Legislature(1995 - 1996)
03/05/1996 02:04 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 5, 1996 2:04 p.m. MEMBERS PRESENT Representative Cynthia Toohey, Co-Chair Representative Con Bunde, Co-Chair Representative Norman Rokeberg Representative Caren Robinson Representative Tom Brice MEMBERS ABSENT Representative Gary Davis Representative Al Vezey COMMITTEE CALENDAR HOUSE BILL NO. 452 "An Act relating to state foundation aid and supplementary state aid for education; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 451 "An Act prohibiting persons from receiving or attempting to receive duplicate assistance; directing the Department of Health and Social Services to establish a pilot project relating to identification of recipients of public assistance; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 535 "An Act relating to postsecondary education." - SUBCOMMITTEE APPOINTED HOUSE BILL NO. 512 "An Act establishing English as the common language and related to the use of English in public records and at public meetings of state agencies." - HEARD AND HELD HOUSE BILL NO. 480 "An Act relating to physician assistants, including the treatment of their services under group health insurance policies." - HEARD AND HELD HOUSE BILL NO. 93 "An Act relating to the duty-free mealtime for teachers in certain school facilities." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 452 SHORT TITLE: CALCULATION OF STATE AID TO EDUCATION SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 01/26/96 2541 (H) READ THE FIRST TIME - REFERRAL(S) 01/26/96 2541 (H) HES, STATE AFFAIRS, FINANCE 01/26/96 2541 (H) FISCAL NOTE (DOE) 01/26/96 2541 (H) GOVERNOR'S TRANSMITTAL LETTER 03/05/96 (H) HES AT 2:00 PM CAPITOL 106 BILL: HB 451 SHORT TITLE: PROHIBIT DUPLICATE PUBLIC ASSISTANCE SPONSOR(S): REPRESENTATIVE(S) MULDER JRN-DATE JRN-PG ACTION 01/26/96 2541 (H) READ THE FIRST TIME - REFERRAL(S) 01/26/96 2541 (H) HES, FINANCE 02/29/96 (H) HES AT 3:00 PM CAPITOL 106 02/29/96 (H) MINUTES(HES) 03/05/96 (H) HES AT 2:00 PM CAPITOL 106 BILL: HB 535 SHORT TITLE: POSTSECONDARY EDUCATION SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES JRN-DATE JRN-PG ACTION 02/29/96 2962 (H) READ THE FIRST TIME - REFERRAL(S) 02/29/96 2962 (H) HES 03/05/96 (H) HES AT 2:00 PM CAPITOL 106 BILL: HB 512 SHORT TITLE: ENGLISH AS THE COMMON LANGUAGE SPONSOR(S): REPRESENTATIVE(S) KOTT,Barnes JRN-DATE JRN-PG ACTION 02/12/96 2728 (H) READ THE FIRST TIME - REFERRAL(S) 02/12/96 2729 (H) HES, JUDICIARY 02/27/96 (H) HES AT 3:00 PM CAPITOL 106 02/27/96 (H) MINUTES(HES) 03/05/96 (H) HES AT 2:00 PM CAPITOL 106 BILL: HB 480 SHORT TITLE: PHYSICIAN ASSISTANTS SPONSOR(S): REPRESENTATIVE(S) THERRIAULT JRN-DATE JRN-PG ACTION 02/09/96 2686 (H) READ THE FIRST TIME - REFERRAL(S) 02/09/96 2686 (H) HEALTH, EDUCATION & SOCIAL SERVICES 03/05/96 (H) HES AT 2:00 PM CAPITOL 106 WITNESS REGISTER SHIRLEY HOLLOWAY, Commissioner Department of Education 801 West 10th Street, Suite 200 Juneau, Alaska 99801-1894 Telephone: (907) 465-2800 POSITION STATEMENT: Testified on HB 452 JAMES ELLIOTT, Director School Finance Department of Education 801 West 10th Street, Suite 200 Juneau, Alaska 99801-1894 Telephone: (907) 465-2891 POSITION STATEMENT: Testified on HB 452 WANDA COOKSEY, Lobbyist Small Single Site School District Consortium P.O. Box 240052 Douglas, Alaska 99824 Telephone: (907) 586-9073 POSITION STATEMENT: Testified on HB 452 CARL ROSE, Executive Director Association of Alaska School Boards 316 West 11th Street Juneau, Alaska 99801-1510 Telephone: (907) 586-1083 POSITION STATEMENT: Testified on HB 452 DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder Alaska State Legislature Capitol Building, Room 411 Juneau, Alaska 99801-1182 Telephone: (907) 465-2647 POSITION STATEMENT: Presented sponsor statement for HB 451 LIZ DODD, Board Member American Civil Liberties Union of Alaska; and National Board Member of the American Civil Liberties Union 100 Parks Street Juneau, Alaska 99801 Telephone: (907) 463-2601 POSITION STATEMENT: Testified in opposition to HB 451 JIM NORDLUND, Director Division of Public Assistance Department of Health & Social Services P.O. Box 110640 Juneau, Alaska 99811-0640 Telephone: (907) 465-3347 POSITION STATEMENT: Testified in opposition to HB 451 ROGER POPPE, Legislative Administrative Assistant to Representative Pete Kott Alaska State Legislature Capitol Building, Room 432 Juneau, Alaska 99801-1182 Telephone: (907) 465-6882 POSITION STATEMENT: Presented CSHB 512 ROY IUTZI-MITCHELL P.O. Box 749 Barrow, Alaska 99723 Telephone: (907) 852-3145 POSITION STATEMENT: Testified in opposition to HB 512 MARY SATTLER, Intern to Representative Irene Nicholia Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99801-1182 Telephone: (907) 465-4527 POSITION STATEMENT: Testified in opposition to HB 512 REPRESENTATIVE GENE THERRIAULT Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801-1182 Telephone: (907) 465-4797 POSITION STATEMENT: Prime sponsor of HB 480 JOHN RILEY, Chairman Legislative Affairs Committee Alaska Academy of Physician Assistants 6411 Italy Circle Anchorage, Alaska 99605 Telephone: (907) 345-2029 POSITION STATEMENT: Testified in support of HB 480 JEANNE CLARK, President Alaska Academy of Physician Assistants Fairbanks, Alaska Telephone: (907) 452-6610 POSITION STATEMENT: Testified in support of HB 480 CATHERINE REARDON, Director Division of Occupational Licensing Department of Commerce & Economic Development P.O. Box 110806 Juneau, Alaska 99811-0806 Telephone: (907) 465-2534 POSITION STATEMENT: Testified on HB 480 REED STOOPS, Lobbyist Aetna Life & Casualty 240 Main Street, No. 600 Juneau, Alaska 99801 Telephone: (907) 463-3223 POSITION STATEMENT: Testified on HB 480 ACTION NARRATIVE TAPE 96-20, SIDE A Number 001 The House Health, Education and Social Services Standing Committee was called to order by Co-Chair Bunde at 2:04 p.m. Members present at the call to order were Representatives Bunde, Toohey, Robinson and Brice. Members absent were Representative Davis, Rokeberg and Vezey. A quorum was present to conduct business. Co-Chair Bunde announced the calendar was HB 452, HB 451, HB 535, HB 480 and HB 512. House Bill 93 had been rescheduled. HB 452 - CALCULATION OF STATE AID TO EDUCATION Number 098 SHIRLEY HOLLOWAY, Commissioner, Department of Education, introduced Richard Cross, Deputy Commissioner, Jim Elliott, Director of School Finance, and Eddy Jeans, the department's expert on PL-874. Commissioner Holloway said there were two main reasons that HB 452 was before the committee. First, Governor Knowles made a commitment at the beginning of his Administration to ensure that the school funding formula is fair, equitable and accountable and protects the partnership between the state, federal and local dollars. The second reason had to do with the changes in the federal impact aid law, lowering the allowable disparity standard from 25 percent to 20 percent. She stated in order to continue to consider impact aid when calculating the state's portion of school funding, Alaska would have to meet the 20 percent federal disparity test in FY 96. In order to meet the disparity in FY 96, the department had requested supplemental funding of $1.2 million in aid to the Rural Education Attendance Areas (REAA) who are at the bottom of the disparity table. This would provide $500 per instructional unit. Failure to meet this disparity will cost the state $30 million to $35 million. The other option would be to prorate the instructional unit down by $2,850 in FY 98, or the state would have to fill that gap with state general fund money. COMMISSIONER HOLLOWAY remarked that the State Board of Education is committed to revising the Alaska Foundation Program. They appointed a task force last year which struggled with this issue and ultimately made the recommendation to the State Board of Education that there be a minimalist fix and to then encourage the State Board to continue working on a more creative funding formula for the state. The State Board of Education took that under consideration and the legislation before the committee was the result of the State Board of Education's recommendation to the Governor. She commented the State Board of Education is now meeting as a committee of the whole to work on the foundation formula and have a time line set to introduce a new foundation formula during the next legislative session. She emphasized this request is a short-term fix; it buys time to develop long-term solutions and it addresses the disparity test by providing for the supplementary aid to REAAs. It offsets the cost of supplementary aid by increasing the amount of impact aid deductible from REAAs from 90 percent to 95 percent, and it incorporates the single site funding into the formula which has been an issue since the current formula went into effect in FY 88. Number 345 COMMISSIONER HOLLOWAY said the department is concerned about the quality of public education in the state of Alaska and feels that funding is the mechanism for developing quality schools. Consequently, the department believes that a funding strategy, which she hopes to bring to the legislature next session, will reflect a well-articulated and strongly driven instructional philosophy about what they hope to achieve. She noted that over the years, funding has been approached from "let's just re- distribute the dollars" versus "what are we trying to achieve." She often hears the comment "just re-write the formula" as if it is some simple task, when indeed it is a very difficult and complex task and one that needs thoughtful design. She added that many people have tried and not been successful. The department feels that one of the things that has been lacking in the past is the strong philosophical premise involving all the stakeholders. The State Board of Education's plan is to take their proposed foundation formula to the public and have lots of public engagement over the summer so there can be a good understanding of what they are trying to achieve. Number 435 COMMISSIONER HOLLOWAY said the department is really focused on what she called a "standards-driven change effort." That is high standards for kids with an assessment to make sure they are being reached. Also, high standards for professionals are being worked on through the State Board of Education/Board of Regents partnership to make sure that teachers coming out of the preparation institutions meet those standards, and they are looking at licensing and re-licensing people based on standards. The third area of focus is parent, family and community involvement in student learning and how that can be promoted. The fourth area is school standards. The State Board of Education is looking at a school accreditation process based on the research of what makes a quality school, so the kids are most apt to achieve those high standards set for them. Number 498 COMMISSIONER HOLLOWAY concluded that even though the discussion today was a short-term fix for funding, she wanted to put it in the framework of having high standards for kids and having the money to make it happen for them. Number 523 CO-CHAIR TOOHEY asked if the state of Alaska was going to fashion their education system after any other state that has already tried it? She is fearful that with the downturn in finances, the state will jump into a system that has never been tried before or will go into a system that cannot be achieved. She noted there have been trials across the country on what makes a good school, and it has been determined that it has absolutely nothing to do with money. COMMISSIONER HOLLOWAY responded that the concepts being discussed have been used in other states. For example, one of the concepts being considered by the State Board of Education is rolling capital improvement dollars into the foundation formula. That is being done in 14 other states where there is a per pupil dollar amount allocated for capital improvement projects. She didn't think the State Board of Education was currently considering anything that was so far out of the norm that would jeopardize the system. They are trying to simplify the formula so it can be understood by average folks and can be communicated to parents. The Board of Education is very interested in looking at it from a per pupil cost, so discussions can take place on how much it costs to educate a child in a specific place versus the present convoluted instructional unit calculation. She believed the effort was to simplify it so it is understandable and most of all, make sure that it is fair. Number 708 CO-CHAIR BUNDE said he was heartened by Commissioner Holloway's willingness to grasp the reality of the state's educational system, the dollars that are available for education and the fact that we need to streamline, consolidate or even close small schools that aren't educationally or economically viable. Those are difficult decisions. He noted that Commissioner Holloway had remarked that if the impact aid is lost, the state could either accommodate the impact aid or reduce the formula by close to $3,000. There is concern the federal government is in the process of weaning us and they will keep making this disparity more and more difficult to achieve so eventually the state will have to reduce the amount of funding or take whatever action needs to be done. Co-Chair Bunde asked if Commissioner Holloway shared that concern, if this would be taken into the formula re-write and if she could anticipate a time frame in which that may occur. COMMISSIONER HOLLOWAY said it was her impression that it wouldn't happen real soon, but there is a perception that the federal government is trying to wean the state every time the disparity is moved down. She said she didn't have a sense for the time table. Number 816 JAMES ELLIOTT, Acting Director, School Finance, Department of Education, testified the current program is authorized through FY 99. He felt is was safe to say that every President since President Truman has tried to get rid of the program, so the best guess is that it is going to be around for some time. CO-CHAIR BUNDE noted that one of the challenges has been single site schools and asked Mr. Elliott if he had any idea of how that challenge would be addressed in the re-write. COMMISSIONER HOLLOWAY responded that as far as she knew, it was not being discussed as a separate issue, so it would not be identified as outside the general formula. She believed one thing being looked at by the State Board of Education is generally streamlining dollars and trying to give the dollars to the local level for them to make decisions about what to do. She said if the concept of having capital improvement dollars as part of the foundation formula is successful, there has been some general discussion that if a school district had met their major maintenance and construction issues and there was some assurance of that, there would be no reason why those dollars couldn't be used to reduce class size for example in urban areas. The general direction the State Board of Education is currently discussing has to do with putting the money in more of a block grant kind of fashion and allowing the local people to make decisions about where they need to spend their money. Number 837 CO-CHAIR BUNDE asked if he could interpret that to mean there would still be a superintendent for a school district which is one school. COMMISSIONER HOLLOWAY said the State Board of Eduction will be holding an all-day workshop on governance on April 18. She commented that some of the board members are interested in looking at alternative governance models for the state. A whole day will be devoted to working on Native student learning issues and there is a steering committee working on framing those issues. Number 974 CO-CHAIR TOOHEY asked if the single site schools were brought up in the discussions on the foundation formula? COMMISSIONER HOLLOWAY asked Co-Chair Toohey to repeat her question. CO-CHAIR TOOHEY asked if the one superintendent/one school/one school district issue had been brought up in discussions on the foundation formula? COMMISSIONER HOLLOWAY replied that it had been discussed at the committee level, particularly as it related to the tiny schools. CO-CHAIR TOOHEY asked if there was any consensus. COMMISSIONER HOLLOWAY responded it is still being discussed and no decisions have been reached. CO-CHAIR TOOHEY remarked those were going to be hard decisions and she didn't feel the decisions were going to be made by a group of individuals like those meeting in April. She added nobody would make those decisions unless they were being paid to and even then, it would be a difficult decision to make. In her opinion the buck was being passed when those decisions were left to public discussion groups. Number 1067 REPRESENTATIVE BRICE expressed his appreciation to Commissioner Holloway for the work she was doing. He felt is was important to recognize that HB 452 was not a substantial rewrite of the foundation formula. He felt the current issues were compliance with the disparity test and the single site question. He acknowledged that a rewrite of the foundation formula would be a major undertaking, but hoped it would be the goal of this Administration to put policy over politics and that major issues would start being addressed. He mentioned he was fairly happy and satisfied with the educational system in the Fairbanks area, considering the high level of national merits and high SAT scores coming from the Fairbanks schools. Representative Brice requested a more detailed explanation on Section 4. Number 1218 CO-CHAIR BUNDE commented that the fiscal note addressed funding for single sites and funding needed to meet the disparity requirements of the federal government. He referenced the $223.8 reflected on the fiscal note and asked if that money would be deducted from funding for education, or would it be in addition to what the legislature is expected to fund for education this year. MR. ELLIOTT responded it is in addition to. CO-CHAIR BUNDE clarified that the department wanted to add $223.8 to the existing formula. MR. ELLIOTT said that portion goes to the REAAs. He said, "It's the difference of what is deducted and then the $500 per instructional unit that they're given. There is about a quarter of a million dollars difference." CO-CHAIR BUNDE said what he was trying to get at in round numbers was the amount of the total educational budget for this year assuming flat funding. MR. ELLIOTT said about $650 million. CO-CHAIR BUNDE questioned if the $223.8 would not be in addition to that amount. MR. ELLIOTT said it is in addition to the current budget. CO-CHAIR BUNDE noted the budget actually would be about $800 million then. MR. ELLIOTT informed Co-Chair Bunde it was $223.8 thousand, not million. CO-CHAIR BUNDE verified that it was $223,800 in addition to the $650 million. Number 1329 CO-CHAIR BUNDE referred to the comments on fairness and balance and asked Commissioner Holloway if she had an idea of how to balance the disparity where there are REAAs with little or no local contribution versus places like Kenai, where they are up to the maximum local contribution. COMMISSIONER HOLLOWAY said that was a real issue for them. First of all people often say that REAAs don't contribute, but in fact, the $35 million received for offsetting the cost is mostly generated off the backs of REAAs. So, in some sense, that is their contribution. The State Board of Education, under the direction of the Governor, is aware of the difference in the perception of fairness and the board is dealing with that. Also, the board is talking about raising the cap because it is real important for some communities. She added that is all part of the current discussion of the State Board of Education, and she thought they were ready to take the difficult step of making the decision after there had been public engagement. She didn't believe the State Board of Education was expecting any other group to make a recommendation. Number 1410 CO-CHAIR BUNDE referred to the $61,000 foundation formula and asked Commissioner Holloway if she thought the impact aid was about $500 of that $61,000. MR. ELLIOTT said that is the supplemental required for the state to meet disparity at the new federal standard. CO-CHAIR BUNDE verified it would be $61,500, which actually raises the foundation. COMMISSIONER HOLLOWAY interjected it would raise for the REAAs, because they are at the bottom, and have to be brought up in order to meet the 20 percent disparity test. Number 1450 CO-CHAIR BUNDE referred to the $35 million impact aid and asked Commissioner Holloway how that would be prorated out in the $61,000. MR. ELLIOTT indicated the department had a schedule prepared and he would be happy to furnish that information to the committee. CO-CHAIR BUNDE referenced Commissioner Holloway's comments on good education policy and research as it related to the quality of schools and asked if she had some idea as to what direction the research was leading them in trying to develop quality schools. COMMISSIONER HOLLOWAY advised there is about 25 years of research that demonstrates the kind of things that need to happen in schools in order to increase the probability of students learning and learning well. For example, one of the quality indicators that might be used in a school assessment or accreditation model would be that that school or district had determined what they want their kids to know and be able to do, had identified the desired results, and had an assessment system in place to measure that. She said knowing what is trying to be reached is one of the key quality indicators that makes a difference. Another high quality indicator is a planned systematic instructional approach throughout the system, so kids move well between schools and feeder schools. She said that principals play a key role if they are instructional leaders and keep the focus in the school on instruction, not on other issues. She offered to provide the committee with a general list of quality indicators. Number 1614 CO-CHAIR BUNDE said that he had read the series of articles in the Daily News Miner on rural schools and had heard from people in rural areas who felt they were, in some cases, ill-treated or mischaracterized. From an urban educator's point of view, he thought it was fairly balanced and asked if Commissioner Holloway would care to share her reaction to the articles. COMMISSIONER HOLLOWAY said that a lot of her years in Alaska had been spent in rural Alaska, and it was her opinion that rural Alaska was doing a far better job than those articles indicated. One of the reasons she believed that was true was because when standardized tests scores were used to determine whether children had learned, it's necessary to know where the children were at when they started. For instance, if a child came into the school and achieved at the 5th percentile on the first standard achievement test, but achieved at the 35th percentile three years later, that indicates lots of new learning and skills had been achieved. But many times children will come into a school program and will be at the 50th percentile the first time they are tested and five years later, they still score at the 50th percentile. If that's the measure, did that child need to go to school - there wasn't a whole lot of value added. She would say there is a lot of value added through the public education system in rural Alaska, but point out that's only one measure. Broader measures need to be looked at and that's why the assessment is so important. Does that mean there aren't any problems in rural Alaska? The answer is no, there are a lot of problems, but there are problems in urban Alaska, as well. She said when looking at schools that are not producing kids who are achieving well academically, we can identify schools in Fairbanks, Kenai and Anchorage who have the same kind of academic profiles as students in rural Alaska. It's not a rural/urban issue; it's much more complex than that. Number 1738 CO-CHAIR BUNDE commented there is a lot of frustration on the part of the public that high school graduates are being certified to do things they are not capable of doing. His recommendation is a two- tiered system of a high school diploma and a certificate of attendance. Students who have occupied a chair and kept it warm for three years, get a certificate of attendance. The students who can actually read and write get a high school diploma. He asked Commissioner Holloway for her reaction to such a system. COMMISSIONER HOLLOWAY responded that if a system identifies what kids should know and be able to do and then measure that, there shouldn't be kids who just sit in seats. CO-CHAIR BUNDE noted every time he goes to a high school, he sees kids sleeping. COMMISSIONER HOLLOWAY acknowledged she does too, and said it bothers her a great deal. She said there is some discussion about different certificates of mastery but that is an issue the State Board of Education has not taken on yet. Her hope would be that communities would come together and determine what they expect their students to know when they leave the 12th grade. She added that needs to be assessed along the way so when students at the 3rd grade are not meeting the bench marks, something will happen. She said that has not traditionally been done in education. The kids are just sent to school, the chairs are counted and the room has been determined large enough, but we've not held ourselves accountable for whether kids are learning. CO-CHAIR BUNDE added that the input may have to come from parents. COMMISSIONER HOLLOWAY said it was her hope that parents would be involved in all the processes. Number 1846 REPRESENTATIVE CAREN ROBINSON said she was trying to get an idea of when Commissioner Holloway was hoping to have legislation ready. It was her understanding that a subgroup would hold public hearings during the interim and bring their recommendations to the State Board of Education. The State Board would then bring the proposal to the Governor, who would then bring it to the legislature. She asked if that was the plan? COMMISSIONER HOLLOWAY said the State Board of Education is designing conceptually, the foundation formula. The board wants to take that to the public and hopes to have it solidified to recommendations for the Governor in time for introduction next legislative session. REPRESENTATIVE ROBINSON asked if the State Board of Education would be looking at the cap. She mentioned that Juneau is another area that has reached the cap, which means no additional city dollars can be put into education. COMMISSIONER HOLLOWAY assured Representative Robinson that was an area that would be looked at. There are several other areas in addition to Juneau where that is a problem. The board is aware of the problem and will be addressing it. Number 1943 CO-CHAIR TOOHEY referred to an article from Newsweek Magazine and commented that if a child isn't given the proper track setting at an early age, the child will never learn. She asked Commissioner Holloway if she was aware of any program, other than Headstart, that would help these children. COMMISSIONER HOLLOWAY said one of the initiatives of the Children's Cabinet is the 0 to 6 age group, and there is an attempt to identify across departments what kind of services families are receiving to address the issue. Also, the department has recently formed a partnership with the PTA, after a review of the Utah model which has a center for family learning so good parenting and stimulation can be addressed early on. The Department of Education is trying to form a partnership with the Department of Health & Social Services to work with primarily teen-age mothers. She announced the department had just received a Danforth Grant, for the Department of Health and Social Services and schools to develop a plan to provide integrated services to families at the local level. Legislators, Governor's staff and local people will be involved. She said it is recognized that a lot more family support is needed early on if those kids are going to have a chance at learning. Number 2088 WANDA COOKSEY, Lobbyist, Small Single Site School District Consortium, testified that Section 4 of HB 452 covers the issue the consortium was concerned about. It places in the formula, the equation that's been used to compute the grant amount appropriated for the 21 school districts for the last several years. The Small Single Site School District Consortium supports HB 452 for that section. Number 2148 CARL ROSE, Executive Director, Association of Alaska School Boards, said his comments were directed to Sections 1, 2 and 4 dealing with disparity. He advised that the rules have changed on the issue of disparity. The state of Alaska has at stake in FY 98, about $35 million and in order to qualify for that, the disparity test needs to be met in FY 96. He presented figures, in round numbers for the committee to state his point. He said, "If you take a look at the REAA supplemental, that $500, you have to have a supplemental appropriation of $1.2 million. The 90 percent to 95 percent deduct will get back from REAAs about $1 million, the net investment to the state is about $200,000 in FY 96 to qualify for $35 million in FY 98." In other words, a net investment this year supplementally of $200,000 qualifies the state for $30 million to $35 million in FY 98. He referred to the discussion regarding the possibility of federal impact aid going away sometime in the future and said the fact is this year Alaska can qualify for $35 million in FY 98 which shouldn't be overlooked because to prorate the instructional unit by that amount of money is roughly $3,000. The impact of that would be borne by the districts who have the most instructional units; Anchorage, Fairbanks, Mat-Su, Kenai and Juneau. The largest school districts would take the largest hit of that proration. MR. ROSE said the second area of support is for the single site school districts. As everyone is aware, a formula is currently used to calculate the amount of money that's appropriated for the single site schools. For many of these schools, 10 percent to 15 percent of their annual budget is wrapped up in a single site supplemental appropriation, and they are simply asking to be inside a foundation unit. Number 2242 CO-CHAIR BUNDE asked if it would be fair to say this would add a level of comfort for the single site school districts because these funds would be wrapped in other funding and would not be a separate budgetary item. MR. ROSE said all the single site school districts budget that money contingent on a supplemental, where all the other districts receive their funding up front. CO-CHAIR BUNDE said there are really two choices: This bill or reduce the foundation formula by about $3,000. MR. ROSE responded yes, in FY 98. Number 2279 CO-CHAIR BUNDE said that Commissioner Holloway had mentioned they were looking at a per student application rather than a unit as they move toward rewriting the foundation formula, and asked Mr. Rose if he would care to comment. MR. ROSE said the Association of Alaska School Boards' position is adequacy and equity in funding. He said the concern is that as their responsibilities to provide public education continue to grow, more and more mandates are made and the money gets less and less. The majority of their money is generated through regular instruction, K-12, and that source is tapped for every other mandate that is passed. The association is open to addressing the foundation unit for a whole host of reasons. If in fact the PL-874 impact funds should go away, the measure used to provide equity is the federal disparity test. If federal funding leaves, the state will have to devise their own standard, because he felt it would go to court. Currently, the federal government decides whether the state satisfies an equity standard because the state receives federal aid. Without federal aid, there would have to be an Alaskan standard. It will have to be looked at through the foundation process. CO-CHAIR BUNDE said he would hold HB 452 in committee and schedule it for another hearing. TAPE 96-20, SIDE B Number 001 CO-CHAIR BUNDE announced the next bill on the agenda was HB 451. HB 451 - PROHIBIT DUPLICATE PUBLIC ASSISTANCE DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder, presented the following sponsor statement: "House Bill 451 requires the use of fingerprints for identification of welfare recipients, just as the federal government requires fingerprinting of its employees. Today, we require teachers, substitute teachers, bank employees and many other workers to be fingerprinted. Fingerprinting has long been established as a valid method of identification. Electronic fingerprinting avoids the mess of ink used in the traditional fingerprinting. It is also much easier and quicker to perform. House Bill 451 also adds two new sections to our laws that makes it a violation to seek or receive duplicate benefits under the General Relief program and the Aid to Families with Dependent Children program. "House Bill 451 would establish a pilot program to use electronic fingerprinting to identify applicants for General Relief Assistance and Aid to Families with Dependent Children. This will allow the state to be certain that no one is able to enroll under multiple names, using fingerprints for absolute identification. As state and federal programs limit duration of benefits, this will enable Alaska to keep accurate track of recipients and to work with other states to determine if applicants have received federal funded benefits outside Alaska. "Electronic fingerprinting is a simple procedure, both for the applicant and the individual taking the fingerprint. The process requires a person put their index finger and thumb on a glass screen. A computer takes a picture creating an accurate and permanent record. There is no messy ink usually associated with fingerprinting. The fingerprint can be saved in a data bank and used to compare with current and future applicants. "Electronic fingerprinting of welfare recipients is not a new idea. The states of California, New York and Pennsylvania are currently using this system. Connecticut, Massachusetts, Arizona and Washington are all in the process of moving toward this system. "While New York and California are certainly larger than our state, the notion of how much they've been able to save is an important issue to consider, and relatively, we think we can save similar kinds of dollars. "New York saved $500,000 in a two county pilot program and has expanded the program statewide. New York City alone will save $35 million with this program. "California began its pilot program in Los Angeles County in 1991 with its general assistance program. It was so successful that in 1994 they expanded it to the AFDC program. The independent consulting firm of Ernst & Young evaluated this program in Los Angeles and recommended it for implementation statewide. "House Bill 451 gives Alaska the opportunity to take the lead in preventing welfare fraud by developing a system that can identify our applicants and compare them to those who have received benefits in other states." MR. DeWITT mentioned that Washington State has legislation currently to investigate a pilot program that uses the driver license as the key for identification. It requires a thumb print on the driver license and then requires the driver license as proof of identification for any state benefit. Number 105 CO-CHAIR BUNDE said he assumed there was a fair amount of fraud, so this type of system would save the state money in avoiding duplicate benefits. He noted however, the fiscal note does not reflect any savings. MR. DeWITT noted he had reviewed the fiscal notes and felt the costs were a little excessive, but he thought it was something that could be addressed in the Finance Committee. In terms of the amount of fraud, he thought the department should be and has been commended by the federal government for its handling of fraud. The process has been changed from a paper process into a computer generated age where changing documents and forging driver licenses for example, which have pictures on them is fairly easy. He cited a personal experience with his 13-year-old daughter who had her identification stolen and approximately a month ago, she got a letter a collection company stating she needed to pay up on the check she had cashed using her driver license as identification and verified by a bank teller, and the check had bounced. He said first off, his 13-year-old daughter doesn't have a driver license and second, he believed that most bank tellers were fairly well trained to look at a picture on a driver license, when accepting it as identification. He concluded that the ability to forge the documents used today for identification is improving substantially, which is one of the reasons Washington is moving toward one identification card using fingerprints for all benefit applications. The idea behind this legislation is to get on the front edge of fraud being seen in a lot of other places, and to begin to build a data base so as the limitation of benefits is being considered at both the state and federal level, Alaska has a data base against which future applications can be compared. CO-CHAIR BUNDE commented he had been at a restaurant one time having lunch, paid with a credit card and got the wrong credit card back. He used that credit card for three weeks with no problem and didn't realize the mistake until he received a billing statement. He encouraged Mr. DeWitt to follow up on the fiscal impact and the savings through increased efficiency. Number 285 REPRESENTATIVE BRICE asked Mr. DeWitt how many people the Department of Health & Social Services thought were double-dipping in this manner. MR. DeWITT replied there was no absolute way of identifying it. He explained the legislation sets up a small pilot project to find out if administratively it could be carried out. One of the problems in terms of specific identification is, for example in Anchorage there is only one enrollment office. They had considered having a project in both Anchorage and Fairbanks to compare the two and gain a lot more information, but the cost reflected on the fiscal note made it difficult to push for both locations. REPRESENTATIVE BRICE asked what the current fraud rate was in the Aid to Families with Dependent Children program. CO-CHAIR BUNDE indicated the Director of Public Assistance was in the audience and would be testifying. REPRESENTATIVE BRICE asked if Mr. DeWitt had looked into other types of identification such as retinal scanning. MR. DeWITT replied they had not, but added that Representative Mulder met with state house members from Pennsylvania who shared with him the success they have had with this concept. Representative Mulder had contacted other states, but this process seemed to be a simple, nonintrusive methodology of developing an accurate data base. A factor in selecting the electronic fingerprinting process was that a number of other large states were moving in this direction. CO-CHAIR TOOHEY surmised the expense of retinal identification would far exceed other identification systems. REPRESENTATIVE BRICE said not necessarily; it does the same thing as a fingerprint. Number 433 REPRESENTATIVE ROBINSON asked who would be doing the fingerprinting and if the idea was for the divisions to have the equipment? MR. DeWITT said the equipment is very simple to operate. It's basically a matter of punching bottoms on a computer screen. REPRESENTATIVE ROBINSON asked if the main thrust for setting this up was to deal with fraud. She asked if the fraud rate of the other states had been compared to Alaska's. MR. DeWITT responded the fraud rates had not been compared, but they did look at the savings other jurisdictions gained, which were substantial compared to the money spent. CO-CHAIR BUNDE asked if he was correct in assuming there were two areas of savings - the prevention of fraud and the prevention of paperwork, since this would be done electronically. MR. DeWITT said it was his belief that would be the case over time. Initially, in the pilot program no savings is expected. However, one of the questions that remains open regarding a limitation of benefits is what the federal penalties will be for not being able to identify an individual who has exceeded the benefit period. This system gives an absolute way to identify the person. He noted there were several bills contemplating a limitation of benefit time in this legislature. The real issue is how to keep track of an individual between this benefit period and a new benefit period three or four years downstream and how to aggregate those. This system has the ability to do that. CO-CHAIR BUNDE questioned the error rate. MR. DeWITT responded that of the individuals he has talked with, none of them have raised that as an issue. He noted that electronic fingerprinting is used in Alaska. The correctional system, state troopers and court system all find it to be very effective; none of them have indicated a problem with error rate. As a matter of fact, the error rate on electronic fingerprinting is substantially less than with the ink fingerprints because it is much more difficult to distort the print by moving the finger on a computer-driven system as opposed to ink and paper. Number 601 LIZ DODD, Board Member, American Civil Liberties Union of Alaska; and National Board Member, American Civil Liberties Union, testified that she had learned about HB 451 just a few days ago and hadn't had a lot of time to involve the national experts who were well versed in this issue. She said that most places where fingerprinting is used have survived court challenges in order to make sure that the legal threshold for the violation of privacy has been met before fingerprinting is allowed. That's why it is not really proliferated throughout society, but in very specific places. Generally, before a person's privacy is violated, there has to be a real concrete need for gathering the information. This bill represents a speculative need. It speculates there might be legislation that limits welfare benefits to a certain period time, whether that be in the state of Alaska or in certain states, so there would be a need to determine when a person got off benefits, when the benefits expired and in what state that happened. At this point, however, that is speculative. To be fingerprinting people, violating their rights to privacy, on the chance that this information will be needed in this state to work with other states to make sure this type of fraud doesn't happen, is a speculative harm weighed against a concrete constitutional right of privacy. Number 726 MS. DODD further explained that if the federal government passes welfare reform that limits the benefit time, she was certain there would be enforcement provisions. Various measures will be discussed by individuals who have a high level of expertise and a good understanding of what electronic fingerprinting means in terms of constitutional rights. Also, no one has been able to say there is a huge problem in Alaska. The potential for fraud is much greater in the states that border each other, thus the need is greater in those states. If someone in the state of Alaska wants to duplicate benefits, they have to fly to Washington State, for example, and they certainly won't reap much of a profit. She felt there was not a lot of fraud within in the state and that's the reason why no one has been able to quantify it. She stated she would like to have additional time to research the issue, to talk with the national experts and get back to the committee with some comprehensive information as to the threshold as to where fingerprinting becomes permissible. Number 840 REPRESENTATIVE VEZEY said he failed to understand why Ms. Dodd thought there was a constitutional issue in that no individual is forced to sign up for a benefit program; it's a voluntary request for service. MS. DODD responded that because people are compelled to request public assistance by virtue of their neediness, there are going to be people trying to get these benefits. If a constitutional right is being waived for just people who interface with the system in one area, then that is discriminatory. In other words, as long as a person is not in need of public assistance, then that person's privacy rights are protected; nobody is going to fingerprint that person. To the question of whether or not public assistance is voluntary, she thought that was the difference in perspective between her organization and Representative Vezey. CO-CHAIR TOOHEY noted that she had recently been fingerprinted while applying for a concealed weapon permit and asked if Ms. Dodd was indicating that Co-Chair Toohey had given up her rights by being fingerprinted? MS. DODD responded that society has determined there is a concrete risk that a violent crime will be committed with a firearm, which is just one risk. Number 953 JIM NORDLUND, Director, Division of Public Assistance, Department of Health & Social Services, testified the department was opposed to the legislation for three reasons: 1) It addresses a problem that doesn't exist; 2) it has a cost to the state without any anticipated savings; and 3) it sets up an information tracking system that is virtually useless. He advised that he would address each of these issues in detail. MR. NORDLUND referenced Ms. Dodd's testimony regarding the differences between California, New York and the state of Alaska. In Alaska, there are small communities and even in Anchorage, the largest community in the state, there is one public assistance office. He commented it would be virtually impossible to apply for benefits one day under one name and the following day apply for benefits under another name. It would be impossible to apply for assistance under two different names. He said for the most part, he didn't see that any duplicate benefits were issued in the state of Alaska. However, that's not to say there isn't welfare fraud in the state - there is welfare fraud and there is a fraud unit that tracks down fraud. This is not the type of fraud the state is faced with, however. MR. NORDLUND said secondly, if the state doesn't pay duplicate benefits in Alaska, there really is no savings to be achieved through this measure. It would simply be a cost as reflected in the fiscal note, to implement something that doesn't do any good. He said Curt Lomas was available to answer any questions regarding the fiscal note. MR. NORDLUND said his last point was that HB 451 sets up a tracking system that is virtually useless. Even if there was a problem with duplicate benefits in the state and the fingerprints were taken, there is no place to send those fingerprints. There is no other state that has a systematic information identification system like this. He noted there are a few states that have projects like this as Mr. DeWitt mentioned, and there is some sporadic application of this program, but for the most part any systematic tracking system is nonexistent. He felt the state would be premature to set up a fingerprinting system in the state when there is no place to send those fingerprints. MR. NORDLUND said because of welfare reform and it appears there is going to be a lifetime limit on benefits, there is a need to track. He pointed out there is a problem in the federal welfare legislation in that there is no system set up for tracking benefits across state lines. From what he has seen, there is nothing anticipated in terms of a federal set up in creating this tracking system that is going to use fingerprints as a method of identification. That's not to say there couldn't be in the future; it's possible, but at this point he said we'd be way out in front with a fingerprinting system that doesn't do the state any good. Even with a pilot program, if there was a problem with duplicate benefits, he asked what good is it just to take fingerprints in Anchorage when those prints can't be compared with someone who might be trying to apply for duplicate benefits in any other city in the state. He commented this is one instance where a pilot program really doesn't make any sense. MR. NORDLUND pointed out the provision in the legislation which says to apply for duplicate benefits is fraudulent is unnecessary because the current statutes already consider applying for duplicate benefits as welfare fraud. He informed the committee of an individual in Anchorage who attempted to do that under an alias, and she is currently serving time in jail. Number 1173 CO-CHAIR BUNDE said he remembered reading about a case in Anchorage where an individual had accumulated quite a bit of money and asked if having the fingerprints would have assisted in tracking the person down when the department became suspicious. He felt there were two kinds of fraud: 1) when the same person applies for duplicate benefits; and 2) a person applies for benefits they are not entitled to. MR. NORDLUND explained the two most common kinds of fraud encountered by the department. The first is when an individual's living circumstance has changed. The income of the entire household is looked at when determining if an individual is eligible, and if the person moved in with someone who is providing for them and it is not reported, that is fraud. The other kind of fraud is failure to report earned income or failure to report an increase in assets, which would make a person ineligible. Number 1257 REPRESENTATIVE ROBINSON clarified that the type of fraud in Alaska is different from the kind of fraud that can be detected with fingerprinting. In other words, all fraud cases won't fit under the fingerprinting process. MR. NORDLUND said that was correct. He added there are two motives behind this legislation; one is the possibility of someone falsifying their identification and secondly, the need to track people to ensure the five year limit, if imposed, had not been exceeded. The second need is a real need. He explained that Alaska needs to have a system in place which will be able to track benefits beyond the 60-month limit that is anticipated will be imposed on recipients. Alaska does not have the mechanism to compare that information with other states, but whatever mechanism is determined, has to be in place in all states and has to be applied uniformly. At this point, there is no indication that fingerprinting is going to be that mechanism. It is known that each state's eligibility information system will be able to track people from one state to the next under their true identity. Mr. Nordlund said the department is working on a proposal to accomplish that. In fact, part of the information systems request was included in the supplemental budget approved by the House of Representatives last week. Number 1355 REPRESENTATIVE VEZEY referred to Mr. Nordlund's intuitive opinion that there is very little fraud of duplicate benefits and asked if there was any audit information available to actually quantify the presence or absence of this kind of fraud. MR. NORDLUND responded yes. He explained that a big part of their program is quality control, which is required under federal regulation. A random sampling of the caseload is taken periodically and reviewed for variations or problems in the eligibility determination process. It is partly through this quality control process that other kinds of fraud are discovered, but duplicate benefits have not been a problem. CO-CHAIR BUNDE announced this was the first hearing on HB 451 and it would be held in the HESS Committee for further discussion. HB 535 - POSTSECONDARY EDUCATION Number 1400 CO-CHAIR BUNDE announced HB 535 was an act to reconfigure the Postsecondary Education Commission. He appointed a working subcommittee of Co-Chair Toohey, Co-Chair Bunde and Senator Green. REPRESENTATIVE ROBINSON asked if there would be any minority members on the subcommittee. CO-CHAIR BUNDE explained that minority members were welcome to participate. HB 512 - ENGLISH AS THE COMMON LANGUAGE Number 1503 ROGER POPPE, Legislative Administrative Assistant to Representative Pete Kott, said he would be addressing the amendments in the latest committee substitute. CO-CHAIR BUNDE responded he would first like to take testimony on teleconference. Number 1665 ROY IUTZI-MITCHELL testified via teleconference from Barrow and greeted the committee in Inupiat and Yupik. He strongly urged the committee to defeat HB 512 for several reasons. Even though English is his first language, he speaks German, Inupiat and Yupik also. Since he is an employee of a college, which is part of an Alaskan municipality, if this bill had been enacted he would have been forbidden to greet the committee in the two Alaskan languages. He felt that was a direct violation of Amendment I of the Bill of Rights. Specifically, HB 512 would abridge Alaskans freedom of speech and diminish the right to petition the government. Second, HB 512 suggests that English is an endangered language in need of legislative protection. Section 01.10.210 suggests that Alaskans are currently being denied employment by state agencies, based solely on their lack of facility with languages other than English, even when facility in another language is not a bona fide job qualification. He would like to know if there are examples of this having happened in Alaska; he suspected not. Third, he questioned the bill's finding that "the use of an official language or common language as the language of public record in no way infringes upon the rights of people to exercise the use of a primary language of their choice for private conduct". Based on his own research of Alaska Native languages and other sociolinguists, he said that simply is not true. It is not more true than, for example a law which makes one religion the official religion of the state of Alaska, and then claiming that it in no way infringes upon an individual's religious choice. Fourth, he believed that HB 512 would encourage disharmony among Alaskan residents. The United States has always been a nation of many people through many languages. Until this century, many regions of the U.S. were home to Americans with languages other than English. For example, German/American communities which have used their own languages for local commerce, church, local government and public schooling. Language differences are not the causes of divisiveness. As an example, Switzerland which is officially trilingual and Finland, which is officially bilingual, clearly illustrate that modern industrial countries can consist of groups, each speaking their own languages while simultaneously enjoying high standards of living and a low level of civil strife. Fifth, he urged the committee to consider that the state of Alaska has a moral obligation not to discourage the survival of Alaska's 28 Native languages and to please remember that in this context, English is an immigrant language in Alaska. CO-CHAIR TOOHEY asked Mr. Mitchell if he was by chance a pilot. MR. MITCHELL replied no. CO-CHAIR TOOHEY asked Mr. Mitchell if he had any problem with English being used as the universal language for the aviation industry and if he could see the reasoning behind it. MR. MITCHELL said yes, because the pilots operate in situations where split-second decisions are made. CO-CHAIR TOOHEY understood that, but added that people coming from any other country in the world must use English as the language in the aviation industry. MT. MITCHELL said that was true, and in fact there is a simplified version of English of only a few hundred words, that is taught to pilots of international airlines. CO-CHAIR TOOHEY commented this bill shouldn't be taken personally, but as a help for everyone. CO-CHAIR BUNDE called a recess at 3:35 p.m. TAPE 96-21, SIDE A Number 004 CO-CHAIR BUNDE called the meeting back to order at 3:42 p.m. Number 036 MARY SATTLER, Intern to Representative Irene Nicholia, greeted the committee in Yupik and testified that she is a Yupik Eskimo from Bethel, Alaska. She is currently serving as the 1995-96 youth representative for the National Congress of American Indians (NCAI) and was testifying in the capacity of Miss NCAI for the National Congress of American Indians, which is the oldest, largest and most representative Indian tribal organization in the nation. She is opposed to HB 512. She said that we all need a common language to communicate in, however, she believes that English already serves as the lingua franca and this bill would only undermine the other languages of Alaska. She remarked that implementing legislation which deems English as the official language would only add to the devaluation, depreciation and denigration of extremely important mother tongues. It has been the purpose for the last hundred years or more of the Anglo American school system to destroy the Native American cultures through a concerted attack on traditional Native American languages. The establishment of an official language would further that attack. She felt this legislation was being initiated by a national interest group that did not have Alaska's best interest in mind. She could understand how legislation such as this would have bearing in California or Texas; however, in Alaska nothing has indicated that communication in public meetings of state agencies is hindered in any way by any other language. She does not believe there should be further undermining of the emotional and psychological foundations of the young people in Alaska. The preservation of culture primarily through the medium of language was one of NCAI's founding principals and remains a top priority. She concluded that their linguistic heritage is vital for the continuation of their cultures, which have historically undergone major assaults. Native nations across the country have expressed deep concern about the potential impact of such legislation. Number 213 CO-CHAIR TOOHEY noted that a request had been made at the last hearing for information as to how other states that have Indian/Native cultures have dealt with this. MS. SATTLER added that as the intern for Representative Nicholia, she is the staff member to HB 167, a bill that would include Native language and history in the curriculum at schools. She referred to Section 01.10.210 (a)(3) which states, "does not apply to bilingual education or activities if the education or activities are authorized under state or federal law;". This was a concern for her because it has passed in several other states. She noted that a Congressman from New York introduced a bill on February 21, 1995, that would make English the national language and all federal programs that promote bilingualism. Therefore, this would directly impact legislation promoting bilingualism in the state of Alaska. CO-CHAIR BUNDE didn't believe that HB 512 would have an impact, but the federal legislation may. HB 512 specifically exempts bilingual, but whether the state should be funding bilingual education or if it should be taking place in the home is another discussion. MS. SATTLER felt that deeming English as the official language and establishing it in state agencies, which in a way a school is a state agency, would be justification to further downplay the role of bilingualism. Number 466 REPRESENTATIVE VEZEY asked Ms. Sattler how many documents she was aware of that were written in Yupik. MS. SATTLER said Yupik isn't traditionally a literate language. Number 493 REPRESENTATIVE BRICE asked Ms. Sattler how many school board members she knew of who may, on occasion, respond in their Native language to a question from the public in a public school board meeting. MS. SATTLER's response was inaudible. Number 570 MR. POPPE said at the last meeting the committee had adopted a committee substitute, but the proposed committee substitute Work Draft 9-LS1700\F, dated 3/5/96, before the committee had at least two additional changes. He noted the title had been changed from "English as the common language" in the original version of the bill, to "English as the official language" in the committee substitute to make it clear this legislation deals with public and official documents, and does not attempt to change the speech patterns of anyone in the state. That change from common language to official language is reflected throughout the bill. Language was inserted on page 1 under the Findings Section which reads, "(2) Native people were the first to establish a richness and variety of languages in this state;" to give recognition to that fact. He said language had been added to page 2, line 2, to make it clear the legislation wasn't trying to stop people from speaking in their Native language. Even though the bill drafter had indicated this bill was not an attempt to infringe upon the rights of free speech of the people, the sponsor had inserted "or for speaking in public buildings or other public or private places." He added that in the case of formal public meetings, a translator would have to be provided by the speaker if he/she wished to be understood. MR. POPPE said the real heart of the bill is lines 5-10 on page 2. He noted the word "orally" had been inserted on page 2, line 8, at the request of a committee member, so a public employee of a state agency trying to perform his duty under this bill would be required to provide a summary or statement in English in the written record, but could speak in another language when it was called for. At the suggestion of another committee member "written" was inserted on page 2, line 9, to refer just to written records. Records is defined differently in many instances, so the sponsor was trying to focus on just written records. He referred to page 2, line 16, "under state or federal law" and said the sponsor was not trying to exclude anyone, but it was an oversight that "state" had been omitted. Mr. Poppe remarked that the sponsor had been in touch with Senator Stevens office, and at the request of the AFN, amended language was being inserted in the federal bill so bilingual programs wouldn't be touched. When that language was given to the bill drafter for HB 512, Representative Kott's office was informed that because there were so many updates to the federal bill, it was made generic federal law. The sponsor was trying to meet the federal concerns regarding bilingual education, while still trying to protect those programs. He reiterated it was not the intent of the sponsor to prevent Native communities or their school districts from having kids taught in the Native languages or developing curriculums in the Native language. CO-CHAIR BUNDE referred to page 2, line 25, Section 6, subsection (b) which states, "A person may not be denied employment by a state agency based solely on that individual's lack of facility in a language other than English" and said in California and Florida there are situations where a person need not even apply for the job unless the person is able to speak a specific language. He asked if that was what the sponsor was trying to address. MR. POPPE thought that was the intent, so if there was a specific job requirement which required some facility in another language, that would be taken into account. CO-CHAIR BUNDE noted that in order to work in his office, an individual needs a high level of proficiency with English, which is discriminatory against individuals who are not proficient in English. MR. POPPE said that would not be covered under this bill, but it is a related issue. Number 1107 REPRESENTATIVE VEZEY didn't think there was any statutory definition that defines a school district as an agency. REPRESENTATIVE BRICE pointed out it was defined in the Definitions Section of the committee substitute. MR. POPPE said the Native villages had expressed some concern with the school district being included. He added the bill drafter thought this would not be a problem but because of the concern, the sponsor is willing to consider and draft a friendly amendment that would define municipality, which could include second class cities and villages, and redefine school district in some way to take those concerns into account. He didn't have proposed language for the amendment, but emphasized the sponsor was willing to consider it. CO-CHAIR BUNDE questioned that as more people are accommodated, how many dialects of a particular language would be allowed to be used by school board members. He recognized what the sponsor was trying to do, but wondered if there was an end to the process. MR. POPPE said part of what needed to be focused on is that nothing is broken yet, but the sponsor views it as keeping it maintained so something doesn't break down in the future. He pointed out there are no statutes dealing with this issue and other states are receiving requests for printed documents in other languages. In an attempt to meet those requests, the city of Los Angeles for example, in the last municipal election spent $900,000 for ballots printed in Spanish. Also in response to requests, the Internal Revenue Service printed 500,000 tax forms in Spanish and received 318 responses back in Spanish. Mr. Poppe said it's getting into an area of public cost which could start looming on the horizon because there is nothing to prevent a citizen from requesting a public document in any of the 54 languages spoken in this state. Between 1980 and 1990, Canada, because of its dual language requirement with French, spent nationally $6.7 billion on public documents in French as well as English, and their population is one-tenth of Alaska's. The Division of Elections estimated their costs to be $11,500 if they were to receive such a request. That would be for just one language and would not include translation costs. CO-CHAIR BUNDE announced that HB 512 would held in committee until the next meeting. HB 480 - PHYSICIAN ASSISTANTS Number 1422 REPRESENTATIVE GENE THERRIAULT, Sponsor, read the following sponsor statement: "House Bill 480 is intended to clarify the process that is currently in place for granting physician assistants the authority to practice in the state, and to prohibit unfair insurance discrimination against physician assistants. "The bill would change current language in AS 08.64.107, dealing with the regulations for physician assistants, from `The board shall adopt regulations regarding the registration of physician assistants...' to `The board shall adopt regulations regarding the licensure of physician assistants...' This would more accurately reflect the actual requirements a physician assistant must meet before he or she can practice in the state under AS 08.64.170. Under AS 08.64.170, a physician assistant must be licensed to practice medicine under the supervision of a licensed physician. Because state regulations require this credentialed process that is in essence licensure, references in state statute should be changed to more accurately reflect the high standards that must be met to practice as a physician assistant in Alaska. "In addition, this bill would prohibit unfair discrimination against physician assistants under group health insurance policies. It states that if an insurance policy covers the type of services that a physician assistant is licensed to perform, then the policy must cover those services when they are performed by a physician assistant, and may not discriminate against physician assistants by excluding their services, while covering other providers who perform the same services." REPRESENTATIVE THERRIAULT said he had been in contact with physician assistants (PAs) in his area for the last year or two over a number of issues. Some of the issues have been dealt with through regulations, however, this particular issue of licensure cannot be dealt with through regulation. There is an inconsistency in the statutes that can only be cleared up by legislation. With regard to the nondiscrimination, he was requesting that the physician assistants be added to the existing list of providers. He said that representatives from the major health insurance providers had indicated that for the most part that coverage is provided and those payments are made. Number 1574 REPRESENTATIVE VEZEY said he didn't understand the motivation for this legislation. REPRESENTATIVE THERRIAULT explained that the process physician assistants go through is more akin to a licensure, rather than a registration. He referred to a letter from the Medical Board in which they recommend the change in statute to more accurately reflect the process that physician assistants go through to practice in the state of Alaska. That change in wording means something to the health care providers and the insurance providers. REPRESENTATIVE VEZEY said he understood the physician assistants wanted the wording change from registration to licensure, but he failed to understand the importance of that. He asked if Representative Therriault was saying that insurance companies won't pay a registered health care provider, only a licensed health care provider. REPRESENTATIVE THERRIAULT responded there had been instances where a health care provider was denied payment because they were in a registered classification rather than a licensured classification, by the strict wording of the statute. However, the process by which they go through to perform the services in the state is more akin to licensure. REPRESENTATIVE VEZEY asked if Representative Therriault could identify who was denying payment. REPRESENTATIVE THERRIAULT said there were people signed up to testify who could speak to specific instances. Number 1666 CO-CHAIR BUNDE asked if this portion of the bill would be more or less a semantic change in that nurses, doctors and dentists are licensed, but physician assistants are registered. REPRESENTATIVE THERRIAULT said that was his understanding. Number 1690 CO-CHAIR TOOHEY said she thought it was semantics. She is a registered nurse, but holds a nursing license. Number 1724 JOHN RILEY, Chairman, Legislative Affairs Committee, Alaska Academy of Physician Assistants, testified from Anchorage that the Academy was supporting HB 480 to reserve access to the primary health care services that are provided by physician assistants throughout the state of Alaska. He said in the past, PAs were in general reimbursed by insurance carriers for services provided. However, recently some federal insurance carriers have denied reimbursement for PA-provided services because PAs weren't considered to be licensed in the state. Section 1 of HB 480 is an attempt to address that problem. If private insurance companies followed suit, PAs would be unable to provide many services to the Alaskan public in (indisc.) instances. Section 4 is an attempt to ensure that private carriers will continue to reimburse for PA provided services. He emphasized that is the only intent of this bill; it is only an attempt to ensure that the positive impact of PAs have had in Alaskan's health care in the last 20 years will continue. Number 1795 CO-CHAIR BUNDE said there were two major sections; Section 1 would bring the description of the certification process in line with other medical professionals in that PAs would then be licensed. MR. RILEY said that even though it is just a semantic change, that wording has been used by some federal carriers to deny reimbursement for PA services. CO-CHAIR BUNDE verified that the purpose of Section 4 was because the Academy wanted the statute to indicate physician assistant fees would be covered by insurance. MR. RILEY concurred and said the reason that both these sections were included is because simply changing Section 4 would not have the effect on the federal carriers due to federal waivers from state law. CO-CHAIR TOOHEY offered to give the committee an update on federal Blue Cross/Blue Shield, who insures the federal employees in the Park Service. She had talked with the Washington, D.C. Branch of the Blue Cross/Blue Shield Office just that morning and they hoped to have a change in their policy by the end of the week. She said they realized it was just a very small section of the employees in Alaska that were not being covered by PAs and they were willing to look into that issue. MR. RILEY interjected there was another federal carrier; the government employees health association had the same issue. Additionally, there are some concerns because other companies who are not federal rely on the use of the term "licensed provider," so the problem may not be solely confined to the federal carriers. Number 1932 REPRESENTATIVE VEZEY commented that federal agencies are exempt from any statute written by the Alaska Legislature and do not have to accept medical care in Alaska. Number 1960 JEANNE CLARK, President, Alaska Academy of Physician Assistants, said that HB 480 would change the language in current statute from registration to licensure. This change would accurately reflect the stringent credentialing process that currently a physician assistant goes through to become authorized to provide medical services in the state. The State Medical Board has supported this change and this request for legislation. She noted this will in no way change the collaborative plan that is required with a physician who supervises the physician assistant to provide these services. In addition, HB 480 would prevent insurance companies from not reimbursing services provided by physician assistants as a class of providers. Currently, many companies reimburse for services provided by a physician assistant that do not specify the term "physician assistant" in their policy. Experience in other states has shown that because the language is not specified, companies have stopped reimbursement or have refused to recognize PAs as providers of medical services. She stated that recently, several companies had refused to reimburse for services provided by PAs in Alaska. Section 4 of HB 480 would prevent discrimination against reimbursement of physician assistants as a class who provides medical services in this state. CO-CHAIR BUNDE referred to the previous question regarding the insurance companies who specifically refused to reimburse for physician assistant services and asked if she was aware of who those companies were. MS. CLARK responded there have been some federal programs that have not reimbursed, but she knew they were exempt from the state. There have been other carriers, specifically in her practice that have refused to reimburse for services that she provided to a patient. She had copies of other examples with her. Physician assistants who provide medical services under physician supervision continue to work to improve access and provide cost effective medical care. She believes the changes in HB 480 would continue to achieve these objectives, especially with the changes that are occurring with different carriers coming in to the state and with the development of managed care plans. Number 2095 CO-CHAIR TOOHEY expressed her concern with Section 4 of HB 480. She felt it was particularly important that the medical society be given a chance to respond whenever any medical problem is discussed involving nurses, doctors, chiropractors, etc. She added the society was given the opportunity to provide feedback on Sections 1-3, but they had no knowledge of Section 4. Co-Chair Toohey asked the medical society for their thoughts regarding Section 4 and apparently they are split down the middle on whether it should be allowed or shouldn't be allowed. The reason for PAs is to give a cheaper cost to the community that is paying the bill, either the patient or the insurance company and that's why the insurance companies are involved in this. It is her belief that if a person sees a physician assistant at the doctor's office, the charge should be less than if the patient had been seen by the doctor. She asked what is to prevent a physician from having 15 physician assistants throughout a city, not involved with the patients at all and charging for a physician's visit for each of the PAs? She questioned if the insurance company is obligated to pay a doctor's visit fee when the patient was seen by a physician assistant. She thought it was not and said she would not pay a physician's rate when she had been seen by a physician assistant. Co-Chair Toohey thought the bill needed to be amended until the medical community had an opportunity to discuss the issue. She had no problem with Sections 1-3 of the bill. There is no difference in the education of a licensed PA and a registered PA, but she thought Section 4 should be brought before the medical community, who are responsible for physician assistants. MS. CLARK remarked that the language regarding the licensure is cited in the federal register and in the Health Care Finance Administration's regulations. She said that is one of the biggest reasons for the change in wording because that's where the insurance industry is getting their direction to make policy. With regard to Section 4, she said the medical society had not indicated to the Alaska Academy of Physician Assistants that they were not in agreement with that section. She said there hadn't been an objection raised in the past, and didn't see any problem with getting their feedback. CO-CHAIR TOOHEY reiterated that she had checked with the medical community and they are split right down the middle. They have some major concerns with Section 4 because they are ones responsible for physician assistants. She read from a letter from Leslie Haywood as follows: "The medical board had not taken a position on the entire bill, just the registered licensed portion." Ms. Haywood also indicated there was no limit to the number of PAs a physician can sponsor. Co-Chair Toohey added the medical society also takes that position. Number 2316 MS. CLARK remarked that John Riley had spoken with a member of the Alaska State Medical Association who said the association could not make a statement positive or negative on this bill until it was discussed with their delegates the following weekend. Mr. Riley indicated the physician member he spoke with understood what the intentions were of HB 480. CO-CHAIR BUNDE commented that further information was anticipated from the medical community. TAPE 96-21, SIDE B Number 001 REPRESENTATIVE VEZEY reiterated that he failed to see that the difference between registered and licensed was anything more than semantics. He remarked the problem was so small, was it really worth the risk of changing the statute. Often times, additional problems are created when the statute is changed. He asked if Ms. Clark was aware of any private providers of medical coverage who are not recognizing physician assistants as health care providers, especially in the context of the absence of a physician in the community. MS. CLARK replied yes, she personally had an experience and she had letters from other physician assistants who had been denied in the past. REPRESENTATIVE VEZEY asked which companies were involved? MS. CLARK responded private, small insurance companies. CO-CHAIR BUNDE noted there were two from Aetna. MS. CLARK said it may seem like a small problem now, but other states are having major problems. The Academy wants to do something about it before it becomes a major problem involving access to health care for certain individuals in the state. REPRESENTATIVE VEZEY again asked Ms. Clark for the name of the entity that is causing the problem. CO-CHAIR BUNDE interjected there were two from Aetna, one from Met Life and one from the Government Employees Hospital Association (GHEA). REPRESENTATIVE VEZEY clarified that GHEA was exempt from state statutes and regulations. MR. CLARK said this was really not controlled by Blue Cross/Blue Shield. Based on their research on the national level, it is controlled by the government employees' benefits committee which is headed by Senator Stevens. It is the government employees' regulations that state it has to be a licensed practitioner. Number 156 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Commerce & Economic Development, testified that the department supports the change from registration to licensure and had submitted a zero fiscal note. She thought the Division of Insurance could more appropriately address the questions regarding Section 4. She said it is true that we can't regulate the federal government; therefore, this is basically adapting to their terminology. Within the occupational licensing statutes, licensure is the most common term, but there are some programs where certification or registration are used. The medical board has voted to support the change from registration to licensure and she hoped the committee would see fit to do so, also. CO-CHAIR TOOHEY asked if Ms. Reardon was going to address Section 4? MS. REARDON referenced the previous concerns that had been expressed regarding the number of PAs a doctor could have working under his/her supervision and the billed rates and said this is the case currently. Section 4 does not permit that to happen in a way that can't occur at the present time. In other words if a doctor wants several PAs working under his/her supervision or charges a physician's rate, that currently is the doctor's right. The Division of Occupational Licensing doesn't regulate fees. She pointed out that SB 100, which was introduced last year, contained the same wording as in Section 4, so the medical community would have been aware that the proposal existed previous to HB 480 being introduced. Number 299 REED STOOPS, Lobbyist, Aetna Life & Casualty, said the letter distributed to committee members which indicated that Aetna didn't pay a physician assistant claim actually says the only reason the claim wasn't paid was because the bill was submitted directly by the physician assistant and not through the supervising physician. He stated Aetna does pay those bills when submitted through the supervising physicians. He asked if this bill was enacted would it obligate Aetna or any other insurance company to change the procedure to make payment directly to a physician assistant or is the licensing statute, which places the physician assistant under the supervision of a physician, the guiding statute? While it may not be a major issue, he thought it was one that needed to be clarified. Number 347 CO-CHAIR TOOHEY cited a hypothetical situation where she as a stockholder of Aetna is very concerned that Aetna is paying the proper fee for the proper services. She is also a recipient of a state contract. She asked if her insurance company would pay the same rate for services provided by a PA as services provided by an MD? MR. STOOPS said it was his understanding the physician assistant is billed at a lower rate; therefore, that is the rate that is being paid. He did not know if the supervising physician gets some payment for the supervisory capacity. He added that he would discuss the issue with representatives from Aetna who were due in town the following day. CO-CHAIR TOOHEY noted that Ms. Clark indicated she is on a salary and the insurance company is billed by the physician. The issue raised is there is nothing in law that states a physician assistant should be paid less than a doctor. Physician assistants don't require the education of a doctor, but they do perform a vital function in the state. Co-Chair Toohey thought it would be detrimental if they charge physician fees for physician assistant services. Number 455 MS. CLARK said with regard to payment for services, "If services are provided - I take care of you, I charge a fee for the service I provide to you. I am given the authority to take care of you through the statutes currently. That bill is sent in to the insurance company with the name of the provider who provided that service, the physician assistant. Then it goes to your insurance company. Now, if your insurance company has negotiated with your employer and the employee to give a lower rate, I mean that's between those three entities." She commented that is not what they are looking for in this bill; they want physician assistants to be recognized as a provider of medical services. CO-CHAIR BUNDE asked if she, as a physician assistant who provides treatment, bills the insurance company directly? MS. CLARK said her services are billed through the physician or through the clinic she works for. CO-CHAIR BUNDE clarified that the clinic bills under the doctor's name and then whatever the doctor bills the physician assistant's time out at, the doctor has the right to bill the physician assistant's rate according to the group policy at either a PA rate or an MD rate. MS. CLARK said that was right. For example, in her current practice in Fairbanks, the physician is a participating provider in Blue Cross/Blue Shield of Washington/Alaska and accepts whatever Blue Cross/Blue Shield pays for services. If she provides the service, the rate billed is discount. That has been negotiated with the people who bought the service of the insurance company. CO-CHAIR BUNDE asked if a group policy doesn't address physician assistants, is it possible that a physician could bill a PA's work at the MD rate. MS. CLARK said it's a fee for service; it's the service that's being provided and that's what is being billed. CO-CHAIR BUNDE gave an example of Group Policy A which says that an insurance company will pay for physician assistants at a certain rate and for physicians at a certain rate. The physician assistant provides service and the clinic employing the physician assistant bills out the PA's time at the agreed upon rate. On the other hand, Group Policy B does not address physician assistants, it only addresses physicians. The physician employs the physician assistant and the service is provided by the physician assistant, but the physician bills at the physician rate, not at a lesser rate. MS. CLARK emphasized that would be based on what the policy pays. CO-CHAIR BUNDE said but if there is only one rate to bill, that is the rate billed. MS. CLARK said it depends on what the terms are of the policy. CO-CHAIR BUNDE interjected that when an employer is negotiating a group policy, it is incumbent upon that employer to negotiate a policy that addresses a rate differential between services provides by an MD and services provided by a PA. MS. CLARK commented that is done a lot in the industry. CO-CHAIR BUNDE noted that if it isn't done, then the physician has a right to bill at the physician rate according to the policy. REPRESENTATIVE ROBINSON referred to the term "service provided" and said if she went to a physician assistant or a physician and had a throat culture, that would be the service that was provided and that is what would be charged for. MS. CLARK said national statistics indicate that charges provided by a physician assistant are less than a physician's rate. CO-CHAIR TOOHEY questioned what rate she would be charged if she went in for a throat culture and paid cash? MS. CLARK said it's the price for the service provided. CO-CHAIR TOOHEY said that is what is being addressed under Section 4 and that is what she objects to because there is no delineation. CO-CHAIR BUNDE said HB 480 would be held in committee for another hearing. ADJOURNMENT CO-CHAIR BUNDE announced the adjournment of the House HESS Committee at 4:50 p.m.