COMMISSION, DEPARTMENT OF EDUCATION, spoke to the fiscal
note attached to the Executive Order (EO) which indicates a
reduction in costs because the Commission would be
eliminated. What was not included in the Executive Order
was information that the Department of Education (DOE) has a
pending RSA for $40 thousand dollars. DOE backed that
amount out of their proposed FY97 budget and the fiscal note
provided by the Department of Revenue represents that
amount.
Representative Brown MOVED to adopt Amendment #1, 9-
LS1749\K.2, Ford, 4/26/96. Ms. Barrans explained that the
amendment would eliminate the Commission and would move the
regulation of the post secondary institutions to the
Department of Education as a department function and would
also provide the needed technical corrections. She
reiterated that the amendment would eliminate the separation
of power issue, which was of concern to the Administration.
Representative Mulder asked if Amendment #1 would be
comparable to the Executive Order. Ms. Barrans stated it
would. Representative Mulder OBJECTED to Amendment #1.
A roll call was taken on the MOTION.
IN FAVOR: Brown.
OPPOSED: Kelly, Kohring, Martin, Mulder, Parnell,
Therriault.
Representative Grussendorf, Navarre, Hanley and Foster were
not present for the vote.
The MOTION FAILED (1-6).
13
Representative Parnell MOVED to adopt Amendment #2, 9-
LS1749\K.1, Ford, 4/25/96, for purposes of discussion.
Representative Brown OBJECTED. Ms. Barrans noted that the
Commission has been supportive of the WAMI program and that
the amendment would reinstate it. She pointed out that it
was a low cost program to administer.
WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS,
UNIVERSITY OF ALASKA, understood Representative Bunde's
intent in the amendment to move the WAMI program to a new
base. She acknowledged that the University was willing to
work with him on that concern.
Ms. Redman advised that the WAMI program is a major public
policy question that the State of Alaska needs to deal with.
It is an expensive program, although, it is not an expensive
program as an alternative to medical school. The University
of Washington sets aside ten seats for Alaskans. The policy
issue needs to be determined by the Legislature if the
intent is to provide for rural doctors.
She recommended establishing an interim committee to pursue
the concerns. Ms. Redman objected to Amendment #2 as
proposed. It would place into the University budget, the
money for the years 2, 3 and 4 as part of the program. She
pointed out that this was not part of the University of
Alaska's program; it is a straight pass through to the
University of Washington. It would inflate the University
of Alaska's budget.
Representative Brown asked where the first year funding
would come from. Ms. Redman replied all first year funding
is contained in the UAA budget. The students attend UAA for
the first year and then go to the University of Washington
for the next three years.
Representative Therriault asked some ideas which could
attract students to rural Alaska. Ms. Redman stated that
there are some states which pay a flat amount of money
enticing doctors into rural areas. Other states pay back
the student loans. These systems do work and would be
cheaper than the current system used in Alaska under the
WAMI program.
REPRESENTATIVE CON BUNDE commented that the driving force
behind the WAMI program was UAA. They want the program. He
thought it would be advisable to consolidate the funding
into one entity. Representative Martin noted that he did
not believe that anyone from the University "desperately"
wanted this program.
14
Ms. Redman corrected that Representative Bunde had been
referring to the maintenance of the first year budget at the
University of Alaska. She added that this was a high
priority for UAA. The residency program currently being
implemented at the Anchorage hospital would not exist if it
were not for the WAMI program participation. The University
does not want the funding responsibility for years 2, 3 and
4.
In response to Representative Brown's question, Ms. Redman
noted that forty students per year are participating in the
WAMI program. Ten from each class. The cost is $2 million
dollars; emphasizing that it is a very expensive program.
Representative Brown suggested adding a Letter of Intent to
attach to the legislation.
Representative Kohring voiced his support of the amendment.
Representative Bunde thought that since years 2, 3 and 4
were at the University of Washington, that would be the
ideal place to have the funding located.
A roll call was taken on the MOTION.
IN FAVOR: Kohring, Kelly.
OPPOSED: Martin, Mulder, Parnell, Therriault,
Brown.
Representatives Navarre, Grussendorf, Hanley and Foster were
not present for the vote.
The MOTION FAILED (2-7).
Representative Mulder noted that it was his intent to
support the Letter of Intent to further investigate
alternatives.
Representative Martin MOVED to report CS SB 301 (FIN)am out
of Committee with individual recommendations and with the
attached fiscal notes. There being NO OBJECTION, it was so
ordered.
CS SB 301 (FIN)am was reported out of Committee with "no
recommendation" and with fiscal notes by the Department of
Revenue dated 4/19/96, two from the Alaska Post Secondary
Commission dated 4/02/96 and 4/19/96 and two by the
Department of Education dated 4/19/96 and a zero fiscal note
by the Alaska Postsecondary Commission.
ADJOURNMENT
The meeting adjourned at 4:00 P.M.
15
| Document Name | Date/Time | Subjects |
|---|