Legislature(1995 - 1996)
03/26/1996 03:04 PM House HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE March 26, 1996 3:04 p.m. MEMBERS PRESENT Representative Cynthia Toohey, Co-Chair Representative Con Bunde, Co-Chair Representative Gary Davis Representative Norman Rokeberg Representative Caren Robinson Representative Tom Brice MEMBERS ABSENT Representative Al Vezey COMMITTEE CALENDAR * HOUSE BILL NO. 393 "An Act relating to managed care for recipients of medical assistance; and providing for an effective date." - PASSED CSHB 393(HES) OUT OF COMMITTEE HOUSE BILL NO. 435 "An Act relating to employment contributions and to making the state training and employment program a permanent state program; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 506 "An Act relating to establishment of a fire fighting and safety training program by the University of Alaska." - PASSED OUT OF COMMITTEE CONFIRMATION HEARINGS: Professional Teaching Practices Commission Peggy E. Conner Jones Bruce F. Johnson Marsha K. Van Abel Jacquie Whitmore - CONFIRMATION FORWARDED University of Alaska Board of Regents Joe L. Hayes, Jr. - CONFIRMATION FORWARDED Board of Chiropractic Examiners Pam Aldersebaes - CONFIRMATION FORWARDED Board of Clinical Social Work Examiners Beverly Haywood - CONFIRMATION FORWARDED Board of Dispensing Opticians Mary C. Seutter - CONFIRMATION FORWARDED Board of Marital and Family Therapy Mercy Dennis Dixie A. Hood Sandra M. Samaniego - CONFIRMATION FORWARDED State Medical Board Keith M. Brownsberger, MD Beverly Fletcher Donald G. Hudson, DO Sarah A. Isto, MD Suzanne H. Lombardi Donald C. Olson, MD Irvin A. Rothrock, MD - CONFIRMATION FORWARDED Board of Certified Direct-Entry Midwives Marilyn Holmes - CONFIRMATION FORWARDED Board of Nursing Josephine Malemute CONFIRMATION FORWARDED Board of Pharmacy Chris E. Coursey CONFIRMATION FORWARDED State Physical Therapy and Occupational Therapy Board Leslie F. Schwartz CONFIRMATION FORWARDED Board of Psychologist and Psychological Associate Examiners Gail C. Shortell, Esq. CONFIRMATION FORWARDED HOUSE BILL NO. 529 "An Act giving notice of and approving the entry into, and the issuance of certificates of participation in, a lease-purchase agreement for a centralized public health laboratory." - SCHEDULED BY NOT HEARD HOUSE BILL NO. 535 "An Act relating to postsecondary education." - SCHEDULED BUT NOT HEARD (*First public hearing) PREVIOUS ACTION BILL: HB 393 SHORT TITLE: MANAGED CARE PROGRAM FOR MEDICAID SPONSOR(S): REPRESENTATIVE(S) ROKEBERG JRN-DATE JRN-PG ACTION 01/05/96 2369 (H) PREFILE RELEASED 01/08/96 2369 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2369 (H) HES, STATE AFFAIRS, FINANCE 03/21/96 (H) HES AT 3:00 PM CAPITOL 106 03/21/96 (H) MINUTE(HES) 03/26/96 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 435 SHORT TITLE: STATE TRAINING & EMPLOYMENT PROGRAM SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 01/19/96 2488 (H) READ THE FIRST TIME - REFERRAL(S) 01/19/96 2488 (H) LABOR & COMMERCE, HES, STA, FINANCE 01/19/96 2488 (H) 3 FISCAL NOTES (2-DCRA, LABOR) 01/19/96 2488 (H) GOVERNOR'S TRANSMITTAL LETTER 02/07/96 (H) L&C AT 3:00 PM CAPITOL 17 02/07/96 (H) MINUTE(L&C) 02/14/96 (H) L&C AT 3:00 PM CAPITOL 17 02/14/96 (H) MINUTE(L&C) 02/15/96 2772 (H) L&C RPT 2DP 3NR 02/15/96 2773 (H) DP: ELTON, KOTT 02/15/96 2773 (H) NR: ROKEBERG, KUBINA, PORTER 02/15/96 2773 (H) ZERO FISCAL NOTE (GOV) 02/15/96 2773 (H) 3 FNS (LABOR, 2-CRA) 1/19/96 03/21/96 (H) HES AT 3:00 PM CAPITOL 106 03/21/96 (H) MINUTE(HES) 03/26/96 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 506 SHORT TITLE: UNIVERSITY FIRE FIGHTING PROGRAM SPONSOR(S): REPRESENTATIVE(S) NAVARRE,G.Davis,Phillips JRN-DATE JRN-PG ACTION 02/12/96 2727 (H) READ THE FIRST TIME - REFERRAL(S) 02/12/96 2727 (H) HES, FINANCE 03/21/96 (H) HES AT 3:00 PM CAPITOL 106 03/21/96 (H) MINUTE(HES) 03/26/96 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER BOB LABBE, Director Division of Medical Assistance Department of Health & Social Services P.O. Box 110660 Juneau, Alaska 99811-0660 Telephone: (907) 465-3355 POSITION STATEMENT: Testified on HB 393 JAY LIVEY, Deputy Commissioner Department of Health & Social Services P.O. Box 110601 Juneau, Alaska 99811-0601 Telephone: (907) 465-3030 POSITION STATEMENT: Testified on HB 393 HARLAN KNUDSON, Executive Director Alaska State Hospital & Nursing Home Association 319 Seward Street, Suite 11 Juneau, Alaska 99801 Telephone: (907) 586-1790 POSITION STATEMENT: Testified in support of HB 393 DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Testified in support of HB 435 REMOND HENDERSON, Director Division of Administrative Services Department of Community & Regional Affairs P.O. Box 112100 Juneau, Alaska 99811-2100 Telephone: (907) 465-4708 POSITION STATEMENT: Answered questions on HB 435 DAVID STONE, President Council of Alaska Producers 3100 Channel Drive, Suite 2 Juneau, Alaska 99801 Telephone: (907) 463-5704 POSITION STATEMENT: Testified in support of HB 435 MARK MICHAELSON, Coordinator Service Delivery Area Program Division of Community & Rural Development Department of Community & Regional Affairs P.O. Box 112100 Juneau, Alaska 99811-2100 Telephone: (907) 465-4891 POSITION STATEMENT: Answered questions on HB 435 TOM ACKERLY, Legislative Administrative Assistant to Representative Mike Navarre Alaska State Legislature Capitol Building, Room 521 Juneau, Alaska 99801-1182 Telephone: (907) 465-3779 POSITION STATEMENT: Testified on HB 506 MARYLOU BURTON, Director of Statewide Budget University of Alaska Statewide Juneau, Alaska 99801 Telephone: (907) 463-3086 POSITION STATEMENT: Testified on HB 506 ACTION NARRATIVE TAPE 96-33, SIDE A Number 001 The House Health, Education and Social Services Standing Committee was called to order by Co-Chair Cynthia Toohey at 3:04 p.m. Members present at the call to order were Representatives Toohey, Bunde, Rokeberg and Davis. Members absent were Representatives Robinson, Brice and Vezey. CO-CHAIR TOOHEY announced the agenda was HB 393, Managed Care Program for Medicaid; HB 435, State Training & Employment Program; HB 506, University Fire Fighting Program; and Confirmation Hearings. She noted that HB 535 was rescheduled for Thursday, March 28. HB 393 - MANAGED CARE PROGRAM FOR MEDICAID Number 123 REPRESENTATIVE NORM ROKEBERG, Sponsor, said House Bill 393 provides for the establishment of a pilot program for managed care for Medicaid recipients. He noted that managed care can mean many different things to many different people. This particular bill was brought forward for the precise reason of the legislature taking an active role in the development and implementation of a managed care plan and program for the state of Alaska. His involvement stems from his concern that national legislation is leading the way and in a certain sense, forcing the state to go this direction on the one hand; on the other hand, it's also potentially going to be giving the state an opportunity to embrace some newer and innovative concepts in health delivery in the state. REPRESENTATIVE ROKEBERG stated the Medigrant program that has been proposed in Washington, D.C. is one form and there is also a per capita type Medigrant program for Medicaid. Potentially, there is the National Governor's Association compromise plan. All three of these plans or basically a compromise, potentially could be coming out of Congress this year, but if they do not do so this year for partisan political purposes, he predicted it will happen within a year or eighteen months, no matter who is elected President. Therefore, he felt it was important for the state of Alaska to prepare for a new era of managed care health delivery to the Medicaid recipients of the state. He explained that the grants would allow flexibility, whereas presently waivers have to be applied for. Ninety-four percent of the rest of the states have some sort of managed care in their health delivery systems for Medicaid recipients. Managed care is a way to give high level of care and quality services, while keeping the cost down. For example, in the last four years the cost in the state of Alaska has increased 50 percent. The gross total spending for FY 97 is $336 million; that's number 2 to education as a line item in the state's budget. Much of that funding comes from the federal government, but in the last year $145 million in general fund receipts went into Medicaid services. Another way to look at that is there has been an average increase over the last five years of 13.9 percent growth. This is the fastest growing area of the state's budget, so he felt it was important that something be done to try to contain the cost increase. REPRESENTATIVE CAREN ROBINSON arrived at 3:07 p.m. Number 400 REPRESENTATIVE ROKEBERG pointed out that in 1994 the legislature put intent language in the budget instructing the Department of Health & Social Services to look into managed care. The department has been actively pursuing development of managed care programs and ideas. As a matter of fact, most recently they awarded a contract to Fox Systems Health Management Associates in Scottsdale, Arizona to review all the managed care options for the state. Also, the division is giving special consideration to implementation this next fiscal year of a managed care model called "Primary Care Case Management (PCCM). REPRESENTATIVE TOM BRICE arrived at 3:12 p.m. REPRESENTATIVE ROKEBERG said his interest in the health care system was primarily from the fact that as an independent businessman, he was unable to obtain insurance, except at a very high cost. He, like many others, thought that Alaska could not sustain and support an HMO or a managed care type system because we lacked the infrastructure, the size or the capabilities that many states have to be able to implement such a system. He mentioned that he attended a number of seminars last fall, including one on rural managed health care, which convinced him that it could be done in the state of Alaska. There was testimony from small areas of the country that have developed either statewide, regional or even small community plans and adapted managed health care into their communities. He received a lot of information about how this plan was implemented in the state of Arizona, which has 46 counties and two competing managed care plans in each of the counties. So essentially, even a Medicaid recipient has a choice of plans in the counties in Arizona. He said it was interesting to note that Arizona led the country in the development of their managed care systems, since as a very conservative state politically, they for years had not taken Medicaid money. Until about 15 years ago, they did not take any federal funds for public health, and at that point in time they realized their public health clinics were so overburdened they couldn't supply the needed services to their citizens. They got an 1115 Waiver and developed a managed care plan, which has taken a number of years to develop, but now it is the most successful in the country. Number 605 REPRESENTATIVE ROKEBERG advised the committee he had also gotten some information from the state of Oregon where they were serving 280,000 people before they implemented their managed care plan, but because of the cost savings they were able achieve by implementing a managed care plan, they've expanded that service to 400,000 people, which is a 43 percent increase. The biggest segment of the population in the United States are the uninsured. They make just enough money to get by, but they do not qualify for Medicaid or are not fortunate enough to be involved in an insurance plan. The biggest concern among most health care professionals right now is that the people who don't have insurance aren't able to get it. The state of Oregon is one example where the number of people served was expanded and chipped away at the middle level of the uninsured. Number 672 REPRESENTATIVE ROKEBERG in conclusion said this bill before the committee asks the department to come forward with a plan and new legislation for the legislature's review. He said that's all this bill does; it doesn't matter if you're for or against the concept of managed care. The intent is that the legislature needs to be a part of this process. It sets up a pilot project, gives certain guidelines, has findings and asks the department to come back next year with their plan. CO-CHAIR TOOHEY asked if there were any questions of the sponsor. Number 753 REPRESENTATIVE ROBINSON asked Representative Rokeberg why he believed legislation was needed if the department was already working on a plan. REPRESENTATIVE ROKEBERG acknowledged there was a process the department was going through, but it was being done on their own time frame and based on decisions made by the department. He reiterated the intent of this bill is to involve the legislature. Additionally, one of his other motivations was to move this process along because of the impact on the budget. CO-CHAIR TOOHEY remarked that two years ago the legislature spent a great deal of time on health care issues. She asked representatives of the department to come forward to testify on HB 393. Number 890 BOB LABBE, Director, Division of Medical Assistance, Department of Health & Social Services, said the department has had some informal discussions with Representative Rokeberg on HB 393 and provided information as to what the department was working on in the area of managed care. They have a contractor who is assisting the department and he thought it had been primarily an educational process for the staff. He said being somewhat removed from the Lower 48 development of managed care, it takes some time to learn and understand the new concepts. He noted that the department had made some decisions which they believed were based on the 1994 legislation directing them to look into case management systems. That was the basis for issuing the contract and they believe the primary care case management option is consistent with that initial direction and not inconsistent particularly with even the more full blown capitation type model. The department felt they would start with that and do some piloting around that concept. He noted in that particular model, there's usually a physician, possibly a nurse practitioner/physician assistant under contract with the state to provide primary care services and act as a referral agent for other specialty services. Clients are then enrolled with a primary care case manager and need to get approval for an outside referral. The payments are typically continuous fee for service for the primary care case manager, as well as the specialty services, hospital care, etc. There is not a lot of change in how people are reimbursed. It starts organizing the system so there are linkages between the providers. There's probably better access in some ways for primary care services; typically one of the goals is to have services provided without the use of an emergency room, if the physician case manager is available or has to make arrangements to be available. The department views this as a step in the process and believes they can move in that direction. They've been working with their current resources and trying to reprogram their own staff. He said this bill as it's drafted, from their purpose, seems to fit with their abilities to move ahead and they could support it because it is in the interest of moving the department along and getting another tool for improving management of their program. Number 1119 CO-CHAIR TOOHEY asked Mr. Labbe when the department's plan would start functioning. MR. LABBE said an actual target for enrollment hasn't been determined. The department is gathering data and decisions will need to be made about where to pilot the projects, which client groups and which types of services will be included. He commented that usually not every Medicaid service is put into this. The department wanted to wait until the contract agency was finished, which is expected to be around June 1, to make those decisions. It is his hope to get something going in the next fiscal year. He added that it would require involvement from the local community providers, recipients and family members. The department has announced the recruitment of a position in their Anchorage office to focus on this. Number 1170 REPRESENTATIVE BRICE asked if the department had taken any steps to rectify the concerns raised over the optical hardware contract; specifically the undermining of instate resident businesses by shipping out of state. Number 1227 JAY LIVEY, Deputy Commissioner, Department of Health & Social Services, said two or three years ago under the Medicaid program, the department decided it would be cost effective for Medicaid to bid a contract for a company to provide eye glasses to Medicaid recipients. The company that was awarded the competitive bid was an out-of-state provider. It saved the department a considerable amount of money in Medicaid service to do that. He thought that Representative Brice was asking if there was a guarantee that under future managed care programs the department would support the Alaska infrastructure. He believed under a case management proposal, as explained by Mr. Labbe, they would because they would be signing up local Alaskan physicians to provide that particular service. CO-CHAIR TOOHEY asked if it would be under a competitive bid. MR. LABBE responded that for the primary care case management program, he would not anticipate a competitive bid. The department would encourage providers to meet a set of standards that would be established and then sign up. He said the plus side of having sort of a performance expectation for the primary care case managers goes beyond where we currently are with the fee for services, but it's not to the point of having two or three plans that would compete for best price. Based on his experience of working with Oregon in the development of managed care, he wasn't sure he would encourage competition initially. He added that if there were already a number of commercial plans to select from, then he might look at competition. CO-CHAIR TOOHEY commented that it wasn't being narrowed down to one hospital versus the other. She asked Mr. Labbe how this legislation would help the department and if he felt it was necessary. REPRESENTATIVE ROBINSON inquired if anything would change if this legislation did not make it through the process. MR. LIVEY thought this bill provided some affirmation of the direction the department is headed anyway, which he felt was valuable in their discussions of managed care with providers and clients. In the absence of this legislation, he believed the department would proceed with their current project. He reemphasized the bill does provide some impetus and general direction for the department. REPRESENTATIVE ROKEBERG commented the biggest difference and the value of the bill is the speed at which things might get done, which is a friendly intention. Number 1453 HARLAN KNUDSON, Executive Director, Alaska State Hospital & Nursing Home Association, testified in support of HB 393. The association had three reasons for their desire to see this bill passed and signed by Governor Knowles. The first is that managed care will help control the Medicaid budget. It changes the total incentive of the current health care system. Under a managed care system, the incentive is on wellness. Second, it provides a boost for the department to reach out and work with providers, which they feel is very important. Third, it sets up pilot programs so instead of attempting to move the whole system into managed care, it allows it to be tried in both the rural and urban areas. Mr. Knudson said there is managed care in the Native Health Service, and asked why areas like Bethel, Nome, Dillingham couldn't put together a contract on Medicaid with the department. In areas such as Ketchikan or Kodiak where there isn't a prominence of a Native system, why couldn't a managed program be put together and brought back to the Indian Health Service or to the Medicaid system. He concluded that HB 393 opens those kinds of doors for health care. He believes it is a good bill and urged the committee's support. Number 1547 CO-CHAIR BUNDE said he had heard anecdotally of a system like this being put in for Medicaid in a larger urban center, doctors were assigned that were difficult to reach and use of the emergency room increased because people would wait until the problem was acute instead of having to take a bus or drive several miles to get to the doctor. He said he was describing the down side of managed care for Medicaid and asked Mr. Knudson what his reaction was to that. MR. KNUDSON replied that Co-Chair Bunde's comment was well taken and in the beginning of some of the Medicare managed care programs they were aware of situations where the incentive had been to keep the patient out of the system; in other words make it difficult for the patient. He said that's growing pains and it is something that Alaska will go through. He didn't feel that should be a concern, as he believed there would be good, competent managed care, but the risk is there of shutting some people out of the system. CO-CHAIR BUNDE said his point was that they won't be shut out of the system, they'll just go back to using the emergency room as preventive care. CO-CHAIR TOOHEY asked if under managed care there was a set price for a particular service such as a broken leg that Medicaid would pay and could be collected, would the patient be able to go to the physician of their choice or would it have to be a physician in the managed care program? Number 1638 MR. LABBE responded that under the primary care case management program, the client would have a choice of primary care providers, and once the client had selected a primary care provider they would stay with that primary care provider; in other words, that would be their medical home. If the client wished access to specialty care, a referral from their primary care provider would be needed. CO-CHAIR TOOHEY noted for the record the Alaska State Medical Association has taken no position on this bill. REPRESENTATIVE ROKEBERG said he envisions this, because of the rural nature of Alaska and the way many rural managed care organizations are established in the Lower 48, as there being a small core group of primary care providers, but there will be backstops that will be networked in or have a relationship with a tertiary care hospital in a large urban area. He asked Mr. Knudson if he could envision the networking and ability to use the tertiary hospitals throughout the state in coordination with the rural clinics that exist today. MR. KNUDSON said he could see Cordova for example, that is isolated but has a big influx of population, having a major relationship with one of the major hospitals in Anchorage and being able to offer a contract to either Medicaid or Aetna on a per capita basis. Number 1756 REPRESENTATIVE ROKEBERG said by networking there were certainly creatively ways that could be workable in the state of Alaska. MR. KNUDSON said with the regard to networking, the integration is already going on. There is a lot of collaboration in every community in the state. The Kenai Peninsula is way ahead on the relationship between the doctors, the hospitals, the nursing home, the community mental health center, local psychologist, etc., with shared services, equipment and all those areas. CO-CHAIR TOOHEY asked if anyone else wished to testify on HB 393. Hearing none, she closed public testimony. Number 1797 REPRESENTATIVE ROBINSON moved to adopt CSHB 393, Version F, dated 3/21/96. Hearing no objection, it was so ordered. REPRESENTATIVE BRICE asked if the state would consider, for example, a 5 percent for residents preference to providers who want to bid competitively for these services? REPRESENTATIVE ROKEBERG said that's why this legislation was before the committee. That's why this bill is needed so if there is a concern about procurement and the preference the legislature has a voice in it. He's had discussions with the department about the potentiality of exempting this particular provision from the procurement code. One of his concerns in setting up a pilot program is that he thought something very close to a Request for Proposal (RFP) should be put together to get demonstrated interest. However, the ability to just grant a contract to the lowest performing bidder may not be in the best interest of the state on the initial pilot level. He didn't think there should be too much concern about not having local providers, except in the secondary areas like optical, drugs, prosthesis and things of that nature where there may be some outside contractors that may be able to provide those services. REPRESENTATIVE BRICE wanted some assurance, because it wasn't spelled out in the bill, that the pilot program should have that. CO-CHAIR TOOHEY said HB 393 requests the department to look into this and urges the department to bring their plan before the legislature. REPRESENTATIVE BRICE wanted it to be clear on the record by both the sponsor and himself that any deleterious effects to the tertiary businesses associated with health care will be watched with a great deal of scrutiny. REPRESENTATIVE ROKEBERG said we want people to watch, that's the whole idea of the bill. REPRESENTATIVE ROBINSON made a motion to move CSHB 393(HES) out of committee with attached zero fiscal notes and individual recommendations. CO-CHAIR TOOHEY objected and asked for a roll call vote. Voting in favor of the motion were Representatives Rokeberg, Robinson, Davis and Bunde. Voting against the motion were Representatives Brice and Toohey. HB 435 - STATE TRAINING & EMPLOYMENT PROGRAM Number 2089 CO-CHAIR TOOHEY turned the gavel over to Co-Chair Bunde. DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor, read the following statement: "For the past six years the State Training and Employment Program (STEP) has temporarily existed as a contingent training and employment program for Alaska's workers. The original 1989 legislation allowed the state to collect from each worker in Alaska one-tenth of 1 percent of their employee tax contribution to fund an alternative, flexible training program designed with a threefold purpose: 1) to reduce future claims against unemployment benefits; 2) to foster new jobs for Alaskans by encouraging businesses to locate in Alaska due to the availability of a skilled work force; and 3) to increase training opportunities to Alaskans severely affected by economic and technological fluctuations. Alaska private sector employers, organized labor and the now-defunct Alaska Job Training Council are in accord that STEP is a proven and valid approach to advancing Alaska residents' opportunities for viable employment. In the six years since its inception as a temporary measure, STEP has demonstrated its efficiency. We know that STEP works for Alaskans. The legislation before you will enable STEP to take its rightful place as an established permanent program to keep Alaskans' employment skills up-to-date and competitive in the rapidly changing world of work." He introduced Rebecca Nance, Director of Employment Security, and Arbe Williams, Director of Administrative Services, who were available to answer questions. CO-CHAIR BUNDE asked Mr. Perkins if he would like to speak to the reason behind the two sets of fiscal notes. MR. PERKINS replied Remond Henderson from the Department of Community & Regional Affairs had drafted the fiscal notes and would be happy to respond. Number 2236 REMOND HENDERSON, Director, Division of Administrative Services, Department of Community & Regional Affairs (DCRA), explained that the original fiscal notes were prepared based on instructions the department had received from the Office of Management & Budget, which was to show these numbers for information purposes only and to show negative amounts as to what would happen if the bill was not passed. Those were the instructions from the DCRA's budget analyst; Department of Labor on the other hand, got different instructions and put their numbers in as positive numbers for information purposes only. Mr. Henderson revised his fiscal note to be consistent with the Department of Labor, and the amounts indicated in the fiscal notes are the amounts in the respective budgets for DCRA and the Department of Labor. Number 2295 REPRESENTATIVE ROKEBERG asked if the figures had been changed on the fiscal notes? MR. HENDERSON responded affirmatively and explained the fiscal note he prepared was based on the amount in DCRA's budget. There was a budget amendment that was prepared to reduce the amount in their budget so that it matched the amount that was in the Department of Labor's budget that they were going to RSA (reimbursable service agreement) to the DCRA. Now the amount in the fiscal note agrees with the amount in the DCRA's budget and also agrees with the amount the Department of Labor is transferring to the DCRA. REPRESENTATIVE ROKEBERG asked if this was a wash transaction in that regard. MR. HENDERSON responded yes. REPRESENTATIVE ROKEBERG presumed there was no fiscal impact per se to the general fund. MR. HENDERSON confirmed that. Number 2335 DAVID STONE, President, Council of Alaska Producers, said the council is a nonprofit corporation whose members are essentially all of the major mining companies who are actively exploring, developing and operating in Alaska today. Examples are Cominco and the Red Dog Project, Kennicott and the Greens Creek Mine, Nevada Gold Fields and Nixon Forks Mine. On behalf of the council, he expressed the mining industry's support for the reauthorization of the State Training and Employment Program. This program is and has been business friendly and business accessible. The program encourages businesses to invest in the skills of Alaskans. TAPE 96-33, SIDE B Number 001 MR. STONE continued this program helps the Alaskan work force keep up-to-date with new technologies and techniques, keeping it competitive in the world economy. The program is more flexible and has less restrictions than most federal job training programs. The primary reason for that is due to the fact that this program has been designed and is administered by Alaskans. The program has been well integrated with other existing employment and training programs to the delivery of the already established and proven private industry councils and complements those efforts. The STEP has already trained Alaskans and resulted in jobs for Alaskans in the mining industry such as the Nixon Forks mine in McGrath and the Greens Creek Mine near Juneau. The program has also helped workers who have lost their jobs. As the mining industry grows and hopefully creates new high paying jobs in Alaska, STEP can help ensure that it's Alaskans that are trained and qualified to fill these jobs. MR. STONE said the Council of Alaska Producers views STEP as a true partnership between the state of Alaska and industry which will result in the jobs being filled by Alaskans. He urged the committee to pass HB 435. Number 046 CO-CHAIR TOOHEY asked Mr. Stone if there was some reason he hadn't mentioned Echo Bay. MR. STONE said that Echo Bay has been very supportive of STEP because those monies have been used for the mine training school in Juneau at the University of Alaska Southeast. Echo Bay sees the potential of 400 jobs for the AJ mine project, and in order to hire Alaskans, there's going to be training involved and Echo Bay would like to see STEP be a part of that training. REPRESENTATIVE ROBINSON asked how the STEP integrated into the university program as she understood the program was being shut down. MR. STONE responded the instructor is taking a leave of absence and the university is willing to start the program again when Echo Bay gives the go ahead that indeed they have the permits and are ready to start training for those jobs. REPRESENTATIVE ROBINSON understood that this training program took place through the university. MR. STONE said that was one aspect of the training. These monies can be used for individuals to go to the Alaska Vocational Technical Center (AVTC) as an example, depending on the type of training. In the case of the underground mine training school, these can monies can also be used for that. Number 110 REPRESENTATIVE ROKEBERG asked if he understood correctly that there has actually been a program in Juneau training miners for jobs that don't exist. MR. STONE said no, the university's mine training school is basically going into a "mothball" state. REPRESENTATIVE ROKEBERG said he was talking about previously. MR. STONE explained the last class had trained workers here in Juneau for the Nixon Fork mine in McGrath because this is the only underground mine training school site. So people were trained for jobs that did exist. Number 135 CO-CHAIR BUNDE asked what kind of tuition the participants are expected to pay. MR. STONE said he didn't know the figure, but the council partners with the university so the costs are quite reasonable. Participants need appropriate clothing and tools to learn their trade, some of which are provided by the mining industry. CO-CHAIR BUNDE said he was curious about the industry's contribution. MR. STONE noted that the industry has contributed a great deal and is ongoing, as long as the school exists. Industry has provided heavy equipment, tools, spare parts, employees as trainers, etc. He emphasized that it has been a true partnership arrangement. CO-CHAIR TOOHEY asked if this was what she referred to as a proprietary education, with a specified time period and the participants graduating with a degree. MR. STONE said this was a 6 week school and the participants receive a 40-hour Mining Safety & Health Administration (MSHA) certification which is an underground certification that is required to go underground. The participants get basic exposure to explosives, drilling and all the basics of underground mining, as well as their math skills, etc. When they complete the training, it conveys to the industry that these people are ready for work and have the basic skills to be exposed to underground mining. CO-CHAIR BUNDE clarified that proprietary schools are private for profit schools; this is a certificate program through the university. CO-CHAIR TOOHEY said she understood that and asked if the certificate was valid in other states. She inquired as to the cost of the school. MR. STONE responded that the certificate is valid in other states and he guessed the cost to be somewhere in the neighborhood of $1200 for the 6 weeks. Number 237 REPRESENTATIVE ROBINSON asked Mr. Stone to explain how it would work when Greens Creek, for example was ready to start training. MR. STONE gave a hypothetical situation where the Kensington project is the next one; Kensington says they will have a need for a certain number of entry level employees and they'd like them to be Alaskans. The university then will actually recruit for the program and run that program when it is filled with approximately 20 students. That is how it has been done in the past. When Nixon Forks notified the university of their need to train locally, residents from McGrath were brought to Juneau, trained and those individuals who graduated were able to get jobs. Number 282 REPRESENTATIVE ROKEBERG referenced the supporting documents in committee members' packets which indicated that some of the state training was conducted out of state. He asked what the breakdown was regarding the location of the training that had taken place. MR. PERKINS explained that the first three pages of the supporting documents were current expenditures; the estimated FY 97 budget, the estimated FY 96 budget and the FY 95 actuals. He directed the committee's attention to the documents pertaining to the Anchorage/Mat-Su area which listed the vendor's name, the type of training and the amount. REPRESENTATIVE ROKEBERG asked if the assistance and the training were summed together for a total of $453,000 for Anchorage or was it $253,000? MR. PERKINS said the FY 95 actuals were $253,819 for training and $200,351 for employee assistance. He commented that Mark Michaelson or Remond Henderson could probably give a more detailed answer. CO-CHAIR BUNDE asked Mr. Henderson if he had an answer to Representative Rokeberg's question. MR. HENDERSON referred to the FY 95 actual amounts with a summary schedule for the three service delivery areas. The first one was the Alaska Statewide Service Delivery Area which represented the amount spent by the Alaska Statewide Service Delivery areas handled by Mark Michaelson. Number 468 MARK MICHAELSON, Coordinator, Service Delivery Area Program, Division of Community & Rural Development, Department of Community & Regional Affairs, said the packet of information before the committee needed to be viewed in the context under which programs and services were provided. The State Training & Employment Program was established six year ago in the attempt not to duplicate any existing programs or services offered by the federal program, but to complement and supplement. The administrative structure selected was one set up by the Job Training Partnership Act (JTPA). That particular federal program recognized three distinct areas in the state of Alaska: The Anchorage/ Mat-Su consortium, the Fairbanks Private Industry Council, and the statewide, which as Mr. Henderson indicated, is what the DCRA works with. The information before the committee references activity, expenditures and services provided within those three jurisdictions. He explained that he is a state employee located in Juneau, but his counterparts are not state employees; they are employees of the Fairbanks Productivity Improvement Center (PIC) and have an affiliation with the local government, as well as in Anchorage where there is an affiliation with the municipality of Anchorage. MR. MICHAELSON said that Representative Rokeberg had referenced some out of state expenses or training outside the state of Alaska and added that activity is not prohibited with the STEP program nor is it prohibited with the JTPA, the federal source; however, the policy taken is that people will only be sent to out of state training if comparable training for a particular occupation is not available for a particular individual and under some circumstances. For example, if the wait was going to be 9 to 12 months to get someone into a university program, then out of state training would be looked at. He added those decisions are made after an individual assessment of that particular person's request. The greatest amount of training takes place instate with Alaska institutions and often times with the support and participation of Alaskan businesses. REPRESENTATIVE ROKEBERG said it appeared to him that Anchorage or the Kenai Peninsula would be allocated under the statewide appropriation. He asked if the Department of Community & Regional Affairs was only a part of this program? MR. HENDERSON interjected he believed Representative Rokeberg was asking in terms of what Anchorage gets, how are the funds allocated to the geographical locations within the Anchorage area, how does Fairbanks allocate their funds, and how does the balance of the state allocate their funds. REPRESENTATIVE ROKEBERG said actually it's how much each area got. MR. MICHAELSON said the total allocation of the total STEP resources is determined by an unemployment figures formula applied by the Department of Labor. It's based upon population, unemployment and those types of data. He wasn't able to provide specific details, but thought perhaps representatives from the Department of Labor could provide additional information. REPRESENTATIVE ROKEBERG asked how much of the $3.4 million budget was paid by the employees of the state and how much by the federal government. MR. MICHAELSON responded with that particular budget, the entire cost is incurred by the State Training & Employment Program. There are additional programs and services made available through the federal Job Training Partnership Act. He asked committee members to bear in mind that the JTPA serves approximately 4 to 5 percent of those individuals potentially eligible, so there is not a plethora of resources and training dollars available for people who are looking for assistance. Number 674 CO-CHAIR BUNDE noted that Representative Rokeberg had asked how much was the student's responsibility. REPRESENTATIVE ROKEBERG interjected he was referring to employees of the state. He asked where was the money coming from? MR. HENDERSON said the unemployment insurance trust fund. One- tenth of one percent of the.... REPRESENTATIVE ROKEBERG asked if that was funded 100 percent? MR. HENDERSON said this comes directly from the unemployment insurance trust fund - one-tenth of 1 percent; the entire amount that is spent by the DCRA for this program comes from that fund. REPRESENTATIVE ROKEBERG asked if 100 percent of all these dollars are coming from the paychecks of the employees of this state or is there a federal contribution. MR. HENDERSON remarked he thought there was a federal contribution. REPRESENTATIVE ROKEBERG noted that the people of the state are paying a contribution. Number 748 REPRESENTATIVE DAVIS presented a scenario where AVTC in Seward wanted to establish a police training standards school, where all the state troopers, city policeman and correctional officers could be trained. He asked how they would go about getting funds for that, other than drawing from the those departments who have a current budget to do that. He said they pay for the training of troopers and correctional officers and then they give them a job. He asked how would that scenario fit in? MR. MICHAELSON said he could give Representative Davis a real life example that involved another industry. A few years ago with the advent of the community development quota program for the fisheries in the Bering Sea, AVTC wanted to participate and industry needed trained workers. There was an opportunity to put together a customized program for residents primarily in the Bering Sea coastal communities. AVTC bid on a competitive Request for Proposal. He noted the department lets their money out on a competitive RFP for approximately 70 percent of the training resources and the balance is made available for individual referral for a direct referral to a preexisting program. With the competitive RFP, AVTC did bid and was awarded training funds. In turn they provided a very valuable training program with in excess of 100 western Alaskans going through that program and being able to secure employment. REPRESENTATIVE DAVIS asked if there was an opportunity to charge a tuition, also? MR. MICHAELSON responded that was correct. Number 890 CO-CHAIR BUNDE commented that if there were a number of in-depth questions still remaining about this proposal, he would rather they be addressed to the various departments and the bill would be brought up again on Thursday, March 28. REPRESENTATIVE ROKEBERG stated he would like a breakdown on the statistics for the Anchorage area and the statewide delivery area. He was curious if the Kenai Peninsula and Mat-Su were considered part of the Anchorage delivery area or if they were part of the statewide area. He also requested information on the formula based on unemployment and population statistics. Number 933 CO-CHAIR BUNDE asked the representatives from the various departments to address Representative Rokeberg's questions. He announced that HB 435 would be held over until Thursday. HB 506 - UNIVERSITY FIRE FIGHTING PROGRAM Number 963 TOM ACKERLY, Legislative Administrative Assistant to Representative Mike Navarre, said that HB 506 attempts to make a separate entity out of the Mining and Petroleum Training Service (MAPTS) which is currently a university program. The purpose of doing that is to ensure that its funding is secure and not used by other parts of the university program. In several past sessions there have been stipulations on the university budget that MAPTS would be able to keep at least $150,000 of the money it makes during the course of the year for the purpose of improving its program and keeping it a state of the art program. Another part of this is they not only need the carry forward ability, but they also need the ability to accumulate funds because some years they may need $50,000 while in other years they may need $200,000. Representative Navarre was hopeful that through legislative efforts, MAPTS could be made a stand alone, autonomous program still affiliated with the university, but ensure its perpetual funding. CO-CHAIR BUNDE asked Marylou Burton to present the university's position on HB 506. Number 1083 MARYLOU BURTON, Director of Statewide Budget, University of Alaska Statewide, said the university is neutral on HB 506. It doesn't appear to expand the university's existing authority to run an effective MAPTS program. However, the university is supportive of Representative Navarre's intent which they believe is to encourage the industry to support instate training and instate facilities to conduct that training. The university has no stand on the bill beyond that. CO-CHAIR TOOHEY asked if the MAPTS program collects fees? MS. BURTON responded affirmatively. CO-CHAIR TOOHEY asked if the fees go into the university budget? MS. BURTON replied yes. CO-CHAIR TOOHEY asked if that gave the MAPTS program some degree of comfort they would be there forever? MS. BURTON suspected this bill would give some comfort. On the other hand, to her knowledge the fees that are collected relative to this program go right into the program. For example, the program last year was subsidized with general funds; the amount that was collected relative to the program went into the program, and the university put in approximately another $300,000 last year. CO-CHAIR TOOHEY said she would like some assurance that the university was aware of the program and would indeed continue to fund the program. MS. BURTON said it was her assumption the university would continue to fund the program. Number 1158 REPRESENTATIVE DAVIS thought this legislation gave a comfort level to the MAPTS program as to their ability to plan. The opportunities are becoming more and more abundant as to who they can draw from; their training is becoming necessary worldwide and they've gained the reputation of being able to provide a service. He added that if there is a competitive spirit among the university, then the best proposal wins. CO-CHAIR BUNDE asked if there was further testimony. Hearing none, public testimony was closed. Number 1225 REPRESENTATIVE ROKEBERG moved to pass HB 506 out of committee with individual recommendations and attached zero fiscal note. Hearing no objection, it was so ordered. Number 1283 CO-CHAIR BUNDE announced the committee would be considering confirmations appointments. The first appointment before the HESS Committee was for the Professional Teaching Practices Commission. The slate was Peggy Conner Jones, Anchorage; Bruce F. Johnson, Kodiak; Marsha K. Van Abel, Anchorage; and Jacquie Whitmore, Anchorage. Number 1332 REPRESENTATIVE ROKEBERG moved to forward the appointment of Peggy Conner Jones, Bruce F. Johnson, Marsha K. Van Abel and Jacquie Whitmore, Professional Teaching Practices Commission. Hearing no objection, it was so ordered. Number 1371 REPRESENTATIVE ROKEBERG moved to forward the appointment of Joe L. Hayes, Jr. of Fairbanks, University of Alaska Board of Regents. Hearing no objection, it was so ordered. Number 1383 CO-CHAIR TOOHEY moved to forward the appointment of Pam Aldersebaes of Juneau, Board of Chiropractic Examiners. Hearing no objection, it was so ordered. Number 1397 REPRESENTATIVE ROKEBERG moved to forward the appointment of Beverly Haywood of Juneau, Board of Clinical Social Work Examiners. Hearing no objection, it was so ordered. Number 1406 REPRESENTATIVE ROKEBERG moved to forward the appointment of Mary C. Seutter of Wasilla, Board of Dispensing Opticians. Hearing no objection, it was so ordered. Number 1417 REPRESENTATIVE ROKEBERG moved to forward the appointment of Mercy Dennis, Anchorage; Dixie A. Hood, Juneau; and Sandra M. Samaniego, Fairbanks, Board of Marital and Family Therapy. Hearing no objection, it was so ordered. Number 1443 CO-CHAIR TOOHEY moved to forward the appointment of Keith M. Brownsberger, MD, Anchorage; Beverly Fletcher, Juneau; Donald G. Hudson, DO, Anchorage, Sarah A. Isto, MD, Juneau; Suzanne H. Lombardi, Anchorage; Donald C. Olson, MD, Nome; and Irvin A. Rothrock, MD., Fairbanks, State Medical Board. Hearing no objection, it was so ordered. Number 1457 REPRESENTATIVE ROKEBERG moved to forward the appointment of Marilyn Holmes of Juneau, Board of Certified Direct-Entry Midwives. Hearing no objection, it was so ordered. Number 1461 REPRESENTATIVE ROKEBERG moved to forward the appointment of Josephine Malemute of Fairbanks, Board of Nursing. Hearing no objection, it was so ordered. Number 1467 REPRESENTATIVE ROKEBERG moved to forward the appointment of Chris E. Coursey of Eagle River, Board of Pharmacy. Hearing no objection, it was so ordered. Number 1475 REPRESENTATIVE ROKEBERG moved to forward the appointment of Leslie F. Schwartz of Petersburg, State Physical Therapy and Occupational Therapy Board. Hearing no objection, it was so ordered. Number 1486 CO-CHAIR TOOHEY moved to forward the appointment of Gail C. Shortell, Esq., of Anchorage, Board of Psychologist and Psychological Associate Examiners. Hearing no objection, it was so ordered. Number 1514 CO-CHAIR BUNDE announced that all the confirmations before the HESS Committee had been moved forward. Number 1519 CO-CHAIR TOOHEY noted that she had sent out questionnaires to the boards and associations the confirmation nominees were associated with. She received an affirmative response of every nominee. CO-CHAIR BUNDE announced a Joint House/Senate HESS Committee meeting the following day at 9:00 a.m. in the Butrovich Room. Number 1559 CO-CHAIR BUNDE adjourned the House Health, Education & Social Service Committee at 4:28 p.m.