Legislature(2015 - 2016)HOUSE FINANCE 519

04/16/2015 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 3:00 p.m. Today --
+= SB 26 BUDGET: CAPITAL TELECONFERENCED
Heard & Held
+ SB 71 VACCINE CERTIFICATION FOR PHARMACISTS TELECONFERENCED
Moved SB 71 Out of Committee
+= HB 81 EXEMPTION: LICENSING OF CONTRACTORS TELECONFERENCED
Scheduled but Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 16, 2015                                                                                            
                         2:49 p.m.                                                                                              
                                                                                                                                
2:49:49 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Thompson   called  the  House   Finance  Committee                                                                    
meeting to order at 2:49 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Cathy  Giessel,  Sponsor;  Dr.  Jay  Butler,  Chief                                                                    
Medical Officer,  Department of Health and  Social Services;                                                                    
Sara Chambers,  Administrative Operations  Manager, Division                                                                    
of  Corporations,   Business  and   Professional  Licensing,                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
Joe Michel, Staff, Representative Steve Thompson.                                                                               
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Dirk  White,  Pharmacist  and  Former  President,  Board  of                                                                    
Pharmacy,   Sitka;   Daniel    Nelson,   President,   Alaska                                                                    
Pharmacists    Association,    Fairbanks;   Ryan    Ruggles,                                                                    
Pharmacist   and  District   Pharmacy  Manager,   Albertson-                                                                    
Safeway,   Anchorage;   Lis  Houchen,   Northwest   Regional                                                                    
Director,  State  Government Affairs,  National  Association                                                                    
Chain   and   Drug   Stores,  Olympia,   Washington;   Barry                                                                    
Christensen,   Co-Chair,   Alaska   Pharmacist   Association                                                                    
Legislative Committee, Ketchikan.                                                                                               
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 81     EXEMPTION: LICENSING OF CONTRACTORS                                                                                   
                                                                                                                                
          HB 81 was SCHEDULED but not HEARD.                                                                                    
                                                                                                                                
SB 26     BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          CSSB 26(FIN) was HEARD and HELD in committee for                                                                      
          further consideration.                                                                                                
                                                                                                                                
SB 71     VACCINE CERTIFICATION FOR PHARMACISTS                                                                                 
                                                                                                                                
          SB 71  was REPORTED  out of  committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
          published fiscal  impact note: FN1 (CED);  and one                                                                    
          previously published zero fiscal note: FN3 (DHS).                                                                     
                                                                                                                                
SENATE BILL NO. 71                                                                                                            
                                                                                                                                
     "An Act relating to the practice of pharmacy; and                                                                          
     relating to the administration of vaccines and related                                                                     
     emergency medications."                                                                                                    
                                                                                                                                
2:50:38 PM                                                                                                                    
                                                                                                                                
SENATOR CATHY  GIESSEL, SPONSOR, discussed  the legislation.                                                                    
She explained  that SB 71  allowed pharmacists in  Alaska to                                                                    
administer   vaccines  without   a  collaborative   practice                                                                    
agreement.  She  detailed   that  a  collaborative  practice                                                                    
agreement, established  in 2001, was a  contract between the                                                                    
pharmacist  and   a  medical  provider  which   allowed  the                                                                    
pharmacist  to  administer   vaccines.  The  contracts  cost                                                                    
between  $50 and  $500 and  often proved  difficult for  the                                                                    
pharmacist,  especially  those in  rural  areas,  to find  a                                                                    
provider who  will oversee the vaccine  administration which                                                                    
involved  paperwork.  The legislation  authorized  certified                                                                    
pharmacists  to  administer  the  vaccinations  without  the                                                                    
oversight agreements in place.  She relayed that pharmacists                                                                    
had been  educated in vaccine  administration since  2005 as                                                                    
part of  their curriculum  and were entering  the profession                                                                    
with a  doctorate degree in pharmacology.  The bill mandated                                                                    
that pharmacists educated  prior to 2005 would  have to take                                                                    
a specific  course approved  by the  Board of  Pharmacy. She                                                                    
described   the  training   that  the   pharmacists  already                                                                    
received  in the  administration  of vaccinations  including                                                                    
adverse  reactions  response  and  interactions  with  other                                                                    
medications.  She  shared  that   as  a  nurse  practitioner                                                                    
herself,   she  relied   on  the   pharmacist's  specialized                                                                    
knowledge  when  prescribing.  The bill  would  particularly                                                                    
help   rural  pharmacies   by  removing   the  collaborative                                                                    
agreement  mandate.   She  shared   that  in   states  where                                                                    
pharmacists   possessed   the   independent   authority   to                                                                    
administer  vaccines immunization  rates rise.  She informed                                                                    
the  committee  that  Alaska had  a  low  vaccination  rate.                                                                    
Currently,  all  vaccinations  were  recorded  in  a  system                                                                    
called Vactracks and all healthcare  providers had access to                                                                    
the  information. Alaskan  pharmacists administered  over 13                                                                    
thousand  flu vaccines  in the  previous year.  She believed                                                                    
that the bill  would improve access to  immunizations in the                                                                    
state.                                                                                                                          
                                                                                                                                
2:55:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler  wondered  if the  system  of  recording                                                                    
immunizations  needed   to  be  improved   or  strengthened.                                                                    
Senator Giessel answered that the  VacTracks system had been                                                                    
in place for a number  of years and all healthcare providers                                                                    
used  the system.  She elaborated  that the  system "vastly"                                                                    
improved the tracking  of vaccines and she was  not aware of                                                                    
any flaws.                                                                                                                      
                                                                                                                                
Representative   Kawasaki   asked   for   details   on   how                                                                    
pharmacists  currently  administered  vaccinations.  Senator                                                                    
Giessel answered that the healthcare  provider must fill out                                                                    
paperwork and review  records; they were not  required to be                                                                    
physically   present.  She   added  that   the  system   for                                                                    
pharmacist administered immunizations  was already in place.                                                                    
The  bill  merely  removed the  paperwork  requirements  and                                                                    
allowed    highly    trained    professionals    "administer                                                                    
medication."  Representative  Kawasaki   asked  whether  the                                                                    
State  Medical  Board  or the  Medical  Association  had  an                                                                    
opinion about the legislation.  Senator Giessel replied that                                                                    
she  had  not  received  any  opposition  from  the  medical                                                                    
community.                                                                                                                      
                                                                                                                                
Representative  Guttenberg asked  whether the  bill required                                                                    
pharmacists to administer an expanded  list of vaccines that                                                                    
were  currently  not  administered by  pharmacists.  Senator                                                                    
Giessel  responded that  she was  not sure  and deferred  to                                                                    
pharmacists  to   answer  the   question.  She   noted  that                                                                    
pharmacist  routinely   administered  flu   vaccines,  which                                                                    
required   needles,  syringes,   refrigeration,  and   other                                                                    
relevant supplies therefore, were already equipped.                                                                             
                                                                                                                                
Representative Guttenberg  wondered about logistics  and how                                                                    
things  would change  for the  pharmacist  and the  pharmacy                                                                    
space  with  passage of  the  bill,  particularly for  rural                                                                    
pharmacies.                                                                                                                     
                                                                                                                                
DIRK  WHITE,  PHARMACIST  AND  FORMER  PRESIDENT,  BOARD  OF                                                                    
PHARMACY,   SITKA   (via  teleconference),   answered   that                                                                    
internally and  procedurally the pharmacy would  not change.                                                                    
He revealed that a limitation  of the collaborative practice                                                                    
agreement was that the agreement  was specific to a location                                                                    
and  the   pharmacist  could  not  leave   the  pharmacy  to                                                                    
administer   vaccinations.   He   highlighted   pharmacists'                                                                    
inability  to  travel  to  community   health  fairs  as  an                                                                    
example. The  bill would enable  pharmacists to go  to other                                                                    
locations   and  travel   to  rural   areas  to   administer                                                                    
immunizations.                                                                                                                  
                                                                                                                                
3:03:52 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  whether  there  were any  safety                                                                    
issues with the bill.                                                                                                           
                                                                                                                                
DR. JAY BUTLER, CHIEF  MEDICAL OFFICER, DEPARTMENT OF HEALTH                                                                    
AND   SOCIAL   SERVICES,   communicated   that   pharmacists                                                                    
currently delivered  a large  number of  vaccines throughout                                                                    
the state  and therefore, did  not have any  safety concerns                                                                    
or  reservations  with  allowing pharmacists  to  administer                                                                    
vaccines.  Representative  Gara  asked  whether  his  answer                                                                    
extended  to the  ability of  the  pharmacist to  administer                                                                    
emergency  medications  due  to  an  adverse  reaction.  Dr.                                                                    
Butler answered that  allergic reactions to a  vaccine was a                                                                    
rare occurrence  and that under the  collaborative agreement                                                                    
the   pharmacist  was   currently   allowed  to   administer                                                                    
emergency medications.                                                                                                          
                                                                                                                                
Representative  Kawasaki  stated   that  currently  under  a                                                                    
collaborative physician  agreement reports were  written and                                                                    
reviewed. He  asked whether,  absent an  agreement reporting                                                                    
would still be required.  Dr. Butler replied that completion                                                                    
of   the  vaccine   adverse  event   reporting  system   was                                                                    
mandatory.  He   explained  that  the  system   was  a  tool                                                                    
available to  pharmacists and patients and  was monitored by                                                                    
the  federal Food  and Drug  Administration and  Centers for                                                                    
Disease Control.                                                                                                                
                                                                                                                                
Vice-Chair   Saddler   noted    that   the   bill   included                                                                    
administration  of emergency  medications and  asked for  an                                                                    
example of  emergency medications. Dr. Butler  answered that                                                                    
epinephrine  administered  for  rare allergic  reactions  to                                                                    
immunizations   called  "anaphylactic   reactions"  was   an                                                                    
example  of emergency  medication. Vice-Chair  Saddler asked                                                                    
whether    pharmacists   received    specialized   emergency                                                                    
medication response training. Dr.  Butler responded that the                                                                    
critical  issue was  the ability  to  recognize the  adverse                                                                    
reaction.                                                                                                                       
                                                                                                                                
DANIEL  NELSON, PRESIDENT,  ALASKA PHARMACISTS  ASSOCIATION,                                                                    
FAIRBANKS  (via teleconference),  stated his  strong support                                                                    
of the legislation.                                                                                                             
                                                                                                                                
RYAN  RUGGLES,  PHARMACIST  AND DISTRICT  PHARMACY  MANAGER,                                                                    
ALBERTSON-SAFEWAY,    ANCHORAGE     (via    teleconference),                                                                    
testified in  support of  the bill.  He shared  that Alaskan                                                                    
pharmacist  currently administered  many types  of vaccines.                                                                    
The  legislation would  remove  the collaborative  physician                                                                    
agreement  mandate  which  was  "difficult  to  obtain"  and                                                                    
limited the  pharmacists' ability  to serve  their patients.                                                                    
He  believed that  passage  of SB  71  would strengthen  the                                                                    
continuity of  care that  pharmacists endeavored  to provide                                                                    
patients.                                                                                                                       
                                                                                                                                
3:11:31 PM                                                                                                                    
                                                                                                                                
LIS HOUCHEN,  NORTHWEST REGIONAL DIRECTOR,  STATE GOVERNMENT                                                                    
AFFAIRS,  NATIONAL   ASSOCIATION  CHAIN  AND   DRUG  STORES,                                                                    
OLYMPIA, WASHINGTON (via teleconference),  spoke in favor of                                                                    
the bill. She listed  the organization's members. She shared                                                                    
that in 2012  only 1.2 percent of Alaskans  had received the                                                                    
flu   immunization.  The   association  believed   that  the                                                                    
legislation would  increase access to vaccinations  in rural                                                                    
areas.                                                                                                                          
                                                                                                                                
BARRY CHRISTENSEN,  CO-CHAIR, ALASKA  PHARMACIST ASSOCIATION                                                                    
LEGISLATIVE   COMMITTEE,  KETCHIKAN   (via  teleconference),                                                                    
testified  in support  of the  legislation. He  thought that                                                                    
the  bill  would help  reduce  the  cost of  healthcare.  He                                                                    
relayed  that the  association had  met  with other  medical                                                                    
providers  prior to  the bills  introduction to  inform them                                                                    
about the legislation.                                                                                                          
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Representative  Kawasaki  spoke  to  the  fiscal  notes.  He                                                                    
pointed  to Fiscal  Note 1  (CED) and  wondered why  it cost                                                                    
$2.5  thousand to  amend the  regulation. He  previously had                                                                    
not  seen  a  fiscal  note   accompany  a  bill  changing  a                                                                    
regulation.                                                                                                                     
                                                                                                                                
Co-Chair Thompson assumed it was a one-time cost.                                                                               
                                                                                                                                
Senator Giessel  deferred the question to  the Department of                                                                    
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
SARA CHAMBERS,  ADMINISTRATIVE OPERATIONS  MANAGER, DIVISION                                                                    
OF  CORPORATIONS,   BUSINESS  AND   PROFESSIONAL  LICENSING,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
answered  that the  Department  of  Commerce, Community  and                                                                    
Economic Development  (DCCED) was implementing  the practice                                                                    
of requesting  receipt authority for  the average cost  of a                                                                    
division  "regulation project"  in  an effort  "to best  and                                                                    
conservatively manage  licensing fees" that were  charged to                                                                    
the  licensees. She  elaborated  that  the division  handled                                                                    
"competing interests"  between the division and  the various                                                                    
board's   mission  related   and  statutory   authority.  In                                                                    
situations  when the  division  had other  bills related  to                                                                    
regulations and  were managing tens of  thousands of dollars                                                                    
dealing  with  regulation  changes, the  fiscal  note  added                                                                    
transparency  to the  process  and alerted  the boards  that                                                                    
their  funds were  being  spent in  case  funding for  their                                                                    
other mission purposes was curtailed.                                                                                           
                                                                                                                                
Representative   Kawasaki  supported   adding  the   receipt                                                                    
authority in the  fiscal note as long as  the practice would                                                                    
continue into the future.                                                                                                       
                                                                                                                                
Representative Wilson wondered how  many hours it would take                                                                    
to amend  the regulation  and how the  department calculated                                                                    
the $2.5 thousand expenditure.                                                                                                  
                                                                                                                                
3:17:14 PM                                                                                                                    
                                                                                                                                
Ms. Chambers  replied that the expense  was calculated based                                                                    
upon a  variety of expenses  including the charges  from the                                                                    
Department  of   Law  (DOL)  review  and   DCCED  regulation                                                                    
specialist time.  She added that  the bulk of the  cost came                                                                    
from  printing and  postage for  sending copies  of the  new                                                                    
regulations  to the  licensees';  mandated  by statute.  She                                                                    
shared  that $2.5  thousand was  an  average board  expense.                                                                    
Representative Wilson  asked whether there was  an option to                                                                    
send the  regulations by email.  Ms. Chambers  answered that                                                                    
the  department  was  exploring the  option  with  DOL.  The                                                                    
current  legal  interpretation  required the  paper  option.                                                                    
Representative Wilson  believed the  email option  should be                                                                    
pursued.                                                                                                                        
                                                                                                                                
Representative  Pruitt voiced  that previously  the division                                                                    
spread  the  cost among  all  boards.  He thought  that  the                                                                    
division  was  attempting  to shift  to  using  the  receipt                                                                    
authority  to charge  the actual  costs on  to the  specific                                                                    
board  affected. He  hoped  it would  be  the direction  the                                                                    
department  would   take  on   any  future   adjustments  or                                                                    
regulation  projects for  any licensee  group. He  asked for                                                                    
confirmation on  his comments. Ms. Chambers  agreed with his                                                                    
comments  and related  that the  division was  ensuring that                                                                    
"the  expenses were  directly  correlated  to the  licensing                                                                    
fees  of the  particular licensed  profession that  incurred                                                                    
the costs."                                                                                                                     
                                                                                                                                
Representative  Kawasaki  cited  Fiscal  Note  3  (DHS)  and                                                                    
relayed that  the analysis noted  that the  Medicaid program                                                                    
would  be expected  to incur  costs  resulting from  changes                                                                    
needed  to the  claims processing  system. He  wondered what                                                                    
the total  costs amounted  to. Dr.  Butler replied  that the                                                                    
original  fiscal  note  had   included  a  one-time  capital                                                                    
request of  $50 thousand  for the claims  processing without                                                                    
the   collaborative   agreement.    Subsequently,   it   was                                                                    
discovered  that  the  bonus   performance  money  from  the                                                                    
Children's Health Insurance Program  (CHIP) could be used to                                                                    
implement  the  changes  to the  claims  processing  system.                                                                    
Therefore, the fiscal note had been zeroed out.                                                                                 
                                                                                                                                
3:22:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair Saddler  MOVED to REPORT  SB 71 out  of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB  71  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note:  FN1 (CED); and  one previously  published zero                                                                    
fiscal note: FN3 (DHS).                                                                                                         
                                                                                                                                
CSSB 26(FIN)                                                                                                                  
     "An Act  making and amending  appropriations, including                                                                    
     capital  appropriations,  supplemental  appropriations,                                                                    
     reappropriations,  and   other  appropriations;  making                                                                    
     appropriations    to     capitalize    funds;    making                                                                    
     appropriations under art.  IX, sec. 17(c), Constitution                                                                    
     of the State of  Alaska, from the constitutional budget                                                                    
    reserve fund; and providing for an effective date."                                                                         
                                                                                                                                
Co-Chair  Neuman  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute   for  CSSB   26(FIN),  Work   Draft  29-GS1781\F                                                                    
(Martin,  4/16/15).  There being  NO  OBJECTION,  it was  so                                                                    
ordered.                                                                                                                        
                                                                                                                                
JOE MICHEL, STAFF,  REPRESENTATIVE STEVE THOMPSON, explained                                                                    
the changes  in the  Committee Substitute.  He noted  that a                                                                    
few changes were made to  Section 1; the numbers section. He                                                                    
pointed to page  5, line 30 under the  Department of Natural                                                                    
Resources  (DNR): Snowmobile  Trail Development  Program and                                                                    
Grants  in the  amount of  $250,000 and  clarified that  the                                                                    
funding was  collected from the  sales of snow  machines and                                                                    
were  designated  program  receipts and  not  general  funds                                                                    
(GF). In  addition, the Cooperative Water  Resources Program                                                                    
pass through  grant to the  United States  Geological Survey                                                                    
(USGS) for stream gauging projects  was removed from DNR. He                                                                    
explained that  the item was  removed at the request  of DNR                                                                    
because  the project  was not  currently  going forward.  He                                                                    
addressed  the   section  related   to  the   Department  of                                                                    
Transportation and  Public Facilities  (DOT) on page  14. He                                                                    
highlighted three  substantially different changes  from the                                                                    
governor's amendments. He  pointed to line 23,  the Knik Arm                                                                    
Crossing in the  amount of $45.3 million  and emphasized the                                                                    
item was  comprised of federal  receipts. The  $45.3 million                                                                    
was originally  reflected in  the item  on line  27 National                                                                    
Highway System and Non-National  Highway System Pavement and                                                                    
Bridge Reconstruction and Refurbishment  which was used as a                                                                    
placeholder in  case the state  could receive  extra federal                                                                    
receipts. Therefore, the inclusion  of the Knik Arm Crossing                                                                    
federal  receipt authority  item was  a net  zero. He  cited                                                                    
line 24,  Kotzebue Cape  Blossom Road in  the amount  of $33                                                                    
million,   which  was   recently  granted   federal  receipt                                                                    
authority  for   the  total  amount  which   eliminated  the                                                                    
previously $4 million GF appropriation.                                                                                         
                                                                                                                                
3:29:06 PM                                                                                                                    
                                                                                                                                
Mr. Michel  moved to  page 23,  which contained  the numbers                                                                    
section  for the  Supplemental Budget  amendments. He  cited                                                                    
line 22,  Emergency Repair of  State Forest Road  Systems in                                                                    
the  Tanana  Valley  State  Forest in  the  amount  of  $896                                                                    
thousand  that was  added  by request  of  the governor.  He                                                                    
turned to the Supplemental  Operating Budget section on page                                                                    
26.  He  referenced  page  27, line  22  that  included  $40                                                                    
million  for  Medicaid services  in  FY  15. The  last  item                                                                    
concluded the changes to the numbers sections of the bill.                                                                      
                                                                                                                                
Mr.    Michel   addressed    the   following    supplemental                                                                    
appropriations  in  the language  section  of  the bill.  He                                                                    
began  with  the  Department   of  Administration  (DOA)  in                                                                    
Section  10 on  page  32 in  the amount  of  $3 million  for                                                                    
paying  costs   associated  with  the   Alaska  Correctional                                                                    
Officers  Association  settlement for  FY  15.  He moved  to                                                                    
subsection b  (line 5), and  stated that $1.317  million was                                                                    
appropriated to pay for the  single audit for the Department                                                                    
of  Health  and  Social  Services (DHSS).  He  related  that                                                                    
subsection (c)  was a  new item  totaling $792  thousand for                                                                    
costs related  to labor contract  negotiations. He  moved to                                                                    
the DCCED  in Section 11,  (line 12)  in the amount  of $2.3                                                                    
million  for the  costs associated  with  the regulation  of                                                                    
marijuana in FY  15 and FY 16.  He  noted that in subsection                                                                    
(b)  (line 17),  $57.5 million  originally appropriated  for                                                                    
the Interior Energy Project  was reappropriated. He directed                                                                    
attention to  DHSS in  Section 12 (line  26) and  noted that                                                                    
additional  language   had  been  added  [to   the  Medicaid                                                                    
Services expenditure]. He read the following:                                                                                   
                                                                                                                                
     No money appropriated in this appropriation may be                                                                         
     expended for an abortion that is not a mandatory                                                                           
     service required under AS 47.07.030(a).                                                                                    
                                                                                                                                
He moved to  subsection (b) (line 10) and  explained that in                                                                    
the prior  year an oversight occurred  and the appropriation                                                                    
language had  not included the  words, "general  fund" which                                                                    
was   originally  a   reappropriation  from   the  Fairbanks                                                                    
virology   laboratory.  The   reappropriation  was   for  an                                                                    
emergency  medical services  match for  community ambulances                                                                    
for the Code  Blue project. He pointed to  the Department of                                                                    
Law appropriations in  Section 13 (page 33, line  18) in the                                                                    
amount  of  $8.889.9  million  to   pay  for  judgments  and                                                                    
settlements against the state.                                                                                                  
                                                                                                                                
Mr.  Michel  addressed  Sections   14  (page  33,  line  27)                                                                    
regarding DNR and  noted the sum of  $3 million appropriated                                                                    
for fire suppression activities.  He cited the Department of                                                                    
Revenue (DOR)  appropriations in  Section 15 (page  33, line                                                                    
30)  and noted  the amount  of  $50 thousand  for the  costs                                                                    
associated with  updating the tax revenue  management system                                                                    
and tax  forms and drafting  regulations to implement  a new                                                                    
surcharge on refined motor fuels  for the fiscal year ending                                                                    
June 30,  2015. He added that  Section 16 (page 34,  line 3)                                                                    
was  related  to  reappropriations  for  the  Department  of                                                                    
Transportation  and  Public  Facilities.  He  reported  that                                                                    
subsections (a)  and (b)  dealt with  the class  5 injection                                                                    
well  compliance and  remediation project  in the  amount of                                                                    
$3.4  million.   He  shared  that   subsection  (c)   was  a                                                                    
reappropriation for  terminal improvements and  a renovation                                                                    
project at the Ted  Stevens Anchorage International Airport.                                                                    
He stated  that subsection (d) reappropriated  funds for the                                                                    
Kalsin  Bay maintenance  station  that had  burned down  and                                                                    
needed  replacement. Subsection  (e)  was the  appropriation                                                                    
for the  Dalton Highway disaster emergency  repairs totaling                                                                    
$5 million.  He directed attention  to Section 17  (page 35,                                                                    
line  12) regarding  Debt and  Other  Obligations and  noted                                                                    
that the school  bond debt decreased by  $5 million dollars.                                                                    
He  reported that  Section 18(page  36,  line 22)  contained                                                                    
Ratifications  which  reflected expenditures  already  paid.                                                                    
He  added  that  Section  19(page   35,  line  21)  included                                                                    
language related  to Medicaid. Section 20(page  36, line 27)                                                                    
included a fund  transfer in the amount of  $13.3 million to                                                                    
the Alaska  Housing Capital Corporation account.  Section 21                                                                    
(page  36, line  29) reappropriated  $750 thousand  from the                                                                    
Digital   Teaching  Initiative   three  year   demonstration                                                                    
project   to  the   Alaska   Housing  Capital   Corporation.                                                                    
Subsection (b) reappropriated $875  thousand from the Alaska                                                                    
Public  Safety Information  Network  (APSIN)  to the  Alaska                                                                    
Housing Capital  Corporation. He noted that  Section 22(page                                                                    
36,  line 27)  Federal and  Other Program  Receipts had  not                                                                    
changed and  granted Legislative Budget and  Audit authority                                                                    
to  issue  Revised  Program  Legislation  (RPL)  during  the                                                                    
interim.  Section 23  (page 37,  line  25) Insurance  Claims                                                                    
authorized  receipt and  expenditure of  settlements related                                                                    
to insurance claims.                                                                                                            
                                                                                                                                
3:37:26 PM                                                                                                                    
                                                                                                                                
Mr. Michel  continued with  Section 34  (page 37,  line 30),                                                                    
National  Petroleum Reserve  - Alaska  Impact Grant  Program                                                                    
that  granted  federal  money   to  communities  related  to                                                                    
impacts from the oil and  gas activities on the North Slope.                                                                    
He  detailed  that Section  25  (page  38, line  20)  Alaska                                                                    
Aerospace   Corporation,  reappropriated   funds  from   the                                                                    
corporation  to  the  Hope Community  Resources,  Inc.,  for                                                                    
upgrades to  housing to  meet state  licensing requirements.                                                                    
Subsection  (b)  reappropriated  $3 million  to  the  Alaska                                                                    
Housing  Finance Corporation  for  the supplemental  housing                                                                    
program.                                                                                                                        
                                                                                                                                
Vice-Chair Saddler  asked what amount was  reappropriated to                                                                    
Hope  Community  Resources,  Inc. for  licensing  fees.  Mr.                                                                    
Michel  answered  that  there   was  a  variety  of  capital                                                                    
appropriation items Hope  Community Resources requested. The                                                                    
state  requirements  for  licensing  would  cost  Hope  $125                                                                    
thousand, which was the amount specified in the bill.                                                                           
                                                                                                                                
Co-Chair  Thompson asked  members  to  hold questions  until                                                                    
after Mr. Michel ended his sectional presentation.                                                                              
                                                                                                                                
Mr.  Michel  addressed  subsection (c)  that  reappropriated                                                                    
funds  to  the  Cold  Climate Housing  Research  Center.  He                                                                    
turned to  subsection (d) that  reappropriated funds  to the                                                                    
Fairbanks   North   Star   Borough   School   District   for                                                                    
renovations at  the Barnette  Magnet School.  Subsection (e)                                                                    
reappropriated funds  to DOT for  the Alaska  Marine Highway                                                                    
System  vessel  overhaul  and rehabilitation.  He  moved  to                                                                    
Section 26  (page 39, line  31) Commercial  Vessel Passenger                                                                    
Tax  Account, which  reappropriated  lapsed  funds from  the                                                                    
account  back into  the passenger  tax  account. Section  27                                                                    
(page  40, line  7)  Department of  Commerce, Community  and                                                                    
Economic  Development, included  a  reappropriation for  $33                                                                    
thousand from the Alaska Energy  Authority (AEA) Mount Spurr                                                                    
Geothermal  Project  reappropriated  to the  AEA  electrical                                                                    
emergencies  program.  Subsection  (b)  reappropriated  $9.5                                                                    
million  from  the Mount  Spurr  Geothermal  Project to  the                                                                    
renewable energy  grant fund. He shared  that subsection (d)                                                                    
was  a  reappropriation  to the  Denali  Commission,  for  a                                                                    
federal-state partnership  grant. He moved on  to Section 28                                                                    
(page  40  line  28)  Department   of  Education  and  Early                                                                    
Development which  included reappropriations to pay  for the                                                                    
current year's  major maintenance  projects for  schools. He                                                                    
discussed  Section  29  (page 41,  line  19)  Department  of                                                                    
Environmental    Conservation     (DEC)    which    included                                                                    
reappropriations amounting  to $3.026  million for  a number                                                                    
of  DEC   projects  for  the  Department   of  Environmental                                                                    
Conservation.   He   specified   that  $800   thousand   was                                                                    
reappropriated to  the Spill Prevention and  Response (SPAR)                                                                    
account.                                                                                                                        
                                                                                                                                
3:42:03 PM                                                                                                                    
                                                                                                                                
Mr.  Michel  shared  that  the  numbered  subsections  under                                                                    
Section 29  listed the reappropriations made  for the Naknek                                                                    
sewer relocation and system upgrade.  He stated that Section                                                                    
30,  (page 45,  line  28) Department  of  Health and  Social                                                                    
Services  included   reappropriations  that   mitigated  the                                                                    
mistake from  the prior year  when the words  "general fund"                                                                    
was  inadvertently  omitted   from  the  Fairbanks  Virology                                                                    
Laboratory  reappropriation.  He  reported that  Section  31                                                                    
(page  46,   line  23)  Department  of   Natural  Resources,                                                                    
reappropriated funds  to the  unified permit  automation and                                                                    
document management system  for permit streamlining. Section                                                                    
32  (page   46,  line  28)   Department  of   Public  Safety                                                                    
reappropriated  funds  from  the video  judicial  conference                                                                    
arraignment  study  in  the amount  of  $100,000  for  state                                                                    
trooper video  equipment and storage. He  noted that Section                                                                    
33 (page 47, line  3) House Districts, were reappropriations                                                                    
that changed  the scope  of the  same projects.  He stressed                                                                    
that the  projects were not  new. Section 34 (page  47, line                                                                    
21) House Districts  29 - 31 reflected a change  in the same                                                                    
project. He  noted that Section  35 (page 48, line  1) House                                                                    
Districts  29  - 31  was  a  reappropriation for  the  Inner                                                                    
Island Ferry  Authority in the  amount of $200  thousand. He                                                                    
stated that Section  36 House Districts 38 -  39 reflected a                                                                    
reappropriation  for  lapsing  funds   for  the  exact  same                                                                    
project. Subsection  (b) related to a  pilot project program                                                                    
study that would enable the  Norton Sound Health Corporation                                                                    
to  takeover a  juvenile justice  facility for  a behavioral                                                                    
health or  wellness center  to be  paid entirely  by federal                                                                    
money.  Section  37  (page  48,   line  21)  Office  of  the                                                                    
Governor, reappropriated  $500 thousand that  was designated                                                                    
for Arctic Policy  back into the general  fund; other monies                                                                    
were  reappropriated  for  Artic   policy.  He  voiced  that                                                                    
Section   38  (page   48,   line   31)  Reappropriation   of                                                                    
Legislative  Appropriations  reappropriated   funds  to  the                                                                    
Alaska  Legislature,  Legislative  Council,  Senate  Special                                                                    
Committee on  the Arctic, for  work conducted  last session.                                                                    
Subsection  (b)  totaled   approximately  $7.5  million  and                                                                    
reappropriated  funds  for   the  Capitol  building  seismic                                                                    
retrofit.  He  noted that  Section  39  (page 50,  line  11)                                                                    
Shared  Taxes and  Fees, reflected  the amount  necessary to                                                                    
refund to  local governments and other  entities their share                                                                    
of taxes  and fees  collected for  various programs  for the                                                                    
fiscal year. Section 40 (page  50, line 19) Non-general Fund                                                                    
Receipts  which pertained  to the  Mental Health  Budget and                                                                    
related  to Medicaid.  He read  the following  language from                                                                    
Section 40:                                                                                                                     
                                                                                                                                
     … [for  the proposed expansion of  the state's Medicaid                                                                    
     program]  may not  be accepted  or expended  without an                                                                    
     acceptable reformation plan  and appropriation approved                                                                    
     by the legislature.]                                                                                                       
                                                                                                                                
Mr. Michel referred  to Section 41 (page 51,  line 7) Alaska                                                                    
Housing  Capital  Corporation (AHCC),  which  reappropriated                                                                    
funds from many items and  deposited the money into the AHCC                                                                    
account.                                                                                                                        
                                                                                                                                
3:46:28 PM                                                                                                                    
                                                                                                                                
He  highlighted  that   subsection  (a)  reappropriated  the                                                                    
remaining funds from the Mount  Spurr Geothermal Project and                                                                    
that subsection (b) reappropriated  the remaining balance of                                                                    
the  Alaska Aerospace  Corporation  launch pad  construction                                                                    
funds  into  the  corporation's account.  He  reported  that                                                                    
subsection  (c) reappropriated  the remaining  $250 thousand                                                                    
from the  state ferries $2.5 million  appropriation into the                                                                    
AHCC  account.   He  turned   to  subsection   (d)  totaling                                                                    
$27,108,103   of   various   lapsing  project   funds   that                                                                    
reappropriated  the  lapsing  funds into  the  AHCC  account                                                                    
versus depositing  the capital  funds back into  the general                                                                    
fund.  The AHCC  account  funds were  expended similarly  to                                                                    
general  funds.  He  delineated  that  the  purpose  of  the                                                                    
account was to keep the  previous capital dollars as capital                                                                    
funds for future capital expenditures.                                                                                          
                                                                                                                                
Co-Chair  Thompson interjected  that  the  AHCC account  was                                                                    
created by the legislature several  years ago "as a place to                                                                    
park money that was not sweepable."                                                                                             
                                                                                                                                
Mr. Michel noted that there  were 93 numbered subsections of                                                                    
capital reappropriations into the AHCC account.                                                                                 
                                                                                                                                
Mr. Michel pointed to Section  42 (page 60, line 1) Repeals,                                                                    
and  explained  that  in  previous   versions  of  the  bill                                                                    
language was  inserted that  referred to  the Constitutional                                                                    
Budget Reserve and was removed  from the current version. He                                                                    
added  that  subsection  (a)  related  to  whether  interest                                                                    
accrued  for  Alaska  Marine  Highway  System  (AMHS)  could                                                                    
remain in the  AMHS and subsection (b)  referred to one-time                                                                    
education money. He  addressed Section 43 (page  60, line 5)                                                                    
Lapse, which  related to the  various sections  with lapsing                                                                    
funds. Subsection (b)  related to funds that  did not lapse.                                                                    
He   detailed  that   Subsection  (d)   was  language   that                                                                    
designated all of the appropriations  in the bill as capital                                                                    
in order to prevent the  appropriations to be deposited into                                                                    
the department's operating budget.  He remarked that Section                                                                    
44  (page   60,  line   15)  Contingency,   was  contingency                                                                    
language.  Section 45  (page  60, line  18)  related to  the                                                                    
supplemental  appropriations contained  in the  legislation.                                                                    
Section  46   (page  60,  line   19)  related   to  "regular                                                                    
appropriations."  Finally, Section  47  (page  60, line  21)                                                                    
were effective dates for Sections 45 and 46.                                                                                    
                                                                                                                                
3:52:07 PM                                                                                                                    
                                                                                                                                
Mr.  Michel  reverted  to Section  43,  subsection  (c)  and                                                                    
remembered   that  $1.000.075   million  for   redistricting                                                                    
purposes  was  removed  in the  original  governor's  budget                                                                    
request.                                                                                                                        
                                                                                                                                
Co-Chair Neuman  apologized to Pat Pitney,  Director, Office                                                                    
of  Management and  Budget, Office  of the  Governor for  an                                                                    
occurrence during  budget discussions in his  office earlier                                                                    
in the day.                                                                                                                     
                                                                                                                                
Representative  Wilson  asked  for a  breakdown  of  capital                                                                    
budget  totals  of  general funds  and  federal  funds.  Mr.                                                                    
Michel  replied that  the capital  budget  was comprised  of                                                                    
$114 million  in unrestricted  general funds,  $60.8 million                                                                    
of designated  general funds, $70.4  million of  other state                                                                    
funds, and $1.277.650 billion of federal funds.                                                                                 
                                                                                                                                
Representative  Gara   asked  whether  the   capital  budget                                                                    
increased compared  to the  prior version  of the  bill. Mr.                                                                    
Michel  answered that  the  bill  included the  supplemental                                                                    
budget  and additional  supplemental requests  were included                                                                    
after discussions between the  House and Senate occurred. He                                                                    
delineated that  the difference between the  two versions of                                                                    
the legislation  totaled $48.415  million in  general funds.                                                                    
He  noted  that  $40  million  was  appropriated  as  FY  15                                                                    
supplemental   funds  for   Medicaid.  An   additional  $250                                                                    
thousand in  designated general funds  were included  in the                                                                    
Senate version.  The Senate decreased general  funds by $2.5                                                                    
million in other state funds for supplemental items.                                                                            
                                                                                                                                
Representative Gara pointed  to page 14 of  the bill related                                                                    
to Knik  Arm Crossing money  in the amount of  $45.3 million                                                                    
in federal funds.  He wondered where the  money was included                                                                    
in  the prior  version. Mr.  Michel replied  that the  funds                                                                    
represented future  federal receipt authority. He  cited the                                                                    
item on  page 14, line  26, the National Highway  System and                                                                    
Non-National    Highway   System    Pavement   and    Bridge                                                                    
Reconstruction   and    Refurbishment   ($109,920,000)   and                                                                    
explained that  the item  had been  $45.3 million  higher in                                                                    
the previous version of the bill.                                                                                               
                                                                                                                                
3:56:51 PM                                                                                                                    
                                                                                                                                
Representative  Gara  wondered   whether  there  was  future                                                                    
receipt money  in the  prior bill version  for the  Knik Arm                                                                    
Crossing.    Mr.   Michel    replied   in    the   negative.                                                                    
Representative Gara  referenced page  14, line 23,  Knik Arm                                                                    
Crossing,  and asked  whether the  money was  future federal                                                                    
receipt authority. Mr. Michel affirmed.                                                                                         
                                                                                                                                
Mr.  Michel, in  response to  a question  by, Representative                                                                    
Gara answered  that the item on  line 26 was reduced  by the                                                                    
same  amount  as  the federal  receipt  authority  of  $45.3                                                                    
million  for the  Knik  Arm Crossing  when  included in  the                                                                    
current version.                                                                                                                
                                                                                                                                
Representative  Munoz asked  whether the  $45.3 million  for                                                                    
Knik  Arm  Crossing  was  consistent  with  former  Governor                                                                    
Parnell's   budget.   Mr.  Michel   expressed   uncertainty.                                                                    
Representative  Munoz   asked  for   a  follow  up   on  the                                                                    
information  and  in  addition  information  on  the  Juneau                                                                    
Access numbers as well.                                                                                                         
                                                                                                                                
Representative  Guttenberg  wondered   what  the  impact  of                                                                    
dedicating the  federal receipt  authority of  $45.3 million                                                                    
had  on   other  projects.  Mr.  Michel   replied  that,  in                                                                    
discussions with  DOT he discovered  that removing  the Knik                                                                    
Arm Crossing receipt authority from  the item on line 26 was                                                                    
appropriate. The Highway System  item acted as a placeholder                                                                    
for future  receipt authority.  He did  not know  the direct                                                                    
impact but was  assured by the department  and governor that                                                                    
the remaining $109 million was sufficient.                                                                                      
                                                                                                                                
4:00:02 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg  pointed   out  that   when  the                                                                    
Statewide   Transportation    Improvement   Program   (STIP)                                                                    
committee met  the STIP would  be amended and  some projects                                                                    
would  move off  of  the  list due  to  the  large Knik  Arm                                                                    
receipt authority.                                                                                                              
                                                                                                                                
Co-Chair Neuman asked for verification that the increment                                                                       
had been requested by the DOT. Mr. Michel responded in the                                                                      
affirmative.                                                                                                                    
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:01:37 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:01 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 26 CS WORKDRAFT FIN 041615 F version.pdf HFIN 4/16/2015 1:30:00 PM
SB 26