Legislature(2007 - 2008)SENATE FINANCE 532

03/13/2007 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 59(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved SB 81 Out of Committee
Heard & Held
                    SENATE FINANCE COMMITTEE                                                                                  
                         March 13, 2007                                                                                       
                           9:02 a.m.                                                                                          
CALL TO ORDER                                                                                                               
Co-Chair  Bert  Stedman  convened the  meeting  at  approximately                                                               
9:02:29 AM.                                                                                                                   
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
Also  Attending:   DOUG  LETCH, Staff  to  Senator Gary  Stevens;                                                             
DARWIN  PETERSON,  Staff  to Senator  Lyda  Green;  DENNIS  EGAN,                                                               
President and General Manager,  Alaska Juneau Communication, past                                                               
President   and  current   Board   Member,  Alaska   Broadcasters                                                               
Association; RICHARD  BENEVIDES, Staff  to Senator  Bettye Davis;                                                               
PAT  DAVIDSON,  Director,  Division of  Legislative  Audit;  MIKE                                                               
PAWLOWSKI, Staff to Representative Kevin Meyers;                                                                                
Attending  via   Teleconference:    From  Ketchikan:   BOB  KERN,                                                             
President, TLP  Communications Inc.; From offnet  locations: JAKE                                                               
LIBBY,  President, Palmer  Rotary Club;  SCOTT SMITH,  President,                                                               
Alaska Broadcasters Association;  MIKE HOGAN, Executive Director,                                                               
Alaska  Physicians and  Surgeons,  Inc.;  DENNIS VALENZENO,  PhD,                                                               
Director, Alaska WWAMI [Washington,  Wyoming, Alaska, Montana and                                                               
Idaho]  Biomedical   Program,  University   of  Alaska-Anchorage;                                                               
SUZANNE TRYCK, WWAMI                                                                                                            
SUMMARY INFORMATION                                                                                                         
SB  59-BROADCASTING PROMOTING CHARITABLE GAMING                                                                                 
The Committee heard  from the sponsor, a  service organization, a                                                               
business  association   and  a  private  business.   A  committee                                                               
substitute was  adopted and amended.  The bill was  reported from                                                               
SB  81-EXTEND BOARD OF MIDWIVES                                                                                                 
The  Committee  heard  from  the  sponsor  and  the  Division  of                                                               
Legislative Audit. The bill was reported from Committee.                                                                        
HB  18-POSTSECONDARY MEDICAL & OTHER EDUC. PROG.                                                                                
The  Committee  heard from  the  sponsor  and the  University  of                                                               
Alaska. The bill was held in Committee.                                                                                         
9:03:52 AM                                                                                                                    
     SENATE BILL NO. 59                                                                                                         
     "An Act relating to the use of broadcasting to promote                                                                     
     charitable raffles and lotteries."                                                                                         
This was  the first hearing for  this bill in the  Senate Finance                                                               
Co-Chair  Stedman  announced  intent  to report  this  bill  from                                                               
Committee barring any issue raised at this hearing.                                                                             
9:04:26 AM                                                                                                                    
Senator Huggins moved  for adoption of CS SB  59, 25-LS0410\C, as                                                               
a working document.                                                                                                             
There was no objection and the committee substitute was ADOPTED.                                                                
9:05:24 AM                                                                                                                    
DOUG LETCH, Staff  to Senator Gary Stevens, sponsor  of the bill,                                                               
testified to the  portion of the bill that relates  to the use of                                                               
broadcast media to promote raffles and lotteries.                                                                               
9:06:27 AM                                                                                                                    
Mr.  Letch  expressed the  intent  of  this  bill to  "level  the                                                               
playing  field"   for  Alaska  broadcasters.   Currently  statute                                                               
prohibits broadcasters  from airing "truthful  and non-misleading                                                               
advertisements" of lawful charitable  gaming activity. Because of                                                               
this,   those  involved   in   local  charitable   organizations,                                                               
including Boy Scouts  of America, Girl Scouts  of America, senior                                                               
centers, football  leagues, little  leagues, and others,  are not                                                               
allowed to utilize radio and  television to advertise raffles and                                                               
other fundraising events. Such advertisement  is allowed in print                                                               
Mr. Letch  remarked that existing statute  could impede "positive                                                               
governmental   interests"   because   the   Alaska   Broadcasting                                                               
Association member stations are  not allowed to assist non-profit                                                               
organizations in efforts to generate funding.                                                                                   
9:07:10 AM                                                                                                                    
Mr. Letch furthered that the  current law could deny broadcasters                                                               
equal  protection  under  the  federal  and  State  constitutions                                                               
because  it prohibits  "without rational  basis" broadcast  media                                                               
from engaging in  conduct allowed for print  media. This includes                                                               
third-party advertising promoting charitable gaming activities.                                                                 
Mr.  Letch gave  as an  example the  prohibition against  the Boy                                                               
Scouts of  America from  advertising its  raffles on  local radio                                                               
Mr. Letch spoke  of his experience in broadcasting  in Alaska and                                                               
emphasized its importance.                                                                                                      
9:07:52 AM                                                                                                                    
Mr. Letch  attested that  promotion of  small raffles  is simple.                                                               
However, larger  raffles such  as the  football league  in Kodiak                                                               
require more promotion, which this legislation would allow.                                                                     
9:08:59 AM                                                                                                                    
Co-Chair  Stedman requested  an  explanation of  the language  of                                                               
Section 5 adding a new paragraph  to AS 05.15.690 pertaining to a                                                               
"cabbage classic" at the Alaska State Fair in Palmer.                                                                           
9:09:25 AM                                                                                                                    
Mr. Letch deferred to Senator Green's staff.                                                                                    
9:09:37 AM                                                                                                                    
DARWIN  PETERSON, Staff  to Senator  Lyda  Green, testified  that                                                               
this  language was  "selected  as  a policy  call  by the  Senate                                                               
President  working with  the Palmer  Rotary  Club." The  existing                                                               
language  of  AS  05.15.690 lists  the  classics  for  charitable                                                               
events  permitted  by  law.  Many   specify  the  venue  and  the                                                               
administrator of the classic, including  the Kenai River Classic,                                                               
which specifies  that the Kenai  Chamber of  Commerce administers                                                               
that event.                                                                                                                     
Mr. Peterson  qualified that the  cabbage classic  location would                                                               
not have  to be limited  to the Alaska  State Fair, nor  would it                                                               
have to  be administered  by the Palmer  Rotary Club.  The Palmer                                                               
Rotary  Club  has  historically  operated  the  contest  and  the                                                               
contest has  always been held  at the Alaska State  Fair. Senator                                                               
Green determined that  the language of Section  5 would therefore                                                               
be consistent  with the  remainder of  the statute.  However, the                                                               
Committee  could delete  such specification  from  the bill.  The                                                               
existing classic would  be allowed to continue  and other cabbage                                                               
classics would be allowed as well.                                                                                              
9:11:14 AM                                                                                                                    
JAKE  LIBBY,   President,  Palmer  Rotary  Club,   testified  via                                                               
teleconference  from   an  offnet   location  to  the   logic  of                                                               
identifying the cabbage  classic as the event held  at the Alaska                                                               
State  Fair.  This  event is  already  nationally  recognized  in                                                               
conjunction with the Giant Cabbage  Weigh-Off at the Alaska State                                                               
Fair. Few other opportunities for a cabbage classic exist.                                                                      
9:12:30 AM                                                                                                                    
Senator Olson surmised from the  language of Section 3 that youth                                                               
organizations in general are unable  to participate in charitable                                                               
events unless  those events  are listed  as exceptions.  He asked                                                               
the reason for this.                                                                                                            
9:13:02 AM                                                                                                                    
Mr. Peterson  responded that,  as a "policy  call of  the state",                                                               
such  activities have  been closely  managed. Specific  statutory                                                               
authority allows for this oversight.                                                                                            
9:13:21 AM                                                                                                                    
Senator  Olson   asked  the  difference  between   a  raffle  and                                                               
"outright gambling".                                                                                                            
Mr. Peterson  answered that the profits  of a raffle are  paid to                                                               
9:13:34 AM                                                                                                                    
Senator Elton pointed  out that because the  provision of Section                                                               
5 limits the cabbage classic to  the one event held at the Alaska                                                               
State  Fair, the  language  of Section  3  referring to  "cabbage                                                               
classics" should be in the singular rather than plural.                                                                         
9:14:01 AM                                                                                                                    
Mr. Peterson agreed.                                                                                                            
9:14:06 AM                                                                                                                    
Amendment   #1:  This   conceptual  amendment   deletes  "cabbage                                                               
classics"  and  inserts "cabbage  classic"  where  it appears  in                                                               
Section 1 on page 1, line 10; in  Section 2 on page 2 line 4; and                                                               
in Section  3 on page 2,  line 10. The amended  language reads as                                                               
     Section 1. AS 05.15.100(a) is amended to read:                                                                             
          (a) The department may issue a permit to a                                                                            
     municipality  or qualified  organization.  The permit  gives                                                               
     the municipality or qualified  organization the privilege of                                                               
     conducting  bingo, raffles  and  lotteries, pull-tab  games,                                                               
     ice classics, race classics,  rain classics, goose classics,                                                               
     mercury  classics,  deep   freeze  classics,  canned  salmon                                                               
     classics,  salmon   classics,  king  salmon   classics,  dog                                                               
     mushers'  contests,  snow  machine classics,  fish  derbies,                                                               
     animal classics,  crane classics, cabbage  classic, Calcutta                                                               
     pools, and contests of skill.                                                                                              
     Section 2. AS 05.15.115(c) is amended to read:                                                                             
          (c) A permittee may not contract with more than one                                                                   
     operator at  a time  to conduct the  same type  of activity.                                                               
     For the  purposes of this  subsection, bingo  games, raffles                                                               
     and lotteries, pull-tab games,  ice classics, race classics,                                                               
     rain  classics,  goose   classics,  mercury  classics,  deep                                                               
     freeze  classics, canned  salmon classics,  salmon classics,                                                               
     king salmon  classics, dog  mushers' contests,  snow machine                                                               
     classics,  fish derbies,  animal  classics, crane  classics,                                                               
     cabbage classic,  Calcutta pools, and contests  of skill are                                                               
     each a different type of activity.                                                                                         
     Section 3. AS 05.15.180(b) is amended to read:                                                                             
          (b) With the exception of raffles, lotteries, bingo                                                                   
     games,  pull-tab  games,   rain  classics,  goose  classics,                                                               
     mercury  classics,   deep  freeze  classics,   dog  mushers'                                                               
     contests,  snow machine  classics,  canned salmon  classics,                                                               
     salmon  classics, animal  classics, crane  classics, cabbage                                                               
     classic,  Calcutta  pools,  and  king  salmon  classics,  an                                                               
     activity may  not be licensed  under this chapter  unless it                                                               
     existed in the state in  substantially the same form and was                                                               
     conducted in  substantially the  same manner  before January                                                               
     1, 1959.  A snow machine  classic may not be  licensed under                                                               
     this chapter  unless it has  been in existence for  at least                                                               
     five years before  the licensing. An animal  classic may not                                                               
     be licensed  under this chapter  unless it was  in existence                                                               
     before November 1, 2002.                                                                                                   
Senator Elton offered a motion for adoption.                                                                                    
Without objection the amendment was ADOPTED.                                                                                    
9:15:52 AM                                                                                                                    
SCOTT   SMITH,   President,  Alaska   Broadcasters   Association,                                                               
testified  via   teleconference  from   an  offnet   location  to                                                               
reiterate the Association's  desire to better serve  the needs of                                                               
communities. Currently  broadcasters are unable to  promote these                                                               
charitable events  in any  way. Broadcasters  would like  to help                                                               
promote and provide outreach to  organizations to assist in these                                                               
fundraising efforts.                                                                                                            
9:17:00 AM                                                                                                                    
BOB  KERN,  President,  TLP Communications  Inc.,  testified  via                                                               
teleconference  from  Ketchikan,  that the  corporation  operates                                                               
KFMJ Radio  and publishes the  local newspaper. He also  serves a                                                               
member of  the Alaska Public Broadcasting  Commission (APBC), and                                                               
although  he was  not speaking  on its  behalf, this  legislation                                                               
would  "favorably  impact" the  26  public  radio and  television                                                               
stations overseen  by the APBC.  Those stations would  be allowed                                                               
to  assist  nonprofit  groups   and  organizations  in  promoting                                                               
activities in their communities.                                                                                                
Mr.  Kern stated  that this  bill  would also  eliminate a  "huge                                                               
amount  of confusion  that exists  between Alaska  and the  other                                                               
states in  the union and FCC  [Federal Communications Commission]                                                               
regulations." Alaska is  one of two states in  which stations are                                                               
unable to broadcast gaming or lottery announcements.                                                                            
Mr. Kern  told of a situation  in which a local  radio station in                                                               
Ketchikan and  the American Diabetes  Association "ran  afoul" of                                                               
State  and federal  statutes.  In a  written  statement, the  FCC                                                               
informed it would  not prosecute or fine the  station because the                                                               
Association  held a  gaming permit  issued by  the State  and the                                                               
raffle was  not in  violation of FCC  regulations. State  and FCC                                                               
rules  are  not   consistent  with  each  other   and  should  be                                                               
9:20:37 AM                                                                                                                    
DENNIS  EGAN,  President  and   General  Manager,  Alaska  Juneau                                                               
Communication, past  President and  current Board  Member, Alaska                                                               
Broadcasters Association,  testified in Juneau in  support of the                                                               
bill, reading his testimony into the record as follows.                                                                         
     SB  59  affords  a  solution   to  the  disparate  treatment                                                               
     currently being imposed on  Alaska's broadcasters by current                                                               
     Alaska statute.                                                                                                            
     Alaska   statute  prohibits,   but   only   via  radio   and                                                               
     television, the  advertising of lawful charitable  gaming or                                                               
     conduct. Newspapers and related  media are free to advertise                                                               
     the  very   same  activity  and   conduct  that   radio  and                                                               
     television stations may not advertise.                                                                                     
     Recognizing  the  unfair  burden placed  upon  broadcasters,                                                               
     Congress passed the  Charity Games Advertising Clarification                                                               
     Act  of 1988.  It has  been in  effect since  1990. Congress                                                               
     opened  the  door  for  broadcasters   to  advertise  for  a                                                               
     charity, not to conduct charitable gaming.                                                                                 
     The new federal  law left it up to the  individual states to                                                               
     ratify the  federal law.  To this  date, nearly  every state                                                               
     has  allowed  broadcasters  in their  respective  states  to                                                               
     become fully consistent with federal law.                                                                                  
     Under the Charity  Games Advertising Act signed  into law by                                                               
     President  Regan   in  1988,   federal  law   prohibits  the                                                               
     acceptance  of any  advertising from  a business  is primary                                                               
     purpose is  the conducting of a  gaming activity… charitable                                                               
     or otherwise.                                                                                                              
     We  feel  that being  allowed  to  announce that  the  local                                                               
     volunteer fire department is having  a raffle to raise funds                                                               
     for CPR equipment,  or the senior center  is selling tickets                                                               
     on an afghan  to raise funds for the  senior citizen Care-A-                                                               
     Van, or  the high  school sports  teams are  selling tickets                                                               
     for a raffle  to raise funds for travel,  is not detrimental                                                               
     to anyone.                                                                                                                 
     Alaska's broadcasters are not trying  to suggest to you what                                                               
     activities should be  permissible in the state.  What we are                                                               
     asking  is  that  all  media  including  print,  electronic,                                                               
     direct mail  and even  the signs we  see on  municipal buses                                                               
     have  the same  ground  rules when  it  comes to  promotion.                                                               
     Congress recognized  this inequity with passage  of the 1988                                                               
     Charity Games Clarification Act.                                                                                           
     As  a federal  licensee, broadcasters  are one  of the  most                                                               
     highly regulated industries in the United States.                                                                          
     We  urge you  to  provide equity,  and  give your  favorable                                                               
     consideration of SB 59.                                                                                                    
9:23:44 AM                                                                                                                    
Senator Olson requested clarification that Alaska is one of only                                                                
two states that allow "blanket charitable events being                                                                          
9:23:54 AM                                                                                                                    
Mr. Egan affirmed.                                                                                                              
9:24:19 AM                                                                                                                    
Co-Chair Stedman pointed out that the fiscal note may need                                                                      
modification to account for increased fee generation from the                                                                   
cabbage classic.                                                                                                                
9:25:16 AM                                                                                                                    
Mr. Letch did not oppose this.                                                                                                  
9:25:28 AM                                                                                                                    
Senator Huggins offered a motion to report CS SB 59, 25-                                                                        
LS0410\C,   as    amended   from   Committee    with   individual                                                               
recommendations and a forthcoming fiscal note.                                                                                  
There was no objection and CS SB 59 (FIN) was REPORTED from                                                                     
Committee with a forthcoming fiscal note from the Department of                                                                 
AT EASE 9:26:05 AM / 9:27:57 AM                                                                                             
9:28:01 AM                                                                                                                    
     SENATE BILL NO. 81                                                                                                         
     "An  Act extending  the termination  date for  the Board  of                                                               
     Certified  Direct-Entry  Midwives;   and  providing  for  an                                                               
     effective date."                                                                                                           
This was the first hearing for this bill in the Senate Finance                                                                  
Co-Chair Stedman announced intent to report this bill from                                                                      
9:28:57 AM                                                                                                                    
RICHARD BENEVIDES, Staff to Senator Bettye Davis, sponsor of the                                                                
bill, read the sponsor statement into the record as follows.                                                                    
     Senate  Bill 81  extends the  sunset  date of  the Board  of                                                               
     Certified  Direct-Entry Midwives  until  June  30, 2015,  in                                                               
     accordance  with  the  recommendations  of  the  Legislative                                                               
     Auditor. The legislative auditor  has concluded the Board of                                                               
     Certified   Direct-Entry   Midwives  meets   the   statutory                                                               
     requirements of  public need  and is  in compliance  with AS                                                               
     08.01.065(c), which requires  occupational licensing fees to                                                               
     cover the regulatory costs of that occupation.                                                                             
     The board  has served as  a means to make  people practicing                                                               
     Midwifery  aware of  the level  of experience  and education                                                               
     expected of them.  It consists of five  members appointed by                                                               
     the Governor: one public  member, two certified direct-entry                                                               
     midwives  (CDMs),  one  certified  nurse  midwife,  and  one                                                               
     physician licensed by the Alaska  State Medical Board who is                                                               
     either  an obstetrician  or  who  has specialized  obstetric                                                               
     Their   duties    include   examining    and   certificating                                                               
     applicants,  permitting  apprentices, holding  hearings  and                                                               
     ordering   disciplinary   sanctions.   They   maintain   all                                                               
     educational  records;   approve  curricula,   training,  and                                                               
     programs  for direct  entry midwives  and apprentices.  They                                                               
     have  worked proactively  to ensure  that public  safety has                                                               
     been maintained while improving  the profession of Midwives.                                                               
     They have  successfully incorporated  Certified Professional                                                               
     Midwife  standards  into   Alaska's  Certified  Direct-Entry                                                               
     Midwives  licensing program  and  worked with  the State  to                                                               
     establish  Medicaid  procedures  for CDM  services,  thereby                                                               
     placing Alaska  among eight states which  both license their                                                               
     traditional midwives and  provide Medicaid reimbursement for                                                               
     their services. They  continue to work to  create and revise                                                               
     regulations  that   ensure  proper  training   and  increase                                                               
     educational requirements.                                                                                                  
     Women  seeking an  alternative to  hospital care  for normal                                                               
     pregnancy and  birth rely on  the diligence of the  board to                                                               
     enhance  both   the  quality  and  accessibility   of  their                                                               
     healthcare. We urge your support on passage of this bill.                                                                  
9:30:51 AM                                                                                                                    
Mr. Benevides informed that approximately ten percent of all                                                                    
births in Alaska are done through midwifery. Additionally,                                                                      
membership on this board has the highest licensing fee.                                                                         
9:31:09 AM                                                                                                                    
Co-Chair Stedman  cited a letter  to the Division  of Legislative                                                               
Audit  from  Dana  Brown, Chair  of  the  Certified  Direct-Entry                                                               
Midwives Board dated  October 26, 2006 and included  in the audit                                                               
report [copy  on file] on page  17. The text of  the letter reads                                                               
as follows.                                                                                                                     
     This is written in response  to the preliminary audit report                                                               
     concerning the  Board of Certified Direct-entry  Midwives. I                                                               
     concur with  the recommendation that the  legislature extend                                                               
     the  termination date  of the  board  to June  30, 2015.  My                                                               
     conclusions are  the same as  those in the audit  report. In                                                               
     the Analysis  of Public Need  section on page 8,  it implies                                                               
     that  the  board  increased certification  requirements  for                                                               
     apprentice  direct-entry supervisors.  We tried  to do  this                                                               
     but were unable  to change regulation because  of wording in                                                               
     statute.  Someday the  Midwives Association  of Alaska  will                                                               
     need to  go to  the legislature and  try to  get legislation                                                               
     passed to  change wording in  statute so that  certain regs.                                                               
     can be  addressed. I concur with  the rest of the  report. I                                                               
     am very pleased with the report.                                                                                           
AT EASE 9:32:14 AM / 9:32:23 AM                                                                                             
Mr. Benevides  was unaware of specific  regulatory changes sought                                                               
by the Board.                                                                                                                   
9:32:44 AM                                                                                                                    
Senator Olson asked the number of licensees in the State.                                                                       
9:32:51 AM                                                                                                                    
Mr. Benevides deferred to the Division of Legislative Audit.                                                                    
9:32:59 AM                                                                                                                    
PAT  DAVIDSON, Director,  Division of  Legislative Audit,  listed                                                               
the number  of Certified Direct-Entry Midwife  (CDM) licensees at                                                               
the end  of 2006 as 28  and the number of  registered apprentices                                                               
at that time as eight.                                                                                                          
Senator Olson asked  the number of births and the  number of "bad                                                               
9:33:34 AM                                                                                                                    
Ms. Davidson did  not know the number of births  performed or the                                                               
number   of  negative   outcomes.   The   Division  reviews   the                                                               
investigations conducted by  the Board and the  outcomes of those                                                               
investigations. It found that investigations  were conducted in a                                                               
timely manner and with satisfactory outcomes.                                                                                   
9:34:07 AM                                                                                                                    
Senator Olson  asked if any disciplinary  actions against members                                                               
were taken in the past year.                                                                                                    
9:34:17 AM                                                                                                                    
Ms. Davidson did not know.                                                                                                      
Senator Olson asked  the number of disciplinary  actions taken in                                                               
the history of the Board.                                                                                                       
9:34:43 AM                                                                                                                    
Ms. Davidson again did not  have the information, but assured she                                                               
would research the matter.                                                                                                      
9:34:54 AM                                                                                                                    
Senator  Olson  asked  if Certified  Direct-Entry  Midwives  have                                                               
authority to prescribe any medication.                                                                                          
9:35:01 AM                                                                                                                    
Ms. Davidson did not know.                                                                                                      
9:35:04 AM                                                                                                                    
Mr.  Benevides  interjected  that midwives  are  prohibited  from                                                               
practicing unless  they are  located within  a certain  number of                                                               
miles  to   a  practicing  doctor.  Additionally,   midwives  are                                                               
prohibited from performing any  "medically difficult" births. The                                                               
last disciplinary action taken by  the Board was against a person                                                               
practicing without a license.                                                                                                   
9:35:59 AM                                                                                                                    
Senator Olson  asked about the continuing  education requirements                                                               
and  whether  those requirements  have  changed  in recent  years                                                               
similar to changes imposed by the State medical board.                                                                          
9:36:17 AM                                                                                                                    
Mr.  Benevides  could not  speak  to  the details  of  continuing                                                               
education requirements.                                                                                                         
9:36:36 AM                                                                                                                    
Co-Chair  Stedman  asked  Ms. Davidson's  recommendation  on  the                                                               
aforementioned need for statutory changes.                                                                                      
9:36:39 AM                                                                                                                    
Ms.  Davidson did  not  have adequate  information  to provide  a                                                               
complete  answer.  The  Division  determines  whether  boards  or                                                               
commissions are able  to "carry out their  business" and "leaves"                                                               
necessary  statutory  changes  to  the  board  or  commission  to                                                               
9:37:31 AM                                                                                                                    
Co-Chair  Stedman,  noting that  the  Board  was operating  at  a                                                               
deficit,  asked   whether  the   license  fee  rates   should  be                                                               
9:38:08 AM                                                                                                                    
Ms. Davidson directed  attention to Exhibit 1 of  the Analysis of                                                               
Public  Need on  page  9 of  the  audit report.  Exhibit  1 is  a                                                               
spreadsheet  titled, "Board  of Certified  Direct-Entry Midwives,                                                               
Schedule of License  Revenues and Board Expenditures, FY  03 - FY                                                               
06, (Unaudited)". Fees  are levied on a two-year  basis, with the                                                               
Board receiving most  revenue every second year,  including FY 05                                                               
and FY 03. The lesser  revenue generated in the intervening years                                                               
should be adequate to sustain  the program through that year. The                                                               
greater amounts collected in subsequent  years have been utilized                                                               
to  reduce the  cumulative  deficit. She  highlighted the  Ending                                                               
Cumulative Deficits  for FY  03: $8,188; FY  04: $45,026;  FY 05:                                                               
$13,000; and  FY 06:  $24,395. This pattern  of reduction  to the                                                               
deficit would continue as fee  rates would be unchanged for 2007.                                                               
The  balance  should  be zero  barring  any  unforeseen  spending                                                               
increases, and at that time the fee should be reduced.                                                                          
Ms.  Davidson informed  that expenditures  "spiked"  in 2002  and                                                               
2003 primarily  in contractual costs  with the Department  of Law                                                               
and for investigations.                                                                                                         
9:40:25 AM                                                                                                                    
Co-Chair   Stedman  asked   about  the   high  litigation   costs                                                               
referenced in the audit report.                                                                                                 
9:40:37 AM                                                                                                                    
Ms. Davidson pointed out that  statute requires that occupational                                                               
boards must  be self  financed. Therefore,  the board  incurs the                                                               
costs associated with investigations,  legal actions and drafting                                                               
of new  legislation. The increased  costs incurred by  this board                                                               
do not  cause "particular concern".  A board with as  few members                                                               
as  the  Board  of  Certified   Direct-Entry  Midwives  has  high                                                               
licensing fees.                                                                                                                 
9:41:34 AM                                                                                                                    
Senator Thomas  asked why the  personal services  and contractual                                                               
expenses of FY 03 and FY 04 were higher than FY 05 and FY 06.                                                                   
9:42:03 AM                                                                                                                    
Ms. Davidson  responded that the contractual  costs are comprised                                                               
of  legal fees  involving investigations.  She could  not address                                                               
the disparities in the personnel services costs.                                                                                
9:42:33 AM                                                                                                                    
Senator  Thomas, citing  page 10  of  the audit,  noted that  the                                                               
Division  of  Occupational  Licensing,  Department  of  Commerce,                                                               
Community  and Economic  Development,  opened nine  investigative                                                               
cases during the period of July  2002 and June 2006 pertaining to                                                               
the Board of Certified Direct-Entry  Midwives. He asked if any of                                                               
these  investigations  were  ongoing  at this  time  and  whether                                                               
additional  legal  fees  associated   with  the  complaints  were                                                               
9:43:18 AM                                                                                                                    
Ms. Davidson had no direct  information. Fees associated with the                                                               
investigative  cases depend  on  the direction  each case  takes.                                                               
Investigation and  legal fees concern all  boards and commissions                                                               
because their expense  requires license fees to  "swing" from one                                                               
year  to the  next. However,  these boards  and commissions  must                                                               
deal with the costs of investigations and be self sufficient.                                                                   
9:44:20 AM                                                                                                                    
Senator Elton,  returning to the  letter from the Board  Chair on                                                               
page 17  of the  audit report, suggested  "cognitive differences"                                                               
exist  between the  understanding of  the Board  and that  of the                                                               
Division of Legislative  Audit. He cited a finding on  page 12 of                                                               
the audit, which reads as follows.                                                                                              
     It appears  that the board  has effectively  and efficiently                                                               
     obtained   its  objectives   and   purposes.  In   proposing                                                               
     regulatory  changes,  the board  has  worked  to ensure  the                                                               
     objective of  the regulation is  clearly defined.  They have                                                               
     provided  for consistent  language throughout  the Certified                                                               
     Direct-Entry  Midwives  regulations  and  have  updated  the                                                               
     regulations  and  statutes to  reflect  new  changes in  the                                                               
     professional  environment.   Evidence  suggests   the  board                                                               
     establishes and meets its operational objectives annually.                                                                 
Senator Elton surmised  that the audit report deems  the Board to                                                               
be  solely responsible  for  drafting  legislation, although  the                                                               
Board   itself  is   "complaining"  that   it  could   not  draft                                                               
Senator Elton commented  that he supports this  Board. Members of                                                               
the profession have not protested the amount of the licenses.                                                                   
9:45:59 AM                                                                                                                    
Ms. Davidson would  discuss the matter with the  Board Chair. The                                                               
Board claims it  could not draft regulations because  it does not                                                               
have statutory  authority. However,  the Division  of Legislative                                                               
Audit has determined the Board does have sufficient authority.                                                                  
9:46:34 AM                                                                                                                    
Senator Huggins asked if a  "clear message" could be gleaned from                                                               
the number  and types of complaints  filed, as listed on  page 10                                                               
of the audit.                                                                                                                   
9:46:59 AM                                                                                                                    
Ms.  Davidson  perceived  no  clear   message.  The  Division  of                                                               
Legislative  Audit  reviews the  types  of  complaints and  their                                                               
source.  Because most  of the  complaints  were filed  by a  Peer                                                               
Review Committee  member (67 percent) or  by another governmental                                                               
agency (22  percent), the  issues were  primarily administrative,                                                               
such as incomplete applications.                                                                                                
9:47:54 AM                                                                                                                    
Senator Olson  pointed out  the current  licensing fee  of $2,088                                                               
and asked whether  the profession had "any relief  in sight" that                                                               
could  encourage  more  people  to  enter  the  midwifery  field.                                                               
Midwifery offered a "nice option"  for those physicians unwilling                                                               
or unable  to perform  births due  to high  malpractice insurance                                                               
9:48:33 AM                                                                                                                    
Ms.  Davidson  responded  that  the license  fees  could  not  be                                                               
reduced because the governing Board must be self sufficient.                                                                    
9:48:54 AM                                                                                                                    
Mr.  Benevides  recalled  testimony   provided  in  the  previous                                                               
committee  of  referral  on  this  bill  from  a  CDM  expressing                                                               
willingness to  pay the large  amount because that  person "loved                                                               
their job".  This midwife  was reassured  that the  activities of                                                               
those in the profession were overseen by the Board.                                                                             
Mr.  Benevides informed  of two  different regulations  published                                                               
the  prior   month  pertaining  to  reimbursement   and  facility                                                               
reimbursement   for   Certified  Direct-Entry   Midwives.   Those                                                               
regulations could be  the same as those referenced  in the letter                                                               
by the  Board Chair. A new  set of proposed regulations  has also                                                               
been opened to public comment.                                                                                                  
9:50:13 AM                                                                                                                    
Senator  Huggins, referring  to  Senator  Olson's statement  that                                                               
some doctor's  could be unable  to afford  malpractice insurance,                                                               
hypothesized that  a "lower profile  of litigation"  could result                                                               
in lower insurance rates for  midwives. Senator Huggins commented                                                               
in the  irony that the  "least qualified" professionals  with the                                                               
"highest risk" would have the lowest profile.                                                                                   
9:51:01 AM                                                                                                                    
Senator  Olson corrected  any  misinterpretation  of his  earlier                                                               
remarks  asserting that  midwives  are "very  well trained"  with                                                               
skill  levels equal  to many  doctors.  Midwives do  no have  the                                                               
ability to  perform surgery and  therefore are unable  to perform                                                               
cesarean section births.                                                                                                        
9:51:39 AM                                                                                                                    
Senator Huggins asked the type  of insurance carried by Certified                                                               
Direct-Entry Midwives.                                                                                                          
9:51:50 AM                                                                                                                    
Mr.  Benevides was  unsure. Because  of "law  structure" midwives                                                               
are not allowed to participate in high risk pregnancies.                                                                        
9:52:12 AM                                                                                                                    
Senator  Olson shared  that CDMs  normally  participate in  group                                                               
insurance  coverage.   License  fees   are  often  paid   by  the                                                               
corporation  that  employs the  midwife  or  the organization  in                                                               
which the midwife practices.                                                                                                    
9:52:37 AM                                                                                                                    
Senator  Dyson  suggested  that   the  discussion  on  this  bill                                                               
highlighted a policy issue.  The Legislature's determination that                                                               
all boards  and commissions must  be financially  self sufficient                                                               
could  provide   an  adverse  incentive   for  these   boards  to                                                               
adequately  "police"  their  members. Investigations  increase  a                                                               
board's operating  costs and licensure fees  must subsequently be                                                               
increased. This  issue is most  predominant in the  mental health                                                               
boards, as  the boards that  have prosecuted the most  cases also                                                               
have the  highest license fees.  As a  result new members  to the                                                               
mental health care profession consider  joining boards with lower                                                               
fees. This reduces  the membership on the  boards that diligently                                                               
pursue the conduct of its professionals.                                                                                        
9:54:09 AM                                                                                                                    
Senator  Huggins  offered  a  motion  to  report  the  bill  from                                                               
Committee  with   individual  recommendations   and  accompanying                                                               
fiscal note.                                                                                                                    
There  was no  objection and  SB 81  was REPORTED  from Committee                                                               
with  zero  fiscal  note  #1 from  the  Department  of  Commerce,                                                               
Community and Economic Development.                                                                                             
AT EASE 9:54:53 AM / 9:56:35 AM                                                                                             
9:56:38 AM                                                                                                                    
     SENATE CS FOR CS FOR HOUSE BILL NO. 18(SED)                                                                                
     "An  Act amending  the functions  and powers  of the  Alaska                                                               
     Commission on  Postsecondary Education; and relating  to the                                                               
     repayment    provisions    for   medical    education    and                                                               
     postsecondary degree program participants."                                                                                
This was the  second hearing for this bill in  the Senate Finance                                                               
9:57:02 AM                                                                                                                    
Co-Chair  Stedman  announced  that  the  Committee  would  review                                                               
additional  information  but  would  not report  this  bill  from                                                               
Committee at this time. Fiscal issues must be addressed.                                                                        
9:57:26 AM                                                                                                                    
MIKE PAWLOWSKI, Staff to Representative  Kevin Meyers, sponsor of                                                               
the bill, testified to a  memorandum dated February 26, 2007 from                                                               
Representative  Meyer to  Co-Chair  Stedman [copy  on file].  Mr.                                                               
Pawlowski  noted this  memorandum addressed  questions raised  at                                                               
the previous  hearing and highlighted  the responses  to Co-Chair                                                               
Hoffman's questions as follows.                                                                                                 
     1.  What  is  the   long-term  effectiveness  of  the  WWAMI                                                               
     program?  How  many   WWAMI  [Washington,  Wyoming,  Alaska,                                                               
     Montana  and Idaho]  graduates are  still practicing  in the                                                               
     State of Alaska?                                                                                                           
          a. The first WWAMI class graduated in 1975. 60% of all                                                                
          WWAMI graduates are still practicing in Alaska today.                                                                 
     2. How  many WWAMI  graduates practice  in Bethel?  How many                                                               
     WWAMI graduates practice in rural Alaska?                                                                                  
          a. While WWAMI graduates have previously practiced in                                                                 
          Bethel and Western Alaska, there are none currently                                                                   
          practicing in  the region. Students have  however, been                                                               
          accepted from  the area and students  from rural Alaska                                                               
          represent a  significant portion of the  incoming WWAMI                                                               
          classes. Out  of the 60% of  WWAMI graduates practicing                                                               
          in Alaska, almost 1 in  4 are currently practicing in a                                                               
          rural community, compared to only  1 in 10 in the other                                                               
          WWAMI states.                                                                                                         
9:59:18 AM                                                                                                                    
Mr. Pawlowski continued overviewing the memorandum and the                                                                      
question posed by Senator Elton as follows.                                                                                     
     3.  Address   whether  the   Senate  Special   Committee  on                                                               
     Education's amendment functions to  increase or decrease the                                                               
     chances  a   participant  will   go  in   to  general/family                                                               
     practice.  Did  the  amendment  increase  the  participant's                                                               
     costs in  light of the fact  that family practice is  one of                                                               
     the lowest paid specialties in medicine?                                                                                   
          a.  The answer  to the  first part  of the  question is                                                               
          difficult   since  it   requires   speculation  on   an                                                               
          individual's educational and  professional choices. The                                                               
          amendment clearly  increases the debt burden  a student                                                               
          takes  on  during  their   studies  and  through  their                                                               
          residency.  For example,  if a  student borrowed  their                                                               
          portion  of tuition,  the  obligation  they would  have                                                               
          accrued  after 3,  5, or  7 years  of residency  at the                                                               
          current interest rate of 7.5% would be:                                                                               
               3 years: $93,172                                                                                                 
               5 years: 107,672                                                                                                 
               7 years: 124,429                                                                                                 
          When viewed  in combination with the  student's tuition                                                               
          payments of $15,500 per year,  a WWAMI student is faced                                                               
          with the  prospect of coming  out of residency  with as                                                               
          much  as   $200,000  in  outstanding   obligations,  in                                                               
          addition   to  whatever   they  accrued   during  their                                                               
          undergraduate  career. If  interest didn't  accrue, the                                                               
          student's  WWAMI obligation  would be  $75,000. Whether                                                               
          this  difference   pushes  an  individual   toward  one                                                               
          particular specialty  or another  is difficult  to say.                                                               
          However, in  accruing a higher obligation  a person has                                                               
          substantially  increased their  incentive to  return to                                                               
          Alaska to practice.                                                                                                   
10:00:23 AM                                                                                                                   
Co-Chair  Stedman noted  information regarding  the Alaska  WWAMI                                                               
Biomedical Program  website was submitted by  Senator Olson [copy                                                               
on file].                                                                                                                       
10:00:53 AM                                                                                                                   
MICHELLE    RISK,   University    of   Alaska,    testified   via                                                               
teleconference from an offnet location  that she was available to                                                               
respond to questions on the fiscal note.                                                                                        
10:01:13 AM                                                                                                                   
MIKE HOGAN,  Executive Director, Alaska Physicians  and Surgeons,                                                               
Inc.,  testified  from  an  offnet  location  that  he  was  also                                                               
available  to respond  to  questions. He  voiced  support of  the                                                               
10:01:31 AM                                                                                                                   
Co-Chair  Stedman learned  that Pete  Kelly, Director,  Office of                                                               
Government Relations,  University of  Alaska, and  Diane Barrans,                                                               
Executive    Director,   Postsecondary    Education   Commission,                                                               
Department of Education and Early  Development, were available to                                                               
respond to questions.                                                                                                           
10:02:05 AM                                                                                                                   
Co-Chair Stedman  spoke to the cost  of the program to  the State                                                               
and the  "potential impact in years  to come". He asked  Ms. Risk                                                               
to address the cost implications.                                                                                               
10:02:27 AM                                                                                                                   
Ms.  Risk asked  whether  the Committee  had  received a  revised                                                               
fiscal note from the University of Alaska.                                                                                      
10:02:45 AM                                                                                                                   
Co-Chair  Stedman established  that the  Committee did  have this                                                               
fiscal note  in its  possession along with  the two  fiscal notes                                                               
adopted by previous committees.                                                                                                 
10:03:26 AM                                                                                                                   
Co-Chair  Stedman  commented  on  the "shear  magnitude"  of  the                                                               
revised  fiscal note  and  inquired whether  the  costs could  be                                                               
"absorbed" in the University of  Alaska's and the WWAMI program's                                                               
10:03:38 AM                                                                                                                   
Ms.  Risk  pointed  out  that  the  University  would  contribute                                                               
$180,000 University Receipt funds in FY 08.                                                                                     
10:04:04 AM                                                                                                                   
Senator   Elton  directed   attention  to   the  $30,000   travel                                                               
expenditure listed  on the revised  fiscal note and asked  for an                                                               
explanation  of  the travel  involved  in  the operation  of  the                                                               
10:04:18 AM                                                                                                                   
Ms. Risk  replied that the  revised fiscal note  contains funding                                                               
for  two new  faculty positions  and support  staff positions  to                                                               
accommodate the increase of the  program from ten to 20 students.                                                               
The  funding  specified  in  the  travel  component  would  cover                                                               
expenses  incurred  by all  of  the  program's positions.  Travel                                                               
would be to the other states participating in the program.                                                                      
10:04:54 AM                                                                                                                   
Senator  Elton asked  the  purpose  of the  travel  to the  other                                                               
10:05:08 AM                                                                                                                   
Ms. Risk answered  that the travel is necessary  to allow faculty                                                               
to "learn about the program."                                                                                                   
10:05:24 AM                                                                                                                   
DENNIS   VALENZENO,  PhD,   Director,  Alaska   WWAMI  Biomedical                                                               
Program,   University   of    Alaska-Anchorage,   testified   via                                                               
teleconference from an offnet location,  about the two additional                                                               
faculty positions.  WWAMI is a  collaboration of  several states.                                                               
Participating faculty congregate to discuss the program.                                                                        
10:06:15 AM                                                                                                                   
Senator Elton noted that at least one annual trip occurs.                                                                       
10:06:22 AM                                                                                                                   
Dr. Valenzeno  affirmed that one  trip occurs  at the end  of the                                                               
school year.  Additionally, other travel is  necessary to address                                                               
changes to the program.                                                                                                         
10:06:40 AM                                                                                                                   
Co-Chair  Stedman  requested  an  explanation of  the  change  in                                                               
number of positions.                                                                                                            
10:06:50 AM                                                                                                                   
Ms.  Risk informed  that two  new  full time  positions would  be                                                               
created  and  that two  existing  part  time positions  would  be                                                               
expanded to full time positions.                                                                                                
10:07:22 AM                                                                                                                   
Co-Chair Stedman asked the cost breakdown of the positions.                                                                     
10:07:25 AM                                                                                                                   
Ms.  Risk answered  that $40,000  would be  utilized to  fund the                                                               
expansion  of  the part  time  positions.  The remainder  of  the                                                               
$250,000 Personal  Services component  would be utilized  for the                                                               
salary and benefits of the two new full time positions.                                                                         
10:07:42 AM                                                                                                                   
Co-Chair Stedman  asked if the  professors participating  in this                                                               
program teach only to WWAMI students.                                                                                           
10:07:50 AM                                                                                                                   
Dr. Valenzeno replied that the  faculty instructs WWAMI students,                                                               
as well  as undergraduate and graduate  students, particularly in                                                               
the biology and chemistry courses.                                                                                              
10:08:22 AM                                                                                                                   
Senator Olson  asked if  the two new  faculty positions  would be                                                               
clinical or professors.                                                                                                         
10:08:36 AM                                                                                                                   
Dr. Valenzeno  answered that  one position  would be  a "fulltime                                                               
basic scientist" and  the other position would  be categorized as                                                               
one-half basic scientist and one-half clinical scientist.                                                                       
10:08:56 AM                                                                                                                   
Senator  Olson informed  that some  travel  expenses include  the                                                               
costs of  students traveling to  rural sites. He  has experienced                                                               
WWAMI students traveling in Nome and Barrow.                                                                                    
10:09:07 AM                                                                                                                   
Senator  Thomas asked  the number  of students  currently on  the                                                               
waitlist  to enter  the WWAMI  program  and the  duration of  the                                                               
waitlist. He commented on the need  to pass this legislation in a                                                               
timely manner  to allow  those students who  would be  allowed to                                                               
participate in  the expanded program  to apply for  acceptance in                                                               
medical school in Washington.                                                                                                   
10:09:41 AM                                                                                                                   
SUZANNE  TRYCK  testified  via   teleconference  from  an  offnet                                                               
location  identifying   herself  as   "from  the   University  of                                                               
Washington  side  of the  Alaska  WWAMI  Program". Currently  ten                                                               
additional students  are on the  waitlist and have  "already been                                                               
determined  to be  accepted  into the  program."  The letters  of                                                               
invitation for "the first ten"  had been mailed. The ten students                                                               
on the  waitlist, "will,  we fear, go  away with  each succeeding                                                               
day; they probably have letters  of invitation from other medical                                                               
schools." Therefore the timing "is an issue for us."                                                                            
10:10:38 AM                                                                                                                   
Senator Elton  requested that  because of  the timing  issue, the                                                               
Committee consider reporting  this bill to the  next committee of                                                               
referral  with the  expectation that  the fiscal  notes could  be                                                               
addressed  "within the  next  couple of  days"  and finalized  by                                                               
another committee.                                                                                                              
10:11:34 AM                                                                                                                   
Co-Chair  Stedman   acknowledged  the  testimony   regarding  the                                                               
urgency of this  legislation. He also noted the  Committee was in                                                               
the process of addressing the  University of Alaska budget, which                                                               
correlates to the funding of the Alaska WWAMI program.                                                                          
10:12:06 AM                                                                                                                   
Co-Chair  Hoffman expressed  concerns  about  the revised  fiscal                                                               
note. The  WWAMI program could  be beneficial in  alleviating the                                                               
shortage  of doctors  practicing in  Alaska. However,  the health                                                               
care profession  needs in rural  areas "far outweighs"  the needs                                                               
in urban  areas. He expressed  interest in including  a provision                                                               
in  this bill  that would  "give  direction" and  result in  some                                                               
additional  physicians practicing  in rural  areas. As  currently                                                               
written,  this  legislation  could   facilitate  an  increase  in                                                               
doctors  practicing   in  Alaska  but  no   increase  in  doctors                                                               
practicing in Rural Alaska.                                                                                                     
10:13:30 AM                                                                                                                   
Senator  Olson  deemed  the issue  of  less  concern.  Physicians                                                               
practicing  in rural  locations  would have  incentive to  accept                                                               
offers of employment in urban  centers. However, if urban centers                                                               
were adequately  represented, fewer  offers would be  extended to                                                               
physicians in  rural areas and  thus those physicians  would more                                                               
likely remain in their current practice.                                                                                        
10:14:51 AM                                                                                                                   
Senator Olson offered a partial  solution to the fiscal concerns.                                                               
Rather  than  expanding  the  program  to  admit  ten  additional                                                               
students,  a  compromise  could   be  made  and  five  additional                                                               
students could be allowed to participate.                                                                                       
10:15:29 AM                                                                                                                   
Co-Chair  Stedman indicated  he  would  collaborate with  Senator                                                               
Olson  to  develop  the  proposal.  The  fiscal  impact  of  this                                                               
legislation  would  be  addressed   through  the  regular  budget                                                               
10:15:53 AM                                                                                                                   
Co-Chair Stedman ordered the bill HELD in Committee.                                                                            
AT EASE 10:17:27 AM / 10:17:40 AM                                                                                           
Co-Chair Bert Stedman adjourned the meeting at 10:17:40 AM                                                                    

Document Name Date/Time Subjects