Legislature(1995 - 1996)

01/31/1995 08:05 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                        January 31, 1995                                       
                           8:05 a.m.                                           
 MEMBERS PRESENT                                                               
 Representative Jeannette James, Chair                                         
 Representative Scott Ogan, Vice Chair                                         
 Representative Joe Green                                                      
 Representative Ivan                                                           
 Representative Brian Porter                                                   
 Representative Ed Willis                                                      
 Representative Caren Robinson                                                 
 MEMBERS ABSENT                                                                
 COMMITTEE CALENDAR                                                            
 * HB 74:"An Act relating to the assault of children by                       
   PASSED OUT OF COMMITTEE                                                     
  HB 4:"An Act relating to absences from the state                            
 for purposes of determining residency under                                   
 the permanent fund dividend program; and                                      
 providing for an effective date."                                             
   PASSED OUT OF COMMITTEE                                                     
  HJR 3:Proposing an amendment to the Constitution of                         
 the State of Alaska prohibiting the imposition                                
 of state personal income taxation, state ad                                   
 valorem taxation on real property, or state                                   
 retail sales taxation without the approval of                                 
 the voters of the state.                                                      
   PASSED OUT OF COMMITTEE                                                     
   HB 70:"An Act relating to treatment of permanent                           
 fund dividends for purposes of determining                                    
 eligibility for certain benefits; and                                         
 providing for an effective date."                                             
   PASSED OUT OF COMMITTEE                                                     
 * HB 81"An Act relating to the preservation of public                        
 facilities and to appropriations for annual                                   
 maintenance and repair, periodic renewal and                                  
 replacement, and construction of public                                       
   HEARD AND HELD                                                              
 (* First public hearing)                                                      
 WITNESS REGISTER                                                              
 REPRESENTATIVE CON BUNDE                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 108                                                    
 Juneau, AK 99801                                                              
 Telephone: 465-4843                                                           
 POSITION STATEMENT:  Sponsored  HB 74                                         
 REPRESENTATIVE PETE KOTT                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 432                                                    
 Juneau, AK  99801                                                             
 Telephone: 465-3777                                                           
 POSITION STATEMENT:  Sponsored HB 4                                           
 TOM ANDERSON, Legislative Aide                                                
   to Representative Terry Martin                                              
 Alaska State Legislature                                                      
 Capitol Building, Room 502                                                    
 Juneau, AK 99801                                                              
 Telephone: 465-3783                                                           
 POSITION STATEMENT:  Provided Information on HJR 3                            
 ROD MOURANT, Administrative Assistant                                         
   to Representative Kott                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 432                                                    
 Juneau, AK 99801                                                              
 Telephone 465-3777                                                            
 POSITION STATEMENT:  Discussed information relating to HB 70                  
 ELMER LINDSTROM, Special Assistant                                            
 Office of the Commissioner                                                    
 Department of Health and Social Services                                      
 P.O. Box 119691                                                               
 Juneau, AK 99802-0601                                                         
 Telephone: 465-3030                                                           
 POSITION STATEMENT: Provided Information HB 70                                
 CURTIS LOMAS, Welfare Reform Coordinator                                      
 Division of Public Assistance                                                 
 Department of Health and Social Services                                      
 P.O. Box 11064                                                                
 350 Main St., Room 317                                                        
 Juneau, AK 99811-0640                                                         
 Telephone: 465-3347                                                           
 POSITION STATEMENT:  Provided Information on AFDC Program                     
 JON SHERWOOD, Program Coordinator                                             
 Office of the Commissioner                                                    
 Division of Medical Assistance                                                
 Department of Health and Social Service                                       
 Juneau, AK 99802-0601                                                         
 Telephone:  465-3355                                                          
 POSITION STATEMENT:  Provided Information on PFD                              
 JOHN STEINMANN, Architect                                                     
 Division of Finance and Facilities                                            
 Department of Education                                                       
 801 West 10th Street, Suite 200                                               
 Juneau, AK 99801                                                              
 Telephone: 465-2781                                                           
 POSITION STATEMENT: Provided Information on HB 81                             
 PREVIOUS ACTION                                                               
 BILL:  HB  4                                                                
 SPONSOR(S): REPRESENTATIVE(S) KOTT                                            
 JRN-DATE     JRN-PG                  ACTION                                   
 01/06/95        21    (H)   PREFILE RELEASED                                  
 01/16/95        21    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        21    (H)   STA, JUD, FIN                                     
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/24/95              (H)   MINUTE(STA)                                       
 BILL:  HB 74                                                                
 SHORT TITLE: ASSAULT BY ADULTS ON CHILDREN                                    
 SPONSOR(S): REPRESENTATIVE(S) BUNDE, Green, Toohey, Kubina,                   
 JRN-DATE     JRN-PG                  ACTION                                   
 01/06/95        40    (H)   PREFILE RELEASED                                  
 01/16/95        40    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        40    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 01/20/95       106    (H)   COSPONSOR(S): GREEN                               
 01/20/95       106    (H)   COSPONSOR(S): TOOHEY                              
 01/23/95       119    (H)   COSPONSOR(S): KUBINA                              
 01/25/95       136    (H)   COSPONSOR(S): B. DAVIS, ROKEBERG                  
 01/31/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 BILL:  HJR  3                                                               
 SHORT TITLE: VOTER APPROVAL FOR NEW TAXES                                     
 SPONSOR(S): REPRESENTATIVE(S) MARTIN, Rokeberg, Bunde                         
 JRN-DATE     JRN-PG                  ACTION                                   
 01/06/95        16    (H)   PREFILE RELEASED                                  
 01/16/95        16    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        16    (H)   STA, JUD, FIN                                     
 01/19/95        86    (H)   COSPONSOR(S): BUNDE                               
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/24/95              (H)   MINUTE(STA)                                       
 BILL:  HB 70                                                                
 SPONSOR(S): REPRESENTATIVE(S) KOTT, Green                                     
 JRN-DATE     JRN-PG                  ACTION                                   
 01/06/95        39    (H)   PREFILE RELEASED                                  
 01/16/95        39    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        39    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/24/95              (H)   MINUTE(STA)                                       
 01/25/95       135    (H)   COSPONSOR(S): GREEN                               
 BILL:  HB 81                                                                
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
 JRN-DATE     JRN-PG                  ACTION                                   
 01/13/95        42    (H)   PREFILE RELEASED                                  
 01/16/95        42    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        42    (H)   STATE AFFAIRS, TRANSPORTATION, FINANCE            
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/24/95              (H)   MINUTE(STA)                                       
 01/26/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/26/95              (H)   MINUTE(STA)                                       
 01/31/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 ACTION NARRATIVE                                                              
 TAPE 95-5, SIDE A                                                             
 Number 000                                                                    
 CHAIR JEANNETTE JAMES called the meeting to order at 8:05 a.m.                
 Members present at the call to order were Representative Ogan,                
 Green, Ivan, Porter and Willis.  Members absent were Representative           
 Robinson.  Chair James stated there was a quorum present.                     
 HSTA - 01/31/95                                                               
 Number 017                                                                    
 HB 74 - ASSAULT  BY ADULTS  ON CHILDREN                                     
 CHAIR JAMES recognized Representative Con Bunde, sponsor of  HB 74.           
 REPRESENTATIVE CON BUNDE reported that Shaun Jensen who was the               
 impetus of HB 74,  and who was schedule to be here, would not be              
 available to testify due to weather conditions.  His plane was                
 grounded in Sitka.  HB 74 was initiated because of public concern             
 about the attack on this young person, Shaun Jensen, by three                 
 adults who could only be charged with a misdemeanor for their                 
 crime.  Representative Bunde said the bill was intended to fill a             
 gap if adults attack children under the age of ten.  Instead of               
 just being charged with a misdemeanor, it will ensure that they can           
 be charged with a felony.  This bill allows prosecutorial                     
 discretion, where there is an attack on a young person by people              
 over the age of eighteen.  Representative Bunde explained a                   
 discretionary provision has been included, because sometimes there            
 are minor "fisticuffs" or misunderstandings that do not warrant a             
 felony charge.  Some individuals at age 14 look more like 17 years            
 old, so there is some discretion required by the prosecutor.  Also,           
 there is public condemnation for people who would willingly and               
 knowingly attack a young person.                                              
 Number 115                                                                    
 REPRESENTATIVE BUNDE read the written testimony of Julie Jensen               
 Zarr for the record.  The following testimony was read as follows:            
 My name is Julie Jensen Zarr and I am here today to ask for                  
 your support in passing House Bill 74.  The current assault                   
 law needs to be updated.                                                      
 On November 11, 1994 at 5:30 a.m. while delivering the                       
 Anchorage Daily News my 14 year old nephew, Shaun Jensen, as                  
 viciously assaulted by 3 adult men in South Anchorage.  Shaun                 
 lost 2 permanent teeth, suffered neck trauma and was run over                 
 by his own snow machine.  The law as it reads now only made                   
 misdemeanor charges against these men possible, not a message                 
 we want to send to thugs that prey on our young.                              
 In 1971, my family moved to Alaska and settled in South                      
 Anchorage, it was a great place to grow up.  We felt safe and                 
 secure walking or horse back riding anywhere.  My parents                     
 raised three children in Alaska we are now running our                        
 businesses and raising our children here.  The Anchorage of                   
 the 50s, 60s, 70s and 80s did not have drive by shootings,                    
 assaults or random senseless acts of violence, the law at that                
 point in time fit, but in 1995 it does not.  As crimes change                 
 so much, the laws must change to fit the crimes of 1995 and                   
 This event brought to light for me the need to make a                        
 difference and try to turn a negative into a positive,                        
 teaching my nephew and 2 children of empowerment instead of                   
 victimization.  A change in this law will show that through                   
 hard work and believing in an idea one person can make                        
 positive impact on society.  The outpouring of support from                   
 the people of Anchorage has also had a healing effect on                      
 Again, I ask for your support in passing House Bill 74.  I                   
 want to thank the committee for their attention and support.                  
 Thank you for taking the time to listen to me today.                          
 Number 137                                                                    
 CHAIR JAMES noted, for the record, that Representative Caren                  
 Robinson came in during the sponsor's statement.                              
 Number 140                                                                    
 REPRESENTATIVE JOE GREEN asked what the charge would be if the same           
 thing happened to adults.  He also questioned whether or not the              
 injury to Shaun was done by fists.  There was some concern on his             
 part about if the bill was taking this far enough.                            
 REPRESENTATIVE BUNDE said that hitting with a fist is not assault             
 with the deadly weapon unless there is bodily harm.  So, the same             
 damage to adults would just be a misdemeanor.  Representative Bunde           
 said there is a question about the difference between adults and              
 juveniles, and how to determine if a person is adult.  Some 16 year           
 olds appear to be older.  He said it is a frustration, and the law            
 should be written as "doable" without clogging the system.                    
 Number 213                                                                    
 REPRESENTATIVE BRIAN PORTER complimented the sponsor of this                  
 legislation for not trying to dig into the criminal statutes and              
 change standards of physical injury.  These standards have been               
 with us since 1980 and there is a lot of case law behind them.                
 Trying to tinker in that area because of one situation would be               
 folly; it would lead to a law that would not fit the next                     
 situation.  What this bill does is present a policy-call on whether           
 the whole category of offense should become a felony.                         
 Representative Porter said he thought the bill was the right                  
 approach that will satisfy the individual case without disrupting             
 the statutes.  He said whenever there is an alleged crime there are           
 two considerations:  (1) if a crime has been committed; and (2)               
 then proving it.  One is called "criminal law" and one is "criminal           
 evidence."  Criminal evidence, having to meet a standard of beyond            
 a reasonable doubt, is where prosecutors and police officers run              
 into problems.  That was a problem with this case.  The use of a              
 snow machine to run over the child is something most people think             
 should be a felony, yet it had to be proved beyond a reasonable               
 doubt that the machine was intended to be used as a dangerous                 
 instrument.  If that could not be proved, the charge would be a               
 Number 258                                                                    
 REPRESENTATIVE GREEN wondered why they made it the age of 16, not             
 17 or adulthood.  He wondered if maybe they should make it anything           
 below 18.                                                                     
 REPRESENTATIVE BUNDE reiterated that some 16 year olds are quite              
 physically mature and others aren't, so 16 seems to be the cusp of            
 the change.  More 17 and 18 year olds are likely to appear adult              
 than 16 year olds.                                                            
 Number 279                                                                    
 REPRESENTATIVE IVAN IVAN had a question about the language of the             
 bill.  He wanted a definition of "reasonably" used on page 2, line            
 5.  It states that the "injury reasonably requires medical                    
 Number 285                                                                    
 REPRESENTATIVE BUNDE answered that a reasonable adult will say                
 whether an injury is serious enough to require medical attention.             
 Number 293                                                                    
 CHAIR JAMES called for a motion.                                              
 Number 295                                                                    
 REPRESENTATIVE PORTER moved that the committee pass HB 74 out of              
 committee with individual recommendations and attached fiscal                 
 notes.  There being no objections, it was so ordered.                         
 HSTA - 01/31/95                                                               
 Number 327                                                                   
 HB 4 -  PERMANENT  FUND  DIVIDEND ELIGIBILITY                                
 REPRESENTATIVE KOTT brought a proposed committee substitute (CS) to           
 present to the committee, as the committee requested at the last              
 meeting.  The CS was CS 9-LS0036-C, dated 1-27-95.  He defined the            
 CS changes, as follows:                                                       
 1.Section 1 redefines allowable absences as eligibility                      
 criteria instead of elements of residency.                                    
 2.Section 2 moves into a new section, those allowable                        
 absences already authorized by statute under AS                               
 43.23.095, the current definition of "state resident."                        
 It makes the historical piggy back allowable absences                         
 previously in regulation a statutory allowable absence.                       
 It is now incorporated in statute.                                            
 3.Section 3 deletes the references to absences in the                        
 definition of State resident, since absences are defined                      
 as eligibility criteria in section one and Section 2 of                       
 the bill, so they are trying to conform and remove                            
 conflict.  Also, Section 3 makes it clear that while                          
 absent an individual must maintain at all times an intent                     
 to return to the state and remain permanently a resident.                     
 4.Section 4, the Permanent Fund Dividend of certain spouses                  
 retroactively reinstates the eligibility of all otherwise                     
 eligible individuals accompanying their eligible resident                     
 spouses for the years 1992, 1993 and 1994.  This will                         
 allow the department to pay piggybacking spouses who were                     
 originally denied those dividends in 1992 and 1993.                           
 5.Section 5 of HB 70, gives up to 1,317 of the 1994                         
 piggybacking spouses who did not appeal by December 1,                        
 1994 the ability to submit an appeal until September 1,                       
 6.Section 6 makes Sections 1 and 3 retroactive.  The one,                    
 effective date January 1995, makes the piggyback                              
 allowable absence effective for the 1995 dividend.                            
 7.Section 7 makes the act effective as soon as it is signed                  
 by the Governor.                                                              
 Number 402                                                                    
 CHAIR JAMES asked for a motion to accept the CS, 9LS0036-C, as the            
 working document.                                                             
 REPRESENTATIVE CAREN ROBINSON moved to accept CS 9LS0036-C as the             
 working document.  Hearing no objection, it was so ordered.                   
 Number  418                                                                   
 CHAIR JAMES confirmed that the committee would be working with this           
 CS, 9LS0036-C.  There were no other persons wishing to testify so             
 CHAIR JAMES asked for a motion.                                               
 Number  420                                                                   
 REPRESENTATIVE ROBINSON moved that they pass the CS for HB 4 out of           
 committee with individual  recommendations.  Hearing no objections,           
 it was so ordered.                                                            
 HSTA - 01/31/95                                                               
 Number  427                                                                   
 HJR 3 - VOTER APPROVAL FOR NEW TAXES                                          
 TOM ANDERSON, Legislative Aide to Representative Martin, sponsor of           
 the measure, testified on the two versions of HJR 3, Version C and            
 Version F.  Version C would require prior voter approval of any               
 increase in the rate of one or more of those taxes that they are              
 looking at, ad valorem, retail, or income tax.  Version F would               
 require voter approval of any changes, increases or  decreases in             
 the rate of one or more taxes.                                                
 CHAIR JAMES said one change is to vote on any increase as well as             
 any implementation of any of these.  The other says that any                  
 change, whether an increase or decrease, would have to be voted on.           
 She opened it to discussion.                                                  
 Number 460                                                                    
 REPRESENTATIVE SCOTT OGAN said the people probably wouldn't have              
 any argument to decrease taxes so he suggested they adopt Version             
 CHAIR JAMES called for a motion and Representative Ogan moved to              
 adopt Version C as the working document.  It is number LS0214-C.              
 Hearing no objection, it was so ordered.                                      
 Number 478                                                                    
 REPRESENTATIVE OGAN expressed his support for the bill.                       
 REPRESENTATIVE PORTER said he could not support this bill at this             
 time.  He questioned the ability of this bill to frustrate the                
 efforts of the legislature to establish a long range fiscal plan.             
 If this bill were in place the legislature would have to work                 
 around it, and it would be difficult.                                         
 Number 491                                                                    
 CHAIR JAMES said that what they are deciding is whether or not they           
 wish to put forth this issue to the rest of the members of the                
 legislature, and whether they wish this to go to the people.  There           
 are some hoops to go through before this would be implemented.                
 This Version C of HJR 3 would need two-thirds vote on the floor of            
 the House and Senate, then the bill would have to go to the vote of           
 the people, and it would have to pass by a majority vote.                     
 Number 500                                                                    
 REPRESENTATIVE OGAN said that he polled the people in his district            
 and that at least eight and a half to nine out of ten people spoke            
 in favor of having the right to vote on taxes.                                
 REPRESENTATIVE OGAN moved to pass the resolution out of committee             
 with individual recommendations.                                              
 Number 515                                                                    
 There being objections, CHAIR JAMES called for a roll call vote.              
 Representatives Green, Ivan, Willis, Ogan and James voted in favor            
 of moving HB 4 out of committee.  Representatives Porter and                  
 Robinson voted against the bill.  The bill passed with individual             
 HSTA - 01/31/95                                                               
 Number 535                                                                    
 HB 70 - PERMANENT FUND DIVIDEND HOLD HARMLESS                               
 ROD MOURANT, Administrative Assistant to Representative Kott,                 
 sponsor of the bill, said there would be new items in their bill              
 packet, including a revised fiscal note from the Permanent Fund               
 Division, and a series of fiscal notes from the Department of                 
 Health and Social Services, demonstrating the financial savings and           
 expenses to the various programs that are affected by this                    
 legislation.  There is also a letter from Hope Cottages expressing            
 concern about HB 70 and its effects on their program.                         
 Number 562                                                                    
 REPRESENTATIVE PETE KOTT stated that he did not have anything more            
 to add.  However, he would answer questions.                                  
 REPRESENTATIVE GREEN wanted assurance that if the bill passed, it             
 would not cause people to lose their benefits.  He said the                   
 Department of Health and Social Services had said that individuals            
 would not lose their benefits, because they were the administrators           
 of the program, but that some people questioned if that was true.             
 Number 600                                                                    
 ELMER LINDSTROM, Special Assistant to Commissioner Perdue,                    
 Department of Health and Social Services, testified that the                  
 department is opposed to the bill.  He asserted that although there           
 is a net saving if thinking in terms of total funds, there is a net           
 cost to the state, in terms of general funds.                                 
 Number 605                                                                    
 CHAIR JAMES asserted that we have a tax on everyone in the state              
 for this hold harmless amount.  It is never appropriated in the               
 budget, because it is part of the statute, yet Alaska residents are           
 paying close to $23 million to $24 million in additional benefits             
 that would not have to be paid if we did not have the hold harmless           
 provision.  This should be included in the budget appropriations'             
 Number 622                                                                    
 MR. LINDSTROM said that all the funds, PFD, the various public                
 assistance programs, and the hold harmless, are included in the               
 operating budget on an annual basis.  The confusion is the funding            
 source.  He said that they dont often talk about that during the              
 budget deliberation because, again, the hold harmless funds are not           
 general funds, they are earnings of the permanent fund.  They are             
 real dollars, and they are appropriated through the regular                   
 operating process.  The information about the reductions from the             
 PFD check is included on the PFD check stub.                                  
 Number 656                                                                    
 CHAIR JAMES said people are distressed that money comes out of                
 their PFD checks.  The issue is that this is a tax, any time the              
 state takes money from income, it is a tax.  She suggested that we            
 take the funds from the general fund.                                         
 Number 661                                                                    
 REPRESENTATIVE ROBINSON asked what the savings would be to the                
 individual,  and what the increased amount would be to the general            
 CHAIR JAMES asked if the expense would be the same or less if these           
 funds were taken from the general fund instead of from the PFD fund           
 since it would only be a different funding source.                            
 MR. LINDSTROM said the expense would be the same.  There would be             
 an increase of $20 million in the general fund costs, however, if             
 the legislature were to take that approach.  He said that if the              
 decision were made to fund the hold harmless out of the general               
 fund it would not require a piece of legislation.  It would be a              
 budget decision made by the finance committees.  Legislation would            
 not be required to accomplish a funding source switch.                        
 TAPE 95-5, SIDE B                                                             
 Number 001                                                                    
 MR. CURTIS LOMAS, Welfare Reform Coordinator, Department of Public            
 Assistance, Department of Health and Social Services gave                     
 information on the expenditures on the various relief programs.               
 About $1,050,000 would be the increased expenditures of the general           
 relief program; $330,000 would be part of the increased                       
 expenditures in the Medicaid Program; and $472,000 would be the               
 increased expenditures in Public Assistance administration.                   
 Number 016                                                                    
 REPRESENTATIVE ROBINSON brought up the debate and the letter from             
 Hope Cottage that disputes what the Mr. Lomas had said the other              
 day that people would not lose their medical benefits.  They                  
 believe that in cases of nursing homes, and others, that they would           
 lose their benefits.                                                          
 Number 025                                                                    
 JON SHERWOOD, Program Coordinator, Division of Medical Assistance,            
 Department of Health and Social Services, reported that the receipt           
 of the Permanent Fund Dividend (PFD) would not disqualify someone             
 for Medicaid in the month of receipt.  If they retained the                   
 dividend, they would become ineligible because they would be what             
 they call "over resource" in future months.  Some people were                 
 placed on the Hold Harmless Program, and about 75 percent of the              
 spending in the Medicaid Hold Harmless Program is for facilities,             
 hospitals and nursing homes.  They don't know the reasons why                 
 people chose to retain that money, but Mr. Sherwood said they are             
 pretty sick people, so spending their PFD may not be their first              
 priority.  There are situations where Medicaid allows up to three             
 months of coverage retroactively.  If they are looking at                     
 retroactive cases some people will be disqualified, because of the            
 receipt of a permanent fund dividend check in a prior month.                  
 REPRESENTATIVE ROBINSON asked what would happen to someone in a               
 nursing home if they were dying and received the dividend and were            
 suddenly ineligible.  She asked if they would be kicked out.  If              
 they did not have money to continue to be in the facility, she                
 asked what would happen to them.                                              
 MR. SHERWOOD said he wasn't aware of a case where anyone was                  
 kicked out in a situation like that.  Generally, the social workers           
 at the nursing home would work with the family to try to get the              
 money spent as soon as possible.  If there was a period of                    
 ineligibility that would become a debt that the client had to pay             
 the nursing home.  If the client couldn't pay the debt, it would be           
 a "bad debt" to the facility.  Medicaid also allows provisions for            
 people to use their income, when they are in a nursing home, to pay           
 uncovered medical expenses such as expenses they haven't covered.             
 If someone had some income coming in later months, they could pay             
 off the debt using that income.                                               
 REPRESENTATIVE ROBINSON asked who is responsible for the bad debt             
 if the client or family doesn't have money to pay it.                         
 MR. SHERWOOD said that he thought the bad debt does not go into the           
 rate they pay nursing homes, but he wasn't certain.                           
 Number 100                                                                    
 REPRESENTATIVE PORTER commented that it is not a problem of                   
 accepting the permanent fund dividend, but retaining it.                      
 MR. SHERWOOD said that is the case; there are a few exceptions but            
 that is the rule.                                                             
 REPRESENTATIVE PORTER said it puts a person in the unusual                    
 situation of having to spend their money to get more.                         
 MR. SHERWOOD said he is in situations where he encourages people to           
 plan spending their PFD to pay some uncovered medical expenses.               
 CHAIR JAMES asked if there were any other questions of the people             
 from the Division of Public Assistance.                                       
 Number 120                                                                    
 REPRESENTATIVE SCOTT OGAN asked if people on public assistance                
 spend their money on medical expenses, they would lose their PFD.             
 MR. SHERWOOD said if they spend it in the month they receive it, in           
 most cases it won't effect their Medicaid eligibility.                        
 Number 150                                                                    
 REPRESENTATIVE IVAN said he is not familiar with the welfare                  
 program and he asked what the average length of time is that a                
 family is on public assistance if they got on AFDC or Medicaid or             
 some sort of Public Assistance.                                               
 Number 173                                                                    
 MR. CURTIS LOMIS said it is hard to say.  The data they have                  
 indicates that most families remain on public assistance for less             
 than two years.  He did not have detailed length of participation             
 data to provide specific information on that.                                 
 REPRESENTATIVE IVAN brought up how different Alaska is from other             
 states.  It is equivalent to five states.  It is very diverse and             
 different circumstances occur if you compare one family in an urban           
 setting versus a rural setting.  He said he would need more                   
 information on the impact of this bill on the different                       
 constituencies before he could consider supporting such legislation           
 as this.                                                                      
 Number 195                                                                    
 MR. LOMIS presented a legislative research report, prepared last              
 year, for purposes of analysis for a different piece of                       
 legislation.  It is research request 94-94.172, and what it has is            
 a breakdown of public assistance benefits by community for the                
 month of October, 1993.  This report is being updated by                      
 Legislative Research with October, 1994, information.  He referred            
 the committee to this document for analysis.  The numbers are very            
 representative.  REPRESENTATIVE JOE GREEN  asked if they must spend           
 the PFD in the same month or same year to avoid the problem.                  
 Number 227                                                                    
 MR. LOMAS said they have to spend the PFD check in the same month             
 it is received.  The PFD money is considered as income for that               
 month.  If it is retained in the next month it is a resource, so              
 then it might put the recipient over the resource line.                       
 Number 214                                                                    
 REPRESENTATIVE ROBINSON spoke about the lengths of time people are            
 on public assistance, and about the people who come to Alaska from            
 the Lower 48 states.  There is a strong impact of other people                
 coming in to get our benefits.  She wondered if this would be part            
 of the research they are doing.                                               
 CURTIS LOMAS said the question has come up repeatedly over the last           
 several years and the department did some research about three                
 years ago.  They questioned applicants who had been in the state              
 less than a year about their reasons for coming to Alaska.  They              
 come for reasons like anyone else, they are looking for jobs.                 
 There is also a prevailing perception that Alaska is wealthy and it           
 brings people here.                                                           
 CHAIR JAMES recalled hearing about people moving into the state               
 specifically because they had a disabled person in the family and             
 medical benefits and treatments for disabled people are better here           
 than in other states.  She asked Mr. Lomas to respond to that                 
 Number 276                                                                    
 CURTIS LOMAS confirmed that the benefit levels in Alaska are higher           
 than other states, although we are not higher in disability                   
 programs.  The department's research does not bear out that                   
 benefits are a major factor when people from other states decide to           
 come to Alaska.                                                               
 Number 290                                                                    
 REPRESENTATIVE CAREN ROBINSON wanted to know how much higher our              
 payments are, and if that is because our cost of doing business               
 here is higher.  She wondered if the reason is that medical costs             
 are higher and housing is higher; we are not so much higher                   
 compared to the kind of service they can get in the Lower 48.                 
 MR. LOMAS said that when the department has compared the AFDC rates           
 in our state to that of other states, speaking  in terms of the               
 cost of living in Alaska, Alaska comes close to the top six states            
 as a percentage of the poverty guide line.  As generous as Alaska             
 is, it is not considered remarkable compared to other states.                 
 Number 308                                                                    
 MR. SHERWOOD said people with disabilities may be intrigued by the            
 levels of benefit payments in Alaska compared to other states, yet            
 they lose interest in coming to Alaska when he explains the cost of           
 rent in Alaska, or the lack of availability of some kinds of                  
 services that disabled people need in many communities.                       
 REPRESENTATIVE KOTT returned to give a closing statement on HB 70.            
 There was concern about how it would effect Child Support and                 
 Enforcement Division (CSED) individuals.  Since the last meeting,             
 he spoke with them and determined that there would not be any                 
 pragmatic impact.  Also, he had a preliminary zero fiscal note, so            
 there is absolutely no impact on CSED.                                        
 REPRESENTATIVE KOTT said there may not be statutory requirements to           
 change the funding source; however, there would be statutory                  
 requirements to eliminate or delete from statute the hold harmless            
 provisions, as well as the notification to the public, which is               
 currently required.  There will be some kind of statutory                     
 requirement.  Also, there may be some start up costs in the                   
 program.  The bill has a Judiciary and Finance referral.  There is            
 a mechanism to transfer people on and off of programs, namely,                
 automation, and he believes some kind of program can be constructed           
 to offer ease of transfer and to reduce bureaucratic costs.                   
 Number 385                                                                    
 REPRESENTATIVE KOTT said he spoke to Jan Hansen who said many                 
 people have come here because of Alaska's public assistant                    
 programs.  Ten percent of Alaskan people are receiving some type of           
 public assistance, one out of ten people.  As stated before, the              
 majority of people on public assistance stay on the program less              
 than two years.  Judging from the information Representative Kott             
 has, this is a slim majority, Over 40 percent stay on the program             
 longer than two years.                                                        
 The fiscal note is based on the theory that everyone currently on             
 the Hold Harmless Program will accept the PFD check.                          
 Representative Kott thinks that, in the final analysis, people on             
 public assistance will opt to stay on public assistance program and           
 not receive the PFD check.                                                    
 Number 403                                                                    
 REPRESENTATIVE IVAN spoke of his concern to have slow welfare                 
 reform and said he respects the efforts and the intent of this                
 CHAIR JAMES made a comment that many of the problems result from              
 federal regulations.  We are in a transition period, where in                 
 Washington D.C., they are currently working on what to do and how             
 they will address welfare.  Some federal changes might give us more           
 control over how we handle public assistance.                                 
 Number 442                                                                    
 REPRESENTATIVE BRIAN PORTER does not see this legislation as a step           
 that would frustrate the attempt at welfare reform.  He doesn't               
 think it will adversely affect anyone, since there are mechanisms             
 in place for those who have a dire need.                                      
 Number 460                                                                    
 REPRESENTATIVE KOTT stated they are trying to work toward a mind              
 set of being more self-sufficient.                                            
 Number 485                                                                    
 REPRESENTATIVE ROBINSON voiced her objections.  She totally                   
 disagreed with the testimony.  She said that passing this bill                
 would hurt the most needy people in our state, seniors, disabled,             
 the poor and sickest.  She believe they are spending the PFD                  
 frivolously.  The permanent fund is part of their wealth that they            
 deserve to receive.  She said she will be voting against this bill.           
 Number 526                                                                    
 CHAIR JAMES commented that there are the working poor also who are            
 not on public assistance.  Each one of them is paying about $41 of            
 their permanent fund dividend check to keep these other people                
 Number 539                                                                    
 REPRESENTATIVE BRIAN PORTER moved that the committee pass HB 70               
 from the House State Affairs Committee, with attached fiscal notes            
 and individual recommendations.                                               
 Number 540                                                                    
 REPRESENTATIVE ROBINSON objected.                                             
 REPRESENTATIVE ED WILLIS testified that he will not support the               
 bill.  The intent of this bill was that money be put away for all             
 generations of Alaskans.  All Alaskans deserve its bounty.  He                
 believes that those of us who can work must help the people who               
 cannot help themselves, and he will not support this bill until he            
 knows precisely what impact this bill would have.  As it is,                  
 everyone is only guessing, so for that reason he will have to vote            
 CHAIR JAMES said that the motion before the committee was whether             
 or not to move this bill out of committee with individual                     
 recommendations.  She asked the secretary to call the roll.                   
 Number 590                                                                    
 Representatives Ivan, Robinson and Willis voted against moving HB
 70.  Representatives Porter, Ogan, Green and James voted in favor             
 of moving the bill with individual recommendations.  The motion               
 passed and HB 70 was moved out of committee.                                  
 The committee took a brief break.                                             
 CHAIR JAMES called the meeting back to order at 9:35 a.m.                     
 HSTA - 01/31/95                                                               
 Number 622                                                                    
 HB 81 - PRESERVATION OF PUBLIC FACILITIES                                   
 CHAIR JAMES announced that she would roll HB 81 over to the next              
 meeting.  She also said that on February 17, 1995, is an annual               
 meeting regarding public facilities management, which she will be             
 CHAIR JAMES read the Sponsor Statement, updated 1-9-95, for the               
 The State of Alaska has 2.3 billion dollars invested in 1,717                
 public buildings.  There is currently a gigantic deferred                     
 maintenance backlog (Deferred Maintenance list, prepared by                   
 the Alaska State Facilities Administrators.  February 1993,                   
 attached as exhibit #10) for these public buildings, this is                  
 a public disgrace, our buildings are falling down around us                   
 No new construction should be undertaken until we have                       
 repaired and maintained our current facilities to an                          
 acceptable condition.  It is senseless to keep building new                   
 facilities while our current buildings deteriorate from a                     
 maintenance need to a replacement need.                                       
 This bill requires:                                                          
 1.  All deferred maintenance is to be performed over a 15                    
 year period on all public buildings for a total                               
 appropriation as extrapolated from the fiscal note of                         
 $251,400,000.00 ($113,985,800.00 in the first 6 years) in                     
 capital replacement costs, the sum of the dollars needed                      
 is astonishing.  The fiscal note for FY 95 building                           
 operation is $61,102,700.00 and continues annually                            
 forever, adjusted for inflation at an annual rate of 3.5                      
 percent.  The operating budget has been underfunded for                       
 a long time and is the reason the deferred maintenance                        
 2.  All new buildings built after #1 is complete will need to                
 be funded by a formula program to guarantee that the new                      
 buildings will be properly maintained.                                        
 The continuing problem of assuring the money appropriated for                
 maintenance goes to the maintenance is one that we must                       
 examine and incorporate into this bill through the amendment                  
 Public facilities have been underfunded for many years, it is                
 sheer folly to expect our buildings to fix themselves, and to                 
 continue to ignore this crushing need is totally                              
 The Department of Transportation and Public Facilities is the                
 agency I will charge with this task of repairing and replacing                
 our public facilities including University of Alaska                          
 CHAIR JAMES said that in the analysis of the bill, all deferred               
 maintenance on state buildings would take place over a 15 year                
 period.  All new buildings would be constructed after all deferred            
 maintenance is completed.  New construction will be funded by a               
 formula program to guarantee that they will be properly maintained.           
 TAPE 95-6, SIDE A                                                             
 CHAIR JAMES said there are horror stories about maintenance                   
 problems.  The state needs operating expenses to avoid these                  
 capital expenses.                                                             
 Number 016                                                                    
 REPRESENTATIVE WILLIS concurred.  He served on Military and                   
 Veterans Affairs budget subcommittee last year and found that they            
 let maintenance slip.  A preventative maintenance program could               
 take care of problems in the first instance and cost considerably             
 less than the repairs.                                                        
 Number 050                                                                    
 REPRESENTATIVE ROBINSON spoke in favor of the bill, saying she                
 thought it was a good direction for the legislature to move toward.           
 She asked how the priorities would be set out and if it would be              
 similar to the school districts are doing now.                                
 Number 108                                                                    
 CHAIR JAMES said there would be an analysis by those people who are           
 supposed to evaluate what is the most needed.  The maintenance                
 would be brought current over a fifteen year period.  Meanwhile, we           
 would be taking a life-cost basis and in the operating budget we              
 would be funding what that is, so we could do the keeping up while            
 catching up.                                                                  
 REPRESENTATIVE ROBINSON asked if they would repeal the way they are           
 handling maintenance and programs for the school districts now.               
 CHAIR JAMES answered that there is a dispute as to whether or not             
 the school districts are doing fine the way they are.  They are               
 doing fine with new buildings, but there is an extensive amount of            
 deferred maintenance at this point too.                                       
 REPRESENTATIVE ROBINSON brought up a Juneau school as a follow-up             
 to that.  The high school is in need of a new roof.  Last year,               
 they are number 7 on the priority list, and this year they are back           
 down to 47.  She was curious about how this would work, because at            
 the school district level it seems they are in this spinning wheel.           
 One day they are at four and next year at seven.  When thinking               
 about public facilities, which are grantees through the Division of           
 Family Youth Services and through the Department of Public Safety,            
 she wondered if they had considered including these into the                  
 CHAIR JAMES answered, "yes," and then recalled the Fairbanks                  
 Resource Center, which is a grantee of the state.  They are                   
 pleading with the state for money to build their own building to              
 avoid paying the outrageous rent they are paying; then the State              
 could use their operating funds for the purpose that they are                 
 intended.  However, Chair James pointed out that it does not work             
 that way.  It costs nearly as much to own a building as it does to            
 rent one.  This is a myth that many people hold to, but normally,             
 the cost of maintenance is included in the rent they pay.  There              
 are advantages to owning a building, but it does not necessary save           
 Number 132                                                                    
 REPRESENTATIVE OGAN said that CHAIR JAMES' statement was somewhat             
 accurate, but he would have to debate with her some on it.  When              
 moving into a new building, maintenance would be less.  When you              
 rent a building the amortization costs are factored in as well as             
 maintenance.  In short term, they would have more money, but in               
 long term, it might cost more.                                                
 CHAIR JAMES said that there is a life cost basis for determining              
 how much should be used for maintenance each year.  If money is put           
 aside on a life cost basis we would have the money when needed for            
 Number 158                                                                    
 REPRESENTATIVE PORTER wondered what can be done to maintain an                
 account for maintenance.  The legislature changes every two years             
 and the philosophy of funding also changes.                                   
 Number 175                                                                    
 CHAIR JAMES asserted that the legislature cannot be forced to                 
 appropriate funds for anything.  It is up to the legislature to do            
 that, and every two years they are free to budget what they want.             
 However, the public is greatly distressed with the deferred                   
 maintenance on our public facilities.  If there was a provision in            
 the statutes to allow for a formula driven amount  to apply to                
 maintenance, the general public would not allow the legislature to            
 turn away from the issue.                                                     
 REPRESENTATIVE ROBINSON inserted that the legislature would need a            
 proposal to consider.                                                         
 Number 200                                                                    
 JOHN STEINMANN, Architect, Division of Finance, Department of                 
 Education (DOE), testified in favor of this bill.  The Department             
 of Education is an advocate of maintenance, and there are presently           
 163 Rural Education Administrative Areas (REAA) and 360 city                  
 borough sites.                                                                
 CHAIR JAMES asked about a life-cost amount calculated in the amount           
 to do maintenance and repairs.                                                
 MR. STEINMANN said the DOE advocates a plan to work on a long term            
 life cycle basis.                                                             
 Number 247                                                                    
 REPRESENTATIVE GREEN mentioned there was money in the budget for              
 maintenance, but it was appropriated to do other things.  He was              
 concerned that this situation might happen again.                             
 MR. STEINMANN wasn't prepared to answer that.                                 
 CHAIR JAMES rolled the bill over to the next meeting on Thursday,             
 February 2, 1995.                                                             
 There being no further business to come before the State Affairs              
 Committee, CHAIR JAMES adjourned the meeting at 10:25 a.m.                    

Document Name Date/Time Subjects