Legislature(1997 - 1998)
01/30/1997 03:03 PM House HES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STANDING COMMITTEE ON HEALTH,
EDUCATION AND SOCIAL SERVICES
January 30, 1997
3:03 p.m.
MEMBERS PRESENT
Representative Con Bunde, Chairman
Representative Joe Green, Vice Chairman
Representative Al Vezey
Representative Brian Porter
Representative Fred Dyson
Representative J. Allen Kemplen
Representative Tom Brice
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
*HOUSE BILL NO. 66
"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 facility."
- HEARD AND HELD
*HOUSE BILL NO. 54
"An Act establishing the Alaska education technology program; and
providing for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 66
SHORT TITLE: APPROVE CENTRALIZED PUBLIC HEALTH LAB
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES
JRN-DATE JRN-DATE ACTION
01/15/97 66 (H) READ THE FIRST TIME - REFERRAL(S)
01/15/97 66 (H) HES, FINANCE
01/30/97 (H) HES AT 3:00 PM CAPITOL 106
BILL: HB 54
SHORT TITLE: EDUCATION TECHNOLOGY PROGRAM
SPONSOR(S): REPRESENTATIVE(S) KOTT,Grussendorf,Kemplen
JRN-DATE JRN-DATE ACTION
01/13/97 42 (H) PREFILE RELEASED 1/10/97
01/13/97 42 (H) READ THE FIRST TIME - REFERRAL(S)
01/13/97 42 (H) HEALTH, EDUCATION & SOCIAL SERVICES
01/30/97 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
GREGORY V. HAYES, DR. P.H, M.P.H., M.S.,C.L.D., Chief
Laboratories
Division of Public Health
Department of Health and Social Services
P.O. Box 110613
Juneau, Alaska 99811-0613
Telephone: (907) 465-3019
POSITION STATEMENT: Testified in support of HB 66
DR. MICHAEL PROPST, Medical Examiner
Division of Public Health
Department of Health and Social Services
5700 East Tudor Road
Anchorage, Alaska 99508
Telephone: (907) 269-5090
POSITION STATEMENT: Testified before the committee
FORREST BROWN, Debt Manager
Treasury Division
Department of Revenue
P.O. Box 110405
Juneau, Alaska 99811-0405
Telephone: (907) 465-3750
POSITION STATEMENT: Testified on HB 66
ELMER LINDSTROM, Special Assistant
Office of the Commissioner
Department of Health and Social Services
P.O. Box 110601
Juneau, Alaska 99811-0601
Telephone: (907) 465-3030
POSITION STATEMENT: Testified on HB 66
GEORGE DOZIER, Legislative Aide
to Representative Kott
Alaska State Legislature
Capitol Building, Room 204
Juneau, Alaska 99801
Telephone: (907) 465-3777
POSITION STATEMENT: Testified on HB 54
KAREN JORDON, President
Alaska Society for Technology in Education
Juneau School District, Technology Coordinator
11575 Mendenhall Loop Road
Juneau, Alaska 99803
Telephone: (907) 789-1803
POSITION STATEMENT: Testified in support of HB 54
BOB BARTHOLOMEW, Deputy Director
Income and Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, Alaska 99811-0420
Telephone: (907) 465-2320
POSITION STATEMENT: Testified on CSHB 54(HES)
LARRY WIGET, Director of Government Relations
Anchorage School District
coordinator, Public Affairs
4600 Debarr Road
Anchorage, Alaska 99519
Telephone: (907) 269-2955
POSITION STATEMENT: Testified in support of HB 54
ACTION NARRATIVE
TAPE 97-5, SIDE A
Number 0000
CHAIRMAN CON BUNDE called the House Health, Education and Social
Services Committee meeting to order at 3:03 p.m. Members present
at the call to order were Representatives Bunde, Vezey, Porter,
Dyson, Kemplen and Brice. Representative Green arrived at 3:07
p.m. This meeting was teleconferenced to Anchorage and Kenai.
CHAIRMAN BUNDE announced that the agenda included HB 66, Approving
a Centralized Public Health Lab and HB 54, Education Technology
Program.
HB 66 APPROVE CENTRALIZED PUBLIC HEALTH LAB
Number 0048
CHAIRMAN BUNDE said HB 66 is a reprise of what the committee looked
at last year and added that last year's bill did not go through the
Senate. He said HB 66 has been introduced on the House side with
a companion bill introduced on the Senate side discussing the need
for a centralized public health lab in Anchorage.
GREGORY V. HAYES, DR. P.H, M.P.H., M.S.,C.L.D., Chief, Laboratories
Division of Public Health, Department of Health and Social
Services, was first to testify. He said that he has been in the
State of Alaska for three years. Formerly, he was the Director of
the Public Health Laboratories for the State of Indiana. He
received his doctorate in Public Health Laboratory management
through a cooperative program with the National Centers for Disease
Control and the University of North Carolina at Chapel Hill. Prior
to that time, he was a research microbiologist at the Centers for
Disease Control.
DR. HAYES thanked the committee for this opportunity to address the
Department of Health and Social Service's (DHSS) desire to
construct a new consolidated Public Health Laboratory facility.
This new facility would be located in Anchorage. It would include
the functions of the Juneau and Anchorage Public Health
Laboratories and the Medical Examiner's Laboratory. Design and
construction costs would be paid through debt financing. Through
the sale of certificates of participation for a lease-purchase of
the facility.
DR. HAYES said the services of the State Public Health Laboratory
are unique and are directed toward prevention and control of
disease in the community and therefore differ from the services of
clinical laboratories directed an individual patient care. The
laboratories are focused on communicable disease testing and work
in partnership with the National Centers for Disease Control and
private laboratories in the state. Labs fulfill an assessment,
policy development and assurance role. They perform advanced
testing for infectious agents not routinely performed in the
private sector. Focusing on hard to test for pathogens which are
unusual, exotic, rare, and sporadic.
DR. HAYES said the laboratories assist private laboratories in the
state with difficulties in identification and confirm unusual
results they obtain. They are constantly collecting data for
targeted disease control efforts. The laboratories set-up to apply
state of the art technology for the rapid testing of large numbers
of specimens in the event of an epidemic and are specialized in
disease surveillance and the recognition of new and re-emerging
diseases.
DR. HAYES said the following are some examples of how the Public
Health Laboratory has benefited Alaskan citizens. In 1991, there
was an major epidemic of gastrointestinal illness involving a large
seafood processor at Dutch Harbor. Due to their expertise and
ability to rapidly process specimens; the state laboratory was
essential in establishing the cause of the outbreak; in both ill
individuals and the local water supply which was being used to
process king crab. This allowed appropriate antibiotics to be
quickly administered and water supplies to be treated, ensuring the
safety and world-wide reputation of Alaska's seafood products.
DR. HAYES said in May of 1992, there was a widespread outbreak of
gastrointestinal illness, affecting tourists visiting Alaska during
the height of the tourist season. Tourists became ill, on cruise
ships, bus tours, the Alaska railroad, and in Anchorage and
Fairbanks hotels. The state laboratory was able to tract down the
agent causing this outbreak quickly, allowing for rapid treatment
of tourists and disinfection. The state avoided a major disruption
of the summer tourist season and huge losses of tourist revenue and
good will.
DR. HAYES said in 1994, there were widespread outbreaks of
tuberculosis in rural villages. The investigation required a
comprehensive collaborative effort to assess the presence and
severity of disease and to arrange for appropriate treatment.
Monitoring the status of these outbreaks continues today.
DR. HAYES said the ability of the state to control tuberculosis
depends on an effective, integrated program that includes a viable
State Public Health Laboratory.
DR. HAYES said in June of 1995, a rabid dog exposed 26 people to
rabies in Pilot Point. Due to the expertise of our virologist, it
was determined that the rabies virus had not yet reached the
salivary glands of the dog and thereby eliminated much of the fear
related to this exposure. The state laboratory is the only
laboratory in the state which performs very specialized rabies
testing.
DR. HAYES said the state laboratory provides essential services for
disease surveillance, control and prevention, as well as
recognition of new and re-emerging infectious disease agents that
threaten the public's health and welfare. Examples include:
measles, influenzae, diphtheria, hepatitis B, rubella, pertussis,
salmonella/shigella, and sexually transmitted diseases including
HIV.
DR. HAYES said the State Public Health Laboratory is an essential
component of the state and national public health system with a
different mission than private laboratories. It provides
scientific and technical information for disease prevention and is
Alaska's first line of defense in recognizing and controlling the
spread of communicable diseases. The labs core functions include;
support of disease control and prevention programs. It provides
maternal, child, and family health programs. It also provides
environmental health programs and epidemiological programs.
DR. HAYES said the laboratories also focus on the development, of
methods for testing when those methods are not readily available,
and transfer this technology to the private sector. They perform
diagnostic product evaluations, data collection, testing of high
quality at a reasonable cost. The laboratories also provide:
training, laboratory expertise and reference services to the
private laboratory community in the diagnosis of diseases of public
health significance.
DR. HAYES said the laboratories provide for a national surveillance
link. These functions are very different from the role of a
private clinical laboratory. He questioned whether the State's
Public Health Laboratory should be privatized and said even the
most ardent supporters of government privatization are reluctant to
argue for privatizing the public health laboratory function. All
50 states and U.S. territories have public health laboratories and
none have been privatized. This is because the services they
provide are inherently public. They do not merely perform tests
and provide results to health care providers as private labs do,
but are an essential component of public health policy
determination.
DR. HAYES said the following criteria are commonly used by state
governments to determine whether privatization is appropriate.
He said you do not privatize if the service provided is a core
function of government such as policy making. Policy development
is a core function of the State Public Laboratory. He said you do
not privatize if tasks are uncertain and prone to revision. This
is certainly the situation with an outbreak or an epidemic. You do
not privatize if the value of output is hard to measure and said
the value of emergency preparedness is very hard to measure.
DR. HAYES said you do not privatize if the government provider is
the most knowledgeable about accomplishing the task, and the
transfer of such expertise would be difficult. He said that the
Public Health Laboratory staff are specifically trained for
participating in public health investigations and have many years
of experience. He said you do not privatize if the process is as
important as the result. The state laboratory staff works rapidly
and closely with the state's epidemiologist during investigations
from the initial point of determining what needs to be sampled; how
the samples are to be obtained; and how the samples are to be
tested; frequently changing protocols and modifying algorithms as
the situation requires. Samples are not just dropped off to be
tested as is the case in a private laboratory. Public health
laboratories go well beyond what one could expect a private
contractor to do and staff are specifically trained for public
health investigations.
DR. HAYES said a further test is to look at criteria in favor of
privatization. He said you privatize if specific performance
expectations can be set forth. If results are more important than
the process. If outputs are easy to measure. If problem providers
can be readily replaced. If activity is short-term or intermittent
in nature. If the private sector has specialized expertise or
skills that give operational efficiency and effectiveness. Or if
the activity has been successfully privatized in other states.
None of these criteria fit the State Public Health Laboratory.
Once we understand that policy making and epidemiological functions
are a core responsibility of public health laboratories.
DR. HAYES said if testing were privatized multiple contracts would
be necessary since no one laboratory performs all types of testing
currently performed at the State Public Health Laboratory and for
many tests no private laboratory is available. It also needs to be
noted that from conversations with private providers, the few tests
which they could perform, would simply be added to their current
workload that is already being sent out-of-state.
Number 0927
DR. HAYES asked why is a new laboratory was necessary. Two of our
facilities are in urgent need of repair, having mechanical and
structural inadequacies for conducting laboratory testing. The
laboratories are in leased space, have poor facility layouts, and
space limitations for future growth. Our Juneau and Anchorage
laboratories were constructed as office space and currently have
major health and safety concerns such as inadequate ventilation
systems for working with infectious organisms and inadequate
electrical wiring.
DR. HAYES said that in 1990, the Anchorage Laboratory almost burned
down due to faulty wiring and one staff person contracted
tuberculosis thought to be due to the totally inadequate air
handling system. The heating system in our Anchorage facility has
failed twice since November and because many tests have temperature
requirements, no testing could be performed during these heating
failures. Also, the pipes in our TB laboratory burst in December
flooding the highly infectious contained area where TB testing is
performed.
DR. HAYES said, additionally, a permanent home must be found for
the Medical Examiner. Currently this program is occupying
temporary space at the Department of Public Safety's Crime
Detection Laboratory. The crime laboratory needs this space to
develop a much needed DNA analysis laboratory.
DR. HAYES said construction of a new facility would save the state
money. An unrecoverable investment would be necessary to repair
our current facilities and consultants have told us that even then
they could not bring these facilities up to code. A new facility
would maintain an essential public service more cheaply and more
efficiently. There would no longer be the need for duplication of
activities at multiple locations.
Number 0880
DR. HAYES said new advances in technology such as DNA testing,
newly emergent diseases and federal regulations for conducting
infectious disease testing require a safe, well-designed,
adaptable, and modern facility. We need a new facility to see us
through the 21st century. He asked what problems a new facility
would solve. The problem of fragmentation of services and reduced
efficiency. The problem of leased and temporary space. The problem
that our facilities are not designed for current operations. The
problem that significant capital investment would be required to
fix and maintain our current facilities, and they still would not
meet code. And simply that the state does not need, nor can it
afford four separate laboratories. One Lab in Juneau, two Labs in
Anchorage and one Lab in Fairbanks.
DR. HAYES said existing laboratory conditions in the Anchorage and
Juneau Laboratories are inadequate, unsafe and in major need of
repair to leased space. The Medical Examiner is occupying borrowed
space and Public Safety needs this space. Our Fairbanks laboratory
is also in leased space, which is old and inflexible, but it was
designed as a laboratory and it is currently safe.
DR. HAYES said the Department of Health and Social Services has a
long history of analyzing the problems. We know what the problem
are and we know how to solve them. We have studied the problems
extensively and we gave taken a good government approach by
engaging in long range planning, analyzing needs and reviewing all
alternatives and have developed a comprehensive workable solution.
Number 0978
DR. HAYES said there have been fourteen separate studies since 1985
regarding how to correct problems, and how to position the States
Laboratories for the future. The conclusion of these studies
strongly supports the construction of a new laboratory facility.
Solving the problem of inadequate Public Health Labs in Juneau and
Anchorage. Solving the problem of permanent housing for the
Medical Examiner, increasing operational efficiency and saving
operating costs. We can't afford four separate laboratories. We
don't need four separate laboratories and we must find a permanent
home for the Medical Examiner.
Number 0978
DR. HAYES said last year HB 529 was on the Senate calendar the last
night of the legislative session. Unfortunately, the legislature
adjourned prior to taking a vote. This bill combined the Anchorage
and Juneau Public Health Laboratories with the Medical Examiner's
program in a newly constructed facility. The Fairbanks laboratory
was to remain operating.
DR. HAYES said in the first year a new laboratory is occupied it
would save the state approximately $293 thousand dollars. It would
save the Department of Health and Social Services close to $218
thousand in personnel and lease costs; and save the Department of
Administration $75 thousand in lease costs.
Number 1031
DR. HAYES said the cost of the new facility is estimated to be
$18,440,000. Annual payments would be approximately $2,420,000 for
ten years, with a total estimated Debt of $24,130,000. He said
this is somewhat over the proposal last year, but costs from last
year's proposal have been adjusted for inflation and the assumption
of Coroner responsibilities by the Medical Examiner's program.
Number 1055
DR. HAYES said it is critical that the Medical Examiner's
laboratory be near Public Safety's Crime Detection Laboratory due
to their close interaction and cooperation. Therefore several
alternatives for state-owned land are being considered immediately
adjacent to the Crime lab. He requested the committee's support
for this very important project.
Number 1080
REPRESENTATIVE JOE GREEN said last year's bill did not include
combining the Fairbanks laboratory with the Anchorage and Juneau.
Number 1110
DR. HAYES said the original bill was for a centralized laboratory,
that is the version that made it out of the House. The bill was
modified in the Senate.
Number 1123
CHAIRMAN BUNDE said HB 66 is a compromise bill.
Number 1131
REPRESENTATIVE TOM BRICE asked if the site for the State Public
Health Laboratory was going to be on the Division of Motor Vehicles
or on the Department of Transportation and Public Facilities
(DOT/PF) site.
Number 1157
DR. HAYES said the site they prefer is the one listed as DOT/PF
because it is closer to the crime lab. He said the medical
examiner is in daily interaction with the crime lab. He referred
to Slide 26 of the handout supplied to the committee members.
Number 1175
REPRESENTATIVE BRICE asked how many medical examiners would be
brought into the new facility.
Number 1199
DR. MICHAEL PROPST, Medical Examiner, Division of Public Health,
Department of Health and Social Services, testified via
teleconference from Anchorage. He said in the Medical Examiner's
office the two forensic pathologist include himself and his deputy,
Dr. Norman Thompson. He said an additional staff of eight people
are also located in the office.
Number 1234
REPRESENTATIVE BRICE asked how many procedures are performed per
year.
MR. PROPST said his office does approximately 500 hundred to 600
hundred procedures per year where the pathologist is involved in
putting hands and eyes on a deceased remain.
Number 1284
REPRESENTATIVE AL VEZEY referred to the tables under the Department
of Revenue fiscal note. He said on page two there is a current
interest rate table and on page three there is a current rate plus
75bp.
Number 1299
FORREST BROWN, Debt Manager, Treasury Division, Department of
Revenue (DOR), said DOR ran the debt service schedules at current
interest rates which translates to a true interest cost over the
ten years of a 4.9 percent tax-exempt financing. He said because
interest rates are quite volatile, every day they bounce around.
This has been increasingly so in the last year or so. He clarified
that bp means basis points. He said to test the sensitivity of
what would happen if there was an increase in interest rates,
three-quarters of a point higher, DOR ran the same number and then
came up with the higher debt service. In that instance the debt
service would exceed slightly the amount listed in HB 66. If that
was the amount authorized, then the financing would have to be cut
back by approximately $400,000. He said DOR is calling this
information to the laboratory people to tell them that they run
some risk of interest rates going against them in this period, in
which case they might not have all the funds they need.
Number 1382
CHAIRMAN BUNDE asked whether, cumulatively speaking, Dr. Hayes
mentioned the amounts that would be saved came to close to half a
million dollars per year; $200,000 in one department, $200,000 in
another and then $75,000 in another.
Number 1403
DR. HAYES said it was $293,000 a year in personnel savings and
lease costs.
Number 1406
CHAIRMAN BUNDE asked if he had taken the total and had broken it
down into three components.
Number 1418
DR. HAYES said it was $293,000 total savings in terms of lease cost
and personnel; $218,000 from DHSS and $75,000 from Department of
Administration which pays one of the leases.
Number 1428
REPRESENTATIVE BRIAN PORTER asked Mr. Brown, from his experience,
whether this proposal was a little bit risky to add a limitation
that wouldn't provide for an interest rate increase.
Number 1447
MR. BROWN said that no one can forecast what interest rates are
going to be. He said he would feel more comfortable, as their de
facto financing partner, if he had a little more flexibility. He
said when DOR is going to go out and bid this financing he expects
a good reception from Wall Street. If the rates are truly higher
than they are now, it could force a difficult decision on the
operating people. He said if they go forward with the project and
scale it back they might need to go back in a year for a supplement
or do they postpone it.
MR. BROWN said, if he had a preference, he would have a little more
flexibility to meet whatever the market is. In other words by
financing this amount and certainly putting a ceiling on the amount
that could be spent on the project is appropriate, but it should
also recognize that interest rates are very volatile and could go
the other way. He said DOR could end up with a 4 percent effective
cost to capital in which case you might spend $2.1 million a year
instead of $2.4 million.
Number 1489
REPRESENTATIVE PORTER said in reading this, it says the anticipated
total construction and other costs are not to exceed $18,440,000.
"The total anticipated annual amount of rental is and the total
anticipated lease payments for the full term total up to be...I
guess to give that the best light interpretation, I think it
implies that you could adjust the rate, but the total cost of the
project would be $18.4 million."
Number 1514
MR. BROWN said because a legislative requirement states that when
DOR comes in and provides numbers before getting legislative
approval on any real estate lease financing. He said DOR indicates
these three numbers; the total amount of the financing, the total
anticipated amount of the annual payments and the total amount of
payment over the term of the loan. The bond counsel is consulted
and has to give an opinion on the tax exempt nature of these bonds
when DOR floats them. He said the counsel has looked at this
legislation in the past as being a maximum, that they would not be
comfortable with certifying that DOR followed the law and that the
bonds were tax exempt without DOR staying at or under the amount
specified here. So, even though it reads anticipated, the legal
folks have taken a narrower interpretation of that amount and so
DOR has taken that direction and become conservative in their
approach.
Number 1555
REPRESENTATIVE VEZEY said DOR did a calculation based on current
interest rates which were 4.9 percent on tax exempt.
Number 1567
MR. BROWN said DOR did this a couple of days ago and went to each
year of the maturity. In this type of financing, in a ten year
financing you issue serials, ten different maturities. He said DOR
looked at a single A credit of comparable deals that were offered
that particular day and priced it on that basis. He said on the
day DOR did it, the best estimate was that the payments would be
what is shown on that schedule and that the overall true interests
are, when you discount that back and you meld in the varying
maturities and the various interest rates for each of those serial
maturities, it would be 4.92 percent. He said DOR did the same
thing if interest rates had gone up 75 basis points to 5.67 percent
overall and carefully worked that assumption in to each of those
ten maturities to determine that it would be somewhat over the
anticipated amount. It is not a way of forecasting what is going
to happen, but DOR wanted to indicate that there was some risk of
interest rates with the current language of HB 66.
Number 1625
REPRESENTATIVE VEZEY asked him when they were thinking of doing
this.
Number 1629
MR. BROWN said DOR, assuming that HB 66 was approved, would go to
work on the financing and would issue the certificates of
participation, delivering them on February 1, 1998. He clarified
that DOR was forecasting a year ahead of time.
REPRESENTATIVE VEZEY asked if we have seen three-quarters of a
percent fluctuation in interest rates in the past year.
Number 1651
MR. BROWN said in December of 1995, the interest rate "would have
been around 440 and we have been as high, last summer, as 525, 530
on a ten year. So, that's a fluctuation of 60 to 70 basis points
just in the past year. So, it's partially on that basis that we
selected 75 basis points as the one to test the sensitivity,
figuring that if it happened in the past year it well could happen
again. We have no way of knowing, from time to time the fed
tightens things up and the overall level of interest rates goes up.
And even though the tax exempt rates are about 80 percent of what
the taxable rates are they still follow very, very closely."
Number 1690
REPRESENTATIVE BRICE asked Dr. Hayes for clarification of the
inclusion of the coroner duties with the medical examiner's office.
Number 1713
DR. HAYES said the coroner's responsibilities is a new program for
the medical examiner program.
Number 1720
DR. PROPST said HB 520 which passed in the last session, becoming
effective on September 23, 1996, eliminated the Office of Coroner
statewide. He said the medical examiner's office took many of the
responsibilities for accepting and reporting of sudden and
unexpected deaths.
Number 1743
REPRESENTATIVE VEZEY asked if HB 66 was included in the Governor's
Budget Proposal to the legislature which was given in mid-December.
DR. HAYES said he did not believe so.
Number 1824
ELMER LINDSTROM, Special Assistant, Office of the Commissioner,
Department of Health and Social Services, was next to testify. He
said there would be no impact on the fiscal year 1998 budget, the
first payment would appear in fiscal year 1999 and would appear in
the front section of the operating budget along with similar such
debt service items. The project is figured into Office of
Management and Budget's (OMB) six year capital plan and, likewise,
it has been figured into the Administration's assumptions and plans
for fiscal year 1999.
Number 1802
REPRESENTATIVE PORTER referred to the language as addressed the
three numbers; the cost and the interest, total payments and the
total costs and said if there is any concern whether it might not
be appropriate and asked if they would entertain something that
would make it appropriate.
MR. LINDSTROM said they would be prepared to discuss that on
Tuesday.
CHAIRMAN BUNDE said in the perusal of the information that if
questions came up the committee members should contact Mr.
Lindstrom so that he could answer them on Tuesday.
Number 1843
DR. HAYES said the handout, located in the committee file, follows
the slides that his office was going to show. He said his
presentation followed each slide.
HB 54 EDUCATION TECHNOLOGY PROGRAM
Number 1896
GEORGE DOZIER, Legislative Aide to Representative Kott, the sponsor
of HB 54 testified before the committee. He said the bill creates
an education technology program and fund. He said it is
Representative Kott's position that the world economy is rapidly
evolving, evolving of one being manufacturing based to one of
increased technological change and information management. Alaska
is part of the world economy, we are not a separate enclave. What
happens in the rest of the world directly affects us and we must
compete with other components of the world economy.
MR. DOZIER said, to be competitive, Alaska must be more
sophisticated in the use of technology and that it requires
education. Alaska has always had a strong commitment to providing
education and, as the economy evolves, we must increasingly
emphasize education technology. We haven't done so heretofore, we
must do more and as the pace of economic evolution increases we
must increase our emphasis in this field.
MR. DOZIER said HB 54 is a start in that direction. It creates the
Education Technology Fund in the Department of Education (DOE), it
provides a mechanism for channeling grant money to various schools
and libraries, provides a mechanism to create access to various
computer networks and also provides a mechanism for training
educators and librarians in the use of this technology. He said HB
54 is not an appropriation bill. It does provide that the
legislature may appropriate money into the fund but it does not
actually make that appropriation. It envisions public and private
donations to the fund.
Number 1992
MR. DOZIER said, regarding this fund source, Representative Kott
submitted a proposed committee substitute which was drafted in
blank which he urged upon the committee. He said the proposed
committee substitute doesn't change HB 54 except that it creates a
tax deduction. He said Alaska corporations are paying Alaskan
income tax. Money that would be donated into the Education
Technology Fund would create a deduction for that taxpayer. It is
believed that it would encourage donations to that fund.
MR. DOZIER said it is common knowledge that many Alaskans are not
prepared to deal with rapid technological changes and
Representative Kott feels strongly that we must do something about
this or Alaska will be left in the dust. He said HB 54 is a step
in that direction and Representative Kott recommends this bill to
the committee.
REPRESENTATIVE VEZEY questioned why we need HB 54 as it doesn't
seem to do anything that we can't do under existing law.
Number 2047
MR. DOZIER said HB 54 creates a centralized authority that would be
able to develop expertise in this area to provide guidance to the
various entities it would service.
REPRESENTATIVE VEZEY said, unless there is something here that he
did not know, we do not need a law to that as we can do this under
existing law.
MR. DOZIER said HB 54 provides an encouragement to donate money to
this fund.
Number 2088
CHAIRMAN BUNDE asked what the impact the proposed committee
substitute would have on the general fund.
Number 2094
MR. DOZIER said he did not have information regarding that issue.
He pointed out that it is not a tax credit, but a tax deduction.
He did not envision that tax payers would be paying money into the
fund in lieu of the general fund.
Number 2116
KAREN JORDON, President, Alaska Society for Technology in
Education, Technology Coordinator for the Juneau School District,
was next to testify. She said over the last four years, Juneau has
passed two bond initiatives to provide $6 million for eight schools
and 5,500 students. She said technology is not a frill, it is a
necessity. It is not merely a nice thing to do or something we do
when we have some extra money to throw at a special pet project.
Technology is now a complete and total necessity for every
graduating senior.
MS. JORDON said she has appeared the last seven years before the
committee to testify for an educational technology bill. She said
HB 54, in different forms, has been on the table for about seven
years and several times the question has come up that it can be
done without a bill. She said the answer is that it wouldn't be
done without legislation. Money is not being put towards
technology and added that the mechanism towards technology is not
being put forward int the state. She said when basic clerical
staff are hired in offices, it is expected that they have a high
level of technology skills. Degrees or special training are not
being sought, it is expected that high school graduates have enough
technology skills to be able to come into offices and use the
computers that are available.
TAPE 97-5, SIDE B
Number 0000
MS. JORDON said HB 54 is also about equal access to educational
opportunity. In Juneau, voters have approved technology funding
for all of their schools, Anchorage has not, and
several rural areas are not able to pass bonds or not able to bond
their constituents to fund technology. She said it does not mean
that we should then fund technology at different levels throughout
the state.
MS. JORDON said HB 54 sets up a fund. She said money would
available through federal grants and through donations such as the
recent donation from BP (Alaska) Inc. This money would be
coordinated through this fund. There are three things which have
to happen statewide; network all of the schools, provide better
telecommunications to rural areas and buy computers and software
for student use. She said these three issues are not simple and
are somewhat expense. It also takes a degree of technological
knowledge that is not readily available in every school in the
state which includes Anchorage as well as bush communities.
MS. JORDON said, during the past Congressional session, $200
million of federal money was put into a federal technology literacy
challenge fund and states can apply for that money. She said the
biggest hole in Alaska's application is that the state has no
mechanism for funding technology statewide and many other states
do. She said when the application question arises of how the state
is currently funding technology the answer is that we really aren't
doing it or it is funded by districts who are able to come up with
the money in their limited operations funds.
Number 0094
MS. JORDON said there is a need for centralized help. She said she
is not normally a proponent of centralized administration, but in
this instance she is. She said she gets calls from all over the
state looking for information on how they go about networking their
school or what kinds of things they should look at in implementing
a technology program. She said this is an area that needs a
clearing house for information, a central place for assistance.
MS. JORDON said, as the legislature goes through the budget cutting
and takes a careful look at how to prepare this state for the
future, funding technology should be considered so that students in
Alaska are prepared to support themselves. She suggested that HB
54 will help the state build the capacity for economic development,
it will help people find jobs wherever they live in the state.
Number 0184
REPRESENTATIVE GREEN asked her how the determination would be made
as to how much of the grants went to what schools when all the
schools were requesting the latest computer technology.
Number 0223
MS. JORDON said there would be two initial steps; organizing
materials in a clearinghouse of information which can be
distributed to all of the sites and going after money for the fund.
She said there is no appropriation for this fund, it is a zero fund
at this point. The fund would seek out federal grants, Alaska
Scientists and Technology grants and money from BP, ARCO, Exxon or
whoever wants to fund technology in the state. After that as it is
anytime you organize and administer any large project,
determinations would have to be made on a needs basis, a capacity
basis and said there are some places that are further along in
their readiness. She said there are community people who have
thought through how they would implement technology.
Number 0287
REPRESENTATIVE GREEN said a couple of people would be established
to look for funding and asked if there would be more incentive if
the salaries were paid by the funds they collect. He said this
could be done rather than establishing an organization which may or
may not get something. He said it seemed to him that if the staff
was self supporting, they might have more of an impetus to seek
funds.
Number 0323
MS. JORDON said it makes sense, but you have a start up costs. You
cannot start a program with no people. She said she would support
at least an initial year of funding and out years it could be
funded by the fund itself.
Number 0341
REPRESENTATIVE GREEN said the fiscal note shows a six year funding
mechanism on the general fund. He asked if HB 54 needed to be re-
drafted to eliminate this funding.
MS. JORDON said to start the fund you would have to provide money
for staff.
Number 0375
REPRESENTATIVE GREEN asked if the first year couldn't be started
with existing people.
Number 0395
MS. JORDON said the DOE had a person that was paid for through Star
Schools or some other grants, but that person was lost. She said
DOE does not have anyone dealing with technology.
Number 0394
REPRESENTATIVE FRED DYSON asked how many students homes have
computers.
Number 0410
MS. JORDON said she thought it was one-third and growing.
Number 0417
REPRESENTATIVE DYSON asked if she felt the kids would independently
pick up a level of proficiency without being in a formal class.
Number 0425
MS. JORDON said some kids will pick up a level of proficiency. She
said this fund not only talks about technology, so that students
can sit down and someone can teach them to use the technology. She
said kids pick up technology fairly quickly, but we are talking
about technology for kids to use as tools throughout their daily
work. She said, in Juneau, the quality of student work and
products skyrocket as kids have access to technology tools, the
internet, CDs and data bases that are in the schools now. She said
Anchorage and other places are not able to do that. She said a
system and a quantity of money is needed to set up this fund.
Number 0485
CHAIRMAN BUNDE said the people in the Anchorage community decided
that they did not want to invest, perhaps almost blindly, in funds
for technology. He said just because you build it does not mean
they will come.
Number 0511
REPRESENTATIVE DYSON asked, "would it be fair to infer with what
you said that kids that, children who learn on their own don't tend
to have such a dramatic impact on their scholastic performance as
those kids that learn in a more structured situation, or has more
geared applications."
Number 0540
MS. JORDON clarified that he was asking where would technology have
more of an impact on academic performance and said she thought it
would be both. She said it approves student's academic performance
when they are able to use technology tools as it is a whole other
media for teaching all students. When we talk about the amount of
jobs that are basic entry level, non-skilled work, she said the
state has to reach far more kids than are currently reached through
basic text based resources.
Number 0569
REPRESENTATIVE DYSON said we used to be able to correlate how a
child performed academically based on whether or not the child came
from a home where the parents were readers and there was a library
in the home. He asked if there are segments of the Alaska
population that have a disproportionate need for help in getting on
board with technology.
Number 0604
MS. JORDON said you could say that. In Juneau to address the fact
that some kids have access to technology at home so that they can
continue their work outside of school, the city looked at community
access points; public libraries, community centers, housing
projects and other places where students could go in other hours
and get access to technology tools. She said in rural areas the
school is a public access point and has longer hours than some of
the more urban schools.
Number 0641
REPRESENTATIVE DYSON asked her if she would extrapolate that the
resources from this program might be more utilized in rural areas.
Number 0654
MS. JORDON said she would not say that because the same condition
exists in Anchorage as exists in some rural areas. She said
Wendler Junior High has 15 computers for 1,200 students. She said
Juneau has a four or five to one ratio.
Number 0676
CHAIRMAN BUNDE said, if he could correctly quote what he read, that
every high school student in Galena has a power notebook.
Number 0714
CHAIRMAN BUNDE said it was the chair's intention to form a
subcommittee to look into the impact on the general fund by the
proposed committee substitute.
Number 0742
REPRESENTATIVE PORTER made a motion to adopt the proposed committee
substitute for HB 54, Version B. Hearing no objection CHAIRMAN
BUNDE announced that the committee had adopted CSHB 54(HES).
REPRESENTATIVE PORTER said he would be interested to see what the
impact on the general fund would be from the DOR. He said he would
like someone from the DOR or DOE to tell the committee precisely
why they can't perform these services using existing personnel.
Number 0787
REPRESENTATIVE VEZEY asked if CSHB 54(HES) creates a fund, within
the DOE, administered by the DOE which means that the Commissioner
of Education is the trustee of the fund.
Number 0825
MS. JORDON said she believed the fund would be in the DOR.
Number 0815
REPRESENTATIVE VEZEY said CSHB 54(HES) creates in Title 14, the
education statute, a fund in DOE.
Number 0825
BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,
Department of Revenue, was next to testify. He said CSHB 54(HES)
sets up the fund within DOE and thus they would be the overseer of
how it is implemented on the programmatic side. The role of DOR
would be limited to the investment of the funds.
Number 0846
REPRESENTATIVE VEZEY clarified that the dispersement of the fund
would be up to the DOE. He said this would again create a
centralized pool within the DOE with the whole state arguing over
how to disperse it.
Number 0863
REPRESENTATIVE J. ALLEN KEMPLEN asked if CSHB 54(HES) would serve
as an incentive for local initiatives to develop and acquire
computers and educational technology.
Number 0883
MS. JORDON said she did not know if CSHB 54(HES) includes this
provision. She said former versions of this bill used to have a
match set up and then it would act as an incentive. She said it
would be an incredible incentive to get people organized, have a
plan in place and have figured out what their technology support
and their training should be, etc. She said it would be a very big
incentive.
Number 0935
REPRESENTATIVE KEMPLEN asked if the fund would also serve as a
vehicle for private sector contributions from corporations in the
state.
Number 0935
MS. JORDON said yes, and added that it would be a vehicle for
contributions even without the tax deduction portion of CSHB
54(HES). She said the tax deduction would be a substantial
incentive for corporations to choose this as a donation point.
Number 0962
REPRESENTATIVE PORTER asked if it was customary, that the cost for
DOR to administer a new fund, to come out of the fund itself rather
than needing a new fiscal note.
Number 0970
MR. BARTHOLOMEW said he was correct and the fiscal note from the
Treasury Division is now zero because there is no money in the
fund. He said the division states in the fiscal note that they
would use the fund itself as a funding source, but there are some
upfront costs that are charged to DOR as soon as the fund or
account is set up. He said if, at that point, there was no money
available money could be advanced with the idea that there would be
contributions coming in. He said this would be a safe bet
because...
REPRESENTATIVE PORTER asked if there was a fiscal note from DOR.
MR. BARTHOLOMEW said there should be a fiscal note from the DOR.
He said that fiscal note addresses the Treasury Division's
investment cost and added that the CSHB 54(HES) version would
require a new fiscal note.
Number 1025
CHAIRMAN BUNDE said a subcommittee could look at some of these
questions including the general fund impact as a result of the tax
deduction and the idea that if the fund could be operated on soft
money so that whoever was administering the fund would have to
raise money to pay their own way. He asked Representatives Kemplen
and Vezey to serve on the subcommittee and Representative Green to
serve as chair. He asked the subcommittee to report back to the
committee a week from Tuesday, February 11, 1997.
Number 1088
LARRY WIGET, Director of Government Relations, Anchorage School
District, and coordinator of (indiscernible) and previous to that
he was the coordinator of the library program (indiscernible)
technology for the Anchorage District, testified via teleconference
from Anchorage. He said the Anchorage School District supports the
passage of HB 54 and said they have been working for several years
to meet the needs of getting technology to their students and to
students around the state. He said the needs are greater now than
ever before and they can not be met through the state district
budgets. For example, the entire Anchorage School District
instructional technology budget, with a projected 48,000 students
for next year, is about $33,000 or about 70 cents per student. He
said instructional technology and getting this technology into the
hands of teachers and student is a priority of the district.
MR. WIDGET said they have a technology commission which will be
looking at developing and further refining the district's
technology. He said given the cost of technology and the budget
constraints the district is unable to fund that money.
MR. WIGET said CSHB 54(HES) will establish an endowment fund, it
will not meet instructional technology needs. It will lay the
foundation for teacher monies to be set aside for technology needs
statewide. It recognizes the importance of technology to the
future of Alaska and it recognizes that the local community
technology increases by the use of a matching grant. He asked the
committee to pass HB 54.
Number 1184
CHAIRMAN BUNDE added that the subcommittee examine what the local
match should be and if that was advisable.
ADJOURNMENT
There being no further business to conduct, CHAIRMAN BUNDE
adjourned the meeting of the House Health, Education and Social
Services Standing Committee at 4:10 p.m.
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