Legislature(2019 - 2020)ADAMS 519
03/22/2020 11:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB115 | |
| SB155 | |
| SB134 | |
| SB172 | |
| SB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 155 | TELECONFERENCED | |
| + | SB 55 | TELECONFERENCED | |
| + | SB 134 | TELECONFERENCED | |
| + | SB 172 | TELECONFERENCED | |
| += | SB 115 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 22, 2020
11:33 a.m.
[Note: continuation of March 21, 2020 meeting.]
11:33:59 AM
CALL TO ORDER
Co-Chair Johnston called the House Finance Committee
meeting to order at 11:33 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Jennifer Johnston, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick (via teleconference)
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
Representative Adam Wool
MEMBERS ABSENT
None
ALSO PRESENT
Darwin Peterson, Staff, Click Bishop; Chad Hutchinson,
Staff, Senate Majority; Senator David Wilson, Sponsor; Gary
Zepp, Staff, Senator David Wilson; Elizabeth Rexford,
Staff, Senator Donny Olson; Kris Curtis, Legislative
Auditor, Alaska Division of Legislative Audit; Senator
Donny Olson, Sponsor; Jasmin Martin, Staff, Senator Wilson;
Nancy Meade, General Counsel, Alaska Court System.
PRESENT VIA TELECONFERENCE
Brent Goodrum, Deputy Commissioner, Department of Natural
Resources; Ramona Monroe, Alaska Miners Association,
Anchorage; Karl Hanneman, Alaska Miners Association,
Anchorage; Albert Wall, Deputy Commissioner, DHSS, Juneau;
Jared Kosin, President and Chief Executive Officer, Alaska
State Hospital and Nursing Home Association, Anchorage;
Robin Minard, Mat-Su Health Foundation, Wasilla; Jon
Zasada, Policy Integration Director, Alaska Primary Care
Association, Anchorage; Don Black, Executive Director,
Bethel Family Clinic, Bethel; Eric Boyer, Program Officer,
Alaska Mental Health Trust Authority, Anchorage; Sevilla
Love, Integration Coordinator, Alaska Primary Care
Association, Anchorage; Prentice Pemberton, Counseling
Solutions of Alaska, Anchorage; Gennifer Moreau-Johnson,
Director, Division of Behavioral Health, Department of
Health and Social Services; Melissa Hill, Administrative
Operations Manager, Division of Health Care Services,
Department of Health and Social Services; Charles McKee,
Self, Anchorage; Representative Kelly Merrick.
SUMMARY
CSSB 55(2nd JUD)
APPOINTMENTS TO COURT OF APPEALS
CSSB 55(2nd JUD) was HEARD and HELD in committee
for further consideration.
CSSB 115(FIN)(efd fld)
MOTOR FUEL TAX; EV REG. FEE
CSSB 115(FIN)(efd fld) was HEARD and HELD in
committee for further consideration.
SB 134 MEDICAID COVERAGE OF LIC. COUNSELORS
SB 134 was HEARD and HELD in committee for
further consideration.
CSSSSB 155(RES)
EXPLORATION & MINING RIGHTS; ANNUAL LABOR
CSSSSB 155(RES) was HEARD and HELD in committee
for further consideration.
CSSB 172(L&C)
EXTENDING THE STATE MEDICAL BOARD; AUDIT
CSSB 172(L&C) was HEARD and HELD in committee for
further consideration.
Co-Chair Johnston reviewed the agenda for the meeting.
CS FOR SENATE BILL NO. 115(FIN)(efd fld)
"An Act relating to vehicle registration fees; and
relating to the motor fuel tax."
11:35:09 AM
Co-Chair Johnston indicated the committee would be hearing
SB 115 first.
Co-Chair Johnston OPENED Public Testimony.
Co-Chair Johnston CLOSED Public Testimony.
DARWIN PETERSON, STAFF, CLICK BISHOP, provided a brief
review of the legislation. SB 115 proposed to increase the
highway motor fuel tax from $.08 cents to $.16 cents. The
original legislation proposed to increase the marine fuel
tax from $.05 cents to $.10 cents. The amendment that was
added to the bill in the House Transportation Committee
provided a refund for commercial fishermen. In order to
receive a refund of $.05 cents per gallon, fishermen would
be required to send in their fuel receipts at the end of
the year.
Mr. Peterson reported that the bill did not propose a
change for aviation or jet fuel. He spoke about the off-
road refund. In current statutes if a person purchased
highway gasoline for off-road vehicles such as snow
machines and 4-wheelers, they could send in their receipts
for a refund of $.06 per gallon. The legislation proposed
to increase the refund amount for off-road vehicle fuel
from $.06 cents to $.12 cents. He was directed by the
sponsor to request that the committee consider amending the
bills effective date. Currently, the legislation reflected
an effective date of July 1, 2020. Due to the current
COVID-19 disaster, he respectfully requested the committee
consider extending the effective date to January 1, 2021.
Co-Chair Johnston replied that the committee would be
taking up amendments. She reported there were 4 amendments
submitted for consideration.
11:38:32 AM
Vice-Chair Ortiz MOVED to ADOPT Amendment 1, 3l-LS0895\E. l
Nauman 3/17/20 (copy on file):
Page 2, following line 22:
Insert a new bill section to read:
* Sec. 3. AS 43.40.00S(a) is amended to read:
(a) Every dealer or user of refined fuels shall pay a
surcharge of $.015 [$.0095] a gallon on refined fuel
sold, transferred, or used in the state."
Renumber the following bill sections accordingly.
Co-Chair Johnston OBJECTED for discussion.
Representative Josephson explained the amendment added a
tax of 55/100 cents per gallon to the purchase of refined
fuel. The funds would be used for making the prevention
account whole in the out years from the Spill Prevention
and Response Division. He borrowed the concept from a bill
offered in 2015 by Senator Micciche. The Senator had
increased the tax by $.0095 cents to support the division
which received a significant amount of its revenue from the
funding. The revenue had declined because cars were more
efficient and because throughput had declined, which was
another source of revenue for the department. He called it
the "one latte" tax because it would cost about $5.00 per
year for the average driver. He was told by the sponsor and
the administration that they were not opposed to the
amendment.
Representative Carpenter asked how much revenue a tax of
$5.00 per year per person would generate each year.
Representative Josephson responded that it would generate
additional revenue of $3.8 million.
Representative Knopp asked if the funding would go to the
Department of Environmental Conservation (DEC) for spill
response. Representative Josephson responded affirmatively.
He noted that the concept had already been applied in the
2015 legislation he mentioned. If the amendment passed, the
state would spend less to regulate and prevent spills.
Otherwise, the money would have to come out of the states
treasury. Currently, the fund could not sustain the
division past 2024. The fund would simply be depleted. He
cited the example of class 2 tank farms. The administration
wanted to terminate 7 positions, reduce training for
responders and staff, and reduce its regulation of long-
term soil and water contamination among other things. The
effect was already being felt.
Representative Knopp asked why the fund was in decline.
Representative Josephson replied that it had to do with
people purchasing hybrid cars and because of throughput
declining from 550,000 to 480,000 barrels per day and
falling.
11:43:54 AM
Vice-Chair Ortiz added that, with the gradual erosion of
revenue, it had been projected that the spill response fund
would be at zero by 2024.
Representative Knopp did not understand the correlation
with throughput because it was not a refined product.
Representative Josephson understood that, starting in 1986
and adjusted after the oil spill in 1989, there was a $.05
cent surcharge on throughput. One cent per barrel went into
the spill response fund which was designed to be used for a
massive Exxon-Valdez type of problem. The remaining $.04
cents went into the spill prevention account. The amendment
would supplement the prevention side.
Representative Wool wanted to make sure he understood the
amendment and provided what he thought were the terms. He
wondered about the total amount of refined fuel.
Representative Josephson thought Mr. Peterson could
respond. Mr. Peterson asked Representative Wool to repeat
his question. Representative Wool restated his question.
Mr. Peterson indicated that the additional increase of $.08
cents per gallon plus $.05 cents for marine fuel would
bring in an estimated amount of $34 million. He though a
half-cent would bring in about $3 million to $4 million.
Heating fuel was exempt from the tax. He indicated that
there were additional exemptions as well.
Representative Wool thought the total revenue from the tax
would be about $2 million. Representative Josephson
responded that it was $3.8 million and the total gallons
taxed was roughly 695 million gallons in Alaska.
Co-Chair Johnston WITHDREW her OBJECTION.
Representative Carpenter OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Knopp, LeBon, Ortiz, Wool, Johnston,
Foster
OPPOSED: Merrick, Sullivan-Leonard, Tilton, Carpenter
The MOTION to ADOPT Amendment 1 PASSED (7/4).
11:50:32 AM
Representative LeBon MOVED to ADOPT Amendment 2
31-LS0895\E.3 Nauman 3/20/20 (copy on file):
Page 1, line l, following "registration":
Insert "and registration"
Page 1, following line 2:
Insert new bill sections to read:
"* Section 1. AS 28.10.155(a) is amended to read:
(a) Except as provided in {c) of this section, the
[THE] owner of a motor vehicle [, OTHER THAN A
COMMERCIAL MOTOR VEHICLE,] that is required to be
registered under this chapter may elect to register
the motor vehicle permanently in lieu of registration
under AS 28.10.108 if the vehicle is at least eight
years old and the owner resides in the unorganized
borough or in a municipality that elects, by passage
of an appropriate ordinance, to allow the permanent
registration of motor vehicles. The permanent
registration expires when the owner transfers or
assigns the owner's title or interest in the vehicle.
A permanent registration may not be renewed. On
receiving the proper application and fees, the
department shall issue to the registered owner
registration plates, tabs, and a permanent
registration form.
* Sec. 2. AS 28.10.155 is amended by adding new
subsections to read:
(c) The following vehicles are not eligible for
permanent registration under (a) of this section:
(1) commercial motor vehicles;
(2) electric vehicles;
(3) plug-in hybrid vehicles;
(4) vehicles powered by an alternative fuel and
manufactured primarily for use on public roads.
(d) In this section,
(1) "alternative fuel" includes hydrogen and natural
gas;
(2) "electric vehicle" and "plug-in hybrid vehicle"
have the meanings given in AS 28.10.42l(k)."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 3"
Renumber the following bill sections accordingly.
Co-Chair Johnston OBJECTED for discussion.
Representative LeBon explained the amendment would exclude
electric vehicles, plug-in hybrid vehicles, and
alternatively fueled vehicles from being eligible for
permanent registration, known as a Z-tag. The issue was
brought to his attention by the American Automobile
Association (AAA) who noted the disparity between vehicles
powered by traditional motor fuel, such as gasoline and
diesel, versus electric and hybrid vehicles. He continued
that when contributing to the highway maintenance fund,
since electric and hybrid vehicles would be purchasing less
motor fuel at the pump the bill raised the bi-annual
registration costs for the vehicles to ensure they were
contributing to the highway maintenance as users of public
roads. However, current law allowed a person to buy an
electric vehicle that was more than 8 years old, purchase a
permanent registration which would be $200 for an electric
or hybrid vehicle, plus a $25 permit registration fee never
again having to contribute towards highway maintenance. He
argued that by excluding electric, hybrid, and alternative
vehicles from permanent registration fees, highway
maintenance costs could be recuperated. Prior testimony
revealed that the life span of a battery in an electric
vehicle was about 8 years. However, technology was
anticipated to improve.
Representative Josephson relayed that the bill already
treated hybrid and electric cars differently. He thought
the bill was potentially double-dipping by treating them
differently than other regular cars over 8 years old. He
asked if he was accurate.
Representative LeBon was looking to not exempt a hybrid or
electric vehicle just because it reached a certain age, if
it was still on the road. The goal was to continue to
collect a fee towards road maintenance even if a vehicle
reached a certain age. He argued that an electric or hybrid
vehicle should continue to contribute to road maintenance
as long as they were on the road.
Representative Wool provided clarity regarding the
amendment. He suggested that the basic average increase
would be $50 for a gasoline-powered car. The difference in
the registration fee for a hybrid or electric car would be
about $50. He thought the bill addressed the inequity and
leveled the playing field.
Co-Chair Johnston WITHDREW her OBJECTION.
Representative Carpenter OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Knopp, LeBon, Ortiz, Sullivan-Leonard, Tilton,
Wool, Carpenter, Josephson, Foster, Johnston
OPPOSED: Merrick
The MOTION to ADOPT Amendment 2 PASSED (10/1).
11:56:18 AM
Representative LeBon MOVED to ADOPT Amendment 3,
31-LS0895\E.4 Nauman 3/20/20 (copy on file):
Page 3, line 25:
Delete "1"
Page 3, line 27:
Delete "(A)[(1)]"
Insert "(1)"
Page 3, line 28:
Delete "(B)[(2)]"
Insert "(2)"
Page 3, line 30:
Delete "(C)[(3)]"
Insert "(3)"
Page 3, line 31:
Delete ";or"
Insert "."
Page 4, lines 1 - 3:
Delete all material.
Co-Chair Johnston OBJECTED for discussion.
Representative LeBon explained that Amendment 3 would
remove the language inserted by the House Transportation
Committee creating a $.05 cent per gallon refund for marine
fuel tax paid by licensed commercial fishing vessels. The
bill raised tax on marine fuel from $.05 cents to $.10
cents per gallon. The refund would essentially exclude an
entire industry from paying the increase in the tax which
went to state and municipal port and harbor maintenance and
upgrades which would directly benefit the fishing industry.
He understood that the commercial fishing industry had
experienced many economic challenges even before the
states current array of economic challenges. He continued
that the increase from other fees was certainly part of the
industry. However, he saw the amendment being about equity.
He could see the argument for reducing the amount of the
increase but not for excluding an entire industry from the
increase in which it would be a direct beneficiary. He
spoke with the sponsors office and the sponsor was okay
with the proposed change.
Representative Knopp asked for clarity on the amendment. He
noted on page 4 that there was an exemption for the
commercial fishing fleet. He asked about the items on
page 3, lines 25, 27, and 28 regarding off-road users.
11:59:01 AM
Representative LeBon responded that the intent of his
amendment was to address the favorable treatment that
commercial fishermen would receive from the $.05 cents per
gallon exemption under the amendment passed by the House
Transportation Committee. His understanding was that other
users of marine fuel such as charter fishing operators,
tourism operators, boating operators, barge operators, and
ferry operators would pay the $.05 cents per gallon
surcharge. Commercial fishermen would enjoy the ability to
apply for a refund by sending in their receipts. He posed
the question whether commercial fishermen were receiving a
benefit. Currently, the way the bill was structured,
commercial fishermen would receive a refund of the
additional $.05 cents per gallon. If the commercial
fishermen were not going to receive a benefit, he wondered
if other users such as charter boat operators, tourism
operators would receive a benefit. He thought the
commercial fishermen would benefit in some way and should
pay the tax.
Vice-Chair Ortiz spoke against the amendment. The
commercial fishing industry, under the current scenario
with COVID-19, was facing a huge loss in profits. When
considering a $.05 cents exemption. However, getting out to
the fishing grounds was costly in fuel. He did not agree
with the amendment.
12:02:11 PM
Representative Knopp opposed the amendment. He reported
that everything on page 3 reflected existing language
applicable to off-road equipment including loaders,
graders, and excavators used for road maintenance or at
mining sites. He read from a portion of the bill staring on
page 3, line 23. He concluded that the purpose of the motor
fuel tax was to fund highway maintenance. The vehicles he
was referring to were not used on highways. He also
referred to the new language on page 4. There were many
additional costs on the commercial fleet. He thought
anything that could alleviate the pain would be desirable.
Mr. Peterson replied that in his view the amendment was
deleting the sub numbers that were inserted because of the
new language on page 4, lines 1-3 creating the refund for
commercial fishermen. If the amendment sponsored by
Representative LeBon were to pass, the refund for $.12
cents per gallon for off-road use would still apply. The
refund would apply for anyone who purchased fuel for
vehicles used off-road. The amendment would delete the new
language inserted by the House Transportation Committee on
page 4, lines 1-3. If the amendment were to pass the
commercial fishing industry would no longer have the option
to apply for a refund for the additional $.05 cents.
However, the $.12 cent per gallon off-road rebate would
remain in the bill.
12:06:12 PM
AT EASE
12:07:31 PM
RECONVENED
Representative Knopp had not interpreted the amendment
correctly. Although he had received clarification, he
argued that some sectors of the commercial fishing industry
needed some relief. He continued to oppose the amendment.
Representative Wool asked how many other states provided a
different tax rate for marine versus highway fuel. Mr.
Peterson responded that most all other states charged the
same excise tax for marine fuel as they did for highway
fuel. Alaska was unique in having two different tax rates.
Representative Wool asked if different rates had applied in
Alaska for a significant period. Mr. Peterson responded
that the last time the marine fuel tax was changed was in
1994. The highway fuel tax was changed last in 1970. In
1945, when Alaska was still a territory and the tax was
created, he believed it was $.01 cent for both fuel
categories. He was unsure when the legislature separated
highway fuel tax from marine fuel tax charging different
rates. He suspected it was when the commercial fishing
industry came into existence. He would have to research
when the two taxes were separated.
Representative Wool understood the effects of the COVID-19
virus on several different industries. The sponsor of the
amendment mentioned other industries that would not be
exempt. He asked if a state aid package was in the works
for the fishing industry. Co-Chair Johnston thought several
relief avenues would be accessible in the near future.
12:11:17 PM
Mr. Peterson reported speaking with Jim Anderson, the
operations manager for investments at the Department of
Community and Economic Development (DCCED). Current statute
provides the department the ability to defer loan payments
and withhold penalties for the commercial fishing fleet
through loans provided by DCCED. He also understood that
the Alaska Commercial Fishing and Agriculture Bank (CFAB)
had the statutory authority to do so as well. Interest
would continue to accrue, but for the duration of the
current disaster, the commercial fishing fleet could defer
payments, particularly if the commercial fishing fleet was
not able to operate in the coming summer due to the
canneries not opening. He noted that permits would not be
seized as well.
Representative Wool asked about processors. He asked if the
reduction would apply. Mr. Peterson asked if Representative
Wool was talking about the amendment from the House
Transportation Committee. Representative Wool responded
affirmatively. Mr. Peterson responded in the negative. [Mr.
Peterson was interrupted with an additional question from
Representative Wool].
Representative Wool asked if the exemption would apply to
ancillary vessels such as a tender or a floating processor.
Mr. Peterson replied that the only people that could apply
for the refund were licensed commercial fishermen who had a
Commercial Fisheries Entry Commission (CFEC) license. He
did not believe it would apply to processors.
Representative Wool asked if most CFEC licenses were issued
to Alaska Residents. He wondered about the percentage of
licenses issued to residents versus non-residents. Mr.
Peterson confirmed there were non-residents who fished
commercially in Alaska but did not know the percentage.
Co-Chair Johnston WITHDREW her OBJECTION.
Vice-Chair Ortiz OBJECTED.
Representative LeBon provided closing remarks on
Amendment 3. He thought it was necessary to know how the
$.05 cent per gallon would benefit all payers or whether
anyone was excluded. He suggested it was easy to connect
the dots on the highway fuel tax improving highway
maintenance such as timely snow removal and roads remaining
open 24/7. He mentioned a Fairbanks family-owned trucking
business that was not opposed to the additional tax. The
company wanted the roads to be managed. He wondered if all
parties were being treated fairly.
Vice-Chair Ortiz remarked that the captain of the fishing
vessel had to fill out and submit the proper paperwork in
order to receive a refund. He was unsure how many fishermen
would actually submit the proper documentation. The amount
of money the state would lose was not calculable. However,
he felt granting the exemption was a statement about how
much the industry contributed to Alaskas economy.
12:16:58 PM
AT EASE
12:24:10 PM
RECONVENED
Representative Tilton had not seen the amendments prior to
the meeting. She appreciated the time to consult with other
members.
A roll call vote was taken on the motion.
IN FAVOR: LeBon, Wool, Johnston
OPPOSED: Merrick, Ortiz, Sullivan-Leonard, Tilton,
Carpenter, Josephson, Knopp, Foster
The MOTION to ADOPT Amendment 3 FAILED (3/8).
12:25:54 PM
Co-Chair Johnston MOVED to ADOPT Amendment 4, 31-LS0895\E.5
Nauman 3/20/20 (copy on file):
Page 1, line 5, following "$100,":
Insert "the owner of a vehicle powered by alternative
fuel shall pay a special biennial registration fee of
$100,"
Page 1, following line 8:
Insert a new paragraph to read:
"(1) "alternative fuel" includes hydrogen and natural
gas;"
Renumber the following paragraphs accordingly.
Representative Sullivan-Leonard OBJECTED for discussion.
Co-Chair Johnston reviewed the amendment. She noted there
were other alternative fueled vehicles being introduced
into the market. She indicated natural gas had been around
for a significant amount of time and felt it should be
included in the alternative fuel special biannual fee of
$100.
Representative Sullivan-Leonard asked if Representative
Johnston had a figure of how much the amendment would
generate in revenue. Co-Chair Johnston responded in the
negative. She explained that hydrogen-fueled vehicles were
just reaching the market presently. They would be limited
to markets in San Francisco and Vancouver. However, they
would be coming. She continued that natural gas-fueled
vehicles had come and gone. She wanted to ensure that both
types of alternative fueled vehicles were included.
Representative Wool replied that since the legislature did
not know what the tax structure was, he would be hard-
pressed to increase it for a new type of technology not
presently in existence. He asked if there was currently a
natural gas tax refund related to gas at a residence.
Co-Chair Johnston replied that in Anchorage there was
natural gas and there had been vehicles fueled by natural
gas including part of the municipalitys fleet. One of the
challenges with natural gas was the length of time it took
to fill up a car. The municipality converted to natural gas
then converted back. She did not think there was a natural
gas tax beyond what was currently in place to heat
residences and barbeques. She added that she did not
believe there was a natural gas motor fuel tax.
Representative Knopp supported the amendment. He thought
the sponsor had estimated about 600 alternative fueled
vehicles on the road. He thought the fee was very
appropriate and would help to pay for some of the states
road maintenance.
Representative Sullivan-Leonard MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Knopp, LeBon, Ortiz, Foster, Johnston
OPPOSED: Merrick, Sullivan-Leonard, Tilton, Wool,
Carpenter
The MOTION to ADOPT Amendment 4 PASSED (6/5).
12:31:22 PM
Co-Chair Johnston MOVED to ADOPT a Conceptual Amendment to
include an effective date of January 1, 2021 and to direct
Legislative Legal Services to make any necessary technical
and conforming changes.
Vice-Chair Ortiz OBJECTED for discussion.
Co-Chair Johnston explained that with current economic
uncertainties, she did not think the bill should take
effect in the current year. She also thought carve-outs
should be avoided, as it was unclear which industries would
be affected most.
12:32:17 PM
AT EASE
12:32:41 PM
RECONVENED
Co-Chair Johnston WITHDREW her motion.
Co-Chair Johnston restated her motion. She MOVED to ADOPT a
conceptual amendment that would include an effective date
of January 1, 2021 and to direct Legislative Legal Services
to make any technical or conforming changes.
Representative Tilton OBJECTED.
Representative Tilton wanted clarification that without the
amendment to change the effective date to January 1, 2021,
the bill would take effect 90 days after the governor
signed the bill if he chose to do so. She asked if she was
accurate. Co-Chair Johnston replied, "Thants correct."
Representative Tilton WITHDREW her OBJECTION.
Vice-Chair Ortiz OBJECTED for further discussion.
Vice-Chair Ortiz asked that if the amendment were to be
adopted, he wondered how much revenue would be lost. He
invited members to keep in mind the states infrastructure
and deferred maintenance costs.
Mr. Peterson responded that the effective date on the
Senate side was July 1, 2020 but failed on the Senate
floor. Currently, the bill would go into effect 90 days
after the governor signed the bill or allowed it to become
law without signature. It was difficult to know when the
bill would go into effect, as it was up to the Senate
President, once the bill passed in the Senate, when it
would be transmitted to the governor. If the bill was
transferred to the governor while the legislature was in
session, he would have 15 days, excluding Sundays to decide
what to do with the bill. Should the governor sign it or
allow it to become law without signature, it would be 90
days after that. The effective date of the bill without an
effective date would be sometime in the summer rather than
July 1, 2020. He anticipated that about $16 million would
be lost with a delayed effective date of January 1, 2021.
Vice-Chair Ortiz asked if Mr. Peterson thought the bill
sponsor would be open to the amendment. Co-Chair Johnston
interjected that she had spoken with the bill sponsor
earlier in the day and he was open to the amendment. Mr.
Peterson responded, "That's correct."
Representative Knopp asked that if the bill went into
effect July 1, 2020 there would be more revenue lost
because of activity in the summer. He believed Mr. Peterson
was assuming that revenues would be equal throughout the
year. He suspected that the summer months would generate
more revenue than in the winter months. He asked if it was
reasonable to think the state would be losing more than $16
million in revenue by deferring the effective date.
Mr. Peterson responded that it was certainly possible. He
assumed more revenue would be generated in the summer
months with the increase in tourism and rental car
business. He was providing a rough estimate of $16 million
to $17 million by taking half of what the bill would
generate in a year.
12:37:32 PM
Representative Wool thought any guess about fuel purchases
in the following months would be just a guess. He wondered
about the railroad. He commented that the Alaska Railroad
bought a significant amount of diesel. Mr. Peterson guessed
that the railroad would be exempt as a government entity
similar to the ferry system.
Representative Carpenter was uncertain of revenue loss.
However, it was also additional cash being taken from the
economy. Cash was the most important thing to get people
through the current situation.
Vice-Chair Ortiz WITHDREW his OBJECTION.
There being NO further OBJECTION, it was so ordered. The
conceptual amendment was ADOPTED.
12:40:07 PM
AT EASE
12:41:35 PM
RECONVENED
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 155(RES)
"An Act relating to exploration and mining rights;
relating to annual labor requirements with respect to
mining claims and related leases; relating to
statements of annual labor; defining 'labor'; and
providing for an effective date."
12:41:35 PM
CHAD HUTCHINSON, STAFF, SENATE MAJORITY, introduced himself
and indicated SB 155 was a mining rights bill. The bill was
the product of a multi-year process in which the sponsor
had been working with a number of stakeholders including
the Alaska Miners Association Working Group. The working
group was composed of several members including J.P.
Tangeman, Ramona Monroe, Deanna Crockett, Karl Hanneman,
and a number of small placer miners from Interior Alaska.
The Department of Natural Resources (DNR) had been helpful
in crafting the legislation. He noted that a couple of
members of the Senate had taken a special interest in the
bill over the years. He reported that the genesis of the
bill started during the Walker administration.
Mr. Hutchinson began the PowerPoint Presentation:
"Committee Substitute for Sponsor Substitute for Senate
Bill 155 (CSSSSB155(RES)) (copy on file). He addressed
slide 2 which discussed the purpose of the bill. The
legislation was an attempt to correct perceived problems
that had occurred throughout the mining industry over a
couple of decades. The bill addressed due process and
proper notice.
Mr. Hutchinson reported that Senator bishop had been
approached by small miners from the Interior and small
miners, in general, about paperwork violations causing them
to have problems related to their mineral interests. In
some cases, miners experienced a de facto taking their
mineral interests because of a typo in an Affidavit of
Annual Labor or other required paperwork. Essentially, the
bill was about mining rights. He thought the bill was
timely because it would help to ensure that Alaskas mining
laws would be adequately equipped for the future of the
nation and Alaska. As the state was looking at a new
economy it would be considering electric vehicles, the
internet, a planned integrated electrical grid system, and
smart homes, for example. The reality was that raw
materials were needed for all of the things he mentioned.
Alaska was a resource-rich state. He cited several of the
states resources. He remarked that the bill synced well
with some of the goals at the federal level. Senator
Murkowski was moving forward with the American Energy and
Innovation Act. The importance of mineral security was one
of the principles being considered in the act, as there was
an increased focus on decreasing the United States
reliance on China. China produced a significant amount of
rare earth elements including critical and strategic
minerals related to national defense. There was a national
appetite for the state to move in a different direction.
Mr. Hutchinson indicated that the foundation of the bill
started with the Alaska Constitution. He cited Article 8,
Section 1 that talked about the general policy of
developing resources available for maximum use and being
consistent with the publics interest. Article 8, Section
11 of the constitution dealt with mineral rights recognized
at statehood. The rights continued based on statements or
affidavits of annual labor. He explained that a miner was
required to provide a document that stated that they were
producing on the land and to pay royalties and rents on the
land. He indicated there would be further discussion on how
the state was ensuring that miners were in the best
position to do what they did best - produce. The state was
trying to give the benefit of the doubt to miners, as it
was in the interest of the state, small businesses, and
large businesses. The bill was also designed for miners in
the field and based on real world experience. Much of the
bill was directly based on an injustice that had likely
occurred previously and had been relayed to the Alaska
Miners Association.
Mr. Hutchinson moved to slide 3 which provided an example.
He explained that a small miner in the Interior had a small
typo on one of his filings related to his Statement of
Annual Labor. Even though the statement was filed properly
with the recorder's office and the notary stamp contained
the correct date, he was accused of abandoning the claim
because he failed to put the date on his statement. It was
a large problem for miners because they had invested time
and money but did not have a guarantee that they would have
a right to their claim in the future. The bill addressed
the problem.
12:48:27 PM
Mr. Hutchinson continued to slide 4 which addressed
qualifications in sections 1, 2, and 3. The bill was broken
into large sections. Sections 1, 2 and 3 addressed
qualifications. Currently, a person had to be a U.S.
citizen and 18 years old. A U.S. Corporation qualified as
an interest. Guardians of minors also qualified. The bill
would add a few provisions that occurred in real life that
the working group recommended for 2020. He read the list
from the slide:
Section 1 AS 38.05.190(a) is amended -
Qualifications
Adds that mining rights can be acquired by:
• Conservators of minors or incapacitated adults;
• Individuals at least 18 years of age or older who
have declared their intentions to become citizens
of the United States;
• Limited Liability Companies (LLCs);
• Registered trusts (with a qualified trustee)
Mr. Hutchinson noted that the word "persons" was changed to
"individuals" in the bill. Also, the language as it
pertained to declaring intentions to become a citizen of
the United States went back to the federal mining law of
1872.
Mr. Hutchinson turned to slide 5 which addressed Section 2
of the bill. The section had to do with due process and
proper notice. Senator Bishop wanted to make sure that
miners were given the ability that if there was a typo or
some sort of error, they would be given proper notice,
given time to cure the issue, and allowed to move forward
with production. If an unqualified person received notice,
they might become qualified or transfer their interest
within 90 days after due process and written notice and
before the department made a "void" declaration.
Mr. Hutchinson moved to slide 6 which addressed Section 3
dealing with qualifications specific to process. The
written notice was very important to Senator Bishop. There
were two levels of notice that existed in the bill. The
first was written notice via certified mail. The second was
a notice via regular mail. He explained that many miners in
the field were away from civilization. If a miner failed to
rectify the issue, the result would be void.
12:53:29 PM
Mr. Hutchinson discussed additional measures of Section 3
on slide 7:
• (f) If the unqualified person fails to cure the
defect within 90 days after the department sent
written notice, the department may declare the
exploration or mining interest "void" and open to
location. There shall be no third-party location or
judicial action within those 90 days.
• (g) "qualified to do business in this state" means
holding a certificate issued by the Commissioner of
Commerce, Community, and Economic Development
(necessary to do business in the state).
Mr. Hutchinson indicated Section 4 and Section 5 dealt with
mining claims on slide 8. He explained that deposit rights
were established in the State of Alaska by using a system
called the Meridian Township, Range, Section, and Claim
(MTRSC) System. It was suggested that a valid MTRSC system
location presumptively established the rights of the
deposits in the section that a miner filled out.
Mr. Hutchinson displayed slide 9 which showed a form
completed by miners. He reviewed the form contents
including the area for a claims sketch. The example was
done on a computer. However, he had seen forms with hand
drawn maps with xs denoting location.
Mr. Hutchinson moved to Section 5 of the bill on slide 10.
Section 5 dealt with mining claims and changes in locations
and amended notices. The bill eliminated some unnecessary
language that, because of changes made later in the bill,
was no longer relevant. There was a reference to
AS 38.05.200 which indicated that notices could be amended
at any time to correspond to amended locations, as long as
it did not interfere with the rights of others. It allowed
the miner to amend and correct, providing more freedom and
flexibility as long as the document was recorded in the
same manner as the original form.
Mr. Hutchinson returned to the theme of making sure miners
were producing and that every benefit of the doubt was
given to them to ensure that they would bring raw materials
to market.
Mr. Hutchinson advanced to slide 11 which showed an
Affidavit of Annual Labor. He indicated sections 6, 7, 8,
and 9 dealt with annual labor. Annual labor was one of the
things under the state constitution the miner had to do to
show that he was producing on the land. The sheet shown on
the slide was an example of a form miners had to complete.
The form showed who, what, when, and why details. The form
demonstrated that the ground was being worked. He reviewed
each section of the form. The most important section was at
the bottom of the form where a labor description was
provided. It explained the activities of the miners
including moving dirt, building roads, or exploration. The
form had to be completed every year and submitted to DNR.
12:57:35 PM
Mr. Hutchinson explained that Section 6 of the bill on
slide 12 outlined the guidelines of performance of annual
labor. The bill included a few new provisions that mirrored
more of what happened in reality. Sometimes there were
mineral interests, boundaries of federal or private Native
regional corporation land or state land. The bill sponsor
wanted to make it clear that one Statement of Annual Labor
and the performance occurring on the land could also
include the adjacent federal and private mineral interests
that might be in close vicinity.
Mr. Hutchinson noted that in the labor portion he included
what it looked like as it related to the amount miners
might have to pay if they did not work the grounds. The
rates included $100 for each claim and $400 for each
quarter section. If miners were not producing, they could
choose to pay a monetary fee. One of the provisions
included in the bill was that a miner could not pay in lieu
of producing or conducting labor on the ground for not more
than five consecutive years. The state did not want miners
sitting on grounds paying nominal amounts and not producing
raw materials.
Co-Chair Foster asked that if a miner with 10 claims or 10
quarter sections which were all adjacent to each other (all
touching) would only have to complete one affidavit rather
than one for each. He queried the fee and asked about
claims nearby. Mr. Hutchinson responded that as long as
there was a common plan for development in the areas, only
one Statement of Annual Labor would be required. The
purpose of the bill was to reduce paperwork for miners and
to make sure they were producing.
Co-Chair Foster asked if they would qualify if the claims
were 1 mile away rather than adjacent to each other. Mr.
Hutchinson presumed they would be touching. However, he
indicated there was someone online to answer the question.
Co-Chair Foster was comfortable with the answer. He also
asked for clarification about the ability to pay a fee if a
miner did not work the land. Mr. Hutchinson responded that
a miner could currently pay a fee. The bill would provide
particulars to the labor itself. The bill would also allow
a miner to pay without producing. However, a cap was being
inserted which would not allow payment beyond five
consecutive years.
Co-Chair Foster thought that as long as a miner worked once
every five years, they would be able to make payments for
five years. He provided an example and asked if he was
correct. Mr. Hutchinson deferred to Brent Goodrum from DNR
who was online.
1:01:48 PM
BRENT GOODRUM, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES (via teleconference), reported that currently in
state regulations miners were able to pay in lieu of labor.
The bill sought to define the limit in statute to no more
than five consecutive years.
Representative Josephson assumed that the point of the
five-year cap was to put a claim in service and produce it,
rather than for someone to only talk about it for several
years. Mr. Hutchinson responded in the affirmative.
Representative Josephson referenced Co-Chair Fosters
example of 10 adjacent claims. He wondered whether all ten
claims would be satisfied if the claim holder only worked
one of them. Mr. Hutchinson deferred to Mr. Goodrum. Mr.
Goodrum responded that if they were to work one particular
claim and held the other claims in common the labor on the
one claim would satisfy the other claims.
Representative Josephson asked if the new provision was
more generous than in current law where there was a more
overreaching expansive effort. He asked if he had made a
fair assessment. Mr. Goodrum replied that it was the
current practice as well with any affidavits of labor.
Labor that was conducted on claims that were held in common
could be attributed to all of the claims and covered them.
It was consistent with how DNR was currently doing things.
Representative Josephson asked that if he had a claim on
state land which was adjacent to federal land, a miner
would have to have a joint plan of development with the
federal claim owner. He wondered if he was correct. Mr.
Goodrum responded that Representative Josephson was
correct. Currently, in a situation where an adjacent
mineral interest was federal or private, it was a slightly
different nuance being captured in the bill.
1:06:00 PM
Representative Josephson asked Mr. Hutchinson if the
removal of the word "affidavit" would influence the
document being a sworn statement.
Mr. Hutchinson responded that it would not have the same
legal effect as an affidavit. The reason for the removal of
the word and replacing it with "Statement" was because
there had been errors on the affidavits in the past.
However, it proved to be factually inaccurate. He suggested
that it was a real-world issue, particularly with small
family mines. The sponsor thought it would be better to
declare it a Statement of Annual Labor rather than an
affidavit that would be filed with the court. It would be
slightly different. The obligation and the expectation were
for a person to tell the truth. Technically, it would be a
statement rather than an affidavit.
Co-Chair Foster asked about miners submitting affidavits
for claims that were scattered and inaccessible by road. He
asked if there was any enforcement in terms of making sure
miners actually did the labor that they reported.
Mr. Goodrum responded that currently the affidavits of
annual labor were prima facie evidence that the labor had,
in fact, taken affect. As the legislature went forward with
the legislation designed to help clarify and prove some of
the deficiencies that were currently in statute, DNR would
also have to look at what regulations would help clarify
how DNR would work with the statutes. He suggested that
some of the work could be done. For instance, a miner in a
geographic area flying lidar or performing some other
activity that might encompass all of the claim properties,
would likely be contributing to the labor necessary to a
particular claim. He suggested that additional work would
be required of DNR moving forward with the legislation.
Representative Wool asked to return to slide 9. He
referenced the squares [Representative Wool was referring
to the squares in the claim sketch]. He asked if each
square with a number was an individual claim. Mr.
Hutchinson believed the answer was yes.
Representative Wool suggested that for any work of $100 on
one of the 10 claims that were touching would count for all
10 claims. He asked if the reason for including the
requirement of labor was to ensure that the person was
actually working the claim. He thought it was more valuable
to the state for someone to work the claim rather than
paying $100 to the state. Mr. Hutchinson stated that the
representative was correct. He explained that the reason
the bill included a 5-year threshold was to avoid someone
simply sitting on the resource rather than mining the
interest. The bill was attempting to remedy the problem.
Representative Wool asked how long the fee had been $100.
Mr. Hutchinson would have to look up the information. To
his knowledge the amount had not changed significantly over
the course of the mining industry.
Representative Wool suggested that the fee of $100 could
have been in effect in 1970. Mr. Hutchinson indicated the
amount had been around for a while. He would have to double
check the specific date.
1:12:15 PM
Mr. Hutchinson continued to Section 7 on slide 13 which
dealt with the information found on the Statement of Annual
Labor. The bill would make things crystal clear to the
miners what the expectations were of the state. He read the
list from the slide:
Section 7 - AS 38.05.210(b) Clarifies the information
found in a Statement of Annual Labor
Added:
• Individual signs the statement to certify that
it is true and correct to the best of the
individual's knowledge.
• The statement must include:
• The assessment work year
• The name and land administration number
assigned by the department
• Every meridian, township, range, and
section in which the mining claim is
located
• The recording district
• The total amount of work required
• A description of the labor performed
• The value of the labor performed
(including excess labor value from
previous year)
• The name and mailing address of the owner
designated to receive notices
Mr. Hutchinson moved to slide 14 dealing with annual labor
and paper requirements as stipulated in Section 8 of the
bill. He restated that the benefit of the doubt was being
given to the miner. The bill encouraged miners to produce
and take minerals from the ground. The bill would also
remove some of the restrictions having to do with paperwork
violations. The provision in Section 8 would allow miners
to correct their Statement of Annual Labor at any time
before DNR declared that the interest was invalid. He read
from the slide:
Section 8 AS 38.05.210(c) -Allows for statements of
annual labor to be corrected at any time (before
"invalid" declaration)
Added:
• The Statement of Annual Labor, whether recorded
before or after the effective date of this Act,
may be corrected or amended before the 90-day
cure period.
• The corrected Statement of Annual Labor shall be
recorded like the original.
• A corrected statement may not be applied against
labor required to be done during a subsequent
year.
• A corrected statement shall be recorded in 90
days.
Removed:
• 2-year threshold has been removed. In other
words: There had to be a correction within two-
years.
Mr. Hutchinson elaborated that one of the things that had
been a problem for some of the mineral interests was that
there could not have been a correction of a Statement of
Annual Labor that went beyond a 2-year period. The bill
would open the limited window to anytime.
Mr. Hutchinson moved to section 9 on slide 15 which added
new provisions. The provisions had to do with some of the
technicalities related to statements of annual labor. He
restated many of the provisions including certified mail,
proper notice, and a 90-day threshold.
Mr. Hutchinson continued to slide 16. The information was
added in statute (AS 38.05.215 - AS. 38.05.235) and applied
to an instance where there were two co-owners and one of
them had to forfeit their interest. The process involved
publication, going through the proper process of recording
in the recording district. He as happy to answer questions
regarding the specific topic at a later time.
Mr. Hutchinson continued to Section 10 which defined labor
on slide 17 and slide 18. He read the list beginning on
slide 17 and continuing on slide 18:
Section 10 Labor includes:
• Work performed in good faith on a mining claim,
leasehold location, or mining lease that is directly
related to exploring for, developing, or producing
minerals, including:
• Excavating, tunneling, drilling, or clearing land
• Constructing or maintaining roads, trails, and
landing strips
• Extracting or producing ore
• Performing metallurgical analyses, environmental
studies, economic feasibility studies, engineering,
and permitting
• Constructing settling ponds, water supplies, and other
utilities
• Providing worker housing
• Performing reclamation activities under a reclamation
plan
• Transporting workers and equipment in the state to or
from a mining site (not to exceed 50% of the total
value of labor in the Statement of Annual Labor for
the assessment year)
• Conducting a geological or airborne survey by a
qualified expert and verified by a detailed report
that sets out:
• The location of the survey
• The nature, extent, and cost of the survey
• The name, address, and professional background of
the person conducting the work
Mr. Hutchinson noted that a qualified expert was previously
defined in AS 38.05.242(6).
Mr. Hutchinson continued to slide 19, Section 11 which
dealt with the abandonment of a claim. It tied in with a
previous example of a typo scenario. He elaborated that the
issue of abandonment of a claim would arise if no labor
occurred, no rent was paid, or no royalties were paid.
Under such circumstances another miner could work the
ground.
Mr. Hutchinson explained that the heart of the legislation
was removing the provision that if a Statement of Annual
Labor did not accurately set out essential facts it would
become void and would have no effect. Essentially, a typo
on a Statement of Annual Labor would no longer be a back-
breaker as it related to a miners ability to continue to
work the ground. It alleviated the abandonment issue in
which a miner had invested a significant amount of time and
equipment and resources just because of a typo in their
Statement of Annual Labor.
Mr. Hutchinson turned to slide 20 which continued to
address Section 11 of the legislation. It was a clean-up
provision related to rents and royalties and specified that
if there had been a partial payment of rents and royalties,
the miner would have the ability to cure the situation
paying the full payment amount due to the State of Alaska.
Mr. Hutchinson moved to slide 21 dealing with transfers in
Section 12 of the bill. The section dealt with transferring
a claim from an unqualified person to a qualified person.
The section outlined the procedure. One of the provisions
that had been eliminated was a nebulous provision related
to regulations deemed to be too vague.
Mr. Hutchinson moved to slide 22, Section 13 that dealt
with another clean-up provision. It ensured that mining on
state selected land located on or after an active
unpatented federal mining claim could be located only with
recorded permission of the unpatented federal mining claim
holder.
Mr. Hutchinson scrolled to slide 23 which related to
Section 14 of the bill. The provision stated that DNR was
not required to go back and look through their files for
compliance issues without any sort of good cause. He
reported that DNR naturally went through the process when
some of the filings were presented to the department. Some
of the small miners' groups were concerned that DNR was
unilaterally looking through the files for typos and
violations. The bill ensured that it was not the case.
1:18:11 PM
Mr. Hutchinson reviewed slide 24 regarding sections 15, 16,
and 17 of the bill. Section 15 dealt with applicability
which mostly applied to Section 8 and Section 9 and Section
13 - the written permission from the federal unpatented
holder. Section 16 ensured that there was a smooth
transition process. As the state went through regulations
there would not be any declarations of abandonment moving
forward if the legislation were to become law. Section 17
indicated an immediate effective date. He concluded his
presentation and was available for questions.
Representative Wool had a question about labor and the $100
fee. He suggested paying $100 was much easier than actually
doing work. He asked what would happen presently if a miner
did not meet the labor requirement. He also asked how long
a miner could not do labor. Mr. Hutchinson answered that
$100 was in statute currently. The bill would limit the
time a person could sit on a claim without working to 5
years.
Representative Wool wondered how it appeared in statute
presently. He asked if the timeframe was indefinite. Mr.
Hutchinson answered that it was the reason for implementing
a restriction.
Representative Wool suggested that people holding onto
claims and not developing them were more likely mom-and-pop
operations. Mr. Hutchinson had mentioned molybdenum,
magnesium, and graphite, which he thought would be pursued
by corporate entities rather than the smaller miner. He
wondered if there was a disconnect mostly for gold. Mr.
Hutchinson commented that it was for the future. He noted
that the Alaska Miners Association included large and small
miners. Generally, there had been a consensus in support.
If there was time, the committee would hear testimony from
some of the larger mines that had capital interests off to
the sideline but were supportive of the bill. It started
with the mom-and-pop operations and the smaller miners too.
1:22:01 PM
Representative Wool asked if there were small mining
operations that also looked for other minerals besides
gold. Mr. Hutchinson indicated that it started with gold
which was an important mineral.
Representative LeBon shared that he had provided banking
services for many gold miners during his past career as a
banker. He agreed that it was long overdue to clean up some
of the statutes and regulations related to mining. He
attested that the concerns and issues brought up by Mr.
Hutchinson were very real, as he had heard about them
often. The relationships that miners had with DNR was not
always good. He suggested that the bill would likely help
improve those relationships. The bill would lend itself to
increased mining productivity and encourage entry into the
industry for individuals who wanted to start a gold mine.
He thought it would be easier for potential miners to take
the initial step in investing in a gold mining operation.
He argued that the legislation was not only advantageous
for current miners, it would also benefit future miners
encouraged by the changes presented in the bill. He was in
full support of the bill.
Vice-Chair Ortiz appreciated the legislation. He asked
about the regulatory environment in relationship to the
mining industry prior to the bill. He wondered if Alaska
was viewed as a friendly and supportive environment to the
mining industry prior to the bill. Mr. Hutchinson answered
that he had heard Senator Bishop state numerous times that
he believed Alaska's law was 50 years behind.
Vice-Chair Ortiz asked if Mr. Hutchinsons response meant
that Alaska was less open to the mining industry. Mr.
Hutchinson answered there had been a struggle with the
perception of how DNR was interpreting some of the
provisions in statute. He brought up the example he had
previously provided about de facto abandonment where a
miner received a document stating that his claim was
abandoned. He was not provided with an ability to cure the
issue. Generally, constitutionally, a person was entitled
to due process and notice. He thought a legitimate case
could be made that there had been de facto takings that had
occurred over decades where the affected miner did not have
the ability to cure in a way that satisfied constitutional
requirements of due process and proper notice.
Vice-Chair Ortiz asked what the most significant impact
would be of enacting the bill. Mr. Hutchinson answered that
the hope was increased production. He believed the
legislation would provide more stability with the states
statutes. He suggested that the due process provisions
created a higher probability that people could invest the
necessary capital knowing that the law was structured in a
way that placed miners in a good position to be successful.
Co-Chair Foster shared that he had grown up mining and his
family had been in the mining industry. He asked for
verification that the bill did not affect the carryforward
for the affidavits. For example, if a miner did $1000 in
labor in the current year, he would be able to carry over a
portion to the following year. He did not believe the bill
changed the provision. He asked if he was correct. Mr.
Hutchinson responded, "Thats correct."
Co-Chair Foster suggested that if a miner was deficient in
their rent payment made on the affidavit of labor, they
would receive a notice indicating that there had to be a
cure. However, if a miner were to send in the affidavit of
labor past the due date, it would be considered an
abandonment of a claim and there would be no further notice
provided to the miner. He asked if he was accurate.
Mr. Hutchinson answered there was a balance. He elaborated
that the bill provided a miner the ability to cure within a
timeframe. Ultimately, the idea was to increase production.
If a miner received notice that there was some sort of
deficiency, was given the opportunity to cure, and did not
act, someone else in line could step in. The bill was
encouraging someone to produce the claim. The bill struck a
balance.
Co-Chair Foster suggested that it was not only addressing a
deficiency in a rent payment, it also provided a miner the
opportunity to cure a situation in which the affidavit was
not submitted in a timely manner. He asked if he was
correct. Mr. Hutchinson answered that once a miner had
proper notice, they would have 90 days to cure the defect.
If they were not able to, it could constitute
abandonment.
1:28:59 PM
Representative Josephson stated that currently the process
was indefinite. A person could receive a claim and
effectively turn it into their cabin site without any other
burden than an annual fee. Mr. Hutchinson answered that he
had only heard the concern anecdotally. It was a concern
that existed and, the bill was attempting to move away from
such a practice.
Representative Josephson asked how his constituents
benefited from small mines, in terms of rents and
royalties. Mr. Hutchinson deferred to DNR to answer the
question.
Mr. Goodrum replied mining was an important industry in
Alaska. Every year it contributed a significant amount of
money to the states coffers. Within DNR, the state
collected rental payments annually in addition to or in
lieu of labor payments made. Miners were also required to
make royalty payments to the state when they produced. He
continued that miners paid other taxes to the Department of
Revenue (DOR) pulling in far more money than DNR from the
mining industry. He noted presentations being done in the
Senate Resources Committee in which many of the numbers
were captured from the mining industry. He reiterated that
mining had been an important part of Alaskas history and
would be a critical industry going forward in the state.
Representative Josephson commented that although there were
mines throughout Alaska, they tended to be regions like the
Minto area, the North Star Borough, and the Seward
Peninsula. He suggested that small mines were more
intensively located in certain parts of the state. He asked
if he was correct. Mr. Hutchinson answered in the
affirmative.
Representative Wool wanted to better understand the term
"carry forward" as mentioned by Co-Chair Foster. He
provided an example. He asked, if a miner spent $5000 in
one year for dirt work, whether it would carry the claim 50
years. Mr. Hutchinson deferred the question to the
department.
Mr. Goodrum responded that if a person held 10 mining
claims and the requirement was for $100 of labor on each
claim which would be a total of $1000 to be done in the
year. It could all be done on one of the claims if the
miner was developing them sequentially such as moving
upstream. If there was a positive balance of annual labor
that was completed, the labor could be carried forward. He
indicated there was a specified amount that could be
carried forward which he thought was for less than 5 years.
He indicated that Ramona Monroe was on the phone and could
provide additional detail.
RAMONA MONROE, ALASKA MINERS ASSOCIATION, ANCHORAGE (via
teleconference), answered that the law would allow the
carry forward to be applied in the year the work was done
plus four sequential years if there was sufficient labor to
satisfy the labor requirement for each of the four
subsequent years for a total of five years. The goal was
that at least once every five years a miner was working
their land.
1:34:24 PM
Co-Chair Johnston OPENED public testimony.
KARL HANNEMAN, ALASKA MINERS ASSOCIATION, ANCHORAGE (via
teleconference), spoke in support of the legislation. He
was a member of the Alaska Miners Association working
group that had advocated for the changes presented in the
bill. The changes were primarily process and administrative
in nature. The goal was to improve the efficiency and the
relationship between the miners and DNR. It was an
important step forward in terms of simplifying the
administration of mining claims. He asked members for their
consideration and thanked them for their time.
1:35:24 PM
Co-Chair Johnston CLOSED public testimony.
Co-Chair Johnston asked the department to review the fiscal
note.
Mr. Goodrum reviewed the fiscal impact note [FN1 (DNR),
OMB Component Number 3002] which essentially covered what
would be required of the department to do additional work.
Under current statute certain activities occurred by
operation of law. The bill would create a process and a
timeframe in which DNR employees would need to make contact
with certain miners and to provide the time period and
window to make administrative corrections. For example, in
FY 21 the fiscal note would be $176,700 for two Natural
Resource Specialist I employees to assume the duties of
communicating with miners to ensure mining claims and
rental properties were properly maintained.
Representative Knopp asked if the positions would have
other job duties as assigned or would they be limited to
contacting miners.
Mr. Goodrum responded that positions would be additional
positions. Currently there was about 35,000 mining claims
throughout the state. The mining section had about 20
personnel actively manning them. The fiscal note would come
from program receipts generated from the mining industry.
He reported that in FY 19 the mining industry generated
$5.4 million to DNR alone. The Department of Revenue
received several other monies related to mining. The
program receipts would be generated by the department and
the Division of Mining, Land and Water from mining
activities.
Representative Knopp looked at the fourth paragraph of the
fiscal note that discussed the Natural Resource
Specialist I. He had only seen two qualifications; A miner
had to be a minimum of 18 years of age and had to be a U.S.
citizen. He wondered if there were other qualifications.
Mr. Goodrum noted that at the beginning of the bill a
couple of sections talked about modifications to
qualifications. Some of them had to do with limited
liability corporations and trusts. However, the
preponderance of the work would be done when someone
identified a potential error in a Statement of Annual Labor
and communication with the potentially affected miner. The
specialist would have to provide a time and process for a
miner to amend, correct, or cure a deficiency.
Qualifications only played a small part. The larger portion
of work that would be done by the 2 Natural Resource
Specialists would be working with mineral tenure and
mineral rights that were acquired and properly maintaining
them.
Representative Knopp referred to deficiency notices. He
asked about deficiencies other than annual work
requirements.
1:40:02 PM
Mr. Goodrum responded that the positions would be located
in the Minerals Property Section of DNR. He mentioned MTRSC
claims and working with miners regarding which mineral
rights were being acquired at the time of filing the
claims. Sometimes there might be other private property or
other things withheld. The two positions would be
corresponding with miners to ensure that the mining rights
acquired were understood by all parties. The positions
would ensure that when corrections needed to be made, the
department was notifying and corresponding with miners to
provide support for them in protecting their rights.
Representative Knopp noted there was nothing included in
the travel line on the fiscal note. He asked Mr. Goodrum to
comment.
Mr. Goodrum answered that quite likely employees from the
mining section would be traveling who were involved in
permitting. The division did over-flights throughout the
state to ensure work was done in a proper fashion. The two
particular positions being discussed would be more involved
with written correspondence and phone calls rather than
traveling to the field.
SB 155 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 134
"An Act relating to medical assistance reimbursement
for the services of licensed professional counselors;
and providing for an effective date."
1:42:38 PM
SENATOR DAVID WILSON, SPONSOR, indicated that SB 134 was an
act relating to medical assistance reimbursement for the
services of licensed professional counselors. The bill also
benefited all Alaskans in need of behavioral health by
expanding its capacity. The legislation would add licensed
professional counselors (LPCs) to the Medicaid optional
services. The concept of the bill was to expand behavioral
health capacity and utilization for Alaskas most
vulnerable population.
Senator Wilson continued that Medicaid clients and all
Alaskans had difficulty finding access to behavioral health
care often waiting 3 to 6 months for appointments. In a
state of crisis, they utilized the most expensive platinum
level of care there was - Alaskas emergency rooms. He
asserted that in current times, it was not where they need
to be. He reported that it cost on average about $4360 for
behavioral health assessment in Alaskas emergency rooms
versus about $200 in a clinical setting. Adding more
counselors to provide services in a clinical setting would
provide Alaska with improved health care outcomes at a
lower cost. The bill would provide the appropriate level of
care with an appropriate level of health care providers.
Costs were rising at an unsustainable rate and something
needed to be done differently to stop the trend.
Essentially, Alaska needed to retool its factories and
systems to get more productive and better outcomes for
Alaskan citizens. He asserted that SB 134 complimented
HB 290, SB 120 and many other pieces of legislation in
terms of the 1115 waiver to help provide a cost containment
reduction increasing access for Alaskans with better
outcomes of behavioral health services. He believed that
other healthcare providers in Alaska agreed, as there were
letters of support and people waiting to testify in favor
of the legislation. His staff, Mr. Zepp, would be reviewing
a PowerPoint Presentation for the committee.
1:45:16 PM
GARY ZEPP, STAFF, SENATOR DAVID WILSON, began with slide 2
of the PowerPoint presentation titled "SB 134 "An Act
relating to medical assistance reimbursement for the
services of licensed professional counselors; and providing
for an effective date" dated March 22, 2020 (copy on file).
He relayed that SB 134 would add licensed professional
counselors to the Medicaid optional services. The concept
of the bill was to expand capacity and utilization of
behavioral health care in a clinical preventative setting
versus a state of crisis in Alaska's emergency rooms.
Mr. Zepp continued that the expansion of behavioral health
care was projected to reduce waiting for services and to
improve the quality of care by providing the appropriate
care by the appropriate healthcare provider. He reported
that it would cost less than behavioral healthcare in
emergency rooms across the state. In conversations with
stakeholders, he heard about wait times for substance abuse
disorders, suicide, depression, trauma from violence, and
serious mental illness of anywhere from 3-6 months for
Medicaid clients. It was due to a workforce shortage of
behavioral healthcare professionals who were available to
see Medicaid clients.
Mr. Zepp thought everyone had seen examples of behavioral
healthcare shortages that had been revealed in peoples
daily lives and through stories in the media. Licensed
professional counselors were a valuable cost-effective part
of treatment for behavioral health care. The proposed
legislation was a piece of the behavioral health capacity
puzzle that already included marital and family therapists,
licensed social workers, PhD psychologists, prescribing
nurse practitioners, and medical doctors like psychiatrists
and primary care physicians. There were approximately 717
active licensed professional counselors available in
Alaska.
Mr. Zepp turned to slide 3 regarding behavioral health.
Many people were familiar with the term "mental health."
Mental health covered many of the same issues as behavioral
health, but the term only encompassed the biological
component of the aspect of wellness. He read from the
slide:
Behavioral health is the scientific study of the
emotions, behaviors, and biology relating to a
person's mental well-being, their ability to function
in everyday life, and their concept of self.
"Behavioral health" is the preferred term to "mental
health." A person struggling with his or her
behavioral health may face stress, depression,
anxiety, relationship problems, grief, addiction,
attention-deficit/hyperactivity disorder or learning
disabilities, mood disorders, or other psychological
concerns. Counselors, therapists, life coaches,
psychologists, nurse practitioners, or physicians can
help manage behavioral health concerns with treatments
such as therapy counseling or medication.
Representative LeBon asked what the minimum qualifications
were to become a licensed provider of mental health
services to be eligible for Medicaid reimbursement. Mr.
Zepp deferred to the various people online to address the
question. Senator Wilson thought Deputy Commissioner Wall
could answer Representative LeBons question.
1:49:11 PM
ALBERT WALL, DEPUTY COMMISSIONER, DHSS, JUNEAU (via
teleconference), responded that the requirements for
licensure rested with occupational licensing. An academic
and professional background check and a test were required.
After making application and all that was entailed a person
would become professionally licensed in the state. In the
state plan for Medicaid, the states agreement with the
federal government as to how it handled Medicaid, there
were specific definition of health care provider types. He
indicated that part of the lengthy process of getting a new
provider type into the system could be addressed with the
federal government after a bill was passed with the
provider type. He was describing a multi-step process.
First, a provider had to become an enrollable provider in
statute. Second, the state had to add the professional
licensure to Alaskas state plan with Centers for Medicare
and Medicaid Services (CMS). Third, regulations had to come
after the fact to put together the framework in which the
new license type could bill Medicaid. There was a
professional licensure board that had oversite of the
license. The definition was included in the agreement with
the federal government and the state would craft
regulations in which to bill through.
Mr. Zepp considered slide 4: "Why Medicaid clients and who
are they?" He read from a prepared statement:
"Why Medicaid clients and who are they? Medicaid
provides health coverage and long-term care services
for Alaska's most vulnerable: children, seniors,
people with disabilities, pregnant women, and very low
income or working poor.
Medicaid clients have difficulties finding access to
behavioral healthcare and often have to wait three to
six months for appointments. So, you can imagine a
person in crisis or someone who is ready to accept
behavioral healthcare services and there isn't any
access or are told it's available in three or four
months. So, what are their options? Alaska's emergency
rooms.
SB 134 would directly impact the lives of our most
vulnerable population of citizens, our poor, our
young, and our seniors. Alaska's emergency rooms have
been overwhelmed with volumes of Medicaid client's
emergency situations in need of behavioral health. The
leading cause of emergency room visit are related to
alcohol disorders and the associated aliments of
alcohol abuse.
Often Medicaid clients have nowhere else to go due to
the lack of access and the lack of capacity which
causes patients to stay much longer in the emergency
room than they should. Typically, if a Medicaid client
is in a stage of crisis and there is not access to the
appropriate care, they leave the facility and the
cycle repeats itself. They will be back at the
emergency room because they are open 24 hours a day,
seven days a week."
Mr. Zepp moved to slide 5: "Adult Untreated Behavior Health
Statistics." He indicated that the following few slides
reflected some of the statistics concerning the lack of
behavioral health care, both nationally and within Alaska.
He read from a prepared statement:
Approximately, 70 percent of American's who need
behavioral health services do not receive treatment.
For substance use disorders it's about 92 percent that
typically do not receive treatment; and adults with
serious mental health issues, approximately 66
percent, do not receive behavioral health treatment.
Without treatment in a timely manner, this often can
lead to interactions with the police, the court
systems, and the correctional facilities within our
state.
According to the "Bureau of Justice Statistics",
approximately 51.4 percent of prisoner have a serious
psychological distress and/or a history of a mental
health problem 20 percent of those are considered
"severely and persistently" mentally ill.
Mr. Zepp discussed children untreated for behavioral Health
on slide 6. He relayed that the chart showed levels of
depression, anxiety, and behavioral health disorders by age
for children. He read from a prepared statement:
"As you can see, children are very much susceptible to
behavioral health issues. Common behavioral health
issues that our children experience include
depression, anxiety, behavioral disorders, and the
most common which is attention-deficit/hyperactivity
disorder (ADHD). A child diagnosed with depression has
approximately a 74 percent chance of having a co-
disorder, like anxiety. If a child is diagnosed with
depression and anxiety disorders, if not treated, they
usually increase over time, and the child's behavioral
health condition worsens.
Boys are more likely than girls to have a mental,
behavioral, or developmental disorder and children
living below the poverty line have a 22 percent more
likelihood of a mental, behavioral, or developmental
disorder.
SB 134 can expand the capacity of behavioral
healthcare in our schools, our communities, and our
healthcare facilities."
1:54:35 PM
Mr. Zepp continued to slide 7 which discussed the Alaska
assessment of behavioral health care needs. He read from a
prepared statement:
Mental disorders among children can cause serious
changes in the way children typically learn, behave,
or handle their emotions, which causing distress and
problems throughout the day.
This is absolutely tragic, and you have probably heard
this previously, but according to the American
Foundation for Suicide Prevention, the Alaska Bureau
of Vital Statistics, and the State of Alaska, Office
of Epidemiology:
Alaska has the highest rate of suicide per capita in
the country;
In Alaska, suicide is the number one leading cause of
death for ages 10-64;
Alaska rate is 21.8 suicides per 100,000 people and in
rural Alaska it is 35.1 per 100,000;
There was a 13 percent increase in suicides between
2013-2017, as compared to 2007-2011;
Toxicology results following suicides since 2015 show
70 percent involved one or more substances, most
frequently alcohol;
More than 90 percent of people who die by suicide have
depression or diagnosable, treatable mental or
substance abuse disorder."
Mr. Zepp turned to slide 8: "Alaska assessment of
behavioral health care needs." He continued to read from a
prepared statement:
"Later in our presentation, the expert testimony will
be able to shed a light on the workforce shortage of
behavioral healthcare professional available to treat
Medicaid clients and Alaskans in general.
The 2016 Alaska Behavioral Health Systems Assessment
Report estimated that 145,790 adult Alaskans roughly
20% of the state's population - need behavioral health
services. Despite the estimated need for mental health
care in Alaska, the ratio of mental health providers
to population is low compared to national levels.
Also, most behavioral health professionals work in
urban areas and in remote areas of the state, they
have even lower provider/population ratios."
Mr. Zepp moved to the chart on slide 9: "Alaska Emergency
Room Department Super-Utilizer Facts Total Medicaid Billed
Charges." He read from his prepared statement:
"The chart above reflects the total cost that the
State of Alaska has paid to emergency rooms for
Medicaid clients throughout our state over the
previous four years.
As you can see, in 2016 the total costs were $233
million + and that amount has risen over the last four
years by $47.1 million dollars or 21.1 percent.
As an example, in 2019, the top 2.9 percent of "super-
utilizers" consumed 16.3 percent of the charges at $46
million dollars (1,301 clients at an average cost of
$35,357 annually). They had 10 visits or more per
year, some as much as 50 visits per year.
If we count the top 10.03 percent of "super-utilizers"
(6,250 Medicaid clients) costs $114.0 million or 40.67
percent of the total charges annually (6,250 clients
at an average cost of $18,240 annually). They had 5
visits or more per year.
Costs are rising at an unsustainable rate and we have
to do something different to stop this trend. We need
to improve Medicaid programs and provide increased
quality and become more cost efficient. We believe,
and other healthcare providers in Alaska agree, by
adding more LPC counseling services, we have a chance
to improve these outcomes.
1:58:31 PM
Representative Josephson asked what was typically the
reason for an appointment. Mr. Zepp responded that the
majority of Medicaid clients were seen in Alaska emergency
rooms for substance abuse disorders. Representative
Josephson assumed people were going through withdrawals.
Co-Chair Johnston indicated there were some folks online
that would likely be answering Representative Josephsons
question.
Representative Wool asked if the increase in Medicaid
billed charges for emergency room services in 2018 and 2019
was due to Medicaid expansion. He had heard from hospitals
prior to Medicaid expansion that they had several people
going to the emergency room, as it was their only option.
The hospitals were not billing because Medicaid was not
available at the time. He suspected that the increase in
charges was a result of an increase in Medicaid patients
through the expansion. Mr. Zepp deferred to Deputy
Commissioner Wall.
Representative LeBon asked how emergency room repeat
customers were intercepted and directed to providers. If
people were to continue the pattern of showing up to the
emergency room, the hospital would not refuse to treat the
patients.
Senator Wilson responded that the Mat-Su Health Foundation
had the High Utilizer Mat-Su (HUMS) Project. He indicated
members likely had an information sheet in their packets.
It reflected an intensive case management program. He
believed Providence had a similar program in place and had
seen a significant drop in expenses. In talks with the
Mat-Su Foundation and Providence, he found that they
diverted patients for which they could not bill for
services. He also noted another information sheet that
talked about Medicaid super utilizers and why they entered
emergency rooms, many of which were experiencing substance
abuse or behavioral health issues.
Mr. Zepp continued with his prepared statement regarding
slide 9:
"With the federal approval of state's 1115 waiver for
behavioral healthcare services and by adding LPCs to
the mix of behavioral healthcare professionals it
offers an opportunity to expand capacity, increase the
quality of care, lower the costs versus the crisis
mode at the platinum level costs that the state has
already paid.
I'll repeat, the amounts shown above is what the state
has already paid on behalf of Medicaid clients in
Alaska for emergency room visits over the last four
years."
2:02:29 PM
Mr. Zepp continued to slide 10: "Alaska Emergency Room
Department Super-Utilizer Facts Number of Medicaid
Clients." He read from a prepared statement:
"The chart above shows that the number of Medicaid
clients in our emergency rooms have not increased but
the costs have.
The most common diagnoses for the top 2.7 percent
super-utilizers are alcohol-related disorders and the
associated ailments;
The top 2.7 percent of "super-utilizers" are likely to
be between 20-59 years old & 61 percent are females
and 39 percent are males."
Representative Tilton posed a question about how to change
a persons behavior who was consistently going to the
emergency room because it was what they knew to do. Mr.
Zepp suggested that in a few minutes the committee would
hear from the Mat-Su Health Foundation and from Jared
Kosin, the CEO of the Alaska State Hospital and Nursing
Home Association (ASHNA). Currently, they had two programs
that had been in practice for about 2 years that were
experiencing success in rerouting patients away from the
emergency room to a clinical setting. Both programs had
achieved health improvements and cost savings.
Representative Tilton asked if the bill would increase
availability of substance abuse providers. Mr. Zepp
responded affirmatively. He noted that in 2018 the Senator
had sponsored SB 105 which added licensed, marital family
therapists to the Medicaid optional services. He thought
there was a stereo type in place regarding licensed marital
therapists and licensed professional counselors that
their scope was limited in terms of what they could
provide. However, the counselors could provide a wide
variety of services up to, but excluding, the prescription
of drugs. Licensed therapists could handle many modalities
including: substance abuse, anxiety, schizophrenia, mood
disorders, and depression.
Mr. Zepp continued to slide 11: "Preventative behavioral
health care can reduce costs." He continued reading his
prepared statement:
"There is good news however. Since the passage of SB
105, which added licensed martial and family
therapists to the Medicaid Optional Services. Several
programs aimed at diverting Medicaid clients from
emergency rooms into more comprehensive coordinated
care models are in practice right now.
As you'll hear from Mr. Jared Kosin, the President and
CEO of the Alaska State Hospital and Nursing Home
Association and hopefully from the Mat-Su Health
Foundation ladies, Ms. Elizabeth Ripley and Robin
Minard. Programs are diverting "Super-Utilizers" from
our emergency rooms in Alaska to a clinical or
coordinated care setting and it does save money. These
two are examples that are working in Alaska right now
and achieving significant results. Most importantly,
the Medicaid clients are receiving improved quality by
the appropriate healthcare professions but at
substantially reduced costs. This saves the Medicaid
program money! By adding capacity with Licensed
Professional Counselors to assist with behavioral
healthcare issues, this enhances those programs as
well as other private practice clinical settings too.
We did want to touch on the fiscal note from our
friends at the Department of Health and Social
Services. It's understood they have to provide
estimates of what programmatic changes may costs but
we believe there is more to the story."
Mr. Zepp thanked the stakeholders that supported the bill.
He revealed a list of the stakeholders on the final slide.
Co-Chair Johnston thanked the presenters and encouraged
invited testimony to begin.
2:08:52 PM
JARED KOSIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ALASKA
STATE HOSPITAL AND NURSING HOME ASSOCIATION, ANCHORAGE (via
teleconference), indicated the association fully supported
SB 134 and thought it was smart policy and a smart use of
resources. He suggested the legislation would reduce visits
to emergency rooms. Utilization would be reduced in 2 ways.
First, it would create direct access to care in the
community. In response to Representative Tiltons question
regarding how to change behavior, he suggested that people
would have an option other than going to a high
level-of-care emergency department. He thought it was
reasonable to think people would go to another provider for
care. For those people that were hard-wired to go to an
emergency room, they could be redirected via a successful
discharge from an emergency department. He relayed that
currently in the system of care, with the capacity issues
at Alaska Psychiatric Institute (API), patients were going
to the emergency room in crisis, being converted to
Title 47 ex-parte patients, and were boarding at emergency
departments for days at a time while they waited for an
inpatient bed. Patients would then be discharged from their
inpatient bed and would show back up at emergency rooms
perpetuating a vicious cycle. The legislation would provide
emergency departments with the option of making a warm
handoff to a counselor in the community. The counselor
could then take the patient working with them on a long-
term basis. Such capacity was currently non-existent or, if
it did exist, it was on a very low level. The bill would
allow for more continuity of care. He sincerely believed
SB 134 would decrease health care costs rather than
increase them. Ultimately, the bill would save the state
money. He urged members to support the bill.
2:13:00 PM
Representative Tilton referenced Mr. Kosins statement
about the bill allowing hospitals to make successful
discharges because they would have the ability (currently
not in existence) to handoff patients to providers. She
asked if capacity of providers or the lack of the ability
to bill Medicaid influenced why behavioral health providers
were not presently used.
Mr. Kosin responded that both applied. He used the Mat-Su
Regional Medical Center as an example. It had a private
family practice as part of its network of services called
Solstice Family Care. Solstice Family Care had a licensed
clinician who could provide services for Medicaid
recipients. However, currently there was no way to bill
Medicaid for its services. He asserted that without the
ability to bill for services, the entity could not stay in
business for very long. The bill would allow for a new
avenue for discharging patients from the emergency
department to the clinician at Solstice Family Care, work
with the patient on a plan of care to help them through
episodes that would otherwise land them back in the
emergency room, and bill Medicaid. The cost for 15 visits
to the clinician would equal approximately the same as a
single visit to the emergency room. The economics were
justifiable.
Representative Carpenter asked about the likelihood the
federal government would approve professional counseling
services. He wondered if there were already other states
that include it in their services.
Mr. Zepp reported having reached out to the National
Council of State Legislatures to do some research. They
found that about 6 states including Montana, Washington,
and Oregon, had already added licensed professional
counselor services to their Medicaid optional services.
2:15:55 PM
ROBIN MINARD, MAT-SU HEALTH FOUNDATION, WASILLA (via
teleconference), relayed that the Foundation shared
ownership in the Mat-Su Regional Medical Center and
invested its profits back into the community in order to
improve the health and wellness of Alaskans living in
Mat-Su. She was testifying in strong support of SB 134. The
bill was crucial because it would help address an important
health issue facing Mat-Su residents every day - mental
health and substance use problems. Licensed professional
counselors were key behavioral health providers who could
help with the mental health and substance use issues.
Ms. Minard continued that the Foundation was aware the
issues were difficult for Mat-Su residents because they had
stated as much in the previous 3 community health needs
assessments. She reported that in 2013 residents and
professionals stated that the top 5 challenges they faced
were alcohol and substance abuse, children experiencing
trauma and violence, depression and suicide, domestic
violence and sexual assault, and lack of access to
behavioral health care. Residents with the list of issues
could be helped with access to counseling. School nurses in
the same survey were seeing waiting lists as long as
4-8 months for children and families that had Medicaid to
get into see a counselor - much too long to have to wait.
It was crucial that Alaska residents had access to
behavioral health providers for care before their problems
escalated to the state of crisis.
Ms. Minard continued that Mat-Su Regional Medical Center
and the community was inundated by residents who were in
crisis related to behavioral health issues. In 2016, 3443
residents were seen in the emergency department with a
primary behavioral health diagnosis, and those people had
8400 visits costing $43.8 million in facility charges. The
cost did not include the costs associated with law
enforcement or emergency transportation. The average cost
per visit was over $5000 and, the average cost per patient
was almost $13,000.
Ms. Minard noted the senator mentioning the HUMS Program
earlier in the meeting. She explained that HUMS was a
program supported by the Mat-Su Health Foundation, the
program was started as a way to provide care coordination
and access to community support for high utilizers. High
utilizers were defined as residents who have had 5 or more
visits to the emergency department in a year and who were
unable to independently access consistent, appropriate care
in the community. The HUMS program had already resulted in
dramatic cost savings. It had also alleviated significant
trauma for patients as well as health care providers and
families who often suffered trauma along with the patient.
She urged members, as they delved into the data, to keep in
mind that if people had access to care before their needs
became a crisis, there would be far less need for a program
such as HUMS.
Ms. Minard relayed some of the results of the HUMS Program
to-date. She reported a cost savings of $2.168 million over
2 years. In 2018, the top 3 utilizers saved $340,288 by not
making emergency department visits. In the same year, 7
patients did not visit the emergency department at all
after they enrolled in the HUMS Program. She relayed that
enrollment was voluntary for the patient. The age of the
patients ranged from 16-82, and 72 percent had Medicaid as
their health insurance. She reiterated the importance of
Medicaid clients having access to the whole continuum of
care. The program had an external evaluator and the
Foundation was still learning and tweaking the program to
make it more effective and less expensive as time passed.
Ms. Minard shared a couple of success stories from the
program thus far. The first was a young adult client that
had had 17 visits to the emergency department in the prior
year. They had poorly managed diabetes and a substance
abuse disorder. Most of their emergency department visits
lead to inpatient admission into the intensive care unit
(ICU). They had a long history of IV drug use and was non-
compliant with primary care appointments. She continued
that when the person was referred to the HUMS Program, the
outlook was poor, and HUMS staff were told the client had
little or no interest in improving their situation. With
time and a listening ear, the HUMS staff built a rapport
with the person and it quickly became obvious that the
desire for a healthier life existed. She was happy to share
that the client was currently sober; their diabetes was
well managed; they had a driver's license; they were
working a full-time job; and they had a great relationship
with the primary providers office.
Ms. Minard presented a second example. Another client had
been extremely proactive with their care and improving
their own quality of life. They had been able to maintain
sobriety for over 6 months and enrolled in parenting
classes to become a better parent in the hopes of regaining
custody of their child. The program assisted with housing,
getting them into substance use disorder treatment, and
with purchasing needed hygiene and clothing items. The
person had gained and maintained steady employment at a
restaurant in walking distance of where they lived so they
could get to work. The client was currently saving money to
get their own apartment. She concluded that the HUMS
Program showed great promise. However, even more promising
was the idea that if there was more behavioral health care
available earlier on, the HUMS program might not be needed
in the future. The hope was for people to get care in a
lower cost setting. She understood there was concern about
adding costs to the Medicaid System. She asserted that
SB 134 would do the opposite; it would allow behavioral
health care to be provided in the least costly setting,
thus, avoiding all of the more expensive care later. She
thanked members for their time.
2:22:15 PM
Co-Chair Johnston OPENED Public Testimony.
JON ZASADA, POLICY INTEGRATION DIRECTOR, ALASKA PRIMARY
CARE ASSOCIATION, ANCHORAGE (via teleconference), spoke in
support of SB 134. He read from a prepared statement:
"Alaskas 2 federally qualified health centers
actively support SB 134 adding Medicaid reimbursement
for LPCs has been a top priority in our efforts to
expand access to behavioral health services for many
years.
Community health centers are already using LPCs in
their practices to provide school-based services,
individual counseling services, substance abuse
disorder treatment, and in supporting care
coordination activities. And this does include
individual coaching on basic health and hygiene issues
such as were addressing now with the COVID epidemic.
However, these services provided by LPCs are not
currently reimbursable. They are currently paid for
through earned income, federal and private grant
funds. This is not sustainable.
Health centers have received considerable federal
funding to expand behavioral health services in the
primary care setting. They are required to provide
behavioral healthcare that is integrated with medical,
dental, pharmacy, and other services. Adding LPCs to
the roster of billable providers enables health
centers to make their services more sustainable. This
is the national best practice.
LPCs are a valuable, cost-effective component of team-
based whole-person care. This is particularly
important right now as we are doing everything that we
can to keep patients out of emergency rooms and
hospitals. Mild and moderate anxiety and depression
are co-occurring conditions with chronic conditions
including diabetes and hypertension. LPS are a vital
provider type that can typically provide short-term
counseling support that enhances the work of other
medical, dental, and pharmacy team members in
stabilizing and improving the health of emergent
patients and assisting them in managing chronic
conditions over time.
Finally, in 2017, Alaska health centers reported a
deficit of 12-18 behavioral health providers that
could expand access to 6000 to 9000 additional
patients. We support SB 134. It addresses a key need
in Alaskas response to behavioral health, lends
stability to efforts already underway, and offers
another tool in our response to improving care and
lowering the overall cost of care."
Mr. Zasada thanked the committee for its time.
2:25:24 PM
DON BLACK, EXECUTIVE DIRECTOR, BETHEL FAMILY CLINIC, BETHEL
(via teleconference), introduced himself and read a
prepared statement:
"Our clinic employs one licensed clinical worker and
one licensed professional counselor in our behavioral
health department. When I last spoke, we were
providing services to teens at the Bethel Youth
Facility in efforts to reverse destructive habits
while these students are still young. Our substance
abuse programs were embedded in the community as well
as at the Yukon-Kuskokwim Correctional Center where
our staff provided group and individualized guidance.
All that is gone while we hunker down. Although our
delivery has changed, our services continue. We
continue in more individualized services and, where
possible, by electronic medium. More individualized
services stretch our staff thin, but limited Medicaid
billable staff stretches us even thinner. Were
venturing into the unknown. We have no numbers to
support where we are going. We just know, we just all
know, we are going there.
Look around the room, or if you are meeting
electronically as I am, imagine youre looking around
the room. See not just the faces of your colleagues.
See not just the names of your colleagues. See the
person. We are all gathering on a Sunday, not as an
ordinary day but as a day to accomplish important
business in the time remaining this session Meanwhile,
there is a wave coming. We dont know how hard it will
hit. We dont know when it will hit. We just know that
it will hit, and there is nothing we can do to stop
it. And we cant even swim, just float. This stressor
just entered all of our lives.
Some of those people around the room or virtual room
will cope with this stressor better than others. It
doesnt matter how we cope or appear to cope it was a
stressor for everyone. Many of you have coping
mechanisms to help you relax a morning cup of coffee
and a newspaper at the local coffee shop. Closed.
Church closed. A relaxing dinner with loved ones or
friends after a long day closed. A trip to the gym
or local pool to work off some anxiety, relax, and re-
center all closed. We are helping our clients build
mental and emotional tools to help them address the
stressors in their own lives. Now we have a new
stressor to add to the list. We anticipate more
individualized time will be needed. We also anticipate
a potential flood in demand of these services. For
those in the Medicaid world, we may have to triage and
choose between which services are billable and which
services are not.
I just closed my dental office on Friday and am re-
purposing as many staff as possible to assist in the
increased needs in other areas of our clinic. With the
reduction in some services, the revenue to run the
clinic becomes more of a concern. When I triage a
behavioral health patient, part of that formula may
have to include the sustainability of the overall
clinic when it should be the greater need of the
patient. Passing SB 134 allows me to focus more on the
patients needs and less on the financial needs.
Passing SB 134 allows me to have access to a broader
range of billable behavioral health specialist labor
pool. It amazes me how an entire globe is pivoting all
in the same direction all at this very same point in
time. SB 134 has become something different to me in
the past few weeks. It has become our essential part
of that pivot."
2:29:15 PM
ERIC BOYER, PROGRAM OFFICER, ALASKA MENTAL HEALTH TRUST
AUTHORITY, ANCHORAGE (via teleconference), indicated he
also served as the chair for the Alaska Healthcare
Workforce Coalition. The Coalitions primary focus was to
increase the workforce in the healthcare industry across
Alaska. The Trust and the Coalition supported SB 134 to be
able to expand the number of behavioral health
practitioners who could bill for Medicaid services which
would increase the responsiveness of the healthcare
community. People experiencing behavioral health disorders
could be treated when they needed the help versus being put
on a waitlist.
Mr. Boyer continued that the Alaska Mental Health Trust
Authority (AMHTA) was concerned about Trust beneficiaries'
lives being improved. Beneficiaries included Alaskans with
mental health issues, substance use disorders,
developmental disabilities, Alzheimer's Disease and related
dementia, and traumatic brain injury. In partnership with
the Department of Health and Social Services, the Trust
ensured Alaska had a comprehensive and integrated system of
care to provide the necessary services and supports for
beneficiaries in their community of choice and in the least
restrictive setting possible. The legislation would create
a more equitable distribution of health professionals in
Alaska. It would expand options for behavioral health
treatment and care, decrease the wait times experienced by
many who were seeking behavioral health services, and
prioritize helping out the most vulnerable beneficiaries
across the state. He reiterated that the Trust fully
supported SB 134.
2:31:22 PM
SEVILLA LOVE, INTEGRATION COORDINATOR, ALASKA PRIMARY CARE
ASSOCIATION, ANCHORAGE (via teleconference), had direct
insight from her service in the healthcare field. She
alluded to the failing attempt that Alaska health centers
were currently facing because they could not meet the
behavioral health needs of their communities due to the
limitations barring them from hiring qualified behavioral
health providers known as licensed professional counselors.
She noted the bio, psycho, social, and economic impact of
COVID-19 which would only exponentiate the dire need to
prioritize the passage of SB 134.
Ms. Love continued that the behavioral health issues on the
system came at an exorbitant cost to state and federal
funding. All of the conditions were preparing to swamp an
already over-burdened emergency and acute response and
social service system in the wake of COVID-19.
Ms. Love reported there were LPCs available to go to work
presently, but health centers were not able to hire them
due to not being able to bill Medicaid. She indicated that
when patients were sick, they went to their primary care
provider. She referred to an article that reported up to 45
percent of people who died by suicide had visited their
primary care provider within a month of their death.
Additional research suggested that up to 67 percent of
individuals who attempted suicide received medical care as
a result of their attempt. She concluded that given the
statistics she provided, primary care had an enormous
potential to prevent suicide and connect people with the
needed healthcare they required.
Ms. Love continued that by capturing patients when they
presented to primary care, providers could help them. She
advocated removing all barriers between driving down costs
while meeting the increasing behavioral health issues of
individuals and families on their way into the system. She
argued that prevention was needed immediately before state
social youth and family services and psychiatric admissions
were necessary. All of the issues were most appropriately
prevented, met, and treated in primary healthcare centers.
The licensed professional counselor workforce was needed to
reduce future financial burdens and to save lives.
2:34:25 PM
PRENTICE PEMBERTON, COUNSELING SOLUTIONS OF ALASKA,
ANCHORAGE (via teleconference), spoke in support of SB 134.
He provided a brief work history. He was currently in
private practice and owned Counseling Solutions of Alaska.
He had 23 therapists who worked for him in Anchorage and
Eagle River. He was calling on behalf of all of them in
support of the bill. Changing the rule that a psychiatrist
had to supervise LPCs and licensed clinical social workers
(LCSWs) was long overdue. He responded to an earlier
question about qualifications. Licensed professional
counselors need the same qualifications to provide therapy
as those required for LCSWs and licensed marriage and
family therapists (LMFTs). The qualifications included a
graduate degree, 2 years of supervised work experience,
passing a licensing exam, and taking continuing education
credits. They were as qualified to provide therapy as any
other LPSCs, LPSWs, or LMFTs.
Mr. Pemberton conveyed that the preferred approach to
treating kids and teens was psychotherapy first, then
referral for evaluation by a psychiatrist. He thought
things were currently done in reverse order. He argued that
supporting families and kids in their community and
allowing problem solving was the way to avoid further
hospitalizations and the use of valuable emergency room
resources. He suggested that Medicaid kids were some of the
most vulnerable citizens Alaska had, yet they were denied
reasonable access to much needed mental health services for
them and their families.
Mr. Pemberton continued that as a community mental health
provider and medical social worker, one of his largest
frustrations was not being able to find quality outpatient
services. As a provider in private practice, he was
contacted frequently by doctors, pediatricians, and family
doctors looking for providers who would take their Medicaid
clients, as they could not get them in anywhere. The
emergency room was their last hope. Families were desperate
to help their kids in crisis. He surmised that the state
would pay for the care of todays children. The question
was would the investment occur in the near term by paying
for their health and wellness, or would it be in several
years by paying for their institutionalization or
incarceration. He thought much of the backlog could be
alleviated.
2:38:29 PM
Co-Chair Johnston CLOSED Public Testimony.
Co-Chair Johnston asked someone to walk through the fiscal
note.
2:39:09 PM
GENNIFER MOREAU-JOHNSON, DIRECTOR, DIVISION OF BEHAVIORAL
HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via
teleconference), spoke in support of the bill. The bill
could expand access to care for eligible Alaskans
statewide. She also noted the potential for expanded access
for care in rural communities for individuals experiencing
mild to moderate disturbances. There was also the potential
decrease overtime of psychiatric emergency services and
acute care services. Licensed professional counselors would
also be able to provide screening, grief intervention, and
referral to treatment which was a key element of the
continuum of care.
Co-Chair Johnston interrupted Ms. Moreau-Johnson. She asked
if she could walk through the fiscal note. Ms. Moreau-
Johnson deferred to Melissa Hill.
MELISSA HILL, ADMINISTRATIVE OPERATIONS MANAGER, DIVISION
OF HEALTH CARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES (via teleconference), reviewed the fiscal note
[OMB Component 3234]. The fiscal note showed a $55,900
services request to complete modifications to the Medicaid
Management Information System (MMIS) that would add a new
provider type and adjust associated business rules.
Co-Chair Johnston set the bill aside. She confirmed that
the amendments for another bill had been sent out via
email.
SB 134 was HEARD and HELD in committee for further
consideration.
2:42:55 PM
AT EASE
2:56:38 PM
RECONVENED
CS FOR SENATE BILL NO. 172(L&C)
"An Act extending the termination date of the State
Medical Board; requiring a report on the State Medical
Board's audit compliance; and providing for an
effective date."
2:56:47 PM
ELIZABETH REXFORD, STAFF, SENATOR DONNY OLSON, introduced
herself and read the sponsor statement:
SB 172 will extend the termination date of the State
Medical Board (board).
The State Medical Board has served the public's
interest by effectively licensing physicians,
osteopaths, podiatrists, physician assistants, and
paramedics. The board monitored licensees and worked
to ensure that only qualified individuals practiced in
Alaska. Furthermore, the board has developed and
adopted certain regulatory changes to protect the
public, improve the licensing process, and improve the
delivery of services.
The most recent audit completed by the Division of
Legislative Audit has proposed a termination date that
is three years less than the eight-year maximum
allowed per statute. The Senate Labor and Commerce
committee recently amended the bill to reduce the
termination date by an additional two years for a
sunset date of June 30, 2023. Additionally, the
committee also required that the legislative audit
division submit a report concerning compliance of the
recommendations from the audit to the medical board
within one year after the effective date. The reduced
extensions and one-year report requirement are due to
the audit's finding that board had failed to follow
through on a few set priorities. First, the board
failed to consistently report license actions to the
Federation of State Medical Boards. Secondly, the
board has failed to adopt regulations governing
registration in the controlled substance prescription
database. These regulations require licensees to
register in a controlled substances prescription
database. Thirdly, the board did not monitor
compliance with the database registration requirement.
The board is tasked with adequately monitoring
licensees to ensure that those with a DEA number
register with the controlled substance prescription
database.
We respectfully request that the termination date of
the board be extended to align with the Senate Labor &
Commerce committee's recommendation of June 30, 2023,
as well as requiring the one-year report from
legislative audit. These changes are incorporated into
the current version.
Co-Chair Johnston thanked the sponsor and his staff for the
bill and invited Kris Curtis to the table.
2:59:52 PM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, conducted an audit of the State Medical
Board. She indicated a copy of the report was in members
packets. She reviewed the state audit:
The audit concluded the board served the public's
interest by effectively licensing physicians,
osteopaths, podiatrists, physician assistants, and
paramedics. The board monitored licensees and worked
to ensure only qualified individuals practiced in
Alaska. Furthermore, the board developed and adopted
certain regulatory changes to protect the public,
improve the licensing process, and improve the
delivery of services.
The audit also concluded the board did not serve the
public interest by inconsistently reporting board
license actions to the Federation of State Medical
Boards (FSMB). In addition, the board did not adopt
regulations to require licensees register in the
controlled substance prescription database and did not
adequately monitor licensees to ensure those with a
DEA number registered with the controlled substance
prescription database.
Ms. Curtis indicated the audit recommended the Legislature
extend the board for 5 years.
Ms. Curtis referred to the background section of the audit
on page 5. She read from the report:
Senate Bill 74, effective July 2017, required
occupational board licensees that prescribe controlled
substances to register with the controlled substance
prescription database maintained by the Board of
Pharmacy. The database is intended to reduce misuse,
abuse, and diversion of controlled substances.
Practitioners are required to check the database prior
to dispensing, prescribing, or administering
medications, with certain exclusions.
Ms. Curtis turned to page 11 which showed a schedule of
licensing activity. The board issued just over 1600 new
licenses from FY 16 through January 2019. As of the end of
January 2019 there were 5073 active licensees which
represented a 9 percent increase compared to the 2012
sunset audit.
Ms. Curtis pointed to page 14 which displayed a schedule of
revenues and expenditures. She indicated there was a
deficit in 2018 of over $800,000. In response to the
deficit they increased fees. The schedule of fees was shown
on page 15.
Ms. Curtis reported that the auditors made 3
recommendations for improvement beginning on page 18 of the
audit. She read from the report:
Recommendation No. 1: The board should adopt
regulations to guide the process for registering with
the controlled substance prescription database.
The board did not adopt regulations to require
licensees with a Drug Enforcement Administration (DEA)
number register with the controlled substance
prescription database. Senate Bill 74, Section 60
included uncodified law that directed all boards that
licensed occupations with prescription authority to
adopt regulations to implement the law.
Rather than adopt regulatory guidance for registering,
the board expanded the regulatory definition of
unprofessional conduct to include licensees that do
not register. The board also implemented regulations
that require review of the controlled substance
prescription database prior to prescribing or
dispensing and added an opioid maximum daily dosage.
Board members did not consider the importance of
establishing regulations to guide in the process and
believed the regulatory changes that were made were
sufficient to satisfy the requirements of Senate
Bill 74.
The database was intended to reduce misuse, abuse, and
diversion of controlled substances. The lack of
regulations regarding registration requirements
increases the risk that licensees will not register
which, in turn, limits the database's effectiveness.
As described in Recommendation No. 2, the audit found
a high degree of noncompliance with the registration
requirements.
We recommend the board adopt regulations to guide the
process for registering with the controlled substance
prescription database.
Recommendation 2: The board should develop procedures
to
ensure licensees with a DEA number register in the
controlled substance prescription database.
Per AS 08.64.101(a)(7), effective July 2017, the board
must
require a licensee who has a DEA registration number
to register with the controlled substance prescription
database. The audit reviewed 25 new licenses (of which
19 had a DEA number) and 15 renewal licenses (of which
13 had a DEA number).
Auditors noted that the application form for new
licenses did not require an applicant provide evidence
of registration with the controlled substance
prescription database. Division staff processed the
applications and the board approved the applications
without regard for whether or not the applicant
registered with the database. Auditors checked the
database and found that five of the 19 new license
applicants with a DEA number (26 percent) had not
registered four applicants were not listed in the
database and one was listed in the database with a
status of "pending." Auditors noted that the renewal
application was revised in November 2018 to request
applicants for renewal licenses list their controlled
substance prescription database registration number.
However, applicants were permitted to list a status of
"pending," and division staff did not verify that a
licensee obtained a registration number at a later
date. Four of the 13 renewal applicants with a DEA
number (31 percent) had a status of "pending."
The board and DCBPL failed to comply with
AS 08.64.101(a)(7) due to a lack of procedures and the
board's decision to allow licensees a grace period
before enforcing the new requirements. The law did not
provide for a grace period and had an effective date
of July 2017. The controlled substance prescription
database was intended to reduce misuse, abuse, and
diversion of controlled substances.
Incomplete information within the database limits its
effectiveness, which increases the risk that
controlled substances may be abused or diverted.
We recommend the board develop procedures to ensure
licensees with a DEA number register with the
controlled substance prescription database.
Recommendation 3: The board chair should work with
DCBPL's
director to establish and implement procedures to
ensure board disciplinary actions are reported in
accordance with state law.
Of the 140 board disciplinary actions issued by the
State Medical Board between FY 16 and January 2019, 44
(31 percent) were not reported to the FSMB as required
by AS 08.64.335.
Alaska Statute 08.64.335 states:
The board shall promptly report to the Federation
of State Medical Boards for inclusion in the
nationwide disciplinary data bank license and
permit refusals under AS 08.64.240, actions taken
by the board under AS 08.64.331, and license and
permit suspensions or surrenders under AS
08.64.332 or 08.64.334.
The 44 disciplinary actions not reported to FSMB were
actions taken by the board under AS 08.64.331.
According to DCBPL management, staff misunderstood the
types of actions to be reported.
Additionally, the board and DCBPL lacked written
procedures to ensure the actions were correctly
reported in a timely manner. The national data bank
maintained by FSMB is designed to restrict the ability
of incompetent physicians to move from state to state
without disclosure or discovery of a physician's
damaging or incompetent performance. DCBPL's failure
to report disciplinary actions increases the risk to
public safety.
We recommend the board chair work with DCBPL's
director to establish and implement procedures to
ensure board disciplinary actions are reported in
accordance with state law.
Ms. Curtis directed attention to the responses to the audit
beginning on page 31. The commissioner of DCCED stated that
corrective action had already been taken to make sure that
disciplinary actions were reported in compliance with state
law.
Ms. Curtis continued to page 33 of the audit containing the
response from the board chair. In response to
recommendation 1 to adopt regulations the board chair
reiterated her belief that the statutes clearly required
licensees to register with the controlled substance
prescription database. In her opinion, regulation did not
seem necessary. She also stated that the regulations that
were created were reviewed by the Department of Law and
were found to be sufficient. However, the chair stated that
the board would consult the Department of Law and take any
corrective actions that they deemed necessary.
Ms. Curtis continued that in response to recommendation 2
to develop procedures, the chair stated that a procedure
had been created to ensure that their licensees would be
registering with the database.
Ms. Curtis reported that in response to recommendation 3
the chair agreed to implement procedures to ensure
disciplinary actions were reported in accordance with state
law.
3:05:45 PM
Representative LeBon asked Ms. Curtis if she had a sense
that the State Medical Board was investigating as
appropriate. He queried about issues that might be falling
through the cracks and not actually reaching the decision
level. Ms. Curtis commented. "Theres always things that we
dont know." The audit always focused on efficiency to
which investigations were happening. The auditors did not
look at actual investigations and evaluate whether they
made a right decision. She could not properly address
Representative LeBons question.
Representative Knopp asked if the board was fully staffed.
Ms. Curtis relayed that the entire board had changed over
within the previous few months.
Representative Knopp asked Ms. Curtis to tell the committee
about the make-up of the board. He asked if the board
consisted of members of the public or whether they were
medical professionals. He asked the question because Ms.
Curtis had mentioned regulations. Ms. Curtis referenced
page 1 of the audit which went into detail about the
organization and function of the board. The board was
comprised of 8 members 5 physicians, 1 physicians
assistant, and 2 public members with no direct financial
interest. The Division of Corporations, Business, and
professional Licensing provided support for the board in
terms of drafting regulations. The Department of Law
reviewed the regulations.
Representative Knopp asked where the board fell short. He
wondered if it was turnover in membership. Ms. Curtis
thought they had a valid argument in that they felt like
the statutes were clear. The statute stated that licensees
had to register. In the boards opinion, additional
regulations were not needed. The auditors felt that the
non-compliance was so high, that it warranted putting
regulations into place.
3:08:39 PM
SENATOR DONNY OLSON, SPONSOR, wanted to respond to
Representative Knopps question. He indicated that the
board had changed out completely over the previous couple
of months. The issue he had with the new board members was
that they were either from Anchorage or Fairbanks with only
one person from Sitka. He thought there was a
maldistribution of board members. He agreed with the
auditors recommendation of having tighter constraints.
Co-Chair Johnston relayed that Dr. Richard Wein was online
and available for questions.
Senator Olson indicated he had been on the board
previously. He expressed concerns that a chairman had not
been named. He thought the circumstance was similar to a
ship without a captain at the helm.
Representative Knopp noted Senator Olsons comments about
proper geographic representation. He wondered if the board
would be better served with members that were more evenly
distributed throughout the state. He asked if there was
something the legislature could do to help. Senator Olson
responded that there was a statute which stated that
members should be from as many geographical areas of the
state as possible. However, the statute could be
interpreted loosely, giving the governor the ability to
choose whomever he wanted. He mentioned equipment and lab
tests. He deferred to Ms. Curtis to answer the remainder of
Representative Knopps question. Ms. Curtis asked
Representative Knopp to restate his question.
Representative Knopp thought an executive director was
needed for the board, as it did not appear that certain
things were being done. Ms. Curtis responded that the board
had an executive director. She reported that the position
had been occupied by someone for a long time but had left.
A new person had recently taken the position. She also
noted that the auditors were conducting an audit on the
Direct Entry Midwives whose board had turned over 100
percent. In the prior year, the Board of Nursing had turned
over 100 percent as well. She commented that there appeared
to be a pattern.
3:12:55 PM
Representative Josephson indicated his office had a bill to
improve the PDMP [Prescription Drug Monitoring Program]. He
thought Ms. Curtis had testified that the board did not
think regulations were needed, as the statutes were clear
enough in terms DEA prescribers having to register. He
asked if he had heard her correctly. Ms. Curtis responded
affirmatively.
Representative Josephson asked about the 26 percent that
did not register. He noted there were several providers
that did not prescribe opiates and would not need to
register. There were other providers that did prescribe
opiates but had not registered. He asked if he was correct.
Ms. Curtis responded that the percentage applied to the
number of providers that should have registered. He was
correct that not all providers had to register. However, 26
percent of providers who had a DEA number and were required
to register, did not do so.
Representative Josephson suggested it meant that providers
who had not registered could not get into the system to
look someone up, even if they wanted to. He asked if he was
correct. Ms. Curtis responded, "Yes."
3:14:27 PM
Representative Wool asked that if someone registered with
the PDMP, they would not necessarily check the database
before writing a prescription. Essentially, they could
write 10 prescriptions to 10 different people, never look
them up, and no one would know. Ms. Curtis was unsure
whether there was an audit trail function within the
database to monitor inquiries. There certainly could be.
There was no one responsible for monitoring the system.
Representative Wool thought there was a requirement that
physicians also enter prescription information that would
be accessible to pharmacies. However, it was not part of
the law. Only pharmacists had to check the database. Ms.
Curtis indicated it applied to all individuals who had
prescribing authority. They were supposed to check the
database before they administered or prescribed
medications. It was both.
Representative Wool explained that as he understood it,
providers only had to check the database to see the
patients history at the pharmacy. The provider did not
have to enter the prescription they were prescribing. Ms.
Curtis reported that there was a requirement that
prescriptions were uploaded into the database at some time
in the process. The audit took a deeper look at the issue
when it conducted a pharmacy audit. The Board of Pharmacy
extension date was limited to 3 years. In the next Board of
Pharmacy audit, the auditors would be looking at compliance
across all occupations.
Representative Josephson mentioned HB 242. He was
astonished that the board did not notify prescribers that
they were not in compliance with the law. It could put
pressure on the board to revoke a providers license.
Co-Chair Johnston noted Ms. Chambers was online and
available for questions.
Ms. Curtis mentioned that the auditors found it slightly
egregious that the board granted a grace period, as the law
did not provide for a grace period. The Board Chairs
response was that it was not the boards intention to grant
a grace period for complying with the law. The board only
intended to grant a grace period for enforcing the law.
From the auditors perspective there was not a difference.
Representative Carpenter wondered if the board members were
the same members through the previous 2 audits. Ms. Curtis
did not know what percentage of the board was in place
previously. The prior audit was in 2012. The auditors had
consistently found problems with reporting. In the chairs
response she did not think the auditors characterized the
finding correctly. She stated that the prior finding was
not exactly the same as the current funding. Ms. Curtis
agreed that the findings were slightly different, however,
the recommendation was the same. The auditors recommended
that they start reporting correctly in compliance with the
law which they had not been doing consistently. She
highlighted that they were not reporting the portion
related to civil fines.
3:19:18 PM
Co-Chair Johnston OPENED Public Testimony.
3:19:47 PM
CHARLES MCKEE, SELF, ANCHORAGE (via teleconference), was a
beneficiary of the McKee Trust and had had access to
medical facilities as recently as October. He spoke in
support of the extension of the medical board. He recalled
the governors veto of Medicaid funds. He referred to a
lawsuit in which a medical establishment of doctors and
nurses sued the current administration. The case was
settled out of court due to an artificial emergency that
was created by the current administration related to the
veto of Medicaid which he needed to access. He reminded
members the state was currently in emergency status but,
the artificial emergency was manifested by the current
administration which mandated that everyone sign a loyalty
pledge.
Co-Chair Johnston interjected that the testifier needed to
stay on the topic of the bill.
Mr. McKee indicated the State Medical Board should have
refused compliance like the staff at the Alaska Psychiatric
Institute (API) who resigned in protest. He reiterated his
approval of the extension.
3:21:46 PM
Co-Chair Johnston CLOSED public testimony.
CSSB 172(L&C) was HEARD and HELD in committee for further
consideration.
3:21:59 PM
AT EASE
3:22:53 PM
RECONVENED
CS FOR SENATE BILL NO. 55(2d JUD)
"An Act relating to judges of the court of appeals;
and providing for an effective date."
3:23:03 PM
Co-Chair Johnston invited Senator Wilson's staff to provide
a brief introduction of the bill.
JASMIN MARTIN, STAFF, SENATOR WILSON, indicated that the
senator was on other state business but would likely be at
the hearing shortly. She explained that SB 55 added a
fourth permanent judge to the Court of Appeals. Any
criminal trial that ended in a conviction could be
appealed. Since 2014, there had been a significant increase
in the instances of criminal trials. The court needed a
fourth judge to catch up on the large backlog and to keep
pace with the current and expected cases in the future. The
bill was fully supported by the Alaska Court System. Nancy
Mead was in the room to answer specific questions about the
courts.
Ms. Martin continued that the focus of the legislation was
to strengthen the continuum of public safety. It was
essential to equip the courts to handle the growing
workload. The issue was highlighted by the Chief Justice in
his recent address to the legislature. The current average
time between a criminal appeal being filed and being
decided was about 3 years. She asserted that the timeline
was unacceptable to victims, the public, attorneys, and
defendants.
Ms. Martin asserted that the court would be much faster at
resolving the cases that were pending and ready for
decision if there was an additional appellate judge. In
2013, the total number of cases ready for review and
assigned to a judge was approximately 50. In other words,
judges could keep pace if they were issued about 50
decisions per year. However, in 2018, the number of case
assignments rose to about 90 decisions per year. The judges
could not keep pace with the increase in cases. The
legislation would improve the function of Alaskas criminal
justice system.
Ms. Martin indicated that the legislatures recent focus on
crime legislation had increased the expected case load of
the Court of Appeals. In 2018 and 2019 there was a record
high number of felony cases filed at the trial courts. All
of the facts she had laid out had proven the need for an
additional judge. She asked members to support SB 55. She
offered to review the sectional analysis at the request of
the committee.
Co-Chair Johnston thanked Senator Wilson for coming back to
the hearing. She invited Nancy Mead to the table to present
invited testimony and provide a review of the fiscal note.
3:26:06 PM
NANCY MEADE, GENERAL COUNSEL, ALASKA COURT SYSTEM,
explained that the Court of Appeals was an appellate court
that only handled criminal cases. After a persons Superior
Court Trial, an appeal went to the Supreme Court in the
instance of a civil case and to the Court of Appeals in the
instance of a criminal case. Since the inception of the
Court of Appeals in 1980 it had always had 3 judges and had
been unable to keep pace with the number of filings and the
amount of work since 2011. She expected the trend to
continue. Currently, the Court of Appeals was not
publishing, disposing, or finishing as many cases as there
were cases coming in the door.
Ms. Mead reported that the Alaska Court System had been
dealing with the problem with several approaches over the
last few years. It had been trying to find funding to have
temporary judges handle a portion of the cases. Some of the
cases were being handled in a quicker manner with shorter
decisions. Presently, it was the Alaska Court Systems
priority to find a lasting fix to the problem which it
expected to continue due to changes in criminal laws and
with all of the other increased number of felony trials and
felony filings over the previous few years. The Alaska
Court System fully supported the bill. It was usually
neutral on bills but, the Supreme Court needed the issue to
be addressed. She could provide more detail if the
committee desired or could answer any questions.
Representative Sullivan-Leonard asked Ms. Mead to explain
the 4 full-time positions listed in the fiscal note. Ms.
Mead responded that a judge in any appellate court in the
country needed some support staff in order to do an
effective job. A judge on the Court of Appeals had 2 law
clerks. Law clerks were typically, but not always, recent
graduates of law school. They served for 1 year. It was
standardized around the country with all different judges
and all different courts that most law clerk positions
lasted 1 to 2 years. A judge came with 2 law clerks and a
judicial assistant. A judicial assistant kept track of all
the files, answered phones, and handled the front desk.
They also typically kept things on schedule and handled the
computer system as well as other miscellaneous items. In
order to be an effective judge, they needed an effective
staff.
Representative Wool asked about the uptick in 2018. Ms.
Mead relayed that felony filings typically fluctuated up
and down through the years. She reported a severe downtick
in the number of filings and the number of trials between
2016 and 2018. The court systems data did not tell the
story of why things happened. She had heard that with some
of the monumental changes in the criminal law made during
the time period there were fewer arrests and fewer felony
filings. She suggested that perhaps it was related to the
resources of the Department of Law being able to file
certain things. Also, there were changes to the drug laws
that meant that certain drug felonies were no longer
felonies they significantly dropped. In FY 18 the laws
reverted back, and there were an additional 1000 felony
filings than the previous year. She reported that there
were about 7200 filings in 2018, versus about 6200 in 2017.
In FY 19 the number increased again from 7200 to 7350. The
Alaska Court System expected the number of cases to
continue to rise as more prosecutors were hired and more
law enforcement was on the street.
3:30:58 PM
Representative Wool wondered if HB 49 had been taken into
account or whether the effects of HB 49 would start to
appear. He wondered if Ms. Mead expected another quantum
leap. Ms. Mead replied that the Alaska Court System
expected at lease a steady increase from HB 49, if not a
more substantial one. In HB 49 the Department of Laws
fiscal note included the funding for 6 additional
prosecutors. She reported that with more prosecutors in
place, there would be more enforcement or consequences for
criminal offenses leading to more work for the court
system.
Vice-Chair Ortiz asked Ms. Mead if adding an Appellate
Court judge would really solve the backlog problem. Ms.
Mead responded that the bill would solve the courts part
of the problem. She clarified that there were delays at the
trial court level which SB 55 did not address. The bill
applied to the Court of Appeals. She reiterated that the
average time for an appeal to be filed and resolved was 3
years. No one thought the timeframe was acceptable. The
part of the problem the court was responsible for would be
solved by having a fourth judge on the Court of Appeals.
Other reasons for delay were largely because the agencies
also had difficulty getting all the resources garnered to
get cases briefed in time. They were building up their
resources as well. She reiterated that the part of the
problem that was attributable to the court taking too long
to put its decisions together would be solved by having a
fourth judge on the Court of Appeals.
Representative Knopp wondered about the nature of the
appeals the court was hearing. He asked whether certain
rules should be tightened. Ms. Mead responded that all the
cases were criminal in nature. The cases were basically
equally split between merit appeals (where a defendant felt
something was handled improperly at the trial court level)
and sentence appeals (where a defendant felt they should
have received less time). The reversal rate was low, and
defendants did almost all of the appealing. There were
limited circumstances in which the prosecutor could appeal
such as double jeopardy. She continued that when defendants
appealed, they won only about 10 percent to 12 percent of
the time. When a defendant received a reversal it usually
meant that the case was remanded and sent back to the court
to correct an error. The person was not typically set free
or declared innocent by the Court of Appeals. She provided
an example.
Representative Knopp asked if there was anyone that
reviewed the merits of the appeal before it went to the
trial court for appeal. He wondered if it automatically
went to the Court of Appeals.
Ms. Mead responded that a defendant had a right to file an
appeal. Most defendants in Alaskas system were represented
by a public defender who helped them put together their
appeal. The public defender acted somewhat as a filter to
put together the best arguments. It would be unusual for a
public defender to refuse to file an appeal for a client.
The public defender filtered the appeal to make it as
strong as possible streamlining things and ensuring that
the arguments had merit rather than being frivolous.
Representative Josephson asked if there was a system for a
motion for bail pending an appeal. Along with 3 years being
broadly unacceptable, there were victims that wanted
finality and defendants who might or might not be in
custody pending appeal. He asked how time would be made up
for someone who was wrongfully held in custody. Ms. Mead
answered that people could be out on bail pending appeal.
If it happened, it was often because the person was out on
bail on their own recognizance or in the community pending
their trial. If they did not violate their bail conditions,
went through their trial, and were convicted, they could
request to remain out on their own recognizance during the
pendency of their appeal. It was not common for a person
who was incarcerated to have their case completely reversed
100 percent such that they were found innocent. An appeal
was sent back about 10 percent of the time for a trial
court judge to correct an error.
3:38:05 PM
Co-Chair Johnston OPENED Public Testimony.
Co-Chair Johnston CLOSED Public Testimony.
Co-Chair Johnston would be setting the bill aside.
SB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnston would be recessing Monday morning's
meeting scheduled for 9:00 a.m. to a call of the chair.
ADJOURNMENT
3:39:14 PM
The meeting was adjourned at 3:39 p.m.