03/11/2003 08:00 AM House STA
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 11, 2003
8:00 a.m.
MEMBERS PRESENT
Representative Bruce Weyhrauch, Chair
Representative Jim Holm, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Paul Seaton
Representative Ethan Berkowitz
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 15
"An Act relating to establishing the Alaska No-Call List, a data
base of residential telephone customers who do not wish to
receive telephonic solicitations; providing that the data base
be compiled at no cost to the customers; requiring paid
telephonic sellers to purchase the data base; requiring
telephonic sellers to identify themselves; requiring telephonic
solicitors who are otherwise exempt from registration as
telephonic solicitors to file with the Department of Law and
purchase the data base; and providing for an effective date."
- HEARD AND HELD
CONFIRMATION HEARINGS
Personnel Board
Paulette Simpson - Douglas
- CONFIRMATION(S) ADVANCED
Alaska Public Offices Commission
Larry Wood - Eagle River
- CONFIRMATION(S) ADVANCED
EXECUTIVE ORDER 108 - TRANSFER FUNCTIONS TO DEPARTMENT OF HEALTH
& SOCIAL SERVICES
- EXECUTIVE ORDER ADVANCED
HOUSE BILL NO. 158
"An Act eliminating the longevity bonus program and making
related conforming changes; and providing for an effective
date."
- HEARD AND HELD
HOUSE BILL NO. 157
"An Act eliminating the Alaska Public Offices Commission;
transferring campaign, public official, and lobbying financial
disclosure record-keeping duties to the division of elections;
relating to reports, summaries, and documents regarding
campaign, public official, and lobbying financial disclosure;
providing for enforcement by the Department of Law; making
conforming statutory amendments; and providing for an effective
date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 161
"An Act allowing expenses of the correctional industries program
that may be financed from the correctional industries fund to
include the salaries and benefits of state employees."
- SCHEDULED BUT NOT HEARD
HOUSE JOINT RESOLUTION NO. 4
Proposing an amendment to the Constitution of the State of
Alaska relating to the duration of a regular session.
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 15
SHORT TITLE:TELEMARKETERS NO-CALL LISTS
SPONSOR(S): REPRESENTATIVE(S)FATE
Jrn-Date Jrn-Page Action
01/21/03 0035 (H) PREFILE RELEASED (1/10/03)
01/21/03 0035 (H) READ THE FIRST TIME -
REFERRALS
01/21/03 0035 (H) L&C, STA, FIN
01/29/03 (H) L&C AT 3:15 PM CAPITOL 17
01/29/03 (H) <Bill Postponed>
02/07/03 0153 (H) COSPONSOR(S): CHENAULT
02/07/03 (H) L&C AT 3:15 PM CAPITOL 17
02/07/03 (H) Moved CSHB 15(L&C) Out of
Committee
MINUTE(L&C)
02/10/03 0166 (H) L&C RPT CS(L&C) NT 3DP 4AM
02/10/03 0166 (H) DP: CRAWFORD, ROKEBERG,
ANDERSON;
02/10/03 0166 (H) AM: LYNN, GATTO, GUTTENBERG,
DAHLSTROM
02/10/03 0167 (H) FN1: ZERO(CED)
02/10/03 0167 (H) FN2: (LAW)
02/10/03 0167 (H) REFERRED TO STATE AFFAIRS
02/10/03 0172 (H) COSPONSOR(S): CRAWFORD
02/18/03 0231 (H) COSPONSOR(S): KERTTULA
02/18/03 (H) STA AT 8:00 AM CAPITOL 102
02/18/03 (H) Heard & Held
02/18/03 (H) MINUTE(STA)
02/25/03 (H) STA AT 8:00 AM CAPITOL 102
02/25/03 (H) Scheduled But Not Heard
03/05/03 0450 (H) COSPONSOR(S): CROFT
03/11/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 158
SHORT TITLE:ELIMINATING LONGEVITY BONUS PROGRAM
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0427 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0427 (H) STA, FIN
03/05/03 0428 (H) FN1: (ADM)
03/05/03 0428 (H) GOVERNOR'S TRANSMITTAL LETTER
03/05/03 0428 (H) REFERRED TO STATE AFFAIRS
03/11/03 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
REPRESENTATIVE HUGH FATE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 15.
JIM POUND, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 15.
STEVE CLEARY, Executive Director
Alaska Public Interest Research Group (AkPIRG)
Anchorage, Alaska
POSITION STATEMENT: Testified briefly during hearing on HB 15.
MARIE DARLIN
AARP Capital City Task Force
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 15.
REPRESENTATIVE HARRY CRAWFORD
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as cosponsor of HB 15.
PAULETTE SIMPSON, Appointee
to the Personnel Board
Douglas, Alaska
POSITION STATEMENT: Testified as appointee to the Personnel
Board.
LARRY WOOD, Appointee
to the Alaska Public Offices Commission (APOC)
Eagle River, Alaska
POSITION STATEMENT: Testified as appointee to APOC.
BOB LABBE, Deputy Commissioner
Office of the Commissioner
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: During hearing on EO 108, explained the
reorganization of DHSS.
KARLEEN JACKSON, Deputy Commissioner
Office of the Commissioner
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified and answered question during the
hearing on EO 108.
MIKE MILLER, Commissioner
Department of Administration (DOA)
Juneau, Alaska
POSITION STATEMENT: Gave some background regarding HB 158 and
the Alaska Longevity Bonus program.
ACTION NARRATIVE
TAPE 03-19, SIDE A
Number 0001
CHAIR BRUCE WEYHRAUCH called the House State Affairs Standing
Committee meeting to order at 8:00 a.m. Representatives Holm,
Seaton, Dahlstrom, Berkowitz, Gruenberg, and Weyhrauch were
present at the call to order. Representative Lynn arrived as
the meeting was in progress.
HB 15-TELEMARKETERS NO-CALL LISTS
Number 0040
CHAIR WEYHRAUCH announced that the first order of business was
HOUSE BILL NO. 15, "An Act relating to establishing the Alaska
No-Call List, a data base of residential telephone customers who
do not wish to receive telephonic solicitations; providing that
the data base be compiled at no cost to the customers; requiring
paid telephonic sellers to purchase the data base; requiring
telephonic sellers to identify themselves; requiring telephonic
solicitors who are otherwise exempt from registration as
telephonic solicitors to file with the Department of Law and
purchase the data base; and providing for an effective date."
[In committee packets was a proposed committee substitute (CS),
Version I, labeled 23-LS0058\I, Craver, 2/28/03.]
Number 0219
REPRESENTATIVE HUGH FATE, Alaska State Legislature, sponsor,
referred to Version I and said it provides an opportunity for
people not to receive annoying telephonic solicitations. The
new language puts into place a plan to allow Alaskans to submit
their phone numbers to be placed on a list that will eliminate
sales phone calls from professional solicitors. It would
require companies involved in telephone soliciting to purchase
that list and make every attempt to not call those numbers.
This won't eliminate every phone call. Groups will still be
permitted to contact their members, and companies and
organizations that have done business with a customer within the
last two years will still be permitted to contact homes and seek
donations.
REPRESENTATIVE FATE said this has support from the AARP. He
noted that many telephone solicitor calls are directed toward
seniors. He spoke of the fast-talking scam artists who make
"too good to come true" offers, taking the life savings out of
the pockets of many of those senior citizens. He opined that
while [federal efforts in progress] will help, much of the
authority must remain in the hands of the state. Noting that
much of the language is based on Colorado's, he said that state
is "receiving and not losing funds from the program." He told
the committee this is an opportunity to improve the lives of
constituents by ending "this fast-growing intrusion into our
private lives." He mentioned an intention to reduce or
eliminate the fiscal note.
Number 0520
REPRESENTATIVE SEATON moved to adopt the proposed CS, Version
23-LS0058\I, Craver, 2/28/03, as a work draft. There being no
objection, Version I was before the committee.
REPRESENTATIVE FATE clarified that an annual fee of $5 [to be
paid by the residential subscriber] is part of Version I.
Number 0720
REPRESENTATIVE GRUENBERG offered Amendment 1, which [applied to
Section 9 of the bill but] read as follows [original punctuation
provided]:
Section 2. AS 45.50.475(b)
Page 8, line 14, change "engage a person in a
telephone conversation repeatedly" to "repeatedly
engage a person in telephone conversations."
There being no objection, Amendment 1 was adopted.
Number 0810
REPRESENTATIVE GRUENBERG offered Amendments 2(a) and 2(b).
Amendment 2(a) read as follows [original punctuation provided]:
Section 2. AS 45.50.475(b)
Page 2, line 18, remove "of $750."
Amendment 2(b) read as follows [original punctuation provided]:
Section 2. AS 45.50.475(b)
Page 2, line 18, remove "of $750."
This provision allows the attorney general to set the
access fee.
REPRESENTATIVE GRUENBERG noted that Amendment 2(a) says it would
be at least $750, and Amendment 2(b) allows [the attorney
general] to set the fee.
CHAIR WEYHRAUCH surmised that Representative Gruenberg was
asking that the committee hold a policy discussion to decide
whether the $750 should be removed or put as a "floor."
REPRESENTATIVE GRUENBERG said he assumes [the committee] wants
it to cover the cost. He suggested another option might be to
change the word "must" on line 21 to "is intended to", for
example. He said he'd just like to make sure these things mesh.
Number 0983
REPRESENTATIVE BERKOWITZ asked how many solicitations occur in
the state. He explained that the question is whether $750 will
cover the cost, and that he was trying to understand the
dimensions of the issue.
Number 1030
JIM POUND, Staff to Representative Hugh Fate, Alaska State
Legislature, said it depends on how many calls are made
regionally. He surmised that in Alaska three or four [companies
make solicitous in-state calls]; many calls are generated from
Outside. He estimated that there are 15 to 20 companies in the
Seattle area and 30 to 40 companies in Colorado. He added,
"Anymore, they seem to be able to call from anywhere in the
country."
REPRESENTATIVE BERKOWITZ suggested that another alternative is
to charge a fee each time the list is used, rather than allowing
a subscriber to buy the list for a year.
MR. POUND said he would interpret the $750 in the legislation as
a one-time-only fee per year, much like a subscription.
REPRESENTATIVE BERKOWITZ explained that his suggestion was in
the context of Representative Gruenberg's proposal to have a
policy discussion with regard to subsidizing the cost of
maintaining the list.
REPRESENTATIVE FATE posited that [having a per-use fee] could
tend to raise administrative costs.
Number 1230
REPRESENTATIVE SEATON reported that his study of the fiscal note
showed that at $750, it would be a $103,000 fiscal note in the
first year, which would take approximately 125 subscribers to
offset. Referring to the numbers of companies in and out of the
state previously alluded to by Mr. Pound, he said he was trying
to figure out how the bill would be enforced.
Number 1326
REPRESENTATIVE FATE responded that he thinks there was previous
discussion regarding that point. He said there are ways of
enforcing it, but there will also be "some slippage"; for
instance, some solicitors change phone numbers and addresses
every week. Regarding the others, he recalled that "there were
ways in which the state could stop those kinds of solicitors, or
force them to buy the list."
CHAIR WEYHRAUCH asked about charging a fee that would pay for
the cost of the program, and leaving it up to the agency.
REPRESENTATIVE GRUENBERG indicated that's essentially the intent
of Amendment 2(b).
REPRESENTATIVE FATE explained that the fiscal note had not yet
been changed to reflect the effects of the $5 per-person charge.
He added, "That was to have changed this fiscal note and to
have, if not completely covered the cost, to have come very
nearly to covering the cost."
Number 1433
MR. POUND, in response to a question from Representative Seaton,
said the phone company will have nothing to do with the fees.
The company involved with the fees will be that with which the
Department of Law has contracted, because that is where the data
base will be created.
Number 1476
REPRESENTATIVE DAHLSTROM told Representative Fate she didn't
understand how the state could manage this without the phone
company's involvement. She asked if he'd engaged in
conversations with the various local exchange carriers and if
they are able and willing to step up to the plate with regard to
the enforcement that will go along with this.
REPRESENTATIVE FATE said several states do this very nicely. He
deferred to Mr. Pound.
MR. POUND responded that he'd held a conversation with GCI,
whose biggest concern was with the management of telephone lines
and the associated costs. He noted that the $5 fee and annual
renewal requirement would eliminate GCI's concern. He said,
essentially, a person's number would come off the list if that
person didn't automatically renew and pay the $5 each year. In
further response, he reiterated that no money would go to the
phone company; it would go to the contractor that would be
contracted with through the Department of Law. It would be a
matter of people's asking to be on the list, regardless of what
phone company they used.
Number 1648
REPRESENTATIVE BERKOWITZ said it seems charging people $5 to
assert their privacy rights is a tad peculiar. He asked if
there was any reason not to drop that provision.
REPRESENTATIVE FATE answered that there is probably no reason,
but Alaska hasn't had any experience [with a no-call list]. He
also mentioned the state's current population base. The $5 is
necessary in order to pay for the program, he opined; however,
that doesn't mean that provision can't be dropped in the future,
once there is some experience in the program.
REPRESENTATIVE BERKOWITZ said he can't imagine that the number
of people who would register for this service would exceed
20,000-50,000. In that range, he said, the cost of
administering the $5 fees would take most of what income might
result from administering those fees. He added, "I hate to go
to people and say, 'You need to pay in order to be let alone.'
I think that sends a real mixed message."
Number 1760
MR. POUND responded that people already have to pay a phone
company for unlisted telephone numbers. A $5 user fee would
cover [the state's] expenses. He said, "If we do not charge a
$5 user fee and there is no ability to cancel out a telephone
number, the telephone company is going to consider that
additional cost on their end, and they're going to end up
charging the fee and they'll get the $5."
REPRESENTATIVE BERKOWITZ said it seems [the legislature] could
see that costs are covered by having the amount be more than
$750. He explained that if people want to pay money to bother
him at home, he is quite willing to let them do that; however,
he doesn't think he should have to pay to tell them to leave him
alone. He stated his belief that the burden is on [those
companies] to gain access to his information, not on him to tell
them to stay away.
MR. POUND told Representative Berkowitz that the "black dot"
list - which the program under discussion has been equated to -
is basically a "pay" service.
REPRESENTATIVE BERKOWITZ emphasized that it's a [service] with
the phone company. He said there is an important difference
between requiring the government to be an agent of pay, as
opposed to a private entity.
Number 1859
REPRESENTATIVE SEATON referred to page 5, beginning on line 23,
which read:
(4) calls on behalf of the person that
result in violations of this section occur not more
than twice in a 30-day period [AS 45.50.475 ARE
INFREQUENT].
He said the way that reads to him is that a solicitor could call
once a month - basically, several times a year - and not have a
violation.
Number 1900
MR. POUND explained that the intent is to allow for two
mistakes. The [language] is not designed so that if a solicitor
calls someone who is on the list, he or she can immediately be
thrown into jail; it is designed to eliminate as many solicitous
phone calls as is practicable. He added, "And if it becomes a
problem under the harassment section, then it becomes a felony."
REPRESENTATIVE SEATON reiterated that his interpretation of the
language is that a solicitor could call once a month without
being in violation.
MR. POUND said that is the language of the Department of Law and
that he doesn't think Representative [Fate] would object to
eliminating that section.
REPRESENTATIVE FATE stated, "You sometimes have to make
allowances for mistakes." He said he thinks the language simply
allows for two mistakes in a 30-day period.
Number 2015
REPRESENTATIVE SEATON said he doesn't think it was anybody's
intention to allow a telemarketer to call a person on the no-
call list once a month. He asked if he might be misinterpreting
the language.
MR. POUND said he interpreted the language to say that the
solicitor would not be allowed to make more than two mistakes
"out of their data base" in a 30-day period.
Number 2030
REPRESENTATIVE GRUENBERG referred to [page 5], beginning on
line 12, which read as follows:
(d) A person who employs individuals to engage
in telephonic [TELEPHONE] solicitations is not liable
for the violation of this section [AS 45.50.475] if an
employee solicits a residential telephone customer who
is identified in the data base [TELEPHONE DIRECTORY]
as not wishing to receive telephonic [TELEPHONE]
solicitations if the person established that
(1) the person has adopted and implemented
written procedures to comply with (a) of this section
including corrective actions where appropriate;
(2) the person has trained its personnel in
the procedures established under (1) of this
subsection;
(3) the call that violated this section [AS
45.50.475] was made contrary to the procedures and
policies established by the person; and
(4) calls on behalf of the person that
result in violations of this section occur not more
than twice in a 30-day period [AS 45.50.475 ARE
INFREQUENT].
REPRESENTATIVE GRUENBERG said the way he reads that, a solicitor
can make two calls to a person on the [no-call] list in any 30-
day period and get away with it; a solicitor who makes three or
more is in violation. He said he could understand the goal from
[the Department of] Law, because [the deleted original language
using] the word "infrequent" is vague, which could result in a
constitutional challenge. He said the question is to decide
what the standard ought to be.
Number 2155
CHAIR WEYHRAUCH reminded the committee that there were still
proposed amendments pending. He remarked that Representative
Fate had addressed the fiscal note, but it was based on the
original bill. He acknowledged that it would be any sponsor's
concern to have a low fiscal note, but said, "The fiscal note
had not addressed these fee changes." He agreed with
Representative Berkowitz that he doesn't want to have to pay to
have someone not call him, which is like paying [racketeers] for
protection. He said he also thinks [the legislature should]
charge the people who want to take advantage of the consumer by
calling at all hours to pay the cost of the program.
Transferring the burden of the cost to the callers might result
in a zero fiscal note.
Number 2265
REPRESENTATIVE HOLM asked if the purpose of the bill is to
protect people from getting the [solicitous] calls; if so, why
would someone want to pay a $5 fee every year? He emphasized,
"I don't want them to call ever." He asked how the committee
might present an option for people to put their names on a list
so that they'd never be called. He said Representative
Berkowitz brought up an interesting point about rights.
Representative Holm said, "I'm not sure when you get a phone
that you have a right not to have somebody ring it." He stated
his understanding that there is machinery currently on the
market for approximately $30 that prevents people from
automatically dialing one's number. He asked for guidance. He
clarified that he wants to know if this bill will stop people
from calling or only stop them from calling for a year because
the $5 fee has been paid.
Number 2366
REPRESENTATIVE FATE responded that [HB 15] is not a bill to
protect. He said people would make the choice whether to be on
the list.
REPRESENTATIVE HOLM responded that he never chose to be called
to begin with.
REPRESENTATIVE FATE asserted that the ability to call people is
simply freedom of speech. He said HB 15 may not prevent one or
two calls from slipping through, because there are "renegade
solicitors" who make a business of this. He reiterated that
similar programs have been successful in other states. He said
[the legislation] would reduce and, in many cases, eliminate
those solicitations that are unwanted.
Number 2474
REPRESENTATIVE DAHLSTROM asked who would have the burden of
proof that a solicitous phone call was made. She also referred
to page 5 [line 24] and proposed a change from the 30-day period
to no more than two call in a 365-day period. She added a
suggestion to put everyone on the no-call list and let those who
want to receive solicitous phone calls pay the fee.
REPRESENTATIVE FATE responded that arbitrarily saying that a
solicitor may call nobody may be unconstitutional because of the
freedom of speech amendment.
Number 2544
CHAIR WEYHRAUCH said everyone is angry about getting solicitous
phone calls and [HB 15] needs to move.
REPRESENTATIVE FATE noted that he has received [numerous] public
opinion messages [in support of] the legislation.
Number 2588
REPRESENTATIVE BERKOWITZ, in regard to Representative Holm's
previous questions about the propriety of banning people from
making phone calls, said people put "no trespass" signs on their
doors. He said he honors those when he campaigns and hopes the
other legislators do too. He said he is weighing in with those
who previously said the $5 fee should not be passed, but that
cost should be passed on to the solicitors. He asked that [the
sponsor] make sure that [automated calls] are addressed as well,
since they aren't live calls from people and are "way more
annoying than they ought to be, even when they are political
ones from the President."
CHAIR WEYHRAUCH stated his intent to pass the bill out of
committee by Thursday [March 13, 2003] as a committee substitute
that would speed through the House Finance Committee.
REPRESENTATIVE FATE said he would appreciate the assistance of
the committee.
REPRESENTATIVE BERKOWITZ noted that the $5 issue is a policy
call for this committee to make, whereas working on the fiscal
note is the job of the House Finance Committee.
CHAIR WEYHRAUCH said he thinks the focus of the committee is to
have "as much of the burden of the program pass to those who
would take advantage of the consumer."
Number 2717
REPRESENTATIVE GRUENBERG stated a need for either an interstate
compact or federal legislation. He suggested adding a provision
to the bill requesting the federal government to legislate in
this area, because these companies are not Alaskan companies.
REPRESENTATIVE FATE related his understanding that there is
pending federal legislation.
Number 2804
STEVE CLEARY, Executive Director, Alaska Public Interest
Research Group (AKPIRG), let the committee know that he would be
available whenever HB 15 is scheduled again. He said he was in
Colorado recently, and his relatives [lauded] the program there.
He said, "The fact that it's more than paying for itself speaks
to how worthy this program is."
Number 2869
MARIE DARLIN, AARP Capital City Task Force, testified in support
of HB 15, noting that the committee had a letter of support from
[AARP's] state office in which it addressed the fact that there
is currently proposed federal legislation. Notwithstanding
that, she said AARP's members strongly feel that [Alaska] needs
to have its own law, because the [pending] federal law does not
go far enough and doesn't preclude states from having "stronger
bills." She noted that the "black dot" program costs $5 to $8,
depending on a person's phone company's rates. She said
probably two-thirds of seniors [in Alaska] would pay $1, if that
amount were offered, in order not to be called [by solicitors].
Number 2946
REPRESENTATIVE HARRY CRAWFORD, Alaska State Legislature,
cosponsor HB 15, said the amount of $750 was set in an effort to
establish a self-supporting program, after looking at other
states' programs, which were between $300 and $800.
TAPE 03-19, SIDE B
Number 2996
REPRESENTATIVE CRAWFORD said the program should be paid for by
the people who want to make money with it; consumers shouldn't
have to pay to be left alone. He referred to the current "black
dot" list and said, in some places in rural Alaska, it costs up
to $50 to get on it. He noted that only 2 percent of
subscribers in Alaska get on that list, whereas in other states
that have a do-not-call list, the number of subscribers is 10 to
20 percent. He offered his belief that $750 would be an
adequate amount to attract third-party contractors to administer
the program at no cost to the state.
Number 2917
REPRESENTATIVE BERKOWITZ asked Representative Crawford if he
knows if other states have a mandatory fine for violation of the
provisions.
REPRESENTATIVE CRAWFORD answered, "It's all over the board as to
what becomes a violation." He said he thinks two calls per
month is probably the most lax. He noted that [the sponsor] had
used much of the language from the Colorado bill, but added, "We
left that part out."
REPRESENTATIVE BERKOWITZ said it seems that if there were
mandatory sanctions for violations, those sanctions would help
offset the cost of the program. He added, "There's unscrupulous
solicitors out there, and we ought to be dinging them for the
cost of this, rather than the people of the state."
Number 2878
REPRESENTATIVE CRAWFORD said the State of Oregon is making more
money back on the program with its prosecutions than it ever put
out. It is a positive fiscal note once the program gets under
way. He informed the committee that when Louisiana [adopted] a
do-not-call list, 50,000 people signed up in the first week.
REPRESENTATIVE FATE mentioned including the Department of Law in
discussions of HB 15 [that would take place between this meeting
date and the next hearing on March 13, 2003].
CHAIR WEYHRAUCH announced that HB 15 would be held over.
CONFIRMATION HEARINGS
CHAIR WEYHRAUCH brought before the committee the confirmations
of Paulette Simpson and Larry Wood, appointees to the Personnel
Board and the Alaska Public Offices Commission, respectively.
Personnel Board
Number 2796
PAULETTE SIMPSON, Appointee to the Personnel Board, related her
understanding that the function of the [Personnel Board] is to
approve and disapprove amendments to the state personnel rules,
to consider extensions of the partially exempt and classified
service, and to hear appeals under the Alaska Executive Branch
Ethics Act. She said she is pleased to be able to serve on the
board.
Number 2760
REPRESENTATIVE BERKOWITZ asked Ms. Simpson to confirm that she
is an official with the Republican Party.
MS. SIMPSON said she is vice chair [of the state party].
REPRESENTATIVE BERKOWITZ explained his reason for asking:
Several years ago, when Katie Hurley was nominated to serve, the
majority in the legislature at that time rejected her
appointment because of her partisan affiliation. He asked Ms.
Simpson to comment on that action and how that might bear on her
own nomination.
MS. SIMPSON responded that she thinks that is a judgment the
legislature will have to make. She said she is reviewing the
minutes of the past two years with regard to the activities of
the Personnel Board. Saying she frankly doesn't see much of a
conflict there, she invited members to review those minutes.
REPRESENTATIVE BERKOWITZ made the following statement:
When the legislature rejected Katie Hurley, I thought
that was one of the most disgraceful moments during my
service in the legislature. And I don't think that
just because someone has a partisan office necessarily
disqualifies [him or her] from serving on a public
commission. I just wanted that to be clear.
Number 2682
REPRESENTATIVE GRUENBERG surmised that [the board] acts on
executive ethics complaints.
MS. SIMPSON answered, "When there are some, yes."
REPRESENTATIVE GRUENBERG asked whether it sits in a quasi-
judicial capacity. He said there is concern, not on a partisan
basis, but as to whether there is an inherent conflict. He
explained, "When somebody sits in a quasi-judicial capacity, and
when they have an official partisan office, ... they may each
impact on each other. And I haven't figured out exactly what
the right result is yet, but I just wanted that on the record,
because we went through this on the House floor last week." He
told Ms. Simpson it sounds as though she is in a similar
situation to the one involving Mr. Ruedrich [a Republican Party
official who is also on the Regulatory Commissioner of Alaska
(RCA)], and that this is a quasi-judicial body.
Number 2589
REPRESENTATIVE BERKOWITZ asked Ms. Simpson how she would act if,
for example, there were an ethics complaint against
Mr. Ruedrich. He asked if she would recuse herself.
MS. SIMPSON responded, "I expect I would be required to."
Regarding her familiarity with the board's responsibilities, she
said she has read all the minutes. Most of the ethics
complaints are not made public, and it is difficult to tell when
reading the minutes which ones have been considered. In further
response, Ms. Simpson said she believes she can sit "fairly and
objectively." She added that she doesn't believe she'd have
been nominated to serve if she weren't viewed as being as fairly
objective.
REPRESENTATIVE BERKOWITZ explained that Ms. Simpson's name had
come up in conjunction with taking over party services because
Mr. Ruedrich had said he was not going to be serving in that
capacity; thus she clearly would be working closely with him in
her party position.
MS. SIMPSON explained that [Mr. Ruedrich] had taken over all of
the federal issues of the party, whereas she is working in
districts and on statewide fundraising. She said although she
contacts [Mr. Ruedrich] from time to time, a division of
responsibilities exists.
CHAIR WEYHRAUCH noted that Ms. Simpson's work with the school
district and raising her children was not included on her
resume.
MS. SIMPSON added, "Or the museum."
Number 2485
REPRESENTATIVE GRUENBERG clarified that none of his previous
comments were meant to reflect personally on Ms. Simpson.
[Although no formal motion was made, the nomination of Paulette
Simpson, appointee to the Personnel Board, was treated as
advanced from the House State Affairs Standing Committee.]
Alaska Public Offices Commission
[Contains discussion of HB 157]
Number 2470
LARRY WOOD, Appointee to the Alaska Public Offices Commission
(APOC), told the committee he was born in Alaska in 1950; spent
some "growing-up years" in Washington State; and has spent the
last 18 years in Alaska, in Fairbanks and then in Eagle River.
He is married with four children. He is an attorney who has
been practicing in Alaska for 28 years, the last 12 years with
Alyeska Pipeline Service Company, currently as assistant general
counsel. He said he has previously served as a general counsel
at the Alaska Railroad Corporation and, prior to that, as chief
assistant attorney general for the State of Alaska in Fairbanks.
MR. WOOD noted the irony of being before the committee while
pending legislation exists [HB 157, which would eliminate APOC].
In response to a question by Representative Berkowitz, he
clarified that his name might be familiar because a different
Larry Wood, perhaps from Palmer, ran for a House seat this past
fall.
Number 2348
REPRESENTATIVE GRUENBERG asked Mr. Wood to describe his views on
the role of APOC and his role as a commissioner.
MR. WOOD listed four central functions of the commission:
campaign financing, lobbying registration, disclosure of income
and interests of public officials and candidates, and regulation
and enforcement of complaints for the aforementioned areas. He
described the role of commissioners as follows: to help oversee
the work of the staff and the director in enforcing and ensuring
that those laws are fairly administered and, from time to time,
to adjudicate complaints that come before the body. In further
response, he said his philosophy is that those things are very
important. The agency has its roots in 1974 legislation.
Across the country, historically, there have been campaign
finance reform bills and legislation impacting all the states.
He said he believes in the firm administrating of those laws and
he expects that [Alaska] will continue to ensure that [those
laws] are protected and honored.
REPRESENTATIVE BERKOWITZ asked Mr. Wood if he had any thoughts
regarding the proposed elimination of APOC.
MR. WOOD responded that obviously oil production and revenues
are declining. He said he is sympathetic to the task faced by
the governor and the current legislators to attempt to identify
efficiencies in state government. Furthermore, this is a
regulatory and quasi-judicial agency. He noted that [the
commission] held a teleconference yesterday and is beginning to
assemble facts and a history. He mentioned a brief discussion
of what [the commission's] functions are and what it's doing in
order to assist the governor and the legislature. He said, "I
think it's incumbent now, in our agency, to ensure you have all
the facts and information you'll need to make the right
decisions."
[Although no formal motion was made, the nomination of Larry
Wood, appointee to the Alaska Public Offices Commission, was
treated as advanced from the House State Affairs Standing
Committee.]
EXECUTIVE ORDER 108 - TRANSFER FUNCTIONS TO DEPARTMENT OF HEALTH
& SOCIAL SERVICES
Number 2140
CHAIR WEYHRAUCH announced that the next order of business was
Executive Order (EO) 108, transferring functions to the
Department of Health & Social Services.
Number 2063
BOB LABBE, Deputy Commissioner, Office of the Commissioner,
Department of Health & Social Services (DHSS), explained that
most of the reorganization of DHSS isn't included in EO 108
because it could be done without an executive order. The
primary action called for in EO 108 is the movement by statute
of some programs that are currently in other departments and of
some "commission and board activity" into DHSS. The goal is to
improve program alignment and to consolidate similar programs
within the department. Mr. Labbe said the department would be
giving a presentation and providing details at the 3:00 p.m.
House Health, Education and Social Services Standing Committee
meeting on this date.
CHAIR WEYHRAUCH noted the need for the current committee to hear
it too.
MR. LABBE suggested starting with the presentation and then
addressing the executive order. He reiterated that the intent
[of EO 108] is to integrate the services and combine similar
programs for alignment, with the idea to improve customer
service, efficiency, and coordination of programs. For example,
he said [DHSS] worked with the Division of Senior Services,
which is part of the Department of Administration, to administer
home- and community-based care programs for seniors and persons
with disabilities. During that time [DHSS] found that to make
certain improvements often required two commissioners and three
or four division directors to get together. He said it was a
great collaboration, but things didn't move as efficiently as
they could have by putting everything under one department and
into a single division.
MR. LABBE noted that the reorganization will create several new
divisions by combining divisions. He referred to page three of
a document ["Reorganizing Alaska's Department of Health & Social
Services for Better Customer Service," included in the committee
packet, of which page three was henceforth handed out in a
larger print]. He explained that the Division of Longevity
Programs, including the Longevity Bonus and the Pioneers' Homes,
will be moved [from the Department of Administration] to DHSS.
"Child Care Assistance" and Child Care Licensing will be moved
from the Department of Education and Early Development (EED)
into DHSS, and the Commission on Aging and the Alaska Pioneers'
Homes Advisory Board will be moved into DHSS, he noted.
Number 1676
MR. LABBE said [DHSS] has changed the designation of the
Division of Alcohol and Drug Abuse - separately identified in
statute - by putting its duties and responsibilities under DHSS
generally. Other adjustments in the proposed restructuring
include creating these new divisions. Two new offices are
established within the department. One, an office of rate
review, would oversee rate setting for all of the fee-based
programs; work on alignment; and make sure rates are well
thought out, reasonable, and well-managed, and that they make
sense "across things that are similarly performed throughout the
year [by] the department." He explained:
This would include such things as our hospital and
nursing rates through Medicaid, our foster care rates,
our childcare facility rates, that sort of thing. We
wanted to create a body of expertise. We've also
created an Office of Program Review, which will be
primarily into ensuring that the programs are working
well together and to provide oversight, and to make
sure that we're maximizing our use of federal funds
and diminishing our use of state general funds.
One of the things we can do, by some of these
consolidations, is to combine some of our federal
funding program with some of our general fund programs
that are providing similar services, so that we can
look at the opportunities to replace the general fund
because of our fiscal issues that we're dealing with.
We're also going to increase our emphasis on program
integrity, aiming to curb instances of fraud and abuse
in program services, and we're going to have an
increased focus on our faith-based initiative.
Karleen [Jackson] will be heading that upward. We're
... very interested in improving customer service so
that we are responding appropriately and promptly to
constituents, not always getting what you're asking
for, but at least getting a response promptly. And I
think with the way some of it has been organized in
the past has ... just sort of evolved over time.
People are kind of bounced around too many spots
sometimes, because of the way the programs have been
placed.
Number 1449
MR. LABBE said a third deputy [commissioner] position is being
established and will replace the director of the current
Division of Family & Youth Services (DFYS), which will
essentially be eliminated; a new Office of Children's Services
will be created. He mentioned that the traditional child
protection activity will be in that office. [A large chart was
placed in position for viewing.]
MR. LABBE noted that some programs which currently reside in the
department in other divisions, primarily in the Division of
Public Health, will be moved into the new Office of Children's
Services: the WIC Program [Special Supplemental Nutrition
Program for Women, Infants and Children], the Infant Learning
Program, and the Healthy Families Program. In response to a
query by Chair Weyhrauch, he said the chart is the proposed
reorganization, supported both by EO 108 and adjustments made
under the commissioner's authority. The majority of functions
are currently in DFYS. The governor wished to elevate the
position, acknowledging the importance of this area, he said,
and [DHSS] has renamed it the Office of Children's Services. He
added, "We also wanted to put in some family support service
activity, so the focus was not simply on the child protection
and foster care, but also to provide some additional services in
that, so we can consolidate services for children in a single
division."
Number 1294
MR. LABBE said the Division of Health Care Services is new and
is a creation from the current Division of Medical Assistance,
which has administered the Medicaid program. He continued:
We also have combined, in this program, some other ...
Division of Public Health programs, such as the Breast
and Cervical Cancer screening program [and] Infant
Screening and Testing programs. And in this health
care services area, we have also taken out of the
Division of Medical Assistance some responsibilities
that have been tied to the Medicaid program for
behavioral health and long-term-care services and
moved these other divisions [that] we'll get to.
MR. LABBE said the intent with regard to the Division of Health
Care Services is as follows:
The primary customer focus is the health care provider
community that receives provider payments for health
services. This would be your physicians and hospitals
and doctors and pharmacists. And we found that the
provider groups that these other public health
programs were working with were essentially the same
they were receiving for similar health services. So,
that's really what's behind that area.
MR. LABBE noted that the Division of Alaska Longevity Programs
is transferred by EO 108 and that there are no other changes
within the structure at this time.
Number 1173
REPRESENTATIVE SEATON asked about public health.
MR. LABBE answered that it will continue to exist as the
Division of Public Health, but the focus will be on its core
public function. He elaborated:
This division focuses on, primarily, disease
prevention and control, homeland security related to
public health. I think you're all aware of the work
that's being done in the bioterrorism activity and the
infrastructure that's being put together there, the
recent discussions with smallpox and whatnot - this is
all being handled in that division.
We're also consolidating some of our ... planning
functions. ... Part of our facility planning has been
in our Division of Administrative Services that is
handling certificate-of-need functions, and we are
putting those into this reconstituted Division of
Public Health.
And we're also anticipating consolidation of licensing
of health care and other department providers. That
would not happen immediately, but would happen
probably the following year; ... we would bring in not
only our hospital and nursing home licensing
functions, but also the assisted living, childcare
licensing, and foster-care licensing into one section.
That won't show up in the '04; that would be probably
an '05 action. That's sort of further down.
MR. LABBE indicated the Division of Senior and Disability
Services on the chart. He said EO 108 will bring in some
functions that have been in the Division of Senior Services,
Department of Administration. He noted that currently there is
a Division of Mental Health and Developmental Disabilities. The
developmental disabilities part will be merged into the new
Division of Senior and Disability Services, which will provide a
broader array of long-term care services, community-based
services that are provided under Medicaid waivers for both the
"DD" [developmental disabilities] and the senior and disabled
populations, currently administered by two different divisions
and two different departments. The Medicaid financing, he said,
which had all been part of the current Division of Medical
Assistance, would be moved into that division. He said the
Division of Health Care Services would have "sort of" the acute
care; the Division of Senior and Disability Services would have
the long-term care and "Medicaid financing."
Number 0899
REPRESENTATIVE HOLM asked whether "independent living" fits into
this department.
MR. LABBE said he believes that can be found in the Department
of Labor [& Workforce Development], associated with the Division
of Vocational Rehabilitation. At this point, he said, it isn't
part of the restructuring being addressed, although it might be
something to consider later. Returning to his presentation, he
continued:
The other piece here that is sort of what we would
call our "phase two," ... the Adult Public Assistance
Program, which is ... cash assistance for persons with
disabilities and seniors that's currently administered
in the Division of Public Assistance. We envision
transferring that whole set of responsibilities to the
Division of Senior and Disabilities Services, but it
won't show up in the '04 budget; it will be most
likely the following year, because it's a significant
restructuring in itself. But the idea when we're done
is that you would have all of the senior and
disabilities services in one place. Application[s]
for cash grant, medical assistance, [and] community-
based care all can be handled through that one stop.
MR. LABBE invited his colleague to outline the next column on
the chart.
Number 0758
KARLEEN JACKSON, Deputy Commissioner, Office of the
Commissioner, Department of Health & Social Services), noted
that Mr. Labbe has been working [with the proposed changes]
"forever," whereas she is looking at it with "new eyes," more
like the committee members. She returned attention to the
Office of Children's Services [column] and noted that all the
items listed without something in parentheses are already within
what is now called DFYS. She clarified that unless there are
parentheses, nothing has changed.
MS. JACKSON listed the items in the third column on the chart,
which read [with a few technical and formatting changes]:
Division of Public Assistance
Current functions of DPA (except APA)
Denali KidCare Outreach (from DPH)
Childcare Assistance
Division of Administrative Services
Current functions of DAS (except Health Planning
& CON)
Division of Juvenile Justice
No changes
Division of Behavioral Health
Mental Health Programs
Alaska Psychiatric Institute
Residential Psychiatric Treatment Centers (RPTCs)
(from DMA)
Inpatient Psychiatric Care (from DMA)
Substance Abuse Programs (from ADA)
Fetal Alcohol Syndrome Program (from ADA)
Boards and Commissions
Suicide Prevention Council
Alaska Mental Health Board
Governor's Advisory Board on Alcoholism and Drug
Abuse
Alaska Commission on Aging
Governor's Council on Disabilities and Special
Education
Pioneers' Homes Advisory Board
MS. JACKSON said the biggest change within this block lies in
the Division of Behavioral Health, a new concept of dealing with
co-occurring disorders which so many of the department's clients
have, involving mental health and substance abuse. She said the
boards and commissions are essentially the same, except for the
addition of the Alaska Commission on Aging and the Alaska
Pioneers' Homes Advisory Board.
Number 0535
MR. LABBE, in response to a question from Representative Seaton,
said the Public Health Nursing section remains in the Division
of Public Health. He reiterated that the Infant Learning
Program and the Healthy Families [Alaska] are moving to the
Office of Children's Services. He mentioned the Breast and
Cervical Cancer [Screening] and the Infant Screening and Testing
[programs, listed under the Division of Health Care Services].
He said he thinks it has been found that the Public Health
Nursing section of the Division of Public Health is also a
service provider, and will continue to provide services that
would be partially supported through the Division of Health Care
Services. He mentioned the Medicaid program's having paid for
nurses to provide more child screening, for example, and said
that will continue, "especially in those areas that don't have
that kind of capacity in the private sector, or other types of
providers to do that work."
REPRESENTATIVE SEATON summarized his understanding, then, that a
public health nurse would serve as a contract agent for the
Division of Health Care Services, doing infant screening in
appropriate areas, or that a private clinic also could do that
screening as a contractor.
MR. LABBE responded, "I believe that would be the way I would
look at it."
Number 0410
MR. LABBE said part of the department's initial concept was the
decentralization of the Medicaid program, which was in excess of
$800 million. He said it is, essentially, a federal program
that pays for state services and requires state matching funds.
He said the types of services supported by that program are
sometimes referred to by people as "health services"; however,
he stated the following:
This whole long-term-care area, which is heavily
Medicaid-financed around the country, including
Alaska, ... includes your nursing facilities and your
homecare services. [It] really takes on a different
focus and constituency around it in, say, your
physician services and your hospital services.
Splitting those up allows more management oversight
and more focus on that.
A number of states have moved in this direction and,
... given our fiscal issues today, I think that for a
long time we thought, "Well, we can make this work the
way we were doing it." But it creates more fiscal
responsibility in the divisions that are actually
doing the day-to-day administration of community-based
care service and the authorization.
In the past we've had, through Division of Medical
Assistance, agreements with other divisions to, say,
screen people and sign them up for these programs, but
the fiscal responsibility all went to the Division of
Medical Assistance. And so the Division of Medical
Assistance budget would grow and grow and grow, and
those people making the decisions about the services
were somewhere else.
And so, by moving the fiscal responsibility and the
regulatory responsibility there, I think that the
directors and I, ... our intent is to hold the
directors of these divisions accountable, provide them
the tools and flexibility to manage these areas. ...
We believe that we can make a significant improvement
in not only the access and service ... in the customer
service, but also the efficiency of the program - not
only administrative efficiency, but also fiscal,
simply looking at program opportunities.
And the Division of Behavioral Health is another good
example where we have Medicaid through the prior
division paying for like mental health services to
psychiatric hospitals and psychiatric facilities, and
the Division of Mental Health providing grants - the
community providers. And by putting this
institutional community together under a director
whose job it is to make sure all that's working well,
... there's some opportunity to providing a broader
array of community services and probably reducing
institutional costs, which are generally so much
higher than community-based service.
There's a number of programmatic issues that are
buried in the structure, and the structure we believe
will move us closer to a model that will allow us to
focus on these things.
Number 0071
REPRESENTATIVE SEATON said, "I think what I'm hearing you say is
that we're qualifying too many people, and if we put the budget
in with each one of those purposes, then we'll have the people
not qualify as many people." He mentioned making individual
judgments.
TAPE 03-20, SIDE A
Number 0001
MR. LABBE responded that the person responsible for a budget in
an area will be accountable to make sure that the decision
making is accurate. That person will also have authority to
develop regulations to make sure only the most appropriate
services are being provided, for example. There will be more
"direct line" responsibility. The issue right now, he said, is
who is in charge. He said [the department] will be working
through the Office of Program Review on program integrity.
Number 0164
REPRESENTATIVE SEATON stated concern that in some areas there
are aggressive providers who, following regulations, bring
people into the system, which increases the load. He continued:
I'm a little uncomfortable, if what we're saying is
we're going to give the budget over here so that
individual providers have to pick and choose who is
going to receive services, instead of changing the
regulations to limit who is going to receive,
statewide, those services.
REPRESENTATIVE SEATON asked that [the department] "incorporate
that into this, so that everybody is playing with the same
ball."
Number 0271
REPRESENTATIVE BERKOWITZ commended and thanked [Mr. Labbe and
Ms. Jackson]. He asked them to remember, as they go through the
budget battles, that the department is about people, not
programs, and to fight hard for their budget dollars. He noted
that Denali KidCare, for example, has been viewed sometimes as
being on the chopping block or at least being trimmed back.
Asking them to continue to aggressively expand the program, he
said there were some innovative results in the task force that
the last administration initiated, suggesting ways of pooling
pharmaceutical costs with other states that result in reduced
costs. He indicated there are many initiatives in other states
to ensure quality medical care and reducing the overall cost of
medicine; he posited that [the department] needs to continue
[looking at those options].
REPRESENTATIVE BERKOWITZ said the courts have been very
aggressive with mental health. He remarked, "I want to make
sure that we're continuing in that direction." He said he has
heard overmuch discussion regarding programs, and he
reemphasized that he is watching what the reorganization does in
terms of how it affects people. He spoke of homes devastated by
domestic violence, child abuse, people who have an inability to
get access to health care, and making people choose between
children as to who gets what. He said, "Those are really
dramatic choices. I don't think we should be trying to balance
the budget on the backs of those people." He asked Mr. Labbe
and Ms. Jackson to carry that message where it needs to go.
Number 0472
MS. JACKSON said she really appreciates Representative
Berkowitz's comments and, having newly come from the nonprofit
sector and having dealt with those families, agrees with his
statements. Part of her personal focus, she said, is ensuring
that there are program alignments that allow those being served
to see the state as invisible - not to have to deal with
different divisions or programs, but to be able to walk in with
complex needs and get the services they require. She noted that
Mr. Labbe not only is an expert at the details of program and
budget, but also has "a heart for the people we serve."
Number 0559
MR. LABBE told the committee the reorganization plan was
announced on March 4 [2003] and the governor released his budget
on March 6, which reflects a number of the previously discussed
changes in the FY 04 budget. He said EO 108 would take effect
July 1, 2003, which is when most of the implementation would
take place. Some [changes] would be implemented in 2004, such
as the Adult Public Assistance and the licensing-functions
consolidation. He said it is an ambitious agenda, with a lot of
work to do internally and externally.
Number 0665
REPRESENTATIVE SEATON asked if the Division of Senior and
Disabilities Services would include all disability services, for
example, "children" and "disabled" as well as seniors.
MR. LABBE responded, "The disabilities would include children,
as well, that are receiving the Medicaid community-based
services." He mentioned that the Infant Learning Program
provides some services to children with disabilities, but the
Medicaid-financed services and the developmentally disabled
grant services would be part of that disability distribution.
MR. LABBE told the committee, regarding the federal Medicaid
program, that there are only certain things that the federal
government will allow when "you break up the package." For
example, [the department] can't split physician services between
two divisions. As a result, [the department] ends up with not
just seniors in the Division of Senior Services, but with
younger people who, for example, are receiving "some type of ...
personal care attendant - it could be a family member - because
you just have to administer the one spot." He mentioned
"smaller numbers of individuals that are in that group" and
added, "So, the larger group is served when you consolidate it."
CHAIR WEYHRAUCH noted that this is the only committee of
referral for EO 108.
Number 0880
REPRESENTATIVE SEATON moved to advance EO 108 out of committee
with individual recommendations and the accompanying fiscal
note. There being no objection, EO 108 was advanced from the
House State Affairs Standing Committee.
Number 0956
REPRESENTATIVE BERKOWITZ suggested it would be appropriate for
the House Health, Education and Social Services Standing
Committee to view [EO 108] as well.
CHAIR WEYHRAUCH said that could be a consideration.
REPRESENTATIVE BERKOWITZ said the committee did not hear any
contrary opinion and he doesn't know if it exists. If there is
criticism, he suggested, perhaps the legislature could
"constructively modify components of this change."
CHAIR WEYHRAUCH responded that public notice of the current
hearing was given and no one was present to testify on EO 108 or
criticize it. No one responded by e-mail or in writing, either,
he noted. He said the other EOs are getting more attention.
[EO 108 was advanced from committee.]
HB 158-ELIMINATING LONGEVITY BONUS PROGRAM
CHAIR WEYHRAUCH announced that the last order of business was
HOUSE BILL NO. 158, "An Act eliminating the longevity bonus
program and making related conforming changes; and providing for
an effective date."
Number 1070
MIKE MILLER, Commissioner, Department of Administration (DOA),
explained that his role was to give some background regarding HB
158 and the Alaska Longevity Bonus program. He reminded the
committee that there have been three major votes in the
legislature regarding the Alaska Longevity Bonus program; he was
in the legislature for two of those votes, while his older
brother was in the legislature for the first vote. He said he
discussed the first vote at length with his brother. The vote
was taken in the mid-1970s and created the Alaska Longevity
Bonus program; at that time, it had a type of sunset clause
because the only people who could qualify were those who'd been
in Alaska before 1959 - before statehood. Commissioner Miller
said, according to his older brother, it was an effort to reward
Alaskans who had been in the state during the territorial days.
COMMISSIONER MILLER said there was a case against a longevity
bonus program in 1984 - the Vest case - which challenged the
constitutionality of the territorial clause; the State of Alaska
lost in the Alaska Supreme Court. Commissioner Miller said he
was in the legislature at that time and it had two choices:
abolish the program or open it up to all seniors. He noted that
[the state] was "awash in oil dollars" at the time and opened
the program up to all seniors. He indicated, in retrospect,
that this was a mistake.
Number 1237
COMMISSIONER MILLER said in 1994 the program's costs were
beginning to "run wild" in the amount of $67 million and were
projected to be over $100 million within the next couple of
years, with no end in sight; [the legislature] decided something
had to be done and chose to "stair step" the program. He took
responsibility for that decision which, he opined, turned out to
be the wrong one. Two classes of seniors were unintentionally
created: those who collect [the bonus check] and those who
don't. He estimated that there are 18,000 people collecting
[longevity bonus] checks. His sources tell him that there are
approximately 38,000 people in Alaska over the age of 65. He
added that there's no rationale of "why you get it, or why you
do not get it."
COMMISSIONER MILLER shared stories illustrating that the result
of the stair stepping was that some seniors born and raised in
Alaska, but born one year past the cutoff date, did not qualify,
whereas others qualified for the program after having moved up
from "Outside," for example. He said the program no longer
serves its original intent; the program passed in the '70s bears
no resemblance to the one in existence today. Commissioner
Miller said this is one reason he is personally supporting the
bill to eliminate the program. In response to a question by
Chair Weyhrauch, he said the original bill [required that a
person had to be] 65 years old. He said he believes that
currently the youngest senior on the program is 72.
REPRESENTATIVE BERKOWITZ said, "That's correct."
CHAIR WEYHRAUCH offered his understanding that [the current
qualifications] require a senior to be 72 to collect it.
COMMISSIONER MILLER answered yes, "assuming that they were in
the state at the time that the last step took place." He said
his mother is 86 years old, was out of the state approximately
five years during the stair stepping, is now back in the state,
but does not qualify, even though he believes she paid her dues
in the territorial days and early statehood. In further
response, he said he doesn't know the exact number of people in
Alaska who are at least 72 years old. He reiterated that there
are two groups of seniors for whom, in his opinion, there is
little rhyme or reason why they've been divided that way.
Number 1514
REPRESENTATIVE BERKOWITZ disagreed. Noting that a statute came
into effect in 1996, he said about the program, "It was a
promise that apparently that legislature felt it couldn't keep
in perpetuity, so, in essence, it phased out the program; that
constitutes rhyme and reason." He said he appreciates the
difficult financial position it puts the state in, but a promise
was made to seniors, many of whom are depending on the income
from the longevity bonus and most of whom are on fixed incomes.
For example, according to some surveys he has viewed, he said up
to 65 percent of the people in the Matanuska-Susitna area who
collected [the bonus] in 1993 indicated it was absolutely
essential for their well-being. He told Representative Miller,
"You might disagree with it, but to dismiss it as being without
sense, I think, overstates your case."
COMMISSIONER MILLER explained that the "rhyme or reason"
referred to the legislature's lacking the political courage to
say, "Enough is enough." He said he would agree to disagree
[with Representative Berkowitz].
Number 1610
CHAIR WEYHRAUCH asked if there had ever been an analysis done
during Commissioner Miller's time in the legislature to consider
making the program needs-based.
COMMISSIONER MILLER said there had been some discussion;
however, there was disagreement within the senior community as
to whether to make it needs-based. He said he believed that the
prior [Knowles] administration offered proposals a couple of
times to make it needs-based, but the legislature, for whatever
reason, decided not to do that.
CHAIR WEYHRAUCH asked if there had been discussion regarding
having people "check off" whether they want the longevity bonus
or not.
COMMISSIONER MILLER said he doesn't believe that discussion took
place, although people could make that choice by not applying
for the bonus. In response to a question regarding how people
sign up each year, Commissioner Miller explained that people who
receive the check each year fill out a form found on each check.
CHAIR WEYHRAUCH asked if there'd ever been an attempt to send a
form out to qualifying seniors asking if they want to receive a
longevity bonus, asking them to sign and send the form back.
Number 1735
COMMISSIONER MILLER said he doesn't believe that sort of
"blanket statement" had even been discussed. He reminded the
committee that unlike an executive order, a bill can be changed
[to incorporate] different ideas. He agreed to a request made
by Chair Weyhrauch to "send us the form." In further response,
he related his belief that checks go out either at the end of
the month or at the first of the month.
CHAIR WEYHRAUCH asked if there had been any analysis to
determine what the predominate use of the money received by
seniors is.
COMMISSIONER MILLER indicated he didn't know.
CHAIR WEYHRAUCH offered that he has heard the money is used to
offset the cost of prescription drugs.
COMMISSIONER MILLER said he understands what a tough decision is
before the committee. [The state] would spend approximately
$47.5 million on the program [in 2003]. The legislature needs
to ask if that's affordable or whether some of that money would
be better spent in other areas for seniors. The question he
posed to the committee is whether it should spend limited
dollars as a "blanket" to all seniors, or to help those most in
need. He said he personally believes in the latter.
Number 1900
CHAIR WEYHRAUCH asked that top department officials be involved
on future hearings [of HB 158]. He also requested the presence
of the [assistant] attorney general tasked with drafting the
bill, and asked for as much information as possible on the
program to be given to the committee and made public in advance
of the next scheduled hearing. He said this issue is an
important one.
Number 1982
REPRESENTATIVE LYNN remarked that he is over 70 years old and
doesn't receive the longevity bonus. He said he supports
Governor Murkowski's "courageous" [financial] plan, but that he
also believes in keeping his own campaign promises, one of which
he read as follows, "Bob Lynn believes in your longevity bonus
as a contract between Alaska seniors and the State of Alaska.
I'll protect [the] longevity bonus contract."
REPRESENTATIVE LYNN said he thinks people need to be able to
trust their government and those they elect. In the world of
politics, he said, "old folks are too often a target of fiscal
opportunity." He noted that 18,000 [seniors] does not
constitute a large portion of the overall state population of
approximately 650,000. He added, "So it's kind of easy pickings
to pick up $47 million dollars there." He agreed that [the
state] obviously needs the $47 million, because it facing a
fiscal crisis; however, he suggested that a cruise ship tax
would raise that amount, for example, or a car rental tax. He
said the list goes on regarding where money can be raised. He
added, "The pickings are easier from the elderly than they are
from the big guys who have lobbyists and who have the bucks to
fight this type of thing." He said he will keep his promises
and respect his elders. He noted that this isn't a personal
issue, but a political one.
Number 2139
REPRESENTATIVE BERKOWITZ asked if anyone had conducted a recent
economic analysis of the impact of cutting the longevity bonus.
He said he was aware of a 2000 analysis by the McDowell Group
and another done by Legislative Research about 10 to 15 years
ago. He asked for an update containing the following
information: the contribution this $47 million makes to the
economy, who the beneficiaries are, where the money is spent,
and whether it has a different multiplier than multipliers from
other aspects of the economy.
REPRESENTATIVE BERKOWITZ shared a concern raised to him by a
senior constituent that seniors on fixed incomes spend a lot of
their money in the state, and that seniors on fixed incomes
might be forced to sell their homes [if HB 148 passes]. He
asked if the administration had given any consideration to those
concerns and, if so, what evidence it has to support the
elimination of a longevity bonus.
Number 2215
COMMISSIONER MILLER said he would do his best to find "whatever
information we have on hand."
REPRESENTATIVE BERKOWITZ stated: "It is somewhat appalling that
a change of this magnitude was contemplated without doing the
preliminary homework."
Number 2235
REPRESENTATIVE GRUENBERG said [$47] million is a lot of money.
Given the lengthy history of various administrations' attempts
to attack this program and the lengthy history of legislative
support for the program, he suggested that the administration
knew HB 158 would be controversial; therefore, it must have an
alternative plan. He asked Commissioner Miller, "Where else can
you cut into your department?"
COMMISSIONER MILLER said his department has large areas where
general fund dollars exist, such as the Office of the Public
Defender, OPA [Office of Public Advocacy], and "leasings," but
"leasings" is the only area that can and is being considered for
cuts. He indicated that Pioneers' Homes and Senior Services
have large amounts of general fund dollars, but will be moving
to the Department of Health & Social Services. He mentioned the
[Division] of Motor Vehicles [within the Department of
Administration] as another agency with general fund dollars. He
indicated some things just cannot be touched.
Number 2357
REPRESENTATIVE GRUENBERG said his previous question was partly
rhetorical because he knows there aren't many areas [where cuts
can occur]. He then mentioned an issue before the committee the
prior week regarding public facilities, which are administered
by several different departments. He asked Commissioner Miller
if he believed there would be any cost savings in consolidating
the administration of public facilities.
COMMISSIONER MILLER responded that some of those issues are
being considered now and he believes there would be some cost
savings, but he could not say how much at the present time.
REPRESENTATIVE GRUENBERG suggested this committee would be
interested in Commissioner Miller's views on that.
COMMISSIONER MILLER reiterated that the committee is faced with
a big policy call.
CHAIR WEYHRAUCH announced that HB 158 would be held over.
ADJOURNMENT
Number 2441
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
10:12 a.m.
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