Legislature(2023 - 2024)ADAMS 519
05/08/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HJR2 HB38 | |
| HB21 | |
| HB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 112 | TELECONFERENCED | |
| + | HB 21 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HJR 2 | TELECONFERENCED | |
| += | HB 38 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
May 8, 2023
1:33 p.m.
1:33:57 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:33 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Alexei Painter, Director, Legislative Finance Division;
Bernard Aoto, Staff, Representative Will Stapp;
Representative Sarah Vance, Sponsor; Representative Justin
Ruffridge, Sponsor; Sylvan Robb, Director, Division of
Corporations Business and Professional Licensing,
Department of Commerce Community and Economic Development.
PRESENT VIA TELECONFERENCE
Ajay Desai, Director, Division of Retirement and Benefits,
Department of Administration; Andrea Mueca, Health
Operations Manager, Division of Retirement and Benefits,
Department of Administration; Ken Truitt, Legislative
Liaison, Department of Administration; Dr. Ashley Schaber,
Chair, Alaska Board of Pharmacy.
SUMMARY
HJR 2 CONST. AM: APPROP LIMIT
HJR 2 was HEARD and HELD in committee for further
consideration.
HB 21 SCHOOL/UNIVERSITY EMPLOYEE HEALTH INSUR
HB 21 was HEARD and HELD in committee for further
consideration.
HB 38 APPROPRIATION LIMIT; GOV BUDGET
HB 38 was HEARD and HELD in committee for further
consideration.
HB 112 PROFESSION OF PHARMACY
HB 112 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE JOINT RESOLUTION NO. 2
Proposing amendments to the Constitution of the State
of Alaska relating to an appropriation limit.
HOUSE BILL NO. 38
"An Act relating to an appropriation limit; relating
to the budget responsibilities of the governor; and
providing for an effective date."
1:35:48 PM
Co-Chair Foster invited questions on HJR 2 and HB 38.
Representative Coulombe asked if revenue put into accounts
such as the Permanent Fund Earnings Reserve Account (ERA)
would be included in the spending cap.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
responded that one of the exclusions to the cap was any
appropriation to the Permanent Fund. Any appropriation to
the fund was permitted to exceed the cap. In addition, the
Legislative Finance Division (LFD) would not include any
appropriations in its calculations of the limit that would
require further appropriations to spend. For example,
putting money into the Statutory Budget Reserve (SBR) would
not qualify as an appropriation towards the limit.
Representative Coulombe asked if monies put into the higher
education fund by the legislature would be subject to the
cap.
Mr. Painter responded that the situation would invoke the
cap because the monies would have to be appropriated out of
the fund in order to be spent. Appropriations into the fund
would not be subject to the cap but appropriations out of
the fund would be subject to the cap.
Representative Ortiz asked whether the spending cap
included the Permanent Fund Dividend (PFD) and the capital
budget.
Mr. Painter responded that the cap would not include the
PFD, but it would include the capital budget; however,
there was the ability to exceed the statutory
appropriations limit for capital expenditures with a two-
thirds vote.
Representative Ortiz asked if it was safe to say that the
impact of the constitutional and statutory limit on
spending was a limit on the operating budget on its own.
Mr. Painter responded, "to some extent, yes," but it would
require a two-thirds vote to exceed the limit.
Representative Ortiz asked if the bill could still act as
an effective spending limit without including the PFD,
which was the most significant spending item.
Mr. Painter responded that it would act as a limit on
expenditures for all other items, but it would not limit
how much money could be spent on the PFD.
1:40:12 PM
Representative Galvin commented that the state has
essentially used the Base Student Allocation (BSA) as a
regular formula and oftentimes funds outside of the formula
had been incorporated in order to cover costs. She
understood that the limit was calculated by looking at the
past five years of inflation and averaging the increases.
She asked what would happen if there was a significant bump
in education costs and wondered if there would need to be a
two-thirds vote to increase spending.
Mr. Painter responded that the limit was calculated based
on a five-year average of gross domestic product (GDP)
adjusted for inflation. If there was a spike in inflation
in the current year, it would be captured in the inflation
adjustment and would impact the prior year's figures. For
example, the current year would use the prior year's
inflation rate, which was 8 percent. By using prior year
inflation, the calculation could be made using a known
amount, which was the approach proposed in the legislation.
If it was based on projected inflation, the calculation
could adjust every minute depending upon what was happening
in real time; however, the number would be an estimate as
opposed to a known number. There was an inherent tradeoff:
the calculation could be based on inflation in the current
year but could only be an estimate, or the calculation
could be based on the inflation rates in the prior year and
be a known number.
Representative Galvin understood that the state was not
keeping up with inflation rates, particularly in education
spending. She wondered what would happen if the numbers
were based on figures that were not accurate. For example,
she wondered if the state would be at a disadvantage if the
increase was only 2.5 percent as it would still not match
inflation rates.
Mr. Painter responded that it was a policy call.
Representative Galvin asked if Mr. Painter would agree that
there had not been incremental increases in the last seven
years that would have kept up with inflation.
Mr. Painter responded that the BSA had increased by $30 in
the present year which was the first increase since 2017.
Representative Galvin asked what percentage would be
represented by the $30 increase.
Mr. Painter responded that it was about half a percent.
Representative Galvin asked for clarity that it was a 0.5
percent increase.
Mr. Painter responded in the affirmative.
Representative Galvin noted that the percentage floor was
important when it came to education.
1:45:33 PM
BERNARD AOTO, STAFF, REPRESENTATIVE STAPP, responded that
the five year trending average when applied to the current
year would total $21 billion. He explained that the 11
percent figure represented the floor, which would equal
about $4.9 billion as proposed by HB 38 and about $5.1
billion as proposed by HJR 2. The floor could be adjusted
according to the percentages.
Representative Galvin asked Mr. Aoto to translate the
figures to BSA dollars.
Mr. Aoto responded that a 1 percent increase to the limit
would be about $475 million. The proposed $680 increase to
the BSA would equal to about a $175 million increase. He
suggested that a 1 percent increase would allow for more
money to be spent on the BSA.
Representative Galvin understood that instead of there
being a $175 million incremental increase, there would be a
$475 increase if the legislation were to pass. She asked if
her understanding was correct.
Mr. Aoto responded that the increase in the percentage
would increase the allotted spending amount to about $475
million. The legislature would need to make a policy call
on how to spend the money.
Representative Galvin understood there would be $475
million available, but the legislature would choose the way
in which the money would be spent and whether the money
would be incorporated into the spending floor for
education.
Mr. Aoto replied that the legislature had the power of
appropriation.
Co-Chair Foster suggested that the bill's sponsor respond
to the questions.
Representative Stapp commented that any type of
appropriation limit had to be tied to something. The
existing appropriation limit was tied to a "hard number"
while the bills before the committee were tied to a percent
of the state's gross economic output. He suggested that if
the percentages were changed upwards that there would be
more space created in the budget to appropriate money for
operating and capital expenditures. If the statutory limit
in HB 38 was increased, capital expenditures could
theoretically fall underneath the appropriation.
1:49:54 PM
Representative Josephson recalled the figure $5.4 billion.
He understood neither HB 38 nor HJR 2 required a division
between capital and operating.
Mr. Aoto responded that the 11 percent figure under HJR 2
would be $4.8 billion, and 13 percent would be $5.1
billion. He clarified that the figures represented the
dollar amounts if the legislation was implemented by FY 24.
Representative Josephson commented that regardless of
whether HJR 2 or HB 38 were to pass, the capital and
operating expenses would not be divided. Both pieces of
legislation proposed a single and unified limit.
Mr. Aoto responded that there was a singular limit but
there was a provision on page 2, line 4 of HJR 2 stating
that a two-thirds vote would be required for the
legislature to appropriate an additional amount for capital
improvements in excess of the limit.
Representative Josephson asked what was anticipated for
capital expenditures when the 11 percent and 13 percent
figures were decided upon.
Representative Stapp responded that the 11 and 13 percent
numbers were amended downward in the previous committee of
referral [House Ways and Means Committee]. He thought that
while it was important to have an appropriation limit, he
did not want to implement legislation that would incumber
the legislature's ability to make investments in the state.
He thought a happy medium could be achieved if the
percentages were amended upwards.
Representative Josephson thought Representative Stapp must
have had a target dollar amount. He clarified that he
wanted to know the size of the capital budget under HJR 2
in the event that a two-thirds vote was not achieved.
Representative Stapp responded that it would be any type of
appropriation that fell within the statutory limit of the
bill. He noted that it could be amended. He deferred to his
staff to elaborate.
1:53:34 PM
Mr. Aoto responded that the total would be about $4.8
billion. The operating budget plus the capital budget would
need to equal $4.8 billion if the legislature did not
achieve a two-thirds vote.
Representative Josephson asked if a legislature could
"suffocate" the capital budget and supplant and grow
operating budgets.
Representative Stapp understood that Representative
Josephson was asking if the legislature could effectively
spend the entirety of the operating budget up to the
spending cap and not have a capital budget. He asked if his
understanding of the question was correct.
Representative Josephson replied in the affirmative. He
wanted information on the de minimis match, which was
around $100 million.
Representative Stapp responded that it could theoretically
be done if there was enough revenue. He did not think the
legislature would ever intentionally suffocate the capital
budget and argued that the legislature already had the
ability to do so if it wanted.
Representative Josephson understood that the administration
of past Governor Sean Parnell saw revenue that could have
"floated all boats." There was $95 million designated to
the Susitna-Watana Dam two years in a row under the Parnell
Administration. If a similar circumstance occurred in the
present day and an individual was advocating for a BSA
increase, the individual would be at odds with people who
wanted a larger capital budget. He understood that there
would be plenty of money to satisfy the capital budget and
the public school advocate, but the two parties would be
battling for space. He asked if his understanding was
correct.
Representative Stapp responded that Representative
Josephson's description was one way to articulate the
situation. He would argue that there was already a battle
going on. He thought that a threshold to achieve a capital
budget was a more equitable solution for the bulk of the
legislature and he would hope that it would be more likely
that the legislature would be in favor of a more robust
capital budget that met the needs of the entire state
rather than a limited amount.
Mr. Aoto added that the financial situation the legislature
was presently in was not because of a cap, but because of a
lack of revenue.
Representative Josephson understood that if the legislation
were to pass, the legislature could have all the revenue it
wanted but could not spend beyond the cap to solve
identified problems.
Mr. Aoto responded that there was a list of exceptions in
which the legislature could appropriate beyond the cap,
such as a disaster declaration. The instances that would
qualify as exceptions to the limit were subject to the
opinion of the legislature.
1:58:03 PM
Co-Chair Johnson asked if the green section of slide 12 [in
the previously presented PowerPoint presentation titled
"HJR2 GDP Based Spending Cap" (copy on file)] represented
the full amount of the percent of market value (POMV)
revenue that would be drawn. She wondered if the amount was
split out in any way.
Mr. Painter responded in the affirmative. The entire POMV
draw was shown as unrestricted general fund (UGF) revenue
and the PFD was shown as the unfunded expenditure.
Co-Chair Johnson understood that some were concerned about
there being taxes without a spending limit and that the PFD
was not subject to the limit. She did not think the PFD was
being considered in the equation if 50 percent of revenue
was not taken out for the PFD. She asked Representative
Stapp to expand on the contradiction that some individuals
did not want any new taxes unless there was a spending
limit, but the PFD was not subject to the spending limit.
She asked him to elaborate on the way in which the PFD's
exclusion would impact taxes and the spending limit.
Representative Stapp responded that slide 13 of the
presentation addressed the question. The slide showed the
governor's proposed 15 percent constitutional limit on GDP.
The constitutional limit would effectively put all
available revenue within the spending cap. The proposed 15
percent of GDP constitutional limit could theoretically
allow for all money to be appropriated through government
expenditures if there was a $0 PFD. He recognized that the
PFD was the largest appropriation the legislature made. If
half of the POMV was appropriated towards the PFD, there
would not be enough revenue to reach the current limits
unless new revenues were added.
Co-Chair Johnson understood that excluding the dividend
from the cap would have a different effect because it was
tied to GDP. She thought information was being conflated
and wanted to ensure that it was noted that it was tied to
GDP and was not based on traditional elements of the
spending cap.
2:03:04 PM
Mr. Painter commented that appropriations were often
constrained by revenue and any spending limit would not be
as important when revenue was the constraint. A situation
in which a spending limit would have made a difference was
in the prior year's session because revenue was not as much
of a constraint. Instead of a revenue constraint, the
constraint was the desire to not spend all of the money. A
spending limit would serve to cap the years with high
revenue. There could also be a cap set on oil which would
provide a different constraint.
Mr. Aoto responded that the value of using a GDP-based
spending cap was that it would capture a number of
different aspects of the economy that should be monitored
by the legislature, such as general population and
inflation. It also would allow the legislature to factor in
elements such as consumer spending, business spending, net
imports, and net exports when deciding how to appropriate
funds. There were previous iterations of spending caps that
tried to use one aspect of population inflation that
resulted in a more draconian and restrictive spending cap
than the one proposed by HJR 2.
Co-Chair Johnson asked if a floor was not needed because of
the existence of the POMV. She did not want to craft a
situation in which the spending cap would force austerity
on the state. She understood that the Permanent Fund draw
would always provide the needed funds if it were based on a
balanced budget. She asked if there was ever a time in
which the GDP spending limit would be so low that the
legislature would not be able to meet the needs of
Alaskans.
Representative Stapp responded that in the event of a
fiscal disaster in which there were multiple years of
declining GDP growth, it would be more likely that there
would be a revenue limit and not a spending limit. If there
was a serious drop in GDP over a five-year period, there
would also be a significant drop in the spending limit and
there would be an increase in out-migration from the state.
The government adjusted its spending downward when there
was a major out-migration in state in the 1980s and he
thought the same strategy could be implemented if the
situation were to happen again. He thought it would be wise
to reevaluate spending levels if there was another surge in
out-migration. He did not foresee the scenario occurring
but suggested that Mr. Painter elaborate on the question.
Mr. Painter commented that when the limit was set in FY 83,
expenditures were close to the limit in the first few years
and then spending was flat for nearly two decades;
therefore, the limit was not a meaningful factor. A similar
situation could occur with a GDP limit, but the limit
likely would not have grown as quickly as the figure
representing population plus inflation because GDP would
have also been impacted. In the 1980s, revenue was the
reason for the state's limited expenditures.
2:09:11 PM
Representative Hannan wanted more information about the
idea of excluding the PFD from the spending caps. She
understood the thought process in comparison to the current
spending cap; however, the proposed spending cap seemed to
be higher than some of the state's constitutionally
mandated spends. She asked for more information on the
reason for holding the PFD outside of the spending cap.
Representative Stapp opined that the PFD was a separate
political issue that warranted its own resolution. He
thought that if the percentages of the cap were to be
amended to 14 percent or 15 percent, it would include all
available revenue. He thought it was interesting to note
that the PFD had been subject to a significant swing in
variation of appropriation. If a hard limit was fixed in
the bill, it would effectively require a policy call on the
dividend within the spending cap. If all available revenue
fell under the cap, a dividend amount could be inferred
within the cap.
Representative Hannan asked if Representative Stapp found
any jurisdictions in which a spending cap was separate from
a taxation policy. She acknowledged that there were no
individual taxes implemented in Alaska and that most states
that had taken on a spending cap did so in order to govern
a sales tax, income tax, or property tax. She wondered if
Representative Stapp's research found any jurisdictions
where revenues and spending caps were separate.
Representative Stapp asked for clarification on whether
Representative Hannan was asking if had found a spending
cap in his research that was divorced from taxation.
Representative Hannan responded in the affirmative.
Representative Stapp replied that the current spending cap
in the state had no bearing on taxation and any variation
in spending caps that were indexed at population and
inflation had no impact on tax policy. He thought GDP was a
better metric to use when coordinating a tax policy because
if there was a more robust private sector, there would be a
better base upon which to implement taxes.
Representative Hannan suggested ignoring Alaska as the
state was the exception and not the rule. She offered
Colorado as an example and explained that an implemented
spending cap was immediately followed by tax increases. She
asked if there was any state apart from Alaska that had set
a spending cap without also addressing taxation policy in
the state.
Representative Stapp responded that unlike every other
state, Alaska did not have a broad based tax. The concept
behind the limit was to encourage responsible government
appropriations. He could not think of an example of another
state apart from Alaska that had implemented a spending cap
withing addressing taxation policy because Alaska did not
have a broad based tax.
2:14:13 PM
Representative Galvin wondered whether a spending cap would
bring about more transparency, accountability, and
responsiveness, which is what she thought Alaskan voters
wanted. She was aware of a paper by the Economic Policy
Institute that argued that spending caps were not
necessarily beneficial in achieving the goal of
transparency. When there was a shock to the economic system
such as the 2008 recession, Alaska was not impacted as
strongly as other states because Alaska was able to quickly
invest. She recalled that in 2008, Alaska invested around
25 percent into the nation's economy and saved over 700,000
jobs. She asked Mr. Painter to speak about the ways in
which the state would be impacted if there was a similar
event in the future, but the state had implemented a
spending cap. She also asked how a disaster would be
defined and how it was determined that a situation was dire
enough to warrant spending beyond the cap.
Mr. Painter responded that the definition of disaster was
in statute and the governor had the power to declare
disasters in response to natural disasters, diseases, war,
or other similar events. He did not think economic
disasters were included in the definition. He thought that
if the GDP crashed and a disaster was severe enough, a GDP-
based spending limit could potentially mean that Alaska
could not respond; however, it was based on a five-year
average with a lag. If a GDP-based spending limit was in
place during the current session, the data used to
determine the limit would be the previous year's GDP and it
would not necessarily be restrictive. If the statutory
limit was set close to the current expenditures and the
constitutional limit was set higher, the expenditures for
economic disasters would likely be capital spending, which
was the case in 2008. The capital funds could be spent with
a two-thirds majority under the spending cap. It could
become problematic if there was a significant long-term
disaster, but the state would have had to have significant
savings in order to spend the funds in the first place. The
spending limit would not be the limiting factor if there
was a multi-year depression. The statutory limit could also
be amended by future legislatures with a simple majority
vote of both bodies.
Representative Galvin asked how long the recession in 2015
lasted in Alaska.
Mr. Painter responded that he did not know as far as a
formal definition of recession from a macro-economic
perspective. There were deficits from FY 15 through FY 21,
but that alone did not necessarily qualify the time period
as a recession.
Representative Galvin asked if Alaska was sensitive to
extreme fluctuations.
Mr. Painter responded that the economy in the state was
more volatile than most states. It was also not necessarily
correlated to the nation's economy. Alaska had a relatively
volatile economy because of its dependence on a volatile
resource.
2:20:33 PM
Representative Josephson asked what the current
constitutional limit from 1982 would be as a percent of
GDP.
Representative Stapp responded that he would guess it would
be around 25 percent or 26 percent. He deferred to Mr.
Painter.
Mr. Painter replied that he thought it would be approaching
50 percent because the 13 percent level represented about
$5.8 billion and the current constitutional limit was about
$11.3 billion. If the figures were doubled it would total
about 50 percent. He was not certain of the figure and
would return to the committee with a more precise
calculation.
Representative Josephson noted that Representative Stapp
had mentioned a five-year economic downturn. He asked
Representative Stapp to repeat his comments.
Representative Stapp responded that the GDP was based on a
five-year rolling average. If there was a severe economic
downturn for five consecutive years, downward pressure
would be placed on a GDP-based spending limit based on an
average.
Representative Josephson noted that there was an economic
downturn from 1933 through 1938 and the Roosevelt Recession
immediately followed in 1937. He relayed that the response
at the time was a Keynesian approach to prime the public
and get the economy going and to avoid the European
experience of complete political disruption. He noted that
the situation would not occur in the same way in Alaska
because it was a state and not a country; however, given
the countercyclical nature of the state and the fact that
the 2008 recession was a "blip" to Alaska, he asked if
there would be circumstances in which the state was unable
to respond and it would be watching events unfold that the
state could theoretically resolve but could not take
action.
Representative Stapp responded that the big difference was
that the state could control fiscal policy but not monetary
policy. In the event of a recession, the state would be
limited by a collapse in all available revenue and there
would be massive out-migration. He thought that the best
way to prepare for a disaster scenario would be to amend
the percentages upward. He reiterated that he was not
worried about a spending cap having a negative impact on
the state in a disaster because there would be a collapse
in all revenue and the spending cap would be the least of
the state's worries.
Representative Josephson replied that there was a strong
governor model in the state and the legislature would need
a two-thirds vote to override a veto. In a crisis, it was a
limitation on legislative prerogative.
2:25:14 PM
Representative Ortiz wondered if it would be better to
suspend the idea of a spending cap until the question of
revenue was resolved. He thought that revenue was in
essence the current spending cap and that it had been a
successful model. The legislature was able to address
capital projects and deferred maintenance when the state
had more revenue in the prior year. He did not understand
why a spending cap would be tied to GDP when revenue was
not tied to GDP.
Representative Stapp responded that the main issue was how
the state allocated the existing revenue it already had.
He thought the most valuable information from Mr. Painter
on the history of the cap was that both the constitutional
limit and statutory limit for appropriations had been
violated by the legislature on multiple occasions. He
suggested that when a limit existed in statute or in the
constitution that had been repeatedly violated, the
legislature had the responsibility to do its due diligence
to reform the issue and increase accountability to
citizens. It was possible to have a tie in terms of overall
GDP that would allow for future conversations on revenue
and on the PFD amount. The main goal of the bill was to
smooth out the boom and bust cycle that was Alaska's
revenue picture. He argued that the state likely allocated
money in high revenue years such as FY 12 and FY 15 for
good purposes, but he thought the state also wasted a lot
of money.
2:29:28 PM
Representative Coulombe asked how the current spending cap
related to the private sector.
Mr. Painter responded that the spending cap was tied to a
fixed number that grew by population and inflation. The cap
did not directly reference the size of the economy in any
way.
Representative Coulombe asked if the state needed to
respond to the spending occurring within the private
sector.
Mr. Painter responded that the spending cap was based on a
fixed number which grew by population and it did not matter
if the population was employed. However, revenue did
originate from the private sector.
Representative Coulombe asked how the proposed spending cap
would incorporate the private sector into the equation.
Mr. Aoto responded that the cap would use state GDP and
that some of the elements of state GDP were business
expenses, business spending, net imports, and net exports,
which were all directly related to the private sector.
Representative Coulombe commented that many examples had
been brought up during the meeting on what could happen in
extreme situations. She thought that the state's revenue
had been historically volatile, and Alaska was not
financially disciplined in high revenue years. She thought
that there would be fewer emergencies if the state invested
in a more regimented manner. There would be more stability
in the savings accounts to increase education spending and
it would encourage savings and "rainy day" finances. She
liked the idea of a spending cap because it would force the
legislature to think about the future and it would smooth
out emergency spending and big deposits.
Representative Tomaszewski thanked Representative Stapp for
bringing forth the bill and he thought that it was exactly
what the state needed. He thought the state needed the
ability to control spending and the cap would allow for
steady funding and decreased dependence upon digging into
its savings accounts. He commended Representative Stapp for
his responses to the questions of other committee members
and he looked forward to hearing more about the
legislation.
HJR 2 was HEARD and HELD in committee for further
consideration.
HB 38 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 21
"An Act relating to group insurance coverage and self-
insurance coverage for school district employees,
employees of the University of Alaska, and employees
of other governmental units in the state; and
providing for an effective date."
2:34:58 PM
Co-Chair Foster invited the sponsor and her staff to
introduce the bill.
REPRESENTATIVE SARAH VANCE, SPONSOR, introduced HB 21. She
offered a PowerPoint presentation "HB 21; School Healthcare
Consolidation," dated May 8, 2023 (copy on file). School
districts were experiencing challenges in recruiting and
retaining teachers and staff, which was an issue compounded
by the rising costs of health care. She had attended a
local school board meeting in her district at which she
heard the teacher representative for health insurance plead
with school board members to hold an emergency meeting to
discuss what could be done to better recruit and retain
teachers. The rising costs of health care and premiums for
families were forcing teachers to leave the state or the
profession. She recommended the introduction of HB 21 after
attending the meeting.
Representative Vance advanced to slide 2 and explained that
the bill had been offered and heard in prior legislatures,
but only as a requirement that all school districts
consolidate. She indicated that HB 21 was different in that
it supported local control and was completely optional for
schools. She moved to slide 2 and relayed that according to
an Institute of Social and Economic Research (ISER) study
from 2019, there were three aspects of public education
costs in Alaska that set it apart from other states: small
schools, health care, and energy.
Representative Vance continued to slide 3. Alaska had the
highest per-capita health care costs in the nation which
negatively impacted private and public sectors of the
economy. The high costs put downward pressure on wages
which made it difficult for schools to offer nationally
competitive salaries to teachers in Alaska. Her goal was to
ease the financial burden on school districts and give the
state more leverage to negotiate with health care
providers. She moved to slide 5 and relayed that the bill
would amend current statute to allow the option for school
districts, the universities, and governmental units such as
cities and boroughs to participate in AlaskaCare. The
aforementioned entities would have the choice to opt into
the pool and enable the Department of Administration (DOA)
to negotiate a better cost of health care.
Representative Vance continued to slide 5. She explained
that the main benefit of consolidation was that it would
save money. By expanding the number of participants in a
health care pool, the potential for savings increased. Most
of the state's school districts were small and carried the
cost burden alone. Several school districts had responded
to the proposed consolidation and reported possible savings
of about $7 million per year. This would allow for some
districts to not only close their budget gap but provide
better health care to participants. The Mat-Su school
district had reported that if all district employees'
bargaining units were to be consolidated, the district
could save up to $7 million. The savings would be about
$3,000 per employee and would equate to a $125 increase in
the Base Student Allocation (BSA). If all districts chose
to consolidate, the savings would be about $200 million per
year. The bill would also provide more health care options.
Some districts were facing challenges in finding affordable
health care options due to high-use numbers and the bill
would expand options to offset high-use. An additional
benefit would be that the bill would reduce the burden on
staff and allow schools to focus on providing quality
education.
Representative Vance advanced to slide 6 and concluded that
the bill was intended to reduce education costs and better
serve the needs of Alaskans.
2:40:59 PM
Representative Vance offered to review the sectional
analysis (copy on file).
Co-Chair Foster replied that he would like to hear the
sectional analysis.
Representative Vance relayed that she would provide some
highlights of the sectional. She indicated that the one
change made by the House Labor and Commerce Committee was
Section 9:
Section 9. Authorizes the Department of Administration
to investigate the potential costs of any interested
school district, local government, or the University
of Alaska, and share that report with the Legislature
before the Commissioner approves their admission into
AlaskaCare
Representative Vance continued by highlighting Section 3 of
the sectional:
Section 3. Allows the Commissioner of Administration
to expend from the public education fund (AS
14.17.300) to the group health and life benefits fund
(AS 39.30.095) a total of $100,000,000 or less as
needed to pay claims submitted by school district
employees who are covered by a policy of self-
insurance provided by the state; and, requires the
Commissioner of Administration to repay the public
education fund, over a period of 10 years, the full
amount of the commissioner's expenditures from the
public education fund
Representative Vance explained that Section 3 had been a
particular topic of interest and she deferred to the will
of the committee on whether to include it in the bill. She
relayed that Sections 4 through 6 contained the majority of
the content of the bill. She stated that Section 4 allowed
schools districts and the university to be part of the
state health care plan. The other sections [Section 5 and
Section 6] gave the board of regents, universities, and the
Regional Educational Attendance Area (REAA) the legislative
authority to optionally participate in the plans. Section
10 authorized DOA to provide group medical insurance to
school employees, school district employees, and other
governmental employees by means of self-insurance. If it
was not beneficial for an entire unit to opt into the pool,
DOA could determine that the unit would benefit more
through a policy of self-insurance. She emphasized that
there were options depending on the cost and the health
care provider.
Representative Vance continued on Section 12 and explained
that it ensured that the bill was applicable to collective
bargaining agreements and other contracts that would become
legally binding on or after the effective date of Sections
1 through 8. Section 13 would require self-insured school
districts to transfer the closing balance of their self-
funded insurance reserve account after enrollment in a
health care plan administered by the state. It would
require that the amounts be applied to offset
reimbursements owed by the school district. She continued
that Section 14 noted that the bill would not automatically
go into effect and would allow for a one-year transition
period to adopt regulations and gauge interest in
consolidation. It would allow DOA to see the cost and
benefits and any required further analysis.
Co-Chair Foster invited questions from the committee.
2:45:21 PM
Representative Stapp expressed his appreciation to
Representative Vance for bringing forward the bill. He
asked about the actuarial analysis of the impact on
AlaskaCare. He thought that small and high-risk groups
would flow into the AlaskaCare plan, and he thought it was
unlikely that larger entities like the Anchorage School
District would consolidate due to the nature of cost. He
understood that the last time the state looked at the plan
was in 2014 and he thought it would be good to look at it
again. He asked if the sponsor or a representative from the
Division of Retirement and Benefits (DRB) wanted to comment
on the potential influx of a high-risk population into the
plan.
Representative Vance responded that she had spoken with DOA
and it was not planning on doing actuarial analysis of the
bill until it reached the House Finance Committee. She
noted that representatives from DRB were available for
questions.
Representative Stapp asked if someone could provide
comments on the overall impact of the bill and of the
influx of high-risk individuals on the overall plan.
AJAY DESAI, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS,
DEPARTMENT OF ADMINISTRATION (via teleconference),
responded that DRB had not done any actuarial analysis yet.
The division had only determined initial operational costs
based on the initial analysis of the bill, which had been
submitted to the legislature.
Representative Stapp asked for more information on the
method of actuarial analysis. He opined that an actuarial
analysis was a key ingredient when determining the
viability of the long-term impact of the bill.
Co-Chair Foster asked Mr. Desai at what point the actuarial
analysis would occur.
Mr. Desai deferred the question to his colleague.
2:49:04 PM
ANDREA MUECA, HEALTH OPERATIONS MANAGER, DIVISION OF
RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION,
JUNEAU (via teleconference), responded that the division
was planning on testing three scenarios when it conducted
the actuarial analysis: a neutral cost impact, a reduced
cost impact, and an increased cost impact. Depending on who
joins the plan, it was unclear whether the state would save
money, lose money, or be financially unaffected. She
relayed that the division would get updated analysis within
three weeks.
Co-Chair Foster noted that part of the reason for the delay
was that the cost for the actuarial analysis was
substantial. He asked what Ms. Mueca for the expected cost.
Ms. Mueca responded that the request would cost around
$30,000.
Representative Stapp understood that there was a similar
analysis conducted in 2014 for the Senate that had a cost
of about $200,000. He asked if Ms. Mueca was sure she could
do a thorough analysis for $30,000.
Ms. Mueca responded that she was not familiar with the 2014
analysis and she would have to look through the study for
updated information. She thought the turnaround would be
quicker if the division could follow a template for the
analysis.
Co-Chair Foster thought he saw an email recently that
suggested a range of $150,000 to $200,000.
Representative Vance commented that the progress of the
bill was at the will of the finance committee.
Representative Hannan understood that there were two
districts represented in the packet of letter of support
for the bill (copy on file). She noted that some districts
had more than one insurance plan because there were
different bargaining units represented by different
individuals. She wondered if Representative Vance had
received direct communication from other school districts
indicating interest in consolidation. She was generally a
"huge fan" of universal healthcare, but she also had served
on her health plan's trust and understood that teachers
were typically expensive to insure. The most expensive
periods of time in a person's life were childbearing years
and the years proceeding retirement, and many teachers were
young women. She asked if the sponsor had heard from the 51
other districts in the state and wondered if other
districts were interested in joining the plan.
Representative Vance responded that she had emailed all the
districts asking for their interest and input and she had
heard back from Ketchikan, Kenai Peninsula, and Mat-Su. The
districts as a whole had been quiet and she was unsure if
districts were still deliberating. The Mat-Su and Kenai
Peninsula districts were some of the larger districts and
had indicated that they wanted the health care option to be
available.
Representative Hannan commented that the letter of support
from Mat-Su was not in her packet and she would like to see
the letter. She was unsure if the Mat-Su district had more
than one unit represented in the plan or whether the plan
was unified.
Representative Vance responded that she would provide the
information to the committee. She recalled that Mat-Su had
four bargaining units and it was a conversation to see
whether some or all wanted to join the plan. She
anticipated that each school district or unit would come to
DOA and have a conversation about their needs and determine
whether the plan would save money while providing the same
level of health care, or whether it would be more costly.
Co-Chair Foster noted that there was a representative from
DOA available for questions. He asked if DOA could comment
on the actuarial analysis.
2:56:04 PM
KEN TRUITT, LEGISLATIVE LIAISON, DEPARTMENT OF
ADMINISTRATION, (via teleconference), responded that DOA
would begin an actuarial study when it was requested by the
finance committee. It could not begin the analysis until it
was formally requested.
Co-Chair Foster asked if Mr. Truitt could provide more
information about the cost.
Mr. Truitt responded that the cost was estimated to be
around $30,000.
Representative Ortiz asked what went into determining the
costs in the fiscal note [by DOA with Control Code vwuQl]
of about $350 million per year [he later corrected the
number to $350,000]. He asked how the fiscal note was
determined.
Mr. Truitt responded that the question would be better
answered by Ms. Mueca.
Ms. Mueca responded that the fiscal note totals had to do
with the requirements for staffing. She explained that DRB
would need three full-time employees, actuaries, and legal
counsel in order to conduct the study.
Representative Ortiz noted that he meant to say that the
fiscal note totaled $350,000 not $350 million.
Representative Galvin commented that the concept of the
bill could be a "game changer" for education. She noted
that her questions were similar to Representative Hannan's
and wanted to know how many districts had indicated
interest in the plan. She wondered if districts could help
each other if many were interested in the plan. She thought
the bill could help the state support its children.
3:00:47 PM
Representative Stapp asked what the current per employee
per year cost was for AlaskaCare.
Ms. Mueca responded that the average per employee per month
cost was around $1,734. She would have to calculate the
numbers to provide the annual cost.
Representative Stapp commented that it was about $20,000
per year based on Ms. Mueca's response. There was a Haight
Law Group study [from 2014] that showed a cost of $18,446
per employee per year for insurance. He understood that the
goal of the bill was to bring about savings and that some
school districts would choose to consolidate to save money.
He thought some groups or districts could drive the cost of
AlaskaCare up. He reiterated that he did not understand how
the actuarial analysis could be conducted for $30,000.
Ms. Mueca responded that there was already a starting point
for the actuarial analysis which was the reason why DRB was
quoted $30,000 for the analysis. She could provide any
additional information about the analysis if Representative
Stapp would like.
Representative Stapp asked for a list of the information
that the division was going to examine. He thought that the
actuaries would want to look at the employee costs, the
deductibles, and other factors.
Ms. Mueca would follow up with the information.
3:03:57 PM
Representative Coulombe relayed that she assumed the
university supported the bill. She asked if her assumption
was correct.
Representative Vance responded that the university was
neutral on the bill and adding the university to the plan
was not a necessity. When she introduced a version of the
bill four years prior, her school district did not need the
plan; however, the district desperately needed the bill
four years later. She thought the change spoke to the
importance of having health care options for the future
because many municipalities that do not currently need the
option might need it in future years.
Representative Coulombe asked if DOA would help small
school districts decide whether it was prudent for the
districts to join the plan.
Representative Vance responded that Section 9 addressed the
issue. She explained it was a requirement that there be a
report detailing the potential costs before the
commissioner authorized acceptance of the units.
Representative Coulombe asked if the prior versions of the
bill that mandated participation were driven by
Representative Stapp's earlier point that the plan could be
overwhelmed by high-needs groups. She asked for
Representative Vance's opinion on whether participation
should be mandatory.
Representative Vance responded that there had been a
conversation about mandatory participation in 2014. She
stated her understanding that some districts wanted to
maintain local control and opposed the idea of forceful
consolidation. She added that AEA also opposed making
participation in the plan mandatory.
Representative Coulombe liked that participation was
voluntary.
3:07:27 PM
Co-Chair Johnson asked if the information requested by
Representative Stapp could be provided to all members. She
wondered how many districts had a blind health care trust.
She understood that Mat-Su did not.
Representative Vance was uncertain of the number. The Mat-
Su district had given great support to the bill because it
could save $7 million per year. The district was the first
to reach out to her office in support of the legislation
because it estimated a $3,000 savings per employee per
paycheck.
Co-Chair Johnson commented that the bill had potential. She
understood that some contracts had higher levels of
transparency than others. She hoped transparency would be
increased if the bill were to pass.
Representative Vance noted that the AlaskaCare 2020 active
employees premiums chart (copy on file) as provided by DOA
was included in member's packets. She highlighted that she
was offering the bill as a tool for the legislature to draw
on to examine cost-reducing methods and to make the most of
the state's dollars while providing excellent health care
to Alaskans. She argued that the state indirectly paid for
health care in one form or another through the BSA. She
would let the committee determine which entities should be
included in the plan but her goal was to put all school
districts on equal footing. There were some small districts
that needed help and larger ones that did not. The bill was
meant to look to the future and recruit and retain teachers
by providing great health care.
HB 21 was HEARD and HELD in committee for further
consideration.
3:11:04 PM
AT EASE
3:16:42 PM
RECONVENED
HOUSE BILL NO. 112
"An Act relating to the Board of Pharmacy; relating to
the practice of pharmacy; relating to pharmacies;
relating to prescription drug manufacturers; relating
to prescriptions for epinephrine; relating to the
administration of epinephrine; and providing for an
effective date."
3:17:20 PM
REPRESENTATIVE JUSTIN RUFFRIDGE, SPONSOR, introduced HB
112. He explained that the bill came about after being
discussed for multiple years by the Alaska Board of
Pharmacy. The board was tasked with regulation changes by
the administration, and it thoroughly examined the
regulations of the profession of pharmacy. The regulation
changes were referred to as "right touch" regulations and
modernized the profession as it had changed immensely over
the past 25 years. The board started keeping a list of the
items that would need to be changed in statute in order to
implement the right touch regulations. The bill was a
collection of the statute changes to help modernize the
profession and it would also give the board the authority
to continue the regulatory process. He relayed that the
chair of the board would offer a presentation to explain
the bill in more detail.
DR. ASHLEY SCHABER, CHAIR, ALASKA BOARD OF PHARMACY (via
teleconference), introduced the PowerPoint presentation
"House Bill 112: Profession of Pharmacy" dated May 8, 2023
(copy on file). She began on slide 2 which detailed the
board's 2023 strategic plan. There had been a cumulative
effort over the last several years to ensure that the board
had statute changes that would allow it to meet its
mission. She highlighted that one of the board's four goals
[listed on the slide] was to grow the economy while
promoting community health and safety. Many of the changes
related to the aforementioned goal, particularly to
routinely review the effectiveness of regulations that
reduced the barrier to licensure without compromising
patient health and safety. She relayed that the board
currently had seven members, five of whom were pharmacists
and two of whom were public members.
Dr. Schaber continued to slide 3 and offered some
background information on HB 112. She explained that the
bill would address necessary changes by doing the
following:
• Streamlining licensure process while improving
public safety
• Compliance with the Drug Supply Chain and Security
Act
• Alignment with other professional boards in Alaska
and pharmacy boards in other states
• Clarification of pharmacists' roles in epinephrine
access
Dr. Schaber indicated that the bill was a collaborative
effort between the board and the Alaska Pharmacists
Association.
Dr. Schaber continued on slide 4. The first goal was to
streamline the licensure process while improving public
safety. The bill eliminated unnecessary forms currently
required in statute. The forms were redundant and included
information that was already part of the licensure process.
The elimination of the forms would reduce the burden on the
applicant and on the board. It also clarified that only
pharmacists who dispensed controlled substances would be
required to register with the Prescription Drug Monitoring
Program (PDMP). It would also add a national criminal
background check for all applicants, which would add
another layer of protection. The background check was
required in 30 other states and was a statutory requirement
for nursing and other professions.
3:23:48 PM
Representative Hannan asked what details were included in
the national background check when it was returned to the
board. She asked if included specific information or simply
showed whether an applicant had committed a criminal
violation.
Dr. Schaber responded that she did not know which details
were included in the background check. She thought that the
background check acted as a flag to prompt additional
review.
Representative Ruffridge responded that the application for
licensure currently had a "self-selection" response, which
meant that the application asked whether an individual had
been convicted of a crime or was currently under
investigation for a crime. Applicants were able to select
"no" on the application even if the true answer was "yes,"
and there would be no follow-up. During his time on the
board, there were at least a few cases in which the answer
checked on the application was no, but the actual answer
was yes. The reason for the request was to ensure that
applicants were answering truthfully on their applications.
If a person were to lie, there would be reason to deny the
individual a license.
Representative Hannan noted that the committee spent time
in the prior week talking about background checks for
cannabis convictions that were no longer convictions under
the law and how the process should be changed. She could
see a problematic situation occurring in which a pharmacist
applicant had a cannabis conviction in another state, but
it was not considered a criminal offense in Alaska. She was
hoping that there would be more detail than a yes or no as
the answer was often more complicated. She did not think
answering yes should be an automatic denial, but she was
unsure if federal law would allow nuances to be considered.
Representative Ruffridge responded that marijuana was still
considered an illicit substance because it was federally
illegal. A violation with a controlled drug of any type
would be a flag to prompt additional review of an
application. The board considered it an issue in its hiring
process even though marijuana was legal at the state level
because pharmacists would have access to controlled
substances.
Representative Coulombe asked Representative Ruffridge to
put his credentials on the record.
Representative Ruffridge responded that he was the previous
chair of the Board of Pharmacy. He had a doctorate in
pharmacy and had been a licensed pharmacist in the state
since 2008.
3:29:31 PM
Dr. Schaber continued on slide 5. The next goal was to be
compliant with the Drug Supply Chain and Security Act
(DSCSA). She read from the slide as follows:
• The federal Drug Supply Chain and Security Act
(DSCSA) further secures the U.S. drug supply through
a system to prevent harmful drugs from entering the
supply chain, detect harmful drugs if they do enter,
and enable rapid response when such drugs are found.
o Boards of Pharmacy play a key role in this
process through appropriate licensing of drug
distributors and pharmacies
• HB 112 ensures the AK Board of Pharmacy powers and
duties support the DSCSA related to manufacturers,
out-of-state pharmacies, and internet pharmacies to
ensure Alaskans receive safe medications
Dr. Schaber explained that the change would be a
modernization to the process. Currently, out-of-state
pharmacies were required to register based on a statute put
in place in 1992. The drug supply chain and pharmacy in
general had changed significantly since 1992 when the
original statute was put in place. She relayed that
compliance with DSCSA would give the board jurisdiction
over out-of-state pharmacies. There was a concern that out-
of-state pharmacies that were mailing prescriptions into
the state might not be providing the same kind of
counseling that the in-state pharmacies were required to
provide. The concern had been raised many times over the
years in the form of public comment.
Dr. Schaber continued on slide 6 and the next goal, which
was alignment. To achieve the goal, the bill would replace
one of the two public member seats with a pharmacy
technician seat. As the field of pharmacy had changed over
the years, the role of pharmacy technicians had changed
with it. Both public member seats had been vacant for about
a year and adding the pharmacy technician seat would allow
for an additional perspective. The board also hoped that it
would help fill the vacancy. The next change would be to
allow the board to adopt language to create a retired
pharmacist status. It would align the board with pharmacy
boards in other states and with other professional boards
in the state. The last change associated with the goal of
compliance was to clarify the board executive
administrator's salary which would allow the required
flexibility for a pharmacist to serve in the role in the
future. The salary was currently not flexible enough to
allow a pharmacist to apply for the position. The board did
not want to require that a pharmacist serve in the position
because applicants with other credentials were able to
serve also, but it wanted to allow for the possibility.
3:34:02 PM
Dr. Schaber continued on slide 7 which detailed the goal of
epinephrine access. The changes in the bill would move the
epinephrine training program from the authority of the
Department of Health (DOH) to be overseen by the board. It
also clarified that a pharmacist could administer
epinephrine or prescribe epinephrine auto-injectors to an
individual who had completed the training program. It would
ultimately increase epinephrine access for Alaskans with
anaphylactic emergencies or those who might not know they
were at risk for anaphylactic emergencies. She added that
access was especially important in the rural areas of the
state. Some of the changes in the bill also increased
access by decreasing barriers to dialysis fluids, which was
also important for Alaskans living in rural areas on home
dialysis by allowing patients to receive the treatment at
home.
Dr. Schaber concluded her presentation on slide 8 and
thanked the committee for its time. She urged the
committee's support of the bill.
Co-Chair Foster asked for clarity on the uses of situations
in which epinephrine would be used.
Dr. Schaber responded that epinephrine was an emergency
medication used for allergic reactions, such as eggs, bee
stings, or peanuts. Some individuals were aware that they
had anaphylaxis, and some were not aware until they were
exposed to the substance that causes a reaction.
Representative Hannan asked about the board executive
administrator's salary detailed in Section 10 of the bill.
She asked how many other professional boards allowed for
similar flexibility in salary. She wondered if there was a
salary classification for pharmacists in the state pay
schedules.
3:37:10 PM
SYLVAN ROBB, DIRECTOR, DIVISION OF CORPORATIONS BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE
COMMUNITY AND ECONOMIC DEVELOPMENT, responded that there
were other pharmacists that worked for the state and there
were pay schedules in place. The pay ranged depending on
duties: for example, there was a pharmacist employed in the
Alaska Psychiatric Institute (API) as well as DOH
pharmacists in for Medicaid purposes with salary ranges
from 24 through range 27. Relating to executive
administrator of other boards, six of the boards had an
executive administrator positions and one other board had a
similar position with a different title. Only the Board of
Nursing had required qualifications for the executive
administrator role as it required that the individual was a
registered nurse (RN).
Representative Hannan asked if the nursing board members
were paid on the RN pay schedule.
Ms. Robb responded that the members were not paid as
nurses. The executive administrator positions were
considered partially exempt and the salary for the position
was not specified in statute; however, it was the highest
paid position because it required that the individual be a
licensed professional and have a master's degree, it was
the highest paid of the executive administrator positions
and was a range 25.
Representative Hannan asked if the phrasing for the
pharmacy board's executive administrator was unique or if
other boards had similar required competencies. She
wondered if the administrators were adequately compensated
based on the advanced requirements.
Ms. Robb responded that not all heath care boards had
executive administrators. The nursing board was the only
board requiring the administrator to be a member of the
nursing profession. The pay for the executive administrator
positions ranged depending on the workload and on whether
the pay was dictated in statute. The executive
administrator position for the pharmacy board was currently
not filled by a pharmacist. If the board hired a pharmacist
for the position, it wanted the ability to pay the
individual fairly based on the advanced requirements.
Representative Hannan asked what the range increase would
be in order to pay the executive administrator as a
pharmacist.
Ms. Robb replied that the other pharmacists that worked for
the state were range 24 through range 27 depending on their
duties. The board would have to work with classification to
determine which other state pharmacist position the
executive administrator was most similar to in order to
determine the range.
3:41:53 PM
Representative Josephson asked if the licensees of board
paid for the executive administrator positions.
Ms. Robb responded in the affirmative and noted that the
divisions were funded through receipt-supported services.
The cost of all staff for a particular board were paid by
the licensees for that particular profession. The Division
of Corporations Business and Professional Licensing (DCBPL)
conducted time keeping in order to allow staff to indicate
which program they were working on to ensure that the
charges were allocated appropriately.
Representative Josephson understood that the boards were
providing services "out of the kindness of their hearts."
He was not aware that some boards had an executive
administrator apart from the Medical Board. He asked if the
state would pick up the extra costs if a board chose not to
hire an administrator.
Ms. Robb responded that all were paid by the licensees of a
board, and it would not matter whether the board had an
executive administrator.
Representative Josephson asked why each board would not
want their own executive administrator.
Ms. Robb responded that it depended on the scope and
complexity of the program. The Board of Nursing was a team
of 10 individuals that oversaw 28,000 licensees and it made
sense for the board to employ an executive administrator.
There were some boards with more complex licensing than
others and needed more employees. Boards with fewer
licensees and less complex licensing processes had less of
a need for an executive administrator.
3:44:36 PM
Representative Coulombe understood that out-of-state
pharmacies had to be registered but did not have to be
licensed. She asked if her understanding was correct.
Representative Ruffridge responded in the affirmative.
Representative Coulombe wanted to ensure that adding the
licensing requirement would not be too much of a
hinderance. She relayed that there were many individuals
who relied on online pharmacies. She asked what licensing
would be like for an out-of-state pharmacy.
Representative Ruffridge responded that under the current
process, registering with the Board of Pharmacy simply
indicated that a pharmacist existed and may or may not send
for medications with the state. There was no jurisdiction
by the board of the medications that entered the state to
ensure that counseling had been provided to the individuals
receiving medications. There was no ability for the board
to maintain safety measures. Over the years, mail order
pharmacies had become more popular and regulations had not
kept up with the changes. The change would not be overly
burdensome to companies that already mailed a significant
amount of medications into multiple states and would simply
put Alaska in alignment with many other states in the
nation.
Representative Coulombe asked if there were new fees
associated with registration or licensing.
Representative Ruffridge responded that there were fees
associated with licensing and registration, but the board
had gone through multiple iterations of fee reductions over
the last few years. He argued that the fee for pharmacy
technicians was essentially nonexistent. Technicians were
simply required to pay an initial $25 fee to become
registered and licensed, which was reduced from a fee of
$150.
Co-Chair Foster suggested that Representative Ruffridge
make closing comments.
Representative Ruffridge thanked the committee for its
time. The bill had been well vetted and had been overseen
by three different chairs of the pharmacy board. He thought
that the support for the bill was encouraging and that the
bill represented the desires of the profession of pharmacy
as a whole. He welcomed the support of the committee and
was happy to answer any other questions.
HB 112 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the agenda for the following day's
meeting.
ADJOURNMENT
3:50:04 PM
The meeting was adjourned at 3:50 p.m.