Legislature(2001 - 2002)

05/17/2002 05:01 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     SENATE FINANCE COMMITTEE                                                                                 
                      SECOND SPECIAL SESSION                                                                                  
                           May 17, 2002                                                                                       
                              5:01 PM                                                                                         
SFC-02 2nd SS #1, Side A                                                                                                        
CALL TO ORDER                                                                                                               
Co-Chair Kelly convened the meeting at approximately 5:01 PM.                                                                   
Senator Dave Donley, Co-Chair                                                                                                   
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Lyda Green                                                                                                              
Senator Alan Austerman                                                                                                          
Senator Lyman Hoffman                                                                                                           
Senator Donald Olson                                                                                                            
Also Attending:  SENATOR GENE THERRIAULT; JIM DUNCAN, Commissioner,                                                           
Department of Administration                                                                                                    
Attending via Teleconference:  There were no teleconference                                                                   
SUMMARY INFORMATION                                                                                                         
SB 2006-APPROP: CAPITAL PROJECTS                                                                                                
The Committee adopted a committee substitute and moved the bill                                                                 
from Committee.                                                                                                                 
SB 2007-APPROP: CONST. CBR                                                                                                      
The bill moved from Committee.                                                                                                  
SB2001-PIONEERS' AND VETERANS' HOME/ADVISORY BD                                                                                 
The Committee heard from Senator Therriault and the Department of                                                               
Administration. The bill moved from Committee.                                                                                  
Co-Chair  Kelly   announced  that   the  following  two   pieces  of                                                            
legislation  individually address  the FY 03 Capital Budget  and the                                                            
provision to withdraw  funds from the Constitutional  Budget Reserve                                                            
(CBR) fund,  neither of  which passed the  House of Representatives                                                             
during the regular legislative session.                                                                                         
AT EASE 5:03 PM / 5:04 PM                                                                                                       
     SENATE BILL NO. 2007                                                                                                       
     "An Act making  an appropriation to reverse the  effect of art.                                                            
     IX, sec. 17(d), Constitution  of the State of Alaska; making an                                                            
     appropriation    to   balance   revenue   and    general   fund                                                            
     appropriations;  making an appropriation  to the Department  of                                                            
     Revenue  for management  of the constitutional  budget  reserve                                                            
     fund;  making   appropriations  under  art.   IX,  sec.  17(c),                                                            
     Constitution  of the State of  Alaska, from the constitutional                                                             
     budget reserve fund; and providing for an effective date."                                                                 
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Donley  commented this  legislation  is the  mechanism  by                                                            
which the State would access  the CBR fund and that passage requires                                                            
a vote of three-quarters  of the members of both the  Senate and the                                                            
House of Representatives.  He stated  that the need for these  funds                                                            
is  dependant  upon  whether  revenue  is  sufficient  to  fund  the                                                            
activities  of state  government  in the  upcoming  fiscal year.  He                                                            
remarked that current estimates  indicate CBR funds would be needed.                                                            
Senator  Leman  furthered  that,  although  small  compared  to  the                                                            
proposed  total   withdrawal  from   the  fund,  the  $125,000   CBR                                                            
withdrawal for  the Department of Revenue, Division  of Treasury, as                                                            
contained  in  this bill,  is  part of  the  efforts of  the  Senate                                                            
Majority to meet spending limitations.                                                                                          
Senator Ward  offered a motion to  move SB 2007 from Committee  with                                                            
individual recommendations.                                                                                                     
Without objection SB 2007 MOVED from Committee.                                                                                 
AT EASE 5:07 PM / 5:27 PM                                                                                                       
     SENATE BILL NO. 2006                                                                                                       
     "An    Act   making    and    amending    appropriations    and                                                            
      reappropriations; and providing for an effective date."                                                                   
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Kelly explained  the intent  to adopt  the language  of SB                                                            
247, the  FY 03 Capital  budget as  passed by  the Senate, with  the                                                            
exception of the CBR fund access provisions.                                                                                    
Senator Ward  moved to adopt an unnumbered  bill, work order  number                                                            
22-LS1818\A, as a working draft committee substitute to SB 2006.                                                                
Co-Chair Donley objected.                                                                                                       
Co-Chair Donley restated  earlier concerns that Anchorage wastewater                                                            
and  water  quality  projects  "traditionally  have  been  seriously                                                            
under-funded".  He compared  the amount  of funds  appropriated  for                                                            
Cordova and Juneau  as higher than that appropriated  for Anchorage.                                                            
He remarked  that  a more equitable  statewide  distribution  system                                                            
must be developed in the future for funding such projects.                                                                      
Co-Chair Donley  removed his objection to adoption  of the committee                                                            
substitute as a working  draft and it was ADOPTED without objection.                                                            
Senator  Ward offered  a motion to  move from  Committee CS  SB 2006                                                            
(FIN) "as amended, Version A," with individual recommendations.                                                                 
There was no  objection and CS SB  2006 (FIN) MOVED from  Committee.                                                            
AT EASE 5:29 PM / 5:32 PM                                                                                                       
     SENATE BILL NO. 2001                                                                                                       
     "An Act changing  the name of the Alaska Pioneers'  Home to the                                                            
     Alaska  Pioneers'   and  Veterans'  Home  and   of  the  Alaska                                                            
     Pioneers'  Homes Advisory  Board  to the  Alaska Pioneers'  and                                                            
     Veterans'   Home  Advisory  Board;  relating   to  housing  and                                                            
     services  for veterans; relating to the advisory  board for the                                                            
     home; making  other amendments to the statutes  relating to the                                                            
     home; and providing for an effective date."                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair Kelly pointed  out this is similar to legislation passed by                                                            
the Senate  during the regular legislative  session but not  adopted                                                            
by the House of Representatives.                                                                                                
SENATOR  GENE  THERRIAULT  detailed   the differences   between  the                                                            
version  originally introduced  by  Governor Tony  Knowles and  that                                                            
adopted by the  Senate Rules Committee and passed  by the Senate. He                                                            
stated the Senate  Rules committee substitute and  SB 2006 specify a                                                            
limit of  30 percent of beds  in each Pioneers'  Home that  could be                                                            
dedicated  to veterans.  He noted  the Administration  had  proposed                                                            
instating this limit in regulation rather than statute.                                                                         
Senator  Therriault listed  the second  change  from the  Governor's                                                            
original version  specifies that this legislation  only takes effect                                                            
if an  agreement is  reached with  the US  Veterans' Administration                                                             
(VA). He  explained this  provides that veterans'  federal  per diem                                                            
payments are paid  to the veterans, and the veterans  would then use                                                            
those funds  to pay the State for  services provided to them  in the                                                            
Pioneers' Homes.  He clarified the  per diem payments are  different                                                            
than VA benefits,  which include prescriptions  and other  coverage.                                                            
He informed that if the  per diem payments were made directly to the                                                            
Homes,  the  federal government  could  impose  regulations  on  the                                                            
Homes.  He read  language from  Section  24 of SB  2001,  CONTINGENT                                                            
EFFECTIVENESS, specifying  that the receipt of the per diem payments                                                            
from resident veterans,  are accepted, "without any need for changes                                                            
in the state ownership  and authority to operate and manage the home                                                            
under the  state laws  as they would  exist after  being amended  by                                                            
this Act." He emphasized  the intent that this legislation would not                                                            
"trigger"  any changes  to the manner  in which  the State owns  and                                                            
operates the Pioneers' Homes.                                                                                                   
Senator  Hoffman asked if  the Department  of Administration  fiscal                                                            
note, dated 5/17/02, reflects the aforementioned changes.                                                                       
Senator  Therriault replied  the  fiscal note  "operates  separately                                                            
from this  bill" and explained  that the  fiscal note addresses  the                                                            
cost of opening additional  beds. He noted there are currently 90-95                                                            
veterans  residing  in the  Pioneer's  Homes, and  this legislation                                                             
would allow receipt  of these patients' VA per diem  payments, at no                                                            
cost to the  State. He stated that  additional beds could  be opened                                                            
under this legislation  for new veteran residents  as well, if funds                                                            
were appropriated.                                                                                                              
Senator Therriault  qualified this legislation contains  a provision                                                            
in Section  21 relating to  a study, which  would entail  additional                                                            
Co-Chair Kelly asked for  further explanation of the consequences of                                                            
the VA  per diem  payments made  directly to the  State, versus  the                                                            
payments made to veteran residents and forwarded to the State.                                                                  
Senator Therriault responded  there is some concern that if money is                                                            
directly appropriated to  the Homes, there are "all kinds of strings                                                            
attached", in the form  of VA regulations that would dictate how the                                                            
State  must operate  the Homes.  On the  contrary,  he explained  if                                                            
funds are  appropriated to  the veteran and  used by the veteran  to                                                            
pay  the  out-of-pocket  cost  of  residency  in the  Home,  the  VA                                                            
regulations would not apply.                                                                                                    
Senator  Hoffman asked  if once  agreement  is reached  with the  VA                                                            
whether the fiscal note would become invalid.                                                                                   
Senator Therriault  responded the  matter is dependent upon  whether                                                            
the Committee  chose to appropriate  State funds to open  additional                                                            
beds at the Homes.                                                                                                              
Senator  Hoffman  restated  his  impression   of negotiations   that                                                            
determined  that this bill would not  be enacted until there  was an                                                            
understanding  by  Alaska's  Congressional   delegation  related  to                                                            
funding. He asked  how this agreement would impact  the fiscal note.                                                            
JIM  DUNCAN, Commissioner,  Department  of  Administration,  replied                                                            
that Section  24 stipulates  that this legislation  would only  take                                                            
effect  when the  Alaska Department  of  Administration  and the  VA                                                            
reach agreement  regarding the per  diem payments and the  ownership                                                            
and operation of the facilities by the State.                                                                                   
Mr. Duncan  added that,  under this legislation,  the Department  is                                                            
required  to report to  the Legislative Budget  and Audit  Committee                                                            
once such an agreement is reached.                                                                                              
Mr. Duncan  informed that  the negations are  on-going and  that the                                                            
goal  is to  reach an  agreement  as quickly  as possible  to  allow                                                            
veterans to  receive the benefits  "they deserve" and are  "entitled                                                            
Senator Hoffman  cited the fiscal note indicates the  intent to fill                                                            
50  additional  beds at  a  cost of  $1.5  million. He  again  asked                                                            
whether the fiscal  note must be changed if these  beds could not be                                                            
filled until the agreement is reached.                                                                                          
Mr. Duncan  replied  the fiscal  noted  is based  on the  assumption                                                            
there would  be an agreement and the  legislation would take  effect                                                            
by July  1, 2002.  He stated it  is uncertain  whether an  agreement                                                            
would be  reached by  that date  and suggested  the Committee  could                                                            
consider  an effective date  of October 1,  2002, as he was  certain                                                            
the beds would be open  by that date. He stressed any fiscal note is                                                            
an estimate  and this fiscal note  estimates the beds would  be open                                                            
by October 1.                                                                                                                   
Senator Leman  asked for further explanation of the  fiscal note. He                                                            
referenced the analysis  indicates the funding would be used to open                                                            
50 beds for veterans,  although there are currently  95 veterans who                                                            
are residents  of the Pioneer Homes, and the intent  is to designate                                                            
115 beds for veterans.  He surmised that 35 veterans would reside in                                                            
the Homes in beds not designated for veterans.                                                                                  
Mr.  Duncan replied  there  is  currently  no preference  given  for                                                            
veterans  in the Pioneer  Home system. He  noted the language  in SB                                                            
2001 states a  preference could be assigned for up  to 21 percent of                                                            
the total number  of beds, but no  more than 30 percent of  the beds                                                            
in  any  one  Home.  He  calculated  21  percent  of  the  currently                                                            
available 500  beds, plus the proposed  addition of 50 beds,  in all                                                            
of  the Homes  to  be 115  beds  that  could  be designated  with  a                                                            
preference  for  veterans.   Therefore,  he  said,  the  95  current                                                            
veterans  would reside  in the designated  beds  and there would  be                                                            
space available  for up to  an additional  20 veterans. He  stressed                                                            
the additional  50 beds  are necessary  to provide  the 20  veteran-                                                            
designated beds because  of the 21-percent provision. He pointed out                                                            
more than 20 veterans could  access the 50 additional beds depending                                                            
on their placement on the waiting list.                                                                                         
Senator Leman  clarified the remaining  30 additional beds  would be                                                            
available to those  first on the waiting list regardless  of whether                                                            
they are a veteran.                                                                                                             
Mr. Duncan affirmed.                                                                                                            
Senator  Leman asked  the  assumption  of "money  flow"  of the  new                                                            
veteran residents.                                                                                                              
Mr. Duncan replied the  estimates are based on the assumption of 115                                                            
veteran residents. He qualified  this could be an underestimation as                                                            
more veterans could be accepted into a Home.                                                                                    
Senator  Leman next  referred testimony  given by  the witness  when                                                            
similar  legislation was  before the  Committee  during the  regular                                                            
session.  Senator Leman had  assumed from  this testimony that  this                                                            
legislation  could  be enacted  with  fewer than  50  new beds  made                                                            
Mr. Duncan  stated this fiscal note  is "not inconsistent"  with his                                                            
recollection of  the earlier conversation. He noted  the fiscal note                                                            
accompanying  the  original  legislation  was $2.6  million  general                                                            
funds and $2.6 million  Pioneer Home program receipts. He stated the                                                            
goal was to fill  all 600 beds possible in the Pioneer  Home system.                                                            
He informed that due to  concerns about the level of State spending,                                                            
the Department  submitted  a fiscal  note for SB  2001 to allow  the                                                            
opening of 50  beds and to start the program. He stated  this matter                                                            
is a policy call for the  Committee to determine. He recommended the                                                            
Committee  provide  funding  to  open the  maximum  number  of  beds                                                            
Senator Leman asked the  amount of time between when an agreement is                                                            
reached and  when the residents are  moved into the Homes.  He asked                                                            
if there  would be delay  caused by current  leases or other  living                                                            
arrangements that must be addressed by the future residents.                                                                    
Mr. Duncan surmised these  factors would not cause delay because the                                                            
future residents  have been listed on the waiting  list for a period                                                            
of time and  have already made necessary  arrangements. However,  he                                                            
pointed  out additional  staff must  be hired,  which could  require                                                            
time. He assured that a  portion of the beds would be opened as soon                                                            
as adequate  staff is in  place; with the  remaining beds opened  as                                                            
Senator Leman calculated  that the addition of 30 beds would provide                                                            
111 veteran preference designated beds statewide.                                                                               
Mr. Duncan agreed.                                                                                                              
Mr. Duncan next pointed  out the fiscal note includes $250,000 for a                                                            
private  contractor  to  conduct  a  study  of the  unmet  needs  of                                                            
veterans  in Alaska under  the age  of 65, which  he stressed  is an                                                            
important element of the legislation.                                                                                           
Senator  Ward   moved  SB  2001  from   committee  with   individual                                                            
recommendations and the accompanying fiscal note.                                                                               
There  was  no objection  and  SB  2001 MOVED  from  Committee  with                                                            
accompanying   $3  million  fiscal  note  from  the  Department   of                                                            
RECESS TO CALL OF THE CHAIR 5:52 PM                                                                                             
Co-Chair Kelly adjourned the meeting at 05:57 PM.                                                                               

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