Legislature(2005 - 2006)SENATE FINANCE 532
05/05/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB105 | |
| HB16 | |
| HB381 | |
| HB484 | |
| HB399 | |
| HB377 | |
| HB426 | |
| HB13 | |
| HB334 | |
| HCR30 | |
| HB426 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 105 | TELECONFERENCED | |
| += | HB 16 | TELECONFERENCED | |
| + | HB 13 | TELECONFERENCED | |
| + | HB 381 | TELECONFERENCED | |
| + | HB 426 | TELECONFERENCED | |
| += | HB 484 | TELECONFERENCED | |
| + | HB 334 | TELECONFERENCED | |
| + | HB 399 | TELECONFERENCED | |
| + | HB 377 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HCR 30 | ||
MINUTES
SENATE FINANCE COMMITTEE
May 5, 2006
9:07 a.m.
CALL TO ORDER
Co-Chair Lyda Green convened the meeting at approximately
9:07:24 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Lyman Hoffman
Also Attending: REPRESENTATIVE JOHN COGHILL; REPRESENTATIVE
CARL GATTO; REPRESENTATIVE JAY RAMRAS; JANET CLARKE, Assistant
Commissioner, Department of Health and Social Services; STACIE
KRALY, Chief Assistant Attorney General, Statewide Section
Supervisor, Human Services Section, Civil Division, Department
of Law; BRYAN BUTCHER, Director, Governmental Affairs and Public
Relations, Alaska Housing Finance Corporation, Department of
Revenue; JOE DUBLER, Director, Finance, Alaska Housing Finance
Corporation, Department of Revenue; FRANK HOMAN, Commercial
Fisheries Entry Commission; SUE WRIGHT, Staff to Representative
Mike Chenault; MIKE POWLOWSKI, Staff to Representative Kevin
Meyer; REVENIA MOSS, Staff to Representative John Coghill; KEVIN
HENDERSON, Division of Public Assistance, Department of Health
and Social Services; DONNA MCCREADY, Alaska Action Trust; CODY
RICE, Staff to Representative Carl Gatto; EDDY JEANS, Director,
School Finance Division, Department of Education and Early
Development; CARL ROSE, Executive Director, Association of
Alaska School Boards; STEPHANIE ALLISON, Alaska Kids Count
Network; JIM POUND, Staff to Representative Ramras;
Attending via Teleconference: From an offnet location: DAN
FAUSKE, Chief Executive Officer/Executive Director, Alaska
Housing Finance Corporation, Department of Revenue; DAN
MCDOWELL;
SUMMARY INFORMATION
HB 105-MEDICAID FOR ADULT DENTAL SERVICES
The Committee heard from the Department of Health and Social
Services and the Department of Law. An amendment and a letter of
intent were adopted and the bill was reported from Committee.
HB 16-SCHOOL FUNDS RELATED TO BOARDING SCHOOLS
The Committee heard from the sponsor and the bill was reported
from Committee.
HB 381-TOBACCO REV. FOR CAPITAL PROJECTS
The Committee heard from the Alaska Housing Finance Corporation.
The bill was held in Committee.
HB 484-FISHERY ASSOCIATION REIMBURSEMENT
The Committee heard from the sponsor and the Commercial
Fisheries Entry Commission. An amendment was offered but failed
to be adopted. The bill was reported from Committee.
HB 399-ELDER FRAUD AND ASSISTANCE/OPA
The Committee heard from the sponsor and a member of the public.
The bill was reported from Committee.
HB 377-EXEMPTION: RES. BLDG. DRAWINGS & SPECS
The Committee heard from the sponsor and the bill was reported
from Committee.
HB 426-MEDICAL ASSISTANCE/INS COOPERATION
The Committee heard from the sponsor, the Department of Law, the
Department of Health and Social Services and the Alaskan Action
Trust. Five amendments were adopted and the bill was reported
from Committee.
HB 13-SCHOOL FUNDING & SCHOOL BOND REIMBURSEMNT
The Committee heard from the sponsor, the Department of
Education and Early Development, and advocate organizations. An
amendment was offered but failed to be adopted. The bill was
reported from Committee.
HB 334-MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION
The Committee heard from the sponsor. A committee substitute was
adopted and amended. The bill was reported from Committee.
HCR 30-AK CLIMATE IMPACT ASSESSMENT COMMISSION
The resolution was reported from Committee.
9:08:36 AM
CS FOR HOUSE BILL NO. 105(FIN)
"An Act relating to coverage for adult dental services
under Medicaid; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Green noted Co-Chair Wilken had raised questions at the
previous hearing and has drafted language with assistance of the
bill sponsor.
9:09:11 AM
Amendment #1: This amendment inserts "Subject to appropriation,
the" to subsection (a) of Sec. 47.07.067. Payment for adult
dental services., added through Section 2 on page 2, line 5.
This amendment also inserts a new subsection to Sec. 47.07.067
on page 2, following line 13 to read as follows.
(b) On or before June 30 of each fiscal year, the
department shall review appropriations available for the
purposes of this section for the following fiscal year, and
estimate the scope of services to be used and number of
eligible recipients anticipated to be served during the
following fiscal year. Notwithstanding the maximum amount
of benefits specified in (a)(1) of this section, the
department shall reduce, by regulation, that specified
maximum amount of benefits for the following fiscal year if
the department's estimates under this subsection would
exceed appropriations available for that fiscal year.
Notwithstanding any contrary provision of AS 44.62.250 and
44.62.260, the department may adopt emergency regulations
to implement this subsection.
Co-Chair Wilken moved for adopted and objected to provide an
explanation.
Co-Chair Wilken expressed concern about the cost of this program
and his intent that it not "grow uncontrolled", as has occurred
with other programs. He informed the Department of Health and
Social Services that he would not support a supplemental
appropriation, if requested, the following legislative session.
9:10:37 AM
JANET CLARKE, Assistant Commissioner, Department of Health and
Social Services, testified that in meeting with Co-Chair Wilken
she learned his intent to consider language that would place a
tighter restraint on spending. He also wanted a letter from the
commissioner outlining a plan to operate the proposed program
within the allocated funding amount. Co-Chair Wilken also
intended to allocate these funds in a separate appropriation to
allow the legislature to track the funds independently.
Ms. Clarke stated that a new fiscal note was prepared to reflect
the intentions of Co-Chair Wilken. She explained that funding
allocated through a separate appropriation could not be
transferred to another Budget Request Unit (BRU) component.
STACIE KRALY, Chief Assistant Attorney General, Statewide
Section Supervisor, Human Services Section, Civil Division,
Department of Law, testified that the amendment before the
Committee would provide for a yearly adjustment of the program.
At the conclusion of each fiscal year, the Department of Health
and Social Services make a determination of the number of
participants of the program the previous fiscal year, the
services provided and the amount expended. If costs exceeded
allocation, the maximum benefit amount for each patient would be
reduced on a pro rata basis. All patients would be allowed to
participate; however, fewer funds would be available for
preventive maintenance procedures.
9:14:26 AM
Co-Chair Green asked if the provisions of the amendment were
consistent with the letter of intent accompanying this
legislation that was adopted by the House of Representatives.
Ms. Clarke affirmed.
9:14:45 AM
Co-Chair Wilken removed his objection to the adoption of the
amendment.
Without further objection the amendment was ADOPTED.
9:14:54 AM
Co-Chair Wilken commented that many people would be eligible to
receive services through this program; however, it was brought
to his attention that an insufficient number of dentists
operating in the state accept Medicaid. Some dentists list their
reasons as Medicaid reimbursement for services is inadequate to
cover the cost of delivery, too many Medicaid covered patients
fail to keep appointments, and liability. He intended to
collaborate with the Department to entice dentists to provide
this care. Such enticement would not be possible under current
statute and he did not intend to include any relevant changes in
this legislation. However, he would address the issue in the
future. He supported the proposed program.
9:17:03 AM
Co-Chair Wilken moved for adoption of a letter of intent signed
by the Committee's co-chairs.
Co-Chair Wilken offered a motion to report CS HB 105(FIN), as
amended, from Committee with individual recommendations, letter
of intent, and a new fiscal note.
There was no objection and SCS CS HB 105 (FIN) was MOVED from
Committee with a letter of intent and a new fiscal note dated
5/4/06 in the amount of $2,633,000 from the Department of Health
and Social Services.
9:18:04 AM
CS FOR HOUSE BILL NO. 16(RLS)
"An Act relating to funding for school districts operating
secondary school boarding programs, to funding for school
districts from which boarding students come, and to the
effectiveness of district secondary school boarding
programs; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE JOHN COGHILL, sponsor of the bill, testified to
the success of students attending boarding schools in Alaska.
9:19:20 AM
Co-Chair Wilken recognized the efforts undertaken in adopting
regulations to implement this legislation. However, if the
completed regulations were "significantly altered" from what was
agreed upon during deliberations on this bill, the new statutes
would be reconsidered the next legislative session. He did not
support the State Board of Education changing the regulations
without involvement of the legislature. He has discussed this
with Representative Coghill and did not anticipate any
difficulty.
9:20:08 AM
Senator Olson shared that boarding school enabled him to
continue his education and realize professional success.
Extended separation from his family was not easy but was worth
the results.
9:21:04 AM
Co-Chair Wilken asked if a new fiscal note would be forthcoming
to exclude Lower Kuskokwim.
Co-Chair Green indicated the revised fiscal note would be
prepared that would reflect an amount reduction to $1.79 million
from $1.255 million.
9:22:09 AM
Co-Chair Wilken offered a motion to report SCS CS HB 16, 24-
LS0125\C, from Committee with individual recommendations and new
fiscal note.
Without objection SCS CS HB 16 (FIN) was MOVED from Committee
with a new fiscal note dated 5/2/06 in the amount of $1,079,000
from the Department of Education and Early Development. [NOTE: A
corrected fiscal note dated 5/6/06 in the amount of $1,254,900
was received from the Department of Education and Early
Development and was submitted to the Senate Secretary to be
reflected as accompanying this bill as reported from Committee.]
AT EASE 9:22:24 AM
9:23:24 AM
CS FOR HOUSE BILL NO. 381(FIN)
"An Act relating to the financing of construction, major
maintenance, and renovation of certain capital projects;
authorizing the commissioner of revenue to sell the right
to receive a portion of the anticipated revenue from a
tobacco litigation settlement to the Northern Tobacco
Securitization Corporation, and relating to that sale and
the use of the revenue; authorizing the Northern Tobacco
Securitization Corporation to issue bonds and use the
proceeds to acquire the right to receive a portion of
anticipated revenue from a tobacco litigation settlement
and for other purposes, and relating to those bonds; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
9:23:58 AM
BRYAN BUTCHER, Director, Governmental Affairs and Public
Relations, Alaska Housing Finance Corporation, Department of
Revenue, introduced Mr. Fauske and Mr. Dubler.
9:24:19 AM
DAN FAUSKE, Chief Executive Officer/Executive Director, Alaska
Housing Finance Corporation, Department of Revenue, testified
via teleconference from an offnet location that he would be
available for questions following presentation of the bill.
9:24:58 AM
Mr. Butcher pointed out that the Senate companion legislation
had been heard in this Committee. He would therefore focus his
testimony to changes made to the original bill by the House of
Representatives. The amount of $140 million was established in
conjunction with the House Finance Committee and deemed
"attainable and conservative". In subsequent discussion with the
Corporation's financial advisor the amount would be increased to
$145 million to reflect a "slight up tick in the tobacco
market." This market is very volatile and therefore difficult to
determine an exact amount. A final amount should be available
the following day.
Mr. Butcher spoke to previous testimony in which larger amounts
were announced. However, repayment of $14 million over the term
of the bonds could actually cost $200 to $300 million. This
represents "diminishing returns" in which each dollar was not
maximized.
9:26:03 AM
Mr. Fauske reiterated Mr. Butcher's testimony, noting that $14
million on "the unrated side" plus "a section of below
investment grade" estimated amount of between $21 and $22
million.
9:26:29 AM
Co-Chair Green requested an explanation of the process of
implementing the provisions of this legislation.
9:26:34 AM
JOE DUBLER, Director, Finance, Alaska Housing Finance
Corporation, Department of Revenue, testified that this bill
would allow the Northern Tobacco Securitization Corporation to
restructure the existing two transactions; one sold in the year
2000 and the second in 2001. The tobacco market at that time was
"young" and Alaska was the first state to undertake this type of
transaction. The process has matured and more structures have
been implemented to allow for additional proceeds from the same
amount of revenues.
Mr. Dubler explained this bill would allow the payoff of the
existing bonds and utilize the new structures to realize more
from the same revenue stream. Additionally the maturity date of
the bonds would be extended.
Mr. Dubler reminded that the first transactions were
specifically shorter terms with the goal being receipt of a
specific dollar amount. The first issuance garnered $93 net
proceeds. He understood that Governor Murkowski and the
legislature had decided to maximize the amount of proceeds from
the transactions through the proposed restructuring. Therefore,
the Corporation has proposed a more aggressive bond structure,
which this bill would allow.
Mr. Dubler stated this proposal would "free up" the surpluses
available after the bonds currently outstanding were "defeased".
Those surpluses would be expended on the capital projects listed
in this legislation.
9:28:23 AM
Co-Chair Green ordered the bill HELD in Committee.
9:28:29 AM
CS FOR HOUSE BILL NO. 484(FSH)
"An Act allowing for revenue received from issuance of
additional entry permits to be appropriated for
reimbursement to salmon fishery associations."
This was the second hearing for this bill in the Senate Finance
Committee.
9:28:59 AM
REPRESENTATIVE PEGGY WILSON, Sponsor of the bill, testified that
she agreed to the changes requested by the Committee.
9:29:22 AM
Co-Chair Wilken moved for adoption of SCS CS HB 484, 24-
LS1693\Y, as a working document and objected for discussion
purposes.
Representative Wilson explained the addition of a subsection to
the bill that would provide that an appropriation made under the
subsection must be made within 30 years after the date the money
was expended or the debt was incurred.
9:30:06 AM
Co-Chair Green emphasized the difficulty of the issue and the
need for assurances to prohibit litigation. This matter is not
easy to understand and she appreciated the sponsor's and other's
efforts.
9:30:34 AM
Senator Stedman expressed "discomfort" with 30-year time limit.
Co-Chair Wilken removed his objection to the adoption of the
committee substitute.
Without further objection SCS CS HB 484, Version "Y" was ADOPTED
as a working document.
9:31:17 AM
Amendment #1: This amendment reduces the number of years, from
30 to 15, in which the legislature may appropriate to a
participating salmon fishery association for reimbursement of
expenses it incurred in the implementation of a fleet reduction
program, any revenue resulting from the sale of permits for the
same fishery.
Senator Stedman moved for adoption.
Senator Stedman pointed out that the earlier provision did not
stipulate a timeframe, which provided the legislature with
latitude to determine appropriate reimbursement. Many changes
have occurred in the commercial fishing industry over 30 years.
A 15-year time limit would be more applicable to allow the
legislature to gauge economic gains in the industry.
9:33:08 AM
Co-Chair Green shared these concerns. However, the time limit of
30 years was chosen because it is the length of the loan. The
association, in collecting funds to buy permits, does not have
any control over when it could be directed to issue additional
permits.
9:33:48 AM
Senator Stedman understood the argument, but pointed out that
the association could follow a different timeframe and not
utilize the debt. The 30-year proposal represents an "unwieldy
amount of time." In conversations he had with representatives of
the United Fisherman of Alaska, he did not fault their
preference of the 30-year limit.
9:34:31 AM
Senator Olson, as commercial fisherman, understood the
fluctuation of prices. A 30-year time limit is appropriation and
would alleviate pressure on fishers to resolve the issue.
9:35:20 AM
Representative Wilson expressed concern that because fisherman
do not have the money and are considering taking out a loan,
they would be taking a risk since the long term prices are
unknown. A provision on this legislation to last at least the
length of the loan would provide some assurance. This would also
assist then in obtaining the loan given the guarantee provided.
9:36:13 AM
FRANK HOMAN, Commercial Fisheries Entry Commission, testified in
Juneau in agreement with Representative Wilson. Commercial
fishers, to form an organization to buy back the permits, would
be required to obtain a 30-year loan. The provision of the
committee substitute would protect these borrowers during the
term of the loan against a situation in which the State issued
additional permits.
A roll call was taken on the motion to adopt the amendment.
IN FAVOR: Senator Stedman
OPPOSED: Senator Olson, Senator Dyson, Senator Hoffman, Co-Chair
Wilken and Co-Chair Green
ABSENT: Senator Bunde
The motion FAILED (1-5-1)
The amendment FAILED to be adopted.
9:38:35 AM
Co-Chair Wilken offered a motion to report SCS CS HB 484, 24-
LS1693\Y, from Committee with individual recommendations and
accompanying fiscal note.
There was no objection and SCS CS HB 484 (FIN) was MOVED from
Committee with zero fiscal note #1 from the Department of Fish
and Game.
9:39:07 AM
SENATE CS FOR CS FOR HOUSE BILL NO. 399(STA)
"An Act establishing the office of elder fraud and
assistance; and relating to fraud involving older
Alaskans."
This was the first hearing for this bill in the Senate Finance
Committee.
9:39:40 AM
SUE WRIGHT, Staff to Representative Mike Chenault, testified
that this bill is "event driven". She told of the instance of a
distant cousin to the McDowell Family of Sterling taking
"egregious" advantage of the elderly couple. As a result of the
cousin's actions, the McDowell's home was "gutted" to the
"studs". Ultimately the couple lost between $750,000 and $2
million in real property and bank accounts. This was
accomplished through quit claim deeds, powers of attorney and
other documents, which were signed while the victims were
hospitalized and in a medicated state.
Ms. Wright reported the efforts of Representative Chenault's
staff to obtain assistance from a State agency for this family,
with only the Office of Public Advocacy (OPA) responding. The
family has recently obtained stays on eviction notices and has a
guardian appointed to fairly represent the couple's interests.
Ms. Wright stated that the legislation before the Committee
would allow OPA to investigate cases such as this. She was aware
of only one other similar investigation; however, it was pursued
by federal officials. She was aware that many complaints have
been filed, although none that were investigated.
9:43:15 AM
Co-Chair Green announced that one of the victims in this case is
Sam McDowell, who is renown in Alaska.
9:43:38 AM
DAN MCDOWELL testified via teleconference from an offnet
location that his father and mother are the victims Ms. Wright
spoke of. A distant relative had convinced his mother to
authorize access to the couple's assets. Mr. McDowell had made
many attempts to obtain assistance to stop this abuse. His
parents are now "penniless" and residing in separate assisted
living facilities. The perpetrator has been utilizing multiple
social security numbers and had attempted to evict the family
from their homestead riverfront property. Luckily, this was
averted.
Mr. McDowell stressed that with an aging population, efforts
must be undertaken to prevent such abuse of elderly Alaskans.
9:47:43 AM
Senator Dyson requested input from OPA, as he had been informed
that the appropriation listed in the fiscal note would be
insufficient to establish the program.
9:48:24 AM
Co-Chair Green requested the sponsor to speak to this matter.
9:48:27 AM
Ms. Wright acknowledged concerns about the establishment of a
new program. Because the number of cases could not be accurately
predicted, a determination was made to provide adequate funding
for OPA to start the program with minimal number of cases. If
the costs exceed the appropriation, the issue would be
readdressed. Mr. Fink, Director of OPA has made significant
progress in streamlining the agency and making operations more
efficient.
9:49:55 AM
Senator Dyson appreciated Mr. Fink's efforts. Senator Dyson was
aware of other instances of elder abuse. He posed a scenario of
an elderly man falling in love with his nurse, who then takes
advantage of the situation.
9:50:52 AM
Senator Hoffman asked why the fiscal note only reflected funding
for the upcoming fiscal year. He asked whether the program would
only be in operation for one year.
9:51:05 AM
Ms. Wright explained that the cost to operate the program in
future years was unknown. Therefore, the fiscal note contained a
conservative amount for the first year of operation. Once the
estimated number of cases was determined, more accurate
appropriations could be made. As many as 500 complaints could be
filed annually.
9:51:53 AM
Co-Chair Wilken offered a motion to report the bill from
Committee with individual recommendations and accompanying
fiscal notes.
Without objection SCS CS HB 399(STA) was MOVED from Committee
with zero fiscal notes #1 from the Department of Health and
Social Services, #2 from the Department of Law, #3 from the
Department of Public Safety, and fiscal note #4 in the amount of
$189,000 from the Department of Administration.
Ms. Wright thanked the Committee on behalf of the McDowell
family.
9:52:35 AM
SENATE CS FOR CS FOR HOUSE BILL NO. 377(L&C)
"An Act relating to an exemption from certain registration
and practice requirements for persons preparing drawings or
specifications related to the construction of certain
buildings and the grounds of the buildings."
This was the first hearing for this bill in the Senate Finance
Committee.
MIKE POWLOWSKI, Staff to Representative Kevin Meyer, testified
that this bill would eliminate a discrepancy between State law
and municipal building codes. Statute requires that an architect
or engineer consult on the design of multi-family dwellings for
more than four families or is more than four stories. Most
municipal codes define multi-family dwellings as relating to
three or more families or three or more stories. As land becomes
less available, taller houses are being constructed. The
building codes provide a "check and balance" on the safety of
the design.
Mr. Powloski stated this bill would align State law with
municipal building codes and would only apply for properties
governed by a building code. This is intended to eliminate
additional costs incurred in complying with multiple
regulations.
9:54:28 AM
Senator Bunde clarified that an area in which a municipal
building code is in effect, the provisions of this legislation
would apply.
9:54:58 AM
Co-Chair Wilken offered a motion to report the bill from
Committee with individual recommendations and accompanying
fiscal note.
There was no objection and SCS CS HB 377 (L&C) was MOVED from
Committee with zero fiscal note #1 from the Department of
Commerce, Community and Economic Development.
RECESS 9:56:01 AM / 4:45:52 PM
4:46:02 PM
SENATE CS FOR CS FOR HOUSE BILL NO. 426(HES)
"An Act relating to cooperation of insurers with the
Department of Health and Social Services; relating to
subrogation, assignment, and lien rights and notices for
medical assistance claims; relating to recovery of medical
assistance overpayments; relating to asset transfers and
income diversion by medical assistance applicants; relating
to assets and Medicare enrollment as they affect medical
assistance coverage; relating to home and community-based
services; relating to medical assistance applications for
persons under 21 years of age; requiring a report by the
Department of Health and Social Services; and providing for
an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
4:46:25 PM
REVENIA MOSS, Staff to Representative John Coghill, introduced
the bill as an attempt to ensure that those receiving Medicaid
services are truly in need of such assistance. The bill
endeavors to remedy "abuses" identified within the system, such
as the exclusion of a stepparent's income when calculating
eligibility for the Denali KidCare program. Federal Medicaid
guidelines permit this type of "abuse", thus necessitating
legislative action. The issue of Denali KidCare eligibility
would be addressed during future legislative sessions upon
receiving input from the Department of Health and Social
Services.
4:47:44 PM
Ms. Moss noted that this bill incorporated some of the "fixes"
for Medicaid developed by the Office of the Governor.
4:48:12 PM
Ms. Moss discussed Sec. 11, page 9 of the bill, which directs
the Department to prepare a report for the legislature
delineating recommended changes to reduce medical assistance
expenditures for mental health treatment facilities, both in-
state and out-of-state. Currently, a child placed in a treatment
center outside of Alaska will become eligible for Denali KidCare
after 30 days. This often occurs when an insurance provider
refuses coverage of what is considered an unnecessarily high
level of treatment. When coverage is denied, Denali KidCare is
activated to provide assistance. The Department is requested to
assess the cost and level of treatment within these facilities,
and determine if the KidCare program is paying for treatment
services above the level needed by its patients.
4:50:17 PM
Ms. Moss identified another objective of the legislation as
increasing parental accountability by encouraging or requiring
parental participation in the payment of health care for
children. The bill also seeks to maximize third party resources.
4:50:28 PM
Ms. Moss spoke to an application requirement in Sec. 7, page 7
of the bill. This would require that any child under 18 years of
age must be enrolled for Denali KidCare by their parent or legal
guardian. The intent of this stipulation is to ensure that
parents assume responsibility for their child's medical
treatment. She exampled the case of a 15-year old runaway who is
enrolled in Denali KidCare by her 20-year old boyfriend,
unbeknownst to the girl's parents.
4:51:47 PM
Ms. Moss addressed Amendment #2, which she informed was a
consolidation of Amendment #1. It would conform the committee
substitute to a recent Supreme Court decision in the Alborn
case, which made the previous language unconstitutional. The
amendment retains as much of the Department of Law's original
language as possible while still complying with Federal law.
4:52:56 PM
[NOTE: Amendment #1 was not distributed.]
Amendment #2: This amendment deletes and inserts language to AS
47.05.070(b) amended in Section 2 on page 2, line 26 to read as
follows.
(b) When [IF] the department provides or pays for
medical assistance for injury or illness under this title,
the department is subrogated to not more than the part of
an insurance payment or other recovery by the recipient
that is for medical expenses provided by the department.
[THE RIGHTS OF THE RECIPIENT OF THAT MEDICAL ASSISTANCE FOR
ANY CLAIM ARISING FROM THE INJURY OR ILLNESS AND TO THE
PROCEEDS OF AN INSURANCE POLICY COVERING THE INJURY OR
ILLNESS TO THE EXTENT OF THE VALUE OF THE MIDICAL
ASSISTANCE PROVIDED. A RECIPIENT OF MEDICAL ASSISTANCE OR
THE RECIPIENT'S ATTORNEY MUST NOTIFY THE DEPARTMENT IN
WRITING OF ANY ACTION OR CLAIM AGAINST A THIRD-PARTY PAYOR
IF MEDICAL ASSISTANCE WAS PROVIDED BY THE DEPARTMENT TO
TREAT AN INJURY OR ILLNESS FOR WHICH THE THIRD PARTY MAY BE
LIABLE.] Notwithstanding the assertion of any action or
claim by the recipient of medical assistance, the
department may bring an action in the superior court
against an alleged third-party payor to recover an amount
subrogated to the department for medical assistance
provided on behalf of a recipient.
This amendment also deletes subsections (b) and (c) from Sec.
47.05.071. Duty of a medical assistance recipient., added by
Section 3, on page 3, lines 13 through 23. The deleted language
reads as follows.
(b) A medical assistance recipient may not compromise
or resolve an action or claim seeking payment for or
related to an injury or illness for which care or services
were provided or received under the medical assistance
program against an insurer, entity, or other person without
first providing notice to the attorney general's office of
the facts and circumstances giving rise to the action or
claim and the asserted basis for supporting the action or
claim.
(c) A medical assistance recipient may not receive
payment from any source on account of or related to care or
services for which medical assistance was received unless
the recipient has received written consent of the attorney
general's office and has paid the department reimbursement
of the amount of medical assistance provided or paid.
This amendment also inserts language following "party" to
subsection (b)(1) of Sec. 47.05.071 on page 3, line 27. The
amended language reads as follows.
(1) assign to the department the applicant's
rights of payment for care and services from any third
party to the extent the department has paid medical
assistance for care and services.
This amendment also deletes subsection (b)(3) of Sec. 47.05.071
on page 3, line 31 through page 4, line 5. The deleted language
reads as follows.
(3) assign to the department the applicant's
right to the applicant's permanent fund dividend and agree
to sign a new assignment each year; the department shall
use the assignment obtained under this paragraph to obtain
reimbursement or enforce repayment when a recipient does
not pay to the state reimbursement received from a third
party for care or services provided or paid by the medical
assistance program or fails to satisfy a lien perfected
under AS 47.05.075
This amendment also replaces "may be" with "is" in the language
of subsection (c) of Sec. 47.05.072. Duty of attorney for
medical assistance recipient., added by Section 3 on page 4,
line 28. The amended language reads as follows.
(c) An attorney who represents a medical assistance
recipient shall give the attorney general's office 30 days'
notice before any judgment, award, or settlement is
satisfied in an action or claim by the medical assistance
recipient to recover damages for an injury or illness that
has resulted in the department's providing or paying for
medical assistance.
This amendment also deletes subsection (d) of Sec. 47.05.072 on
page 4, line 31 through page 5, line 10. The deleted language
reads as follows.
(d) Except for payments under AS 23.30, an attorney
representing a medical assistance recipient who has
received care or services for the injury or illness
provided or paid for by the medical assistance program
shall maintain any lump sum settlement or judgment paid in
connection with the action or claim in a trust account or
deposit the proceeds into the registry of the court until
any lien perfected by the department under AS 47.05.075 is
satisfied or, if a lien has not been filed under AS
47.05.075, 60 days from the attorney's receipt of the
proceeds.
This amendment also deletes subsections (a) and (b) from Sec.
47.05.073. Judgment, award, or settlement of a medical
assistance lien., added by Section 3 on page 5, lines 15 through
21. The deleted language reads as follows.
(a) An action or claim brought by a medical assistance
recipient or an attorney who represents the medical
assistance recipient against a third party or insurer may
not be compromised or discharged without the express
written consent of the attorney general.
(b) A judgment, award, or settlement that requires or
results in the compromise of a lien under AS 47.05.075 may
not be entered into or granted by a court without the
express written consent of the attorney general.
This amendment also inserts "for medical costs" and deletes
"full" preceding "repayment" to subsection (c) of Sec. 47.05.073
on page 5, line 22. The amended language reads as follows.
(c) A medical assistance recipient may not maintain
any rights to payment for medical costs as a result of a
judgment, award, or settlement of an action or claim for
which another person may be legally obligated to pay
without first making repayment to the department for costs
of past medical assistance services provided to or paid for
by the medical assistance recipient that relate to that
action or claim.
This amendment also deletes "full" preceding "repayment" from
subsection (d)(1) of Sec. 47.05.073 on page 5, line 31. The
amended language reads as follows.
(1) making repayment to the department for costs
of past medical assistance services provided to the medical
assistance recipient related to that action or claim
This amendment also deletes subsection (e) from Sec. 47.05.073
on page 6, lines 4 through 10. The deleted language reads as
follows.
(e) The department's recovery under a subrogation
right, assignment, or enforcement of a lien shall be
applied to the entire payment made in satisfaction of
judgment, award, or settlement.
This amendment also deletes "or give written consent related to"
following "discharge" and deletes "or consent" following
"discharge" from subsection (g) of Sec. 47.05.073 on page 6,
line 11. The amended language reads as follows.
(g) the attorney general may only discharge a medical
assistance lien under AS 47.05.075 if the discharge
complies with federal law.
Co-Chair Green offered a motion to adopt the amendment and
objected to receive an explanation.
AT EASE TO 4:55:49 PM
4:56:21 PM
STACIE KRALY, Chief Assistant Attorney General, Statewide
Section Supervisor, Human Services Section, Civil Division,
Department of Law, explained the amendment as it related to the
Supreme Court ruling and subrogation claims in the Department.
AT EASE 4:57:19 PM / 4:57:40 PM
Ms. Kraly outlined the changes proposed in the amendment.
5:01:33 PM
Co-Chair Green withdrew her objection and the amendment was
ADOPTED without further objection.
5:01:40 PM
Amendment #3: This amendment deletes subsection (d)(2) of Sec.
47.05.073. Judgment, award, or settlement of a medical
assistance lien., added by Section 3 on page 5, line 22. The
deleted language would have allowed a medical assistance
recipient to hold in trust funds received in a judgment, award
or settlement for the purpose of maintaining public assistance
or medical assistance eligibility only with the express written
consent of the attorney general and after repayment of past
benefits was made to the Department of Health and Social
Services. The deleted language reads as follows.
(2) obtaining the express written consent of the
attorney general.
Co-Chair Green moved for adoption.
Ms. Kraly explained that the amendment was needed to make the
bill consistent with the aforementioned Supreme Court decision.
There was no objection and the amendment was ADOPTED.
5:03:20 PM
Ms. Kraly informed that the provisions under Sections 2 and 3,
as amended, would comply with the recent Supreme Court Alborn
decision by identifying and characterizing how the State could
allocate funds recovered under third-party lien and subrogation
scenarios. The system created under these provisions should
prove beneficial to the State.
5:04:13 PM
Ms. Moss assured that the bill's sponsor had been working
closely with the Department of Law, the Division of Insurance,
insurance companies and trial attorneys to produce an ideal
bill.
5:04:43 PM
KEVIN HENDERSON, Division of Public Assistance, Department of
Health and Social Services, addressed Sections 5 through 7, and
indicated the Department's desire to ensure that people who were
able to pay for some or all of their medical care assumed that
responsibility.
Mr. Henderson explained that Section 5 would provide the
Department the authority to garnish the Alaska Permanent Fund
dividend (PFD) of an individual recipient if they were found to
have violated the eligibility rules. The same section contains a
provision providing for the reimbursement of service expenses
paid in the event that the individual who received those
services was ruled ineligible through a hearing process.
5:06:37 PM
Mr. Henderson continued to Section 6, which addressed annuities.
When an individual seeks long-term care services through
Medicaid, the Department would investigate that person's
financial history prior to their becoming a Medicaid participant
to identify possible transfers of assets or "hidden money" that
a person could make inaccessible for the purpose of qualifying
for Medicaid. Annuities are used in other states to circumvent
Medicaid eligibility rules, and this provision would ensure that
annuities were treated similarly to other financial holdings.
5:07:58 PM
Senator Olson asked how an annuity held by more than one person
would be affected if only one of the individuals was seeking
assistance.
5:08:15 PM
Mr. Henderson replied that he would verify, but surmised that
the provision would apply only to annuities purchased by an
individual.
5:08:32 PM
Mr. Henderson spoke briefly to Section 7 (j) and (k), which
addressed rights and procedures of who could apply for Medicaid
on behalf of minor, as discussed previously.
Mr. Henderson then discussed subsection (l) of Section 7, which
he identified as a new requirement made possible by a
"loosening" of federal policy. The change in federal policy
allowed the State to mandate that any person eligible for
Medicare must first apply and enroll in that program before
receiving benefits under Medicaid. While most people over 65
years of age already apply for and receive Medicare benefits,
some individuals under the age of 65 with certain disabilities
also qualify for this program, which is entirely funded by
federal monies. Although not many people under 65 qualify for
Medicare, those who do usually have very costly medical
conditions and this provision would allow the State to utilize
federal funds before expending State dollars.
5:10:14 PM
Mr. Henderson characterized subsection (m) as a "technical"
provision, which acted to "embrace" the federal requirements of
the Deficit Reduction Act of 2005. It relates to the transfer of
assets for less than fair market value, and would lengthen the
"lookback" period for transfers to five years. It would also
impact the "penalty period," or the period of Medicaid
ineligibility, by allowing the penalty period to begin at the
time of application, not at the time of transfer.
Mr. Henderson continued that the bill would allow the Department
to consider multiple transfers as one, and imposes some
restrictions on the use of "life estates".
5:11:55 PM
Mr. Henderson identified subsection (n) as a new policy, also
part of the Deficit Reduction Act, but made broader by the
proposed legislation. The new federal Medicaid eligibility rule
that applies to long-term care requires the State put a "cap" on
the equity value of a home. While nothing would preclude an
applicant from taking a second mortgage on their home or
managing their assets in other ways, if the equity value was
over $500,000 the applicant would not be eligible. The federal
rule applies to long-term care only, but the provision in this
bill would apply to almost all services.
5:13:02 PM
Senator Stedman asked if the change in the "lookback" period
from three to five years would have an impact on pending
applicants.
5:13:15 PM
Mr. Henderson responded that the provisions of this bill would
have an effective date of July 1, 2006. Transfers made prior to
that date would fall under the current three-year time limit.
5:13:50 PM
Senator Bunde asked for an explanation of the fiscal notes.
5:14:20 PM
JANET CLARKE, Assistant Commissioner, Department of Health and
Social Services, noted five fiscal notes accompany this
legislation. Additionally, she reviewed a spreadsheet titled
"SCS CS HB 426 Medical Assistance/Ins Cooperation" dated May 5,
2006 [copy on file] depicting savings to the State's Medicaid
program, and relating them to each section of the bill.
Ms. Clarke informed that the fiscal notes assumed that
regulations would not be implemented until April 1, 2007;
therefore savings for FY 07 were calculated at 25 percent, for a
savings of $1,074,200 in general funds and a total savings of
nearly $2.6 million. For FY 08, the first full year the bill
would be in effect, savings were projected to be nearly $5.1
million in general funds and in excess of $10.9 million in total
savings.
Ms. Clarke shared that the provisions of Section 7, subsection
(l) of the bill would generate the largest amount of savings.
That section contains the requirement that those eligible for
Medicare must first enroll in that program before receiving
Medicaid benefits.
5:17:02 PM
Ms. Clarke commented that the other savings accomplished by this
bill, such as subrogation and garnishment of PFDs, are less
significant but would contribute to the overall cost reduction.
Ms. Clarke categorized Section 6 as "cost avoidance" rather than
savings. She anticipated realized savings for the Medicaid
program and urged the Committee's support of the bill.
5:18:46 PM
DONNA MCCREADY, Alaska Action Trust, appreciated efforts made by
legislators and support staff. She suggested that the word
"full", located on page 5, line 31 should be deleted as it had
been elsewhere in the bill to make the legislation compliant
with the Supreme Court ruling.
Ms. McCready also cautioned that Section 6 (f)(1) seemed to
require the State to receive all trust or annuity assets
remaining at the death of an individual, up to the amount of
medical assistance paid. She was concerned that federal Medicaid
law would not permit the State to take those assets in certain
circumstances, such as in the case of a surviving spouse or a
child under the age of 21. That provision of the bill could
create a liability for the State if such action is not
permissible under federal Medicaid law.
5:22:11 PM
Ms. McCready was similarly apprehensive of Section 9, which
repealed AS 47.05.070(e). This statute allowed the State to
waive its subrogation rights in the event of "undue hardship"
for the recipient. In accordance with federal Medicaid law, the
State is, in some cases, required to consider undue hardship.
Rarely does the State waive subrogation rights, but federal law
requires such consideration. Repealing the statute could create
conflict with the federal law, and she recommended against doing
so.
5:23:38 PM
Ms. McCready raised a "practical consideration" on page 4 line
26, subsection (c), which specified that an attorney
representing a medical assistance recipient must give the
attorney general's office "30 days' notice before any judgment,
award, or settlement may be satisfied" in an action or claim.
She opined that this requirement would be "counterproductive" to
the State. She offered the example of an attorney who was in
trial when the defendant offered a settlement to her client. The
attorney would be required to make an immediate decision without
being able to provide the State 30 days' notice. Upon reaching a
settlement, funds could be transferred to a trust account within
a couple of weeks. The attorney is required by law to separate
funds and hold them safe for those parties that may have valid
claim or lien, such as the State of Alaska. The 30 day notice
requirement could result in an unnecessary delay in the
distribution of funds without providing any additional
protection.
5:27:21 PM
Ms. McCready referred members to page 4, subsection (b) (3),
which added new language to the existing law to require a
recipient of medical assistance submit an application for all
available third party resources that may be able to provide
services or reimbursement. In the case that the only third party
resource available may be a person who has caused harm to the
recipient, the provision could require the medical assistance
recipient to file a suit against the other person. This would
not only increase the amount of litigation in the state, but
also pose risks to the recipient, such as filing fees and the
possibility of a judgment issued against them. She suggested the
provision include a clarification of intent that it would not
require a recipient to file a civil or other legal action to
fulfill that obligation.
5:29:21 PM
Co-Chair Green directed parties to continue their efforts on the
bill, and indicated her desire to bring the bill back before
committee.
The bill was HELD in Committee.
[NOTE: This bill was heard again later in the meeting.]
5:29:41 PM
CS FOR HOUSE BILL NO. 13(RLS) am
"An Act relating to reimbursement of municipal bonds for
school construction; increasing the base student allocation
used in the formula for state financing of public
education; relating to the district cost factors for state
funding of public education; relating to school improvement
funding; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
5:30:31 PM
REPRESENTATIVE CARL GATTO, sponsor of the bill, testified that
this bill would authorize reimbursement of construction bonds at
a rate of 70 percent for schools that meet Department of
Education and Early Development requirements, and at a rate of
60 percent for other schools.
AT EASE 5:31:40 PM / 5:32:20 PM
Co-Chair Green offered a motion to adopt SCS CS HB 13, 24-
LS0062\T, as a working document, and objected to receive an
explanation.
[NOTE: Although no further action was taken on this motion, it
is assumed that the intent of the Committee was to ADOPT the
committee substitute Version "T".]
AT EASE 5:32:42 PM / 5:32:49 PM
Representative Gatto informed that the bill contained $2 million
intended to include the North Slope district in the existing
reimbursement program. The bill would increase the Base Student
Allocation (BSA) by $461 to a total of $5,380 per student, for
an overall increase of more than $96 million. It would also fund
the Institute for Social and Economic Research (ISER) study
recommendations at 25 percent, which includes a "hold harmless"
provision at a cost of over $24 million. The ISER study "hold
harmless" provision and associated cost increases are currently
funded for a single year only.
5:34:27 PM
CODY RICE, Staff to Representative Carl Gatto, directed
attention to Section 5 of the bill, which contained the 25
percent implementation language. Section 6 included the
effective date, and Section 11 provided the repeal date of July
1, 2007.
5:34:57 PM
Representative Gatto reported that a School Improvement Grant
provision similar to old Learning Opportunities Grants (LOGS),
would add $81 per student, which amounts to approximately $10
million in additional costs.
Representative Gatto calculated the bill's total increases as
$131 million, which did not include the changes proposed in the
committee substitute. The Finance Committee substitute contained
provisions for the public school performance incentive program,
which was not part of the sponsor's original legislation.
5:35:37 PM
Senator Bunde stressed that although he was aware school
districts have cost differential struggles, the proposed bill
represented a one-time temporary assistance grant. The one-time
increment provided for in the legislation was not calculated
into the BSA, and should not be considered a reduction in
funding if not repeated the following year.
5:36:23 PM
Co-Chair Wilken indicated he was involved in negotiations to
reach a "middle ground" regarding school funding. He asserted,
however, that he did not intend for his agreement to the
proposed legislation to be interpreted as an indication of his
recognition that the ISER study is valid. Rather, he opined, the
study was not "worth the paper it is written on."
Co-Chair Green realized it would be necessary the following
legislative session to review the school funding formula. The
current legislature had simply run out of time to fully address
the issue.
5:37:42 PM
Senator Stedman reiterated that the proposed legislation was a
"temporary solution to an almost permanent problem." He vowed to
address the issue of school funding in a more permanent fashion
the following year.
5:38:03 PM
Co-Chair Wilken interjected that the foundation funding formula
was not broken, but actually functioning well. The complications
arise from one component of the formula that does not recognize
diminished class sizes. Some districts have had reduced
enrollment, and the current formula does not address spreading
the fixed costs of a school over a smaller student body. He
recognized that aspect of the formula needs attention.
Otherwise, the formula works well. The proposed bill recognizes
that while funding per student is increasing, student enrollment
is equal to what it was in 1999. Changes to the formula must
incorporate an understanding that some districts would see
increases in enrollment while others would experience declines.
5:39:24 PM
Senator Stedman declared that although the funding formula may
not be broken in some districts, it is definitely broken in
Senate District A.
5:39:42 PM
Senator Dyson was "startled at the cost" of the proposed
legislation. He had received information that suggested the
State may have spent the entire "surplus" of FY 06 revenues and
could possibly be creating a deficit. Legislation such as this
bill could exasperate the situation.
5:40:21 PM
Co-Chair Green reminded that the State had $600 million in two
different savings accounts and nearly $600 million in an account
designated for pre-funding of K-12 education.
5:40:41 PM
Senator Dyson agreed, but noted that the Committee had witnessed
$300 million in "surprises" in the previous several days, and
maintained his concern.
5:41:02 PM
Senator Stedman recounted that the legislature had committed a
substantial amount of money to an investment account for the
proposed natural gas pipeline, and more into a trust for future
health and energy needs. He pointed out that these actions could
be considered significant savings.
5:41:34 PM
Co-Chair Wilken reminded members that the anticipated revenue
sharing appropriations to municipalities would provide the
assemblies of organized areas that contribute financially to
their local schools with a supplement. He urged members
representing those areas to mobilize the education populace of
their communities to claim that supplement as "education money".
5:43:04 PM
Representative Gatto spoke of deductions of more than $24
million in addition to $10 million distributed through the grant
provision, resulting in a base of $35 million less than what was
appropriated in the current fiscal year. As the funding base
would be smaller, he suggested the legislature continue the ISER
funding.
5:43:55 PM
Co-Chair Wilken directed attention to AS 14.11.100(p)(2)(H)
amended by Section 3 of CSHB 13(RLS) am, the version passed by
the House of Representatives. That section would provide for a
$2 million "set-aside" for municipalities with student
populations between 1,501 and 1,799 individuals. The "set-aside"
was specific to the North Slope Borough, as those residents
"felt slighted" or excluded from the bonding and grants that
were allocated the previous legislative session. Co-Chair Wilken
explained that the North Slope Borough had not been ignored, for
no request for capital funding for education was made for that
area. For that reason, the language granting the $2 million set-
aside was deleted.
AT EASE 5:46:00 PM / 5:47:13 PM
5:47:16 PM
Senator Hoffman commented that the Committee had not addressed
school construction funding for rural schools. He reminded
members of the Kasayulie case, which found disparities in school
construction funding between rural and urban districts. By
failing to address the school construction issue, the problem
and the lawsuit would be "exasperated". He hoped the school
construction issue would be addressed in the capital budget in
the House of Representatives. Were construction needs of schools
in Rural Alaska not addressed, the problems revealed in the
Kasayulie case would continue to escalate.
5:48:46 PM
Senator Olson opposed the removal of the $2 million set-aside
detailed by Co-Chair Wilken. Bond debt reimbursement is used to
fund schools the borough electorate had voted to build, and may
not be included in a list of identified projects compiled by the
Department of Education and Early Development. He recalled
schools receiving bond funding the previous year that did not
appear on any "list", and requested the Department testify to
the validity of the North Slope Borough's financial needs.
5:50:09 PM
EDDY JEANS, Director, School Finance Division, Department of
Education and Early Development, stated the he had not had an
opportunity to review the request lists. He relayed that the
North Slope had held a bond election in November of 2005 and
approved a $2 million bond proposition for district-wide
maintenance. The House of Representatives felt it appropriate to
include reimbursement for the bond in this bill.
5:51:04 PM
Senator Olson remarked on the existence of school districts
throughout Alaska attempting to make local contributions to
their schools, as the bond vote in the North Slope Borough
illustrated.
5:51:28 PM
Co-Chair Wilken referred to a February 28, 2006 report prepared
by the Department titled School Debt Reimbursement Program [copy
on file]. The report detailed the expenses of the bonding
program. He overviewed the spreadsheet, which listed bond
amounts through 2026, and noted a total bond amount of $825
million and interest totaling $485 million. He suggested the
interest amount may indicate that "we may want to pay cash for
things like that". The report also listed the numerous schools
participating in the bond program, and he concluded that
although it is an expensive program, it is also making the
Alaska education system a "great system."
5:53:07 PM
Amendment #1: This amendment adds a new bill section to amend AS
14.11.100(p)(2) by inserting new language to read as follows.
(H) $2,000,000 to projects in a municipality
with a public school enrollment of at least 1,501 but
less than 1,800 students in fiscal year 2005, as
determined under AS 14.17.500
This language is contained in CS HB 13(RLS)am.
Senator Olson moved for adoption.
Co-Chair Wilken objected.
AT EASE 5:53:52 PM / 5:54:43 PM
Co-Chair Wilken reminded that the Committee had discussed bond
reimbursement in detail the previous year and had received no
request from the North Slope Borough. He objected to funding
requests that did not abide by the legislative committee
process.
5:56:14 PM
Senator Olson conceded Co-Chair Wilken had "valid points", but
countered that schools which were not "on any list" the previous
year received funding in the current year, as did a project
rated 20th on a priority list. He recognized the process but
understood that "extenuating circumstances" sometimes warranted
exceptions, and appealed to the Committee to reinstate the
language.
5:57:06 PM
Senator Stedman shared that communities in his district were not
included on the bond reimbursement list last year, and did not
receive funding. He had received no advance notice to add
schools to the list for "major maintenance", and asked the
process for obtaining reimbursement.
5:57:56 PM
Mr. Jeans explained that the proposed legislation would fund
future bond action. If the bill passed the legislature, the
program would be extended an additional two years under the
rates of the previous year's provision. The North Slope Borough
would be required to hold another bond election and re-approve
the project, as the bill was not retroactive and applied only to
debt incurred in the current year.
5:58:25 PM
Senator Stedman discussed the Schoenbar Middle School located in
the election district he represents, which is undergoing a
refurbishment and, upon completion, would be required to apply
for addition to the major maintenance list and for debt
reimbursement. He asked how this situation compared to the
issues facing the North Slope.
5:59:00 PM
Mr. Jeans replied that the work underway at Schoenbar Middle
School was funded using the borough's own finances. If the
proposed legislation is passed, the debt reimbursement program
will be re-opened October 1, 2006, at which time the city or
borough of Ketchikan could choose to hold an election to approve
bonding for the project. Alternatively, the project could be
submitted for inclusion in the capital improvements project
list, where it would be ranked and prioritized along with all
other state grant requests.
5:59:54 PM
Senator Stedman surmised that the process for Ketchikan to be
reimbursed for their work on the Schoenbar Middle School was
similar to what would be required of the North Slope Borough.
6:00:06 PM
Senator Olson asked if any projects in the North Slope district
would qualify for reimbursement.
6:00:16 PM
Mr. Jeans presumed many maintenance projects could qualify for
reimbursement, but the Borough had not submitted any to the
Department for consideration.
6:00:43 PM
Co-Chair Wilken clarified that the legislature does not approve
the projects, it is only charged with setting the reimbursement
limit according to student populations.
6:01:08 PM
Mr. Jeans affirmed that the bill passed the previous year
established limits on specific districts. The proposed bill did
not contain any limitations, and would be available for any
project that had received voter approval and for which the
application process for reimbursement was completed. The
Department would determine whether the project qualified for 70
percent or 60 percent reimbursement.
6:01:42 PM
A roll call was taken on the motion.
IN FAVOR: Senator Hoffman and Senator Olson
OPPOSED: Senator Stedman, Senator Bunde, Senator Dyson, Co-Chair
Wilken and Co-Chair Green
The motion FAILED (2-5)
The amendment FAILED to be adopted.
6:02:18 PM
Mr. Jeans continued his testimony and overviewed the fiscal
notes. The first fiscal note was for the debt reimbursement
program, and indicated indeterminate amounts as the Department
did not know the amounts districts would submit for
consideration. The second fiscal note related to the Alaska
Military Youth Academy, as its funding is directly tied to the
BSA. The next fiscal note represented the increase to the BSA,
and totaled $96 million.
6:04:09 PM
Senator Stedman requested information on the amount of the
increase to the BSA over the previous four years, including the
current year's adjustment. He estimated the increase at 40
percent.
6:04:38 PM
Co-Chair Wilken reminded that the previous year the Committee
undertook an "historic" effort to address all deferred
maintenance requests. While that endeavor was successful, the
deferred maintenance list had once again approached $200 million
in the current year.
6:05:39 PM
CARL ROSE, Executive Director, Association of Alaska School
Boards, testified to thank the legislature for the efforts
undertaken. He was aware of schools in other areas of the
country that were forced to close due to unfunded retirement
liabilities and an absence of state assistance. He thanked
members for their support in that regard.
6:07:32 PM
Representative Gatto excused himself for a previous commitment.
STEPHANIE ALLISON, Alaska Kids Count Network, and parent,
thanked the legislature for their efforts to maintain adequate
staffing in schools. She had followed the proposed legislation
and was supportive of its intent.
6:09:58 PM
Senator Bunde referenced the chart titled "Student Dollar and
Student Enrollment" provided by Co-Chair Wilken [copy on file],
and noted that while student enrollment had declined, the
student dollar had increased "dramatically". Despite that, an
informal poll taken in his district indicated the majority of
participants considered school funding "adequate" or "too much".
6:10:48 PM
Co-Chair Wilken offered a motion to report SCS CS HB 13, 24-
LS0062\T, from Committee with individual recommendations and new
fiscal notes.
Without objection SCS CS HB 13 (FIN) was MOVED from Committee
with five fiscal notes from the Department of Education and
Early Development: $96,020,900, dated 5/4/06, for the Foundation
Program component; $35 million, dated 5/4/06, for the Foundation
Program component; $646,900, dated 5/4/06, for the Special
Schools component; $5.8 million, dated 5/5/06, for the New
School Performance Incentive Program component; and an
indeterminate amount for the School Debt Reimbursement
component.
6:11:37 PM
CS FOR HOUSE BILL NO. 334(FIN)
"An Act relating to an exemption from and deferral of
municipal property taxes for certain types of deteriorated
property."
AT EASE 6:11:51 PM / 6:12:12 PM
AT EASE 6:13:17 PM / 6:13:38 PM
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Green moved for adoption of SCS CS HB 334, 24-LS1353\Y,
as a working document and objected to receive an explanation of
the bill and proposed changes.
6:13:56 PM
Senator Bunde thanked the Committee for including in the
proposed legislation a provision that would allow a local
government to defer the property tax obligations of a person
experiencing "catastrophic hard times" until they were able to
make payment or sell the property. He had developed the
provision in a different bill, and appreciated its inclusion in
this legislation.
6:15:34 PM
REPRESENTATIVE JAY RAMRAS, sponsor of the bill, testified that
the bill would assist developers and local governments in
refurbishing deteriorated properties by revising and clarifying
existing tax deferral language. It would allow a municipal
government to enter in to an agreement with a developer to defer
property taxes until a specified time, thus binding future
assemblies or councils to the terms of the agreement.
Representative Ramras excused himself for a prior commitment.
6:18:24 PM
Co-Chair Wilken noted for the record that he'd had concerns
about the bill's affect on the "chain of ownership". He had
discussed the issue with the bill's sponsor, and his concerns
had been alleviated.
6:18:46 PM
Co-Chair Green remarked that the provisions of the bill are
"permissive language", which allow the tax deferral but do not
require it.
6:19:01 PM
Senator Olson asked the sponsor's opinion of the changes made by
Senator Bunde's amendment.
6:19:11 PM
JIM POUND, Staff to Representative Ramras, replied that the
amendment had no affect on the existing language of the bill; it
simply added additional permissive language. The sponsor favored
the amendment.
Co-Chair Green removed her objection to the adoption of the
committee substitute.
Without further objection, SCS CS HB 334, Version "Y", was
ADOPTED as a working document.
6:19:57 PM
Amendment #1: This amendment inserts a new bill section to read
as follows.
Section 1. AS 27.45.030(b) is amended to read:
(b) In (a) of this section, "property used exclusively
for religious purposes" includes the following property
owned by a religious organization:
(1) the residence of an educator in a private
religious or parochial school or a bishop, pastor, priest,
rabbi, minister, or religious order of a recognized
religious organization; for purposes of this paragraph,
"minister" means an individual who is
(A) ordained, commissioned, or licensed as a
minister
(B) employed by the religious organization
to carry out a ministry of that religious
organization;
(2) a structure, its furniture, and its fixtures
used solely for public worship, charitable purposes,
religious administrative offices, religious education, or a
nonprofit hospital;
(3) lots required by local ordinance for parking
near a structure defined in (2) of this subsection.
New Text Underlined
Co-Chair Green offered a motion to adopt the amendment and
objected to provide an explanation.
Co-Chair Green read the language of the changes into the record
and stated this would further clarify statute.
Co-Chair Green removed her objection.
6:20:37 PM
Co-Chair Wilken asked the impact of this provision to the
Fairbanks local governments.
6:20:44 PM
Mr. Pound responded that it would have no effect in Fairbanks;
the provision is primarily intended to address issues with the
Municipality of Anchorage.
6:20:59 PM
Co-Chair Wilken commented that the language was particularly
broad.
6:22:52 PM
Co-Chair Green remarked the changes were intended to clarify the
definition of "minister".
6:23:08 PM
Co-Chair Wilken exampled a teacher who taught in a religious
school, but was not a "minister". He asked if that teacher would
receive tax exemption.
Co-Chair Green clarified that only the property of the religious
organization was eligible.
Co-Chair Wilken then asked if a house owned by the religious
organization but occupied by the teacher would qualify.
Co-Chair Green affirmed.
6:24:15 PM
There was no further objection to the adoption of the amendment
and it was ADOPTED.
6:24:49 PM
Co-Chair Wilken offered a motion to report SCS CS HB 334, 24-
LS1353\Y, from Committee with individual recommendations and
accompanying fiscal notes.
Without objection, SCS CS HB 334 (FIN) was MOVED from Committee
with zero fiscal note #1 from the Office of the Governor, Office
of Management and Budget, for all State agencies, and zero
fiscal note #2 from the Department of Commerce, Community and
Economic Development.
6:25:08 PM
CS FOR HOUSE CONCURRENT RESOLUTION NO. 30(FIN) am
Creating an Alaska Climate Impact Assessment Commission.
This was the second hearing for this resolution in the Senate
Finance Committee.
Senator Olson offered a motion to report HCR 30, as amended,
from Committee with individual recommendations and accompanying
and new fiscal notes.
6:26:05 PM
Co-Chair Wilken objected to comment that although he initially
had significant concerns about the establishment of the Alaska
Climate Impact Assessment Commission, he now understood the more
limited "scope" of the commission.
Co-Chair Wilken removed his objection.
There was no further objection and SCS CS HCR 30 (FIN) was MOVED
from Committee with fiscal note #1 in an indeterminate amount
from the Department of Natural Resources, and a new fiscal note
dated 5/3/06 in the amount of $65,000 from the Legislature.
6:26:43 PM
SENATE CS FOR CS FOR HOUSE BILL NO. 426(HES)
"An Act relating to cooperation of insurers with the
Department of Health and Social Services; relating to
subrogation, assignment, and lien rights and notices for
medical assistance claims; relating to recovery of medical
assistance overpayments; relating to asset transfers and
income diversion by medical assistance applicants; relating
to assets and Medicare enrollment as they affect medical
assistance coverage; relating to home and community-based
services; relating to medical assistance applications for
persons under 21 years of age; requiring a report by the
Department of Health and Social Services; and providing for
an effective date."
[NOTE: This bill was heard earlier in the meeting.]
6:26:57 PM
Co-Chair Green announced additional amendments had been prepared
to address concerns expressed earlier in the meeting.
Amendment #4: This amendment inserts language to subsection
(b)(3) of Sec. 47.05.071. Duty of medical assistance recipient.,
added by Section 3, on page 4, line 9. The inserted language
reads as follows.
A medical assistance recipient is under no duty to file a
civil or other action in order to reimburse the state for
the cost of care or services.
Co-Chair Green offered a motion to adopt the amendment and
objected to obtain an explanation.
Ms. Moss noted the amendment would add language to page four,
line nine to clarify that the term "application" would not
require a medical assistance recipient to file a lawsuit to seek
reimbursement from a third-party.
Co-Chair Green read the language, as amended.
Ms. Moss advised that the State would be permitted to file a
lawsuit on behalf of the recipient, but the recipient would not
be required to do so themselves.
Co-Chair Green removed her objection to the adoption of the
amendment.
Without further objection the amendment was ADOPTED.
6:29:28 PM
Amendment #5: This amendment changes the language of subsection
(c) of Sec. 47.05.072. Duty of attorney for medical assistance
recipient., added by Section 3 on page 4, following line 25, to
read as follows.
(c) An attorney who represents a medical assistance
recipient shall give the attorney general's office notice
within 30 days of any judgment, award, or settlement in an
action or claim by the medical assistance recipient to
recover damages for an injury or illness that has resulted
in the department's providing or paying for medical
assistance.
Co-Chair Green moved for adoption and objected to obtain an
explanation.
Ms. Moss explained that the amendment modified language in the
bill that required an attorney representing a medical assistance
recipient give the attorney general's office 30 days' notice
before accepting a settlement or judgment in a case. The
amendment addresses concerns raised by attorneys who believed
the 30 day notice requirement would result in unnecessary delays
in the distribution of funds.
6:30:06 PM
Co-Chair Green understood the amendment would change the
requirement of 30 days' notice before an action was taken to
notice within 30 days of the action.
Ms. Moss affirmed.
6:30:24 PM
Ms. Moss remarked that concerns over Section 9 were discussed at
length.
Ms. Kraly reviewed the concerns. She understood that federal
Medicaid law did not require an "undue hardship" waiver for a
subrogation issue, as it did in other matters. Ms. Kraly
qualified her position by reminding that the State is required
to abide by federal Medicaid requirements. If such a waiver
requirement existed, the State would have to provide for that
through the regulatory process.
6:31:58 PM
Ms. Moss announced that Alaska would be the first state to pass
legislation to comply with these new federal regulations.
6:32:18 PM
Co-Chair Green added that substantial discussion had occurred in
regards to improving efficiency and accuracy in developing
legislation to implement the new federal Medicaid requirements.
Although no formal action was taken, the amendment was ADOPTED,
per the intent of the Committee
6:32:41 PM
Amendment #6: This amendment deletes the specification of "full"
repayment in subsection (d)(1) of Sec. 47.05.073. Judgment,
award, or settlement of a medical assistance lien., added by
Section 3 on page 5, line 31. The amended language reads as
follows.
(1) making repayment to the department for costs
of past medical assistance services provided to the medical
assistance recipient related to that action or claim
Senator Hoffman noted earlier testimony indicated that the word
"full" should be deleted.
6:32:55 PM
Ms. Moss acknowledged that the omission of the word "full" had
been discussed. The amendment to omit it had been overlooked.
Senator Hoffman understood that the word "full" had been omitted
in Amend #2, page 3, line 3, and suggested the same deletion on
page 5, line 31.
6:33:45 PM
Ms. Kraly agreed there had been an oversight, and "full" should
be deleted as indicated by Senator Hoffman.
Co-Chair Green clarified the amendment .
Co-Chair Green offered a motion to adopt the amendment, as
amended.
There was no objection and the amendment was ADOPTED.
6:35:01 PM
Co-Chair Wilken offered a motion to report SCS CS HB 426(HES),
as amended, from Committee with individual recommendations and
accompanying fiscal notes.
Without objection SCS CS HB 426(FIN) was MOVED from Committee
with fiscal notes from the Department of Health and Social
Services: #1 for $0 from the Department of Health and Social
Services, Behavioral Health RDU; #2 of $51,700 for the Public
Assistance RDU; #3 of ($83,100) for the Senior and Disabilities
Services RDU; #4 of ($2,734,900) for the Health Care Services
RDU, Medicaid Services component; and #5 of $190,300 for the
Health Care Services RDU, Medical Assistance Administration
component.
ADJOURNMENT
Co-Chair Lyda Green adjourned the meeting at 6:35:52 PM
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