Legislature(1995 - 1996)

03/05/1996 02:04 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
          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.                                                        
                                                                               
                                                                               

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