Legislature(2009 - 2010)HOUSE FINANCE 519

03/26/2010 01:30 PM FINANCE

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Moved Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 26, 2010                                                                                           
                         1:40 p.m.                                                                                              
1:40:53 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Stoltze  called the House Finance  Committee meeting                                                                   
to order at 1:40 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Vice-Chair                                                                                      
Representative Allan Austerman                                                                                                  
Representative Mike Doogan                                                                                                      
Representative Anna Fairclough                                                                                                  
Representative Neal Foster                                                                                                      
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Doug   Wolliver,   Administrative  Attorney,   Alaska   Court                                                                   
System;  Mindy   Lobaugh,  Juneau;  Hannah   McCarty,  Staff,                                                                   
Kerttula;  Diane Barrans,  Executive Director,  Postsecondary                                                                   
Education Commission,  Department of Education;  David Logan,                                                                   
Alaska  Dental  Society;  Tracy   Oman,  Executive  Director,                                                                   
Alaska Optometric Association                                                                                                   
PRESENT VIA TELECONFERENCE                                                                                                    
Jean  Mischel, Attorney,  Legal  Services;  Dr. Mark  Prator,                                                                   
Alaska  Dental  Society;  Nancy  Davis,  Executive  Director,                                                                   
Alaska  Pharmacy   Association;  Barry  Christensen,   Alaska                                                                   
Pharmacy Association                                                                                                            
HB  52         POST-TRIAL JUROR COUNSELING                                                                                      
               HB 52 was REPORTED out of Committee with a                                                                       
               "do pass" recommendation and the previously                                                                      
               published fiscal note: FN2 (CRT)                                                                                 
HB 235         PROF STUDENT EXCHANGE LOAN FORGIVENESS                                                                           
               HB 235 was HEARD and HELD in Committee for                                                                       
               further consideration.                                                                                           
1:40:58 PM                                                                                                                    
HOUSE BILL NO. 52                                                                                                             
     "An Act authorizing psychological counseling for                                                                           
     jurors serving in criminal trials who are traumatized                                                                      
     by graphic evidence or testimony."                                                                                         
Co-Chair Hawker discussed housekeeping.                                                                                         
1:41:41 PM                                                                                                                    
Representative  Beth Kerttula presented  a brief  overview of                                                                   
the legislation.  The bill  would allow  the court  system to                                                                   
offer juror counseling for particularly difficult cases.                                                                        
DOUG   WOLLIVER,   ADMINISTRATIVE  ATTORNEY,   ALASKA   COURT                                                                   
SYSTEM, discussed  the$15,000 fiscal note. He  explained that                                                                   
during  the  process  to  approximate  the  fiscal  note,  he                                                                   
solicited judges,  asking them  how often they  believed that                                                                   
juror counseling  would be needed.  Most judges  offered that                                                                   
they  rarely  saw  cases  where  juror  counseling  would  be                                                                   
necessary,   but   all   the   judges   relayed   that   they                                                                   
occasionally  heard  traumatic   cases.  Several  judges  had                                                                   
revealed  that   they  had  entered   the  jury   room  after                                                                   
deliberation and found jurors who were inconsolable.                                                                            
Co-Chair Hawker  submitted that it  was not possible  to know                                                                   
how much  would be required  for the counseling  program, but                                                                   
it was  certain that the  services compulsory under  the bill                                                                   
would  require  the  court  system to  procure  staff  on  an                                                                   
outside  contractual basis.  Mr. Wolliver  replied that  that                                                                   
was correct.                                                                                                                    
Co-Chair  Hawker   assumed  that   the  fiscal  note   was  a                                                                   
reasonable approximation. Mr. Wolliver replied yes.                                                                             
1:44:39 PM                                                                                                                    
Vice-Chair   Thomas   declared    that   he   supported   the                                                                   
legislation.  He  relayed that  he  would understand  if  the                                                                   
program needed  to request more  funding in the  supplemental                                                                   
Co-Chair Hawker dismissed Mr. Wolliver with appreciation.                                                                       
1:45:34 PM                                                                                                                    
MINDY LOBAUGH, JUNEAU,  read from a prepared  testimony (copy                                                                   
on file):                                                                                                                       
     Mr. Chairman & Members of the Committee, Thank you for                                                                     
this opportunity and all you do for the State of Alaska.                                                                        
     This bill represents a bridge, a bridge that I and                                                                         
many  other  jurors  did  not  have at  the  end  of  a  very                                                                   
traumatic trial.                                                                                                                
      You arrive at the courthouse, given detailed                                                                              
instruction of  what is expected  of you  as a juror  and how                                                                   
the process  of a  trial works.  What the  court system  does                                                                   
not do is transition the juror out of the trial.                                                                                
     It is not uncommon to have major criminal trials run                                                                       
for many  days. I served  as a juror  on the Rachel  Waterman                                                                   
trial 4  years ago and it  lasted approximately 10  days. For                                                                   
me I arrived open  and ready to do my civic  duty as a juror.                                                                   
And for  10 days  prosecutors went  into excruciating  detail                                                                   
to  help the  jurors  relive the  events  of an  unsuspecting                                                                   
mother getting abducted  from her home, tortured  and finally                                                                   
     It was then our duty to determine if the defendant,                                                                        
her  daughter  was  guilty  of   masterminding  this  tragedy                                                                   
against a  woman who was  a pillar of  her community.  By the                                                                   
end of  the trial I  left there as  a victim feeling  closed,                                                                   
mentally  battered  and very  traumatized  by  the burden  of                                                                   
knowledge that I now carried.                                                                                                   
     I am here to tell you the media does not even come                                                                         
close to  covering the  depth of  this trial.  As a  juror we                                                                   
had  access to  piles of  emails detailing  out various  ways                                                                   
these  men planned  to kill  the  mother, physical  evidence,                                                                   
photographs and of course hours of testimony.                                                                                   
     For quite some time during and following that trial                                                                        
eating  for  me  was a  near  impossibility  because  of  the                                                                   
constant nausea I felt.                                                                                                         
     To my friends and family I became a stranger……and each                                                                     
night I prayed myself to sleep.                                                                                                 
     One of my fellow jury mates was pregnant with her                                                                          
second child.  She had shared  her excitement  and ultrasound                                                                   
pictures with us  early on. By the end of the  trial she lost                                                                   
her baby and had to be excused from the trial.                                                                                  
     When this trial ended with a hung jury I turned to the                                                                     
presiding  judge and  ask if the  courts offer  some kind  of                                                                   
counseling  or process  to  help jurors  deal  with all  this                                                                   
traumatizing information? The answer was NO.                                                                                    
     For me it was like having a door slammed in my face.                                                                       
There would be  no help transitioning back to  my life before                                                                   
this trial,  no bridge. Rather  I would have to  move forward                                                                   
with this  dark knowledge  deeply entrenched  in my  mind and                                                                   
the minds of my fellow jurors.                                                                                                  
     It was at this point I felt the court system had                                                                           
failed me as a juror doing my civic duty.                                                                                       
Mr. Chairman,  Members of  the Committee,  Please help  me to                                                                   
build  this  bridge  by  supporting HB  52  Post  Trial  Jury                                                                   
Counseling.  I may not  have found  closure with respects  to                                                                   
this  trial but  maybe you  can  help build  that bridge  for                                                                   
future Jurors doing their civic duty by passing HB 52.                                                                          
Thank  you  so much  for  your  time and  I  am open  to  any                                                                   
questions you may have.                                                                                                         
1:49:44 PM                                                                                                                    
Representative  Kerttula  explained  that a  similar  program                                                                   
had  been instituted  in King  County,  Washington, and  that                                                                   
she had  spoken with  a myriad  of counselors in  researching                                                                   
the bill.                                                                                                                       
1:50:51 PM                                                                                                                    
Representative   Fairclough  wondered   if  counselors   were                                                                   
available  for the  judges  who sat  in  on traumatic  cases.                                                                   
Representative  Kerttula replied that  she did not  think so.                                                                   
She  shared that  while researching  the bill,  the level  of                                                                   
professional trauma  had been highlighted. She  believed that                                                                   
legislation could  be crafted that  could speak to  the needs                                                                   
of courtroom professionals.                                                                                                     
Representative  Fairclough  added  that  the  issue  was  the                                                                   
risk  of   desensitization  among  courtroom   professionals.                                                                   
Representative Kerttula agreed.                                                                                                 
1:51:58 PM                                                                                                                    
Co-Chair Stoltze  asked if the  counseling sessions  would be                                                                   
privileged.   Representative   Kerttula  replied   that   the                                                                   
information  would be  privileged  unless  the client  waived                                                                   
the right to privilege.                                                                                                         
Representative  Salmon  asked  how the  counseling  would  be                                                                   
made  available  to  jurors  who   resided  in  rural  areas.                                                                   
Representative  Kerttula  expected   that  the  court  system                                                                   
would treat  rural and  urban jurors  equally. If  necessary,                                                                   
counselors  would be  flown in  to  rural areas  in order  to                                                                   
provide the service.                                                                                                            
1:53:39 PM                                                                                                                    
HANNAH MCCARTY,  STAFF, KERTTULA, added that  tele-counseling                                                                   
could also be provided as an option in rural areas.                                                                             
Co-Chair  Hawker  noted  that  judges,  as  state  employees,                                                                   
could use  state employment insurance  to pay  for counseling                                                                   
1:54:26 PM                                                                                                                    
Co-Chair Hawker opened public testimony.                                                                                        
Co-Chair Hawker closed public testimony.                                                                                        
Co-Chair  Hawker solicited  further  committee testimony  and                                                                   
Co-Chair  Stoltze MOVED  to  report HB  52  out of  Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
note. There being NO OBJECTION, it was so ordered.                                                                              
HB  52  was  REPORTED  out of  Committee  with  a  "do  pass"                                                                   
recommendation  and  the previously  published  fiscal  note:                                                                   
FN2 (CRT).                                                                                                                      
1:56:33 PM     AT EASE                                                                                                        
1:58:30 PM     RECONVENED                                                                                                     
HOUSE BILL NO. 235                                                                                                            
     "An Act relating to professional student exchange                                                                          
     program   availability    and   conditions    for   loan                                                                   
1:58:54 PM                                                                                                                    
REPRESENTATIVE  CATHY  MUNOZ,  SPONSOR,  testified  that  the                                                                   
bill  would  establish  a  loan   forgiveness  incentive  for                                                                   
Alaskan  students  entering  into  the  fields  of  pharmacy,                                                                   
optometry,  and dentistry.  The bill would  work through  the                                                                   
Western Interstate  Commission for Higher  Education (WICHE),                                                                   
which is  a professional  student exchange program  providing                                                                   
students  in 12 western  states with  access to  professional                                                                   
healthcare  programs   unavailable  in  the   student's  home                                                                   
state. With this  legislation the state would agree  to pay a                                                                   
participation  fee   for  each  student,   thereby  reserving                                                                   
spaces  for Alaskan  students  entering  into the  fields  of                                                                   
pharmacy,  optometry, or dentistry.  Alaska currently  offers                                                                   
no  programs in  the aforementioned  fields.  The bill  would                                                                   
establish  the maximum  cohort  of 60  students  over a  four                                                                   
year period,  five students per  profession, and  15 students                                                                   
per year.  The participation  fee through  WICHE was  $22,700                                                                   
for a dentistry  slot, $15,600 for optometry,  and $6,900 for                                                                   
a pharmacy  slot. A  25 percent  forgiveness incentive  would                                                                   
apply  to students  who return  to Alaska for  at least  five                                                                   
years, and  additional 25 percent  was available  for student                                                                   
that practiced  in underserved  areas of  the state  or areas                                                                   
that accepted Medicaid patients.                                                                                                
Representative  Munoz   continued.  The  standard   repayment                                                                   
period  would be  15 years  and  participants that  qualified                                                                   
could receive  annual credits  on loan balances,  which would                                                                   
result  in  shortening  the repayment  period  or  allow  for                                                                   
reduced monthly  payments. In  FY 15, when repayments  begin,                                                                   
approximately  $40,000  would  be  repaid  within  the  first                                                                   
year.  In FY 16  $116,400 would  be repaid  and within  three                                                                   
years   the  repayment   would   increase  to   approximately                                                                   
$420,000  annually.  She  stressed   that  the  three  fields                                                                   
identified   in   the   bill    remained   as   educationally                                                                   
underserved professions  in the  state. She urged  support of                                                                   
the  legislation  as a  vehicle  to connect  motivated  young                                                                   
Alaskans with job opportunities in fields of high demand.                                                                       
2:03:10 PM                                                                                                                    
Co-Chair  Hawker  felt that  the  language  of the  bill  was                                                                   
unclear concerning  the 60 students. He said that  he had not                                                                   
seen any  reference to  the five years  of 15 students  each.                                                                   
He noted Page 1, Lines 6, 7 and 8 of the bill:                                                                                  
     "the  Alaska   Commission  on  Postsecondary   Education                                                                   
     shall provide  adequate funding for not fewer  than five                                                                   
     students  to attend  four-year programs  in each  of the                                                                   
     following fields:"                                                                                                         
Representative  Hawker suggested that  the language  could be                                                                   
further clarified.                                                                                                              
Representative  Munoz  replied  that  the  intention  was  to                                                                   
allow  for five  students per  category, per  year, for  four                                                                   
years.  She  agreed  that  the bill  should  be  amended  for                                                                   
Co-Chair  Hawker expressed  confusion  with  the language  in                                                                   
Section  4; Loan  forgiveness  for program  participants.  He                                                                 
queried  why the  legislature should  appropriate funds  that                                                                   
would enable  the state  to forgive debt  for loans  that the                                                                   
state had granted to Alaskan students.                                                                                          
2:06:04 PM                                                                                                                    
Representative  Munoz  responded   that  the  intent  of  the                                                                   
legislation was  to have 5 percent  of the loan  forgiven for                                                                   
each year  that the  student lived  in Alaska upon  returning                                                                   
to the state.   If the student were to reside  in-state for a                                                                   
minimum  of five years  then they  would qualify  for the  25                                                                   
percent  forgiveness.   If  they  were  to  practice   in  an                                                                   
underserved  area, or if  five percent  of the gross  billing                                                                   
of their  practice was for  Medicaid patients,  an additional                                                                   
25  percent forgiveness  could  be granted.  The  percentages                                                                   
applied to  the state's participation  fee, and the  funds to                                                                   
feed  the  program  would be  appropriated  annually  by  the                                                                   
Co-Chair  Hawker restated  his question.  He understood  that                                                                   
the state  was going  to need  to appropriate  more money  to                                                                   
forgive the loans.                                                                                                              
2:07:51 PM                                                                                                                    
Representative  Munoz thought that  the language  referred to                                                                   
the funds  appropriated  initially for  the program.  She did                                                                   
not believe  that the intention  was the forgiveness,  but to                                                                   
fund the initial participation fee.                                                                                             
2:08:50 PM                                                                                                                    
JEAN     MISCHEL,    ATTORNEY,     LEGAL    SERVICES     (via                                                                   
teleconference),  believed  that  the  money  for  the  loans                                                                   
originally  came  from  the  Student  Loan  Corporation,  and                                                                   
those funds were  was not considered to be part  of the state                                                                   
general  fund, once  deposited  into the  student loan  fund.                                                                   
Once   deposited,    the   funds   were   not    subject   to                                                                   
appropriation,  but  the  loan  forgiveness  portion  was  an                                                                   
asset of the  state that would require an  appropriation back                                                                   
into the fund.                                                                                                                  
Co-Chair   Hawker  said   that  if  there   was  a   required                                                                   
appropriation  there  should  be language  to  authorize  the                                                                   
debt  forgiveness.  He  requested  further  research  on  the                                                                   
2:10:44 PM                                                                                                                    
Representative  Foster requested the  definition of  the word                                                                   
"underserved"  as defined  by  the Department  of Health  and                                                                   
Social Services (HESS).                                                                                                         
Representative  Munoz relayed that  the definition  was based                                                                   
on  whether or  not a  community  had an  adequate number  of                                                                   
practitioners in  a certain category  of service to  care for                                                                   
individuals   in    the   community.   The    definition   of                                                                   
"underserved"  was not  meant  to encompass  all  communities                                                                   
that were considered rural.                                                                                                     
KENDRA  KLOSTER,  STAFF,  REPRESENTATIVE   MUNOZ  added  that                                                                   
Ketchikan  had  been  defined as  underserved  because  there                                                                   
were only two dentists that served the entire community.                                                                        
Representative  Foster wondered  who  made the  determination                                                                   
as  to  whether  a community  was  underserved.  Ms.  Kloster                                                                   
replied that underserved areas were determined by HESS.                                                                         
2:12:57 PM                                                                                                                    
Representative  Gara  shared   that  the  bill  introduced  a                                                                   
mandate that  was not on a  state agency. He stated  that the                                                                   
Alaska  Commission on  Postsecondary Education  (ACPE)  was a                                                                   
quasi-state   agency  because   their   decisions  were   not                                                                   
determined  by  the  governor.  He thought  that  this  point                                                                   
could  help  to  clarify  the  language  pertaining  to  loan                                                                   
Co-Chair Hawker  replied that the language would  be examined                                                                   
Vice-Chair  Thomas  requested  the definition  for  the  word                                                                   
"resident",  as  it pertained  to  the  bill.  Representative                                                                   
Munoz replied  that legally there  was a definition  that was                                                                   
used  by the  ACPE to  qualify  for student  loans, and  that                                                                   
that definition would  be used. She believed  that a resident                                                                   
was an individual  that had lived in the state  for a minimum                                                                   
number of months.                                                                                                               
Vice-Chair  Thomas  shared  that  the  University  of  Alaska                                                                   
board  of regents  defined a  resident  as a  person who  had                                                                   
received the permanent  fund and had lived in-state  for five                                                                   
years.  He  pointed  out  to the  committee  that  under  the                                                                   
governor's scholarship  bill, and HB 235, residency  could be                                                                   
established  after  30  days.  He argued  that  if  a  person                                                                   
wished  to receive  the benefits  under  the legislation  the                                                                   
definition  should   be  more   stringent.  He  feared   that                                                                   
students from  out of  state would default  on the  loan, and                                                                   
simply leave the state.                                                                                                         
2:16:50 PM                                                                                                                    
Representative  Munoz replied  that  she was  not opposed  to                                                                   
writing stricter  residency requirements  into the  bill. She                                                                   
added  that if recipients  of  the loans left  the state  and                                                                   
did  not  come  back  they would  not  be  eligible  for  the                                                                   
forgiveness  benefit.  She stressed  that  the  loan and  the                                                                   
forgiveness  applied to  the state's  participation fee,  not                                                                   
to the full tuition requirements of the student.                                                                                
Vice-Chair Thomas  suggested adding  a default clause  to the                                                                   
bill. He  asked who determined  the three professions  listed                                                                   
in the legislation.                                                                                                             
Representative Munoz  replied that they were fields  that did                                                                   
not  have   programs  offered   in  Alaska  or   out-of-state                                                                   
incentive programs for Alaskan students.                                                                                        
2:20:12 PM                                                                                                                    
Vice-Chair  Thomas thought  that nursing  should be  included                                                                   
in the  professions listed in  the legislation. He  had heard                                                                   
that  the  university  in  southeast   only  allowed  for  10                                                                   
students  to   enter  the  nursing  program,   forcing  other                                                                   
students to  seek training out-of-state. Ms.  Kloster replied                                                                   
that  nursing  was  not included  under  the  WICHE  program,                                                                   
which is  way it was not  included in the professions  listed                                                                   
in the bill.                                                                                                                    
Vice-Chair   Thomas  asked   if   pharmacy,  optometry,   and                                                                   
dentistry were the  only professions identified  in the WICHE                                                                   
program.  Ms.   Kloster  answered  that  the   WICHE  program                                                                   
included;   dentistry,   occupational   therapy,   optometry,                                                                   
pharmacy,   physical   therapy,  physician   assistant,   and                                                                   
Vice-Chair  Thomas wondered  why only  three of the  programs                                                                   
under  WICHE had  been identified  in the  bill. Ms.  Kloster                                                                   
replied that the  three fields had been identified  as fields                                                                   
where students  were traveling out out-of-state  for training                                                                   
and  not  returning  to  Alaska.   Research  had  shown  that                                                                   
programs  for the  remaining  fields recognized  under  WICHE                                                                   
were  already available  through  the University  of  Alaska.                                                                   
Additionally,  there  was  an  occupational  therapy  program                                                                   
available  through Creighton University,  via the  University                                                                   
of Alaska Anchorage.                                                                                                            
2:22:56 PM                                                                                                                    
Representative Austerman  referred back to Page 1,  Line 7 of                                                                   
the  bill. He  assumed  that the  language  meant that  money                                                                   
would  be put forward  for a  minimum of  five students,  but                                                                   
requested  further clarification  of the language.  Moreover,                                                                   
he wondered  if any one  of the three identified  occupations                                                                   
were  to be  offered in-state,  would the  state continue  to                                                                   
fund sending students out-of-state for training.                                                                                
Representative  Munoz  hoped  that  once  the  fields  became                                                                   
better represented  in the state,  and the underserved  areas                                                                   
were provided  for, the legislature  would cease to  fund the                                                                   
program. She  asserted that  at the  present there  was great                                                                   
need   in   the   three   fields    throughout   the   state.                                                                   
Representative  Munoz   added  that  an   annual  legislative                                                                   
review  of the  program, through  the  budget process,  would                                                                   
determine existence of the program in the future.                                                                               
2:25:12 PM                                                                                                                    
Representative  Salmon  thought  that the  fields  under  the                                                                   
program should be  expanded to other medical  occupations. He                                                                   
suggested  including   all  seven  fields   identified  under                                                                   
Representative  Munoz stated that  there were several  of the                                                                   
occupations  already   offered  through  the   University  of                                                                   
Alaska. The  two fields  not offered  in-state that  were not                                                                   
included in  the legislation, podiatry and  physical therapy,                                                                   
could be added  to the legislation. She said  that only three                                                                   
were chosen in the attempt to be fiscally conservative.                                                                         
2:28:23 PM                                                                                                                    
Representative Gara  understood that the program  was limited                                                                   
to  students   who  attended   WICHE  schools  for   training                                                                   
programs  that were  not available  in-state.  He noted  that                                                                   
the  state  had  a  shortage   of  nurses  and  primary  care                                                                   
physicians.  He wondered  why there was  no loan  forgiveness                                                                   
for   the  loans   taken   out   to  pursue   those   fields.                                                                   
Representative  Munoz   replied  that  nursing   and  primary                                                                   
physician  programs  were not  an  option through  the  WICHE                                                                   
program.  However, the  state had a  successful program  with                                                                   
the University  of Washington  of which  more slots  could be                                                                   
added to expand  opportunities for Alaskans. She  agreed that                                                                   
the state  needed to increase  the educational  opportunities                                                                   
for nursing in the state.                                                                                                       
Representative  Gara understood the  need to keep  the fiscal                                                                   
note  conservative.  He  wondered  why  the  forgiveness  was                                                                   
limited  to students that  attended schools  under the  WICHE                                                                   
program.  Representative Munoz  shared  that the  legislation                                                                   
would authorize  funding for  the participation fees  through                                                                   
the WICHE  program. It  did not address  the tuition  fees at                                                                   
those institutions.  She reiterated  that the bill  addressed                                                                   
the  participation fee  in  the WICHE  program,  and not  the                                                                   
actual tuition.  She explained that  the WICHE program  was a                                                                   
compact  of  state;  the  fees   were  negotiated  that  then                                                                   
reserved  a certain  number of  slots for  students from  the                                                                   
participating  12  states. In  the  case  of Alaska,  if  the                                                                   
state paid  the fees, a maximum  cohort of 60 slots,  for the                                                                   
three fields, would be secured.                                                                                                 
Representative   Gara  felt   that   students  were   already                                                                   
receiving a  discounted education through the  WICHE program.                                                                   
He  wondered  why  a  student,  studying  one  of  the  three                                                                   
fields,  could not  attend  the school  of  their choice  and                                                                   
receive the  same amount of loan forgiveness.  Representative                                                                   
Munoz  responded  not sure  the  requirement of  attending  a                                                                   
WICHE school  could be  removed. She did  not think  that the                                                                   
same  program  could   be  negotiated  with  a   school  like                                                                   
Stanford or Harvard.                                                                                                            
2:34:03 PM                                                                                                                    
Representative  Kelly queried the  intent of the  language on                                                                   
page 2, Line  9. Ms. Kloster responded that  the language was                                                                   
on par  with the  Washington, Wyoming,  Alaska, Montana,  and                                                                   
Idaho  (WWAMI)  program,  setting   the  terms  of  the  loan                                                                   
repayment   on  the   same  interest   rate   as  the   other                                                                   
participating states.                                                                                                           
2:35:17 PM                                                                                                                    
DR.    MARK    PRATOR,    ALASKA    DENTAL    SOCIETY    (via                                                                   
teleconference),  testified in support  of HB 235.  He stated                                                                   
that  there were  44 states  that had  incentive programs  to                                                                   
bring students  back to high need  areas of their  home state                                                                   
after  graduation. He  stressed the  importance of  providing                                                                   
incentives  for   students  training  in  the   three  fields                                                                   
identified in  the bill to return  to Alaska. He said  that a                                                                   
new  generation of  dentists,  optometrists, and  pharmacists                                                                   
was  becoming more  necessary to  serve people  in high  need                                                                   
areas.  He  relayed  that  the  average  tuition  for  dental                                                                   
schools ran between  $50,000 and $100,000 per  year, and that                                                                   
the  loan forgiveness  program  would be  helpful in  keeping                                                                   
trained professionals in-state.                                                                                                 
2:39:14 PM                                                                                                                    
Representative  Salmon shared that  he was billed  $5,000 for                                                                   
his  last  hour  and  30 minute  visit  to  the  dentist.  He                                                                   
wondered why such  a lucrative profession would  require loan                                                                   
Vice-Chair  Thomas wondered  how many  dentists retired  each                                                                   
year in Alaska.  Dr. Prator replied that he did  not know. He                                                                   
related  that there  were approximately  300 active  dentists                                                                   
in Alaska,  a large  percentage of which  were over  50 years                                                                   
old.  He  stressed  the importance  of  getting  the  Alaskan                                                                   
residents who  leave the state  for training in  dentistry to                                                                   
return  to  the state  to  practice.  He believed  that  loan                                                                   
forgiveness was the key.                                                                                                        
Vice-Chair  Thomas  offered that  most  of southeast  was  an                                                                   
"economy  free   zone"  that   did  not  attract   healthcare                                                                   
2:42:13 PM                                                                                                                    
Representative  Gara understood that  without the  passing of                                                                   
the legislation,  the WICHE  discount  would not be  extended                                                                   
to Alaskan  students studying  dentistry. Dr. Prator  replied                                                                   
in the affirmative.                                                                                                             
2:43:48 PM                                                                                                                    
Representative Joule  wondered the committee would  hear from                                                                   
a representative from the Department of Education.                                                                              
Representative  Kelly asked if  the legislature approved  the                                                                   
loan forgiveness  component, the  discount through  the WICHE                                                                   
program  would be  included  also.  Dr. Prator  thought  that                                                                   
that was correct.                                                                                                               
2:45:15 PM                                                                                                                    
Vice-Chair  Thomas  asked how  many  dentists  in Alaska  had                                                                   
graduated from  schools participating  in the WICHE  program.                                                                   
Dr.  Partor  did  not  know.   He  shared  that  he  had  not                                                                   
graduated  from   a  WICHE  school,  although   he  had  been                                                                   
presented  with the opportunity  to attend  one. He  returned                                                                   
to Alaska because he was born and raised here.                                                                                  
2:46:19 PM                                                                                                                    
DIANE  BARRANS,  EXECUTIVE  DIRECTOR,  ALASKA  COMMISSION  ON                                                                   
POSTSECONDARY EDUCATION, DEPARTMENT  OF EDUCATION, provided a                                                                   
historical perspective  on the Professional  Student Exchange                                                                   
Program, which  was the  program HB  235 attempted  to amend.                                                                   
The  Professional  Student  Exchange  Program  (PSEP)  was  a                                                                   
consortia approach  to reducing  the state's need  to develop                                                                   
high cost  graduate education  programs.  From 1955 to  1992,                                                                   
the  legislature  annually  appropriated   general  funds  to                                                                   
support Alaskans going into any  one of 14 graduate fields of                                                                   
study. The program  was phased out in the mid-90s  because of                                                                   
the cost  associated with it.  In late 1990s  the legislature                                                                   
approved a bill that allowed the  student loan corporation to                                                                   
begin to lend  the support fee to Alaska  participants, under                                                                   
certain circumstance. Under the  current terms of the program                                                                   
the commission identified which  of the fields of study would                                                                   
be  included under  the  loan  through a  3  prong test:  the                                                                   
program  of study  is not  available  in Alaska,  there is  a                                                                   
workforce  need for the  profession in  Alaska, and  that the                                                                   
income associated with entering  the profession is sufficient                                                                   
to cover  the debt. There were  a larger number of  fields in                                                                   
the  student exchange  program  than Alaska  participated  in                                                                   
including;   dentistry,   medicine,   occupational   therapy,                                                                   
optometry, osteopathy, pharmacy,  physical therapy, physician                                                                   
assistant,  podiatry,  and veterinary  medicine.  The  fields                                                                   
that were listed in the legislation met all three criteria.                                                                     
2:49:58 PM                                                                                                                    
Representative Gara  asked if the benefit of  paying in-state                                                                   
tuition;  at  an  out  of  state   school,  under  the  WICHE                                                                   
program,  did   not  apply   to  the  graduate   professional                                                                   
degrees. Ms.  Barrans replied  that there were  three student                                                                   
exchange  programs   administered  by  WICHE.   One  was  the                                                                   
Professional  Student  Exchange  program,  which  had  a  per                                                                   
student  fee associated  with  it.  Two others;  the  Western                                                                   
Undergraduate Exchange  Program, for  which the state  paid a                                                                   
membership fee,  and the  Western Regional Graduate  Exchange                                                                   
Program, for which there were no separate fees.                                                                                 
Representative Gara  asked if the students identified  in the                                                                   
bill   would  receive   any   discounts   without  the   loan                                                                   
forgiveness  program. Ms.  Barrans said  only if the  student                                                                   
borrowed  the additional  PSEP  loan,  which paid  a  support                                                                   
Representative  Gara understood that  this bill would  help a                                                                   
student  attending a  WICHE  school repay  the  loan if  they                                                                   
returned  to practice  in Alaska.  Ms.  Barrans replied  that                                                                   
that was correct.                                                                                                               
2:52:13 PM                                                                                                                    
Co-Chair  Hawker  mentioned  the  section  of  statute  being                                                                   
amended  was basically  state  participation  in the  compact                                                                   
for the  WICHE schools.  He said  that the  PSEP program  had                                                                   
been  funded   through  general   funds.  He  asked   if  the                                                                   
authority to  make loans  of state money  for the  purpose of                                                                   
the  program was  general authority  under the  postsecondary                                                                   
education commission, or was there a niche in statute.                                                                          
Ms. Barrans  replied that  there was a  niche in  statue. She                                                                   
furthered  that  in  the corporations  statute  there  was  a                                                                   
provision that said  that the student loan  corporation could                                                                   
fund the loans.                                                                                                                 
Co-Chair Hawker  summarized that the  intent of the  bill was                                                                   
to override  the student loan corporation  repayment interest                                                                   
rates with  the same interest  rates that were paid  by WWAMI                                                                   
students. Ms. Barrans replied in the affirmative.                                                                               
2:55:04 PM                                                                                                                    
Vice-Chair Thomas  asked if the initiation of  the bill would                                                                   
impact bonds  authorized in  the previous  fiscal year.   Ms.                                                                   
Barrans  said  no. She  said  that  care  had been  taken  to                                                                   
indicate   when   a   program   that   the   commission   was                                                                   
administering  as  a state  agency  was  not a  student  loan                                                                   
corporation obligation.                                                                                                         
Vice-Chair  Thomas understood  that  money would  need to  be                                                                   
appropriated for  the loan forgiveness  program on  an annual                                                                   
basis. Ms. Barrans replied yes.                                                                                                 
Vice-Chair Thomas  asked how much  money the state  currently                                                                   
had loaned  out to students.  Ms. Barrans said  approximately                                                                   
$724  million.  Vice-Chair  Thomas  asked how  much  of  that                                                                   
total  was   in  default.   Ms.  Barrans   replied  that   he                                                                   
cumulative default  rate was approximately 11  to 12 percent.                                                                   
The  default  rate after  the  first  year of  repayment  was                                                                   
roughly 6 percent.                                                                                                              
Vice-Chair Thomas  if a student  under the WICHE  program was                                                                   
to drop out of  school in the first year how  would the money                                                                   
be  reconciled by  the state.  Ms. Barrans  stated that  loan                                                                   
programs  were  carefully  crafted  to  incorporate  all  the                                                                   
tools  needed  to   collect  on  the  loan;   permanent  fund                                                                   
dividends  could be  garnished  and administrative  judgments                                                                   
could  be  issues  against  property.  She  added  that  loan                                                                   
applicants were subject to a credit report review.                                                                              
Vice-Chair   Thomas  asked   if   parental  guarantees   were                                                                   
required for  applicants under 21  years of age.  Ms. Barrans                                                                   
replied that  a credit worthy  co-signer was required  by any                                                                   
applicant  that  had not  met  the credit  writing  standard,                                                                   
which is a minimum FICO score of 680.                                                                                           
2:58:56 PM                                                                                                                    
Representative Austerman  revisited the language  concerns on                                                                   
Page 1,  Line 7  of the  bill. Ms. Barrans  relayed  that she                                                                   
had been  operating under  the assumption  that the  language                                                                   
intended  that there would  be five  students, per  category,                                                                   
per year. She  said that the assumption was  reflected in the                                                                   
fiscal note.                                                                                                                    
Representative Austerman  noted that "not fewer  than", could                                                                   
mean  more than  five. Ms.  Barrans replied  that the  number                                                                   
was subject to appropriated funds.                                                                                              
Representative  Austerman  requested  information  pertaining                                                                   
to other  loan programs for  medical professions, and  to the                                                                   
WICHE  program.  Ms.  Barrans  said  she  would  provide  the                                                                   
information to the committee.                                                                                                   
3:01:21 PM                                                                                                                    
Representative  Joule  requested  information  detailing  the                                                                   
benefits to the  state from other programs that  offered loan                                                                   
forgiveness to  professionals committed  to returning  to the                                                                   
state.   He  wondered   if  there  were   any  similar   loan                                                                   
forgiveness    programs    for   students    seeking    trade                                                                   
Ms.  Barrans replied  that  there  were two  career  specific                                                                   
loan programs which  had forgiveness benefits.  The A.W. Win-                                                                   
Brindle Memorial  Scholarship Loan,  which was available  for                                                                   
individuals studying  fisheries, and was funded  by donations                                                                   
from  the fishery  industry, was  not funded  by the  student                                                                   
loan corporation  or the  state. Under  the program  students                                                                   
could  receive  up to  50  percent  off  of their  loan.  The                                                                   
Teacher Education  Loan Program pre-existed the  student loan                                                                   
corporation  and was  funded by  the  state for  a number  of                                                                   
years  from  the  general  fund.   The  program  20  year-old                                                                   
program  was designed  to  take  graduates from  Alaska  high                                                                   
schools  who intended  to be teachers,  and  give them  up to                                                                   
100 percent  forgiveness for teaching  in rural  schools. She                                                                   
divulged  that   the  program   had  not  been   particularly                                                                   
successful  as the  default rates  for the  program had  been                                                                   
high,  and  the  students  drive to  teach  in  a  qualifying                                                                   
community  had diminished.  She believed  that fewer than  30                                                                   
percent  of  the  participants  in the  program  went  on  to                                                                   
receive the benefits.                                                                                                           
Representative  Gara  reiterated  his  understanding  of  the                                                                   
legislation.  He suggested altering  the program  proposed in                                                                   
the bill altogether.                                                                                                            
3:06:04 PM                                                                                                                    
Ms. Barrans  replied that the  sponsor had intended  to offer                                                                   
a  program  that  would  help   Alaskan  students  that  were                                                                   
interested in  entering the  three identified professions  by                                                                   
providing  debt relief  to them  in return  for returning  to                                                                   
the state.                                                                                                                      
3:07:17 PM                                                                                                                    
Co-Chair  Hawker hoped  Ms. Barrans  would  be available  for                                                                   
future discussion concerning the legislation.                                                                                   
3:08:02 PM                                                                                                                    
DAVID LOGAN, ALASKA  DENTAL SOCIETY, testified  in support of                                                                   
the legislation.  He shared that under the  WICHE program, he                                                                   
was  able to  graduate without  a  large amount  of debt.  He                                                                   
said that dental  students currently faced  staggering amount                                                                   
of debt  after  graduation. Undergraduate  and dental  school                                                                   
could cost  $200,000 to $350,000.  He reminded  the committee                                                                   
that  dentistry  programs  were  not offered  in  the  state,                                                                   
consequently,  non-resident   tuition  is  the   reality  for                                                                   
students training  out-of-state.  While the proposed  program                                                                   
would not make  the non-resident tuition disappear,  it would                                                                   
be a  great help.  He relayed  that there  was a huge  health                                                                   
care  issue   in  the   state,  multiple  professions   faced                                                                   
shortages.  The dental  school graduates  were not  returning                                                                   
to   the   state  to   fill   the   void  left   by   retired                                                                   
practitioners. He  felt that by providing incentives  for in-                                                                   
state residents                                                                                                                 
3:13:14 PM                                                                                                                    
NANCY    DAVIS,   EXECUTIVE    DIRECTOR,   ALASKA    PHARMACY                                                                   
ASSOCIATION,   EAGLE   RIVER  (via   teleconference),   urged                                                                   
support for the  bill. She stated that Alaska  had a shortage                                                                   
of pharmacists, with  a 25 percent vacancy rate  in 2007. She                                                                   
said  that the  shortage  would  continue as  the  population                                                                   
aged and  medication use  increased as  more state  residents                                                                   
decided to  retire in-state. Alaska  is the only  WICHE state                                                                   
without a pharmacy  school, and one of five  states without a                                                                   
loan  repayment program  for  pharmacy  students. She  shared                                                                   
that  pharmacy was  the third  largest  health profession  in                                                                   
the United  States. The WICHE  web-site could be  visited for                                                                   
further information  on workforce  needs in the  country. The                                                                   
pharmacy  association  was  working with  the  university  to                                                                   
establish prerequisite  classes in pharmacy within  the state                                                                   
to assist student in the pursuit of pharmacy school.                                                                            
3:16:53 PM                                                                                                                    
BARRY  CHRISTENSEN,  ALASKA PHARMACY  ASSOCIATION,  KETCHIKAN                                                                   
(via   teleconference),  testified   in   supported  of   the                                                                   
legislation.  As  a former  WICHE  student, he  stressed  the                                                                   
importance of  the program  incentives for students  choosing                                                                   
to return to  Alaska after graduation. He felt  that the bill                                                                   
would address  the critical  shortage of  pharmacists  in the                                                                   
3:18:10 PM                                                                                                                    
TRACY   OMAN,    EXECUTIVE   DIRECTOR,   ALASKA    OPTOMETRIC                                                                   
ASSOCIATION,  testified in  support of  the legislation.  She                                                                   
stated that  there were  119 practicing  optometrists  in the                                                                   
state,  27  would  soon  be  reaching   retirement  age.  For                                                                   
example, the  two practicing optometrists  in Kodiak  were 63                                                                   
and 66 years  old, one of  which had been searching  for five                                                                   
years  for  someone  to  take  over  his  practice.  The  tow                                                                   
optometrists in  Ketchikan were in  their late 50s.  The more                                                                   
remote   areas   of   Alaska  do   not   have   optometrists.                                                                   
Optometrists  from Anchorage  and Fairbanks  traveled to  the                                                                   
under-served  areas, but  as the  practitioners aged,  travel                                                                   
became  more burdensome.  She  added  that residents  of  the                                                                   
under-served  areas  often waited  months  for  appointments.                                                                   
The  optometric association  provided  a  web-site to  assist                                                                   
doctors in finding  assistants to share the  work, there were                                                                   
14  doctors  on   the  site  that  had  been   searching  for                                                                   
assistance for over  a year. She concluded that  the bill was                                                                   
a good tool to incentivize doctors to return to the state.                                                                      
Co-Chair  Stoltze  acknowledged  Ms.  Oman's  work  with  the                                                                   
Lions Club.                                                                                                                     
3:23:08 PM                                                                                                                    
Co-Chair Stoltze closed public testimony.                                                                                       
3:23:25 PM                                                                                                                    
Representative  Munoz revisited the  provision that  had been                                                                   
highlighted   by  Representative   Hawker  concerning   state                                                                   
appropriation  for the  loan forgiveness.  She hoped  to have                                                                   
deeper  discussions  of  the concerns  with  the  section  in                                                                   
order to  rework the  language to  create the clarity  sought                                                                   
by the committee.                                                                                                               
Co-Chair  Hawker  thought  that   the  discussions  would  be                                                                   
better done offline and not during committee time.                                                                              
Representative  Munoz  added   that  she  would  revisit  the                                                                   
language on  Page 1, Line 7  to clear up the  concerns raised                                                                   
by Representative Austerman.                                                                                                    
Representative  Kelly  also requested  that  the language  of                                                                   
the bill be revisited with a focus on clarity.                                                                                  
Representative  Austerman   voiced  that  he   was  reserving                                                                   
support  for  the  legislation  until  he  had  reviewed  the                                                                   
information requested of Ms. Barrans.                                                                                           
Co-Chair   Stoltze  wanted   to  hear   all  the   additional                                                                   
information before making any decisions as well.                                                                                
HB  235  was   HEARD  and  HELD  in  Committee   for  further                                                                   
The meeting was adjourned at 3:27 PM                                                                                            

Document Name Date/Time Subjects
01 HB52 Sponsor Statement[1].pdf HFIN 3/26/2010 1:30:00 PM
HB 52
10-02-26 HB 52 Letters of Support.pdf HFIN 3/26/2010 1:30:00 PM
HB 52
HB 52 Backup Support Articles.pdf HFIN 3/26/2010 1:30:00 PM
HB 52
HB 52 Letter Violent Crimes Comp. Board.pdf HFIN 3/26/2010 1:30:00 PM
HB 52
HB235 Rural Health Research.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB235 AK Dental Society Letter.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB235 Sponsor Statement[1].pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB235 States Loan Forgiveness Provisions.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB235- statistics[1].doc HFIN 3/26/2010 1:30:00 PM
HB 235
HB235 Wiche Report.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB235 WICHE Tuition -pharmacy school.xls HFIN 3/26/2010 1:30:00 PM
HB 235
HB235Barrans Ltr & DOL opinion.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB325 HB326 Stoltze Handout.pdf HFIN 3/26/2010 1:30:00 PM
HB 325
HB 326
Memo re changes for CS.HB235.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
sectional analysis HB235.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
Copy of Dentist-Opt-Pharm geo dist 1-2010HB235.xls HFIN 3/26/2010 1:30:00 PM
AKOA Letter of Support HB 235.pdf HFIN 3/26/2010 1:30:00 PM
HB 235
HB 235 State Dental Loan Repayment Programs - Examples from Other States.doc HFIN 3/26/2010 1:30:00 PM
HB 52 Fiscal Note Backup.pdf HFIN 3/26/2010 1:30:00 PM
HB 52
HB 52 Testimony.pdf HFIN 3/26/2010 1:30:00 PM
HB 52