Legislature(2003 - 2004)
04/26/2004 09:01 AM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 26, 2004
9:01 AM
TAPES
SFC-04 # 94, Side A
SFC 04 # 94, Side B
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:01 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice-Chair
Senator Fred Dyson
Senator Ben Stevens
Senator Donny Olson
Senator Lyman Hoffman
Also Attending: LINDA HALL, Director, Division of Insurance,
Department of Community and Economic Development; BILL HOGAN,
Director, Division of Behavioral Health, Department of Health and
Social Services; VERNER STILLNER, Legislative Representative,
Alaska Psychiatric Association; GREG O'CLARY, Commissioner,
Department of Labor and Workforce Development; GREY MITCHELL,
Director, Division of Labor Standards and Safety, Department of
Labor and Workforce Development RACHEL LEWIS, Unclaimed Property
Administrator, Division of Treasury, Department of Revenue;
Attending via Teleconference: From Fairbanks: JEANNETTE GRASTO,
Member, Alaska Mental Health Board and the National Alliance for
the Mentally Ill; From Anchorage: VERA JAMES, Alaska Native Health
Board; From an offnet location: JEFF JESSEE, Executive Director,
Alaska Mental Health Trust Authority;
SUMMARY INFORMATION
HB 347-EXEMPT TAXIS FROM VEHICLE RENTAL TAX
The Committee heard from the sponsor and the bill reported from
Committee.
SB 311-INSURANCE & WORKERS' COMPENSATION SYSTEM
The Committee heard from the Department of Community and Economic
Development. Two amendments were considered but not adopted and the
bill reported from Committee.
SB 364-LIMIT STATE AID FOR MENTAL HEALTH CARE
The Committee heard from the Department of Health and Social
Services, the Alaska Mental Health Trust Authority and advocates
for the mentally ill. The bill was held in Committee.
SB 278-FEES:REC DEVICES/BOILERS/CERT. OF FITNESS
The Committee heard from the Department of Labor and Workforce
Development. An amendment was adopted and the bill was held in
Committee.
SB 368-TOBACCO TAX; LICENSING; PENALTIES
After a brief discussion the bill was reported from Committee.
SB 231-DECREASE TIME TO CLAIM UNCLAIMED PROPERTY
The Committee heard from the Department of Revenue. Two amendments
were adopted and the bill was reported from Committee.
HOUSE BILL NO. 347
"An Act exempting taxicabs from the passenger vehicle rental
tax; and providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, "exempts taxicabs from the
vehicle rental tax. In the last year the Legislature established a
ten-percent vehicle rental tax on the lease or rental of passenger
vehicles. House Bill 347 exempts taxicabs from the definition of a
passenger vehicle."
SUE STANCLIFF, staff to Representative Pete Kott, had no new
testimony to offer, she relayed that the sponsor supports the
action taken at the previous hearing of rescinding adoption of
Amendment #1.
Co-Chair Green offered a motion to report the bill from Committee
with individual recommendations and accompanying fiscal note.
Without objection HB 347 MOVED from Committee with a zero fiscal
note #1 from the Department of Revenue.
CS FOR SENATE BILL NO. 311(JUD)
"An Act providing for a special deposit for workers'
compensation insurers; relating to the board of governors of
the Alaska Insurance Guaranty Association; stating the intent
of the legislature, and setting out limitations, concerning
the interpretation, construction, and implementation of
workers' compensation laws; relating to restructuring the
Alaska workers' compensation system; eliminating the Alaska
Workers' Compensation Board; establishing a division of
workers' compensation within the Department of Labor and
Workforce Development and assigning certain Alaska Workers'
Compensation Board functions to the division and the
Department of Labor and Workforce Development; establishing a
Workers' Compensation Appeals Commission; assigning certain
functions of the Alaska Workers' Compensation Board to the
Workers' Compensation Appeals Commission and the Workers'
Compensation Hearings Board; relating to agreements that
discharge workers' compensation liability; providing for
hearing examiners and hearing panels in workers' compensation
proceedings; relating to workers' compensation awards;
relating to an employer's failure to insure and keep insured
or provide security; providing for appeals from compensation
orders; relating to workers' compensation proceedings;
providing for supreme court jurisdiction of appeals from the
Workers' Compensation Appeals Commission; providing for a
maximum amount for the cost-of-living adjustment for workers'
compensation benefits; providing for administrative penalties
for employers uninsured or without adequate security for
workers' compensation; relating to assigned risk pools and
insurers; and providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, sponsored by the Senate Rules
Committee at the request of the Governor, "changes the way
workmans' compensation disputes and appeals are resolved. Under
Senate Bill 311, appeals [would be] reviewed by the newly created
workmans' comp commission."
Amendment #1: This amendment deletes "Workers' Compensation Appeals
Commission" and inserts "workers' compensation hearings office" on
page 1, lines 9, 10 and 11, and deletes "providing for supreme
court jurisdiction of appeals from the Workers' Compensation
Appeals Commission;" on page 2, lines 4-6. The amended title of the
bill reads as follows.
An Act providing for a special deposit for workers'
compensation insurers; relating to the board of governors of
the Alaska Insurance Guaranty Association; stating the intent
of the legislature, and setting out limitations, concerning
the interpretation, construction, and implementation of
workers' compensation laws; relating to restructuring the
Alaska workers' compensation system; eliminating the Alaska
Workers' Compensation Board; establishing a division of
workers' compensation within the Department of Labor and
Workforce Development and assigning certain Alaska Workers'
Compensation Board functions to the division and the
Department of Labor and Workforce Development; establishing a
workers' compensation hearings office; assigning certain
functions of the Alaska Workers' Compensation Board to the
workers' compensation hearings office and the Workers'
Compensation Hearings Board; relating to agreements that
discharge workers' compensation liability; providing for
hearing examiners and hearing panels in workers' compensation
proceedings; relating to workers' compensation awards;
relating to an employer's failure to insure and keep insured
or provide security; providing for appeals from compensation
orders; relating to workers' compensation proceedings;
providing for a maximum amount for the cost-of-living
adjustment for workers' compensation benefits; providing for
administrative penalties for employers uninsured or without
adequate security for workers' compensation; relating to
assigned risk pools and insurers; and providing for an
effective date."
This amendment also deletes "Workers' Compensation Appeals
Commission" and inserts "workers' compensation hearings office" on
page 4, line 27, 29 & 30, page 5, line 6, and page 6, lines 20-21,
and deletes "chair of the commission" and inserts "chief hearing
officer" on page 7, line 14. This amendment also replaces
references to the "office of the commission" and "commission" with
"hearings office" and replaces references to "commission clerk"
with "chief hearing officer" where they appear in the bill.
This amendment also deletes from Section 10, new sections:
23.30.007, 23.30.008, and 23.30.009, on page 8 line 16 through page
11, line 30 and inserts new language to read as follows.
Sec. 23.30.007. Workers' compensation hearings office.
(a) There is established in the Department of Labor and
Workforce Development a workers' compensation hearings office.
The hearing examiners and hearing panel hear original
petitions when a claim is filed under this chapter and have
jurisdiction to hear appeals from decisions and orders of the
director.
(b) The commissioner shall appoint a chief hearing
officer and hearing examiners.
(c) The chief hearing officer may
(1) employ and supervise hearing office staff,
hearing examiners, and hearing panels and appoint a hearings
office clerk;
(2) establish and implement a time management system
for the hearings office, staff, and hearing examiners;
(3) assign the work of the hearing examiners,
hearing panels, and staff so that hearings and appeals are
resolved as expeditiously and competently as possible,
including designating hearing examiners to hear preliminary
matters; and
(4) prepare and annual budget of the hearings office
and hearing panels.
(d) The hearings office, in its administrative capacity,
shall maintain, index, and make available for public
inspection the final administrative decisions and orders of
the hearing examiners and hearing panels. To promote
consistency among legal determinations, the chief hearing
officer may review and circulate among the other hearing
examiners the drafts of formal decisions, decisions upon
reconsideration, and other legal opinions of the other hearing
examiners of the hearings office. The drafts are confidential
documents and are not subject to disclosure.
(e) The hearings office, in its administrative capacity,
may adopt regulations implementing its authority and duties
under this chapter, including rules of procedure and evidence
for proceedings before hearing examiners and hearing panels in
workers' compensation proceedings under AS 23.30.090 and
23.30.110 and for the adjudication of all claims and petitions
under this chapter. The provisions of AS 44.62 (Administrative
Procedure Act) apply to the adoption of regulations by the
hearings office.
(f) The hearings office, in its administrative capacity,
may adopt and alter an official seal and do all things
necessary, convenient, or desirable to carry out the powers
expressly granted or necessarily implied in this chapter.
This amendment also deletes all language on page 32, line 3 through
line 16, following "defense" in Section 55, amending Sec.
23.30.108(c).
This amendment also deletes ", but is not a public employee for
purposes of AS 23.40" from page 35, line 16, in Section 58 that
adds a new Sec. 23.30.112. Hearing examiners.
This amendment also deletes Section 63 and Section 64 on page 38,
line 14, through page 43, line 1 and inserts new bill sections to
read as follows.
Sec. 63. AS 23.30.125(a) is amended to read:
(a) A compensation order becomes effective when filed
with the director [IN THE OFFICE OF THE BOARD] as provided in
AS 23.30.110, and, unless proceedings to suspend it or set it
aside are instituted as provided in (c) of this section, it
becomes final on the 31st day after it is filed.
Sec. 64. AS 23.30.125(c) is amended to read:
(c) If not in accordance with law, a compensation order
filed by a hearing examiner or hearing panel as provided in
(a) of this section may be suspended or set aside, in whole,
or in part, through injunction proceedings in the superior
court brought by a party in interest against the division
[BOARD] and all other parties to the proceedings [BEFORE THE
BOARD]. The payment of the amounts required by an award may
not be stayed pending final decision in the proceeding unless
upon application for an interlocutory injunction the court on
hearing, after not less than three days' notice to the parties
in interest and the director [BOARD], allows the stay of
payment, in whole or in part, where irreparable damage would
otherwise ensue to the employer. The order of the court
allowing a stay must [SHALL] contain a specific finding, based
upon evidence submitted to the court an identified by
reference to it, that irreparable damage would result to the
employer, and specifying the nature of the damage.
Sec. 65. AS 23.30.125(d) is amended to read:
(d) If an employer fails to comply with a compensation
order making an award that has become final, a beneficiary of
the award or the director [BOARD] may apply for the
enforcement of the order to the superior court. If the court
determines that the order was made and served in accordance
with law, and that the employer or the officers or agents of
the employer have failed to comply with it, the court shall
enforce obedience to the order by writ of injunction or by
other proper process to enjoin upon the employer and the
officers and agents of the employer compliance with the order.
Sec. 66. AS 23.30.125(f) is amended to read:
(f) Subject to an employer's or employee's burden of
proof, a finding of fact made by the hearing examiner or
hearing panel [BOARD] as a part of a compensation order is
conclusive unless the court specifically finds that a
reasonable person could not have reached the conclusion made
by the hearing examiner or hearing panel [BOARD].
New Text Underlined [DELETED TEXT BRACKETED]
This amendment also deletes Section 75 amending AS 23.30.155(f) on
page 47, lines 13-20.
Senator Hoffman moved for adoption.
Co-Chair Green and Co-Chair Wilken objected.
Senator Hoffman recalled an equal amount of testimony supporting
and opposing this amendment. He stated that most testimony
recognized the benefits of some provisions of the bill. However, he
was not convinced from the testimony that the creation of the
appeals commission would save money and result in lower insurance
premiums. He referenced page two of fiscal note #3 from the
Department of Labor and Workforce Development projecting the cost
of the appeals commission at $1.2 million. He commented that it was
unfortunate that all Members were not present to hear testimony
from three individuals who have worked in the field of workers'
compensation for a combined period of over 50 years. He relayed
this testimony expressing concern with the proposal to replace a
judge with three commissioners.
Senator Hoffman told of the approximate 35 to 50 workers'
compensation cases heard in superior court. He calculated the
number of cases the three member commission would hear to be "a
fraction" of the approximately 600 cases heard annually by a
superior court judge. He also pointed out the proposed salary of
the three commissioners, one at a Range 30F salary would
significantly exceed the salary paid to one judge.
Senator Hoffman also was unconvinced that less time would be
required for workers' compensation claims with the creation of the
commission. Since the system is unproven, he informed that he had
suggested the legislation should have a lapse date, at which time
the process would be evaluated. He stated this suggestion was
rebuffed.
Senator Hoffman supported Sections 1 through 7 of the bill.
However, he asserted that with the major deficits facing the State,
the additional $1.2 million expense of the proposed commission are
unwarranted since no savings has been proven.
Co-Chair Wilken questioned the $1.2 million amount.
Senator Hoffman cited page two of page four of the Department of
Labor and Workforce Development fiscal noted dated 2/9/04, which
projects personal services costs at $1,183,900 associated with the
new positions.
Co-Chair Wilken informed of an updated fiscal noted 4/20/04, which
projects the amount to be $627,000.
Senator Hoffman pointed out the personal services amount remains
listed as $1,183,900, as shown on page two of the updated fiscal
note.
Co-Chair Wilken clarified the existing $938,000 allocated for the
workers' compensation appeals process must be deducted. He listed
two cost components in the updated fiscal note: $627,000 for new
workforce and $198,000 for appellate courts.
Senator Hoffman agreed; however was not convinced from the
testimony that this legislation would streamline the workers'
compensation process. He noted that experts in this matter predict
the changes would add time and expense to the process. He also
remarked that the Alaska Supreme Court has no flexibility in
determining which cases it would hear, and as testified to by the
Alaska Court System, costs for that branch of government would
likely increase.
A roll call was taken on the motion.
IN FAVOR: Senator Hoffman and Senator Olson
OPPOSED: Senator Dyson, Senator B. Stevens, Senator Bunde, Co-Chair
Green and Co-Chair Wilken
The motion FAILED (2-5)
The amendment FAILED to be adopted.
Amendment #2: This amendment deletes language from Section 64 on
page 40, lines 28-31 and inserts new language to read as follows.
Sec. 23.30.128. Commission proceedings. (a) The commission
shall review all discretionary actions and findings of fact by
a hearing examiner, hearing panel, or the director under the
substantial evidence standard of review. The commission shall
review the conclusions of law by a hearing examiner, hearing
panel, or the director using the commission's independent
judgment. A hearing panel's findings regarding the credibility
of testimony of a witness are binding on the commission. The
findings of the hearing panel, if not set aside by the
commission, are conclusive.
Senator Olson moved for adoption.
Co-Chair Green objected.
Senator Olson commented this legislation is the result of the
financial burden that workers' compensation insurance has incurred
for businesses, particularly small businesses. He stressed the
worker's compensation system must be reviewed and revised to become
more efficient. He outlined the current practice of due process,
notably that the appellate court does not consider new evidence but
rather whether the lower court operated correctly. He pointed out
that this legislation would allow the proposed commission to
consider new evidence, resulting in essentially two trials. He
agreed with the intent that the workers' compensation system should
be streamlined and argued that the proposed process would instead
"clog up the system". He questioned the ability of the commission
to preserve the "standard of review" and operate under these
circumstances. He asserted the proposed commission would add
"another layer of government."
Co-Chair Green reviewed testimony from an assistant attorney
general with the Department of Law, who disagreed with Senator
Olson on this matter, in that the role of the proposed commission
would not establish new precedent in the appeal process.
Senator Olson acquiesced that Kristin Knudsen, affirmed that
currently the superior court could hear new testimony, but he
pointed out that in actuality only five percent of cases have
allowed new evidence to be introduced.
Co-Chair Wilken noted Ms. Knudsen was available to testify via
teleconference.
Senator Bunde compared the appeals process to the legislative
committee process with himself as the chair of the Senate Labor and
Commerce Committee and Co-Chair Wilken, chair of the Senate Finance
Committee, hearing much of the same testimony.
Senator Dyson appreciated the efforts of Senator Olson to save
money and streamline the workers' compensation process. Senator
Dyson relayed that many friends who incurred workplace injuries and
became involved in the workers' compensation system were
unsatisfied with the appeals process. He commented that many
injuries worsen over time and that he favored allowing new
information about the worsening injuries to be considered. He
therefore did not support adoption of the amendment.
Senator Hoffman stated that Senator Bunde is correct in comparing
the workers' compensation appeals process to the legislative
committee process, but stressed the processes are long and costly.
He opined this legislation would not streamline the process, but
rather delay proceedings.
Senator Hoffman requested demonstration of the savings testified
to. He cited that data shows 50 percent of cases are awarded to the
employer and 50 percent are awarded to the employee. He therefore
concluded that savings would only be realized with fewer cases
awarded to employees.
Senator Olson stressed the entire appellate system is intended to
review decisions made at lower levels to ensure laws have been
followed, etc. He agreed that new evidence would be helpful, but
reiterated it would "bog down the system".
LINDA HALL, Director, Division of Insurance, Department of
Community and Economic Development, cited language in Section 64,
adding Sec. 23.30.128(b), on page 41, lines 6 & 7 of bill, "Except
as provided in (c) of this section, new or additional evidence may
not be received with respect to the appeal."
Senator Olson acknowledged this point; however, remarked his
amendment addresses language in Sec. 23.30.128(a) on page 40, lines
28 and 29, "The commission may review de novo all discretionary
actions, findings of fact, and conclusions of law by the hearing
examiner, hearing panel, or the director in hearing, determining,
or otherwise acting on any compensation claim or petition."
A roll call was taken on the motion.
IN FAVOR: Senator Hoffman and Senator Olson
OPPOSED: Senator B. Stevens, Senator Bunde, Senator Dyson, Co-Chair
Green and Co-Chair Wilken
The motion FAILED (2-5)
The amendment FAILED to be adopted.
Senator Dyson expressed his conflicting support for this
legislation, commenting that most of the provisions would be an
improvement over the current system, although he remained concern
about "other contentious areas." He relayed a discussion he had in
which he learned that the law and structure of either system would
be adequate depending on the quality, experience and commitment of
the people entrusted to implement it. He remarked that the
Administration must employ fair and qualified staff. He surmised
that if operated correctly, the new provisions would streamline the
system. He charged the Murkowski Administration with recruiting and
employing the best possible staff.
Senator Hoffman informed he would be voting against this
legislation. He stressed that as an employer, he must "make
payroll" and that he failed to recognize any savings created from
these changes. Rather, he asserted this legislation would create
"bigger government and not even better government."
Co-Chair Green stated that the current system is inefficient and
cumbersome, noting that some cases are pending for over a year,
with no superior court hearing scheduled.
Senator Olson commented that workers' compensation is a "sticky
quagmire" that as an employer, he must pay into. He assured that he
has the welfare of his employees at heart but that there is a
better way to address the issue.
Co-Chair Green offered a motion to report the bill from Committee
with individual recommendations, accompanying fiscal notes and a
new fiscal note.
There was no objection and CS SB 311 (JUD) MOVED from Committee
with zero fiscal notes #1 and #2 from the Department of Community
and Economic Development and Department of Law, respectively,
indeterminate fiscal note #4 from the Department of Administration,
fiscal note #5 for $198,800 from the Alaska Court System and a new
fiscal note for $627,000 dated 4/20/04 from the Department of Labor
and Workforce Development.
CS FOR SENATE BILL NO. 364(HES)
"An Act relating to liability for expenses of placement in
certain mental health facilities; relating to the mental
health treatment assistance program; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, sponsored by the Senate Rules
Committee at the request of the Governor, "provides a mechanism to
help contain the costs of Designated Evaluation and Treatment
program. The DET program provides psychiatric inpatient care to
certain persons enabling them to receive care close to their home
and family." He noted the Senate Health and Social Services
Committee adopted a letter of intent.
JEANNETTE GRASTO, Member, Alaska Mental Health Board and the
National Alliance for the Mentally Ill-Alaska, and the National
Alliance for the Mentally Ill-Fairbanks, testified via
teleconference from Fairbanks about her advocacy for people with
mental illness. She read her testimony into the record as follows.
SB 364 represents a major philosophical change without
discussion. It conflicts with the principles articulated in
Alaska Statute 47.36.055 and a shared vision too [of] our
current plan for mental health services. It violates the
principle that services will be provided in the least
restrictive setting and as close to the client's home as
possible. If changes in policy are going to be made, it should
be made with discussion and input from mental health
consumers, mental health courts, hospitals, the Division of
Behavioral Health and other stakeholders.
The utilization review section of this bill would allow more
efficient use of resources and appears to be a positive step,
but savings from improved management should be used for added
service capacity.
The rest of the bill represents a giant step backward. In
Fairbanks we are so grateful to have the capacity and quality
of programs that we currently have at Fairbanks Memorial
Hospital for DET beds in our mental health unit. These beds
are a critical part of the community-based services we rely
on. Before this unit was expanded to 20 beds, many Fairbankans
in acute need have spent up to three days in jail and then
were transported to API [Alaska Psychiatric Institute] in
Anchorage 300 miles away from their families and natural
support system. This was a terrible situation for both
consumers and their families and often exacerbated their
illness and symptoms. It seems like the dark ages now looking
back on it. We've come so far.
Our State is currently trying to expand DET beds so people can
access services in their community and that was a consensus
decision by the mental health community. API is downsizing and
could be reserved for the most complex people whose needs
can't be met locally. And communities would be expected to
take care of their own whenever possible.
The people we're talking about in this bill are among the most
vulnerable of Alaskans. They're either a danger to themselves
or others or they're gravely disabled and unable to take care
of themselves. They're the poorest of the poor without even
disability income or Medicaid. Alaska clearly has a
responsibility to take care of these vulnerable people. I also
think its discriminatory because we're denying them access to
a community system of care that everyone else uses. They
become second-class citizens even among an already
marginalized group.
Maybe you think it doesn't matter because it won't affect
anybody you know. But mental illness affects one in five
Alaskan families. It isn't rare and the treatment for mental
illness is more effective than heart disease or cancer. I'm
always amazed how many of my friends are struggling either
with mental illness themselves or with a family member. And it
really is a crisis when it happens to you. It isn't uncommon
when mental illness first strikes, a person is unable to work
and has no other income and is indigent until they either
return to work or qualify for disability income.
Finally, many DET patients are involuntarily committed. Is it
appropriate to take away the civil rights of an indigent
individual and then not cover their treatment? What kind of
state are we becoming if we pretend to be broke? If Alaska is
so broke we cannot take care of these most vulnerable Alaskans
then it is imperative that we have a sound fiscal plan that
guarantees we can serve their needs. Cuts to State budget must
never come from need.
Co-Chair Wilken thanked the witness for her on-going volunteer work
with the mentally disabled.
VERA JAMES, Alaska Native Health Board, testified via
teleconference from Anchorage as follows.
The ANHB is the over-arching voice representing 229 federally
recognized tribes. As part of its mission the AHNB strives to
promote the mental wellbeing and pride of Alaska Native
people. Some of these people seek mental health treatment and
not all patients of mental health facilities are covered under
insurance or other third-party resources, including Medicaid,
to pay for the cost of evaluation or treatment.
The Alaska Native Health Board therefore urges the state of
Alaska to provide financial assistance for the liability of
expenses of patient placement in certain mental health
facilities. The ANHB supports the implementation of SB 364,
which mandates that those needing mental health treatment be
eligible for financial assistance under the Act.
JEFF JESSEE, Executive Director, Alaska Mental Health Trust
Authority, testified via teleconference from an offnet location
that the Authority supports many provisions in this bill,
specifically the "management tools" the Department is seeking. He
gave examples of adequate notice and timely applications for
services provided. He spoke in favor of efforts to ensure the
Department does not pay more for treatment and evaluation than is
necessary.
Mr. Jessee however, expressed concern that in the event it appears
inadequate funds were available during a fiscal year to provide
necessary services the Department of Health and Social Services
could cease payment. He predicted this would result in the
transportation of many patients from areas of the state to the
Alaska Psychiatric Institute (API). He reminded that the new API
facility was constructed specifically upon the premise that
services would be available and would expand over time. He noted
that facilities in Fairbanks and Anchorage are equipped to provide
diagnosis.
Mr. Jessee informed that designated evaluation and treatment
facilities are expensive to operate and must have a yearlong
business plan. He furthered that hospitals must have certainty of
funding and that a hospital considering undertaking a capital
investment must consider the possibility that a major fund source
might not be guaranteed year round. He also pointed out that as the
program expands to more communities, funds would be divided
further, as is occurring with the community mental health block
grants. He warned that if a facility, such as the program operating
in Juneau were to close for a portion of the year, the State would
incur the cost of transporting patients to the API facility in
Anchorage.
SFC 04 # 94, Side B 09:48 AM
Mr. Jessee continued that this proposal would do significant damage
to the emergency system in the state. He recommended that these
sections be omitted from the bill, especially Section 2.
Mr. Jessee emphasized that other provisions of this bill are
positive, in that they would support additional management tools if
the Department found them necessary.
Senator Hoffman asked how a patient would be cared for if this bill
were implemented and the API facility was at capacity.
Mr. Jessee deferred to the Department. However, he predicted this
would be a significant problem, noting the limited number of "beds"
licensed for mental health care. He reported that in instances of
high occupancy, patients are released at the first opportunity,
which is often not advisable treatment and that many of these
patients must be readmitted.
Senator Hoffman asked if capacity limits would be reached more
often under the provisions of this legislation.
Mr. Jessee affirmed that facilities would reach capacity sooner. He
spoke to the difficulties of releasing patients from API who are
not Anchorage residents. He explained the importance of a patient's
community in outpatient treatment.
Co-Chair Wilken recalled these issues were discussed when this bill
was heard in the Senate Health and Social Services Committee. He
noted the letter of intent adopted by that committee and
recommended the Senate Finance Committee also adopt the letter to
express the intent that alternative revenue sources should be
secured so that the level of services would not be affected.
BILL HOGAN, Director, Division of Behavioral Health, Department of
Health and Social Services reaffirmed the State is responsible to
pay the cost of diagnosis, evaluation and treatment for those
individuals who are financially eligible and who need to be
involuntarily committed to non-State operated hospitals. He read
testimony into the record as follows.
The costs of these services and the related transportation
have increased dramatically over the past several years. From
FY 01 through FY 03, the costs have increased over 100
percent. The rationale for those increases has to do with an
increase in the average daily Medicaid rate as well as an
increase in the total number of beds utilized between [FY] 01
and [FY] 03.
The intent of SB 364 is to reaffirm the importance of DET as
the cornerstone our foundation of our community mental health
system, but at the same time give us a mechanism to more
adequately manage diagnosis, evaluation and treatment
services. The bill would give us the capability through a
registration process - through hospitals having to register
people who come into their facilities within 24 hours - at
least a better mechanism to manage costs. Currently it's
possible that someone might be admitted to a DET service and
the State would not be notified for up to six months after
admission. This legislation would require notification within
24 hours. It also would give us the capability of "day 8"
which is a critical day when trying to stabilize individuals
who serious psychiatric problems or symptoms. It would give us
the capability of actively working with the hospitals to
ensure that if the person needs to be in the hospital that we
would actively or proactively work with the hospital. If the
person did not need to be in the hospital, we would actively
work to develop a discharge plan to leave the hospital.
Again, as you've heard we have worked actively with our
partners, including the Alaska State Hospital and Nursing
Association, the Alaska Mental Health Board, the Alaska Mental
Health Trust [Authority], various advocates, and then members
and clients, to come up with language that is for the most
part is acceptable to all parties.
The one sticking point continues to be Section 2, which
essentially stipulates that we will only fund the service up
to the appropriation from the legislature. As Senator Wilken
has pointed out, in out letter of intent, we clearly commit to
looking at all other possible funding sources to ensure that
we are able to adequately fund this particular service.
However if we are not able to come up with additional dollars,
in the worst case scenario, an individual would have to be
sent to API. Let me also point out that we want to actively
and will continue to actively work with our community mental
health providers to find alternative community facilities or
programs for individuals before they would have to be
transferred to API.
Senator Hoffman asked the Division's intent in implementing this
legislation.
Mr. Hogan listed the first priority as locating services within the
patient's community. He stated the Department would try to locate
alternative placement if no services were available in the
patient's community and API was at capacity. He stressed the intent
to ensure patients receive hospital care if needed.
Senator Hoffman asked how services would be delivered to patients
residing in a community without a treatment facility in the event
API had no vacancies.
Mr. Hogan replied this scenario occasionally occurs. In these
instances, he stated that efforts are made to make space available
at API for that individual.
Senator Olson asked the number of licensed beds at API.
Mr. Hogan answered 92 beds.
Senator Olson asked the occupancy rate over the last year.
Mr. Hogan replied the 75-80 average daily censuses show the
facility averages 75 to 80 percent capacity.
Senator Olson expressed concern that if space were not available at
mental health facilities, patients would be admitted to a local
hospital that is not equipped for the special needs of patients
with mental illnesses. He relayed his experience that these
patients often require protection from themselves, and at times
must be restrained. He remarked that most doctors are not trained
in psychiatry and would be required to provide care they are not
qualified to administer.
Mr. Hogan responded that the intent would not be to transfer those
patients who are perceived to be a danger to themselves or others
or who have been involuntarily committed. Rather, he stated the
intent would be to stabilize patients so they could be transferred
to their community.
Senator Hoffman asked if the Department has considered the
financial risks of liability for failure to provide services.
Mr. Hogan indicated extensive discussion within the Department and
with the Department of Law has occurred. He furthered that the
procedures of other states is being researched and that he would
provide information on the findings.
Co-Chair Wilken cited the analysis in the fiscal note, which
reports that the Designated Evaluation and Treatment (DET) program
would no longer receive $724,900 federal funding beginning in FY
05. He surmised this is the impetus of this legislation.
Mr. Hogan affirmed that the program would receive a reduction of
$700,000 in FY 05, according to the Governor's proposed budget. He
expressed intent to secure alternative funding for this program and
told of options. He emphasized the need for this legislation to
improve management of the program.
VERNER STILLNER, Legislative Representative, Alaska Psychiatric
Association, read his testimony into the record as follows.
The mental health system can best be judged when it is under a
state of emergency. And such an emergency in mental health
system is covered by this piece of legislation. In other
words, when an individual, due to mental illness, is dangerous
to self or others, or gravely disabled and unable to care for
themselves, a physician or a mental health professional can
petition the court for a 72-hour hold. And an involuntary
hospitalization takes place. Currently that can take place in
Palmer, Ketchikan, Cordova, Homer, Valdez, Sitka, Bethel,
Kodiak, Juneau and Fairbanks. And then if the individual needs
to be committed for a 30-day evaluation, a longer period of
time, that individual can be hospitalized at Fairbanks
Memorial Hospital or Bartlett Regional Hospital, or the API.
My concern about this piece of legislation is that there may
be an unfunded mandate. In other words, you don't fund an
emergency system in my estimation with a letter of intent. I
predict that when the Committee of next fiscal year comes
around and the money has expired for this kind of payment for
these hospitals I've mentioned, the hospitals will start
saying "no" and pointing to the API.
The cuts in the budget that are proposed in the House and in
the Senate, cut the budget for institutional care, for
community care and for transport of patients to such
facilities. So my concern is that if these systems of
designated evaluation treatment facilities are not properly
assured of funding, they will start saying "no" and start
shifting people to the API. And the API by next year will be
downsized to a bed census of 72 capacity. And I predict that
the current census will be all that they currently will be
able to do and these hospitals will be left with individuals
to evaluate and treat and possibly not be compensated for.
I support the administrative procedures in this provision to
better manage those monies, in other words, that these
hospitals have to notify the Department when someone is
admitted. All that I think needs to be greatly improved and
there are some cost savings there. But I'm concerned that the
bill currently the way it is funded, will be a unfunded
mandate to hospitalize individuals in an emergency basis and
therefore I think the mental health of the communities and
also the public health of the community may be compromised.
Senator Hoffman understood the witness testified that the capacity
of API would be reduced in the year 2005.
Mr. Stillner affirmed the new facility would contain 72 beds.
Mr. Hogan clarified the facility would contain 74 beds with the
ability to increase to 80 beds in the event of an emergency. He
informed that the new facility is scheduled to open in July 1,
2005.
Co-Chair Wilken ordered the bill HELD in Committee.
CS FOR SENATE BILL NO. 278(L&C)
"An Act relating to fees for the inspection of recreational
devices, including instructional devices, for certificates of
fitness for electrical wiring and plumbing, for filing
voluntary flexible work hour plan agreements, and for licenses
for boiler operators; relating to the building safety account;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, sponsored by the Senate Rules
Committee at the request of the Governor, "creates two new fees and
increases existing fees charged by the Department of Labor and
Workforce Development."
GREG O'CLARY, Commissioner, Department of Labor and Workforce
Development, testified this legislation relates to user fees, which
have not been increased for ten years.
GREY MITCHELL, Director, Division of Labor Standards and Safety,
Department of Labor and Workforce Development, outlined the bill.
Section 1, he stated would establish a fee for amusement and
recreational devices for each inspection performed. These fees, he
informed, would pay the cost of inspector travel and certification
for testing that must occur outside Alaska, and subsequently pay
the cost to maintain the inspection services.
Mr. Mitchell detailed that Section 2 would impose a $200 fee for
boiler operator licenses, pointing out that no fees currently are
imposed for this license and the fee would support the program that
administers testing and issues the licenses.
Mr. Mitchell next informed that Section 3 would increase the
existing license fee by $20 for electricians and plumbers from $160
to $200 for a two-year. He reported this fee was last increased in
the year 1993 and the increased revenues would pay the cost of an
additional electrical inspector position, which along with the
current two positions, would provide "a good coverage area" for the
State with one inspector located in Southeast Alaska, one in
Southcentral and the third located in the Northern areas. He noted
the number of plumbing inspectors would not change.
Mr. Mitchell then explained that Section 4 relates to a filing fee
and qualified that the revenues from this fee would not be utilized
to support inspection services, but would rather be deposited to
the State general fund.
Commissioner O'Clary interjected that Co-Chair Green has proposed
an amendment to Section 4.
Mr. Mitchell continued that Sections 5 and 6 would establish that
the fees charged in Sections 1 through 3 would be deposited into
the Building Safety Account, a sub-account of the State general
fund utilized for the mechanical inspection sections programs. He
remarked this office operates "as close as you can get in
government, like a business", explaining that the fees charged are
directly used to fund the services provided.
Mr. Mitchell concluded with Section 7 that establishes the
effective date.
Senator Olson asked the number of people who would be affected by
the fees imposed in Section 1 for inspection of recreational and
amusement vehicles.
Mr. Mitchell replied that approximately 50 businesses in the State
operate recreational devises. He noted this includes businesses
that operate go-carts, ski lifts and bumper cars. He stated that an
amendment to the companion legislation adopted by the House of
Representatives would exempt from the fee a company such as Golden
Wheels, the largest operator, to employ inspectors from out-of-
state. He relayed the Department would support such an amendment to
the Senate bill as well.
Senator Olson referenced the $100 filing fee for applications for
flexible work schedules proposed in Section 4. He asked if public
employers would be subject to this fee as well as the private
sector. He exampled prison guards working 12-hour shifts.
Mr. Mitchell responded this legislation would only apply to private
businesses, noting the current exemption in the statute requiring
overtime pay for flexible work hour plans. He used workweeks of
four 10-hour days as an example. He stated this legislation would
impose a fee for applications for the exemption. He reported the
Department received approximately 200 such applications the
previous year.
Senator Bunde clarified the provisions of Section 4 would not apply
to State negotiated union contracts that allow State workers to
work less than 40 hours per week.
Mr. Mitchell affirmed.
Amendment #1: The amendment deletes "for filing voluntary flexible
work hour plan agreements," from the title of the bill on page 1,
lines 2 and 3. The amended language reads as follows.
"An Act relating to fees for the inspection of recreational
devices, including instructional devices, for certificates of
fitness for electrical wiring and plumbing, and for licenses
for boiler operators; relating to the building safety account;
and providing for an effective date."
This amendment also deletes Section 4 from the bill on page 2,
lines 7 - 10, which read as follows.
Sec. 4. AS 23.10.060 is amended by adding a new subsection to
read:
(f) An employer shall pay a nonrefundable fee of $100 for
each voluntary flexible work hour plan agreement that the
employer files with the department under (d)(14) of this
section.
Co-Chair Green moved for adoption.
Co-Chair Wilken objected for discussion purposes.
Co-Chair Green explained that current statute require employers to
pay employees overtime pay for work performed beyond 40 hours per
week or eight hours per day. She noted this statute also allows an
employer and an employee to mutually agree to an alternative
arrangement, such as four ten-hour workdays within a week, without
overtime compensation, provided that the employer submits to the
Department of Labor and Workforce Development a "voluntary flexible
work plan". She opposed the provision in this legislation that
would impose a $100 filing fee to the employer, as it involves a
voluntary agreement between the employer and employee.
Co-Chair Wilken calculated the fiscal note for this legislation
would become zero if this amendment were adopted.
Commissioner O'Clary informed that a zero fiscal note would be
acceptable to the Department.
Co-Chair Wilken removed his objection to the adoption of the
amendment.
Senator Bunde understood that fees are intended to equal the cost
of processing licenses, permits, etc. He surmised therefore that if
this amendment passes, flexible work plans would no longer be
required or filed with the Department to negate any expense to the
Department.
Commissioner O'Clary replied that the notification would continue
to be required but that no fees would be collected for this
service.
Senator Bunde asked what the Department does with the flexible work
plan notifications.
Mr. Mitchell reaffirmed that the flexible work plans would still be
required through regulation. He stated that the Department reviews
these plans to ensure they meet the intent of the overtime
exemption provisions.
Senator Bunde remarked that administering this program must incur
an expense to the Department.
Mr. Mitchell affirmed that staff time is spent reviewing and
approving the flexible work plans.
Senator Bunde asked the cost.
Mr. Mitchell did not know the exact amount.
Senator Bunde opined that the cost should be determined and
reflected in the fiscal note.
Co-Chair Green pointed out this amendment would maintain the status
quo of the program, as no fees are currently collected.
Co-Chair Wilken removed his objection to the adoption of the
amendment.
Senator Bunde objected. He asserted that the fiscal note should not
be zero, but rather should reflect the cost of administering the
program.
Co-Chair Wilken asked the approximate range of the cost.
Commissioner O'Clary qualified that any estimate would be
speculation and very approximate.
Mr. Mitchell calculated that approximately 200 to 250 flexible work
plans are filed each year and that depending upon the complexity,
each plan could require up to one-half hour to review. He noted
that simpler plans could be reviewed in ten minutes. He pointed out
however, that staff time is only a portion of the program's
expenses and that office space and other expenses are incurred. He
estimated the program would cost approximately $2500 per year.
Co-Chair Wilken asked if the margin of error would be approximately
$1000.
Mr. Mitchell agreed this was a fair assessment.
Senator Bunde calculated the cost per filing to be approximately
$10.
Mr. Mitchell agreed this is an approximate amount.
Senator Bunde requested an updated fiscal note.
Co-Chair Wilken suggested the Committee adopt the amendment and
hold the bill to await an updated fiscal note.
Without objection the amendment was ADOPTED.
Co-Chair Wilken ordered the bill HELD in Committee.
SENATE BILL NO. 368
"An Act relating to taxes on cigarettes and tobacco products;
relating to tax stamps on cigarettes; relating to forfeiture
of cigarettes and of property used in the manufacture,
transportation, or sale of unstamped cigarettes; relating to
licenses and licensees under the Cigarette Tax Act; and
providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, sponsored by the Senate Rules
Committee at the request of the Governor, "increases the cigarette
tax from a dollar a pack of 20 cigarettes to two dollars per pack
and tobacco tax from 75 percent to 100 percent of the wholesale
cost. In addition, SB 368 allows the Department of Public Safety to
seize and dispose of assets used in cigarette smuggling and tax
evasion activities."
Co-Chair Wilken noted CS SB 378 23-GS2116\I incorporates the six
amendments adopted at the previous hearing and makes no other
changes.
Senator Hoffman commented this is a "bad, bad bill."
Co-Chair Green expressed concern about the forfeiture provisions of
this legislation. She stressed the important to decide whether the
intent of this legislation is to generate revenue for the State, or
for advocacy groups, or to change behavior. She stated she would
oppose this bill.
Senator Bunde offered a motion to report SB 368, as amended, from
Committee with individual recommendations and accompanying fiscal
notes.
Without objection SB 368 (FIN) MOVED from Committee with fiscal
note #1 for $828,100 from the Department of Revenue and fiscal note
#2 for $206,400 from the Department of Public Safety.
CS FOR SENATE BILL NO. 231(STA)
"An Act relating to unclaimed property; and providing for an
effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, sponsored by the Senate Rules
Committee at the request of the Governor, "shortens the time period
after which certain unclaimed property is presumed to be abandoned
and must be transferred to the custody of the State. Senate Bill
231 conforms to the most current Uniform Unclaimed Property Act."
RACHEL LEWIS, Unclaimed Property Administrator, Division of
Treasury, Department of Revenue, testified this legislation would
shorten dormancy periods for unclaimed property. This, she
informed, would provide the State the opportunity to locate owners
of unclaimed property quicker, and would allow companies that hold
"uncashed" checks and banks with inactive accounts to "clean those
off their books" in a timely manner. She stated that holding
unclaimed property creates a liability for companies and banks and
that the State would become the active custodian for these assets.
She also noted that this legislation would allow assets to become
the property of the State sooner to the benefit of all residents.
She explained that these funds could be used for schools, road
projects and other programs until the owner submits a claim for the
assets.
Co-Chair Wilken amendment explanations
Amendment #2: This amendment changes the language in Section 5 on
page 3, lines 14 - 30 to read as follows.
Sec. 5. AS 34.45 is amended by adding a new section to read:
Sec. 34.45.175. Certain property distributed in insurance
company reorganizations. (a) The following property
distributable in the course of a demutualization or related
reorganization of an insurance company is deemed abandoned two
years after the date of demutualization or reorganization as
follows:
(1) money that remains unclaimed and the owner has
not otherwise communicated with the holder or its agent
regarding the property as evidenced by a memorandum or other
record on file with the holder or its agent;
(2) stock or other equity interest if
(A) the instruments or statements reflecting
the distribution are either mailed to the owner and
returned by the post office as undeliverable, or not
mailed to the owner because of an address on the books
and records of the holder that is known to be incorrect;
and
(B) the owner has not otherwise communicated
with the holder or its agent regarding the property as
evidenced by a memorandum or other record on file with
the holder or its agent.
(b) Property that is not subject to (a) of this section
is reportable as otherwise provided in AS 34.45.110 -
34.45.780.
Co-Chair Wilken moved for adoption and objected for an explanation.
Ms. Lewis noted that the legislation contains a definition of
demutualization that "did not fit the stylistic needs of Alaska
statutes." This amendment, she stated was drafted by the Department
of Law to better conform the definition to Alaska statutes.
Co-Chair Wilken removed his objection and the amendment was ADOPTED
without objection.
Amendment #3: This amendment inserts two new bill sections on page
8, following line 14 to read as follows.
Sec. 14. AS 34.45.320(d) is amended to read:
(d) the holder of an equity [OWNERSHIP] interest under AS
34.45.200 shall deliver a duplicate certificate, or other
evidence of ownership if the holder does not issue
certificates of ownership, to the department. Upon delivery of
a duplicate certificate to the department, the holder and a
transfer agent, registrar, or other person acting for or on
behalf of a holder in executing or delivering the duplicate
certificate is relieved of all liability, in accordance with
the provisions of AS 34.45.330 to every person, including a
person acquiring the original certificate or the duplicate of
the certificate issued to the department, for loss or damage
resulting to a person by the issuance and delivery to the
department of the duplicate certificate.
Sec. 15. AS 34.45.330(c) is amended to read:
(c) A holder who has delivered property [, INCLUDING A
CERTIFICATE OF AN OWNERSHIP INTEREST IN A BUSINESS
ASSOCIATION,] other than money to the department under AS
34.45.110 - 34.45.430 [,] may reclaim the property if it is
still in the possession of the department, without payment of
a fee or other charge, upon filing proof that the owner has
claimed the property from the holder.
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Wilken moved for adoption and objected for an explanation.
Ms. Lewis explained this amendment reflects recommendations from
the Division of Legal and Research Services to address grammar and
punctuation.
Co-Chair Wilken removed his objection.
Co-Chair Green asked if this amendment would insert new language
into the bill.
Ms. Lewis replied that the Department of Law recommended against
utilizing "ownership" and "equity" in the same sentence and this
amendment therefore delineates the two words.
Co-Chair Wilken noted this amendment was submitted at the request
of the Division of Legal and Research Services.
Without objection the amendment was ADOPTED.
Co-Chair Green offered a motion to report SB 231, as amended from
Committee with individual recommendations and accompanying fiscal
note.
There was no objection and CS SB 231 (FIN) MOVED from Committee
with fiscal note #2 for $60,000 from the Department of Revenue.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 10:33 AM
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