Legislature(1993 - 1994)
03/03/1994 03:00 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE March 3, 1994 3:00 p.m. MEMBERS PRESENT Rep. Cynthia Toohey, Co-Chair Rep. Con Bunde, Co-Chair Rep. Gary Davis, Vice Chair Rep. Al Vezey Rep. Pete Kott Rep. Harley Olberg Rep. Irene Nicholia Rep. Tom Brice MEMBERS ABSENT Rep. Bettye Davis (Excused) OTHER LEGISLATORS PRESENT Rep. Jim Nordlund COMMITTEE CALENDAR *HB 337: "An Act relating to the possession of controlled substances within 500 feet of recreation and youth centers." PASSED OUT OF COMMITTEE *HJR 52: Urging the Congress to amend the Social Security Act so that the higher cost of living in Alaska is reflected when the per capita income of the state is used as a factor in determining the federal share of Medicaid costs." PASSED OUT OF COMMITTEE *HB 356: "An Act relating to living wills and do not resuscitate orders; and providing for an effective date." HEARD AND HELD *HB 506: "An Act relating to student loans; to sanctions for defaulting on a student loan, including denial of a state occupational license or disbursement of state money; and providing for an effective date." HEARD AND HELD WITNESS REGISTER KIM BUSCH, Director Division of Medical Assistance Department of Health and Social Services P.O. Box 110660 Juneau, Alaska 99811-0660 Phone: (907) 456-33552 Position Statement: Testified in support of HJR 52 MARK JOHNSON, Chief Emergency Medical Services Department of Health and Social Services P.O. Box 110616 Juneau, Alaska 99811-0616 Phone: (907) 463-5807 Position Statement: Testified in support of HB 356 VONA HALL, Member American Association of Retired Persons 9416 Long Run Rd. Juneau, Alaska 99801 Phone: (907) 789-7422 Position Statement: Testified in support of HB 356 CRAIG LEWIS, Executive Director Interior Region Emergency Medical Services Council 1881 Marika St. Fairbanks, Alaska 99709 Phone: (907) 456-3978 Position Statement: Testified in support of HB 356 (Spoke via offnet) ERNEST LINE 2645 Whispering Woods Wasilla, Alaska 99645 Phone: (907) 376-6709 Position Statement: Testified in support of HB 356 (spoke via teleconference) SANDY TACKETT, Nurse Petersburg Hospital P.O. Box 589 Petersburg, Alaska 99833 Phone: (907) 772-4291 Position Statement: Testified in support of HB 356 (spoke via teleconference) JULIE RENWICK, Coordinator of Social Services Wesley Rehabilitation and Care Center P.O. Box 1066 Seward, Alaska 99664 Phone: (907) 224-5241 Position Statement: Testified in support of HB 356 (spoke via teleconference) LINDA SWENSON, Nurse Seward General Hospital P.O. Box 365 Seward, Alaska 99664 Phone: (907) 225-5205 Position Statement: Testified in support of HB 356 (spoke via teleconference) RICHARD JONES, Administrator Wesley Rehabilitation and Care Center P.O. Box 1066 Seward, Alaska 99664 Phone: (907) 224-5241 Position Statement: Testified in support of HB 356 (spoke via teleconference) NANCY JO BLEIER, Director of Social Services Southeast Alaska Regional Health Corporation 3245 Hospital Dr. Juneau, Alaska 99801 Phone: (907) 463-4040 Position Statement: Testified in support of HB 356 (spoke via teleconference) CAPTAIN STEVE IHA, EMS Coordinator Capital City Fire/Rescue 820 Glacier Hwy. Juneau, Alaska 99801 Phone: (907) 586-5322 Position Statement: Testified in support of HB 356 JOE MCCORMICK, Executive Director Alaska Commission on Postsecondary Education 3030 Vintage Blvd. Juneau, Alaska 99801-7109 Phone: (907) 465-6740 Position Statement: Testified in support of HB 506 BRIAN BRUBAKER, Coordinator University of Alaska Coalition of Student Leaders P.O. Box 84791 Fairbanks, Alaska 99708 Phone: (907) 474-5156 Position Statement: Testified on HB 506 (spoke via teleconference) NICHOLAS ABRAMCZYK, Member Associated Students of the University of Alaska, Fairbanks P.O. Box 99775 Fairbanks, Alaska 99775 Phone: (907) 474-5156 Position Statement: Testified on HB 506 (spoke via teleconference) ANDREA PAIGE ADAMS, Vice-President United Students of University of Alaska, Southeast 222 Tongass Sitka, Alaska 99835 Phone: (907) 966-8413 Position Statement: Testified on HB 506 (spoke via teleconference) BARBARA GABIER, Program Coordinator Division of Occupational Licensing Department of Commerce and Economic Development P.O. Box 110806 Juneau, Alaska 99811-0806 Phone: (907) 465-2534 Position Statement: Testified on HB 506 PREVIOUS ACTION BILL: HB 337 SHORT TITLE: DRUG FREE RECREATION AND YOUTH CENTERS SPONSOR(S): REPRESENTATIVE(S) NORDLUND,Porter,Finkelstein, Martin,Brown,Ulmer,Brice,Hudson,Menard,Sitton,Navarre, Phillips,B.Davis,Green,Nicholia JRN-DATE JRN-PG ACTION 01/03/94 2015 (H) PREFILE RELEASED 01/10/94 2015 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2015 (H) HES, JUDICIARY 01/13/94 2055 (H) COSPONSOR(S): B. DAVIS 01/14/94 2084 (H) COSPONSOR(S): GREEN 01/18/94 2101 (H) COSPONSOR(S): NICHOLIA 03/02/94 (H) HES AT 03:00 PM CAPITOL 106 03/02/94 (H) MINUTE(HES) BILL: HJR 52 SHORT TITLE: DETERMINING FEDERAL SHARE OF MEDICAID SPONSOR(S): REPRESENTATIVE(S) NORDLUND,Brice,Foster,Larson, Finkelstein,Toohey,Hanley,Nicholia,B.Davis,Davidson JRN-DATE JRN-PG ACTION 01/21/94 2123 (H) READ THE FIRST TIME/REFERRAL(S) 01/21/94 2123 (H) HEALTH, EDUCATION & SOCIAL SERVICES 01/26/94 2159 (H) COSPONSOR(S): HANLEY 02/02/94 2230 (H) COSPONSOR(S): NICHOLIA, B. DAVIS 02/03/94 2247 (H) COSPONSOR(S): DAVIDSON 03/02/94 (H) HES AT 03:00 PM CAPITOL 106 03/02/94 (H) MINUTE(HES) BILL: HB 356 SHORT TITLE: LIVING WILLS AND MEDICAL CARE ORDERS SPONSOR(S): HEALTH, EDUCATION AND SOCIAL SERVICES JRN-DATE JRN-PG ACTION 01/10/94 2021 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2021 (H) HES, JUDICIARY 03/03/94 (H) HES AT 03:00 PM CAPITOL 106 BILL: HB 506 SHORT TITLE: STUDENT LOAN PROGRAM SPONSOR(S): HEALTH, EDUCATION AND SOCIAL SERVICES BY REQUEST JRN-DATE JRN-PG ACTION 02/16/94 2416 (H) READ THE FIRST TIME/REFERRAL(S) 02/16/94 2416 (H) HES, L&C, FINANCE 03/03/94 (H) HES AT 03:00 PM CAPITOL 106 ACTION NARRATIVE TAPE 94-35, SIDE A Number 000 CHAIR BUNDE called the meeting to order at 3:06 p.m., noted members present and announced the calendar. He brought HB 337 to the table. HB 337 - DRUG FREE RECREATIONAL AND YOUTH CENTERS REP. JIM NORDLUND, Prime Sponsor of HB 337, addressed his bill. He stated that in current law there are provisions for drug free school zones that increase the penalties for individuals who are arrested for possession of drugs in school areas. He said the proposal would expand the zone to include recreation and youth centers. He indicated that his committee substitute (CS) would specify those recreation and youth centers as those operated by the municipality or the state. He referred to the sponsor statement and said that within his district the legislation would address the problems in the Spenard, Fairview, and Mountainview Recreational Centers. He indicated that the Chief of Police, Kevin O'Leary, maintains that the areas around recreation and youth centers are fertile ground for those who promote and sell drugs to children. He also indicated that police officer Patrick O'Brien, school liaison officer, asserts that the parking lot of the Fairview Recreation Center is the sight of a huge drug trade. REP. NORDLUND stated that HB 337 has no fiscal note. He indicated that the CS would narrow the zones down to recreational centers operated by the municipality or the state. Also, the CS would make provisions to allow centers operated by the municipality the option of posting signs indicating drug free zones. Number 170 REP. TOOHEY asked how a person would know an area is a drug free zone. REP. NORDLUND said when some of the violators are arrested, they will learn that the penalties are more severe than they used to be. Also, media sources and the general public will help to disseminate the provisions of the new law. Number 192 (CHAIR BUNDE indicated that Rep. Vezey arrived at 3:09 p.m. and both Rep. Nicholia and Rep. Brice arrived at 3:11 p.m.) REP. TOOHEY asked how much a sign would cost. REP. NORDLUND said he did not know. CHAIR BUNDE stated that all-weather signs are approximately $200 apiece. REP. TOOHEY suggested that the recreation centers have a bake sale to raise money for the signs. She felt that the signs needed to be seen. Number 215 CHAIR BUNDE clarified that the CS narrows the zones to municipal and state recreation and youth centers. REP. NORDLUND agreed. REP. TOOHEY made a motion to adopt the CS as a working draft. CHAIR BUNDE, hearing no objections, said the CS for HB 337 was before the committee and asked for further testimony. Number 249 REP. NORDLUND stated that he did not bring other witnesses to testify because he felt the concept of the bill is simplistic and does not need much explanation. He indicated a number of letters of support in the committee bill packets. CHAIR BUNDE asked for further questions. He then asked the pleasure of the committee. REP. BRICE made a motion to pass the CS for HB 337 out of committee with individual recommendations and accompanying fiscal note. CHAIR BUNDE, hearing no objections, declared that the CS for HB 337 was so moved. He brought HJR 52 to the table. HJR 52 - INCREASE IN FEDERAL MEDICAID FUNDING Number 309 REP. JIM NORDLUND, Prime Sponsor of HJR 52, addressed the resolution. He stated that the resolution deals with the issue of fairness regarding the state of Alaska. He said currently the federal Medicaid rates vary nationwide from 50% to 70% based on relative per capita income of the various states. He explained that Alaska's high cost of living is not taken into account when reimbursement is set. The purpose of the resolution is to amend the Social Security Act to take into account Alaska's high cost of living and to set the differential accordingly. He pointed out another disadvantage in the way Medicaid rates are set for the state. He said, "although, the cost of living is considered in terms of deciding who is eligible to receive Medicaid, therefore increasing the Medicaid pool, in turn we do not receive the difference... in receiving the greater amount of money... or that's not taking into consideration... the cost of living is not taken into consideration in setting the rate." He said that if the state had a 25% increase, which is approximately what the cost of living difference is for the state, it would mean an additional $31 million dollars to the state of Alaska. REP. NORDLUND indicated that the resolution also recognizes the work that Senator Stevens has been doing in Congress to make the necessary changes. Number 387 CHAIR BUNDE asked for testimony from Kim Busch. Number 390 KIM BUSCH, Director, Division of Medical Assistance, Department of Health and Social Services, testified in support of HJR 52. She stated that the Medicaid federal matching percentage is based on per capita income with a floor of 50%. She said if the floor did not exist, Alaska would receive an even lower match rate. She said the formula is also used for AFDC, the JOBS program, and other federally funded programs. She explained that the government uses a 25% cost of living differential to set the poverty level in Alaska. She said the result for FY 94 is $48.8 million that are not coming into Alaska. Medicaid would receive an extra $33 million and AFDC would receive $15.7 million. MS. BUSCH felt it was critical to insert the provisions in Title 19 of the Social Security act now, because all of the health care reform legislation that is before Congress is using the same formula and Alaska is seriously disadvantaged. Number 487 REP. TOOHEY asked when the resolution would take effect. Number 490 MS. BUSCH said it would take effect when the legislature adopts it. She said if Congress moves the resolution, it would take effect this fall. CHAIR BUNDE closed public testimony. Number 512 REP. BRICE made a motion to pass the CS for HJR 52 out of committee with individual recommendations. CHAIR BUNDE objected as to explain his no vote. He stated that the additional funds from the federal government would still be taken from the general public's pockets. He said it is not free money. He maintained that the Medicaid program is wildly out of control and he thought Alaska should lead by example and not ask for extra money. Number 538 REP. VEZEY asked what would happen if the cost of living in Anchorage turned out to be lower than Washington, D.C. MS. BUSCH stated if the cost of living changed dramatically and was no longer higher than most, the state would not need the differential. She asserted that the situation currently is grossly unfair. She also said that Congress must find savings in order to fund the increase, indicating that savings would be found within Title 19 to fund increase for Alaska. She said that many other congressmen have been able to act to get consideration for increases for their state. Number 606 REP. BRICE said, "Better to buy... have this money come to the state in the form of extra federal money for Medicaid, Medicare, whatever, than to be buying whatever on the East Coast for nonproductive use, which is another thing that our federal government is known for. Buicks or bombs, that's what I say." CHAIR BUNDE said, "It's federal, it's free." Number 623 REP. G. DAVIS agreed with Chair Bunde's point, but said the system is a match program that is mandated by the federal government. He said, "It's a mandate from the feds, and it's a match program. So it's costing state dollars. At the current rate the mandate from the feds is mandating that the state spend so many dollars. Under this resolution the mandate is that the state will not need to spend so much dollars. So, I can certainly agree with that." Number 641 REP. NICHOLIA stated that there is definitely a higher cost of living in the rural areas. She said it is very expensive for rural residents to go to Anchorage and Fairbanks for medical treatment, citing that many forgo medical treatment until the illness has gone past the point of medical care, resulting in people dying unnecessarily. She felt that Medicaid dollars could go far for those people. She also reminded the committee that a large percentage of people on Medicaid are children. She said a no vote would deny children better medical services. She further stated that in regards to the JOBS program there are a limited number of people who are allowed to go to job training, and she felt that number would increase as a result of the resolution. Number 685 CHAIR BUNDE asked if most Natives are covered under the Native Health Service. Number 688 REP. NICHOLIA indicated that federal funding is also limited for Indian Health Services. She said a lot of people are turning to Medicaid. She then pointed out that the interior has the highest cancer rate for the whole state of Alaska. Number 710 CHAIR BUNDE, hearing no further discussion, called for the vote. Representatives Toohey, Gary Davis, Kott, Olberg, Nicholia and Brice voted yea; and Representatives Bunde and Vezey voted nay. Chair Bunde indicated that the CS for HJR 52 was so moved. He then brought HB 356 to the table. HB 356 - LIVING WILLS AND MEDICAL CARE ORDERS REP. CYNTHIA TOOHEY stated that HB 356 complements current statutes pertaining to the rights of the terminally ill by adding specific recognition of do not resuscitate (DNR) orders to the existing legislation with regards to the rights of the terminally ill to make a declaration relating to the use of life-sustaining procedures. She said a new section, Section 18.12.035, that allows attending physicians to issue DNR orders requires the Department of Health and Social Services (DHSS), with the approval of the State Medical Board, to issue regulations adopting a standardized protocol governing the withholding of CPR by physicians and other health care providers and establishes the requirements under which health care providers other than physicians must comply with DNR orders. REP. TOOHEY further stated that Section 18.12.037 requires the DHSS to develop standardized designs for DNR identification cards, forms, necklaces, and bracelets to indicate that the person who is in possession of one of the items has executed a living will or that a DNR order has been issued by a physician. Other provisions of the bill amend existing provisions by including DNRs along with living wills in areas such as immunities for health care providers, acting under the provisions of living wills, DNR orders, and penalties. Rep. Toohey maintained that DNR orders are issued only in the case of terminal illness. REP. TOOHEY explained that under existing practice, emergency response providers are required to institute CPR on site even if the person has a living will. She indicated that a properly executed DNR order and procedural protocol, recognized by all concerned parties, would help to avoid futile and unwanted interventions. Similarly, within health care institutions, DNR orders are necessary in the absence of a living will when attempts at resuscitation serve only to prolong the process of dying. CHAIR BUNDE indicated that there would be testimony via teleconference. REP. BRICE asked if the memo from Craig Lewis would be addressed. CHAIR BUNDE indicated that Mr. Lewis was on teleconference. Number 825 REP. VEZEY asked Rep. Toohey to explain the penalty section, Section 5. REP. TOOHEY stated that if an individual at a hospital, where fees are being charged, resuscitates a person against a DNR order, the individual will not be paid. REP. VEZEY referred to the $1000 civil penalty. REP. TOOHEY stated that the penalty is in existing law. REP. VEZEY said he failed to see the merit of mandating a $1000 civil penalty. He asked Rep. Toohey if she thought that was in the best interest of the bill. REP. TOOHEY deferred the question to Craig Lewis. Number 861 CHAIR BUNDE indicated that Mr. Lewis would address that question during public testimony. He said that Fairbanks, Mat-Su, Petersburg, Seward, and Sitka were on teleconference. Number 865 MARK JOHNSON, Chief, Emergency Medical Services, Department of Health and Social Services, testified in Juneau in support of HB 356. He stated that emergency care providers are trained to aggressively care for patients, but he also felt there are terminally ill patients whose discomfort should not be prolonged. He said when such patients, in consultation with their physician, choose to have a DNR order in place, the emergency medical providers would prefer to respect those wishes. Number 910 CHAIR BUNDE explained to the teleconference listeners that HB 506 would probably be brought to the table by 4:00 p.m. Number 921 VONA HALL, Member, Legislative Task Force for the American Association of Retired Persons (AARP), testified in Juneau in support of HB 356. She stated that she had been told the meeting was the prior day, and at that time, had planned to give a very elaborate speech including horror stories about the financial and emotional expense endured by clients who have had devastating effects from too much terminal care. She stated that her testimony would be brief as she had found her husband the day before with a broken hip on the ice in the driveway and she was due at the hospital as he was undergoing surgery. She said her husband was alive and indicated that under different circumstances the DNR legislation could have played an important role in their lives. She also said that the legislation is not just for old people. She suggested that it is for everybody that goes snowmobiling, drives a car, or perhaps walks in front of a car. She said her children and friends are aware of her do not resuscitate orders. She strongly emphasized the importance of the living will. Number 995 REP. TOOHEY asked how her husband was. MS. HALL said he was undergoing surgery right then. CHAIR BUNDE expressed his appreciation for her testimony, and wished Ms. Hall's husband the best. Number 018 CRAIG LEWIS, Executive Director, Interior Region Emergency Medical Services Council (IREMSC), testified via offnet in support of HB 356. He stated that he had several suggestions to make that perhaps would improve the legislation and asked if he should summarize or do a line by line analysis. CHAIR BUNDE asked him to summarize and said the committee would ask specific questions if necessary. MR. LEWIS indicated that the words "attending physician," which are used throughout the bill, should be enhanced because in some rural areas there is no attending physician. He asked that the definition of attending physician be expanded and clarified. He also explained that the term cardiopulmonary resuscitation (CPR) is a process of hands on patient care. Regarding the term, he suggested that artificial exchange of oxygen needed to be specified. He said that if the change is not made, an emergency care provider may conclude that an oxygen mask should not be put on the patient's face. He said that withholding resuscitation needs to be very specific. MR. LEWIS expressed his concern that the legislation is not as "rurally oriented" as it could be. He said a very specific mechanism needs to be in place to address the unique emergency treatment needs of rural areas. Mr. Lewis explained that an Emergency Medical Technician (EMT) could have administered hours of aggressive treatment and not be able to get the patient anywhere near a physician, let alone an "attending physician." TAPE 94-35, SIDE B Number 000 MR. LEWIS further indicated that on page 2, lines 11-17, the word "qualified" was very unclear. Number 050 REP. TOOHEY stated that the word "qualified" means that the person who possibly would be undergoing emergency treatment has already signed a living will and has proof on their body that they do not want resuscitation. MR. LEWIS read lines 11-17 on page 2 to indicate the vagueness of the term qualified. He continued on with his summary and stated that he did not want the legislation to only address health care facilities. He said rural Alaska has many situations where DNR orders are relevant and appropriate. Rural Alaska does not have health care facilities if the definition means hospital or multi- physician clinic. He felt that the definition had to be more rurally oriented. MR. LEWIS further suggested that the provision on page 3, lines 10-12, is not a realistic approach in rural settings. He said he was unsure of the necessity of the provision on page 4, lines 7-15. Mr. Lewis expressed further concern regarding page 5, lines 4-8, which addresses the issue of complying with the DNR orders from other states. He said to his understanding the legislation would allow an Alaskan medical provider to recognize other DNR orders from other states. He felt that it may be a regulation issue and related that EMTs are trained to aggressively treat patients, not to withhold treatment. Number 195 ERNEST LINE, Concerned Citizen, testified via teleconference in support of HB 356. He stated that the committee should consider possible future legislation regarding physician assisted suicide. He then addressed the bill. He maintained that the State Medical Board may be opposed to the provision on page 1, line 9. He suggested that the legislature could approve the regulations. He further indicated that on page 2, line 18, the provision would actually compel compliance if the facility is a state run operation. Mr. Line suggested that the phrase "shall not attempt resuscitation until all provisions of Section 3, paragraph b, are exhausted" should be inserted. Mr. Line also supported the idea of increasing the $1000 fine to violators of DNR orders, citing that it would ensure compliance. Number 300 REP. TOOHEY asked if Mr. Line knew of people whose DNR orders were not carried out. She asked if he thought it was a major problem in medical facilities. MR. LINE stated that he has read about cases where the physician did not personally believe in DNR orders. Number 327 SANDY TACKETT, Nurse, testified via teleconference in support of HB 356. She stated that health care people needed to have the information within HB 356 to carry out the wishes of a patient. Number 345 CHAIR BUNDE asked witnesses to limit their testimony by associating themselves with the similar positions of prior testifiers and by adding any yet unheard testimony. Number 350 JULIE RENWICK, Coordinator of Social Services, Wesley Rehabilitation and Care Center, testified via teleconference in support of HB 356. She stated that she was concerned about the definition of qualified patient. She indicated that she originally thought the legislation was only addressing the terminally ill. She also said she hoped the provision regarding protocol would be written to protect the wishes of the individual and/or family guardian. She also said in Section 3 individuals need to be more involved with the decision making with the doctor. She further stated in regards to DNRs in other states that there is a nationwide organization called Right to Life that issues small living will cards to people who travel throughout the nation. She questioned whether the cards would comply with any single state with living will provisions. Number 424 LINDA SWENSON, Nurse, Seward General Hospital, testified via teleconference in support of HB 356. She stated that in regard to the oral DNR order provided for on page 2, line 2, the DNR order should never be given orally in an urban hospital. She also expressed concern as to what is a qualified patient. She stated that people make living wills with DNR orders anticipate that they, at some time, will not be able to speak for themselves. Number 475 RICHARD JONES, Administrator, Wesley Rehabilitation and Care Center, testified via teleconference in support of HB 356. He asked what protocol would be if an individual who had previously provided a DNR order is in need of emergency treatment at a hospital and is unable to express their wishes at that time. He asked if the prior DNR order would be honored or would a physician have to order another DNR. He asked who was responsible for the legislation, and expressed his thanks. Number 526 CHAIR BUNDE stated that Rep. Toohey was responsible for introducing HB 356. Number 528 NANCY JO BLEIER, Director of Social Services, Southeast Alaska Regional Health Corporation, testified in support of HB 356. She stated that she also had concerns with the terms "qualified" and "health care facility." Number 570 REP. TOOHEY read for the record from statute 18.15.010: "A qualified patient means a patient who has executed a declaration in accordance with this chapter and who has been determined by an attending physician to be in terminal condition." CHAIR BUNDE said his understanding of the issue is that the legislation addresses terminal patients only and perhaps it could also include someone who is in the peak of health but meets with a catastrophic accident. Number 587 CAPTAIN STEVE IHA, EMS Coordinator, Capital City Fire/Rescue, testified in Juneau in support of HB 356. He stated that Juneau has had DNR protocol in place for 3-1/2 years, and it has been quite successful. He said it was his understanding that a living will can be initiated by anyone regardless of that person's health condition. However, he said the living will is not enacted until a physician (or perhaps two) determines that the patient is terminally ill. He said that stipulation creates a Catch 22 situation. He asked what protocol would be in the case of a healthy, 35 year old man who chokes on a piece of meat. He said that technically he could be in a DNR state. He felt that the legislation needs to be more specific. CAPT. IHA also said there is no way for EMTs to really know the validity of an out-of-state DNR order. He said that for the most part his EMTs honor DNR orders within the Juneau system. He suggested that the term "qualified" be more clear. Number 648 REP. TOOHEY asked what the medical protocol would be if Capt. Iha found a person collapsed on the street corner of the capitol with a DNR arm band on. CAPT. IHA said there is no protocol for such an instance. He stated that the DNR patients in Juneau have been determined to be terminally ill by a physician and have filled out a form that has been sent to Fire/Rescue dispatch. He said that it is understood that those patients on the DNR list at dispatch would be responded to at their home. REP. VEZEY asked what the protocol would be if he choked on a piece of meat. He asked how an EMT would know he had a living will. CAPT. IHA said, "If you're talking about putting do not resuscitate type bracelets or identifications, then it would become an issue." REP. VEZEY said that he never thought that executing a living will would put himself in the position of not receiving medical attention. CAPT. IHA said if DNR orders are part of the living will, it must be very clear. Number 696 CHAIR BUNDE said there is a difference. He then asked Rep. Toohey how she would like to address all the aforementioned concerns. REP. OLBERG said that Rep. Vezey would fall under the Do Not Resuscitate Legislators provision. CHAIR BUNDE said he wanted to amend that to specify minority legislators. REP. TOOHEY clarified that the legislation is a companion bill to a living will in a hospital. It would allow EMTs who have found a terminally ill person collapsed on the street corner to respect that person's DNR order. Number 744 MR. JOHNSON stated that all the aforementioned concerns could be dealt with quite easily. He referred to testimony from Mr. Line and indicated that he has every confident in working with the medical board and felt there would be no problems in doing so. CHAIR BUNDE closed public testimony on HB 356. HB 506 - STUDENT LOAN PROGRAM CHAIR BUNDE then brought HB 506 to the table and turned the gavel over to Rep. Toohey to preside over the remainder of the meeting. CHAIR TOOHEY took a brief at-ease from 4:08 p.m. to 4:20 p.m. Number 795 REP. BUNDE addressed HB 506. He stated that Joe McCormick would further address the bill. REP. BRICE stated for the record that he presently has an active student loan, and indicated that there might be a conflict of interest. CHAIR TOOHEY thanked Rep. Brice and said his comment was so noted. REP. BUNDE stated that the legislation would attempt to make the student loan "a little more business-like." He said administratively progress has been made, but he would like to see even more progress to maintain the student loan program, and indicated that as it exists, it costs more money to bond the program than is being received. He said under those circumstances, the program would eventually run out of money. He indicated that the bill addresses seven items within the loan program: 1. It would change the interest rate from a fixed rate to a variable rate. 2. It would allow for restrictions for eligibility of a loan if an individual has had a prior loan written off as a bad debt. 3. It would allow wages to be garnished. 4. It would deny state licensure if an individual is in default of a student loan. 5. It would also deny state warrants. 6. It would allow for the refinancing of student loans. 7. It would allow for an expanded family education loan eligibility. Number 870 REP. BUNDE asked if there were any questions. TAPE 94-36, SIDE A Number 000 REP. OLBERG asked if the interest rate would have a floor or could it go down to 1%. Number 050 JAMES MCCORMICK, Executive Director, Alaska Commission on Postsecondary Education, testified in Juneau in support of HB 506. He stated that it does not have a floor, but would be tied to the cost of the money that is secured in the bond market. He said it would be unrealistic to assume that the cost of money would go down to 1% or less. REP. OLBERG asked if the rate would have a cap. MR. MCCORMICK said no. REP. OLBERG asked what the interest rate is based on. MR. MCCORMICK replied that it is based on the cost of money when bonds are issued to replace the capital of the loan fund. He said the interest rate from loans disbursed from the bond proceeds would be tied to the cost of the bond proceeds. REP. OLBERG asked if the rate could be annually adjusted. MR. MCCORMICK said it could be a possibility. He said the problem would be that a greater administrative burden would be put upon the entity that would administer the loan fund, because the interest rate would change from year to year. Number 076 REP. OLBERG said he felt that the software required for that process would not be a difficult transition. He then asked if teaching certificates would be included under denial of licensure. Number 085 MR. MCCORMICK answered that he had a friendly amendment to restrict the impact of Section 1 to only persons licensed for professional or occupational licenses only. He then stated that he was unsure if teaching certificates would fall under the provision. REP. BUNDE stated that he currently sits on a committee that is rewriting the provisions for granting a teacher's license. He felt that a teaching certificate would fall under that section, and he would encourage the amendment. Number 121 REP. OLBERG agreed with the amendment. REP. BUNDE maintained that there are many other student loan programs that offer a lower interest rate and that students should be encouraged to shop around. REP. VEZEY asked what the average maturity date of a student loan is. MR. MCCORMICK responded by saying the average student is in school 2-1/2 years with one year grace and a standard ten year repayment. He said that many students qualify for extended repayment plans of 15 years. He stated that the average is 12 to 13 years. REP. VEZEY said, "paying on the loan or have the loan out." MR. MCCORMICK said, "paying on the loan." REP. VEZEY clarified that the average loan has a 15 year life. MR. MCCORMICK added that there is no stated forgiveness on the loan, so it could be an outstanding balance for an indefinite amount of time. Number 188 REP. VEZEY asked what kind of maturity was on the bonds that are issued. MR. MCCORMICK stated that the bonds have approximately a 10 year maturity. REP. VEZEY questioned whether it would be prudent to take out a long term, variable rate loan. MR. MCCORMICK maintained that the legislation provides for a fixed rate loan, fixed to the cost of that money for that bond issue. The rate would not change for the bond issue. REP. VEZEY clarified that money would be available one year at one rate and at another rate the next year, but the rate would be fixed for the life of each individual loan. MR. MCCORMICK agreed. He also said that it is possible to have a variable rate bond and a variable rate interest on the loan. He indicated that it would require more sophisticated software. REP. VEZEY suggested that if the loans went to a variable rate, investments would need to be accessed to ensure that there would be no exposure to an arbitrage situation. MR. MCCORMICK agreed and said language within the bill states that the commission will ensure that the rate covers the administrative cost of the loan. He asserted that the thrust of the bill is to recognize the actuarial soundness of the loan fund and specified that an interest rate must be actuarially sound given the terms of the loan. Number 321 REP. VEZEY stated that the student loan program did not have a loan forgiveness program. MR. MCCORMICK explained that there is no loan forgiveness on loans that are currently being granted, but there is loan forgiveness for loans that have been made in the past that will continue into the future for which there is no offset. He said currently no fees are charged and no premiums are collected to cover the loan forgiveness, and he anticipated there would be a depletion in the fund annually as students qualify for forgiveness. REP. VEZEY asked if there is a significant depletion in the loan reserve. MR. MCCORMICK said historically there has been a significant depletion, but it has slowed. He further stated that money is lost in three areas -- interest not charged to a borrower (in school plus one year of grace), loans that default, and loans that have forgiveness provisions. REP. OLBERG suggested that the term of the loan be tied to the source of the funds, and explained that if there are ten year bonds, there should be ten year term loans. MR. MCCORMICK stated that the term of the loan is dealt with in the section pertaining to refinancing. He also said that in current statute there is a provision that allows up to 15 years if the student has an extremely high debt. He felt the terms of the loan will be much more flexible when there is a consolidation provision that would allow students to collapse various loans into one new promissory note at a new interest rate which would be tied to the bond issue. REP. BUNDE stated that the current interest rate is 8%, but if all the interest free time that a student has is considered, it is actually closer to 5%. The loan was bonded at 6%, indicating a loss. CHAIR TOOHEY said that forgiveness loans are dying out as the practice stopped in 1987. REP. VEZEY suggested that the student loan program showed a positive cash flow. MR. MCCORMICK agreed, but he indicated that when he used the term "actuarially sound," he was talking in terms of the total life of the loans and total life of the bonds, not just what the balance sheet reflects for one particular year. REP. VEZEY asked if, at the current fixed rate of 8% with forgiveness periods and the cost of funds, is the program operating in the black? MR. MCCORMICK said yes. REP. BRICE asked Mr. McCormick what constitutes a defaulted loan. He also asked if he knew of the University of Alaska Coalition of Student Leaders (UACSL) and of their position on the bill. CHAIR TOOHEY asked if Rep. Brice would hold his questions to allow for teleconference testimony. Number 500 BRIAN BRUBAKER, Coordinator, University of Alaska Coalition of Student Leaders, testified via teleconference on HB 506. He stated that the coalition favors a cap to be put on the variable rate, as well as provisions for exceptions on a case by case basis. He also said that the withholding of licensure should also be dealt with on a case by case basis. He stated that the coalition has become involved as a result of past problems with the time frame that loans were being delivered in. He also said that the student loan program does need to move ahead to a more business like approach, citing that as being one reason they support the variable rate with a ceiling. He further stated that a major portion of university money comes from student loans, and indicated that next year the cost of a credit will be $67. He then asked how the Alaska Commission on Postsecondary Education (ACPE) would ensure that the lowest interest rates would be offered. Number 618 NICHOLAS ABRAMCZYK, Member, Associated Students of the University of Alaska, Fairbanks, testified via teleconference on HB 506. He stated that a student must fill out the same application year after year. He felt that some type of consolidation process should be used to avoid redundancy, and suggested that it would steer the program toward a more business like program. He said he supported a cap on a variable rate. Number 669 ANDREA PAIGE ADAMS, Vice-President, United Students of University of Southeast, Sitka, testified via teleconference on HB 506. She stated that she has been working with Mr. McCormick to keep him informed of the students' ideas. She said that on February 20, 1994, the students passed a resolution in support of ACPE's recommendations for HB 506. She said she would like to see the recommendations go through. Number 692 CHAIR TOOHEY closed teleconference testimony and asked that Rep. Brice's questions be addressed. REP. BUNDE asked that someone address the fiscal note. MR. MCCORMICK said he understood the student's concern for capping the interest rate, but it would defeat the purpose of going to a variable rate in the context of not having to come before a legislative body to change the rate again. He said, because the program is audited by the state and private firms, and financial advisors are hired to advise administration on the cost of money and the issuance of bonds, the public can be assured that students are receiving the lowest possible interest rate. He further stated that the program must be operated in such a way that students will want to borrow from the program. The rate will have to be competitive with that of other loans. He also indicated that the process must competitive and indicated that a new application would be coming out in the following weeks that would simplify the application process. He maintained that the bill would allow for the simplification of repayment of a loan and urged that there be appropriate administrative funds to make the process work. Number 779 CHAIR TOOHEY complimented Mr. McCormick on being a fine caretaker of the state's money. REP. BUNDE, referring to the students asking for a cap on the interest rate, said that they can't take advantage of low interest rates when they are available and not pay their fair share when they are higher. He further stated that Alaskan students are paying only 23% of the actual cost of their education. Number 816 REP. BRICE asserted that the government's role is to help students along. He felt there should be a cap, especially if the prime rate does go up to 21% again. He felt the cap should be at 15% and explained that the state must make the loans attractive to students. He suggested an amendment to Section 2 that would establish a ceiling at 15%. REP. BUNDE said that he sympathized with the student's plight, but indicated that there is a provision within the bill for refinancing. Number 885 REP. BRICE asked if the provisions for refinancing were only for certain circumstances. REP. BUNDE observed that if the cost of money went over 15%, money to operate the program would come out of general funds. He then reminded the committee that the "sympathy for running this program in the legislature under general funds is waning." He indicated that there are legislators that would like to eliminate or privatize the program. MR. MCCORMICK asserted that there has been no general fund expenditures for the loan program since 1993. Number 908 REP. BRICE asked under what circumstances can a person refinance, and what is the limit to the amount of times a person can refinance? MR. MCCORMICK replied that there would be no limitations specified in the language of the bill. He said that typically when a student wants to refinance, there is a cash flow problem. The student would then collapse the loans into one, and the individual payment would be less than the total amount of payments of the individual loans. He further stated that the refinancing terms should not be dictated by the bill itself. He felt that the language was flexible enough as to have a viable refinancing structure. He asserted that there are appeal mechanisms in place that would be implemented when a student challenges the denial of a license. MR. MCCORMICK made reference to a friendly amendment that would be submitted to Rep. Bunde at a later time. He suggested that the Department of Commerce would need the authority to require applicants for professional licenses to disclose their social security numbers so computer matches could be done between the two departments. REP. BUNDE asked if there was someone from Occupational Licensing to address the fiscal note. He then made a suggestion to continue discussions of HB 506 the following day. Number 965 BARBARA GABIER, Program Coordinator, Division of Occupational Licensing, Department of Commerce and Economic Development, testified in Juneau on HB 506. She stated that there would be 1800 matches of professional licenses for matches on loans. Of that 1800, there is a potential for 10% default. Hence, she said that there would be possibly 180 persons that would be sought after for revocation of license. She anticipated that 90 of those persons would ask to have a hearing, and a hearing costs $3,000. She further stated that through streamlining procedures the cost could be cut down to approximately $500 per hearing and related that cost to the fiscal note. REP. BUNDE asked what would be the net gain or loss for tracking down those who are in default. MR. MCCORMICK maintained that to break even he would have to collect 20 loans. He said that if the average loan is $5000 per person, 20 people would figure to $100,000. He further stated that any loans collected beyond the 20 students would be above a break even figure. He felt the thrust of the revocation provision is not the actual seizure of a license, but is the psychology of the threat of denial or revocation of licensure if a loan is in default. MS. GABIER said, "We have built into the fiscal note... reviewing it annually and recovering only the costs that... are actually incurred by the division." Number 068 REP. VEZEY asked if the Department of Commerce requires people to disclose their social security number. MS. GABIER said no. REP. BUNDE suggested that if disclosure of the social security number is refused, perhaps licensure could be refused. CHAIR TOOHEY asked for further testimony. There was none. She then asked the pleasure of the committee. REP. VEZEY asked if he could propose an amendment. CHAIR TOOHEY asked if it was an involved amendment. REP. VEZEY said yes. CHAIR TOOHEY asked that the amendment be proposed at the next hearing of HB 506. Seeing no further business before the committee, CHAIR TOOHEY ADJOURNED the meeting at 5:02 p.m.