Legislature(2013 - 2014)SENATE FINANCE 532
04/16/2014 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB379 | |
| SB220 | |
| HB308 | |
| HB361 | |
| HB160 | |
| HB116 | |
| SB48 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 278 | TELECONFERENCED | |
| + | HB 385 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 379 | ||
| = | SB 220 | ||
| = | HB 308 | ||
| = | HB 361 | ||
| = | HB 160 | ||
| = | SB 48 | ||
| = | HB 116 | ||
SENATE FINANCE COMMITTEE
April 16, 2014
1:39 p.m.
1:39:08 PM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 1:39 p.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Benjamin Nageak; Angela Rodell,
Commissioner, Department of Revenue; Rob Elkins, Deputy
Director, North Slope Borough, Anchorage; David Teal,
Director, Legislative Finance Division; Representative
Lindsey Holmes; Representative Dan Saddler; Sara Chambers,
Director, Corporations, Businesses, and Professional
Licensing, Department of Commerce, Community and Economic
Development; Representative Steve Thompson; Brodie
Anderson, Staff, Representative Steve Thompson; Lynne
Young, Executive Director, Alaska Athletic Trainers
Association, Juneau; LeeAnne Carothers, President, Alaska
Physical Therapy Association, Juneau; Kathy Lea, Chief
Pension Officer, Division of Retirement and Benefits,
Department of Administration; Vasilios Gialopsos, Staff,
Representative Charisse Millet; David Scott, Staff, Senator
Donnie Olson; Michael Barnhill, Deputy Commissioner,
Department of Administration.
PRESENT VIA TELECONFERENCE
Matt Fonder, Director, Tax Division, Department of Revenue;
Allan Johnston, Volunteer, Team Network, Anchorage; Kevin
Anselm, Director, Division of Banking, Department of
Commerce, Community and Economic Development, Anchorage;
Lorri Unumb, Executive Director, Autism Speaks, South
Carolina; Rebeka Edge, Director, Behavior Matters, Eagle
River; Teri Keklak, Division of Behavioral Health,
Department of Health and Social Services; Deb Etheridge,
Medical Assistant, Division of Health Care Services,
Department of Health and Social Services.
SUMMARY
SB 48 PERS CONTRIBUTIONS BY MUNICIPALITIES
SB 48 was HEARD and HELD in committee for further
consideration.
SB 220 PERS/TRS STATE CONTRIBUTIONS
SB 220 was HEARD and HELD in committee for
further consideration.
CSHB 116(L&C)
PERS CREDIT FOR MILITARY SERVICE
CSHB 116(L&C) was REPORTED out of committee with
a "do pass" recommendation and with previously
published zero fiscal note: FN1(ADM).
CSHB 160(FIN)
LICENSING OF ATHLETIC TRAINERS
CSHB 160(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 278(FIN)am
EDUCATION
CSHB 278(FIN)am was SCHEDULED but not HEARD.
HB 308 ALASKA SECURITIES ACT EXEMPTIONS
HB 308 was HEARD and HELD in committee for
further consideration.
HB 361 LICENSING OF BEHAVIOR ANALYSTS
HB 361 was HEARD and HELD in committee for
further consideration.
CSHB 379(FIN)
OIL & GAS PROPERTY TAX
CSHB 379(FIN) was HEARD and HELD in committee for
further consideration.
HB 385 PERS/TRS STATE CONTRIBUTIONS
HB 385 was SCHEDULED but not HEARD.
CS FOR HOUSE BILL NO. 379(FIN)
"An Act relating to the limitation on the value of
property taxable by a municipality; and providing for
an effective date."
1:39:52 PM
Senator Olson pointed out that the legislation was the top
priority for the North Slope Borough. He shared that the
industry did not have a problem with the bill, and there
was no loss of revenue to the state.
REPRESENTATIVE BENJAMIN NAGEAK, stated that he was there to
answer any questions on the bill. He stressed that his
constituents had been waiting a long time for the
legislation. He felt that the bill was a workable solution
to the issue.
Senator Olson wondered how Representative Nageak, as the
former mayor of the North Slope Borough, saw the budget
advantages. Representative Nageak replied that the
legislation would be very helpful to the borough's
operating budget. He remarked that infrastructure was built
when the borough was established, and stressed that the
legislation would provide the proper maintenance to the
infrastructure.
Co-Chair Meyer surmised that the legislation would provide
the North Slope Borough more flexibility for use of capital
and operating funds. He queried the borough's current mil-
rate. Representative Nageak replied that the current mil-
rate was 18.5. He stated that the borough only had one year
of a higher, 19.5 mil-rate.
Co-Chair Meyer wondered if there was a proposal to change
the mil-rate. Representative Nageak replied that there was
no proposal to change the mil-rate. He stressed that the
legislation was intended to allow some flexibility of fund
usage.
Co-Chair Meyer understood that there was no difference in
the amount that the state received from oil proceeds or any
difference in the amount that the oil companies paid.
Representative Nageak agreed with that summation.
1:45:12 PM
ANGELA RODELL, COMMISSIONER, DEPARTMENT OF REVENUE, shared
that the Department of Revenue (DOR) worked to ensure that
the bill was revenue neutral. She recognized that
municipalities throughout the state who had oil and gas
property may need flexibility to differentiate between
their operating and debt service. She felt that the
legislation provided the opportunity for the municipalities
to address that issue, without impacting the state's
financial picture, nor increase the taxes within the
communities.
Co-Chair Meyer wondered if the bill would impact the
neighboring cities. Commissioner Rodell replied that the
bill would affect any community that had oil and gas
property.
Co-Chair Meyer asked if the Kenai and Soldotna was included
in the legislation. Commissioner Rodell deferred to Mr.
Fonder.
Senator Olson wondered if the communities in the
unorganized boroughs would be affected by the legislation.
Commissioner Rodell deferred to Mr. Fonder.
MATT FONDER, DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE
(via teleconference), looked at page 48 of the DOR Revenue
Sources Book, and announced that there was a table that
indicated the breakdown of property taxes and how they were
shared. He stated that the chart indicated that the Kenai
had oil and gas property. The tax was $19.8 million in the
year prior was $19.8 million, and the local share was $9.7
million, so the state received $10.1 million in property
taxes on the oil and gas property in Kenai. He stated that
the unorganized boroughs did not assess property taxes, so
the local share on the unorganized line of the chart was
zero. The tax on oil and gas property in unorganized
boroughs was $58.9 million, and was wholly contributed to
the state.
Senator Dunleavy surmised that the state would not be
financially impacted by the legislation. Commissioner
Rodell replied in the affirmative, if the locals kept their
property taxes the same.
Senator Dunleavy asked if there would be an impact to the
state if the boroughs made changes to their current
property taxes. Commissioner Rodell replied that there
could be an impact to the state, because that was written
in statute.
Senator Dunleavy wondered if the legislation would change
the borough's status negatively or positively. Commissioner
Rodell responded that it was possible that certain
communities could receive a positive impact, if they have
very low tax rates. She stated that any municipalities that
was at the 20 mil rate would not see any change.
Senator Dunleavy surmised that Valdez would not be harmed
by the legislation. Commissioner Rodell agreed.
Senator Dunleavy asked if the Fairbanks Northstar Borough
would be affected by the legislation. Commissioner Rodell
responded that the borough should not be harmed by the
bill.
1:51:06 PM
Senator Hoffman wondered why the law was initially enacted
for 9.08 mil-rate for the operating budget, and the
difference for the capital budget. Commissioner Rodell
asked for clarification.
Senator Hoffman wondered why the current statute was set at
9.08 mil-rate. Commissioner Rodell responded that she
understood that the 9.08 mil-rate was set by the local
communities. The state had a statute that directed all
localities, whether or not there was oil and gas property
tax, at a rate of 30 mils. She stated that the number was
adjusted through the multiplier factor into a corresponding
mil-rate. The North Slope Borough had a 9.08 mil-rate for
the operating budget.
Senator Hoffman looked at the third paragraph of a document
provided by the sponsor, which stated that the restriction
applied to the 18.5 rate. The current law required the
municipalities to spend $9.8 million on operating costs and
$9.45 million capital costs. He queried the reason for that
restriction. Commissioner Rodell replied that the
multiplier put a cap on oil and gas property was because of
an issue of fairness and equity. The state had a desire to
help some communities that did not have oil and gas
property.
Senator Olson pointed out that the sponsor statement
clearly pointed out the restrictions of the tax revenue
usage.
ROB ELKINS, DEPUTY DIRECTOR, NORTH SLOPE BOROUGH,
ANCHORAGE, stated that the committee was dealing with the
mil-rate for the current operating year. The mil-rate was
determined through the calculation, which was a statewide
per capita value multiplied by the 225 percent currently in
statute. It was then multiplied by the total number
residents, to arrive at an equivalent tax base. The
equivalent tax base was then multiplied by the 30 mil-rate
cap. He stated that the calculation provided a maximum
dollar amount that could be spent on operations. The amount
was then converted into a mil-rate based on the total
assessed value. He stated that the North Slope Borough had
continued to limit itself with the 18.5 mil rate.
Senator Olson wondered why the original formula was
established, which used so much money for debt service. Mr.
Elkins responded that he understood that the statute was
put in place in order to achieve equity. It would limit the
borough's ability to sell debt.
Co-Chair Meyer asked why the fiscal note was indeterminate.
Commissioner Rodell replied that the fiscal note was
indeterminate. The fiscal note would be zero if the
communities continue to operate as they were currently.
There could be positive adjustments to the state, if the
communities lowered their mil-rate to take advantage of the
greater operating flexibility. Adversely, if the community
raises their mil-rate, it will have a negative impact to
the state.
1:59:40 PM
AT EASE
2:01:53 PM
RECONVENED
Co-Chair Meyer CLOSED public testimony.
Vice-Chair Fairclough announced that she would like to hear
testimony on the legislation from the State Assessor's
Office.
CSHB 379(FIN) was HEARD and HELD in committee for further
consideration.
Co-Chair Meyer handed the gavel to Co-Chair Kelly.
2:03:07 PM
AT EASE
2:16:47 PM
RECONVENED
SENATE BILL NO. 220
"An Act relating to additional state contributions to
the teachers' defined benefit retirement plan and the
public employees' defined benefit retirement plan; and
providing for an effective date."
2:17:39 PM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
discussed some slides dated 4/16/14 (copy on file). He
stated that there was a presentation of the Teacher
Retirement System (TRS) on the previous day, but there was
some additional information received in the meantime. He
drafted a graph based on some of the information from the
actuaries. He stated that the chart was very similar to the
graph that was presented on the previous day. He looked at
the slide titled, "Cumulative Costs of Options to Eliminate
PERS and TRS Unfunded Liability ($ millions)". He stated
that the graph was a combination of TRS and PERS. He noted
that the base case showed the lowest cost in the early
years and the highest total cost. The dark blue line
represented the governor's proposal, which deposited $3
billion total cash infusion, and ended up costing less in
the long run. He stated that the graph showed two scenarios
for PERS. He stressed that the graph would be too muddied
if he addressed level-dollar and level-percent for each of
the options. He remarked that the graph was only a sample
of an outcome. He shared that a $4 billion cash infusion
would be expensive initially, but would become the cheapest
over time. He stated that a $3 billion cash infusion, as
requested by the governor, but went to level-percent of
pay-amortization, it would be cheaper than the base case by
approximately $500 million per year. He stressed that it
would pass the level dollar, and would end up slightly more
expensive than a $4 billion cash infusion. He remarked that
there was always an opportunity to increase the cash
infusion, or make other changes to the system. He noted
that the lines in the future were far from a reliable
prediction or projection.
Mr. Teal looked at the slide titled, "PERS and TRS
Combined." He stated that the slide represented the
previous graph, but in number-form.
Mr. Teal highlighted the slide titled, "Cumulative Costs of
Options to Eliminate PERS Unfunded Liability ($ millions)."
He stated that the graph showed some changes that were
caused by the differential between the rate that was
charged to employers, which was 12.56 percent in PERS, but
the normal cost was 12 percent. He stressed that there was
very little difference between the full-employer rate and
the normal cost of the program. He stated that the rate cap
in TRS was 22 percent, and the normal cost was
approximately 10 percent, so there was a drastic
difference. He stated that there was more money flowing
from employers, as the defined benefit employees were
replaced with defined contribution employees. He stated
that a $3 billion cash infusion into PERS would mean that
the debt would be paid off in five years. He felt that the
option may not be wise, because the rates would drop to
zero.
2:23:19 PM
Mr. Teal looked at the slide titled, "PERS options." He
stated that the numbers showed the same outcomes as the
graphs. He felt like the numbers showed an unreliable
degree of accuracy. He felt that the graphs helped
determine the overall spread between the different options.
SB 220 was HEARD and HELD in committee for further
consideration.
2:24:18 PM
AT EASE
2:30:37 PM
RECONVENED
HOUSE BILL NO. 308
"An Act relating to the exemptions under the Alaska
Securities Act and to securities issued by Native
corporations; and providing for an effective date."
2:31:01 PM
REPRESENTATIVE LINDSEY HOLMES, explained the legislation.
She stated that HB 308 removed the reporting requirements
and fees for three types of exempt security transactions:
sales by an issuer to not more than 10 persons in the
state; sales by an issuer to not more than 25 persons in
the state; an offer to existing security holders of the
issuer. Under current law, if the security issuance
qualifies as exempt from registration under AS
45.55.900(b), issuers are currently still required to file
a form and pay a fee to the Department of Commerce,
Community and Economic Development (DCCED). She stated that
DCCED collected the information and reviewed it, however it
did not appear to add any protections to the state or the
investors. Often small business owners hire lawyers to
navigate the form which caused expense and can slow down
the process. While removing the reporting requirements, the
bill still required the business issuing the securities to
provide required information to investors in compliance
with the Securities Act so that they could make an informed
investing decision. The bill kept the act's consumer
protection language intact and did not inhibit the Division
of Banking and Securities from investigating violations or
the investor seeking damages through the court system. The
bill also changed the amount of time DCCED had to review
rescission offers from only two days to ten days and had
several conforming language changes. The bill further
sought to clarify that stock issued by the Alaska Native
Claims Settlement Act (ANCSA) corporations to Alaska
Natives born after December 18, 1971 or issued after the
original stock offering in compliance with federal law were
exempt from registering under AS 45.55.070. This clean up
responded to a report done by the United States Government
Accountability Office that was concerned that Alaska
statutes were not treating newly issued ANCSA corporation
stocks the same as the initial offering.
ALLAN JOHNSTON, VOLUNTEER, TEAM NETWORK, ANCHORAGE (via
teleconference), testified in support of the legislation.
He stated that he had volunteered in various organizations
in Anchorage and across Alaska. He had worked to create
"Angel Funds" from the federal government, which would be
matched by the private sector. He stated that the Banking
and Securities Division had done a remarkable job in
assisting in education, because many people were unfamiliar
with securities laws. He stated that Alaska was 50th in the
country for its capital, and third in median family income.
He stressed that the gap would be closed by encouraging the
residents to invest locally and create local businesses.
2:36:52 PM
KEVIN ANSELM, DIRECTOR, DIVISION OF BANKING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, ANCHORAGE
(via teleconference), introduced herself. She offered to
outline the legislation, but felt that Representative
Holmes had summarized the bill accurately.
Co-Chair Meyer asked if DCCED had any comments on the
legislation. Ms. Anselm replied that there was a PowerPoint
presentation in the packet, which was an overview of the
securities requirement. She stated that the legislation
eliminated the paperwork and filing fees with the Banking
and Securities Division for the small offerings and for
offerings to existing securities holders. She added that
there were two clean-up items were related to rescission
offers allowing the division more time to ensure that it
met its consumer protection requirements.
Co-Chair Meyer CLOSED public testimony.
HB 308 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 361
"An Act relating to licensing of behavior analysts."
2:40:00 PM
REPRESENTATIVE DAN SADDLER, explained the legislation. He
stated that Autism was a significant and growing problem in
Alaska. Statistics show that one in 110 Alaska children,
about 1 percent, are born with this developmental
disability, characterized by a diminished ability to
communicate, social isolation, and other symptoms. While
not curable, autism was treatable. Scientific, peer-
reviewed studies show that early intensive treatment in the
form of Applied Behavioral Analysis (ABA) offered the best
opportunity to help people with autism improve their
ability to function productively in society. He stated that
ABA was recognized as the basis for the most effective form
of treatment for autism by the U.S. Surgeon General, the
National Institute of Child Health, and the American
Academy of Pediatrics. One can best understand ABA as
behavior modification therapy: It sought to encourage
appropriate behavior by assessing and managing the
relationship between the environment and the desired
behavior. Forty years of research showed that nearly half
of people with autism who received intensive early
intervention and treatment did not require lifelong
services and support, and half could achieve normal
functioning after two to three years. This could mean a
lifetime savings of $200,000 to $1.1 million for a person
through the age of 55-years-old. One of the most important
elements in successful autism treatment is having it
provided by those who hold the nationally recognized
credential of Board-Certified Behavioral Analyst (BCBA). To
qualify as a BCBA, applicants must have a minimum of a
master's degree, plus extensive training and experience
requirements of up to 1500 hours of supervised practice in
the field, 225 hours of graduate-level classroom work, or a
year's experience teaching ABA at the university level.
They must also pass the challenging BCBA certification
examination. The Board-Certified Assistant Behavioral
Analyst, or BCABA credential, required slightly lower
standards. The state already supported the training of
BCBAs through a grant to eh Center for Human Development at
UAA. There were currently approximately 20 to 30 BCBAs and
BCABAs in Alaska, although not all of those were currently
working in the field. Under current state law, Alaskans
with BCBAs could not bill health insurance companies or
Medicaid for their services at a rate that reflected their
high degree of training and professional skill because
there were not formally licensed. He announced that BY 361
addressed that situation by providing for those holding the
BCBA or BCABA credentials in Alaska to be licensed by the
Division of Professional Licensing, in the DCCED. He
announced that 14 other states currently provided licensing
and regulated behavior analysts. The approach had the
strong support of Alaska BCBAs and the national autism
advocacy groups. By ensuring licensing and higher standards
of practice for BCBAs and BCABAs, HB 361 would do the
following: encourage more people to provide autism services
in Alaska; offer higher reimbursement rates for
professional providers, provide better outcomes for Alaska
children with autism; save the state money by avoiding the
need for costly institutional care; and improve the quality
of life for hundreds of Alaskans and their families.
LORRI UNUMB, EXECUTIVE DIRECTOR, AUTISM SPEAKS, SOUTH
CAROLINA (via teleconference), spoke in support of the
legislation. She stated that she was involved in various
autism advocacy groups. She felt that the bill took in many
considerations including people who were moving from other
states to practice behavior analysis. She remarked that the
bill outlined some exemptions for people who need not have
a license, such as a family member of a person with autism.
She stated that the legislation relied on the existing
national board certification, which was the appropriate
structure for a licensing bill. She announced that she had
worked on various state's legislation that created
licensure for behavior analysts. She stated that there were
currently 15 state that licensed behavior analysts, and
Tennessee had just passed a behavior analyst licensing
bill, so there were almost 16 states that license behavior
analysts. She remarked that the legislation contained
disciplinary mechanisms to ensure adequate consumer
protection and created a temporary license for those who
had already been practicing within the state.
2:47:04 PM
REBEKA EDGE, DIRECTOR, BEHAVIOR MATTERS, EAGLE RIVER (via
teleconference), testified in support of the legislation.
She announced that she was a parent of two children with
autism. She stated that in her position as director of
Behavior Matters, she had a staff of 24 that served clients
Anchorage, Mat-Su, Talkeetna, Kenai, and Juneau. She felt
that the legislation would allow her business to continue
to work with their current families while provided a
professional weight that was consistent with their training
and expertise.
Co-Chair Meyer wondered if the bill would pertain to other
behavioral issues other than autism. Representative Saddler
replied that that the legislation would pertain to other
behavioral issues. He stated that the principles of applied
behavioral analysis have applicability to dealing with
various development disabilities like children with fetal
alcohol spectrum disorder (FASD).
Co-Chair Meyer wondered how many people would seek a
license in behavioral analysis. Representative Saddler
replied that there were approximately 25 people that would
seek a license, but agreed to provide further information.
Co-Chair Meyer asked if other states had a similar program.
Representative Saddler responded that 16 states had
instituted behavioral analysis licenses.
SARA CHAMBERS, DIRECTOR, CORPORATIONS, BUSINESSES, AND
PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY
AND ECONOMIC DEVELOPMENT, introduced herself.
Co-Chair Meyer wondered if she had drafted the attached
fiscal note. Ms. Chambers replied that she did not draft
the fiscal note, but she was familiar with it.
Co-Chair Meyer remarked that the fiscal note was
indeterminate. He looked at the third paragraph fiscal
analysis, and saw that the financial impact to health care
and Medicaid services could be significant. He asked for
further explanation regarding that statement. Ms. Chambers
responded that the fiscal note that he was referencing was
from the Department of Health and Social Services (DHSS).
She stated that DCCED supplied a fiscal impact note.
2:52:26 PM
Vice-Chair Fairclough stated that there was an issue of
recovering the fees for licensing in Alaska. She remarked
that the fiscal note was very low from DCCED. She queried
the fee estimate. Ms. Chambers responded that the fiscal
note reflected the additional appropriation that was needed
to implement the program, and it was not the total cost of
the program. She announced that she had been working with
the bill sponsor to provide additional information that
would be an estimate of anticipated additional costs based
on similarly situated programs. She stated that it was
determined that the additional cost plus the fiscal note
could result in a license that would cost around $500 to
$600 per license.
Vice-Chair Fairclough stressed that Alaska had faced issues
of investigation, as far as the boards to use the
information that DCCED provided to manage the funds.
Representative Saddler replied that the fee would be
significantly lower after the first year. He observed that
it would be small number of licensees, so the likelihood of
investigation would be substantially low.
Vice-Chair Fairclough stressed that there was a flat rate
of how the departments spread cost over licenses.
Representative Saddler agreed that he would not argue
statistics.
TERI KEKLAK, DIVISION OF BEHAVIORAL HEALTH, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES (via teleconference), stated
that the Division of Health Care Services created the DHSS
fiscal note. She stated that the fiscal note was
indeterminate because until licensure occurs, it was
difficult for the department to estimate the utilization
that might occur. She stated that DHSS required approval
that the coverage would be paid to the independent
practitioners under benefits. She stated that the licensees
were not currently listed in the Medicaid statute as
independent practitioners. She stated that there would be
some analysis of the medical necessity, utilization, and
determine services.
2:57:48 PM
Vice-Chair Fairclough looked at page 2 of the fiscal note,
and saw that it indicated 1838 under the age of 21 with a
diagnosis of autism. She queried an estimate of the cost of
one person receiving services. Ms. Keklak replied that DHSS
could not currently estimate that cost. She stated that
there needed to be a determination of the specific services
that would be covered.
Vice-Chair Fairclough understood that there was a wide
range of services, so she asked for an estimate range of
the cost of services. Ms. Keklak replied that she could not
address a range of costs.
DEB ETHERIDGE, MEDICAL ASSISTANT, DIVISION OF HEALTH CARE
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via
teleconference), responded to a question from Vice-Chair
Fairclough. She stated that the persons who were diagnosed
with autism would undergo an initial assessment that would
be eligible for and need service. She remarked that, in
comparison to other states, the assessment cost would be
around $175. If it was estimated that 100 percent of
persons under the age of 21 with a diagnosis of autism, the
total health assessment cost would be around $320,000. She
stated that the service cost estimate would require some
eligibility determinations.
HB 361 was HEARD and HELD in committee for further
consideration.
3:02:12 PM
AT EASE
3:09:24 PM
RECONVENED
CS FOR HOUSE BILL NO. 160(FIN)
"An Act relating to the licensing and regulation of
athletic trainers."
3:10:04 PM
REPRESENTATIVE STEVE THOMPSON, stated that the legislation
would amend current statutes to establish licensing and
regulations of athletic trainers. He stated that athletic
trainers were multi-skilled, midlevel medical care
providers that provided a unique combination of injury and
illness treatment, rehabilitation, and injury prevention.
Athletic trainers were similar to nurse practitioners,
midwives, physician assistants, neuropathic physicians, and
physical therapists. He stressed that all of those
positions were licensed in Alaska, in order to provide
immunity for health care providers. Certification was
provided through the National Organization of National
Athletic Trainers Association. There were specific
requirements before certification was issued: 1) mandatory
post-secondary degree; 2) formal instructions in extensive
basic and applied sciences; 3) specific professional
content; and 4) comprehensive national examination through
the Board of Certification Inc. He stated that HB 160 would
require people using the title "Athletic Trainer" who were
working cooperatively under the supervision of a doctor to
be licensed. Alaska was one of two states that did not
currently license athletic trainers. Athletic trainers in
Alaska asked for the legislation, because they understood
the need to be licensed in order to be recognized as health
care providers. He urged the committee's support of the
legislation.
Vice-Chair Fairclough stated that her staff had met with
the sponsor's staff regarding the current language. She
felt that the legislation may have ramifications on school
districts and other athletic programs for children and
adults throughout the state. She wondered if that was the
intent of the legislation. Representative Thompson deferred
to Mr. Anderson.
BRODIE ANDERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
announced that he was working with the committee co-chairs'
staff to draft a committee substitute that would directly
address the concerns of fitness trainers and coaches, and
the relationship in an exemption.
Vice-Chair Fairclough thanked a constituent who had sent a
solution to the issue via email.
Co-Chair Meyer asked if Mr. Anderson was working with his
staff on the committee substitute. Mr. Anderson replied in
the affirmative.
3:14:30 PM
LYNNE YOUNG, EXECUTIVE DIRECTOR, ALASKA ATHLETIC TRAINERS
ASSOCIATION, JUNEAU, testified in support of the
legislation. She remarked that athletic trainers were
highly qualified, educated, and multi-skilled health
professionals who collaborate with and work under the
supervision of physicians. The services provided by
athletic trainers consist of prevention, emergency care,
clinical assessment, therapeutic intervention, and
rehabilitation of injuries and medical conditions.
Individuals who want to become athletic trainers must have
a bachelor's degree at an accredited athletic training
university. Once the individual meets the requirement, they
were eligible to sit for the Board of Certification Inc.
exam. Upon completion of the exam, the individual would be
a certified athletic trainer. Once the individual was
certified, they must maintain their credentials by taking
50 continuing education units (CEUs) every two years in
addition to maintaining an emergency cardiac care course at
the professional rescuer level or above. The CEUs were
approved by the Board of Certification Inc., and ten of the
CEUs needed to be evidence-based medical courses.
Senator Bishop wondered if the CEUs could be conducted in
the state. Ms. Young replied that there were over 300
accredited universities to become athletic trainers, but
none of those universities were in Alaska. There were some
online courses and clinics in the state that provided
access to CEUs.
3:21:52 PM
Vice-Chair Fairclough asked if the licensure would get
different benefits from insurance providers and billing of
hours. Ms. Young replied that there was current outreach
through schools and universities, but did not directly bill
insurance providers. She furthered that there were some
athletic trainers that worked with physicians in the clinic
setting, and if they were used to assist the provider was
billed under "Incident 2." She explained that the specific
in that bill was parallel with medical assistants, etc. She
stated that athletic trainers had a national provider
identifier that allowed them codes regarding billing for
rehabilitation.
Vice-Chair Fairclough wondered if the law to license would
affect the billable hours. Ms. Young responded that the
licensure would be recognized as a health care
professional, but have no other association.
LEEANNE CAROTHERS, PRESIDENT, ALASKA PHYSICAL THERAPY
ASSOCIATION, JUNEAU, stated that she supported licensure of
health care providers for the protection of the public, she
announced some concerns with the bill. She looked at the
use of the word "rehabilitation" in the proposed scope of
practice and in definitions in Sections 8.07.030(d) and
08.07.090(4). She felt that use of the word
"rehabilitation" would have potential to cause consumer
confusion. She stated that physical therapists were
currently considered the most qualified practitioners for
rehabilitation. She suggested the inclusion of language
that specifically limited the role of the athletic trainers
to injuries sustained or exacerbated while participating in
a sport or sports-related activity, and/or was designated
for the purpose of returning the patient to athletic
participation. She also expressed concern of the use of
language with definitions as they pertain to illness. She
urged the inclusion of language that clarified that the
treatment of limited to injuries or conditions associated
with participation in sport. There were significant
differences in the education and training for athletic
trainers and physical therapists. The entry level degree
required for athletic trainers was a bachelor's degree and
the entry level degree for physical therapists was a
doctorate degree.
3:26:36 PM
Co-Chair Meyer felt that there would be changes to the bill
in a forthcoming committee substitute.
Co-Chair Meyer CLOSED public testimony.
Co-Chair Meyer looked at the fiscal note, and remarked that
the fiscal note may not cover the actual cost of the
legislation.
Vice-Chair Fairclough stated that the Legislation Budget
and Audit (LB&A) had created a joint subcommittee on the
issue.
CSHB 160(FIN) was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 116(L&C)
"An Act relating to the use of credited military
service by retired peace officers and firefighters to
meet certain requirements for major medical insurance
coverage; and providing for an effective date."
3:29:00 PM
KATHY LEA, CHIEF PENSION OFFICER, DIVISION OF RETIREMENT
AND BENEFITS, DEPARTMENT OF ADMINISTRATION, introduced
herself.
VASILIOS GIALOPSOS, STAFF, REPRESENTATIVE CHARISSE MILLET,
explained the legislation. He announced that Honorably
discharged members of our nations' military service who
come to work for the State of Alaska are currently allowed
to purchase qualifying time within the PERS system for
their previous military service. Under current law, this
purchased time may not be used to satisfy the credited
service requirements for normal retirement. This exemption
precludes persons from using their purchased time to
qualify for health care benefits. He state that HB 116
proposes that peace officers or firefighters be allowed to
use the time they purchase for normal retirement. Already
these brave individuals have served their country. They
have then made a career providing public safety and rescue
in one of the most hazardous working environments to be
found. Their service to others, by placing themselves in
harm's way on a continuous basis, merits consideration in
the development of Alaska's retirement and benefit system.
He announced that HB 116 makes a minor, and tightly
tailored, modification to our retirement laws to allow a
person to use their purchased service to qualify for normal
retirement benefits. The intent of HB 116 is that peace
officers or firefighters who choose to purchase the service
time bear the cost to the state that the additional
benefits will create. He stated that HB 116 creates an
appropriate recognition of their service to their country
and their state by ensuring the have a fair retirement in
their future.
Vice-Chair Fairclough queried the length of time it takes
for a firefighter or police officer to qualify for
benefits. Ms. Lea replied that a police officer or
firefighter could reach eligibility for retirement benefits
with 20 years of service; but they needed to have 25 years
of service to have system-paid medical coverage if they are
in tiers 2 or 3.
Vice-Chair Fairclough remarked that there was a disparity
between what was required to acquire a pension and medical
coverage in tiers 2 and 3. Ms. Lea agreed, and stated that
the five extra years was required to gain system-paid
premium health care. She stated that there was access to
health care, but they must have five extra years in order
for the system to pay for the premiums.
Vice-Chair Fairclough wondered if an honorable discharge
was recognized under military service. Ms. Lea replied that
the military service required an honorable discharge.
Co-Chair Meyer wondered if Vice-Chair Fairclough was
concerned about "double dipping."
3:33:48 PM
Vice-Chair Fairclough stressed that she was attempting to
determine what benefit would be achieved, and what the
individual was currently receiving. She stressed that there
was a 25 percent buy back over 20 years, and a 25 percent
buyback with the 25 year requirement. She understood that
there was an actuarially draw for the pension, but felt
that there was a possible allowance for double benefits.
Ms. Lea replied that she could not speak to the intent of
the legislation. She announced that there were some
restrictions within the system for claiming benefits under
the military category, if one was already eligible for
retirement benefits from one's military service. A person
with 20 years of military service that would qualify for a
federal benefit could not claim the service if they were
tier 2 or 3. She furthered that she was unsure about the
health care benefits related to that issue.
Mr. Gialopsos looked at AS 39.35.340(a):
A vested employee is entitled to credited service for
active military service in the armed forces of the
United States, either by enlistment or induction, if
the employee received a discharge under conditions and
was not entitled to receive retirement benefits from
the United States government for the same service.
Senator Olson wondered what efforts were being made for the
tier 4 employees. Mr. Gialopsos responded that, because
tier 4 was a defined contribution system, the provisions of
health care after a person left service were fundamentally
different.
Ms. Lea agreed with Mr. Gialopsos, and furthered that,
under tier 4, there were no provisions to claim any type of
service in the plan. There were no predications on years of
service to claim service. A tier 4 employee must retire
directly from the plan, must have at least 10 years of
service, and be Medicare age eligible to receive retirement
health coverage.
Vice-Chair Fairclough stated that, usually, when a policy
or bill was considered, the reason was because an
individual was adversely affected. She wondered if there
was an adversely affected individual who may have
influenced the drafting of the bill. Mr. Gialopsos replied
that there were several peace officers and firefighters who
purchased their military time, under the assumption that it
would bring them full retirement. He stated that there were
several letters of support who were looking to retire early
that would like to purchase their medical time, because
they recognized that they were a liability to their
colleagues because of their age.
3:38:53 PM
Vice-Chair Fairclough asked if the individual's payments
into the plan would count toward their health benefits. Ms.
Lea replied that those were two different calculations. The
calculation to use military service to increase the number
of years of service to increase their retirement benefit
was partially subsidized by the employer, so it was a flat
percentage of their vesting year salary. The legislation
outlined an additional cost, if the member wanted to claim
it for pension purposes and health care services.
Vice-Chair Fairclough wondered if there would be a negative
impact to those that were already in the system, because
there was a change to the cost of the system. Ms. Lea
replied that there would be no impact on the remainder of
the population in the system, because the claimant would
pay the full cost for the coverage.
Vice-Chair Fairclough surmised that the calculations were
based on a certain set of assumptions. Ms. Lea agreed.
Senator Bishop queried the cost of the full five years. Ms.
Lea replied that the cost would be approximately $60,000 to
$70,000, depending on age, circumstances, and number of
years purchased.
Senator Hoffman wondered what other categories under tiers
2 and 3 could be a net zero. Ms. Lea replied that there
were other types of claim service that were full actuarial
costs. She stated that purchasing temporary service to be
used for retirement eligibility already existed in statute.
She stated that the legislation was similar to the statute,
and furthered that there was a public service benefit that
was full actuarial cost.
Senator Hoffman surmised that all other programs already
had the option to purchase in tiers 2 and 3 for other
categories of 20 and 30 years for buyback. Ms. Lea
responded that all others did not have the specific
provision to purchase military time to be used toward their
30 year retirement.
Senator Hoffman wondered why other positions or categories
of employment were not offered the option to purchase the
time for a 30 year retirement, if it was a net zero. Mr.
Gialopsos replied that it was the sponsor's intent to look
at a particular segment within tiers 2 and 3, who post the
highest risk in the actuarial pool. He could not
specifically address the reasons why it would not directly
apply to the purchase of a 30 year retirement.
3:44:48 PM
AT EASE
3:46:11 PM
RECONVENED
Co-Chair Meyer CLOSED public testimony
Vice-Chair Fairclough MOVED to REPORT CSHB 116(L&C) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 116(L&C) was REPORTED out of committee with a "do
pass" recommendation and with previously published zero
fiscal note: FN1(ADM).
3:47:07 PM
AT EASE
3:48:39 PM
RECONVENED
Co-Chair Meyer handed the gavel to Vice-Chair Fairclough.
SENATE BILL NO. 48
"An Act requiring each municipality with a population
that decreased by more than 25 percent between 2000
and 2010 that participates in the defined benefit plan
of the Public Employees' Retirement System of Alaska
to contribute to the system an amount calculated by
applying a rate of 22 percent of the total of all base
salaries paid by the municipality to employees of the
municipality who are active members of the system
during a payroll period; reducing the rate of interest
payable by a municipality with a population that
decreased by more than 25 percent between 2000 and
2010 that is delinquent in transmitting employee and
employer contributions to the defined benefit plan of
the Public Employees' Retirement System of Alaska;
giving retrospective effect to the substantive
provisions of the Act; and providing for an effective
date."
3:48:53 PM
DAVID SCOTT, STAFF, SENATOR DONNIE OLSON, SB 48 seeks to
provide relief to those communities that have faced
hardship due to the PERS "salary floor" established in SB
125 of the 25th Legislature. He stated that SB 125 changed
the PERS system from a 'multiple employer plan' to a 'cost
share plan'. That is, SB 125 transferred the individual
liability of the 160 PERS employers and consolidated that
liability so that all the employers share in that
liability. He announced that SB 125 also created what is
commonly referred to as the 2008 salary floor. That is,
every PERS employer will have a penalty imposed on them if
their salary base is below that of 2008. This was
instituted to ensure that the system could not be "gamed".
This is to keep municipalities from hiring people on a
contract basis and, therefore, allowing the base payments
into the system from shrinking. Many municipalities, due to
circumstances beyond their control, have found themselves
under the 2008 floor for a number of years. Most of these
are very small remote communities. Some of the affected
communities are simply trying to lower their budgets by
actively laying-off or not re-hiring due to attrition.
Some communities lost employees due to a base closure or a
regional clinic closure. To further make the point, there
is currently one community that owes $420,000 at 12 percent
interest. He stressed that SB 48 was introduced to help
communities in this situation. He stated that SB 48 will
address this issue in two ways: 1) Changes the "2008
floor" to 2012 for those communities that have lost 25
percent of their population between 2000 and 2010; and 2)
Provides relief to those communities that are delinquent in
transferring contribution if their population decreased by
more than 25 percent between 2000 and 2010. He remarked
that SB 48 does not intend to repeat the "2008 floor"
debate, but rather provide relief to those communities
affected by the arbitrary line that SB 125 created.
Vice-Chair Fairclough handed the gavel to Co-Chair Meyer.
3:56:11 PM
Senator Olson understood that the communities were facing a
financial burden that they would never overcome. He queried
the efforts of various communities who were attempting to
remedy this financial problem. Mr. Scott replied that there
were some communities that had lost 25 percent of their
populations from 2000 to 2010, like Pelican. He stated that
Pelican, Anderson, and Atka did not have any outstanding
delinquent contributions. He stressed that the only two
communities that had delinquent contributions were Galena
and St. George, who had also lost populations by more that
25 percent between the two censuses.
Co-Chair Meyer surmised that the bill asked the state to
cover those communities' share of the PERS contribution.
Mr. Scott replied that the legislation would forgive the
delinquent contribution penalty and cover the cost of the
contribution. He stressed that the bill to the PERS system
would continue to grow from 12 percent on $690,000, which
was up from the year prior at $420,000.
Co-Chair Meyer wondered if there was any hope that the
communities would be able to pay that amount. Mr. Scott
replied that Galena had taken a loan interest loan through
the bond bank to attempt to cover their community costs,
while recovering from a flood. He felt that Galena would
not be able to cover that cost, because the interest was
making the debt grow rapidly.
Senator Bishop stressed that Galena was under severe
financial stress from various entities. Senator Olson
agreed.
4:00:32 PM
MICHAEL BARNHILL, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, stated that the bill's fiscal note
reflected a retroactive effect. He stated that the
communities would see a benefit of a decreased rate of
interest that had an impact on the system, which was
detailed in the fiscal note.
Vice-Chair Fairclough pointed out that the fiscal note from
the Department of Administration (DOA) showed $180,000 in
FY 14; $176,000 in FY 15; $167,000 in FY 16; $157,000 in FY
17; $148,000 in FY 18; $139,000 in FY 19. She felt that it
appeared that the contribution by the state would decrease.
She looked at the estimated supplemental FY 13 costs of
$706,000. Mr. Barnhill replied that the supplemental cost
reflected the impact of the retroactivity of the bill. He
stressed that the costs were amounts that the state would
not collect under existing law, if the bill were passed
into law.
Co-Chair Meyer wondered if the money would ever be
collected. Mr. Barnhill responded that it was difficult to
speculate the future for communities like Galena, but one
could not rule out that perhaps Galena's fortune may turn
positive at some point.
Senator Olson stressed that Galena recently suffered a
flood, and some people could not even move back into their
homes. He pointed out that there was a significantly
decrease in the general population and school membership.
He reiterated that it was very improbably that Galena would
be able to afford to pay the debt.
Vice-Chair Fairclough wondered how the issue of fairness to
the state picking up the costs of one municipality on not
that of another municipality. She remarked that the
Municipal League had asked the legislature to eliminate the
termination studies for other cities. She felt that there
was a problem in determining what communities were
considered "winners" and "losers." She felt that there were
many communities across the state that were burdened by the
2008 salaries costs, in regards to contributions. Mr.
Barnhill responded that he was not diminishing the
substantial burdens that Galena and other communities were
facing. He stressed that the issue was statewide for
smaller communities' ability to sustain participation and
TRS on an ongoing basis.
4:05:55 PM
Vice-Chair Fairclough stressed that the issue of pension
liability was a burden for everyone, which was why the
governor had suggested a cash infusion. She stated that
there were municipalities that had discussed the
termination study. She felt empathy, but felt that solving
the issue for one community may be at a disadvantage for a
dozen other communities or the entire system. The state was
transitioning from meeting its obligations to withdrawing
reserves. She felt that the bill was an entire year's worth
of conversation to determine the best method. She felt that
it was reasonable to reduce the interest rate, when
communities were struggling. She wondered how the state
would react, if the city failed to make the payments. She
specifically wondered if those employees would not be
entitled for benefits. Mr. Barnhill replied that, to date,
the process was to send notices of delinquency on a
periodic basis. The statute provided DOA the authority to
intercept municipal revenue sharing, but had never
exercised that right. As the delinquency list continued to
grow, the state's reticence to exercise that intercept
needed to be examined.
Senator Olson wondered if the employees would not receive
their retirement benefits, if there were delinquent
payments. Mr. Barnhill responded that the employees were
still participants in the system, and were still entitled
to their benefits.
Senator Hoffman remarked that $420,000 for a community of
470 people, it would take approximately 12 or more years of
revenue sharing to pay that debt. He stated that the
community was probably utilizing the revenue sharing to
keep their offices open. He stated that most of the
communities of 100 to 500 people used their revenue sharing
to keep their municipal office in operation. He furthered
that, in 2010, there were 470 people in Galena, so a family
of required to pay in excess of $3500 dollars. He stressed
that Galena was greatly impacted, much more than other
small communities in the state.
4:11:27 PM
Co-Chair Meyer wondered if there were any PERS employees in
Galena. Mr. Barnhill replied that there were PERS employees
in Galena, and deferred to Mr. Scott for the exact number
of employees.
Mr. Scott stated that there were 17 PERS employees in
Galena.
Co-Chair Meyer queried the economic activity in Galena.
Senator Hoffman responded that the current economic
activity was focused on home repair.
Co-Chair Meyer stated that the military base in Galena had
closed, with no effort toward reopening.
Mr. Scott announced that Galena had 17 current PERS
employees, however the community's contribution to the
state was for 36 employees, which was the 2008 floor.
Vice-Chair Fairclough surmised that there would be 36 total
employees that would be retired from the PERS system. Mr.
Scott replied that the 36 employee contribution was
considered the 2008 floor.
Co-Chair Meyer stressed that it was an important issue, and
felt that it would not be resolved in the current session.
He hoped that Mr. Barnhill could assist in a solution
during the interim. Mr. Barnhill replied that he was
willing to explore solutions.
Vice-Chair Fairclough wondered if the 25 percent loss in
the census was an accurate measurement to assist all
Alaskan communities. Mr. Barnhill replied that there was a
census table that outlined population loss employer by
employer. He stated that the table would show how many
participating employers were added at the 25 percent level,
20 percent level, and so forth.
Mr. Scott stated that he would provide the graph to the
committee at a later date.
Vice-Chair Fairclough whether the 25 percent threshold was
better than the 20 percent threshold. Mr. Barnhill
responded that he was not prepared to respond to the
inquiry.
Vice-Chair Fairclough asked if there was a different
criteria that the Senate should study. Mr. Barnhill replied
that there should be an examination of a prospect for a
sustainable revenue base within the community that could
support continued participation in the system over the next
ten or twenty years.
Senator Hoffman noticed that Mr. Barnhill had stated that
there was an option of intercepting Galena's revenue
checks. He wondered if the department would withhold that
particular implementation of the law, until the legislature
was able to address the issue the following year. Mr.
Barnhill replied that the state needed to reexamine its
reticence in utilizing the revenue intercept. He stressed
that he would look some solutions that would avoid using
the revenue intercept.
SB 48 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 278(FIN) am
"An Act increasing the base student allocation used in
the formula for state funding of public education;
relating to the exemption from jury service for
certain teachers; relating to the powers of the
Department of Education and Early Development;
relating to high school course credit earned through
assessment; relating to school performance reports;
relating to assessments; establishing a public school
and school district grading system; relating to
charter schools and student transportation; relating
to residential school applications; relating to tenure
of public school teachers; relating to unemployment
contributions for the Alaska technical and vocational
education program; relating to earning high school
credit for completion of vocational education courses
offered by institutions receiving technical and
vocational education program funding; relating to
schools operated by a federal agency; relating to a
grant for school districts; relating to education tax
credits; establishing an optional municipal tax
exemption for privately owned real property rented or
leased for use as a charter school; requiring the
Department of Administration to provide a proposal for
a salary and benefits schedule for school districts;
making conforming amendments; and providing for an
effective date."
CSHB 278(FIN)am was SCHEDULED but not HEARD.
HOUSE BILL NO. 385
"An Act relating to additional state contributions to
the teachers' defined benefit retirement plan and the
public employees' defined benefit retirement plan; and
providing for an effective date."
HB 385 was SCHEDULED but not HEARD.
ADJOURNMENT
4:18:35 PM
The meeting was adjourned at 4:18 p.m.