Legislature(2005 - 2006)HOUSE FINANCE 519

04/26/2005 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 13 SCHOOL CONSTRUCTION BOND REIMBURSEMENT TELECONFERENCED
Heard & Held
+= HB 53 CHILDREN IN NEED OF AID/REVIEW PANELS TELECONFERENCED
Heard & Held
+ SB 67 CLAIMS AGAINST HEALTH CARE PROVIDERS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
= HB 275 TRANSPORTATION PROJECT BONDS
Moved CSHB 275(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 26, 2005                                                                                           
                         1:43 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:43:55 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bill Stoltze, Vice-Chair                                                                                         
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Carl  Gatto;   Representative  John  Coghill;                                                                   
Representative  Mary  Kapsner; Representative  Peggy  Wilson;                                                                   
Representative  Bill  Thomas;  Senator  Ralph  Seekins;  Cody                                                                   
Rice,  Staff,  Representative   Carl  Gatto;  Rynnieva  Moss,                                                                   
Staff,  Representative  John   Coghill;  Brian  Hove,  Staff,                                                                   
Senator  Ralph  Seekins;  Eddy   Jeans,  Director,  Education                                                                   
Support   Services,  Department   of   Education  and   Early                                                                   
Development;   Stacy  Kraly,   Assistant  Attorney   General,                                                                   
Department  of   Law;  Jan  Rutherdale,   Assistant  Attorney                                                                   
General, Department of Law; John  MacKinnon, Deputy Director,                                                                   
Department  of  Transportation  and Public  Facilities;  Dick                                                                   
Cattanach,    Executive    Director,    Associated    General                                                                   
Contractors  of  Alaska,  Anchorage;  Jim  Jordan,  Executive                                                                   
Director,  Alaska  State  Medical  Association  (ASMA);  Mike                                                                   
Haugen, Executive  Director, Alaska Physicians  and Surgeons,                                                                   
Anchorage;  Julie Lucky, Staff,  Representative Hawker;  Pete                                                                   
Ecklund, Staff, Representative Kevin Meyer                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Tom  Boutin,  Deputy  Commissioner,  Department  of  Revenue,                                                                   
Anchorage;  Tammy  Sandoval,   Acting  Director,  Offices  of                                                                   
Children's Services, Department  of Health & Social Services,                                                                   
Anchorage                                                                                                                       
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 13     An Act relating to reimbursement of municipal                                                                         
          bonds  for school construction;  and providing  for                                                                   
          an effective date.                                                                                                    
                                                                                                                                
          HB 13 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 53     An    Act    relating    to    child-in-need-of-aid                                                                   
          proceedings; amending  the construction of statutes                                                                   
          pertaining to children  in need of aid; relating to                                                                   
          a  duty  and  standard  of  care  for  services  to                                                                   
          children  and  families;   amending  court  hearing                                                                   
          procedures to allow  public attendance at child-in-                                                                   
          need-of-aid proceedings;  establishing a right to a                                                                   
          trial  by jury  in termination  of parental  rights                                                                   
          proceedings;  reestablishing and relating  to state                                                                   
          and  local  citizens'  review  panels  for  certain                                                                   
          child  custody   matters;  amending  the   duty  to                                                                   
          disclose information  pertaining to a child in need                                                                   
          of  aid;   establishing  a  distribution   age  for                                                                   
          permanent fund dividends  held in trust for a child                                                                   
          committed  to  the  custody of  the  Department  of                                                                   
          Health and Social Services;  mandating reporting of                                                                   
          the  medication  of   children  in  state  custody;                                                                   
          prescribing  the rights of grandparents  related to                                                                   
          child-in-  need-of-aid  cases  and  establishing  a                                                                   
          grandparent   priority  for  adoption   in  certain                                                                   
          child-  in-need-of-aid  cases;  modifying  adoption                                                                   
          and  placement  procedures   in  certain  child-in-                                                                   
          need-of-aid   cases;  amending  treatment   service                                                                   
          requirements  for  parents  involved  in  child-in-                                                                   
          need-of-aid  proceedings; amending Rules  3 and 18,                                                                   
          Alaska  Child in  Need of Aid  Rules of  Procedure;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          HB 53 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 275    An Act authorizing financing for certain public                                                                       
          transportation  projects;   giving  notice  of  and                                                                   
          approving  the  entry  into,  and the  issuance  of                                                                   
          revenue obligations  that provide participation in,                                                                   
          lease-financing      agreements      for      those                                                                   
          transportation  projects;   and  providing  for  an                                                                   
          effective date.                                                                                                       
                                                                                                                                
          CS HB 275 (FIN) was reported out of Committee with                                                                    
          a "no  recommendation" and  with a new  fiscal note                                                                   
          by the Department of Revenue.                                                                                         
                                                                                                                                
                                                                                                                                
CS SB 67(JUD)(efd fld)                                                                                                          
          An Act relating to claims for personal injury or                                                                      
          wrongful death against health care providers.                                                                         
                                                                                                                                
          CS SB 67 (JUD)(efd fld) was HEARD and HELD in                                                                         
          Committee for further consideration.                                                                                  
                                                                                                                                
1:45:36 PM                                                                                                                    
HOUSE BILL NO. 13                                                                                                             
                                                                                                                                
     An Act relating to reimbursement of municipal bonds for                                                                    
     school construction; and providing for an effective                                                                        
     date.                                                                                                                      
                                                                                                                                
Co-Chair  Chenault MOVED  to ADOPT  work draft  #24-LS0062\X,                                                                   
Mischel,  4/26/05, as  the  version of  the  bill before  the                                                                   
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
REPRESENTATIVE  CARL GATTO,  SPONSOR,  noted that  HB 13  was                                                                   
introduced  to  "take  care of  a  fast  growing  community".                                                                   
Every  community  in the  State  has school  maintenance  and                                                                   
replacement needs;  Mat-Su has needs for  school construction                                                                   
because of the growing student numbers.                                                                                         
                                                                                                                                
HB 13  requests a 70/30  split for those construction  costs.                                                                   
The district would float bonds  in hopes of getting approval.                                                                   
Following a survey,  the approval rating for  the bonding was                                                                   
approximately  80%.   Since that  time, the  bill has  gotten                                                                   
"heavier".   He stressed that  the committee substitute  just                                                                   
adopted incorporates  a substantial revision to  the original                                                                   
proposed  HB 13.   The  intent of  the original  bill was  to                                                                   
build  space for children.   The  bill now  includes a  major                                                                   
revision of the  funding formula and threatens  the substance                                                                   
of the bill.                                                                                                                    
                                                                                                                                
Representative  Gatto  pointed out  that  a  study was  added                                                                   
under  the committee  substitute.   He  stressed  that SB  36                                                                   
changed the method  of funding from an instructional  unit to                                                                   
use of  a formula.   Mostly rural  school districts  suffered                                                                   
under SB 36.   That bill carried a "funding  floor" providing                                                                   
rural  schools grant  money and  an adjustment  was made  for                                                                   
those districts.                                                                                                                
                                                                                                                                
Representative Gatto  challenged the model used  for the air-                                                                   
study.  The  problem is that study deals with  facts, numbers                                                                   
and observations and  cannot be proven right.   The study was                                                                   
flawed.  Because of those flaws,  the Institute of Social and                                                                   
Economic  Research (ISER)  commissioned  a second  one.   The                                                                   
current  version  of  HB  13 resulted  from  that  study  and                                                                   
propose money be redistributed.                                                                                                 
                                                                                                                                
1:53:33 PM                                                                                                                    
                                                                                                                                
Representative  Gatto acknowledged  that  some districts  are                                                                   
underfunded.   HB  13  addresses redistribution  of  district                                                                   
funds.  He highlighted  the districts that would  not do well                                                                   
under HB 13:                                                                                                                    
                                                                                                                                
   ·    Anchorage school district would loose $24 million                                                                       
        dollars;                                                                                                                
   ·    Mat-Su schools district would loose $3 million                                                                          
        dollars, and                                                                                                            
   ·    Fairbanks school district would loose $6 million                                                                        
        dollars.                                                                                                                
                                                                                                                                
1:55:21 PM                                                                                                                    
                                                                                                                                
Representative Gatto  noted that he  spends a lot of  time in                                                                   
the  classroom in  his  district  and that  he  has a  strong                                                                   
association  with   his  school   district.    He   found  it                                                                   
astounding that  there are classrooms  with 35 students.   He                                                                   
believed  that the ISER  study would  make situations  worse.                                                                   
The Mat-Su district  is already very efficient,  using 90% of                                                                   
income for salaries, while other districts give only 65%.                                                                       
                                                                                                                                
Representative  Gatto emphasized  his concern  that the  ISER                                                                   
study and  the proposed legislation  not be married as  it is                                                                   
unreasonable  and  unfair  to penalized  districts  that  are                                                                   
crowded, while sending  money to districts that are  not.  He                                                                   
believed that crowding is the  single most important issue in                                                                   
the classroom.                                                                                                                  
                                                                                                                                
1:58:19 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer understood  that the original bill  did have a                                                                   
70/30 change and  that the proposed committee  substitute did                                                                   
include the ISER study.  He requested  that Co-Chair Chenault                                                                   
address the changes.                                                                                                            
                                                                                                                                
Co-Chair Chenault apologized for  "hi jacking" Representative                                                                   
Gatto's bill.   He noted for  the record that  he understands                                                                   
the need for  the Mat-Su school district and  their expanding                                                                   
population.    He  referenced   the  inequities  in  his  own                                                                   
district  and agreed with  the inequities  resulting  from SB                                                                   
36.   He  pointed  out that  his  own district  suffers  huge                                                                   
concerns with  the cut backs that have  dramatically affected                                                                   
the  district.   He added  that  his district  has a  nursing                                                                   
option  only one  time per  week; there  are no  kindergarten                                                                   
aids,  and that  most  of the  schools  have between  400-500                                                                   
students.   Co-Chair  Chenault  questioned  how the  inequity                                                                   
problems could be fixed statewide.                                                                                              
                                                                                                                                
2:02:17 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  agreed that  the proposed scenario  is not                                                                   
the right answer and stressed  that every study has looked at                                                                   
cost differentials; they are all  are flawed.  Everything has                                                                   
been postponed and the school districts can no longer wait.                                                                     
                                                                                                                                
2:03:28 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  agreed  that  taking money  away  from  a                                                                   
school  district,   forces  that  district  to   become  more                                                                   
efficient.   Because his  district has  become so  efficient,                                                                   
they have been penalized.  SB 36 is flawed.                                                                                     
                                                                                                                                
2:07:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault pointed out  that the Kenai School District                                                                   
is composed  of both urban and  rural schools.  The  time has                                                                   
come to  fix these  problems and  HB 13  is the beginning  of                                                                   
that fix.   Legislators  must come  together to determine  an                                                                   
agreement regarding the issues.                                                                                                 
                                                                                                                                
2:08:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault hoped that HB  13 could make it through the                                                                   
House  and  Senate  and  become  a  vehicle  for  opening  up                                                                   
discussion on these issues.                                                                                                     
                                                                                                                                
2:09:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  understood that  the change made  by Co-Chair                                                                   
Chenault was to Section 3.  Co-Chair Chenault said yes.                                                                         
                                                                                                                                
2:09:17 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  acknowledged  that  the ISER  report  was                                                                   
added to  the original bill  and he thought  it would  be the                                                                   
fairest way to make a difference.  It would provide a four-                                                                     
year phase in beginning this year.  It would:                                                                                   
                                                                                                                                
   ·    Help the State's budget process,                                                                                        
   ·    Allows districts to determine their costs; and                                                                          
   ·    Allow time for legislative committees to determine                                                                      
        if the numbers were correct.                                                                                            
                                                                                                                                
Co-Chair  Chenault  noted  support  for  the  original  bill,                                                                   
realizing there  are other  districts with similar  concerns.                                                                   
He  emphasized   that  these   statewide  problems   must  be                                                                   
addressed.                                                                                                                      
                                                                                                                                
2:11:03 PM                                                                                                                    
                                                                                                                                
EDDY JEANS, DIRECTOR, EDUCATION  SUPPORT SERVICES, DEPARTMENT                                                                   
OF  EDUCATION AND  EARLY DEVELOPMENT,  noted  that the  total                                                                   
cost  of ISER  proposed  differential  would  be $82  million                                                                   
dollars.                                                                                                                        
                                                                                                                                
2:12:03 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer understood  that Anchorage  would remain  the                                                                   
same for  all four years.   Mr. Jeans  stated that  Section 3                                                                   
would phase  in the  cost differential  recommended  by ISER,                                                                   
over a four-year period.  Doing  the phase-in, there would be                                                                   
an  annual   cost  of  approximately  $20   million  dollars.                                                                   
Anchorage is at zero because it acts as the baseline.                                                                           
                                                                                                                                
2:12:57 PM                                                                                                                    
                                                                                                                                
Representative Hawker requested  backup for the fiscal impact                                                                   
to the individual  schools districts.  Mr. Jeans  said it was                                                                   
not available.                                                                                                                  
                                                                                                                                
Representative  Hawker asked the  funding level base  for the                                                                   
$82  million dollars.   Mr.  Jeans  replied it  was based  on                                                                   
student allocation,  A.S. 4576.  Representative  Hawker asked                                                                   
the  consequences  of  increasing  that amount.    Mr.  Jeans                                                                   
replied it would be approximately $90 million dollars.                                                                          
                                                                                                                                
2:14:07 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  inquired if  there  would  be a  hold                                                                   
harmless for those  communities close to the  baseline factor                                                                   
or would there  be redistribution.  Mr. Jeans  stated that if                                                                   
the cost differentials  were implemented, without  the fiscal                                                                   
note being  adopted, there would  be redistribution  based on                                                                   
the  A.S. 4576,  prorating  the  student allocation  down  to                                                                   
equal the differentials.                                                                                                        
                                                                                                                                
Representative  Hawker questioned the  cost to the  Fairbanks                                                                   
School district.   Mr.  Jeans said it  would depend  if there                                                                   
were   a    full   implementation    or   graduated    scale.                                                                   
Representative  Hawker asked about  the full  implementation.                                                                   
Mr.  Jeans  did   not  have  that  number  available.     The                                                                   
redistribution,  if held  to A.S.  4576 appropriation  level,                                                                   
would have  an adverse  effect to  the Anchorage,  Fairbanks,                                                                   
Mat-Su, Ketchikan and Juneau School Districts.                                                                                  
                                                                                                                                
Representative   Hawker  stated  for   the  record   that  he                                                                   
associated  himself with  the  frustrations  recorded by  Co-                                                                   
Chair Chenault,  however,  proposing an  approach as  done by                                                                   
the Chair,  troubled him.   Solving problems by  taking money                                                                   
from one  school district and giving  it to another  is not a                                                                   
good model.                                                                                                                     
                                                                                                                                
2:16:13 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault asked  if the State  continues to  bump-up                                                                   
the student  base allocation, what  would happen.   Mr. Jeans                                                                   
explained that  the proposal would  adjust the  existing cost                                                                   
differential by  one quarter of  the difference.   That would                                                                   
have an  annual cost  of approximately  $20 million  dollars.                                                                   
The  $20 million  would be  in  addition to  the $70  million                                                                   
dollars  currently  being  considered   under  HB  1  at  the                                                                   
discussed  level.   The  total  increase  to schools  in  the                                                                   
current  year if both  bills passed,  would be  approximately                                                                   
$90  million  dollars.    All  school  districts  would  have                                                                   
increased funding under that scenario.                                                                                          
                                                                                                                                
2:18:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault asked if school  funding was increased next                                                                   
year  by  $70 million  dollars  would  all  school  districts                                                                   
benefit.   Mr. Jeans explained  that the manner in  which the                                                                   
bill is currently  structured, the adjustment  would be built                                                                   
into  the base  next year.   If  the  Legislature elected  to                                                                   
increase  the base  student  allocation,  that would  provide                                                                   
additional  resources  to  all school  districts  across  the                                                                   
State.                                                                                                                          
                                                                                                                                
Co-Chair Meyer  pointed out  that SB  155 includes  the 70/30                                                                   
program.  Mr. Jeans  advised that SB 155 is  a grant program.                                                                   
Under  the Department's  school  construction grant  program,                                                                   
there is a participating share.   For the larger communities,                                                                   
their local match is 30%.  Similar  rules apply, however, the                                                                   
difference is, under  SB 155, the State is  providing for the                                                                   
grant  to 70%;  under  the  debt reimbursement  program,  the                                                                   
voters  would  need to  approve  the  project for  the  bonds                                                                   
issued.                                                                                                                         
                                                                                                                                
2:21:32 PM                                                                                                                    
                                                                                                                                
In response  to a  query by Representative  Kelly,  Mr. Jeans                                                                   
understood that Kenai would experience a small drop.                                                                            
                                                                                                                                
2:22:42 PM                                                                                                                    
                                                                                                                                
Representative  Joule asked  why the  original bill  language                                                                   
had been deleted allowing for  the Rural Education Attendance                                                                   
Area (REAA) bonding.  Co-Chair Chenault did not know.                                                                           
                                                                                                                                
Representative  Joule  voiced his  concern  with  SB 155  and                                                                   
major  maintenance with  comparison  to HB  13, which  allows                                                                   
districts some construction costs.   The contingency language                                                                   
allows the  REAA's to  address new  school construction.   He                                                                   
said he would address those concerns with an amendment.                                                                         
                                                                                                                                
2:25:03 PM                                                                                                                    
                                                                                                                                
Representative Hawker raised concerns  regarding the basis of                                                                   
the numbers.  He noted that the  Legislative Budget Committee                                                                   
(LBA)  Committee  had contracted  for  the  air report.    He                                                                   
pointed out  that he was disappointed  with the flaws  in the                                                                   
ISER   evaluation   process.      To   determine   the   cost                                                                   
differentials,  ISER made  a judgmental  determination.   The                                                                   
reason  that  a  teacher  would   accept  a  job  in  certain                                                                   
locations is #5 on the teacher's lists.                                                                                         
                                                                                                                                
Representative Gatto remembered  the study, pointing out that                                                                   
salaries  were not  #1.   Representative  Hawker pointed  out                                                                   
that was one  of the driving factors  in the ISER study.   He                                                                   
indicated  he was  troubled with  the proposed  numbers.   He                                                                   
believed   that  the   closer   the  decision   was  to   the                                                                   
Legislature, the  better that decision could  be, looking for                                                                   
equivalency to level the playing field.                                                                                         
                                                                                                                                
2:30:35 PM                                                                                                                    
                                                                                                                                
Representative Croft  commented on the process  that occurred                                                                   
with passage of SB 36 seven years  ago.  He noted that he was                                                                   
the only  legislator from Anchorage  or Fairbanks  that voted                                                                   
against  SB 36.   That bill,  the education-funding  formula,                                                                   
was based  on false information.   The legislation  concluded                                                                   
that it cost  no more to put  a teacher in rural  Alaska than                                                                   
it does in  Anchorage.  That was  and still is false.   There                                                                   
were other  falsehoods in  the premise  of SB  36.   The ISER                                                                   
study  asked the correct  questions  by asking  how to  get a                                                                   
teacher out  to the village  area.  The  ISER puts  the State                                                                   
closer to the  truth regarding those costs.   To pretend that                                                                   
it does not does cost more to  have a teacher in rural Alaska                                                                   
is not true and does an injustice  to many of the students of                                                                   
the State.                                                                                                                      
                                                                                                                                
2:33:53 PM                                                                                                                    
                                                                                                                                
Representative  Hawker added  that the  ISER study based  its                                                                   
conclusions on  questions.  It  was acknowledged in  the ISER                                                                   
report that they  did not address whether  additional funding                                                                   
would result in the districts having additional personnel.                                                                      
                                                                                                                                
2:34:57 PM                                                                                                                    
                                                                                                                                
Representative  Kelly was concerned  with what was  happening                                                                   
in Co-Chair Chenault's  district but wanted to  know that the                                                                   
legislation would "make sense"  regarding cost differentials.                                                                   
                                                                                                                                
2:37:36 PM                                                                                                                    
                                                                                                                                
Representative Joule  stated that he would have  an amendment                                                                   
regarding  the contingent  effect  of the  needed  conforming                                                                   
sections for appropriations in the REAA's.                                                                                      
                                                                                                                                
HB 13 was HELD in Committee for further consideration.                                                                          
                                                                                                                                
                                                                                                                                
AT EASE:       2:39:22 PM                                                                                                     
RECONVENE:     2:43:45 PM                                                                                                     
                                                                                                                                
HOUSE BILL NO. 53                                                                                                             
                                                                                                                                
     An  Act relating  to  child-in-need-of-aid  proceedings;                                                                   
     amending  the  construction  of statutes  pertaining  to                                                                   
     children  in  need  of  aid;  relating  to  a  duty  and                                                                   
     standard of care for services  to children and families;                                                                   
     amending  court  hearing   procedures  to  allow  public                                                                   
     attendance    at    child-in-need-of-aid    proceedings;                                                                   
     establishing a  right to a trial by jury  in termination                                                                   
     of  parental  rights  proceedings;   reestablishing  and                                                                   
     relating to state and local  citizens' review panels for                                                                   
     certain  child custody  matters;  amending  the duty  to                                                                   
     disclose information  pertaining to  a child in  need of                                                                   
     aid; establishing a distribution  age for permanent fund                                                                   
     dividends  held in trust  for a  child committed  to the                                                                   
     custody   of  the  Department   of  Health   and  Social                                                                   
     Services;  mandating  reporting  of  the  medication  of                                                                   
     children  in state  custody; prescribing  the rights  of                                                                   
     grandparents related to child-in-  need-of-aid cases and                                                                   
     establishing  a  grandparent  priority for  adoption  in                                                                   
     certain child- in-need-of-aid  cases; modifying adoption                                                                   
     and placement  procedures in certain  child-in- need-of-                                                                   
     aid cases;  amending treatment service  requirements for                                                                   
     parents  involved in  child-in-need-of-aid  proceedings;                                                                   
     amending  Rules 3 and  18, Alaska Child  in Need  of Aid                                                                   
     Rules  of  Procedure;  and providing  for  an  effective                                                                   
     date.                                                                                                                      
                                                                                                                                
Representative  Kelly  MOVED  to ADOPT  Amendment  #1,  which                                                                   
would insert  "court records"  on Page 1,  Line 3.   (Copy on                                                                   
File).  Co-Chair Meyer OBJECTED.                                                                                                
                                                                                                                                
RYNNIEVA  MOSS,  STAFF, REPRESENTATIVE  JOHN  COGHILL,  noted                                                                   
that  the amendment  added language  to  the title.   It  was                                                                   
important that the  title states concise.  The  court records                                                                   
were modified in Sections 18 & 19.                                                                                              
                                                                                                                                
2:45:23 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #1 was adopted.                                                                                    
                                                                                                                                
2:45:44 PM                                                                                                                    
                                                                                                                                
Representative Croft  MOVED to ADOPT Amendment  #2.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Representative  Croft explained  the  amendment would  insert                                                                   
language on  Page 5, "to  the fullest extent  consistent with                                                                   
the  child's best  interests".   (Copy  on File).   Ms.  Moss                                                                   
concurred, pointed  out that also had been a  concern for the                                                                   
Department of Law.                                                                                                              
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #2 was adopted.                                                                                    
                                                                                                                                
2:47:05 PM                                                                                                                    
                                                                                                                                
Representative Kelly  MOVED to ADOPT Amendment  #3.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms. Moss explained  that the amendment would  add language on                                                                   
Page  7,  Line  7,  "or  whose   safety  or  welfare  may  be                                                                   
endangered by public release of  such information".  (Copy on                                                                   
File).                                                                                                                          
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #3 was adopted.                                                                                    
                                                                                                                                
2:47:36 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  MOVED to  ADOPT  Amendment #4,  which                                                                   
would delete all  material on Page 7, Lines 14-20.   (Copy on                                                                   
File).  Co-Chair Meyer OBJECTED.                                                                                                
                                                                                                                                
JULIE  LUCKY,  STAFF, REPRESENTATIVE  HAWKER,  explained  the                                                                   
amendment,  recommending a  policy call  by the Committee  to                                                                   
determine  whether  child-in-need-of-aid hearings  should  be                                                                   
open to  the public.  She  resisted sharing that  information                                                                   
and recommended an opinion from Department of Law.                                                                              
                                                                                                                                
2:51:30 PM                                                                                                                    
                                                                                                                                
Representative  Croft  questioned whether  public  disclosure                                                                   
could  be  better.   He  asked  if  confidentiality  protects                                                                   
children.   Ms.  Lucky shared  her opinion  regarding how  it                                                                   
affects children at risk.                                                                                                       
                                                                                                                                
2:52:40 PM                                                                                                                    
                                                                                                                                
Representative  Hawker noted that  the crux of  the amendment                                                                   
addresses  the  language  of  the  bill,  making  the  public                                                                   
hearing   process   open   to   the   public   and   limiting                                                                   
confidentiality.    The  proposed  language  provides  strong                                                                   
"affirmative"  duty  that the  public  may not  disclose  any                                                                   
information from  a hearing by making it a  misdemeanor crime                                                                   
to violate that.  He thought that  could be a bright line for                                                                   
an innocent child.                                                                                                              
                                                                                                                                
2:54:35 PM                                                                                                                    
                                                                                                                                
Ms.  Moss  noted  that  the  Sponsor  was  in  opposition  to                                                                   
Amendment #4.                                                                                                                   
                                                                                                                                
2:55:51 PM                                                                                                                    
                                                                                                                                
JAN  RUTHERDALE, ASSISTANT  ATTORNEY  GENERAL, DEPARTMENT  OF                                                                   
LAW, related her  experience in drafting the  bill during the                                                                   
task  force.   A  lot  of time  was  spent on  balancing  the                                                                   
privacy rights of the child with  the benefits of opening the                                                                   
hearings.     It  was  determined   that  the   provision  of                                                                   
Subsection (F),  Section 10 was  important and  the amendment                                                                   
proposes  to modify  that section.   The  protections of  not                                                                   
disclosing  the child's  name,  plus requiring  the court  to                                                                   
notify  everyone.   Subject to  the  court's sanctions,  that                                                                   
would violate the order.                                                                                                        
                                                                                                                                
Ms. Rutherdale  addressed questions  about the studies.   She                                                                   
said the system  is broken with so little funding  going into                                                                   
that system and by opening the  hearings, would be one way to                                                                   
obtain  necessary changes.   Several  states  have opened  up                                                                   
hearings without  problems.   There are already  restrictions                                                                   
in place.                                                                                                                       
                                                                                                                                
3:00:03 PM                                                                                                                    
                                                                                                                                
JOSH FINK,  (TESTIFIED VIA TELECONFERENCE),  PUBLIC ADVOCATE,                                                                   
OFFICE OF  PUBLIC ADVOCACY  (OPA), ANCHORAGE, concurred  with                                                                   
comments  made by  Ms.  Moss that  they  support the  current                                                                   
language  in  the  bill.    He   related  history  of  public                                                                   
disclosure  and the importance  of that.   He voiced  concern                                                                   
with  Amendment  #4,  indicating that  public  discussion  is                                                                   
important with the need for "side boards".                                                                                      
                                                                                                                                
3:02:02 PM                                                                                                                    
                                                                                                                                
Representative  Croft  referred  to  the last  line  of  that                                                                   
section.  He asked  if a judge had experience  in a case with                                                                   
a reporter  who disclosed information  they should  not have,                                                                   
then  shouldn't  they  retain   the  power  to  exclude  that                                                                   
reporter from subsequent hearings.                                                                                              
                                                                                                                                
3:03:00 PM                                                                                                                    
                                                                                                                                
Ms.   Rutherdale    agreed   with   Representative    Croft's                                                                   
interpretation  that  the court  has  the  power to  close  a                                                                   
hearing.                                                                                                                        
                                                                                                                                
Ms.  Moss inquired  if Representative  Croft had  recommended                                                                   
any language.  Representative  Croft recommended deleting "in                                                                   
the case".                                                                                                                      
                                                                                                                                
3:04:12 PM                                                                                                                    
                                                                                                                                
Representative Hawker WITHDREW Amendment #4.                                                                                    
                                                                                                                                
3:04:35 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  MOVED to  ADOPT  Amendment #5,  which                                                                   
would add  a conceptual amendment  on Page 11 to  Section 16.                                                                   
Co-Chair  Meyer  OBJECTED.    Ms.  Moss  indicated  that  the                                                                   
sponsor would have no problem with that language.                                                                               
                                                                                                                                
3:05:00 PM                                                                                                                    
                                                                                                                                
Ms.  Lucky spoke  to the  duty  of the  Department to  notify                                                                   
adult family members  while termination is happening.   There                                                                   
are  many families  where there  is a  cycle of  abuse.   The                                                                   
amendment would  not preclude the Department  from looking at                                                                   
a family member that might have had trouble in the past.                                                                        
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #5 was adopted.                                                                                    
                                                                                                                                
3:06:11 PM                                                                                                                    
                                                                                                                                
Representative Kelly  MOVED to ADOPT Amendment  #6.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
3:06:49 PM                                                                                                                    
                                                                                                                                
Ms. Rutherdale explained that  she had proposed the language.                                                                   
The  language  clarifies  that   the  parties  including  the                                                                   
parents have access  to agency records.  Currently,  a person                                                                   
would  have to  obtain  a court  order.   She  spoke to  that                                                                   
limitation.                                                                                                                     
                                                                                                                                
Representative Kelly  asked if that had fallen  out of favor.                                                                   
Ms. Rutherdale  replied that the  language has fallen  out of                                                                   
favor, but the amendment has not.                                                                                               
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #6 was adopted.                                                                                    
                                                                                                                                
3:07:53 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to  ADOPT Amendment #7.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms. Rutherdale noted that she  had recommended the amendment,                                                                   
which would delete language on  Page 5, Line 24, "Guardian ad                                                                   
litem  appointed by  the  Court" and  insert  "a guardian  ad                                                                   
litem appointed by the court".                                                                                                  
                                                                                                                                
Representative Croft pointed out the need for renumbering.                                                                      
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #7 was adopted.                                                                                    
                                                                                                                                
3:09:41 PM                                                                                                                    
                                                                                                                                
Representative Kelly  MOVED to ADOPT Amendment  #8.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms.    Rutherdale    explained   the    amendment    provides                                                                   
clarification  that caregivers include  a parent  or guardian                                                                   
of the  child.  The language  covers situations in  which the                                                                   
caregiver  should be  warned  regarding  information.   Often                                                                   
they  have no  connection with  OCS.   The proposed  language                                                                   
covers licensing and day care agencies.                                                                                         
                                                                                                                                
Co-Chair Chenault asked about  warning day care providers and                                                                   
if  the  language  would  apply to  only  licensed  day  care                                                                   
centers.   Ms.  Rutherdale replied  it  applies to  licensing                                                                   
agencies and to any caregiver  of a child.  If the person has                                                                   
control, they need to be warned to protect that child.                                                                          
                                                                                                                                
Co-Chair Chenault  mentioned a  felon doing  day care  in his                                                                   
area and  inquired  if the law  would apply  to that  person.                                                                   
Ms. Rutherdale advised  that OCS would need to  know about it                                                                   
in order  to provide  the warning  and would affect  anything                                                                   
regarding the child's safety.                                                                                                   
                                                                                                                                
Co-Chair  Chenault  explained that  the  man  was accused  of                                                                   
kidnapping 15-years  ago and currently,  he is  providing day                                                                   
care out  of his home.     He  cares for only  four children,                                                                   
under  the  number to  require  a  license.   Ms.  Rutherdale                                                                   
responded it would cover that situation.                                                                                        
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #8 was adopted.                                                                                    
                                                                                                                                
3:14:26 PM                                                                                                                    
                                                                                                                                
Representative Kelly  MOVED to ADOPT Amendment  #9.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms. Moss  indicated that  the amendment  addresses a  concern                                                                   
regarding  multiple  children  with multiple  fathers.    She                                                                   
added that  grammatically  the sentence  needs to delete  the                                                                   
second comma.                                                                                                                   
                                                                                                                                
Representative  Hawker MOVED a  friendly amendment  to delete                                                                   
the second  comma.   There being  NO OBJECTION, Amendment  #9                                                                   
was amended.                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, amended Amendment #9 was adopted.                                                                            
                                                                                                                                
3:15:43 PM                                                                                                                    
                                                                                                                                
Representative Kelly MOVED to  ADOPT Amendment #10.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms.   Moss  explained   that  the   amendment  addresses   an                                                                   
oversight.   Additionally, the  word "member" was left out in                                                                   
the insert of Section ©.                                                                                                        
                                                                                                                                
Representative Hawker  MOVED to AMEND Amendment  #10 with the                                                                   
addition of that language.  There  being NO OBJECTION, it was                                                                   
amended.                                                                                                                        
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, amended Amendment #10 was adopted.                                                                           
                                                                                                                                
3:16:56 PM                                                                                                                    
                                                                                                                                
Representative Kelly MOVED to  ADOPT Amendment #11.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms.  Rutherdale explained  that  the amendment  would  insert                                                                   
language on  Page 20, Line  29, following "child",  "under AS                                                                   
47.10.088(i) or  under (e) of  this section".    The language                                                                   
clarifies  that  the  paragraph   refers  to  both  sections,                                                                   
identifying adoptive placement homes.                                                                                           
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #11 was adopted.                                                                                   
                                                                                                                                
3:18:06 PM                                                                                                                    
                                                                                                                                
Representative Kelly MOVED to  ADOPT Amendment #12.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms. Moss advised that Amendment  #12 would delete language on                                                                   
Page  21, Line  23:  "and shall  be  closed  to the  public",                                                                   
because the  purpose of  the bill is  to open proceedings  to                                                                   
the public.                                                                                                                     
                                                                                                                                
Representative Croft asked if  they were closed to the public                                                                   
before.   Ms. Moss  said no  and that  the language  had been                                                                   
taken from other federal statutes.                                                                                              
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment #12 was adopted.                                                                                   
                                                                                                                                
3:19:06 PM                                                                                                                    
                                                                                                                                
Representative Kelly MOVED to  ADOPT Amendment #13.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Ms. Moss explained that the original  language mandated audio                                                                   
and videotaping.   That could create  a burden for OCS  and a                                                                   
fiscal  note   if  for  some   reason  the  federal   dollars                                                                   
disappear.  The requested language  would be more permissive.                                                                   
                                                                                                                                
TAMMY  SANDOVAL,   (TESTIFIED  VIA  TELECONFERENCE),   ACTING                                                                   
DIRECTOR,  OFFICES OF CHILDREN'S  SERVICES (OCS),  DEPARTMENT                                                                   
OF HEALTH  & SOCIAL SERVICES,  ANCHORAGE, stated that  it was                                                                   
best  practice  to  have  children   audio  and  video  taped                                                                   
whenever possible,  but she  realized that  they do  not hold                                                                   
the purse strings to mandate that.                                                                                              
                                                                                                                                
3:20:08 PM                                                                                                                    
                                                                                                                                
Representative  Croft  said that  under  current  law, it  is                                                                   
permissive.   Amendment #13 establishes  a tiered  system for                                                                   
physical abuse.   Ms. Moss stated  that they did not  add the                                                                   
"shall" on Line 8.                                                                                                              
                                                                                                                                
Representative Croft asked why  that was the best practice in                                                                   
certain cases  not severe  or sexual.   He asked why,  in the                                                                   
sexual  abuse  cases would  they  want  to create  a  "shall"                                                                   
standard.  Ms. Moss concurred  and agreed that would create a                                                                   
check and balance.                                                                                                              
                                                                                                                                
Representative  Croft  asked if  an implication  was  created                                                                   
when using  "may" for severe  physical abuse and  "shall" for                                                                   
sexual abuse.                                                                                                                   
                                                                                                                                
STACY KRALY,  ASSISTANT ATTORNEY GENERAL, DEPARTMENT  OF LAW,                                                                   
agreed with the premise, however,  understood that "shall" on                                                                   
Line 8,  creates a  large fiscal impact  on OCS,  because the                                                                   
mandatory nature creates an obligation.                                                                                         
                                                                                                                                
Ms. Sandoval  added that  adding "shall"  on Line 8  relieved                                                                   
their office.   She agreed,  however, it was  determined that                                                                   
having the  burden of that language  to transport a  child or                                                                   
interviewer would create difficult  costs.  She mentioned the                                                                   
best practice issue could be dealt with internally.                                                                             
                                                                                                                                
3:25:17 PM                                                                                                                    
                                                                                                                                
Representative   Croft  pointed   out   that  the   mentioned                                                                   
situation  could not be  feasible and  thought that  it could                                                                   
result in  trauma to the  child.  He  maintained that  it was                                                                   
"best   practices"   to   audio    and   videotape   victims,                                                                   
particularly sexually violated  victims and that it should be                                                                   
required.    He  suggested  that  on  Lines  5  &  6  of  the                                                                   
amendment, deleting language "alleging  severe physical abuse                                                                   
by a parent or caregiver".  He  preferred that all reports of                                                                   
harm  be  taped  but was  comfortable  with  it  being  those                                                                   
involved with sexual abuse.                                                                                                     
                                                                                                                                
Ms. Kraly  agreed with the  "unless" phrase.   She reiterated                                                                   
that best  practice requires  a fiscal  note.  She  requested                                                                   
time  to determine  if  the change  would  work  with a  1985                                                                   
Supreme Court  case decision,  regarding requirements  that a                                                                   
police officer tape interviews with suspects.                                                                                   
                                                                                                                                
Representative Croft MOVED to  AMEND Amendment #13, Lines 5 &                                                                   
6, deleting  language  "alleging severe  physical abuse  by a                                                                   
parent or  caregiver".  Additionally,  Lines 8 &  9, deleting                                                                   
the phrase, "except  that an interview of a child  may not be                                                                   
videotaped  if"   and  insert  "unless".     There  being  NO                                                                   
OBJECTION to the amended language,  it was incorporated.  Ms.                                                                   
Moss indicated that the sponsor would support that change.                                                                      
                                                                                                                                
Co-Chair  Meyer WITHDREW  his  OBJECTION,  to the  amendment.                                                                   
There being NO further OBJECTIONS,  amended Amendment #13 was                                                                   
adopted.                                                                                                                        
                                                                                                                                
3:30:08 PM                                                                                                                    
                                                                                                                                
                                                            th                                                                  
Representative  Foster mentioned  that 15  years ago,  the 9                                                                    
Circuit Court made a judgment,  which was recently overturned                                                                   
because the right of the accused  was unable to cross-examine                                                                   
the tape.  He did not know the value of the amendment.                                                                          
                                                                                                                                
Ms. Rutherdale  explained that the  purpose of the  taping is                                                                   
to guarantee that  there is accurate information  coming from                                                                   
the child.  Generally, it is not used in court.                                                                                 
                                                                                                                                
3:32:00 PM                                                                                                                    
                                                                                                                                
Representative Kelly MOVED to  ADOPT Amendment #14.  Co-Chair                                                                   
Chenault OBJECTED.                                                                                                              
                                                                                                                                
Ms. Moss  stated that  Amendment #14  defines child  advocacy                                                                   
centers and that  the State directs OCS to  utilize them when                                                                   
available.                                                                                                                      
                                                                                                                                
Co-Chair  Chenault WITHDREW  his OBJECTION.   There  being NO                                                                   
further OBJECTION, Amendment #14 was adopted.                                                                                   
                                                                                                                                
Representative Kelly  pointed out an extra common  on Line 8.                                                                   
He MOVED  to AMEND Amendment #8  by deleting the  comma after                                                                   
"neglect".  There being NO OBJECTION, it was amended.                                                                           
                                                                                                                                
There being  NO further OBJECTION,  amended Amendment  #8 was                                                                   
adopted.                                                                                                                        
                                                                                                                                
3:34:09 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer inquired the change to the fiscal note.                                                                          
                                                                                                                                
3:35:16 PM                                                                                                                    
                                                                                                                                
Ms. Moss  responded that  she could  not provide an  accurate                                                                   
number  at this  time, noting  possible  lost federal  funds.                                                                   
OPA and the Public Defenders Office  have reduced their notes                                                                   
by approximately  66%.  Ms. Moss pointed out  the substantial                                                                   
increase for budgeting of front line workers.                                                                                   
                                                                                                                                
3:36:41 PM                                                                                                                    
                                                                                                                                
Representative  Hawker voiced concern  passing a bill  out of                                                                   
the  House Finance  Committee  that  does not  indicate  true                                                                   
fiscal costs.                                                                                                                   
                                                                                                                                
3:37:43 PM                                                                                                                    
                                                                                                                                
Representative  Croft  referenced Section  38,  Page 21,  the                                                                   
panel  open  to the  public.    He voiced  concern  with  the                                                                   
confidentiality in Section 41  that the members and staff may                                                                   
not disclose.   He  thought that they  ought to have  similar                                                                   
obligations  as  those  listed  in  Section  10.    Ms.  Moss                                                                   
understood that was already covered.                                                                                            
                                                                                                                                
Ms.   Kraly  pointed   out  that   Section   41  contains   a                                                                   
confidentiality  provision that  has a restriction  regarding                                                                   
what can be divulged.  Representative  Croft read Section 41,                                                                   
"The members  and staff of the  State panel do  not discuss".                                                                   
Ms. Kraly  agreed with Representative Croft's  interpretation                                                                   
that if the meetings  were going to be open,  there should be                                                                   
a similar limitation to the individuals that attend.                                                                            
                                                                                                                                
3:40:35 PM                                                                                                                    
                                                                                                                                
Ms.   Moss  said   she   was   under  the   understood   that                                                                   
confidentiality  would be created  for any  child-in-need-of-                                                                   
aid    proceedings.       Representative   Croft    requested                                                                   
reconsideration  on Page  7, regarding  a person attending  a                                                                   
hearing.  Ms.  Rutherdale advised that Page 7  does not apply                                                                   
to the Citizen's Review Panel.                                                                                                  
                                                                                                                                
Representative  Croft MOVED to  ADOPT Amendment #15a  on Page                                                                   
22,  Line 15,  "a person  attending  a hearing  of the  State                                                                   
panel and" before "members".    Ms. Moss indicated that would                                                                   
be okay.                                                                                                                        
                                                                                                                                
There being NO OBJECTION, Amendment #15a was adopted.                                                                           
                                                                                                                                
3:42:27 PM                                                                                                                    
                                                                                                                                
Ms. Sandoval  reported on the  reworking of the  fiscal notes                                                                   
and removing  the jury trial.   The Division has  reduced the                                                                   
notes to just over $200 thousand dollars.                                                                                       
                                                                                                                                
3:43:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer stated  that HB 53 would be  HELD in Committee                                                                   
for further consideration of the fiscal notes.                                                                                  
                                                                                                                                
                                                                                                                                
AT EASE:        3:44:10 PM                                                                                                    
RECONVENE:      3:52:31 PM                                                                                                    
                                                                                                                                
HOUSE BILL NO. 275                                                                                                            
                                                                                                                                
     An Act authorizing financing for certain public                                                                            
     transportation projects; giving notice of and approving                                                                    
     the entry into, and the issuance  of revenue obligations                                                                   
     that   provide    participation   in,    lease-financing                                                                   
     agreements  for   those  transportation   projects;  and                                                                   
     providing for an effective date.                                                                                           
                                                                                                                                
3:53:19 PM                                                                                                                    
                                                                                                                                
*Co-Chair Chenault  MOVED to  ADOPT work draft  #24-LS0902\G,                                                                   
Utermohle,  4/26/05, as the  version of  the bill before  the                                                                   
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
PETE ECKLUND,  STAFF, REPRESENTATIVE  KEVIN MEYER,  explained                                                                   
the  changes.   The original  version of  the bill  allocated                                                                   
$115  million  dollars for  statewide  projects.   Version  G                                                                   
allocates $183  million dollars for projects.   He referenced                                                                   
the handout:  "Grant Anticipation  Revenue Vehicles  (GARVEE)                                                                   
Project List".  (Copy on File).   He pointed out that many of                                                                   
the projects  relate to the gas  pipeline.  The  bond package                                                                   
could  be paid  back over  16 years,  totaling $16.1  million                                                                   
dollars per year, for a total of $257 million dollars.                                                                          
                                                                                                                                
3:55:56 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  related the bill's  history and  concern with                                                                   
using  the  bonds.    He  observed  that  the  Department  of                                                                   
Transportation  & Public  Facilities and  the Alaska  General                                                                   
Contractors would rather use a different funding source.                                                                        
                                                                                                                                
3:57:38 PM                                                                                                                    
                                                                                                                                
JOHN    MACKINNON,    DEPUTY    DIRECTOR,    DEPARTMENT    OF                                                                   
TRANSPORTATION AND  PUBLIC FACILITIES, testified  that GARVEE                                                                   
bonds  "do  not grow  the  program".    He pointed  out  that                                                                   
federal  funding for  the past  18 months has  been a  roller                                                                   
coaster  ride  and  the  Department   is  anxiously  awaiting                                                                   
reauthorization.   GARVEE's are  a great mechanism when there                                                                   
is a growing  program.  Paying out interest  earnings shrinks                                                                   
the  program,   ending  up  with  a  bulge   in  construction                                                                   
activity.    He  maintained  that   using  the  GARVEE  bonds                                                                   
concerns the Department.                                                                                                        
                                                                                                                                
Co-Chair Meyer  pointed out that  some of the  proposed roads                                                                   
were ones supported  by the Governor, noting  that passage of                                                                   
the bill  would allow acceleration  for those projects.   Mr.                                                                   
MacKinnon agreed.                                                                                                               
                                                                                                                                
3:59:58 PM                                                                                                                    
                                                                                                                                
Representative Hawker  recognized the reticence  of using the                                                                   
proposed vehicle.   He asked if  the bill were  passed, would                                                                   
that  be  a single  placement  or  would  it be  placed  into                                                                   
components.   He asked the  schedule of the bond  placements.                                                                   
Mr. MacKinnon did  not know, indicating it would  be the call                                                                   
of the Governor.                                                                                                                
                                                                                                                                
4:01:24 PM                                                                                                                    
                                                                                                                                
Mr. Ecklund  countered  in support of  the GARVEE's  pointing                                                                   
out that in the last two years,  heavy construction inflation                                                                   
has been  growing at  the rate  of 50% per  year.   By moving                                                                   
some  projects up  and  doing  them now,  there  could be  an                                                                   
inflationary  cost savings.    The interest  earnings on  the                                                                   
bonds could be used to offset the State match.                                                                                  
                                                                                                                                
4:02:19 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault asked  what  would happen  with left  over                                                                   
money  from the  allocations.    Mr. MacKinnon  replied  that                                                                   
rarely is  there money left  over on  a project and  the bill                                                                   
provides the ability to allocate for other projects.                                                                            
                                                                                                                                
Co-Chair Chenault commented on  "old" money still waiting for                                                                   
the  General  Obligation  (GO)  allocation.    Mr.  MacKinnon                                                                   
understood that  the policy was  for those monies to  stay on                                                                   
the project  list.  That  money could  be reallocated.   If a                                                                   
GARVEE  package  results, the  Department  will  have to  use                                                                   
"discipline".   If  projects grow  and  exceed the  available                                                                   
number, it  is important that  the Department  remains within                                                                   
budget, otherwise it could drain other projects.                                                                                
                                                                                                                                
4:04:49 PM                                                                                                                    
                                                                                                                                
Representative  Holm was  concerned  that  projects would  be                                                                   
built with  no maintenance funding  placed in.   He requested                                                                   
an analysis  for the  projects and asked  to what  extent the                                                                   
State studies programs.  Mr. MacKinnon  acknowledged that the                                                                   
Department  is  aware  of the  increased  maintenance  costs,                                                                   
however,  those are not  considerations  when the project  is                                                                   
being  built.   Representative  Holm reiterated  his  concern                                                                   
that when projects are placed  on the STIP, they come without                                                                   
a maintenance  factor  built in.   He maintained  that  it is                                                                   
important  to  look at  planning  and  if  there would  be  a                                                                   
significant impact.                                                                                                             
                                                                                                                                
4:07:41 PM                                                                                                                    
                                                                                                                                
Mr.  MacKinnon pointed  out that  it  would be  good to  have                                                                   
information  regarding  the increase  in  annual  maintenance                                                                   
costs.  Representative Holm agreed.                                                                                             
                                                                                                                                
Representative Hawker  asked if there could be  a penalty for                                                                   
early financing or payoff if another  preferred mechanism was                                                                   
chosen instead of the GARVEE.   Mr. McKinnon did not know but                                                                   
indicated that the State could  substitute the federal screen                                                                   
for other sources.                                                                                                              
                                                                                                                                
4:09:40 PM                                                                                                                    
                                                                                                                                
DICK  CATTANACH,   EXECUTIVE  DIRECTOR,  ASSOCIATED   GENERAL                                                                   
CONTRACTORS OF  ALASKA, ANCHORAGE,  clarified that  his board                                                                   
concurred with  the Department's  position against  using the                                                                   
GARVEE bonds.   The  use of the  bonds would  not add  to the                                                                   
highway  program  but rather  would  move projects  from  the                                                                   
future  to the  present.   The  bonds  will  not add  project                                                                   
money, with the exception that  building now might be cheaper                                                                   
than building  in four years  because of inflation.   Issuing                                                                   
GARVEE  bonds means paying  interest and  that interest  must                                                                   
come from  the $6  billion dollar  allocation.  The  interest                                                                   
costs might  offset the inflation  and the State will  end up                                                                   
with  a program  no bigger.    He emphasized  that using  the                                                                   
GARVEE bonds creates an artificial period of time.                                                                              
                                                                                                                                
4:12:07 PM                                                                                                                    
                                                                                                                                
Mr. Cattanach  thought  that the $200  billion dollar  number                                                                   
was  exorbitant.    The projects  would  total  $500  million                                                                   
dollars  for two  years  and contractors  would  ramp up  for                                                                   
that.   Paying off the  bonds, it would  be decreased.   With                                                                   
the  bonds  issued last  year  and  the current  ones,  would                                                                   
result  in a  reduced  program  of $25-$30  million  dollars.                                                                   
Instead of $4 million future dollars,  the end result will be                                                                   
$375 million  dollars  for the  next 14 years.   He  stressed                                                                   
that if  using GARVEE  bonds, the  projects must be  selected                                                                   
carefully.  He reiterated his  opposition to using the bonds.                                                                   
                                                                                                                                
4:14:37 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  commented that  finding  roads  for the  gas                                                                   
pipeline is  important.   He pointed out  that some  of those                                                                   
roads  are  on  that  list  and  there  is  a  need  to  find                                                                   
geographical balance.                                                                                                           
                                                                                                                                
4:15:16 PM                                                                                                                    
                                                                                                                                
Mr. Cattenaugh  argued against using  the GARVEE bonds.   Co-                                                                   
Chair Meyer  acknowledged that  his first  choice was  to use                                                                   
the surplus Amerada Hess general fund money.                                                                                    
                                                                                                                                
4:16:05 PM                                                                                                                    
                                                                                                                                
Representative Hawker asked how  Mr. Cattenaugh would counsel                                                                   
the Committee  for road  maintenance funding for  sustainable                                                                   
planning.    Mr.  Cattenaugh  responded  that  the  Statewide                                                                   
Transportation  Improvement  Projects (STIP)  process  works,                                                                   
acknowledged, it is  flawed.  The STIP is currently  the best                                                                   
process  that  the  State  has.   He  did  not  know  how  to                                                                   
otherwise  respond  to  Representative   Hawker,  reiterating                                                                   
concern  that  GARVEE  bonds  are  not  a  good  option;  the                                                                   
projects  would  be  on  top of  a  highway  program  already                                                                   
costing $400 million dollars.                                                                                                   
                                                                                                                                
4:18:16 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  commented  that  he  really  did  not                                                                   
understand the  STIP process and  asked what would  happen if                                                                   
the State did  have an alternative funding source  and if the                                                                   
STIP  money was  lost  or available  for  rescheduling.   Mr.                                                                   
Cattenaugh  believed   it  would  be  available   as  it  was                                                                   
authorized for Alaska.                                                                                                          
                                                                                                                                
4:19:52 PM                                                                                                                    
                                                                                                                                
TOM   BOUTIN,   (TESTIFIED   VIA    TELECONFERENCE),   DEPUTY                                                                   
COMMISSIONER, DEPARTMENT OF REVENUE,  ANCHORAGE, responded to                                                                   
Representative Hawker's query,  a question for the Department                                                                   
of  Transportation &  Public Facilities.   He  noted that  in                                                                   
2003, the State  did issue GARVEE bonds.  He  understood that                                                                   
for  each GARVEE  qualified project,  the State  goes to  the                                                                   
federal  government  to  obtain  an okay  for  that  project.                                                                   
Therefore, a project that qualifies  for GARVEE, reduces what                                                                   
otherwise  would be  federal  receipts.   If  a project  were                                                                   
funded through some alternative  funding, the State would not                                                                   
be giving up federal money.                                                                                                     
                                                                                                                                
4:22:12 PM                                                                                                                    
                                                                                                                                
Mr. MacKinnon  agreed  and that  it could free  up that  much                                                                   
money.    Representative  Hawker   was  hopeful  to  find  an                                                                   
alternative mechanism  to the  GARVEE process that  would not                                                                   
compromise funding down stream.                                                                                                 
                                                                                                                                
4:23:15 PM                                                                                                                    
                                                                                                                                
Mr. Boutin added that typically  the bonds could be issued so                                                                   
that there could  be an early call provision.   With the call                                                                   
premium,  there  would  be  an issuance  cost  and  the  bond                                                                   
proceeds would not be invested  with high rates on the bonds.                                                                   
There would  be costs in issuing  that debt and  not spending                                                                   
the money.   Using the GARVEE  bonds, there will be  a credit                                                                   
rating concern.                                                                                                                 
                                                                                                                                
4:24:24 PM                                                                                                                    
                                                                                                                                
Representative Holm  asked if the money would be  lost if the                                                                   
projects  were not  completed and  wondered how  many of  the                                                                   
projects  would be  "time trapped"  under  the STIP  process.                                                                   
Mr. MacKinnon  did not know.   He pointed  out that  the list                                                                   
provided  by Co-Chair  Meyer's  staff  included  a number  of                                                                   
those projects.                                                                                                                 
                                                                                                                                
Representative  Holm  commented  on the  problems  associated                                                                   
with the  STIP process in those  areas of the State  that are                                                                   
adversely affected by projects  not funded.  He was concerned                                                                   
with supporting the GARVEE bonding.                                                                                             
                                                                                                                                
4:26:52 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  requested  clarification if  the  STIP                                                                   
list  would use  GARVEE  bond funding.    Mr. MacKinnon  said                                                                   
there would be a $100 million dollars total in that list.                                                                       
                                                                                                                                
4:28:28 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch  noted  in  his area,  there  is  a                                                                   
backlog of projects  and continues to be a  stagnant decline.                                                                   
He thought the State should foster  more private development.                                                                   
He  applauded the  Chairman for  "looking for  every dime  he                                                                   
can", reiterating that his area  is "hurting".  There is high                                                                   
unemployment with access needs for resources and roads.                                                                         
                                                                                                                                
Representative Weyhrauch  referenced the list,  requesting it                                                                   
to  be  amended  to  include  a  road  extension  on  Glacier                                                                   
Highway.   He  emphasized  that SE  Alaska  supports the  gas                                                                   
pipeline.   He acknowledged that  S.E. Alaska is  a different                                                                   
world and  urged that member's  support addressing  the needs                                                                   
in S.E. Alaska, too.                                                                                                            
                                                                                                                                
Mr. Cattenaugh  stated that the  general contractors  are not                                                                   
opposed  to any projects;  however, warned  about moving  the                                                                   
proposed dollars  forward.   He warned  that the State  would                                                                   
not gain anything  that way.  The Alaska  General Contractors                                                                   
(AGC) will support another source  of funding.  Alaska is the                                                                   
only State in the  nation that does not have  a State highway                                                                   
program.  In  most states that program equals  or exceeds the                                                                   
amount received  by the federal  government.  There  are over                                                                   
$10 billion dollars worth of needed  projects.  He encouraged                                                                   
the Legislature re-think outside federal highway dollars.                                                                       
                                                                                                                                
4:32:52 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer indicated  that he would like  to find another                                                                   
source  of  money  for  these   roads;  however,  it  is  not                                                                   
available.   He agreed  that there are  other sources  but to                                                                   
date, they have  not been explored.  In order  to address the                                                                   
priority roads, GARVEE bonds are the only thing available.                                                                      
                                                                                                                                
Representative  Weyhrauch  maintained the  real  need is  for                                                                   
fiscal planning.                                                                                                                
                                                                                                                                
Representative  Hawker  interjected that  last  year, if  the                                                                   
House had  been successful  with the  Senate in adopting  the                                                                   
Percent  of Market  Value (POMV),  a constitutional  spending                                                                   
limit,  and HB  298, then  the  State would  be enjoying  the                                                                   
beginning of fiscal planning.                                                                                                   
                                                                                                                                
4:35:04 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch  MOVED to AMEND  on Page 3,  Line 3,                                                                   
inserting,  "Glacier Highway  road  extension  - $10  million                                                                   
dollars - Section (23)".                                                                                                        
                                                                                                                                
Co-Chair  Meyer  asked  if  that was  on  the  Department  of                                                                   
Transportation  & Public  Facilities'  list.   Mr.  MacKinnon                                                                   
replied that  project could fit  into the list.   There being                                                                   
NO OBJECTION, it was added.                                                                                                     
                                                                                                                                
Representative Foster  MOVED to report CSHB 275  (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  275 (FIN)  was reported  out of  Committee with  a "no                                                                   
recommendation" and with a new  fiscal note by the Department                                                                   
of Revenue.                                                                                                                     
                                                                                                                                
4:38:12 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 67(JUD)(efd fld)                                                                                       
                                                                                                                                
     An Act relating to claims for personal injury or                                                                           
     wrongful death against health care providers.                                                                              
                                                                                                                                
BRIAN HOVE,  STAFF, SENATOR  RALPH SEEKINS,  said that  SB 67                                                                   
would amend  AS 09.55 by  adding a new  section (.549).   The                                                                   
section would  place a two-step limit on  non-economic damage                                                                   
awards  where  health care  providers  render  services.   In                                                                   
cases involving  wrongful death or severe  permanent physical                                                                   
impairment,  damages  would  be   limited  to  $400  thousand                                                                   
dollars,  while all  other  cases would  be  limited to  $250                                                                   
thousand dollars.                                                                                                               
                                                                                                                                
The bill intends to alleviate  a growing, two-pronged, crisis                                                                   
in Alaska's  health care  industry, the  dearth of  liability                                                                   
insurance  carriers and  the declining  number of  practicing                                                                   
physicians.  Liability  insurance is necessary.   Health care                                                                   
providers understand the necessity of liability coverage.                                                                       
                                                                                                                                
Mr. Hove stated that in today's  world, commercial enterprise                                                                   
must have coverage.  Medical malpractice  insurance companies                                                                   
have  found Alaska  uneconomic  and  have left  that  market,                                                                   
which has created  uncertainty and opened the  door to higher                                                                   
rates across the board.                                                                                                         
                                                                                                                                
Mr. Hove  noted every Alaskan  needing medical care  pays the                                                                   
added  costs  of  doing business,  however,  there  are  more                                                                   
serious  concerns with  a  critical shortage  of  physicians.                                                                   
Alaska ranks near the bottom in  the number of physicians per                                                                   
capita nationwide  and that over half of  Alaska's physicians                                                                   
exceed the age  of 50.  Additionally, it is  continually more                                                                   
difficult  to  recruit new  entries  when other  states  have                                                                   
capped  non-economic   damages  at  or  near   $250  thousand                                                                   
dollars.  It is  important to note that SB 67  does not alter                                                                   
awards  for  quantifiable  damages  such as  lost  wages  and                                                                   
medical expenses.   Furthermore, it  is not intended to  be a                                                                   
solution  to the  entire range  of issues  facing the  health                                                                   
care industry today.  However,  it does provide a step in the                                                                   
right  direction   in  terms   of  stabilizing   the  medical                                                                   
insurance market  in Alaska and  boosting efforts  to attract                                                                   
the next generation of physicians.                                                                                              
                                                                                                                                
4:39:59 PM                                                                                                                    
                                                                                                                                
JIM  JORDAN,   EXECUTIVE  DIRECTOR,   ALASKA  STATE   MEDICAL                                                                   
ASSOCIATION (ASMA),  ANCHORAGE, testified  in support  of the                                                                   
legislation.     He  mentioned   the  national  shortage   of                                                                   
physicians.   The  Association of  American Medical  Colleges                                                                   
has  issued an  alert that  it  is time  to ramp  up for  the                                                                   
medical  shortage.    He  emphasized  that  the  shortage  is                                                                   
particularly acute in the Western states.                                                                                       
                                                                                                                                
Mr. Jordan maintained that the  State of Alaska cannot afford                                                                   
the  loss of  another  physician.   There  are  a variety  of                                                                   
reasons that physicians  are being lost.  He felt  that SB 67                                                                   
could aid in recruitment of new  doctors.  Mr. Jordan pointed                                                                   
out that two  of the four insurance companies  that have left                                                                   
the State are still doing business  in Idaho.  Alaska exceeds                                                                   
Idaho's [medical  insurance] rates by  50 percent.   He urged                                                                   
support for SB 67.                                                                                                              
                                                                                                                                
4:47:57 PM                                                                                                                    
                                                                                                                                
Representative  Foster referenced the  materials in  the file                                                                   
which  indicates  that  the  number  of  doctors  across  the                                                                   
country have tripled since 1989.                                                                                                
                                                                                                                                
4:51:20 PM                                                                                                                    
                                                                                                                                
Mr.  Jordan questioned  which  report was  being  referenced.                                                                   
Representative Foster restated  that the report indicates the                                                                   
tripling per  capita.   Mr.  Jordan advised that  the numbers                                                                   
being discussed  are the total number of  physicians licensed                                                                   
in the  State.  It  is important  to take into  consideration                                                                   
how  many doctors  are  actually  practicing.   The  national                                                                   
organization of  State Medical  Boards indicates that  60% of                                                                   
physicians have  licenses in multiple states.   The directory                                                                   
is  the  best   attempt  to  determine  who   the  practicing                                                                   
physicians are.                                                                                                                 
                                                                                                                                
4:53:39 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch   questioned  if  37   doctors  had                                                                   
dropped  out of practice  last  year.  Mr.  Jordan said  yes,                                                                   
primarily due to the number of deployed military positions.                                                                     
                                                                                                                                
Representative   Weyhrauch  asked   if  they  had   purchased                                                                   
malpractice insurance.  Mr. Jordan  believed that the retired                                                                   
military had been covered under the federal torte act.                                                                          
                                                                                                                                
4:56:05 PM                                                                                                                    
                                                                                                                                
MIKE  HAUGEN,  EXECUTIVE  DIRECTOR,   ALASKA  PHYSICIANS  AND                                                                   
SURGEONS,   ANCHORAGE,   testified    in   support   of   the                                                                   
legislation.  Approximately, 60%  of the Alaskan voters favor                                                                   
placing  a  cap  on  non-economic  damages  in  medical  non-                                                                   
practice  cases.   He added that  72% of  the voters  believe                                                                   
that health  care providers are  doing a good  job preventing                                                                   
medical errors and  promoting public safety.   Nearly half of                                                                   
the voters feel  that some physicians have  stopped providing                                                                   
some  complex  or  high-risk   medical  services  to  protect                                                                   
themselves from the  lawsuits.  Voters fear  that the medical                                                                   
non-practice component will impact them directly.                                                                               
                                                                                                                                
                                                th                                                                              
Mr.  Haugen pointed  out  that  Alaska ranks  46   out of  50                                                                   
states in  the number  of per capita  doctors.  Those  states                                                                   
that have enacted  meaningful, non-economic damage  caps have                                                                   
seen an average of about 12% more doctors per capita.                                                                           
                                                                                                                                
Mr. Haugen  argued that the concern  is one of access.   With                                                                   
only two insurance carriers left  in the State, Alaska cannot                                                                   
afford  to  loose one  of  them.   There  are  enough  senior                                                                   
doctors in  the State deciding  to retire from practice.   It                                                                   
is  very difficult  to attract  new doctors  into Alaska  and                                                                   
with just  two carriers, it will  not be getting  any easier.                                                                   
He stated that SB 67 would help address these concerns.                                                                         
                                                                                                                                
4:59:16 PM                                                                                                                    
                                                                                                                                
Representative Holm asked if it  was in the best interest for                                                                   
Alaskans to have young or old  doctors.  Mr. Haugen responded                                                                   
that would depend  on the qualifications and  ability of that                                                                   
physician.   The  doctors coming  out of  medical school  are                                                                   
exposed to the  most current technology and  theory while the                                                                   
older physicians  have experience.   The fact is  that Alaska                                                                   
needs to attract more doctors of all ages.                                                                                      
                                                                                                                                
Representative  Holm   pointed  out  that  it   is  extremely                                                                   
difficult  to  attract  specialists  in Fairbanks.    He  was                                                                   
concerned  that  the  legislation might  attract  only  young                                                                   
doctors.                                                                                                                        
                                                                                                                                
Representative  Holm   referenced  an  article   regarding  a                                                                   
liability  insurance analysis  undertaken by  a group,  which                                                                   
ranks Alaska between  33%-36% nationwide.  Alaska  ranks very                                                                   
low for doing  business and recommended that  torte reform be                                                                   
implemented.                                                                                                                    
                                                                                                                                
5:02:58 PM                                                                                                                    
                                                                                                                                
Mr. Haugen  explained that the  proposed legislation  was not                                                                   
the  ultimate  solution to  the  problem.   He  thought  that                                                                   
eventually, the Legislature could create a better fix to the                                                                    
problem.                                                                                                                        
                                                                                                                                
5:04:59 PM                                                                                                                    
                                                                                                                                
Representative Holm advised that there is no guarantee from                                                                     
any insurance company that they will stay in Alaska either                                                                      
with or without passage of the legislation.                                                                                     
                                                                                                                                
CS SB 67(JUD)(efd fld) was HELD in Committee for further                                                                        
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 5:05 P.M.                                                                                          
                                                                                                                                

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