Legislature(1995 - 1996)
04/20/1995 08:45 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 20, 1995
8:30 A.M.
TAPE HFC 95-87, Side 1, #000 - end.
TAPE HFC 95-87, Side 2, #000 - #572.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 8:45 a.m.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Therriault
Representative Grussendorf
Representative Kelly
Representatives Kohring, Parnell and Navarre were absent
from the meeting.
ALSO PRESENT
Representative Brian Porter; Tom Wright, Staff,
Representative Ivan; Bob Bartholomew, Director, Income and
Excise Audit Division, Department of Revenue; Michael Stark,
Assistant Attorney General, Department of Law; Dennis
DeWitt, Staff, Representative Mulder; Jerry Shriner, Special
Assistant, Department of Corrections; Jerry Weaver, National
Bank of Alaska, Anchorage; Stan Ridgeway, Deputy Director,
Division of Vocational Rehabilitation, Department of
Education.
SUMMARY
HB 65 An Act establishing a loan guarantee and interest
rate subsidy program for assistive technology.
CSHB 65 (HES) was reported out of Committee with a
"do pass" recommendation and with a zero fiscal
note by the Department of Education, dated
3/22/95.
HB 219 An Act authorizing special medical parole for
terminally ill prisoners.
CSHB 219 (FIN) was reported out of Committee with
a "do pass" recommendation and with two zero
1
fiscal notes; one by the Department of
Administration, dated 3/27/95; and one by the
House Finance Committee for the Department of
Corrections, dated 4/20/95.
HB 230 An Act making appropriations to the Department of
Education for support of kindergarten, primary,
and secondary education and for community schools
programs for fiscal year 1996 and fiscal year
1997; making appropriations from the
constitutional budget reserve fund under art. IX,
sec. 17(c), Constitution of the State of Alaska;
and providing for an effective date.
HB 230 was rescheduled.
HB 269 An Act relating to credits against certain taxes
for contributions to certain public educational
radio and television networks and stations and to
endowments for public educational radio and
television networks; and providing for an
effective date.
HB 269 was HELD in Committee for further
discussion.
HB 286 An Act providing an exemption from gambling and
certain alcoholic beverage laws for gambling
conducted by cruise ships for their ticketed
passengers in the offshore water of the state;
relating to promotions on board cruise ships;
defining 'cruise ship'; providing for exemption
procedures for certain cruise ships before they
can conduct gambling in the offshore water of the
state; providing an exemption from the
coin-operated device tax for cruise ships exempted
from the gambling laws; and providing for an
effective date.
HB 286 was rescheduled to 1:30 p.m. on 4/20/95.
HOUSE BILL NO. 65
"An Act establishing a loan guarantee and interest rate
subsidy program for assistive technology."
REPRESENTATIVE BRIAN PORTER, sponsor HB 65, testified in
support of the legislation. He explained that HB 65 would
provide a mechanism to use federal funding to provide
assistive technology opportunities to individuals with
disabilities. The state would guarantee 90 percent of the
federal loan. He emphasized that the program will allow
2
disabled persons to buy items that can assist them in
becoming productive members of society. The legislation is
pointed to those who cannot afford the technologies but are
not poor enough to qualify for welfare assistance. The
program would be administered by individual banks. He
emphasized that other states that have initiated the program
have had a default rate of 5 to 5.5 percent.
In response to a question by Representative Therriault,
Representative Porter clarified that federal funding is
anticipated at $100.0 thousand dollars to initiate the
program. He clarified that the report required by the
legislation would not be annual.
JERRY WEAVER, SENIOR VICE-PRESIDENT, NATIONAL BANK OF ALASKA
testified via the teleconference network. He spoke in
support of HB 65. He observed that there are approximately
20,000 persons with disabilities in Alaska.
STAN RIDGEWAY, DEPUTY DIRECTOR, DIVISION OF VOCATIONAL
REHABILITATION, DEPARTMENT OF EDUCATION testified in support
of HB 65. He noted that the legislation provides a loan
guarantee and an interest rate subsidy for those that
qualify. He anticipated that the program would be funded at
$100.0 thousand dollars a year for four years though federal
assistive technology funding.
Representative Brown asked who would manage the loans. Mr.
Ridgeway explained that the Director of Vocational
Rehabilitation would set up a loan committee that would
establish the guidelines and assure that funds are not over-
committed. The banking institutions will administer their
own loan funds.
Representative Brown noted that the Department of Commerce
and Economic Development manages most of the state's loan
programs. Mr. Ridgeway stated that the Department of
Commerce and Economic Development is not involved in the
program at this time. Representative Brown observed that
most state loan functions have been consolidated in the
Department of Commerce and Economic Development.
Mr. Ridgeway clarified that state funding would come into
effect if a loan was defaulted.
In response to a question by Representative Therriault, Mr.
Ridgeway explained that there is no actual cash outlay for
the interest subsidy. The interest subsidy is established
by the state and bank. He explained that a portion of the
funds could be used for the buy down of interest rates.
Representative Foster MOVED to report CSHB 65 (HES) out of
3
Committee with individual recommendations and with the
accompanying fiscal note.
CSHB 65 (HES) was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Education, dated 3/22/95.
HOUSE BILL NO. 219
"An Act authorizing special medical parole for
terminally ill prisoners."
DENNIS DEWITT, STAFF, REPRESENTATIVE MULDER testified in
support of HB 219. He provided members with a proposed
committee substitute for HB 219, work draft #9-LSO810\M,
dated 4/19/95 (copy on file). He explained that the
committee substitute removes the requirement for parolees
and prisoners to pay for drug testing. He observed that HB
219 provides the Department of Corrections additional tools
to control spiraling inmate health care cost by allowing
special medical parole for terminally ill and severely
disabled prisoners. The legislation also allows the
Department to charge for medical services within facilities.
The legislation creates a new category of parole called
"special medical parole" for inmates who are suffering from
terminal diseases or are severely disabled. The
classification only allows parole. It does not guarantee
parole. The judgment will still rest with the Parole Board.
The change was recommended by the Alaska Sentencing
Commission. He observed that inmates may be medicaid
eligible if they are paroled. Medicaid pays 50 percent of
health care costs.
Mr. DeWitt noted that the legislation will also allow the
Commissioner of the Department of Corrections to establish
charges for the health care provided by the Department. He
emphasized that the legislation will help deter frivolous
use of health care by inmates.
In response to a question by Representative Brown, Mr.
DeWitt clarified that the committee substitute would result
in a zero fiscal note by the Department of Corrections.
Representative Brown asked if there would be projected
savings. Mr. DeWitt acknowledged that a savings is
expected. He emphasized that it is difficult to calculate
the savings. Representative Mulder observed that the
Department expressed concern that their budget not be
effected by an anticipated savings.
Representative Mulder spoke in support of HB 219. He noted
that the Department is in strong support of the legislation
in order to control spiraling medical costs in the
4
institutions. He MOVED to adopt the committee substitute
for HB 219, work draft #9-LSO810\M, dated 4/19/95. He
explained that the costs of administering the drug testing
repayment overshadowed the benefits in the legislation.
There being NO OBJECTION, work draft #9-LSO810\M was
adopted.
JERRY SHRINER, SPECIAL ASSISTANT, DEPARTMENT OF CORRECTIONS
clarified that the Department of Corrections would support a
zero fiscal note with the adoption of CSHB 219 (FIN). He
stressed that collection would be difficult and the cost of
collecting could exceed the amount collected.
In response to a question by Representative Martin, Mr.
Shriner noted that there are no prisoners who would be
currently affected by the legislation. He stated that it is
difficult to anticipate potential savings.
Mr. DeWitt reiterated that parolees would be eligible for
the medicaid program.
In response to a question by Representative Grussendorf, Mr.
DeWitt clarified that parole cannot be forced on an
individual. He stated that the state or the inmate could
initiate a request for parole. The current terms of parole
would not be changed. Representative Grussendorf noted that
some prisoners may have no place to go outside of the
prison.
Representative Brown noted that the sponsor statement
estimated that 5 to 10 prisoners may be affected. Mr.
DeWitt emphasized that there would not be a large number of
inmates affected. Representative Mulder stressed that a few
drive the majority of the costs. He observed that one
terminally ill prisoner had medical bills of $567.0 thousand
dollars over two months.
Representative Brown asked if prisoners have alternative
health insurance. Mr. Shriner estimated that very few would
have alternative health insurance other than medicaid. He
noted that one prisoner who would have been eligible under
the bill was recently placed in a nursing home.
Representative Brown noted that section 13 states that
prisoners are responsible for their own medical care and
would be required to pay a portion of the costs based upon
the prisoner's ability to pay. Mr. DeWitt noted that
section 13 is new policy. He stressed that many inmates
have some funds. He stated that the co-payments would be
small. The provision is designed to act as a deterrent to
frivolous complaints.
5
Representative Brown expressed concern with the effect that
the provision would have on people with resources and who
are confined for some period of time. She observed that
health insurance is more expensive if the person is not part
of an employee's plan. Mr. DeWitt replied that the
expectation is that there would be a relatively small number
of inmates that would have the independent wealth to cover
their own health care. He stressed that it is an attempt to
allow the Department to get control on utilization as
opposed to securing revenue.
Mr. DeWitt noted that there will be individuals in halfway
houses and soft beds that will have other coverage or
resources. The legislation allows the Department to become
a secondary payer to the primary health care provider.
Representative Brown asked if the income of a working spouse
could be reached by the Department. Mr. DeWitt expected
that the initial focus would be to deter unnecessary
utilization and capture available other coverage. He
acknowledged that the legislation allows a broader
interpretation. He emphasized that Alaska is not a
community property state. He stressed that because the
institution does not have its own billing system it is going
to be difficult to bill other coverage externally. He noted
that the intent is to allow the Department to take advantage
of other coverage that is available or to access the
resources of someone that is independently wealthy.
Representative Brown questioned the legality of the
retroactive provision.
MICHAEL STARK, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
assured her that the retroactive provision would not present
a legal problem. He emphasized that the provision is not
intended as part of the punishment imposed on an inmate. It
is a reasonable effort by the state to defer expenses. He
added that institutionalized populations often include
individuals that manifest medical complaints in which there
is no basis in fact. He stressed that the legislation will
deter frivolous medical complaints.
Representative Brown reiterated concerns with the breadth of
the provision. She asked to what extent the state would
pursue other resources. Mr. Stark suggested that some
mechanism could be developed to pursue resources that
inmates may have. He stressed that it will take time to
develop procedures. He emphasized that there will be no
denial of medical services. He observed that regulations
will have to be adopted.
Representative Therriault MOVED to report CSHB 219 (FIN) out
6
of Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 219 (FIN) was reported out of Committee with a "do
pass" recommendation and with two zero fiscal notes; one by
the Department of Administration, dated 3/27/95; and one by
the House Finance Committee for the Department of
Corrections, dated 4/20/95.
HOUSE BILL NO. 269
"An Act relating to credits against certain taxes for
contributions to certain public educational radio and
television networks and stations and to endowments for
public educational radio and television networks; and
providing for an effective date."
TOM WRIGHT, STAFF, REPRESENTATIVE IVAN provided members with
Amendment 1 (Attachment 1). He explained that the amendment
added the Fisheries Resource Landing Tax at the request of
the Department of Revenue to the list of allowable tax
credits; limits the tax contribution at $400.0 thousand
dollars; and sunsets the credit for contributions to public
broadcasting after five years.
(Tape Change, HFC 95-87, Side 2)
Mr. Wright clarified that upon the sunset the contribution
ceiling will revert to the current level. He observed that
the sunset was included in response to concerns regarding
the Endowment Trust and contributions to individual
stations.
Representative Martin expressed concern with the inclusion
of the Fisheries Resource Landing Tax.
BOB BARTHOLOMEW, DEPUTY DIRECTOR, DIVISION OF INCOME AND
EXCISE AUDIT, DEPARTMENT OF REVENUE explained that the state
shares 50 percent of the collection of shared fish taxes.
The tax credit will reduced what is shared to the local
governments. The general fund contribution would not be
reduced.
Representative Therriault spoke in support of including the
Fisheries Resource Landing Tax in the contribution credit.
Mr. Bartholomew observed that the Department of Revenue felt
that the tax should be included so that all tax payers would
be afforded the same credit.
In response to a question by Representative Brown, Mr.
Bartholomew explained how the Fisheries Resource Landing Tax
7
operates. It was instituted in FY 94. It is applied
against fish caught outside of the three mile state waters
limit and landed inside of Alaska to be transported to other
areas. The value of the fish is taxed by 3.3 percent. Fish
caught inside Alaskan waters are taxed at the same rate.
The tax is estimated to bring in $6.0 million dollars.
Fifty percent of the tax would be shared to the areas where
the fish tax was collected. The state would receive $3.0
million dollars. The tax program is currently under
litigation. The tax will not be shared until all legal
challenges have been resolved.
In response to a question by Representative Brown, Mr.
Bartholomew clarified that general fund revenue will not be
reduced by the addition of the Fisheries Resource Landing
Tax. The credit would be deducted from the municipal share
of the tax. He explained that all municipalities will share
in the loss of the credit. Any municipality subject to
sharing will be reduced a pro-rata share.
Representative Brown asked if the credit will reduce income
to communities that receive a portion of the shared taxes.
Mr. Bartholomew stated that the portion of the tax credits
that are claimed against the fisheries taxes would reduce
the municipal share. He stressed the inability to determine
the exact amount that would be potentially reduced.
Representative Martin expressed concern that the Department
of Revenue is being required to perform additional
administrative duties. Mr. Bartholomew noted that the
Department does not allocate the cost of administering the
tax programs.
In response to a question by Representative Martin, Mr.
Wright acknowledged that local governments had not had an
opportunity to respond to the amendment.
Representative Grussendorf suggested that including a credit
for the fisheries tax amounts to cost shifting. He spoke in
support of the five year sunset provision.
Mr. Bartholomew noted that the Fisheries Tax was already
included in HB 269. He emphasized that the new credit will
be treated the same as the current credit in statute. Co-
Chair Hanley observed that section 15 is current law. He
stated that the Fisheries Business Tax which applies to fish
caught in Alaskan waters was included in previous law. The
credit was taken out of the municipal portion. The
amendment adds fish that are caught outside of the three
mile limit.
Representative Brown asked the impact on local governments.
8
Mr. Bartholomew stated that it is hard to estimate new tax
payers. He observed that the fiscal note was based on
current contributions. He noted that the fiscal impact to
municipalities would not change with the addition of public
broadcasting. He stated that there is no sharing on
contributions to public broadcasting or education on the
taxpayers part. He stressed that the impact is one hundred
percent on the state treasury.
Representative Mulder MOVED to adopt Amendment 1.
Representative Martin OBJECTED. He stressed that local
governments should have a chance to testify on the change.
Mr. Wright noted that some public radio stations are owned
by local governments. Representative Brown suggested that
the question be divided. Representative Mulder spoke
against dividing the question. He emphasized that rural
Alaska is the real beneficiary. A roll call vote was taken
on the main MOTION.
IN FAVOR: Kelly, Mulder, Therriault, Hanley
OPPOSED: Brown, Grussendorf, Martin
Representatives Kohring, Navarre, Parnell and Foster were
absent from the vote.
The MOTION FAILED (4-3).
Representative Mulder stressed that rural communities would
benefit from the amendment. Representative Grussendorf
emphasized the need for more discussion. Representative
Therriault suggested the bill be held.
Representative Brown provided members with Amendment 2
(Attachment 2). She explained that the amendment would
include contributions to public schools for education
technology, among organizations that are authorized to
receive the tax credit. She stressed the need for
educational technology.
Co-Chair Hanley expressed concern that the legislation not
become too inclusive. Representative Kelly asserted that
public radio and television are a low priority.
Representative Therriault suggested the amendment be
included in HB 106, Percent for Art.
Representative Grussendorf encouraged Representative Brown
to withdraw the amendment.
Representative Brown observed that new schools generally
allocate dollars for educational technology. She observed
that older schools are the most in need of educational
9
technology.
Co-Chair Hanley noted that Amendment 2 had not been moved.
HB 269 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 10:00 a.m.
10
| Document Name | Date/Time | Subjects |
|---|