Legislature(1999 - 2000)
05/06/1999 01:55 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 6, 1999
1:55 P.M.
TAPE HFC 99 - 119, Side 1.
TAPE HFC 99 - 119, Side 2.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:55 P.M.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Vice Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative Williams
Representative G. Davis
ALSO PRESENT
Sheila Peterson, Staff, Senator Gary Wilken; Llewelyn
Lutchansky, Staff, Senator John Torgerson; Jerry McCune,
Lobbyist, United Fishermen Association, Juneau; Kevin
Brooks, Director, Division of Administrative Services,
Department of Fish and Game; James Baldwin, Assistant
Attorney General, Department of Law; Jay Lively, Deputy
Commissioner, Department of Health and Social Services; Rick
Solie, (Testified via Teleconference), Fairbanks Memorial
Hospital, Fairbanks; Lisa Wolf, (Testified via
Teleconference), Director of Planning, Providence Medical
Center, Anchorage.
SUMMARY
HB 187 An Act relating to the certificate of need program
for nursing care facilities and other facilities;
and providing for an effective date.
CS HB 187 (FIN) was reported out of Committee with
"no recommendation" with a fiscal note by the
Department of Health and Social Services dated
4/26/99.
SB 146 An Act relating to the amount and disposition of
the commercial fishing license fee and to the
fishermen's fund; and providing for an effective
date.
HCS CS SB 146 (FIN) was reported out of Committee
with "no recommendation" and with a fiscal note by
the Department of Labor and the Department of Fish
and Game.
HOUSE BILL NO. 187
An Act relating to the certificate of need program for
nursing care facilities and other facilities; and
providing for an effective date.
Co-Chair Therriault advised that the committee substitute
would provide for a "tighter" title.
Representative Bunde MOVED to adopt work draft, 1-LS0708\D,
Lauterbach, 5/6/99, as the version before the Committee.
There being NO OBJECTION, it was adopted.
Representative Bunde noted that he had been involved with
the Long Term Health Care Task Force which spent much time
discussing nursing concerns and costs related to nursing
home facilities. He pointed out that the legislation would
address the State's need for a nursing home facility.
SHEILA PETERSON, STAFF, SENATOR GARY WILKEN, stated that
Alaska has had a Certificate of Need (CON) law since 1976.
The purpose of that law is to insure the development of an
accessible, cost-effective health care system with quality
service. Currently, the Department of Health and Social
Services reviews all nursing home expansion projects with an
estimated cost of over $1 million dollars. The review of
each request is limited to factors of accessibility and
quality in order to determine if the service is available
and could be provided in a quality manner.
Under the proposed legislation, a new standard of need would
be adopted for nursing home CON requests. The revised
standard allows decisions to be made based on additional
criteria such as need, financial feasibility and
availability of alternatives. Under the change, a new
nursing home project would need to demonstrate cost
effectiveness and appropriateness of the service.
Ms. Peterson advised that the Department of Health and
Social Services estimates that on the average, ten new
nursing home beds would increase the Medicaid budget by
about $1 million dollars annually. The decision to expand
existing nursing home facilities has long-term implications
to both the State treasury, senior citizens and those with
disabilities. The legislation will give the Department of
Health and Social Services the tools necessary to make
informed decisions.
Co-Chair Therriault pointed out that a primary concern is
that the beds are eligible for Medicaid participation. If a
facility over bills and has fixed costs, those costs are
passed on to the State through Medicaid billings. The
proposed method allows front-end participation.
Representative Bunde recommended that it is financially
advisable to limit the number of nursing home beds. The
legislation would encourage more home and community care.
Co-Chair Therriault referenced Page 4, asking if CON would
continue to be in place for other medical facilities.
Representative G. Davis asked how the proposed legislation
would apply to HB 161. Co-Chair Therriault explained that
Medicaid considerations are exempt from HB 161 because they
are exempt from statute mechanisms addressing costs and the
options list.
JAY LIVELY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICESS pointed out that language had been included
to clarify that existing standards would apply to acute care
and that new standards will only apply to long term care.
Mr. Lively commented that the Department strongly supports
the legislation.
In response to Representative J. Davies, Mr. Lively
stipulated that some home care provided for individuals who
would have been eligible through the nursing home component,
would now be eligible through home and community based
services. Waiver costs are considerably less than nursing
home costs. The legislation provides for alternative use to
the most expensive care.
Representative Bunde pointed out that in order to be
Medicaid eligible, a person would need to be impoverished.
Representative J. Davies elaborated that it would ultimately
be cheaper for those people to stay in their own homes.
Representative Bunde noted that group would still require
State payment.
RICK SOLIE, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS
MEMORIAL HOSPITAL, FAIRBANKS, spoke in support of the
legislation. He reiterated that this bill is the product of
the Long-Term Care Task Force recommendations and would also
represent a good effort on the part of providers and users,
to address future problems of a growing elderly population.
LISA WOLF, (TESTIFIED VIA TELECONFERENCE), DIRECTOR OF
PLANNING, PRIVIDENCE MEDICAL CENTER, ANCHORAGE, voiced
support of the proposed legislation.
Representative Kohring asked if a certificate would be
required of all nursing care facilities which receive
Medicaid funds. Mr. Lively replied that would be a portion
of any nursing home cost. He added that the nursing homes
in Alaska are primarily funded (about 85%-90%) by Medicaid.
Care in this State is so expensive that most people can not
afford to pay for it privately.
Representative Foster MOVED to report CS HB 187 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 187 (FIN) was reported out of Committee with "no
recommendation" and with a fiscal note by Department of
Health and Social Services dated 4/26/99.
SENATE BILL NO. 146
An Act relating to the amount and disposition of the
commercial fishing license fee and to the fishermen's
fund; and providing for an effective date.
LLEWELYN LUTCHANSKY, STAFF, SENATOR JOHN TORGERSON, stated
that SB 146 would increase the cost of a crew member's
fishing license from $30 dollars per resident and $90 per
non-resident to $60 dollars for a resident and $125 dollars
for a non-resident. At present time, 60% of the crewmember
license fees goes into the Fisherman's Fund.
SB 146 would reduce the percentage of license fees that goes
into the fund from 60% to 39%. At the 39% level, the
Fisherman's Fund will have the same amount of funding it
receives now. The current balance of the fund is over $9
million dollars.
Ms. Lutchansky noted that SB 146 would direct 61% of the
crew license fee to the Fish and Game Fund to be made
available for appropriation in FY00 for the Commercial
Fisheries Management budget.
In conclusion, Ms. Lutchansky pointed out that the intent of
the legislation is to direct crew license fees so to benefit
the commercial fisheries industry.
JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, stated that the Administration supports the
legislation, however, there is concern with the proposed
amendment and asked the Committee to consider possible
measures to eliviate a potential legal problem. The bill
changes the rate on dedicated funds that existed before
statehood. Under legal opinion, when that occurs, it could
have the potential of destroying the dedication of funds.
Mr. Baldwin pointed out that there is an opinion split
between the Department of Law and the Legislative Council.
He requested Committee members to consider measures as taken
in the tobacco tax bill, in which certain contingent
provisions were formed.
Co-Chair Therriault asked if the Department had testified to
the issue in previous committee hearings. Mr. Baldwin
replied that he had sent a letter to the Senate Finance
Committee explaining the issue. He added that he had
discussed the concern with Senator Torgerson and his staff
and had testified regarding the concern in the House Labor
and Commerce Committee. Mr. Baldwin believed that Senator
Torgerson understood the problem, however, he believes that
the concern is that "lawyers disagree with one another".
Representative J. Davies asked if adding a surcharge rather
than changing the fees would eliminate the concern. Mr.
Baldwin explained in essence that is what had been done with
the tobacco tax until it was increased in 1998.
Representative Austerman voiced support for the concept of
the legislation, however, he advised that adjusting the
rules of a dedicated fund including the addition of a
surcharge could raise questions.
Ms. Lutchansky spoke to the dedicated fund issue. She noted
that the sponsor understands that there is a small risk that
this could be challenged, but thinks there would be time to
address the concern before it gets to court. Senator
Torgerson requests that the bill pass from Committee as is.
Representative J. Davies asked if the sponsor of the bill
had considered the surcharge. Ms. Lutchansky replied that
route would be risky.
Co-Chair Therriault MOVED to adopt Amendment #1. [Copy on
File]. Representative Austerman OBJECTED.
SHEILA PETERSON, STAFF, SENATOR GARY WILKEN, spoke to the
amendment. She pointed out that when SB 146 was before the
Senate Finance Committee (SFC), it came to Senator Wilken's
attention, that regardless of their age, any individual
should purchase a crew member license if they are on a boat
touching fish.
Ms. Peterson stated that when the crewmembers license fee
was raised from $30 dollars to $60 dollars, the Senator was
concerned about young children on boats fishing with their
parents in the "mom and pop" operation. Senator Wilken
drafted the amendment with the idea that a youngster 10
years or younger would only need to purchase a $5 dollar
license. Last year, there were 325 total residents involved
in this category. She understood that both the Department
of Fish and Game and the Department of Labor do not oppose
the legislation or the amendment. This would impact those
individuals that need to purchase a commercial fishing
license because they are engaged in the business of fishing.
Co-Chair Therriault stated it is not legal to hire children
to work on a boat because of child labor laws.
Representative J. Davies replied that is an exception to
that in the fishing industry.
JERRY MCCUNE, LOBBYIST, UNITED FISHERMAN ASSOCIATION,
JUNEAU, stated that a minor can be taken fishing as long as
they do not work on the machinery. He added that many
families work with their children and neighbors.
Representative Austerman spoke to his objection. He pointed
out that currently the charge is $30 dollars and questioned
why the State should reduce it. Ms. Peterson stated that it
could stay the same, however, Senator Wilken believes that
fishermen currently receive minimal assistance and that
children should never have had to buy a $30 dollar license.
KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF FISH AND GAME, commented that the amendment
addresses 350 licenses out of 25 thousand, of which vendors
sell most of those licenses.
Representative Grussendorf pointed out that there are many
"fishing" families in which the fishing boat is their home.
He acknowledged that the amendment would address the concern
adequately.
Representative Austerman MOVED to AMEND the amendment,
deleting "$5" and inserting "$30". Representative Foster
OBJECTED. Representative Austerman advised that is the
amount currently being paid. Representative Bunde inquired
the cost to issue a license. Mr. Brooks replied that the
Department pays 15% commission for issuance of a license and
the other costs have not been broken down. He observed that
$5 would be above the Department's cost.
A roll call vote was taken on the motion.
IN FAVOR: G. Davis, Austerman
OPPOSED: Bunde, J. Davies, Foster, Grussendorf,
Kohring, Moses, Williams, Therriault.
Co-Chair Mulder was not present for the vote.
The MOTION FAILED (2-8).
(Tape Change HFC 99 - 119, Side 2).
There being NO further OBJECTION to Amendment #1, it was
adopted.
Co-Chair Therriault questioned why the 3:1 ratio was not
incorporated into the raise of license fees. Ms. Lutchansky
replied that there had historically been a case that
challenged the non-resident fees. Mr. Brooks added that it
was a very complex formula used to determine the per capita
costs of commercial fishing invested by the State which
places a limitation on the differential.
Representative Bunde asked if the same ratio applied to
sport fishing. Mr. Brooks replied that the license fee is
closer to a 3:1 ratio, which results from the dollar
difference rather than the ratio. He pointed out that
concern had been discussed in previous committee hearings
and always came back to the proposed formula.
Representative J. Davies MOVED to ADOPT conceptual Amendment
2, which would apply to the constitutional concern from the
Department of Law. He recommended changing language on Page
1, Line 10, deleting "10" inserting "15"; Page 2, Line 5,
delete "$60" inserting "$30"; Page 2, Line 5 delete "$125"
and insert "$90". He continued, Page 2, Line 6, adding
language: "There is a surcharge of $30 for a resident
license fee and $35 dollars for the non residence license
fee". Page 2, Line 13, after "fee" add the language "and
surcharges"; Page 2, Line 19, deleting "39" and inserting
"60". He stated that the language of the amendment would
place the same amount of money into the fisherman's fund and
into the fish and game fund and which would separate more
cleanly the existing dedication. Representative Austerman
OBJECTED.
Representative Grussendorf noted that his intention was to
preserve the fisherman's fund and that future legislators do
not look to that fund as a revenue source. If the amendment
is adopted, it will clarify the intent of that fund.
Ms. Lutchansky voiced concern that 40% would possibly go to
the general fund rather than to the fish and game fund.
Representative J. Davies noted that his intent was not to
change that amount. Co-Chair Therriault pointed out that
the amendment could "trigger" a title change. Ms.
Lutchansky commented that the sponsor would not favor that
approach. Representative J. Davies responded that the
approach suggested by the amendment would create less of a
court challenge.
Representative Austerman observed that each year the
Legislature seems to indicate that commercial fishing
industry is not paying it's way in the State. He emphasized
that fish and game are the renewal resources of this State
and recommended that the proposed legislation is one of the
"brighter spots" in legislation proposed this session. It
provides a creative way to generate funds for the Department
of Fish and Game to continue their work of protecting our
natural resources. His voiced concern that the amendment
could possibly destroy the bill.
Representative J. Davies replied that the amendment could
protect the intent of the bill from the future risk.
Representative Bunde observed that the amendment would
change the amount of collected fees resulting in a fiscal
impact. Mr. Brooks understood Representative J. Davies'
intent that the 15% commission would apply to the original
fee.
Representative Bunde noted that he was uncomfortable with a
major rewrite of the bill. Mr. Brooks explained that the
amendment was largely the approach recommended by Mr.
Baldwin, Department of Law. Representative Austerman
reminded members that Mr. Baldwin stated that there is a
split opinion on the possible action of the legislation.
Representative G. Davis agreed that the amendment would
create a title change. Representative J. Davies disagreed
that there would be a need for a title change and that the
surcharge would be part of a consolidated fee. He stated
that the amendment would preserve the intent of the bill,
not changing the disposition of the funds.
A roll call vote was taken on the motion to adopt Amendment
IN FAVOR: J. Davies, Grussendorf
OPPOSED: G. Davis, Foster, Kohring, Moses, Williams,
Austerman, Bunde, Therriault
Co-Chair Mulder was not present for the vote.
The MOTION FAILED (2-8).
Mr. Brooks advised that the bill will generated enhanced
revenue. He addressed the Department of Fish and Game's
fiscal note. The commission will be changed from 15% to 10%
in the assumption that the expenditure will remain where it
currently is. The Department's budget is built on this
legislation moving as there is a $100 thousand dollar impact
where the general fund has been cut. Co-Chair Therriault
questioned if a new fiscal note would be necessary from
Committee action taken. Mr. Brooks responded that there
should be a change to the note, not to the expenditure but
rather a revenue estimate.
Representative Foster MOVED to report HCS CS SB 146 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal notes. Representative Williams
OBJECTED.
Representative Williams commented that with the fishing
disaster, fishermen can not pay more than they already are
paying. Many fishermen do not take money "out of State" as
strongly believed. He pointed out that the fishing industry
is the largest employer in the State of Alaska and adds a
lot of money to our economy.
Representative Grussendorf agreed with the comments of
Representative Williams, however, pointed out that the
Department is relying on this funding source to balance
their budget.
Representative Austerman echoed the comments of
Representative Williams, however, reflected that it is
essential to have the legislation then not have it.
Representative Kohring associated his remarks with those
made by Representative Williams.
Representative Bunde commented that he was pleased that the
commercial fishing industry was breaking even, which has not
always been the case. He emphasized that commercial fishing
is not a "State religion" and that industry must pay its
way.
Representative Austerman disagreed with Representative
Bunde's statement that commercial fishing has not paid it's
own way. The issue is that the taxes collected from
fishermen and then how those funds are disbursed is a
decision made by the Legislature, and that those funds often
do not make it back into the general fund. .
A roll call vote was taken on the motion to move the bill
from Committee.
IN FAVOR: G. Davis, Foster, Grussendorf, Austerman,
Bunde, J. Davis, Therriault, Mulder
OPPOSED: Kohring, Moses, Williams
The MOTION PASSED (8-3).
HCS CS SB 146 (FIN) was reported out of Committee with "no
recommendation" and with fiscal notes by the Department of
Labor and the Department of Fish and Game.
ADJOURNMENT
The meeting adjourned at 3:05 P.M.
H.F.C. 10 5/06/99
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