Legislature(2005 - 2006)SENATE FINANCE 532

05/05/2006 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
-- Recessed to approx. 4:30 pm --
+= HB 105 MEDICAID FOR ADULT DENTAL SERVICES TELECONFERENCED
Moved SCS CSHB 105(FIN) Out of Committee
+= HB 16 SCHOOL FUNDS RELATED TO BOARDING SCHOOLS TELECONFERENCED
Moved SCS CSHB 16(FIN) Out of Committee
+ HB 13 SCHOOL FUNDING & SCHOOL BOND REIMBURSEMNT TELECONFERENCED
Moved SCS CSHB 13(FIN) Out of Committee
+ HB 381 TOBACCO REV. FOR CAPITAL PROJECTS TELECONFERENCED
Heard & Held
+ HB 426 MEDICAL ASSISTANCE/INS COOPERATION TELECONFERENCED
Moved SCS CSHB 426(FIN) Out of Committee
+= HB 484 FISHERY ASSOCIATION REIMBURSEMENT TELECONFERENCED
Moved SCS CSHB 484(FIN) Out of Committee
+ HB 334 MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION TELECONFERENCED
Moved SCS CSHB 334(FIN) Out of Committee
+ HB 399 ELDER FRAUD AND ASSISTANCE/OPA TELECONFERENCED
Moved SCS CSHB 399(STA) Out of Committee
+ HB 377 EXEMPTION: RES. BLDG. DRAWINGS & SPECS TELECONFERENCED
Moved SCS CSHB 377(L&C) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
= HCR 30 AK CLIMATE IMPACT ASSESSMENT COMMISSION
Moved SCS CSHCR 30(FIN) Out of Committee
                            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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